While many Americans can't wait to cook their turkeys and decorate their Christmas trees, anyone trying to sell a home in the coming months will have an entirely different perspective of the holidays. More than three years after home prices peaked, sellers are still facing an unaccommodating market. On average, it takes between seven and eight weeks to sell a home these days. That's up sharply from four to five weeks back in September of 2005, according to the National Association of Realtors. But the real estate market's seasonal pattern will insert an additional hurdle in front of home sellers this winter. Since many home buyers with children plan their purchases around the scholastic calendar—starting their search in the spring, signing a contract in the summer, and moving in by late August—sales activity tends to erode as the days grow colder before bottoming out in January or February. That means anyone selling a home over the holiday season will have more than just long lines at the mall to contend with. Here are 10 tips to help sellers get the best deal they can during the sluggish, off-season housing market:
1. If you can, wait: With the dynamics of the national housing market heavily favoring buyers, those in a position to postpone their home sale—even for a few months, until the spring—should consider doing so, says Guy Cecala, the publisher of Inside Mortgage Finance. "If you are really looking for top dollar and what people got a couple years ago, don't even bother putting it on the market," Cecala says. "And there are a lot of people who are making that decision."
2. Know your local market: Nothing will affect the outcome of your home sale more directly than its price tag. But in order to determine an appropriate price, you've got to know the ins and outs of your local real estate market. Truth is, all those stories about the national housing slump aren't nearly as important as the developments going on right in your neighborhood. So sellers should do everything they can to take their local market's pulse: read the real estate section in the local newspaper, click through a good housing blog that covers the area, check out nearby homes that are for sale: How much are they selling for? How long are they staying on the market? Here is where a real estate agent with experience in that local market can be a big help. "You can't just look across an entire marketplace and say, "Here is my metro area, and here is what's happening,' " says Keith Gumbinger of HSH.com, a publisher of mortgage and consumer loan information. "You have to try to attenuate yourself with what is happening in your very individualized local market." In addition, take note of any nearby foreclosed properties, as well as changes to the local economy that could alter future housing demand.
3. Price aggressively: Once you've got a handle on local market conditions, it's time to price the property. In so doing, be aware that today's buyers are demanding bargains. "The market is very impatient and unforgiving on high-priced houses," says Ron Phipps, a broker with Phipps Realty in Warwick, R.I. "If you are priced over the market, it is unlikely that anything will happen." That means you might have to list the property at 10 to 20 percent—depending on your local market, of course—below what you think it is worth, Cecala says. "Properly priced houses—i.e., discounted houses—are getting snapped up, and people will even bid on them," Cecala says. "If you are trying to capture what you saw [in home prices] two or three years ago, you may not be able to see that for five or 10 years. And people don't seem to accept that."
4. Negotiate your broker's commission: Since you may have to list your home for lower than you would like, it's worth asking if your broker is willing to accept a reduced cut as well. Broker's commissions averaged 5.20 percent in 2008, according to a March 2009 ForSaleByOwner.com analysis. And by handing a smaller cut to their agent, sellers can help soften the blow of the sluggish market. "You want to negotiate your commissions beforehand, especially if you are already pricing very aggressively," Gumbinger says.
5. Get preinspected: With the economy staggering under the weight of 10.2 percent unemployment, home buyers aren't walking around with a lot of cash for home repairs. That means homeowners need make all major repairs before putting the property on the market. To determine what repairs are needed, sellers should have a home inspector evaluate the house, says Judy Moore of Re/Max Landmark Realtors in Lexington, Mass. "In today's market . . . you can lose a sale over the silliest things after a home inspection," Moore says. "And it's not necessary if you get it taken care of beforehand."
6. Dress the outside: Would-be buyers won't want to see the inside of your home if the outside isn't appealing. So sellers need to make sure their property projects a warm and inviting feeling to anyone who passes by. "Part of the way that [buyers] make that instant decision [to purchase a home] is the condition of it when they first come up to the house," says Pat Lashinsky, the president and CEO of ZipRealty. So repaint the front door, trim the hedges, and mow the lawn. "You are going to want to fix doorbells," Lashinsky says. "A lot of people just have a sign on their door that the doorbell doesn't work. That's just a small sign that things haven't been fixed at the home."
And as we head into the winter months, sellers should be sure to remove any ice or snow from walkways whenever buyers visit. "What is so important is keeping the sidewalk safe, a lot of rock salt, or whatever it takes," Moore says. "If you have a steep driveway, it's got to be cleared and sanded or whatever you normally do to make sure it is safe, because safety is the utmost concern, especially during the winter season."
7. Let it shine: With the days growing shorter, sellers need to be mindful of keeping their home well-lit even when they aren't present. Sellers often head out to work without making arrangements to have their lights turned back on when it gets dark, Lashinsky says. "If someone was to come by and see their house at 5:30, everything looks dark," Lashinsky says. "If you are going to be selling your house, you want to make it as light as possible so that it is engaging and inviting and it brings people in."
8. Make it bigger inside: Sellers, of course, need to make sure the home's interior is immaculately clean and decluttered whenever it's being shown to potential buyers. Sellers should also remove all family photos from the walls in order to make it easier for buyers to envision themselves living there. At the same time, sellers can make their home appear larger by removing certain furniture items. "If you have oversized furniture that's really comfortable—you have that great La-Z-Boy—you might want to take it out when your home is on sale to make the rooms look bigger," Lashinsky says.
9. Be flexible: In understanding the current dynamics of the market, sellers should be prepared to entertain all bids—even those they consider too low—and perhaps toss in perks to get the deal done. "It is absolutely a buyer's market; [buyers] don't need you as badly as you might need them," Gumbinger says. "You may have to be more flexible than you might prefer in terms of price. You might have to be flexible in terms of concessions to help pay a buyer's closing costs and things of that nature."
10. Be professional: Although it can be difficult to do, property owners should remember that above all, selling one's home is a business transaction. Some sellers will say, "'I know the market is soft, et cetera, but this is my house and my house is special,'" Phipps says. "Unfortunately, every seller has that feeling." Sellers need to do their best to emotionally detach themselves from the property. "While it is your home, you need to treat this as a business decision," he says.