Selling in a slow market

Marketplace Staff Mar 16, 2007

TESS VIGELAND: Step back in time with me now to the days when prospective buyers camped out overnight to be the first through the door of an open house. The days when they came with blank checks in the hopes of submitting the highest cash bid. The days when they would nod and say, “Sure!” to a seller’s demand that they never chop down the fig tree in the back yard.

Ahhh, days long gone. Good news for buyers, but it means things are much tougher for sellers. But not impossible. Elizabeth Razzi is the author of the new book “The Fearless Home Seller.” So Elizabeth, what does it mean to be a seller in a buyer’s market?

ELIZABETH RAZZI: It means, first off, you need to know what the competition is, and then you have to have a plan to beat the competition. And there are only two ways to beat it, and that’s with a lower price or a better product. And so if you can dress your house up better than others, just make it so nice that you’re starting to reconsider your decision to move, that’s when it’s time to sell the house, that’s when it’s ready. And you have to know what the going price is for the competing properties in your area. And if you want to really make a sale sooner rather than later, you have to undercut that price a bit.

VIGELAND: How do you determine how much you undercut by?

RAZZI: That’s the million-dollar question.

VIGELAND: Yeah, the magic number.

RAZZI: Yeah. A lot of it just betrays how much desperation there is on your part. If you really have to get it sold now, you’re looking at putting it on the market, you know, 5 percent under the competition, maybe more than that.

VIGELAND: But at the same time, don’t you want to avoid looking desperate?

RAZZI: Sure. But I mean if you are, you know, you are. And buyers are really smart. And, you know, poor buyers really got abused during the boom market, and they haven’t forgotten that. I mean sellers were . . .

VIGELAND: Haha, payback time!

RAZZI: It’s payback time, yeah. You know, they were making full-price offers and they were still being asked for more blood after giving everything they had. And now, they’ve got the upper hand. You can expect that they’re going to expect that you’re desperate, unless you’ve got a really gorgeous property and it’s really desirable. And you can tell, because it’s gonna get a lot of showings really quickly, if you’ve got one of those properties. But if you’ve got a cookie-cutter house, that’s the same three-bedroom colonial that’s identical to all the other three-bedroom colonials in the neighborhood, you’re gonna have to compete. And they know it.

VIGELAND: How do you set your house apart, then, from all of the other houses in your neighborhood that might be for sale? What’s the biggest thing that you can do to assure that you’re showing that your open house is gonna draw a lot of potential buyers?

RAZZI: Make it really turn-key. I mean, people don’t have time. Buyers are always scared that they’re buying into a money pit. And so if your home is the one that really is in good repair, tip-top shape, it shows. And that will help your property sell faster than the competition. And that extends to the garden, the driveway, you know the trees overhead. Just have everything in really good shape. You have to be on-target with the price, you can’t mess around with that. Beyond that, you know, once you’ve got a really great product and you’ve got it priced to sell, you’ve got the really smart, on-the-ball real-estate agent in your corner, then you may start talking about some incentives. And that means you can offer to buy down their interest rates for the buyers, you can offer to pick up some of their closing costs. And this, of course, all is money out of your pocket, it’s you know dollars off your sale price. But you do what you have to do. You also may consider offering a bonus to the real-estate agent who brings a buyer. That’s not magic, but it’s, you know, part of the incentives that you can do to make your deal more attractive than the others out there.

VIGELAND: Boy, it’s just amazing how much of a turn-around this is from a few years ago. You know, we heard storires about sellers who would require that buyers keep the old doghouse up, in memeory of the dog that used to live there. THings like that. It’s completely turn-around now.

RAZZI: Yes, and it was so common for sellers to demand that you drop any inspection contingency or any contingencies you know, the appraisal. And contingineces are back. Buyers are reasserting their rights to them. And it’s a smart move for them, I think it’s absolutely sound

VIGELAND: All right, I have to ask you, what kind of home seller have you been? Have you followed your own rules?

RAZZI: Unfortunately, some of these rules come about from experence. And I have been in the postiion of owning two homes in the middle of a very icey winter, where we had to hammer the ice off the steps of the house we were trying to sell so that people could come and look at it. And owning two homes with two mortgages is not at all fun. And I’ve gone through some of the mistakes that I try to drive people around in this book.

VIGELAND: Such as?

RAZZI: Hiring a real-estate agent who was a fine agent, but wasn’t a specialist in my neighborhood. And that cost us. It cost us several weeks of primetime on the market. Most of us make mistakes when we’re doing this because we don’t buy and sell a house every couple of months. Every time you go back to it, every 5, 10, 15 years, the rules have changed a little bit.

VIGELAND: All right, well thanks for helping us all learn from some of your mistakes as well.

RAZZI: Oh, you’re welcome.

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