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Thursday, July 28, 2011

What to do when house lingers unsold

What to do when house lingers unsold

By Michele Lerner

The real estate market in the Washington metro area has been luckier than most in maintaining its stability, but it has by no means been immune to the economic downturn.

While homes in some neighborhoods have managed to hold their value and even experience price increases, in others, homes still languish on the market. Sellers have a few options available if their home stays on the market too long, including lowering the price, making some home improvements or renting their home while waiting for the market to improve.

“In the D.C. area, most homes should sell within no more than 60 days if they are properly priced and in good condition,” said Valerie Blake, an associate broker with Prudential Carruthers Realtors in the District. “There are three things that determine whether a home sells and for how much: location, condition and price. You can’t control the location, so you have to look at the condition and price if something is not selling.”

Heather Elias, a Realtor with Century 21 Redwood Realty in Ashburn, Va., said sometimes the lack of an offer is market-dependent and sometimes it is simply about the house itself.

“If a home is getting showings but no offers, you can look at the feedback from other agents and see if the problem is the price or the condition of the property,” Mrs. Elias said. “If there are no showings at all, then the problem is usually the price.”

Mrs. Elias recommended that frustrated sellers visit three other properties on the market in their area that are comparable in size and price to evaluate the differences.

“You have to look at homes like a buyer,” Mrs. Elias said. “For instance, if two houses are similar, but one has granite counters and yours doesn’t, you either need to drop the price or make adjustments to the condition. It depends on what the issue is as to which choice makes more sense.”

Home sellers who are not getting many showings should carefully evaluate the marketing efforts of their real estate agent. Most buyers today first sift through properties online, so if your home does not have enough photos that show the home at its best or does not appear on a variety of websites with property listings, it may be time to push your Realtor to do more marketing.

While all Realtors recommend pricing a property appropriately from the beginning, they also acknowledge there is an art and a science to setting the listing price.

“The hardest part for sellers is to recognize that the real estate market is fluid, with some areas coming back more quickly than others,” saidDebra Swann, a Realtor with Long & Foster Real Estate in Mitchellville. “It is best to get the price right within the first six weeks a home is on the market, because if you have a house on the market too long and you keep dropping the price, you look desperate.”

Mrs. Elias said if houses in your area are selling and yours is not, a price reduction may be required to at least bring your property in line with others on the market.

“Pricing a home is very specific to the owner’s situation and how quickly they want to sell the property,” Mrs. Elias said.

Other options besides lowering the price include staging the home and making improvements.

Mrs. Elias said it may be time to bring in a professional stager if your home is comparable in size and condition to others that are going under contract, but you still are not getting offers.

“A stager can make a house show better,” Mrs. Elias said.

Sellers need to be cautious about overspending on a stager or for home improvements to make sure they do not reduce their potential profits.

“There are plenty of inexpensive ways to give a place pizzazz and to differentiate yourself from other places on the market,” Ms. Blake said. “For example, you can put a stone or glass backsplash in the kitchen for a little bit of money or paint an accent wall to draw attention to the house rather than the furniture. Some of the best things sellers can do are free, such as decluttering. But sometimes it makes sense to spend a few hundred dollars on some improvements that make a home show better.”

Sellers can offer incentives to buyers, such as closing cost assistance, but they also can work with their agent to offer an enticement to buyers’ agents.

“Sometimes people offer a bonus to the buyer’s agent to encourage them to bring their clients to the property,” Ms. Swann said. “It is important, too, to make sure the seller’s agent is holding open houses for other brokers and actively marketing the property to them as well as directly to buyers.”

Mrs. Elias said that while some builders and Realtors offer a buyer’s agent bonus, she said the commission each agent earns should have no bearing on whether they show one house or another.

Some frustrated sellers opt to take their home off the market temporarily, but Ms. Swann said a home must be off the market for six months before it is treated as a newly listed home on the multiple listing service.

“Sometimes sellers want to temporarily stop showing the house in order to have it on the market at a busier time, such as in the spring or fall market,” Ms. Blake said.

Mrs. Elias said agents easily can see whether a home has been on and off the market, so she said it only makes sense to do this if a homeowner wants to sell at a different time of year or wants to stop showings to make improvements to the property.

“Sometimes moving out can help you sell a home, especially if you put in new appliances, fresh paint and carpet and some new landscaping, because that can make a home look new,” Ms. Swann said.

A vacant home can be easier to sell because it is always available for showings, but sometimes, Mrs. Elias said, a home just looks better furnished.

Some sellers opt to rent their home for a year or two, hoping for a market turnaround by the time the lease ends.

“Sellers need to be prepared to spruce up the home in order to attract a renter and then to fix it up again with new carpet, new paint and perhaps new appliances when they put it back on the market,” Ms. Swann said.

Ms. Blake said with rents rising in this area, sellers may have a better chance of the rental income covering their mortgage, but she said they need to consider the difficulty of selling the property with a tenant still on the premises.

Two other options are to sell the home at an auction or to investors who advertise quick sales for cash, but Realtors say both of those scenarios typically result in a relatively low sales price compared to the market.

“You can always try burying a St. Joseph statue in your backyard, which is supposed to bring luck to home sellers,” Mrs. Elias said. “They even make environmentally friendly statues now of clay called ‘EcoJoe.’ “Since thousands of homes sell each month in the Washington area, one of these tactics is likely to result in a sale — with or without a little help from St. Joseph.

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