This has been on my mind for a while, so I’ll throw it out there for people to discuss. Sometimes a non-agent can introduce topics that the real estate community may be uncomfortable in discussing with their clients. So, here goes…..
The topic: Is this lousy news for sellers just the spice to get them to realize that the white- hot markets of 2005-2007 are long gone?
Price reductions have been taking place for sometime. Months and months. But, many have been token reductions and the conversations I hear and read on blogs is that, in some instances, resistance has been fairly strong.
What good does it do when a seller who reduces a price by $3K on a $650,000 listing that has been languishing on the market for months? If today, after weeks of small incremental reductions, the listing is priced at $550,000, there is no agent on earth representing a buyer that will take it seriously. Especially after seeing the price reductions go on and on for months. I don’t know who is torturing who: the homeowner doing this practice or an agent who can’t pull the plug on the listing? I’ve heard that not taking a listing is not in the DNA of agents (I’m teasing of course.)
I know of some agents who have broken their backs and have spent a lot of money on listings only for the seller to eventually pull the plug on the listing out of frustration. And then, (drum roll please) have the $500K+ listing end up renting for under $2000.00/mo. Any sellers out there understand the rent-to-price ratio relationship over the history of residential real estate? Now, on the other hand, many of today’s agents have little experience in working through a correction and pricing and marketing a home effectively. If we are honest, there was not a lot to do in a white-hot market to generate the offer: place the listing on the NWMLS and arrange a time with the seller to accept multiple offers. I hear some were even nice enough to offer coffee and pastries to the agents sitting in cars outside of a property waiting for their turn to submit their offer. How times have changed.
I have seen a couple of examples of the substandard work ethic and marketing in my neck of the woods in Snohomish Co: outrageously poor marketing, only to have another professional agent come to the rescue and have a successful sale. Good for that agent and good for the seller to recognize when a change is needed.
Will agents bring the Seattle Times clipped article to listing presentations? When is real estate bad news good for moving sellers in the right direction and getting the market moving? Perhaps today. Or, maybe we still have a long way to go in understanding how damaging the excesses of next to zero lending standards will turn out to be and the artificial appreciation it fostered.
PS. Those who are currently in the market to buy should be in conversations with your loan officers regarding the recent drop in interest rates. Just today, our office is hearing that there are 30 yr fixed rates at 5.5% at par, some even indicating a small rebate at that rate. Consult with your loan officer.