Showing once, showing twice, priced right … Sold!

Selling in a down market is difficult, but not impossible

There’s a lot of competition on the market for those who need to sell their homes right now, and the age-old mantra of clean, de-clutter and update, while still essential, doesn’t quite cut it in today’s oversaturated housing market.

“Pricing is the biggest concern right now. The home must be priced competitively, and the condition of the home would have to be darn near perfect to get the house sold. It has to have all the major mechanical updates: a new roof, furnace, electric, windows — all those sorts of things,” said Eric Goosen, a Realtor with Real Estate One and owner of Goosen Realty in St. Clair Shores.

With houses seemingly for sale at nearly every corner in metro Detroit, and an abundance of foreclosures and short sales listed at rock-bottom prices, the experts agree that in order for a home to sell, it must be priced right.

“There’s no question about it, and that’s that in the end, it really comes down to price — it has to be priced aggressively, and when I say aggressively, I mean aggressive because they are competing against foreclosures,” said Realtor Robert Dundon of Weir Manuel Realtors in Birmingham.

“Definitely, price is everything,” agreed Gary Patrosso, a Realtor with Keller Williams Realty in St. Clair Shores. “The competition they’re facing is quite steep; they’re competing with the bank-owned homes and the HUD (U.S. Department of Housing and Urban Development) homes — that’s what first-time buyers are looking at.

“HUD has some great incentives. No. 1, HUD offers the FHA (Federal Housing Administration) $100 down payment program, and then gives extra incentives: If the home is more than $25,000, HUD gives the buyer $2,500 toward closing costs. They can also get a 3 percent concession of the sale’s price; HUD offers concession money for the first year’s homeowners insurance, private home inspections, tax prorations,” Patrosso said.  “On top of all this, first-time homebuyers are eligible for up to $8,000 in federal tax credits.”

With such stiff competition, the average homeowner may feel that he just can’t compete.

Goosen noted that while “banks keep dropping prices on foreclosures, oftentimes those foreclosures are going to need a lot of work. Buyers need to balance the costs of buying a foreclosure that needs $10,000, $15,000, $20,000 worth of work, rather than a home that needs nothing. Many buyers don’t have the money after closing costs to make those repairs.”

To that end, what many sellers may not know, said Dundon, is that there’s something to be said for a “warm home,” or a house that’s currently occupied and well maintained, and buyers know that.

“That’s why the condition of the house has to be in very, very good shape. Not so much cosmetic things, but the things that are going to be expensive for the buyer: Any concrete, foundation or roof problems need to be fixed to get the house sold; the windows need to be clean; clean up the landscaping, the gutters and edge the lawn; the smell of the house and the cleanliness are very important — things like that can help tremendously,” Goosen said.

Offering concessions upfront can also help, said Patrosso.

“The fastest way to sell is to lower the price, but offering concessions toward closing costs right upfront is a good way to attract buyers. … These concessions are huge because most first-timers have the credit score and the income, but they don’t have closing cost money,” he said.

It may seem like doom and gloom for the average homeowner looking to sell, but that’s not entirely the case, said Dundon. “There is a positive side to taking a hit on your home: When you’re moving up to a bigger home, you’re also getting a tremendous deal on the other end,” he said.

“Don’t look at it like you’re giving your home away. Look at it like you’re going to move into a better home, like you’re going to recoup the money you lost when you buy that bigger house in a better school district,” Patrosso said.

On a more positive note, Dundon said, the market is beginning to stabilize.

“I honestly think that it’s the worst I’ve ever seen, but it’s getting better — things are very slowly starting to turn around. In 2010-11, people are going to say, ‘I should have bought in ’09.’

“Right now, it really is a tremendous time to buy. I’ve been in it for 35 years and I’ve never seen the deals I see now — ever. … Houses are selling — every single day houses are selling, and prices are already hitting bottom.”

Five years from now, the Realtors agree, today’s buyers are really going to reap the benefits of homeownership, especially considering the rock-bottoms prices, low interest rates and government incentives currently being offered.

“This market is changing people’s lives. Not only are buyers getting a great deal, but FHA interest rates are phenomenal right now. Five or six years from now, the value of that house could very well double, and that could change lives forever,” Patrosso said.

For more information, contact Dundon at (248) 644-6300, Goosen at (586) 771-1100 or Patrosso at (586) 541-4058.