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I don't understand why more sellers don't price their homes for what their worth, instead of what the banks say they are worth. I don't understand why this continues as it cannot be helping the economy at all. Or do the lenders just think that anything is better than nothing?
I am not talking about way overpricing due to emotional ties and such, just not the ridiculously low pricing that is going on. I am not talking about homes that were purchased at ridiculously high prices and now they are worth less than half that, either. I am talking a fair price for a decent home.
Many homes in my area are so under priced it is ridiculous. 4 BR/2 BA, 1600sq ft going for 125K? I am so sick of hearing, "but the comps...." I think the sellers need to take back the way the market goes. I do not think that 150K is asking too much, but the "comps" say it is. Some of these homes are totally upgraded too. Great for buyers, I am sure, but it is what is keeping the whole housing situation in a rut. Potential sellers don't want to list that low, so they don't. This leaves buyers having to buy shorts or foreclosures. Seems that agents are all into pushing for the short sale now, without even trying to list a bit higher.
It is all just discouraging and for the person who doesn't want to short or foreclose, (myself included, but I know many others too) it is even more discouraging. You want to do the "right" thing, but it becomes increasingly difficult as time passes. People then get ticked off and figure if the bank is going to mess with them, they no longer care about what happens to the bank. I see and hear this time and time again. Sad.
I don't agree with your logic. It is a buyer's market right now. People can get good deals. If someone wants to sell and $125K is the going rate for a comparable home, then that's what they should do. Pricing it at $150K will make it sit on the market for a long time, until they inevitably have to come down anyway.
You simply sound like a frustrated seller. While I empathize, that's simply the reality of the current real estate market.
Not yet a frustrated seller, just in the researching phase of that RE he**. As I stated, I am not talking overpricing a home, because, trust me, even at a price that is fair, I will still lose. But, I think it is a shame that sellers are basically forced into selling at a price that will force them into bankruptcy, short sales or foreclosures.
My point is that if more agents or sellers would list their homes at a fair price, even taking a hit, it would raise the market a bit. I would think that the banks would be happy with that. How can they be happy dealing with foreclosures and shorts? How can they be happy when they won't even consider a short until the homeowner stops payments for some months. Maybe I am missing something here, I don't work in the banking industry.
I don't relish the idea of "stopping payments" just to satisfy a short sale agenda. And even then, you don't know if a bank would accept your short sale. Then what? Come up with the total deficiency? I think a short would not even be a consideration, in the beginning, if that were a possibility.
Like I said, even at the fair price, it would still be a good deal for buyers. I realize that pricing it higher it could sit on the market for a while...that is my whole point...maybe it wouldn't sit for a while if everyone started pricing in that same range.
Thank you for empathizing, my point is that we need to change the current real estate market. It seems it is hurting more than just helping the buyers. Even potential buyers have to wait forever to get answers from the bank on all these shorts and foreclosures. You simply sound like a happy buyer/investor.
Agents can't collude with other agents to force the prices higher and most agents would rather not have to deal with short sales on either end, trust me on that. I've seen isolated pockets of what you are talking about, though. When a particular area hits a moment in time when there are no or extremely few properties for sale (and those for sale properties are in lousy shape) or when sellers just get fed up and are determined to hold out for a slightly higher price, there is an opportunity for the next seller to price their home a little higher. It can't be much higher because it must be able to appraise in order for the buyer to get a loan. Once the next property comes on the market, they see that they can list a bit higher, and on it goes. It is not agents who set the listing or selling prices. The agents bring the historical information to the parties and they decide what to do but, if the buyer wants a loan, they have to stay close to the most recent sales data because that is exactly what the appraisers use.
No seller is forced into BK unless they are underwater and literrally cannot keep up with their payments, usually stacked on top of other personal financial problems.
SS are a pain in the okole to handle. REOs not too bad. If you can think of a way to get the banks to act like reasonably motivated sellers , go for it.
The price of anything is what ever the market will pay. I hope to buy this year and know that I will have to lower the price of my current home to get rid of it in today's economy. The banks are sitting on their own inventory and the invidual can't compete with them. It will be many years before the real estate market begins to climb higher. Realtor fees are a huge problem for sellers so try to negotiate a low commission or use alternative listing methods. It makes no sense to hand a realtor more money than most of us make in a year just for one sale as there is nothing more special about them than a used car sales person. They tell you anything to get a commission.
Move on with your life and don't let the price of a house rob you of your happiness.
My point is that if more agents or sellers would list their homes at a fair price, even taking a hit, it would raise the market a bit.
Kimba, you have to take into account that housing is a free market and prices are controlled by supply and demand. Prices will be high if demand is high or supply is low. Prices will be low if demand is low or supply is high. The value of any house is whatever buyer and seller agree to at the time of sale. If all those other houses are selling at $125K then it's unlikely anybody will be able to move a property in that neighborhood if they're asking $150K.
One real estate agent explained it to me this way and I think her ideas have merit. She said it's difficult to sell a house for other than what it's worth. If you price your house too high you won't get any offers, or you'll get what you might consider low-ball offers (but perhaps realistic ones). If you price your house too low then you're going to get multiple offers and maybe a bidding contest. She said that the end result will be about the same other than the amount of time it takes to sell your house.
We are currently in a buyer's market. The value of any property is whatever it can be sold for. That won't change until either supply goes down or demand goes up. Supply is unlikely to go down any time soon. The market will go up as soon as the US economy starts recovering. Until then the situation is unlikely to change. This situation is beyond the ability of sellers or seller's real estate agents to change.
Realtor fees are a huge problem for sellers so try to negotiate a low commission or use alternative listing methods. It makes no sense to hand a realtor more money than most of us make in a year just for one sale as there is nothing more special about them than a used car sales person. They tell you anything to get a commission.
I don't know what realtor you've been using but I'd love to hear the details upon which you've made your conclusion.
I don't understand why more sellers don't price their homes for what their worth, instead of what the banks say they are worth. I don't understand why this continues as it cannot be helping the economy at all. Or do the lenders just think that anything is better than nothing?
I am not talking about way overpricing due to emotional ties and such, just not the ridiculously low pricing that is going on. I am not talking about homes that were purchased at ridiculously high prices and now they are worth less than half that, either. I am talking a fair price for a decent home.
Many homes in my area are so under priced it is ridiculous. 4 BR/2 BA, 1600sq ft going for 125K? I am so sick of hearing, "but the comps...." I think the sellers need to take back the way the market goes. I do not think that 150K is asking too much, but the "comps" say it is. Some of these homes are totally upgraded too. Great for buyers, I am sure, but it is what is keeping the whole housing situation in a rut. Potential sellers don't want to list that low, so they don't. This leaves buyers having to buy shorts or foreclosures. Seems that agents are all into pushing for the short sale now, without even trying to list a bit higher.
It is all just discouraging and for the person who doesn't want to short or foreclose, (myself included, but I know many others too) it is even more discouraging. You want to do the "right" thing, but it becomes increasingly difficult as time passes. People then get ticked off and figure if the bank is going to mess with them, they no longer care about what happens to the bank. I see and hear this time and time again. Sad.
I don't want to be rude, but if you've never listed or sold homes before, I think you won't understand what happens if you don't follow the comps and price accordingly.
They will absolutely languish on the market.
Believe me, if we real estate agents could dictate the market with our seller, we would. But that's not how it works.
If there are similarly-built and appointed homes in the same area for 10-20k cheaper, why would it seem sensible that we could demand 10-20k more for the same property?
Would you buy a car from a dealership that listed the same car for $x if x was $5,000 dollars more than a dealership next door?
You don't dictate the market, the market dictates you.
Quote:
Originally Posted by Heidi60
It makes no sense to hand a realtor more money than most of us make in a year just for one sale as there is nothing more special about them than a used car sales person
What??? lol
I honestly can say that I wish we realtors were lucky to make that much money. I believe the national average income among realtors is something like $35,000 per year. Among realtors with over 10 years experience, the number is something like $52,000 per year. Do you think that's extravagant?
Please understand that, a) most realtors work really hard for what money they do recieve, 2) Realtor fees don't go to one person, they're split amongst a slew of people that are working hard, spending their own money (and time) to market a house, and c) as an example, on a $250,000 dollar sale, the entire commission would be between $12,500-$15,000. That's then split 50/50 between the listing and the buyer's agent. Now you're at $6,250-$7,500. Both the listing and seller's agent splits with their hiring broker at a commission of between 49% and up. To be simple, let's say the split is 50/50. Now a single realtor has made $3,125-$3,750 on the sale of your home. (I hope you're making more than this per year, by the way). And let's not forget all the expenses that realtors incurred in marketing your property. Expenses during open homes - printed materials, cookies, snacks, drinks; Expenses during broker's opens - printed materials, cookies, snacks, drinks, etc; The association fees that your realtor pays to allow other agents, brokers and consumers into your house costs him anywhere between $500-$1500 per year; newspaper and website listing fees. And what's his time worth? And just like any other honest citizen, your realtor pays taxes.
Being a realtor probably isn't as glamorous as you think it is.
Last edited by llowllevellowll; 02-19-2011 at 11:07 AM..
I don't want to be rude, but if you've never listed or sold homes before, I think you won't understand what happens if you don't follow the comps and price accordingly.
They will absolutely languish on the market.
Believe me, if we real estate agents could dictate the market with our seller, we would. But that's not how it works.
If there are similarly-built and appointed homes in the same area for 10-20k cheaper, why would it seem sensible that we could demand 10-20k more for the same property?
Would you buy a car from a dealership that listed the same car for $x if x was $5,000 dollars more than a dealership next door?
You don't dictate the market, the market dictates you.
I don't think you are being rude. I have not been an agent. I have bought and sold as a homeowner, only, through an agent.
I understand your point, but that is my point, that if other sellers would list a little higher, then your demand for a higher price would be reasonable.
Now, if banks are holding inventory and they keep sliding them out there for dirt cheap, this is a problem for those sellers looking for a fair price.
I suppose it is just wishful thinking on my part that it is time the people start dictating the market, to some degree.
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