Mike’s Real Estate Show

this is an email to Guy Kovner who wrote a front page article on the real estate market highlighting two couples/Home Sellers who are “Trapped” here in the County as they cannot sell their homes. This is my response.

 I disagree with the tenor of your article exclaiming Seller’s are “trapped” in their homes. My last 7 transactions over the past two months had an average time on the market of 14 days. They sold close to 98.9% of the listing price at the time of sale. This is an important phrase which is abused by many in my industry. “Listing price at time of sale” does not take into consideration the many price reductions which came BEFORE the FINAL list price. However, in my case we did NOT have price reductions but priced them to sell at the time we placed them on the market. Both of the parties you highlighted in your article have two thing in common—Equity and Greed!!!

Both Sellers have owned their homes for many years but are making the sale an issue of future retirement. The market doesn’t care about their retirement plans! They still want to get a “Seller’s Market Price”. The Hastings Court folks are trying to get the maximum out of their home by paying less fees by using a for sale by owner assistance real estate company to get it into our MLS. And instead of passing the savings on in the way of realistic pricing, they are maximizing the listing price and not LISTING the home to SELL at the time of market entry. Now they both are gradually dropping the prices piecemeal while never truly getting the home priced right. I call this “chasing the market” and it is a fatal flaw in most seller’s marketing plans. They feel their home is “impeccable”, “has many upgrades”, and “shows so much better than their neighbors”. But this is what Buyers EXPECT today in ALL properties. Hence these Sellers price above the market, not the comparables, but the market, claiming it only “takes one buyer”. Then they say “we’ve reduced our price and no deal!” Truth is they were overpriced to begin with and should have been priced $20,000 below at the TIME of their market entry. But that market has now left them and to be truly competitive they should be $30,000 below the price they set originally. Hence, they never catch up and begin chasing the market. They could have sold for Thousands more earlier but now are still overpriced for the market. And the sad part is both these folks have the equity to do this. They “need” more money! I can’t tell you how many times I have Sellers tell me they “need” to get a certain price to accomplish some future goal. The market does NOT care what you want. With over 3400 listings on the market, up from 1850 listings 9 months ago, you can see buyers have much in which to choose. Sellers who think all it takes is “one” buyer are foolish and unrealistic. Folks who are on the market as long as these two and with so little in price reductions are perceived as stubborn, unrealistic and hard to get to reality. Hence, agents avoid them like the plague. Their Homes “Sell” all the others. Agents point out, “Look what they want for this one—the one down the street is $20,000 less!” Sure the folks on Eve Court got a buyer right off but their buyers had a house to sell. And those buyers probably had to list too unrealistic to give them their unrealistic listing price!! It can be a vicious cycle. I had a home which closed week before last which was priced very aggressively at $589,900. It was on Springwood Court, Santa Rosa, which is in the NorthWest area. Many, many homes for sale in that area and with much bigger square footage. We had all the furniture moved out, a great stager came in and brought HER staging furniture in, the seller redid counter-tops and painted and decorated the exterior. We sold for full price OVER the weekend in 3 days! PLUS—it was a 100% financed transaction! Your bigger story Guy is the amount of “vacant” homes now on the market. Near a 1/3 of all of our listings are vacant with another huge number tenant occupied. What does this mean? Investor’s selling, flippers getting out of the market, foreclosed homes (REO’s—Real Estate owned) and pre-foreclosure folks who have walked from their residences. The foreclosure market is a very ominous, black cloud forming on the horizon. I liken the “loss mitigation” department (this is the pre-foreclosure work out guys) to the poor soul who was way off the beach when the Tsumami hit in Maylasis. That’s your big story.