If You Must Sell, Name Your Price Carefully
Saturday, March 24, 2007
The mantra of real estate agents these days is that a well-priced property will sell. But even the most experienced agents say deciding on a price has become one of the most difficult parts of selling.
When the market was hot, agents and sellers looked at recent sales in the block or building, then tacked on another $10,000 or so. Not anymore. What a property went for last month may be more or less than it will go for this month.
"Because the market was so quirky over the past year, it's tough," said Roby Thompson, a real estate agent at Long & Foster's Woodley Park office. "A recent sale may not be a great comparable to use."
That is especially true of condominiums, which have taken a bigger hit than single-family houses because developers glutted the market with them. Extra features, such as patios or washers and dryers in units, are ever more important.
"The price needs to be competitively very attractive, meaning on the lower end of comparable recent sales," said Holly Worthington, an agent with Long & Foster and past president of the Greater Capital Area Association of Realtors. "Prices are roughly where they were about a year to a year and a half ago for the condo market."
The recent crackdown on nontraditional mortgages is also having an impact on pricing, agents said. Banks are tightening their standards for giving out mortgages and are more closely scrutinizing appraisals, they said.
"The price has to be more accurate," said Craig Mastrangelo, a real estate agent at Re/Max Distinctive in Arlington. "An appraiser knows that underwriting is not just going to have to sign off on anything more."
Which means that anyone who bought a home after the market started to cool in 2005 and is now trying to sell it should be prepared to lose money.
"If you bought your condo in 2001 or 2002, you're still in great shape," said Lisa Fowler, a researcher at George Mason University's Center for Regional Analysis. "If you bought it in '05, that is, at the height of the market, you own a condo not worth as much as you paid for it."
Many people in that situation are probably wondering whether they should sell or wait it out. Many agents and analysts generally agree that if you don't have to sell right away, stay put.
"Do everything you can to hold onto it. The market will turn around," said Nelson Mendes, a loan officer for First Horizon in Arlington.
Fowler said sellers should consider giving the market another two years. "If you bought a house to live in, you're in pretty good shape," she said.
But if you do have to sell, be aggressive and hit the spring market as soon as you can, agents said.
"Put it on the market sooner rather than later and make sure it's priced correctly, and make sure it shows to its absolute best advantage," said Joseph Himali, a real estate agent at Best Address in Georgetown.
Agents said making sure a property looks its best is crucial. Keep every room clean, especially the kitchen and bathroom. Get rid of clutter and remove excess furniture. You might want to consider adding more lighting or plants. More important, make sure nothing needs repair. Buyers are now asking for inspections, which was not the case two years ago.
"Property in beaten-up condition or poor condition, which is not priced to reflect the poor condition it's in, will sit on the market," Worthington said.
And be prepared to offer incentives, such as picking up the buyer's closing costs or the condo fees for a while.
"It's still definitely a buyer's market out there. No question," Mendes said. "Just about every transaction has some kind of seller concession on it."