Tips for Selling a Home in a Slow Market

Unfortunately, Sellers of Real Estate in the current market cannot look to the market that existed in 2003-2006 for guidance in selling a home. In that time period, the Buyers were lined up and were begging just to have their contracts with escalation clauses even considered. It was truly a Sellers' market and any property – regardless of condition – could be quickly sold at ever increasing prices. The picture in 2009 is quite different. The market is no longer hot and there are triple the number of properties for sale than in 2005. The situation poses further problems for those who are also trying to sell their homes without the aid of a Realtor. It is hard to know just where the market is and what steps to take to properly sell your home. It requires creativity, flexibility and hard work. Somehow, you have to distinguish your home from the others and get potential buyers to see that yours is the best home and the best deal.

Pricing

The first thing you have to do is forget about prices from 2005 and even 2006. You cannot look to those prices to determine a current realistic price for your home. Too many people have "followed the market down" in the past two years. By that, we mean that the home, for example, was priced at $475,000 in November of 2005 – because the previous actual "sale" that went to settlement in September of 2005 was for $470,000 and the Seller wanted to leave a little "room" for negotiations. However, the house that settled in September was contracted for in July of 2005 while the market was still good. By the time November came around there is no way that the same house would have sold for $470,000.00. More than likely, the contract might have been written for $460,000, or even $455,000. Three months go by at the $475,000 asking price and the market by February had now gone down to $455,000 for the house. The Seller, feeling a bit desperate, lowers the price to $460,000. Unfortunately, that wasn't quite enough and three more months go by such that the real market value is down to $440,000 and the Seller lowers the price, once again, to $445,000 – also without good results. As you can tell from the example, the Seller keeps following the market down, but too slowly. Had the Seller originally priced the house at $455,000 in November, it might have sold and gone to settlement by the end of the year. Instead, the Seller is still holding on to the property 8 months later and its value is now probably $440,000.

In short, it is vital to properly price your property – preferably below the competition. You need accurate data on the "real" sales prices recently – not from 2006 or 2007, or even 2008. You need to know what types of concessions Sellers were also providing (e.g. closing cost credits, loan buy-downs, new appliances, etc.). It is dangerous to get greedy and think you can get last year's prices and, in addition, save the cost of a Realtor �. You may even wish to pay for your own appraisal of the property to assist you in reaching the right price. You must be prepared to set your price below the competition and make the deal attractive to your buyer if you are to succeed in this market.

Put on a Happy Face

In selling a home the concept of "curb appeal" is very important. When you drive up to your home can you honestly say to yourself that it looks really nice and appealing? A little paint on the trim, some new door hardware, neatly cut grass and some plantings and walkways can go a long way to making the house attractive and inviting. On the inside, make it look clean, neat and roomy. Remove all clutter and extra furniture – even if you have to rent a storage facility for several months. Get rid of every extraneous item and piece of junk. Toys should not be laying around on the floor in the house and everything must be spotless and fresh. Get the carpets professionally cleaned. If that doesn't do it, consider even replacing certain carpets (of course, with a totally neutral color). Make sure all appliances are in perfect working order. Even consider replacing faucets and showerheads (relatively low cost) with new ones. Get new toilet seats (or even new toilets if your's are old and not in perfect condition. If you have an old refrigerator, stove or dishwasher, consider replacing them now. Remove wallpaper where possible and paint the walls with neutral colors. Make it possible for buyers to visualize themselves living in your home and not your family. It may seem harsh and you may even feel like a stranger in your own home, however, it may be necessary to take those steps so as to sell your home.

Give Back a Little Bit

Probably the best way to get your buyers is to make it easier for them to get into your house at the lowest possible out of pocket cost. Say, for example, you have a Buyer with excellent credit and you are selling a house that could appraise at $400,000 but you are willing to accept $390,000. If the Buyer is considering 100% financing (a first trust of $320,000 and a second of $80,000), you may all be better off to agree upon a sales price of $400,000 with Seller credits towards closing costs and other expenses of $10,000.00. In that way, you Buyer may be able to get the house with no money down – a very attractive proposition for many purchasers with good credit but limited cash.

Make it Easier for the Buyer

If your Buyer needs flexibility on such things as settlement dates or access for inspections and appraisals, do what you can to assist. Locate your own title insurance policy and offer it as an incentive to a potential buyer (they can save up to 40% of the cost of a new policy just by having a copy of your policy – on a $400,000 sale, the savings to the Buyer can be more than $500.) Think outside of the box and figure out the ways necessary to achieve your Buyer's needs. If the Buyer can get a First mortgage of $320,000 at 5.75% but a second mortgage is only available at 7.5%, if you can afford to do it, consider providing the second mortgage yourself at the same 5.75%. Where else can you get 5.75% return on your money now? Alternatively consider "buying down" your buyer's mortgage. Typically, a lender fee of 1 point would "buy down" a 30 year loan from 7% to 6.75%. Therefore, it would cost, say, $3,200 to buy down a $320,000 mortgage from 7.0% to 6.75%. You can offer that incentive to your Buyer to get them the lower cost loan.

Help with the Settlement

If you even want some more input and control over the situation, offer the pay the Buyer's closing fee (in our office, normally $295) if the buyer agrees to use the settlement attorney of your choice. You can then keep control over your charges as a Seller and have greater input into the entire settlement process.

Don't forget, if you need assistance with drafting a complete contract for the sale of your home as well as real estate settlement services our office can assist you at each step of the process at very reasonable fees. Please feel free to contact Kimberly Jones for further details about our services, fees and other costs. You can reach Kimberly at 301-251-6200.

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