A married pair of social workers are approaching retirement and hope to soon sell their house in Brentwood, Tennessee, a ritzy suburb of Nashville. For years, the property values there have escalated. But as they approach the market, the couple are taking no chances on the sale of the six-bedroom colonial revival house they bought in 1999.
“We aren’t big salary people. We couldn’t imagine buying a house in our neighborhood now. Yes, people want to live here. But the local market is starting to weaken. So, we don’t want to push our luck,” the husband says.
As he notes, for-sale properties are lingering unsold longer than before -- with days on market increasing. What’s more, some pending sales have flopped after buyers backed out in search of better deals.
“These failed listings are cautionary tales for greedy sellers who list too high. We don’t want to get humbled because we’re in a hurry to retire,” the husband says.
Brentwood is hardly alone in experiencing an increasing number of canceled sales. In December alone, about 40,000 home purchase agreements were canceled in the United States, says Chen Zhao, head of economics research at Redfin, the national real estate brokerage.
“High housing costs and rising inventory have made homebuyers more selective,” Zhao says.
As she explains, buyers seeking to cancel often cite a home inspection report that finds significant problems with the property, such as a malfunctioning HVAC system or a leaky roof. But the cancellation might truly be due to fears of overpaying.
Daniel Harbuck, a real estate broker and the author of “Unlocked: Homebuying Secrets No One Has Ever Told You,” doesn’t know the Tennessee social workers in this true story. But he agrees that careful pricing is in the sellers’ interest.
“Your home’s price tag? It’s the ultimate first impression. Nail it, and the buyers come running. Flub it, and watch your profits vanish. In this real estate game, the price is your power move,” Harbuck says.
Here are a few pointers for home sellers:
-- Look for an assertive listing agent to represent you.
“In all markets, selling a home to make an immediate move is anxiety-producing, and all the more so at a time of economic uncertainty,” says Stacy Berman, a longtime real estate agent in Maryland.
She recommends you search for an agent with extensive experience selling properties in your community. Another key is to rely heavily on referrals from neighbors and friends who’ve sold in the same area.
Don’t know anyone from whom to seek referrals? Another approach is to call the managing broker of a major realty office nearby. Ask the broker to refer you to an experienced listing agent with a substantial track record selling homes similar to yours in your price bracket.
-- Factor in your competition before pricing.
Eric Tyson, a personal finance specialist and co-author of “House Selling for Dummies,” says that prior to accepting any pricing recommendation, all sellers should do at least a nominal amount of research.
“Ask your agent for a list of properties near your home that have sold recently. Then get in your car and drive by these homes, noticing how they compare with your own,” Tyson says.
If your drive-by tour raises questions in your mind about whether your listing agent is suggesting too high or low an asking price, request a justification for the recommended price. Then reach your own conclusion.
“At the end of the day, it’s the owners, not the agent, who have the final say on pricing,” Tyson says.
-- Weigh a plan to price slightly below others nearby.
Remarkably, sellers in a desirable area can often receive more for their property if they price it just slightly below its apparent market value.
“Pricing a little lower than the competition can generate excitement. More people are likely to bid if they perceive the property to be a good value. And this can create an auction effect that could help you at the bottom line,” Tyson says.
-- Try to delegate many of your presale chores.
Sellers typically spend several months or more preparing their property for market. They cull through belongings, paint wherever needed and clean exhaustively.
But if you’re selling under time pressure, chances are you’ll have no more than a few weeks to get the home in showing condition.
One obvious way to cut back on your home-prep time is to hire contractors for work you might normally do yourself. Tyson says that sellers working against a tight deadline can get a lot more accomplished in a shorter time if they delegate.
-- Create a contingency plan for your property’s sale.
Sometimes even a home that’s in good condition and correctly priced will fail to sell in a reasonable time for reasons hard to determine.
To avoid panic in this situation, Tyson recommends that people who must sell in a hurry develop a plan B for coping if the process takes longer than expected, compelling them to move before their place is sold.
Perhaps you’ll arrange for a trusted family member to take responsibility for your home sale. Or maybe you’ll want to “buy” time by renting out the house for six months or so.
“You’ve got to look at the big picture. What matters is not only your financial well-being but also your emotional health,” Tyson says.
(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)