The Dangers of Overpricing Your Home

It's your castle. It's much better-looking than the one down the street that sold last year in just 2 weeks. You spent thousands of dollars on upgrades. You need this much money to buy your next home. Hey, there's no way you're giving it away.

Is this you? If it is, and you are trying to sell your home right now, you might be putting yourself in the "No Sell" zone.

What is the "No Sell" zone? It's pretty simple: Your are placing your home on the market, not in the market. And if you are pricing your home based on the above thoughts, you are not selling your home.

The harsh reality is, nobody cares what you paid for it, how much you spent on upgrades, how much you owe, or how much you need to walk away with. A property is only worth what somebody is willing to pay for it - period.

In this market that can be a scary thing to accept, especially when you feel you are only 'breaking even'. Especially when your neighbor's home sold for $15,000 more last year. How can that be?

It just is.

So, if you are in a position where you want or need to sell your home, let's take a look at what overpricing it will do for you:

~Let's say the Market Value is $350,000, and you decide you want to "test" the market for a few weeks and you list it at $400,000. Did you know that the first 2 weeks on the market is the most crucial period of a listing?

~Well, we are now in week 2 and activiy should be at its peak. You should have had many showings by now. But for some reason, buyers are not looking at your house because the competition is priced lower.

~The dreaded 3-week mark. Interest is now fading. You've lowered the price, and your house is still on the market, but you are not ahead of the market, you are chasing the market now, and you are struggling to keep up.

~Uh-oh, It's been a month. Interest is seriously waning. Nobody is calling. You now price your property below market in hopes of generating some activity, but most buyers looking for your type of property are already looking elsewhere. They've already seen yours and it 'was too expensive'.

~~It's been 3 months. You've now dropped the price so far that your property is listed as "a steal!"

What happened to "not giving it away"?

When you are ready to sell your home, the best thing you can do for yourself and your profit is to remove yourself emotionally from the equation. Listen to the market. You may not like what it has to say, but in the end, it can save you thousands of dollars.

Hold on to your hats, boys and girl! It's the Market Update by Chicago Association of Realtors

Click on any of the pics for a larger view...


First, the "Quick Glance" for the week of October 17-23rd:
Wait! There's more....... Median 3rd Quarter Sale Prices for attached single-family homes (you know you want it...don't act like you don't)

And finally.... 3rd Quarter Number of Attached Units moved in Chicagoland (because it's what you need):

Weekly Real Estate News Channel has arrived....

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Foreclosures - Really the best deal?

Foreclosures are a tricky business, and despite what the media and 'investment gurus' are leading you to believe, they are not always the best deal.

Remember this: The wave of foreclosures that are happening right now are the result of subprime loans made during the housing boom. Those loans were made when market values were much much higher. Therefore, many of these banks, though not in the business of selling real estate, are holding loans that are larger than the worth of the house. Meaning? No equity. A good deal -- a really good deal -- is buying into equity. Not only that, these banks are not so crazy about giving up these houses for less than what is owed to them. Sure, they may be forced to adjust the value of the house they are holding downward to stay inline with today's prices, but they are not likely to go BELOW market value. Basically, the prices are likely to be the same as any other home out there on the market, except....

Often times when people go into foreclosure, they stop taking care of their homes. They are angry, sad, feel it's not worth it. So guess what you are getting? Deferred maintenance issues and a bank-owned property with no disclosures.

Think again. Deals can be had, but right now some of the best deals out there are houses on the market that have not gone upside down on their mortgages. Houses still owned by their owners. Houses with disclosed history. Houses whose ultimate sale price is a decision controlled by the owners who may be willing to strike a deal with you - much more so than a bank.