A Cautionary Tale for Sellers – Chasing the Market Down

Why it’s better to work out a realistic price when a property is first listed:

Sunset from the lanai on Pa’ani Pl. (MLS# 232786)

I’m experiencing a frustration common to agents across the country. I have sellers with a spacious, immaculate 4-bedroom property in Kona Palisades, with only one downfall. By the time buyers decide that the site just off of Ka’iminani Dr. is more of a benefit than drawback (excellent climate and convenient location balanced against it being a busy street), the buyers have seen more price drops in the neighborhood, and my seller’s property has become overpriced!

This property was put on the market 200 days ago, and they’ve been chasing the market ever since. While I can’t say that their original valuation was unrealistic–the house is 6 years old and looks new–I advised them to price it lower because there have been many short sales in the area, and prices had been dropping and dropping. Correspondingly, my sellers have lowered their price $120k in 200 days.

What I was unable to do is to convince them from the beginning that they were overestimating what their home would sell for, even though it was probably one of the nicest in the neighborhood. (It’s lovely–enormous, open-plan layout on the upper floor, panoramic ocean views, separate living area downstairs, open beam ceilings, high-end kitchen, wood floors, very large lanai, low maintenance landscaping, and fruit trees producing apple  bananas, limes, mangoes, and lychees.)

For those who don’t know Palisades, it is one of the most pleasant places to live on the Big Island. I live a few blocks away, also at the 1200 ft. elevation, and I love it! In the morning, it’s bright and sunny; about 11a.m.-12p.m. the clouds roll over from the mountain and it cools down. There’s rain in the afternoon, and then a cool breeze arrives and it clears up. There are always beautiful sunsets.

Now I’m renewing my efforts. I tell my sellers that they need to get ahead of the market–have a price so irresistible that buyers won’t be able to pass it up. Three to four months ago they could have sold at the current price, but today at that price they aren’t getting many showings. When a market is trending down, it’s critical to get the asking price “right” from the start.