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Mission Impossible: Trying to Sell Your Home in a Buyer’s Market
So, you have your home for sale. How’s it going so far? Any offers? If the answer is no, you’re not alone. As of the end of October 2007, there were 34,042 homes on the market just in the Twin Cities alone and this statistic does not include homes that are available “for sale by owner.” This number is up 10 percent from last year. Break it down to the ridiculous and it means that we currently have a 10-month supply of homes which is up 28 percent from last year. A 10-month supply means that it will take, on average, approximately 10 months to sell the current inventory. This does not take into consideration homes added to the market after the statistic was printed. Keep in mind that this number is revised monthly and can change for better or worse. You can find out more by going to www.mplsrealtor.com and click on market stats. What does this mean for you, you’re wondering? Well, don’t panic. There is hope and help available to you. You just have to keep your eyes and ears open and watch a little HGTV.
I know what you’re thinking. There have been hundreds, maybe thousands of articles written about home selling strategies ranging from proper staging techniques, kitchen makeovers, the importance of fresh paint and new carpet, to a good old fashioned price reduction. Certainly, each of the above mentioned options are good depending on the situation, but today’s seller has to seriously think through the best choices available for the home they’re trying to sell, and be smart about its execution.
When it was a seller’s market all you had to do was put a sign in the front yard and field offers, often times multiple offers. Those days are gone and now the sellers of the world have to accept that it is, in fact, a buyer’s market. The reason for the shift is simple. There is currently too much inventory for the number of buyers out there right now. This doesn’t mean that it’s the end of real estate as we know it. The consumer (both seller and buyer) need to realize that buying and selling real estate is a cyclical business. Sometimes the market is in favor of the seller and sometimes it’s in favor of the buyer. Right now, the buyer wins. What does this mean to today’s seller? Your house has to stand out, and not just a little bit, but a lot! I’ll explain.
Don’t Cut Corners, but Don’t Over-Improve
They say you have to spend money to make money and by “they” I mean the experts. Nowhere is this statement truer than in the high stakes world of real estate. However, nobody wants to spend a fortune fixing up a house they’re trying to sell, right? I can understand if everyone felt that way and would be shocked if they didn’t. But, take it from me, there are many, many, many things you can do wrong and you don’t even know you’re doing them. I’ve been in lots of homes where the homeowner makes improvements on their property only enough to get by. If this is you, I’ve got some important information for you. You’re not fooling anyone. When you make tiny improvements such as paint trim and doors white or change out light fixtures, you need to be careful that you haven’t overlooked the big picture.
I was previewing several homes last week for an out-of-town client. The only real criteria were price and location; otherwise, she was open to unique and different characteristics of the homes she would see. Her open mind was a good thing based upon what I saw. Out of twelve homes previewed in one day, five of them were identical in layout and level of finishes. What set these five homes apart from one another? Nothing! That’s the problem. You don’t want a prospective buyer making a buying decision by pulling a number from a hat. Make your house special in some way, shape or form. If you’re one of the five homes currently for sale that does look the same, why should a buyer choose you? You need to be able to answer that question. And, only once it’s answered are you on your way to a quick sale.
The same holds true for over-improving. I was in a home last month that had high-level finishes, granite countertops, stainless steel appliances, tile flooring, Moen® fixtures, etc. The improvements were lovely indeed; however, the improvements on this 1956 rambler were only to the kitchen and bathrooms. The rest of the house looked like it did in 1956. Since the over-improved areas were beautiful, the rest of the house looked completely out of place. It was as if you walked into a different home as you passed through each room. Not to mention the fact that this seller will be hard pressed to recoup the investment they made with each improvement. As a buyer, would you spend an extra $10,000 on the home because it had a granite countertop? Try to be consistent and make sure your improvements fit the flavor of your architecture as well as your era.
Once you determine improvements are necessary, get the best help. What I mean by this is: do the work yourself only if you know you can do it well. Don’t short change yourself by thinking that if you do the work, it will save you money in the long run. Trust me. It won’t. I was in a house last week where it was quite evident that the homeowner did all of the improvements themselves. The home was freshly painted and there were brand new, white six-panel doors installed. Sounds nice, right? Wrong! It was a disaster. It appeared there was only one coat of paint applied to the walls because the previous color was bleeding through. And, even if there had been two coats, the application was a problem: the painter didn’t bother to mask off trim, with overpainting at ceiling, base board and window trim. Note to seller…if you aren’t good at painting, don’t paint. Hire it done. And, make sure you go with a neutral palette. Don’t pick colors that you like. The idea is that you won’t be living there very long, right? Pick colors that appeal to the masses which is beige, beige, and more beige.
The new doors were nice except for the fact that the seller purchased standard sized doors probably from their local home store. These are great stores with good products, however, the door openings were not a standard size, so the seller cut the bottom off of the doors so they would fit the opening. No! No! No! People, your buyer is going to notice! Unless the person who buys your home is less than four feet in height, this will be a glaring issue for them. They will notice that they have to bend down to grab the door knob to open it (not to mention the possibility of having to duck upon entering the room). If you have a low door opening, order a custom door. If a custom door is not an option and you must use a standard size door, at a minimum, cut from both the top and bottom so the six-panel pattern on the door is even when you look at it. You don’t want the knob closer to the floor than the ceiling. Remember, your buyer will be an adult.
Be Aware of the Media
Listen, it’s not all gloom and doom. Homes are selling and the market is finally considered stable so that it’s fair to both buyers and sellers. Unfortunately, buyers and sellers haven’t realized this yet. All you have to do is read the paper and watch TV. Throughout history the media has taken advantage of the immediate needs of the consumer on things that are most important to them at the time. HGTV is one example of how the media has addressed the housing issues we are currently faced with. Homes have to sell. We have too many buyers and because we have too many buyers, they have permission to be picky. Today’s buyer has the need for homes that sparkle. HGTV has taken full advantage of that need. If you’ve watched HGTV at all, you would have noticed that they have over 50 shows specifically designed to help enhance or sell a home. These shows range from “Designed to Sell” to “My House is Worth What?” On “Designed to Sell” the basis of the program is to show audiences how to turn a tired house into a showpiece by giving sellers a $2,000 budget and a team of experts to transform their house into the hottest property on the block. The program is chock full of interior-design ideas, home-improvement tips and real estate insider secrets.
Not only does HGTV have around-the-clock television programming, they also have an extensive website which offers tips and tools to sellers. The real estate section covers every area of uncertainty as it pertains to selling your home. You can take the quiz, “Will It Sell?” which will determine if your home needs improvements or “30 Can’t Miss Staging Tips” which gives the reader simple ways to improve the appearance of their home. How about, “10 Ways to Increase the Value of Your Home” or “Does Your Home Have What Buyer’s Want?” Basically, you can point and click and have access to everything you need step-by-step to get your home sold.
It wasn’t too long ago when a trip to the hardware store to pick up a basic “how to” manual and figure it out on your own was a person’s only option shy of hiring a professional handyman or remodeler. Or, maybe you had a friend who had relatively decent taste (at least you liked how she dressed) so you asked her to help you choose new colors for your home and rearrange your furniture. How many of you have picked up a Minneapolis or St. Paul newspaper lately? If you have, you’ve probably noticed the home section continuing to grow. Not only are there an abundance of listings, but there are tons of “how to” articles and news reports on current local and national housing trends and market conditions. Today, in an effort to find out what’s going on in the housing industry, all you have to do is turn on the TV, grab a newspaper or get on-line. Everything you need to know will be right in front of you.
Real Estate Agent versus FSBO
So, you’ve made some improvements and you’re ready to sell. Are you going to hire an agent or sell it yourself? In a seller’s market there are definite pros and cons to either having an agent assist you in the sale of your home or selling it yourself (for sale by owner). Unfortunately, we’ve established that it isn’t a seller’s market right now. Therefore, I would tell you that if you want to sell your home, you’d better get yourself an agent and not just any agent. Don’t let them razzle-dazzle you with past selling stats.
The real estate market was on fire for years so most real estate agents sold a lot of homes. Today, you need to ask prospective agents how they sold those homes. What did they do to get them sold outside of standard real estate marketing practices such as putting the home on MLS, placing a sign in the ground and having an occasional open house? You want an agent who takes this business of selling properties to the next level. Will they list your home on www.realtor.com and www.justlisted.com? Do they network with other agents within their office or company around the Twin Cities? Is their website interactive? How many hits a month do they get on their website? Are they notifying the neighbors that your home is for sale and are they asking them if they know anyone looking to purchase a home in the near future? How do they follow up with prospects that come through your open houses? These are only a sampling of questions to ask when you sit down with a prospective real estate professional to determine if they are right for you.
Price it Right the First Time
I know you’ve all heard this before, but it’s true and warrants mentioning again. You have to price your home right, which is another benefit of having a real estate agent assisting you with the sale of your home. They will do what is necessary to determine an appropriate price range. Determining this “right price” requires research. Your agent will have to look at other like properties that have sold within a specific timeframe. They will also be helpful in showing you the inside of homes that are currently for sale which look just like yours. Remember, you need to set yourself apart from the other homes out there, so seeing the competition will help you determine what needs to be done (if anything) to your property as it pertains to pricing or improvements.
Staging is Everything
Work with an agent who has access to a home stager. These people are very good at working with your existing pieces of furniture and often times have filler pieces warehoused that they will loan to you while your home is on the market. Their job is to make sure the furniture in every room is to scale with the room, that it all works together, and that what the consumer sees will leave a lasting impression. They will also be very honest with you regarding the need to de-clutter, repaint or recarpet, finish unfinished spaces or depersonalize. Try not to take their criticism personally. They have been trained to think like a consumer, not like a seller. It’s personal to you because you live there and it’s currently your home not the stagers, but don’t lose sight of the prize. Remember, you need to get your home sold as quickly as possible and they’re the key.
Just Do It!
Selling your home really is a science. Not rocket science, but a science none-the-less. Today’s buying market demands the best choices available and they will take their time in making the decision to buy and specifically in choosing which house they will buy. Do yourself a favor and put your home in the best possible position of being the house chosen by the few buyers out there right now looking to purchase. If you do it right, you’ll wind up being one of today’s favorable statistics and celebrating the sale of your current home from the family room of your new one.
Okay, so you’ve read the information and are contemplating my advice. While you’re determining whether or not you’re even up for the challenge of strategic home improvements, let me leave you with this last thought. If you just don’t want to do anything other than stick a sign in the ground, log onto www.HGTV.com and send in an application. If you’re one of the lucky people chosen for a home makeover, not only will it be free, but you’ll get yourself on TV!
Kelly Lucente is a real estate agent in the Twin Cities and a member of the NAHB. You can reach Kelly at www.KellyLucente.com.
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