Steve Kent's October 2006 Newsletter

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Tips for Selling in a Buyer's Market

By Michele Dawson

      As the fall season brings the usual slow-down in home sales activity, many regions of the country that experienced hot sellers' markets over the summer are now seeing a change toward buyers' markets. But don't let that hamper your plans -- if you prepare properly and make the right moves, you can sell your house.
      One of the first things real estate brokers and agents will encourage you to do if you're selling in a challenging market is to price your house appropriately and add appeal.
      So what can you do to give your house selling appeal?
      For starters, you should:
  • Set your price competitively.
  • Offer incentives. If your carpet is old or outdated, offer a carpet allowance up front. If a potential buyer knows this right off the bat, they might be able to overlook the unattractive carpet - probably the first thing they'll notice when they walk in the door. Or, offer to include your appliances with the home. If you're moving into a new home, appliances may already be included, or you may be ready to upgrade. This type of offer will be especially enticing to first-time buyers who are putting most - if not all - of their available cash into their down payment and closing costs.
  • Offer to pay the nonrecurring closing costs - the loan appraisal, loan points, credit report, title insurance, and property inspections. This can be a major motivation to cash-strapped buyers; these costs usually run about 3 to 5 percent of the cost of the house. Depending on your market and budget situations, you may offer to pay part or all of the costs.
  • Get a professional home inspection before you put your house on the market. Nothing will kill your deal quicker than a buyer's inspector finding a major problem during the inspection process. Even if you reach an
  • agreement with the buyer on who will pay how much of the repair work - or if you agree to pay all - the fact that the buyer has to wait for the repairs could put a damper on their plans, and even trigger them to break the deal, especially if there are plenty of other comparable houses on the market.
  • Be flexible. When you get an offer and the buyer wants to move in sooner than you'll be ready, make plans to stay in an apartment or with relatives until your new place is ready. A month or two of inconvenience will surely be worth it down the road.
  • Create good curb appeal. A home shopper's first impression is everything. The moment they pull up to the curb, they'll make an instant judgment. You'll want to be sure it's positive. You can begin by making sure leaves are raked up, and your shrubs and bushes are pruned. Make sure bikes and toys are out of sight.
  • Focus on your walls. If your walls are dirty, it will be an automatic turnoff to potential buyers. Think about touching up the paint on your walls before you put your home on the market, keeping the colors neutral and light. Save your favorite reds and greens for your next place, where you'll be staying put for awhile.
  • Make sure your home shows well. Get rid of all the clutter. Keep the house clean and simple. If you have a lot of knickknacks, keep them out of sight. Make sure there are no lingering pet or smoke odors. Set out some fresh flowers. Turn on some light music.
  • Let the light in. Open blinds and curtains so plenty of light illuminates the home's interior.
          And, most importantly, be patient. Don't be too hasty in reducing your asking price. But be ready to when the time comes. You'll want to talk to your agent about how long homes are staying on the market in your neighborhood. The time to think about reducing your price is once you pass that mark.
  •       If people stop dead in their tracks to admire your residence, your house has curb appeal.
          According to the National Association of Realtors, curb appeal sells more than half of all houses that go on the market. At the very least, it makes buyers take notice, gets them across the sidewalk or yard and inside the front door.
          Real estate agents say that when you couple curb appeal with pricing the house appropriately, that figure climbs to 90 percent. What kind of property it is has a bearing on how it is perceived, but generally, the tidier, fresher and cleaner it looks, the more curb appeal it has. And painting is key.
          Painting can be very expensive, but it is the least expensive way to get the biggest return on your investment. Because painting is a maintenance issue, you can't say to a buyer, "Well, I spent X amount on painting." But the expense of painting definitely will be reflected in the quality of the buyer's offer.
          In the new-home market, exterior coloration is both art and science. For years, builders felt comfortable choosing exterior colors. However, in the last 10 years, the architect, designer and, in some cases, the land planner are being brought in early on in the process to choose exterior coloration.
          While this kind of input consumes time and money, the rewards are huge. The new-home market is highly competitive. If the colors strike a chord with buyers, customers will beat a path to the builder's door.
          Single homes have much more flexibility in color, but there have to be limits. Builders tend to limit choices, and homeowners associations and civic groups tend to enforce those limits long after the builder has sold out and moved on.
          And for good reason. How other houses in a neighborhood are painted has a real impact on how your house is perceived by a buyer. If the house next door is loud and unpleasant-looking, it will affect both saleability and price.
          Do-it-yourself guru Bob Vila said he always tries to encourage consumers to "be kind to their neighbors when picking color schemes. "If you aren't sure what to paint your house, hire a consultant. That will save you money and aggravation in the long run.''
          Even when no one is telling you what to paint your house, the colors you choose for your house will elicit an emotional response in the buyer. But what will turn a buyer on?
          Most buyers can only see what is in front of their faces. They can't see one color and change it in their mind's eye to something they might want. Then there is the 5 percent who can see past years of neglect. What are people finding personally satisfying?
          According to a national survey by Sears Weatherbeater Paints, more than 37 percent of all Americans (23 million households) would choose white as the primary color in painting the exterior of their houses.
          In order of preference, the choices are white, gray, blue, tan and brown, cream, beige, green, yellow and, finally, red, Sears said. Color is a funny thing. If I were choosing a color for resale, I'd go conservative. Still, lighter colors work better. A house that is dark isn't appealing. But bold colors are a risk.
          In older neighborhoods, a subtle brick red, a Williamsburg blue and hunter green on a stone house appear to be good choices. By and large, though, you'll see white and creams, especially on the trims, with a deeper color for the door. People want the feel of the old, and traditional colors are nice and soothing.
          In newer houses, the move is toward the neutral. Off-whites and clays are popular for trim. Front doors seem to be the focus of colors, even in houses other than townhouses.
          Whatever your personal preference, you should always keep resale in mind. If you go off the deep end of the color spectrum, you could affect not only the value of your house but that of the entire neighborhood.
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