When Radiah Corn Minor, and Timothy Minor put their home on the market last year to relocate for new jobs, they assumed it would sell within four months. It was, after all, a traditional-style, 14-year-old, 2,400-square-foot, four-bedroom house with a covered front porch sitting in the middle of an upscale Durham, North Carolina, neighborhood. The couple thought it would be an easy sale.
But four months quickly came and went with no offers. For the first few months, the couple relied on traditional methods of selling their home. Their realtor hosted open houses, bought ads in local papers, and even tried word-of-mouth marketing. But when the house didn’t sell, the Minors took more aggressive actions. In the end, it took eight months and thousands of dollars of upgrades before they found a buyer.
Their experience is like that of millions of Americans trying to sell their homes in the worst housing market since the Great Depression. The grim reality for sellers: U.S. housing prices have plunged about 19% since their mid-2006 high—and they are expected to continue dropping for all of 2009. The low prices are creating a discount market for first-time homebuyers and real estate investors. But for those trying to sell their homes, the competition is fierce.
The good news? Homes are selling. The National Association of Realtors reports that total existing-home sales, including single-family and condos, jumped 6.5% in December, compared to the previous month. To get their home to stand out, however, home sellers must employ aggressive tactics, say real estate experts.
The Minors’ new strategy started with their real estate agent, Roger Hudson of Fonville Morisey Realty in Durham, arranging for several brokers to tour their home and advise them on how to stage the house to make it more marketable.
After the consultation, the Minors removed all family photos and their ethnic art. Realtors say “neutralizing” the house in this way allows potential buyers to visualize themselves living there. From there, the couple de-cluttered each room to make the home look more spacious. They emptied the closets, putting most personal belongings in storage. They replaced the carpeting throughout the home; landscaped the backyard; painted the halls, bathroom, and master bedroom; and added new, faux granite countertops in the kitchen. As another incentive, they offered a one-year warranty on the home and termite prevention service with a five-year warranty. Finally, they threw in a 43-inch TV. Total cost of these “incentives”: $8,000. “In a better market, you didn’t have to be so assertive,” says Timothy, an associate vice chancellor for development and university relations at North Carolina A&T State University.
Perhaps most important, the couple lowered their asking price three times, from $316,000 to $299,000. After that, their first serious bid came in at $285,000. “It was a terrible offer,” says Minor. After a week of tough negotiating, wherein they agreed to install a new washer and dryer and refinish the floors, the Minors sold the house for $295,000.
The No. 1 problem for many sellers is anxiety. To make selling your home less stressful, experts recommend several strategies:
Get an inspection. It’s always cheaper to fix your own problems. As a seller, you don’t want the buyer demanding an additional $500 at closing for a repair that may cost half that. If the buyer finds too many problems, that may cost you the deal. The fewer items you give buyers to negotiate over, the better your position to sell the home.
Be aware of who your clients are. Typically, homebuyers tend to buy about 50% more home than they currently have. So, if your home is listed for $300,000, your ideal customer currently lives in a $200,000 home.
Have a professional stage your home. And remember: once you put your home on the market, it’s no longer your home. It’s a product. You have to make it desirable to as many people as possible. Depersonalize. Minimize furniture and create more walking space.
Select a good agent. A good agent pitches you a comprehensive marketing plan, which should include advertising your home online with virtual tours, targeted open houses, and staging techniques. The agent should be familiar with your neighborhood and present you with a market analysis of recent homes sold in your area.
Price your home appropriately. Sellers must keep in mind that they may be competing against lower foreclosure prices. Rely on your realtor’s market analysis (and perhaps appraisal) to help determine value. Pricing your home based on what others are listing their homes for is not realistic and could cause you to list your home too high or too low.
Be ready to offer concessions to make your home more attractive. Realtors report that some sellers are offering up to $10,000 in closing costs, televisions, gas cards, and even cars.
Do your homework, say the Minors. “We didn’t think it would be this hard,” says Radiah, an immunologist and assistant professor at North Carolina A&T State University. “You really have to put your best foot forward before you put the ‘for sale’ sign out.”
This article originally appeared in the May 2009 issue of Black Enterprise magazine.