Advice for Sellers in a Buyers Market
Do you have your home for sale? Are you contemplating a sale of your home in 2006? What is the current housing market trend? Are homes selling as fast as they have a sign placed in the yard? Or are you noticing more signs everywhere you drive, and those for sale signs seem to sit for weeks and months as you drive by?
It is critical to understand what your market conditions are currently, and which way the market is trending. If homes are selling as fast as they are listed you continue to be in a sellers market with demand stronger than supply.
If you are in a market where the homes for sale appear to be just sitting you are probably in a buyers market with supply exceeding demand. If you understand that you are in a buyers market then you can take positive action that will allow you to accomplish your goal of getting your home sold.
Finding the best real estate agent will help you immensely to goal achievement; getting sold. Sure you know friends that sold on their own in a short period of time, and tell you they got the price they wanted. That was probably in a different market, when there were far fewer homes for sale. To ignore current market conditions may cause you many extra months on the market, and a great deal of money.
Price will be the key ingredient for success following agent selection. During a sellers market you can easily identify what buyers have paid for homes like yours in similar locations, and add up to 5% above those sale prices, to establish your asking price. If in a sellers market you would probably sell in a short period of time.
If your market has changed or is changing to a buyers market, if you price as if you're in a sellers market, you will be one of those homeowners with a sign in your yard for 6 months to a year or longer. The Springfield, Illinois market started changing on Oct. 1, 2005 when the inventory of listed homes exceeded 1700 for the first time in history. The growth in inventory has continued through the typically slower listing months. There are currently more homes for sale in January 2006, than there were in any of the first nine months of 2005. The number of unsold homes is at a record level.
With an oversupply of homes for sale it would be a foolish business decision to price as if you remained in a sellers market. Place your emphasis for pricing not on what sold in the recently past sellers market, price based upon what your closest competition is asking. You should not exceed what your competitors are asking or prospective buyers will perceive the competition as the better value, making offers on those homes.
The condition of your home will play a larger role in a buyers market. The home that is perceived to be in the best condition for the price will receive offers first. Don't offer allowances for cosmetic improvements such as flooring, or painting. You are better served by doing the work before you enter the market. The less a buyer perceives they will need to do to the home the better. You cannot walk on, touch, feel, or smell an allowance.
You can also improve the condition of your home, in the buyers eyes, by having the home inspected by a licensed inspector before listing, having repaired any unknown defects, and providing evidence of repairs to the buyer. This does not prevent the buyer from obtaining their own inspection, however it does eliminate any major repair surprises that usually cause the sale to fail. Remember you will have negotiated the sale price before the buyer has their inspection, and the home will never be more valuable to the buyer regardless of what repairs are needed.
If your major mechanical systems are functioning properly but are older, offer a home warranty. Most home warranties will cover the major mechanical components for one year from closing for the buyer. The buyer would be responsible for placing claims, and paying a deductible. You as the seller purchase the agreement, which are very affordable, usually in the $350 to $450 range, and pass ownership of the agreement to the buyer at closing. You are done with the warranty at that point.
Clean sells. Homes are meant to be lived in, until you go to the market, then it must be as perfect as you can get it. We're not talking a Saturday vacuuming and dusting clean, we're recommending a Marine boot camp clean. In addition to clean, there is declutter. You should prepare your home to create a sense of spaciousness in every room and closet. In closets, if you can see 75% of the floor, and have removed the clothes you haven't worn for 6 weeks, that will usually suffice.
If your goal is to get your home sold, price your home competitively at or below your most immediate competition, replace worn carpet, and paint, have a home inspection repairing any discovered defects, offer a home warranty if your mechanicals are older, deep clean and declutter the home. The final ingredient is to hire the best real estate agent you can find through interviews.
The key to selecting the best agent is to trust but verify what the agent tells you what their performance record has been the preceding year, that they provide you with examples of their marketing materials (if not top notch, then neither will your home be to prospective buyers that view the materials), and that they offer you an exit clause in the listing contract if they fail to perform as they agreed, or you're simply not happy with their performance.
In the Springfield market there are currently 4 to 5 home sellers for every buyer in the market, even at a time when homes are selling at a record pace, (sales pending are up 27% YTD). In almost every price range the inventory of homes for sale exceeds 5 months, and in some price ranges there is an excess of 9 months inventory. These conditions follow 8 consecutive years of record setting sales in our market, and the months of inventory for sale are calculated upon sales continuing at that record pace. What will happen if interest rates go up? Will that generate more buyers entering the market; or fewer?
In the Springfield market during the record setting year of 2005, fifty-three percent of home listings sold and closed. Forty seven percent went unsold. With the spike in new listings taking place, it is estimated fifty percent of home listings will sell in 2006, and that may be optimistic if interest rates rise.
For additional information and advice on how to successfully sell a home; visit SpringfieldHome.com, e-mail fritz@springfieldhome.com, call 217-652-7653, request a Fritz Pfister Home Sellers Guide, or register for "The Home Selling Process 2006" seminar to be held Feb. 11, 2006 at the Crowne Plaza Hotel in Springfield, IL., from 1 to 4 PM.
If you need to sell a home in 2006, or know someone who does, we appreciate your referrals. Our service has produced 48% more home seller closing in our market since 2000 than any other agent or team available. If you already know a real estate professional that you recommend, that's great, and we hope they do a good job for you.
It is critical to understand what your market conditions are currently, and which way the market is trending. If homes are selling as fast as they are listed you continue to be in a sellers market with demand stronger than supply.
If you are in a market where the homes for sale appear to be just sitting you are probably in a buyers market with supply exceeding demand. If you understand that you are in a buyers market then you can take positive action that will allow you to accomplish your goal of getting your home sold.
Finding the best real estate agent will help you immensely to goal achievement; getting sold. Sure you know friends that sold on their own in a short period of time, and tell you they got the price they wanted. That was probably in a different market, when there were far fewer homes for sale. To ignore current market conditions may cause you many extra months on the market, and a great deal of money.
Price will be the key ingredient for success following agent selection. During a sellers market you can easily identify what buyers have paid for homes like yours in similar locations, and add up to 5% above those sale prices, to establish your asking price. If in a sellers market you would probably sell in a short period of time.
If your market has changed or is changing to a buyers market, if you price as if you're in a sellers market, you will be one of those homeowners with a sign in your yard for 6 months to a year or longer. The Springfield, Illinois market started changing on Oct. 1, 2005 when the inventory of listed homes exceeded 1700 for the first time in history. The growth in inventory has continued through the typically slower listing months. There are currently more homes for sale in January 2006, than there were in any of the first nine months of 2005. The number of unsold homes is at a record level.
With an oversupply of homes for sale it would be a foolish business decision to price as if you remained in a sellers market. Place your emphasis for pricing not on what sold in the recently past sellers market, price based upon what your closest competition is asking. You should not exceed what your competitors are asking or prospective buyers will perceive the competition as the better value, making offers on those homes.
The condition of your home will play a larger role in a buyers market. The home that is perceived to be in the best condition for the price will receive offers first. Don't offer allowances for cosmetic improvements such as flooring, or painting. You are better served by doing the work before you enter the market. The less a buyer perceives they will need to do to the home the better. You cannot walk on, touch, feel, or smell an allowance.
You can also improve the condition of your home, in the buyers eyes, by having the home inspected by a licensed inspector before listing, having repaired any unknown defects, and providing evidence of repairs to the buyer. This does not prevent the buyer from obtaining their own inspection, however it does eliminate any major repair surprises that usually cause the sale to fail. Remember you will have negotiated the sale price before the buyer has their inspection, and the home will never be more valuable to the buyer regardless of what repairs are needed.
If your major mechanical systems are functioning properly but are older, offer a home warranty. Most home warranties will cover the major mechanical components for one year from closing for the buyer. The buyer would be responsible for placing claims, and paying a deductible. You as the seller purchase the agreement, which are very affordable, usually in the $350 to $450 range, and pass ownership of the agreement to the buyer at closing. You are done with the warranty at that point.
Clean sells. Homes are meant to be lived in, until you go to the market, then it must be as perfect as you can get it. We're not talking a Saturday vacuuming and dusting clean, we're recommending a Marine boot camp clean. In addition to clean, there is declutter. You should prepare your home to create a sense of spaciousness in every room and closet. In closets, if you can see 75% of the floor, and have removed the clothes you haven't worn for 6 weeks, that will usually suffice.
If your goal is to get your home sold, price your home competitively at or below your most immediate competition, replace worn carpet, and paint, have a home inspection repairing any discovered defects, offer a home warranty if your mechanicals are older, deep clean and declutter the home. The final ingredient is to hire the best real estate agent you can find through interviews.
The key to selecting the best agent is to trust but verify what the agent tells you what their performance record has been the preceding year, that they provide you with examples of their marketing materials (if not top notch, then neither will your home be to prospective buyers that view the materials), and that they offer you an exit clause in the listing contract if they fail to perform as they agreed, or you're simply not happy with their performance.
In the Springfield market there are currently 4 to 5 home sellers for every buyer in the market, even at a time when homes are selling at a record pace, (sales pending are up 27% YTD). In almost every price range the inventory of homes for sale exceeds 5 months, and in some price ranges there is an excess of 9 months inventory. These conditions follow 8 consecutive years of record setting sales in our market, and the months of inventory for sale are calculated upon sales continuing at that record pace. What will happen if interest rates go up? Will that generate more buyers entering the market; or fewer?
In the Springfield market during the record setting year of 2005, fifty-three percent of home listings sold and closed. Forty seven percent went unsold. With the spike in new listings taking place, it is estimated fifty percent of home listings will sell in 2006, and that may be optimistic if interest rates rise.
For additional information and advice on how to successfully sell a home; visit SpringfieldHome.com, e-mail fritz@springfieldhome.com, call 217-652-7653, request a Fritz Pfister Home Sellers Guide, or register for "The Home Selling Process 2006" seminar to be held Feb. 11, 2006 at the Crowne Plaza Hotel in Springfield, IL., from 1 to 4 PM.
If you need to sell a home in 2006, or know someone who does, we appreciate your referrals. Our service has produced 48% more home seller closing in our market since 2000 than any other agent or team available. If you already know a real estate professional that you recommend, that's great, and we hope they do a good job for you.
