SMART MOVES - Home sellers: Can you afford complacency?

SMART MOVES - Home sellers: Can you afford complacency?

With summer upon us, housing inventories are tight as a drum in many popular neighborhoods. Indeed, it now takes a typical home seller less than a month to capture a deal, according to a new report from the National Association of Realtors.

“Houses continue to fly off the market,” says George Ratiu, a top economist and the association’s director of housing and commercial research.

But he says current home sellers should “absolutely avoid complacency” because there are a few darkening clouds starting to form over the market. The new report shows that due in large part to rising mortgage rates, home sales fell back for the second straight month in May. What’s more, some properties in poor condition are languishing unsold for a lengthy period.

As real estate agents can attest, a home that first goes on the market at a list price substantially over its legitimate value can take an unusually long time to sell. But even well-priced homes can linger unsold for a lengthy period if presented to the public in poor condition.

“Some people just don’t have the money to spend for necessary remodeling, or they have to make a quick move for a job transfer and don’t have time to make improvements,” Ratiu says.

Ashley Richardson, a veteran real estate agent, says a minority of sellers are stubbornly indifferent to the advice of their agents on necessary fix-ups, and these sellers must ultimately accept a sacrificial price.

“In the end, a house in poor condition will probably sell to an investor, who will insist on a discount of between 25 and 50 percent off its potential market value. Investors usually do the necessary improvements themselves and then quickly flip the property,” says Richardson, who’s affiliated with the Residential Real Estate Council.

Here are a few pointers for sellers:

• Seek an agent willing to offer some oversight of your issues.

Homeowners facing financial hardship – such as a potential foreclosure – often lack the time and money for needed property fixes. But those with the resources to make the needed changes should do so and often benefit from the help of a listing agent willing to captain their project team.

“The agent can screen contractors, secure proposals and help ensure the work is done right. They can also make sure that the house is kept locked up and secure in your absence,” says Eric Tyson, a personal finance expert and co-author of “House Selling for Dummies.”

Of course, not every listing agent is willing to coordinate pre-sale improvements. But others will enthusiastically assist, realizing that they, too, would benefit from a successful sale.

However, Tyson cautions that some agents – including very accomplished ones – lack the know-how to provide expert guidance on infrastructure repairs, such as major plumbing or electrical work.

“Don’t assume every agent is up to the task. Good bets are house aficionados, or people in the business who fix up houses and then sell them for a profit,” Tyson says.

• Recruit energetic assistance for your decluttering campaign.

It’s no secret that prospective buyers are turned off at the sight of a cluttered home. Most can’t envision the size and scope of a property with overflowing bookshelves, bathroom vanities crammed with toiletries, or kitchen countertops ridden with gadgets.

Still, Mark Nash, author of “1001 Tips for Buying and Selling a Home,” says most sellers find the pre-sale process of culling through their belongings both taxing and emotionally overwhelming.

“Well over half the people who’ve lived in a house for 10 years or longer have accumulated way too much junk. And they have a terrible time going through all those belongings in a methodical way,” Nash says.

Nash encourages sellers to post an ad offering to pay for help culling through their possessions –keeping those they value and casting off or giving away those they don’t want.

Chances are your ad will attract neighbors, including students, who are seeking part-time work for extra spending money. The person you hire should help you plow quickly through your accumulations and also help with the physically demanding side of the work.

• Realize that looking back is a waste of your time.

Some homeowners have for years allowed their properties to deteriorate while they’ve focused on other issues, such as career challenges, child-rearing or health problems. Others have no explanation for neglecting their homes, except inertia and procrastination.

Also, Nash says, many sellers resist the idea of putting money into a property they’ll soon be leaving. This is especially true of cosmetic improvements, such as the sanding and polishing hardwood floors, or kitchen upgrades.

“People ... kick themselves that they didn’t make the changes sooner so they could enjoy them, too,” Nash says.

But there’s no advantage to postponing needed improvements. Resistance to change can be an especially costly error if your place is already vacant and you’ll have to carry two mortgage payments until it gets sold.

To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.