Homesellers - Don’t chase the market down! Beat the market!

Zoom In

spongebob-declining-marketI wanted to write this post since I have seen many homesellers “Chase the Market Down“.  This means that homesellers are always two steps behind because home prices are falling faster than their price reductions.

We have had multiple homes for sale in Naperville and other Chicago suburbs where the owner rejected offers as being “too low”.  Now, I understand that owners naturally fear underselling their homes, BUT in a declining real estate market the prices gets lower and lower.  You will NEVER get your price if it is going DOWN.
Compare this to an appreciating market (like in years past) and if you didn’t like an offer you just waited for the next one.  Eventually prices would rise and you would get the price you want.  Not so as you will see in the chart below!
chasing-the-market-down1

Example (Names (uh, dollars) have been changed to protect the innocent :-) )

List Price 01/01/09:       $350,000
Offer: 02/28/09:               $319,000 (Seller says “No Way”)
Lower Price 03/20/09: $325,000
Offer: 04/15/09:               $290,000 (Seller says “No Way”)
Lower Price 06/01/09:  $309,000
Offer: 07/12/09:               $289,000 (Seller said “I should have taken that first offer!!”)

THIS HAPPENED MULTIPLE TIMES ON MULTIPLE LISTINGS. 

Eventually the lighbulb goes off and the Seller says “I GET IT“.  Unfortunately, it is months later and thousands of dollars off the price of the home.

DON’T CHASE THE MARKET DOWN! 

The one way to salvage this is if you are Buying Up.  Read our other post to see how you can salvage your equity.

If homesellers keep this up, my investors will be buying these properties at all time lows!

Rich and Karen Ayers are licensed Real Estate Brokers in Illinois.  We are experienced Brokers who specialize in Residential and Investment real estate in Naperville, Oswego, Plainfield and the surrounding suburbs of Chicago. We also own and manage multiple investment properties and help real estate investors find, buy, fix, rent and sell their investments. Visit our website at www.AyersTeam.com or receive our blog via your RSS Feed or in your email.