Monday, November 13, 2006

Tips on Selling in a "Down Market", Pitfalls to Avoid

As I have been saying for some time now, prices are not going up here in Phoenix; nor are they flat; they are, in fact, declining. People are beginning to realize this and the latest figures in the Arizona press back up this assertion. Those folks blaming these reports for depressing home prices need to get their heads out of the sand and face reality.

Having said all that, I am definitely getting the feeling that buyers are beginning to come out of their shells here in the Valley of the Sun. With prices down considerably from the peak, but interest rates still at almost historical lows, buyers, quite rightly, feel that this is a good time to buy. However, they are in a strong position. Unlike recent years, they have plenty of inventory to view, can take their time making their selection, and can expect reasonable sellers to work with them on price and terms. Notice I said reasonable. Too many homes on the market today are so massively over-priced, and the owners are so ensconced in cloud cuckoo land, that they are not really for sale. Oftentimes, one of these owners of overpriced homes will tell you “Hey it gets shown a couple of times a week….” What they do not realize is that shrewd agents are showing the overpriced “turkey” in order to sell the fairly priced home down the same Arizona street.

What is a seller to do? Well, if you have to sell your home, you have to price it accordingly. “Price fixes everything” has always been my mantra and always will be. If you want to sell your Phoenix area home the list price has to be in what I call the “Top-Ten” of lowest prices. In order to sell a home, it has to be shown. It will not get shown, at all, if the price is unreasonable. If you want to sell your home make sure, at the minimum, that you have as many clear photos as possible. You should have a virtual tour. If your agent has neither of these things, fire him or her. Buyers, mostly on the internet, skip over properties without visual representation. You cannot afford to be skipped over.

Finally, in this type of market, watch out for the bottom-feeders. There are people, and agents, who churn out junk-offers by the score at an arbitrary 70-75% of the asking price in the hope of finding desperate sellers. Often, even if you agreed to their low price, they just want to tie up your property until they can find a buyer to sell it to, at a profit, of course.

Also, beware the offers that are 30-35% over asking price in which you kick back excess funds, over appraised value, to the buyer. These almost always involve bank fraud, corrupt appraisers and an excellent chance of a trip to the hoosegow.

Don’t let greed or desperation blind you.

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