Dena Land News A
NE WS LE T T E R S E R VI N G
BY L I NDA L A NE- W HI T E – K E LL E R W ILL IA MS RE ALT Y – P AS AD E NA , M Y H O M ET O W N OF A LT A D E NA/ PA SA D E NA A ND O UT L Y I NG A R EA S
C A
Let’s Start With a Higher Price? Let’s Not
September 2007
Linda Lane-White “Singing” Realtor ® CA Lic #01091347 Notary Public In T un e W ith Y ou r N ee d s
445 S. Fair Oaks Avenue Pasadena, CA 91105 Phone: 626-786-1231 Fax: 626-296-1979 www.lindalanewhite.com
Inside this issue: Higher Price?
1
Basic Tool Box
2
Recipe of the Month
2
Backyard Fall Cleanup
2
CMA
2
Ceedub Construction
2
Christmas Tree Lane
3
Recent Area Sales
3
Mortgage Services (sponsor)
4
For Sale
4
Ask An Expert
5
Financial Services (sponsor)
5
September In Dena Land
6
It’s no secret that the real estate market is not exactly what it was last year. Things have slowed down; there are fewer buyers looking, but still quite a few homes for sale. So now may be a good time to revisit one of the ever-unpopular real estate subjects—how to set the listing price. Or rather, how not to do it. Why? Because the price is the number one determining factor of whether the home will sell in a timely fashion or even sell at all. Sellers don’t like to hear what I’m about to say, and some agents don’t like to bring it up. But, I’m all about being up front with my clients., so here goes: the market sets the price, not the seller. What I mean by this is that the seller can’t expect a buyer to show up and pay more than the home’s current value. ―I need to net X amount of money from this sale,‖ is not a good reason for the buyer to agree to a higher price. ―So-and-so’s home sold for this much last year, so mine is worth the same.‖ The buyer doesn’t care. ―I spent this much for all the upgrades, so that justifies my higher asking price.‖ Not really. Your house can’t sell for more than what the current market will bear, and
everything else is far less relevant. Ignore the market, and buyers will ignore your house. Is it denial or belief in miracles that makes some sellers think that, despite what the data shows, someone may still show up and pay the overblown price? I’m not sure, but I
frequently hear something like this: ―OK, let’s start with the higher price, and if we get no bites we’ll lower it later.‖ Oh, how bad this idea is. Any agent who’s been in the business for more than two weeks can tell you that the most activity a listing will get is when it first becomes available. All the buyers that are in the market right now will take a look at it, either in person or just on the MLS printout their agent gives them. If they determine that the seller’s price is unreasonable, they’ll move on and go look at other houses. The seller adjusts the price six weeks later? Too late. The buyers have already crossed this house off their list and they won’t look at it again. Why? Because they’ve forgotten why they crossed it off.
―Didn’t we look at this one already? I can’t remember, but we’ve already ruled it out for some reason. Plenty more to look at, so just forget it.‖ All the seller can hope for now is attracting new buyers that are just starting to look. And that’s a lot fewer people than number of people already looking. What ultimately happens in the ―let’s start high and adjust later scenario‖ is this...The seller eventually lowers the price to what it should have been all along, but still no one bites. The seller, starts to get nervous, and maybe offers an incentive or two. Still no bites. Now the seller has lost a lot of time, and starts to get desperate. Whatever event that prompted the sale (new job, family situation, etc.) is really putting the pressure on the seller. And the buyers start to sense this. And now low-ball offers start to come. What do you think happens next? Either the home sells for less than it should have, or the seller gives up in disgust and decides to wait for a better time. Neither outcome sounds particularly good as far as I’m concerned. So what’s the point I’m trying to make? If the price is right the home will sell. If it isn’t then it won’t. It’s that simple really. And with the market being the way it is, careful pricing is now more important than ever.