Buy or Sell First? The Chicken and Egg Question:
by Michele Dawson
For homeowners aiming to sell their home and buy another, it's the classic real estate, which came first, the chicken or the egg, question - buy or sell first?
If you sell first, you may find yourself under a tight deadline to find another house, or be forced in temporary quarters. If you buy first, you may be saddled with two mortgage payments for at least a couple months. You may need the money from the sale of your original home in order to pre-qualify for a loan for your new home. You may be facing a job relocation and need to sell quickly.
There are many variables involved; there is no universal correct answer. It basically comes down to your specific circumstances.
Dan Gregor, a Realtor in Pickerington, Ohio, says there is generally less pressure when you sell first.
"It really comes down to risk," Gregor said. "It's whether you want the risk of owning two houses, or possibly none at all."
Gregor says that if you have the money to make two mortgage payments, the pressure is off. But if you need to sell your house in order to qualify for a loan, then you have no choice - you'll have to sell first.
"You can write contingent contracts, but if you really want the home, you'll pay a premium - that's if the seller will even entertain a contingent offer," he says.
And if you go ahead with a contingent offer, then you may end up settling for less for the house you're selling in an effort to get it sold quickly.
Gregor says for most people, the stress level is lower when you sell first.
"You have time to get pre-approved for your mortgage and see all the housing options in the price range you'd like to buy," he said.
When your selling house is in contract, he suggests you pick the three best homes of those you've viewed and prepare to make an offer on the one that best meets your needs.
"The absolute worst that can happen is the right home isn't available," Gregor said. "You end up in a short-term rental with the cash in your pocket and pre-approved. Financing for the balance you need. So you look like a cash buyer when you make an offer on the home you finally decide on."
But brisk selling conditions in some parts of the country require more aggressive tactics.
Brett Furman, a broker in suburban Philadelphia, says the strong market dictates that homebuyers focus on buying first, and selling later.
"The housing market in the suburban Philadelphia market is moving very quickly," said Furman. "Normally we advise our buyers to sell their home first and buy second ... However with the faster moving market, we are advising many of our buyer clients to obtain a mortgage commitment that is not contingent upon selling their existing house."
In their book, House Selling for Dummies (Hungry Minds Inc., 1999), Eric Tyson and Ray Brown "strongly recommend" that you sell first.
"Even in good real estate markets, sales frequently drag on much longer than you expect," the authors say. "Selling in a weak market usually compounds the problem. Homeowners tend to overestimate their house's resale value and underestimate the length of the selling process - a fiscally deadly one-two punch."
But selling first isn't the perfect solution. Some of the issues that may come up include:
· Being forced out of your house before you have a new place available. Where will you live? Where will your kids go to school?
· Having to move twice. Do you want to go through the hassle? Where will you store your extra furniture while you live with family and friends or rent an apartment?
· Not being able to find a house you like. How long are you willing to live in temporary quarters until you find a suitable house?
Whichever way you go, it always seems to work out in the end, at least in Gregor's experience.
"I've been in the business for 30 years," he said. "We've never had anyone out on the street and the vast majority of our clients that make double moves are those building new homes that had to have their property sold first."
Published: July 14, 2003
Wednesday, April 06, 2005
Homeowner Hints for a Successful Sale
Homeowner Hints for a Successful Sale
Exterior
Grass and shrubs
Keep trimmed. Consider a fast-greening fertilizer such as ammonium sulfate inexpensive for a deep green lawn.
Pets
If you have a dog, clean up any dog dirt on a daily basis. Secure pets while the house is being shown. If you have a cat, change the litter box daily.
Fences
Make any needed repairs. A neat, well-painted fence gives a positive impression.
Flowers
Plant seasonal blooming flowers, especially near the front door and in any patio area. A profusion of color can have your home half-sold before the door is even opened.
Bird feeders
Hummingbird feeders and bird houses create a pleasant mood, especially when they are close to any patio area.
Paint:
Front door
Front door should be refinished or painted if it shows excessive wear.
Condition of exterior paint
Often only the trim or, depending on sun exposure, only one or two sides of the house need painting. Keep in mind that paint is cheap compared to the extra dollars a home with a clean, fresh appearance will bring.
Lawn furniture:
Place lawn furniture in an attractive, leisurely manner. A badminton net or croquet set-up gives a positive image as well.
Roof:
If the roof needs to be repaired or replaced, it's best to have the work done. Otherwise, buyers will want to deduct the cost even if your price already reflects the required work. Delaying repairs can actually cost you twice as much.
Interior:
Housekeeping. You are competing against model homes, so your home must look as much like a model as possible. Floors, bath fixtures and appliances must be sparkling. Consider using a car wax on appliances. Make beds early in the day. Unmade beds and late sleepers create a very negative image.
Odors and aromas:
Avoid heavy frying, using vinegar or cooking strong-smelling foods such as cabbage. The odors last and work against the image you are trying to create. On the other hand, some smells have a positive effect on people: Baked bread, apple pie, chocolate cookies and cinnamon rolls are examples of foods that can sell your home. Consider keeping prepackaged cookie or bread dough in the refrigerator. Just before a scheduled showing, the smell of these baking foods can be a great help to us. If you or your family members smoke, don't smoke in your home and don't allow guests to smoke. Stale tobacco odors can be masked with some odor sprays. If the temperature allows it, open windows and air out the house every morning.
Paint:
If you have leftover paint, you can accomplish a great deal by doing touch-ups where needed. If the surface is dark, repaint with light colors such as off-white, oyster, light beige or pale yellow. Light colors make rooms appear fresh as well as larger.
Plumbing:
Repair any leaky faucets. Make certain that you don't have a gurgling toilet. Clean out any slow drains.
Shades and blinds:
Replace any torn shades or broken blinds.
Drapes:
If drapes need cleaning, have it done. If they are old and worn, stained or dark, consider replacing them with either light-colored drapes or off-white vinyl vertical blinds. Large department stores or catalog houses usually have standard sizes.
Carpets:
Dirty carpets should be either professionally steam-cleaned preferred , or you should rent a heavy-duty cleaner. If the carpet is badly worn, replace it with a new carpet and a quality pad in a neutral color. Consider either a plush or berber carpet.
Lighting:
If any room appears dark, increase the wattage of your light bulbs. Before a showing, open the blinds and drapes and turn on the lights, even during the day--you want the house as bright as possible. Be sure that your light fixtures and windows are clean.
Closets:
If closets appear crowded, remove items not needed and put in boxes. They can be stacked neatly in a corner of the basement, attic or garage.
Too much furniture:
Many homes appear crowded, with too many pieces of large furniture and too much bric-a-brac. Consider putting excess furniture in a storage locker.
Garage and basement:
Spruce up your work area. Consider a garage sale to get rid of items you no longer need. Put excess items in boxes and stack them neatly in a corner. Consider using commercial garage floor cleaner on oil and grease marks on the garage floor and drive-way. You might consider a commercial steam cleaner not a carpet cleaner.
Temperature:
On cold days, a natural fire in the fireplace will help us sell your home. Start the fire before the showing is scheduled. On hot days, consider turning the air conditioner four to five degrees cooler than normal. The contrast will seem phenomenal, making a very positive impression. In moderate weather, open windows for fresh air.
Your Best Role during Showings:
When your home is shown, it's best that you disappear for a while. Buyers feel restrained with an owner present. If buyers hesitate to voice their concerns, then their questions cannot be answered and their problems cannot be solved.
If you must remain in the house, try to stay in one area. Excellent places to be are working in the garden, on the lawn or in the workshop. These activities create a positive image. While soft music is fine, turn off the TV.
Never, never follow the agent around the house during the showing, volunteer any information or answer questions the buyers may have. You have engaged professional real estate salespeople. We will ask you questions if necessary.
Exterior
Grass and shrubs
Keep trimmed. Consider a fast-greening fertilizer such as ammonium sulfate inexpensive for a deep green lawn.
Pets
If you have a dog, clean up any dog dirt on a daily basis. Secure pets while the house is being shown. If you have a cat, change the litter box daily.
Fences
Make any needed repairs. A neat, well-painted fence gives a positive impression.
Flowers
Plant seasonal blooming flowers, especially near the front door and in any patio area. A profusion of color can have your home half-sold before the door is even opened.
Bird feeders
Hummingbird feeders and bird houses create a pleasant mood, especially when they are close to any patio area.
Paint:
Front door
Front door should be refinished or painted if it shows excessive wear.
Condition of exterior paint
Often only the trim or, depending on sun exposure, only one or two sides of the house need painting. Keep in mind that paint is cheap compared to the extra dollars a home with a clean, fresh appearance will bring.
Lawn furniture:
Place lawn furniture in an attractive, leisurely manner. A badminton net or croquet set-up gives a positive image as well.
Roof:
If the roof needs to be repaired or replaced, it's best to have the work done. Otherwise, buyers will want to deduct the cost even if your price already reflects the required work. Delaying repairs can actually cost you twice as much.
Interior:
Housekeeping. You are competing against model homes, so your home must look as much like a model as possible. Floors, bath fixtures and appliances must be sparkling. Consider using a car wax on appliances. Make beds early in the day. Unmade beds and late sleepers create a very negative image.
Odors and aromas:
Avoid heavy frying, using vinegar or cooking strong-smelling foods such as cabbage. The odors last and work against the image you are trying to create. On the other hand, some smells have a positive effect on people: Baked bread, apple pie, chocolate cookies and cinnamon rolls are examples of foods that can sell your home. Consider keeping prepackaged cookie or bread dough in the refrigerator. Just before a scheduled showing, the smell of these baking foods can be a great help to us. If you or your family members smoke, don't smoke in your home and don't allow guests to smoke. Stale tobacco odors can be masked with some odor sprays. If the temperature allows it, open windows and air out the house every morning.
Paint:
If you have leftover paint, you can accomplish a great deal by doing touch-ups where needed. If the surface is dark, repaint with light colors such as off-white, oyster, light beige or pale yellow. Light colors make rooms appear fresh as well as larger.
Plumbing:
Repair any leaky faucets. Make certain that you don't have a gurgling toilet. Clean out any slow drains.
Shades and blinds:
Replace any torn shades or broken blinds.
Drapes:
If drapes need cleaning, have it done. If they are old and worn, stained or dark, consider replacing them with either light-colored drapes or off-white vinyl vertical blinds. Large department stores or catalog houses usually have standard sizes.
Carpets:
Dirty carpets should be either professionally steam-cleaned preferred , or you should rent a heavy-duty cleaner. If the carpet is badly worn, replace it with a new carpet and a quality pad in a neutral color. Consider either a plush or berber carpet.
Lighting:
If any room appears dark, increase the wattage of your light bulbs. Before a showing, open the blinds and drapes and turn on the lights, even during the day--you want the house as bright as possible. Be sure that your light fixtures and windows are clean.
Closets:
If closets appear crowded, remove items not needed and put in boxes. They can be stacked neatly in a corner of the basement, attic or garage.
Too much furniture:
Many homes appear crowded, with too many pieces of large furniture and too much bric-a-brac. Consider putting excess furniture in a storage locker.
Garage and basement:
Spruce up your work area. Consider a garage sale to get rid of items you no longer need. Put excess items in boxes and stack them neatly in a corner. Consider using commercial garage floor cleaner on oil and grease marks on the garage floor and drive-way. You might consider a commercial steam cleaner not a carpet cleaner.
Temperature:
On cold days, a natural fire in the fireplace will help us sell your home. Start the fire before the showing is scheduled. On hot days, consider turning the air conditioner four to five degrees cooler than normal. The contrast will seem phenomenal, making a very positive impression. In moderate weather, open windows for fresh air.
Your Best Role during Showings:
When your home is shown, it's best that you disappear for a while. Buyers feel restrained with an owner present. If buyers hesitate to voice their concerns, then their questions cannot be answered and their problems cannot be solved.
If you must remain in the house, try to stay in one area. Excellent places to be are working in the garden, on the lawn or in the workshop. These activities create a positive image. While soft music is fine, turn off the TV.
Never, never follow the agent around the house during the showing, volunteer any information or answer questions the buyers may have. You have engaged professional real estate salespeople. We will ask you questions if necessary.
Tips To Help You Sell A Vacant House
Tips To Help You Sell A Vacant House
The ad looks too good to be true -- a home with all the prerequisites you want is on the market in a fabulous neighborhood. The community is near work, the schools are great, there are lots of activities nearby -- and the asking price is competitive.
But when the prospective buyers approach the newly listed home, hopes plummet -- the place is vacant and filled with scarred walls, dirty floors, and an unkempt yard.
Unfortunately, a home which is merely "lived-in" when furnished and occupied may look bare and blemished when empty. But the good news is that selling a vacant home isn't an impossible task, especially if you follow these pointers:
Remember first impressions. Regardless of whether your home is vacant or not, its appeal from the street is crucial in making a positive impact with potential buyers.
Paint or fix up the front entrance as required.
If you have a lawn, keep it mowed. Hire a neighborhood teen or local landscape service to keep it maintained. If you have an automated irrigation or sprinkler system, you'll want to leave it on, or ask a neighbor to water for you. This is especially crucial in regions with scorching summers.
If your house is on the market in fall, be sure you or someone you hire keeps leaves cleaned up. Likewise, if it's winter and you live in a snowy area, be sure driveways and entrances are cleared.
Spruce up landscaping before you leave. Plant some new shrubs, lay down some fresh ground cover, or brighten it up with some colorful annuals.
Go through every room of your house, paintbrush in hand, and touch up any walls that have been scuffed or marked up. After moving furniture out, you're sure to find a slew of such marks.
Walls painted in bold, bright colors are wonderful attention-getters when complemented by furniture, rugs, and accessories. However, in an empty room, these bold colors may put buyers off. You may want to consider painting neutral colors throughout the house before you sell.
Get carpets professionally cleaned once everything is moved out. If the floors aren't taken care of, the prospective home buyer may wonder, what else isn't?
Clean your house thoroughly in every nook and cranny -- including windows and fireplaces -- before you let potential buyers look at it.
If at all possible, try to leave some furniture in the house. This will give prospective buyers a sense of size and proportion -- and a place to sit down. Empty rooms tend to look smaller than they actually are.
Don't set your deserted house up for potential break-ins. You may want to invest in exterior sensor lights that automatically turn on when it gets dark and turn off at sunrise. Make sure you cancel your newspaper subscription and forward your mail.
If you have a security alarm, use it -- just be sure you leave your entrance code with your real estate broker.
Be sure you review the provisions of your homeowners insurance. Many companies have a cap on how long coverage will last while the property is vacant.
As you prepare a vacant home for sale, also consider this idea: Some buyers like the flexibility that comes with buying a vacant house. They can move in as soon or as late as they'd like, and they don't have to worry about floors getting soiled and walls getting banged up when you move out.
The ad looks too good to be true -- a home with all the prerequisites you want is on the market in a fabulous neighborhood. The community is near work, the schools are great, there are lots of activities nearby -- and the asking price is competitive.
But when the prospective buyers approach the newly listed home, hopes plummet -- the place is vacant and filled with scarred walls, dirty floors, and an unkempt yard.
Unfortunately, a home which is merely "lived-in" when furnished and occupied may look bare and blemished when empty. But the good news is that selling a vacant home isn't an impossible task, especially if you follow these pointers:
Remember first impressions. Regardless of whether your home is vacant or not, its appeal from the street is crucial in making a positive impact with potential buyers.
Paint or fix up the front entrance as required.
If you have a lawn, keep it mowed. Hire a neighborhood teen or local landscape service to keep it maintained. If you have an automated irrigation or sprinkler system, you'll want to leave it on, or ask a neighbor to water for you. This is especially crucial in regions with scorching summers.
If your house is on the market in fall, be sure you or someone you hire keeps leaves cleaned up. Likewise, if it's winter and you live in a snowy area, be sure driveways and entrances are cleared.
Spruce up landscaping before you leave. Plant some new shrubs, lay down some fresh ground cover, or brighten it up with some colorful annuals.
Go through every room of your house, paintbrush in hand, and touch up any walls that have been scuffed or marked up. After moving furniture out, you're sure to find a slew of such marks.
Walls painted in bold, bright colors are wonderful attention-getters when complemented by furniture, rugs, and accessories. However, in an empty room, these bold colors may put buyers off. You may want to consider painting neutral colors throughout the house before you sell.
Get carpets professionally cleaned once everything is moved out. If the floors aren't taken care of, the prospective home buyer may wonder, what else isn't?
Clean your house thoroughly in every nook and cranny -- including windows and fireplaces -- before you let potential buyers look at it.
If at all possible, try to leave some furniture in the house. This will give prospective buyers a sense of size and proportion -- and a place to sit down. Empty rooms tend to look smaller than they actually are.
Don't set your deserted house up for potential break-ins. You may want to invest in exterior sensor lights that automatically turn on when it gets dark and turn off at sunrise. Make sure you cancel your newspaper subscription and forward your mail.
If you have a security alarm, use it -- just be sure you leave your entrance code with your real estate broker.
Be sure you review the provisions of your homeowners insurance. Many companies have a cap on how long coverage will last while the property is vacant.
As you prepare a vacant home for sale, also consider this idea: Some buyers like the flexibility that comes with buying a vacant house. They can move in as soon or as late as they'd like, and they don't have to worry about floors getting soiled and walls getting banged up when you move out.
The Effects of Supply and Demand
The Effects of Supply and Demand
The free enterprise system is alive and well in real estate. Homes may be bought and sold at will with few, if any, governmental restrictions. Sellers may ask any price they wish, and buyers may offer whatever price they are willing to pay. Asking too much for a home is the prerogative of sellers, just as offering too little is a legitimate choice of buyers. Nevertheless, a sale takes place only when the buyer and seller reach a price level acceptable to both. That is the way a free market economy works. The final price, called "fair market value", is defined as "that price which a buyer is willing to pay, and at which a seller is willing to sell, both parties being knowledgeable about the property, and neither party being under any time pressure to act."
Real estate is highly marketable, meaning that there is always a ready supply of both buyers and sellers. Buyers can choose from a wide selection of similar homes, while sellers have free access to all available buyers. Because price must be agreed upon before a sale can take place, there are three reasons for pricing a home fairly from the beginning: A home priced at "fair market value" is more likely to sell at full price. Buyers compare the features and amenities offered by similar homes. They are likely to recognize a fairly priced home, without feeling they must bargain to receive fair value. An overpriced home helps to sell the competition. Buyers will compare the overpriced home with other similar homes, and then buy one of the other homes. Even if a buyer agrees to pay an inflated price, mortgage rejections can occur when a home does not appraise for the purchase price.
Selling your home? Set the price at "fair market value", and then watch buyers compete to purchase it.
The free enterprise system is alive and well in real estate. Homes may be bought and sold at will with few, if any, governmental restrictions. Sellers may ask any price they wish, and buyers may offer whatever price they are willing to pay. Asking too much for a home is the prerogative of sellers, just as offering too little is a legitimate choice of buyers. Nevertheless, a sale takes place only when the buyer and seller reach a price level acceptable to both. That is the way a free market economy works. The final price, called "fair market value", is defined as "that price which a buyer is willing to pay, and at which a seller is willing to sell, both parties being knowledgeable about the property, and neither party being under any time pressure to act."
Real estate is highly marketable, meaning that there is always a ready supply of both buyers and sellers. Buyers can choose from a wide selection of similar homes, while sellers have free access to all available buyers. Because price must be agreed upon before a sale can take place, there are three reasons for pricing a home fairly from the beginning: A home priced at "fair market value" is more likely to sell at full price. Buyers compare the features and amenities offered by similar homes. They are likely to recognize a fairly priced home, without feeling they must bargain to receive fair value. An overpriced home helps to sell the competition. Buyers will compare the overpriced home with other similar homes, and then buy one of the other homes. Even if a buyer agrees to pay an inflated price, mortgage rejections can occur when a home does not appraise for the purchase price.
Selling your home? Set the price at "fair market value", and then watch buyers compete to purchase it.
6 Reasons Homes Don't Sell
6 Reasons Homes Don't Sell
Has your lawn grown up around that "For Sale" sign? Have the wasps moved into the lock box on your front door? Did you just receive an invitation to your real estate agent's retirement party? If so, chances are your home sale fizzled.
Here are the six most-common reasons why homes don't sell and what you can do about it.
1. Your home is overpriced.Optimistic home sellers love to parrot the old adage, "There's a buyer for every home." But they often leave off the qualifier: "at the buyer's price."
The fact is buyers -- not sellers -- ultimately determine the market value of a home. You can ask for the moon and set your listing price well above comparable properties in your neighborhood, but at some point it will be up to you, the seller, to accept what the buyer thinks your home is worth.
Overpricing is the most common reason homes don't sell. When you ask an unrealistic price, it sets in motion a process that often works against you. Here's why:
Most real estate agents, and hence most qualified buyers, will see your new listing within 30 days. If it is overpriced by as little as 5 percent, it will be duly noted and interest in your property will wane, especially if you show no intention of coming off your asking price. You likely already priced out buyers who might have qualified for financing at a more reasonable price. Even if you manage to find a buyer at your inflated asking price, the property may not appraise at that figure and the financing will fall apart.
Your real estate agent may have approved or even suggested the inflated asking price to secure your listing (more on this in No. 4). Conversely, other Realtors often use overpriced properties like yours to help sell their own listings ("Here's what they are asking. Now would you like to take a second look at that first house I showed you?")
If you have a house that really should be priced at $200,000 and you've got it listed at $260,000, you are trying to compete against homes that really are worth close to $300,000 and all of a sudden your home really is not competing well. You want to compete with what is available out there among homes similar to yours.
If your home remains on the market for too long, agents and buyers may begin to wonder if there are other, perhaps more serious reasons why it isn't selling.
It becomes shopworn, the same as a jacket hanging in the store week after week. People are aware that it has been on the market a long time and agents stop showing it.
2. Your home doesn't "show" well.Your home is competing against shiny new houses in those pristine subdivisions out in the suburbs with their attractive prices, incentives and community amenities.
Face it: Even the best old house needs a little makeover if it hopes to attract a qualified buyer.
The good news is most of the work will be cosmetic and relatively inexpensive: a new coat of paint, a few attractive window boxes, a thorough cleaning of floors and carpets. Voila! The place may look good enough to reconsider.
A good real estate agent can advise you on where your time and money are best spent.
Price and condition are two things that the seller can do something about. I think paint is probably a seller's best friend because it makes things smell fresh and look fresh. If it's time to paint, it's time to paint. It's the best return on investment."
3. You're in a bad location.Nothing has a greater impact on your home's value than its location. Your humble abode might be worth a king's ransom were it located in Palm Beach, Aspen or San Francisco. It might even jump thousands in value just two streets over in the next (and far superior) school district.
"If you're in one of the higher-ranked schools around here, you're going to add $50,000 to $100,000 to the price of the same house," according to Lenn Harley, a broker with Homefinders.com Inc. in Maryland and Virginia.
The point is location rules in real estate.
If your home's location is less than desirable, your options are somewhat limited. A good real estate agent will do his best to help you accentuate the positive and eliminate the negative of your circumstances, say by using foliage to screen off offensive adjoining properties or dampen traffic noise.
The best way to compensate for a poor location is to reduce your asking price or offer attractive incentives such as seller financing or a lease option with rent credit.
4. You have a lousy listing agent.Yep, they exist: Real estate agents, who mislead, misfire and misbehave.
Their bad advice can cost you plenty in time, money and the sheer hassle of keeping the place show-ready 24/7.
The agent from hell will allow you to overprice your home ("Here's what I can get for you if you list with me!"), not market it properly (see No. 6), fail to screen for qualified buyers, be unresponsive to interest from other agents (if they sell their own listing, they don't have to split the commission) and keep you totally in the dark throughout the process.
What's more, if your agent is abrasive, arrogant or otherwise difficult to work with, other agents may not want the hassle of showing any of their listings to prospective buyers.
5. You are battling competition or market conditions.We've all heard the terms "buyer's market" and "seller's market." In real estate, market conditions are affected by any number of external forces, some of them predictable (the weather, sort of), some of them unpredictable (the local economy, interest rates, public optimism or pessimism).
In a "hot" or seller's market, homes go fast. Inventory (homes on the market) may be low, meaning less competition for you. Chances are better that you will get your asking price in a hot market; in fact, it is not uncommon to even be offered more than your listing price.
But in a "flat," "cold" or buyer's market, sales slow to a trickle, inventories grow and buyers can find bargains, especially when they know the seller is motivated (i.e., paying on two mortgages).
If you're trying to sell in a flat market, you're not only competing against all that vacant new construction, but against rentals as well. In this case, be prepared to settle for less than top dollar, or wait to sell until the pendulum swings once again in your favor.
6. You have ineffective marketing.Gone are the days when an agent could simply place your listing with the local multiple listing service, hold a halfhearted open house and wait for another agent to bring forth a buyer.
Today's top performers launch a multilevel marketing plan that includes listing tours for area agents, newspaper and even TV ads, weekend open houses, listing fliers and placements in local real estate publications.
Computers and the Internet also have changed the face of real estate. According to the National Association of Realtors, today more than one-third of all home buyers use the Internet for house hunting. The best real estate agents are computer-savvy. They have your listing in color on their laptops to show clients and communicate frequently via e-mail, a particular boon when working with out-of-town buyers.
Suffice it to say that if your real estate agent isn't listing your home online through the company Web site as well as with the local MLS, you may not be getting the exposure necessary to find a buyer.
There are those who just put the listing in the multiple and pray it will sell and those that put a lot of effort into marketing their listings. Unfortunately, with this weird system of compensation we have, they all get paid the same, whether they know nothing or have many years of experience.
Has your lawn grown up around that "For Sale" sign? Have the wasps moved into the lock box on your front door? Did you just receive an invitation to your real estate agent's retirement party? If so, chances are your home sale fizzled.
Here are the six most-common reasons why homes don't sell and what you can do about it.
1. Your home is overpriced.Optimistic home sellers love to parrot the old adage, "There's a buyer for every home." But they often leave off the qualifier: "at the buyer's price."
The fact is buyers -- not sellers -- ultimately determine the market value of a home. You can ask for the moon and set your listing price well above comparable properties in your neighborhood, but at some point it will be up to you, the seller, to accept what the buyer thinks your home is worth.
Overpricing is the most common reason homes don't sell. When you ask an unrealistic price, it sets in motion a process that often works against you. Here's why:
Most real estate agents, and hence most qualified buyers, will see your new listing within 30 days. If it is overpriced by as little as 5 percent, it will be duly noted and interest in your property will wane, especially if you show no intention of coming off your asking price. You likely already priced out buyers who might have qualified for financing at a more reasonable price. Even if you manage to find a buyer at your inflated asking price, the property may not appraise at that figure and the financing will fall apart.
Your real estate agent may have approved or even suggested the inflated asking price to secure your listing (more on this in No. 4). Conversely, other Realtors often use overpriced properties like yours to help sell their own listings ("Here's what they are asking. Now would you like to take a second look at that first house I showed you?")
If you have a house that really should be priced at $200,000 and you've got it listed at $260,000, you are trying to compete against homes that really are worth close to $300,000 and all of a sudden your home really is not competing well. You want to compete with what is available out there among homes similar to yours.
If your home remains on the market for too long, agents and buyers may begin to wonder if there are other, perhaps more serious reasons why it isn't selling.
It becomes shopworn, the same as a jacket hanging in the store week after week. People are aware that it has been on the market a long time and agents stop showing it.
2. Your home doesn't "show" well.Your home is competing against shiny new houses in those pristine subdivisions out in the suburbs with their attractive prices, incentives and community amenities.
Face it: Even the best old house needs a little makeover if it hopes to attract a qualified buyer.
The good news is most of the work will be cosmetic and relatively inexpensive: a new coat of paint, a few attractive window boxes, a thorough cleaning of floors and carpets. Voila! The place may look good enough to reconsider.
A good real estate agent can advise you on where your time and money are best spent.
Price and condition are two things that the seller can do something about. I think paint is probably a seller's best friend because it makes things smell fresh and look fresh. If it's time to paint, it's time to paint. It's the best return on investment."
3. You're in a bad location.Nothing has a greater impact on your home's value than its location. Your humble abode might be worth a king's ransom were it located in Palm Beach, Aspen or San Francisco. It might even jump thousands in value just two streets over in the next (and far superior) school district.
"If you're in one of the higher-ranked schools around here, you're going to add $50,000 to $100,000 to the price of the same house," according to Lenn Harley, a broker with Homefinders.com Inc. in Maryland and Virginia.
The point is location rules in real estate.
If your home's location is less than desirable, your options are somewhat limited. A good real estate agent will do his best to help you accentuate the positive and eliminate the negative of your circumstances, say by using foliage to screen off offensive adjoining properties or dampen traffic noise.
The best way to compensate for a poor location is to reduce your asking price or offer attractive incentives such as seller financing or a lease option with rent credit.
4. You have a lousy listing agent.Yep, they exist: Real estate agents, who mislead, misfire and misbehave.
Their bad advice can cost you plenty in time, money and the sheer hassle of keeping the place show-ready 24/7.
The agent from hell will allow you to overprice your home ("Here's what I can get for you if you list with me!"), not market it properly (see No. 6), fail to screen for qualified buyers, be unresponsive to interest from other agents (if they sell their own listing, they don't have to split the commission) and keep you totally in the dark throughout the process.
What's more, if your agent is abrasive, arrogant or otherwise difficult to work with, other agents may not want the hassle of showing any of their listings to prospective buyers.
5. You are battling competition or market conditions.We've all heard the terms "buyer's market" and "seller's market." In real estate, market conditions are affected by any number of external forces, some of them predictable (the weather, sort of), some of them unpredictable (the local economy, interest rates, public optimism or pessimism).
In a "hot" or seller's market, homes go fast. Inventory (homes on the market) may be low, meaning less competition for you. Chances are better that you will get your asking price in a hot market; in fact, it is not uncommon to even be offered more than your listing price.
But in a "flat," "cold" or buyer's market, sales slow to a trickle, inventories grow and buyers can find bargains, especially when they know the seller is motivated (i.e., paying on two mortgages).
If you're trying to sell in a flat market, you're not only competing against all that vacant new construction, but against rentals as well. In this case, be prepared to settle for less than top dollar, or wait to sell until the pendulum swings once again in your favor.
6. You have ineffective marketing.Gone are the days when an agent could simply place your listing with the local multiple listing service, hold a halfhearted open house and wait for another agent to bring forth a buyer.
Today's top performers launch a multilevel marketing plan that includes listing tours for area agents, newspaper and even TV ads, weekend open houses, listing fliers and placements in local real estate publications.
Computers and the Internet also have changed the face of real estate. According to the National Association of Realtors, today more than one-third of all home buyers use the Internet for house hunting. The best real estate agents are computer-savvy. They have your listing in color on their laptops to show clients and communicate frequently via e-mail, a particular boon when working with out-of-town buyers.
Suffice it to say that if your real estate agent isn't listing your home online through the company Web site as well as with the local MLS, you may not be getting the exposure necessary to find a buyer.
There are those who just put the listing in the multiple and pray it will sell and those that put a lot of effort into marketing their listings. Unfortunately, with this weird system of compensation we have, they all get paid the same, whether they know nothing or have many years of experience.
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