Daily Archives: November 29, 2008

I can always take a lower offer…

In light of the what the data stacking (refer previous post) up is showing, I just thought it might be a convenient time to mention a couple points. Until REINZ releases the full & final official figures in a few weeks we won’t know the full picture.

One thing I can say, the strategy the media has been commenting on about in recent days, that of placing a higher price on a property to make allowances for a lower offer, will not work in today’s market.

As a seller, often times the rose coloured glasses make one forget what being a buyer is like.

A buyer will typically gives themselves a price range, lets say $300,000 – $325,000 for example.

Now if they don’t find their dream home in a month or so, all is not lost, they will be at least one further important step closer to their goal. They will have become expert at recognizing value in the $300,000 – $325,000 price range segment.

A seller then decides to place his home on the market at $339,000 by saying “I can always take a lower offer.” You can see where this is going I’m sure…..

Those above example buyers who have seen everything on the market at say, $290,000 – $340,000 will quickly make judgement about the new listings value after inspection, and based on this, react positively or negatively. Importantly in todays market those most interested in the new listings, are the cash buyers who have done an immense amount of research.

Immense amount of research, what do you mean?

For many baby boomers or like me, those chronologically challenged, unless you are used to utilizing a PC or the web to do research, you’ll be out of touch with how todays younger generations approach buying a home.

We all know how much information is available on the web, and it is this facility that most younger generations use to conduct their forward planning. By the time they show up at an open home todays generation of younger buyers will already know twice the amount of info you would have when you were looking to buy your first home in 1975 or 1985. In fact half is probably underestimating, more likely triple or quadruple the info.

Yet, its these cash buyers who will just walk away, and many time not even go to the trouble of making an offer. You only get one chance to make that first impression, don’t blow it.

The way to get the best price possible is to get as many people interested in the property when it is newly listed.

Contrary to popular belief, when the Property Press or your local Real Estate book or lift-out comes out each week, buyers aren’t scanning it to look at places to visit.

I believe they are actually scanning it to cross some off the list. Don’t make it easy for them.

Remember♣ what Kevin Costner said in Field of Dreams

Price it accurately and they will come….  I think thats what he said…or something like that.

♣actually I do know what he said because I was involved with the sales of this movie in Australia in the late 1980s for Warner Bros…….

November 2008 will go down as an interesting month….

I’ve just run a few numbers on November 2008 so far in Nelson.

And the data shows a median number of days to sell at 50, and the average number of days to sell at 88.

I’m of two minds about applying medians to average selling days, and I think the average number of days should also be considered. If it has taken much longer than the 50 days, see below, then those sellers aren’t interested in accountant type figures that don’t always reflect the whole story for Mums & Dads out there.

So far in November 22 properties took over 50 days to sell, 17 of those over 90 days, and 11 took more than 150 days to sell.

The median of the price reduction for those 22 properties was $21,500 from the listing price. Just for your info, the median for those over 90 days was $24,000, which goes to show as we all know the longer the property is on the market, the rarer becomes the opportunity to get the best price.

And just for comparison purposes, the median price reduction from list to sell, for the whole data sample of homes sold so far in November in Nelson is $10,000.

As you can see from the chart, vendors have to be very sharp on correctly pricing, so that they are in the market, not just “on the market”, if they want to sell. It’s apparent from the data (as the chart shows) that over the last 2 months there is a delta forming and anedotally, it appears its getting bigger.