« Homes For Sale in Alpharetta | Main | Water Council to Holds Meeting Open to Public About a Comprehensive Water Plan »
Sellers Are Not that Desperate!
By Ryan Ward | November 27, 2007
If you are in the market to buy a home in Atlanta now or in the near future, you might have a preconceived notion that the real estate market is in terrible shape and that if a home is listed for sale that you can surely “steal it” for a price far below what the sellers have it listed for. I would like to give a you a solid piece of advice and I want you to take it to heart. In the end, it is an issue of perceptions and right now, far too many buyers have incorrect perceptions of the state of the real estate market in Atlanta. Put down the newspaper and turn off the news reports about real estate. They are incorrect or incomplete at best.
Here are some facts you might not know about the market:
- Very few homes will sell for 10% less than the list price unless you are looking for homes listed for sale above $1,000,000 or specifically looking at foreclosures and short sales. These segments make up about 10% of the total market of Atlanta homes for sale.
- As of the last complete month of real estate statistics in Atlanta, home values are down .3% from 2006. This puts values for single family homes at about the same value as February of 2006.
- Price adjustments are generally reflected in the list price of homes so to think that all sellers need to sell or are willing to unload is not a realistic expectation.
There is a way for you to find out what is going on in the market and you should educate yourself before you hop in your car and start shopping for a new home. If you go out looking with the idea that a list price is not close to a sales price, you may end up very disappointed. It’s your expectations that are a little off. It’s true, there are great values to be had, but blindly low-balling sellers in the hopes that come across a bargain is like shopping backwards.
As a buyer, you have an obligation to yourself to understand the market before you spend hundreds of thousands of dollars on a home and people like myself are here to help. Let me set this up with a real life example:
Let’s say you are a buyer searching for Alpharetta homes for sale. No particular reason except that Alpharetta is one of the many areas in Metro Atlanta that illustrates a perfect example of what I am talking about. Let’s also say that you want to go look at homes that are listed for $600,000 - $650,000 because you think that they will be likely to take an offer of around $500,000. O.K., on its face this doesn’t sound like a real scenario, but, I know for a fact that it is because I have talked with four different buyers with this mentality this week and many others with similar illusions over the past several months and as soon as they realize that this is not a realistic scenario, they cease to be buyers. I suppose some might say they never were buyers, but, I contend that it was the incorrect expectations that turned them off, not that they weren’t buyers. So back to these $650,000 houses in Alpharetta. As of one year ago, these homes sold for:
- In 2006, homes sold for 97% of list price and sold in 73 days.
- In 2007, homes sold for 95% of list price in 75 days.
So looking at these numbers you could reasonably expect to pay $630,000 for a $650,000 house in 2006. How much have things changed? Well, now you can reasonably expect to pay $617,500. Can you see how it might be somewhat unreasonable to expect to buy this home for $500,000?
What’s the Point to My Story?
Quite simple really. If you have the correct understanding of the market, you will be in a better position to find homes that you can buy. That’s why you are out looking at homes, right?
Category: Alpharetta Real Estate, Atlanta Real Estate |
Hello and welcome to my Atlanta real estate blog. My name is Ryan Ward and I run The Ryan Ward Group at Keller Williams Realty Consultants. Stay informed with information on neighborhoods, market statistics, homes and editorials on local, regional and national news that affects all of us here in Atlanta and elsewhere. If you have any questions about what you read or would like additional information, please fill in the form below or give me a call at 404.630.3187.
November 28th, 2007 at 9:48 am
Ryan, Great post! I know that this is an issue nationally with buyers and sellers. We have many houses on the market right now that are overpriced and those Realtors are performing a disservice to their clients. There are also those homes that are priced correctly and some even that show high levels of motivation to sell (great deals). I believe that a major part of the problem (at least in my area of TN) is those homes that are priced too high have given the buyers a false pretense that anything they look at can and should be 20% - 30% less than what the sellers are asking. It has become quite a chore to decide what is an accurate price and what is not. You can look at comps and see that 1 house sold for $179,000 in Jan., but a very similar house in the same subdivision sold for $157,000 last week. There are too many variables driving prices right now and many of them are BS (IMO). I suspect that over the next 2 years or so you will continue to see the same trend of depreciation like you have stated above. What a mess. I can’t wait for the market to level off. Sorry for the long post…
November 28th, 2007 at 10:21 am
Ryan,
Nicely put. I feel it is our responsibility as ethical real estate agents to continue to educate the consumer on the state of the real estate market in the U.S. and attempt to minimize the damage being done by the media in general.
Thanks for an understanding of the Alpharetta Real Estate market.
November 28th, 2007 at 10:57 am
Annie,
Our latest statistics look like we may have reached the bottom and I hope that trend begins to swing back the other direction…
Jennifer,
Education is the key, at least, I think so. When buyers have the wrong impression, they will just end up dissapointed, frustrated or think I don’t know what I’m doing because I can’t find them a house for 70% of list value.:-)
December 1st, 2007 at 1:07 pm
I won’t work with people who just want to low-ball every seller. It makes me look bad as an agent. I want to work with realistic and educated buyers and part of my job is providing them with the knowledge.
January 5th, 2008 at 8:16 pm
I don’t mind working at low-ballers - but it usually takes a few offers to bring them around. Though what they have to understand is: if they really like the house then they need to make a decent offer. Once that seller gets offended by their offer they will not budge off their price and ultimately the buyer won’t get a good deal.