INSIDER: Giving up Greed in a Seller’s MarketLIV Sotheby's
In today’s market, it is tempting for a seller to think they can put a property on the market for any asking price and get it, especially with Realtor.com’s recent release ranking Denver as the hottest home market in the country. However, despite the allure of lightning quick home sales and eye-widening offers, that is not the case.
While inventory around the $300K range is exceptionally tight, and a seller may receive multiple offers every time a unit gets listed, there are pitfalls in thinking that multiple offers, bidding wars and over-asking-price offers will be the case every time, at all price ranges.
Sellers must actively seek the sweet spot in today’s market, and that is marketing a home aggressively, without being insatiable.
If a property is priced too high, even with the market driving it, a seller may be faced with a buyer who is only putting three percent to ten percent down. When that happens, and a high loan to value ratio occurs, it makes lenders very cautious about the credit worthiness of a buyer, and also the true value of a property. Therefore, even though the market is able to achieve a certain price (market value), it may not allow for appraised value. If appraised value and market value are the same, it’s merely a coincidence!
The message to sellers is; we are still in a seller’s market but it is important to understand the definition of what a seller’s market is.
A Seller’s Market:
- Your home should be priced competitively, but you can list on the high side of reasonable.
- To be competitive, a seller still needs to continue making improvements to their home, or they may ultimately lose out on a higher re-sale price.
- Updates to hardware, flooring, and lighting are small improvements that go a long way, however today’s seller need not worry about installing a new $50K kitchen to seal the deal.
- And, if updates have not been made in more than 25-30 years, a seller must price realistically and ensure the property is always thoroughly clean.
People love to buy a house that needs some updating, but only under the pretense that the home has been maintained very well.
Whether buying or selling a home, understanding your local market will give you the confidence to move forward. LIV Sotheby’s International Realty compiles monthly, quarterly and year-end reports to help consumers make better real estate decisions. To access current market reports visit www.coloradomarketreports.com. To service all of your real estate needs visit www.livsothebysrealty.com.