It’s a buyer’s market and most homes selling during this distressed time are Florida foreclosures. But there are ways for homeowners to increase the odds of attracting a buyer and competing against the lenders.
Sellers trying to move property in South Florida's housing market face one of the toughest environments in decades with an abundance of competition from cheap Florida foreclosures and short sales.
In February, more than 60% of homes sold were so-called distressed sales, where the seller, most typically, a lender lets the property go for a meager amount.
"If you don't have to sell, wait until all the bank-owned homes, at least in your neighborhood, are sold," said Miami real-estate broker Doug DeWitt. "Otherwise, the strategy for selling now is to wave the white flag early."
If you can't hold out, here are few tips Realtors say may increase your chances:
Price competitively: This hurts because foreclosures and short-sales are being offered for prices far below what their market value was only three years ago. Buyers, though, are flocking to foreclosures.
Prices have been falling so precipitously that appraising the value of a home can be tricky, since comparable sales may be too old and not accurately reflect the market. "Buyers are looking for extraordinary value. You have to price ahead of the market to sell," said Charles Richardson, a vice president for Coldwell Banker.
Richardson said all pricing rules of thumb had been tossed out the window, but that relocation companies estimate it costs a homeowner 1 percent to 1.5 percent of a home's value to own a property each month. "So, if you hold the property for six months, it would be smarter to go ahead and sell the property at a 10 percent discount today," he said.
Spruce the place up: Your home doesn't have to be the cheapest on the block, but buyers should be able to immediately perceive the value in your dwelling over others. Since so many foreclosures are in disrepair, this gives your home a chance to shine with minimal repairs. Don't spend thousands on a new kitchen or anything, said DeWitt.
It may be better just to drop your price instead. But, he cautioned, you don't want a buyer checking off a list of needed repairs when they walk through the home. You can up-grade small things like hardware on cabinetry. And,it's always a good idea to slap the walls with a fresh coat of paint and thoroughly clean and rid your home of clutter.
Hire a Realtor: In a market saturated with so much inventory, real estate agents naturally say that it's more important than ever to hire an agent. Real estate agents will list your property in the MLS system, a property database used by thousands of agents representing buyers. You'll also get the benefit of their marketing expertise, getting your home in front of as many eyeballs as possible -- on the Internet, in print and elsewhere.
A real estate agent will be able to help you price the home and determine whether potential buyers have the wherewithal to close. Savvy buyers represented by other agents may try to beat down an additional discount on the commissions they know you are trying to save by flying solo.
Offer an incentive: Anything that gives you an edge over the next home for sale will help your chances. Some condo sellers, for instance, will offer to pay one or more months of association fees. Other sellers agree to leave the Beamer in the garage or the flat screen on the wall.
Seller financing: This is risky and could be unlawful if not done the right way, but it can be an option for some sellers since it is becoming extremely difficult for buyers to get mortgages, especially in condos. Most lenders won't allow sellers to finance down payments or even offer assistance, since it reduces the borrower's equity stake in the home.
Contributed by MLR Realty
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