Texas Home Sales: Ghost Equity - Why your home may not be selling at mid-Summer 2010

We're at the half-way point in our Summer selling season. No buyer yet? Your buyer may still be sitting in their current home, hanging onto equity that no longer exists, rather than taking a contract and moving here. I call that 'Ghost equity'. That equity in their current home DID exist - at one point in time. We even know the point in time - between the Winter of 2007 and Spring of 2008. But, then we experienced the recession that many regions are still working their way out from under. And, that equity disappeared. It is now just a figment of their imagination, but they aren't yet ready to cope with reality. So, they remain in their current home, and overpriced, and miss their opportunity to get here and buy your amazing DFW area home.

Don't get me wrong. There are some in DFW still holding onto ghost equity, too. We aren't immune. But, SO MANY of our neighborhoods have turned the corner and are now in an upward swing on their sold price per square foot. Compared to other regions of the country, we're experiencing a much better Summer selling season than we have in over two years. The "comps" don't lie.

So, what can you do to counteract this phenomenon here in Texas:

1. Lower your price. Not the most popular choice with home sellers, this option is the most immediate and effective way to drive more prospective buyers to your home. Although this action does not work to get the seller with ghost equity into our town any quicker, it does open up your home to more buyers as the price reduces. And, more showing traffic is what is needed to bring about a faster sale. In my experience, there truly is a buyer for every home. And, this year, price is a big determining factor. If the buyer were within 1-2% of your current price, they would have been so bold as to submit an offer for your consideration. So, keep in mind that, if you do put through a price reduction, you need to make it count. 2-3% reductions are getting noticed in our area and we're seeing showing traffic improve. You aren't looking to lower the price so much that there is a stampede thorugh your living room. But, it has to be significant enough to create a sense of urgency for the buying public.

2. Tour your immediate competition. Go out to your favorite online real estate site, check out the homes that area immediately surrounding your home listing, and set up an appointment with your agent to tour those homes. Information is power! The more you know about your competition, the easier it is to put yourself in the mind of the buyer who will be touring those homes and comparing them to yours. These tours take just a short amount of time (about an hour), but are incredibly helpful.

3. Give your agent the authority to give some pertinent information about your specific situation to the other agents. The Texas Association of Realtors has a form that we use often in the sale of homes. It's called the Seller Authorization To Release And Advertise Certain Info (form TAR 1412). In past years, I would not have even dreamed of using this form on a normal resale sale listing. Now, I find that the buyers are even more curious about the situation that caused the seller to list the house. They want to know whether or not the seller may be open to leasing. The buyers also want to know whether or not the sale involves more than just the buyer and seller as the negotiating parties. This form, when using the information on the Private Remarks field of our MLS, gives the buyer's agent the ability to overcome objections during the home tour. Just as a residential service contract helps buyers feel more comfortable buying resale versus new construction, the TAR 1412 form gives buyers a comfort level with the sellers even before the offer is written.

Follow one or all of these tips, and you can refresh your home listing and give yourself the best possible shot at a successful home sale this Summer.

Have a blessed day!

Ronda