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Time to cut your price?
IMG height=214 alt="" src="046p1_lg.jpg" width=149 border=2> "Buyers are taking a wait-and-see attitude," said Blanche Evans, editor of Realty Times, a trade publication. "It's the nature of buyers to seek a bargain." Realtors are advising clients eager to sell to drop their price before the winter sales slowdown. Some area brokers are telling clients to cut their asking price to late 2004 levels. Many sellers are ignoring such advice, suspecting agents are just trying to win easier sales for themselves. Yet a growing number of listings are languishing as buyers and their agents perceive them to be too overpriced to even waste time making an offer on. "I'm encouraging clients to make price reductions as quickly and deeply as possible," Evans said. "My advice on new listings is to price where it's painful now, to avoid it being more painful later." So how do you determine if your property is overpriced, and how much should you shave off if it is? Here are recommendations from several real-estate experts:
Perish the thought First, forget about the piein the-sky figure you felt your house was worth. Just like with tech stocks before their 2000 collapse, paper gains aren't worth crying over or holding out hope you'll regain anytime soon. To make reducing your asking price easier to handle, consider instead how much you've made on your home. Calculate your annualized investment return based on your down payment, not your purchase price. You may be pleasantly astounded.
How much interest has there been in your property? If 10 qualified buyers have been through and it remains unsold, it's time to look hard at a price drop. If you're getting showings but not offers, the buyers think your home is overpriced. If you're not getting showings at all, the professionals think you're overpriced. In the latter case, you may be way overpriced. What's your motivation? If you don't need to move, you can sit tight on your price. If you've bought another home and can't afford to indefinitely pay two mortgages, and you don't want to be a landlord, the question is how much lower should you go? In that case, cut your price at least by the amount of "carrying costs" you'll pay on the vacant house until next spring's selling season. Check the clock How long has it taken to sell homes in your price range in your area recently? If yours has been on the market nearly half that time or longer, a price cut's likely in order. The reason: Buyers a re suspicious about homes up for sale more than a couple of months - even if the only thing wrong with them is they were overpriced to start. A lot to consider How many listings are there in your area compared with a year ago? The larger the inventory, the more choices buyers have and the more pricecompetitive you need to be. So what's new? If there's significant residential construction in your area, you may want to make a pre-emptive price cut. Otherwise, you could soon find a nearby, brandnew home priced less than your similarly-sized, aging model. Walk a mile in their shoes Ultimately, the best indicator of whether your home is overpriced is to ask yourself: "What would I pay for my house today?" So at what price do you think your house would be a great deal these days? Add on 2 or 3 percent for negotiating room and that may be an attractive asking price - at least for the moment. For an experienced professional, call me today! 318 Main St., Northborough. Office: 508-393- 4442, Cell: 508-380-0112, E-mail: Scopet@aol.com, website: www.karenscopetski. com |
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