Agent Asks What Should I Tell the Seller

Steven Keefe, Broker/Owner
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

Today I received an email from one of my agents who had a seller who was confused about current market conditions and how to price his property.  What follows is the email I sent him.

Dear Agent,

 

Thanks for copying me on the correspondence from Mr. Seller, I would direct him to www.mountainupdate.com for some statistical information on our market.  The following would be my comments after looking closely at his particular property.  As we discussed the comparable sales to this property provide for an indicated value of mid to high 600's.  Unfortunately, like with other areas of So. Cal, Lake Arrowhead has not experienced appreciation, in fact in nearly every instance properties purchased in the past 2 years are selling for considerably less than what the owners paid for them. 

 

The properties that are moving quickly are the distressed and bank owned (foreclosure) properties.  Mr. Seller missed the mark regarding pricing.  Sellers that want to move their property need to list the property as close to their bottom line as they can bear.  Padding the price will only prolong the agony.  Properties that are selling are going out on average 97% of asking price because they have been priced correctly.  There is too much inventory available for sellers to choose from in this range, financing is extremely tight over 500k, and there are too many motivated sellers in the market for a buyer to even look at an overpriced property.

 

Timing is more a function of pricing than anything.  If something is priced 100k over the market, it isn't going to sell now, and it isn't going to sell in 2 years at that price.  What we know is that properties that ask a lot, and reduce over time almost always trail the market and eventually sell for less than they would have if thew were not overpriced to begin with. 

 

This may seem harsh, but the reality is that Mr. Seller must strongly consider pricing the property to sell, or just wait.  It will do more harm than good to list the property above the market. 

 

Naturally, there may be somebody out there that will contradict what I am saying here.  It is unfortunate, that some Brokers are of the mind that they will list a property at any price, maybe a miracle will happen, or maybe they will grind the seller over time down on the price. Brokers that subscribe to that theory or practice don't admit it to a seller, but they will admit it to you and I.  They are so desperate for a listing that they will say almost anything.  Their results show it.  Refer Mr. Seller to www.mountainupdate.com to see for himself what our competitors who promise higher sales prices actually do.  The results speak for themselves, Jim, you me and our team have more sales than all other companies in our marketplace combined.  In fact some of the companies that I hear people speak so highly of sell almost nothing. 

 

This is very difficult market, and it will be so at least through this next year.  Sellers deserve to and need to have accurate, professional information to act on.  Sometimes it isn't pretty, but if someone wants to sell and net the highest proceeds possible, they need to be in tune with the market and they have to work with a Broker who is willing to tell them the truth.

 

Steve Keefe

Broker/Owner

Coldwell Banker Sky Ridge Realty

Comments

[Greg Allison]

I am not sure why Mr. Keefe neglects to reflect on the one single fact that makes this market so unique. It is worth a mention. Where else beside the tourist Mecca of Big Bear are you going to buy property with the qualities that Lake Arrowhead has to offer ?? When you have that one of a kind advantage of “location” & “quality destination” which are the number one phrases used by a realtor. Why not play to your strengths ?? I'm not sure, however it appears as though Mr Keefe lives in a bubble and may be rather conservative. I don’t know him so it’s just a guess.
There are 2 kinds of sellers, panic sellers who are behind on their payments and probably are behind on paying taxes as well. Then there are sellers who are in no hurry to sell to the lowest bottom bidder. Why would you even compare Arrowhead Woods to the rest of the market we call Southern California ?? There is no comparision. We are not limited to local buyers, this kind of location appeals to buyers from all over the US. But it still remains a fact, this is a very unique community and therefore if a buyer wants those qualities in a permanent home or vacation home he or she is NOT going to find that anywhere else within 75 miles of Los Angeles ? Oh I forgot about Mammoth or Lake Tahoe. I mean there is the coast, now that is quite the opposite and has it attractions if you love living around millions of other people.
Where in So Cal are they going to find a private deep water Lake at 5,000+ feet elevation with four seasons & snow ?? Nowhere !! The panic sellers will run their course and prices will level out & then the real functions of the Lake Arrowhead real estate market will rule again and we can expect more of the trend that has been the benchmark for decades as it relates to home prices and sold prices around this lake. This downward trend has happened before & will occur in the future again for whatever reason. Answer: Tell the seller, the market will dictate in the end if your home sells of not. Price your home close to what you wnat to net after fees and counter offers. There is nothing to fear but fear itself. Cash buyers are out there and if you're patient you will get your price, or 97% of your asking price & I don't know anyone that would turn that down. Sincerely, Mr Seller