Price Your Fort Lauderdale Real Estate Home Or Condo To Sell
July 14, 2008
So your having a real hard time trying to sell your Fort Lauderdale real estate home or condo. You keep getting told by the your agent you are working with that you need to reduce your asking price again and again. Maybe the first thing you need to do is fire your real estate agent. The second thing you have to do is stop “chasing the market down”?
In a good, appreciating market you don’t need to have any real skill-set to sell a property. Just about any agent who can fog a mirror can put a sign in the ground, get some business cards and “sell” your home.
However, when you are trying to sell in a declining market, you actually have to know what you are doing. Part of knowing what you are doing is properly determining the CURRENT market value of the home you are trying to sell AND the likelihood of future suppressing factors.
While it’s easy to tell a homeowner what they want to hear so you can get the listing, it’s another when an agent must admit they were wrong and ask for reduction after reduction.
If you as the homeowner are trying to sell your house for the most money in the shortest period of time there is one immediate question you should ask yourself and at minimum the agent you hire should ask.
Do I absolutely need to sell my house right now? If you are in no hurry or in no direct or immediate need to sell your home, now is NOT the time that your home should be on the market. In a declining market it is best that the homes that need to be sold be brought to market and the rest should wait until the market turns around.
Now that it has been determined that you absolutely need to sell your home, the next question you need to ask yourself, is after the payoff of your mortgage and all costs and expenses associated with the closing of the transaction, how much money do you want or expect to walk away with from the closing table?
Two pretty simple questions that often go unasked in today’s market by inexperienced real estate agents.
In order to price your home correctly or to determine if you should even be attempting to sell your home in the current Fort Lauderdale real estate market we seek to ascertain this information BEFORE bringing a property to market.
This allows us to to determine our two benchmarks for pricing your home:
Minimum Offer Required -This would be the sum of what your mortgage payoffs are + any judgments or liens + any taxes you may owe + all of the closing costs involved with the transaction = the Minimum Offer Required (MOR) to sell your home. (closing costs to be estimated excluding commissions which will be added)
Desired Offer Amount - This would be the sum of what your mortgage payoffs are + any judgments or liens + any taxes you may owe + all of the closing costs involved with the transaction coupled with how much cash you would like to walk away with from the closing of the transaction.
For example, let’s say you own a 3 bedroom, 2 bath home in the Fort Lauderdale real estate market. You owe the following:
1st Mortgage: $175,000.00
2nd Mortgage: $18,000.00
County Taxes: $4,500.00
Old Water Bill: $450.00
Estimated Closing Costs:$3,000.00
Total Minimum Offer Required: $200,950.00
So with commissions, you would need a minimum offer of approximately $210,000.00 to sell your home without the aid of a short sale or you bringing cash to closing.
Now let’s find out what your Desired Offer Amount would be. In order to determine that figure you simply add that number to your MOR. So if you want to clear $20,000.00 you would need to price your home at approximately $235,000.00 for that to work out.
Is this realistic? The only way to know is for the agent to now run a comprehensive valuation to determine where your home falls in the spread of homes for sale on the market.
If you price your home at $260,000.00 and your house is sitting at the high end of the market and there are several “similar and like homes” on the market for less, then you are in prime position to be chasing the market down. Unfortunately, because of the way your agent priced the property you may never catch up.
So many Fort Lauderdale Real Estate properties are sitting on the market, no showings, no offers. They were priced at or near market at the time of the listing. Do you know what the current market price of your Fort Lauderdale Real Estate Home is? Or are you ˜chasing the market down?
Let me explain what “Chasing the Market Down” is.
- You priced your home at $260,000.00 on February 1st, which was what your agent thought was market value then.
- Between February 1st and April 1st (60 days on market) several homes in your area sell, your market price drops to about $235,000.00. You do not realize the impact this has on you and are still convinced your property is worth $260,000.00. Your agent has mentioned a price reduction, you have resisted. You really believe your home is worth $260,000.00, after all, it was worth over $325,000.00 last summer.
- On April 15 you agree to reduce your price to $240,000.00, which seems like a considerable reduction, after all $20,000.00 is a lot of money when it is coming out of your pocket. But is it? You are now priced at $240,000.00 and the market value is $235,000.00.
- Another 30 days goes by and still…no showings and no offers! You wonder what is the agent doing to sell your home? Your agent has suggests that another price reduction is in order, even though you JUST reduced it $20,000.00 a month ago. What is going on? This is serious!
- You finally agree to reduce your price to $235,000.00 on May 1st, but uh oh…another month has gone by since market price was established at $235,000.00. Have you asked for and received an updated valuation? You should be getting an updated valuation every 30 days at minimum. Since you have not received one you don’t realize that the market has dropped yet again and it’s painful to realize that your REDUCED price of $235,000.00 is now overpriced as the market shows a value of $215,000.00.
- What started out as a “let’s see what we can get” act of futility now finds you chasing the market down.
- As you chase the market down, you realize if you had priced the property correctly at the outset, it is very likely that you coul have actually sold the property and moved on with your life. As it is now, your sitting on a property whose value is falling in a declining market.
I wish I could say that the scenario I just outlined was a fantasy…quite the opposite and much to the contrary. It is more commonplace than most real estate agents care to advise. It is not out of the ordinary to see homes plummet $10,000.00 or more per week in value.
Some homes here in the Fort Lauderdale real estate market are selling for nearly 50% off of what was perceived as market value.Many agents simply do not price properties correctly and don’t know how to negotiate to keep value in place. The Fort Lauderdale Real Estate real estate market is flooded with properties right now.
In Broward County the absorption rate is nearly 3 years. Meaning at the current sales pace that it would take nearly three years to sell just what’s on the market TODAY!
Here’s what all homeowners looking to sell must sincerely realize. There is more inventory than Buyers. The Buyers who are out there are bargain hunting as can be expected, and many, many, homes will simply not sell because they are priced out of the market.
Sellers, you must be priced correctly for your market conditions, or simply stated, you won’t be making your move. It’s not good enough being “on the market”. You must be “in the market” to make your sale and move.
What you’ll need is an experienced, market savvy real estate agent who will tell you what you need to hear, not what you want to hear. If you need to sell, be smart. Price your home below market value. Offer value! Value is what is selling right now.
Chasing the market down is for suckers and it is being unfortunately orchestrated by inexperienced real estate agents. Don’t fall victim to this borderline malpractice.
If you need to sell get serious about it and do what is necessary to sell. This is not the market to speculate in. Simply stated, if you do not need to sell, then don’t. This is the wrong time for you to be ”testing” the market.
Here some other posts you may find interesting...
Fort Lauderdale Real Estate
Fort Lauderdale Homes And Condos For Sale
If you are interested in learning more about buying a home or condo in Fort Lauderdale or anywhere in South Florida; or if you need any information about the Fort Lauderdale real estate market, please feel free to contact me and it would be my pleasure to assist you.You can contact me at the number shown below or please feel free to contact me by the form below and I, or one of my assistants, will be sure to get right back to you within a few hours, if not sooner.
If you are inquiring about a specific property shown on this site, please include the address of the property in the comment section of the contact form below.
Bank Owned Properties In Fort Lauderdale
Foreclosures In Fort Lauderdale
Homes Fort Lauderdale
cforms contact form by delicious:days
Robin Sing-Cunningham
robins@robinashley.com
Access USA Realty
Local Fort Lauderdale | South Florida : 954-709-7461
My Assistants:
Barry Johnson: bjohnson@robinashley.com
