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Look, every market is different, just as every house is different. A seller needs to price within the comps for THEIR neighborhood, period. It doesn't matter if those comps have rolled back to 1990, 1998 or 2008 prices. Price within the comps, then negotiate with QUALIFIED buyers. Buyers who can't qualify are irrelevant; other buyers can. That's just the reality of the world.
If I'm a seller, I don't care about historic anything. I care about what my comps are in my neighborhood right now. That's all that matters. What happened yesterday is irrelevant today. What may happen tomorrow is yet to be determined.
People get priced out of areas all the time. Some people have been priced out of Southern California since the 80s. Will they ever get a chance to buy in Beverly Hills or Santa Monica or Venice? Probably not. Do sellers in BH or SM or Venice care? Absolutely not. Because the comps show that some buyers still can, will and are buying within the very comps that fencesitters object to.
HOLLYWOOD -great post!!! Many buyers are bitter *cough cough*lol and cannot afford the price range so they get nasty and insult people. i.e. above poster!
Being nasty and insulting people is wrong. But as a seller in this market place you need to have thick skin and not take it personally. A polite "no thanks" takes the high road.
You can corkscrew all the way into the ground on the matter of principle. You may win but at what cost?
Sometimes you have to swallow your pride, declare victory and move on. Things could be worse.
But it's a two way street. Go back to the height of the bubble tell me how you would defend the out- of-sync prices sellers were getting for their homes.
What goes around comes around....and greed goes both ways.
I'm not defending anything. I'm a businessperson. Real estate is a business, and I approach buying and selling as a strategy.
Buyers are emotionally wanting prices to drop. They're wishing, hoping and clinging to 1998 prices or 2000 prices like they're a bible. Sellers are looking at their comps and pricing within them as a starting point to negotiation. Who's untethered from reality-- the buyer who wants the seller to price at some arbitrary number that he or she might be able to afford or the seller who wants to price his home for the same price his neighbors just received last month?
I would LOVE to know why KC hasn't "chimed in" with all her data and links to support why all you "SELLERS" are delusional and how "unaffordable home prices are, in comparison to income". Gold dust, hammy, rothbear- you rock. I'll be curious to see if all your posts get butchered as mine have. I am not a seller but believe all that you say is true! Have a good day.
Wow. Don't even know where to start with this one.
Greed. I love how people refuse to look at BOTH sides of this and calling GREED on the person wanting the house for less when isn't it the SAME EXACT GREED for the seller to want top dollar for their house?
Priced right: Best approach to this is based on RECENT comparable SALES in your given area. Then factor in a down market where values are dropping for almost every where so maybe a TAD below or RIGHT at recent comps would be 'priced right'. Is that so much to ask?
People get attached and add value to their house since it was theirs and must be so much more precious than the larger nicers house down the street which sold for less than they are asking. (Isn't that GREED?)
Sure you can bring up insane scenarios of people making $25k a year wanting to buy a $500k home. Sure. But that is not what is happening out there. Homes went up 100-150% in many areas in a few SHORT years while historically they went up 3% (NOT 6%). A price adjustment is in order and is occuring in most areas.
So sit in your overpriced house and call buyers for refusing to overpay in todays market as greedy. Doesn't change the fact that your house will be losing value while you sit.
And HOW is it ripping someone off to make an offer on a house? The seller has to AGREE to the price last time I checked. So they can say no and move on. No one is forcing anyone to move. Unless you can't afford to live in the house in the first place. And that is their fault and not the buyers problem.
Great post. Not sure if you can make it any simplier than that. Now if it would only sink in for those sellers who continue to have their heads in the sand.....
As a seller, I am not desperate, so yes, he can live with the commute for now and we won't take any lowball offers !!
Worked up? It is the buyers that get me worked up when they want something for free just because they cannot afford to live in a more expensive home.
You missed Flat2Mt's point. If you are not desperate to sell and he can continue to commute in the meanwhile, then here's some simple, yet timely advice.
TAKE YOUR HOME OFF THE MARKET SO YOU WON'T HAVE TO DEAL WITH LB BUYERS!!!
Heads in the sand???? IF a house is listed at say 150k and all the houses for sale in the area are priced in the same range, and they are listed correctly for the area sold comps why in the heck would a seller lower their price to what it MIGHT be worth in the future? If you want to buy at a future possible reduced price then by gosh wait till then. No one is telling buyers they have to buy and if you are so worried about what the home will be worth in 6 months then wait 6 months and hope the home you are wanting is reduced and not sold. I cant wait to see what happens when all the deal seekers do when they have to sell, are they going to go back on the market in say 5 yrs and sell it at a low price or are they going to try to sell at a profit???
Heads in the sand???? IF a house is listed at say 150k and all the houses for sale in the area are priced in the same range, and they are listed correctly for the area sold comps why in the heck would a seller lower their price to what it MIGHT be worth in the future? If you want to buy at a future possible reduced price then by gosh wait till then. No one is telling buyers they have to buy and if you are so worried about what the home will be worth in 6 months then wait 6 months and hope the home you are wanting is reduced and not sold. I cant wait to see what happens when all the deal seekers do when they have to sell, are they going to go back on the market in say 5 yrs and sell it at a low price or are they going to try to sell at a profit???
Who is suggesting that? Price at fair RECENT comps or slightly below (to sell sooner than later if NEEDED) and to take into a effect a declining market. This ISN"T the case in many areas.
Well, I certainly didn't mean to start a war here. And no, I am not a greedy, unrealistic, uneducated, underage, Cheerio-eating buyer either (Who eats Cheerios, anyway? I wouldn't even feed my dog that processed stuff!)
All I would like to say is that I am sitting on several hundred thousand dollars of a down payment, a decent credit score, and I would like to HELP this economy by buying a house. But instead, I wait. Because I see that the majority of buyers are still pricing their properties based on:
what they owe, what they paid, what they want, what their XYZ relative thinks they should get, what THEY think they should get, what they need to pay off their HELOC or Home Depot credit card account, what they need to send their kids to college, what they need to pay for that island vacation, and who knows what other factor,
EXCEPT THE FAIR MARKET VALUE OF THE PROPERTY (which is calculated based on VERY RECENT 30-60 day comps, which are 1998-2002 pricing in my area).
This is not rocket science: If you bought your house in 2005 for 500k, and did nothing to it since then, it should NOT be priced at 500k today. Sorry. If you have to bring a check to closing, well, guess what: Everyone's doing it! The houses that are overpriced sit on the market for 6 months to a year. They go through price reduction after price reduction and they still won't sell because by then a buyer thinks the property is old, undesirable, etc. Then these properties come back on the market about a year later as a short sale or foreclosure. So sad. And the housing crisis never ends.
Be a patriot! Help ease the housing crisis and improve the economy. Price your house accurately. Think of how much further along our economic recovery would be if we had a huge run-up in home sales!
Whether or not a certain buyer can get a loan has little to do with the FMV of a home. Banks are lending very selectively. A lot of people who want to buy homes simply aren't qualified for the range they want to buy in. The buyers need to lower their sights, instead of expecting sellers to make up their shortfall.
In other words, if someone wants to buy a $400K home and it isn't happening, maybe the buyer needs to make more, instead of expecting the seller to take less. If a seller is priced within the comps, then there are buyers who find that price range affordable, whether you do or not. The person out of sync isn't always the seller.
I am sorry, Hollywood, but you are totally wrong. The availability of credit has a huge impact on the current FMV of a home.
Prices are based on supply and demand. Where those two points meet, a house it sold at that price.
A key factor in determining the level of demand is the availability and cost of credit. During the boom, as it has been noted, credit flowed easily and cheaply, increasing the demand for housing and pushing up prices.
Now that cheap and easy credit is no longer available, the opposite is happening. Fewer buyers have access to credit, thereby decreasing the demand for housing, putting a negative impact on the price of housing.
Does the individual buyer's situation change the FMV of a specific house? Of course not. But without a doubt, the availability and cost of credit very much impacts the prices of housing.
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Where's KCfromNC when you need her?
