In the spring of 2005, the local real estate market was at an all-time high. Homes in the $200,000-$400,000 price range were easily selling within about two months and even more expensive homes were closing within just three months. Real estate was a solid, strong investment all over Acadiana.
Then the unthinkable happened. It got even better.
Everyone knows the impact of hurricanes Katrina and Rita on our real estate market. But many sellers today are still clinging to the memory of 48-hour sales, offers beyond the asking price, and long lists of back-up contracts. Those fairy tale scenarios are gone, but sellers have not quite come back to grips with reality.
I recently met a homeowner who was convinced he could sell his home himself because he’d seen friends do it in those months after Katrina. He even did some asking around about comparable sales prices of other homes in his neighborhood and then set the price for his home.
“It’s been languishing on the market now for three months,” he told me. “I just don’t get it. Where are all the eager buyers? Has our market gone flat?”
“No,” I assured him. “The market is still vibrant and active. The most important thing is to price your home properly.”
No one likes to leave money on the table in any negotiation, but few sellers can afford the luxury of taking a year to sell their home in the hopes of obtaining what they view to be top dollar. How you position your home from the moment it enters the Multiple Listing Service is the key.
Issues to consider include the amount of negotiation room you leave yourself in determining an asking price and the price range. A home priced at $305,000 will never show up in an online search of the $275,000-$299,999 price range, though your flexibility may dip into that area.
Other factors include the negative perception some homes develop after sitting on the market for several months. Buyers become hesitant and leery of properties that haven’t moved quickly. They ask, “What’s wrong with this one?” In most cases, nothing is wrong with the home. We’re just back into a more realistic market.
In fact, we’re in a changing market. It is crucial to watch sales every week, stay attuned to where activity is shifting and disregard unreasonable comps. It is imperative to know the inventory in your price range, even down to details like the type of flooring, the quality of landscaping, or other features that make one listing more appealing than another. Sellers get caught up in thinking of the energy or memories they have put into a home rather than thinking of it as a product or a commodity.
Taking the time to follow statistics regarding asking price versus sales price or days on the market can also help. For example, homes are currently selling at 2-3 percent below asking price. Homes in the $299,999 and under price range are selling within four months or less, and homes in the $400,000 and upward category can take six to 12 months to close.
Appraisers are playing an even more critical role in the sales process. Unfortunately, their guidelines have changed due to national trends. They have begun to require more comparable sales figures covering longer periods of time in making their assessments.
Inspections, too, can inhibit the smooth sale of a home. They examine the nitty-gritty details of properties and can disrupt or kill the sales process. One young couple who recently listed their home told me they didn’t want to pay for an inspection, and would let the buyers do it. “But what if the inspection reveals a serious problem with your house?” I asked, explaining this fear factor of discovering the unknown was something they needed to get beyond. It’s crucial to discover any potential issues before a house goes on the market, rather have a sale fall apart and lose additional months as you backtrack to repair your home.
Today it is important to make it onto a buyer’s short list because of the availability of inventory. An overpriced home, a poorly maintained home, or an ineffectively marketed home can prohibit that from happening.
We’re back to reality now in Acadiana — but our reality is still extremely good. (Just ask homeowners in Florida or Ohio.) The smart sellers and buyers know it and are making decisions based on that reality (not on misleading comps) and are positioning themselves properly in this market.
Teresa Hamilton of Van Eaton & Romero has been Lafayette’s No. 1 real estate agent in either closed sales, listings or both for more than 10 years — and has been one of Lafayette’s top agents for more than two decades. This representation is based in whole or in part on data supplied by the Realtor Association of Acadiana Multiple Listing Service. Neither the Board nor its MLS guarantees or is in any way responsible for its accuracy.
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