5 Rules to Sell Your Home in a 'Fugetaboutit' Real Estate Market
Friday, September 25, 2009 | Ethan RobertsRating:
Tycoon readers,A few weeks ago, I wrote about how to buy a home at the best price. Today I'm going to turn that idea around, and tell you how to sell your home for the best price in a bad real estate market. ...
There is a realtor who lives around the corner from me. She works for the largest real estate company in the area. Her company advertises heavily, and touts itself for its ability to list and sell homes quickly and easily.
Last year when she decided to sell her own primary residence, she listed it herself and hung the big company sign out on the lawn. And everyone on my block was curious to see how she would do.
So we waited ... and waited ... and waited.
So, Ethan, tell us -- was she able to sell her own home?
Fugetaboutit!
Fugetaboutit (fuh-get-a-bout-it): A slang expression, sometimes used by certain groups of people on the streets of Northern cities, such as New York or Philadelphia. It translates roughly as, "Forget about it," "Not going to happen" or "Don't even consider it."
The term was made popular in gangster movies such as "Goodfellas" and recent cable programs like "The Sopranos."
Liotta, DeNiro and Keitel in the 1990 film, 'Goodfellas'
After nine months on the market, during which time she dropped her price three times, the home still sits there today unsold.
The first listing, in 2008, was for only three months. Then, when the home didn't sell, it was taken off the market for a while -- you don't want that listing to appear stale!
This year, she listed it again for about six months. In addition, the price was dropped about $60,000, but still did not generate a contract for sale!
On the Other Hand...
About five months ago, an old friend called to say his parents wanted to try to "flip a house" (i.e., buy it, fix it and re-sell it quickly), and asked me to keep an eye out for a house that might suit their purpose.
One week later, I found a foreclosure that I thought would be perfect for them, and called my friend to give him the news.
They negotiated a good deal, bought it at the end of May, spent a few months fixing it up ... and then tried to sell it by themselves.
Fugetaboutit!
Two weeks later, after no calls off their ads or signs, they offered me the listing.
I listed the home on Aug. 3.
By Sept. 18, we had a pre-approved buyer and a signed contract.
So what does that make me, Superman?
Fugetaboutit, no way.
I look more like that nerdy guy in the back of the Superman comic book (see below)!
But I do know a thing or two about how to sell a home, and today I want to share five solid rules with you that have worked for me, to help you sell your home in this "fugetaboutit" real estate market.
This nerdy guy sees all...
The 5 Rules are:
Rule # 1: Don't even think about trying to sell the home yourself.
In good times, only about 15% of the "for sale by owner" homes will sell without having a real estate agent. In bad times, it's even more difficult to do so.
With a shortage of buyers, and a huge inventory of multiple-listing homes to choose from, buyers and their agents will most likely ignore your home.
Rule # 2: You must price it right.
Ironically, realtors are their own worst enemies when it comes to pricing their personal homes. The average realtor prices their own home about 2%-3% higher than they do other people's homes.
Hmmm, why is that? Greed? Stupidity? Ego? Letter D, all of the above?
And yes, that realtor's home around the corner was very overpriced for quite some time, leaving the home unsold for months and months until it began to look stale.
The most important thing is -- don't try to get last year's (higher) price.
Today is a brand-new day, and if you want to sell your home, you must price it close to what homes have been selling for within the last three to four months only.
Lender guidelines no longer permit appraisers to even consider sales that are older than that.
Rule # 3: Remember, you are selling to someone who isn't you!
Do not assume that everyone else has the same tastes as you.
Maybe you love those wild and crazy designer colors, but when it comes time to sell your home, the magic color word is "NEUTRAL."
So, you need to re-paint any room that has bold colors that could turn off a potential buyer. How do you expect a potential buyer to match their green couch with an orange and purple wall?
A fun room to live in, but not so much fun trying to sell...
Rule # 4: Skimp on exterior curb appeal, and buyers will skimp on your ask price.
Buyers are very good at reducing your asking price by exaggerating the costs of the work needed. I have had buyers tell me they would have to spend $10,000 to paint three interior rooms and change the carpet.
Fugetaboutit! I could get that done for less than $2,000!
One mistake that I see sellers making, over and over again, is pinching pennies to save on repairs ... and thinking that it won't matter to a buyer.
Fugetaboutit! It does matter!
Trying to save a few bucks by skimping on your home's exterior look could cost you a lot more on your sales price than those few bucks you managed to save. It's penny-wise and pound-foolish.
These days with so many homes to choose from, buyers are understandably picky. Don't give them an excuse to bypass your home before they even walk inside.
People always want to know what renovations will give them the best return for their money. According to Remodeling Magazine, these are the top five mid-range renovations by return on investment:
Buyers are very good at reducing your asking price by exaggerating the costs of the work needed. I have had buyers tell me they would have to spend $10,000 to paint three interior rooms and change the carpet.
Fugetaboutit! I could get that done for less than $2,000!
One mistake that I see sellers making, over and over again, is pinching pennies to save on repairs ... and thinking that it won't matter to a buyer.
Fugetaboutit! It does matter!
Trying to save a few bucks by skimping on your home's exterior look could cost you a lot more on your sales price than those few bucks you managed to save. It's penny-wise and pound-foolish.
These days with so many homes to choose from, buyers are understandably picky. Don't give them an excuse to bypass your home before they even walk inside.
People always want to know what renovations will give them the best return for their money. According to Remodeling Magazine, these are the top five mid-range renovations by return on investment:
| PROJECT | JOB COST | RESALE VALUE | COST RECOUPED |
| Deck addition (wood) | $10,601 | $8,676 | 81.8% |
| Siding replacement (vinyl) | $10,256 | $8,274 | 80.7% |
| Minor kitchen remodel | $21,246 | $16,881 | 79.5% |
| Window replacement (wood) | $11,512 | $8,946 | 77.7% |
| Window replacement (vinyl) | $10,537 | $8,132 | 77.2% |
On the lower end of ROI would be renovations such as a home office remodel (54.6%) and a sunroom addition (56.7%)
You can also get a substantial return on less-expensive projects, simply by giving the exterior a pressure wash and a fresh coat of paint.
Replace those old, worn shutters; mow the lawn; trim the bushes and add some fresh red cypress mulch to the flower beds. You will be amazed at the difference in how your home looks.
In fact, you may like it so much, you may decide not to sell
I like to replace doorbells (a very cheap fix), and add brass door knockers and kickplates to a freshly painted door as well. This really spruces up the front entryway.
Before and after of a foreclosure I rehabbed to rent.
The door was changed, kickplate and door knocker added
and the trim painted.
Before and after of a home that I rehabbed,
rented for a year, and then sold.
A fresh coat of a better-color paint,
and some edging and trimming were all
that were done to make a dramatic change...
rented for a year, and then sold.
A fresh coat of a better-color paint,
and some edging and trimming were all
that were done to make a dramatic change...
Rule # 5 Kitchens and bathrooms sell a house.
Kitchens and bathrooms are where you want to focus most of your time, energy and money on the interior, to get the best return for your dollar and to increase the odds of selling your home quickly.
Below is a photo from the listing of mine that just sold. The seller spent a good portion of his rehab dollars on this kitchen, adding new paint, countertops, appliances and fixtures to create this magnificent look.
When he bought the house, the countertops were gray, the floor beige, and the walls a mustard color. Nothing matched or blended at all.
But look now:
A look like this will bring out the offers...
So if you are trying to sell your home, you had better follow my five rules, or -- as the fellas below would say -- "Fugetaboutit! You ain't selling nuttin'!"
Look youz guys, follow them five rules, or fugetaboutit!
And now let's hear from the Tycoon readers. Have you sold a home within the past year or two? If so, what are some of the repairs or renovations that you made in order to do so? How did things turn out? Love to hear from you!
See you next week!
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Ethan Roberts
Contributing Editor
The Tycoon Report
