This reflection is really a continuation of my previous article on January 17, 2007 regarding the state of real estate here in the valley. Little has changed since that article. Our market continues in transition toward a more balanced state in which expectations of buyers and those of sellers are more closely aligned. Good indicators of when that balanced state is reached will be when buyers are more confident and back in full force. They will no longer be leery that they are buying at some “peak” in the market, or that “some bubble is going to burst”, as perceived by their “market experts” – usually their parents, friends, spouse or partner!
Today, there are over 8000 properties for sale in the Coachella Valley, not including the newly built homes that are springing up everywhere. Considering the entire inventory out there, potential buyers certainly do have the upper hand.For starters, be realistic; get informed as to what is happening in your specific market – not nationally, not statewide, or even in the valley, but in your own neighborhood. Understand that what happened last year to the house next door, or elsewhere in your neighborhood, is not relevant in today’s market. Even if your neighbor’s house sold above its list price a year ago, it just doesn’t matter in today’s marketplace. What does matter is what price the comparable houses in your neighborhood are selling for today, or have sold for in the not too distant past, i.e., the last six months.
Also, it really doesn’t matter what you paid for your house, how much you have spent on improvements, or your emotional attachment to it because you raised your family there. These things may be really important to you, but unfortunately, they are not important to a potential buyer. All a buyer really cares about is the value of the house to him or her, and that value is determined by how much the buyer is willing to pay for it today. The challenge for the seller is that he needs to be willing to price his or her home aggressively, that is, to be in line with today’s current prices of homes sold.
First Step – Determine a reasonable selling price
The first step is to get a knowledgeable Realtor to help you determine a fair and reasonable price. An excellent realtor will research the recent sales of comparable houses in your neighborhood to provide you with a market analysis (CMA) and also provide you with an impartial assessment of your property and how it compares to successfully sold properties similar to yours. Your Realtor should also help you understand what happened when houses that were listed didn’t sell, and why. You can often learn as much from a history of the houses that didn’t sell as from those that did.
Second Step – Objectively evaluate the condition of your homeand make necessary changes
Take stock of the condition of your house, both its interior and exterior. The potential buyer’s first impression of your house is the most important one, and you only get one chance to make it a good one. You hear a lot about “curb appeal”, and it really is important because that’s the point where first impressions are formed. So fix what is broken and spruce up what is needed to emphasize the property’s best attributes. To see a check list of the items to consider (for there are too many to list here), I suggest that you click on the Buyer/Seller section of our Web site and review the recommendations there.
One other thing to consider at this point – if you are moving out of your home and it is being sold empty of furniture and decorations, consider having your home staged by a professional. Anything you can do to enhance the appearance of the property will pay handsome dividends when it comes time for prospective buyers to determine the size of their offer.
Third Step – Develop a marketing plan
When you interview professional Realtors to make a selection of one to represent your property, be sure that you get a marketing plan that is specific to the needs of your specific home and neighborhood. Expect that the plan will have a time line that commits not only to what will be done, but also to when it will be done. Hold your Realtor accountable; get a commitment for periodic status reports or reviews of what is working in getting potential buyers through your house and what isn’t. Above all, stay flexible on price and terms. In this transition market, the competition takes new forms all the time. You and your Realtor will have to be nimble to keep up with competition.
Just remember that, in this market, you and your Realtor really have to work at taking your property to prospective buyers. Buyers aren’t just randomly going to walk into your house. How, and in what form a marketing plan unfolds, is left to your Realtor to define. Not all things work in all environments, for all properties. Just make sure you get a plan, and that it is followed.
I think that most everyone would agree that the market is still in its correction phase. We don’t all necessarily agree as to whether it’s a true “Buyers Market” or not, but we all do agree that there are a lot more folks looking today than were looking a few months ago. Now our job as Realtors is to convert them into buyers.
This year, as the market correction runs its course, a more stable and predictable real estate market will emerge. It will be defined by a state in which your house, your neighbor’s house, and other comparable properties are all listed and sold at prices within a few percentage points of one another. At this point, these conditions will again become the norm, not the exception. We will see a correspondence or equalization in what buyers expect and what sellers want.