Sellers

How long does it take to sell a 4 (or 4+) bedroom house in Coal City, Diamond, Carbon Hill? Not as long as it used to!

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I’ve been spending a lot of time in Diamond Estates this week. Many homes, damaged in last year’s tornado, are fixed with homeowners back in place- some bigger and better than ever before. Others are works in progress. Because it’s how my brain works, I wanted to put a number on the subdivisions’ recovery- or lack thereof. In the below chart you will see the numbers for a year leading up to the tornado and the year since. I’m pleased to report that while we’re a sale off, the median price is up a percent and the average time it takes to put said houses under contract is down 9 days (or about 31% depending which angle sounds better to you). This shows that these two subdivisions are as strong, or stronger, than previously. I’d expect nothing less from this #CoalerStrong community.

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Price Drops

by Jim Ludes on September 11, 2014

in Sellers,Statistics

In the two weeks leading into 9/8/14 there were 2,329 price changes in my entire Multiple Listing Service (so, in Northern Illinois). 2.1% of those were either zero change in price (don’t get me started on agents that do that) or price increases. That leaves us with 2,270 single family houses that reduced their asking price.

Of those 2,270, the average price reduction was 4.1% and median was 3.58%. This really pleases me as longtime readers (and sellers) of mine know that I preach that no price drop of less than 3% is worth it because houses generally sell for around 96% of last list price (meaning- if you’re struggling to sell and price is the issue, you’re in need of a drop in excess of 4% to meet the market).

So, if you have a house to sell, don’t just listen to my advice…..listen to the advice of half or better of sellers on the market. If you’re considering a price drop, 3-4% should be the minimum you want to do.

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I preach this stuff a lot. Eventually though, everyone will listen. Pricing is important. Here is a chart of the last 12 months of sales in Grundy County (single family) and the relationship between days on the market and percent of original list price obtained.

Notice the obvious downward linear trend!

What happens if we segment that graph in two parts, one sales from 1-90 days on the market and the other from 91+? You’ve long known about my quality listing approach to listing and selling property, the first graph contains all eligible single family houses for that, the next does not.

Of houses sold in 90 or fewer days, 58.99% of them were “Quality Listings” (again, don’t misconstrue that to mean the other houses weren’t quality or that those agents didn’t do a great job. It’s just a metric I use to show which were truly exceptional. The below graph shows that as you go on in days, you get further from 100% of list price but by a ridiculous margin…..

…..however, when looking at sales 91 and more days from the time of listing, you see that amount of original list prices obtained are harder to rely on. This is why I tell my clients, on listing presentations, that I start losing sleep after 90 days.

The data in this post was obtained exclusively from Grundy County, IL. I’d be willing to bet you large sums of money, however, that it works for Will, Cook, LaSalle, Denver, New York, etc.

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I just closed on a house on Pheasant Lane in Coal City that made my seller a good amount of money on a property she owned for 21 months. Here’s what the inventory is looking like for single family homes 3 bedroom and more in Coal City/ Diamond.

In the past 12 months…..

  • 3 bedroom houses are down 22.2%
  • 4+ bedroom houses are down 19.4%
  • ALL bedrooms are down 19.6%

The buyers market is evaporating!

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I was skimming an article on Trulia’s Pro Blog that was emailed to me this morning titled, “5 Ridiculous Things Sellers Say (and how you can deal with it).” I don’t care about how they plan for me to deal with it, I’ve been doing this long enough to not need that advice. I was only interested in the 5 seller statements deemed ridiculous by someone. I’m not sure I would call these things ridiculous. I think I would describe them as in need of more education. Here they are and the rest of my thoughts:

  1. “But I spent X years or $XX on that.” This is true. Sellers will frequently tell me how much money they’ve put into something. ‘I bought my house for $160,000 eight years ago and have put $20,000 into it since I did.’ Totally fair, Mr. Seller. In some cases, that might be worth something (depending on what that 20k was for, but in many cases you’re just keeping the house in shape.
  2. “We just need to find a buyer who understands my tastes.” While this can happen and does, it really depends on your taste. If you’re into wild, bright colors and no furniture it might be a little bit (see: WAY) harder to find that match than it would be with subtle colors and Pinteresty decorating.
  3. “I want to price it high so I have room to come down.” This isn’t ridiculous. I hear it at more listing appointments than not. It is however, ore often than not a flawed logic. As buyers are more and more educated with the Internet, it’s harder and harder to trick one into overpaying for a house (tighter appraisals hurt that ability too). Sure, there’s a sucker born every minute….but even a sucker has access to see that the house 2 doors down from yours, that’s nicer, sold for $20,000 less than you’re asking three months ago. Anyone who has listed with me in the last 8 or 9 years has heard the, “I like to list houses like Carmax prices cars” speech from me. Such is to say, a good market analysis tells us a price range in which the house should sell for given the current state of the market (which is always fluctuating to a degree). An appraiser probably won’t go over my high end price, so to list too much higher than that would usually be a mistake.I can count on one hand the number of times in 11 years that listing significantly higher than my suggestion (see: more than 3%) was a good idea.
  4. “That offer is an insult- I won’t even dignify it with a response.” This one- probably ridiculous, if I’m being honest. A house is worth what a buyer is willing to pay for it. ALL offers should be given at very minimum a counter-offer. Even if you come down a tiny amount with a message that the opening offer isn’t even close to where you want to end up- it’s better than losing a potential buyer. If that buyer doesn’t want to meet the price you are willing to sell at, make that his/her/their choice and not of your own doing.
  5. “I need to get $X for my home I want to take my Australia trip- let’s list the place for that.” Unfortunately, the market does not care what you want or need to sell your house for. It only cares what your house is worth. Your local grocer might need to make more profits this month because the owner’s kid needs $6,000 in braces, but if he jacked up the price of milk to $6 on everyone for three weeks what do you think would happen? A) people will pay $6 for milk or B) they’ll buy milk elsewhere?  If you said B, you’re right….. and they’ll buy someone else’s house too.

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Agent Photography Crimes

February 25, 2014

“A picture is worth a thousand words.” It’s true. But you don’t want those words to be curse words from your seller. I tweeted out a link to an Inman News top ten photography crimes real estate agents commit. I’d like to do my own touch on that and add a couple off the top [...]

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USDA Extension

February 20, 2014

Great news, Morris! USDA has extended you until 2020! After several years of living 6 months to 6 months, we now have you locked up for 6 years. It wasn’t long ago that I wrote about this.… but it will be a while until I have to again. This is good for both buyers and [...]

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Homes Needed

February 4, 2014

One of the bad biproducts of having a career year in 2013 is that I left myself too few houses to sell. There are buyers out there (mine and others) who want houses. You can sell yours for more today than you could have in the past several years. If you’re on the fence, you [...]

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Agency

January 24, 2014

People you use to list a property with or buy a house from are real estate agents. But what IS agency? Agency refers to an individual with whom you’ve established a formal agency relationship. Someone that is looking out for you and your interests. This individual (often times referred to as your REALTOR) usually indicates [...]

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