Sell It In The Slow Season

Story from HeraldNet.com, November 26, 2006

Summer, the prime time for selling a home, was approaching and Jeanne and Eric Mehan wanted to sell fast.

In the rush to sell before fall, the Woodinville couple acted on some bad advice.

Put it on the market, full of clutter, not cleaned, at top price, even if it’s not ready, advised their real estate agent. Let’s market your home to a flipper, someone who wants to buy it, fix it and resell. Let’s see if we get a nibble and you can work on it in the meantime, the agent told them.

Wow, that was some bad advice. Weren’t the flippers mostly gone by fall?

The agent took marketing photos of the laundry room with the toilet seat up and dirty clothes piled on the floor – with his cell phone camera.

The Mehans’ house got some foot traffic and a few offers for half the $475,000 asking price. Meanwhile, the precious summer season faded. The agent suggested pulling the property off the market and re-listing.

Half of the asking price! Now we’re talking…

“At that point I wanted nothing more to do with him. I fired him,” Jeanne Mehan said.

Now it was fall and the holidays were around the corner. Could they sell their home quickly during a traditionally soft market?

The months before Christmas are often considered a difficult time to sell a home. Potential buyers are hunkered down for the holidays and sellers don’t want to mess with listing a home during those busy months, the thinking goes.

Fewer people are buying single-family homes and condominiums in November, December and January, according to statistics kept by the Northwest Multiple Listing Service.

Pending sales were at their highest last year in June, with 8,896 recorded in King, Snohomish, Pierce and Kitsap counties. By December, sales had dipped to almost half of that, with 4,837 recorded.

That doesn’t mean selling is going to be a cakewalk. Houses need to be priced what they’re worth, agents need to market homes aggressively and sellers need to be willing to clean and fix problems, Deptuch said.

Buyers are pickier than ever, she said. Buyers expect the walls to be painted and the carpet to be in good shape. They want homes clean and free of clutter. Buyers want to walk into a home and feel like it could be theirs, she said.

The Mehans moved extra belongings into storage and hired professional cleaners. They painted the house in and out, replaced dated garage doors and put in a new lawn. The house got new light fixtures, doors and carpets.

The result: the couple put their house on the market for $429,999. Within a dozen days they received three offers and a sale is pending.

Don’t you just love a happy ending?

(Debra Smith, HeraldNet.com, 11.26.2006)

  

8 comments:

  1. 1
    jcricket73 says:

    Wow, this clearly spells doom for the real estate industry and anyone who wants to sell their house:

    1) Some yahoo agent gives people bad advice and they overprice their house at $475k

    2) People wise up and dump agent.

    3) They re-price their house at $430k

    What a total debacle ;-)

    4) House sells with multiple offers, during the slowest season of the year.

    IMHO, you can’t just look at price reductions to predict market doom – it’s more complicated than that.

    To me, the market’s all over the map right now. Some areas are tanking, some are going up, some are flatlining. Median prices in Seattle have continued to go up while inventory has dropped (but to seasonally reasonable levels) and price reductions have increased (to record highs). That’s very weird to me, and I don’t see how that “happens” unless the numbers aren’t as tightly correlated as everyone seems to think they are.

    I’m not saying we aren’t (or are) in a bubble, or that prices will or won’t fall, but after reading this and other real estate blogs for more than a year, I can safely conclude that neither the boosters nor the bubble-bloggers have an accurate read on the market and a more detailed analysis is probably warranted.

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  2. 2
    synthetik says:

    Actually, I posted the article to reinforce the idea that people are taking their homes off the market as a result of the slow season; therefore, as predicted, inventory will go down a bit.

    You’re right – you can’t simply look at price reductions… there’s also a deep drop in % of sales, overall trend in increased inventory, steep drop in building permits, massive incentives by builders, increase in foreclosures and an increase in media gloom & doom.

    The economy, which is finally showing signs it cannot support the housing crash, won’t help as the dollar erodes and consumers finally figure out they have nothing left in their piggy bank.

    At first glance, one might think a 6% increase in ‘black friday’ spending might be a good thing; but then you realize that the horde are only buying 40% off items.

    Not a lot of corporate profits to be had there…

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  3. 3
    Richard says:

    Gotta love it when a news story goes to press with critical information missing…

    How much did the renovations cost?

    How is the price differential significant without this information?

    Rate this comment: Thumb up 0

  4. 4
    Anonymous says:

    I just released my report on Orange County
    Daily Home Price Analysis

    Rate this comment: Thumb up 0

  5. 5
    PugetHouse says:

    jcricket73 makes pertinent points. Actually, it’s not entirely the agents’ fault that sellers are so greedy and make those bone-headed mistakes. Most sellers will not initially work with an agent that gives them too much reality at once.

    Thus, one tricky art to listing homes is “educating the seller,” which means taking a listing with a stubborn seller at an inflated price, and letting reality sink gradually in. Most agents would love to price their listings aggressively, but the sellers just have too much emotional capital invested to make the call objectively.

    In short, if you want to kiss the listing good-bye, be up-front and genuine with the homeowner.

    Any wonder that a majority of agents are “extravagant” with the facts?

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  6. 6
    Eleua says:

    I was hoping to post this on today’s open thread.


    The National Association of Realtors said Tuesday that existing home sales edged up 0.5 percent to a seasonally adjusted annual rate of 6.24 million. It marked the first sales increase since February.

    However, the median, or midpoint, price for a home sold dropped to $221,000 in October, a decline of 3.5 percent from a year ago. That was the biggest year-over-year price decline on record. It marked the third straight month that home prices have fallen compared to the same period a year ago, the longest stretch of such declines on record.

    We have only begun to set records. Remember, none of the bulls even hinted at this, so disregard their calls for a booming Spring selling season.

    This is going to be really, REALLY ugly.

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  7. 7
    stephen says:

    I agree that there is a bubble, I also find it amusing that low single digit declines following absurd double digit gains makes everybody freak. If I went to Vegas and raked in the dough for for days on end and then gave a few points back at the end I would be pretty happy. The way they are talking if prices drop 20% from their highs after advancing in many cases 100%+ over the past five years it will be a total diaster, ha :-)

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  8. 8
    Eleua says:

    Stephen,

    The reason a slight rollback is the cause for panic is from the leverage used.

    If there was no leverage (homes were purchased for 100% cash), and you made 100% over 3 years, and then gave back 20%, it is a big case of “so what?”

    If you levered-up to get into your home, and then borrowed against the equity, and you know your house is overvalued, you are in big trouble.

    Also, much of the retail sector is addicted to HELOC spending, and the spending from those employed in the REIC.

    It would only take about a 15% rollback in prices to create a scenario where you have universal equity destruction, and massive bank defaults/liquidations.

    It is in that aftermath that you will see price reductions around 50-80% off the peak.

    Then you will have panic – and it will be justified.

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