Heads in the sand make for disappointed sellers

(flickr photo by CALF Learning Future 2010)

There are no real estate booms on the horizon.

So says PJ Wade on the RealtyTimes blog regarding five strategies “sellers haven’t learned and keep paying for.”

The first is understanding that “time marches on, not backward.”  She underscores the message as follows:

Waiting for real estate prices to return to pre-recession levels before you put your home on the market means you don’t understand that time only goes forward.

Other of her points:

Sellers, most buyers are just as smart as you

(Flickr photo by Luciana Christante)

If you are putting your home on the market, chances are it has been a while since you have been a buyer.

In that event, you may well benefit from being reminded of tips that buyers would give you if asked. We can thank Trulia columnist Tara-Nicholle Nelson for gathering insights from her long experience on the search side of residential real estate.

Her post on the BusinessInsider site offers five observations (quoted verbatim) worth considering:

When selling, don’t check reality at the door

SUMMER DAYS DRIFTING AWAY

One of my favorite posts.

Sellers tend to learn the hard way.

That’s the message of a piece in today’s New York Times, which chronicles the bad decisions that some sellers made when they listed their homes.

Among a few anecdotes, the newspaper quotes a couple who ignored their broker’s advice to ask no more than the prices of houses near their 4,000-sf place in suburban Houston:

You’re emotionally attached, so you think your home is worth more. I had a landscape service and a Sub-Zero refrigerator and an icemaker on every floor, but buyers don’t care, they want deals.

Listed originally for $825,000, the house being sold by Michel and Rick Shanks underwent four price reductions and eventually sold for $605,000 after 10 months on the market.

Well, doh.

Sellers may want to forget about offer amount

(Flickr photo by Welfli)

Okay, I wrote that headline to get your attention.

The amount of an offer obviously matters, but it’s not everything.  In a sense it is not the most important thing.

What should matter to sellers is the quality of the offer, and that depends on several factors.

Some sellers shouldn’t reduce the asking price

When a listing doesn’t sell within a reasonable amount of time, it always is tempting to suggest that the seller chop the price.

I have been maintaining forever that the only reason a property doesn’t sell is its price.  Offer a $1 million apartment for $900,000, and buyers will swarm with their offers.  Offer it for $100,000, and it will go to contract virtually in seconds.

So it’s price, right?

The High Road: Brokers may take too much credit

(Flickr photo by Tumbleweed)

When an apartment sells for more than similar units — in the neighborhood or, especially, in the same building — the listing broker takes and gets a huge amount of credit for that achievement.

But how much of the number is attributable to the broker’s skill?

The fact is

Weekly Roundup: Brooke’s place takes a beating, mortgage rates jump, $1 million goes only so far

Because of city’s renters, state has lowest homeownership rate in the nation

Harlem attracts post-slump buyers

Brooke Astor’s Park Avenue duplex goes for half its 2008 asking price

Wall Street jobs cut since 2008 could total 32,000 by end of next year

Landlords trim concessions in Q3, effectively raising rents

Even with sales slowing, 3Q prices of new condos rise 4% in Manhattan and 3% in Brooklyn

Governor’s wife selling their home on their own behalf

Actor lists his vantage point in Montana for $14 million to surf in Hawaii

What $1 million buys

When should a property no longer be shown?

The period from the moment that a seller accepts an offer for the sale of real estate and a contract is signed and delivered can stretch for weeks in New York.

Factor in the time that can pass before the transaction is completed and months can pass.  The variables include the approval process by a co-op board as well as the diligence that lenders require for clearing the release of funds before the deal can close.

Anything can happen until settlement, so sellers and brokers are constantly on edge.

If the transaction doesn’t close for any reason,

That maxim about the first offer proves correct

Sellers who resist a first offer can count on crying over spilled milk. (Flickr photo by +tajc)

Conventional wisdom has it that the first offer on a property usually will be the best one.

With two co-ops on the market of which I have knowledge, such has been the case.

One was listed for $799,000 at the outset and the other, for $3.95 million.

The first apartment went on the market in early February. A few weeks later, I presented an offer

Accept no offer until your home is on the market

The garden I tended behind my rowhouse in Washington, D.C.

How tempting it is when you get an unsolicited offer to sell your home before you put it on the market.

Maybe you’ll have no, or at least a reduced, brokerage fee. There’ll be no open houses that require your preparation and evacuation. And forget about the anxiety of waiting for a buyer to bite, conducting fruitful negotiations and wondering, “What if?”

Don’t do it.

The situation arises more often that you might imagine. Hell, it happened to me when I moved back to Manhattan from Washington, D.C.

But don’t do it.

There is ample for reason for rejecting an early offer or equivocating  should one surfaces: