So you are attempting to sell your home and it just is not happening. What should you do? This market is about strategy and for some homeowners; it is about home ownership survival. The recommendations fall into three categories: the basics, the advantageous, and the critical.
The BASICS:
1. We have an over supply of residential properties and lower demand. While the demographics suggest that we have a balance between the number of households and the number of potential purchasers, the fact is that we have an eleven month supply housing. Specifically, if no new listings come onto the market, based the on the number of sales per month, it will take us eleven months to sell the current inventory of houses. A healthy market is a 5 or 6 month supply. In 2004, we had a 3 month supply. (Obviously, that was a seller’s market).
2. Price matters. You have heard the advice, but it is very simple: limited demand, high supply equals lower price. Many people are under the impression that the town or city assessment is ‘below’ the real value of their property. Unfortunately, that is just not true, particularly in East Greenwich which completed it last town wide revaluation at the height of the market. Additionally, those properties that are actually selling are priced slightly below fair market value. If you do not want to sell your house at a low price as compared to 2004, then do not put it on the market. Wait. They market will get better in time.
3. The buyers have the upper hand. It may seem obvious, but in a buyer market the buyers have the advantage. The goal is to sell the property, which means that you need to work with the buyer. While your predisposition may be to be adversarial, you do so at your own peril. You need to work to get the buyer, then get the proposal, and then get to closing. If you do in fact close, you have done well.
4. The agent and the marketing strategy matter: There are many good agents in the market. They have many business models. You need to evaluate their results, their approach, and their effectiveness for you. The best agents, and their teams, have many sales for a reason. Ask them for their results. Newspaper advertising, according to the National Association of Realtors, is not effective. Less than five percent of all sales are generated from Print media. Eighty-five percent is generated from the web. You need to have a strategy that is web based. Among the skills set required is a comprehensive understanding of both the market and of financing. Your agent should be able to talk about the competing properties and the recent sales in your neighborhood. More importantly, you need an agent who can close the buyer and negotiate effectively for you. This is not a luxury, it is a necessity. Finally, your agent needs to be persistent in the marketing process as well as the closing process. Realtors are the best agents. Work with the best Realtor, and/or agent you can find.
The Advantageous:
1. Price below ‘fair market value.’ In a market in which prices are continuing to go down, you need to price below what was fair value 90 days ago. While they are the comparables, they are old and misrepresentative of what is happening today. You need to price in anticipation of where the market is going. The good news is that they you may be getting less than you want for your home, but you should also be paying less for your new home.
2. Offer financing incentives. The vast majority of buyers will need a mortgage. As a seller you can significantly reduce their monthly payment buy paying some of the cost of the mortgage. One seller, with whom we are currently working, is offering the buyer either 3 months of mortgage payments or a 1% reduction in the mortgage rate for five years. Incentives matter for everyone involved in the transaction. Give the buyer a reason to give your property serious consideration.
3. Prepare the House for Maximum WOW impact. With almost 7000 single family homes on the market right now, the buyers will ignore those houses with problems as well as those houses that are tired. The fixer-up buyer can buy great at low price, why would they pay fair price for a project? They won’t! If your septic is failing, or the roof is leaking, fix it. There are dozens of competing houses in great shape without issues. “Tired houses” sell in a sellers market, but they are difficult in a buyers market. Get advise from your Realtor on how to stage and freshen up you property. Recently, we had an estate house on the Hill that needed repairs and updates. The family followed our recommendations, which included repainting interior and exterior, refinishing the floors, painting the kitchen cabinets, etc. We sold the property quickly and at a strong price. If they had not done the work, it is likely the property would still be on the market.
4. Availability to view. Your home should be available to be seen on the web as well as in person. There is much conversation in the real estate industry about the 360 degree tours and their value. One thing is certain, potential purchasers ‘view’ the properties with multiple photos. The importance of visual images in marketing real estate cannot be overstated. The same fact is true of brochures. Moreover, the brochure should re-enforce the value of the property, not detract from it. State law requires the buyers be given certain forms. They should be packaged in a professional an appealing format. Information about the state, city/town is helpful. One other inconvenience of a buyers market: When you receive a request to show your property, do not postpone it. With so many properties on the market, you give the buyer a reason to eliminate your home because it is not available to be seen. If you need to move the appointment an hour or two, no problem, but to another day may be enough to take you off of the agenda permanently. Incidentally, make sure that your agent is available and flexible for showings as well.
The Critical:
1. Respond to all offers: If you do the preceding steps well, you should receive an offer. It is really difficult not be offended, but do not be. A buyer needs to start somewhere and does not want to pay too much. By making an offer, they are telling you that they are really interested in your house. You should be encouraged by that fact alone. It does not matter where they start, but rather where they end up. The wisdom and advice of a strong agent is most critical in this element. Do your best not to take it personally.
2. If you cannot make your mortgage payments, get help and assistance early. Ideally, you should contact your lender, before you are late with a mortgage payment. It is important to try to avoid foreclosure. Beyond losing your house, you will seriously hurt your credit, and making getting back into the homeownership ranks very difficult. Most lenders will work with you. Some will work with you to do a ‘short sale.’ This is when the lender agrees to take less than you own on the mortgage in order to sell it. Some lenders will also provide’ forbearance.’ This is when the lender agrees to suspend mortgage payments. In both situations, it is the lenders decision whether to reduce the payoff or suspend payments. Our experience recently, is that they are willing to work with you. You need to call them before the situation is desperate. Also, let your agent know what is going on. They can help you with the lender, too.
3. It’s not over, until it is over. Many sellers expect that negotiations are over once the sales agreements are signed. In some instances and in the best case, that is true, but it is no longer common. Inspections are also a renegotiation of the agreement. Some transactions are negotiated all the way to and including closing. The media onslaught suggests that you should not buy. Buyers cannot ignore the repetitious and shortsighted advice. You need to live somewhere and it is a great time to buy. Prices are low and selection is great. The transaction is not complete until it is closed and you have received your proceeds.
You can prevail in your goal of selling your house. You need to be smart and strategic. With the best professional assistance, you can make it happen.
Ron Phipps, CRS, ePro, GRI
www.phippsrealty.com
No comments:
Post a Comment