As March Madness spins into high gear, many teams dread hearing certain words -namely that of the team name they would be playing in the first or second round of the tournament. Hearing the words North Carolina, Kentucky or Lehigh can strike fear into the hearts of those teams hoping to advance further into their respective brackets. But all teams know that being prepared, working to eliminate their weaknesses and putting forth their best effort can go a long way toward getting to that final four and perhaps beyond...
Likewise, as the real estate selling season spins into high gear and sellers contemplate putting their homes on the market, they too dread certain words buyers utter with foregone expectation; seller concession! Seller concessions can take the shape of many forms-money towards closing costs, escrowed funds to fix or update certain elements of the home, inspection items that seem to nickel and dime the seller into a state of restrained fury and on and on. Although, we’ve seen seller concessions become somewhat commonplace over the past few years, the current markets momentum is starting to put the ball back into the seller’s court!
Seller monetary concessions, although still being utilized are shrinking in size and what’s even more promising-seller’s are refusing or greatly reducing the amounts they are willing to concede to buyers in their counter- offers. Seller monetary concessions for Februry 2011 averaged $6,905 vs $3,866 for Feb 2012 (Old Town 22314), a drop of almost 56 percent to LY. In fact, we’ve seen a 17 percent drop in overall average seller monetary concessions from January 2012 to month ending February 2012 in all of Alexandria. I surmise this might be the trend going forward however, there are some steps that you and your realtor can take to mitigate concessions from the very beginning.
Your realtor should know precisely what the average monetary concessions and the trends of these concessions were over the past several months so you know what to expect. Secondly, do everything you can to eliminate the buyer asking for concessions by:
1. Pricing your home right-the key element that will eliminate almost all need for concessions.
2. Repair anything in the home you know needs attention-even the little details.
3. Do the basics well-paint, clean, de-clutter while paying close attention to areas that really have an impact i.e.: bathrooms and kitchens. Don’t forget the curb appeal!
4. Consider offering a home warranty-some realtors may even pay for these as part of their marketing. They’re a great way to put a buyers mind at ease and coverage can begin while you’re still in the home!
5. Consider having a home inspection done before putting the house on the market-often any repairs that may be discovered are much less expensive than finding out about them when the buyer does the home inspection.
6. Have a prepared strategy with your realtor about responding to concessions with price and concession ratios.
In the coming months, we may even see specific new regulation on FHA loans that decrease the amount of seller concessions that a buyer may currently get for FHA loans-6 percent today, with talks of it being cut in half in the very near future. All of this points to the possible end of the “buyer” dynasty over the past several years and the re-emergence of the seller in the game of real estate!
Thinking about selling your home, let us show you the benefit of using “The Selling Edge” to market and sell your home!