If there's a news report soon about a formerly nice suburban neighborhood morphing into a home-selling battlefield, I may have to take a bit of the blame.
Last week I had the same introductory chat about the challenges of selling a home with owners living a few houses apart. There was no known connection between the couples (each was referred to me by a different person), but both their stories and their homes were practically identical. Each of the neighbors hoped to be in their new homes by summer, so they needed suggestions about how to jump to the head of the real estate line.
We discussed the long lag time between listing and selling times for homes in the region, and the great deal of inventory in their price range. I shared stories of houses lingering on the markets for six months, nine months, or even one year, and the reasons things dragged for many homeowners. Some went to contract with buyers with decent but not stellar credit who failed to qualify for mortgages, while others deals died once appraisals came back thousands of dollars below the sales price. Some house sales lagged as lenders refused to approve market values deals proposed by underwater short sellers, and others loitered while strapped sellers couldn't make the updates and repairs their homes required to attract buyers.
The homeowners picking my brains admitted they didn't have the most contemporary homes in the community. One told me point-blank that it "seemed foolish to sink money into improving something you'll never enjoy, and that the buyers will probably change." While that thinking might be logical, it was quite misguided. "As buyers can choose from dozens of three-bedroom, two-bath ranches, all listed for sale around the same price point," I cautioned, "why would they even consider a home with avocado kitchen appliances, a water heater that takes forever to produce tepid showers, and a roof that sags lower than great-grandma's breasts?"
In this skittish housing market, the buyers I counsel want the best house for the least amount of money. They don't give a hoot, dear homeowner, that you can't clear enough to buy a new home if you invest any more in your old one, and please don't try to tell them that you "could have got $200,000 more at the height of the market."
The formula for selling in 2011 is simple, and I shared it willingly with my callers. "The magic of turning from homeowner to seller lies in dropping your price as low as it can go. Check out the price of comparable homes for sale in your neighborhood, and list yours for less. How much less depends on how fast you want to wave goodbye to the neighbors."
What I didn't say is that after low-balling the competition, don't expect to see your goodbye waves returned with warm shouts of "Keep in touch!" As the neighbors realize their home values have tumbled thanks to your sales price, the retort to your wave may be limited to the one-fingered variety.