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Sellers need reality check

Posted by Scott Van Voorhis  February 24, 2014 08:59 AM

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The spring market is getting ready to kick into gear. And would-be home sellers across Massachusetts are once again seeing dollar signs.

Reports of rising home prices have emboldened many sellers, who think the crazy days of the real estate bubble have returned and the sky is the limit.

But while prices are definitely going up, the easy money mortgages that drove the last bubble are gone.

In fact, when it comes to pricing your home, the margin of error is not all that big, warns Bruce Taylor, co-founder of ERA Key Realty Services in Whitinsville.

ERA Key Realty has 18 offices doing business across a broad swath of Central Massachusetts, from south to Franklin and north to Lowell and as far east as Framingham.

A seller might be able to get away with a little overpricing. You might even find a buyer if you list at 5 percent above comparable properties in your neighborhood.

But once you hit 10 percent, you are going to run into some serious problems, Taylor contends.

In his market, that's roughly pricing your house at $330,000 instead of $300,000.

"We have had a very significant rebound in the last two years but we we are still not back at 2006 levels," Taylor notes.

Of course, that won't stop some sellers, who pick a price out of the thin air and insist on giving it a try in hopes of hitting the real estate jackpot.

But if a seller comes into his office insisting on $390,000 or even $420,000 when the real price is $300,000, Taylor doesn't mess around.

"If they come in at a number 30 to 40 percent over and we can't get you come down, we just pass," Taylor says.

So why not play along with the seller's fantasies?

Because it too often is the start of a downward spiral, where the property doesn't sell and them becomes perceived as damaged goods.

In the end, the seller might wind up netting less than the market price of his home just in order to move it after it has sat on the market for months, Taylor says.

So what's your take? Seeing some crazy asking prices in your neighborhood?


This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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