In many areas the housing market is inundated with homes in foreclosure and short sales. How can your home stand out and be noticed when buyers look everywhere and see homes selling for much less than their value, simply because of the situation the home owner is in?
Should you even bother putting your home on the market or better yet, what if you have to sell your home due to a particular reason, like relocating?
Think Like A Buyer
Begin by answering a question about the market itself. Are most of the short sales and foreclosures occurring in one particular area of town or are they occurring all over, including your own neighborhood? If you’re competing with homes in another area that is distressed you don’t have nearly as much to worry about. If the distressed sales are hitting a particular neighborhood then it’s a little more like comparing apples to oranges. However, if you’re competing with short sales and foreclosures directly in your neighborhood or even on your particular street then you’re unfortunately going to have to compete with distressed homes for sale.
The plus side of it all is that often distressed homes don’t show as well; especially if the home was literally abandoned by the former owners and left to the lenders. The negative side is the obvious, homes similar to yours are going to probably sell for under true market value and it will affect how you price your home. Hopefully you have an agent who knows how to price in this type of market and still get you the most money possible for your home. The first thing to do is remove yourself from your own shoes and step into the shoes of the buyer to look at your home to ask a few questions. The answers may surprise you.
Questions to Answer
First is there a reason a lender would appraise your home for more than a distressed home in the same area? The answer here depends upon both the condition of the distressed home and yours. Let’s say the bank owned home is priced at $225,000 but needs another $15,000 in repairs and improvements to be livable. Comparing with your home a buyer may decide that since the total value of the home would be about $250,000 to get the home in good condition, then that would be what they offer to you for your home in move in condition.
The assumption would be that in either case it will cost them $250,000 to buy a home in this neighborhood and they can do that by either waiting until the bank owned home is ready to move in or they’ll accept yours for the same price and not have to deal with contractors or doing the work. Either way, for the buyer both homes are only worth one price to come to the ultimate end which is moving into the home.
The tip here is to price your home slightly below market value. This technique usually results in people coming to look at the distressed homes in the area, noticing your home, seeing the value price that it’s being offered at and think in terms of your home not needing a lot of work that distressed homes will need. This will probably happen to various people and in the end cause a bit of a bidding war; ending with multiple offers and a higher sale price in the end.
Second ask yourself what would make a buyer choose your home over a bank owned home? The answer is probably going to be that your home doesn’t need a lot of work and for many people that’s a definite reason to buy your home before they buy the distressed home. Most people want to buy a home and move in. Life is hectic enough and adding on the stresses of construction and repairs while you’re preparing to move isn’t exactly an enticing thought.
Make sure you make it known to those looking at your home that unlike some of the homes that are in foreclosure or short sale your home is in move-in condition. What you don’t want to do is put thousands of dollars into updates hoping to entice the buyers to purchase your home. Chances are you will not get a return on the money spent to update your home so you may as well have just reduced the home’s price by that amount instead of pouring labor and money into updates.
Lastly, ask how much more is your home worth than the home in foreclosure or short sale. You will probably be surprised to see that in actuality your home is not worth a whole lot more. It may be a matter of a few thousand dollars in the end that puts your home at a slightly higher value. Many times banks will try to get true value out of the home because of the neighborhood. If the entire neighborhood is not distressed then chances are you will have the ability to price your home fairly close to the true value.
It’s obvious that selling your home while other distressed sales are all around you is not the best conditions. If you can hold off and don’t have to sell your home it may be a good idea to wait; but if you truly need to sell then make sure your agent understands how to sell in a market where your competition is distressed sales. Your agent should know where to price your home so it not only gets you the most money possible but actually may end up causing multiple offers to come through and end with a bidding war that gets you the money you deserve.
For more information on how to sell your home quickly, go to www.springscleverseller.com or contact Juanita Simkins, Professional Realtor & Expert Negotiator (719) 229-5770
