It seems to be happening more frequently than ever these days. Properties are going into escrow with "qualified" buyers and then for some strange reason you'll see them back on the market in a couple of weeks. What's going on?
There could be a variety of reasons. For starters, some buyers will make their best effort to get a property into escrow... sometimes without ever intending on paying the offer price. They'll put a beautiful offer in on the property without having even looked at it and by the grace of their inspections will then adjust their offer based on the findings. In a depressed market like this one, the adjustments can be abused putting a desperate seller back on their heels. When the seller recognizes the deceit, sometimes they'll refuse to accommodate the buyers proposal... but the damage to the listing has already been done. Inspections are designed to flush out those adjustments, but there can be too much capitalization on the weak in a one sided market.
Sellers need to weary of offers that are too attractive. Offers coming in well above the asking price either better be in cash or well justified by the comps. If the home is going to be financed, particularly via FHA or VA, then it's going to have to appraise for the loan amount or more. A smaller down payment is more likely to cause problems with the lender and hence the escrow is more likely to take a dive.
With lending being so stringent these days, it wasn't a shock when a client of mine who had made it to within a week of closing after having all contingencies removed got a call from the lender who was pulling the plug. My client had put a sizable good-faith deposit on the property, paid out of pocket for the inspections and the appraisal, and was even "pre-approved" for the loan when suddenly the lender came back and said that the insurer refused to insure the loan. This created a losing situation for my client and immediately removed control of the sale from us. It took some creative thinking to regain control and get to the best solution, but we managed to resolve the issue. But that's just another illustration of why you're likely to see a property go from "Pending" to "Active" unexpectedly these days.
By Valerie Finholm, FrontDoor.com | Published: 7/10/2008
Incremental price drops give buyers a bad impression, so reduce the price of your home before putting it on the market.
National real estate expert and television commentator Barbara Corcoran recommends that sellers price their homes 15 percent below comparable homes on the market.
"There's nothing sexier than an underpriced house," she said. "The most enticing houses on the market are the cheapest and newest listings."
If your home is languishing on the market, try Corcoran's tips for getting your home sold.
Tip #1: Stay ahead of the curve.
Corcoran knows that her advice isn't popular with sellers. "It's like the doctor giving you bad news that you have to hear," she said.
But drastic measures are the only way sellers can stay ahead as the pricing curve for houses speeds downward, she says.
In a bad market (and Corcoran says this is the worst real estate market she's seen in the 30 years she's been in the business), sellers who overprice or even market-price their homes often end up making small price reductions again and again as similar homes that are priced lower come on the market.
"Nothing smacks of desperation more than incremental price drops," she said.
Chiseling away at the price signals to buyers and Realtors that a house is "stale" or that something is wrong with it.
Tip #2: Don't wait for conditions to improve.
Corcoran advises sellers against "sitting it out" in hopes that the housing market will improve. "You're joining thousands of other homeowners who have also decided to wait," she said.
She predicts the market will continue its slide downward, and those who wait will have to make even more drastic cuts to sell their houses.
Realtors from various parts of the country agree with Corcoran's advice that sellers should underprice their houses before putting them on the market. However, several said a 15 percent cut seemed harsh.
Susie Hatch, a Realtor in West Hartford, Conn., said pricing a house 5 percent below comparable houses is more realistic in the Hartford area market, which hasn't been as troubled as the housing markets in Las Vegas and California.
Tip #3: Find a great broker.
Corcoran and other experts say it's important in a down market for a seller to hire a top Realtor because the top 10 percent of Realtors make 90 percent of the sales.
To find a good Realtor, Corcoran suggests visiting a local real estate office and asking the owner or manager to recommend the best agent for the job. "They will put you in the hands of someone who will get it sold," she said.
Tip #4: Whip your home into shape.
Finally, Corcoran says setting a lower price doesn't mean a seller can skimp on getting their home in tiptop shape before putting it on the market. Clear out clutter and family pictures; they create "visual noise" that distract a buyer from imagining your house as their house.
Five good reasons to sell your home during the holidays Contrary to popular belief, buyers shop for homes all year round, including the holiday season. In fact, sellers who put their homes on the market during the holiday season (roughly between November and January) may have an advantage because there are fewer houses on the market so there's less competition. There are several other reasons to consider putting your home on the market during the holidays:
1. Many home buyers have extra time off during the holiday season so they have more time to look for their new home.
2. Because of the limited supply of homes for sale, sellers may be able to receive a higher purchase offer than expected.
3. Buyers looking for homes during the holidays are usually highly motivated to buy before the end of the year so they can get extra itemized income-tax deductions for mortgage loan fees, interest and pro-rated property taxes.
4. Festive lights and holiday decorations can help a home "show better."
5. Because January is traditionally the month for work transfers, having a home on the market at the end of the year can capture the transferees who may not be able to wait until the Spring to buy a home.
If everyone were to market real estate the same way, how could anyone stand out? With so many agents getting the same marketing training from the big box real estate companies, it can be difficult to find an agent that can make your listing a cut above the rest.
One of the strengths agents have that work with the big box real estate companies is the name brand recognition. But that's about the strongest part of their marketing campaign when it comes to selling your house.
The Placer County Association of Realtors is warning the big box agents that changes are imminent with regard to consumers' behavior. As a result, simply having the ability to put your house in the local MLS database is no longer enough to generate a sale. Consumers are not just putting the fate of their home buying or selling in the hands of an agent, they're being proactive throughout the process... and in some cases paying the agent for their own hard work.
The internet is giving you, the consumer, more tools to manage your own real estate sales. In 2007, 100 million people used the internet as part of their real estate hunt. 75% percent of those efforts were started with Google or Yahoo. Consumers these days want to feel in control while knowing they have the best mentor on their side.
At Durrin Realty we capitalize on both avenues in marketing your home... your listing is marketed not only in the MLS database to local real estate professionals, but more importantly directly to the consumers using the same resources a savvy investor would use. Your listing with Durrin Realty is marketed worldwide, so that anyone, not just those who are moving across the neighborhood, inquiring about the area homes like yours is sure to find your home in their list.
At Durrin Realty we understand the level of service our customers are looking for. We strive to be your partners throughout the real estate acquisition and transfer process. We encourage our agents to serve with the heart of a teacher so that you, the consumer, can make the most informed decisions. Furthermore, we're able to adapt to the needs of almost anyone depending on their experience in the buying/selling process, their motivations, or their learning style.
Whether you're looking to find your dream home or build your real estate portfolio, we're here to help. We'd be excited to be part of your team.
Joshua Durrin
Broker/Owner
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