Am I Facing Reality?
Well at the beginning of the month I beat up on sellers telling them that they must face reality. I must soften that a bit and admit that saying that is easier than doing it. I understand that pricing a house that has been your home is not only a business decision, but also an emotional/personal one. So when the market stats and the advice of a professional real estate agent should be the pricing gauge, you find you have to fight an overwhelming drive. The urge to let other factors influence your home pricing. Factors such as how much you owe, how much money you need to move to your next house, how much money you put into improvements, and more. None of this will cause your house to sell for more than a buyer will pay.
You would think as an investor, I would not be susceptible to these things. I should be looking at this from a purely business perspective. I am trying, but I am struggling. The problem my husband and I have is that if we go much lower we will have lost money on this house that we so carefully remodeled to resell. Ouch.
I ran the numbers, I looked at the comparable properties and I still think compared to other homes it is priced well. But in the small town it is in, it is entirely possible that the whole town is overpriced. Other homes have also lowered there price, but with none selling.
As Jeffrey Otteau of Otteau Valuation Group, Inc in East Brunswick, NJ says, one of the “undesirable effects of Over Pricing is that marketing time becomes extended, which serves to delay the sale, eliminates all sense of urgency and will eventually lead to price reductions.” Otteau offers workshops for real estate professionals with market forecasts and other helpful topics.
I have heard this from Jeffrey a number of times, and my broker has coached me. I know that the best way to price a house is what Jeffrey Otteau calls “right pricing”. You set you price lower than the competition and you will end up with a faster sale and a higher price. It is tough to swallow, but studies show it to be true.
So did I practice what I preached? Not too well. What will I do? I will make another price reduction on Monday. Check back here for the closing party when I sell it.
Sellers: You Have Got to Face Reality
Many sellers are not facing the reality that their house is worth less than they think it is. Unfortunately, some sellers have financial reasons for “needing” to get more than the market will bear.
I just got an email from a seller in New Jersey who says:
“We are currently listed with a real estated agent, but because of the 6% commision it makes it difficult to come up with a price that works for everyone. We have had two offers. However, they were not the right ones.”
This is what I told him:
You have to face the reality that you can only sell your house for what a ready and willing buyer will pay. How much money you need is irrelevant. (sidenote: I might have been a little blunt here, what a seller needs is not totally irrelevant, but they can’t always get what they need.)
I suggest you go back and see if those people are still interested. Were both offers near the same price? If so, that is about what your house is worth in this market.
If the reason you won’t take these offers is because you need a certain amount of money to move or you owe more on the house than would be covered by the price, you have some options.
If you owe more than the house will sell for (with or without the commission), you can try to negotiate a short sale with the bank. A short sale is when the bank agrees to take less than is owed on a mortgage as payment in full. You may be able to list the real estate commission as an expense to reduce the mortgage payoff amount (or the net) the bank will get.
Be warned, you must show that you have some financial hardship: like a medical condition that cause high bills, or lost your job, or something along those lines, and a short sale can take 1-4 months to complete or more.
If you rejected these offers because you need a certain amount of money to move or buy another house, I am sorry to say that you probably won’t get better offers in this market. But your agent will advise you on that.
Sorry to be so frank, but if you really want to sell you house you must face the realities.
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If he replies, I will let you know what he said.
Bad Luck, Poor Decisions Put Widow on Brink of Foreclosure
It is the big story right now, subprime loans and ARMs resetting and forcing homeowners info foreclosure. It may be the big story, but it is a sad story.
If this is what you are facing don’t wait, do something. Start by doing some searching and reading on the internet to be educated about what your choices are. And protect yourself against unscrupulous people wanting to steal your home. If you still have time to work things out with the bank you can find an ethical person to help you through the details. If you need to sell quick you need to work with an ethical investor who can buy your home. That is what we do. But first read a bit, so you know what your options are.
Here is one example of a homeowner who is now facing foreclosure:
Fritsky thinks about that now because she faces losing her house to foreclosure, perhaps in a matter of weeks. The 50-year-old mother of two owes about $250,000 on her house now — because she’s borrowed off her equity or refinanced a total of eight times since 2001.
Fritsky’s situation appears dire: She has a $25,000-a-year job and an 18-year-old daughter with a chronic health condition.
“Where am I supposed to go?” Fritsky asked in an interview this month, her eyes moist with tears. “People in my position — where do they go?”
Fritsky is one of those homeowners who have literally lived off their houses in recent years.
Although no one can know how many people have used their homes to supplement their incomes, economists and lenders are concerned that the stagnant wages and low-interest-rate mortgages that marked the first half of this decade created a financial cliff for many homeowners.
Now, with interest rates up and real estate prices declining, people like Kathy Fritsky find themselves falling into an abyss.
You Must Do These Things to Sell Your House Fast
If you’re going to sell in this market there are really only a few — but very important — things you must do.
1. Fix up the place…..
2. Price it below market…..
3. Market the deal as much as the house…..
4. Bonuses and higher commissions….
5. Offer other non-real estate incentives to the buyer……
Click the source link to read the whole article
David Lereah of NAR Brings Us Good Tidings for NJ Real Estate
After bottoming in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turnaround by summer, according to the latest forecast by the National Association of REALTORS®.
David Lereah, NAR’s chief economist, said annual totals for existing-home sales will be fairly comparable between 2006 and 2007. “We have to keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation,” he said. “We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it’ll be pretty much of a wash in terms of annual totals. The good news is that the steady improvement in sales will support price appreciation moving forward.”
Good ole David Lereah, bringing us some good news. We can be optimistic about the future, but we must be realistic about pricing. Sellers listen to your Realtor. Price realistically. That means price low. Your agent should show you closed sales and also show you which houses are in competition with yours. You also need to get your house ready for sale. Declutter and maybe get a stager.
I will be posting on staging soon, but it you want more info now, contact me.
