Be Flexible, Price Reasonably When Selling
Despite growing uncertainty in the economy, Americans want ever-larger homes. “There was a great boom in trade-up housing during the last five years of the 1990s and that has continued into the new millennium,” says James W. Hughes, a professor at Rutgers University who specializes in real estate economics.
The median-sized American home has reached an “all-time peak” of 2,100 square feet. And many consumers still hanker for properties in the 4,000-to 5,000-square-foot range.
Even so, in the post-Sept. 11 period, economists report that would-be buyers, including those who are well-positioned financially, are becoming cautious. “People are getting a little bit more conservative. They’re worried they may be buying at the peak of the market,” Hughes says. “Many potential buyers are feeling somewhat jittery now,” agrees David Lereah, chief economist for the National Assn. of Realtors.
There are several positives, however, in today’s real estate markets. Mortgage rates are hovering around historic lows, making real estate attractive for financial security. “For a lot of people, real estate has proved a better investment than the stock market, which has been messy lately,” says Lereah, author of “Rules for Growing Rich” (Random House).
Are you planning to sell your home in the near future? Then these suggestions could prove helpful:
* Be flexible with prospects who must sell their home to buy yours.
With demand for upgraded housing still running high, many buyers continue to aspire to move to prestigious neighborhoods where homes are typically large and have such coveted features as gourmet kitchens and luxurious master bedrooms.
If your home is located in such a neighborhood, your prospects for a successful sale remain strong. But as Hughes points out, upper-end buyers are among the most deliberate in making real estate decisions these days.
To assist trade-up buyers, offer an extended time window so they can liquidate their home before closing. Instead of the customary 30-to 60-day period between sales contract and closing, agree to a closing date at least 90 days out. “Moving the closing date further away helps reduce the anxiety,” Lereah says.
* Price your home a peg below rival properties.
Are your neighbors’ homes similar to yours? Then today’s cautious buyers will likely be sensitive to fine distinctions in price. Under these circumstances, pegging your price $1,000 to $3,000 below the competition could help your place stand out. “You certainly want to be realistic on pricing and follow the advice of your real estate agent,” Hughes says.
* Have your agent prepare some statistics to encourage interest in your home.
“At this point in time, real estate agents should be stressing the long-term safety of housing investments and how housing is a safe port in an economic storm,” Hughes says. Prospects need extra assurance that they’re making a sound financial choice, and numbers can help provide that.
Obviously, property values don’t move upward every year in every community--and reversals do happen. But throughout the post-World War II period, the long-term trend for real estate has been very positive almost everywhere, according to Hughes, author of “America’s Demographic Tapestry” (Rutgers University Press). He suggests that a listing agent help clients by graphing changes in the value of the property from the date of its construction to the present.
Also, in a period of economic uncertainty, it’s wise to provide a would-be buyer with information from the past six months on comparable sales in the same neighborhood.
* Don’t rule out open houses.
Realtors often are candid that public open houses rarely lead directly to a sale. Many visitors are curiosity-seekers or neighbors in search of interior design ideas. The reality is that most serious buyers see properties with their agents by appointment.
If your home is in the trade-up category, which means that relatively few lookers can afford it, it can be especially tempting to restrict showings to an “appointment only” basis. But in times of economic uncertainty, broader access is important.
Although the odds of finding a buyer directly through an open house event are slim, such an event does sometimes produce results through word-of-mouth communication. For example, a neighbor might tell a colleague about your spacious family room with arched ceilings. Such a contact could provide the makings for a deal.
* Realize that patience may be vital.
In many neighborhoods during the past several years, sellers have enjoyed the upper hand, often receiving multiple offers within a short time span. You could still be fortunate and sell your home quickly these days. But given the realities of the current housing market, it might take longer than before to consummate a deal, no matter how effective your marketing strategies are.
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Ellen James Martin is a syndicated columnist. She can be reached via e-mail at ellenjamesmartin@aol.com. However, she cannot answer readers’ questions individually. Distributed by Universal Press Syndicate.
