Tips For Selling Condos In A Down Market
As you look around the Tampa Bay area, you'll see that there are thousands of condominiums on the market. These range from relatively modest properties designed for an easily affordable retirement to multi-thousand square foot penthouses overlooking the Gulf of Mexico for the super-rich.
Right now, they all have one thing in common: They're hard to sell.
It seems the market for condos in Tampa Bay -- and in many other markets around the country -- has gone from overheated to ice cold. The market is glutted with condos. In fact, during July the Pinellas Realtor Organization (PRO) reported that there were 6,194 condos for sale in the Multiple Listing Service but only 299 were sold during the month.
If you have a condo for sale, those numbers should scare the dickens out of you -- especially if you really need to get the place sold.
So, what can you do?
First, you need to be patient. The market has changed during the last year or so and there's nothing much you can do about a change in the marketplace except wait. Eventually the market will turn back in your favor.
Second, you need to hire a good real estate agent. Don't try to sell a condo on your own. In most condos, you're not even allowed to put up a sign or do any other kind of on-site advertising. Due to condo rules, you just don't have the marketing tools that a professional real estate agent will have. The agent can use the marketing tools at his disposal to find a buyer for your property. Your best bet is to take advantage of the marketing tools the agent has to offer, pay the commission and let the agent do all the work.
Third, you need to make sure your unit is priced right. If you price it too high, it will sit unsold. This is especially true if your unit is in a community that has several other units similar to yours that are currently for sale. The best thing to do is complete a thorough review of what similar units have sold for during the last six months. This will tell you what the market is like for your unit. Then, find out exactly what the asking price is for similar units in your complex. Price your unit just under the lowest priced unit that is currently for sale. This ensures that you have priced your unit properly and gives you a competitive advantage against other units like yours that are currently for sale.
But what else can you do as a condo seller?
I have always liked "buyer incentives" as a way to speed up sales in a slow market. Years ago I used to sell waterfront homes in a similarly slow market. Quite often the speedboat hanging on the davits in the back yard was thrown in as an added incentive. I've heard of cars being part of the sale, furniture, even a vacation cruise.
The same approach will help sales today, I'm sure. Plasma TV's, stereo systems, supermarket gift certificates for several months worth of food, all new kitchen appliances, you name it. They can all make the sale easier and faster.
Another great incentive is to offer to pay the buyer's homeowner's association fees for a year or two. If I was a condo buyer, I'd love that! If there's an assessement that might become the buyers to pay after closing, offer to pay it off. You could also offer to pay the buyer's home insurance for the first year of ownership. If you live in a flood zone, offer to pay the flood insurance premium for the first year.
There's no doubt that we've moved into a buyer's market. Don't be surprised if your buyer asks you to pay all or part of their closing costs. Go ahead and do it if that will make the sale and you have enough equity. It's another one of those really good incentives that get your condo sold.
One of the tried-and-true incentives that can really help cement a sale is the offer of a mortgage buy-down. By buying down the buyer's mortgage interest rate by a point or two, you may reduce the monthly payments and thereby make it possible for the buyer to afford your condo. Talk with the buyer's mortgage company about how you can make this happen.
Recently, I've been seeing a lot of condo sellers offering to pay a real estate agent bonus to sell the unit. Condo developers seem to be big on this incentive program. Frankly, I don't like real estate agent bonuses because they only benefit the agent, not the buyer. If you want to make the sale, you have to make the incentive available to the buyer, not to his agent. Offering a bonus to the agent will probably get your property shown a little more often, but it won't make the sale happen any faster because the incentive to buy is being offered to the wrong person. If you want to give an incentive to real estate agents, just increase the sales commission by a percentage point -- that will get their attention, believe me. That's my opinion anyway.
If you have a condo to sell, or if you're an agent with condo listings that need to move, I hope some of these ideas prove beneficial. Ultimately, however, it gets down to the same old story. Real estate that has been well maintained, is in a nice area, and is offered at a fair price will sell. Property that isn't, won't.
For more information on today's real estate world, visit my website at www.thestpeterealestatesite.com.
Right now, they all have one thing in common: They're hard to sell.
It seems the market for condos in Tampa Bay -- and in many other markets around the country -- has gone from overheated to ice cold. The market is glutted with condos. In fact, during July the Pinellas Realtor Organization (PRO) reported that there were 6,194 condos for sale in the Multiple Listing Service but only 299 were sold during the month.
If you have a condo for sale, those numbers should scare the dickens out of you -- especially if you really need to get the place sold.
So, what can you do?
First, you need to be patient. The market has changed during the last year or so and there's nothing much you can do about a change in the marketplace except wait. Eventually the market will turn back in your favor.
Second, you need to hire a good real estate agent. Don't try to sell a condo on your own. In most condos, you're not even allowed to put up a sign or do any other kind of on-site advertising. Due to condo rules, you just don't have the marketing tools that a professional real estate agent will have. The agent can use the marketing tools at his disposal to find a buyer for your property. Your best bet is to take advantage of the marketing tools the agent has to offer, pay the commission and let the agent do all the work.
Third, you need to make sure your unit is priced right. If you price it too high, it will sit unsold. This is especially true if your unit is in a community that has several other units similar to yours that are currently for sale. The best thing to do is complete a thorough review of what similar units have sold for during the last six months. This will tell you what the market is like for your unit. Then, find out exactly what the asking price is for similar units in your complex. Price your unit just under the lowest priced unit that is currently for sale. This ensures that you have priced your unit properly and gives you a competitive advantage against other units like yours that are currently for sale.
But what else can you do as a condo seller?
I have always liked "buyer incentives" as a way to speed up sales in a slow market. Years ago I used to sell waterfront homes in a similarly slow market. Quite often the speedboat hanging on the davits in the back yard was thrown in as an added incentive. I've heard of cars being part of the sale, furniture, even a vacation cruise.
The same approach will help sales today, I'm sure. Plasma TV's, stereo systems, supermarket gift certificates for several months worth of food, all new kitchen appliances, you name it. They can all make the sale easier and faster.
Another great incentive is to offer to pay the buyer's homeowner's association fees for a year or two. If I was a condo buyer, I'd love that! If there's an assessement that might become the buyers to pay after closing, offer to pay it off. You could also offer to pay the buyer's home insurance for the first year of ownership. If you live in a flood zone, offer to pay the flood insurance premium for the first year.
There's no doubt that we've moved into a buyer's market. Don't be surprised if your buyer asks you to pay all or part of their closing costs. Go ahead and do it if that will make the sale and you have enough equity. It's another one of those really good incentives that get your condo sold.
One of the tried-and-true incentives that can really help cement a sale is the offer of a mortgage buy-down. By buying down the buyer's mortgage interest rate by a point or two, you may reduce the monthly payments and thereby make it possible for the buyer to afford your condo. Talk with the buyer's mortgage company about how you can make this happen.
Recently, I've been seeing a lot of condo sellers offering to pay a real estate agent bonus to sell the unit. Condo developers seem to be big on this incentive program. Frankly, I don't like real estate agent bonuses because they only benefit the agent, not the buyer. If you want to make the sale, you have to make the incentive available to the buyer, not to his agent. Offering a bonus to the agent will probably get your property shown a little more often, but it won't make the sale happen any faster because the incentive to buy is being offered to the wrong person. If you want to give an incentive to real estate agents, just increase the sales commission by a percentage point -- that will get their attention, believe me. That's my opinion anyway.
If you have a condo to sell, or if you're an agent with condo listings that need to move, I hope some of these ideas prove beneficial. Ultimately, however, it gets down to the same old story. Real estate that has been well maintained, is in a nice area, and is offered at a fair price will sell. Property that isn't, won't.
For more information on today's real estate world, visit my website at www.thestpeterealestatesite.com.
-30-
posted by Terry Ward at 4:34 AM
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