John Philip Mason is a residential appraiser with 20 years experience and covers the Hudson Valley region of New York. He’s a good friend and a true professional who believes that all appraisers need to have a macro-economic perspective in order to be effective. This week, tries to try out some options for sellers in Solid Masonry. …Jonathan Miller
It been said many times before, when the going gets tough, the tough get going. The question is where do they go to? But before we go on to answer that question, let’s be clear about just who the “tough” are. These days it is undoubtedly the sellers who have it tough, from individual homeowners to large scale developers. As the inventory climbs and demand falls, many are trying anything and everything to make their properties more saleable. Their options fall into one of several categories and include:
- a) Do nothing and “wait it out,” hoping demand will pick up (a lot), supply will drop (a lot), or someone will fall in love with your home and pay your price (mucho a lot). Meanwhile, some would be sellers have decided to rent out their properties for a while, knowing the situation will improve, eventually.
- b) Assume the problem is not you or your property; it’s simply the real estate agent. So you fire them and hire another, but make no other changes (see the following three choices).
- c) Focus on the physical nature of the property and do things such as fix the place up, de-clutter, paint, “stage the home,” etc.
- d) Focus on financial incentives by offering bonuses to the selling agents, paying the buyer’s closing costs, providing decorating allowances, pre-paying the real estate taxes for a set period, buying down the purchaser’s mortgage rate, etc.
- e) Reduce the asking price to insure the property is properly priced, regardless of any ego or emotions, knowing the best priced properties sell in any market.
Options “a” and “b” appear to be the most popular choices, by far. These two choices allow for the least discomfort, as would be sellers don’t have to admit it’s their ego (or sense of greed) getting in the way. And for “flippers” they don’t have to acknowledge their timing was off and they over-paid. Should the market continue on a downward slide (yes, the market is in a downward slide), many of these folks are in for a brutal awakening.
Options “c” and “d” are also quite popular, as they represent a compromise of sorts, in that sellers feel like they are having their cake and eating it too. That is, they can concede a concession or two, but gain a sense of comfort by getting what they consider to be a good sale price. Call it what ever you wish, it’s still a market in a downward slide.
Option “e” is clearly the most painful of the choices. For some it represents a sense of missed opportunity (if only we had sold last year). For flippers new to the game or heavily leveraged it can mean an end their dreams (aka another get rich quick scheme shot to hell). But for a growing number, it is of great relief to get out while they still could sensing things might get worse before they get better.
While life is not fair, it is also not unfair. It is not out to get us and most of us will be here when the sun rises tomorrow. But are these trying times? Just ask those who are trying.