My House isn’t Selling in a Seller’s Market

 

Our market is currently moving at a fast pace, especially for homes less than $200,000. Currently, as of this writing, there are 3292 active single family listings in the Multi-Listing Service (MLS) and 1512 listings sold in the last 30 days.  Meaning that we currently have 2.18 months worth of inventory. Since a balanced market is six month’s worth of inventory, you can clearly see that we have a strong seller’s market.  However during that same time frame we also had 439 homes which were removed from the MLS by expiring or being released or withdrawn. So if the market is so strong why are so many homes not selling.

I believe the expectations of sellers is that since there is so little to buy on the market and homes are going so fast that you can throw anything out there and it will sell.  The homes that are not selling are not priced right or correctly marketed in my professional opinion.  Several of these homes need repairs or a good cleaning. Most buyer’s want something that is move in ready.

Buyer’s are shopping on the internet and want to see a home virtually prior to taking their time to visit the house in person. They are drawn to properties with good pictures and aerial shots if the property warrants it. Although you need to know when to use aerials and when not to.  They want good floor plans, and updated features. And of course they are looking for a great price or at least a fair one.  If the price is out of whack they won’t make an offer.  If the home has outdated features like wall paper and a lot of gold fixtures then the buyer’s are wanting to reduce the price to compensate for the work.  And for the most part these buyer’s are over estimating the cost of these updates.  Too much HGTV in my opinion, or they just don’t know who to call to get a good price on making updates.

Sometimes Sellers seeing other homes in their subdivision selling quicker than their home start to question what their realtor is doing or not doing to get their house to sell.  They demand more open houses, another broker’s open, more fliers.  Surely more marketing will do the trick. Let me assure you that when a realtor, any realtor, enters the listing into the MLS it goes to all the different websites.  There are hundred’s of them that pick up the listing and help to market it. So if your realtor has inputted everything correctly and uploaded great pictures (I use professional ones) people are going to see it. The true issue is most likely price or condition.  And any condition can be fixed by price. Because if it is cheap enough someone will see value in it and buy it.

So if your house hasn’t sold and it is currently off the market and you would like some advise, please feel free to reach out to me. Sandi Walker 405-213-2992 or visit my website http://www.equityhomesteam.com.   This is not intended as an advertisement to list a property currently on the market with another realtor.

 

Let’s price it right to begin with

Sometimes people buy a home with the intention of living there for a long time and then life changes and they need to move. Depending upon when they purchased the house and the market, there may or may not be enough equity to sell the house without bringing money to the table. If they put money down when they purchased the property there is no guarantee that they will get all that money back when they sell. It is a hard conversation to have with a seller, but an important one. A house is simply not worth what the seller needs, rather what the market dictates.
So the question is always what should we do in that case. I have had several sellers want to list the price above market value in order to cover costs. Sometimes these sellers have transfer orders or need to move now so the house is left vacant. In this case I simply ask the seller if they want me to give them an accurate value and list it to sell quickly or would they like me to lie to them about the value, put it on the market at a price I know will not sell, and then reduce it every couple weeks until it gets to the actual market price. Of course, Mr. Seller, by that time you realize that the days on market is going to be long and then buyers are going to think they can negotiate for a price below market.
In addition to not selling quickly, there are holding costs associated with a house that is not selling. The seller still has to pay the mortgage, utilities, maintenance and upkeep. Even if the house is paid for there will be taxes and insurance accruing on the property. Therefore I will usually ask a seller who is in this situation, “Do you want to bring the money one month at a time or all at once?” The seller who is going to pay the holding costs waiting for a buyer is bringing money to the table so to speak–one month at a time. So why not simply price the house correctly at first. The market will always determine if the house is priced correctly by either supplying a buyer or not.
If you are looking for an experienced realtor to give you an honest assessment of your property, please contact me 405-213-2992 or visit my website.

Price it correctly and it will sell

I believe the number one thing that causes a house to sell or not to sell is pricing. You can advertise and market the property like crazy, you can stage it and make it smell good; however, if the house is not priced correctly it is going to sit. I tell sellers all the time this is a beauty contest and a price war. And any objection can be fixed by pricing the house accordingly.
Sellers always want the most money from their property, and I understand that. If I had a property for sale, I would want the same. Knowing that buyers want the best deal and are likely to negotiate and for a reduction in price or concessions, sellers often want to price the house to give them some leeway to negotiate. But is this a good idea? I don’t believe so and here is why.
Home buyers are out viewing homes and comparing their features and benefits. They want and expect the home to be clean and generally in good condition unless they are looking for a fixer upper and that is a whole other article. They have a budget for a certain dollar amount and are looking in that price range. So if the seller prices the property $5,000 to $10,000 above value in order to negotiate, the buyer who is looking for a property like the seller’s may never see it. Buyers who do see it may believe that the seller is not willing to negotiate and get the price of the home in line with the market. And finally, the overpriced house may help to sell the neighbor’s house which is priced correctly because now it looks like a deal.
The thing I have learned over time is that you cannot underprice a home. If you price it a little under market then buyers will see the value in the home and it is likely that the seller will receive multiple bids. Often times when this happens the price goes up not down. It becomes like an auction atmosphere and the emotions of the buyers endeared to the property cause them to bid the price of the house back up to market value.
If you would like assistance with buying or selling real estate, please feel free to contact me at 405-213-2992 or http://www.sandiwalker.com

I am giving my house away

The other day I was talking with a seller about his house. It had been on the market for a few months and he had only a few showings. He wanted the house sold which makes sense since he had listed for sale with a licensed Realtor.   According to the comps in the neighborhood, the house appeared to be priced at the top end of the pricing for the neighborhood. The house was completely redone with fresh paint and new flooring. He had installed new granite counter tops and appliances in the kitchen and the bathrooms had been updated.  The MLS had the house highlighted with 20 pictures, the max, and it had been emailed to many agents and buyers alike.  The Realtor had had a broker’s open and open houses but there were simply no offers. He was frustrated and was considering renting the house until the market improved.

Currently, we have a low level of inventory with low interest rates.  Many people consider us in a sellers’ market so I am assuming what he met to say is that he wants to wait until the property has appreciated to a higher value. Because while the market is good, we are still not making crazy speculative buys that have no merit.

I informed him that if the property was not showing and it was being marketed, which it was, that the price was too high. To which he responded, “Well anyone can give a property away.”  Regardless of what the area comparable show the market is rejecting the price of the home.  As I reviewed the other properties in the area, it appeared that the homes in the addition that were for sale may not have been updated to the same level as this gentleman’s property. And while the seller and Realtor could justify the list price, the buying public was choosing something else. If the property is not priced correctly, buyers will not waste their time looking at it, believing the seller is unreasonably.

I personally do not believe that you list a house too low. If you do, the buyers will know and multiple offers will force the price of the property back up to fair market value. I have personally witnessed this several times especially with foreclosed homes that are listed below value.

If you have questions regarding real estate, please feel free to contact me at 405-213-2992 or visit my website  http://www.sandiwalker.net

How do I know how much a HUD property sold for?

You can know the price a HUD property went under contract for prior to it closing.
In the good old days HUD would post every bid on their website after the bid was over and the world could see each and every bid. Today, they are not as forthcoming with information. However you can still view the net amount of the winning bid to HUD.

Go to HUD’s website, http://www.hudhomestore.com, click on bid results. A new window will open. Fill in the state and maybe the city or the zip code. It will list all of the properties which have recently sold. It does take HUD a few days to list the information here and will not be available the day the bid is open.
You will be able to see the real estate firm that sold the property, the net amount of the bid to HUD, and whether the buyer is an owner occupant or an investor.
By reviewing past winning bids, buyers can understand the way the market is bidding on these types of properties. This can show whether the list prices are being exceeded or if buyers are paying the list price or less.
It also shows the dated the offer was submitted, opened, and accepted. If a time delay is shown between the date opened and accepted, the public can understand that this was a back up bid.
If you need help on a HUD property, call me. I specialize in selling HUDs and other repo properties and know how to get them closed. Feel free to call me at 213-2992 with any of your real estate needs or visit my website http://www.sandiwalker.net.
And be sure to follow my blogs.

Is the list price of a HUD property really the price?

People often ask me how HUD prices their homes. It is very simple. They obtain a FHA appraisal from a licensed appraiser. The appraisal price is the list price. If a buyer is obtaining a new FHA loan to purchase the property, the lender will use this appraisal. So if a buyer using a FHA loan bids over the list price, they will need to bring the difference to the table. If the buyer is using a conventional loan then a new appraisal will be obtained.
I have sold many HUD properties over the years and have seen some incredibly low appraised values on these properties. In these instances, multiple buyers tend to bid the price back up to fair market value—the price an educated buyer is willing to pay.
Sometimes the appraisal price is higher than a buyer is willing to pay. If so, HUD will reduce the sales price in time. It always makes me shake my head when a property has been on the market for awhile, the price is reduced and the buyer then pays more than the new list price. Why that buyer didn’t make an offer before, I don’t know. Maybe they just didn’t see the value at the old price structure.
During the initial bidding period when the bids are sealed for 5-10 days (depending if the property is insured or not, another blog topic) I strongly suggest making your highest and best offer. If the property is past the initial bid cycle and can now be bid on as a daily bid, the buyer may bid more aggressively. Just remember someone else may be bidding on the property also, at what price you are willing to lose the property.
Unless the property has been on the market for a long period of time (120-180 days) do not expect HUD to take a low ball offer.
A few days after the bid is accepted, HUD will post the winning bid amount in the bid review. Remember this is a net amount to HUD so you will need to adjust the amount to cover commissions to get a more accurate dollar amount.
If you want to purchase a HUD property, call a realtor who knows the HUD process and can assist you in getting the property closed.
If you have real estate questions, please feel free to call me at 405-213-2992 or visit my website. And be sure to follow my blogs for more useful info.

Is the market rejecting you?

Sometimes sellers want to list a property based upon what they need in order to pay off the property or for some amount that they need to move. However the value of a property is only worth what an educated buyer is willing to pay for it. Buyers today have lots of electronic information to help them get the best deal possible. They are looking to pay fair market value or to get a deal.
If your home is listed on the open market and you are not getting any showings, I am positive your home is over priced for the market. I believe that you need a certain number of showings in a week to get the property sold. This number will change based on your selling price.
If you are getting showings but you are not getting offers, then there is something wrong with the property. The buyers are finding something else that meets their needs with more amenities or is cleaner or perhaps is more updated. Feedback in this instance is critical. If the seller can fix the items that causing buyers to buy something else, then the property will sell. If they cannot fix the items that buyers are stating as reasons for not purchasing the property; i.e. room size, layout, or location; then the seller will need to lower the price to compensate for these items.
Everything will sell provided it is priced correctly and marketed effectively. And while advertising a property so people know it is available is crucial, pricing is probably the most important part of marketing. If a home is not priced correctly, it will just sit on the market and help other properties around it to sell.

If you enjoyed this post, please follow my blog. If you have questions, regarding real estate, please feel free to contact me at 405-213-2992 or visit my website at http://www.sandiwalker.net

Pricing the property correctly

I am constantly hearing from sellers who want to try a little higher and we can always adjust the price downward, if that doesn’t work. The problem with this theory is that they get stuck on the number and don’t want to reduce the price fast enough. The longer the house sits on the market, the more the buyers think they can write a lower offer.
A house that is priced at market value or maybe a little below market value will increase amount of interest in the property. It is hard to under price a property. If the property is truly below market value, the market will correct this by bidding over the list price. We have seen this several times lately where a multi offer situation occurs on a property because more than one person believes the house is worth at least what the house is listed at. Because people buy homes based on emotion and facts, people tend to increase their bid in a multi offer situation to get the property that they desire. This increases the price of the home.
Whereas if the property is over priced and nobody is looking at the home, the home becomes stale and stays on the market a longer period of time. Therefore it is suggested that if you are not getting showings you reduce the property every two to four weeks until you get an interested buyer.
A common understanding amongst real estate professionals is if you are not getting showing, the house is priced to high. If you are getting showings and no offers then there is something wrong with the house. Getting feedback will help determine why people are looking and not making an offer. It may be that the owner can fix what is causing the buyers to not purchase the property. If the owner cannot remedy the issue (location, floor plan, room sizes, etc) they may have to adjust the price to entice someone to purchase the property.
The value of a property is not determined on what the current paid for it, or the amount of money they spent to improve it. The value is not determined by what the realtor says, the county assessor, or what the neighbor down the street sold their property for last year. The true value of a property is determined by the market and what a buyer is willing to pay for it.
If you have questions about real estate, please feel free to call me at 405-213-2992 or visit my website http://www.sandiwalker.net.