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October 8, 2017July 15, 2019

Buyer’s market home selling

Home Buyer’s market (infographic from nar.Realtor)

As winter approaches, many home sellers will be contemplating their next move after their homes have not sold. It is likely that a volatile housing market awaits home sellers during the first half of 2018. If you’re planning to list your home, you should have a selling plan that is able to adjust to market conditions quickly. In other words, know about home selling in a buyer’s market.

The good news for home sellers is that this year’s home sale prices continue to climb, as the September 26th 20-city composite of the S&P Corelogic Case Shiller National Home Price Index (spindices.com) revealed. The national index during July increased 5.8 percent compared to the same period last year, while the Washington DC area realized a 3.3 percent year over year gain. However, there is expectation home sale prices may moderate or even slightly decrease in the first quarter of 2018 because of Fed policy and other market forces.

David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices stated in the release:

“While home prices continue to rise, other housing indicators may be leveling off. Sales of both new and existing homes have slipped since last March. The Builders Sentiment Index published by the National Association of Home Builders also leveled off after March. Automobiles are the second largest consumer purchase most people make after houses. Auto sales peaked last November and have been flat to slightly lower since. The housing market will face two contradicting challenges during the rest of 2017 and into 2018. First, rebuilding following hurricanes across Texas, Florida and other parts of the south will lead to further supply pressures. Second, the Fed’s recent move to shrink its balance sheet could push mortgage rates upward.”

Of course, home sale price indices only show sale prices for homes that sell. And while home sale prices are increasing back to record levels in many areas, the volume of homes sold during 2017 so far is disappointing. According to a September 20^th NAR news release (realtor.nar), August’s existing home sales dropped 1.7 percent. The Pending Home Sale Index for August dropped 2.6 percent, which made the NAR revise their 2017 home sale forecast to be “slightly below the pace set in 2016.” Home sale volume in the first quarter of 2018 may also lag due to continued lack of inventory and anticipated increasing mortgage interest rates. Lawrence Yun, cheif NAR economist, quipped

“The supply and affordability headwinds would have likely held sales growth just a tad above last year, but coupled with the temporary effects from Hurricanes Harvey and Irma, sales in 2017 now appear will fall slightly below last year…The good news is that nearly all of the missed closings for the remainder of the year will likely show up in 2018, with existing sales forecast to rise 6.9 percent.”

Since these are August sales figures from the NAR, it is an unfortunate truth that August sales were not really affected by hurricanes. Mostly because hurricane Harvey hit Texas the very last days of August and Irma hit Florida in September. The main affects of the hurricanes disruption to existing home sales will be seen in September’s statistics. And “missed closings” is a euphemism for phantom closings, because they don’t really exist. So, with regard to sliding home sales, you should take Yun’s “headwinds” of supply and affordability very seriously.

Home selling in 2018, a buyer’s market?

Home sellers positioning themselves solely on this year’s home sale prices may be in for a rude awakening next year. Sellers may feel as if the market is getting soft, however that may change the latter half of 2018 as home prices moderate. Sellers will need to be reasonable. They will need to have awareness of many factors besides home sale prices, including existing home sales volume and neighborhood sale trends. Including home selling in a buyer’s market.

If you’re planning to sell your home, you will need to play to your audience (home buyers), and listen to their feedback. Know how to sell in 2018. Prepare your home before listing it in the MLS by repairing deferred maintenance and possibly making updates. Home buyers have a track record of paying more for a home that has been totally renovated. However, if you don’t completely repair and/or update your home, be prepared to lower your sale price.

Be flexible to quickly adjust to a seemingly buyer’s market. Feedback is highly important to get other’s perspectives about your home. However, take Realtor feedback with a grain of salt. Instead, have your agent collect buyer feedback at open houses. Home buyers tend to be more honest when giving feedback, and it can be especially helpful in a buyer’s market. If the consensus is that the price is too high, the price may actually be too high. If buyers are turned off by the condition and/or curb appeal of the home, consider making repairs or lowering price to reflect the condition. If they are focused on your décor, consider hiring a professional stager to make the home more appealing.

Rather than a soft market, we are experiencing the struggle for a balanced market due to an inventory shortage and sharply decreasing affordability. The last year and a half has been all about the home seller. However, 2018 will be about the home buyer. Home selling in a volatile or buyer’s market can be challenging. If you’re planning a sale, be realistic about your home’s condition and value. Over pricing your home from the start can make your home languish on the market, which could get you a much lower price if it sells.

By Dan Krell
Copyright© 2017

Original published at https://dankrell.com/blog/2017/10/08/buyers-market-home-selling/

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

January 6, 2017November 23, 2021

Greedy home seller tips

Don't be a greedy home seller — Pricing Strategy for a Home Sale (infographic from forsalebyowner.com)

When there is a buzz about home sellers being greedy, you know home sales are doing well. So, not surprisingly, along with last year’s record home sales came the reports of greedy home sellers. Are you a greedy home seller? Or are you adjusting to a market where home prices are increasing?

Greed has developed a bad rap. Surely there is an evolutionary basis for greed. Many believe that early hominids promoted personal and group survival by being “greedy” (although disputed by some). Those who hoarded food, so as to have more than enough, lived through difficult winters and droughts. During times of financial prosperity, greed is looked upon favorably. However, in the aftermath of a recession, greed is thought of as the basis for fiscal calamity. Immortalized in Gordon Geckko’s famous “greed is good” speech in the 1987 movie Wall Street, “greed” is a cinematic vehicle to show the fine line between a healthy desire to prosper and a corrupt drive to have more than enough.

Avoid being viewed as a greedy home seller by creating a realistic pricing strategy. Creating a pricing strategy is an art and a science. When selling a home, you have to determine the list price. There are many factors to consider besides recent neighborhood sales, such as condition of your home, sales trends, mortgage interest rates, economic trends, etc. Like other home sellers, you fall into a conundrum. If you price your home too high, then it will limit potential home buyers who visit. However, if you price your home too low to increase home buyer interest, you may not get the price you want.

Contrary to some assertions that a home’s list price doesn’t play a role in the sale, there is evidence to suggest that it really does matter. Lu Han and William C. Strange determined that a lower list price does increase home buyer visits – but only to a point (What is the Role of the Asking Price for a House? University of Toronto, Rotman School of Management; 2012). They concluded that there is a point at which the home price is perceived to attract too much buyer competition, which may turn off other home buyers. Furthermore, their data shows that there is a negative relationship between a list price and the number of home buyers: meaning that the higher the list price relative to the neighborhood, the lower number of home buyer visits, and vice-versa.

If you fear being a greedy home seller by asking for a high price for your home, there is research to suggest that you’ll let go of the greed in order to make a deal. A 2013 study by Nuno T. Magessi and Luis Antunes looked at how the emotions of fear and greed compete internally (Agent’s fear monitors the spread of greed in a social network; Proceedings of the 11th European Workshop on Multi‐Agent Systems EUMAS, 12-13). They concluded that greed is mitigated by the fear of loss within the confines of a social network. When applied to a home sale, the fear of not selling a home competes with the impulse to hold out for the high price. Deducing further, there is a need to fit within one’s social network by trying to sell a home for the most money, and yet avoid the stigma of a failed home sale.

Don’t be a greedy home seller. RealtorMag described three common home seller mistakes in a 2015 post (3 Mistakes Sellers Often Make; realtormag.realtor.org; April 12, 2015). Included were “Not being honest with the home’s history,” “Not making a better home presentation,” and “Being unrealistic about the home’s value.” About unrealistic home value, it was said:

“…Despite tight inventories of homes for-sale in many markets, sellers still need to be careful not to get too greedy with their list price, say real estate professionals…Home owners tend to get a much lower price when they overprice a home at the onset and then drop the price several times. The longer the home lingers on a market, the more likely it will receive a deeper discount…”

If your home doesn’t sell, you must examine your pricing strategy. Was the price realistic, or were you too greedy?

Original published at https://dankrell.com/blog/2017/01/06/greedy-home-seller/

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April 21, 2016November 23, 2021

Coping with today’s market

It’s that time of year again; the real estate market is getting hot along with the temperature. And that’s about the only thing most are able to predict about this year’s real estate market. Since the Great Recession, early forecasts about home buying and selling trends have typically missed the mark; the trends have varied, sometimes significantly, from year to year. Notwithstanding a very active season, many will be in for a surprise; some will be pleased about their home sale, while others not so much. And if you are selling a home, I’ve provided some tips to help you cope with today’s market:

Home buyers in today’s market

The most important point to remember this year: many home buyers are looking to buy a home, but not necessarily yours. The notion that your home appeals to all home buyers is false. If your home isn’t selling as fast as you thought it would, consider stepping back for a moment to re-evaluate your home and marketing plan.

Most home buyers are looking for a “turn-key” home and won’t settle for just anything on the market. Additionally, most are not willing to spend time and money updating a home they just purchased. Know your home before marketing it and consider making repairs if your home has considerable deferred maintenance.

Prepare your home for today’s market

The next item to remember this year, is that no matter how well your home shows: be prepared for a less than complimentary home inspection. Because there are a number of systems and many components to your home; chances are that there are items that need attention, repairing, and/or replacement – which the home inspector will cheerfully point out. Home inspectors will visually inspect your home, probing structural components when necessary; a detailed report indicates their observations. Most home inspectors are not experts in all aspects of home construction; and commonly recommend other professionals to examine items more closely.

As a home seller, you should understand that buyers in today’s market are under pressure about the investment they are undertaking; and are willing to walk away based on the home inspection findings. Sometimes, it’s not what – but how it’s said that will rattle buyers. Regardless, an uncomplimentary report does not have to blow up the deal. Be prepared for extra rounds of negotiating after the home inspection. Every transaction is different, and your agent should provide guidance on what’s reasonable and appropriate.

A final thought: don’t get greedy, but don’t leave money on the table either. Although inventory remains an issue in a number of areas, don’t feel compelled to over price your home based on the lack of homes for sale. However, don’t be complacent with the “average” home sale price of the neighborhood either. When comparing recent neighborhood sales, you should make pricing adjustments (plus and minus) depending on differences in your home’s age, amenities, size and other factors.

A word of caution: There is a growing trend in the reliance on automated valuations by real estate agents. AVM (automated valuation models) are helpful, but not always accurate. These reports are based on public information about your home and may not include correct information. If your agent recommends a sale price based an automated valuation, you should review the report attentively. If the report confidence level is low to medium, be prepared to carefully review the report and comparables, making adjustments as needed.

Original located at https://dankrell.com/blog/2016/04/21/home-sale-tips-on-coping-with-todays-market/

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June 15, 2010October 5, 2019

Moving day does not have to be stressful

If it’s not the negotiating, the inspections, the mortgage process that makes you uneasy about the buying/selling process, then it’s the thought of moving. Yes, thoughts of moving and all that may go along with it can make even the most stable person break down.

The two main pieces of advice most professionals offer about moving include planning and organization. Planning your move will keep everything in perspective as you create parameters within which all the activities of your move will be completed. Organizing allows you to keep track of your activities and belongings during your moving period.

Much of the stress that is felt during the move stems from feelings of being overwhelmed by thoughts of everything that must be accomplished during your move. Mitigating the stress and emotion of the move is easier when you have a timeline (of actions and goals) that ends on the day you vacate the home. Having a daily goal will allow you to focus on the task at hand without getting distracted. Each day’s goal can be determined by going into each room noting what needs to be accomplished, including any ancillary activities that need to be completed.

An important aspect of a move is organizing what items are coming with you and what items can be thrown out or donated; this should be easy if you have already de-cluttered your home prior to selling. Staying organized during unpacking can be accomplished by making notes of room destinations for boxes; the notes can be detailed to include whose belongings are in each box as well the contents.

Moving to a new home is not a cheap endeavor; you are sure to spend money on the move even if you’re a do-it-yourselfer. The cost of moving can vary depending on the moving company and services you choose. Doing it yourself is not always the least expensive route; the total cost of a truck rental, packing supplies and your time may compare to the price of a limited service mover. If you’re busy, then you might appreciate a full service moving company that will do all of the packing for you. À la carte moving services may be easier on your pocketbook and also eliminates services you may not need. When shopping for a moving company, make sure they are reputable by checking their credentials and ensuring they are bonded and insured.

Portable storage units have become the “hybrid” of moving because it allows you to do all the work of loading your possessions into a container, but the delivery of the storage unit is carried out by a moving company. The storage unit can either be delivered to your new home or placed in storage until you are ready to unpack.

Moving into a new home is often associated with life events- the good ones and sometimes the not so good ones. Besides having to move, life events have their own challenges; so it’s often helpful to recruit as much help as possible, not just for the physical labor but for the emotional support too.

Although planning and organizing can minimize stress and drama, your plan may need to be flexible to adapt to any unforeseen obstacles; as Robert Burns’ poem To a Mouse testifies: “The best-laid schemes o’ mice an ‘men…(often go awry).”

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 June 14, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell.