Q. Your column in the Sunday Globe “The price is right, but yours could come on down” (Address, Jan. 18) was just terrific. We sold an antique Cape two years ago after one month on the market, when we set a price lower than what the broker recommended but one that was not crazy reduced.
Since then, we have been living in our investment condo while watching the market in our town of Plymouth. We are looking to purchase another single-family to live in. I am puzzled by the phenomenon of the house priced too high that sits on the market for weeks, months, years without an adjustment. I’ve seen houses on the market for 5,470 days and wonder: Does the owner think someone out there will be willing to pay that price if he just waits long enough? Is this a take-it-or-leave-it price?
Naturally, as a potential buyer, I am repelled by this and won’t even drive by such properties.
A. It’s so important to understand that buyers dictate a home’s true value. You can’t just put a stick in the sand and demand that you make a certain number. You will be forever chasing the market — down.
My feeling is that some sellers can’t detach themselves from their homes; they let their emotions rule. They don’t understand that this is a business transaction that’s based on supply and demand.
It makes no difference how much money they put into the house, what they owe on it, or how much better they think it is than the neighbors’. The only thing that matters is what buyers think the house is worth in today’s market.
I agree with you. I will never understand why someone would keep their home on the market month after month without reducing the price. Some sellers will tell their agents “there is someone out there who will think it’s a value at this price,” but it doesn’t work that way. If the house isn’t getting any activity, it’s priced too high.
I must confess that much of this comes down to education. It’s our job as realtors to explain the facts to sellers at the prelisting appointment. It can be a difficult discussion for some agents — they don’t want to jeopardize a potential listing — but it really is necessary. It is a waste of everyone’s time to have an overpriced listing.
But don’t be appalled by these listings that have been sitting on the market. Look at them as an opportunity to grab a house that no one else is looking at. Often the sellers really are motivated to sell. Many times, they have already moved out.
Sellers who overprice their homes may be foolish, but the agent who represents them is foolish as well.
Selling before you buy
The thought of needing to sell one house in order to purchase another can be overwhelming. Not only must you be concerned with finding the right house, but the coordination of both transactions needs to be perfectly orchestrated. Please take comfort in knowing that this is done all the time. What may surprise you is that the key to this transaction is the value of your current home. It’s extremely important to get an accurate price. Without this information, you really don’t know what you can afford to spend.
I can’t stress enough that you need to work with a knowledgeable seller’s agent, one who won’t just tell you what you want to hear. You need your home to sell quickly so you can be considered a serious buyer.
Once you know what your home is worth, it’s time to speak with a lender. He or she will ask additional questions about your annual income, how much you owe on your current home, and what other liabilities you have. The lender will also run a credit report. Armed with this information, the lender will be able to provide you with the estimated monthly expense for what you can afford.
Having done all this homework, you are ready to find your next home. Get acquainted with the market, the towns you are interested in, and what you can get for your money in each. Once you feel comfortable that you will be able to find a house in your price range, it’s time to put your home on the market and start seriously considering properties.
When you receive an offer on your home, you get to choose the terms. If you haven’t found a house yet, request that the closing date be pushed out as far as possible, with the option to go earlier if you find a home.
I won’t kid you, there are times that the buy and sell dates don’t line up perfectly, so make arrangements to stay with a friend or relative for a few days.