The 17-day government shutdown last October put a pause on the year-long frenzy that was the Washington market from fall 2012 until fall 2013.
Sellers are still receiving high prices and multiple offers and prices have continued to climb in many neighborhoods, but the market became a bit more even-handed between buyer and seller than it had been for the last several seasons. Buyers used to writing offers with escalation clauses began to approach writing offers with some trepidation due to the uncertainty that came with our political dysfunction.
A memorably long winter went by and spring came quite late — the market was tepid during Jack Frost’s ill-conceived joke on the East Coast but started to heat up again in April and May and continued through the summer. A seller looking at the market must ask himself: What is a recipe for success in this market climate?
Sellers by nature have a tendency to overplay their hands in sellers’ markets and many sellers find themselves lagging behind with a market mentality that was completely reasonable six months ago, but is not now. This is mainly due to the delay in market news reporting and sellers’ reluctance to change their approach. Many sellers feel they can ask whatever they want for their properties and because of the market, they are guaranteed to get multiple offers. Others feel that they can price a bit high to “test the market” and lower the price later. I can say with certainty that the market is not treating sellers who overprice their homes kindly. The house will indeed sit.
As I tell all my seller clients, first impressions are important and buyers give your property one chance to impress them when it comes to market. If they decide your property is overpriced, they will go elsewhere and you will have to wait for a new crop of buyers who have not yet seen the property to come into the market or make a major price and presentation adjustment to get buyers back in the door.
Inventory is still tight, but even being the only game in town does not mean you can ask whatever you want. Markets are efficient and buyers are more sophisticated than sellers sometimes give them credit for.
So why are there still bidding wars? Sellers who price correctly and present their homes well are rewarded — this value pricing enchants buyers. You essentially cannot underprice a property in D.C. — if you do, it will bid up.
Certainly you do not want your sale to be a de facto auction. Pricing right though, not only do you often get more money, you benefit from the pent-up demand for inventory and may have buyers waive many or all of their contingencies. You have better offers to choose from.
In the spring, I wrote about a house in Potomac that we were refreshing to meet the desires of today’s buyers. The house received multiple offers in three days and settles this Thursday for well over the asking price in a market where the average house in that price range takes several months to sell for far less than the original price. My sellers wisely chose to go to market with a time-tested approach, an excellent presentation combined with a fair price.
Don’t let a prospective listing agent “buy” your listing from you by promising the price you want to hear. A cycle of reductions almost always nets the seller less money in the end in addition to being a completely inefficient way to get the job done. I will say it once more — the best way to get your house sold is to price it correctly from the get-go. The market will reward you for it.
Sammy Dweck with Evers & Co. Real Estate, Inc. is a licensed real estate agent specializing in residential resales in the D.C. metro area. He was the Evers & Co. Agent of the Month in April 2014. Reach him at Sammy@sammydweck.com or 202-716-0400.