Tuesday, June 28, 2011

Yes, you can sell your home in a down market

Meredith Gray, 53, with her two dogs on the front steps of her home, is trying to leave nothing to chance in selling her four-bedroom antique colonial home in Norwalk, Conn. A freelance fashion stylist and writer, Gray has taken every precaution she could think of in working to move the house she and her ex-husband bought 17 years ago.

CHICAGO — The home next door is in foreclosure. The neighbors down the street just put their house up for sale at a ridiculous discount. And “For Sale” signs litter lawns all over town.
“It’s probably the worst time you could find to sell a house since the late ’70s or early ’80s,” says Loren Keim, professor of real estate at Lehigh University.

Meredith Gray is leaving nothing to chance in selling her four-bedroom colonial in Norwalk, Conn. A freelance fashion stylist and writer, Gray, 53, has taken every action she could think of to get an offer for the house she and her ex-husband bought 17 years ago.

She researched and interviewed four brokers before hiring one, made a YouTube video showcasing the house, and created a hardcover book of comments and photos of the house in all four seasons to display for open house visitors. And she priced her house competitively with the broker’s guidance.

She even brought in a shaman to cleanse the house of any negative vibes, figuring it couldn’t hurt. “If you really want to move your house in this kind of a market, you have to do everything,” she says. “It’s a lot of effort, but people shouldn’t leave it all in the hands of their broker.”

Unfortunately, all that work still doesn’t guarantee a sale, particularly when many buyers feel little urgency to act and assume they will get a better deal by waiting.

Indeed, the best tips for selling underscore how the market has changed:

PRICE AGGRESSIVELY. Even if you’re fully aware that prices have plummeted, it can come as a shock when a real estate agent advises you to slap a low-low price on your home. The reality is that only 4 percent to 10 percent of homes on the market nationwide sell in a given month right now, according to Keim. A typical selling time for a home the last two years has been eight to 10 weeks. But that time frame makes selling sound easier than it is, because it doesn’t factor in all the homes that never sold, or were pulled off the market and later relisted. Keim says you need to ask for at least 1 percent less than competing homes.

Two local market statistics can be helpful. The most important may be days on the market. Available through most multiple listing services, it shows the average time it takes to sell a home. The specific sales data can provide valuable insight. When reviewing comparable homes it will become clear which list prices led to fast sales and which were set too high and prolonged the sale. But don’t focus on the overall average for a specific location. This can be misleading because it accounts only for homes that sold. Also, homes that were pulled off the market and relisted start the clock back at zero.

Another useful stat is the ratio of list price to sales price. It shows that, for example, homes sold in April went for 69 percent of their list price in Santa Barbara, Calif., 87 percent in Raleigh, N.C., and 96 percent in Milwaukee, according to data compiled by Zillow, the real estate listing and information service. Your local ratio also does not reflect unsold homes. But it gives an idea of the latest price trend.

STAGE LIKE A PRO. What’s new this year is that many sellers are willing to go beyond the basics of staging to make physical upgrades.

After learning a valuable lesson about today’s persnickety buyer, Michael Ayalon went the extra mile in renovating the kitchen of his house in East Meadow, N.Y. Recognizing that their ’70s-era kitchen looked dated, he and his wife, Jennifer, first spent $2,000 on stainless steel appliances before putting the three-bedroom home on the market in April for $399,000. After 15 showings, he says, they realized that “nobody could get past the fact that a project was waiting for them in the kitchen.” So it was do-it-yourself time for Michael, 35, a website designer. They pulled the house off the market for two weeks while he installed a new floor, ceiling, cabinets and granite countertops. Then they put it back on the market in late June at the same price.

GO ALL-OUT ONLINE. Agents recommend putting lots of high- resolution photos and as much information as possible online, including citing upgrades and what you love about living in the home. If you don’t show a photo of a key area — kitchen, bathrooms, backyard — prospective buyers may assume there’s something wrong and move on. It’s important to remember that buyers are going mobile, too. The use of smartphones and apps to review listings has exploded. Nearly 1.8 million homes are viewed daily on Zillow’s apps alone, and the service says 30 percent of its weekend traffic and 20 percent overall come from mobile devices.

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