If you are a serious home buyer, the absolute best time ofthe year to buy is between Thanksgiving Day and New Year’s Day, even extendingthrough Super Bowl Sunday in many cities. The reasons are (1) few home buyersare in the market during the holiday season so competition is low and (2) houseand condo sellers who have their homes listed for sale now are usually highlymotivated to sell and will listen to any reasonable purchase offer.
There is an additional special reason the 2006 holidayseason is a great time to be a home buyer: it’s a home “buyer’smarket” in most communities. That means even during this slow holidayseason, when most unmotivated sellers take their listings off the market, thereare more homes listed for sale than there are qualified buyers searching forhomes.
Purchase Bob Bruss reports online.
However, thousands of home sales take place during this”slow season.” New-home builders are anxious to close sales by Dec.31, 2006, so they are offering amazing sales incentives such as (1) no mortgagepayments for several months, (2) free upgrades, (3) no closing costs, (4) 100percent mortgage financing, and (5) even reduced sales prices.
But sales incentives for buyers of resale homes aredifferent. Motivated sellers (and their anxious listing agents) are willing tolisten to all reasonable purchase offers. Buyer negotiation strategies includeasking for the seller to pay the mortgage loan fee and/or nonrecurring closingcosts. In other words, it’s a great time to be a home buyer.
HOME SELLER BENEFITS OF SELLING DURING THE SLOW SEASON. If youare a motivated home seller, especially in the lower price ranges in yourcommunity, this can be a superb time of year to sell.
Buyers who are in the market now are usually very anxiousto buy, perhaps motivated by a job transfer, marriage or divorce, birth ordeath in the family, down-payment gift from parents, year-end salary bonus, orother buying incentives.
As a home seller, you won’t have as many prospective buyersas during the peak home sales season of March through June in most communities,but home buyers at this time of year are usually very serious.
For example, many home buyers want to close their purchasesby Dec. 31 to claim the extra tax deductions, such as for loan fee points,pro-rated property taxes, and prepaid mortgage interest. However, if you can’tmove out by year-end, you can probably rent-back for a month or two from thebuyer providing the sale is recorded before New Year’s Day.
An extra seller bonus is if the home was your principalresidence at least 24 of the last 60 months before the sale, Internal RevenueCode 121 gives you up to $250,000 tax-free capital gains (up to $500,000 for aqualified married couple filing a joint tax return).
HOW TO EARN TOP DOLLAR FROM YOUR HOME SALE. To earntop dollar from your home sale requires making your residence show its best.Although the weather outside might not be perfect, the interior of your homecan sparkle.
The most profitable but least expensive home improvementsinclude painting, cleaning and repairing. Fresh interior paint is, by far, themost profitable improvement. Other profitable moneymakers that add more marketvalue than they cost include new light fixtures, new carpets and flooring, andnew plumbing fixtures. Your goal should be to make the residence as close to a”model home” as possible.
A recent innovation for home sellers who want to sell fortop dollar is to “stage” the residence. That means a professionaldecorator or “stager” refurbishes the residence, often removing theseller’s dingy old furniture and bringing in rented furnishings to showprospective buyers how desirable your home really is. Spending several thousanddollars for home staging usually pays off with a faster sale for top dollar.
HIRE THE BEST LISTING AGENT. If yourhome is not already listed for sale, interviewing at least three successfullocal real estate agents can pay off in many ways. Even if you think you cansell your home alone (called “for sale by owner,” or”FSBO”) without a professional agent, interviewing three or moreagents will show you the market value of your residence.
The agents you interview won’t mind. The reason is they knowmost FSBOs decide within 30 to 60 days to hire a professional agent, usuallyone of the agents already interviewed.
Five key questions to ask each interviewed agent include:
1. HOW MUCH CAN YOU GET FOR MY HOME? This is atrick question. Ask it anyway. After inspecting your home, each agent shouldprepare a written CMA (comparative market analysis). Disregard any agent whodoesn’t give you a CMA.
Each CMA form shows (a) recent sales prices of comparablenearby homes within the last few months; (b) asking prices of similarneighborhood homes (your competition); and (c) asking prices of recentlyexpired listings in the vicinity (usually overpriced). Based on the CMAs, eachagent should then give you his/her opinion of your home’s market value. Bewareof any agent who either estimates an abnormally high asking price (called”buying the listing”) or recommends a very low asking price (called”low balling”).
The key reason to interview at least three successful agentswho sell homes in your vicinity is to compare their CMAs, their recommendedasking prices, and their client references.
2. HOW LONG WILL IT TAKE YOU TO SELL MY HOME? The bestagents will recommend a 90-day listing. That is plenty of time for a successfulagent to sell your home. If your listing doesn’t sell within 90 days, but youare pleased with the agent’s service, you can always renew. However, if youselected a “bad agent” then you are not stuck for a long term.
Some agents, when begging for a longer listing, will pointto “average days on the market” your community, which might be 110days. If an agent says that, your instant reply should be, “Well, I don’twant to hire just an average agent. Do you know any superior agents?”
However, if the best agent interviewed insists on a listingterm longer than 90 days, be sure it contains an unconditional cancellationclause after 90 days. Then you won’t get stuck with a lazy or incompetent agentfor a long time period.
3. WHAT IS YOUR MARKETING PLAN FOR MY HOME? The bestagents will anticipate this question and hand you a prepared marketing plan foryour home.
Such a plan should include at a minimum use of the local MLS(multiple listing service), listings on Internet Web sites including
4. HOW MANY LISTINGS DO YOU CURRENTLY HAVE AND WHAT PERCENTOF YOUR LISTINGS SOLD IN 2006? The answer will reveal a “numbersagent” who has lots of listings but sells only a low percentage.
Ask how many assistants each agent has and if you will bedealing with the agent or an assistant. Inquire how often you will hear fromthe agent with progress on the sale of your home. The answer should be “atleast once a week.”
Solo agents without assistants can usually handle 15 to 20listings at most. New, inexperienced agents might have only a few listings, butperhaps they can devote more time to getting your home sold. However, be waryof any part-time agent unless that agent comes very highly recommended by atrusted friend or relative.
5. WHAT ARE THE NAMES AND PHONES OF YOUR LAST FIVE HOMESELLERS? The best agents will anticipate this key question in theirlisting presentations. Before signing a listing, take time to phone eachagent’s seller references to ask, “Were you in any way unhappy with youragent and would you list another home with the same agent again?”
COUNTEROFFER EVERY OFFER. Especially during thisslow holiday home sales season, when you receive a purchase offer, if it is notacceptable be sure to make a written counteroffer. Many buyers love tonegotiate and test home sellers (and their agents). A counteroffer will keepnegotiations open to show if the buyer is serious and if there is anypossibility of a sale.
But bear in mind an old real estate motto: “The firstoffer is often the best offer.” If the first purchase offer you receive isacceptable, grab it rather than risk losing that buyer during this slowest salesseason.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
Copyright 2006 Inman News