By: Dian Hymer
December 16, 2002
The real estate market is changing, and in some areas this means a more challenging market for sellers. You can maximize your chance of a profitable sale by avoiding costly marketing mistakes.
Listing with an out-of-area real estate agent can cost you plenty. It’s difficult to get accurate pricing information from an agent who doesn’t work in your local marketplace. Market conditions can vary significantly from one area to the next, and they can change rapidly. When they do, local agents are the first to know.
If an out of area agent bases his pricing strategy on market conditions in his area, not yours, he could be way off base. Recently an Oakland, Calif., seller listed his property for $1,300,000, which was $300,000 over market value. Not only didn’t the property sell, the seller turned down an offer early on that came in at market value. If he’d listed at market value initially, his home would have sold quickly.
Another reason to list close to home is that local real estate agents representing buyers are likely to have a higher opinion of your listing if it’s with a respected local agent. Also, there could be local ordinances or conventions to comply with that an out of area agent might not be aware of. And, it’s important to list with an agent whose company has a strong local marketing presence. This is how you get the exposure you need for a successful sale.
One of the main reasons sellers list with an agent from another area is to get a break on the commission. However, if your home doesn’t sell, you won’t have saved a dime.
HOME SELLER TIP: One of the most common mistakes sellers make is listing at a price that’s based on what the seller wants rather than on what the house is worth in the current market. The price a buyer will pay for your home is based solely on its current market value. The seller’s hopes and desires do not figure into a buyer’s calculation of what the property is worth.
It’s often difficult for sellers to divorce themselves emotionally from their homes. It helps to work with a knowledgeable real estate professional that can advise you on current market conditions and on the value of your home.
Another common mistake is failing to quickly reduce the price of an overpriced listing. Your home is most marketable when it’s new on the market. That’s when buyers and their agents will be most enthusiastic about your listing. If you leave a listing on the market too long at a price that’s too high, enthusiasm for the property wanes. It’s difficult to rekindle that enthusiasm later.
Accurate pricing can be more difficult in a changing market, particularly in an area where no two homes are alike. You may pick a price and discover a few weeks later when your home hasn’t sold that there are other new listings on the market that are priced more favorably than yours. When there’s a lot of inventory, it’s wise to pick a list price that undercuts your competition.
No matter how anxious you are to get your home on the market, don’t start the marketing process until your home is in showing condition. Even if you’re marketing your home as a “fixer-upper,” it should be clean and clutter-free.
THE CLOSING: One of the biggest mistakes sellers can make is putting their home on the market when they’re not committed to selling. If you don’t have a good reason for selling, wait to market your home until you do.
Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers,” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.