Archive for October, 2008
October 7, 2008
Without a doubt, the most difficult challenge that home sellers face in a buyer’s market is knowing how to price their homes. In a market such as this, where there may seem to be no rhyme or reason as to which homes are selling, and for how much, proper pricing can be especially tricky. (I’ve written about this before, and overpricing is still at the top of my list of real estate pet peeves.) Overpricers (sellers who can’t seem to read the writing on the wall) generally fall into 3 categories:
1. Those who don’t want to face how much money they may have “lost” by not selling a few years ago.
2. Those who believe that overpricing the property will result in a higher sales price.
3. Those who fall prey to realtors who “buy” their listing.
My responses to these types of sellers are as follows:
1. Home equity is purely imaginary, because it is always based on what the bank thinks you can sell your home for. There is no pile of money buried under your house that shrinks or grows with the state of the housing market. Therefore, unless you are upside-down on your mortgage, you will not “lose” money by selling your house for less than what your neighbor sold hers for three years ago . If you are actually upside-down on your mortgage, then I really feel for you – but that doesn’t change the fact that overpricing your house to make up for that loss will only harm you more in the end. I’m sorry, but it’s true.
2. Overpricing your property because you think it will put you in a better bargaining position never, ever works. EVER. If you think your home will fetch $650,000 based on recent comps, pricing it at $675,000 because you know buyers are going to bargain you down, anyway, will not get you an offer of $650,000. It will most likely get you offers that are insultingly low or no offers at all, because any interested buyers will think you are unreasonable. With so many houses on the market, why would a buyer choose to deal with an unreasonable seller? Too many times, I have watched sellers set up this “negotiating cushion”, only to watch their homes languish on the market, have to be pulled off the market, or have to go through a price reduction. Here’s a little tip: You are better off pricing your house 1 to 2% below the most recent comps than you are overpricing and then going through a price reduction. Either approach will likely get you to a similar price. But pricing your house below comps could actually get you multiple offers or your asking price quickly, while overpricing and then going through a price reduction will end up substantially weakening your bargaining stance. You don’t want that.
3. It’s obvious from the sheer volume of overpriced homes on the market that there are some realtors out there who aren’t doing their jobs properly. Realty is like any other business in that there will always be those that will tell you what you want to hear, or who may not stand their ground firmly enough when they do tell you what you don’t want to hear. When a realtor knowingly agrees to overprice your house just so they can get your business, that’s called “buying a listing.” Any realtor who “buys” your listing is not looking out for you – he is looking out for himself. If you’re going to be paying a realtor a chunk of money to help sell your house, don’t you want someone who is going to truly have your best interests at heart? I know of realtors who refuse to take on overpriced listings, and those are the realtors that I would want to hire. Those realtors are the ones who don’t feel right leading you down the primrose path, can’t stomach the thought of adding yet another home to our overstocked inventory that will then sit there, or who take their reputations too seriously to engage in that sort of behavior. Here’s another little tip: A realtor who believes that the home is priced properly will be a much better negotiator and advocate for you than the one who just told you what you wanted to hear.
Now that I got that off my chest…here’s a link to the Loudoun Times-Mirror article that got me thinking about all this again. Entitled, “Selling Your Home in a Buyer’s Market”, it lists seven things to do to prime yourself for proper pricing. Good luck!
October 7, 2008
We’ve been doing our blogging bit here at Redfin DC for about 9 months now and are curious about what you, our illustrious readers, think. What do you like? What do you want to see more of? What coverage areas would you like to see added? (We are already working on adding coverage but are curious to hear your thoughts on the topic.) What would make the Redfin reading experience more meaningful for you?
We look forward to hearing from you. As always, we ask that comments be kept constructive and respectful. Thanks in advance!
October 6, 2008
Online foreclosure auctions are about to launch in Florida and could be a nationwide offering soon. This is a very, very bad idea. [L.A. Times]- …But, as long as you do your research and have the stomach for it, attending a foreclosure home auction in person can actually turn out quite well. [WashingtonPost.com]
- Turns out the sub-prime mortgage debacle has been brewing for a bit longer than we thought. [Snopes.com]
- This argument against the bailout – which believes that hyperinflation will follow and result in the U.S. splitting apart, with cities descending into anarchy – seems a bit, um, dramatic. [Baltimore Housing Bubble]
- I’m not the only one who thinks the market will experience a little spike after the new administration comes to town. Check out this interview with GMU’s Director of the Center for Regional Analysis, in which he discusses how the DC housing market will be affected by the bailout. [Urban Turf DC]
October 3, 2008
A satellite view of Cindy McCain’s childhood home
Recent Sweet Digs Posts
HGTV “Dream House”
Loudoun Links
Embassy Row: $2 Million per Bedroom
October 3, 2008
I had completely forgotten about this! When I wrote my “Wine Country Living” post back in May, I discovered that a Loudoun County winery was going to be featured on HGTV’s “Dream House”. The original debut date was supposed to be July 5th, but (renos and TV production being what they are), it turns out that the show is going to debut this Saturday, October 4th, at 7 a.m. You can see the show’s schedule here, and you can read the homeowners’ blog about the show here. Happy viewing!
October 2, 2008
Two Leesburg families were featured in a Today Show segment on the importance of both Virginia and Loudoun County to the upcoming Presidential election. [MSNBC.com via Leesburg Tomorrow]- Notes from the Loudoun BOS/School Board meeting about land acquisition. [Beyond the Blackboard]
- More about the Broadlands Hospital controversy. [LoudounExtra.com]
- Virginia homebuyers now have the option to purchase title insurance directly. [Leesburg Today]
- $176 million in deficit is not a great place for Loudoun to start FY10. [Leesburg Today]
Image: Artist’s rendering of the Broadlands Regional Medical Center
October 2, 2008
I am still focused on price reductions and Dupont Circle this week, but today I also want to see what kind of house you can get at the high end, median and low end of the listing price spectrum. The median list price for a house right now is $1.145 million. I would guess the homes shown below on beautiful 19th St NW are valued at more than that … I just love this photo.
High End:
Check out the “recently reduced” property selling for $15,900,000 on Embassy Row. Yes, that’s right, it’s not a typo. The address is 1714 Massachussets Ave NW. You’ll need more than $2 million for each of the six luxuriously appointed bedrooms. But that’s a bargain compared to the original $17 million price tag. I wonder if the furniture is included?!
Not Quite as High End: With neighbors like those on ”Mass” Avenue, it doesn’t seem outrageous to spend $1.55 million on an 8 bed/3.5 bath row house at 1926 17th Street NW. This wonderful Victorian was built in 1907 and has been fully renovated, including the brick patio out back. It has been on the market for 22 days and was reduced in price this week from $1.69 million. My guess is that it will not last long.
Closer to the Median:
You can get a 4-bed/2.5 bath colonial row house at 1313 22nd St NW, south of the Circle. The price was reduced last week by over $100,000, to $1,095,000. It has been renovated. It also has 2 parking spots!!!!
At the Lower End:
There is a tidy 3 bed/1.5 bath federal row house closer to Adams Morgan at 1650 Florida Ave NW for $649,000. It looks cute. It has been on the market for 19 days with no price reductions yet. Open Sunday, Oct. 5, 1-4 pm.
Before you make an offer, learn about price reduction trends in your target neighborhood.
More info:
> All houses for sale in Dupont Circle
> Recent sales in Dupont Circle (condos and houses)
Cheers,
Allison
Photo: NCinDC under Creative Commons license
October 1, 2008
Image credit
I’ve tried to write this post at least three times over the course of the past week, but the details have changed so rapidly I almost can’t keep my own opinions straight.
The latest reports have the bailout budget coming in at $850 billion. Eight. Five. Zero. Billion. Wasn’t it just yesterday that statesmen and talking heads alike were all over the airwaves discussing ways in which the revised bill should better benefit Main Street? How is $850 billion a better bill for taxpayers than the original (also stomach-turning) budget of $700 billion? Wouldn’t it be better if they spent LESS? And could someone please tell me how, exactly, mental health care reform will help reopen the flow of credit so that small businesses can make their payroll?
Do they really think renaming it a “rescue package” is going to cause anyone to switch from opposing to favoring the bill?
We’d love to hear from our readers on this topic. What do you think?
P.S. On a positive note, the Senate just approved (literally, just minutes ago) the request for federal funding to deal with Metro’s maladies. This was a huge hurdle to getting the money for the Metro extension.
Recent Sweet Digs Posts
Fabulous Dupont Circle for Under $500/SQFT
