Real Estate Investing: Slow Sellers
In a market that has seen double-digit price increases for two years or more, selling a home was easy. Offer the property for sale at or slightly above market value and watch the bids roll in — sometimes within days.
But all markets go through cycles and real estate is no exception. When the market, whether local or larger, begins leveling off it's possible to find that property sitting waiting for potential buyers. That ties up capital, defers profit taking, and leads to frustration. Don't let your emotions get the better of you. Think your way out.
Even in a tightening property market, a seller has options. If the property is also a primary residence and there's no pressing need to move, one can just sit tight and wait for the next upswing. You may have to wait one year or five, but come they always do.
Whether you're waiting three months or three years, there are several viable strategies for upping the odds of getting acceptable offers.
Almost any property can be improved, usually at modest cost — sometimes with sweat equity alone. Get out your tools, or find a low cost contractor and fix those broken roof tiles. Even if the damage doesn't affect the integrity of the roof, the improvement in appearance is worth it.
Replace those worn throw rugs near entrances to give the house a new look. Paint that room that's seen wear or too much smoke tarnishing. Get the carpet professionally cleaned and keep the inside and out looking immaculate. Buyers always pay more when a property owner shows they've maintained it well.
Other low cost, but profit enhancing, items include inexpensive lawn repairs and a few dozen garden plants and flowers. Remember, the outside of the property is always what visitors see first.
Once you've made everything look and function as well as possible within your modest budget, encourage the neighbors to do the same. Most properties are near others. The appearance of a neighborhood — children's toys in the front lawn, tired looking screens, shaggy hedges, etc — reflect on your property too. Whether future homeowner or investor looking to sell to one, others will be interested in the effects on the property you're offering.
Now that everything possible has been done to make the property and it's surroundings optimal, check to ensure the price is reasonable. Market prices change fast, but they also vary considerably within a local area. A 1,500 square foot one-story dwelling is generally going to go for less than a 2,000 square foot two-story.
Prices vary by total square footage of property, year built, and other factors. Look on-line for comparable properties to get an estimate, then speak to a professional to get "the comps" — the estimate by appraisers and others of the actual prices of comparable properties.
Does the property back up onto a noisy thoroughfare? Consider double-paned windows so visitors inside the house hear nothing but the soft music you play while they're looking.
Has the property been on the market for several months, but not sold? Take it off for awhile, then re-check the price before re-listing. Most people don't want something that others have rejected, even if they can't find anything specifically wrong.
Have you spread the word far and wide? Market heavily to the local area, but spread the word on-line and in other cities that you have an attractive and well-maintained property. People re-locate and it's still the case that advertising to outsiders is less effective than to those who can visit with a short drive or train ride. Use new technology to give you an edge.
Be the one to make that extra effort and you'll get a fair price.