Home-selling season starts sooner than you think By Mary Umberger Chicago Tribune 01-03-2010

Home-selling season starts sooner than you think By Mary Umberger Chicago Tribune 01-03-2010

Home-selling season starts sooner than you think
By Mary Umberger
Chicago Tribune
January 3, 2010

It's nearly spring -- at least that's the case in the parallel, slightly weird universe of real estate.

Traditionally, the "spring" homebuying season, theoretically the busiest time in the marketplace, begins the day after the Super Bowl. Why this is so has never been clear, but it probably has something to do with finally being able to pry spouses off the couch to tour houses.

This year, "spring" arrives later than usual: The big game is on Feb. 7.

But if you're thinking of selling, waiting to list until the bowl festivities have passed probably is a mistake in the current market, according to some local experts.

If you're new to the selling game or haven't sold a house in years, here are a few thoughts:

--Think about planting that "For Sale" sign in the yard before your neighbor gets around to doing the same thing.

"We're going to see a lot of property coming on the market," said James Kinney, vice president of luxury home sales for Baird & Warner Real Estate. "We're going to see everything that people took off the market in the fall, knowing they were going to be back in the spring" in order to qualify under multiple-listing service rules as "new" listings.

Plus, of course, there will be genuinely new listings, in addition to the ongoing cascade of foreclosures and short sales, he said.

"I'm telling people, go ahead and get on the market before there's more inventory," Kinney said. "There are serious buyers out there who have seen everything (currently listed), and nothing is motivating them to step forward, so you want to be the new product."

--Don't be surprised if, in determining an asking price, listing agents emphasize how much the competition is asking, rather than relying solely on data for recently sold homes.

Agents have always at least considered what else is on the market in setting an asking price, said Jim Merrion, regional director of Re/Max Northern Illinois.

"Now there's more weight being placed on the current inventory, because in many cases it's pushing prices to lower levels," he said. "I don't know if it's the effect of HGTV shows or what, but now we're seeing agents taking sellers right into active listings" to get a true comparison of what they're up against. "That never used to happen."

Still, there's a danger in relying too much on what the guy down the street is asking.

"An awful lot of listings are wrongly priced," Kinney said. "If people use those as a guidepost, they could get into trouble. Do a combination of historical data (houses sold no longer than six months ago) and looking at who you're competing against, once you've determined whether they're valid prices."

And then the thorniest issue: Most people have inflated notions of their home's value in this boom-gone-bust market.

Experimenting with trying to net a price that's rooted in the old days taints the house as an "old" listing, Kinney said.

"If you're asking a price commensurate with or higher than prices achieved in 2006 and 2007, you're incorrectly priced," he said. "Every once in a while, yes, you can get that price, but when you're looking at just lots and lots of supply, you're choosing to come in last."

--Don't necessarily go into happy-dance mode just because you get a signed contract. Merrion said there's still work to be done to push the sale through, because tightened lending and appraisal standards could torpedo it.

Merrion said the listing agent needs to be at the inspection to answer questions, and even more critical is the agent's presence at the appraiser's visit.

The agent needs to be armed with floor plans, listing data, the signed contract that spells out seller concessions (such as agreeing to replace a furnace, etc.), plat of survey and other pertinent documents that might help the appraiser get a firm picture of not just the house but also market conditions in the neighborhood.

"Even if you have the inspection and the appraisal, (the buyer) still needs to please the lenders, who might ask for another $2,000 down or for a co-signer," he said. "Just because a lender has issued a commitment doesn't mean it's ironclad."

Merrion said that though it's not clear whether new federal tax credits for move-up buyers are creating momentum, the first-time buyer credit is having an effect, as witnessed in existing-home sales data.

"The market has a long way to go, make no mistake about that," he said. "But it's been marching upward ever so slightly for five months.


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