What It Takes to Sell a House Now
I guess I should consider myself lucky. Within two weeks of putting my mom's house on the market, I had a buyer. Considering that sales of existing homes fell 27% in July and that sellers can expect to wait anywhere from a month and a half to six months to sell their homes, according to the Washington Post, I'd say I'm really lucky.
So how did I do it?
I priced it to sell. The real estate agent I hired researched sale prices of homes in my mother's neighborhood to develop a price range. However, the price we initially agreed on probably was too high ($167,000 for a three-bedroom home in Kentucky) because several people looked at the home within the first week it was listed but no one made an offer. So we lowered the price ... by $10,000. Within a few days, I got an offer that was much lower than the reduced price. After some negotiating, the buyer and I settled on a price about midway between his offer and the asking price. (See Pricing Your Home for a Sale.)
I was able to come down in price so much for reasons that, unfortunately, won't apply to most sellers. My mother owed nothing on the house, so there would be no mortgage to pay off after the sale. And she didn't need the money to buy another house because she moved into an apartment in my home in June (see moving my mom in with me).
I also didn't expect to get top dollar for the house. My husband, sister and I made minimal repairs to get the house in salable condition. There still was a lot of work that needed to be done -- and that was the most frequent comment potential buyers made.
On the flip side, a friend of mine had a buyer for her home within a week of listing it at a price that was at least $100,000 more than what she paid for it two years ago. In the end, she had to settle for a little less than the agreed-upon price because it appraised for less. Still, it was a tidy profit. How'd she do it? She and her husband got the house in top-notch condition and staged it well (see Prepping Your Home for a Sale).
I learned from this process that a house really has to be in great condition or priced low if it's a fixer-upper to sell in this market. Because lenders are requiring larger down payments than they did during the housing bubble (see What It Takes to Get a Mortgage), most buyers won't have a lot -- or any -- cash left over to make repairs to a home.