| 5 tips for selling a home in a buyer's
market |
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Educate yourself
about your neighborhood's real estate market
Perch yourself on the real estate grapevine by talking to neighbors
and real estate agents about sales in your neighborhood.
Do homes tend to sell for 2 percent over the listing
price, or 5 percent under, or what? Was a house recently sold for
a surprisingly low price? Maybe the owners sold it to their own
kids, a young family without much money. Or maybe it was a "short
sale" to avoid foreclosure. That's a good piece of knowledge
to have when a buyer tries to use that low sale price against you
in negotiations.
Interview at least two, and preferably three or four,
potential listing agents, and ask them to prepare competitive market
assessments. The agents will look at comparable homes that have
been sold recently and at homes that are for sale now, and recommend
a listing price and a marketing plan. "Have them walk through
the information they used to come up with that estimate," Lyons
says.
You don't necessarily want to pick the agent who recommends
the highest listing price. You're making a hiring decision, which
is an art and not a science.
Hire an inspector
Buyers often make the purchase offer contingent on the home passing
an inspection to their satisfaction. Increasing numbers of sellers
are hiring inspectors before they put their houses on the market.
An inspector is impartial. "He'll be able to
tell you if the roof needs work, or small electrical things that
need to be done, or plumbing things," Kerr says. Once you have
identified and fixed the problems, "it makes the house that
much more attractive to a would-be buyer."
An inspector might spot flaws that would be obvious
to a buyer, but that you no longer notice. A good real estate agent
does the same, but an inspector will look deeper.
Consider paying the buyer's
discount points
Paying points is an incentive you can offer to a buyer, and Uncle
Sam sweetens the deal.
Let's say the buyer wants you to drop the price by
3 percent. You're firm on the price but are willing to be flexible
by working mojo with the buyer's interest rate and tax bill.
You offer to pay 3 discount points and lower the buyer's
mortgage rate three-quarters of a percentage point, give or take
a quarter-point. By paying the discount points instead of selling
for less, you get your price, the real estate agents get bigger
commissions, and the buyer makes lower monthly payments and gets
to deduct the points from income taxes.
That's right. You pay the discount points, but the
buyer gets the tax deduction.
"It's a win-win-win-win deal," says Bob
Walters, economist for Quicken Loans.
Kerr doubts that the time is right for offering discount
points. "The market hasn't gotten there yet," he says.
When it becomes a pronounced buyer's market, or when mortgage rates
rise a couple of percentage points, that will be prime time for
sellers to pay discount points.
Whether or not you pay the buyer's discount points,
you put yourself in the right frame of mind by merely considering
the option. It makes you think like a buyer -- and that gives you
a competitive edge.
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