I’ve mentioned previously that I recently became an investment property owner and believe the market is now ripe for people who have a little extra cash to dive in. There is a new book out that I’ve started reading and it’s excellent. Here’s a supporting book review that I found on Boston.com. Enjoy!
A few weeks ago I was walking around my neighborhood in the West End of Hartford and saw a couple moving into a house. I welcomed them to the block and during our conversation they mentioned that they bought the house in a private sale. This is not uncommon for the West End. People fall in love with the architecture of certain homes and tell the owners that when they’re ready to move to give them a call.
Well, this past week I was doing a CMA for someone in my neighborhood and it turns out that the private sale house that recently sold was a comparable home. So I pulled up the city assessor data to see if the sales price had been recorded yet. It had. And I basically fell off my chair when I saw it. The house closed at a price at least $100,000 LESS than what it would have sold at if it was a public sale, or at approximately 62% of its estimated market value. Ugh. This made me feel sick for the previous homeowner.
Now, I realize that there may be reasons for purposely selling your house below market value. Maybe the buyer is a relative. Maybe the seller is financially distressed and needs to unload the property as quickly as possible. Maybe the seller is filthy rich and just doesn’t care. I don’t believe any of these reasons were the case in this particular situation. I believe the seller just didn’t know the market value of their property.
So, if you are thinking about selling your home on your own, please at least call a Real Estate professional to get an estimate of your home’s value. It is always free and there is no obligation. We understand that some people sell houses on their own, just like some people prefer to fix their own cars rather than going to a mechanic. It’s the nature of the business. However, we would also like to see you get the most for your home, whether you’re going it alone, or using an agent. Because finding out after the fact that you sold your house at 62% of market value, without intending to, will never leave you with warm fuzzies in your belly.
Here’s a lengthy, but interesting, NYT article about Countrywide and how they profited during the past few years; resulting in many of the mortgage industry challenges we’re currently seeing.
Inside the Countrywide Lending Spree
There was an interesting article published in the Hartford Business Journal yesterday regarding local condo sales. For the first six months of this year, condo sales are off by more than 16% in Hartford County compared to 2006. However, the median price is up 1.5% over 2006. Huh? With more inventory sitting out there longer, why aren’t buyers paying less?
My guess is that we are talking median sales price vs. mean sales price. I ran a quick MLS search, and if you compare condo sales prices for the first half of 2006 to the first half of 2007 in Hartford County, the average (mean) sales price is down .5% in 2007. By using the median measurement (half the values below the middle point and half above the middle point), you are able to paint a positive picture.
Moral of this story: always question statistics because they can almost always be spun in a positive or negative light… And if you’re a condo buyer right now, you should have some leverage negotiating a better price. There’s a lot of inventory out there to choose from and sellers are sitting on their condos longer.
The Greater Hartford Association of Realtors recently released their statistics for July. For the year (and July), the number of listings is up and closed sales are down. Add to that the shrinking number of available buyers due to the mortgage industry troubles. So, to put your home sale in business terms, you now have more competition and fewer buyers. Time to differentiate!
1. Most importantly, price your house right. Be sure the agent listing your home gives you recent closed comps, but also shows you the current competition in your price range. If you need a quick sale, and can financially stand it, price at the lower end of the range compared to your competition.
2. Make sure your house is clean and free of clutter, even if you don’t have the most updated house on the block. Cleanliness and neatness go a long way with buyers.
3. Review the pictures your agent will be posting on the MLS, Realtor.com, their company’s website, etc. before they are posted. Do they show your house in the best light? We see many crappy pictures on the MLS on a daily basis (which feeds the other websites), so make sure your agent isn’t doing you a disservice. Good online pictures make buyers want to see houses.
4. Buy a 1 year Homeowners Warranty. It’s like a gift to the buyer and will cost approximately $450 which comes out of your closing costs. It gives the buyer peace of mind and might make your home stand out from others.
5. Try to make your house as available for showings as possible. If you have pets that may need to be crated, see if you can have a friend or family member watch them during the first few weeks of activity.
Hopefully some of these ideas will help you sell quickly.
On a more national note, here’s a great inventory trends graph for the entire US… Click on the checkmark boxes on the left of the webpage to view different city trends.