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Tips in Selling My Home in a Difficult Market
The good news is nationally home sales were up in July 2008 3.1% compared to July 2007 according to the National Association of Realtors. However, the national median existing-home price was $212,400 in July, down 7.1% from a year ago when the median price was $228,600. So the bad news is most real estate markets are not ready to recover, and there is a glut of unsold homes on the market right now.
Also Chicago area mortgage lending has tightened up with many lenders requiring buyers to come up with 20% down payments, which is making it difficult for buyers to get loans right now. So what does this mean for Chicago area home sellers? You have to price your home right and offer incentives to sweeten your deal. Here are some selling tips to help you sell your Chicago real estate in a difficult market:
1. Pricing your home slightly below market.
2. Use sales incentives to add value to your home and sweeten your deals without dropping your asking price.
3. Offer seller financing to the buyer if possible to close your deal.
Some deals might not be able to close with conventional financing. This works well for real estate investors who are planning to sell property and want a profitable investment.
On the downside though, seller financing can be risky because there is the possibility of the buyer defaulting.
4. Lease-option. Lease options are good for buyers who are worried about current market conditions and cannot make up their mind if they want to buy or they are short on down payments or cannot get financing because of tight credit markets.
5. Purchase a home warranty plan, which protects the appliances in the home, air conditioning and heating systems.
6. Pay the buyer's property taxes for a year or some other period of time. You may already have paid a portion of the taxes or all of it.
7. Do some cosmetic fixing up to your home such as new paint, add landscaping to your yard, make sure your home is clean throughout and remove clutter. Stage your home if it's vacant by furnishing it and showing its best lighting. You want to make your home stand out from other homes that are for sale in your neighborhood.
8. Offer the buyer a cash credit towards their nonrecurring closing costs.
9. Buy down the buyer's mortgage points by a point or two.
10. Hire an experienced and knowledgeable Chicago Realtor who will market your home in the Chicago MLS, newspapers and on the Internet.
Of course, if you are in a distressed situation and facing foreclosure, the best advice is to speak to your lender and try and work out a strategy with your lender to allow you to keep your home and not have to take a loss selling it or lose it to foreclosure.
With the recent passing of the new legislation H.R. 3221, the 'Housing and Economic Recovery Act' of 2008, aimed at helping 400,000 homeowners avoid foreclosure and the government's recent takeover of Fannie Mae and Freddie Mac to keep them from collapsing, this should help many homeowners with sub-prime mortgages facing foreclosure and flooding the inventory in many areas driving home prices down.
Hopefully, many lenders will help their struggling borrowers by agreeing to write off these bad loans under the new bill guidelines and allow them to refinance with more affordable loans.