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To list or not to list?
Timing is important in today’s market
by Jane K. Dove
As appeared in "The HOME Monthly", February, 2008, Hersam Acorn Newspapers
"Know when to hold ’em, know when to fold ’em" is a basic maxim for playing poker, but it can also come in handy when deciding when to list, or de-list, a home in today’s uncertain real estate market. Two local Realtors, Louis Galasso of William Raveis Real Estate in Greenwich and Poppy Mead of Realty Seven in Wilton, offer some advice on making the right strategic move.
Correcting Problems
"There are some different approaches to this," Lou says. "But in general, Realtorsagree leaving a home on the market too long with few showings and no offers doesthe sellers a disservice."
A home that sits unsold month after month raises questions in buyers’ minds. "They think something’s wrong with the home or that it’s way overpriced," he says. "The owners might be well advised to pull the listing, take a breather, re-think their selling strategy, and then put it back on later."
Poppy says one reason for a home languishing unsold may be that it simply needs work. "If the home is fairly priced and you are not getting any results, it may need de-cluttering, decorating or some minor repairs," she said. "You might also want to consider staging. After you have addressed the issues that might be hampering a sale, you can then put the home back on the market as a fresh listing."
Lou says some simple cosmetic fixes could yield quick results. "Things like pet odor, worn or stained carpeting or unattractive wallpaper can be easily corrected. For example, ripping up old wall-to-wall carpeting and refinishing the hardwood floors underneath can make a world of difference."
Both Realtors agree that if the price is too high, you can fix it up and hold it forever and the house still won’t sell. "If a Realtor feels the house is overpriced, they should sit down with the owner and have an honest discussion," Poppy says. "In cases like this, the answer is to simply reduce the price to the proper level to attract buyers."
Lou agrees and said the "stubborn seller" is still alive and well, even in today’s widely reported market adjustment. "I tell my clients their home should sell in six months if it is priced right," he says. "Once you pass that threshold you are going to have to make price reductions because the value of the home becomes diminished in buyer’s eyes."
Poppy concurs. "There are some sellers who simply refuse to accept the fact that their house is not going to sell for what they initially thought. This can be a difficult attitude for everyone involved."
Lou says baby boomers with substantial equity in their homes, built up over time, are among some of the most stubborn sellers out there. This is because many, if not most, baby boomers factor in the profit from their home as a substantial chunk of their retirement planning. Under the current tax laws, a couple can keep the first $500,000 of profit from the sale of a primary residence as tax-free capital gains. This makes a profitable sale even more important.
"I often come across couples that can’t let go of retirement dreams that are based in part on what they believe they are going to get from the sale of their home," Lou says. "Many have made detailed financial plans based on getting a specific figure. If that figure is reduced by more than a few percentage points, it can make a big difference in their projections. If the home is overpriced because they want to hit that crucial number, they would be well advised to take it off the market, recalibrate their finances and then put it back on at the right price."
Timing And Motivation
Both Realtors agree that today’s market makes "holding or folding" a more difficult decision than it would have been during the boom years.
"In this market, it’s hard to price a house exactly, because you don’t know what tomorrow is going to bring," Poppy says. "But if you are getting no response, that indicates a price reduction is in order."
In terms of choosing the month to list a house, sooner in the year is definitely better. "Many people don’t want to list their homes during the holidays," Poppy says. "And about 30% of owners with a listing will take the house off the market during this period. They don’t want the pressure of having the house look totally perfect with children, family and visitors underfoot, so they decide to bow out until after New Year’s."
Lou agreed that winter is a good time to list a home. "You have more motivated buyers early in the year," he said. "I always tell clients that waiting for spring, especially in this market, will not work to their advantage because they will be competing with even more listings."
In the end, deciding whether to "hold or fold" depends in large part on the seller’s motivation. "Some sellers are motivated and some are not," Lou says. "I have had clients tell me they are going to wait the market out and see what happens a few months down the road. But the motivated sellers will keep their home on the market, lower the price if they must, present it in pristine condition, and eventually net a sale." |
