Tough Market? Get Creative!!

Tough Market?  Get Creative!!

            As buyers and sellers try to navigate our current Real Estate market many are found distraught by a lack of offers, or an inability to find the “perfect” house.  While this market does have it’s disadvantages to both parties, either can be successful by being more creative with their offerings and/or offers.  It never hurts to be creative and think (how cliché) out of the box.  Doing so can bring you to the finish line with your needs and wants fully in tact.

Seller Creativity

            As the economy crumbled, largely due to the Real Estate burst, many buyers in the market were left with fewer funds available for purchase.  Whether their savings, 401 or portfolio declined or their ability to finance has been reduced, these buyers just don’t have the ability to renovate or rehab a home the way they’d like.   Seller contributions are not a new trend, but being creative with these contributions can be.  A buyer will gladly finance a new kitchen, pool or roof within a 30 year mortgage rather then coming out of pocket.  If your home lacks a certain “panache” that today’s buyer desires, it may be a good idea to contribute these features either before or after closing.   The thought of taking a task like this on can be intimidating, but in this market it can and will pay off.

Buyer Creativity

            Regardless of market, buyers and many agents are scared to ask for sufficient contributions.  Feeling that the request may leave a bad taste in sellers’ mouth, most won’t even ask.  We need to remind ourselves that this is in fact a buyers market, and many sellers do understand this.  While they are all trying to achieve the highest price possible, you simply don’t know until you ask.  A contribution of closings costs, or a renovation credit may not be the norm, but are generally open to discussion in today’s market.  If you’ve found that house would be just perfect if…..  let the sellers agent know what your thinking, we are here to make the deal work, give it a go, you don’t know unless you ask.

Financing Creativity

            Lynn Whitefall of Goldstar Financial is one of the most creative mortgage brokers I know and had this to say about staying creative with financing in this market – “some creative things I use to help buyers qualify are using money that would be used for down payment to pay down credit card debt to qualify for their desired price range.   A lot of time credit card debt eats too far into the debt ratio and eliminates the purchasing power; so this allows them to qualify for more and have an overall lower monthly obligation. With Interest rates so low we can reduce the principal quickly. “

           
            Success in this market simply calls for creative thinking; don’t be afraid to do so.  Work with a team that pushes the limits and remains creative.  Staying on the forefront of people’s minds while offering them what they want is step one to success.  Break out of that box and throw some “crazy” ideas out, you never know what’s going to work until you try!

Surviving the buyers market in a sellers shoes

Surviving the buyers market in a sellers shoes

            It’s no secret that we have been in a buyers market for quite some time now.  While this can be extremely frustrating for the seller in today’s market, there are ways to prepare and triumph.  With a sound strategy in place, anyone can sell in this market; but like most things in life, it takes work, care and time.  So hike up your pants, roll up your sleeves, and let’s get that home SOLD!

Know your hold costs

            The #1 factor to be aware of in a buyers market are your monthly hold costs.  As days on market climb, your potential net descends.   As shelf life is inherently longer in a buyers market this is a factor that cannot be ignored.   When factoring in hold costs, an offer of $340,000 in your first week is greater then $350,000 6 months from list.   A $3000 monthly hold cost is a fair average for a $350,000 home.  That’s $18,000 after 6 months.  In essence, the 2^nd offer 6 months later is a relative $332,000.  If you had settled for $340,000 on the first offer you would have saved $8000!  It is imperative that you know your hold costs and factor them into all negotiations.

Get Real

            The biggest problem we face in today’s Real Estate market is the continuing effect of the bubble bursting.  While it’s unfortunate, it is, as they say, what it is.   We cannot fool ourselves into believing our homes are worth what they were in the good ‘ole days.  We HAVE to be realistic with today’s market and price accordingly.  We always want to maximize our potential dollar but pricing out of market is simply the wrong way to do so.  Understanding true market value, pricing accordingly and making your home stand out is the way to success in a buyers market. 

Market effectively and consistently

            Marketing mediums have and continue to change at a rapid pace.   A buyers market clearly carries more inventory then is standard.  Thus we need to STAND OUT from the crowd!  With so much competition around be sure to work with an agent who understands marketing to not only today’s buyers, but to your specific buyer base.  This is not the type of market where one ad in a Sunday paper is effective. There needs to be a consistent flow of effective marketing until you reach your goal.  Without it, you are going to be lost in the pack.

            We cannot control the markets we find ourselves in we can only act accordingly.  Remember that selling is possible in any market.  Make a plan, hire the right agent and your sale will be a success!