At the peak of the housing bubble, houses flew on and off the market with the greatest of ease. Credit was plentiful, and the rise in home prices seemed like it would last forever.
Unfortunately, if you're now looking to sell your home, this is no longer the case.
The implosion of the housing market, the lack of easy credit, and a glut of available housing has made selling an arduous process that could take months, even years. According to the Accredited Seller Agent Council, the average time it takes to sell a home is now 10 months. And in hard-hit areas like Phoenix and Las Vegas, the prospect of selling a house is nearly impossible. Sellers are forced to hold onto losing investments, draining their pocketbooks and their confidence in an economic recovery.
"Real estate has fundamentally changed," says Roger Staiger, an adjunct faculty member at the Johns Hopkins Carey Business School. "Real estate is not the American dream. For many, it has become the American nightmare."
Seeking a leg up on competition. But there are steps sellers can take to improve their chances. A prime advantage many sellers can gain is purely aesthetic, according to Brad Knapp, regional vice president for the National Association of realtors for Ohio and Michigan and a senior vice president at Henkle Schueler, a real estate firm in Cincinnati.
"Sellers need to make their home stand out. The first thing is outside maintenance," Knapp says. "Make sure the house is cleared of winter clutter, that windows are washed, that the front door is painted or clean. You have to give the house good curb appeal."
Knapp adds that the inside of the house should be scrubbed of the seller's personality. The home should be free of clutter; excess belongings should be put in a garage or a storage unit. Pictures should be removed and walls freshly painted. "Hunters and fisherman often have game hanging on the walls," Knapp said. "Some people are offended, so get that off the walls and into the garage."
Robert Simon is a professor of urban studies at the Levine College of Urban Affairs at Cleveland State University. He says the house must be presented in a way that reflects not on the owners, but on the value of the home. "It might behoove [sellers] to hire a professional stager to help them," Simon says, referring to people who decorate homes to improve chances of a sale. "You have to get it right so it looks lived in, but definitely not cluttered."
Buyers now expect sellers to spend money on routine maintenance, like fixing a roof, he adds. "People don't care if you spent $15,000 fixing the roof. It's worth nothing," Simon says. "The market expects the roof to be in tip-top shape. You have to go above and beyond."
"You want to get a 'wow,'" he adds. "It can be landscaping, it can be a bathroom or a kitchen. You want to have an eye-catcher, something to remember in a market where there are a lot of good deals. Spend $10,000 to 20,000 to create some kind of recognizable factor."
Realistic on pricing. One of the largest stumbling blocks to selling a home remains price. It's still a buyers' market, and sellers are often disappointed with the offers they receive.
Simon says sellers' expectations need to be lowered and they must be ready to accept less than what they're asking. "When you get the offer, don't be greedy. Take the first reasonable offer. Set a threshold within 5 to 8 percent of your asking price. Make a decision and go with it," he says.
Ideally, if a home is priced to sell, a flood of offers should come in the first two weeks. "After two weeks, you lower your price," Simon says." If a house is on the market for over 100 days, something is wrong. Take it off and sit it out for three months."
Staiger, the adjunct professor at Carney Business School, says homes staying on the market for months or years at a time is becoming the new normal in American real estate.
Purchasing a home was once a cornerstone of the American experience, he says. It was viewed as a sign of financial maturity and stability, as well as a way to build wealth. However, during the subprime meltdown, many Americans lost fortunes through real estate. Now credit is hard to come by and the decades-old belief in the safety of real estate is dead. The purchase of a home no longer holds a sacred place in American society. "You have a repositioning of the American home within the persona of the American culture," Staiger says.
Complicating the difficulty in selling homes is the glut of foreclosed housing that remains on the market. Until that excess supply is removed, sellers will remain at a steep disadvantage.
"It's going to take us two, two-and-a-half years to work through this excess supply, and the banks need to finish foreclosing," Staiger says. "It doesn't allow the market to clear."