Not so long ago, homes were sold while the realtors sign was being planted in the front yard. Those days are long gone as we ride the rollercoaster between a weak job market and hard to get financing.
The media has a knack for presenting the information to us that can be considered sensational. We all agree that the economic situation could be better, but ready for some good news? In the last 12 months an average of 4 million homes were sold each month in the United States according to the National Association of Realtors. Sure the numbers are down from the blistering pace of the last few years, but 4 million is huge, isn’t it?
But what about the glut of for sales signs we all see driving around town? The data reveals that inventory numbers holding steady. Inventory is realtor speak for homes that are for sale. The average monthly inventory figures for last year are running around 3 million. So what does this mean? It’s easy. About 7 million homes are on the market for sale in a month. A little more than half of them sell while a little less that half don’t.
So what does this mean to you? If you are buying, it’s a great time to score a deal. What if you are selling? Here is the way I like to look at home selling. People like to use the word competition when they are talking about their business or sports. How often do you hear that word when selling a home? Rarely. The whole concept of selling a home is on a completely different business tangent. You “list” a property. You “show” a property. All very lofty stuff. When I speak to a neighbor who is selling a home about another neighbor who just “listed” they say, “it’s a good thing – it will bring more buyers”. Baloney! You just opened a hamburger stand and learned that McDonalds is opening in three months across the street. Your neighbor is your competitor or at least his house is. If you get one buyer on your street, you want him to buy your house. Correct?
So like business and sport, how to you become a ruthless competitor and win? Analyze the competition. Do you ever check out your competitor’s store or website? Then you had better take a look in his house. Get your realtor to take you on a tour, they have the access. Analyze all the information available on the Internet. Know how the other properties compare to your property. Are they perfect, are they tired or on a busy street. You are in a battle and you have big money at stake.
Once you have all this information, what’s next? Simple, you need a perfect house. With a lot of inventory out there, buyers have a lot of choice. Do you think buyers are shopping for fixer uppers right now? Not on your life! In this market, buyers can take their time and pick the best move in condition home. More good news, you don’t need to spend a fortune getting your house in top condition. Your focus is to make it cosmetically attractive. Start with the outside. Keep the grass cut. Trim the bushes. Fix pealing paint. If you are in the north east right now, dig a tunnel to the front door. It’s all very basic stuff, but during your competitive analysis, you’ll see how many of your competitors completely miss these simple strategies. Now let’s move to the inside.
The first thing a buyer notices is the smell. Do you have a dog or a dozen cats? You may not be bothered by the litter box odor in your kitchen, but your buyer is already in the car. Eliminate or mask strong odors. Next thing they look for is abuse. Scuff marks, dents and dings on the walls are signs of neglect and a ton of work for the buyer. Fix this stuff. Paint the walls – neutral please! Paint is just a few hundred dollars and a couple of weekends of work. Remember, we are talking about thousands of dollars here. When I do a project around the house, I keep telling myself how much resale value I am creating. I’ve remodeled my master bathroom recently. I probably spent 50 hours on the project. I estimate that when I go to sell, it will add $25,000 to the price. So while I was working on the bathroom, I was making $500 per hour! Sorry, back to the simple stuff. Clean up the clutter in closets, basements and garages. It’s time to get the dumpster. Whatever you can’t part with, fill a moving container and store it off-site. It’s not expensive. People want to imagine themselves in your home. They are not the least bit interested in your hunting trophies. Depersonalize.
Now let’s talk home décor. Kitchens and bathrooms must look good. We are not suggesting that you go nuts remodeling to sell, but do whatever it takes to be competitive. Buyers can accept imperfections here and can rationalize a remodel down the road, so get it looking clean and neat so they can live with it for a while. Furniture placement and condition is important. We all do things in our homes to fit our life style. Did you ever hear your spouse say, “I know it’s weird, but I don’t care what other people think”. Selling is when you better care. We often put our couches in odd locations, but we get an awesome view of our giant flat screen. I went into an open house once where the owner loved house plants. He loved them so much that he had hundreds of them covering nearly every square inch of floor space. Do you think he had trouble selling? Remember the competition and trade your unique habits for a sale.
I think about the first time I was thrust into the home decorating world. My wife wanted to do custom window treatments, bedding, pillows, etc. I thought it was expensive, but I understood that I had to move beyond my “dorm room chic” style. What I didn’t appreciate at the time was the investment angle. As we decorated each room of our first home, we always did something interesting with paint, furniture and custom window treatments without spending a fortune. We were creating a personalized lifestyle while secretly creating a ton of investment value. When we decided to sell, we were at contract in seven days setting a record in our neighborhood for price per square foot. As a condition of the sale, all the window treatments had to stay. Do you think we had competition at the time? Of course we did, but our buyers had seen all the competition and put our house first on their list. We did everything a seller must do in a good or bad market. You see we just don’t preach this stuff, we live it! Right now, you need to be doing everything in your power to be in the half of the market that is selling (at top prices) so perfect your house and crush the competition.