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Business :: Real Estate :: Understanding the Hawaii Real Estate Market :: “Whyyyyyy….Is My Home...

“Whyyyyyy….Is My Home Not Selling!#G@! Darn it!”

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(Pay particular attention to the Weeds!)

Sometimes the life of the Home Owner trying to sell their property with an agent can be stressful. I professionally detest getting calls from my clients asking me the dreaded, “Heh, what’s it going to take to sell my house?!” “When are you going to sell my house?” “What is the problem?”

The last time this happened to me I swore I was never going to be in a position to get these type of phone calls from my clients ever again.

I believe my clients are my friends; they are not ‘just’ clients. I share many of the same desires, challenges we all experience in our life: jobs, families, relationships with our friends, dreams and our desire for quality recreation and ‘down time.’ I share all this with my friends who can also be clients, as quite frankly, who doesn’t want to take care of one's friends? From a professional Real Estate Agent’s standpoint, it sure is a lot easier to generate business from whom we know and trust than to try to chase people who do not know us. I believe you give your friends a wonderful experience helping them with their real estate needs when they ask you to, and good things happen called referrals, repeat business…more business.

Getting the dreaded question, “Heh, when are you going to sell my house?” has even more importance to me, as this question came from friends, people I know. I do not want my friends to think I cannot do something for them in my profession as a Real Estate Broker. It is important to me to be the best I can be in my profession and to rise above the mediocrity in our profession and be part of something positive that can have long lasting effects upon the improvement of many lives.

This is precisely why I then started to utilize a unique, tried and true method of selling homes.

Before I explain my method of successfully selling homes please see below.
Please…Get Your Brain Around This:

Oahu SFH Jan 2010 to Sept 15 2010

This means that 58 Single Family Homes For Sale each month of this year did not sell. No sale. Nada. Zilch. Zippo.

Oahu Condo Jan to Sept 15 2010

83 Condos For Sale each month of this year did not sell.
What could be more embarrassing than having to tell your friend and client:

“Sorry, I could not sell your home.”

Are you still with me? Here is where it starts to get really interesting:

Oahu SFH Avg. % Sold at Full Listing Price or More

Year to date, 66% of ALL Single Family Homes did NOT sell at Full +

Oahu Condos Avg % Sold at Ful Listing Price or More

Year to date, 71% of ALL Single Family Homes did NOT sell at Full +

Once you digest this interesting information you may be interested to know what the Average % of Listings that Sold At Full Price Or More, By Price Range look like.

You can find these graphs on my website at www.hawaiirealestatestatistics.com

There are just too many graphs to show you here.

Here are some examples:

Oahu SFH% $400000-$499999 Sold at Full Price


At this price range 52% of all Single Family Homes did NOT sell at Full Price +.

Oahu Condo % $200000-$299999 Sold at Full Price+

At this price range 61% of all Single Family Homes did NOT sell at Full Price +.
The Honolulu Board of Realtors and the Star Advertiser at the behest of their deep pocketed advertisers do not want you to know this above information. They also only want you to concentrate upon the List Price to Sold Price Averages.

Here is the month of September Solds C.M.A. (last page of C.M.A. Only) Please note the List to Sale Averages and the summation at the bottom of the page:

September Solds C.M.A.

Look at the bottom of the C.M.A. the total Average % sold to Listing Price is located to the right of the Average Sold Price of $741,549 at the bottom of this C.M.A. page. The average is 97% of all 123 listings sold between Sept. 1st. and Sept. 17th. were sold at 97% of Listing Price. The difference between the Average Listing Price of $779,617 and the Average Sold Price of $741,549 is 5%. How many sellers want to give away 5% of their listing price?

This is just bad business sense for a Seller and I will show you why. But is this also bad business sense for most Real Estate Agents?

Isn’t it the job of most Real Estate Agents is to tell you (the Seller) what you want to hear?

Then isn’t the job of most Agents to get Price Reductions of the Listing Price from the Seller when the home does not sell because it is priced too high, while at the same time the Days On Market are going up?

Apparently the answer may be YES when you stop and consider that less than 35% of all listings are selling this year at Full Price Or More.

RECAP:

  1. Less than 35% of all listings are selling this year at Full Price or More. Does Not Matter, Condo and Single Family Home Both, Less than 35%.
  2. It is a very bad thing for the D.O.M. or Days On Market to go excessively up as no matter what the seller has dropped the price to, once the D.O.M. is high, every buyer out there looking at the listing will think:

“What is wrong with this Home?”

Let us take a closer look at one of these homes that Sold on the last page of this above C.M.A. and how they got to sell at less than Full Price:

December 2nd. 2009 at $1,595,000

This home above started off selling at a listing price on December 2nd. 2009 at $1,595,000 and was price reduced by $100,000 on March 17th. 2010. This home then went on to sell finally at $1,225,000.

There are several points to take away from this experience above:

  1. The D.O.M. or Days On Market as stated in the C.M.A. were 108 days. But this home was listed and sold under two different M.L.S. numbers by the same agent. If we combine the two different M.L.S. D.O.M’s we get 214 days, not 108 days.
  2. Remember? Long D.O.M. = "What is wrong with this Home?"
  3. Ultimately the seller only received 77% of their original listing price and finally sold at a reduced -$370,000 Off Of Their Original Listing Price.

You can certainly believe the Seller asked this agent something like:

“When are you going to sell my house?” The Seller probably asked this several times.

THE SECRET TO SELLING A HOME IS TO:

PRICE IT CORRECTLY!

We are in a Declining Market. One day you are priced correctly and the next day you are not priced correctly. The more days you are on the market the worse your original asking price becomes. The secret here is to price your home correctly so that you are slightly ahead of the market decline where the price, the features of the home generate enough excitement (not interest, excitement) that your home gets lots of buyers who want to see it and…

Lots of Buyers = OFFERS!

If the home is priced correctly you will receive:

COMPETING OFFERS AT OVER ASKING PRICE!

Now how cool is that?!

Now how cool is that?!

Now let us take a look at someone in Lanikai Kailua again (Just to be fair) who did get…

MORE THAN ASKING PRICE!

Property Type: Single Family Properties, Status: Sold
A home in Lanikai
  1. The home comes onto the market 8/25/09 (I had to go back a ways to find a home in Lanikai that sold for more than Listing Price).
  2. The Home goes into Escrow with an Accepted Offer AND turns Pending on 9/1/09
  3. Home Closed and SOLD on 10/14/09

50 Days, This Home is Gone! Sold!
Everyone is Happy and the Seller makes an extra $37,700.00

Before I wrap this up I just have to show this other occasion in pricing a condo recently where the Seller lost 25% of the original asking price:

One Year Later

 This home came onto the market 9/29/08 and it finally sold on 9/10/10. That is almost ONE YEAR LATER and it sold for -$248,000 less than its original listing price or -25%.

This is why I still have Friends and Clients. I had to learn how to do this…Price a Home correctly…. to keep my Friends and Clients!

I wish you all a Wonderful Fall Season where we have plenty of events planned for Halloween, Thanksgiving and E gads! Christmas!

If anyone has questions, please call me. I will answer all your questions if I can and if I cannot I will find someone who can.

Thank you all for your readership, Friendship, to all my friends/clients, Mahalo!

 

Mike Gallagher
Broker in Charge, Abe Lee Realty
808-384-9015 mikeg@hawaii.rr.com

Ethics Complaints Review Member, Honolulu Board of Realtors

www.hawaiirealestatestatistics.com My Website

www.aroundhawaii.com Oceanic Cable

 


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Regarding the Kilauea volcano lava flow.




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