Preparing homes properly a major key to selling

The real estate market can swing in a heartbeat. Recently, inmaricopa.com spoke with several Realtors with experience in the Maricopa market.

Deborah Farhat of Long Realty Alliance, Lisa Zaklan of Keller Williams Legacy One Realty, and Dawn Madden of Oracle Realty & Investment offer their opinions on strategies to sell a home, pricing a home in this market, features that buyers look for and more.

inmaricopa.com: If you absolutely had to sell your house today, what strategy would you use to do so?

Farhat: The home must be priced well from the start. In order to attract buyers in this market, we must allow ourselves to see our homes as a buyer would see it. Is it priced well compared to other similar homes in the resale and new construction markets? What are the first impressions that I give a buyer with my home’s curb appeal to the smallest detail of an organized closet? If I were to look at 10 other homes in the same price range, would my home stand out from the rest? And lastly, can I buy a larger home with similar upgrades for the same amount of money? The strategy also includes a very aggressive marketing campaign at the local, regional and national levels. Our buyers come from all over the country, and the Internet is our number one tool used for today’s buyers to attract them to their new home.

Madden: When working with people that have to sell their home today, I would first stress the importance of using a local Realtor – someone that specializes in the Maricopa marketplace. Of course, you must price aggressively but there is so much more required to make your home stand out from the others on the market today. To bring attention to your home, I suggest heavy Internet marketing as over 83 percent of the home buyers in the market start their search online. Being sure the home is in perfect, upgraded condition is something else to keep in mind. Lastly, being open to alternative purchase methods as opposed to a straight sale will widen the target market as well. Some alternative methods include lease purchase, lease option, land trusts and, if the situation warrants, a short sale.

Zaklan: I’d prepare my home first and then hire a competent agent. Prepare the home first by finishing any outstanding home improvement projects, and complete any maintenance items as described below. With this much inventory, your home needs to stand out and be in the best showing condition possible as soon as it hits the market. Then meet with a Realtor to review market pricing, visit your competition, confirm marketing plans, have photos taken and get in the mind set.

inmaricopa.com: How would you price a home for sale in this market?

Farhat: It’s a combination of analyzing several different viewpoints. How will the buyer value it compared to other active listings? How will the appraiser value it? What is the current market trend for other active/pending homes? How does it compare to the builder’s pricing for new construction? And lastly, what are the builder’s pricing and offered incentives for the move-in ready spec homes? Builder spec homes are the toughest one for our resale market to compete against – brand new homes that are ready to go.

Madden: I would compare their square footage and general layout with builder’s spec homes and price accordingly. Yes, the builder has not added painted, landscaping, etc. but nowadays buyers want all the upgrades but don’t have any intention of paying for them. It is typical to find someone that only wants to look at the three least expensive resale homes that are in the market for their criteria. It’s disheartening that all those funds put into the upgrades may get your home sold faster, but it won’t net you additional funds for the upgrades in this type of heavily biased buyer’s market.

Zaklan: With the amount of new homes being built and foreclosures still on the rise, the current market is still considered a ‘trailing market’ in terms of price. It may be at a slower pace than last year, but it is still trailing. So if I absolutely had to sell in the shortest amount of time, I would price my home just below the most recent comparable sales price – staying ahead of the market instead of trying to catch up to it.

inmaricopa.com: What improvements or maintenance would you make to a house now before trying to sell it?

Farhat: In general, there are several things a seller must to do to create a ‘marketable’ home. If the home shows any obvious repairs or maintenance needs, these should be fixed before the home goes on the market. Buyers are now seeing homes that are in model-like condition, so a home that is presented with obvious repairs will most likely be passed by. Another recommended change is repainting interior walls that have been personalized or are painted with dark colors. Rooms appear larger if light/neutral colors are used. Finally, ongoing maintenance is critical throughout the listing period. The interior of the home needs to stay clean, and yards should be maintained at all times. Buyers usually show up when you least expect them.

Madden: In a buyer’s market, the home has to be in perfect condition from the first look to the last. Fix anything that is wrong with the home immediately. Do not wait for the buyers to inspect the home and ask for what they want repaired. As far as décor, investing as little as $2,000 can make all the difference between selling your home and not selling your home. The landscaping should be substantial, perfect and still easy to care for overall. The interior of the home should be painted a neutral color. (Note: white is not a neutral color.) There should be furnishings but they should not distract from the room size.

For instance, an oversized couch in a 12 x 12 living room should be replaced with a more size appropriate love seat. I strongly believe there should be personal touches such as family photos and whatnot, but they should be sparse and not overwhelming to potential buyers. The goal is to have people imagine themselves living in the house. This simple fact is why a majority of the builders have spec homes that are completely decorated as opposed to model homes that are white and empty. All and all, the home has to look model perfect from the moment they pull up to the home.

Zaklan: Improve/maintain the front exterior by adding colorful plants, clean windows, keep walkways/doorways swept, maintain the lawn – the goal here is ‘curb appeal’- make it inviting so that buyers will want to stop and visit. Improve/maintain the interior by cleaning carpets and windows, neutralize paint colors and start packing to de-clutter countertops, floors, walls and to de-personalize the home. The backyard is just as important and should always be well maintained, clean and colorful with flowers and plants.

inmaricopa.com: What features are buyers most looking for in a home in Maricopa these days?

Farhat: The most common features include moderate upgrades like tile flooring, upgraded carpets, upgraded appliances and cabinets, double sinks in the master, separate shower and tub, ceiling fans, neutral interior painted walls, and completed backyard landscaping. We also find many people want a place for a work space/computer area in either a den/loft area. Lots of buyers are currently focused in the size of the great room/family room and paying less attention to the formal living/dining room which can be considered an extra space.

Madden: All the upgrades you can imagine without having to pay the price. I heard a Realtor say to a client “It is so great that you have all these upgrades in your home. Did you enjoy them? Great! Because you are not going to make your money back on them but you may sell your home faster because of them.” While I don’t know that I would word my comments the exact same, the fact is that people want a home that is upgraded to the highest level, but they are only willing to pay the base price for the home. These upgrades can include the community amenities, community location, private pool, lot size, as well as interior upgrades such as tile, granite counters, upgraded fixtures, etc.

Zaklan: Maricopa buyers are not that different than buyers in other parts of the valley. In general if they are considering a resale home, they are looking for a property that has been well maintained, priced right and has overall value. Keep in mind that Maricopa has a higher inventory of new homes, so overall value and presentation are that much more important for a resale home. Specific features that are still most desirable are professionally landscaped backyards, upgraded kitchen and bath features including granite and stone finishings, and open floor plans.

inmaricopa.com: If you didn’t have to sell your house now, how long do you think it will be until the real estate market returns to normal, and how did you figure that timeline?

Farhat: The short answer is two to three years from now before the market stabilizes. Our biggest issue across the entire country will be the fallout from the foreclosures that are just beginning to surface. This is the result of the several years of lenders approving loans that provided a low introductory mortgage payment that adjusts the interest rate in future years to current market rates. As these loans/mortgage payments continue to ‘adjust’, they could easily cause more homeowners to not be able to afford their mortgage payment which tragically results in a foreclosure by the bank.

Maricopa faces another challenge with the newness of our city. I see our city as eventually being split into three desired living areas: North of the railroad tracks; East and South of White/Parker; and South of the tracks. As each subdivision builds out within these sections, we will eventually form a separate resale area and less direct builder competition. We are estimating this to be around two to three years before homes ‘North of the tracks’ is complete.

As a resident of Maricopa, both Aziz (Farhat’s husband) and I strongly believe this city will began to see our resale market strengthen again when a few more things come to pass. They include: More Maricopa shopping choices and movie theaters; more youth facilities/activities to channel their energy in the right places; improved schools (a school district performance record correlates to the local real estate values); creation of more jobs within the city. This would help alleviate some of our traffic/commute issues on the 347.

Madden: Saying the real estate market can ever be ‘normal’ is misleading. I will refer back to my previous survey answer for more details on this, but, overall, it’s usually a buyers market or a sellers market. Very infrequently is the market even for both situations which is what most people would consider ‘normal’. That being said, the market is already starting to level out now for the most part meaning price drops are fewer and farther between now. Builders are slowing down their production and therefore their inventory of spec homes. They will slowly start to raise prices again.

In doing so, the Maricopa Market will rebound at a faster rate than it has been. I base this specifically on the comps that I run for my clients or potential clients. Comps are literally a snapshot of what is going on in the market. They show how many homes are listed, pending sale, and actually sold and for what price on each. In this way, comps are factual as opposed to simply giving a personal opinion on anything market related.

When running comps I am sure to specify the home size, include one set for all of Maricopa and another for the community that house is in specifically and include all builders models. All of Maricopa is the competition on a large scale. The community itself is the direct competition. Once people decide they like a specific community more so than others, they want to focus on pricing of homes within that community only. Timing of the comps is important, too.

The average price per square foot for most homes in Maricopa has been increasing over the past few months. For instance, for a home that is 2,600 sq. ft. the comps run on 6/5 that included homes closing between 3/1 and 6/5 averaged at $102.70 per square foot. Comps run on 8/16 that included closings between 5/1 and 8/16 averaged $104.19 per square foot. Now that’s not a lot of increase, but it is an increase. Again, not a huge increase in price per square foot but every little increase helps in a buyers market such as this.

Zaklan: Returning to ‘normal’ I would equate to achieving a healthy balance between supply and demand. This balance is referred to as the absorption rate and is easily figured by taking the number of active listings and dividing it by the number of homes sold in a set period.

Currently there are over 1,100 active and pending listings in Maricopa, and only an average of 60 are selling per month (not including new home sales). This is over an 18-month supply, and a 5-6 month supply is theoretically considered healthy, according to the National Association of Realtors. I can’t provide you with an exact timeline as to when we will achieve that level, but based on economic reports and real estate forecasts, we must anticipate no earlier than fourth quarter of 2008. Have your Realtor provide you updates on this rate, as it is a good gauge and may help you determine when you are ready to sell.

Photo by Dave Thomas