Selling Your San Diego Home?
If you're selling your home this year, be prepared for a marathon, not a sprint. In most places, those heady days of putting a property on the market, receiving multiple bids, getting more than you expected, and accepting an offer in just days -- or weeks -- are over. Now, for most houses in most parts of the country, it's a buyer's market. That means more houses are for sale, there are longer stretches on the market, and prices have slowed, plateaued or, in some places, decreased.
Because buyers feel free to make lowball offers and then just wait, sellers need to be prepared for a sustained effort. Yes, it's a buyer's market, but Mr & Mrs Seller, don't despair. You can definitely increase your chances of selling your house in a reasonable time by following a few guidelines.
Recognize Every Market Is Different
Your state, town or neighborhood could dovetail with national numbers or buck the trend entirely. There really is no national market but instead, a patchwork of regional and local markets. Never rely solely on one person's advice or opinion but rather, talk to a handful of professionals, do your own research and listen to your gut instinct.
Get Your Home Inspected
Before I would even call a real estate agent, I'd have my home inspected. Some real estate agents advise against spending the money (most basic inspections range from $200 and $400) because the buyers will get one anyway prior to closing. Others, me included, recommend it, because it gives sellers an early warning on any repairs they might have to make. In this market, it's better to be proactive because sellers should know what the inspector is going to find and be able to fix it and pick who will fix it. In addition, the seller can use a pre-inspection has a marketing tool.
Shape It Up Before Marketing
Essentially, make it a turnkey, not a turkey! Buyers never want to buy a house that needs a lot of work unless it's an absolute bargain and your goal should be to take away all their opportunities to say "no". Yes, a buyer's market means you've got more competition and so you have to put your very best foot forward. There are a sufficient number of homes available such that if your home isn't appealing and in good repair, potential buyers won't even stop. Some sellers feel it's OK to skip this step and take less, but if the house is not appealing you may well not get the chance to negotiate. Six weeks before you want to put the home on the market is a great time to get it done and you don't need to renovate. Just make sure everything looks great and works well. There are some things you can do to make your home stand out:
- New paint. If needed, paint the whole house. Or maybe just the trim what needs sprucing up (e.g., doorways, baseboards, etc.) to freshen up.
- A clean entry way. Sweep or pressure-wash the front walk and porch. Polish the outdoor metalwork, clean the windows and replace any burnt-out bulbs in outdoor lighting. Add planters with flowers.
- Lush landscaping. Think new mulch, sharp edging, a healthy lawn and beds of flowers at the front door and around the patio.
- If necessary, enlist the services of a home staging expert for suggestions on how to best present the home.
- In essence, it is imperative to maximize your chances of people being excited about your listing when it first hits the market. The first 30 days are critical.
Devise A Marketing Plan
Do you want to use a real estate agent or would you rather try and sell it yourself? If you try doing it yourself, have you set a time limit after which you want to enlist the aid of a professional? Selling it yourself can save you the real estate commission which can be an advantage in a tight seller´s market. But a buyer's market (or rapidly changing market) is a good time to have a little professional expertise to price, market and move your property. And don't forget, potential buyers typically feel that if there's no agent involved, the list price should already be 6 percent less and/or they expect the final purchase price to be less to them not more to you, the seller. Both the buyer and the seller can't save the same 6 percent.
Check Into Company Relocation Assistance
Are you moving to take a new job or position? If so, the company might offer some resources to make things easier. Some companies will even provide a list of real estate pros who will work with you at a discount. If you're selling in a tight market, every little bit helps. Best source: call your human resources department.
Interview Real Estate Agents
If you're interested in using an agent, interview several early on about listing your home. Ask them for advice. What would they highlight about your home? What would they change before it goes on the market? Think of it this way. In a strong seller´s market, most any agent can take an order but in a market like the one we are now in, the agent you choose better be the one who possesses experience, training, sales expertise, marketing skills, reputation, referral connections and more in order to succeed. This person better be the absolute best agent you can find. If it was important before, it is critical now.
OK, so who to choose? Certainly a great referral from a family member, friend, or if you are relocating to the area, a referral from your home town agent, is a good place to start. Also, a call or two to an agent´s past clients will definitely help. Yet, even with a referral it is best to have at your disposal a list of questions which any reputable, experienced and well-prepared agent should be ready and eager to answer.
So, what are the questions? Glad you asked. I just happen to have a list of 25 pertinent questions which, if I were selling a property, would pose to every Realtor who I was considering in representing me in the sale. It´s a great starting point. I have provided this list which is the same one I provide to every potential client when I meet them during a listing presentation, in a previous edition of this newsletter. Now, here are the 25 questions
or I would be pleased to email a copy. Just let me know.
You should also ask to see an activity list -- a list of all the buyers and sellers the agents have recently represented. You don't want private details but you want to see if they've worked in your neighborhood, in your price range, if they have a track record of successful sales. You should definitely call several of their past clients.
Set A Price
The rules are different in buyer´s markets. You don't overprice your house 5, 10 or 20 percent to leave wiggle room for negotiating. While that kind of strategy might never be a good idea, it can really backfire now. If your property is overpriced, the buyer's agent may not even show it to their clients. This may sound a bit harsh but those who overprice their homes in this market are wasting everyone's time.
If you're not using an agent, get your own comps -- from the local paper, sites like Zillow.com and Realtor.com to see how similar houses in the area are priced. Also find out which paper in your area publishes notices when properties are sold. Sometimes it's the local daily or legal paper. Researching those is a good way of tracking actual sales prices as opposed to asking prices. And, you absolutely must continually look at what is on the market3;your competition. Are properties moving? Are prices holding steady or are sellers dropping prices? Put on your shopping shoes and look at everything from a buyer's viewpoint. Before my sellers set their price, I take them on a tour of every home which we believe is the competition. Doing so, we get a feel for what buyers are looking at and it helps greatly in setting a list price. You should also visit new construction homes and find out which amenities and incentives builders are offering.
Then, you must set a realistic figure. Your goal: maximize the chances that the perfect buyer will actually see it. If you have to pad the price understand that determining market value is an art, not an exact science. Three to five percent is one thing; anything above that and you have a problem.
Two more points to consider:
- Modern technology. Agents and buyers are now using computers to search for properties. If you want to sell yours for around $400,000, consider listing it at $399,999, rather than $400,500. That way, a computer search of anything between $350,000 and $400,000 will include your listing.
- Commissions aren't add-ons. Don't add the real estate commission to the value of the home to come up with your asking price. If you use an agent, the fee comes out of your share of the profits. Otherwise, you're going to get penalized for overpricing your house. When the seller's market was in full swing a few years back, it was easy to get agents to list your property for as low as 4 percent (split between two agents). They knew the property would sell in days or weeks and their marketing costs would be low. Now it's reversed. Agents are commonly looking at four to six months to sell a property and so their marketing expenses are now running much higher. This makes them hesitant to offer any discounts.
Understand Your Price
A successful home sale begins before the house is listed... when you decide not to expect to make a killing. While you certainly don't want to undervalue your house, many sellers today just will not make as much as neighbors who sold last year. So, you must be realistic and face reality and not let ego get in the way or should I say, stubbornness. So, if you have your heart set on a certain amount and find out that houses aren't selling for that, you may have to change your mind and sit on the house for a time.
Get Rid Of The Junk
This year it's more important because buyers are going to be much more fussy. Buyers are coming in with an attitude. One way to combat the objections is to throw things out, ship them early or rent a storage locker. But, you´ve got to clear out the clutter. Buyers look for space and light and to show it off, agents need to be able to tour a group comfortably through the house and have their clients actually walk into those "walk-in" closets.
After you have your head on straight, spied on the competition and fixed up your house, it's time to figure out what goodies you will dangle before buyers and their agents. Besides a realistic price, incentives for buyers include paying discount points to lower the interest rate, paying a portion of the buyer´s closing costs or providing flexibility about their move-in date. You might also consider offering a premium to the buyer's agent. Adding half a percentage to the buyer´s agent´s commission (e.g., from 2.5 to 3%) may not cause the deal to happen, but it has the potential to attract a little more attention, quite a few additional showings and make your deal stand out.
Stay On Top Of The Market
You must stay constantly aware of market changes and that is one reason I recommend using an agent. You must stay on top of what is happening with mortgages, finance rates, both "Active" and "Sold" comparables and last...anticipate trends before they happen.