March 8, 2010 Dollars & Sense
March 2010 You can sell your home in a down market if you follow the three P’s: pricing, preparation, and publicity. Your home may sell faster than you think. Despite doom-and-gloom reports about the real estate market, houses are moving. “Those that are priced right and are being marketed properly are selling,” says Dick Gaylord, a broker/associate with RE/MAX Real Estate Specialists of Long Beach, Calif., and past president of the National Association of Realtors (NAR), Chicago.
“It’s usually the price that holds back offers,” he notes. “If you expect to get the price you would have gotten three or four years ago, you’re probably being unrealistic. But if you look at the current market, you can price your house to sell.”
Pricing
The right price depends on your local market. Home values vary widely between regions, even between neighborhoods. Your home’s price should match those of recently sold, comparable homes in your area. “If local home prices have declined rapidly, look back only about three months, six if prices are declining slowly or have plateaued,” recommends Pat Mertz Esswein, associate editor of real estate for Kiplinger’s Personal Finance magazine. “Your neighbor may have sold a year ago for significantly more than your realtor is recommending now, but that’s ancient history. Odds are it’s not a comparable sale.”
If you’re selling your own home, search the local real estate listings on agencies’ websites to find comparable homes and their prices. If you use a Realtor®, he or she should do a market analysis that compares factors such as location, home size, features, condition, and how long homes have taken to sell, and then recommend a range of prices. “Everyone thinks their house is worth the maximum amount, but an agent may recommend a price you’re not initially comfortable with,” Esswein says. “A good agent will show you what’s sold in your area and for how much, to justify the recommended price.”
If you’re motivated to sell quickly, you might start in the middle, even the lower end, of the recommended range. If you don’t mind the sale process taking longer, you can start at the top of the range and work your way down if necessary.
Preparation
The better your home looks, the higher your asking price can be and the sooner it’s likely to sell. “In 2005 you could get away with charging top dollar, without staging your home (making it as appealing as possible to the broadest group of people), and just sit back and wait for multiple offers,” muses Dorcas Helfant-Browning, CEO and managing partner/principal broker for Coldwell Banker Professional Realtors. “Now the market is crowded with inventory and your home has to stand out. Staging is imperative.”
That means depersonalizing your home. “Buyers have to visualize themselves living in the home with their belongings” says Helfant-Browning. “Many sellers have lots of bold, personal things, and buyers get caught up in the those rather than looking at the space and the structure.”
Basic staging steps include:
• Neutralize. Put away family photos, religious items, collections.
• De-clutter. Pack up knick-knacks, clear off countertops, remove up to half your furniture. Consider renting a storage locker until your home sells.
• Rearrange. Arrange furniture so buyers can move smoothly through the home. Highlight rooms’ focal points, such as fireplaces, with furniture groupings.
• Let it shine. Clean or replace carpets, wash or paint walls, pressure-wash siding and decks, and scrub, scrub, scrub, especially in bathrooms and kitchens. Turn on all lights and open drapes for showings.
• Landscape. Mow and edge the lawn, trim the hedges, plant flowers. If your yard doesn’t look well-maintained, buyers will assume your home isn’t and drive on by.
If your funds are limited, spend money where it shows. Buyers form first impressions from your front door and foyer, so make sure they sparkle. Is the doorknob wobbly? The doorbell broken? The doormat shabby? If you’re debating replacing carpeting in either the entryway or a back hallway, choose the entryway.
Don’t go too far with staging, though. While replacing stained, chipped countertops is important, “if you don’t live in a granite-countertop neighborhood, there’s no need to add those. Be smart, and ensure changes make economic sense,” Helfant-Browning advises. “Things that are normal maintenance work, you need to do. Replace the banged-up garage door, but don’t install an expensive hot tub.”
If you can afford it, consider hiring a professional stager to advise you or to handle the staging itself. Realtors can recommend stagers, or you can consult the International Association of Home Staging Professionals. Costs vary for professional staging, but the NAR reports that spending 1% to 3% of your home’s asking price will generally yield an 8% to 10% return. The better your home looks, the higher your asking price can be and the quicker it’s likely to sell.
Publicity
The next step is to make sure potential buyers know you’re selling. “Good real estate agents will use everything in their tool chests to market your property, including online and newspaper ads, open houses, and realtor tours,” says Gaylord.
If you’d rather not pay a real estate agent’s commission, you can do the same on your own. More buyers are shopping online, so be sure to advertise there. “There are many ‘for sale by owner’ Web sites, or you may be able to find an agency that will sell you a package of services including yard signs and online listings, for a flat fee instead of a percentage commission,” explains Esswein.
Sellers and buyers save with CU Realty
CU Realty Services can help you find a participating Realtor in Albuquerque or Livermore who will save you money on real estate commissions. The CU Realty website offers tools for buying and selling homes as well as complete listings of homes by geographic area.
Once you are ready to start looking for your new home, call or visit the Mortgage Center at SLFCU and talk to a loan advisor about mortgage options. And don’t forget to see if you qualify for federal and state mortgage rebates.
Source: Judy Dahl, Home & Family Finance® Resource Center
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