by Karlton Press in Blog,Selling. Tagged: appraisal • doctor phillips • economics • home value • inventory • motivation • opinion of value • proper pricing • sale • selling • southwest orlando • value
Believe me, I get it. You’ve been waiting as long as ten years for the market to turn around. You’re hearing about how prices are going up. Realtors are telling you that in 2016 some areas of Orlando had 10% gains.
Whoo Hoo, now is the time to sell! … Yes, in many cases that is true.
Awesome, I can ask a really high price because the market will keep going up at this rate forever!….No. Sorry Sparky, we need to slow down a bit and talk about human behavior.
Yes, last year was an awesome year for appreciation. By some measures, Orlando has moved into the ‘#1 hottest real estate market’ category. Yes, much of Orlando is due for another strong year with appreciation in the 6%-7% range. Unfortunately, that does not necessarily mean your house. All economics are local, and real estate even more so. The trends can break down even to subdivisions, so you really need to be careful when reading about national, state-wide, or even Orlando Metro stats. Not everyone is going up. In my area of Doctor Phillips in Southwest Orlando, poorly priced homes are causing a glut of inventory that has me feeling very bearish on the market. Not only do I not see 6%-7% appreciation for Doctor Phillips, but I actually am afraid of seeing prices go down.
Here is the problem. It really is twofold. We have sellers eager to finally sell their homes after waiting, sometimes for years, for the value to rise. The bigger problem is that inventories are so low that many real estate agents are telling these sellers anything they want to hear to get the listing. The result is that in some markets this toxic combination is creating artificial inventories. Really great homes are simply not selling because they are poorly priced. Motivated, approved buyers are out there, but they are not looking at the homes because the prices are off. Frankly, they think the sellers are crazy. This increased supply means that these homes take longer to find a buyer, and when they do, it is usually at a lower price than they would have fetched if priced properly from day one. So I say, “stop it!”
Sellers, stop being greedy and ask a fair price for your home. It is only worth what someone will pay for it, and what it will appraise for. Statistically, homes sell for 95% of asking price – don’t waste anyone’s time asking anything more than 5% above likely appraised value. If you don’t feel comfortable with your Realtor’s opinion of value, HAVE AN APPRAISAL DONE and then follow it when pricing your home! Pricing too high means you are turning off buyers before they even view. If you don’t have 10 showings and an offer in the first 2 weeks of being on the market, you’ve missed a golden opportunity. Now, the only option you have left is to lower your price and chase the market. Just stop it!
Realtors, I’m calling you out too. Believe me, I understand. You need listings. There are not enough listings out there for the demand. Buyers want houses, but they want realistic houses. I know the game some of you play. You’ll say anything to get the listing knowing that eventually the seller will lower their price and you’ll get a sale. But here’s the deal; by telling the truth up front about what a home is worth, you’ll be serving everyone better – and you’ll get a sale. So just stop it!
Full disclosure time. I’m ready to move up into a new home. While my family and I enjoy living in our neighborhood, we are outgrowing our house. Improper pricing has always bothered me (mostly because I’ve lost out on listings to other agents who are happy to mislead sellers). Now, I see things from the buyers’ perspective. Our house is ready to sell, and I think I already have 1-3 interested buyers…but I have nowhere to go! All the homes in our area that we are interested in are priced as much as 10%-15% too high! So we just sit here waiting for the sellers to get frustrated and lower the price. We are like a large percentage of buyers out there; ready to buy and just waiting for reality to set in. Just stop it! Price it right and your home will sell. If you need or want more money than the market will bear, just wait a bit and try later. Pricing your home anywhere more than 5% above likely appraised value is just poor economics. Just stop it!