Selling Fast in a Down Market

Selling quickly in this market can be very difficult. But it can be done. I did it this week once again. 3 weeks -- and we got nearly full price.

The key is to know your competition in the neighborhood and value your comps differently.

Right now, the inventory is so large, and there's so few buyers. To sell QUICKLY, your home must stand out. The No. 1 way to make it stand out is price. When there's too many homes on the market, price trumps all. Everybody's looking for a bargain.

To do this, you must have a seller who not only wants to sell fast, but is willing to look at comparable sales in a way that reflects the current market realities.

What do I mean? Two things.

First, in the case of the condo I sold this week in West Hollywood, recent sales suggested the condo was worth somewhere in the $370s. But there were already tons of similar condos available in that price range that weren't selling. If we had priced it around there, we would have had another condo that wasn't selling. Plus, we knew it was a declining market so we knew any recent sales were instantly outdated (see below). So we priced it at $349,000, where we were the only game in town. We got tons of showings, several potential buyers, and got nearly full asking price in this gloom-and-doom market -- and we did it in 3 weeks.

Second, we know that the value of a property is a completely fluid and an entirely relative thing. There's no one way to determine the "value" of a property. And in a market like this, you have to look at comps differently than you did in a rising market.

For example, if the market in a neighborhood is generally sliding at a rate of about 10 percent, you have to apply that 10 percent looking forward. And you have to do it twice. So, if recent sales suggest that your house is worth $2 million, then your house TODAY is really worth 10% less, or $1.8 million. Those sales were in the past. Your value is now 10 percent less. But it's worse than that, really. You aren't selling your house today, you're selling it in the future, so your value going forward is really 10% less than that, or $1.62 million.

Obviously, that is a very generalized view. And again, there's no hard and fast rule for how to look at a property. And I'm telling you this to sell your property QUICKLY. Yes, it stinks. But remember how this principal worked almost exactly in reverse when the market was rising. People who looked at recent comps, knew their property was already worth more than the old comps. And then they priced it even slightly above that -- and many times they got it! Now, the reverse is true.

Again, this is about selling QUICKLY. If you don't price looking forward, the result is usually that the home will sit and will have to endure several price reductions before you sell. If you're willing to wait, you can sometimes get more for the house. But sometimes you'll get less. It's a gamble. And it takes time. Again, this is general and does not apply to every property or every neighborhood in L.A.