Ways Sellers Can Compete with Foreclosures

The number of home purchases involving foreclosed properties or short sales is more significant now than ever before.  However, for many would-be sellers, the idea of competing with the ridiculously low-priced house down the street somehow doesn’t sound all that encouraging.  MSN recently offered some advice to the non-distressed, above-water sellers on ways that they can compete with foreclosures.

1. Sell sooner rather than later.

We’re not suggesting that you should sell ASAP if you’re unsure about it, or if you really don’t have to.  But if you are planning on selling soon, or if you need to sell, now is the time to make your move.

“Sure, the slowdown in foreclosure activity could mean less competition now. But you should account for a boomerang effect: The number of foreclosures is expected to skyrocket later this year.”

2. Get your story out

In many parts of the country, foreclosure purchases and short sales comprise 20% to more than half of all home sales.

“If you are a long-term homeowner who has kept up on your mortgage payments, you must deliver that message. This is your key advantage over a lower-priced foreclosure, especially in light of the robo-signing mess. Buyers will know from whom they are buying the home —no title issues here. You can get this point out tactfully in your ads with phrases such as ‘long-term ownership’ and ‘been in the family for decades.'”

3. Do your homework.

Informed buyers (read: serious buyers) will come prepared with a list of comparable properties which will include any active listings or sales (standard, foreclosure, and short sales alike) in your neighborhood.  Sellers may want to, “Provide your own market analysis, which can help highlight the challenges facing foreclosed properties.”

Your market analysis, according to MSN, should include two parts: “The first report should be of comparable homes sold in the past few months, with foreclosures broken out separately…The second should detail homes on the market now. This will help you frame the decision on favorable terms: Buyers should consider homes like yours instead of foreclosures.”

4. Price aggressively without undercutting foreclosures.

Listen up: “The aim is to sell your home, maybe with a small gain. Forget about making a killing. Few homeowners who are current on their mortgage can match a foreclosure price.

However, buyers are still looking for a good deal.  MSN advises sellers to, “Look at what other nondistressed properties are selling for in your neighborhood and set your price below them. Drive home the point that the price is the price — with foreclosures, a bank can take a better offer until the day of the closing.”

5. Burst those foreclosure fantasies.

Most buyers are not completely aware of what it takes to buy a foreclosed home. Frequently, “Individual buyers don’t stand a chance because they compete with investors who are ready to pay cash. If buyers or agents don’t know this, enlighten them. There is a significant percentage of buyers (who) could not buy a foreclosure if they wanted to.”

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Home Odors that will Scare off Buyers

“Sniff, sniff–that smell is buyers walking away from your odorous abode.”

It may come as a surprise to some, but home odors can turn into a huge problem when it comes to selling your home.

When a buyer walks into a home for the first time, they’re using all of their senses to get a feel for the home and to picture how their life would fit with this home.  And many buyers will have trouble doing this if they can’t get past a bad smell.

A recent article released by MSN pointed out that, “A buyers market is a tough challenge for sellers… Your house has to look a little better, smell a little better and be priced a little better than the other houses the buyer will look at that same day.”

The MSN experts caution sellers not to underestimate the power a bad smell may have on a potential real estate transaction: “Homebuyers don’t want houses that stink. Sellers must identify and remediate odors that make prospective purchasers hold their noses and run for the exits.”

Unfortunately, determining whether or not your home has any problematic smells is not always easy. People get used to the way their own homes smell, making it very difficult to identify a smell that is so familiar to you as one that offensive or unpleasant to someone else

Outside sniffers

The best way to find out whether a house smells OK is to “ask someone who doesn’t live there to come inside and give an opinion,” MSN experts advise.

The best person to rely on for this is the real estate agent hired to sell your home.  It’s important to pick the right agent, as a good agent will always advise on your home’s weak points and ways to minimize or eliminate any potential problem areas.

Pet odors

When it comes to home odors, two of the biggest offenders are pets and cigarettes, neither of which are an easy fix.

“The point might seem obvious, but the first line of defense in any smelly situation is to remove the source of the problem, even if that means a beloved pet must board elsewhere for a while… If the pet is in the house, you’re introducing new odor every day.”

Pet urine, among the worst of bad odors, can seep into the carpet fibers and padding, concrete and wood floors, tile grouting, upholstered fabrics, furniture cushions and pillows.  “Oftentimes…you have to remove the carpet, remove the pad and seal the floor, and then replace the carpet and the pad.”  Cleaning the carpet may help a little, but any humidity will reactivate odors as they rise from the carpet padding or floor beneath.

No smoking

Cigarettes leave a lingering odor, as it clings to furnishings, drapes and other window coverings and work its way inside walls.  According to MSN, “Some topically applied solutions can help to reduce the stench, but an ozone generator, hydroxyl generator or air scrubber should be more effective.”  While these approaches are very effective, there is no guarantee that an odor can be eliminated.

You may also want to consider remedial action, say the MSN experts, in the event that someone suffers a long illness or dies in a home.  In most cases, a good airing may be adequate to remove any odors.  However, “In the case of a violent death, however, professionals who handle what’s known as ‘trauma cleanup’ should be called to do the job. The cost might range from a few hundred dollars to $1,000 or more depending on the type of remediation and the square footage.”  For these types of extreme situations, its probably best to bring in professional help: “It may be traumatic for you to do it yourself.”