August 15, 2010 in Business

Housing slump forces sellers to slash, then slash again

Associated Press
 

NEW YORK – The good news for sellers: Your house will sell. The bad? Only if the price is just right.

That could mean biting down hard and slashing tens of thousands from your ideal listing price if you’re serious about selling. And you should be prepared to get even less than that.

The recently expired tax credits for homebuyers gave sellers a boost. Home sales surged and values edged up. But since the deadline passed at the end of April, housing has faltered. Job insecurity, tight credit and consumer confidence are undermining a sustained recovery, despite the lowest mortgage rates in decades.

In June, sales of previously occupied homes fell 5.1 percent, while new home sales posted the second-weakest month on record. Sellers must set their price with precision or risk languishing on the market. But the vast majority believe their homes are worth more than what their real estate agent recommends, according to HomeGain.com. At the same time, most buyers think for-sale homes are overpriced.

So how do you find the sweet spot?

Analyze your market first. Determine how many houses similar to yours are up for sale. Consider neighborhood, schools, size and price point. The more homes there are, the more it’s necessary to list at the lower end.

So you’ve got the right price, or a price low enough to attract bids. Don’t be disappointed when an offer comes in below the listing price. And don’t send back a token counteroffer.

“Buyers are not interested in back-and-forth negotiations these days,” Phipps said. “They are less emotional and more disciplined. They will walk away.”

If no one shows up for an open house, if no one calls and if there are no offers, then the price is too high. The average discount from the original listing price? Ten percent, according to Trulia.com.

And cut with a machete and not a butter knife. Too many dinky reductions become a scarlet letter on your front lawn and would-be buyers will think you’re not serious.

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