of real estate - Keller Williams Realty

DO YOUR CLIENTS KNOW THEDIFFERENCE BETWEEN HAVING A HOME THAT’S“on the market”Share Jay’svideo explanation“Why Some HousesSit While Others Sell”with your clients.(http://bit.ly/inthemarket)versus “in the market”?By Jay Papasan, Vice President of Publishing and Executive Editor, Keller Williams Realty, Inc.Even in the hardest-hit markets, there are still properties thatsell.So the question is, why do some houses sell and others sit?The answer is really simple. In the current market, houses thatare priced competitively and staged impeccably sell. Othersdon’t.The thing that clients need to understand is that justbecause their house is "on the market," that doesn’t mean it is"in the market."Here’s how you can explain this concept to your clients:• The vertical axis represents price. At the top arehouses priced above the current market value. The mostcompetitively priced homes appear closest to the center ofthe chart.• The horizontal axis represents condition and stagingrelative to the competition. Homes that are staged the bestand in the best conditionappear on the left. Themore work a home needs,the further to the right itappears.• The key factor thatseparates a seller’s marketfrom a buyer’s market is thepercentage of inventory thatfalls within either category.In the current buyer’smarket, there is actually arelatively small percentageof homes that are “in themarket” based on botha competitive price andcondition relative to comps.• Houses out of this zone areeffectively out of the market.They are either pricedtoo high or the conditiondoesn’t warrant the list price.• In a seller’s market, whichmay well be the kind ofmarket that your clientsare familiar with, thePRICEleast competitivemost competitivemost competitivepercentage of housing inventory that is “in the market” isconsiderably larger. Prices are appreciating, so even thoselistings that appear to be overpriced today may get pulledback into the market with a little time.• In the current market, buyers hold the cards. With a lotof sellers competing for their business, they can be choosy.Buyers are hunting for deals and steals and won’t givemuch consideration to listings that are pushing the valueenvelope.• Keep in mind that in today’s real estate market, buyersaccess listings online. They can quickly narrow theirsearch to a geographic area and price range. Once theyhave identified that subset of houses, they go througha quick process of elimination, knocking out homespriced at the top of the market and those that are in leastcompetitive condition.• All things being equal,buyers will always narrow theirOnly a small percentage of thelocal market's housing inventoryis priced "in the market."OUT OF THE MARKET(homes that don't sell)IN THE MARKET(Homes that Sell)A BUYER'S MARKETleast competitiveCONDITION AND STAGINGfocus to the lowest-pricedhomes in the best condition.• A buyer may look at sevenhouses, but they will onlymake an offer on one. Yourhouse may have earned ashowing, but if you didn’tget the offer, all you’veaccomplished is that youprovided the buyer witha means of comparison –effectively helping to sell thehouse down the street.As Tony DiCello, directorof MAPS Coaching, explains,“Even though we talk a lotabout ‘buyer urgency,’ it’s‘seller urgency’ that we needto sharpen our focus on.Houses don’t move in thismarket until sellers get a senseof urgency about staging andpricing them to sell.” kwKeller Williams Realty Nov./Dec. 2010 • vol. 7 no. 6outfront 21