Price It to Sell Or Pull Your Listing!

Every Monday, I check the number of listings that have gone under contract in the last 30 days.  As of Monday (10/27/2008), 50 homes and condos had gone under contract in the last 30 days out of 2,311 residential listings (home, condo, and multifamily listings) on the Golden Isles Multiple Listing Service (MLS).  This was an increase of 10 from the previous week’s 40 under contract.  Based on the data, a residential listing on the Golden Isles MLS has a 2.2% chance of getting a contract.

When one breaks down the numbers to focus on St. Simons Island market activity, the numbers show 10 listings under contract in the last 30 days out of 896 residential listings.  This equates to a 1.1% chance of getting a contract.  The mainland fares a little better with a 2.8% percent chance of getting a contract on a residential listing (40 listings under contract last 30 days out of 1,415 listings).

The listings that do enter into a contract have list prices that reflect real value to the handfull of Buyers in our market.  Unfortunately, most of the 2,311 residential listings on our MLS are priced too high.  These Sellers say: “well, we are not going to give our home away;” “we have to get $XXX,XXX for our home;” ”we paid $XXX,XXX for our home and we are not going to sell if for less;”  “we have to get $XXX,XXX because we owe $XXX,XXX on our mortgage.”  The Sellers refuse to lower their price to attract buyers and contracts.

The market does not care what the Seller paid, the amount of the mortgage, or what the Seller wants for the home.  Buyers are aware of recent sales prices.  They will pay the same or a lower price for a similar home.  But, in this market, they are not going to pay more for their home.  There are enough Sellers that have to sell who are willing to decrease their list prices to attract a Buyer and an offer.  The Buyers will buy homes owned by these Sellers.

Here’s my point.  If you don’t really need to sell now, pull your home off the market.  Tell your agent to cancel the listing.  Let him or her know that you are going to wait a few years until prices trend higher. 

If you have to sell, then wait no more.  Start moving the price down until you see Buyers showing interest in your home (showings and offers).  Every day you hold on to your overpriced home means lost opportunity for you: more mortgage, tax, utility, and insurance payments; further erosoin  in the value of the home (we will probably see prices go down another 5 to 10%); and the missed chance to buy your next home at a great price and a great interest rate.   The sooner you sell, the sooner you cut your losses.

The choice is simple.  Pull your listing or price it to sell.   The total number of listings will tumble and Buyers will see the “must sell” listings.

Buying a Home in Coastal Georgia? Here’s How to Get a Good Deal

Are you going to be buying a home?  Your timing is impeccable!  There are more listings than ever before and lots of motivated sellers.  Here are some tips to help you find the best buy.

(1)  Go to a local Bank or Mortgage Lender to start your application.  This accomplishes two things.  The lender will tell you that you can obtain a loan and she or he will establish your price range.  If you are new to the area, call or email me and I will give you some recommendations for lenders and points of contact.  Use a local lender.  It is hard to reach some underwriter in Denver when you are supposed to close the next day!  If he or she is in Brunswick, you can go stand on their desk to demand information.

(2) Search the local MLS — http://brunswick.1st-place.com  — in your price range and $15,000 higher.  In this market, you may be able to negotiate some of these higher priced properties into your price range.  Learn what is on the market.  There is a link on my web site that will take you to the local MLS.  You might even drive to some of the neighborhoods that look appealing to you.  If schools are important, go to www.schoolmatters.com to check out the Glynn County system.

(3) Describe to your agent your ideal home or condo and your price range.  Let them know the areas that you favor.   Ask them for print outs on homes matching your description and price range.   Your agent will have more details on homes than you are able to see on the public side of the MLS.

(4) Have your agent set up some showings to see your favorites.  Ask to see no more than 6 homes per day.  Any more and they will all blend together in your mind.  Take notes at each showing and use your digital camera to help you remember the homes.   Try to develop a “top 3″ list of homes you would like to buy.  Remember, no home is perfect.  But, you can try to find the one that has the most positive aspects for you and your family.

(5) Now it is time to prepare your offer.  Ask your agent to run a comparative market analysis on recent sales of homes similar to the one you want to purchase.  This will give you a price range to negotiate for in purchasing the home.  Not all agents are adept at comparative market analysis.  So ask your agent to show you the analysis and explain how he or she identified the price range.

(6) Your offer “strategy” should be to negotiate into the price range defined by the recent sales.  One word of caution.  If you really love the home and no other will do, tell the agent to make a full price or close to full price offer.  In this case, you don’t want to be negotiating for lower while some other buyer comes along and takes the home off the market.  Otherwise, offer a price near the range.  Terms are important too.  If you are offering “all cash at closing,”  close in 2 weeks, a large amount of Earnest Money, and “as is,” the Seller is more likely to accept a lower price.  But, if your terms are contingent on your home selling, 45 days to close, a rigerous home inspection, closing costs, home warranty, and throw in the stainless steel refrigerator and the living room furniture . . . ,  you will have to go higher in price!

(7) If you are successful, congratulations!  If the Seller is oblivious to what homes are selling for and will not negotiate lower (even after your agent shows the listing agent the comparative market analysis), go make an offer on home number 2.

This is a fantastic time for purchasing a home.  Hopefully, these tips will help you get what you want at a reasonable price.