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Back to Basics July 31, 2006

BubbleBurstYes, you can prevent the bubble from bursting. Yes, you can prevent home prices from tumbling. The market takes a hit when sellers refuse to see the handwriting on the wall, and are too arrogant and complacent to compensate for market weaknesses.

The Seattle area is almost entirely unigue in its ability to sustain home values. But gone are the days when you can ignore the homes’ weaknesses. Gone are the days when you can put anything on market, in any crappy condition, and have people pouncing on it, regardless of look and smell and overall condition.

You can still get a better price than the comps. But you have to pay very close attention to showing your “product” in its best possible light. You can’t waste your Grand Opening by saying, I’ll lower the price IF it doesn’t sell. You can’t say “I’ll make it look better IF someone doesn’t buy it”. “You never get a second chance to make a first impression, was never truer than it is right now.”

Do not let anyone in your house until it is absolutely READY! Do not hit that button that sends you LIVE into the MLS, while you are still getting the house ready for market. Don’t push your price over the comps, unless you know you are at least as good or better than those comps.

The market tumbles when people are lazy and greedy. When they want to price it higher than any property that has ever sold before, and want to do nothing to make it look its best.

This is one of those “Forewarned is Forearmed” messages, because I am seeing things sitting on market because sellers are digging in their heels and saying I want more money and I want to do nothing to get that more money. Nothing will send the market tumbling faster that a lot of signs out there on stale listing.

If you have had your property on market for more than 45 days and it is not sold…wake up and smell the coffee and make some changes, before the volume of properties not selling sends the market into a tumble. Be reasonable, and make changes as needed. If the market tells you “We’re not buying it” in 30 to 45 days…do something about it. Don’t say “I’m not in a hurry to sell”. You don’t have to be “in a hurry” to notice that no one is making an offer, because your house is not in tip top shape, and so won’t sell at this price.

Don’t just lower the price until it sells. Take it off market, get it looking its best, and then bring it back. When you don’t make your house look its best, you drive down prices, and that hurts your neighbors. Be a good neighbor and sell your house at top dollar by doing anything and everything you can to make it show in its best light.

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1. Resource Man - August 6, 2006

Ardell, I read your “Back To Basics” posting and YES you talk a lot of sense. People can react positively when real estate prices begin to tumble.

After reading what you said I thought you (and the blog readers) might be interested in a short article which relates to “Back To Basics”.

Here it is…

Destroy The Greatest Real Estate Myth And You’ll Come Out Better Off!

By Noel Peebles

We’ve all heard it said, “The most important thing in real estate is LOCATION, LOCATION, LOCATION!” As many will say, “it’s the reason why real estate does or does not sell.”

To that I reply, “RUBBISH, RUBBISH, RUBBISH!”

Sure, location is important, but to elevate it to the status of “the most important reason” is in my opinion, unjustified. In truth, there are 4 key factors that determine whether or not real estate sells. They are:

- PRICE
- CONDITION
- MARKETING
- LOCATION

You’ll notice I put location last on the list. Now don’t get me wrong, location is important, but to say it is the most important factor in any real estate sale is just not true! Let me explain…

Of the four, location is perhaps the least important because of one often overlooked point, which is – Location cannot be changed by anyone in the real estate negotiation process. Just think about that for a moment. Location cannot be changed by anyone in the negotiation process. So, unless you can put your house on wheels, it will stay where it is, meaning you (and your potential buyer) must accept the location as a fixed negotiating point.

Now, there are possibly a few exceptions. For example, it is not uncommon to move a house on the back of a truck from one location to another. In fact, I once watched as a multi-level hotel was lifted and moved on rails from one side of a busy city street to the other. It wasn’t a small building, so I couldn’t believe what I was seeing!

Also, without physically moving a property, it is possible in some circumstances to have a property rezoned by the local authorities. It does depend on your laws relating to where you live. However, I have seen properties triple in value when they were rezoned from ‘rural’ to ‘commercial’. But, as I say, the laws are different from country to country.

Anyway, unless you can alter the location or status of the location, you must generally accept the location as being fixed. Which brings us to the other three points – price, condition and marketing. All three are variables that you can control. Here’s what I mean:

1. You can raise the condition of your property to meet your asking price. Or…

2. You can lower your price to meet the condition of your property. And then…

3. You can run a powerful marketing campaign that makes your property stand out from every other property in town.

Do you see what I mean? You can change the price, change the condition and change the marketing… but the location of your property remains static.

So, to say that LOCATION, LOCATION, LOCATION is the number one reason why a property does or does not sell is just a real estate myth. The truth is; price, condition and marketing rate as more important factors in the real estate negotiating process.

For more information http://www.your-real-estate-resources.com/ or http://real-estate-knowhow.blogspot.com/

2. ARDELL - August 6, 2006

Thank you for the comment Resource Man.

The saying Location, Location, Location is advice for a buyer, not a seller.

The only reason location is mentioned when selling, is to suggest that price must match location. If you live on a “double yellow line” street, you may, all things being equal, get a lower price than a comparable house on a less busy street.