RealtyBizNews - Real Estate Marketing and Beyond
Real Estate Marketing & Beyond
Home » Housing » US Real Estate » Selling Your Home in a Flat Market

Selling Your Home in a Flat Market

By Daniel Doran | August 6, 2012

While there have been phenomenal buying opportunities over the past five years, these have come at a cost to sellers.  Homeowners attempting to sell property that is not distressed in particular, have found it extremely difficult to compete with the flood of short sales and foreclosures on the market.

© rukanoga - Fotolia.com

Many of these sellers are Baby Boomers who were counting on the income from the sales of their homes to fund their retirement.  They paid off their mortgages and were waiting until retirement age to cash out - only now their homes are worth anywhere from 25% to 45% less than they were just a few years ago.

Here are some strategies if you find yourself on the wrong side of this equation to try and minimize the damage:

Don't wait any longer

Yes it may seem like the market has bottomed out and prices may start to rise but this does not mean you should wait it out.  Housing markets are notorious for taking years, sometimes a decade, to recover from the type of depression we have just experienced.  Also, part of the reason prices have stabilized is because lender's artificially created more demand by holding onto foreclosures and not flooding the market with houses.  There are currently still over two million homes in foreclosure.  These properties are going to slow down growth for many years.

Think locally, not nationally

You may have seen a news story that says the housing market is recovering.  Well that may be true for certain parts of the country but what about where you live?  Many markets are still showing downward trends in prices.  Just because some of the hardest hit areas like Phoenix and Miami are rebounding doesn't mean your local market is doing the same.  The best thing to do is go online and look at what housing trends are doing where you live.

Don't compare today to five years ago

Many sellers are still trying to get top dollar for their properties because they are having a hard time accepting the fact their investment has gone down from it's peak.  Just because your house may have been worth $300,000 in 2005 doesn't mean you are going to get that amount for it anytime soon.  Almost everyone has lost money.  If you are trying to recoup the costs for a new kitchen or flooring or an expensive pool you have to let it go.  This money is gone and your house is only worth what you can sell it for today.

Are you upside down?

It is believed that almost half of US homeowners are underwater on their mortgage, meaning they owe the banks more than their homes are worth.  If this is the case and you need to sell your options are very limited.  You can request a short sale from your lender where they agree to accept less than what they are owed in exchange for releasing you from the debt.  However in most short sales you walk away from the property with no money.  A more viable option is to try and rent your home.  Even if you are just breaking even on the payments with the rent you're collecting you  are still paying down your mortgage and holding onto your investment.  Since you walk away from a short sale with no cash this option doesn't cost you any money to do.  If you can keep the place rented then you can wait out the recovery instead of losing everything you put into the house.

Renting versus Owning  

What are you paying right now to own your home? What would it cost you to rent a similar home?  While it is true that with today's ultra low interest rates it is almost always cheaper to own than to rent, what if you're interest rate is not great?  If you have a high interest rate and are upside down on the loan so therefore can't refinance, it may make more sense to sell your home in a short sale and rent something similar.  You could be lowering your monthly expenses and in the meantime rebuilding your credit so in a few years you can buy again.

Daniel Doran is a 20+ year veteran in the real estate industry. He is a previous owner of a law firm, mortgage and title company. Daniel has also written several books on mortgage modification, short sales and real estate investing. He currently specializes in Commercial Finance and Real Estate Development and is a graduate of Manhattanville College and Brooklyn Law School. You can contact Dan at Buildings By Owner

Daniel Doran is a 20+ year veteran in the real estate industry. He is a previous owner of a law firm, mortgage and title company. Daniel has also written several books on mortgage modification, short sales and real estate investing. He currently specializes in Commercial Finance and Real Estate Development and is a graduate of Manhattanville College and Brooklyn Law School. You can contact Dan at Buildings By Owner
Latest posts by Daniel Doran (see all)
  • Sign up to Realty Biz Buzz
    Get Digital Marketing Training
    right to your inbox
    All Contents © Copyright RealtyBizNews · All Rights Reserved. 2016-2024
    Website Designed by Swaydesign.
    linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram