Real Estate Q&A: Know when you’re asking too much for your home
YOUR JOURNEY HOME
Free Press Real Estate Columnist
Q: My mother has her house for sale in Grand Junction. Her Realtor, a long-time family friend, gave her a suggested price and she insisted on pricing the house about 15 percent more than what her friend suggested. The house has been on the market more than three months. Mom has not been willing to listen to the Realtor, so do you have anything to suggest that, as her daughter, I may be able to say to help get the house sold?
A: It is very thoughtful of you to be watching out for your mother’s home selling situation. You also already touched on the main issue, which is price.
Houses are just like anything else we buy — we compare prices as we shop, and many people are very price conscious — with everything from food to houses.
When prospective buyers are looking at homes for sale they are comparing much more than just price: Location, condition of the carpet, age and condition of the roof, pet odors, 1970s counter tops and avocado green appliances, bathrooms, and more. No two buyers are comparing those factors in exactly the same way, but they are all looking the same way at price. Buyers want the most features, benefits, amenities and condition for a price lower than other houses on the market.
Often sellers dig their heels in at a certain price based on what they owe, what they “think” the house is worth, and what the neighbor’s house sold for recently among other reasons. The problem with that is in a market like ours — where buyers are not pressed for time to buy — is that buyers feel that they are in control of the purchase offer and ultimately the buying-selling process.
If a house has not sold for three months, the message from buyers is that it is overpriced. In our market the only way to counter that is with a price adjustment. In Metro Denver, one of the hottest real estate markets in the country in 2014, values may have risen to meet your mom’s price in three months. However, in the Grand Junction market, where we are not seeing that kind of rapid appreciation, the only way a buyer and seller meet on price in this situation is by the seller bringing the price down.
Another thing that can be tough for sellers to accept is that buyers do not care how much a seller owes on their house. A buyer is only going to make a purchase offer based on comparisons with other similar homes; not based on a seller’s circumstances.
Contrary to what sellers may think, it is best to price a home based on the comparable sold properties so that they get a purchase offer as soon as possible. In our market, even during the slump years of 2011 and 2012, it has been consistent that homes sell for about 97-98 percent of the listed price on average when the buyer decides that listed price is “right.” Again, in your mother’s case, buyers have said the price is too high. When she listens to her Realtor or you and adjusts that price, the offer she ultimately receives will be on average very close to the asking price.
So, would it not have been better to price it at a market history-supported price to begin with and have received 97 percent of the list price rather than pricing downward three months later?
I hope this has been helpful and I wish your mother the best of success with the sale of her home.
Free Press columnist Doug Van Etten is a local Realtor with Cherry Creek Properties, a Colorado-wide realty firm that recently opened a Grand Junction office. Van Etten has been helping home buyers, sellers and investors accomplish their real estate goals since 1992. To contact him, email DouglasVanEtten@gmail.com.
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