Let's say you really are in a dire financial situation. The best self help books out there (and even many of the worst) suggest one simple thing before elaborate budgets, job schemes and everything else. They tell you to spend less. Which is quite often a lot easier said than done. But it's possible. The scale is of course up to you, but one of the biggest things you can do to slow the bleeding of your pocket book is knocking a mortgage out of the park.
When you buy a home you typically apply for a home loan from a lender. This lender will pay the seller of the home their asking price and establish a line of credit with you, the buyer. You will then receive monthly payments from them just like you would from Visa or American Express. The amount you pay will of course vary depending on the price of the home, length of the home loan and interest you are charged.
Which is perfectly acceptable. But in a tightening economy sometimes it is necessary to trim the fat. Sure, you can trade in your elaborate BMW for a used Chevy Malibu. But sometimes when the going gets tough it may be prudent to sell your home and either find a cheaper one, or simply tough it out in an apartment for a little while.
The real estate market is in shambles right now. Many big lenders have simply imploded under the stress of so many foreclosures. Many more have stopped issuing new lines of credit altogether. And of the few that are still offering home loans, they're being a heck of a lot pickier about who they reject and who is approved.
Needless to say it's a double edged blade. During the time you may need to sell your home the most it's the hardest. But there are a couple of tricks you can do to get your home on the market and sold as quickly as possible, saving you mortgage payments, time and energy.
- Price it right: The market cannot be manipulated. It is a simple case of supply and demand. When there is more supply than demand, prices drop. When there is more demand than supply, prices sky rocket. So even though your neighbor sold his home, which is identical to yours in every way two summers ago for $250,000 that does not mean yours will go for the same price.
So contact a realtor and ask about a cost market analysis on your home. Most realtors don't get paid until your home is sold, so the report should be free. Just don't lead them on.
- Stay realistic: A real estate agent may give you a price that you don't like. Tough. While they may be off slightly it's probably a whole lot more realistic than your estimate. They are professionals. This is how they make their own mortgage payments.
An agent who panders to you and says they can sell your home for a lot more is typically someone to stay away from. Your home is going to be listed on the same market no matter who sells your property. It's in an honest realtor's best interest to give you an accurate price. The more realistic it is, the faster it sells. The faster it sells, the sooner they get paid. If it's too low, that'll reflect their commission negatively, too.
- Stay away from the buyers: Let your realtor do their job. When a showing is scheduled on your home, get the heck out of dodge. Go for a cup of coffee. Take the dog for a walk. If you stick around and chat up the buyers you may let an insignificant fact slip that may hurt your bottom line if they decide to write up an offer. Or you may come off as desperate.
- Don't be difficult: A lot of people see houses on the fly. Sometimes they may only want to give you a couple of hours notice before they want to see your property. Very rarely will they give more than 48 hours notice. So don't shoot down the middle of the week buyer who wants to check out your home at 7 PM because you're tired and it's 5:00. He may wind up buying your property.
Showings don't take more than fifteen minutes usually. You can manage.
- Listen to feedback. No. Really. Listen: When someone sees your home through your real estate agent they're usually asked to provide some sort of feedback on how your home showed. Gather it and study it.
If a lot of potential buyers didn't like the dark color you painted your bedroom, repaint it. If they thought your lot was too spartan, plant some flowers. And don't be scared to emphasize the good too. If some buyers liked your hardwood floors, polish them. If they thought the breakfast nook was especially cute, put some fresh flowers on the table.
Remember, it doesn't matter what you think. Buyers are fickle and picky, you have to coddle to their general wishes sometimes in order to wash your hands of a home.
- Use public open houses wisely: Open houses cost a lot of time and energy, so it's important to schedule them well. Not only does it destroy your day because you have to bust your hump cleaning and polishing before jumping ship, but advertising is expensive.
So a real estate agent isn't going to want to have one every weekend. Not only will they have to sacrifice a day off, but they're going to shell out a couple hundred bucks to get the word out. All on the chance that someone might show up.
So plan them for weekends that are looking relatively warm and sunny. Stay away from weekends with sporting events, holidays or attractions. If everyone is watching the superbowl or attending the county fair, no one is going to be paying your home a visit.
- Use broker open houses wisely: A broker's open house is just that. It's where your realtor invites all of his cronies to your pad to check it out for their buyers. It's a powerful tool, but keep somethings in mind.
Broker open houses usually only happen to the best priced and maintained homes on the market. Why? Because it's a chance for potentially every real estate professional in the area to critique your home. If they don't like it, they're not going to suggest it to their buyers.
They're also usually in the middle of the week. No one wants to sacrifice their weekend just to stand around a some stranger's house on the off chance they might know someone who might be interested. So make sure you're able to clean house in the middle of your work week.
They're also usually somewhat catered. Everyone loves a free lunch. Food acts as bait. So offer to help your real estate agent with food costs and ideas.
Make it count, because you'll probably only get one broker's open house. Once everyone has seen it, they won't want to see it again.
- Make an awesome first impression: Stupid little details impress people. Even the details that aren't going to stick around after you pack up and move. So consider fresh flowers on the dining room table, keeping the house immaculately clean inside and out and making sure there's as little clutter as possible.
If you need to pack some things or put some stuff in storage, so be it. You're going to have to move it eventually anyway.
- Keep pets out of the way: Sometimes a showing will happen in the middle of the day while you're at work. That's usually fine, if you don't have any pets. But what if you have a dog or a bunch of cats running around? What if one of them gets outside because of an ignorant agent?
Whenever a showing is about to occur or you're going to leave the house for the day, secure your animals. Confine the cats to the guest bedroom with some food, water and a litter box. Crate your dog, et cetera. And make sure everyone knows about them. It's helpful for a buyer to know that you have a lab crated in the basement, but he's really friendly. Or you have a pug locked upstairs that loves to bark, but wouldn't hurt a fly.
- Consider every offer, no matter how pointless it seems: Let's say someone likes your home. So they write an offer and send it along. They may ask for a substantially lower selling price, or that you pay for their cost of moving.
There's probably a reason why they're doing that. Maybe your home is a little over priced. Try to negotiate. You'll be surprised how many people reject contracts on their home because of a couple of thousand dollars, but wind up staying on the market for months and end up paying way more than that in mortgage payments and price reductions.