They key to a successful sale must take into consideration the current neighborhood absorption rate.
In a sellers market, absorption rate may have played a factor into a sale but not as much. What is an absorption rate you ask? Well, it's a tool that your real estate agent should take into consideration when pricing your home.
If you were in need of getting your home sold in less than 6 months, it may be less than a 50-50%. With current market conditions telling us that the average time to get a home sold in the Metro-Detroit area is about 7 months, there is more to pricing a home than simply pulling sales that took place in a neighborhood recently. You must consider the fact that on average many neighborhoods have seen a decline anywhere from 1-3% PER MONTH. So pricing your home is especially important. Taking into consideration the neighborhood absorption rate is key. Whatthis means is that if you currently had 12 properties in a neighborhood that were activily for sale and there have only been 6 sales take place over the past 6 months then what you would do is take the 6 sales and divide it into the 12 that are available to get a 12 month supply of homes. If you had 6 sales over the past six months with only 2 homes that were currently available, you would end up with a 2 month supply of homes and could therefore be more aggressive in your asking price.
Once you have taken into consideration, the neighborhood absorption rate you can better assess your chances of actually selling and where your pricing needs to be. Another very important step to take is to actually run each of the available homes for sale and find their true history. (Some homes are marketed by one agent, then taken off the market and re-listed with another agent.) This tends to throw off the true marketing time. By looking at the entire marketing time, you will also prepare yourself with all the available facts. Lastly, in a declining market like what Metro-Detroit is facing, you only need to look at the number of available properties in a neighborhood. Base 90% of your pricing strategy on actual sale OR you will find yourself chasing the market and constantly having to reduce your price. This strategy will only hurt you and you will end up having to accept an offer for even less than if you had just priced it aggressivily in the first place.
Of course none of the above will make any difference whatsoever if you list your home with just any agent. Consider interviewing several agents. NEVER hire an agent based upon a fee that they charge. Rather, you should focus on the value that an agent brings to the table which includes actual market knowledge, and sales as well as a unique marketing plan that gives you (the seller) a total marketing plan which will give your home worldwide exposure and increase the demand. Here is just one example of what is available to real estate agents so demand the very best: http://www.1043northvermont.com/
DON'T LOOSE SIGHT OF THE BIG PICTURE!
Recently, I have had numerous prospective sellers tell me that they decided to hold off on their move because they didn't feel they had any equity in their homes.
When you look at your situation, todays real estate market can be slightly depressing to say the least.
When looking at the big picture however, you may have noticed that there are numerous properties on the market that are already priced well below value and previously sold prices. Some are still asking slightly more than what they are worth in todays market and it's unbelieveable BUT there are a few that are still way over (by 15% or more) what they would reasonably sell for in todays market.
An experienced full time agent can help you assess your current situation to help you obtain the greatest amount of money for your current home AND, help you acquire a home for a great value.
Here is an example: I just had the honor of working with a client that bought a home in the Royal Oak area 3 1/2 years ago for $232,000. They put 20% down and mortgaged $186,000. They were shocked when reviewing recent comps that showed a value of approx. $185,000 to $195,000. The way they were looking at it, they felt that their down payment was lost. So they made the painful decision to stay put. Luckily (I was referred to them while they were still willing to look at what I had to offer them.) Upon closer look at their situation, we worked through the following scenario. (If they had decided to rent the same home to live in for the past 3 years, rent would have run them $1,350 a month or $48,600 for 3 years of housing.) *And while their home had already been for sale for 5+ months with another agent. I was able to help obtain a buyer in less than 2 months for $194,500. (Please note that this is $11,100) more than if they would have rented for the past 3 years which I believe was a huge win for the seller as so many homes by that point have developed the stigmatta of being a problem property. So they were still ahead of the game and were able to use the tax bennefits by owning a home for the past three years to their advantage.
They have just purchased a home in Troy that sold 4 years ago for $415,000. While the home was in foreclosure and needed some work, the "as-is" appraisal came in at $348,000 and we were able to acquire it for them for just $260,000 which was a $88,000 to $145,000 swing in their favor. So even if we looked at the conservative side and calculated the $88,000 below value, they still had an almost $53,000 swing in their equity possition.
They now own a home that is almost 3 times the size. Long story short... I have been thanked nearly 37 times in the last 60 days for not letting them make a decision to stay put without all the facts. In addition, I have had three referrals already from these grateful clients who have now become friends.
The moral of the story... Looking at the market from only one perspective may hurt you. The big picture is what you need to consider.
A well experienced Realtor can be a major asset to you. Don't select your agent based upon what they charge. Select your agent based upon the value and RESULTS that they bring to the table.
There are many agents that compete based upon the commission that they charge. (I say that this is because they probably don't have anything else to compete on such as experience or even a true marketing plan to get your home sold.) Simply sticking a sign in a sellers front yard today doesn't do the trick.
When you look at your situation, todays real estate market can be slightly depressing to say the least.
When looking at the big picture however, you may have noticed that there are numerous properties on the market that are already priced well below value and previously sold prices. Some are still asking slightly more than what they are worth in todays market and it's unbelieveable BUT there are a few that are still way over (by 15% or more) what they would reasonably sell for in todays market.
An experienced full time agent can help you assess your current situation to help you obtain the greatest amount of money for your current home AND, help you acquire a home for a great value.
Here is an example: I just had the honor of working with a client that bought a home in the Royal Oak area 3 1/2 years ago for $232,000. They put 20% down and mortgaged $186,000. They were shocked when reviewing recent comps that showed a value of approx. $185,000 to $195,000. The way they were looking at it, they felt that their down payment was lost. So they made the painful decision to stay put. Luckily (I was referred to them while they were still willing to look at what I had to offer them.) Upon closer look at their situation, we worked through the following scenario. (If they had decided to rent the same home to live in for the past 3 years, rent would have run them $1,350 a month or $48,600 for 3 years of housing.) *And while their home had already been for sale for 5+ months with another agent. I was able to help obtain a buyer in less than 2 months for $194,500. (Please note that this is $11,100) more than if they would have rented for the past 3 years which I believe was a huge win for the seller as so many homes by that point have developed the stigmatta of being a problem property. So they were still ahead of the game and were able to use the tax bennefits by owning a home for the past three years to their advantage.
They have just purchased a home in Troy that sold 4 years ago for $415,000. While the home was in foreclosure and needed some work, the "as-is" appraisal came in at $348,000 and we were able to acquire it for them for just $260,000 which was a $88,000 to $145,000 swing in their favor. So even if we looked at the conservative side and calculated the $88,000 below value, they still had an almost $53,000 swing in their equity possition.
They now own a home that is almost 3 times the size. Long story short... I have been thanked nearly 37 times in the last 60 days for not letting them make a decision to stay put without all the facts. In addition, I have had three referrals already from these grateful clients who have now become friends.
The moral of the story... Looking at the market from only one perspective may hurt you. The big picture is what you need to consider.
A well experienced Realtor can be a major asset to you. Don't select your agent based upon what they charge. Select your agent based upon the value and RESULTS that they bring to the table.
There are many agents that compete based upon the commission that they charge. (I say that this is because they probably don't have anything else to compete on such as experience or even a true marketing plan to get your home sold.) Simply sticking a sign in a sellers front yard today doesn't do the trick.
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