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Realistic Expectations
January 25th, 2012 12:31 PM

It seems it has been a buyers market for a very long time, and it has.  However, there have been successful sales for sellers whose homes are not  bank owned or short sales, as long as those sellers have realistic expectations in this difficult market.

 First of all, sellers must be realistic in setting their sales price.  This is determined by using comparable properties in the same area that are currently on the market, those that are pending sales, and even those that have expired without selling.  The latter gives an indication that prices were too high.   The most important comparables are those homes that have recently sold, within the past 3 to 6 months.   An appraiser will be required to use distressed sales that were bank owned, as well as short sales, if there are no other recent sale comparables to pull from.  This will, in turn, provide for a much lower appraisal on a non-distressed home.   Sellers need to know what they are competing against.

 Most buyers will initiate a contract with a lowball offer.  This is not to offend or insult the sellers, but to have a beginning point with which to negotiate and compromise, attempting to come to an agreeable price.   Buyers also have access to comparables and are much more educated in real estate values today than in the past.  In a buyers market, it is expected that sellers will move downward from their asking price and accept a lower offer.  Therefore, sellers need to prepare for  that "cushion" when deciding on an initial sales price. 

Most sellers today will not make much profit, if any, from various home improvements done, unless they include major renovations of kitchens and baths or added square feet under air.   Keep in mind that most improvements are done for the enjoyment of the current homeowner and do not necessarily add value to the home.

Flexibility is the key in today's market. If there are unrealistic expectations as to price or profitability, then perhaps it is best to wait out the market until prices rebound.  Otherwise, only frustrations will result for the sellers, buyers and realtors involved.  

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Posted by Barbara Doeringer on January 25th, 2012 12:31 PMPost a Comment

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