When in doubt- blame the market

by Dan Krell © 2010

In a recent conversation with a home owner, who withdrew his home from the market, I asked if we could talk about the possibility of re-listing the home. My intention was to discuss different aspects of the listing, such as; the price, the amount of buyer traffic, and the types of marketing. The usual respectful responses I have heard in the past include; “no thanks” or “sure, when are you available?” However, this owner’s sharp tongue and cryptic language seemed to put all the blame on the market.

Sure, it’s easy enough to just blame the market when your home doesn’t sell. Unlike the many home owners of the last few years, who were forced to make other plans when their homes did not sell, you are more likely aware of today’s general market conditions [than they were]. So listing your home without analyzing the data to plan and tailor your sale for your local market is just poor preparation on your part.

In today’s market, the primary sources of a non sale are either your agent and/or the listing price.

Did you know that many people do not interview more than one agent to list their home? According to the National Association of Realtors 2009 Profile of Home Buyers and Sellers (Realtor.org) forty percent of home owners chose a real estate agent who was referred to them, while twenty-four percent hired someone with whom they worked in the past.

Let’s face it, your decision to sell your home hinges on information provided to you by your agent. Because much of the market data is interpreted, there is a chance that you can be misinformed (or even malinformed) by any one real estate agent; for this reason, (in today’s market) it is essential to interview at least three agents to get an accurate picture of the neighborhood market, pricing and marketing strategy.

Our natural inclination is to hire the agent who promises us the highest price and with the greatest exposure. However, many experts recommend that before you make your decision, you should talk to several past clients of the agent you intend to hire to get a true picture of their professional abilities. Additionally, a current trend of agent passivity has affected many sellers; many agents have discontinued advertising and dropped open houses from their repertoires. The reality is that you need to get the most accurate and candid picture of your ability to sell without the agent’s salesmanship to get the listing.

Pricing a home has become much more technical because of variance in market conditions, seasonal trends, and home differences- while also keeping in step with frequent changes in lending and appraisal practices. When considering pricing, it’s important to review and compare several agents’ data. Although the point of pricing your home properly is one of the most important items to consider when selling a home today, so much has been written and said about it recently that that I won’t belabor the point. However, consider that if your home is over-priced, home buyers may become alienated because the list price is not in their range of competing homes.

Selling and marketing real estate in today’s environment has moved away from the “sales-y” approach by the ego-centered real estate agent, and evolved into relying on truthful and honest information. However, for those who fail to recognize the weaknesses of their home sale- just blame the market.

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of April 19, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell

Strategies to sell your home in a sluggish market

by Dan Krell © 2008

If you are a considering selling your home this spring, you can expect more of the same from the local real estate market (picky home buyers and lots of competition). You can better position yourself and make your home stand out by doing what many other home owners are doing- returning to the basics of home selling. Homeowners are hiring Realtors to list and sell their homes, as well as making their homes more appealing for prospective home buyers.

Hiring a Realtor can help you decide on a list price as well as executing a marketing plan once the home is listed. Pricing your home appropriately is crucial to a successful sale in this market, so consulting a Realtor early in the decision process to get an understanding of the neighborhood market dynamics will be helpful. Every neighborhood is different and you cannot judge what your home will sell for based on media reports or general statements about market conditions. Having a Realtor analyze your neighborhood listing and sold information will help you understand the trends and prices.

Analyzing the days on market trends to understand the consequences of listing at a higher price is important. Many home sellers make the mistake of listing at a higher price believing that home buyers will make lower offers and ask for closing cost assistance; however, this strategy has left many homes languishing on the market. A more realistic approach is to have your Realtor determine a list/sale price for a 30 day sale, 60 to 90 day sale, and a 120+ sale. Although a 30 day pricing strategy is aggressive and not for everyone, you will see that it makes sense compared to carrying costs (paying mortgage, utilities, insurance, taxes, etc.) of an extended sale.

The Realtor you hire should have a detailed marketing plan to advertise and attract interest in your home. Some Realtors rely on their broker to market your home, while others take a more personal approach to marketing your home. Although marketing strategies vary, you can decide what marketing strategy is best for you based on the data provided.

With pricing and marketing in place, how will you satisfy picky home buyers? Discerning home buyers can be influenced by making the best impression when the home is viewed. To make the best impression, you may need to make repairs or updates. For repairs and update ideas, consider having a pre-listing home inspection, a home energy audit, and hiring a home staging professional.

Having a pre-listing home inspection will allow you to find out what items need repair and which systems need updating. Don’t worry about having to make all repairs; the home inspector will explain which repairs are a priority (due to safety) as well as offering recommendations on system updates.

Since home buyers have become more concerned with energy efficiency, having a home energy audit may reveal areas in your home that need updating or repairing to increase the efficiency of the home’s energy use.

Finally, a home staging professional can create an environment within your home to give a home buyer the best first impression.

Selling your home this coming spring will be challenging. However, being prepared and hiring the right professionals can sometimes make the difference to making the sale.

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of December 22, 2008. Copyright © 2008 Dan Krell.

The Art of Pricing Your Home

by Dan Krell © 2007
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As February gives way to March home buyers make their way out of hibernation, while many home owners are preparing their homes for sale. Some home sellers will list their home with a Realtor, while others will attempt to sell by owner. As the home sellers are making their preparations, one item is still undecided-the list price.

Pricing your home correctly is the key to having a successful sale and will make the difference in going to settlement in a reasonable time or having your home languish on the market for weeks and months.

Although it is true that selling a home is not rocket science; however, home pricing is a science to some and an art form to others. There is a certain knowledge and technique in home pricing as well as requiring a lot of work in the form of research.

If you are presently selling your home, (if you haven’t realized it yet) market conditions are no where near the market conditions of several years ago. Don’t expect your home to sell fast at a higher price and/or in poor condition than other homes in your neighborhood-those days are over.

The first step in pricing your home is to see what is happening in the local market and neighborhood. You can see this by getting a comparative market analysis (CMA) from a Realtor. I would ask several Realtors for a CMA as there may be differences in approach and presentation. A CMA is not an appraisal; however it is a comparison of your home to similar homes. It is important to compare your home to homes of similar style and size. Dissecting the analysis in six, three, and one month segments will show you any market trends.

When looking at the analysis, compare recent sales to currently active homes. Are the current listing prices consistent to recent sale prices and days on market? Is your competition is over priced for present market conditions, or is the market slowing down?

Look at the expired and withdrawn listings too. Try to find out why these homes did not sell and avoid doing the same mistakes. Also, look any pending sales for price reductions and seller concession as these may give you a hint to where you need to be in pricing your home.

Now that you have the analysis, it is important to know your competition first hand. Go visit your competition when they hold an open house. Compare active listings’ condition and amenities to your own home. Does your home compare; is the price reasonable; would you consider buying this home?

Be honest with yourself about your home’s condition and features. Are there amenities that will attract home buyers? Are there any problems or shortcomings that will turnoff home buyers? You will need to adjust for these items accordingly.

Home buyers in today’s market are looking for homes that show well and are reasonably priced. Additionally, many home buyers are in need of closing cost assistance. Don’t expect home buyers to make an offer just because the home is on the market-they won’t. Be realistic, as there are lots of other homes on the market that show well and are competitively priced.

This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of 2/12/2007. (c) 2007 Dan Krell.

Home Selling Tips

Because not all listed homes sell, you should be strategizing how to make the most of your sale. What to do? Here are some home selling tips .

Think about the basics that go into a successful home sale. The first is to price the home according to the comparables in the neighborhood. The second is to consider the condition of the home. The third is to have a marketing plan. And lastly, you should have a close working relationship with your Realtor.

Home selling tips

Of course your home should be priced according to the comparables in the neighborhood, and progress should be gauged with the other homes on the market in the neighborhood. That means besides pricing according to the homes that are comparable, your Realtor should expect results within the parameters based on those sales also. Regardless of what you hear, the seller sets the selling price. Your Realtor is only an advisor providing you the data and opinion.

Sale price

Comparing your home to similar homes that sold is critical in deciding a sale price. Comparables are homes that match your home in style and size. If you have a three bedroom rambler, you should compare your home to other three bedroom ramblers in then neighborhood.  Typically, comparables are restricted within a subdivision or within about 0.5 mile to 1 mile. And sales not older than six months (unless there is a lack of home sales).

Home condition

Why is your home’s condition important when deciding a sale price? If your home has deferred maintenance or hasn’t been updated for twenty years, it’s not going to get the same price as the renovated similar home across the street. Be honest with yourself about the home’s condition.  If your home is not in move-in condition, think about the cost of renovating in the price along with market conditions.  If it’s a buyer’s market, you may have to consider a lower price or the home will languish waiting for a buyer.  If it’s a seller’s market, there are more home buyers willing to buy a home with the intention of renovating it.

Marketing plan

You need a roadmap to success. If your Realtor has not yet presented you with a marketing plan, ask for one. Your Realtor should have a plan of action to sell your home. Putting a sign in front of your home and entering the information in the MLS is not typically enough sell a home. Market conditions frequently change, and your Realtor should have a concrete plan to sell your home. The plan should include not only how the home will be marketed, but how the agent will take you from contract to closing.

Your listing agent

The final aspect that is important in selling your home is the relationship between you and your Realtor. Besides having confidence in your Realtor, you should feel comfortable being honest (for good and bad).  It’s not a good sign if your Realtor is often defensive when you express concerns and needs. Your Realtor, on the other hand, should also be honest, as well as timely with information concerning your home. Besides communicating the activity of the potential home buyers, they should also keep you up to date with the neighborhood market keeping an eye on the other homes on the market.

How will you market your home and what will you do if the market changes? When you are interviewing Realtors to sell your home ask about their marketing plan. Ask about a home pricing strategy.  Ask how your home’s condition affects the price.  Ask how the agent communicates and what you should expect from them.