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Selling a home: Get the price right

February 22, 2009|By ARNOLD PLATOU

o What ran Sunday: Why would anyone put their property up for sale now, during what is the worst time to try to sell a house in years?

Location, location, location might be the ruling factor in real estate sales in normal times, but nowadays it's price, price, price.

"In years past, pricing was key but you had other things that carried more weight," said Joan McLernon, president of the Pen-Mar Regional Association of Realtors.

"But in today's market, it is price. If not, it will sit," McLernon said. "The key to selling your house is to have people see it. And it is not a market to test because that just eats your time. Price it right first."

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And, as market data shows, you'd better have patience.

On average, it took 163 days -- more than five months -- to sell a house in Washington County last year, according to Metropolitan Regional Information Systems Inc. (MRIS).

Last month, it took an average of 188 days -- more than six months -- to sell one, MRIS figures show. In January 2008, it took 160 days.

Realistic pricing



So what's a homeowner to do, if he or she has no choice but to try to sell now?

"They have to be realistic on their price," said Lee Downey, a local Realtor for 44 years. "Price is going to determine how quickly their property moves. They're going to have to look and see what their competition is."

Today, that means not only looking at what comparable properties are selling for in your area, but being aware of whether some are about to go -- or have already gone -- to foreclosure.

It also means knowing whether some have been cleared for short sales -- those in which the lender is willing to let a property be sold for less than is owed -- to save the likely loss and trouble of a foreclosure.

"Some communities are more prevalent to foreclosures and short sales than others," said Jim Ward, owner and broker of Advantage Realty in Hagerstown. "But you have to know if you're competing against that kind of pricing."

If so, he said, "you may want to rethink your selling now."

Instead, he said, "You could maybe rent (your house) for a few months. Although, if you look now, even rentals are down."

That's because so many other homeowners who need to sell have turned to renting to help pay their bills. Rents have fallen as the supply of rental housing has increased, Ward said.

One of the first questions a Realtor will ask, especially if you come in fearing foreclosure and wanting to sell your house, is: "Have you discussed this with your bank, your lender?" Ward said. "And, if they say, 'No,' I'm going to say, 'Can you get your banker, your lender on the phone?'"

In fact, he said, if you're behind on your mortgage payments and you think you're going to have to sell, "then you should be contacting your lender right away" to determine whether a short sale is possible.

That will delay the date by which you can put your house up for sale, but these days the lender usually is "very receptive," Ward said.

Finding information



The basic need now for every seller, regardless of whether financial trouble is involved, is to make the listing price realistic to today's market, Downey said.

Realtors use reports like those issued by MRIS to help sellers decide what that price should be.

Homeowners can go on the Internet to www.mris.com/reports/stats and, by clicking on "ZIP Code Statistics," and typing in their own ZIP code, see what the market is in their area.

Information about foreclosure and short sale activity is more difficult to come by.

Since the current home sales crisis began, Realtors have complained that homeowners were too mesmerized by the record price leaps earlier this decade to accept the reality of today's depressed market.

But that might be changing.

"I think people are getting more realistic in pricing of their houses because they're hearing all the negative things in the newspaper and on the radio and on the TV," Downey said.

It's no longer difficult to tell people that their house is worth less than what they owe, Ward said.

"A year ago, it was a lot more difficult because, a year ago, people still had that 2005, 2006 mind-set," Ward said. "But now, they've seen another year of a down market and most sellers are very cognizant of what's going on."

Supply vs. demand



Of the 1,162 houses on the market in Washington County last month, many are priced below $200,000.

According to Downey, who is with Mackintosh Realtors in Hagerstown, 106 of the active listings are priced between $180,000 and $200,000; 112 are between $160,000 and $180,000; and 109 are between $140,000 and $160,000.

These properties "could be half a house to a single house, (and) might even include a mobile home on a lot," he said.

The inventory -- the number of houses on the market -- is itself a problem. The supply is much larger than the demand and more are being put up for sale every month.

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