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Homesellers, Take Off the Gloves When Competing With Foreclosures

Let's face it, if you're selling your home now, you're probably facing some of the toughest competition anywhere: foreclosed properties

How can you compete against a bank that's desperate to sell? Here's how.

1. Know Thy Enemy. Foreclosures have become very aggressive opponents in today's market. If your neighborhood has some foreclosed properties, wait until they are sold before listing your home (if that's possible). Most banks are very eager to sell, so they're creating an underpriced competitor - so you'll need to be just as aggressive.

Buyers today view foreclosures as a "hot buy," meaning that when dealing with the banks they feel that the banks have more selling flexibility than a homeowner does. While this may not be so, it is how buyers are perceiving purchases, so you have to adjust your strategy accordingly.  

With that in mind, when determining comparisons, appraisers no longer care if the home next to yours sold as a foreclosure -- a comp is a comp! The risk factor when buying a foreclosure is no longer considered as high. Either way, the buyer will be able to do their due diligence, and they contractually have the time to have inspectors view the property; in the event there is something wrong with the home, making the purchase risky, the buyer can still back out of the purchase.

2. Stay Put. Although buyers certainly don't want the seller around while they are touring the home, they do appreciate a home that is well taken care of and loved. A vacant home typically feels cold and empty while one that is still occupied has a warm, cozy feel, attracting more buyers. This gives you a leg-up over foreclosures.

3. Keep It Neat. Be sure your home is always presentable. With so many foreclosures on the market today, buyers are seeing homes at their worst. If your home is presented in a neat and clean way, it will attract more positive attention – particularly against that cold foreclosed home down the street. 

4. You did what to your home? Homeowners always update, upgrade and remodel their homes according to their own personal taste. It's easier to sell a home if the décor and paint colors are neutral, allowing the buyer to visualize their own style in the home. You also have a leg up on foreclosures here – they don't come with disclosures! If the kitchen was upgraded, there is no way to know when it was done or how – although some cities do require permits for this, there are many others that do not! Keeping updated records, photos and permits handy for your buyer to review will make them feel much more confident about buying your home.

5. Get real about price. Buyers today are looking for a steal, a bargain, a deal -- whatever name you give it, the result is the same. Buyers are purchasing cautiously and are afraid of overpaying. Once you choose the price at which to list your home, please keep in mind that you will still need to be flexible.

As a real estate agent, I work with the comparables of sold homes to help set the price of your home. However, all it takes is a neighbor to significantly drop their price or for a foreclosure to come on the market and the comparables have now changed.

Buyers today are also watching the days on market and tend to be much more aggressive in their bargaining and negotiating if a home appears to be sitting for any length of time. Don't be insulted by a low offer; work with that buyer and see if you can meet them halfway on price and terms.

6. Choose an Internet-friendly price. More than 80 percent of home buyers today search the internet and most of these sites filter the prices in $25,000 to $50,000 increments. So although a creative price of $555,777 grabs attention, it gets excluded by buyers who are looking up to $550,000 as their maximum purchase price. It has also been shown that prices ending in 000 (such as $500,000) sell at a larger discount than homes ending in 500 (like $524,500).  Because price is ultimately what sells a home, choose a price that will drive more buyers to your home.

7. Pick the Right Day The timing is almost as important as the price. Most buyers are checking out the new listings on a Friday so they can see what is new for the weekend. Listing the home on a Friday is imperative for grabbing additional attention for your home.

Should you sell your home now? See why it might make sense to wait just six months to list your home. Things aren't as bad as they seem...

Suzanne Grace is a real estate agent in Thousand Oaks, Calif.


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