The traditional spring-summer home-buying season has begun. The national housing market remains brutal, affected by high inventory, high foreclosure rates and a historically high level of underwater mortgages. Without a doubt, it is a buyer’s market. But is there anything sellers can do to get the best price for their house and in the shortest amount of time?
24/7 Wall St. examined the U.S. home market with the help of a number of the leading real estate experts and organizations that track housing trends. We asked them just that: What can sellers do in a housing market that a Case-Shiller report last year described as worse than the Great Depression? All of the experts agreed that there are several concrete actions that can help most sellers.
The home sales environment in the U.S. has changed in two profound ways in the past decade. First, the housing bust, which began in 2006, has depressed home values in some markets well over 50%. In these regions, as real estate research firm RealtyTrac reported, more than 1 in 500 homes can be in foreclosure in any given month. In states such as Nevada and Florida, the figures are worse. A foreclosed home often sells for a third less than the price of a house not in foreclosure. And if there are foreclosed homes in their neighborhoods, it is nearly impossible for homeowners selling their houses to get a premium price.
The downward pressure on home values is compounded by the fact that one in five U.S. mortgages is underwater, according to research firm CoreLogic. All of these homes have mortgages with balances greater than the appraised price of the houses themselves. Put together, foreclosures and underwater mortgages make it harder for homeowners in most regions to get anywhere close to what their homes were worth five years ago.
The other profound difference in the home-buying market is the presence of the Internet. Twenty years ago, buyers had few tools to sort through the available houses before visiting them in person. Now, according to Elizabeth Blakeslee, an associate broker with Coldwell Banker in Washington DC, 70% to 80% of buyers look at homes online before they visit a house. The figure is much higher in cases when people are relocating from one part of the country to another. The ability to present a home well online and achieve maximum penetration on the different real estate sites has become of paramount importance — expertise that a good broker has.
Despite the changes, our research shows that some aspects of successful home sales have not changed at all. Homes with “curb appeal” — the impression a buyer gets before reaching the front door — tend to sell better than houses with poor landscaping and exteriors. An excellent real estate agent is by far the best consultant for setting price and preparing a house for sale. Getting a house appraised helps in setting a price that a bank is likely to accept when the buyer applies for a mortgage. Getting the house inspected before the sales process begins allows the seller to identify potential impediments to a sale.
24/7 Wall St. identified the 13 actions homeowners should take to increase the chance of selling their homes, regardless of where the homes are located. Obviously, a seller in a market in which houses are moving quickly and at premium prices has a better chance to sell a home. But these pieces of advice apply to slow, troubled markets as well as to the hot ones.
In order to identify these best practices, 24/7 Wall St. interviewed real estate experts from Trulia, Zillow, Realtor.com and Coldwell Banker and reviewed the most recent housing data from S&P/Case-Shiller, Corelogic, Fiserv and RealtyTrac.