Real Estate Advice

Dangers of Overpricing

Dear Pat,
We are about to put our house up for sale, but we’re getting mixed signals from the agents we’ve been talking to. One said our house should sell for around $200,000, while another thought $180,000 is the best we can get. Now a third agent just said our house could fetch $225,000! Should we just pick the middle number and hope for multiple offers, or try for top price? We can always lower the price if it doesn’t sell, but of course we’d never be able to raise it if we sold too cheap.
---Needing a Game Plan

Dear Game Plan,
I'm not surprised you got such a spread of market value opinions from the agents you saw. Even in a stable market with flat-or steadily rising-prices you'll find wide a variation of market opinions among Realtors. The primary measure Realtors use for market opinions is the price of comparable homes that have sold recently-this can be extremely accurate when comparing virtually identical suburban properties, or city townhouse developments, where quality differences in finish materials or an extra bathroom can be accounted fairly easily. It's much harder in our neighborhood, where our older pre-development houses are individual and unique, thus subject to wide interpretations of value.

But evidence is mounting that this is no longer the steady rising market we've all gotten used to since the late 1990's. After years of double-digit price increases, Longfellow sellers experienced only a 5.9% increase in 2003. Multiple offers this spring have been far from automatic; and a glance at the MLS inventory figures reveals a 5-month supply of houses already for sale in our neighborhood! Buyers have plenty to choose from, and they're taking the time to pick carefully. Unrealistic sellers who go on too high nowadays can expect to wait a long time to move-and likely with a lot less cash than they expected, as they reduce their price again and again while their home grows weary on the market.

So here's your game plan, Game Plan. Get the truth. Think back on those three agents who spread their fistfuls of "comps" on your dining room table: who among them added personal knowledge of the properties to the data? You need to know why your house is more, or less, valuable

than the comparable sold. Pick that Realtor, or keep looking until you find one who you believe is telling you the truth. Then do the thing that most sellers never do, and all too many agents haven't bothered to do: check out the current competition-because in today's changing market yesterday's "solds" are only half-helpful. You need to make sure your home's combination of features, condition and location make it one of the top three candidates on the market at your hoped-for price. If it doesn't measure up, lower your price-before you go on the market.

No space left to repeat my customary lecture about cleaning, floor sanding, staging, basement conditioning, et al: suffice it to say you should do every reasonable thing to make your home stand out in the buyer's mind. Please remember, Game Plan, that a slower market doesn't mean a dead market-it just means you'll need to be realistic (and work a little harder) to make your move. Good luck!

Pat Rosaves is a full-time real estate professional living in the Seward - Longfellow area. She has more than 27 years experience in helping people with their real estate needs. Questions may be sent to her at River Realty, 2543 38th Avenue South, Mpls, MN 55406. Or call her at 612-724-1314 or email her at pat@riverrealty.net