Sound Advice for Sellers

The Wall Street Journal yesterday published this no-nonsense piece directed to today’s would-be home sellers in what is no doubt the worst market in at least 20 years.

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The conservative Journal, which normally likes to find some topspin on even the most bearish stories, pulls no punches with this one.  It is unequivocal, seeing no relief on the horizon.

“…don’t think this is just a momentary lull, a short slowdown before the market recovers and then takes off again. What you see today is the market you have, for now and, quite possibly, for a long time to come.”

Whew!  That’s not far short of the gloomy view I projected just a few days ago in my last post on Redfin, Why I May Never Buy a House Again.

The WSJ piece lists seven points, some of the common “fix and clean up” variety.  But I consider two of the points absolutely critical, which I’m summarizing and quoting from below:

3. PRICE IT CHEAPLY

…you must set your price below comparable nearby properties. Look at the asking prices of neighboring houses, and set your price to beat them. If prices in your area are generally down 20% from where they were at the bubble peak in 2005, then price your house 25% to 30% below its peak bubble value. Your area down 40%? Be prepared to take just half of what the house was worth three years ago.

7. TAKE THE OFFER.

If any qualified buyer comes in with a reasonable offer, be prepared to accept it. … Negotiate, of course, but recognize that the buyer has a lot more clout than you do. Your house, as wonderful as you think it is, is worth only as much as someone is willing to pay for it.  And that, unfortunately, will probably be a lot less than you think.

Two other points stressed in the article are also, in this market, highly recommended:

4. HIRE A TOP REAL-ESTATE AGENT.

I never thought I’d say this, and it’s probably biting the hand that feeds me, but these are crushing times for selling a home.  As the article says:

Ask … for the local real-estate office’s top salesperson. All offices have one or two sellers who greatly outperform their colleagues. That’s who you want.

6. PLAY THE BANKER.

If you have no mortgage you have to pay off, your strongest selling point might be your ability to finance all or a substantial part of a buyer’s purchase….Worst case? Your borrower defaults and you take the property back. And sell it again.

All great advice.  And in the end, the Journal characteristically does find some lipstick on this pig: 

“Hey, it could be worse,” writer David Crook opines.  ”You could be selling a Hummer.”

  • http://www.redfin.com Christina Chan

    Hi Tim-

    I just saw that article! Great advice in there. Though I’d have to say in my case, I really didn’t listen to #7. I didn’t take the first offer that came along. Nor the second. And I think I got as much as I could in this sluggish market when I sold. But more on that in the coming weeks….

  • http://los-angeles-real-estate-blog.com Phyllis Harb

    All sound advice except: do not play the banker! Qualfied home buyers (those with good credit and a down payment) can still easily obtain cheap fixed rate financing. Why would a seller want to loan their money for 30 years on a fixed rate? Why would most smart buyers not opt for a fixed rate?

    The seller does not want to compete with lenders; the seller does not want to take the property back. Sell the house and be done with it UNLESS you have tax ramifications and because of that need to take a mortgage back.

  • Tim Hebb

    Christina,

    I didn’t really emphasize that the WSJ piece is entitled “How to Sell a House, When You HAVE TO Sell It.” (see illustration)

    My impression is that your situation was more elective, so you could afford to ignore #7, or at least be more relaxed with it. Some sellers may not have the time to be.

    Tim

  • http://losangeles.redfin.com/blog/category/marina_del_rey_playa_del_rey_westchester Christina Chan

    Ah, too true, Tim. My situation was a bit different. Of course, I did need to sell, but I certainly had my own timeline. Anyways, great insight, regardless.

  • jessica freeman

    Hello

    i really enjoyed reading youru blog. i wish i read it when i was trying to sale my house in this market.. to make a long story short at an open house one day an inspector from http://www.homeinspectionspecialist.com came and talked to my agent regarding doing a pre-inspection to be able to market the house. well i called them a few days later and they did a home inspection for me. so then everytime a buyer came we showed the pre-inspection to confirm the quality of the house, hence a few weeks later we got an offer and we sold. i look forward to all the updates. thanks again.

    Jessica

  • http://boqueteforsale.com Boquete Real Estate

    Great blog! I wish we had some of these tools here in Panama. The real estate industry is still in its infancy here. It is frustrating sometimes, but everyday we break new ground and that adds an element of excitement to each day.