NEW YORK (06/24/09)--Despite a slight upturn in new housing starts, sellers still face an environment of tight credit, low property values and reluctant buyers. Be prepared to offer incentives for buyers to sign on the dotted line (Money July 2009).
After plummeting to a post-World War II low in April, construction of new housing units rose 17.2% in May (MarketWatch.com June 16). And yet, the average selling price of existing single-family homes was $169,000 in the first quarter of 2009--an $11,000 drop from fourth quarter 2008, according to the National Association of Realtors.
People are still buying, but they may need an added incentive to complete the purchase. If you are trying to make a quick closing on the house you're selling, be willing to make compromises, spruce up your home, and tune in to the buyer's needs:
- Undercut the competition. To sell fast, dropping your price 10% to 15% below comparable homes in your neighborhood should help get your listing noticed. Also, if you can afford it, set your home at the lowest end of its price range. A $199,000 price tag is a deal to buyers in the $200,000 to $250,000 range.
- Use staging techniques. Focus first on improvements that will get the most buyers to your front door. Worthy fixes: power wash your siding, paint the front door, replace the knocker or handle, and give your garden some serious sprucing. On the inside, applying a fresh coat of paint, eliminating odors, and decluttering can go a long way. But don't overspend--the cost should be worth the payoff.
- Target first-time buyers. Thanks in part to the $8,000 first-time homebuyer tax credit, and in part to super-low mortgage rates, first-timers bought more than half the homes purchased so far in 2009.
- Use the Internet. Establish an online presence and spread the word through social networks such as Facebook and Twitter. Sprinkle your description with desirable, accurate keywords and amenities--deck, pool, granite counters or fireplace, for example. Also, consider posting pictures taken with a wide-angle lens--this view makes rooms appear larger.
- Offer extras. Another way to reach first-time buyers: Offer add-ons. Many people are leaving the renter's life, in which landlords tend to the maintenance issues, and they might appreciate a home warranty that provides some coverage when major problems arise. Offering help with closing costs or mortgage protection can also trigger potential buyers' interest (MarketWatch.com June 15).
- Stress a speedy deal. It can take months to close on a short sale or a foreclosed property, but if you're a traditional seller, stress to buyers that you can close the deal in just a few weeks. This could strike a "buy now" mentality among those who fear another buyer might come along and snatch the deal.
For related information, read "Consider Pros, Cons of Rent-to-Own Your Home" in Home & Family Finance Resource Center.
Story posted on CUNA.