How to Sell any Property in a Down Market

How to Sell any Property in a Down Market  

If you are planning on selling your property in this market you are going to need a strategy. In the last 20 years I have pretty much seen everything and I would like to give you helpful and timely tips to help you get it done right.

First, lets talk about what you are in for. In Southern California and most parts of the country there is a huge standing inventory of homes for sale, that is your competition. It is most certainly a buyers market right now and adding another overpriced, unmotivated home for sale in this market is not a positive thing for most Realtors. Also, now is not the time to shop for a "discount" Realtor. You are going to need the best you can find and listings are "a dime a dozen" right now.

Lets start with why. If you're not serious about selling your home right now or not willing to set a realistic asking price then don't list your house at this time, it won't work out well for you, your Realtor or your neighbors. If you are motivated and ready then lets come up with a game plan. Some of these may be obvious but hear me out, you may want to re-define your goals and priorities.

First, lets start with you. It's about finding a buyer. That means your tastes and décor choices don't matter anymore. It's about trying to appeal to a future buyer and making your home better and more attractive than any other in this price range. In a perfect world your home would be vacant or professionally staged with no personal items in sight. You will also need to decide what you are really trying to accomplish. What is your goal? Is it a quick and painless sale? Squeezing every penny out of the sale? Cashing out and renting back? Avoiding foreclosure? If you are in an emergency or panic sale mode then your choices will narrow.

Second, your property will need to be in tip-top condition. If you want top dollar consider a professional paint job inside and out with up to date neutral colors. Consider new flooring. Depending on price range and your goals you may want to consider upgraded granite counters, new appliances and updated baths. If you can not or choose not to upgrade and update then your price expectations will shrink. If your goal is top dollar then these upgrades become mandatory. If you just want a fast sale then price will default to second priority it's that simple and it really is your choice.

Consider this before it's too late. The most ideal choice would be to hire an independent licensed and experienced appraiser to give you a realistic valuation of your home. An appraiser can also tell you what those upgrades would be worth before you spend your money needlessly. Even a room addition, extra bath or complete kitchen remodel can be valued before you spend a dime. This is an appraiser's job and is money well spent. If you were off in your estimate either too high you will waste your time or if you're too low you will have forever lost that money in the sale.

Here is the important part. Here is what most sellers are incorrectly doing right now. If your home is worth say $600,000 most people automatically set their asking price just above that at maybe $625,000. Makes sense to most people but that's where the trouble begins. I personally watched a neighbor do exactly this, he listed his house for $625,000 and nothing happened, weeks turned into months and that same property is still listed today, a year and half later for $399,000. On the other hand a clever neighbor sold his quickly for $610,000 to the first buyer he found and generously gave that buyer $15,000 cash back for a "landscaping allowance" in effect the buyer was thrilled to pay the full asking price because he closed and got cash back to start a pool, landscape the yard or go to Hawaii.

Here is another way to look at it. You can go with the herd mentality and make your price the same as everyone else and ride it all the way to the bottom OR you can under-price yours and make the sale happen in today's dollars and avoid any price reductions at all. Its like catching wave, you need to be at the front, do all your paddling at the beginning and catch it before it drops or you will miss the buyer and be stuck behind the wave always waiting for something to happen. It's not a good bet but, if you price it way under market you can end up with multiple offers and even get an overbid. Here is a secret, what is working right now is buyer incentives - directly to the buyer, they are your customer. Instead of dropping your price $10K, give that to your buyer in the form of cash, home improvement gift card, landscaping allowance, luxury items etc. You will create buyer activity.

Lastly, think positive. It's all about finding a win-win deal. What you probably want is to get the house sold as painlessly as possible. So price it right immediately and make the property as marketable as you can afford without wasting time or money. Keep in mind where the market is going, if it's a buyers market and prices are dropping, get it sold quickly and don't try to hold out for a better offer. But remember it's hard to sell any property with "warts" in this market. Think in terms of a $100 repair that you neglect will take off $1,000 on your final sale price, so cure all the negatives before you list and price it right from the first day and you'll be successful.

Remember to use your appraisers experience and skills in the very beginning not just at the end and you will bargain from a position of knowledge and strength. Please look me up if I can be of service. 

Appraiser/Author

Clifford Diamond, CREA