How to sell your home in tough times with price cuts, staging and negotiation

Your Home: How to sell your home in tough times - May. 2, 2011 Page 1 of 7

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Your Home: How to
sell in tough times
By Amanda Gengler and Elizabeth Fenner

May 9, 2011: 2:12 AM ET

You can't 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 you're 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.
can't 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


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 there's a big gap
between what sellers want and what buyers
It's not enough to show buyers your house are willing to pay.
is a deal: You have to convince them it's 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. Here's 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 don't
sellers in the past year initially listed too
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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 doesn't sell? Bigger mistake.

"The first 30 days on the market are the
most important," says Norwalk, Conn.,
realtor Elizabeth Kamar. That's when your



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 you're for $799,000 and it sold for $808,000.
competing with lots of foreclosures and
short sales, your price should generate Play hardball. It's okay to reject low-ball
enough interest to attract more than one offers if a buyer won't 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 you'll be able to negotiate within
$5,000 to $10,000 below what she thought $10,000 to $20,000 of an acceptable offer.
she'd 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 you'd
$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.



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 isn't essential.
auditor, started a new job in Silver Spring, Get names from realtors or at
Md., after a layoff. realestatestagingassociation.com, then
review the stager's 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 (it's currently a work within it. Stagers typically charge $150
t $389,500). Between rent on Rex's new to $400 to walk through your home and give
place and their carrying costs on the house, recommendations for each room. You can
they're paying a budget-straining $4,000 a then execute the plan yourself or hire the
month. "We need to sell," says Rex, "but we're 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 house's best features while See whether your realtor will pay. If you're
making it as easy as possible for buyers to on the hook for a full 6% commission, you
imagine themselves living there. Veteran real
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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 (accredited



have significant negotiating power. "I'm 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 buyer's
removed excess furniture, among other closing costs or pay the first year's property
things; a professional stylist redid the living taxes or condo or homeowner association
room (see above). "It's 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 it's 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 buyer's 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
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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 home's online presence has a
dozen or two photos: Having 20 instead of
five photos will almost double the number of
hits you'll 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 profits



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 doesn't accommodate prospective buyers'
object to. schedules. Today, if buyers can't get in on
their time, they'll 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 moment's notice.
Yet just as many shoppers don't want -- or And disappear (along with your dog, if
don't 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 doesn't 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
isn't enough. Ask your realtor if you'll 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 Blanc's passed the info to
someone she knew was looking for that kind
of house. Within a week, Mauro had an offer
for $460,000.



price.

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First Published: May 2, 2011: 10:59 AM ET

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