Pat Savani

Every buyer is looking for uncluttered, roomy living area and storage.

When the buyer looks at a de-cluttered property, it allows them to imagine themselves comfortably moving their stuff in!

As a buyer is looking at property they wonder if does this property have the room I need for all my stuff?

Countertops filled with appliances, closets that are filled, attics and basements that are over the top says "no room" to buyers. T

The easy answer for the seller is to pack. If the seller is serious about moving and is committed to a price and terms that reflect current market conditions then packing is part of the process. There are a variety of options, portable off site storage containers, yard sales, and charitable donations are a good start.

The difference of $251 a month, for many folks that's a car payment!

The economy is still a mess, but for those who are working that didn't over extend, affordability has rarely been better. Showing activity was similar to January of a year ago appointments were down 2%, but the number of new contracts were up! We are experiencing multiple contracts on some particularly well priced listings. Multiple contracts indicate that in that area and price point the floor has been indentifed.

This tells me price and value still sell property. Lower interest rates have brought many buyers back into the market place.

If a buyer stopped looking in November, when the market rate was around 6%, with rates down 1% since November, their purchasing power has gone up 10%. Principal and interest on a $400,000 loan at 6% was $2398 at 5% for the same loan amount it's $2147. The difference of $251 a month, for many folks that's a car payment!

Top of the Deck! Given the projected sales pace and your time line, is the property listing positioned close enough to the top of the deck to be the next to sell? The listing inventory is like a deck of cards it gets shuffled every day.

Your listing could be at the top of the deck today, positioned as the next to sell and then because the deck gets shuffled you need to re-adjust the price and or terms or wait.

Assume the absorption study indicates that there are currently 20 homes on the market competing with you and based on recent sales the projected sales pace is 2 sales per month. That means there is currently 10 months of inventory presently on the market.

New listings come on the market every day. Your competition may reduce their price or offer a new incentive and move to the top of the deck. Review the absorption study and decide where do you want to be in the deck?

Pricing property in an uncertain economic environment is a challenge. The study is used to get a broad overview of the market or a market segment by understanding how may properties have sold and or gone under contract during the previous 3 to 12 months.

Once you know how many sold then count the number of active listings currently on the market that meet the same criteria. This will help you project how many should sell in the next 3 to12 months. It is particularly effective when you are researching in a particular price range or geographic area.

1. How many 4 bedroom 3 ½ bath homes may went under contract in the last 90 days?
2. How may are active now? If 6 sold in three months that means on average 2 sell every month.
3. If there is an active inventory of 20, then there is 10 months of standing inventory assuming not one more property is listed. The study is a powerful pricing tool.

An absorption study is a valuable in helping to competitively position your listing in the marketplace.

Once you determine your time line the absorption rate may help them determine the price and terms the property needs be listed at to achieve your timing goal.

Even a property well priced in an over supply market needs to create a competitive advantage.

Just that one half percent increased the buyer's purchasing power on a $400,000.00 loan by $22,000 and at 5% by $47,000.

• Demonstrating to a buyer the power of a lower rate and helping them understand the advantages of focusing on the monthly affordability and the unique window of opportunity that exists today will help them re-engage.
• Most lenders on a 30 year fixed buy down will qualify the buyer on the lower rate and that reduces the buyer's qualifying ratios which will help them qualify for the property.
• It's important to discuss this same opportunity with the seller and the competitive advantage of being proactive in offering a buy down in order increase activity and interest in their listing

Many buyers dropped of the market out when the mortgage melt down happened in November. They were shopping in the market at 6%. Conforming money has recently been 5.5% and under.

As rates hover below 6% the affordability index for the buyer improves and with a buy down the rates drop to numbers we've never seen before and according to most economists will likely not see again in our lifetime.

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