Monthly Archives: December 2012

Home Sellers – To Update or Not to Update – That is the question.

Should I price my home to sell – warts and all – or do some updates to sell faster?  This is a real tough one in this market.  Yes buyers do want it all.  They want an updated home at the best price.  But many times, since that is not available they need to decide whether or not they want a move-in ready home or do they want a better price.  But, most of the time, they will choose one or the other.

Priced at market value, homes that are staged sell 50% faster than homes that are not staged.  White walls, lace curtains, pink carpeting and tiles, turn off buyers and make it hard for them to picture themselves living in the home.  We live in an instant society.  And a lot of buyers work and have lives that are too busy to redo a home.

But on the other side of the coin, foreclosures at great prices, warts and all, rarely stay on the market very long.  As a regular seller, you can’t compete with the foreclosure pricing.  Just like alternative programming during football games, you need to offer the opposite.  Sometimes they are willing to pay.  And often, the good ones go fast.  So, what can you do to inexpensively make your home appeal to the masses.

The trick is to keep in mind the price point you need to be at and spend as little money as you can to make the home look more appealing.

1.  Get rid of the wallpaper.  This can be done yourself or hired out, but do it right.  Don’t paint over it.  Remove it.  Nothing turns off a buyer more than wallpaper.

2.  Paint.  White walls, non-neutral colors in main living spaces (can get away with in kids bedrooms) are a turn off.  Warm tones – carmel,  camel neutral colors that are not too light and not too dark are what make buyers feel at home.

3.  Change the appliances.   New appliances, mostly stainless are what people are looking for.    Sometimes black appliances are a good substitute.

4.  Change the carpeting.  Worn or stained carpeting, non-neutral colors, turn offs.  Prices are pretty good on carpeting these days.   This is the biggest expense you will have, but keep your price point in mind.  Don’t get cheap carpeting, but don’t go overboard either.  Upgrading the pad can make up for a little less expensive carpeting.

5.  Make kitchens and baths look new.  Changing cabinets can be very costly.  But changing the counters to a granite (look for sales) or even a nice formica that resembles granite in the kitchen and baths or marble in the baths can make a huge difference.  New faucets can be a change.

6.  Change the light fixtures or augment them.  Light fixtures can be inexpensive and can make a big difference.  Too much glass or brass often are nos.  Sometimes shades can be added to expensive fixtures to update a little.

7.  Change knobs/hinges on doors.   Brass looks dated to many buyers.

8.  Clean and clean out.  Seems a no brainer, but you really need to make the house look like no one lives there.  Get rid of clutter in rooms and closets – makes rooms look small.  Store things.  Keep the house looking company clean all the time.  Nothing on the refrigerator, counters, floors, etc.  Not easy, but helps.

9.  Drapes – easy to change – very little cost.  Make sure to show the light in homes when showing.

10.  Furniture – no, they are not buying the furniture, but you would be surprised how buyers are put off by older or dated furniture.   Slipcovers and pillows are a good change for couches or it may be a great time to get furniture for the new place and put in the old place.  There are companies who rent furniture, but they can be costly.

Remember, the first rule of marketing is to cater to your target market.  It works in retail and it works in selling homes.

Still a Buyer’s Market – Or Not?

For the last few years, it is has been a buyer’s market where inventories climbed and prices dropped.  Things are starting to change, so is it still a buyer’s market?  The answer is yes and no.

Prices and Sales are Climbing…  Illinois Association of Realtors showed October as a stellar month showing definate signs of increases on all avenues.  In October home sales soared 37.3 percent over previous-year levels in October and median prices increased 3.0 percent.  Statewide home sales (including single-family homes and condominiums) in October 2012 totaled 11,775 homes sold, up from 8,577 in October 2011. The last time this many houses sold in October in Illinois was in 2006 when 13,067 homes were sold.

The statewide median price in October was $133,750, up 3.0 percent from October 2011 when the median price was $129,900. The October median price reflects a 12.9 percent gain from the year’s low point of $118,500 in February 2012.

A few factors contributed to this rise. Interest rates are still low and buyers are finally realizing the bottom has hit and are buying while prices are still good.  Also, inventories have been decreased this year as banks have been putting less foreclosures on the market as a result of the “robo signing” suits in many states.  And finally, many sellers are becoming more tuned in for the pricing in the market and pricing their homes to sell.

What does this mean for Buyers?  It means, for the really good homes – price, location, finishes or all, it means you need to act faster and work with a broker to know what the market is worth.  Low balling doesn’t work if prices are fair.  These “good homes” are getting a lot of attention and multiple offers and are getting at list price, over list price or close to list price.  Regardless of price, even the luxury market homes are getting attention if they are priced right.  There are still a lot of homes out there, but if you are seeing something you like – jump on it and be fair with the price before you end up in a bidding war.  Remember – you are still buying at 10-20% below normal pricing.  You will still have equity.

What does this mean for Sellers?  For sellers, the raise in prices and lull in inventory (maybe temporary) means a light at the end of the tunnel, but it is a long tunnel and a small light, so it depends on sellers to not overprice homes and have them ready for sale.  Depending on the market and price, most buyers want the best price and least work.  And most mortgage lenders want move-in ready homes to loan.  So sellers who put a little money into updating their homes can sell faster and get maximum benefit, but price is still the most important idea.  Having an appealing more updated home and a good price will make it get more attention, sell faster and rise above the rest to maybe get multiple offers and price.  Sellers have to accept the new norm on pricing as the norm. and then their home will move faster.  Remember, as a seller, you too can get a better price on what you are buying and a great interest rate.