Posted by Mike Selvaggio in General on July 16th, 2008 at 11:08 AM
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Personal Property
How to Sell a House, When You Have to Sell It Now
Seven tips for homeowners who can't wait until the market turns around
By DAVID CROOK July 14, 2008; Page R1
So you say you're selling your house?
Hey, it could be worse. You could be selling a Hummer.
If you've been waiting for a good offer to come
through, this probably isn't exactly big news to you: This is the worst
home-selling market since Herbert Hoover was president. In much of the
country, prices are already way down and probably heading even further
south. Houses are sitting on the market for months longer than sellers
expected.
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| Need
to sell your house? Real-estate agents in Greenwich and Wilton, Conn.,
offer tips to Paul Lin of The Wall Street Journal Digital Network on
how to sell a house in a slowing market. |
And don't think this is just a momentary lull, a short
slowdown before the market recovers and then takes off again. What you
see today is the market you have, for now and, quite possibly, for a
long time to come.
"At best, I think we're a year away from the bottom,"
says Sally Bodmer, who has sold Tampa-area real estate for 31 years and
has never seen a worse selling climate. She operates mainly in the
newer suburbs on the far eastern edge of the metropolitan area. It was
a super-hot area in 2005, when developers couldn't build houses fast
enough. "Now," she says, "you can't give them away."
To be sure, things are not awful everywhere. Prices in
metropolitan areas bypassed by the Big Bubble -- places such as
Charlotte, N.C., or Rochester, N.Y. -- have held relatively firm or
risen modestly through the Big Bust. And in some of the worst markets,
elite properties and houses in the best neighborhoods may still buck
the trends.
But even the perennial playgrounds of the upper crust
aren't immune. According to Zillow, a real-estate Web site, prices in
Palm Beach, Fla., are down about 10% from last year. Prices are down
13% in Santa Barbara, Calif.
THE JOURNAL REPORT
So what's a home seller to do? What does it take to sell a house today?
If your job or life circumstances leave you no
alternative other than to sell in this market, you must be prepared to
go well beyond the usual feints and gimmicks if you want to get
potential buyers in the front door and, ultimately, to the closing
table. By all means, feng shui the living room, bury a statue of St.
Joseph in the front yard and bake brownies before the open house.
But if you really want to sell the place, you need to
think and act like a salesperson. Most important, you must separate
your emotional attachment to your family home from your financial
interest in your family's largest asset. Selling a house is business,
and you must approach the sale in a businesslike manner.
Here are seven points to keep in mind:
1. DON'T WAIT AROUND.
Even in the better housing areas, it's taking a long
time to sell houses; and in the hardest-hit metro areas, inventories of
unsold homes are stretching well past 180 days.
So, don't try to sit out the market. That's what
hundreds of other timid sellers are doing, each of them hoping --
somehow, some way -- that hanging on the sidelines will improve prices
and, ultimately improve his or her chances for selling success. It
won't. Not if you expect to sell anytime soon. If you want your place
sold, the best way to make sure that happens is to put it up for sale.
Obviously, you should take advantage of your local
market cycles -- early spring is usually better for selling in much of
the country -- but otherwise don't try timing the market. You won't
have any better luck than a stock trader who's always holding out for
the market highs or lows.
2. FIX IT UP AND CLEAN IT UP.
Buyers are taking your house out on a date. It has to make a good impression.
Don't spend a lot of money -- absolutely no big-ticket
renovations -- but do see that everything is in good repair. And give
the place a new paint job and a general sprucing up. (Caution: This
won't necessarily give you any pricing advantage over less fixed-up
places, but it will attract buyers and keep them interested.)
As you get closer to the date that the house actually
goes up for sale, start moving out by decluttering the place. No buyer
wants to see a house filled to the rafters with other people's things.
They want to imagine their stuff filling the place. "Stage" the place
with only enough furniture to make it look livable; put the rest in
storage.
3. PRICE IT CHEAPLY.
Don't fight the market by trying to price your house
at bubble-era levels or by factoring in all those improvements you
made. It won't fly.
Set a realistic, salable price on day one. Don't let
the house hang around on the market as you gradually lower the price.
Forget what you think the house should be worth or what it was worth three years ago. That's not what it's worth today.
Smart buyers will be looking for bargains. So you must
set your price below comparable nearby properties. Look at the asking
prices of neighboring houses, and set your price to beat them. If
prices in your area are generally down 20% from where they were at the
bubble peak in 2005, then price your house 25% to 30% below its peak
bubble value. Your area down 40%? Be prepared to take just half of what
the house was worth three years ago. Yes, it's painful. But if you want
to sell, you don't have much choice.
And remember: In much of the country, renting is still
a better deal right now than buying. As you try to settle on a price,
look at rents on comparable properties. Buyers are not likely to be
counting on huge price appreciation, as they did during the bubble, so
they may be less willing to take on the higher monthly costs of home
buying and owning. You must set a price that makes someone's
prospective mortgage and home-owning costs look like a better deal than
a month's rent.
4. HIRE A TOP REAL-ESTATE AGENT.
Get the best, most aggressive selling (listing) agent you can find.
When everything was selling before it even hit the
market, of course, you didn't need the best. You just needed the
cheapest. But not these days.
Fortunately, in this market, real-estate brokers are
even more anxious than you. They're eager to get whatever work they
can, so don't rely on your cousin with the real-estate license or your
best friend's wife.
Ask, instead, for the local real-estate office's top
salesperson. All offices have one or two sellers who greatly outperform
their colleagues. That's who you want.
Interview various agents and insist that they present
you with a well-conceived marketing plan that goes way beyond the usual
Internet page, one or two open houses and a yard sign. (Think about
using a professional photographer for multiple shots on the primary Web
listing, your house as the featured "home of the week" in the local
newspaper, a decorating segment on a morning chat show, a stop on the
local garden club's spring tour.)
Sellers of higher-end properties should be able to
negotiate a lower commission percentage, but this is no time to quibble
over a couple of percentage points. Also, offer the agent a big bonus
if he or she sells the house in 30 days or at your asking price. Offer
other agents bonuses if they bring in the ultimate buyer.
5. PROMOTE. PROMOTE. PROMOTE.
Don't rely on the agent to do all the work. The agent
should pay the usual marketing costs, but you should be prepared to
pony up for extras, especially if you insist on more expensive or
untraditional promotions.
You want the house listed regularly in local newspaper
classifieds and, if it's a special, high-end property in a desirable
location, in national publications, too.
Make sure your house is on the leading real-estate Web
sites; Trulia, Zillow, Cyberhomes, Eppraisal and Realtor.com are some
of the top ones.
Beyond that, get really creative. Advertise in
corporate newsletters and intranet listings. Check in with local
relocation firms that help transferring corporate executives find new
homes. List the house on eBay. Put it on Craigslist. Put it in your
church bulletin.
Trophy house in an upscale neighborhood? Hire a string
quartet for the open house. Something a bit more midmarket in a
family-friendly subdivision? Put a clown on the corner handing out
brochures.
6. PLAY THE BANKER.
As bad as things are, there's one big factor in your
favor: the tight credit market. If you have no mortgage you have to pay
off, your strongest selling point might be your ability to finance all
or a substantial part of a buyer's purchase.
You're a lot more flexible than a bank that has the
Federal Reserve looking over its shoulders, so you might even be able
to charge a higher interest rate than a commercial lender as well as
command a higher sale price. (You'll need a real-estate lawyer to make
sure everything is done to protect you and an accountant to set up a
payment system. Peer-to-peer lenders such as virginmoneyus.com have systems to handle mortgage payments.)
Worst case? Your borrower defaults and you take the property back. And sell it again.
7. TAKE THE OFFER.
If any qualified buyer comes in with a reasonable offer, be prepared to accept it.
You don't want to lose the deal by digging in your
heels over a few dollars. Every real-estate office keeps records that
show the percentage difference between asking and selling prices, so
it's easy to figure what's an appropriate offer and what's not.
Negotiate, of course, but recognize that the buyer has
a lot more clout than you do. Your house, as wonderful as you think it
is, is worth only as much as someone is willing to pay for it.
And that, unfortunately, will probably be a lot less than you think.
--Mr.
Crook is editor of The Wall Street Journal Sunday and author of "The
Wall Street Journal Complete Real-Estate Investing Guidebook." He can
be reached at david.crook@wsj.com.
Posted by Mike Selvaggio in General on July 2nd, 2008 at 5:18 PM
More Home Owners Seeking Energy-Efficiency Upgrades
As
home owners grapple with skyrocketing energy costs, more of them are
turning to remodelers for money-saving solutions, according to a recent
NAHB quarterly Remodeling Market Index (RMI).
“It’s no surprise with rising energy prices and other costs draining
the piggy bank that home owners want to maximize home performance with
green remodeling options,” said NAHB Remodelers Chairman Lonny
Rutherford, CGR, CAPS, CGP, president of Legacy Construction, Inc. in
Farmington, N.M.
According to the RMI, 33% of the remodelers surveyed said that they
are increasingly called on to improve the energy efficiency of their
client’s homes.
The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects.
The growing home owner interest in green remodeling comes just as NAHB prepares for the upcoming National Green Building Standard,
which includes the only consensus rating system for remodeling. The
standard provides a roadmap for green remodeling and assures consumers
that remodelers know how to plan and complete authentically green
remodels.
According to the survey, remodelers have installed a number of efficiency-enhancing products in recent months, including:
- Windows — 73% of surveyed remodelers installed more
energy-efficient windows that are insulated to prevent outdoor heat
exchange.
- Insulation — 65% made upgrades such as insulation replacement and
spraying foam or fiber insulation into enclosed walls and roof
cavities, while 27% insulated foundations and 52% installed insulated
exterior doors.
- High-efficiency HVAC systems — 56% of surveyed remodelers installed them.
- High-efficiency kitchen appliances ― 47% installed them.
- Water-saving faucets and fixtures ― 46% installed them.
“Newer technologies are also quickly gaining in popularity,” said
Rutherford. “Thirty-five percent of remodelers reported installing
tankless water heaters, which can save on energy costs by heating water
on demand instead of continuously eating energy.”
For more information, e-mail Kelly Mack, or call her at 800-368-5242 x8451.
Posted by Mike Selvaggio in General on June 25th, 2008 at 11:25 AM
Subject: A Neat Tip
Go to the kitchen and check this out for yourself. Whoever
looks at the end of your aluminum foil box?
We all
use aluminum foil, which is great stuff, but sometimes it can be a pain.
You know, like when you are in the middle of doing something and you try
to pull some foil out and the roll comes out of the box. Then you have to
put the roll back in the box and start over. Well, I would like to share
this with you. Yesterday I went to throw out an empty Reynolds foil box
and for some reason I turned it and looked at the end of the box. And written
on the end it said, "Press here to lock end." Right there on the end
of the box is a tab to lock the roll in place. How long has this little locking
tab been there?????
I looked at a generic brand of aluminum foil and it had one too. Then I
looked at a box of Saran wrap and it had one too! I cannot count the
number of times the Saran wrap roll has jumped out when I was trying to cover
something up. I am sharing this in case you also did not know this.
Posted by Mike Selvaggio in General on May 27th, 2008 at 6:14 PM
Northeast Will Be First to See Signs of a Housing Upturn

Although the national housing outlook has continued to deteriorate
this spring, which is normally the peak home buying season, housing is
expected to start climbing into positive territory before the end of
the year in some parts of the country, according to NAHB’s state and top 100 metro housing starts forecast for 2008-2009.
Continuing turmoil in the credit markets and a weakening economy
guarantee that “housing markets will face another challenging year in
2008 before any meaningful recovery takes hold in 2009,” the NAHB
forecast says.
The credit market crisis alone, which started with last summer’s
subprime mortgage meltdown and has since resulted in a broad-based
mortgage credit crunch for prospective home buyers, has depressed
housing sector activity by an additional 30%, NAHB economists
calculate. As a result, housing permits nationwide have plunged to only
37% of their levels at the height of the boom in 2005.
“Anticipation of further declines in house prices in many markets
will keep demand soft and additions to supply minimal in the near
term,” the forecast says. “Foreclosures threaten to dump additional
houses back into markets with already bloated inventories of unsold
homes.
“But the level of distress in local and regional housing markets is
far from uniform. While the annual figures will be negative for most
markets, our forecast is for recovery in a number of areas by the
fourth quarter of 2008.”
The Northeast will be the first to emerge from the current housing
correction, with several states turning the corner in the third quarter
and most by the fourth, according to the forecast.
“While some of these markets experienced rapid price appreciation
over the decade, the largest markets — New York, Boston and
Philadelphia — avoided the extent of over-building that accompanied the
price run-ups in other markets,” the study says. “The absence of large
unsold inventories will help to mitigate the downward pressure on
prices that will drag out the recovery process in markets that have
similarly elevated housing prices but also have large inventories.”
A growth patch for single-family housing starts in the Northeast
during this year’s fourth quarter encompasses all of the New England
states and extends into New York, New Jersey and Maryland in the
Mid-Atlantic region. “Moving away from the eastern seaboard, markets in
the western and northern parts of these states experienced more
moderate house price appreciation and so are less vulnerable to price
corrections and inventory problems,” the report says.
Next in line for a regional housing recovery is the South, with the notable exception of Florida.
“Housing markets in Texas, Atlanta and parts of the Carolinas
performed well during the housing boom,” the forecast says, “resisting
the excesses that have come back to haunt other markets.” These markets
weathered the onset of the cyclical correction in the industry in 2006
better than most, but they did feel the negative repercussions of 2007
and will experience a mild 2% decline in single-family construction in
this year’s final quarter before returning to robust growth in the
first quarter of 2009.
Most housing markets in Florida will continue to struggle through
the middle of next year, NAHB predicts. “These markets have been the
most volatile through the boom and bust of this housing cycle and will
be the slowest to recover from the heights of speculative excess,” and
they have also been hard hit by escalating foreclosure rates.
Pensacola, where prices and production stayed closer to historical
norms during the boom years, and Jacksonville, where production surged
but price appreciation was more restrained, will experience weakness
this year but are expected to display more strength in 2009 compared to
other Florida markets.
Although the Midwest on the whole is expected to move into a
recovery mode next year, prospects are a bit divided between the
region’s eastern industrial states, which are projected to experience
further declines in the second half of 2008 as the result of ongoing
economic weakness, and the western farm states, which will show signs
of improvement earlier stemming from flourishing agricultural
commodities.
The West will be the slowest to recover, according to the NAHB forecast.
“This should not be surprising since this region is dominated by Las
Vegas, Phoenix and markets in California,” the forecast says. “These
markets join the Florida markets as among the most troubled in the
nation. Over-production, double-digit house price appreciation, heavy
reliance on subprime mortgages and rapidly rising foreclosure rates
were staples of these markets through this housing cycle and most of
these markets are expected to decline through the end of 2009.”
Levels of excess in western markets where prices have been on the
decline are an almost certain indicator of further price erosion, the
study says.
Notable exceptions to the relatively gloomy outlook for the region include:
- New Mexico, where production and price growth have been moderate
and subprime mortgages and foreclosures have remained below the
national average
- Colorado, where production and prices remained restrained, subprime
borrowing has been high but foreclosures have so far been low
- Idaho, where production spiked during the boom put price
appreciation remained modest, and subprime mortgages and foreclosures
have remained low
Posted by Mike Selvaggio in General on May 1st, 2008 at 9:55 AM
Jim Glassman, managing director and senior policy strategist with J.P. Morgan Chase & Co., said that prospective home owners will have to return to how their parents bought homes and start saving more money for a downpayment.
"The customer you have known for the past 20 years is not the customer you will know in the next 10 years," he said, as the economy transitions into a new era that "won't feel like it has as much oomph."
The best news for the economy, he said, is that the emerging economies, largely in Asia, are doing fine and providing strong demand for U.S. exports and providing U.S. companies with "spectacular levels of profits."
"The world has never seen such great economic performance since the dinosaurs," Glassman said, and as a result, the winds are shifting in favor of regions of the U.S. that rely heavily on exports, including Michigan.
In NAHB's latest housing forecast, new single-family home sales are projected to decline 21.8% this year, to 605,000, before climbing 18% in 2009 to 714,000.
Total housing starts are forecast to decline 29.5% to 948,000 in 2008 and rise 10.8% to 1.05 million next year. Most of this year's decline will be concentrated in single-family production, which is expected to drop by 37.1% to 653,000 homes.
Home prices are down about 12% since the height of the housing boom in 2005 and incomes have grown 14%, bringing "prices relative to income to about where they were in 2003" during this year's first quarter, he said. "We have flushed out most of the excess."
Glassman said his guess is that home prices will decline 5% or so further, but gloomier forecasts foresee another 15% to 20% drop, and what will actually happen is probably somewhere in between those two views. "By fall, we will start to see that most of this is over," he predicted, but he conceded that he wished he knew "where home prices would settle out."
The outlook for housing and the economy should be gradually brightening within a few months, but before there can be any assurance that the worst of the downturn is over, there needs to be a pickup in home sales, according to panelists at NAHB's Spring Construction Forecast Conference on April 24 in Washington, D.C.
Residential production and sales this year have declined "more sharply than anticipated," said NAHB Chief Economist David Seiders, and the situation for the U.S. economy "definitely has darkened," with more than an even chance that it has lapsed into a "mild" and brief recession in the first and second quarters.
Seiders said that he continues to believe that new single-family home sales will stabilize during the middle of this year, paving the way for an upturn in late 2008 and in 2009 and leading to improvements in housing starts next year. However, "the sales side has to be off the deck before starts stabilize and move up," he said.
And so far, he reported, there are few signs that new single-family sales are close to bottoming out, with the Commerce Department just announcing an 8.5% decline in March, to a seasonally adjusted annual rate of 575,000, a 17-year low, and increasing the unsold inventory to an 11-month supply at the March sales pace.
Through March, Seiders said, NAHB surveys of 30 large builders accounting for 25% of sales nationwide, showed "no signs of stabilization, although the rate of the decline may be slowing." Likewise, the NAHB/Wells Fargo Housing Market Index, which polls builders to gauge their opinion of current sales conditions and demand six months down the road, remains close to its record low recorded in December and "shows no recovery yet, implying further deterioration of sales."
"We need demand to revive to turn around the market," Seiders said, and he suggested that a temporary tax credit for home buyers, an approach being considered in housing and economic stimulus legislation on Capitol Hill, could help provide the impetus to boost sales and end the downward spiral in home prices that is the biggest concern for the health of the nation's economy.
As home prices have declined, he said, "underwater" mortgages with balances exceeding the value of the home have been adding to the deterioration of loan quality that began in the subprime sector last summer. This is "bad for the financial markets," he said, and could result in further tightening of lending standards, yet more foreclosures and even softer housing demand.
Economists participating in the conference were fairly optimistic that the downward turn in housing prices, while substantial, will taper off before it takes a toll on the longer-range outlook for the economy, but nobody can know for sure, they said.
Seiders also stressed that there are negative implications for the economy if housing does not move into positive territory next year. The tax rebate checks that households will soon begin receiving as part of February's economic stimulus legislation should help revive the economy during the second half of this year, he said, but growth in housing will be needed to keep the economy on a positive course in 2009 as that stimulus fades.
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