For Those Tired of Postponing Their Home’s Sale
For more than two years, a 63-year-old federal employee has wanted to retire, sell his spacious colonial house and move to a small apartment in New York City. Though he's reluctant to sell in a recession -- assuming he'd get more for his property if he waited for economic recovery -- he's tired of keeping his life plans on hold.
Therefore, he's now resolved to sell his house early this autumn, no matter the price it fetches.
His story reflects the sentiments of an increasing number of would-be sellers who've grown impatient with the wait-and-see real estate game and are determined to sell soon, says Monte Helme, a former Century 21 executive and consultant to HouseHunt Inc. (www.househunt.com)
"A lot of people are getting over the fact that they might have sold their house for more if they'd done so in the past," Helme says. "They've taken a dose of reality and are now determined to move on with their lives."
He says homeowners trying to decide whether to proceed with a sale this year should find out if buyer demand has recently intensified in their area.
"We're actually seeing a pickup in buyer demand in a lot of places," Helme says. "This is especially true among first-time buyers who are searching for well-priced homes."
One factor spurring buyer demand is a federal income tax credit of up to $8,000 that's available to first-time purchasers who close a deal by Dec. 1, 2009. Designed by Congress to stimulate the economy, the tax credit (which has income limits and does not have to be repaid) is available to those who haven't owned a home for three years or longer. (To learn more, visit the Internal Revenue Service Web site: www.irs.gov.)
"This tax credit provides a highly desirable incentive to buy a house and could represent a big advantage for people who get their homes ready for sale before December," says Eric Tyson, a personal finance expert and author.
If you are contemplating the sale of your home before the end of the year, these pointers could prove helpful:
Focus on your next purchase, not just your sale.
It's hard for many homeowners to accept that by selling now they might receive a lesser price than before the economic downturn. But rather than second-guessing yourself about not selling earlier, Tyson suggests you focus on the savings you're likely to enjoy on your next home.
"You're especially likely to get a great deal if you trade up to a larger or fancier place," he says.
Obtain opinions of value on your property.
Recent news about the real estate market has centered much attention on homeowners who are "underwater," meaning the outstanding balance on their mortgage exceeds the current value of their home.
However, as Helme says, there are huge numbers of homeowners whose properties aren't underwater. If you bought your place before the year 2000 and haven't drawn down your equity through a cash-out refinancing or a home equity line, the odds are good that you'll walk away with a profit after its sale.
To get a preliminary estimate of the value of your home, he recommends you request the opinion of three real estate agents who are active in your immediate area.
"The more information you can get on whether or not now would be a wise time to sell your home, the better decision you'll make," Helme says.
Given the changing dynamics of the market, you might be pleasantly surprised to learn that your home could sell for more than you anticipated.
"Obviously, the market won't be strong in economically depressed communities," Helme says. "But lately there are signs of real improvement in home sales in a number of neighborhoods where the economy is viable."
Don't do "I need" pricing.
Though the location of a property remains its single most important feature, Helme says price now rivals location as a factor in determining which homes are successfully sold.
The paramount role of pricing means no home sellers who are serious about closing a deal should attempt to test the market with a price higher than their listing agent recommends.
"The sales price should reflect what people are willing to pay now, not what you need or want to get out of the property," Helme says. "It's always the market that decides what your home is worth, not you."
Avoid marketing your place in "as is" condition.
To be sure, the current income tax credit plan and the availability of low mortgage rates are helping stimulate homebuyer interest, especially in desirable areas where starter homes predominate.
Still, prospective purchasers everywhere remain fussy about the properties they're willing to buy. And those selling in a buyer's market should avoid letting their homes go up for sale in "as is" condition, Helme says. Otherwise, your property could languish unsold for an indefinite period, no matter how reasonably you price it.
"Cosmetic improvements, such as painting, cleaning, polishing your floors and planting flowers are low-cost changes," he says. "So for a fairly small amount of money -- often under $1,000 for an average sized home -- you'll make a huge difference in the salability of your property."
To contact Ellen James Martin, e-mail her at: firstname.lastname@example.org.
COPYRIGHT 2009 ELLEN JAMES MARTIN