November 27, 2007
The autumn real estate market has been chilly in places, particularly outside of the Bay Area. The falling leaves are accompanying falling prices in some regions.
Silicon Valley is full of micro climates, or micro markets, so it’s hard to make a blanket statement about “the market”. Some segments are red hot, and others are icy cool. Even within Los Gatos that’s true. We’ve been experiencing the oddly “bifurcated market” for many months now.
What drives some segments into a sellers’ market while others languish? Why do some homes get 5 – 10 offers, and others don’t sell (or even get an offer) despite repeated efforts of seller and agents?
Usually, the leading indicator is (you can guess this) location. (And the main factor that plays into location is schools.) Other significant elements are condition, pricing, accessibility, and finally marketing.
When homes sell today with multiple offers, it’s because all five of these important aspects are right on target. The homes in great condition, in a great location with the best schools, well marketed and with an aggressive price are selling right away and with several bidders.
What You Can Control, What You Can’t in the Sale of a Home:
Location, Accessibility, Marketing, Condition and Pricing
Neither owners nor agents control the location, but every other issue is in their combined control. Let’s look at them.
Accessibility is key because if the home is difficult to see, folks won’t bother. Sometimes they only have a little window of time, and if they find ithe property on the MLS on a Saturday morning, they may only have Saturday afternoon in which to take a walk through. Don’t refuse a lockbox or require all showings to be “by appointment only”, More qualified traffic means better odds that your home will sell faster and for a better price, whether it’s in Saratoga, Los Gatos, San Jose, or anywhere! Making your home easy to view is the cheapest way of helping improve your odds of selling at a good price!
Marketing is what can help buyers to find your home and to see it in its best light. It’s exposure via the web, the MLS, postcards, good flyers, open houses, networking, print ads, you name it. Some agents, though, ignore marketing! They are trained to only worry about price. It’s true that at the right price, any home can sell in any market. But a good agent doesn’t just want your home to sell, but to sell for the best price & terms in today’s market. It is crucial to get the price right, but it’s extremely important to also correctly address condition and marketing. Poor marketing is a lost opportunity and can cost you money.
A caveat: good marketing cannot sell a home with the wrong price or wrong condition. But for a home that is priced right and staged right, marketing can help sell homes for more (and in some cases create multiple offers instead of getting just one).
Condition is also key! Often a little improvement in the presentation of the home can significantly boost the sales price (fresh carpet and paint, neutralizing, decluttering, storing extra “stuff” are all usually good bets – remodeling a kitchen isn’t). Buyers want an updated home that’s tastefully done. When they see a home in original condition, or worse, it can be hard to see past it (and feels frighteningly expensive to update – it can scare them off). Agents with staging knowledge can be invaluable in helping you to “pick your battles” here.
Pricing is by far the most important element to consider here, and a too-high price is the main cause of homes not selling.
How does this happen?
One way is in the agent selection process. Mr and Mrs Seller interview 3 or 4 agents from 3 or 4 different companies and they hire the one who tells them the highest price. (It does happen, I guarantee you!) If several agents give you a price range that’s fairly close and one is way higher, it doesn’t mean that you should hire the agent with the extremely attractive price because he or she can get it for you. It probably means that the agent is just plain mistaken. Or, to sound cynical, it could be that the agent is trying to “buy the listing”. (That is a term that means telling the seller a high price to get the listing. It is unethical and prohibited by the Realtor Code of Ethics.)
A better approach is to pick the agent and then work out the price together. Unsure on where to put the asking amount? If it’s really tricky, hire an appraiser. It’s worth it.
Sometimes the market changes for the worse as soon as your home goes on the market, and you’re left not knowing what just hit you. This happened in September of 2001 after the attacks and it happened again this September, when the market in the west valley just about came to a standstill.
Whether the change is slow or sudden, it can be hard for sellers to believe that the home is no longer worth what it was a couple of weeks ago and they hold on to the higher price, stubbornly. This is a costly mistake, if understandable. In a buyers’ market, in fact, most homes will never sell because the sellers are futilely holding on to a past memory of what the home used to be worth.
And finally, sometimes, price is the only remedy. Sometimes homes can’t be fixed up, sometimes the hours have to be restrictive due to illness or something along those lines – these both hurt the selling price. But in that case, you can lower the offering amount to compensate and to attract a qualified buyer.
Los Gatos is mostly a “normal” or “level” market. Prices aren’t really rising or falling in most of the town – but in some strata and areas things are moving one way or the other. In a declining market, it’s extremely crucial to price your home lower than the most recenly closed sale. If you price it a little high to have “room to negotiate”, you may find that you have no one with whom to negotiate!
In summary. . . Any home can sell in any market. Right now, despite the doom and gloom you are hearing or reading about, there are local homes selling quickly and with multiple offers. These are homes “without issues”. They don’t back to schools, stores, high voltage lines, freeways or busy roads. They have good schools. They enjoy total remodeling and are priced low to get able buyers attention.
Maybe your home isn’t in the ideal location, with the best school. Maybe it’s not full of granite and high end appliances. Maybe it’s not going to get 9 offers in a week.
But your home, if you
want to sell it, can probably be accessible, clean and well staged, nicely marketed, and priced right. Even in today’s market, a home with one or more problems can sell within a month if the issues are addressed (by price if nothing else). The hardest one, of course, is price. It’s hard to sell at one price when a home “used to be worth” or “I thought it was worth” something else. Think of it as being like a share of a company in the stock market: some days it’s up, some days it’s down. If a stock is trading at $100 per share one day, it may be more or less the next day. You can always sell that share – if you’re willing to take the market value for it on that day. It’s the same with your home! A good agent will help you maximize that price by educating you on accessibility and condition, and marketing like crazy. But they all fit together, hand in glove.
If you keep those five elements in mind, you can sell your home in any market. This is true in my Belwood neighborhood of Los Gatos, it’s true in the Platinium Triangle of Saratoga, it’s true in San Jose’s Rosegarden area and all over California.
Call or email me if you’d like a personalized consultation on your home and the market in Santa Clara County today.
Mary Pope-Handy
Realtor, CRS, ABR, e-PRO, SRES, ASP, RECS, CNHS
Helping Nice Folks to Buy & Sell Homes Since 1993
Co-Author:
“Get The Best Deal When Selling Your Home In Silicon Valley”
408 204-7673 (Cell)
www.PopeHandy.com
www.ValleyOfHeartsDelight.com
