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Home sellers now face market conditions that resemble a beach in a nor'easter: As they struggle against the gale-force winds of record-high inventory, a tide of declining home prices, made worse by rising foreclosures, continues to undercut their position.
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Sales this past spring did perk up temporarily. (See home prices year-over-year in June 2008.)That may be because buyers were responding to lower prices -- especially in the entry-level range. But it could also have been the usual seasonal upswing. And forecasters aren't optimistic about a true turnaround anytime soon, given the chill of the credit crunch and declining confidence in the economy.
If you don't need to sell, hunker down and wait for fairer weather. To sell now, you have to want it badly, adapt to the market you're in, and have sufficient equity or means to absorb a loss.
In the District of Columbia, across the line from Takoma Park, Md., Andy Shouse, 35, and Nicole Yohalem, 38, were eager to relocate to Seattle to be close to family. So this past winter, as their elder child, Theo, 4, approached school age, they made their move. They set a deadline of May to sell their home and for Andy to find a job in Seattle. Nicole could telecommute for her job with a nonprofit in D.C.
Six years ago, the couple paid $337,000 for a 2,000-square-foot Dutch Colonial house, with three bedrooms, one and a half bathrooms, a redone kitchen, a finished basement and a great location -- within walking distance of a subway station. With steady home-price appreciation in their area, they were confident that they could sell their house, pay off their mortgage and still walk away with a sizable down payment for their next house. But the market was weaker than they thought, so on the way to a sale, they made some trade-offs.
Hire Help You Can Afford
If you're long on equity and short on experience, energy or time, then a full-service agent will probably serve you best. Andy and Nicole contacted Re/Max agent Patricia Vucich, in Bethesda, Md., who had helped them buy their home in 2002. Vucich charged the full commission for agents in the D.C. area, 6%, with half of that designated for the buyer's broker.
The average commission, according to an annual survey of agents by Real Trends, hit a low of 5% in 2005 near the market's peak but since then has crept up to 5.2%. You can try to negotiate a lower rate, but the best agents may not be amenable, given today's more challenging market.
Home sellers who would rather not pay full freight can share at least some of the burden with a fee-for-service firm, such as Help-U-Sell, or agents affiliated with ZipRealty. In Philadelphia, Chris Carr, owner of Simple Choice Realty, offers an a la carte menu of services, including yard-sign rental for $25, six months of ads on the Multiple Listing Service for $399, assistance with negotiations and paperwork for $500, and a package deal for about $1,000. You also pay the usual commission of 2% to 3% to the buyer's agent. If you took the package deal to sell a $417,000 house, you'd save $11,500 compared with paying a 6% commission.
Fee-for-service agencies typically use an exclusive agency contract, so that if you find a buyer through, say, Craigslist or word of mouth, you pay just your agent's flat fee and no commission. With a traditional brokerage, using an exclusive right to sell contract, you pay the full commission no matter what. When Simple Choice Realty brings the buyer, it rebates up to 50% of the commission to the buyer. The fewer homes the buyer chooses to visit after shopping on the Internet, the bigger the rebate. It's a nice incentive to get buyers in the door.
POSTED BY: Sam Moreno (November 25, 2008 11:46 AM)
...I agree with Tim and Donna. Agents that are surviving this market are hard working people and desrve every penny they make. As for Honest Abe you're probably a renter...
POSTED BY: Jennifer C. (November 25, 2008 05:35 PM)
From 18 months (bad) experience with two different realtors who charged 10% and 7%, I would sincerely advise anyone to research their realtor/agent in depth before signing any listing contract. Study the listing firm and the agent to make certain that they both have proven,numerous sales and experience, especially if your property is unique. Talk to sellers who have used them previously and sold...Sometimes this is the best indicator as to how well YOU will be represented. Consequently, neither agent was successful in the sale of my unique property, but neither agent truly marketed or worked it. They placed it on their websites, put the sign in front and then waited for it to sale itself. When it hadn't done so within 30 days, both times, I was harrassed to drop my price...and still nothing happened. They blamed me! I repainted neutral colors, decluttered, landscaped, staged, cleaned, and dropped my price over $100,000. during the 18 months it was listed while the agents did absolutely nothing. Now I'm doing a FSBO with an attorney and am in total control. I'm sure there are wonderful, productive realtors out there who deserve every cent of their commission...But as a seller, you gotta do your homework to find 'em!
POSTED BY: Brian (December 11, 2008 06:41 PM)
Another good article on selling a home fast www.placekey.com/Article/selling-your-house-fast.html
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