January 4, 2007

Closing the deal: Tips for selling a home in a buyer’s market

By Don Tornincasa
Special to the Times

Although the soaring real estate market has finally come back down to earth, that doesn’t mean home sellers in the Bay Area can’t get their asking price in this more balanced market. Home sales may take a bit longer, but a little creativity can help San Jose homeowners sell their home without having to drop the price.

I’ve been through a number of real estate cycles over the years, both as an agent and as a manager, and have come away with some ideas on how to speed up the sale process in a market like this:

Price your home according to the current market: Just because a house comparable to yours sold for a very high price last year does not mean you will be able to realize the same price when selling your home now. Work with a full-service real estate professional to determine the appropriate, competitive listing price for your home based on current market conditions.

Remember that in this market, your sales associate may encourage a list price in accordance with other homes currently on the market, rather than those previously sold.

Make your home more marketable: As the saying goes, you only get one chance to make a good first impression. When a buyer sees your house for the first time, a critical impression is made. You can maximize curb appeal by trimming trees, planting flowers and even rolling out a new lawn if needed. A fresh exterior coat of paint might also prove valuable. And consider having a professional “stage” your home to make it even more attractive for buyers. My experience has been that the money spent on staging is more than offset by a higher sale price.

Conduct a full home inspection: If repairs are required, it is a good idea to go ahead and fix the problems. Potential buyers will cast an extremely critical eye over your home and, in a buyer’s market, they may take a pass on a home that needs too many repairs. Be sure to have the home inspection report available for prospective buyers itemizing all of the repairs that have been made and the associated cost for each.

Be thankful for appreciation: While price appreciation has slowed in some markets in 2006, it is important to remember the financial gains you have already made over the years through your home equity. According to the Office of Federal Housing Enterprise Oversight over the last five years existing homes in the U.S. appreciated more than 56 percent. The appreciation in the South Bay has been considerably higher. It’s important to factor in those gains when deciding if you’ve made an adequate profit on your home.

Offer a “Seller’s Contribution:” A seller can sweeten the deal by offering assistance to the buyer in ways that do not require lowering the asking price. These tactics can allow your home to stand out from the crowd. For example:

- Offer to buy down the interest rate on the buyer’s mortgage.

- Offer to pay a portion of the buyer’s closing costs.

- Cover the buyer’s mortgage payments for up to the first six months. Depending upon the size of the mortgage the buyer can save several thousand dollars and the seller still gets the original asking price for the home. Again, depending on the mortgage, the seller will get more for the home than if he or she dropped the asking price by $20,000-$30,000.

Many condos and houses in the South Bay belong to homeowners associations that require annual dues. Paying the first year’s fees could be a big incentive to a buyer nearing the limit of his or her liquid assets.

Be patient: Properly priced homes that stand out from the crowd are selling in this market. While the average time for a home on the market has crept up in San Jose, it still is relatively low compared to other parts of the country and a typical housing market in this region. Interest rates remain low and buyers are still out there. If you work with your sales associate to properly prepare and market your home, you’ll be in a good position to sell your home for the best possible price.

Don Tornincasa, manager of Coldwell Banker Residential Brokerage’s San Jose-Almaden office, is a 17-year South Bay real estate veteran who oversees a team of more than 65 real estate professionals in the San Jose area. His office is located at 1096 Blossom Hill Road, Suite 200, and he can be reached at (408) 445.5163 or by e-mail at doncasa@aol.com.