You may have noticed I’ve been writing a lot about home buying lately. True that. It is, after all, a buyer’s market like we haven’t had in a good 15 years. Tis the season, you know. But for every buyer out there, there’s a seller. Actually, for every buyer out there, there’s like 10 sellers. That’s kind of the problem.
There’s a large school of thought that says one reason why home prices have not slid more than they have already is because many folks who would like to sell realize that now is not a good time to do so, and are holding off. If you’re of a certain age and know even a modest amount of people, you probably know a number of people like that – or perhaps, you’re one of those people yourself.
Generally speaking, my advice for people who are considering selling this year is: don’t. Now is not a good time to sell your house. Of course, I need to qualify that six ways from Sunday – actually, now is a fine time to sell your house, if you need to, and if you have one of the few houses that are in hot demand at the moment, which is pretty much limited to fine homes with ocean views or near the beach. If that sounds like your house, don’t worry – it should not be too hard to sell your house. I still don’t think that this is the best time to sell your house even so – but at least these types of properties remain perennially popular, or so it seems.
On my web site, I have a whole section with advice for Santa Cruz homeowners who want to sell their house. To be honest, it’s loaded with articles I got from, I think, the California Association of Realtors. It does have a link to my 30 Day Marketing Plan for Santa Cruz Real Estate, and it also points you to a page where you can go and sign up for my special report, “Insider’s Guide to Selling your Home in Santa Cruz.”
My Insider’s Guide is very good – maybe even great, if I do say so myself. It does go beyond those trite articles you can read anywhere like on MSN House and Home or About.com – yes, it’s true, you really should remove the clutter and put it in the garage or in self-storage. Yes, definitely, mow the lawn and generally speaking, maximize curb appeal. At the very least, your home should be clean and tidy and smell nice.
I’d like to point out a couple of other interesting tidbits, though, which you may not have heard about. Like this article in the Seattle Times, from last year:
[From New study shows which words sell, and which don’t – the Seattle Times]
Words matter. Wars have started over them. Civilizations have collapsed because of them. And it appears the speed with which a house sells might be determined by them.
It is actually a fantastic article, and I suggest you read it. I know what you’re thinking – the “listing remarks” are your Realtor’s responsibility, why should you care? You should care – a lot. Many Realtors put little or no care whatsoever into the remarks, but even if they do put a lot of effort into the remarks, this study shows that what they say really could lower the selling price of your home. No matter which Realtor you chose to help you sell your home, make sure you see every bid of advertising copy, and get your Realtor to fix anything that doesn’t represent your home in its best possible light.
Here’s another interesting thing I came across – it’s an NPR Podcast episode, but here are the show notes:
[From Study Shows Precise Pricing More Enticing to Buyers – NPR]
Researchers at Cornell University say they’ve discovered something strange about the way consumers absorb price information. They say when the price of an item is in a round number, people perceive it as higher than an odd number. In other words, people think a $3,000 car is more expensive than one priced at $3,129.50. The finding has implications for people trying to sell their homes.
When you come right down to it, it’s really all about the price. People often say things like, “My house didn’t sell because it doesn’t have a garage.” Let me ask you this – if the house cost $1, would it sell, even though it didn’t have a garage? Probably, it would have sold for $1. How about $100, or $1,000? Yes, and yes. The problem is not that it doesn’t have a garage. The problem is the asking price was too high for a house that doesn’t have a garage.
Really, it’s all about the price, given the condition, amenities, location, and buyer demand. Getting the asking price right the first time is very, very important. It is much better to set a realistic asking price the first time around, rather than set an optimistic price and “see what the market does.” That may be an OK strategy in an appreciating market (the market may catch up to you), but it’s a really bad play in a depreciating market (the market can easily pass you by on its way down).
Here is an interesting article from NJ.com (yes, New Jersey!):
[From Real estate study finds low list prices work – New Jersey Local & Small Business News]
The study by Otteau Valuation Group measured and analyzed more than 15,000 transactions annually over a period of several years. The same pattern emerged in every price range, regardless of whether the properties in question were entry-level or luxury million-dollar homes: Sellers who priced their home below the market from the beginning, often received a higher price and a faster sale.
So there you have it. OK, New Jersey isn’t Santa Cruz (although, really, New Jersey does have some pretty nice places to hang out, have you been?). But I believe that many of the same principals apply when it comes to pricing strategy. In this market, if you need to sell your home, bite the bullet. Price it right the first time, or you may be find yourself chasing the market downwards for months on end. And that’s not a fun race to run.