Am I Crazy to Try to Sell My House in This Economy?
Your last kid heads off to college in 2 weeks. You just spent your entire Saturday vacuuming 2400 square feet of carpet, scrubbing 3 toilets, 2 tubs, a shower and 5 sinks. Meanwhile your husband spent his Saturday mowing and weed-whacking the baseball-diamond sized yard where all the kids used to play. As the sun sets, you sink into an Adirondack chair on the patio-after hosing down the chairs to remove spider webs and bits of bird droppings. You yawn as you toast your husband with a glass of wine and wonder how you might have spent your day off together if you lived in a condo or at least a home with fewer rooms and a smaller yard. You both agree you’d like to explore this further but the inevitable question comes up, “Are we crazy to try to sell our house in this economy?”
What I’m seeing lately is a lot of folks who would like to put their homes on the market and sell them but don’t because of fear. The fear is fueled by what they read and hear in the media and what they hear when they talk to their friends (who have listened to or read the same news stories on television and the internet) . I would like to address the top 5 reasons why people I’ve spoken with believe it’s not a good time to put their house on the market and “debunk” these ideas based on my experience of selling real estate in this market.
1) The only houses that are selling in this economy are distressed properties that savvy investors can “steal”.
While there are a lot of REO and short sale properties on the market that are being sold to investors and others who are looking for a deal, people who buy these properties have the time, energy and money to put into fixing them up so they’re habitable. However, there are many other people who want a home they can move right into and carry on with their busy lives. These buyers don’t have the time or inclination to wait months to move into a place that needs lots of work or to wait for a bank to agree to sell the property as a short sale. They are relocating themselves and their families into the area and need a home they can purchase and move into within a short timeframe, typically 45-60 days. They want a home that will provide a smooth transition into their new locale. Others moving within the area may need more space for a growing family or may want to downsize because they are empty-nesters, changing circumstances, or want lower housing costs.
2) There are so many For Sale signs around town and some of these homes have been on the market for over a year. Obviously, there is too much supply and not enough demand for homes in this area.
Yes, there are a lot of homes on the market and some of these homes have been on the market for as long as 3 years. These homes were listed too high in the beginning. They chase the market downward, lowering their list price again and again while the market stays one step ahead of them. Other homes are listed by people who are not motivated to sell and simply want to “test the market”. A Realtor® who works with you as a professional consultant tells a seller who is testing the market by pricing their home 20% or more above comparable properties on the market that their house is going to fail that test. A listing agent who is more interested in adding another listing to her portfolio may not be straightforward about where your home needs to be priced in order to sell. If you want to test the market, list with that agent. However, if you want an agent who works with you on pricing and staging in order to get your home sold and not just listed, then choose a real estate professional who will do everything in her power to help you succeed in that goal.
Houses in good condition, priced at or below comparable listings in the neighborhood sell in this market. If you want your home to sell quickly in a buyer’s market, price it below comparable homes in similar condition. This doesn’t mean price it below the listing price of distressed properties. Distressed homes typically have been vacant and neglected for months, sometimes years. They often have issues like missing fixtures, appliances, carpet, flooring, leaky roofs and mold in the basement.
3) My older home has a kitchen that would need expensive updates like stainless steel appliances and granite countertops in order to appeal to today’s buyers and get top dollar. I don’t have that kind of money to spend on expensive upgrades.
A client recently shared with me that a Realtor® from Cleveland told her she would need to put granite countertops into the kitchen of her 40 year old home in Huron, Ohio in order to sell it. Her counters were a neutral laminate in good condition. They priced granite and found it would cost them $4000 of their savings. I advised her to save that money and put some of it towards new interior paint and a new dining table that would better suit her small dining space. She saved herself a couple of thousand dollars and was able to take the dining table to her new home. Their house went into contract 3 days after we listed it and closed escrow 30 days later.
4) I will lose money if I sell now. If I wait a year or two, the market may improve.
This mindset is understandable because it’s based on the fear that things are bad and they’re not going to improve for at least the next couple of years. When the Fed announced recently that interest rates will likely fall further and remain at historic lows until 2013 it doesn’t exactly pump up confidence about the current housing market’s ability to rebound in the near future. I’m not trying to sound like Pollyanna but I found this news encouraging for anyone who plans to sell their home, refinance, or purchase a new home within the next 24 months. Sure there’s a chance you may not get quite as much for your home as you might if you'd sold 5 years ago or waited to sell for another 5 years or more. But if you sell now and buy something else, chances are you will not only get more house for your money than you would if you waited several years and will also likely pay tens of thousands less in interest over the life of the loan on that new place.
5) It could take months or even years to sell my house in this market.
It could possibly take months or even years to sell your home if you list it 20% or higher above comparable sold homes in your area and fail to do everything you can to put it into marketable condition. This doesn’t mean spending thousands of dollars in upgrades. It means having an objective professional come to your home to help you stage and price it for a quick sale. Your Realtor® should be able to consult with you on what to do to make your home look its best. It means clearing out the clutter inside and out, cleaning inside and sprucing up outside, putting on a fresh coat of paint inside and out (as needed), and possibly moving furniture to maximize your space.
Imagine yourself a year from now spending a beautiful Saturday in August riding your bicycle through the California wine country, stopping every now and then to toast each other and the new life you’ve discovered as empty-nesters. My clients who had their house in contract 3 days after listing and closed in 30 are now doing just that.
Copyright © 2011. Ann Steinemann