Just when it seems housing news can't get any worse, media reports surface regularly that cast an even longer shadow over an already doom-and-gloom sales market. By now, most home owners already know there's a glut of properties on the market this spring and that they're competing with banks, auctions and highly motivated sellers for what seems like a shrinking universe of buyers.
As of March 2008, there were nearly 4 million homes for sale in the U.S., up one-third from just two years prior.
But home sellers needn't compete with another opponent: common sense. Just because sellers have shifted into survival mode does not mean they need to push the panic button as well, say real estate veterans who've endured previous down cycles.
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To many, desperate times seem to call for desperate -- and increasingly bizarre -- measures and incentives. One seller threw in his classic 1967 Pontiac GTO to seal a deal. Some family members found themselves wearing "Buy my house" T-shirts with their home's own Web address on the back. Others have resorted to faith-based home marketing, buying $10 St. Joseph Statue Home Sales Kits, featuring a small plastic statue of the saint that owners are supposed to bury under for-sale signs. (If you're into that sort of thing, the company's phone number is 1-888-bury-joe.) One woman in California offered to bake cookies for a would-be buyer every week for a year, says journalist Ben Jones, author of "The Housing Bubble Blog."
Thousands of distressed owners have turned to short sales or discounted payoffs, where the lender is asked to accept less than the total amount due -- only to sometimes find that lenders won't accept these offers if it makes more fiscal sense for them to foreclose. Others owners are requesting that lenders restructure their loans or accept delayed-payment arrangements, oft times discovering that lenders are surprisingly accommodating in order to avoid taking back properties in a declining market.
But before they even get to that point, many buyers have considered offering a litany of incentives to sweeten the pot in this buyer's market. Two distinct sets of guidelines seem to be emerging for sellers: one for those who need to sell almost immediately and another for slightly less-pressured sellers.