Posted on Sunday, December 7th, 2008
There has been plenty of bad news in the real estate market. Both nationally and here in the Twin Cities, homes are selling for less than a few years ago. But that doesn't mean you can't sell your home. In
the first week of December, 62 homes in Dakota county found buyers, and
almost one hundred Saint Paul homes were moved to pending status.
The common theme is that the sellers had priced
their homes to sell for what buyers are willing to pay in 2008. Of
course a lot of homes aren't selling, but that isn't news. A
look at the active and expired listings in the Twin Cities MLS will
make you wonder how many of these prospective sellers have done any
research at all. Many of the active listings and almost all of the expired listings are over priced. The
sellers don't think they are over priced, and they aren't over priced
compared to 2005, but they are over priced compared to what home buyers
are currently willing to pay in the Twin Cities.
Any prospective seller needs to know the list price of their competition, but that's just a beginning. It
seems like many of the sellers who are failing to sell their homes are
looking in the MLS and comparing themselves to other homes for sale
that aren't going to sell either. In other words they
think they've done their research, because they've looked at some data,
but they've been looking at the wrong data. Many of them are looking at the average list price of similar homes, and then pricing their home accordingly. In this market that all but guarantees failure. They need to be comparing their homes to homes that have actually sold. It's also good to look at active listings, but in today's market only the most attractively priced homes are selling. So when looking at active listings, it makes no sense to look at the average price of comparable homes: They aren't going to sell. When
I list a home, the only reason I look at active listings is to make
certain that my listing is priced lower than all but one or two
comparable properties, and that it has more value than almost all
similarly priced properties. If the sellers won't list their home at a price where it has a really solid chance to sell, then I won't list it.
Of course you have heard that when selling a home
you need to have a respected real estate agent perform a comparative
market analysis (CMA). But be sure that you and your agent are looking at the right data. Look
at comparable active listings, but look only for the very best values,
and then make sure you are competitive with these few other listings
that actually are going to sell. If you look at all at the
ones that are priced in the middle of the pack, do it only to confirm
that you are pricing your home so as not to join the pack of homes that
aren't going to sell. Then look at comparable sold listings. You'll be disappointed to see that almost all of them were listed for less than you want for your home. Get over it. If you can't come to terms with it, don't list your home at all. If you want to make yourself feel better, look at the sold price. Even in this market, homes that are priced to sell are doing more than just selling. They are selling for close to full price.
This is an interesting time for Saint Paul area buyers, sellers, and Realtors. But it is important for people to know that homes are still selling, and you can sell your home too!