Recently Chase issued its 15 declining marekt states. Other institutions have declining areas within States. What does this mean to you as a Realtor? What can you do about it?
First a declining market is one where the lender has said the prices of hoimes are going down. This is often because the number of short sales and foreclosures have lowered home prices. This is the issue of looking at comps. As a Realtor what this means to you is even if an appraisal comes back at value but the appraiser noted declining market, your buyer may be asked to come up with more down payment. Often 5 % more. So on a 300,000 house this is a significant chunk of change. This may kill a deal. But also when the buyer sees a declining market and needs to come up with more money he may say wait a minute. I am paying too much for this house. Or he may walk away and wait figuring prices will go down even further. Sound familiar?
So what can you do? If you are in a declining market I have no short term fixes. However if you are in one that is not declining but sales are sluggish here are my recommendations.
1 Price houses correctly. Well priced houses sell. The less time they are on the market the better for your seller and prices.
2 Make sure your seller has done everything needed to sell. You know the drill. Cleaning decluttering etc etc.
3 Encourage your sellers to list early. If they need to sell and are afraid to list because of the market get them going. The more time you have the more likely you are to keep them out of short sale or foreclosure and thus avoid the label of declining Market
4 Another strategy is rent back. If your sellers are going to move but do not want to be on the market early sell with an option to rent back. It takes longer to sell so we need new strategies
The bottom line is educate the selling homeowners and use tactics that give you the most time possible to sell their homes before they get into trouble. You do not want to be labeled a declining market !!! And you can help prevent it.