Today’s housing situation creates a moving target for the homeowner who wants to sell, and it is especially difficult for the For Sale By Owner.  One of my key rules for selling is ‘Don’t chase the price down’!  Unfortunately, this is what most sellers (both those using an agent and the FSBO) are doing.  Agents today say $5,000 and even $10,000 price reductions are not affecting the showings for properties.  The reductions need to be $20,000 or more, and much more if the property is upper end.

What does this mean?  The price was too high to begin with.  Last month over 1300 homes sold in the greater Portland/Vancouver Metropolitan areas.  Buyers are out there, in all segments of the residential market, and they are not stupid.  They have plenty of homes to choose from, so the seller who is able to make sure the buyer knows about his home and ‘proves’ his home is the best value is going to get the sale. 

So, how do you price the home correctly?  Here’s some ideas:

1.  Check the tax records for recent sales.  Most counties now have tax records available online.  Make sure you look at the actual ’sold’ dates and take into account the seller probably accepted that price one to three months prior to the closing dates.  The older the data, the less accurate it is.  Also, some tax records are notoriously inaccurate regarding size, bedrooms, baths, etc., so if you see something that ‘doesn’t look right’, don’t put too much weight on that one.

2.  Hire an appraiser.  They aren’t cheap (figure around $400), but they should give you a definite figure ‘at an exact point of time’.  They will take into account most of the specifics of your home.

3.  Call a Real Estate Agent for a CMA.  A lot of agents will probably do it, just on the hope he/she might get a listing.  Your top agents will probably not do it; they are busy enough with listed clients.

4.  Request my Property Investment Profile.  I do these for hundreds of home owners.  They are automated and do not take much time on my part to set up.  I provide them monthly to my sphere who really have no intention of selling right now, but want to stay informed about what the market says about homes like theirs, and I provide them weekly to actual sellers.  I don’t mind setting one up for you, just visit my website at www.OregonFSBOCoach.com to request it.

Here’s the  bottom line.  Whatever price you set, with the amount of buyers available right now you can know pretty quickly whether or not you have priced correctly (as long as you are sure plenty of people know your home is available – that’s what marketing is about).  If you set a price and a week to ten days goes by without activity, your price is too high.  If you get several showings, but no ’second showings’ or offers, your price is too high.

When you are a For Sale By Owner, this situation has a variety of implications:

Is the Agent bringing a Buyer?

When the agent requests the appointment you should ask this question. Not all visits by agents to homes on the market, FSBO or not, include the buyer. 

1. The agent may be previewing homes for someone from out of town, and he/she wants to be sure to take that buyer to only properties that will meet their needs and desires. 

2. The agent may actually be showing the home to a particlular client. 

3. The agent may be just ‘fishing for a listing’, hoping by getting face to face you will decide to list your property.

Does the agent have a Buyer Broker Contract in place with the client?

This is another question you should ask.  On the surface, it may sound like you are trying to find if you can somehow bypass that agent if the contract does not exist, but in reality you need to know if that client has already agreed to provide remuneration to the agent, whether you do or not.  That can affect the price and terms you are willing to accept if an offer develops.  If the agent is ‘taking care of the paperwork’, you should consider legal assistance because the paperwork the agent prepares will most likely favor the buyer; that’s the duty of the agent to the buyer client.

Remember, the agent is a Professional Negotiator.

When the agent is representing the buyer, it will be like playing golf with Tiger Woods.  The outcome is pretty well determined before you start.  Make sure you know what the market says your home is worth, and that you really understand what the terms of the sales contract mean.

So…

The vast majority of buyers use agents when purchasing a home.  You need to be available to that portion of the market.  Just make sure to protect yourself in the process.

Normally I consider the holiday season a great time to have a home on the market.  First, only real buyers are showing up, because there are too many fun, free other things to do if they are ‘just looking’.  Most sellers do not like to add the stress of keeping the home ready to show in addition to all the other activities between Thanksgiving and Christmas.  So only people that have to sell make their homes available.  In other words, everyone is serious.

Why is this year different?  For one, there are so many short sales clogging up the ‘Active For Sale’ status.  Many of these properties have already had an offer accepted but are awaiting lender approval.  Buyers waiting to hear if the lender okays a sale are on the sidelines, sometimes for months.  Also, the glut of bank owned properties mean many vacant homes that are very easy for agents to show buyers; they don’t even require a call to the seller. 

What does this mean to you.  Every buyer is critical.  Make absolutely sure your price is competitive with the homes that are truly comparable to yours.  Keep the exterior part of the property that faces the street as welcoming as possible.  If you get an offer, even if it is ‘lowball’, do not get offended.  Truly evaluate if you can live with it, and if not, do not reject; do a counteroffer…can’t hurt, might help!