| "My Steamboat Connection" Real Estate Blog |
ArchivesOctober 2006Q & A: What if I am not sure I am ready to sell?
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| Q: What are the odds of selling my home myself? A: The National Association of REALTORS® (NAR) conducted a study that found 70% of all people who see homes for sale can't buy your home because they have frozen equity- in other words, they must sell their home before they buy. 11% of them can't afford what they are looking at. 15% of people who see homes for sale prefer to rent. 4% of them are actually ready, willing and able to buy your home. A real estate agent's job is to weed through potential buyers and pick out that four percent that is ready, willing and able to buy now. For Sale By Owner sellers should consider these odds closely. It is one of the reasons that over 90% of For Sale By Owners eventually list with a real estate agent. |
| Q: Won't another office list my home for a higher selling price? A: Without a doubt. But the key point to keep in mind here is the following: Agents don't establish price - the market does. The only thing that determines the market price- is what a buyer is willing to pay for your property. Many agents list properties at one price and expect to sell them at a completely different price. This is what is known as buying a listing. What this does is excites the seller into signing a contract and a few months down the line the seller is shown the facts and asked to drop the price down to market value. At this point your property is shopworn and will fetch less than it would have if priced right initially. |
| Q: Should I wait to find a property before I put mine up for sale? A: Probably not. It is common to fear you might sell your home before you find a suitable one to replace it. However- this very rarely happens and unless you are looking for a unique property, this will probably end up costing you thousands of dollars. Let's say for instance you find the right property this Sunday at an open house- this is the house- you have to own it. Let's also assume that the seller is asking $175,000 for the house. You probably want to try to negotiate the price downward a little. Well- now you have two jobs. You need to talk him down off his price- but you also need to convince him to take his home off the market and risk not selling it, while you put your home on the market, find a buyer, qualify him and get it closed. Your seller will probably agree to wait a couple of months- but he'll more than likely want you to pay full price for his home. So now, you're out a $5,250 price reduction (going by the 3% national average) but in order to sell your home in two months you now need to get aggressive and price your home for a short sale. Let's say your home is worth $100,000, and to get it sold in two months, you probably need to sell it for $94,000 (going by the national average of 6 months to sell). In this situation, waiting to list your home cost you $11,250 dollars. This is what finding a property before putting yours on the market could cost you. |
Here are the sold stats for the week beginning October 8, 2006. The information was gathered from the Steamboat Spring's Multiple Listing Service (MLS).
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No. of Listings |
Dollar Volume | Average Price | Median Price | Average DOM | ||
| RESIDENTIAL | ||||||
| CONVENTIONAL | 6 | $5,234,000 | $872,333 | $370,000 | 125 | |
Analysis by Area |
||||||
| 1-DOWNTOWN AREA | 1 | $1,355,000 | $1,355,000 | $1,355,000 | 373 | |
| 2-FISH CREEK AREA | 2 | $740,000 | $370,000 | $370,000 | 45 | |
| 3-MOUNTAIN AREA | 3 | $3,139,000 | $1,046,333 | $239,000 | 96 | |
| Totals | 6 | $5,234,000 | $872,333 | $370,000 | 125 | |
| LAND | ||||||
| CONVENTIONAL | 1 | $535,000 | $535,000 | $535,000 | 32 | |
| CASH | 4 | $873,500 | $218,375 | $230,000 | 1,021 | |
Analysis by Area |
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| 3-MOUNTAIN AREA | 2 | $935,000 | $467,500 | $467,500 | 65 | |
| SOUTH AND WEST | 1 | $310,000 | $310,000 | $310,000 | 129 | |
| STAGECOACH | 2 | $163,500 | $81,750 | $81,750 | 1,928 | |
| Totals | 5 | $1,408,500 | $281,700 | $310,000 | 823 | |
| Non Co-op Sales | 4 | $3,102,500 | $775,625 | $194,500 | 992 | |
| Co-op Sales | 7 | $3,540,000 | $505,714 | $385,000 | 128 | |
| All Sold Listings | 11 | $6,642,500 | $603,864 | $355,000 | 442 |
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Q: Can't I list high and come down later? Another drawback to pricing your property at higher than market value is that the first few weeks that your home is on the market is the most critical time. You are the new kid on the block- and buyers that have been waiting for new listings to become available will come to see your home. These are the most qualified buyers because they are just waiting to find the right property, they are already working with an agent, and more than likely are completely approved for their loan. If your home is overpriced, the buyers looking in that price range will be disappointed in your home and will buy something else. But the real loss is that the buyers in the price range that your home should really be in may not even look at your home because it is something they don't qualify for. Consequently, your home languishes on the market until you bring the price down to a more realistic figure. If these buyers haven't purchased something else yet, they will wonder why your home hasn't sold in all this time. Your home is now what is known as shopworn or stigmatized property. Buyers will be asking themselves why your home hasn't sold and what is wrong with it? So you will find yourself lowering the price again from the true market value of your home in order for the home to sell. |
| Q: Does it make financial sense to sell your home without a REALTOR®? A: If all you did was put a sign in front of your house and the first person to drive by offered to pay you full price for your home- then Yes- selling your home yourself does make financial sense if you were asking market value for your home. The fact of the matter is that very few properties actually sell as a result of the sign in the lawn- the majority of sales come from the various contacts that real estate agents make amongst each other and in the real estate community- such as through networking, advertising, delivering flyers, postcards, sending emails etc. Any one of these channels can find that one special buyer- but your odds increase drastically by taking a shotgun approach. By placing a few classifieds, running ads in homes magazines, placing your property on the internet, putting a sign in the yard, creating brochures, networking, through sales meetings, intranet, and direct mail, REALTORS® are able to maximize the exposure of a property and find the most qualified buyer willing to pay the highest price. All of these expenses are necessary to obtain the full market value of a home. And since better than 95% of all properties are sold by real estate agents this fee is already included in the price of the home- it is not tacked on top of the value of the home. |
Here are the sold stats for the first week of October. Information was gathered from the Steamboat Springs Multiple Listing Service (MLS). DOM is Days on Market.
| No. of Listings | Dollar Volume | Average Price | Median Price | Average DOM | ||
| RESIDENTIAL | ||||||
| CONVENTIONAL | 12 | $5,817,895 | $484,825 | $321,250 | 147 | |
| CASH | 9 | $5,889,462 | $654,385 | $550,000 | 284 | |
| OTHER | 1 | $17,500 | $17,500 | $17,500 | 48 | |
Analysis by Area |
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| 1-DOWNTOWN AREA | 3 | $2,102,500 | $700,833 | $550,000 | 400 | |
| 2-FISH CREEK AREA | 1 | $1,490,000 | $1,490,000 | $1,490,000 | 99 | |
| 3-MOUNTAIN AREA | 12 | $6,310,957 | $525,913 | $347,500 | 179 | |
| HAYDEN- TOWN OF | 1 | $17,500 | $17,500 | $17,500 | 48 | |
| JACKSON COUNTY | 1 | $55,000 | $55,000 | $55,000 | 245 | |
| NORTH ROUTT | 1 | $860,000 | $860,000 | $860,000 | 192 | |
| OC PBURG YAMPA | 1 | $180,000 | $180,000 | $180,000 | 293 | |
| W 40 CORRIDOR | 2 | $708,900 | $354,450 | $354,450 | 70 | |
| Totals | 22 | $11,724,857 | $532,948 | $347,500 | 199 | |
| LAND | ||||||
| CONVENTIONAL | 4 | $2,136,000 | $534,000 | $418,000 | 264 | |
| CASH | 4 | $785,500 | $196,375 | $200,250 | 378 | |
| OWNER FINANCE | 1 | $270,000 | $270,000 | $270,000 | 203 | |
Analysis by Area |
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| ELK RIVER AREA | 1 | $270,000 | $270,000 | $270,000 | 203 | |
| HAYDEN- TOWN OF | 1 | $80,500 | $80,500 | $80,500 | 911 | |
| NORTH OF HAYDEN | 1 | $516,000 | $516,000 | $516,000 | 51 | |
| NORTH ROUTT | 1 | $35,000 | $35,000 | $35,000 | 333 | |
| OC PBURG YAMPA | 1 | $270,000 | $270,000 | $270,000 | 205 | |
| SOUTH AND WEST | 1 | $320,000 | $320,000 | $320,000 | 71 | |
| SOUTH VALLEY | 1 | $1,030,000 | $1,030,000 | $1,030,000 | 183 | |
| STAGECOACH | 2 | $670,000 | $335,000 | $335,000 | 405 | |
| Totals | 9 | $3,191,500 | $354,611 | $320,000 | 307 | |
| Non Co-op Sales | 16 | $7,791,457 | $486,966 | $292,500 | 282 | |
| Co-op Sales | 15 | $7,124,900 | $474,993 | $340,000 | 175 | |
| All Sold Listings | 31 | $14,916,357 | $481,173 | $320,000 | 230 | |
| Q: Why is Commission important? A: The marketing fee or commission is the most vital part of the marketing plan because this is precisely what sets the enthusiasm for cooperating brokers. Since commissions are negotiable, we'll talk in terms of averages. Let's say an average commission for a certain area is 7%. The fee is normally divided evenly between the selling office and the listing office. Let's trace the path of this 7% just for illustration purposes. In a $100,000 home, the commission would be $7,000 which is split up between both offices- $3,500 for the listing office and $3,500 for the selling office's effort in securing a buyer. This $3,500 is then divided between the office and its respective agent. On the listing side we'll say $1,750 (50% for illustration purposes) for the office and $1,750 for the agent. From this the agent must pay taxes, MLS fees, expenses incurred on advertising and promotions, desk fees, etc. The agent that procured the buyer would be a similar situation- where their $1,750 would go to pay taxes, MLS fees, expenses incurred with client, time, gas, meals, brochures. All of the sudden, what started out as being a large 7% commission has now dwindled to a near 1% commission. This is why it is crucial to offer at the very least the average commission for your area. It is even highly recommended you consider offering a 1% higher than average commission for the sale of your home. A one percent raise in the commission translates into a 14% raise to the real estate agent's paycheck. |
Q: Won't the REALTOR® work more quickly to get a home sold with a short term listing?
A: A long term listing will actually help your home sell more quickly than a short term listing. Not only does a short term listing imply that you are anxious to sell- encouraging low-ball offers- but real estate is a dollars and cents business which means that no money is spent until all the risks are weighed. Let's say for instance- you list your property for 3 months- and two and a half months have gone by. When your real estate office chooses which ads to run- they would choose listings that will be with them for a longer period of time. The office has no way of knowing whether you choose to extend your listing period or not. Therefore they bank on a sure thing.
| Q: Won't I save more money by selling myself without a REALTOR®? A: You may try to sell your home without a REALTOR® to save a commission- but are you really saving a commission? Let's take a close look at all the key players. We have our seller, who like anyone else wants to save some money so they decide to sell their home without the use of a REALTOR®. Then we have our For Sale By Owner Shopper, who decides to forego using the services, expertise, equipment, negotiating skills, connections and knowledge of a real estate agent- in order to what? Again- save the commission. Are we talking about two separate commissions here? No- there's only one commission. And serious For Sale By Owner Shoppers only shop For Sale By Owner to save this commission. They find a For Sale Buy Owner Property that they can live with and knock the commission right off the top of the price. In this situation- you didn't really save a commission- you just gave it away. Would you rather give this money away to a total stranger or enjoy the benefits of letting an agent handle all of the details? |
The following information was gathered from the Steamboat Springs Multiple Listing Service (MLS). DOM is Days on Market. These stats are for the entire month of September.
| No. of Listings | Dollar Volume | Average Price | Median Price | Average DOM | ||
| RESIDENTIAL | ||||||
| CONVENTIONAL | 81 | $31,107,161 | $384,039 | $345,000 | 207 | |
| CASH | 22 | $10,888,315 | $494,923 | $297,958 | 114 | |
Analysis by Area |
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| 1-DOWNTOWN AREA | 6 | $3,683,650 | $613,942 | $517,000 | 98 | |
| 2-FISH CREEK AREA | 10 | $4,709,000 | $470,900 | $437,000 | 90 | |
| 3-MOUNTAIN AREA | 57 | $19,195,315 | $336,760 | $295,000 | 229 | |
| 4-STRAWBERRY PARK | 1 | $1,850,000 | $1,850,000 | $1,850,000 | 249 | |
| ELK RIVER AREA | 1 | $475,000 | $475,000 | $475,000 | 363 | |
| HAYDEN- TOWN OF | 11 | $1,890,361 | $171,851 | $160,000 | 149 | |
| NORTH ROUTT | 3 | $1,402,000 | $467,333 | $420,000 | 80 | |
| OC PBURG YAMPA | 2 | $271,900 | $135,950 | $135,950 | 87 | |
| SOUTH AND WEST | 2 | $2,850,000 | $1,425,000 | $1,425,000 | 329 | |
| SOUTH VALLEY | 3 | $2,840,000 | $946,667 | $765,000 | 242 | |
| STAGECOACH | 3 | $1,261,000 | $420,333 | $330,000 | 114 | |
| W 40 CORRIDOR | 4 | $1,567,250 | $391,813 | $391,625 | 78 | |
| Totals | 103 | $41,995,476 | $407,723 | $340,000 | 187 | |
| LAND | ||||||
| CONVENTIONAL | 13 | $3,530,800 | $271,600 | $146,500 | 228 | |
| CASH | 24 | $10,752,350 | $448,015 | $196,950 | 203 | |
| OWNER FINANCE | 4 | $154,500 | $38,625 | $27,500 | 56 | |
Analysis by Area |
||||||
| 1-DOWNTOWN AREA | 1 | $360,000 | $360,000 | $360,000 | 324 | |
| 2-FISH CREEK AREA | 1 | $599,000 | $599,000 | $599,000 | 82 | |
| 3-MOUNTAIN AREA | 3 | $1,855,000 | $618,333 | $695,000 | 675 | |
| ELK RIVER AREA | 1 | $218,250 | $218,250 | $218,250 | 94 | |
| GRAND COUNTY | 2 | $78,000 | $39,000 | $39,000 | 444 | |
| GRSCK BLKTL HEN | 1 | $435,000 | $435,000 | $435,000 | 60 | |
| HAYDEN- TOWN OF | 2 | $120,000 | $60,000 | $60,000 | 236 | |
| NORTH ROUTT | 9 | $1,201,700 | $133,522 | $79,500 | 137 | |
| OC PBURG YAMPA | 1 | $38,000 | $38,000 | $38,000 | 99 | |
| SOUTH AND WEST | 1 | $758,000 | $758,000 | $758,000 | 49 | |
| SOUTH VALLEY | 5 | $7,008,000 | $1,401,600 | $1,033,000 | 244 | |
| STAGECOACH | 14 | $1,766,700 | $126,193 | $136,500 | 108 | |
| Totals | 41 | $14,437,650 | $352,138 | $146,500 | 197 | |
| COMMERCIAL/INDUSTRIAL | ||||||
| CONVENTIONAL | 3 | $1,716,000 | $572,000 | $515,000 | 171 | |
| CASH | 1 | $550,000 | $550,000 | $550,000 | 272 | |
| OWNER FINANCE | 1 | $105,000 | $105,000 | $105,000 | 276 | |
Analysis by Area |
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| 1-DOWNTOWN AREA | 1 | $515,000 | $515,000 | $515,000 | 342 | |
| ELK RIVER AREA | 1 | $900,000 | $900,000 | $900,000 | 46 | |
| HAYDEN- TOWN OF | 1 | $550,000 | $550,000 | $550,000 | 272 | |
| OC PBURG YAMPA | 1 | $105,000 | $105,000 | $105,000 | 276 | |
| W 40 CORRIDOR | 1 | $301,000 | $301,000 | $301,000 | 125 | |
| Totals | 5 | $2,371,000 | $474,200 | $515,000 | 212 | |
| Non Co-op Sales | 59 | $26,137,575 | $443,010 | $295,000 | 222 | |
| Co-op Sales | 90 | $32,666,551 | $362,962 | $300,500 | 169 | |
| All Sold Listings | 149 | $58,804,126 | $394,659 | $300,000 | 190 |
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