Selling Your Home in a Bad Economy: Top 3 Qualities to Seal the Deal

by Todd Foust
(Fullerton, CA)

It's tough to sell homes against well-priced competition. In today's market, facts are the number one advantage to ensure a timely and efficient home selling experience. Rather then focusing on how things can go wrong, we have three tips to ensure the process goes right.

Know Your Competition
As a home seller, cheap competition and fixer-up starter homes create obstacles one needs to be prepared to overcome. A seller needs to be knowledgeable in his/her competition and they need to be able to emphasize their strengths to the buyer.

In order to understand your competition, you need to understand the foreclosure/short sale process as well as all the pros and cons of foreclosures. This will equip you with the knowledge it takes to promote and sale your home. First and foremost, foreclosures and short sales have many advantages to the buyer.

Their cheap cost draws the future homeowner in while distracting the other potential factors of owning a foreclosure/short sale home. Many foreclosed homes sell for 30 to 50% off the market value. Aside from cheap cost comes the fact that many foreclosures are fixer uppers that buyers see as a great way to increase the value of their investment for future selling.

On the flip side, owning a foreclosed home also has many cons. The prospective buyer has to deal with the fact that it is a fixer upper and that additional money, time, and work needs to be put into their future home. The property can also be a testament to the bank owned state, many foreclosed homes are run down and stripped of many important components.

The main disadvantage of buying a foreclosed/short sale home is the process of actually owning it. Foreclosed homes require a lot of research, additional paperwork, and waiting time. In many cases, it may take three to four weeks for a response if any, verses the average 48-hour process in the traditional real estate market. Foreclosures/short sales also come with bidding wars and headaches. It may be a constant battle for a cheap home that many buyers are burnt out on.

Emphasizing your strengths as a home seller means many things, not only do you need to promote your advantages but you also need to exploit your competitor's shortcomings. Selling your home means responding to all offers in a timely manner, having easy accessibility for showing, creating a personal realm for your buyer, promoting the condition of your move in ready home that requires no additional work or money. By doing this, you are sure to have a massive advantage over the cold process of foreclosures/short sales.

Bottom line is people still like dealing with people, somebody with an actual pulse, not just a cold corporate bank with no face and name.

Pricing and Motivation

Since home sellers have so much competition in today's market, it is important to have realistic (competitive) pricing for the buyer. A home seller needs the support and expertise of a professional real estate agent's CMA, Competitive Market Analysis, or some other form of market evaluation.

It is important to get a well-informed professional opinion of value, and it needs to be a tough price not a fluffy pie in the sky 'price hope'. A flowery CMA price (deceptive high value) will not attract potential homebuyers, thus your home will stay listed on the market.

Motivation is key to ensure that your house gets sold. If you can't come to terms with the tough competition and current market pricing, you probably aren't ready to enter into the market. This is not a time to test the market, all 'test' are failing.

Psychological: Buyer's Market

In this buyer's market, it is important to concede the buyer as the winner, even if it's just psychologically. The general rule is assess everything you send the buyer in terms of 'how could this make a nervous buyer feel?'. If you accept an offer too quickly, the buyer might feel they've left money on the table. Forget to disclose a default up front, they might feel like you're hiding more information. Refuse to concede some repairs, they might feel like he's getting too attached to the home.

This strategy requires planning and yes, a little guts. The main key is to let the buyer see that you are the one who is losing, even if that may not necessarily be the case.

A seller also needs to offer counter offers when the opportunity presents itself. It is a good rule to let the offers go back and forth a little bit. If the buyer first offers you a price that you may not be fully comfortable with, knock off a couple thousand to show the buyer that they had an affect on your original cost. This strategy lets the buyer feel like they won, rather then getting a price handed to them.

Homeowners are still selling homes everyday, some at great prices in record time. Understanding the competition, having a realistic price with plenty of motivation, and conceding to let the buyer win will sale any home given the tough market and bad economy.


About the Author:
Todd Foust is the chief marketing executive for the FOUST Team at C21 Discovery; one of the top-selling real estate teams in Southern California. He specializes in Orange and Los Angeles Counties and operates one of the area's most informative real estate websites. To contact him or learn more about Santa Ana Real Estate Agents .