Richard Barbee, M.Ed., GRI, CRS

Real Estate Broker

Realty Executives Associates, Inc.

10255 Kingston Pike

Knoxville, TN  37922

Office  693-3232         Cell  388-1621

www.richardbarbee.com

Seller Power in a Down Market

Can we truly make lemonade out of THESE lemons?  The real estate market has taken some real blows across the nation.  Though regional in nature, the national press coverage would convince us that there is no real estate activity whatsoever.  If you have friends or family in California, Florida, Michigan, Ohio, Nevada, or a few other states, you may have heard their lamentations about the status of home sales in their areas.  But, let not your heart be troubled.  Though the market is down, it's not out.  To use a boxing analogy, the market has taken a standing 8-count but is ready to jump back in the fight.

I talk with mortgage lenders all the time.  They have money to lend!  The main problem seems to be qualifying buyers with the new, tougher financing requirements.  The desire to buy is out there.  Credit scores and cash down payments are relatively unchanged.  The issue is that the free-wheeling stated-income, no-money-down mortgages are very scarce.  Even those with 700+ credit scores need some money down in most cases.

So, what power do home sellers have at this point?  If you need to sell, what hope do you have?  Please allow me to empower you with 3 suggestions:

1.  Condition  -  The condition of the property is in the control of the seller.  You must take a look at "the competition's" condition.  Are other homes in your price range offering better flooring, newer appliances, updated roofing, more attractive landscaping, or nicer kitchens?  Visual impressions within the first 2-3 minutes can make or break a buyer's interest.

An experienced Realtor or home stager can offer you sound guidance on competing well in the current market.  If I see 15 houses in the $250,000 range, I can do a mental comparison of conditions.  While every house may have a 2-car garage, new roof, and updated HVAC system, not every property has new carpets, fresh paint, updated plumbing and lighting fixtures, clean smell, and so on. 

Take a look at the house from a buyer's perspective.  Get with a Realtor to take a tour of similar homes in your price range.  Go to some open houses near your property.  Look online at www.richardbarbee.com or www.viewhomes.com to see pictures of other homes in your price range.  If you have been on the market for awhile, have a friend (or family member or church member or co-worker) come over to give you an honest opinion on the condition of the house.  If cash is a problem, there are free and cost-efficient methods for improving condition.

Take a moment to think about any features of the house that might turn off buyers.  One mental note in selling a house, think of it as a house on the market rather than "your home."  Try to remove all sentimental emotion from the situation.  You are trying to sell a product, not your heart or your sense of belonging or your family.  Taking a business-like perspective to the process can help your "market vision".

Additionally, having a pre-listing home inspection can help you get to know more details about the condition of your home.  I mean, how many of us crawl under our houses every 3 months to check moisture, insect status, insulation, plumbing, etc.?  My friend Jack Feldmann of Clayton Inspection Services has proved to me time and again that a professional home inspection BEFORE listing can help a home be far more competitive in the market and eliminate / mitigate any potential risks to the purchase contract.

2.  Price  -  An old saying in real estate goes "Price cures all ills."  There is a price at which every house will sell within 30 days, within 7 days, within 1 day.  This is not a Realtor trick.  It's just true.  At this time, many potential sellers know that they do not have a lot of wiggle room in pricing their home.  Generally speaking, it is a bad idea to try to use the mortgage balance or desired capital gain to determine pricing for your property.  Regarding emotion, this is almost always a hot-button issue between sellers and agents.

My good friend Thaxton Brown, a professional appraiser, always recommends a fresh appraisal when pricing is a bone of contention or a question mark.  The appraisal industry is experiencing change of its own right now.  But, one of the positive processes is the practice of time-sensitive appraisal.  Home prices and market conditions are changing rapidly, for good and bad.  Appraisers are using the most current data that is available to help come to an objective answer.

To put it simply, DO NOT SELL if you don't have to sell right now or if you are razor thin on your loan to value ratio.  Job transfers, family growth, downsizing, life transition and other factors may lead you to sell at this time.  Be assured that all is not lost if you find yourself in that scenario.  There are things that you can do to benefit your situation and achieve some of your goals.

3.  Marketing  -  Realtors must work harder now.  Wide-ranging, sustained marketing campaigns are necessary at this time to achieve the same results of two years ago.  When you pick an agent, take time to explore their marketing strategies for your property.  The internet, professional photography, PDF brochures, creative websites, "guerilla techniques", and print media must be wrapped into a coherent, branded project in order to achieve results.

Make sure you choose an agent with the tenacity, time and knowledge to market in this highly competitive period.

I wish you the best.  Please feel free to check out my website at www.richardbarbee.com , email me at Richard@richardbarbee.com , or call me at 693-3232 (office)  /  388-1621 (cell).  Thank you.