In the dramatic world of the theater, they say “it ain’t over ‘till the fat lady sings.
In the dramatic world of the real estate market, headlines touting multiple offers and appreciating home values can feel like a premature declaration that the recession is over to some homeowners.
As you’ve probably heard a million times, real estate is hyperlocal. And it’s true – in many, many markets across the country, a mood of exuberant recovery has eclipsed the recession era’s stagnation, doom and gloom. But the fat lady hasn’t sung for the 10 million homeowners who are still upside down on their mortgages, according to CoreLogic, or for sellers whose homes aren’t following the national trend of flying off the market after receiving dozens of contingency-free, cash offers.If you’re wanting – or trying – to sell your home, and your neighborhood or town doesn’t seem to have yet hopped onto the housing market recovery wagon, here are a few multiple personality market musts:1. Get your own team of advisors. The role of media commentators in your real estate decision-making is this: they should be one source of information you take into account as you learn the lay of the land. The media is no substitute for having an experienced local real estate agent, mortgage broker, personal financial planner and a tax advisor who can give you customized, personal advice based on what’s going on in:
- your local market (even down to the neighborhood level)
- your personal finances
- your personal career
- your personal life vision
- your personal family situation and
- your personal dreams and goals.
Most sellers do list their homes with an agent, and get the benefit of their advice at that time. What I’m suggesting is that you build a bigger roster of advisors, and that you start talking with prospective agents as soon as you start thinking you might want to sell. Most agents are happy to be brought into the real estate decision-making process as much as a year (or more) before the transaction will begin – it gives them the opportunity to set the client up for success, rather than having to deal with poorly selected property upgrades, extra mortgage debt and other things a self-directed seller might take on in advance of listing their home.
I’ve seen hundreds of sellers make decisions as major as walking away from their homes based on news headlines or advice from friends and family, when early advice from an agent or attorney might have made a major difference in their decision-making – for the better.
2. Keep your own counsel. When your market’s dynamics don’t match those you’re reading and hearing about, it becomes even more critical than usual to make sure you keep your own counsel, as well as your team’s. By this I simply mean that it absolutely behooves you to run your own numbers in detail and get clear on the lifestyle changes you hope to make in the course of selling your home, ideally before you even make the first call to a professional. If your market doesn’t seem to be rebounding like it is elsewhere, you might not have the margin or cushion of expecting to get more than you’re asking for your home or being 100% certain it’ll fly off the market, stat.
This renders it essential that you know exactly how much you owe on your home, what your budget for repairs and pre-listing property preparation is (if any). You might not have the margin to cover overspending on staging and such, so sticking with your budget will be key. It’s also essential to go into your conversations with professionals knowing precisely what your goals and priorities are for the transaction, including whether you want to move up (and why), move down (and why), sell at top dollar no matter what that takes, sell quickly, get out of an upside down mortgage – and how these goals rank in order of importance in your personal value system.
From here, you have a sound foundation from which to make your agent selection, property preparation, listing and timing decisions. More importantly, having personally set priorities – rather than waiting for someone else to set them for you – you’ll have a sound foundation from which to make the course-corrections, price reductions, and negotiation decisions that sellers in slower markets frequently face.
3. Base your pricing and marketing strategy on uber-local, uber-current research. No matter what the market is doing, you should always prepare, market and price your home with reference to the comparable sales data: the most recent sales of similar homes in the geographic area immediately surrounding your home. (Your agent will help you source the relevant data.)
But this time-tested real estate rule of thumb gains extra importance if you’re listing in a market that is not playing by the same rules as the rest of the country. It doesn’t matter whether you read that New York Times article about Manhattanites getting harassed on social media by prospective buyers pleading to pick their offer out of the throngs they receive.
If the data shows that the average home like yours in your neighborhood is selling for 4 percent below asking, and after an average of 45 days on the market, you need to account for that by making sure:
- your home is impeccably staged (note – impeccably doesn’t have to mean expensively – but I’ll have to elaborate on that in another post!), that
- your home is aggressively priced, vis-a-vis the other homes your target buyers will probably be considering and that
- your home is as accessible as possible for showings –
- even if your compatriots in San Francisco and New York don’t have to be quite as vigilant about these things.
Some specific data points your agent can help you factor into the decisions you’ll have to make about precise timing, staging and such include:
- how long the pending homes were listed, on average, before they were changed from Active to Pending
- how far above or below the asking price the average home in your area sells for – with reference only to very recent, very nearby and very similar property sales, and
- how many offers the average home in your market receives before going into contract