Emotions of a seller in a buyers market: Part II
In Part I we left off by saying that much of the anxiety that a seller without a buyer feels can be reduced or eliminated if he has the right information and takes action based on the information received. We suggested that you need the following data:
You need an updated CMA (Comparative Market Analysis).
You need all the feedback received from previous showings.
You need a cost analysis of keeping your home a few more weeks (or months) vs selling it now.
You need to know how much exposure your listing is getting (how many buyers know your home is for sale).
You need to know the differences between the homes that are selling and your home that is not selling.
In Part II we will explore the updated CMA and how it will help you.
First off, just what is a CMA? CMA stands for Comparative Market Analysis. Simply stated, it is a snapshot of your listing (the subject property) as it compares to other "similar" listings within close proximity that have either sold, expired and/or withdrawn in the past few months (usually 3-6 months) and all "similar" properties that are currently active (For Sale).
Our local MLS makes it relatively easy for an agent to produce an adequate CMA electronically by inputting the correct data into the program - the key being "correct" data. While I often utilize the MLS program to develop an analysis, it is only one tool I use. Primarily, I use it as a 'checks and balances' tool to see if its analysis concurs with my own.
What should the "updated" CMA include?
The criteria utilized to determine what makes a listing "comparable" to yours.
The date and price of each comparable sale since the time you listed your home.
What features those that sold had that your home does not have.
All comparable listings (not just three or four that the agent chooses to select) and their prices and history of price reductions (if any).
The price "per square foot" for all of the above (in some neighborhoods where all homes have essentially the same features, etc. this factor weighs more heavily than in 'mixed' neighborhoods).
The low/avg/high values for those listings that sold and those still active (two separate charts).
To help our sellers review the info, I also like to highlight the following with different colors:
All listings that have had price reductions and the amount of those reductions.
All listings priced lower per square foot than yours (if applicable).
All listings that are larger than your property but have a lower list price.
All listings that have expired or been withdrawn since your listing date.
So what does this data mean to you and what do you do with it?
What you are looking for are 'trends':
What did the listings that sold have in common?
Were the sold listings priced lower than your listing?
Did those that sold have something that yours doesn't?
Did those that sold "not" have something that yours does have?
What are the commonalities of those listings that expired or were withdrawn?
Armed with all this information, you should be able to determine how to proceed. (Hopefully you have already done everything you can to make your home as appealing as possible - paint, clean, landscape, de-clutter, etc. But, if not you really should make that Priority #1. The amount of time and money spent to do these things will be rewarded when you close on the transaction.)
Assuming that your agent is effectively marketing your listing - especially on the internet - what we are finding, more often than not, is that the list price has not kept up (or should I say "down") with the rest of the market. If competing listings are priced even 2% or 3% less, your listing better have something "special" that they don't have or it won't even be considered. (They will look at the lower priced homes first and if one of them fits their needs they'll make an offer.) If, however, your agent is relying on outdated marketing methods, then that is something that needs to be addressed asap. The VAST MAJORITY of home buyers are searching the internet with and/or without the assistance of an agent.
IMPORTANT NOTE:
If your agent is relying on the old methods exclusively - MLS, house fliers, open houses, print & TV media - then you are missing out on a huge segment of potential buyers. Extensive INTERNET MARKETING is essential today!
What we are seeing, in today's market, is somewhat akin to the old 'gas wars' of the 1970s - you'd drive up to an intersection and see a gas station on every corner... if all are priced within a couple of cents of each other, you pull into the most convenient location. However, if one station drops their price considerably, they capture almost all the business. The others are forced to drop their prices, too, in order to survive. A buyers market is not all that different. If there are a dozen other listings nearly identical to yours and they are all priced considerably lower, the chances of you selling yours first are slim to none... it's just common sense.
You may decide that you simply can't afford to reduce your price (or just refuse to reduce it for whatever reasons). That is your prerogative - take it off the market and wait for prices to rise again if you want. But if you are in a position where you absolutely must sell, then it is time to do what is necessary to get it done.
At least now you have the information you need to make a cognitive decision rather than an emotional one.
For more information visit our website at http://www.BestHomesInJacksonville.com