Buyers are seeing mortgages at 4 percent and housing prices that are at or near the lowest of the current down cycle. They see it as a great time to buy. But home owners in general don’t see this as a great time to sell even though a home can be sold for a predictable price in a reasonable time frame. That has not been the case for much of the last several years.
The Research Institute for Housing America published a study showing 80 percent of consumers see it as a great time to buy a home, but 92% of current owners see it as a poor time to sell. This is called “negative selling sentiment.”
Gary Engelhardt, the Syracuse University Economist who did the study, notes that many homeowners have not adjusted their price expectations downward to the current market. That confirms a study done by Zillow in 2011 that found most homeowners didn’t think housing market price reductions applied to their homes.
Zillow found that people who had purchased their homes in 2007 or later thought their homes were worth about 14 percent more than their actual sales value. People who bought homes before 2002 were slightly more realistic but still overvalued their houses by about 12 percent.
Many home owners are sitting out the current market rather than selling. That is leaving the market open to those who have to sell, to move, due to divorce or are downsizing. It also leaves two tiers of homes in most MLS systems, those that are priced to the market and those that are horribly over priced. The owners willing to price to the market can definitely get their homes sold as there are buyers out there looking.
What do real estate agents do with sellers who want too much for their homes?
Mike Litzner, broker-owner of Century 21 American Homes on New York’s Long Island, says “it’s all about educating them. We try to show them the comparables” — the recent selling prices of similar houses in the area.
“If sellers really want to sell,” he says, “they adjust their expectations to the changed realities.” If they adamantly refuse, Litzner says his agents often decline the listing rather than waste weeks or months trying to market an overpriced piece of real estate.
Howell says his firm’s agents sometimes walk away from unreasonable listing-price demands, but also use a technique that essentially seeks to bridge the seller-buyer divide: pre-authorized price-reduction clauses embedded in the listing contract that ratchet down the asking number.
The initial reduction kicks in within the first two to three weeks if the house fails to attract buyer interest.
“It works,” said Howell in an interview. “And both sides stand to benefit.” – SeattleTimes
The other approach that is pretty common is agents go ahead and take the overpriced listing. They put it on the MLS system, but don’t really do much more to market the property. They hope that eventually the home owner will adjust their expectations to the market and lower the price enough to sell. Of course, the home owner is paying expenses for the home they no longer want all that time. The housing market has been continuing to see declines in prices. The net effect of that approach has been home owners who end up getting far less for their homes with a stale listing, after sometimes paying years more in payments, taxes, insurance and maintenance, than the could have gotten had they priced their home properly to begin with. Nobody wins except possibly the real estate agent in those cases.
There are proven methods to get the most for your home in a reasonable time frame, if a seller is willing to price their home appropriately. In large markets, it is easy to show lots of comparable sales that can without much doubt demonstrate the value of a home. In a small market like Lake Chelan there are far fewer comparable sales. Even so, there are methods to assure you get the best price possible in the market for your home. Contact us for help selling your Lake Chelan home.
