Above All, DeClutter!

The number one thing that people say in surveys about the experience of selling a home is that they wish they had started getting their homes ready sooner.  Much of the focus is on repairs and improvements, for which there are, of course, other surveys.  The last one I read said that the improvement with the highest return on cost during resale is replacing the garage door.  Not the kitchen or the bathrooms, you should note, both of which are much more expensive and take longer.

We generally advise people not to undergo major work, if their goal is to sell their home in the upcoming season.  Kitchens, master bedrooms, and baths are all things that you should do sooner than that, so that you have a chance to enjoy them.  They are well known not to pay back completely upon resale, and the likelihood that you will choose exactly what the eventual buyers want is pretty small.  I have seen homes with brand-new kitchens, where everyone who sees the home figures that they need to gut the kitchen anyway. 

On the other hand, decluttering is never a waste of time.  Maybe the advice to take out half of what is in every room is a little extreme, especially depending upon your own degree of hoarding tendencies.  However, it is clear that making your home as generic as possible, within reason, will make it easier for buyers to imagine themselves and their belongings in the space.  Decluttering also makes rooms look bigger, and conveys a feeling of serenity that puts viewers into a more positive mood.  And removing stuff doesn't cost any money, or not much, even if you rent a dumpster or hire someone to help.  Since it is the single best thing that you can do, we recommend it to everyone.  If you want to see proof, look on line for before-and-after photos.  You can even consider renting staging furniture, if  yours does not add to the perceived value of your home.

The one downside to this advice is that it does take time, at least for most people, because they want to go through the clutter, not just pitch it or store it.  The latter option should be considered, however, because many of us have found that storing many of your belongings for an extended period makes it easier to decide what you really need to keep, and what you can dispense with at that point.  Good labelling helps in this regard, by the way, because it keeps you from having to go through every box when you do take things out of storage. 

So, whether you want to start removing items from your home, throwing them away, or just stopping the future accumulation of new items, it should be on everyone's to-do list for 2017, even if moving is years away.  Why save now what you will have to discard later?  If you do plan to move this year, convince yourself that paying to move acquired possessions, store them, and move them again will cost money that could otherwise be spent on new furnishings for a future home.  That should be good motivation to shed the old, and embrace the new!

Home for the Holidays

Although I write almost every year about the best time to buy a home--between Halloween and Thanksgiving--and the reason is that people are very motivated to sell at that point, I should also mention that there is one other tip.  If you have a home that is decorated beautifully for the holidays each year, and it is in mint condition, there are always some buyers that have to get a home before the beginning of the new year, usually for job-related reasons, and they are among the most motivated buyers that we see all year.  They're in a hurry, are anxious to get through with the process so that they too can celebrate the holidays, and aren't interested in doing extra work to a new home.  Anything new on the market, that shows well and needs no work, is prime for this type of buyer.  So don't assume that you can't sell your home before spring.  Just think realistically about the effort involved, the showings you'll have to be flexible about, and about the premium you might receive for that extra push.  It just might be worth it. 

Activity Abounds

Finally, spring has sprung, and the real estate market has responded.  I hear stories every day about listings that have sold in one day, listings that have not sold for two years and now have two offers in one week, listings that    are having showings right and left, and buyers that are finally moving off the fence.

The market continues to be driven by first-time homebuyers, and there are still people moving here from other places that are choosing to rent before buying, but the activity is clearly on the upswing, and there is much more of a sense that things are beginning to recover.  While we have more inventory than many other regions of the country, even we are seeing quick turnover in some neighborhoods and price ranges.  For instance, Guilford still has 275 homes on the market, which is a 50% increase over last year, but houses are selling quickly there when they come onto MLS.  East Rock in New Haven has 30 houses for sale, but one of our agents just sold one in a single day.

Have you been waiting for the market to turn so that you could buy or sell?  Have you been waiting for prices to bottom out?  Have you just been waiting?  Wait no more.  The time is now!

New Construction

There's another sign out there that things are improving.  We are starting to see new construction again.  When prices go down, new construction has a hard time competing, since the costs of land, site improvements, labor, and materials don't really go down much, so new construction can't compare to the price of a home that was built a few years ago.  In addition, loans are harder to get, and most builders find it difficult to get financing for projects.  Add in the time a completed home could sit on the market before selling, and you don't see much being started.

Lately, statistics from around the country show housing starts beginning to rise.  We're at the end of that increase, since we don't have as much land, as much new employment, and costs as low as some other states.  Even we, however, are noticing activity.  There is always a portion of the buying public that seeks out new construction, especially people moving from other places, who want their new home to look like the home they left behind.  In recent years, many of them have turned to renting, either because they left behind an unsold home, or because they were worried that it was the wrong time to be buying.  Eventually, even the most skittish will want to settle down.  And it looks as though that time may be upon us--good news for everyone!

Some New Statistics

Just before the beginning of the fall selling season, it's a good idea to review some of the facts we know about the current state of real estate.  We know that Guilford, for example, has twice as many homes on the market now as have been sold since the beginning of the year.  By definition, that constitutes a buyer's market.  We know that pricing high is almost never the way to go, because one of our agents did an analysis of a shoreline agent at another company.  This second agent was known for taking listings at high prices, so we looked at what the sales results were, and the answer was striking, but not surprising.  The agent who lists high sold properties at an average of 59% of the listing price, while most other agents in the same area sold their listings at over 90% of the listing price. 

The final statistic comes from my smart friend in Madison, Wisconsin, whom I've mentioned before, because his market seems to be so much like ours.  He studied the phenomenon of "chasing the market down", which I've blogged about previously.  He looked at the selling experience of sellers who priced correctly from the start, and compared their results to those of sellers who just wanted to "test the market" or who priced their properties above what agents thought they should be for other reasons.  The sellers who priced correctly from the start got 12% more for their properties in half the time. 

What else do I need to say?

Not the Typical July

The weather surely signals that it's midsummer, but the slow start to the real estate year means that the dog days of summer have a little more life to them. We are still seeing new listings, new offers, and new sales. Our web hits doubled from May to June. There was a downward blip for the Fourth of July, and then they went up again. People are clearly thinking about buying and selling, even if every contract seems a long and tortuous process.

On that note, I was spending the weekend in Vermont last weekend with a friend from North Carolina. She was trying to close the sale of a commercial building, which she had sold already once and it had fallen through. She was in negotiations with the new buyer on the day before what was supposed to be the closing. Her husband was bemoaning her travails. I told him that MOST commercial contracts seem to fall apart at least once, and that it is, unfortunately, very common for the buyer to come back at the last minute and ask for concessions, often due to financing conditions. Even in residential, we have a number of contracts now that seem to have taken on a life of their own. They go on and on, with delays, threats, changes, grandstanding, and probably tears. I'm telling you this so you won't take it personally if it happens to you! Forewarned is forearmed.

Time to Reprice that Listing

There's a term in real estate called "chasing the market down", and it refers to people who start out by pricing their listings too high, and then continue to lower them month by month. It's a strategy that many sellers employ, and we agents are not immune to it ourselves, but the results are almost always poor. We can cite example after example of buildings and houses that sold BELOW what they would have sold for, if they'd only started out at the correct price. Now, I realize that "correct" is a term of art, and subject to disagreement. I also realize how tempting it is just to "test the market" at a high number. But you have to understand how the selling process works in order to see what a mistake it is.

A listing receives most attention when it's new, for a number of reasons. We notice signs when they're just erected. We notice pictures in ads when they're different from prior weeks. The same is true of the website. Also, agents and buyers who are receiving notifications of new listings are focusing on the ones that they haven't seen before. Most mailings are done on new listings. Most showings come as soon as something comes on the market. Everyone is motivated to see, consider, and buy something before it gets snatched up by someone else.

What that means for sellers is that you have wasted the most valuable exposure that your listing will receive. It's the same principle as the old saying that "you only get one chance to make a first impression". Every time the price comes down later, agents and buyers will have a subliminal impression that your property is overpriced, or that there's something wrong with it, since it's been on the market for so long. Why would you risk that, when our experience shows that people whose homes sell quickly for a lower price ultimately receive more than people who start out high, in order to "leave room to negotiate" or "see what they can get".

The moral is clear: If you're serious about selling, be serious from the start. Don't waste your time, your agent's time, or the attention span of the buying public. Consumers now are far more educated about prices, with the advent of the Internet. They'll know when you've entered the market with an attractive price, and your chances of selling, and selling quickly, will ratchet up. Take the money and move on. Buy another property while rates are low. Time is money.

Right now, our agents feel that almost 90% of our listings are priced too high to sell right away. Some of that is because, with declining prices, what was a good price 90 days ago may be too high now. Some is because there's just not enough selling right now (for example, only two houses closed in Madison in November). However, a great deal is because people don't understand what I just described above. You will have an advantgage--one you need in a difficult economy--if you do.