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is this called chasing the market?

Posted by works_for_roses (My Page) on
Sun, Jul 18, 10 at 15:52

DH and I both lost our jobs in January. We put the house on the market in April at $399,900. We've had about 7 showings since then, mostly in May. We are usually in the top 2 or 3 (or so they their realtor says) but have not been the final pick yet. Our realtor wants us to lower our price to $379,900. I was thinking $384,900 but then I come back to posts here about making one big price cut instead of several small ones. And not the "chase" the market. Most of our competition is priced is priced $60k less or $100k more than us. None seem to really compete directly as far as neighborhood and size, especially at the higher end. One problem we may have is that we have a huge rose garden (more like a botanical park) that puts off a lot of people as too much work to maintain.Our house is probably the 5th smallest house in the neighborhood where prices go from $380k to $900k

Any advice? None of the other houses that went on the market when we did has lowered their price yet.

http://www.realtor.com/realestateandhomes-detail/Burlington_NC_27215_1118721289


Follow-Up Postings:

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RE: is this called chasing the market?

In a declining market if you are making small price reductions that are behind the trend you are chasing the market down. Houses that are currently on the market that haven't sold are not comps. I am also a believer in pricing "at the break". For example, no one searches up to $379,900. They may search up to $400,000 or $375,000, so in my opinion you really aren't capturing any new buyers until you hit the $375,000 mark.


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RE: is this called chasing the market?

I agree with terriks in pricing "at the break." When we were looking at new houses, our realtor had us set up to receive automatic listings online. During the 3 months that we were looking, some houses at the top end of our price range only showed up on our list when they dropped their price enough to move into our top category.

Anne


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RE: is this called chasing the market?

A quick zillow search shows lots of houses for sale for more in your neighborhood, but the 2 that sold recently were 374k and 381k.

"None of the other houses that went on the market when we did has lowered their price yet. "

Of course, none of those houses have sold either, right? If you want to sell quickly, you should price based on what is selling. If you can afford to wait, the NC market seems to be improving, so buyers probably will come up to 385k+ eventually. It might be a while though. You'll probably eat up all the extra "profit" paying mortgage payments in the meantime.


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RE: is this called chasing the market?

I knew in my gut that that would be the answer, it's just so hard to pull the plug and lower the price. To complicate matters, if we sold we would have to move into an apt somewhere, and then move again because we have no idea where our next jobs might be - we're looking in nc, fl and sc. The $381k sold listing is the house behind me - took 2 years because she started at $549k just as the market was dropping. But it's a very strange floor plan with lots of rooms that you just don't know what to do with.

Thanks for the advice! I guess I gotta do what I gotta do.


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RE: is this called chasing the market?

Works for roses,
I know from reading your other post that you NEED to sell quickly. I agree that making small price reductions will get you nowhere. You need to be AHEAD of the curve, not behind it and not even on top of the curve, if you really want to sell quickly. Especially since your property has some very unique attributes, that to most buyers is a negative. The price has to be so that it entices buyers to make an offer even though they are not wild about the yard. Most buyers are not like you and I. They hate yard work, plain and simple. And no matter what you say, you have a lot of yard work going on there.
If you decide not to remove the roses,I think I would advertise to any potential buyer that with an agreed upon price, you would be willing to sod the back yard for them.
If you do decide to get rid of them, give me a shout. I live in Charlotte, and just built a home on 4 acres. We could work something out.
Your decisions really depend on how quickly you really need to sell. Answer this question honestly first, then you will know what you need to do.
Good luck with the home sale and the job search.


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RE: is this called chasing the market?

I lowered the price to $379,900. The zillow estimate is the price the house was appraised at last year ($368,000) but that was before improvements such as a new kitchen, new stainless appliances and granite countertops, sprinkler system and hardwoods throughout the 1st floor. So I'll see if this produces any lookers.


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RE: is this called chasing the market?

Still think that you should have gone down to $375,000, but good luck!


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RE: is this called chasing the market?

Works,
How long can you wait to sell before you and your spouse become financially burdened? (I don't expect you to answer this publically, but you do need to know the answer between yourselves) Once you get this answer, your RE agent should be able to tell you what price it will take to sell in that amount of time. If your answer is 9 months, then you are probably priced OK. If you need to sell w/in 3 months you need to be priced ahead of the curve, which you are not at the moment.
Keep us updated, and, again, good luck with it all.


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RE: is this called chasing the market?

ncrealestateguy - what price would be ahead of the curve? That was my reasoning for asking this on this forum: I don't know if lowering my price to $379,900 is chasing the market or getting ahead of it.


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RE: is this called chasing the market?

It's hard to say - only your realtor or an appraiser would be able to guide you as to being ahead or behind the curve.

I don't know your financial situation, nor do I want to know (LOL some things are best kept personal!), but, one of the biggest mistakes I've seen in my short life (26 yo) is when sellers ask too much.

We bought our house on the cheap because the sellers were desperate after trying to sell for 3 years. If they would have priced it right in the first place, they could have gotten a lot more (but less than they were asking) and avoided the housing meltdown and the slamdown in prices.

The best thing to do is sit down and talk to your realtor and be very honest with eachother - make sure it is clear there is no puffery or sugar coating. Ask them what you need to price the home at to sell it within your comfort zone of time. It may very well be that 379k is a good price and one you should stick to!!!! Some real estate agents will tell you a higher number to get you on the bandwagon, etc. Let them know to be brutally honest with you, and in exchange, don't get defensive, etc. if it is lower than you thought it would be. Right now in the market, the two most important things are 1. Is it priced to sell within my comfort zone of time? and 2. Will it appraise for the amount we're asking?

Appraisers are tough these days (I learned this the hard way recently), so it is doubly important these days to price appropriately so you are not stuck in a situation where the buyer can't afford the house anymore because they have to add to the down payment to fit within the lender's guidelines.

Only you can make the choice about price, it is a very personal, and important decision. Keep us updated.


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RE: is this called chasing the market?

You should have gone down to $374,900. That gets you below the $375K mark, which is a number that is likely to be searched upon or hard coded into lousy search software which doesn't let the searcher set an explicit number.

Getting just under $375 protects you from searches that stop at but don't show the $375K mark, just in case there are any out there. It also helps psychologically.

Currently, you probably are still looking at being discovered mainly by buyers in the $400K category. For want of an additional $5K, you have significantly limited your exposure to the market.


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RE: is this called chasing the market?

Getting just under $375 protects you from searches that stop at but don't show the $375K mark, just in case there are any out there. It also helps psychologically.

A search for homes up to of $375K would pull anything up to and including $375K. There is really no advantage at all at pricing at $374,900. In fact, if for example someone was searching $375K to $550K you would lose them. I don't see that the OP has increased their buyer pool much by not dropping to $375K as most buyers that were looking up to $400K would have already been aware of their home, but buyers searching up to $375K still don't have it coming up in their searches. Buyers tend to search in $25K increments.

what price would be ahead of the curve? That was my reasoning for asking this on this forum: I don't know if lowering my price to $379,900 is chasing the market or getting ahead of it.

I don't know your market, but my guess is that you are not ahead of the market, and are indeed chasing the market down.


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RE: is this called chasing the market?

A search for homes up to of $375K would pull anything up to and including $375K.

Not necessarily. It all depends on how the software is written. It should, but there is no guarantee. There are too many search packages out there to be sure. Some are poorly written.

I actually ran into this problem when looking for land using the local MLS search feature, since fixed.

The OP is trying to widen the market. Insuring she pick up the downside buyers and dangling the physiological lure of a price under $375K would be worth it in my opinion.


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RE: is this called chasing the market?

Roses,
Unfortnately I work the Charlotte market, so I can not tell you what that magic # is. But your Realtor should be able to.
As far as the pricing cutoff strategy... When buyers know that they can afford a home for $379,000, they don't stop searching at $379000. After all, these are asking prices. I always search about 10% above what my clients tell me they can spend.
Like Sylvia Texas stated... price it right and then market it to likely buyers... garden club members, landscapers... Post a visual tour on Facebook, post a video on You Tube paying careful attention to the meta tags.
All of this marketing, however, is worthless, if you are not priced correctly. Just have a sit down with your agent, and tell her to suggest a price that will generate a sale w/in 3 months.
Good luck.


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RE: is this called chasing the market?

"The best thing to do is sit down and talk to your realtor and be very honest with eachother - make sure it is clear there is no puffery or sugar coating. Ask them what you need to price the home at to sell it within your comfort zone of time. It may very well be that 379k is a good price and one you should stick to!!!! Some real estate agents will tell you a higher number to get you on the bandwagon, etc. Let them know to be brutally honest with you, and in exchange, don't get defensive, etc. if it is lower than you thought it would be. Right now in the market, the two most important things are 1. Is it priced to sell within my comfort zone of time? and 2. Will it appraise for the amount we're asking?"

What good advice this poster gave you, read it again and put it in into action.

The reality we discovered when selling our house (we closed Monday a week ago) is that no matter what the other factors are, if you want to sell your house it's all about price in this market.

FWIW, we sold our house for 75,000 less than our original asking price, it was in a great neighborhood, always in the top 2 or 3, showing agents always stated it showed beautifully, yadda yadda, so on and so forth. The bottom line is that houses over $250k simply aren't moving, and it's a buyer's market.

We could have sold it earlier for maybe more money, we just were not willing to accept the reality of the current RE market.

Have you had any offers? If not AND you really want to sell I'd cut the price as low as you think you could go, then knock off another 10 to 15k, then be prepared to take 20 to 30k less than that.

Unfortunate but true, good luck.

Our neighbors really can't believe the prices that the current sells in the neighborhood are going for, they all think their houses are worth more, as we did when we first listed our house. Our selling price was 50k below the county appraisal. Let me state again this was a 10 year old house with absolutely no issues, when they did the inspection the buyers asked for nothing, as there were no problems.

The point is this; the reality of the current market is all about price, you are competing with desperate sellers, even if you're not one you have to price competitively.


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RE: is this called chasing the market?

ncrealestateguy - I know that you are right. Our current price of $379k is what our realtor suggested. Yesterday we went to an open house of one priced at $369k in the neighborhood. It was unbelievably bad - the refrigerator doors handles were held together with aluminum foil! I can only hope that someone goes to that house before or after coming to my house.


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RE: is this called chasing the market?

I feel like I'm in a similar situation. we're priced at a similar number, in the bottom 3 in price in my school district of about 30-40 listings.

there are some sale prices cheaper by 10-30K, not sure what to do about it.

most houses under 4 seem like disasters. we're probably the same size as a lot of them, but we're only 2 brs, instead of 3, our common rooms are larger. We're completely renovated with a new granite kitchen and new really nice bathroom, everything is basically perfect. they're older, messy, dirty etc. We're still a little lower in price than them, but haven't gotten offers besides 1 really low one, and a good one, that dropped out after acceptance, prior to contract for a "better" house.


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RE: is this called chasing the market?

An update: today I gave my realtor new text for the MLS sheet that focused on the house only and told her what pictures to remove from online listings (all those featuring the yard except for one of the pergola). I confirmed with her that we are being shown in the two larger markets surrounding us (Chapel Hill and Greensboro). I lowered the price to her suggested price instead of creeping down incrementally. Witherspoon Roses is going to come out next week to give me an estimate on taking care of the roses, so i can provide it if needed.

Thanks for everyone's help and suggestions. I will post another update to let you know if anything has changed or not. Mentally, I'm preparing myself in case we need to drop the price further so that I can adjust my expectations.


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RE: is this called chasing the market?

Sounds like you're on the right track.

Thanks for updating us. It's always great to get updates on these kinds of threads!

Hopefully the next house you buy will be your "forever" home and you can grow the most grand rose garden ever in NC.


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