Subscribe Feed (RSS)
Just like putting a puzzle together, getting a decent price for your home means understanding exactly what buyers in your market expect. Good luck with that!
There was a time when a home was placed on the market and a bidding war broke out. Owners quickly discovered that buyers were willing to pay five, ten even twenty percent or more over their asking price, bringing quick and easy profits to them. Those days have passed by and instead we’re seeing just about the opposite taking place – homes languishing on the market with owners dropping their asking prices at least once.
Buyers Win, Sellers Lose
For buyers, any drop in home prices is advantageous to them, but for owners that sort of move can prove financially disastrous. Nearly every home in America has seen its value drop over the past few years, with prices plummeting by as much as 60% even more in some markets. Add the “insult” of a further price cut once a home has been listed and what you have is the makings of a personal financial collapse for some sellers.
Trulia, Inc., the real estate search site, noted that 26% of the homes on the market as of September 1, 2009, have gone through at least one price cut. That rate has increased each of the past four months, suggesting that homeowners are still having a difficult time finding buyers in this market. With the federal government’s $8000 tax credit for new homeowners set to expire on November 30th, homeowners may be forced to drop their prices again in a bid to compete with other sellers.
Ten Percent Discount
According to Trulia, the average discount off of the initial listed price is ten percent. That means a home listed for $329,900 is now selling for about $300,000. As most people will tell you, that newly updated listing price can be further eroded when a prospective buyer makes his offer, reducing the final amount by thousands of dollars.
“The steady rise in price reductions is a signal that sellers are still trying to adjust to the ever changing market conditions,” said Pete Flint, Trulia co-founder and CEO. “We expect the $8,000 federal tax incentive to extend the peak home purchasing season beyond the summer months, continuing to drive competition amongst sellers and ultimately leading to more price reductions, giving consumers a great opportunity to find the home of their dreams.”
Prepare To Deal
What that means is that home sellers need to be prepared for the worst as bargain hunters dictate the market, thanks in part to a generous government incentive. All of the real estate comps you have in your possession may not do you much good especially if you live in a market where price cutting is rampant.
For homeowners who must sell, coming up with a top notch marketable price could be the best approach to moving their homes, but expect to face strong negotiation from mortgage approved, market savvy buyers.
Source: Trulia, Inc.
See Also — How To Sell Your Home In A Lousy Market
Adv. – Are you considering buying a home this year? If so, you may be eligible for an $8000 federal tax credit if you are a first time home buyer. Make you move now while prices are low and before mortgage rates start to climb. Please visit PickMyMortgage.com to learn more about the lending process and to review our free, handy financing tools.
Tags: home prices, Home Selling, homeowner, real estate, Trulia
