On his 70th birthday in January, a doctor who specializes in geriatrics finally retired and fulfilled his long-standing wish for waterfront living. He bought a townhouse in Annapolis, Maryland, and put his Washington, D.C., colonial up for sale the same day.
The doctor loves the new place. But given the COVID-19 outbreak that hit his area in March, he’s increasingly nervous about his unsold colonial, which has yet to attract any offers. In hindsight, he wishes he hadn’t tried to “test the market” with a high price when his home first went up for sale back in January.
Dorcas Helfant, the broker-owner of several Coldwell Banker real estate offices in Virginia, doesn’t know the doctor in this true story. But she says it’s almost never wise to seek an above-market price, especially during a time of economic upheaval like the current one.
“What you want is precision pricing from the outset that’s based on solid data and not hunches or wishful thinking. People who try to push their price at the beginning are often punished later with deflated proceeds or a delayed sale,” says Helfant, a past president of the National Association of Realtors (realtor.org).
Why does hanging too high a price tag on a property at the outset often lead to disappointment for sellers later? The reason is that the current generation of buyers do extensive online research on listings and can easily spot an overpriced listing when it first surfaces.
Danielle Hale, the chief economist at Realtor.com, a real estate listings website owned by the News Corp., says that early this year, home prices were strong until the economy took a dive due to the pandemic. But at this point, she says it's unclear how pricing will evolve in coming months.
“Just how significantly the housing market is impacted by the pandemic will depend on how effective the country is at containing the virus and how the economy responds. If all goes well, we could see buyers returning to the market aggressively this summer to make up for the spring they lost,” Hale says.
But at Seattle-based Zillow (Zillow.com), which tracks real estate markets throughout the U.S., chief economist Svenja Gudell forecasts that the nation’s economic issues have already put a damper on home prices, though only to a limited degree.
“Buyer demand and healthy housing market dynamics will prevent U.S. home prices from dropping more than 2% to 3%,” Gudell says.
Are you a homeowner who plans to sell later this year but fear making errors during a period of economic uncertainty? If so, these few pointers could prove helpful:
-- Consider hiring an experienced appraiser to help judge your home’s value.
These days, pricing is complicated, especially in communities where properties are widely varied. In all areas, an examination of recent sales of similar homes -- known as “comparables” -- helps listing agents provide accurate pricing recommendations.
In normal times, when home prices are generally stable, experienced real estate pros who regularly sell property in your area are sufficiently skilled at using comps to make sound pricing judgments. But Fred Meyer, a real estate broker who sells homes around Harvard University, says that during uncertain times, it could be worth it for sellers to consult a real estate appraiser to also assist with pricing guidance.
“Appraisers are very meticulous in using data to adjust comparable sales to come up with a realistic conclusion on value. For example, they’d know how much to knock off the value of your property if your bathrooms are dated versus another nearby house with newly renovated bathrooms,” says Meyer, who also provides appraisal services in Massachusetts.
-- Avoid taking your frustrations out on your listing agent.
Kathy Zimmerman, a longtime Wisconsin real estate agent who sells property through Re/Max, says that at times of economic uncertainty -- when homes are taking slightly longer than usual to sell -- some frustrated sellers begin to pressure their listing agents.
Zimmerman cautions sellers to “remember that it’s counterproductive to blame the agent for what are essentially market-wide conditions. It could hurt you in the end if you become a very high-maintenance client,” she says.
-- Release your anxieties with a cleaning blitz.
Zimmerman has sold homes for more than three decades, and during that time she’s observed a gradual decline in the cleanliness of properties shown for sale. All too often, she says, dual-income couples lack the time or energy to keep a home as clean as their parents’ generation did. Yet during the COVID-19 era, buyers hanker more than ever to own a spotless, well-kept place where they can get a fresh start.
Anxious homeowners who fear their property won’t sell would do well to re-channel some of their nervous energy into an old-fashioned cleaning campaign that covers every inch of their property. Showing a home in sparkling condition can give you a competitive edge over less-tidy people trying to sell in the same neighborhood.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)