Getting your home sold in a slow market - Be too good to pass up

GETTING YOUR HOME SOLD IN A SLOW MARKET!
Be too good to pass up...

You know, any licensed Realtor can list a property for sale. That is obvious, there are multiple signs on many street corners these days. Why do some sell and others sit unsold. What are Realtors and Sellers doing that are getting their homes SOLD? There are "tools of the trade" for agents to discuss with their sellers to decide if they fit in the marketing plan for their home when it goes on the market.

This is a list of some of them:

PRICE TO SELL - Price your home at or under the competition. In a declining market you want to price your home to be attractive today. Don't play the game of seeing what happens... If the market is dropping 1% per month for example and you play that game, you'll have to drop next month 2% or you'll be behind the market. You'll be doing what we call "chasing the market down" instead of "pacing the market"... I have seen multiple offers on aggressively priced properties that then sell over their list price and that is because in the eyes of the buyer, it was too good to pass up, even in this market. Price right and be too good to pass up. The longer a home sits on the market the lower the offer price proportionate to list price. Buyers think you'll be more negotiable after 30 or 45 days than earlier on in the listing period.

STAGE TO SELL - If I were to tell you there are two things that if you do them will virtually guarantee your home will sell, would you do them? Well if you need to sell, you'd be wise to do both prior to putting your home on the market. One is price and the other is staging. Stage your home. Remember that to sell your car for top dollar you would shine the windows and tires, wash the car, clean the inside and have it smelling and looking good. Why not invest at least that in what may be your largest investment in a lifetime? Staging is not decorating!!! It is maximizing your home's potential to the largest audience of potential buyers. The more exposure and appeal to the widest audience, the more chance of a sale and at a higher price than an unstaged home. Staged homes are clean, look appropriate for their arrangement, (meaning a dining room is a dining room not an office) and are "showcased" much like a builder does for their models. Builders wouldn't invest in staging their models if there was no return. Stage with a professional stager and be too good to pass up.

CREDITS FOR CLOSING COSTS - Many new home subdivisions on the market now are offering up to 6 months with no payments, $50,000 incentives for upgrades and closing costs, premium lots at reduced rates, etc... Again, builders wouldn't invest in incentives if they didn't work. Compete with incentives.

Why do you see sold prices that sometimes are higher than list price? Often it is not a multiple offer situation like the pricing example above, it is because the buyers and sellers have negotiated a higher price so the buyers can finance some of their closing costs and/or improvements. For example. If a property is priced at $400,000 and the buyer offers $390,000 with a $10,000 credit for non-recurring closing costs, the seller may counter back at full price with the $10,000 credit ($410,000) or add $5,000 ($405,000) on the price and split the financing of the closing costs for the buyer. Or somewhere in between if the property is overpriced for the market to start with. Some sellers that are aggressively priced might be able to counter the offer with a little over asking price and give back the credit to the buyer. The buyer has $10,000 less to come up with and is in essence financing the closing costs. That is often easier than finding another $10,000 to purchase with. Many buyers who are short on cash are qualifying based on their credit and income with this method of limiting their closing costs.

In the last few years of the boom, this would not have been possible as sellers didn't have to offer incentives or negotiate. That was then, this is now. Deal with the market you are in... By the way, lenders will allow up to 6% credit for buyer's closing costs. If the non-recurring closing costs do not reach that amount you do not generally get the balance of the credit. Offer credit for buyer closing costs and be too good to pass up.

CREDIT FOR BUYER 2/1 BUYDOWN - Offer money for the buyers financing. As interest rates increase, there are fewer buyers who can qualify for your price range... To increase the number of buyers you either have to lower the price or offer incentives that reduce their payments or increase their ability to qualify. One way to do that is to offer money for the buyer to buy down the interest rate. Called a 2/1 buydown, the approximate 2.75-3 points additional loan fee (2.75 to 3% of the loan amount) will buy down the interest rate the 1st year by 2 percentage points and the 2nd year by 1 percentage point, the third year being at the note rate at the time of taking out the loan. Right now that would be 6.125% note rate but qualifying the buyer at the 4.125% first year rate and the second year rate of 5.125% kicks in for one year followed the third year by the note rate of 6.125% for the balance of the 30 years. The best part of this loan option is that the rate is a FIXED rate, that was just bought down and will not ever adjust above that fixed rate of 6.125% . Offer points for the buyer's 2/1 buydown and be too good to pass up.

BOATS, PLANES AND AUTOMOBILES (TRIPS) - Does anyone really buy a home because the seller offers a trip to Hawaii or a new car? Well if the house isn't in their price range and just isn't the right home for them, no. But again, selling your home is about MARKETING. This marketing technique will call attention to your home. It is a numbers game. The more people through your home, the more likely someone will fall in love. The incentive is designed to bring more people through. Offer perks for the buyer and/or agents and be too good to pass up.

PAY REALISTIC COMMISSIONS - Remember getting your home shown by the most potential buyers starts in most cases with the Realtor who is selecting what their buyers see. They run a list of potential properties for the buyer to view. Within that range, the Realtor may have 120 or more homes available. They are going to show 10 to 30 or more over the course of a couple of weeks. That's 80 or 90 homes that might not get viewed by the buyer. If you want your home to be one of those shown, sometimes the commission is incentive to put you on the "show" list. We all KNOW a buyer isn't going to buy your home if it is not right for them, but being a marketing and numbers game... The more people who see your home, the more likely someone will fall in love with it. Remember the Realtor can work for weeks or months showing a buyer homes and then months for the escrow period and the Realtor doesn't get paid unless they write the offer on a property for that buyer. Sellers who are in sales understand this concept. Increase realtor incentives and be too good to pass up.

There are other ideas that make a difference too, Realtors do broker tours for other Realtors. That Realtor won't have to preview your property to see if it is right for their buyer as they'll have already been in it. It saves them time and makes it more likely your home will be shown if they have someone today or in a few weeks in your price range.

Open houses with purpose and incentives, root beer floats in the summer (outside of course), balloons on signs, invitations to neighbors for early viewings, lottery tickets for viewing homes you list, limousine tours, and more... Pick a Realtor that is creative and understands marketing. Then take these things into consideration when doing your marketing plan and understand that the Realtor you choose will have more success for you if they have the ability to pay for the marketing needed to get your home out there in all mediums. They need advertising in print, magazines for open houses. They need a strong internet presence through their company, your address (http://www.LasQuebradas.com) websites and all of the Multiple Listing and Realtor.com websites and features that promote your home. The internet background stuff to get the exposure for websites is expensive and necessary for a strong marketing plan for a Realtor that lists homes for sale.

Don't decrease your Realtor's ability to pay for these items... By the time they split their commission 1/3 for their company (sometimes ½), withhold money for taxes and medical (not in their paycheck like regular employees), pay for advertising, websites, tours, flyers, internet sites and internet specific sites for your home, they end up with about 1/3 of their commission. Decreasing their commission may decrease the valuable marketing services they can provide. All of these items, behind the scenes, reflect in your marketing and success. Leave out one website and you could eliminate hundreds of leads possible for your home. RIS Media (Real Estate Information Services) says that over half of all buyers search the internet for homes prior to buying, Realtor.com's study shows 86% of all buyers search the internet for homes prior to buying. That is significant enough to make sure it is a major part of your Realtor's marketing plan.

If you plan to sell your home, be serious about selling. Invest the time and funds necessary to bring your home up to the level that will appeal to the most buyers possible. Offer incentives, a clean, well-kept, updated product, then allow your Realtor the resources to provide the marketing needed, and get ready to move. Short cuts in most things cut into your bottom line. Getting the level of service you expect and deserve should be that simple. BE TOO GOOD TO PASS UP AND YOUR HOME WILL BE SOLD!

CONTRA COSTA TIMES

By TERRYLYNN FISHER, Diablo Realty, Realtor, Staging Specialist - CSP/Realtor (Certified Staging Professional), CRS (Certified Residential Specialist), SRES (Senior Real Estate Specialist). Terrylynn is in her 30^th+ year in real estate, works in ALL kinds of markets and has a referral directory of Realtors who use similar marketing in your hometown too. She can be reached at 925 876-0966 for referrals or questions.