What to do if your properties aren’t selling? I from Private Money Lender Arizona tried to talk with a few real estate investors who are struggling for quick selling of their property(s). Let’s hypothetically name one of them as Mr. Fred. He has got three properties on the market and was facing difficulty in selling them. He told me although he is quite stressed due to these circumstances of real estate market but his all three properties are priced properly. I told him let’s make an evaluation of the factors which may be leading your potential clients towards NOT TO BUY your property.
First factor we chose for evaluation is the price of the property. And here we found that Fred was making a huge mistake while determining the price of the property(s). In his market analysis he was purely concentrating on what has been sold in that market and determining the prices of his properties on this basis. He surveyed for the sold properties in that area and then determined his own prices as he concluded that his property worth this much price. At this point I told Fred that your very first step is in a wrong direction while you set the price for your property. Always concentrate on ACTIVE properties rather than sold ones. Because in an appreciating or depreciating market the prices of your properties need to be set on the basis of active properties analysis for faster selling.
So first thing we did is we analyze the competitor properties in the concerning areas of Fred’s properties. Also you need to consider it that we evaluated the existing scenario of Private Money Loans Arizona for his properties. We looked at the active and sold properties in neighborhood. In a downward market it is more important to be competitive with actives than sold ones because sold properties could show you a property sold for but may not have any bearing on what they are going to sell for because the sales price in the future is going to be less than it is in the past.
If you are looking in the past, you are only going to see what is sold but not necessarily what is for sale. So active homes are competition for Fred’s properties we concluded. Sold homes are used as a guide to see the past prices are or it may give you a range of pricing or the high price depending upon your local market. As I talked to Fred and say Hey what is happening in your market place and we discovered it is a depreciating market place. So we looked at all the active and sold properties that were around there and confirmed that sold properties were higher in price than active properties. Fred had been pricing properties based upon the sold properties and not upon the actives.
For example if a property has sold for $150,000 but there is a home across the street which is in same general condition is active for $130,000. Is a guy going to buy $150,000 house and the answer is NO. If he can buy one for $20,000 less why should he be interested in what a property is sold for in the past? He is going to be interested in what’s active on the market. So from a buyer’s stand point, we actually adjusted the prices of two of his three properties. One we thought he is right and the other two we thought need an adjustment on. How often you should be reviewing pricing on your property was Fred’s next question and my answer was every two weeks.
And we at Private Money Lenders Arizona do this with our esteemed real estate investors in order to help them determine their desired Private Money Loans and prices of the properties.
Happy Investing!
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