Eight ways to beat the recession blues in today’s real estate market
BY LISA SCONTRAS
OK, let’s review. When life throws you lemons, what do you do?
It’s amazing how many people forget that, even in a down economy, real estate is bought and sold every day. You just have to know how to make the market work for you. Here are some tips for beating the recession blues.
1 Borrowers should expect to put down at least 10 percent for a “conforming loan” a mortgage that Fannie Mae and Freddie Mac will purchase. But if that is a dealbreaker for you, some borrowers are rediscovering FHA loans, which require only 3.5 percent down and are more lenient on credit scores, making them a popular choice for cash-strapped homebuyers. According to Susan Onishi Andrade, Realtor and partner with Prudential Locations, FHA loans allow entry-level buyers the opportunity at home ownership.
2 The U.S. Department of Housing and Urban Development reports that a staged home will sell at a higher price than an unstaged home. According to Realtor.com, the first thing to do is clear out the clutter. If your house holds too much furniture, your closets are overflowing, your kitchen and bathrooms are crowded or you have family photos or knickknacks collecting dust, it’s time to pack them up. You might consider donating unused items to a charity or even selling them at a tag sale or on eBay for some fast cash.
3 A picture is worth a thousand words and killer photos can sell your home. Sellers, make sure your real estate agent maximizes your home’s exposure with high-quality, professional-looking photos. According to Onishi Andrade, great photos will capture an online buyer’s attention faster than anything else.
“It’s been proven that a vast majority of buyers go online to look at properties long before ever contacting a Realtor or visiting an open house,” she says. “If the listing does not display quality photos, it will have very little appeal to online prospects.”
4 If your house doesn’t have curb appeal, it may sit on the market indefinitely. A Michigan State University study estimates that good landscaping adds 6 to 11 percent to the sale price of a home. To avoid the dreaded drive-by, make sure your lawn is mowed, the porch is immaculate, the house is freshly painted and the front door is clean. Ask your Realtor for advice on how you can spruce up your yard and put more money into your pocket.
5 Homebuyers aren’t the only ones who can benefit from a professional home inspection. If you’re selling your home, have it inspected before you list it on the market. This way, you will know what you can repair ahead of time to make it more appealing to buyers.
“An inspection report will provide you and your agent with a list of repairs that should be addressed prior to putting your property on the market for sale,” says Onishi Andrade. “A pre-inspection sends a message to a buyer that, as a seller, you are conscientious with the condition of the property, trying to minimize the risk of a major problem being discovered during the transaction. The report can also be used to assure prospective buyers that your home has no hidden defects and is in good condition.”
6 Watch what you say. When putting your home on the market, the right phrasing in your listing can be the key to attracting potential buyers. According to a recent MSN article, researchers found that home-listings with the words “beautiful” or “gorgeous” sold 15 percent faster, while “landscaping” bumped sales 20 percent faster. “Move-in condition” expedited the sale by 12 percent.
Contrary to popular belief, the article suggested you steer clear of words that highlight desperation such as “motivated” and “must sell.” The study found that the use of these words in the listing actually slowed sales by up to 30 percent.
7 Investors, especially first-time investors, should look for easyto-rent apartments, condos or a duplex or triplex. According to a leading commercial real estate brokerage firm that specializes in investment services, during a downturn, young people are the most likely tenants of these type units and that segment of the population is growing and buying.
“Consider upgrading your real estate investment portfolio with a 1031 tax exchange,” suggests Onishi Andrade. “Historically low interest rates combined with current market conditions create a perfect environment for the real estate investor.”
8 A real estate agent in Chandler, Ariz., says bad publicity is good for real estate investors. “I love the people who read about all the gloom and doom, because they stay on the sidelines and go, ‘It hasn’t hit bottom yet.’ Whatever. By the time everyone jumps back in, we’ll be out and doing something else.”