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7 Ways to Compete Against “Desperate Homesellers”

Desperate HomesellersThe secret lives of homesellers, like those of the Desperate Housewives on Wisteria Lane, aren’t always what they seem.  The “for sale” signs may all look alike, but…

Those homesellers down the street may be (and probably are) just neighbors who decided to move to a bigger or smaller house, perhaps closer to work or family.  Let’s call them an “Average Homeseller”.

Or they may be a “Desperate Homeseller” – A home owner who is highly motivated to sell because of a divorce, lost job, or a large increase in monthly payments for their adjustable-rate mortgage.  The seller could even be a bank, selling a property that has already gone to foreclosure – or, if the property value is less than the amount owed, the bank’s approval may be required for any sale. 

Desperate homesellers are highly motivated.  Most of them probably have decent credit and want to KEEP it decent by selling their home before they can no longer afford the payments. They will aggressively market their home and they are likely to negotiate on price and terms.  As to banks, they’re not in the business of owning homes and they, too, are willing to negotiate.

Today’s buyers know that, and they EXPECT a good deal.  That’s why competing against desperate homesellers and banks for buyers can be tricky, at best, for an average homeseller.

It probably won’t surprise you if my first word of advice is to hire an experienced real estate agent who has worked in and survived a past Buyer’s Market.  This is no time for you to risk the sale of your home to anyone who may be in the midst of a learning curve for selling in a real estate market like this.  But I have some other tips, as well:

7 ways to compete with “Desperate Homesellers”:

1.  Price your home competitively.  There’s no going back to 2005 prices… not now.  Examine all the statistics – the absorption rate, days on market, average and median sale prices, number of homes on the market, current interest rates – and make an informed decision about pricing.  If your agent doesn’t provide this information to you, choose a different agent!

2.  Make repairs BEFORE putting your home on the market.  Today’s buyers won’t settle for windows that don’t open or dripping faucets.  If you make all needed repairs BEFORE putting your property on the market, it will be a selling point.  If you don’t, any buyer will probably deduct repairs from the offering price AND expect you to make them before settlement.  You might consider obtaining a home inspection to help you identify needed repairs.

3.  Offer incentives to your buyer.  Some suggestions: A home warranty, a year of paid condo fees, closing cost help, a loan buydown, or even membership at the local pool or country club. 

4.  Offer inclusions.  Include appliances, window coverings, custom-built shelving, lighting.  Leave the firewood or pellets for the stove, chemicals for treating well water or your pool.  Tell buyers, “What you see is what you get.”

5.  Make your home shine.  If your home is “best on the block”, buyers will fall in love with it.  Most bank-owned properties are vacant and offer no emotional appeal to prospective buyers, so take advantage of that weakness.  Make sure your home is clean, uncluttered, neutral, in good repair, and “staged” to show its best.  You may wish to consider hiring a professional “staging” consultant.

6.  Exploit your curb appeal.  Make buyers fall in love with your home before they walk in the door – Fresh paint and hardware on the front door, attractive seasonal wreath, well-groomed shrubbery and beds.  If you don’t have the time or energy for this, hire someone to do it for you because this is critical.

7. Offer generous compensation to selling brokers.  Most banks and many desperate homesellers rationalize that lower compensation to selling brokers will increase their bottom line.  The truth is that agents have to support their families, too, and any seller that offers more compensation will probably get more showings.  And a buyer has to SEE your home, before they will buy it.  Get more buyers through your door by encouraging more agents to show your home!

Competing against desperate homesellers can be tricky, but you can outsmart them by following my suggestions.  Just ask the Goulds, who recently listed their Davidsonville home with me.  We listed, sold and settled their home in less than 60 days, at a fair price, in this buyers market.

 

AR - copyscapeCopyright 2007. All rights reserved. Margaret Woda.

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