In print, what people here have said before
Here is a link that might be useful: Homeowner denial
Your best bet is don't move if you don't have to - period.
I think some of the author's views are wrong. People who bought at the top are either upside down or lost true equity (didn't benefit during the run up). Of course they do not want to sell at a significant loss. I think its kind of stupid to call the sellers stubborn for not lowering prices so the market can bottom faster. No one is saying auto makers are stubborn for not lowering their prices more. Maybe the realtors should lower their prices so the market can bottom faster. The story seems a little one sided and from the realtors perspective.
There are some markets and some people who bought at the top and are underwater and I feel bad for them, mostly. But stastically people buying at the very pinnacle has got to be lower than people buying on the way up and down. And there were a lot of people trying to cash in, always a risk.
As well as the markets where this has happened are more likely to recover faster, D.C. Miami, L.A. So if you bought at the peak and are a family chances are you should be staying put long enough for that recovery to happen.
Losing money because you over improved is a possibility in any market.
I feel worse for people in places like the midwest where houses haven't seen any appreciation for years and years but now are also depreciating if you can sell them at all. That's really sort of a separate issue that tends to get lumped on as a little side note if at all, when writing and talking about the real estate market when really they are mostly talking about the big coastal city markets.
In those markets, I'll bet there are significantly more who bought before the crazy boom who saw their house value go up significantly and now don't want to take a lower price than their top appraisal - or like the realtor says - your neighbor got more money 6 months or a year ago so you think you should too. In a some of these areas if you bought say 7 years ago you are probably still going to make money, or at least not lose money.
And "lose money" needs to be defined. A recent dinner conversation with a friend that sold a house in Connecticut - "yea it was a rough sell, I didn't make any money" This is a house they've been in for... 15? years, knowing him never did any maintenance or upgrades......then
"course I put two kids through college on that house" (not while living in the house, ON the house)
Ohhh, totally different story in my mind. He made money. He's just already spent it. People in Detroit and Cleveland have not been able to do that.
It's called PDS.
Here is a link that might be useful: PDS
I was frustated when I read this(these)articles. It's not always the Homeowner. I totally relied on my Realtor's advice in regards to listing price (and 2 subsequent price reductions) when we listed our STILL for sale home in April. I had a new home at stake (contingent offer on new construction) and made sure the Realtor knew I NEEDED REALISTIC advice. No SUGAR COATING. I completely followed his advise from new flooring & other fixups to make our house outshine the competetion (and it looks fantastic, IMO)to listing price and it's current price.
Not one offer in 7-8 months. Since I have gotten 100% positive feedback and priced based on Realtor's advice. I have to assume it's the market and will have to under price my house to get a sale. Could it be that not even the Realtor's know how to price a home??
Our contract is about up with him and although he is a highly respected and experienced Realtor that has been Johnny on the spot, I might have to entertain a fresh set of eyes and get a new price perspective.
When I sold my last house, the realtor came at me with numbers I just laughed at. This was just before the market started sliding and crashing, and even then I just refused to list that high. I told her then what I'd like to get, and what I very realistically expected to get. Well, I listed initially 20% lower than what she wanted. At least that got some lookers. I dropped price twice and it sold slightly above what I expected to get, and exactly what I told her it should get after I contributed to the closing costs. Spot on the money. Instead, I got to chase the market downward and get in front of it. Didn't lose anything but time. It sold in 6 months, and coulda/shoulda sold sooner if it had been priced realistically. She sure didn't object when I called the last time to tell her to cut the price.......I guess she finally believed me.
I liked her and she did a good job, and I'd use her again. I just know that even if you have an agent working for you, that they will automatically try to swing you to list as high as they think there is a snowball's chance in hell to sell it for. Who wouldn't?
Calliope Â You obviously understand the market but I think you are the exception to the rule. :-)
I have a question for youÂ How did you figure out what your house should have sold for? Were there valid recent comps? Or did you use older comps and reduce since the market continues to head down?
What sort of argument did your RE have for the price she suggested?
Just curiousÂ :-)
Yes, there were recent comps and they actually did go at close to her suggested price, but I looked at DOM on them, and wasn't going to bide my time waiting for (just the right party) like those sellers did. I also wasn't in denial about the housing slump coming on. You'd be surprised at how many people thought it was a flash in the pan and would be over quickly. Hah. I invest a little and saw the writing on the wall and took it seriously. I also knew the demographics on that area, and that it would likely sell to somebody who had a decent job and no capital. I was right on that one too, as I think I was one of the first sellers in this area to offer help with closing, right off the bat.
Today's market is for nitty gritty. It's not about good smells and staging (although I did both to a certain extent).....it's about knowing your prospective market and playing to them and not farting around. Unsold houses are a financial drain, and better to cut to the chase right at the beginning than suffer for months and months and still have to surgicate your expectations.