Here’s a short note from a seller in Florida that could easily be any seller in North America in our current market place:
“I have an investment property in Poinciana, Florida, that I have been trying to sell since February this year (2006). It is a brand new 4 bedroom, 2 baths, 2 half-baths condo and we did have it under contract for sale twice and both times, the deals fell through at the 11th hour. We now have it on the rental market and are still having a difficult time finding a qualified tenant. I am currently working with a property management company and am not pleased with the results to date. I am wondering if you have any investors that may be interested in purchasing the property at a discount or any creative ideas for selling/renting in the current market.”
If you’re going to sell in this market there are really only a few — but very important — things you must do.
- Fix up the place. I’m dealing with sellers these days who think that if they just make the house look better than how they’ve been living in it, then maybe that will draw the buyers. This approach is not working in today’s market.One of the ways to overcome this push-back is to simply visit some houses that are in the same market area and type of home that you own. How do they look compared to yours? On top of that — how does your house look compared to the new construction in your price range? Make the house look, “Wow,” in this market or you’ll lose buyers right when they walk into the front door.
- Price it below market. Don’t mess around on this second point or you could lose more money as each month floats by without a sale. If the fish are biting at 20 feet, no expensive bait is going to bring those catfish up to 10 feet. The same is true about your house. If your competitors are selling at $30,000 or $50,000 less than yours, the hot tub, new kitchen and bath are obviously not attracting your “fish.” Get with it, lower your bait, and sell now so you can take advantage of the lower prices when it comes time for your own purchase.
- Market the deal as much as the house. If you will consider closing costs, don’t just say you will, put a dollar mark on it. Offering $5,000, $10,000 or more right up front in your marketing will draw some of the cash-poor buyers to your doorstep.
- Bonuses and higher commissions. Well, it’s not just the buyers who are cash-poor these days — some agents are looking for a little more income themselves. Offer more than your competitor’s commission offer. If the competition is listed at 2.5 percent — pop it up to 3; or go from 3 to 3.5 percent. Another strategy is to offer the same on commission, but throw in a bonus of $2,500, $5,000 or more, to the selling agent. In some offices agents must split the commission with their brokers, while bonuses pass through without any split involved at all.
- Offer other non-real estate incentives to the buyer. Vacations, automobiles, jet skis, media centers, shopping sprees — could be what the buyer wants when it comes to moving into their new home. Check with your loan officer to make sure you can put together a program that will allow such incentives or you can construct them outside of the sales contract in a separate agreement between the buyer and the seller.
In essence, make your house a one-of-a-kind deal that the buyer would be crazy to turn down.
Written by M. Anthony Carr