Selling Your Home In A Crummy Market
April 17th, 2010 by Skip McGrath
A lot of our readers have been ready to downsize or sell their home to move to a better retirement area. They want to sell their homes but think they can’t. As bad as things look they are much better today than a year ago.
Home builders have not been building homes so the supply of new homes is around 250,000 the lowest it has been since the early 1970s. And the supply of resale homes is now about 3.5 million –quite high, but a million less than this time a year ago.
Homes are selling. They are not selling as fast and the prices are low –but they are selling. So here are some tips for selling your home in a tough market.
- Be reasonable with your price. This is a buyers market. A lot of people let their ego get in the way when setting the sales price. I know your home was worth $375,000 three or four years ago. It really hurts to put it on the market at $275,000 but that may be what it takes. Its not so bad though because the home you are going to buy to replace this one is also 30% lower. So when you move you are still trading equal value for equal value.
- Work with an experienced local agent. Stick with someone who has been selling homes in your community for several years. When I sold my last home I called three real estate agencies and asked them the name of their top salesperson. From that list of three I picked the one with the most experience and local knowledge.
- Do all the stuff anyone should do when selling a home. Fix up and paint, clear out closets and garages, spruce up the yard and make sure you have good curb appeal. All of those things really matter. Spending $2000 on improvements in this market could add $5000 to your sales price and reduce your time on market.
- Get rid of your sentimental mindset. We all have a lot of memories wrapped up in our homes. But this is a business transaction and you need to approach it as such. If you price your home too high it may sit on the market a long time –and there is nothing that will reduce your value faster than being on the market too long.
- Be prepared to bargain. When I sell a home, I price it about ten percent over the market valuation but then I tell the Realtor to put the word out that I am a motivated seller. People always make a lower offer than your asking price so you need some room to move. If they think they can get the house for $20,000 less than the asking price they think they have the bargain.
- Don’t spend your money or commit to a new house until this one closes. In the old days about 5% of all home deals fell through. Today it is more like 20%.
Now is actually not a bad time to sell if you want to downsize or move to a different area to retire. The retirement destinations like Arizona, Florida, Southern California and Las Vegas were all hit harder than the rest of the country. Housing prices in those locals fell far more than in the rest of the country, so you will probably be able to actually trade up in dollar-for-dollar value if you shop carefully.
Related posts:
