What a difference a few months make. In most parts of the country, the days of putting your home up for sale at a ridiculously high price and waiting for competing offers to pour in are gone.
“Sellers have been trying to stick it to buyers,” says Kate Fleury Ryan, an agent with Long & Foster Realtors in McLean, Va. “Now they can’t do that.”
Where the market has cooled, owners actually have to work at selling their property. So how do you deal with this new reality?
The key is realistic pricing. Jim Warkentin, another Realtor in McLean, says the recent hot market “was very forgiving” when a house was not priced right. “A trained chimp could put a property on the market and it would sell,” he says. Not anymore.
"Don't be a pig when it comes to money," warns Ilyce Glink, syndicated real estate columnist and author of the book “100 Questions Every Home Seller Should Ask.”
Deciding to buy a house is easy when you know the value is going to skyrocket, she notes. Now buyers are taking the time to figure out the true value of the property. When they sense that the price is right, or even a bit below market value, Glink says, “they’re going to jump all over it.”
How to set the asking price
Glink recommends listing your home at or below the competitive market price. If similar houses similar are priced at $300,000, list yours for $295,000 to generate an extra level of interest. “I guarantee you’re going to get a stream of people through the door,” she says, “and you may even end up with more money because you’ll get into a competitive bidding situation.”
You also need to be ready to respond quickly to changing market conditions. “The market today is not kind to someone who waits too long to lower the selling price,” says Warkentin. He sees buyers walking away from houses selling for $650,000 because the seller won’t come down a couple of thousand dollars — an insignificant amount considering the overall transaction. “A drop in price means a great deal right now,” he says.
Perks can help
“Buyers are not only price-sensitive, they also think in terms of the monthly payment,” says Greg McBride, senior financial analyst at Bankrate.com. By offering to pay the closing costs or some of the points on the buyer’s loan, you can lower their monthly payment without lowering your asking price. “With so many buyers strapped for cash today, that’s a big differential,” McBride says. “It can be the difference between getting a home sold now and waiting months.”
And that’s just what some sellers are doing. Emmett Smith, a Realtor in Richmond, Va., just closed a deal where the seller paid $5,000 in closing costs. “I haven’t seen that for a long time,” he told me. Laura Berman, an agent in the Grass Valley region of northern California, says in the last two deals she negotiated, the seller paid the buyer’s closing costs — $6,000 in one case and $13,000 in the other.
Looks are more important then ever
In a buyer’s market, putting the best face on your house is more important than ever. “Buyers can afford to be pickier,” notes McBride. If there’s something they don’t like about the house, they are more likely to just move on to the next one.
In places where sales have cooled and the inventory of houses on the market is high, “curb appeal” is critical. You need to make sure your house is inviting to someone driving by and really pops off the page in online photos. Remember, the Internet is where most buyers will begin searching for houses to tour.
So how do you give your home a bit more pizzazz without going broke? Look at your landscaping. Does it need to be spruced up a bit? Maybe some new sod, some well-placed shrubs, or some summer flowers can enhance that first impression.
Here are a few other exterior improvements you might want to consider: fresh paint, a new front door, or a new walkway. McBride says something as simple as replacing the door knob with a newer, sturdier model “gives the buyer an impression of a much more solid home.”
Make the inside sparkle
You also want to freshen up the inside of your house. Clean the carpets; if they’re old and worn, consider replacing them. Wood floors should be polished or refinished if necessary. Worn vinyl flooring, especially in the kitchen and bathrooms, should be replaced.
Make sure everything works — doors should close easily and hinges shouldn’t squeak.
“Don’t underestimate the value of a fresh coat of white paint,” Glink says.
You might also consider a minor bathroom upgrade or kitchen remodel. Today’s buyers are focused on these two rooms. In the kitchen, consider replacing faucets and countertops and replacing or refacing cabinet doors.
In the bathroom you can replace broken tile, install new faucets and upgrade the shower head.
“Those are the type of things that just for a very minor investment can make a big difference in terms of what prospective buyers see when they come into your home,” McBride says.
Remember, fixing up doesn't mean covering up. You need to disclose any problems that you know about.
“Don’t try to fool the home inspector,” Glink cautions.
So remember the rules: Clean up, fix up and don't get greedy. Do all that and you've got the best shot at selling your house as quickly as possible for its maximum potential.