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Home sellers face changing realities in real estate market
Home sellers have been in an enviable position for several years, often able to choose from more than one bid. Now, though, the playing field is a lot more level.
Most sellers can't just assume there's a buyer out there willing to pay what they think is fair, says Mike Summey, the co-author of books on real estate investing published by McGraw-Hill. "When pricing your home, you need to look at the facts for your area without emotion. Face reality and then price accordingly," Summey says.
Here are several pointers for those planning to market their homes in the near future:
- Watch for warning signs of a cooling market. Summey says one sure sign is that the number of available properties has surged. It's easy to obtain statistics from your listing agent on what Summey calls "average turn times," also known to real estate agents as "days on market."
If you notice that the average interval between the listing and sale of homes is lengthening in your community, you can assume the market is losing some momentum. Statistics showing bulging inventories also hint at the same trend.
- Don't follow the lead of stubborn neighbors. Dorcas Helfant, former president of the National Association of Realtors, says many sellers cling to unrealistic price expectations.
Buyers tracking shifts in real estate valuations have a big ally in the Internet. Most can quickly spot a home that's overpriced and are unlikely to bid on it.
Your neighbors' overpriced property could help you sell your place--assuming your home is in equally good condition and is priced realistically. Buyers will see both homes on the same tour, and the contrast will make your place stand out favorably, Helfant says.
Good staging, along with fresh paint and new carpeting, can definitely help hasten the sale of a property. Still, as Summey says, these steps won't allow you to fetch an over-market price for your property.
Yes, you can price your listing high on the basis that you can "always come down later." But a house that sits unsold for weeks risks becoming stigmatized.
- Consider offering "seller financing" to your purchasers. If you're in a strong financial position, you may wish to provide a mortgage to your buyers, Summey suggests. Assuming you can offer this mortgage at a rate that's below prevailing bank charges, your purchasers could be willing to spend slightly more than they otherwise would for your place.
You'll want to carefully screen any would-be purchaser interested in making a mortgage loan from you. Be sure to obtain credit reports and also legal advice to ensure that your paperwork is prepared correctly, Summey says.