End Pocketbook Pain!

How important do you think it is to price your home correctly once you've decided to sell? Are you aware that overpricing can be painful to your pocketbook? Sure, it's simple – an overpriced home rarely sells.

Here are some of the best reasons for heeding the advice of your real estate professional regarding price. First, overpricing a home discourages buyers from even making an offer. They feel that even if the offer is accepted, they haven't gained anything more than a fair price.

Overpricing also attracts the wrong prospects. If you've priced your $450,000 home at $500,000, you'll be attracting buyers who expect to see $500,000 worth of home. When they don't, they'll be disappointed. And, you'll lose your desired advertising response, too, since the $450,000 buyers won't even call.

Another casualty of overpricing will be other real estate agents. Keep in mind that they know and understand pricing because of daily contact with sellers. Once they realize your home is overpriced, it may not be shown as much. Worse, it may be shown to help sell the competition (other houses like yours that are priced fairly.) Finally, if a buyer is located, the lender may reject the loan because of a low appraisal.

Price your home fairly from the beginning. You and your wallet will be glad you did!

Finish Before You Begin!

Close your eyes for a moment, and let your imagination take over. Picture yourself as a buyer walking through a home you may wish to purchase.

As you step from the fresh outdoor springtime breeze into the home, your nose immediately notices a slight musty smell. The home appears in good condition except for carpeting that shows heavy wear from the activities of a large family and three dogs.

Once inside, you mention the heavily worn carpeting. The homeowners explain that they will recarpet the home. They point out new carpet samples on the dining table, and explain that they will either install the new carpet or give a "carpet" allowance of $2,800 to the new buyers of their home. Obviously, the homeowners were aware of the one major flaw in the salability of their home and were willing to correct it…after the fact.

What the present owners failed to realize is that, standing in a home with unattractively depreciated carpeting, it is very difficult for buyers to imagine fresh, newly installed carpeting on the floors. Thus, the buyers move on to purchase another home – probably one that looks, smells, and feels cared for.

The lesson for sellers? Make repairs and complete all necessary redecorating before the first buyer crosses your threshold. You'll be rewarded with a quicker, better sale.

What's Your Priority?

Do you remember the sayings, "Don't put the cart before the horse," or "Which came first – the chicken or the egg?" They have to do with priorities, don't they, like deciding which task to accomplish first?

Those same sayings can apply to buying and selling homes. If you presently own a home, and plan to buy another, which do you do first – sell your existing home or buy the new home?

If you sell before you buy, you might worry that you could be left "out in the cold" with no place to live. But if you buy before you sell, you may end up owning two homes at once. It has all the makings of a dilemma, doesn't it?

Try this solution. First, measure you personal commitment to purchasing another home. If you are firmly determined to change your residence, then ask yourself this question: Am I financially able to purchase a second home while still owning the first one? If your answer is "No!", consider selling your present home first.

Selling your existing home first will reveal the solution to the dilemma. First, you will have no double financial pressure. Second, once your home is sold, you will know exactly how much money you have to spend on another home, and when you will need to move. In the current market there is generally a good supply of homes available in any city or town, so you can choose your new home with ease.

To get started, call your professional Realtor® for a free market analysis of your home's value. You'll soon be on your way to that new home of your dreams.

Is the Market Changing?...Here's the May 2007 Update

In January, I wrote a blog entitled "Knowing Exactly When the Market will Change" that received many comments, replies and supportive feedback. In that blog, I stated that as soon as we have 3 consecutive months when more inventory is going off (under contract) than is coming on (new listings) we can expect to once again experience an appreciating market.

Hot off the "Actual Statistics" press, it is now time for my MAY update of how the real estate market is faring in my area of the country - the Massachusetts North Shore, north of Boston. The area of observation consists of 22 towns on the North Shore and considers only SINGLE FAMILY homes for comparison.

So how did we do in May and thus far this year?

In May, 655 single family homes came on the market on the North Shore and 340 homes went under contract. That means that many more listings came on than went off the market: +315, or nearly double. In January, that difference was +195; in February, +135; in March, +287; and in April, +288.

FORECAST: We will continue to remain in a DEPRECIATING market until this trend reverses.

Here's a recap of the previous four months:

In April, 550 single family homes came on the market in the North shore and 262 homes went under contract.

In MARCH, 543 single family homes came on the market on the North Shore and 256 homes went under contract.

In FEBRUARY, 377 single family homes came on the market on the North Shore and 242 homes went under contract.

In JANUARY, 404 single family homes came on the market on the North Shore and 209 single family homes went under contract (off market).

The message: Real estate values will continue to decline until this trend reverses. Part of the solution? Sellers need to recognize that it is no longer 2004 and price their homes ahead of the declining price curve.

I will provide another update again in the beginning of July (for the month of June) and we'll take a look and see if the market is changing or if we can expect more of the same for a while.

What's That Sound? Earnest Money Talks!

Prospective buyers just left the home you have For Sale. They said they would pay full price which sounded great. But then they asked you to hold the house for them until next month. They didn't offer to give you a deposit to hold the home, either. Do you think you really have serious buyers? Would you be willing to hold the home, unsold, for a month for such buyers?

Chances are what you have are just some serious "lookers" or "shoppers," but probably not real buyers. Sincere, motivated buyers understand that in order to purchase a home it is necessary for them to give the sellers (or their real estate agent) an "earnest money" or "good faith" deposit. This is usually an amount that would assure the sellers that their property was indeed SOLD, and which would ensure final settlement on the home.

It is generally thought that the more money tendered by buyers as "earnest money," the more serious and committed they are to completing the purchase.

Real estate purchase agreements often call for the forfeiture of the deposit if the buyers do not complete the purchase. Thus, it follows that insincere buyers won't want to risk a penny, while real buyers will be very cooperative in making a substantial deposit.

Don't hesitate to ask your buyer for "earnest money." It's your assurance of a completed sale.