Spread the Word: NOW is the time to BUY!

by Marqué Bressler
Director of Communication

Central Ohio has typically been a seller's market in recent years. However, this year the tables have turned -- radically! For reasons unknown, home owners have flooded the market wishing to sell their homes. Our inventory has been 23-27 percent higher this year than in the past. As of August 16, Central Ohio had 18,859 residential homes listed for sale. This is the highest number of listings on the market at one time that CBR has on record!

Buyers, on the other hand, have not been as eager to join in the fun. Monthly home sales for the first half of the year have been anywhere from -2.8 lower to 10 percent higher than last year. However, members reported that activity was declining significantly in late spring and early summer. And you were right (as usual). Sales dropped 14 percent in July -- a crushing blow for the remaining 15,000 sellers (and REALTORS®) now pacing the floor.

What can you do? We've listed a wide range of suggestions in this article -- some you may agree with, some you may not, many you've already heard before. So pick and choose what works for you. Bottom line is -- we need to move these listings!

Spread the Good News: Now is the time to buy
After 17 consecutive increases at each meeting since June 2004, the Federal Reserve voted to hold its benchmark interest rate steady at 5.25 percent.

Since peaking at around 6.5 percent in early July, the national 30-year fixed-rate average has been dropping and dipped to 5.99 percent in mid August, and the 1-year adjustable had dropped to 5.36 percent, according to Bankrate.com. Ohio rates are slightly higher but following the same trend.

However, the National Association of REALTORS® is predicting that rates will rise very slowly in the months ahead, reaching 6.9 percent in the fourth quarter.

Due to the high inventory, sellers have no choice but to price their homes competitively.

Buyers will never have more homes to choose from, at such competitive prices and mortgage rates are not expected to get lower this year.

Talk to your dentist, postman, librarian, at the soccer game, at the block party, to your neighbor, etc. etc. As only about half the population regularly watches, listens to or reads the news, there are a lot of people out there who don't know this. So spread the word - Now is the time to buy!

A picture is worth a thousand words
First and foremost, take a flattering picture of the listing. Don't photograph the house with your car in the driveway.

Photograph the house on a nice sunny day with a few clouds in the background and no cars! No toys, no trash cans, close the garage door, just house and lawn. Take the picture at the time of day when the sun is shining at the proper angle to light up the entire front of the house. This usually means not taking the picture when there may be deep shadows on the front. Get a decent camera and take several shots of the house and choose the one you like best.

Make the right first impression.
Buyers decide whether or not they like the house in the first eight seconds, so it's important to make sure your listing looks great from the curb. To do this, pay particular attention to the most noticeable areas A well-manicured lawn, neatly trimmed shrubs and a clutter-free porch welcome prospects. So does a freshly painted -- or at least freshly scrubbed -- front door.

Always, always have your seller `walk the entrance' before a showing to ensure that: toys, garbage, animal droppings, etc. are picked up.; cobwebs are swept clear; driveway & walk are swept clean of clippings; front glass is free of smudges; and the welcome mat is actually welcoming.

Remember, you never get a second chance to make a first impression.

The Inside Scoop
If you're reading this article, you sell real estate and know much of what needs to be done to raise a home's chances selling. That said, I would be remiss if I didn't address some of the more important ways to enhance a listing.

Further, you could be remiss if you're not addressing these issues with your seller. The current market calls for drastic measures. In some cases, that means addressing some uncomfortable topics.

Homes that smell don't sell
After sight, smell is the next most significant sensory factor to consider when trying to create a good impression.

ⁿ Smoke -- Their home was their castle. Not any more. Cigarette and cigar smoke top the list of dislikes as has been confirmed by the many smoking bans voted in by our local consumers. So take the smokes outside if the home is listed.

ⁿ Pets -- We all love them. They smell. Keep the litter box and bird cage clean. Keep the dog outside prior to and during showings.  

Do not recommend the horrid scented sprays as they simply mask the odors temporarily and can seriously offend visitors with allergies to chemical sprays.

Plants are an excellent option as they absorb carbon monoxide and replace with oxygen. Plus, plants are on the top ten list of good design elements.

Have the seller wash the walls with 1 Tbs baking soda + 1 tsp lemon juice to 2 cups hot tap water in a spray bottle. Keep on as long as the paint/wall paper doesn't get ruined (test in a hidden area).

Get the carpets cleaned. Remove any area rugs with stains or odors. Wash or replace linens bearing odors.

Consider investing in a full home ionizer. Move it from listing to listing as needed. You'll be amazed at the difference it can make.

If the odor is significant, recommend professional cleaning services used to rid homes of smoke damage.

Clear the clutter
Go for the junk ? and get rid of it. Nearly all homes will show better if 30% to 50% of the clutter is removed. A 2000 study by HomeGain suggests that sellers will get an average of 511% return on investment just for cleaning and de-cluttering.

Have your seller start with visible areas and remove ALL but the most necessary items from every surface. Then address the closets and cupboards, basement and garage.

Sellers have often realized enough money from a yard sale, auction, or the tax deduction from a charitable donation to pay for other improvements necessary to get the home ready for sale. The alternative is to have them rent a short-term storage space for excess furniture and other belongings.

The garage is the window to your soul
OK, maybe not. But the garage is often overlooked as a significant selling point. A clean, organized garage can make a huge impact on prospective buyers.

Ideally, sellers should rent a storage unit for all of their packed belongings resulting after the de-clutter experience. That way, the car(s) can be properly housed in the garage instead of the driveway or street.

If using the garage is necessary, keep the boxes stacked neatly.

Paint it
Most homes just need a "freshening up" to make them marketable for top dollar. A fresh coat of paint can make a huge difference and costs little compared to the value it adds. If it needs freshening, paint it. But keep the color neutral.

The true cost of repair
Although there is still a market for `fixeruppers', most of today's buyers want a home in near-perfect "model home" move-in condition. And with the number of homes on the market, they can get it. Sellers should make repairs ahead of time. Otherwise, when the buyer's inspector finds unexpected defects, they may try to negotiate the sales price down -- often far more than repairs would cost.

If the repairs can't be made in advance, consider asking your seller to reduce the price now to compensate for improvements the buyers may want to make.

If the sellers are worried about time, have them hire professional cleaners or painters to get the house ready. Remember, prospects would rather see how great the home really looks than hear how great it could look "with a little work."

Light their Way
When done right, proper lighting showcases a home's best features and can help speed a sale. Inside the home, bypass the harsh overhead lighting common to most houses and turn on lamps or light candles. This will add warmth to the rooms and provide a more welcoming atmosphere. Add portable fixtures if necessary to ensure buyers can see each area or to highlight features of the home.

Exterior lighting has fast become a popular enhancement. Every home has a separate and unique character at night. Even houses that are not particularly attractive during the day can be transformed into picturesque, interesting homes at night with low cost, low voltage exterior lighting. Highlight pools, gardens, trees, walkways and entryways. And be sure to make the backyard and deck visible from the house. Safety is an added bonus.

Competitive pricing isn't enough
One of the most valuable services a REALTOR® brings to the table is your expertise in helping the seller price their home competitively. The comparable home sales information as well as your experience with this market combines to enable the seller to compete for the sale.

However, because the market is so saturated with inventory, homes are sitting on the market even when the asking price is a true reflection of its value. This is causing great strife for sellers and REALTORS® alike.

As with any other product, a house is only as valuable as someone is willing to pay. And, in today's market, we simply don't have enough willing buyers.

A price reduction is one option -- but it's not the only option. Reducing the price of a home is usually the first choice as it has proven itself to be the most effective. Whether or not this is an option depends on the sellers financial needs versus their need to sell their home quickly.

But, if a price reduction is not possible, look for ways to sweeten the deal. Depending on your seller's circumstances, they might consider some of these options.

ⁿ Instead of lowering the price from $500,000 to $480,000, keep it and offer to pay $10,000 of the buyer's  
  closing costs. This approach is cheaper ($10,000 in closing cost help rather than a $20,000 price reduction)
  plus it gets to the real need of many buyers, closing assistance.

ⁿ Increase the selling office commission or add a selling bonus

ⁿ Throw in appliances, a vehicle, a year of free maid service, pre-paid condo assessments or maybe even a
  free vacation at a time-share

ⁿ Offer to pay the first three mortgage payments for a potential buyer. On a $300,000 mortgage at 6 percent
  interest, the monthly mortgage payment would be in the neighborhood of $1,800 per month. Over three
  months the buyer would save $5,400 in mortgage payments.

ⁿ Offer buyers cold hard cash for upgrades, such as new carpet and a new paint job.

ⁿ Several new loan programs are available that allow sellers to pay off credit cards, auto loans or other   
  sources of debt for the buyer. This might be all the buyer needs to qualify for the home

ⁿ Cash to close is the most common obstacle a buyer faces. Paying closing costs, points, moving costs, etc.
   is not original, but it puts the buyer where they want to be -- at the closing table.

Now is not the time to cut back on marketing
This is not to say spend money when you're not making any. Marketing is the process or technique of promoting, selling, and distributing a product or service. There are many ways to market yourself and your properties -- and not all of them cost money.

Networking should be part of everybody's marketing and/or business plan, especially if you've got listings that aren't selling. The market is simply not producing enough buyers for the inventory we have. So get out there and find buyers. It's not easy and the results may not be instantaneous, but networking is effective long term and costs little or nothing in most cases.

Talk to people about the market, about a couple great homes you have listed/know of, about the dip in interest rates and, most importantly, that now is a great time to buy.

Remember, only about half the population watches, listens to or reads the news. So chances are you can tell them something they don't know. They may share your information with someone else, etc. etc.

Keep in mind, networking works if you meet people that you can follow up with later and potentially start a relationship that you can either get business from or get referred business from. Don't show up at your daughter's game passing out business cards. Collect business cards instead (so follow up is in your court). Find a couple people to have coffee/lunch with later in the week. They might not need your services right now, but they might know somebody who' does.

e-Mail is free. Use it wisely to make contact with your potential client list. Send them updates on the market, articles of interest, reasons to look at buying a home right now. Be careful with the jokes, recipes, etc. These are fun and may attract attention, but they don't necessarily establish you as an expert in the field and now is a time to keep the focus on you and real estate.

With regard to actual marketing/advertising expenses, these times are the reason you put aside funds when the market was good. Cutting back on your regular advertising will make it that much harder to `catch up' later.

There are many other ways to make the most of a slow market. For ideas, search the Internet. Also, see the article "The Mailbox and Beyond" on page 50-51.

Tapping into higher powers
The August 1, 2006 REALTOR® Magazine Online included a story "Beyond Marketing _ Can Higher Powers Sell a Home?" The story references using out-of-the-ordinary approaches for extra help finding buyers. One such practice involves burying a St. Joseph statue in the yard of a home. More complex are the ancient Chinese philosophy of feng shui and the Indian practice of vaastu.

St. Joseph is known as the patron saint of home sellers and buyers. According to users, burying a statue of St. Joseph in the yard of the listing will produce a successful sale. Some say the ritual began centuries ago when a nun prayed to St. Joseph because her convent was in need of more land. However, no one's exactly sure when or where the ritual began, and it's not endorsed by any church. FYI -- Sales of St. Joseph statues in our CBR Member Service Center are 33 percent higher this year than last year at this time.

Feng shui, which literally means "wind water," is an ancient Chinese design philosophy that centers on rearranging living spaces to enhance positive energy, called "chi," and to create harmony. It prioritizes removing clutter from a home to open up the space and may include rearranging furniture, adding plants, or introducing new colors or materials into a room.

The article further explains these approaches and includes first-hand experiences from REALTORS® across the country. Find it at Realtormag.com

Feedback
Providing feedback after a showing is a courtesy that all REALTORS® should extend to one another. But feedback is especially important now as homes are taking longer to sell so sellers are even more anxious than usual. They want to know why their home is not selling.

Comments you share may allow them to make improvements that could make the difference with the next buyer.

In summary. . . 
The extraordinarily high number of listings on the market today makes this one of the toughest markets Central Ohio has seen in some time.

The good news is... It will change (it always does.)

In the meantime, this is your opportunity to shine! It's a tough market which means they need you now more than ever. You've got the contacts. You've got the means. You've got the MLS. You know what to do to ready a home, to market a home, to negotiate, to sell, to close. Take advantage of this great opportunity and show `em what you've got!