Time Is The Enemy Of The Home Seller
Ladies and gentlemen please note that this blog was written on Aug. 8, 2006. Due to technical difficulties, and changing service providers, we were unable to post to the Blogger site. We apologize for the lengthy delay in posting current information. You can look forward to resumption of the Springfield areas most current real estate information available anywhere beginning next week. Thank you for your patience. We intentionally are posting the Aug blog on this Nov. 25th due to the pertinent information, and timeless advice that can help any home seller. Here goes............
Through the first seven months of 2006 The Capital Area Association of Realtors MLS member brokers reported continued record sales. Closed home sales were up about five dozen over 2005. The brokers also reported the largest number of new listings of homes for sale during the same time frame resulting in only 44% of listings selling through July of 2006, compared to 53% during the same time in 2005.
How the home seller views time, and uses their time will determine whether they sell in 2006, or have to wait until 2007. This is August and time is running out for home sellers this year. Typically in our market 58% of homes are sold April 1st through September 30th, 42% between October 1st and March 31st. The average selling price usually falls 5 to 10% during the slower months of fall and winter, as compared to the more active selling months during spring and summer.
Having served as a full time Realtor since 1987 in all types of markets, I can share there are certain constants within the market regardless of market conditions. The biggest enemy of a home seller is not interest rates, a slowing economy, or supply and demand. Time is the biggest enemy of the seller.
Failure to take the time to prepare the home to show in its best condition, is a catastrophic and common mistake. This usually occurs when an agent hungry for a listing rushes the seller to market. Failure to take the time to prepare, not just cosmetic improvements to please the buyer's eye, but to have a preinspection by a licensed home inspector that will give you the opportunity to repair unknown defects, will cost you time to get sold, and probably cost you a sale.
Failure to take the time to interview several real estate agents is another common mistake. Our Association of Realtors is chalk full of excellent agents, however God did not create all agents equal. With over 800 members, how will you know which agent offers you the proven services that gets homes sold? Most consumers believe agents are interchangeable, that is when you hire one it's the same as hiring another, believing they all offer the same services. This is another recipe for disastrous consequences. Face it folks, most agents working in the market today started during the boom, and have never experienced a slowing market. How do you react to something you've never experienced? You will become the experiment. Choose your agent wisely.
Failure to take the time to discuss the importance of having a pricing plan in place before you list your home for sale, is another common mistake, and can cost you months on the market before getting an offer. The largest pool of buyers you will have to appeal to, will be the day you list your home for sale. Regardless the market conditions, there are always buyers that have seen all homes available, and are waiting for new home listings to become available. You will have more prospective buyers see your home the first three weeks on the market than the next ten weeks combined. Following that, the number of prospective buyers will slow to a dribble. Ask, when everyone has seen my home, who's left?
The one constant a home seller should realize is, the longer you are on the market the less valuable your home becomes. Hence the pricing plan. During the first 2 to 3 weeks on the market only three things can happen; 1. You get no showings which means the market has outright rejected your asking price, 2. You get showings but no offers which means you were close enough to get buyers to look but they perceived other homes as a better value, or 3. you get an offer.
Here is my advice, price the home initially at the price you and your agent believe to be as close to market value as possible. If you have not received an acceptable offer within three weeks, adjust the price below the next price point or by 5%. Have your agent call buyer agents who have shown the home to share the new price. If you continue on the market for another three weeks without an offer adjust the price again. At this point you are waiting for new buyers to enter the market, and realistically you now may wait months for an offer. A word of caution, never allow your agent to advertise "price reduced", this automatically stigmatizes your home, implies that you are desperate, and invites low offers. A home on the market ninety days without a price reduced rider on the sign looks infinitely better than a home on the market ninety days with a price reduced rider.
Time of year can also be your enemy. With the previously mentioned seasonal slowdown approaching, and you are selling a home in the Springfield area, understand there will be fewer buyers entering the market by October. If you list your home today, and don't have a pricing plan, you are almost guaranteed not to sell until spring of 2007.
To place this in proper perspective, the MLS has sold a record 340 homes a month on average this year. There are currently 1797 homes listed for sale, not including FSBO's. The MLS is averaging 595 new listings a month in 2006. If you took math in school you can see that this is not a formula for all home sellers to succeed. The bottom line is there are currently 4 or more sellers for every buyer in the market.
Now in my 20th year of service I can promise you time is the enemy of the seller, but doesn't have to be. Take the time to properly prepare your home to look its best before you enter the market, preinspect the home so defects don't cost you a sale after the buyer inspects, take the time to interview agents hiring the agent with the most effective services, determine a pricing plan before listing your home for sale, and time will be kind to you by getting your home sold in a reasonable amount of time.
Just a quick note about effective services, for that is an entirely different subject for another time. About real estate marketing services; newspaper advertising, and open house combine for less than ten percent of all sales. When interviewing agents who's marketing plan depends upon the marketing tools of newspaper advertising and open house, you will probably be disappointed with your results. Referrals, networking, and the internet generate over 90% of all sales.
If you are on the market trying to sell, or are coming to the market, remember time is the enemy of the seller, but doesn't have to be. Take your time to follow this advice and you will have a good time. Don't, and you won't.
Through the first seven months of 2006 The Capital Area Association of Realtors MLS member brokers reported continued record sales. Closed home sales were up about five dozen over 2005. The brokers also reported the largest number of new listings of homes for sale during the same time frame resulting in only 44% of listings selling through July of 2006, compared to 53% during the same time in 2005.
How the home seller views time, and uses their time will determine whether they sell in 2006, or have to wait until 2007. This is August and time is running out for home sellers this year. Typically in our market 58% of homes are sold April 1st through September 30th, 42% between October 1st and March 31st. The average selling price usually falls 5 to 10% during the slower months of fall and winter, as compared to the more active selling months during spring and summer.
Having served as a full time Realtor since 1987 in all types of markets, I can share there are certain constants within the market regardless of market conditions. The biggest enemy of a home seller is not interest rates, a slowing economy, or supply and demand. Time is the biggest enemy of the seller.
Failure to take the time to prepare the home to show in its best condition, is a catastrophic and common mistake. This usually occurs when an agent hungry for a listing rushes the seller to market. Failure to take the time to prepare, not just cosmetic improvements to please the buyer's eye, but to have a preinspection by a licensed home inspector that will give you the opportunity to repair unknown defects, will cost you time to get sold, and probably cost you a sale.
Failure to take the time to interview several real estate agents is another common mistake. Our Association of Realtors is chalk full of excellent agents, however God did not create all agents equal. With over 800 members, how will you know which agent offers you the proven services that gets homes sold? Most consumers believe agents are interchangeable, that is when you hire one it's the same as hiring another, believing they all offer the same services. This is another recipe for disastrous consequences. Face it folks, most agents working in the market today started during the boom, and have never experienced a slowing market. How do you react to something you've never experienced? You will become the experiment. Choose your agent wisely.
Failure to take the time to discuss the importance of having a pricing plan in place before you list your home for sale, is another common mistake, and can cost you months on the market before getting an offer. The largest pool of buyers you will have to appeal to, will be the day you list your home for sale. Regardless the market conditions, there are always buyers that have seen all homes available, and are waiting for new home listings to become available. You will have more prospective buyers see your home the first three weeks on the market than the next ten weeks combined. Following that, the number of prospective buyers will slow to a dribble. Ask, when everyone has seen my home, who's left?
The one constant a home seller should realize is, the longer you are on the market the less valuable your home becomes. Hence the pricing plan. During the first 2 to 3 weeks on the market only three things can happen; 1. You get no showings which means the market has outright rejected your asking price, 2. You get showings but no offers which means you were close enough to get buyers to look but they perceived other homes as a better value, or 3. you get an offer.
Here is my advice, price the home initially at the price you and your agent believe to be as close to market value as possible. If you have not received an acceptable offer within three weeks, adjust the price below the next price point or by 5%. Have your agent call buyer agents who have shown the home to share the new price. If you continue on the market for another three weeks without an offer adjust the price again. At this point you are waiting for new buyers to enter the market, and realistically you now may wait months for an offer. A word of caution, never allow your agent to advertise "price reduced", this automatically stigmatizes your home, implies that you are desperate, and invites low offers. A home on the market ninety days without a price reduced rider on the sign looks infinitely better than a home on the market ninety days with a price reduced rider.
Time of year can also be your enemy. With the previously mentioned seasonal slowdown approaching, and you are selling a home in the Springfield area, understand there will be fewer buyers entering the market by October. If you list your home today, and don't have a pricing plan, you are almost guaranteed not to sell until spring of 2007.
To place this in proper perspective, the MLS has sold a record 340 homes a month on average this year. There are currently 1797 homes listed for sale, not including FSBO's. The MLS is averaging 595 new listings a month in 2006. If you took math in school you can see that this is not a formula for all home sellers to succeed. The bottom line is there are currently 4 or more sellers for every buyer in the market.
Now in my 20th year of service I can promise you time is the enemy of the seller, but doesn't have to be. Take the time to properly prepare your home to look its best before you enter the market, preinspect the home so defects don't cost you a sale after the buyer inspects, take the time to interview agents hiring the agent with the most effective services, determine a pricing plan before listing your home for sale, and time will be kind to you by getting your home sold in a reasonable amount of time.
Just a quick note about effective services, for that is an entirely different subject for another time. About real estate marketing services; newspaper advertising, and open house combine for less than ten percent of all sales. When interviewing agents who's marketing plan depends upon the marketing tools of newspaper advertising and open house, you will probably be disappointed with your results. Referrals, networking, and the internet generate over 90% of all sales.
If you are on the market trying to sell, or are coming to the market, remember time is the enemy of the seller, but doesn't have to be. Take your time to follow this advice and you will have a good time. Don't, and you won't.
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