A few suggestions for selling your home in a “Buyer’s Market.”

            Many of you are wondering what you can do to speed up the sale of your home; according to the Sussex County Association of REALTORS board as of January 2009 the Absorption Rate was 54.4% (The Absorption Rate is the ability of the real estate market to sell off all of the houses that are for sale. For example, if 100 homes are sold every month and there are 1200 homes for sale then it will take 12 months to sell all of those homes. If there are 2400 homes for sale then the absorption rate will be 24 months or 2 years.)  This means it will take 54.4 months to sell off all the houses that are for sale in Sussex County, DE.  Compare this to 32.5 this time last year, 24.6 in “January 2007 and 13.1 in January 2006..  Only 86 homes sold in January 2009  which is the lowest number of sales since my reports begin in January 2005.  Here are the status for homes broken down by category (these are for all of Sussex County):

Single Family

61 homes sold in January 2009 with a 49.3 absorption rate.

Of these 61, 3 homes sold in the price range of $400,000 - $499,999 and 2 homes sold in the range of $600,000 - $699,999. 

Townhome/Condo (the stats lump them together)

17 condos and townhomes sold in January 2009 with a 71.6 absorption rate. 

Of these 17, 3 homes sold in the price range of $200,000 - $299,999; 3 homes sold in the price range of $300,000 - $399,999; 3 homes sold in the range of $400,000 - $499,999; 3 homes sold in the range of $500,000 - $620,000 (which was the highest).

These statistics are all the more reason you should consider the following recommendations to make your house stand out in the crowd.

In a recent article on MSN written by Liz Pulliam Weston, she recommends doing several things to help your home to sell faster. 

1.       Packing up the clutter is a must; "clutter eats equity," said real-estate broker Barb Schwarz CEO of StagedHomes.com.

2.       Depersonalize and neutralize.   Weston says; “the first items that should go:

·         family photos

·         collections

·         and just about anything else that says ‘you’.”

3.   “Cleaning like a fiend”; is also recommended by Weston.  Odors are a big deterrent to home purchaser’s especially pet odors.  If you need a recommendation for a Cleaning company, please check out www.BethanyBeachCleaners.com.  

4.       Staging your home is also recommended; you don’t want extraneous furniture in a room or pieces blocking a fireplace for example. 

5.       Setting the right price is critical.  As markets cool a too-high asking price can lead to a home being shunned by agents and buyers. A seller may think she's just testing the market assuming buyers will at least make an offer but buyers may assume she's unreasonable and move on. Your goal should be a fair price -- something that's reasonable given the price of other homes in your area.”  You may want to seriously consider paying for an appraisal (or at least a “drive-by” appraisal) as the last thing you want is for someone to put a Contract on your home only to find out your home will not appraise for your sales price. 

Here are a few comments (mistakes) Sellers often Say and Ask about Pricing their Home:

1.       “We can always lower our asking price" - Let’s use an example of a house with an asking price $50k over market. Its not selling so the Seller reduces the price by $10k. It still doesn’t sell so they reduced it again by $10k, it’s still not selling so they reduced it again by $20k; finally they reduced it to market by lowering again by $10k. What do you think happened? It still stayed on the market, do you know why? Guess what is the number one question the Buyer will ask me at the front door of every home I show? -  How long has it been on the market? The buyer then assumes since its not selling either something is wrong with the property or it is still over priced and they will put in a bid below the real market price.

2.       "Couldn't we try it for a couple of weeks?" - The majority of market activity occurs in the first two to three weeks on the market. This is the worst time to overprice since your best customers will come see the home. Most of the marketing activity on a new listing occurs in the first two weeks on the market. So when you ask, can we try it for a couple of weeks, look what you're doing. You're overpricing your home during the period when your best buyers show up, and then lowering it after they're gone.

3.       "But we have so many improvements in it." – However most improvements are made for enjoyment, not resale. Another important point is that structures and improvements do not appreciate in value. It is the real estate—the ground beneath it that appreciates.

4.       "But we paid $_X_for it" - This is the owners attempt to link cost to value. There is no relationship between cost and value. What you paid for something has nothing to do with what it's worth today. If you purchase stocks, you clearly understand this principle.

5.       "They can always make an offer" - The only way a qualified buyer can make an offer on your home is if they see it. The problem is, most buyers look up to their price range, peek a bit over, then focus only in their price range. By overpricing, you put your home into a price bracket where they won't look. The buyers who do see your home will be able to afford your higher price, however they will not be interested in it. The wrong price attracts the wrong buyers."