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The Fayetteville Observer Real Estate Marketplace Page 14, Saturday, May 4, 2002
Five Key Reasons Some
By Robert J. Bruss Tribune Media Services There's only one word to describe the current home sales market in most cities — HOT! Of course, there are a few local exceptions, usually due to regional economic problems. But the nationwide home sales market is so strong, the National Association of Realtors predicts total home sales in 2002 will equal or exceed 2001, which was a record year. Current low mortgage interest rates are obviously a major factor in this optimistic forecast. Today is a great time to be a residential sales agent or a home seller. Yet, perhaps you've noticed some homes in your neighborhood aren't selling. Here are the five key reasons why, even in the current hot market:
1. The home is overpriced. This is the primary reason some homes don't sell. Buyers are not dummies. After spending a week or two in the local home sales marketplace, they usually can spot an overpriced (or underpriced) home. If a home is overpriced, buyers often won't make purchase offers. And their buyer's agents usually won't even show them such homes. If a home doesn't sell within 90 days, unless local economic conditions are bad or the home has another serious drawback, such as a railroad track in the backyard, the residence is probably overpriced. Market values of homes depend on recent sales (not asking) prices of nearby, comparable homes. For this reason, sellers need to keep up-to-date on actual sales prices of neighborhood homes like theirs.
2. The home's condition. Smart sellers get their residences into tip-top "red-ribbon deal" condition before exposing them to the market. That doesn't mean making extravagant improvements. Most residences usually just need a fresh coat of paint inside and outside, serious cleaning and repairing, new carpeting, and perhaps minor fix-up, such as new light fixtures and landscaping "refreshment." If the home is hopelessly outdated, take that into consideration when setting the asking price. But let the buyer remodel to his or her taste. Surprisingly, there are many buyers looking for fixer-upper homes for sale at bargain prices.
3. The home has incurable defects. "There's a buyer for every home, but at the buyer's price" is an old but very true real estate motto. Some residences have incurable defects that cannot be corrected, and these defects must be considered when setting the asking price. For example, a few days ago at a local coffee shop, I met an old friend who finally bought his first home — a small condo. He told me what a bargain he got. But then I asked, "Where is it located?" He gave me the address. Even though it's right next to a busy freeway, he's very happy. His purchase price obviously took into consideration the condo's incurable noisy location defect. Too often, sellers don't consider the incurable drawbacks of their residences because they have become immune to them. But buyers instantly spot such drawbacks, called "functional obsolescence" by appraisers. Examples include a very bad floor plan, location in a high-crime area, and unattractive amenities, such as a tiny yard or small rooms.
4. The listing agent is the obstacle. As in any profession, there are top-quality people and " others". To be polite, some agents are "out of touch" and are more of a hurdle to home sales than a help. Every community has these few "difficult" agents, whom other agents, representing home buyers, dread encountering. However, many of these difficult agents are old-timers who obtain listings because they know so many sellers in the community. Surprisingly, sellers usually have no clue they listed their home with one of these unpleasant agents. For this reason, smart sellers list only for 90 days. If the home hasn't sold by then, usually either (a) it is overpriced or (b) the listing agent is an obstacle.
5. Poor marketing. The home sale marketplace has changed radically in the last three years. Depending on whose statistics you believe, between 40 percent and 70 percent of buyers begin their quest on the Internet Any listing agent who doesn't put all their listings (a) into the local Multiple Listing Service (MLS) and (b) on the Internet is missing a huge source of buyers. Amazingly, some listing agents think all they need to do is get a seller's listing, put it into the local MLS, and wait for another agent or buyer to learn about it. Fortunately, most MLS listings are now available on the Internet at www.realtor.com. But that's not enough. Successful listing agents know more marketing efforts are required to sell most homes. The best agents use aggressive additional marketing plans, such as their own Web site, local mailings, relocation marketing to attract out-of-town buyers, open houses and newspaper advertising. Expensive homes deserve additional promotion such as Internet virtual tours, color brochures and realty magazine ads.
Conclusion. In most communities, today's home sales market is excellent. If your home is listed for sale with a real estate agent and it doesn't sell within 90 days, something is seriously wrong. Maybe it is overpriced. Perhaps it has incurable defects, which should be reflected in the asking price. Or maybe you listed with an ineffective agent. The obvious solutions are either to change the marketing methods or to switch to a better listing agent.
Member, Chamber of Commerce
Alotta Properties, Inc. 2009 Hope Mills Rd., Fayetteville, NC 28304 Phone # (910) 426-7492 |
