CNN posted an article on it’s website recently titled Sell Your House Faster in a Tough Market. They gave some good advice, and some questionable advice. Here is my take, point by point.
Underprice the house by 10%.
This is something I have been harping on for a long time. We are in a price driven market. While “underprice it 10%” is a little simplistic, the concept is sound. Your house has be be price competitive. It is important to look not only at houses similar to yours that have already sold, but also to look at similar houses that are currently for sale. In a falling market, if you are only looking at past sales, you are behind the curve. What becomes more important that past sales is current competition.
Think like a buyer. If you are selling a 3 bedroom 2 bath house in Lynn Haven, you need to go look at the other 3/2’s in Lynn Haven, and objectively compare your house to them. Thats what the buyers are doing! Go scope out your competition like you were a buyer, and then price your house lower than the others.
Sell your house yourself (for sale by owner).
There are some advantages to this approach, mainly the savings in commissions. But there are some drawbacks, which the article discusses. What the article does not mention is the marketing power of the MLS. The only way to get into the MLS is to hire a Realtor and pay a commission, but the MLS exposure will often bring you a buyer faster, and at a higher price than you would get selling it yourself. I have sold houses both ways, and I can tell you that there are buyers that never look at a FSBO. They hire a Realtor and only look at listed houses. If you aren’t in the MLS, those folks will never see you.
Have a multi-pronged marketing stratagy.
I like this idea, but not quite the way the article describes. The first thing they say is to negotiate commission. This may work on higher priced properties where the commissions are serious bucks, but on lower priced properties, dropping your commission means fewer agents will show your home. There just isn’t enough money in it to be worth if for them. If they have a choice of selling two different houses priced the same, one at 5% commission and the other at 6%, which way do you think they are going to steer their buyers?
I think a better strategy is to RAISE the commission for the selling Realtor! Offer a bonus, maybe $500 or $1,000, to the Realtor that brings the buyer, on top of the regular commission.
Doing other marketing yourself is a good idea, but make sure to let your Realtor know what you are doing. And remember, in most cases, you still owe your Realtor a commission, no matter who’s marketing brought the buyer.
Call a cash buyer.
OK, the article doesn’t say this, but almost every city has people that are looking for good deals on houses. Some are landlords looking for rentals, others are people who buy and sell houses as a business. I do both. You make take a discount on the price, but you can get rid of the house in a hurry if you need to. I often advise people to market their house through a Realtor to see if they can get a retail price, but to keep me in mind as a “backup position” if things don’t work out. It’s a no-pressure situation. I can usually give you a ballpark idea of what I can pay for your house in a short telephone conversation. So if you are serious about selling, give me a call at 850-763-7355 and let’s chat.