Category: Loft Sellers
Overpricing your Chicago Loft… The Chain Reaction
Posted by michaelhulett in Loft Sellers Friday, 22 January 2010 22:38 No Comments
Many sellers make the mistake of trying to start high on pricing, hoping to sell their Chicago loft at the highest possible price, then assuming that they can lower the price down the road if the property does not sell. THIS IS A VERY INEFFECTIVE APPROACH. In fact, it’s highly counter-productive. Here’s why:
YOUR BEST SHOT AT A SALE IS IN THE FIRST 60 DAYS
We’ve all heard the saying, “you only get one chance to make a first impression”. The same goes for selling a loft- you only get one chance for a property to hit the market. This is where the property is first intoduced to agents and consumers alike. If you spend that time backpeddling from the wrong price you’ve virtually eliminated the chance to move forward into a contract. Months later when you realize that consumers rarely overpay, it will be too late.
YOU HAVE A REDUCED NUMBER OF SHOWINGS
A basic rule in selling is to generate consistent showings for the property. With little activity, your chances of selling the property reduce dramatically.
MANY BUYERS WON’T EVEN KNOW ITS THERE
Since most buyers typically look within a specific price range, you are excluding potential candidates by pricing above their interest level. Sometimes the smallest price adjustment can open your loft up to a significantly larger pool of buyers.
SELLERS ALWAYS ASK “WON’T BUYERS ATLEAST MAKE AN OFFER?”
At first glance this seems like sound logic. In reality, overpriced listings deter buyers from further interest in the property because they mentally “move past it” thinking their offer and efforts would be in vain since they’d offer a much lower price anyway. That lower price as it turns out is typically a more accurate measure of its true market value. In the end it has the exact opposite effect as intended.
OVERPRICED LOFTS SELL THE COMPETITION
If you’re a seller, the best thing that can happen to you is overpriced competition. It makes your property seem like a great deal! So why would anyone want to help sell their competition?
THE CHAIN REACTION… YOU MISSED THE BEST CHANCE TO SELL IN THE FIRST 60 DAYS, EVENTUALLY THE LONGER MARKET TIME CREATES BUYER HESITATION, LOWER OFFERS, AND A WEAKENED POSITION DURING NEGOTIATIONS.
Once buyers realize a property has been on the market for a long time TWO things immediately come to mind. 1.) What’s wrong with this place? 2.) They must be getting desperate! In addition, as trivial as it may sound during the pre-listing process, please don’t underestimate the frustration associated with long market times. It’s a significant amount of work to properly prepare and continuously maintain a home for sale.
It is imperative that the price is thoroughly researched with comparable properties in the area. Additional factors such as competition and the state of the current market also play a large role in pricing. If your property is priced correctly, you’re taking the foremost step in avoiding long market times and a weakened position at the negotiating table.
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Loft sellers reality check
Posted by michaelhulett in Loft Sellers Monday, 11 January 2010 21:49 No Comments
Loft Sellers Reality Check
Selling your Chicago loft or condo in any market takes a lot of work. Today’s market presents challenges not seen in decades. Yes, you will likely take less for your place than what you expected just a year or two ago. No, if you wait until next year the price will not be more. Given the current elixir of job confidence- or lack thereof, existing inventory, number of sellers who have wanted to sell in the past 2 years but are waiting for a “better” market, and sheer number of distressed properties, it’s likely going to be some time before we see consistent appreciation. It’s been said in real estate that you make money buying, not selling. It’s true. When you’re ready to sell and/or need to sell, the market is what it is. One property or seller can not change the momentum of the market. So… what can you do to influence your sales price to the best of your ability?
1.) You MUST be priced competitively. Keep an eye out for a blog I’m putting out next on overpricing – it says it all. Price is always the first criteria every buyer starts with. If you miss the boat here, you’re swimming.
2.) Your loft MUST show like model. You get one shot once buyers cross the threshold into your home. It’s imperative you do everything in your power to make it count.
Other items that should be discussed with your Realtor…
- Expect to spend money before you go to market. $300 in handyman work + $700 in paint can significantly reduce market time and often yield that much and more in sales price.
- Look for the 3-4 most directly competing properties on the market. Then go over every aspect of each. Next, identify strategies on how to position your property against the others. This IS your buyer’s experience.
- Go through comparable listings that have CLOSED in detail. What’s on the market is your competition but when it comes time to negotiate an offer or to meet an appraiser, this is what they will zero in on.
- Home Staging: do you need a home makeover?
- De-clutter everywhere. Think open, light, and airy. Getting the “extra’s” out is half the battle in showing preparedness.
- Curb appeal rocks. I’m talking to you condo owners. Get on it! If your common area looks less than desirable- then so does your entire home.
Best of luck and of course contact me anytime I can help!
