The effects of the recession and the dramatic declines in home values have caused lenders to price their REO inventory and short-sales at below market prices, so how can sellers price their homes to compete with foreclosures and short sales? Both homeowners and builders are facing stiff competition from lenders, and their options are few.
However, while sellers’ options are limited, they’re not nonexistent. Of course conditions vary around the country, but I’m addressing those areas where sales are sluggish and competition is fierce. There are three steps that I consider essential for those who must sell their home.
● Price the home below market. If you cannot afford to do so, you’re probably not going to sell, unless perhaps through a short-sale. Proper pricing is essential; and an experienced agent can help guide you in setting the price. Most homeowners believe their home is worth more than their neighbors—they have a bigger/better kitchen; they’ve upgraded some features; their home is better maintained; they always win yard of the month—but the reality is that buyers are expecting to find a great bargain. If they don’t perceive your home to be in that category, most will just move on. CLICK for more info.
● Unless your home is professionally decorated, hire a home stager. While sellers often feel it unnecessary or too expensive to employ a stager, doing so can make your home memorable and sets it above the competition; and it can make sufficient difference to generate a sale. And even if you regularly receive compliments on your decorating prowess, consulting a home stager is worth their fee. CLICK for more info.
● Recruit the best agent in your area to list your home. Don’t think you’ll save money by avoiding paying a commission, and don’t think buyers will flock to your home to reap the financial benefits of a FSBO (For Sale By Owner). In the real world of real estate, it rarely happens. Do your homework and enlist the services of an experienced and professional agent; your home will be exposed to more buyers, making a sale much more likely. CLICK for more info.
Of course doing the above cannot guarantee a sale, but ignoring them could keep a home from selling. The housing market varies dramatically from one area to another; being aware of local conditions and tailoring a marketing plan for the specifics of your area will help generate buyer interest and hopefully, a signed contract.
The Housing Guru: The expert source for all your housing questions
Market value is what someone is willing to pay for a home. If you don't think the banks want it, you may be missing something here. I think banks are much more realistic as to what it takes to be the next house that gets the offer where regular sellers have much emotional attachment to their homes.
Hi John, your are so right on and captured the TOPS 3 Actions for moving a House from FOR SALE to SOLD.
Anne - Of course banks want to receive full value for their inventory, but some are willing to take less in order to move their REO inventory quickly; and because of current market confusion, some are selling for less than necessary. I've seen it happen in my neighborhood, with banks selling for much less than the cost of construction.
You're certainly right about the emotional attachment some homeowners have, something that must be overcome in order to sell in today's market.
Barbara - Thanks for stopping by! Have a great weekend.
Well done John. Good information, great advice. I would expect no less...
Jay - Thanks for the support!
Hi, John. There aren't many foreclosures or short sales here in the "horse property" niche but it is only the lowest-priced properties that seem to be getting any attention and most of the interested parties are asking if the owners will finance.
Leslie - This isn't the market of 5 years ago; sellers have to make adjustments.
John,
Now if ever sellers have to be realistic with their pricing. Buyers generally don't even consider visiting a listing that isn't right on market, or less.
Esko - And many unfortunate sellers cannot afford to sell for "market" price.