Overpriced Homes-Sell Slower and For Less

Overpriced Homes-Sell Slower and For Less If there’s anything we can take away from the plethora of Bank Owned Foreclosures is they certainly know how to price a home to move!

I maintain that you almost always shoot yourself in the foot by overpricing your home. Your home will almost always sale at or above market value by pricing at or below market value.

So why is that? Well think back at when YOU were buying a home. Remember when a “great deal” came on the market and everybody and their agents were “swarming” to the open house? You placed your offer only to find out their were 10 other offers and they were going above the asking price? This “bargain price” created an auction affect and got people excited. THAT is how banks are pricing their homes and if you want your home to move quickly and for the most amount of money, this is a winning strategy.

So why don’t sellers do it? I think it’s because there’s a little voice inside of our head (and pocketbook) that says “what if”.

“What if”- I can get $50K over market value. (even if someone were excited enough about your home to pay $50K over appraised value, their lender won’t loan the money if the value isn’t there. No loan, no buyer)

“What if”- I don’t get multiple offers and I only get one offer (May be still overpriced!)

Often fear (and greed) hold us back from making smart choices! Don’t feel bad though, even Real Estate Agents are guilty of senselessly overpricing their homes. Somehow when it’s our turn to sell all of our “market knowledge” becomes goo and leaks out of our ears! It’s like the hairdresser with bad hair!

The bottom line is, almost always, an Over Priced House will sit on the market longer and sell for less than it should have had it been priced strategically from the beginning.

Copyright © 2010 By Stephen Munson,Munson RealtyPasadena|Overpriced Homes-Sell Slower and For Less*overpriced homes,overpriced house

Bernie and I were talking last night about the biggest difference in the local real estate market between last year and this year.  We decided that it was the public awareness of the 'short sale'.  A short sale is when the lender agrees to accept less than the full balance due when the property sells.  To qualify for a short sale you have to have some kind of a hardship.  Job loss, illness, divorce or payment increase on the mortgage itself all qualify as a hardship. Even though getting through the short sale process can be challenging for all parties involved it provides a way to sell the property and avoid foreclosure.  Historically, a short sale will net the lender 20% more than a foreclosure. As a result, this method of avoiding foreclosure is gaining in popularity with most lenders. As your Realtors, it's our job to first qualify the homeowner as a short sale candidate.  Because the whole process can take 4-8 weeks we need to be sure that we all agree to work together to get the job done.  We usually get two or three calls a week from someone considering a short sale. As CDPE's (Certified Distressed Property Expert) we understand what it takes to solve your short sale problem and are ready to get started whenever you are!  

A new year and a new president.  It going to be interestesting.  This morning I deleted all my old posts because frankly, news older than today is old news! I'm pledging to post most days from here on out for those of you hungry for local real estate news.

I'm disregarding the 'it's going to get worse before it get's better' theory.  This may turn out to be true for for other places but I don't believe it here in Oakland County. With $775 billion dollar stimulus package in the wings plus the second $350 billion waiting to be earmarked I firmly believe 2009 will be a better year for most of us locally.  Some of the things 'real estate' to watch for - lower interest rates, more foreclosure help for homeowners, quicker short sale approvals and more home buyer incentive programs.  We're also keeping our ear to the ground for local grant money we know will be available to get those vacant, bank-owned (REO's) homes off the market in your neighborhoods!  The combination of these factors should bring some serious relief to local buyers and sellers.  Don't hold your breath for prices to go up anytime soon though.  We'll be happy if prices just stop going down!  And down they went last year...I'd guess between 12-18%. The actual numbers aren't in yet. You probably don't know that the number of sale was actually up last year.  Unfortunately, the average and mean prices for homes in this area were down significently.

If there is something in particular that you would like to know about the real estate market in your backyard, please give me a call.  If you know someone who needs help hanging on to their home, PLEASE give me a call.  If you know someone who owes more on their home that it's worth and need to sell, PLEASE give me a call.  If you know someone who wants to make a great real estate investment, PLEASE give me a call!  We are on top of what's happening in the market and we CAN help.  Again.....the number is  248-882-4914 .