If you’re thinking of selling your home before the end of the year, you could be in for a rude awakening. While sellers have controlled the residential real estate market for the past five years, that is no longer the case.
Last spring, sellers were fielding multiple offers and selling their homes for for more than list price. But a deepening recession, combined with the economic aftermath and lingering psychological effects of the September 11 terrorist attacks, have leveled the playing field.
The result is that home buyers have some leverage and sellers are getting nervous.
“This was an old farmhouse built around 1910. The only thing that’s original, I think, are are floors we had refinished. Other than that, we’ve put three additions on, all the moldings and woodwork, all the plumbing, electric, you name it,” says Marsha Gats.
Gats is a homeowner with a headache. She and many sellers out there have unfortunately discovered that a balanced real estate market means homes are listed for a lot longer and sellers may not get anywhere hear their list price.
“There’s no doom and gloom in the Chicagoland area. But again, you’re not going to have the frenzy that you had early last year and the last two years. You know the market is more stable now, the average market time is up from 20 to 30 days to over 60 days,” says Bob Zortich.
That means the average number of days a property stays on the market is up as much as 50 percent. Home buyers are taking their time before making an offer. Sellers who don’t recognize that the market has changed could wind up making a very expensive mistake.
“The biggest mistake I see is comparing this to the spring market. Prices just went through the roof, I mean 20 to 30 percent appreciation and a lot of people think it’s that same type of market where they’re in the driver’s seat and it’s really not that kind of market at all,” says Martha May, a listing agent for Koenig & Strey.
Dealing with this market is tough enough. Don’t compound the market issue by making other common seller mistakes.
“People leave things, I mean, I can’t even tell you. Make sure the waste baskets are empty, the clothes, if they’re not clean put in a hamper somewhere. Make it presentable,” says Katie Traines an agent with Coldwell Banker.
You’ll also want to spruce up your home’s curb appeal by cleaning or painting the exterior and upgrading the landscaping. Inside, make your home spotless. Clear off your countertops. And be aware of odors, particularly if you have pets.
“My client and I opened the door and slid into the next room because the pets had left us a gift,” says Holmes.
Crucial mistakes include blowing your rehab budget in one part of the house and leaving the rest undone. A $60,000 tumbled marble floor and an $80,000 gourmet kitchen just make the worn bathroom tiles, a rusty tub and old faucet upstairs look even worse.
“What you spend on your house doesn’t necessarily mean you’re going to get it back. If you did wise things, you might,” Traines says. &”Kitchens and baths are at the top of the list, maybe 95 percent you would get back.”
But because you put in this color carpeting and painted this color and put in a basketball hoop, buyers don’t want that.
What buyers want is to pay less for a home that’s in perfect, or near-perfect condition. So sellers will probably have to negotiate on price.
“People refuse to counter. You turn off the buyer. And I don’t think it’s wise. There has to be some happy medium and you should negotiate,” says Traines. “In our heads, we’ve pretty much decided there’s some negotiation but obviously we’re not willing to give this house away.”
If you’re feeling bad about your house still being on the market, don’t. Here are over 13 properties in the Chicago metro area that have been on the market for a 1,000 days or more and some of those have been on the market for four years.
“In a market like this, where we typically slow down this time of year, we’d start to talk different strageties 30 to 45 days into the listing,” says May. “Price is everything.”