“Why Won’t My House Sell?”
There was a nice little article in the Seatttle Times Saturday Real Estate section which offered suggestions for increasing the appeal of your home to potential buyers. While there are some helpful tips, you may need more significant help if your property has been lingering on the market for more than 60 days.
I spent the early part of my real estate career working open houses for local builders John Buchan, Bill Buchan, Murray Franklyn, etc. This is what they do with “newbies” such as myself, who had about zero sales experience. Whiling away many, many hours at these new construction sites in the late 1980’s I learned a couple of things:
1. New home builders are highly averse to lowering the prices of homes to get them sold. Why? Because the lower price of any sale would potentially drive down the value of homes yet to be built in the same development. Oftentimes these builders would be forging new markets in places where historical values were well below what they wished to build. Thus they needed to establish new comparable values for the sake of getting their new, more expensive homes to appraise. So if they cut the price to get rid of a tough lot and/or house, it could negatively impact the likelihood of getting good appraisals for the others to be built in the same development.
2. How do builders counter the pressure to reduce the price to get a slow property to sell? They improve it. More than once I witnessed shrubs being removed by the landscape subcontractor and new, larger, and more plentiful landscaping installed. I also saw large beautiful decks constructed over what had been a small, insignificant patio. Sometimes blinds were installed on all the windows, the appliances removed and upgraded, garage door openers added, irrigation systems installed, larger and more expensive interior and exterior lighting fixtures replaced smaller ones. Fences built. Builders would add value,0 instead of reducing their price, until their homes sold. Time and again I watched this process yield the desired result.
When it comes to the average home seller, most often we hear, “what if the buyer doesn’t like what I do to improve the value?” Whether it’s replacing the carpet, painting, replacing hardware, all improvements are improvements and increase the chances of selling. It is easy to think that the battle is with buyers. It is not. The battle is with other sellers, especially when the market slows. Everyonw wants to sell, and pricing is an important part of the equation. But giving away value in the form of price reductions is much less effective, and much more expensive, than improving a home to make it more competitive.
So if you are on the market and think you’re not getting anywhere, you’re wrong. You are actually going backwards. While you are sitting still, the market is always changing around you. And every house that sells while yours does not drives the value of your home down. While price reductions might help, the fact is that what was unappealing at $535,000, for example, is not going to be much better at $525,000 or even $515,000. So rather than take the $10,000-20,000 price reduction, get busy. Make the improvements that will your house the best chance to compete. The best, most cost effective improvements are:
1. Update that exterior house color. Colors from the 80’s or 90’s don’t cut it in 2007.
2. Replace those appliances. If they are white or black, you’re in trouble. Stainless is what people want.
3. Do you have gold decorative light fixtures and door hardware. This is a subtle death sentence. Brushed nickle, oil rubbed bronze, brushed chrome are the finishes that buyers want.
4. Do you have laminate counters? Don’t even try. The only place you find laminate counters in new construction in King County will be in a mobile home.
While these improvements do cost money, all of them together will amont to less than the price reductions required to sell your home. Builders know this, and now you do as well.
What’s Hot In The Kitchen: The Latest From Forbes.com
Have you been considering a kitchen remodel? Even if you already have a Viking Range and a Sub-Zero, there are new items that fall into the “to die for” kitchen appliance category. Lucy Maher at Forbes.com does a nice job of presenting the latest technologies for the kitchen. Wait ’til you see the kitchen sink/dishwasher, or the refer/oven. Very cool stuff.
Seattle Times: “Do remodeling jobs with resale in mind”
This article http://seattletimes.nwsource.com/html/realestate/2003035832_realhowto04.html?syndication=rss is a good start. We've worked through many, many remodeling projects with customers over the years, with resale in mind.
(I've threatened to start a diary on this site for awhile detailing what we do for our clients in preparation for market. I've held off because I am afraid of sounding more like a handyman than a Realtor. I'll leave it up to you: if you think I should start a diary, let me know. Thanks, Bill)
Now back to the subject at hand. The Times article touches briefly on a few items. Here they are listed in order followed by our respective comments
1. neutral colors An outdated sentiment. Look at builders' model homes. They are full of bold colors today. Neutral is not the norm, especially in more expensive homes. But bold does not mean wild. We refer to the careful selection of coordinated colors today as designer bold. There are some great resources to help you put togther your pallette of home colors that will make you look like a designer. One that we use is a little known series of brochures developed by Olympic Paints. These can be found at the paint kiosks at Lowes stores, featuring themed colors groups such as "Wine Country" and "Sea Breeze". These brochures offer contrasting colors selected by professional deigners that will give your home a professional, up-to-date look without making dozens of trips to the paint store and buying several pints of sample colors that are close, but aren't quite right.
2. kitchen first While kitchens are high on everyone's list, it is the most expensive room in most homes. Judicious selections are key. Think appliances first, then floors and counters. Cabinets: If cabinets come into play, they should precede everything else. Refacing is often an expensive bad idea. A pretty surface might help, but if cabinet hinges, shelving and interiors are worn out, it's time to consider replacement. While cabinets can cost as much as $200/linear foot, there are many affordable alternatives at the big box stores. Hire a good finish carpenter and get a bid for replacement before signing a refacing contract. If your cabinets are ok in appearance, dress them up with some new pulls, and possibly hinges to match, for an up-to-date look. Appliances: Stainless steel sinks are in, porcelain is out. Get your appliances to match, preferably stainless. If your downdraft cooktop is worn out, consider replacing it with a gas unit and an overhead hood. Most folks know that downdrafts don't work very well. Don't overspend for high end name appliances. We did, and we've had more service calls in the past 3 years than we did in the prior 14 with our Amana, GE, and Maytag products. Floors: Tile or hardwood. Pergo and similar products are ok, but not in homes valued over $500k. Just say no to vinyl, regardless of how pretty it is. Counters: Tile or granite slab. Corian and similar products, in spite of all their known benefits, never garner much value compared to the expense. The colors never seem quite right, and buyers just aren't impressed by it. Don't use marble or travertine in the kitchen. They are too soft and stain too easily.
3. lots of paint This is a no-brainer
4. hide flaws We hadn't thought of this one. It's creative, but can become too personal in taste, and too expensive. Somtimes it's just better to make the repairs and repaint.
5. focus on floors No doubt fresh flooring will impress buyers, but be careful. If your new "builder-beige" bottom of the bin carpet is installed over your original worn out pad, buyers will not be fooled. They'll see that it's new, but if it feels like they're walking on plywood, you may have just thrown away thousands of dollars when a $300 pad upgrade would have made all the difference. Cheap carpet works with a high quality pad.
6. cost-cutting ideas Cute ideas, but stenciling a fake backsplash is a poor substitute for the real thing that screams "I'm trying too hard and I don't have any money!"
7. keep options open This is a great idea that I have not previously considered. Keep those undefined areas flexible for multiple uses. Staging dictates that we at least vignette each room for some type of use. But if your dining room is being used as a woodshop, better move the woodshop to the garage. We've seen may formal areas, either dining rooms or living rooms, set up with a pool table. That may be fine, and fun, while you're living there, but it will definitely hurt your bottom line when it comes time to sell.
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