The 7 Dangers of Overpricing Your Long Beach Homes and Condos

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Overpricing Your Long Beach Homes and Condos, is not a good idea.  Thinking that raising the price to leave wiggle room for negotiation is the first trap to avoid.  That game is old and played out, buyers aren’t interested in playing.  They want to offer you less than asking price and they want asking price to be at or below market.  They want “a deal” and if they don’t get it, they aren’t going to buy. 

 

Here is a little sneak preview of what you will be up against if you decide to test the waters and list your home or condo above market value. 

 

7 Dangers of Overpricing Your Long Beach Homes

1) MINIMIZES OFFERS   

Overpriced properties discourage prospective buyers from making offers since the difference between the listed price and market price often negates reasonable negotiation.  A more realistic price is much more likely to receive a realistic offer. 

2) LESS SHOWINGS

 

Overpriced listings get less showings.  Agents often will not show overpriced listings and lose interest in overpriced properties that sit on the market for any extended length of time without drastic price reductions.  With so much inventory on the market it is in the buyers best interest for the agent to show homes within the buyers price range; agents also do not want to lose credibility with their buyers.  Agents do not spend as much time showing these homes and condos as they might if they had been priced right at the beginning. 

 

3) QUALIFIED BUYERS

Overpriced properties fail to attract qualified buyers.  You (the seller) are perceived to be unrealistic and problematic.  If you are very overpriced your agent is perceived to be less than intelligent for having taken the listing at that price to start with, but that is a whole nuther issue.  It is in your best interest to drive in as much buyer traffic as possible early in the listing.  No Traffic = No Buyer.

4)  LOSES PROSPECTS FROM SIGNS AND ADVERTISING

Prospects that learn about the property from the sign get turned off if it is overpriced.  It is the first question they ask.  They want to know the price before they ask how many bedrooms and baths or about condition.  They will not even view the home if you are overpriced.  Price is everything in todays market.  Buyers viewing the property online will use available compare tools and pass on seeing your home. 

 

5) FINANCING PROBLEMS

 

Appraisers will not be able to bring in the value on the home and lenders will not fund a loan for an overpriced property.  If for some reason the overpriced property passes appraisal, the underwriter will likely quash it toward the end of the escrow timeline.  You will have been off the market for that timeline and market prices will have dropped further.  An all cash offer with the appraisal waived is a fantasy.  No buyer, regardless of their ability to, is going to overpay for a Long Beach home, in todays market.

 

 

6) PRICE REDUCTIONS

 

Reducing your price to keep up with the market is critical.  You should check your price every week or two with your agent and make sure you are priced at or under market. 

 

7) LESS FOR SELLER    

Eventually market interest in overpriced properties completely declines.  As this stage is reached, many sellers become desperate and begin to feel that they would sell at any price.  In the meantime, the seller must bear maintenance and holding costs.  Additionally the actual market value will have decreased while the property sits on the market.  The net result is the seller nets much less than they could have if the property was correctly priced in the first place, this is called “Chasing the Market Down” and is the absolute worst mistake a seller can make in today’s market.  

 

Not pricing your Long Beach home or condo right and not taking appropriate price reductions in a timely manner, can result in:

• Your home not selling
• Short Sale
• Foreclosure

 

If you are considering selling your Long Beach Home or Condo be smart, price your home to sell.  After all, you don’t want to list the home, you want to sell it.  Contact us today for a free home evaluation. 

 

 

Staging and Home Improvement related articles:

• Preparing Your Long Beach Homes for Sale – Home Staging Tips

• Long Beach Home Staging-Define Your Long Beach Homes with Color!

• Redesign Home Staging for your Long Beach Homes

• Staging Your Long Beach Homes

• Remodeling Your Long Beach Home?
• Curb Appeal On A Budget
• Summer in Long Beach California – Reduce Your Energy Costs and Stay Cool
• Self-Healing Homes
• Why Stage Your Long Beach Home or Condo?
• Long Beach Backyards-Ponds and Nasty Swimming Pools
• Long Beach Home Kitchen Remodels
• Long Beach Home Bathroom Remodels
• Stage YOUR Long Beach Home to Sell

Read also:

• Chasing the Market Down – Are You Guilty?
• Long Beach Homes-Issues for 1st Time Home Buyers
• Selling YOUR Long Beach Home – It’ Tough Out There – Are YOU ready for this real estate market?
• Selling YOUR Downtown Long Beach Condos-State of the Market

 

 

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The 7 Dangers of Overpricing Your Long Beach Homes and Condos

Downtown Long Beach Condos Market Report January 2008

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Downtown Long Beach Condos Market Report

January 2008

Downtown Long Beach Condos Summary

                                                                AVG DOM

Active                 154              86

Pending               13               91

Back-Up Offers      2                31

Sold                      8              127

On Hold                3              196

Withdrawn            2              127

Cancelled             18             118

Expired                27             157

 

 

Downtown Long Beach

Condos 3+ Bedrooms

12 Active Downtown Long Beach 3+ Bedroom Condos For Sale, ranging in price from $349,000 to $2,,695,000; ranging in square footage from 1,260 to 4,250  sq ft; 61 average days on market.

 

1 Unit Sold; $1,300,000; 1,759 sq ft.

 

• 4 listings expired
• 1 listing was placed on hold

Downtown Long Beach Condos 2 Bedrooms

74 Active Downtown Long Beach 2 Bedroom Condos For Sale, ranging in price from $169,900 to $1,250,000; ranging in square footage from 822 to 1,630; 91 average days on market.

 

2 Units Sold:

• $275,000; 1,006 sq ft; 202 days on market
• $282,000; 985 sq ft; 88 days on market

1 unit is accepting back up offers, listed at $279,000; 908 sq ft; 14 days on market.

 

10 units are pending, ranging in price from $255,000 to $574,900; 88 average days on market. 

 

• 1 listing was withdrawn from the market.
• 11 listings were cancelled.
  
• 10 listings expired.

Downtown Long Beach Condos – 1 Bedrooms

64 Active Downtown Long Beach 1 Bedroom Condos For Sale, ranging in price from $150,000 to $696,900; ranging in square footage from 500 sq ft to 1,740; 77 average days on market. 

 

5 Units Sold ranging in price from $160,000 to $315,000; ranging in square footage from 584 to 772 sq ft; 120 average days on market

3 Units are pending ranging in pricce from $196,000 to $399,900; square footage 625; 713; 1,118; 101 average days on market. 

1 Unit is accepting Back Up offers; listed at $324,000; 704 square feet; 48 days on market. 

 

• 5 Listings were cancelled.
• 11 Listings Expired.

 

 

Downtown Long Beach Condos – Studios

4 Active Downtown Long Beach Studio Condos For Sale, ranging in price from $165,000 to $249,000; ranging in square footage from 362 to 527 sq ft; 198 average days on market.

 

• 2 Listings were Cancelled
• 2 Listings Expired
  

 

Read Also:

Downtown Long Beach Duplexes For Sale 90802 90813

Downtown Long Beach Homes For Sale 90802 90813

Chasing the Market Down – Are You Guilty?

 

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Downtown Long Beach Condos Market Report January 2008

Separate Property- Whats Love got to do with it?

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Separate Property – Whats Love got to do with it?

 

 

 

One of the pitfalls in relationships is that many eventually end. When real and personal property are involved it can be difficult to muddle through it all. There are ways to protect both your personal and real property – before this happens¦

How does Separate Property affect Long Beach Home Ownership?

Why do people combine households without understanding what is involved in the dismantling of these relationships? Whether you are getting married, combining households or registering as domestic partners, the issues involved with home ownership and personal property are quite serious. When these relationships do not work out it is critical to have your paperwork in order.

This is easier to say than to do, I understand. It is a difficult subject to tackle with somebody you are in love with and are thinking about spending the rest of your life with. How many relationships actually last forever? It is reported that the divorce rate in America hovers in the 50% range.

From: Divorcerate.org

The divorce rate in America for first marriage, vs. second or third marriage
50% percent of first marriages, 67% of second and 74% of third marriages end in divorce, according to Jennifer Baker of the Forest Institute of Professional Psychology in Springfield, Missouri.’

According to enrichment journal on the divorce rate in America:

• • The divorce rate in America for first marriage is 41%
  • The divorce rate in America for second marriage is 60%
  • The divorce rate in America for third marriage is 73%

LaborLawTalk.com states the average divorce rate for the state of California is 75.54%, based on Court Statistics Reports for 1996-2004. These are staggering numbers and should not be ignored.

What is Separate Property?

Nolo defines separate property: In community property states, property owned and controlled entirely by one spouse in a marriage. At divorce, separate property is not divided under the states property division laws, but is kept by the spouse who owns it. Separate property includes all property that a spouse obtained before marriage, through inheritance or as a gift. It also includes any property that is traceable to separate property ” for example, cash from the sale of a vintage car owned by one spouse before marriage-and any property that the spouses agree is separate property. Compare community property and equitable distribution.

Property owned prior to and brought into a marriage is considered separate property. In order for it to remain ’separate property’ it must never be commingled with marital or community property. Once separate property is commingled with marital or community property it becomes community property and cannot be undone.

Some states, such as California, have a separate property rule that says that all property brought into a marriage, including gifts and inheritance, which is kept separate and apart from community property remains the separate property of the spouse that owns it.

 
If one spouse enters a marriage with a checking account with a large balance, say $100,000 and both parties deposit to this account and pay bills from it, the protection of separate property is removed and the original $100,000 has become community property. In this case if the marriage were to come to an end the $100,000 would be divided between the parties. Had the account been kept separate from the marriage, the original owner should leave the marriage with the $100,000 intact as separate property.

If one spouse enters the marriage already in possession of the home they must have a separate checking account for the management of the separate property. They must be careful not to deposit related funds to or from a community property account. If this is done, the home will most likely be deemed to be community property in the event of a divorce.

Anybody concerned with separate property issues should seek the advice of an attorney or a financial professional prior to entering into a relationship. They should then follow their advice.

Read also: Divorce and Real Estate in Long Beach California

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Separate Property- Whats Love got to do with it?

Long Beach Homes-Issues for 1st Time Home Buyers

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With so many Long Beach homes on the market at affordable prices one would think it should be really easy to find a home and get a great deal.  So why are so many first time buyers having trouble finding a home that suits their needs at a price they can afford? 

Up until a year ago it was almost impossible to find decent homes in Long Beach for under $500,000.  Prices have been dropping so rapidly that some homes have finally become affordable to  first time home-buyers.  Recognizing this, many are out shopping, trying to make the dream of home ownership a reality. 

Most first time home buyers are utilizing 100% financing programs and need to have closing costs covered in their offers in order to purchase.  This means they are actually purchasing these homes for the cost of the appraisal and physical inspection, about $600.  Sounds great, doesnt it?   Homes currently on the market affordable to first time home buyers, are predominantly short sales and foreclosures or bank owned properties and are not necessarily in the best condition.  Even with a deep price reduction most of these homes are still beyond the reach of first time buyers because the buyer will have to lay out considerable cash after purchase to bring the house into livable condition.  First time home-buyers just dont have this kind of cash to invest in the home for repairs and upgrades after the purchase.  

Some of the problems buyers have discovered in many of the available homes for sale on the market are:

• Damaged foundations
• Damaged chimneys
• Excessive layers of roofing
• Bent ridge-boards (part of roofs framing)
• Leaking, damaged and old roofs in need of replacement
• Potential mold issues resulting from leaking and damaged roofing
• Kitchens in need of replacement
• Baths in need of replacement
• Incomplete renovations leaving partially completed kitchens and baths
• Badly damaged flooring
• Leaking plumbing
• Electrical problems and upgrades

 

 

Many homes have several of these issues placing the seemingly affordable home into the unaffordable for these buyers. For instance a buyer may be able to afford a new roof, but not be able to afford to reframe the roof if that too is necessary.

Occasionally a Long Beach home will come onto the market in really good condition, priced to sell, receiving multiple offers very quickly.  With so many of these buyers conditioned to write low offers, they miss out on the opportunity to purchase a great home.  When a home finally comes onto the market that is in move in condition and has no major issues, which will cost the buyer after purchase, a really good offer should be written immediately.   If it is priced right, trying to negotiate the price of a home like this is just foolish.  It is not easy, for a first time home-buyer, to find an affordable home in Long Beach in good condition, when you do find one – grab it as fast as you can. 

There are currently 83 Long Beach homes for sale under $300,000, in many Long Beach neighborhoods, many are short sales or are bank owned, and most are in need of work. 
 

The smallest available Long Beach home for sale is a 1 bedroom, 1 bath, 540 sq ft home, priced at $300,000 – huh?
 

The least expensive homes on the market in Long Beach right now are both priced at just $150,000.

• 2 bedroom, 1 bath, 825 sq ft, located in Downtown Long Beach.
• 2 bedroom, 1 bath, 782 sq ft, also located in Downtown Long Beach.

Both of these homes front to an alley – OK, that explains the price.
 

There are 8 Long Beach homes for sale under $300,000, which are over 1200 square feet:

RES	DESCRIPTION	Zip	TGNO	Bd	Bth	Sty	Gar	SqFt	Year Blt	Price	DOM/CDOM
1	fixer/short sale	90810	765B7	3	1	1	2	1,213	1944	$275,000	83
2	fixer/bank owned	90810	795B3	3	2	1	2	1,513	1930	$300,000	64/116
3	short sale	90813	795F6	2	2	1	2	1,338	1989	$244,900	34/257
4	as is/probate	90813	795D5	3	2	2	0	1,240	1922	$249,000	5/266
5	short sale	90805	765E2	3	2	1	1 D	1,216	1925	$275,000	95
6	short sale	90805	765D4	3	2	2	2	1,396	1964	$280,000	160
7	short sale	90805	765F1	4	2	1	0	1,364	1947	$299,500	145/225
8	bank owned	90805	765D2	3	2	1	0	1,384	1926	$300,000	81/262

(DOM = Days on Market: CDOM = Combined Days on Market)

 

See also: 

Condos in Downtown Long Beach For Sale Under $300,000-90802-90813

Read also:

Long Beach Home Search-Where do I start?

 

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Long Beach Homes-Issues for 1st Time Home Buyers

Chasing the Market Down – Are You Guilty?

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Are you “Chasing the Market Down”?

Before your Long Beach home was listed you reviewed your neighborhood comparables, current market conditions and the location and condition of your home with your Long Beach REALTOR®; then determined your listing price of $750,000.   You were aware that prices in most markets nationwide have been declining and that declining prices would necessitate price reductions, if your home didn’t sell in a timely manner. Your REALTOR® explained that not reducing your price could cause you to chase the market down.

Your home is placed on the MLS, is advertised in the local paper, is placed on many important Internet real estate listing sites, lovely fliers have been placed in your home and the sign is up in your front yard.  Several showings occur the first week, a few the second, one buyer comes through with their agent the third week.  Whats up with this?  Why are so few buyers coming to see my beautiful home?  Calling the REALTOR® to have a little chat with them and find out what is wrong.

Shortly after your home went onto the MLS the Long Beach real estate market took a steep decline.  A consultation with your REALTOR® revealed two new comparable listings in your community priced well below your current list price at $725,000 and $705,000.  At about the same time a couple of other comparable homes for sale, in your neighborhood, had reduced their listing prices to $720,000 & $710,000.  You were now priced high on the market at $750,000, on the market for 21 days and your REALTOR® says, in need of a large price reduction.

While you knew that you would likely have to reduce your price you didn’t think that a $50,000 price reduction would be in order just 21 days after placing your home on the market; you resist and only agree to a $25,000 price reduction, after all that is a lot of money out of your pocket – right?  You are now sitting on the market in your area at $725,000. Your competition is priced at:

1. $705,000
2. $710,000
3. $720,000
4. $725,000

You are now one of the two highest prices in your neighborhood, congratulations!  Are you surprised when two weeks go by and only two buyers are interested in viewing your home?

Your REALTOR® calls you and tells you just what you have been waiting to hear, an offer has been received, when can they come by to discuss it?  Excited you inquire “How Much did they Offer?”  Your blood begins to boil when you are informed that the buyer has offered $675,000 and has requested 3% in closing costs, your 2 large plasma TVs and the dining room furniture which cost you a small fortune.  Bellowing into the phone you instruct your REALTOR® not to bother coming over – just decline the offer.  You do not want to hear about a counter offer, this buyer is trying to rob you and is clearly out of their mind if they think they can buy a home in your neighborhood for that price!  The gall of that buyer!

The home currently listed at $705,000 accepts their offer and closes escrow 30 days later.  You are still sitting on the market at $725,000 and are no longer receiving showings.  The neighbors are getting nervous watching prices drop so quickly and 3 more homes in your neighborhood come onto the market – two of them just down the block from your home. The 3 homes that were on the market at $710, $720 and $725 have reduced their prices and you follow suit reducing your price to $710.  The competition?

1. $675,000
2. $679,000
3. $689,000
4. $699,000
5. $705,000
6. $710,000

Congratulations you are still sitting at the top of the heap!  You really needed to take a big leap, but you just could not wrap yourself around it.  Your wife is starting to put the heat on you to get the house sold, you need to move soon; your life is getting very complicated.  Calling the damned REALTOR®!  What exactly is that REALTOR® doing to drive buyer traffic to my home?

Two more homes in your area sell.  The $675 home sells for $660.  The $679 home sells for $655.  Doesn’t make sense!  Nothing makes sense anymore-what the heck is going on?  How could prices drop by almost $100,000 in such a short time?

Two more homes in your neighborhood come onto the market, your wife is driving you crazy, you reduce your price to $660,000 in a desperate effort to sell and get the monkey off of your back.  Stupid REALTOR®!  The competition?

1. $659,000
2. $660,000
3. $675,000
4. $699,000
5. $705,000
6. $710,000

An offer comes in at $655,000.  They want 3% in closing costs and the damned plasma TVs (whats with the damned plasma TVs anyway?!?)  You tell the REALTOR® to get to your house as fast as possible and accept the offer as written.  Your wife is standing behind you with a bat at this point!

You just learned what it means to be guilty of “Chasing the Market Down”.  Had you taken the leap earlier your home would have sold faster and you would have netted much more profit.

Chasing the Market Down is a very serious situation in today’s real estate market.  Many sellers are doing this across the nation.  The clear majority of them never sell.  The expired, canceled and withdrawn listings on the MLS reflect far more properties than the Sold’s do.  Unless you actually need to sell your home this is not the time to be on the market.

If your Long Beach home is currently on the market or if you are thinking of placing your home onto the Long Beach Real Estate market:

• consider the comparables carefully – get ahead of them
  
• review them weekly with your REALTOR® – stay ahead of them
  
• adjust your price to remain competitive – dont play games
  
• dont kid yourself about the actual value of your home – its worth what a buyer will pay
  
• dont be the next seller guilty of “Chasing the Market Down”.
  

If you suspect that you are Chasing Down the Market give your Realtor a call today.

Have to go deal with an offer……….

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Chasing the Market Down – Are You Guilty?