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Answers (4)
- Albert Hepp, "Flat Fee MLS"
- Contributions:104
Equity doesn't and shouldn't factor into an asking price, unless you are in a position where you don't have to move. It is good you mentioned that fact in your post.
If you don't have to move, then you can keep the home on the market and wait to see if there is a buyer that will pay your price. Even if that price is above market, your chances are slim, but you still do have a chance. There just aren't that many buyers out there that will fall in love with a property enough to pay over the market price. It could be a long wait.
The Twin Cities market is challenging right now, especially in the higher price ranges. I currently have some listings in higher price ranges near Arden Hills and there just isn't much buyer activity.
Since you don't have to move, you can probably back into the price you should ask. Here's the equation:
Your total mortgage debt plus
The amount of equity you need to obtain plus
Normal seller closing costs, (plan on about 1%) plus (click here for a detailed post on these costs)
Real estate commissions.
Equals your target price.
For the real estate commission, traditional agents often want 6%, or a flat fee listing company like mine costs $399-499, plus a 2.5% buyer agent commission paid at closing if the buyer is involved with an agent. In some areas offering a 2.7% or 3% buyer agent commission is a good idea to get the most showings. Reducing the real estate commission cost through a flat fee brokerage like ours often enables sellers to price their home at a more attractive price.
It is worth mentioning that this formula is not a good one for sellers who have to move—they have to look at the market value based on recently sold homes in the area. For a seller that has to move the formula above is a recipe for failure—stay away from it!
I hope this answers your question. Thanks.
If you don't have to move, then you can keep the home on the market and wait to see if there is a buyer that will pay your price. Even if that price is above market, your chances are slim, but you still do have a chance. There just aren't that many buyers out there that will fall in love with a property enough to pay over the market price. It could be a long wait.
The Twin Cities market is challenging right now, especially in the higher price ranges. I currently have some listings in higher price ranges near Arden Hills and there just isn't much buyer activity.
Since you don't have to move, you can probably back into the price you should ask. Here's the equation:
Your total mortgage debt plus
The amount of equity you need to obtain plus
Normal seller closing costs, (plan on about 1%) plus (click here for a detailed post on these costs)
Real estate commissions.
Equals your target price.
For the real estate commission, traditional agents often want 6%, or a flat fee listing company like mine costs $399-499, plus a 2.5% buyer agent commission paid at closing if the buyer is involved with an agent. In some areas offering a 2.7% or 3% buyer agent commission is a good idea to get the most showings. Reducing the real estate commission cost through a flat fee brokerage like ours often enables sellers to price their home at a more attractive price.
It is worth mentioning that this formula is not a good one for sellers who have to move—they have to look at the market value based on recently sold homes in the area. For a seller that has to move the formula above is a recipe for failure—stay away from it!
I hope this answers your question. Thanks.
- Michael Emery, "MikeEmery"
- Contributions:7298
I can't tell you what specifically you should do, but I can tell you what is typical for this market.
Many homeowners pull their homes off the market towards the end of October. This way they won't have to keep the home picture perfect during the holidays. There are still people buying homes (folks moving here as there many corporations based in Minnesota) but the market does slow down.
The market begins to return to life around the 1st winter thaw, which is typically in early to mid February. As a rule the coldest period of the year is January and by February folks are going crazy with cabin fever.
So you could pull the property off the market late October, early November and return February/March. Your agent probably would allow you to pull the home off the market before the end of contract, with the assurance that they will get a fresh shot for the spring 2011 market.
There's no advantage to keeping a home on the market over the winter, especially if you don't have to sell. It just racks up DOM or days on market which is a red flag for many buyers and agents.
And hopefully there will be a more stable market in the spring - but there's not guarantees.
Many homeowners pull their homes off the market towards the end of October. This way they won't have to keep the home picture perfect during the holidays. There are still people buying homes (folks moving here as there many corporations based in Minnesota) but the market does slow down.
The market begins to return to life around the 1st winter thaw, which is typically in early to mid February. As a rule the coldest period of the year is January and by February folks are going crazy with cabin fever.
So you could pull the property off the market late October, early November and return February/March. Your agent probably would allow you to pull the home off the market before the end of contract, with the assurance that they will get a fresh shot for the spring 2011 market.
There's no advantage to keeping a home on the market over the winter, especially if you don't have to sell. It just racks up DOM or days on market which is a red flag for many buyers and agents.
And hopefully there will be a more stable market in the spring - but there's not guarantees.
- Mario Quinones, "GetMarioNow"
- Contributions:2
I have told my clients that we will need to reduce the price $10,000 every 14 days until we have an offer. A lot of people think that because they reduced the price it will sell. Unfortunately you may have been priced too high in the beginning so you are now chasing the market.
If you are not getting any showings you are need to reduce the price by 7-10%. If you are getting some showings and no offers, reduce 4-5%; and if you are getting a ton of showings but no offers try a 2-3% price reduction.
It is a price war and a beauty contest and you have to win both. Good Luck!
If you are not getting any showings you are need to reduce the price by 7-10%. If you are getting some showings and no offers, reduce 4-5%; and if you are getting a ton of showings but no offers try a 2-3% price reduction.
It is a price war and a beauty contest and you have to win both. Good Luck!
- Metro Indy Expert.
- Contributions:197
It all depends on your motivation, this is not about the Real Estate agent or your contract, this is all about your needs so if you can wait out the market then keep it for sale and not lower your price. When you listed the home the agent should have done an estimated proceeds sheet to show you what your total costs to sell would be and then you would know what your bottom dollar is.
How do I find out how low to go on the asking price of my house to get enough equity out of it?
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