10 Steps to Sell Your Home Faster in a Slow Market
You probably already know that real estate across most of the country is not appreciating as fast as it was at one time. This isn’t necessarily a bad thing, unless of course you purchased last year and are now selling. People who have owned a property for a few years are generally well ahead in the game. We can’t predict what the future will bring, but so far, most markets have at least slowed, if not declined.
All homeowners want to get the highest possible profits. How do you go about reaching this goal? Here are 10 negotiating steps that a seller can follow to ensure their home is sold quickly and at the best price.
Step 1: Use a broker from the local area. When the market is down, so is the number of buyers. That means that you need to expose your property to as many potential buyers as possible. Who do prospective buyers get in touch with when they are house hunting? The National Association of Realtors statistics show that 85% of purchasers count on real estate brokers for their home selections. The internet accounts for 80% of sales. Who creates all of those online real estate postings? Real estate brokers from the local area.
Step 2: Familiarize yourself with the entire sale agreement. Nearly all jurisdictions have standardized real estate contract that has become lengthy and complex over many years. If you use one of those, read it carefully and be aware that you are agreeing to every unmodified term and condition. Make sure there is nothing in the agreement that needs to be taken out, rewritten or added. The brokers should offer a copy of the sale agreement that they might use at listing presentations and the sale deed should be read to avoid misunderstandings. As these are agreements on forms, whatever is not stated as a requirement by the law can be changed by a cross-out or addenda.
Step 3: Be completely familiar with the current real estate market. For the sake of negotiations, knowing what the recorded sale prices were isn’t sufficient because often they do not give the complete picture. As an example, two houses might have both sold for $300,000. A person might have sold for $350,000 while the other for $300,000 but the owner gave the buyer a 6 percent seller credit for a new roof and appliances, which is $18,000. Local brokers who are familiar with the details of recent sales are able to provide the best negotiation advice.
Step 4: Understand all of the terms you are willing to offer. You are confident that your home is going to sell at some satisfactory price, but instead of starting out with an inflexible amount, consider the property sale as a combination of price and terms. For example, it might make more sense in a slow market to help reduce the buyer’s closing costs by offering a “seller contribution “instead of lowering the price of the property. Often the seller contribution could be significantly less than a reduction in price, and buyers who require cash to close the sale could find it more attractive as well.
Step 5: Request a smaller deposit. In order to bind a legal contract, the buyer needs to make a deposit. In an ideal marketplace, a seller will receive a large deposit, but in a down or “off” market, a much smaller deposit may have to be accepted. The buyers prefer to make the lowest possible deposit because a huge deposit indicates a big financial and psychological commitment. You can ask for a lower deposit if the buyer has mortgage pre-approval or if the buyer shows a strong interest in the property and you have no other offers.
Step 6: Sweeten the pot. Are you really planning to take large items like a swing set or washing machine? In certain cases it may be better to leave such items if a buyer makes an offer.
Step 7: MLS photos have to be updated. If your MLS photo shows snow around your home in the middle of the summer, potential buyers will know your house has been on the market a while. They may interpret the out-of-season photos as meaning you might be desperate to sell and will expect to lower your initial offer. Make sure your broker posts recent photographs.
Step 8: Fully understand the marketing plan. The broker’s marketing plan should be reviewed quite often to see that it is being followed and is changed whenever it is needed.
Step 9: Check out open houses. Going to open houses, also known as “the competition” is a great idea. It isn’t always easy to be objective. However, do other owners have selling ideas that might work in your home? Is there something you can use to bargain with? You could consider offering to do some painting or other cosmetic repairs.
Step 10: Keep everything in context. Don’t worry about nickels and dimes when your main goal is to get the house sold.
As an example, just before closing the deal, we had a buyer request an extra $600 to resolve last minute concerns. That gesture seemed like nothing more than a case of buyer’s remorse, so we agreed to it, received an otherwise ideal price, and closed the sale. It wasn’t long before the prices softened in the local market. It was better to lose $600 than to find another buyer later when the market was harsher and the final sale price might have been less by several thousands of dollars. Would we have preferred to save that $600? Certainly. However, six hundred dollars was a small price to pay considering the delays could have meant a big reduction in price.
Real Estate for Today’s Market.
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Brenda Hanson 952.250.3896
Apple Valley, Minnesota
MN License #40122993