Transcript of "Selling your home money magazine 05.2011"
Your Home: How to sell your home in tough times - May. 2, 2011 Page 1 of 7 83169Print Your Home: How to sell in tough times By Amanda Gengler and Elizabeth Fenner May 9, 2011: 2:12 AM ET You cant count on things turning a soon, either. At the current sales pace, it would take 8.6 months to clear out the 3.5 million existing homes listed today. With the boost from the recent homebuyer tax credit gone, anyone who decides or is forced to put a house up for sale enters a Peter and Lauren Meyer of Montclair, N.J., had to make market where houses often linger a full six dramatic price cuts to nab a buyer. Their starting price i months -- even a year -- without any bites. n February 2010 was $1.149 million. After 5 price cuts, the home sold in November 2010 for $808,000. Put part of the blame on stiff competition: Foreclosures and short sales, which (MONEY Magazine) -- If youre in the market accounted for 39% of sales in February, sell to sell your home, you probably feel you for about 15% less than conventional homes. cant catch a break. Nearly five years into the housing bust, when many experts thought Advertisement the real estate market would at least have stabilized, sales and prices are still dropping in most of the country. In February existing-home sales tumbled 9.6% from the previous month, and the median price of a single-family home dropped to $157,000 from $163,900 the previous year, according to the National Association of Realtors. (Latest home prices )http://money.cnn.com/2011/05/02/real_estate/home-sale-strategies.moneymag/index.htm 5/19/2011
Your Home: How to sell your home in tough times - May. 2, 2011 Page 2 of 7 forecasting firm IHS Global Insight. place attracts the most attention and gets the most showings. The result: You often Fortunately, there is one glimmer of good end up with less than you would have if you news. Bargain hunters, too, know that home priced it right to begin with, says Kamar. So prices are down some 32% from their peak. get aggressive right out of the gate. In a recent CNNMoney survey, three- quarters said that it was a good time to buy a Undercut your competition. In normal times home. But translating that interest into an listings of similar properties in your area actual sale can require some extreme would give you a good sense of what your measures. home might sell for. Today theres a big gap between what sellers want and what buyers Its not enough to show buyers your house are willing to pay. is a deal: You have to convince them its a total steal. That means slashing your price, Instead, figure out what you can realistically bringing in a pro to pretty it up, and creating expect to get by asking your realtor to show a killer website for your home. Heres how to you what houses similar to yours have sold do it right. for in the past three to six months. If more than a couple of the comparable properties Slash Your Price, Bigtime were foreclosures or short sales, look closely at the photos and descriptions of Sellers are still loath to accept the extent of those former listings. Distressed homes the toll the bust took on their homes value, should be included in your comps if they are says Tara-Nicholle Nelson, consumer in move-in condition, says Las Vegas realtor educator for the housing website Trulia.com. Paul Bell. Many also give in to the temptation to list the Once you have a handle on your likely sale property above fair market value to see what price, list your home a bit beneath that, says happens. Big mistake. About a quarter of Rockaway, N.J., agent Ellen Klein. You dont sellers in the past year initially listed too Advertisement high and were forced to knock the price lower, according to Trulia.com. Even in cities that have held up well, such as Charlotte, 25% of sellers resort to at least one price cut, and often two. 6 cities slashing prices Think you can always drop the price if your home doesnt sell? Bigger mistake. "The first 30 days on the market are the most important," says Norwalk, Conn., realtor Elizabeth Kamar. Thats when yourhttp://money.cnn.com/2011/05/02/real_estate/home-sale-strategies.moneymag/index.htm 5/19/2011
Your Home: How to sell your home in tough times - May. 2, 2011 Page 3 of 7 have to undercut by much to attract "At that point we wrestled with lowering the attention, because that price will probably price further, but we were ready to move on," still be about 10% or 15% below what other says Peter. The couple relisted their home homes are listed for. Even if youre for $799,000 and it sold for $808,000. competing with lots of foreclosures and short sales, your price should generate Play hardball. Its okay to reject low-ball enough interest to attract more than one offers if a buyer wont budge. But if a buyer bidder, pushing up the final price to where it is willing to negotiate, push aside feelings of should be. anger or insult and start counteroffering, says Mabel Guzman, president of the When Dorchester, Mass., realtor Julie Chicago Association of Realtors. Simmons wanted to sell her own home in January, she listed it at $460,000, about Ideally youll be able to negotiate within $5,000 to $10,000 below what she thought $10,000 to $20,000 of an acceptable offer. shed sell for. Then, "using incentives as carrots and sticks can make it easier to reach an agreement," "I knew I had to attract attention," she says. says Guzman. For example, if your buyer Even in a harsh winter, she received four refuses to dicker, you might offer to leave offers in less than two weeks -- and sold for behind the appliances. Or maybe youd $465,000. rather take the reduced price but have the buyer agree that you take 60 days, not 30, to Take out the ax. No bites within 30 days? move out. Make a big move. Hire a Stager "When a property sits, people start thinking it must be listed too high," says Klein. To There are people who want to sell, and there stimulate interest, make a giant cut -- as are people who have to sell. Kathy and Rex much as 10% of the asking price, and even m Roberts are among the latter. Based in West ore in an area where prices are still falling. Advertisement That should be enough to warrant a second look from buyers who passed the first time, and to bring in a new pool of potentials who are hunting in the lower price range. Last year Montclair, N.J., empty nesters Peter and Lauren Meyer decided to downsize from their seven-bedroom home to an apartment in the same town. They put their home on the market for $1.1 million, more than their realtor suggested. Six months and four price cuts later they pulled it off the market at $889,000.http://money.cnn.com/2011/05/02/real_estate/home-sale-strategies.moneymag/index.htm 5/19/2011
Your Home: How to sell your home in tough times - May. 2, 2011 Page 4 of 7 Hartford, Conn., the couple, who have two staging professional) designation is a plus children, have been living in different cities -- it indicates the stager has gone through since early December, when Rex, an IT some basic training -- but it isnt essential. auditor, started a new job in Silver Spring, Get names from realtors or at Md., after a layoff. realestatestagingassociation.com, then review the stagers online portfolio of before-and-after photos. Next, call Before and after: Manhattan loft homeowner references and ask how fast makeover their homes sold after staging and whether they think the work helped. Listed that same month, their solidly built three-bedroom 1956 colonial has had no Establish a budget and ask the stager to offers, despite two price cuts (its currently a work within it. Stagers typically charge $150 t $389,500). Between rent on Rexs new to $400 to walk through your home and give place and their carrying costs on the house, recommendations for each room. You can theyre paying a budget-straining $4,000 a then execute the plan yourself or hire the month. "We need to sell," says Rex, "but were stager to do it for an hourly fee, usually not willing to drop the price again." $100 or so, plus the cost of any new paint or furnishings. So in March they tried something new: professional home staging. Staging, If you make big changes, costs can add up increasingly popular with homeowners -- but "I can often make a huge difference trying to sell mid-range houses, can extend using what homeowners already have," says from simply rearranging existing furniture Mary D. Brooks, a stager and realtor from to repainting, replacing fixtures, and Breckenridge, Colo. bringing in new furnishings. The goal: to highlight the houses best features while See whether your realtor will pay. If youre making it as easy as possible for buyers to on the hook for a full 6% commission, you imagine themselves living there. Veteran real Advertisement estate brokers interviewed by MONEY say that proper staging can speed the sale and often increase the price too. The key is to get it done right. Start with an open mind. Staging demands a psychological shift that many homeowners find challenging: thinking of your house not as your home but as a set. That means scrubbing away evidence that you actually live there. Your goal: the homey yet impersonal look of a Pottery Barn catalogue. Find the right stager. The ASP (accreditedhttp://money.cnn.com/2011/05/02/real_estate/home-sale-strategies.moneymag/index.htm 5/19/2011
Your Home: How to sell your home in tough times - May. 2, 2011 Page 5 of 7 have significant negotiating power. "Im Throw money at them. Incentives can perk happy to pay for staging because I know it buyers interest just as much as price cuts, works," says realtor Paul Aspelin of Victoria, says Matt Brown, director of business Minn. development at ForSaleByOwner.com. In fact, many buyers will agree to a higher price if As for the Robertses, after getting advice their upfront costs are lowered, since they from stager Kara Woods, owner of Stage to often run short on cash. Move in Danbury, Conn., they painted their lavender dining room a soft gray and If you can afford it, offer to cover the buyers removed excess furniture, among other closing costs or pay the first years property things; a professional stylist redid the living taxes or condo or homeowner association room (see above). "Its incredible how much dues. However, those freebies may be bigger and more modern it looks," says practically standard, particularly in areas rife Kathy. with distressed properties. Find the Right Hook In that case, says realtor Guzman, you might be able to bring buyers to the door by These days its going to take far more than a tossing in an unusual bonus, such as a FOR SALE sign in the front yard and a spot $1,000 gift card (throw in one for the on the multiple-listing service to get buyers agent as well); a belonging they potential buyers in the door. That means mentioned loving, such as the pool table or getting the word out in a creative fashion -- plasma TV; or a $5,000 credit to use in the and finding a realtor who is willing to do the home as they wish. (You can even pay same. upfront points so that they can get a lower mortgage rate, if you can swing it.) "The more eyeballs that get on the listing, the better," says Katie Curnutte of the real Be aware, though, that you must disclose any estate information website Zillow.com. To do such gifts or payments when the offer is that, you need a multipronged marketing Advertisement plan of attack. Create a great site. About 90% of buyers begin their search on the Internet, according to the National Association of Realtors. Make sure your homes online presence has a dozen or two photos: Having 20 instead of five photos will almost double the number of hits youll get, according to Zillow.com. See the sidebar at right for more ways to keep potential buyers clicking on your site. Vulture investors flipping their way to real estate profitshttp://money.cnn.com/2011/05/02/real_estate/home-sale-strategies.moneymag/index.htm 5/19/2011
Your Home: How to sell your home in tough times - May. 2, 2011 Page 6 of 7 agreed on, and some lenders will not Stay away -- far away. In better times you approve them. If so, you might have to find may not feel obliged to drop everything to another incentive that the bank doesnt accommodate prospective buyers object to. schedules. Today, if buyers cant get in on their time, theyll skip it, says Summer Showcase super condition. Yes, some Greene, who manages realtors in the Fort buyers are hunting for foreclosures in Lauderdale area. So be prepared to show a rough shape that they can nab for a song. perfectly clean home at a moments notice. Yet just as many shoppers dont want -- or And disappear (along with your dog, if dont know how -- to put in that sweat possible) for all showings and open houses equity. So hire an inspector to identify every so that prospects can imagine themselves in problem with the home, even seemingly your house -- an impossible task when your minor issues such as dripping faucets, and family is vegging on the couch. fix them. When Betty McCoy began showing her Prairie "If an outlet doesnt work, why get the buyer Village, Kans., three-bedroom Cape Cod - wondering what else is broken?" asks Beth style house, for example, she kept a list of Foley, an associate broker in Holland, Mich. must-do chores -- including emptying Tell your realtor to give anyone who tours wastebaskets, filling the dishwasher, and your home a copy of the inspection report making the bed and walked out every and your list of fixes. morning with the place spotless. On the weekend she holed up at a local mall. Spread the word online. Having your home listed on a major website like Realtor.com Every time I thought I could go home, a new isnt enough. Ask your realtor if youll get an person wanted to see the house, recalls enhanced listing on the site, where your McCoy. But a few extra hours at the mall paid home gets top promotional billing. Many off in spades. In just a few days McCoy had realtors will create a website just for your an offer for her home -- for the full listing home. You also want to get your listing on Advertisement alternative sites like Craigslist or even Facebook. In 2009, when Karen Mauro put her small, historic two-bedroom Orange County, Calif., home on the market she thought it would be a tough sale. Realtor Lisa Blanc listed the property at $467,500 and spread the word not only through the MLS listing but also with an update on her Facebook page. A Facebook friend of Blancs passed the info to someone she knew was looking for that kind of house. Within a week, Mauro had an offer for $460,000.http://money.cnn.com/2011/05/02/real_estate/home-sale-strategies.moneymag/index.htm 5/19/2011
Your Home: How to sell your home in tough times - May. 2, 2011 Page 7 of 7 price. Subscribe to Money Find homes for sale First Published: May 2, 2011: 10:59 AM ET Advertisementhttp://money.cnn.com/2011/05/02/real_estate/home-sale-strategies.moneymag/index.htm 5/19/2011