A couple of years ago we were in the middle of selling our house right at top of the real estate bubble. Homes were routinely going for asking price, and some houses were even getting multiple offers above asking price. At the time the thinking was that the market would continue going up, and it was better to buy now than in a couple of years when prices had skyrocketed.
Looking back, that thinking seems a bit foolish now, but at the time it seemed reasonable. We ended up selling our townhouse for the asking price, and we made a nice profit. The problem is, we also ended up buying a house for more than it was worth. Hindsight is 20/20, right?
Now that the market has been dropping for a while things are extremely tough for homesellers. Because of the rash of low or no down payment mortgages that happened a few years ago, a lot of homeowners are finding themselves underwater in their mortgages, they owe more than the house is now worth.
The real estate Web site Zillow.com reported that 21.8% of all U.S. homes, representing more than 20 million residences, were in a “negative equity” or “underwater” position after prices dropped more than 14% nationally in the year ended March 31.
With so many homeowners being underwater, a huge number of them are just deciding to walk away from their homes, and the mortgages. The result? A ton of foreclosures. According to Lawrence Yun, chief economist with the National Association of Realtors, there were 2 million properties in foreclosure in 2008. That number could climb to almost 2.5 million this year. With such a huge number of foreclosure properties available, and due to the tough economic times, getting your house to sell is harder than ever. Here are a few tips to help you sell a bit faster.
Tips To Sell Your Home In A Down Market
To make sure your home sells in a down market, there are a few things that you can do.
- You have to be willing to price it right: If you're going to sell your home in a down market, you may have to be willing to make some concessions on price. In many areas foreclosures have depressed the prices quite a bit. While you may not be able to cut your price to the level of some of those bank owned homes, you can still do your research as to what comparable homes are selling for, and undercut their prices. You may not get as much action as the foreclosures, but you will at least get more action than other sellers who aren't as flexible on price. Try not to get emotionally stuck on a certain price. Research prices on sites like Zillow.com where you can see what other homes are selling for, or have an agent give you a comparative analysis.
- Make sure the home has curb appeal: Even if you can't compete on price with foreclosures, you can do your best to make sure that the your house at least looks better on the outside than the foreclosure down the block. Get the home power washed, paint the trim and the doors, put on new exterior lights and/or knockers, and give your plants some sprucing up. All the hard work should pay off by at least getting that buyer through the door. (When we sold, this was key for us because there were similar units at the same or lower price. Our unit was just in better shape, had been repainted, etc.)
- Clear the home of clutter: When you're living in the home, it may be ok to have stacks of papers on the coffee table, and tons of personal photos on the walls. But when you're selling a home you want the potential buyers to picture themselves living in the house. Remove personal photos from the walls, and replace them with neutral framed art. Take everything off the countertops in the kitchen to make it seem like there is more counter space. Remove any unnecessary furniture and put it into storage. If you can remove clothing from the closets and put it into self storage you make the closets feel bigger. Reduce all the extra clutter throughout the house to make it feel bigger, more spacious and buyer friendly!
- Fix big problems: If your house has a big problem that will turn a lot of buyers off, fix it! Shag carpeting in the living room? Consider changing it out with fresh new carpeting. Non-working water softener? Pay to have it fixed, or get a new one. ( We actually did this). Big hole in the wall? Get some drywall and patch it up. Ugly peeling linoleum in the kitchen? Put in new flooring. Anything that can cause instant dislike for your house should be fixed, as long as it isn't too expensive.
- Fix smaller problem areas around the house: Go throughout the house and take notes of all the small things that need fixing that may be a turnoff to a potential buyer. Take the time to go around and fix those things one by one. If you noticed them, the buyer will too! When we sold our house we ended up repainting some trim on the outside of the house, repainting several rooms that had scratches and marks on the wall, and removed some rubber marks on the kitchen linoleum. It only took us one or two days of hard work, but in the end the house looked much better, and was more inviting to a buyer.
- Consider staging the house: When we sold we actually staged the house to make the rooms feel more spacious, give it a less cluttered look and a make people feel more at home. In the living room we removed several larger pieces of furniture, and replaced them with smaller more luxurious pieces from our parent's houses – in a different layout. We took our personal photos down and put up framed art pieces. We removed all the magnets and photos from the fridge, and put up nice valances on the windows. Watch a lot of HGTV and try to emulate what the experts do to stage a house!
- Offer bonuses to agents or buyers: consider offering a bonus to the first agent to bring in a full price offer, or offer to pay closing costs for a buyer (this might be especially attractive for first time buyers). I've even heard of buyers offering to pay a years worth of homeowner's association fees. Be creative.
- Use the power of the web and your personal networks to market your house: Don't rely on the listing that your agent has put online to sell your house. Use other online venues to help sell your house. Put an ad on craigslist, use sites like zillow.com or trulia.com, get your own url with the house's address (4000wooodland.com), promote the house through social media like facebook and twitter, and send out a copy of your listing to people on your email list. Sometimes word of mouth is one of the best ways to market a house.
- Get a good agent to help you sell: Get a good agent to help sell your house, not a friend of a friend – or your aunt Agnes who just got her real estate license. Your house is one of your biggest assets, and this is no time to do someone else a favor. Call a local real estate office and ask for their top salesperson. Interview a few agents and ask them to tell you what their marketing plan is for your home. Use someone who understands the power of the internet, the importance of good wide angle interior photos, and an overall marketing strategy for your house.
- When the house is showing, keep the house clean and don't be there!: When you are having an open house, or the house is having a showing, make sure that you aren't there. There's nothing more annoying than having the home's owners in a house when you're trying to look at it. Also, make sure to keep the house spic and span to make sure that it shows well. Finally consider baking cookies before a showing, or lighting one of those cinnamon roll candles. It will give the house a pleasant aroma, and people will feel at home.
Selling your house in a down market isn't an easy task, but you can still do some hard work along the way and make your chances that much better. In the end your house will show better, and you'll be able to sell your house that much quicker.
Do you have your own tips for things that can make a home sell faster? Were there things that you did when selling your house that made it more attractive to buyers? Let us know about it in the comments!