Selling Your Home: Should You Lower Your Asking Price?

Should You Lower Your Asking Price?

Setting the right price is crucial when selling your home. If you overestimate the value of your house, you risk alienating potential buyers who will not be able to afford to buy it. On the other hand, pricing your house at far less than it is worth can leave potential buyers wondering whether it has hidden problems. Having your house professionally valued can help you to set a fair price, but what happens if this price is not fetching any buyers? At this point, homeowners often toy with the idea of lowering their asking price to clinch a sale. However, some homeowners would be better off waiting for the difficult market to ride itself out, especially if the house in question is desirable in terms of size, location and amenities.

Selling Seasons
The selling season in which you first put your house up for sale can have an impact on how long it takes to sell. The housing market typically starts to warm up during the winter months and reaches a first 'peak' from April through to June. After the summer passes, the selling season tends to slow down again until a second 'peak' begins from September to Thanksgiving. Between Thanksgiving and New Year, the housing market slows down again. Listing your house during one of the 'peak' selling seasons is a good way to ensure that it will receive as much interest as possible from potential buyers.

Standing Your Ground
In a difficult market, houses can take up to a year to sell as the number of sellers is greater than the number of potential buyers. In this situation, it is often unrealistic to expect a quick sale, so try not to panic if your house does not sell quickly after first going on the market. If your house is in a location 'hot spot' or is particularly desirable, it makes little sense to lower your price, as this type of house is likely to attract plenty of interest from potential buyers unless it is grossly overpriced.

Cutting Your Losses
If your house has been on the market for a year or more without a sale, it is probably time to lower the price. As some time has passed since it was put on the market, you may need to take a significant hit on the asking price to interest potential buyers. This is obviously not ideal, but it may be the only way to clinch a sale if you have been unable to secure a sale at the current asking price.

Many buyers look upon price reductions as an indication that you have admitted defeat on the previous asking price, and will often come in with an offer that is below the new asking price. In this situation, you need to decide whether you can afford to accept the reduced offer or whether you are prepared to wait for a different offer. The latter can be a risky gamble as a higher offer will not necessarily be forthcoming, especially in a difficult market.

Contact Ann Smothers from Minnesota Short Sale Help at 612.619.3460 or www.minnesotashortsalehelp.com before you foreclose on your home.

By Sally AquirePhoto: © Yuri Arcurs - Dreamstime

What You Need to Know About Buying Short Sales

What You Need to Know About Buying Short Sales

"Short Sales" has become the buzzword of success in today’s real estate market. In the prevailing economic slowdown, many homebuyers are failing to maintain their loan repayments. As a result, the lender has a choice between initiating a foreclosure proceeding, or letting the property be sold for an amount less than the mortgage against the property. Whenever the lender determines that it may be financially better for them to sell the property rather than opt for foreclosure proceedings, a short sale is in order.

However, buying short sales may not be a profitable proposition in all cases. Potential homebuyers should take note of the following points:

What is the true market value of the property in the current conditions?
Just because it is a short sale offer does not necessarily make it a lucrative real estate deal. It is important to conduct a proper appraisal of the property, its location and accessibility, and the future market prospects in that area.

Evaluate the condition of the property.
Many times, a property that is available on short sale may not have been properly maintained. The truth is that the lenders who are enforcing the short sale are unlikely to invest more money in a property where they are already taking a loss. At the same time, the homeowners also know that they are going to lose the property, so they are not likely to spend on its upkeep either. Therefore, the new buyer must carefully assess the condition of the property before buying any short sale.

Factor in the closing costs of the deal.
You will need to factor in the cost of an inspection, pest control, and home warranty plans. Also, if the home inspection reveals problems you will be responsible for repairs, since the lender is unlikely to absorb these costs.

Factor in the closing time for escrow.
A short sale will usually require a much longer time to close escrow because of the complex legal processes involved. Furthermore, if the property is under more than one lender, then there has to be agreement among all lending parties on the terms of the short sale, which can be time-consuming.

Hire the services of an experienced real estate agent.
Short sales are generally much more time-consuming than a regular real estate transaction. At the same time, they usually generate two or three times the paperwork too. Anyone who is considering buying short sales should get in touch with a real estate agent who has sufficient experience in handling such transactions. That will ensure better financial security for the investor, even though they may have to pay a higher commission to the agent than would be paid in a traditional sale.

Contact Ann Smothers from Minnesota Short Sale Help at 612.619.3460 or www.minnesotashortsalehelp.com before you foreclose on your home.

By John S. JamesPhoto: © Christopher Rawlins - Dreamstime