Repricing often caused by unrealistic expectations, not defects
Several years ago, a home listed for sale developed a stigma if it didn’t sell within a month or two. Today, many sellers have homes listed that have been on the market for six months or longer. In fact, it’s so commonplace for it to take a significant time to sell a house that it is no longer a disgrace if a listing doesn’t sell right away.
It’s an irony of the current market that with all the homes offered for sale, many serious buyers can’t find a home to buy. There are often certain types of homes, in certain areas, that just aren’t on the market. These are usually prime properties in excellent condition that have broad-based appeal. When these listings come on the market, they are usually snapped up quickly, despite the otherwise slow housing market.
Many buyers are sitting on the fence at this point, watching the market and waiting for a better time to buy. It’s impossible to time the housing market, so you won’t know precisely when the market will next correct until that correction has already occurred. A market correction can be verified only through hindsight.
Although most buyers feel more comfortable buying in a hot market — even though it may mean paying more — there are some buyers who see a slow market as a good buying opportunity. If you are one of these buyers and you’re having difficulty finding a home to buy, consider the following options.
HOUSE HUNTING TIP: Get to know the inventory of homes available in your target area. Some of these listings will never work for you, either because they aren’t large enough or because they have defects you might not be able to live with, like a lot of stairs to the front door. You can drop these listings from your radar.
Find an agent who specializes locally and who will keep you well informed on local market conditions. Ask your agent to sign you up for a listing alert program that will send you information directly from the multiple listing service when new listings come on the market or when the status of a listing changes.
Of particular interest are listings that are back on the market, and ones that have had a price reduction. If a house that’s back on the market is one you were interested in, find out why the deal fell apart. In the past, it was commonly assumed that if a transaction failed it was due to inspection-related issues, not financing. Today, we’re seeing more transactions fall apart because the buyers were unable to secure financing. A seller who just lost a deal because the buyer couldn’t perform could be receptive to a reasonable offer from a better-qualified buyer.
Don’t assume there’s something wrong with the house if it’s back on the market, or if it has been unsold and on the market for a long time. In a changing market, it’s often difficult to select a list price that will bring about a speedy sale. Keep an open mind about listings that have had price reductions. These could have been mispriced to begin with. If the sellers are motivated, they will reduce the price until it is in line with the market.
Some unsold listings haven’t moved because they need too much work. In today’s market, the most salable listings are those that are in move-in condition. Properties that need work should be priced to account for the work that will need to be done.
THE CLOSING: Fixer homes may be more difficult to sell in the current market. But, at the right price, a buyer with vision will step up to the plate.
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.
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Copyright 2008 Dian Hymer