Home Selling in a Buyers' Market
The supply of homes and condominiums continues to grow throughout the United States. Hopes that the 2007 spring and summer selling season will see a rebound are fading. Many experts have already declared this season "a bust," and say the hope of seeing any possible rebound is delayed until next year. Home prices are flat-to-declining in many areas, and a sudden tightening of lending standards is limiting the supply of potential buyers by preventing them from getting the loans they need.
It's been a long time since home sellers have faced these conditions. In fact, many are in uncharted waters.
Face the New Reality — It's a Buyers' Market
Homeowners looking to sell have a choice: sell now in the current market, or wait to sell later, when market conditions improve. Of course, the latter assumes they can wait. But if you are determined to sell, you need to forget about the real estate market of just two years ago and face the new reality in many regions: It's a buyers' market, and you will be competing with a growing supply of motivated sellers to get someone to buy your home.
When trying to sell in a buyers' market, two most important factors are price and condition, according to real estate pros. I would add — flexibility. Buyers know real estate prices ran up far too much during the last two years of the real estate boom, and just because you may have paid too much for your home, many buyers don't think they should have to pay to bail you out.
With all this in mind, here are some of the most common mistakes sellers make in a down market, along with ways to avoid them:
You don't want to over-price your house, because buyers will then ignore it and your listing will loose its freshness and appeal, not to mention the uncompensated effort of keeping the home spotless during the showings.
Also, the "original listing price" and "current asking price" are on your home's Multiple Listing Service listing, and some buyers will see it as a sign that you have unreasonable expectations of what you can fetch for your home.
Look at the listing for every comparable home that is or was listed in your neighborhood in the past six months. Compare similar properties, make adjustments for locations, age, upgrades and lot sizes, and come up with a range of values. Most buyers search the Internet and buy a home within 12 miles of their existing home — so use the Internet tools available in your area to see what the supply of homes for sale looks like near you. Also, if you are working with a realtor, don't choose to list with the one who suggests the highest listing price; rather, select a listing agent who can back up his or her proposal with the most facts, market research and experience.
When setting the listing price for your house, use round numbers, in increments of $5,000. Most buyers use the Internet to search for a home. When searching by price, they typically search in increments of $5,000. So, listing at a price of $250,000 will turn up in more searches that listing at $249,900.
For this reason, doing what it takes to get your house in selling shape is the second most important factor, after setting the correct price, if you want to get close to your asking price or sell as quickly as possible. Inexpensive things you can do to increase your home's curb appeal and help it show better include:
The industry term for doing this is "staging a house" and, as you can imagine, it goes far beyond decorating and cleaning. But doing this can result in selling your home more quickly and getting a higher price, according to pros who offer those services.
If you don't have the time or would prefer to have someone trained and objective do this for you, ask your realtor to refer you to a professional home stager. Some realtors have earned the Accredited Staging Professional (ASP) designation and can do this for you. You can also learn more and locate a professional home stager at www.stagedhomes.com.
Also, ask the buyers or their realtor what information they used to determine the price they offered and why they want to buy your house. For example, say the buyers respond that they based their offer on comparable price per square footage for two other listings. If your house includes upgrades and a finished basement that the other listings don't have, include an explanation of the cost of your upgrades and the additional value per square foot with your counter-offer.