Blog Post: Reality Check

I was talking to someone on the phone yesterday that has been looking for a new home in Agoura Hills. After the phone call was finished she emailed me and thanked me for the “reality check” that I had given to her and her husband.

In my work, this is not the most pleasant part of the job, but definitely an important one. In our ever changing economy “reality checks” are important for both buyers and sellers.

As a long time Realtor and also a mother of five, I can definitely tell buyers how important it is to live within your means. When you over-stretch your budget on a home, be it rental or purchase, it can cause devastating effects in your future.  For sellers, many of us also now have a personal experience of what happens when you buy a house, put a lot of money down on it, and then the market turns belly up and all of your equity has flown out the window.  This ebb and flow of the real estate market can cause a few different reactions in those people looking to purchase or contemplating selling their home right now. 

The first reaction:  Some are afraid to buy right now, because the market has come down so much, and they think that maybe it will come down even more.  I call this “Crystal Ball” reasoning. These people pause and wait, thinking they will get a lower price on a house in the future, but their payment will then go up because the interest rates will rise again. Reality check: The interest rates will not stay this low forever.

The second reaction:  Some people hold on to their houses, because they are afraid they will lose that “high market” money that their house was once worth, even though those house prices no longer exist. I spoke to someone recently who had tried to sell his house (For Sale by Owner) at the height of the market. He had negotiated a deal with a buyer on his own, it fell apart, the market tumbled and his house did not sell, but he still believes that if he lists the house now he will be losing that money he could have received if it had sold back then. Reality check: Snap out of it! Your home value may have gone down, but so has that home that you have always wanted to purchase. There is very little competition on the market right now, and this is a great time to list your home!

 The third reaction: People decide to sell, but instead of really looking at current market conditions, they talk to a few real estate companies and go with the one that gives them a presentation with the highest listing price. So their house goes on the market and it sits, and sits, and sits.  Months past, sometimes even a full year, and everyone knows the house is overpriced and it goes stale in the market. The birds start landing on the sign in the yard and it gets a weathered appearance. Reality check: Don’t think the Buyers don’t notice that your home has been listed for 12 months. They will, and if they do decide to offer, they will lowball you on the price, and guess what? Your house will end up selling for what you could have listed it for months ago if you had been realistic. When you decide to list your house make sure that you have an accurate comparative market analysis done, and also make sure to ask your real estate agent what they do and what their firm does to help you sell your home. Don’t live in the past and list your house so high that it will never sell. Reality check: A house is only worth what someone will pay for it. 

Pamela Blankenship
Century 21 Adobe Realty, Agoura Hills