Price Your House Properly From Day One!

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Millionaire Now! by Larry Nusbaum

This blog is based on the organizational principles found in my new book, "Millionaire Now! - A Financial Toolbox with Seven Steps to Wealth".

Price Your House Properly From Day One!

Posted on 01/14/2007 05:15 AM | Link | Post Comment

Housing market pain not revealed by stats : Home sellers are crying but the data doesn't seem to reflect their woes, from CNN Money

"Expectations also come into play. "What sellers are most complaining about is expected price," said chief economist for the Mortgage Bankers Association, Doug Duncan.

People, he explains, hear that a neighbor's home sold for $500,000. They think that their house is better so it's worth more. They price it at $550,000.

But the house's objective value is really only $500,000. Since the seller has priced it too high, it sits for months. In today's market, the house may not sell, even after a price reduction to $500,000, partially because the house is now slightly stigmatized because it has sat on the market so long. To the seller, the market just stinks."

This is a classic mistake made by sellers and their agents. You only get one shot a your first broker's tour and first open house, so price the house correctly. A house priced too high also sends a message to the world that you will be too hard to negotiate with and potential buyers won't even bother making an offfer even if they like the house.

"Many of the bigger price decreases in the area were due to unrealistic pricing in the first place, she said -- like homes with comparable sales at $775,000 priced at $950,000." And, a drop back down in pricing to it's comp does not mean prices are dropping for these $775,000 houses.

Andrew Waite, publisher of the magazine that I write for, Personal Real Estate Investor Magazine, said advertising sales and contracts with real estate vendors can "predict a lot of forward behavior," as can subscription trends.

"We have broken records in both categories in (the fourth quarter of 2006) and into the first issues of '07. Life is good and getting better," Waite says. "The illusion is looking at a highly inefficient market and trying to apply economic metric that fit commodity markets. It does not work."

And, What's Become Of The Condo Conversion? IBD looks at conversion trends around the country and identifies some areas of strength and weakness.

"Most of the successful conversions were and continue to be located in gentrified downtowns where housing has been scarce and unaffordable. New condos with granite counters, stainless steel refrigerators and ranges, and hardwood flooring have appealed to young professionals looking to build equity in a first home and to retiring baby boomers seeking an urban lifestyle in a renovated beaux arts or art deco building.

The main factor driving condo conversions, though, has been relative cost. In Phoenix a converted condo cost $159,900 in 2005 compared with $299,900 for a single-family home. In San Diego, where the average single-family home price rose 25% a year until recently, a condo can be had for $300,000, says real estate firm CB Richard Ellis, while detached houses start at $480,000." ENTIRE STORY HERE

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Make Your Home Worth More in 2007