By Elliott Topkins, Esquire
7/7/11
It would appear that there are some slight glimmerings of a real estate recovery in the air, especially in the northeast portion of the United States. More home are being listed, and more homes are being sold. I know this for a fact, because my business, as a residential real estate attorney, has picked up considerably in the past three months, and notwithstanding the fact that the markets slow down considerably after July 4, I see some promise for a return to real estate “normalcy” probably by the end of 2012.

All of the above being said, I have noticed the following trends in real estate activity which I want to pass on to you, if you are considering placing your home on the market:

• Properly priced homes are selling, and selling sooner than the expected 100 days or so on the market.

• Homes which are initially “overpriced” seem to lose their luster early, and can never regain stature as a property that is desirable.

• Really effective realtors are able to present the appropriate data to assist you in pricing your home to sell. Unless the property is properly priced, it will almost surely languish on the market, with the eventual outcome being that the listing is withdrawn without a successful sale. The amount of wasted time and emotional effort spent on a failed listing is not inconsiderable.

Having said all of the above, I want to share some wisdom imparted to me by Sandra Keller, a first-rate real estate person associated with Coldwell Banker Residential Brokerage, and a person with whom I have recently collaborated with in successful sale transactions. Sandra’s approach is that your ultimate listing price needs to be attractive not only to your prospective buyer, but also to the buyer’s agent (who is locating homes for the potential buyer), the buyer’s lender, and the appraiser, who will do research on comparable properties to confirm to the lender that the collateral is properly valued. To illustrate what Sandra is adverting to, consider the following scenario. An overpriced piece of real estate attracts early enthusiasm, and the buyer puts in an offer to purchase the property for the full listing price. All of this sounds good, until the lender’s appraiser comes back with a valuation that is $30,000 less than the listing price as a proper value. The buyer’s mortgage loan is rejected, and the process goes back to “square one.” The seller almost never retains the old listing price. There is a substantial price reduction to “get the deal done.”

My point is this. Unless you, as a seller, stumble into a naïve cash buyer when you are selling your overpriced home, you are going to waste important time and energy and end up selling your home at the price other than the one originally suggested by the listing agent. I am seeing the following pricing trends:

• Home purchased before 2003 are selling for slightly in excess of their original purchase price.

• Homes purchased in 2003 and 2004 are selling for approximately their original purchase price.

• Homes purchased from and after 2004 are selling for a discount from their original purchase price, usually in the 10 to 15 percent range.

(Mr. Topkins is an attorney with Topkins & Bevans, Braintree Executive Park, 150 Grossman Dr., Braintree, MA 02184. His blog can be found at http://realtorsresourceblog.com. His telephone number is 617/596-3184 and his e-mail address in etopkins@topbev.com.)