Real Estate Insights

Home sales have generally stabilized since the crash in 2008, but home prices are still “up in the air” in many neighborhoods across Santa Clara County. Although foreclosures have diminished, short sales continue to make up a large portion of just about every community’s housing market. So with all the uncertainty, how can today’s sellers who are not facing a distressed sale stand out in their local real estate marketplace?

Here are some realities that any traditional seller who is thinking about putting their home on the market should consider before listing their homes in our current market:

Reality – It will cost you dearly to “chase the market”

Unfortunately, unless you live in the best school districts within Cupertino, buyers are still in control of most markets in Santa Clara County. Added all the national media doom and gloom (talks of “double dip” recession) makes most buyers feel that they are entitled to get a “steal” if the buy right now.

Food for thought - In the past year, about 25 percent of sellers (up from 22% the year before) who initially listed their homes too high ended up having to reduce the price, according to Trulia.com.

So when you’re preparing to list your home, price your home competitively out of the gate. Be sure to discus the market activity in your neighborhood carefully with your Realtor and avoid being tempted to list above fair market value, even if you’re just “testing the water,” as it will surely cost you more over the long-run.

Reality – Buyers won’t pay more for Your house because it has retro-tiled bathrooms

Since home price appreciation is certainly under popular speculation, unless your home has some serious upgrades and advantages over recent sales, be prepared to list at or below your best comparable properties. And with news coming from the National Association of Realtors® (NAR) that the median home price (nationally) fell 5% between February 2010 and February 2011, most buyers will be expecting a discount over previous recent sales unless you can prove why they should pay more.

So, before you rush your home to market, be sure to carefully examine the recent sales activity ion your neighborhood as well as the competition you will be selling against. When it comes down to it, a buyer will choose the best home offered at the best price, so be sure your Realtor walks you through your competition.

Reality - Consider frequent price reductions

During the first 30 days your home is listed on the market it will get the most attention and showings (new listings generate the most buyer traffic), so if you haven’t received any offers during this time then you may want to consider a price reduction. Try putting yourself in the buyer’s shoes for a moment…if a property has been sitting on the market for an extended period of time, wouldn’t you start thinking it must be listed too high, or have some defects?

In order to avoid creating any negative stigmas about your property you should consider making a price reduction plan upfront with your listing agent. Sometimes making a price cut can be extra motivation for buyers to take a second look or attract a new pool of potential buyers seeking a lower price range.

Reality – When you’re selling your home, it’s no longer “your home”

According to a recent NAR article, with the increased level of housing inventory available, more buyers prefer homes that are in move-in ready condition. So if a buyer can’t imagine himself moving into your home the next day, chances are you won’t get top dollar.

So how do you prepare properly? Think “curb appeal, cleanliness and staging…” as these are all key areas that buyers tune into immediately, and considering how first impressions last, if your home is not top shape some buyers may be more likely to turn up their noses. Take extra effort to keep the house in its best shape and be sure to remove clutter and personal accents (like your grandmothers spoon collection hanging in the kitchen, or the life-sized family portrait above the fireplace)…every buyer who walks through the front door needs to be able to imagine that your home is their “new home.”

Work with your listing agent on a plan to prepare your home for sale and discuss the costs and expenses of staging your home. More real estate brokers agree these days that proper staging can actually speed up a sale and increase the final sales price, so be sure to discuss the costs and benefits of hiring a staging professional who can make your home look like it’s ripped from a catalog.

Reality – If buyers can’t see your home they won’t buy it!

You need signs, flyers, open houses, internet presence, and if you’re still occupying the home, you need to be flexible. Think traffic…the more the better!

Your goal, along with the goal of your agent, is to get the home in front of as many possible buyers as possible. Considering that 87% of buyers (and rising) start their home search on the internet, you should ensure that your Realtor can help you come up with a solid marketing plan (including maximizing internet exposure) that will bring the most traffic to your home.

Just make sure that when buyers show up to see the home, they are able to see it! One of the most frustrating aspects that buyers face when conducting their property searches is trying to schedule showing appointments…the more flexible you can be the better chances the right buyer will come through your home soon after it is listed.

Also, think mobile technology – we’re living in an age of instant gratification…if a buyer wants information on your home, they need to receive it quickly or they may lose interest, meaning you lost a potential buyer.

Reality – Buyers will try to purchase your home for the least amount possible

Once your home has been listed for sale your top goal, along with your Realtor, is to generate offers...the more the better! This may mean that an interested buyer may try to make a low-ball offer if they know there haven’t been any previous offers, just keep in mind that you don’t have to accept their offer and you always have the ability to negotiate terms.

However, if a buyer is willing to write an offer then they’re also willing to negotiate… that’s when sellers need to try to set aside feelings of anger or insult and concentrate on the negotiation of terms. And, using incentives, such as agreeing to leave certain appliances or pay for repair work, may get buyers to budge in agreeing to a higher price.

Reality – Buyers today are not in a hurry to buy!

Given today’s low mortgage rates combined with low home prices and high inventory levels, buyers today are surely not in a rush unless they have some personal reasons for purchasing. But, as more realities of the current housing market are relayed to potential buyers, the more likely they will get “off the fence” and purchase, especially since the cost of home ownership increases as interest rates rise, even with falling home prices!