Tuesday, July 28, 2009

My Home Wont Sell.....Help!

Many home owners that are trying to sell their homes have come to me and expressed concerns about how hard it is to sell their home in this horrible market. Even though they already have their home listed by another real estate professional I will listen and even provide some verbal help if the unhappy seller asks. As a side note, Realtor ethics prohibit me or other Realtors from soliciting sellers that already have their home listed by another Realtor (unless I have their permission). However, the seller can approach other Realtors and can ask questions or plan a future listing with a different Realtor.

Now, every city and even specific neighborhoods have their own market and, as a seller, you must become very familiar with market activity, especially what homes sold recently (3 to 6 months ago). You need to determine what they listed for, what they sold for, how long it took to sell, and what these homes have that yours doesn't (or vis versa). The easiest way to get this info is by finding and working with a Realtor.

The bottom line is that PRICE is the MOST IMPORTANT factor in selling your home. If you price to high your home WILL NOT SELL. There are other important factors that affect your home sale, such as condition, location and marketing, but price is by far the most critical. You, as a seller SHOULD NOT just throw a 'For Sale' sign in your yard and price it based on: 1.) what you think its worth; 2.) what it was worth 2 or 3 years ago; 3.) what you paid for it multiplied by (x) years of appreciation; 4.) what your neighbor got for his house last year; 5.) your current mortgage balance plus the cost of upgrades or improvements. Believe it or not many sellers price their home based on one of these items and it is a BAD IDEA as these methods DO NOT tell you anything about what your real estate market will allow or what buyers will pay! The real estate market is just like any other market (e.g. the farmers market, the stock market, etc.) where supply and demand drive it. I wont bore you with examples of a farmer trying to sell his oranges or Supply/Demand curves, but remember that your home will only sell for what a buyer thinks it worth based on perceived value from HIS (NOT YOUR) perspective of value.

Here in Charlotte, most homes are selling for approximately 12% to 15% less that what they originally listed for. The average time to sell a home is over 6 months and much more in many cases. In addition to the above, many sellers are also paying some of the buyers closing costs and providing home warranties, appliances/personal property and other concessions to get the buyer into escrow. Why is this happening? Because sellers are over pricing their homes based on incorrect pricing methods. What are sellers to do then? Well, if you are a seller or if you are thinking about selling then you need to research your real estate market, and find a quality Realtor that can help you establish a listing price based on recent market activity and not your emotions! Most agents will provide a Comparative Market Analysis (CMA), which will show you what's 'Active - For Sale' and, most importantly, 'Recent Solds' at no additional cost if you sign a listing agreement or they might charge you a nominal fee for this service. Either way you need to interview and get the price opinion of at least 2 Realtors and you need to enter the market based on this information and NOT what you THINK your home should be worth. Keep in mind, if you decided to base your list price on EMOTION then you should expect your home to NOT getting much interest or showings, negative 'Feed Back' if you do get a showing, and a 'low-ball' offer if you get one at all. Prepare yourself for a long and painful process.

How to sell your home quickly (this applies to ALL SELLERS):

1.) Take your predetermined-emotional based list price and reduce it by at least 20%. Period. However, if your Realtor gives you a market range of recent comparative 'solds' and they are ranging from $195,000 to 2o5,000 then price on the lower end of the market. Period. Remember, this is a consumer market and you are competing with many, many other homes and very few buyers.

2.) Clean your home. If you are going put your home on the market, then stage it as if it is the model home of the neighborhood. Get ride of junk, excess furniture, excess books, pictures, cd's, toys, etc. Fix and repair damaged items, stains, worn-out flooring, etc. Plant some flowers, mow your yard, paint, clean, paint and remove junk then clean again. Let in natural light and remove tacky and out-dated drapes and fixtures. Bake some cookies before a showing to get a sweet, fresh smell (don't leave them out as this could be a liability) and turn on some classical or smooth jazz music. Leave creative info flyers or DVDs so buyers will remember your place. First impressions are so important and often lead to offers from buyers. Let your home sell its self!!

3.) Fix any major issues (plumbing leaks, roof leaks, damaged siding, broken windows, termites, foundation cracks, etc.) or reduce your price to take into account these major issues. Get a pre-listing inspection by a licensed home inspector so buyers now the condition of your home prior to making an offer!

4.) Select a honest and trustworthy Realtor to help you market the home properly to the right buyers. This will cost you any where from 6% to 1% depending on if you use a full-service or limited service listing agent and if you have to compensate a buyer's agent (the selling agent).

You may find yourself in a position where you simply can not afford to take the above steps to sell and meet your bottom-line. If this is so, then you need to prepare to wait out the slow market on the side lines. Do not just throw your home out there hoping for a miracle buyer to come along. If you truly need to sell due to financial hardship then consider a lease/rental option with a property management company. And, don't hesitate to call your mortgage company and discuss your situation and attempt to establish a "short-sell" situation. This is where the bank will accept less than you owe upon selling your home. There are, also, many government programs that can help underwater home owners get through tough times.

The bottom line is get help and advice from a trustworthy Realtor, mortgage broker, financial advisor and look into government programs that can help home owners decide what's best for you. We are here to help and protect your best interests. You do not have to go it alone in this tough market, and believe me its tough out there. The good news is that homes are still selling (if priced right) and that the market is showing signs of a recovery (it might just be temporary though). Its hard to find clear positives at this time, but be smart and take action if you are planning or are needing to sell your home. Give me a call I will be happy to help! Here are some helpful links discussing market trends. The one on the bottom is specific for the Charlotte, NC market area , but most local MLS's have similar information posted.