In my last post, I mentioned that the first part of 2010 had good activity due to the home-buyer tax incentives. There was (and still is) a lot of "inventory", and low interest rates in addition to the tax incentive, so there were a respectable amount of buyers.
I took a listing with a 6-month listing agreement at the end of October of last year. We tested the market at $250,000, and had a little bit of activity, but no interest. When we got to the end of the year, I strongly recommended that the seller lower the price. After all, if there are buyers in the market and a particular home isn't being looked at, it indicates the house is priced too high. The seller wanted to give it a little more time at that price, and even put together a plan to lower the price as time went on. The first "date" for lowering the price came, and the seller decided to hold the price. This went on and on (I have an email trail for proof). Finally, with three weeks left in the listing agreement, the seller decided to lower the price to $239,500, and told me "you have until the end of the month to get it sold, or I'm going to give the listing to another agent". Honestly, at that point it was fine with me. The new price was a good price, but the seller needed to do that earlier in the year - not as the tax credits were expiring and buyers had already made their decisions. Remember, I had pleaded with the seller to lower the price earlier. By the way, there were quite a few repairs that needed to be made also, but the seller didn't want to do them until the home was under contract, which is a whole other issue!
Anyway, the listing agreement expired, and the seller listed with a different agent. The house came back on the market at $235,900. A month later, it was reduced to $229, 500. Another month passed, and it was reduced to $220,000. Two months after that, it was reduced to $215,000. It finally sold at $206,500, after being on the market for a total of 11 months. By the way, the new listing agent was "proud" to have sold it at that price. Really? Oh, and remember the "plan" I mentioned in the previous paragraph? It looks like the seller followed through this time.
For what it is worth, I have numerous reports that indicate there were VERY FEW buyers looking at homes between $200,000 and $250,000 from June 1 until present. Lowering the price as was done did not put the house into a price range where buyers were looking. There were very few buyers at any price point in that range.
What can we learn from this? First of all, homes that are PRICED RIGHT and SHOW WELL sell, no matter how many buyers are in the market. That's a plain and simple fact. The longer a home stays on the market, the more concessions that a seller will have to make (usually monetary). Another lesson is that, whether you like us or not, MOST Realtors will "tell it like it is". We're trained to know what it takes to buy and sell a house, and that's why people hire us. We have access to all sorts of sales and marketing reports, so there is "hard data" to back up a lot of what we suggest. If you're going to use a Realtor (and I hope you will), understand that they are working for YOU and your best interest.
Oh, this sale will probably impact the value of a lot of homes in it's neighborhood, but that's yet another story. And I congratulate the buyers - they got one heck of a deal!!!
Again, Greed Kills!
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