MARKETING STRATEGY / STAGING

REALTOR®Mag

25 Quick, Cheap and Easy Home Sale Tips

By Barbara Ballinger

© Copyright the National Assocation of REALTORS® unless otherwise noted.

 

 

CONSUMER NOTEBOOK

Top 5 Reasons Some Houses Don’t Sell

 

By Robert J. Bruss

Special to the Times

 

   Whenever I visit Minneapolis, as I do every few months, I drop in at Sunday open houses when I have the time.  In April, I inspected a home near beautiful Lake Harriet.  I was the only visitor at that time, so the realty agent was anxious to talk, even though I told her I wasn’t a serious prospect.

   About six weeks later, I was again in Minneapolis and was surprised to still see a “for sale” sign on that house.  I phoned the listing agent to inquire why, in her opinion,  the house hadn’t sold during this year’s extremely busy spring home sale market.

   She told me this is her only listing that hasn’t sold, and she can’t figure out why it’s still available evan after the seller reduced the asking price below comparable nearby houses.

   Even in an excellent market, there are five major reasons some houses don’t sell.

   1. Overpricing.  Ask any Realtor the most frequent reason homes don’t sell.  They will agree it’s overpricing.  Having bought and sold many houses during more than 30 years as an investor, I fully agree. 

   Many sellers test the market by setting their asking price about what their listing agent advises, based on sale prices of comparable nearby homes.

   Unfortunately, overpricing usually discourages realty agents and their buyers from even looking at house or making a purchase offer.  An overpriced home usually indicates a nonserious seller who is testing the market and will sell only if a foolish buyer offers to pay close to the inflated asking price.

   To avoid overpricing, sellers should interview at least three successful local realty agents before listing the home.  Each agent will prepare a written comparative market analysis.  This form shows recent sales prices of comparable nearby homes, asking prices of competitive neighborhood listings and asking prices of recently expired listings.

   The seller will also receive market value opinions on the home from each of the agents interviewed.

   In today’s strong home sale market, a correctly priced listing should result in home buyers and their realty agents flocking to inspect it.  Of course, the asking price and sales terms should take into consideration any drawbacks of the home that the seller can’t or won’t correct.

   2. Condition of the home.  This is the second most important reason a residence doesn’t sell.  Since most home buyers want a home in near-perfect condition, it pays to fix up a property before selling rather than discounting the price to compensate for repairs needed. 

   Painting inside and outside is the most profitable improvement a home seller can make.  Other inexpensive improvements include new light fixtures, new carpets and fresh landscaping.  Avoid major kitchen and bathroom remodeling, which rarely return their cost in increased sales price.

   Since there are few buyers looking for fixer-upper houses (except bargain hunters like me), they usually demand price reductions to compensate for the work they will encounter.  Most prospective buyers won’t even look at a fixer-upper house, even if it is bargain priced, because they can’t imagine how nice it could become.

   3. Undesirable location.  In addition to obvious drawbacks such as noisy traffic, a high crime rate, poorly maintained homes, nearby unattractive commercial buildings and lack of parks, poor schools are a major location factor. 

   Families with children avoid areas with poorly ranked public schools, no matter how attractive a home might be, while top-quality schools help sell homes and keep home values rising.

   4. The listing agent.  Many home sellers don’t realize that their home hasn’t sold because their listing agent is disliked by other realty agents.  Then interviewing agents before listing, ask them what they think of the others being interviewed.

   Professional jealousy, especially among successful realty agents, enters into agent evaluations, but agents who are known as uncooperative, difficult, rude, inflexible and arrogant won’t get many showings  of their listings.  Cooperative, friendly, enthusiastic and flexible listing agents are an advantage for home sellers.

   5. Marketing plans.  Lazy listing agents merely obtain the seller’s listing, put it into the local multiple listing service and sit back to wait for a buyer’s agent to sell the home.  In today’s competitive markets, that’s not enough to sell most homes.  Successful home sales require a specific marketing plan prepared by the listing agent before the home is listed. 

   Depending on the circumstances, in addition to the MLS, the best agents put their listings on the Internet to attract out-of-town buyers, arrange tours for local realty agents, advertise each listing at least weekly in local newspapers, hold weekend open houses, distribute color brochures on their listings, advertise in local real estate magazines and network with agents who represent buyers to talk up referrals.

   Having worked with many realty agents, I find networking with other agents often bets the best results.

 

   Robert J. Bruss is a syndicated columnist, as well as a real estate investor, lawyer, broker and educator in the San Francisco Bay Area.

  

  

  

 

CONSUMER NOTEBOOK

Pricing Strategy Depends on Market

 

By Dian Hymer

Special to the Times

 

   QUESTION: I am planning to sell my home and wonder about the best pricing strategy.

 

   ANSWER: Sellers often have an inflated view of how much their home is worth.  It’s hard to be objective about the place they call home, and even the most realistic seller can miss the mark when it comes to setting an accurate price, particularly in a volatile market.

 

   How can you make sure that your listing price is right?

 

   Your aim is to select a price for your home so that it will sell for the most money in the least amount of time.  The thought of selling a home quickly makes some sellers nervous.  Yet, the homes that sell the quickest are usually those that sell for the most money.

 

   Generally, you want your list price to be within 2½% to 5% of what you expect the ultimate selling price will be.

 

   Where within this range you should sell the price should be dictated by how much price discounting is occurring in your area.  When there is little discounting and listings are selling for close to the asking price, you should list close to your expected selling price.

 

   To determine the probable selling price, ask a knowledgeable real estate agent in the area to complete a comparative market analysis.

 

   This will give you information about “comps,” properties similar to yours that have sold recently.  You may find that in higher range prices, the deviation between the list rice and the sale price is higher, say 10%.

 

   Let’s say that the comps indicated that your home should sell for about $300,000.  A list price of $307,500 would be 2.5% above the expected selling price.

 

   Pricing strategies change with the market.  When home prices are rising, yesterday’s comps are out of date.  Yet it can be risky to anticipated appreciation and price your home too high.

 

   Pricing your home too high for the market can cost you in the long run.  Here’s why:

 

   Your home is most marketable when it’s new to the market.  If it’s priced too high, it will be shunned by buyers who don’t want to waste time with an unrealistic seller.

 

   After months on the market, your agent may convince you that the reason your home isn’t selling is the price.  Even with a price reduction, it’s often hard to generate enthusiasm for a listing that has been on the market for a while.

 

   When you finally do receive an offer, it could be discounted further.  Buyers usually want to know how long a property has been on the market before they decide how much to offer.  The longer a listing sits on the market unsold, the lower the price the buyer is likely to offer.

 

   To protect yourself from selling for lower than the rising market will bear, ask a realistic price and expose the listing to the market before you listen to any offers.  If you list price is low, buyers will bid the price up.

 

   A different pricing strategy is required for a soft market in which prices are dropping.  The best bet in this case is to undercut your competition.  Again, yesterday’s comps will be out of date.  But in this case, they will be too high for the current market.

 

   In a declining market, it’s better to discount your price up front.  Otherwise, you can be caught chasing a falling market, dropping your price as the market falls further.

 

   Dian Hymer is a syndicated columnist and the author of “Starting Out: The Complete Home Buyer’s Guide” (Chronicle Books, 1998).

   Distributed by Inman News Features.