(Originally posted on June 30, 2007)
How can one word be so powerful?
Ever try to argue with a three-year-old child? First they ask for something simple. Maybe a piece of candy. Your response is equally simple, "No." And the comeback is, "Why?" You know the rest. The question "Why?" can drill down to the root of the issue every time, and we learn that at an early age.
As adults and Realtors, in particular, we know it's impolite to ask why more than once. Whatever response we're given, we usually accept. I'm here to say, "Stop the madness!"
Too many homes, too many prices
I can only take accountability for myself, so I vow to you here in my blog, that I will not contribute to the bloated MLS listings in Las Vegas. How do I intend to accomplish this? By asking the question "Why?" Starting today, when I'm on a listing presentation, and the seller wants to price their home $5,000 or $20,000 more than other comparable homes that have just sold, I'll ask that simple question. If the answer is not reasonable and easily justified to potential buyers, I won't take the listing. Crazy, huh? Not really.
What's the point?
My job is easy. I provide my expertise in the Las Vegas market to price your home so that it will sell, preferably within 30 days. Although it's exciting to have a sign in your window and a lockbox on the door, price means everything. If the price isn't right, you're not going anywhere (just ask Bob Barker). In 60 days, you'll have a stale listing that no Realtor will waste their time showing, and who will you blame? Your Realtor.
The numbers tell the whole story
If you're a regular reader of mine, you'll know I give ongoing statistics of how many homes are for sale, how many are short sales, and how many are in foreclosure. Since it will be July 1st in a matter of hours, here's the running tally:
Total MLS Listings - 25,744
Short sales - 1,518
Foreclosures - 880
Total MLS Listings - 26,951
Short sales - 2,015
Foreclosures - 1,205
Total MLS Listings - 28,315
Short sales - 2,170
Foreclosures - 1,323
It's no wonder that home sales are declining. Sales prices are unreasonable, Realtors can't say no, and buyers aren't falling for it. If every Realtor in Las Vegas would approach their listings and ask them to reduce their price to a reasonable selling price (not the seller's wish list price from 2004), this market would rebound in a heartbeat. But you and I know it's not going to happen.
Sellers and Realtors are living in Fantasyland. If I bless the price you want to sell at without asking "Why?" then it must be reasonable! Now we just have to convince a buyer to go for it. It's miserable for everyone once reality sets in.
A peek into the future
Nobody wants to be the bearer of bad news, especially not me. However, if you read the statistics, not the media hype, you'll see that we have enough inventory today, that it will take 24 months (2 years!) to sell all our current houses. The numbers keep growing, as I've shown you above. Logically this means, as the national press has already told everyone, that Las Vegas is in for two more years of depressed pricing. Bad. Very, very bad (if you're a seller.) So how do you overcome this? Confront your truth. Do you ABSOLUTELY have to sell your home? If you do, price it to sell. If you don't, take it off the market, and talk to a Realtor in the summer of 2009.
I know. Who could have imagined. So the truth is, you're not going to retire off the gains of selling your home. All the promise that you thought your real estate investment had - has almost gone away, if not entirely. It's rough. I'm a homeowner, and I'm in the same position. It was a paper gain in 2004-2005 and nobody wants to let go of that, but you must. Once you know you have to sell your home, work with a professional who will balance your needs with a buyers to get you the highest price in the shortest amount of time.
You get what you pay for
There are so many choices when selling your home, from "For Sale by Owner" better known as a FSBO (pronounced "Fizbo") to assisted realtor services to full-service Realtors. All I ask is that you do your homework. Nothing is more distressing to me than to be the third Realtor in, after the home has been listed twice. A year has gone by, multiple opportunities wasted and the market continues to decline.
When you are selling what is usually the biggest financial investment you have, it's no time to cut corners, and you can actually save money by hiring the best. Hire the Realtor, not just the company name. Ask questions, see what will be done to get your home sold. It's a two-way street - the burden is on you as the seller as well as the Realtor. Realtors can't perform magic when you burden them with unrealistic expectations.
When you meet with a Realtor for the market analysis of your home, and you say you must list for $20,000 more than anyone else, because you owe that much more, get ready for it. Here it comes....
"WHY?" Why should a buyer pay $20,000 more for your home than your neighbors?
YOU: Well, we put in $2,000 in new carpet!
REALTOR: Did you put it in for your enjoyment or for resale value?
YOU: Well, our enjoyment.
REALTOR: Great, because all it does is give you a nicer appearing home and create more value as compared to your neighbors - if the home is price the same.
(Continue this line of justifications by YOU until you see your home is not vastly different than your neighbors.)
The bottom line
Put yourself in the buyer's shoes. Go see your competition and decide which home you would buy first. What's the best bang for your buck? From there, you'll speed the whole process along. The good news is, homes are selling. Be reasonable, be fair and you'll quickly be gone and onto your next adventure.