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It's all about pricing for those seeking timely sale
Savvy sellers take note: It's all about pricing, pricing, pricing. Not last year's. Last month's.
That's the word from sellers and agents across Southern California facing the realities of this fall's buyer's market.
"Pricing is critical," said Sean McLin, a Los Angeles-based ZipRealty Inc. agent. "Buyers start their search from there."
It's not easy being a seller today, what with homes on the market seemingly everywhere. Should owners under price or stick with neighborhood comparables? How long should their homes be on the market before they consider lowering the price? What else can they do? Migraine, anyone?
The good news is that there are clear-cut strategies for pricing a house "right" and getting a "sold" sign up in a timely fashion -- which, in the current market, is about 60 to 90 days, agents say. Here are some top considerations:
- Check what other homes have sold for. First, find out the prices (by square foot) of comparable neighborhood homes that have sold recently -- not those listed for sale, which merely reflect owners' wishful thinking. Then compare the features on the just-sold homes, such as a new roof, fresh exterior paint and landscaping, said Moira Hughes, a Rodeo Realty agent in Westlake Village. If your house is lacking some of the same amenities, price it lower. Also, check how long the other homes sat on the market.
- Price close to what you're willing to accept. Forget about pricing your home higher with wiggle room for negotiating. The higher the price, the more likely the property will sit on the market gaining white-elephant status. Instead of listing at $625,000, a seller would be wiser to list at less than $600,000, to attract buyers looking in the $500,000-to-$600,000 range.
It's also better to be at the lower end of a neighborhood's price range than the top. Especially if time matters. Buyers want to think they're getting a bargain.
Betty Martin sold her Huntington Beach mobile home herself in October with guidance from ForSaleByOwner.com. Her daughter, who occupied it, was getting married.
Martin didn't want to pay extra months' rent on the space while she waited for a buyer, so she listed the unit for $66,500--$6,000 below what an agent had recommended and close to the listing prices of others in the area. She sold the home for $62,000 four weeks later. Colby Sambrotto, chief executive of ForSaleByOwner.com, recommends that sellers list their homes 3 to 4 percentlower than the appraised value and that of comparable homes.
In an even bigger hurry were Matt and Belva Sopene of Burbank, who wanted to move to South Dakota. They listed their three-bedroom house at the low end of prices in their neighborhood near Toluca Lake and sold the property in nine days. They listed the Spanish-style house on a 9,400-square-foot lot for $739,000, held an open house and quickly accepted a $730,000 offer.
"Sellers love their `extra specials,' like a new kitchen and renovated den," Belva Sopene said, but "they are not as important as the price."
- Know when to lower the price. If a house sits on the market more than six weeks without much buyer interest, it's time for a few changes. Spruce it up. Stage it. Add nice furniture and remove the clutter--and lower the price.
Aung Khin re-listed his three-bedroom, 1,155-square-foot West Hills home in July at $569,950. This was after he'd originally listed it for $630,000 eight months earlier and subsequently dropped the price twice.
With a new agent, a new kitchen and new carpeting, a marketing push and finally the right price for the neighborhood, the house sold for $572,000 in 30 days. Khin paid some of the closing costs as a further buyer incentive.
Forial Zaken took agent Larry Heller's advice to drop the price when her 2,100-square-foot home in Granada Hills received no offers at $929,000 after one month on the market in August. Two price reductions later, it sold for $810,000 a month ago.
"When you've done everything to make the house desirable and it's accessible to buyers, but they aren't choosing it, then we know what the house is not worth," said Syd Leibovitch, a broker at Beverly Hills-based Rodeo Realty. "It's time to lower the price and make sure you out-compete others in the marketplace."
- Don't let your home linger on the market too long. Even if you're not in a hurry to sell, the sky's not the limit for a sales price. Many sellers are learning that lesson the hard way. When an overpriced home languishes, buyers start thinking something's wrong with it.
- Decide whether to list on the MLS. The Multiple Listing Service offers wide exposure, and agents recommend listing a house on several of the services.
Sometimes, however, sellers go against conventional wisdom and keep their homes off the MLS to create an aura of exclusivity and to try to fetch a higher price. That strategy works best with higher-priced homes.
Ramsey-Shilling agent Jon Molin recently represented the seller of a 3,000-square-foot condo in Toluca Lake who chose not to list on the MLS, hoping to generate word-of-mouth excitement. The unit was listed for a bit more than $1 million, not unusual for a home that size in that neighborhood. It also was in mint condition. The condo sold for the asking price, after only one week.
"A lot of buyers think they've seen everything on the market, that everyone looks at the same Web sites," Molin said. "When a home's not listed, it feels unique and is a more interesting proposition."
- Use the Web. Most buyers go to the Internet first to find listings--80 percent, according to the latest survey released by the National Association of Realtors. To generate more interest in your listing, ask your agent to post several photos so buyers can see what the house looks like inside and out. Molin recommends sellers provide a virtual tour of the home. Many of his clients use point-of-view cameras, which make browsers feel as though they're there in person.
- Make your home easy to show at any time. That means constantly keeping it tidy--a pain but necessary. Open houses are vital, agents say. Sales do happen at them. And not just on weekends. Buyers drive around on weekdays too.
The bottom line, according to broker Leibovitch, is to "stick to three basics: pricing, buyer accessibility and the home's appearance.
"The better it looks, the higher the price. The harder to show it, the lower the price," he said. "Use your common sense."
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Check what nearby houses have sold for.
- Price close to the amount you'll accept.
- Lower the price if you don't sell in six weeks.
- Don't let your home linger on the market.
- Investigate keeping your listing exclusive versus putting it on the MLS.
- Use the Web.
- Make your home available to show at any time.