As real estate markets go through cycles over time, we look back to see the missed opportunities. Of course, hindsight is 20-20 so it is easy to see these when looking in the rear view mirror. Home affordability is a combination of home prices and mortgage rates. If you look historically at most market cycles, we have either seen high prices and low rates or low prices and high rates. The current market conditions are unprecedented. We have not seen the combination of both low prices and low rates since the 1930s. Most of us are unlikely to see this again in our lifetimes. So here are the top mistakes that experts tell us potential sellers are making right now!
Mistake #3 – Waiting For Home Values To Recover And Then Move. Studies show that the fear of loss is 2.5 times more powerful than the opportunity for a gain. Millions of home owners are waiting for values to recover to sell. BUT they are going to find that the next property they want to buy has also gone up in price. More importantly, the mortgage rates are likely to be significantly higher. In 3-5 years, we expect mortgage rates to be in the 6% to 8% range again. If you do the math, waiting can cost hundreds of thousands of dollars!
Mistake #2 – Let’s Float A Really High Price And See What Happens. This is another common mistake that backfires for the seller. Desirable properties with market values are selling rapidly. Buyers and agents can quickly see properties that are priced significantly above the market. Worse yet, the majority of buyers use a mortgage to finance the purchase. If the property does not appraise, the bank will not approve the loan. Many potential transactions end up being negotiated or fall apart based upon the appraisal values. But most properties never even get an offer if they are priced too far out of the market. Those properties will quickly get ignored by agents and buyers.
Mistake #1 – Let’s Put It On The Market But We Are Not Fixing Up Anything. Buyers usually make emotional decisions for homes. Their first impressions are critical in establishing a perception about the property. The condition of most properties can be improved by doing simple things that do not cost very much money or time. Even banks selling foreclosed properties are doing repairs and making properties look more presentable. Properties in poor condition sell for less than properties where small investments were made in condition, updates, staging and incentives. This is one of those times where spending a little money pays off in better returns. Click here for checklist on Preparing Your Property For Sale.
If you or someone you know are considering selling their property, our award-winning Advanced Property Marketing System is the most effective methodology to get the highest market value.