Home price may be biggest issue when selling a home in the current real estate market.
Q: I have a problem. My property was appraised about five years ago for 50 percent more than what it’s worth now, according to the local assessor’s value.
I’ve listed the home for sale significantly below that number over the last year and I’ve had many lookers but no great offers. I’ve made every improvement or change suggested by my real estate agent, but the most recent offer was 30 percent less than my listing price.
Would it be possible to take a look at what’s viewable on the web and maybe spot some serious defect or drawback that’s causing lookers to back off and not even consider making an offer?
A: The market is rather interesting these days, but not in a good way. There are many fewer buyers out there than in past years. The Great Recession has been one reason there are fewer buyers, but greater scrutiny by lenders has affected the real estate market as well. We’re also seeing a general decline in real estate market prices, which has been relentless in places like Atlanta, Phoenix, Las Vegas and just about the entire state of Michigan.
While you can go to various websites and view general market conditions, you have to take the information given to you by these information as general information and not truthful and reliable information for you.
For example, you can input your address into Zillow.com to get a gauge of where property values have gone in your general area and what that site believes your property value has been and is today. With this information, you can get a sense of market conditions in general and may get a sense of how those market conditions may have affected your ability to sell your home.
In some communities, you might see that the real estate market has come down 10 or 20 percent, while in others the prices have come down up to 70 percent. In areas such as Las Vegas, parts of California and Arizona, and areas in southern Florida, among many, housing prices have collapsed. In Manhattan and around Washington DC, the housing market has not gone down much if any, but rather pricing has recently increased.
However, you may not be able to rely fully on Zillow’s specific market conditions for your home. Your own list price for your home affects how Zillow determines what your home is worth. But if you see that other homes that are similar to yours in your neighborhood have had a declining pricing trend while you have had your home on the market, you might realize that you may have been chasing the market down with your home’s price.
From an emotional perspective, chasing the market down is one of the hardest things you can do. You might find that you have lowered the price on your home, but that each time you listed your home for less, you were behind the current market. So each successive price decline was not sufficient to push you ahead of local market conditions.
We have a home in our neighborhood that was listed for $900,000 when the market was at its peak. But at that point the home was overpriced and there were many lookers but no buyers. As the housing market deteriorated, the owners reduced the price, but never enough to entice buyers that had become accustomed to other homes in the market that were priced lower.
Today, that same home is listed for around $550,000 with few people taking a look at it. You can buy a bigger home in better condition in a better location for that price or less.
You may be in a similar situation. You need to take an objective view of your property. While you may have taken at heart the many recommendations your real estate agents have given you over time, price may be the major determinant in this market to selling your home.
While you can look at the past to see what you might have or could have done, your market to sell your home is today’s real estate market. You need to look at other properties in your neighborhood and community and objectively see those other homes and compare them to yours.
When you look at other homes, you may find that some of them are larger, newer, recently rehabbed, and are in better locations, closer to certain amenities, have a better lot configuration, have a better design or have other features that your home does not have. Once you look at your home and other homes objectively, you can make a determination as to whether your home is priced properly to be sold in the current market.
With our neighbor, the property is competing with many other homes in our community. Our neighbor’s home is older, on a busy street, with a home that does not meet the needs of most people moving into the community. However, our neighbor still sees the property as a valuable commodity that should fetch the price she has set for the property.
Unfortunately for our neighbor, most buyers look at other homes that are newer, in better condition, on better streets that are cheaper and never even take a look at our neighbor’s home.
For you to sell your home, you must overcome the issue that can best be described as what you “must get” when you sell the home. In today’s market, it isn’t what you must get, but what a buyer wants to pay for your house. If there is a disconnect between those two concepts and what you “must get” is above where the market is currently, your home will linger on the market.
Often we hear real estate agents complain about sellers who have decided that they “must get” a certain amount for their home. Those real estate agents will complain that those are the hardest sellers to work with because in their minds they are unable to understand that the housing market may be far below what their hopes are and that listing their home at a price way above the market may hurt their prospects to sell their home.