As we start into a new season in the Denver real estate market, we start to see more sellers getting the "attitude". That means one of three things: The prices are 7% above the last sale because "that is what I think it is worth and everybody's house in Denver is going up that much!"; the availability is limited' eg terms "showings only between 6 & 630"; and the condition is marginal "they can fix it up...I do not have to work to sell my house". One sees this especially in the listings that expire off the market everyday. Truth is, in Denver every neighborhood has its own appreciation rate (price), and sometimes it is depreciation in the million plus range. And more truth: you cannot sell it if they cannot see it (available to show) and it still does need to be in top flight condition to sell as fast as we want. It also points out the value a full-time, professional Realtor can add to your efforts. Here is a perspective from my friend Pat Zaby:
The seller has three tools available to affect the marketability of their home: price, condition and terms. Price is the easiest to adjust for the competing properties, amount of inventory or market conditions. However, lowering the price is not necessarily the best decision when trying to maximize the proceeds of sale.
If a home is in poor or outdated condition, updating can be done to make it show favorably with other homes that are currently on the market. Sometimes, sellers rationalize not doing the work by saying they believe the buyers would rather make their own choices. The truth is that most buyers are using all their resources to get into the home and will have to live in its present condition until they can save enough to make the changes they want.
Another reason to go ahead and invest the money and effort into improving the condition is that it is difficult for buyers to imagine the home any other way than its current condition. When comparing one home to another, buyers will sometimes refer to a home as the “stinky house” or the “old kitchen” which may put it at a disadvantage.
While price and condition are the main things that control the marketability, terms can be equally effective. Terms relate to financial considerations made by the seller to induce a buyer to make a decision to purchase their home.
Seller-paid points or closing costs, interest rate buy downs and owner-financing are examples of terms that may increase the marketability of a home because of the additional benefits they offer to buyers.
An example could be that a seller will carry a 10% second lien so that the buyer can get an 80% loan and avoid the expense of mortgage insurance. The seller gets most of their equity plus a fair interest rate on the loan that doesn’t have to be tied up for 30 years like the first mortgage.
Increasing the marketability of your home is a great conversation to have with your real estate professional especially to help you get the highest price in the shortest time with the fewest problems. Just be aware that not all agents may be as creative as some and not all are Realtors.