I have been doing a lot of listing presentations lately. Most of these would-be sellers are homeowners that are not in arrears on their mortgage payments, and that own houses that few first-time homebuyers can afford. They are really caught in the pinch.
As I start my presentation, I tell the potential sellers that there are certain inescapable realities with which one must come to terms if they are going to be successful in the quest for a consummated sale.
Once these market driven tenets are understood, the process of selling a non-distressed property can be accelerated.
Here are some of those realities:
- All properties are competing with foreclosures, bank-owned and short sale properties. And whether or not that affects the ‘appraisal" of a property, it always diminishes the pool of an already limited number of buyers. There is a glut of homes for sale and a relatively few qualified purchasers that are ready and able to buy.
- There are few or no incentives available for "move-up" buyers to purchase larger or more expensive homes. Since most of the credits and assistance programs are geared towards first time buyers, with little or no money for down-payment, price is the key factor when determining affordability. The monthly mortgage payment is the determining factor for most of the purchasers that are buying today.
- Purchasers with no ready cash can only purchase houses that qualify for unique federally backed funding. While this is an excellent method of liquidating foreclosed properties, it perpetuates the problem by creating an unfair competitive advantage that further erodes the conventional market.
- No qualified purchaser with ready cash and good credit wants to purchase an expensive property in an unstable market. Most want to "hedge their bets" by purchasing below market price to offset the possibility of future price declines.
- And finally, there is an all-consuming overriding desire on behalf of some purchasers to "steal" a house. Although there are plenty of them looking, few will ever purchase a home. As they make one lowball offer after another, the interest rates have inched ever higher and higher, making even less likely that these bargain hunters will ever close a deal.
To offset these realities, a seller must make their "product" as attractive as possible, both in terms of price and appeal. Pricing the property correctly from the get-go is a must, and should include as many purchasing incentives as possible.
- Be prepared to pay closing costs, provide a home warranty, prepay homeowner association fees and any other legal obligation in an effort to diminish the actual cash outlay from a purchaser.
- Keep the house in pristine condition, inside and out. This is the one area where the conventional home seller can excel over a distressed property. A house that is move-in ready and correctly presented can really make a difference.
- Keep an open mind towards all offers. Expect the lowball offer, and attempt to make it work without contempt or resentment. Every purchaser wants to feel like they "tried" to get their best deal.
- And most importantly, make the home available to should on a moments notice. The houses that are the easiest to show get shown the most. It sounds obvious, but if an agent is sitting outside with a buyer, make certain that they can see the house right then. If a seller asks for an appointment, the chance of getting the house shown is probably diminished by 75%!
If these realities are recognized and addressed, there is a good chance that the property will sell. And that's good for sellers and buyers alike!
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