Test-Driving a Listing Is a Bad Idea

Real estate has been hit hard in this economy. Homeowners have watched their home values plummet. If you're thinking about selling your home, you need to firmly decide that's what needs to be done: it's definitely not the time for test-driving a listing. Either put the pedal to the metal to sell it now because you have to, or decide to stay in pit row for the next few years.

If you're going to list it, then you need to list it to sell. That means:

1) ...hiring a Realtor who does the math of comparable home sales in your area and gives you realistic advice about the price. You don't want a Realtor who just wants their sign in your yard to get more leads, who goes along with your price suggestion because it's what the other homes in your neighborhood are priced at (if those homes were priced right to begin with, they would already have sold; since they haven't yet sold, they must be priced too high).

2) ...pricing it right.

3) ...hiring a Realtor who advises you to drop your price if you haven't had any potential buyers or offers in 2-3 weeks... and does it again and again until you hit the "right," saleable price and have serious buyers. The idea is to be the first one on the block to sell, not the last. Because days on the market does affect your home's salability - you want to hit that checkered flag at the finish line as quickly as possible.

4) ...forgetting what you paid for it or how much you put into it or how much you still owe on it. If you need to get out of that home by selling it, then all that thinking goes out the window.

From all the research I've done and the classes I've attended, homeowners are going to see their homes drop in price, to the tune of 10% per year, until 2012. Every month that you don't sell your listed home, you're losing .83% of its value. If you list your home right now and it is worth $185,000, it will have lost $18,500 in value by this time next year. It will lose $1,542 in value just by next month. Why?

Remember the "little" issue of the foreclosure debacle? Well, that "shadow market" of over ONE MILLION foreclosed homes are going to hit the listings. People expect to get great bargains when snapping them up. That's great for those buyers... and horrible for a seller. Every time a foreclosed home sells in your area, it drives your property values down. Your home is worth less.

No foreclosures in your area, you say? Well, you don't really know how many of your neighbors are behind in their payments or are already facing foreclosure. You don't know if a builder is going to come in and undercut present home values by developing lesser quality homes. So you really don't know how much your specific neighborhood or town will suffer in the months ahead. You can only control the here and now. You don't want to get stuck at the back of the pack. So stomp on that gas pedal and sell it with the idea of losing as little time, value, and money as possible.

If you've decided to sit tight and stay in place during this "yellow flag" period in real estate, you can know that eventually, things will right themselves. By this time in 2012, the glut on the home market will hit bottom, and we will start slowly building up speed again. By 2015, we should be cruising back at today's prices. And by 2016, we will finally start racing towards an increase in the value of our homes.

At that point, it will be safe to get back out on the track and test-drive that powerful machine called real estate.

Yours in smiles, : )

Abbey

 

 

 

Posted at 12:02PM Nov 23, 2010 by Abbey Turner in Real Estate  |  Comments[0]