SELLING YOUR HOME IN TODAY’S SLOW MARKET
As lenders nationwide tighten their standards in the face of increased foreclosure rates, sales of existing homes continue to decline and the number of homes on the market has shot up to record levels.
Not only are there more homes on the market, the prices of homes have been declining as well. The median home price has fallen to $230,200, down by 0.6 percent from the median price a year ago. In fact, the median price of existing homes, has fallen every month for a year, something not seen in decades. This means that the homes currently on the market are taking longer to sell and when they do sell they sell for substantially less.
Add in the bank’s tightening their lending standards in response to the rising rate of borrower default, and you have substantially less buyers qualifying for loans. As a result today’s real estate market is suffering from an overflow of inventory and a shortage of capable buyers. So how does one go about getting their home sold today?
According to Julia Mauro, a seasoned real estate agent with Defalco Realty in New Jersey, staging is key in selling one’s home. “In today’s market buyers have an advantage and they know it, therefore they are more demanding and less willing to compromise. If several years ago buyers were willing to overlook imperfections and take on renovations projects, today they demand perfection. Accordingly, staging has become crucial in getting homes sold.”
Staging is the process of setting your home up to show off its strength and maximize the space, while hiding or camouflaging the undesirable areas. For those who can afford it, hiring a professional home stager often means reducing the time your home spends on the market.
For those who cannot afford it, there are several basic staging tips that you can do yourself. First, every room in the house should have a purpose. “There is nothing worse when showing a house, than walking into that one room that is a cross between a messy office, forgotten dining room, mixed in with a storage closet. The buyers do not look past the mess and confusion to appreciate the space, instead they look at it as dead space, which makes the home overall appear smaller” says Mauro.
Make sure that every space has a clearly defined purpose, is not cluttered or messy. If you have high ceilings use shelves or paintings that will take the eye upward and show case the height. If you have a small space, use mirrors and airy fabrics to bring in light and air, and make the space feel larger.
Minor repair projects can also impede the sale of your home. Several years ago, there were more buyers than homes, and often houses flew off the market within days of being listed. In today’s buyer’s market, homebuyers are not as willing to take on a home with a “honey-do” list attached, and if they do they will use it to negotiate a lower price. Often it is cheaper to make the repairs yourself than reduce the home’s price to account for them.
Although the appearance of your home is crucial in getting it sold, a lot also depends on who is doing the selling. Investigate the real estate broker before signing a contract. Often, when choosing an agent to sell their homes, sellers do not spend enough time finding the one that is right for their particular situation. Make sure you sign with a broker that operates in your particular area, they will know and understand the neighborhood and the potential buyers.
Further, although usually real estate brokers have standard commissions, you may be able to get a lower rate just by negotiating it before signing with the real estate broker. Although the law restricts how high of a commission a real estate broker may charge, each broker is free to set a commission that is below the statutory maximum. You can also negotiate the type of listing agreement you sign with the broker. Have the broker explain the different types and choose the one that offers you the most flexibility.
Although selling a home in a slow market is often a difficult and stressful experience, following these tips will help reduce the anxiety and increase the price your home will ultimately sell for.
NEWS & BRIEF
Our former Office Manager Rita E. Wolfe has retired. She spent ten years with us and was a great asset to our office. We wish for much happiness and success in her future.
On February 13, 2008, David A. Kaminsky, Esq. participated in the seminar at the City Bar Center for Continuing Legal Education entitled “Real Estate Litigation: Litigating the Commercial Landlord-Tenant Case”. He was a member of the faculty as a featured expert and panelist.