Sacramento Real Estate Blog

After I wrote the recent post on how you should react to offers as a home seller in today’s market, a few clients asked me to follow that up with what a home seller could do now to get their homes sold. Are there any other tips a seller can use to compete with the bank-owned homes? As we’ve seen, foreclosure sales have almost tripled in Sacramento county from last October to this October. While that might seem like a dead end to many sellers in this market, it is important to remember that some buyers are still interested only in homes that are not bank owned. How can you reach these buyers? Here are some ideas.

It’s Still About Price, But…

You cannot avoid the fact that price is on everyone’s mind these days. Even if your home is not bank owned, you will be competing against homes that are either short sales or REOs. Not to mention the reality of depressed prices in your neighborhood due to less expensive homes selling before all others. Banks can afford to drop their prices to get rid of inventory. Maybe you can’t drop your asking price to rock bottom, but you must price the home as close to an REO as you can handle. Leave some room for negotiation (because there will be some!) but I don’t have to tell you that overpricing your home in this market is essentially like not listing it at all.

That being said, be aware that just because the REO next door to you sells for say, thirty thousand dollars less than where you are priced, that it’s all over for you. Appraisers do have to take into consideration that your home is not a distress sale. Chances are also that REOs have deferred maintenance, thus reducing their value. Ask your Realtor® if you can see the pictures inside the homes listed around yours - that should give you a pretty good idea of where your house should be priced.

Accessibility is Important

Besides just price, bank owned homes have another thing going for them: accessibility. Almost all of them are easy to show. Buyer’s agents love showing REOs because there are never appointments to make and all of them have lockboxes and are vacant. While it might not be possible for you to move out (and sometimes a vacant home can be negative, because buyers don’t get an idea of furniture placement), it is a good idea to have your Realtor® use his lockbox on your door and indicate in the showing instructions that just a message on the phone is enough notice to show the home. This is called “Call 1st lockbox” and is easier on most buyer’s agents and the buyers than making an appointment with you or waiting for a call back. Remember, the home buyers are not in love with your home yet! You have to let them into the home first.

It is also a good idea to leave the house when the Realtor® and the potential buyers come by. Take a walk around the block, go to the store, take the dog for a walk. Give the buyers room. Definitely do not sit and stare at them as they look around the house. That will ensure they run out in within two minutes. And buyers that leave in less than five minutes almost never write offers!

Language & Negotiation

I covered this in detail in the previous post about how to deal with a purchase offer, but it bears repeating: ensure that your Realtor® is telling every buyer inquiry that all reasonable offers will be considered. When you do receive an offer, read it carefully and don’t rush to answer. Chances are it will be low. Learn to negotiate with it. Read this before you do anything. Also, another thing worth mentioning here. Don’t take too long to consider an offer. Your competition, banks, take anywhere from 72 hours to a week and are getting quicker. The best already have a counter offer written and they take very little time in getting it out. Sleep on the offer you receive, but don’t be caught snoozing. The home buyers don’t want to wait forever - there’s a lot to look at!

Ensure Clearances

This is arguably the best advantage you have over REOs and short sales. You have money. I know, it sounds crazy, but hear me out. You, as a homeowner, have lived in the home and chances are you have made repairs where they were necessary. You have taken care of the house. REOs are priced at wholesale prices because they have not been kept up. The people who had their homes foreclosed on definitely did not fix leaky faucets, torn roofs and the banks will not offer clearances for pest work, roof certifications or fix anything else that’s broken. In fact the first line in any bank owned home sale counter offer is, Property sold as-is, where-is.

You will not do that. In addition to making your home look pristine, inviting and warm, in addition to pricing it right, you can get pest inspections and clearances done ahead of time. In other words, your home is turn-key. In spite of what you see around you, there are buyers for turn key homes. Not everyone wants to add their own sweat equity; some people are just fine paying others to do so.

Sweeteners

No, I’m not talking about Splenda. Sweeteners have been largely forgotten in the strong seller’s market we had and could come back in a big way today. These include letting buyers customize their preferences in carpet, paint and so on. If you are considering painting anyway, let the potential home buyers know that they can pick the paint color. Same for replacing the carpet - let them pick it. Most home buyers will change some aspect of the home to suit their personalities anyway and your buyers might appreciate the opportunity to be able to move in without changing anything.

I hear often that to sell a house in this market you must think like a bank. I disagree. I think distinguishing yourself from the rest might be the key. Good luck!