4 Tips for Setting the Right Sales Price

Sellers think their homes are worth more than their real estate professional recommends, and buyers think these same homes are worth less.

It’s a difficult disconnect that makes selling properties a challenge. Successfully marketing a home requires that the price be set carefully -- or it will languish on the market. Among the considerations:

1. How many homes are for sale in the neighborhood? The more homes on the market, the more important it is to list at the lower end of the scale. "I want buyers to ask why is this house priced so competitively," said NAR President-elect Ron Phipps of Phipps Realty in Warwick, R.I. "I want the answer to be an offer."
2. Take short sales and foreclosures into consideration when pricing. If the competing properties are in lousy condition, they are less of an issue, but if they are well taken care of, yet priced 25 percent below market, they can be a serious factor.
3. Negotiate decisively. "Buyers are not interested in back-and-forth negotiations these days," Phipps said. "They are less emotional and more disciplined. They will walk away."
4. Cut the price when you have to. 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. That means it's time to make a meaningful price cut.

Source: The Washington Post, Associated Press (09/18/2010)

Wave of Foreclosure Sales Could Hurt Prices

Uh-oh...More foreclosures could move onto the market as borrowers fall out of the government's loan-modification program. That, coupled with weak demand, could lead to lower home prices across the board, suggests an article in the The Wall Street Journal.

Over the past two years, the pattern has become clear: the more homes that are being sold by lenders, the faster prices will fall. Ivy Zelman, CEO of research firm Zelman & Associates, says that distressed sales could account for 50 percent of properties sold by the end of the year – unless conventional sales recover.

Neither she nor Glenn Kelman, CEO of Redfin Corp., believe that there will be massive declines in prices because homes are already undervalued in many areas, but Kelman suggests that the decline could be 5 percent to 10 percent.

Should the government intervene again? Susan Wachter, professor of real estate at the University of Pennsylvania’s Wharton School, says that could be necessary if the bank sales trigger a downward spiral, "where price declines are feeding further price declines.”

Source: The Wall Street Journal, Nick Timiraos (09/13/2010)

Watch for more news in my blog later in the week regarding sales in Will County!

54 Million Dollar Mortgage for Tiger Woods

And you thought your mortgage was big! In the week since his divorce was finalized, Tiger Woods has made a new commitment that will make your head spin (it did mine!). According to TMZ, Tiger just signed on to a $54 million home loan to fund the construction on his Jupiter Island mega-mansion.

By my (very) rough math, the payment on a $54 million loan is somewhere in the $300,000/month range. Makes your mortgage seem much more reasonable, now, doesn't it?

If you want to see the homes of some of his new neighbors : http://www.trulia.com/for_sale/Jupiter,FL/price;d_sort/

Looking for a Home-Remodeling Contractor?

Anyone looking for contractor recommendations should check out FranklinReport.com, which compiles customer comments, or Angieslist.com, which charges $5 per month and uses credit card info to prevent multiple reviews from the same person.

If you find a contractor who looks reliable, before hiring him, do a background check. Credit bureau Experian runs Contractorcheck.com, charging $13 for a full report.

Seeking face-to-face personal recommendations is also a good idea.

Source: Money Magazine, Josh Garskof (08/27/2010)