Om Ahuja, CEO – Residential Services, JLL India
In a slow real estate market, selling a house can be a daunting task. Nevertheless, selling a property is sometimes necessary or desirable despite market circumstances – for instance, when the home’s mortgage value is higher than its market worth, if one has purchased another house and faces difficulties in paying two mortgages, if one wants to upgrade to a bigger and better house or if there is a need to downsize. Other circumstances such as job relocation and family issues can also necessitate the sale of one’s home – with an express need for a quick sale.
As a rule of thumb, it is never a good idea to sell anything when the market is bad and showing no signs of recovery. That said, if there is no alternative but to sell despite unfavourable market conditions, it is not enough to simply list the home and wait for an offer.
The thought to keep in mind in such a situation is that even though the market has decelerated, there are still plenty of homebuyers eager to find a home. There are some key tactics to help increase the possibility of a sale, and these pertain to preparing both the property and one’s mind to increase the probability of a sale:
• Know Your Market
When selling a house on a depressed market, it is very important to understand what is really happening and why it is happening. Understanding gives objectivity, and an objective mind is more conducive towards a successful sale than a desperate one. Above all, it is important to know the true market value of one’s home, which is often very different from what ones hopes or thinks it is. Most sellers operate in the dark and are simply offering their property for the price they want, regardless of what other homes in the same location are being sold for or are currently selling for. Undervaluing or overpricing your property while trying to sell it on a slow market is a serious mistake.
• Be Competitive In Your Pricing
On a slow market, property prices dip and the possibility of obtaining a really good price is remote at best. It is essential to price your home reasonably by looking at similar options available in the current market. If you take a look at the homes in your project or neighbourhood which are listed with brokers but are not selling, chances are that their owners’ expectations are just too high. To stimulate a sale, under-pricing your property relative to others being offered in the project or location by just a little can generate more interest from buyers. For high-end properties – i.e. luxury units in metro cities valued at Rs.5 crore +, one can should consider using the close bid process. In this process, which reputed property consultants employ on behalf of their clients, bids are invited from prospective buyers with the objective of achieving the best possible price. High-end and landmark properties are normally sold using this process, which invariably help sellers to arrive at an optimal sale price.
• Make Your Home Presentable
Apart from right pricing, nothing will attract potential buyers more than a well-maintained house. This goes beyond just cleaning and sprucing it up, and actually involves removing your ‘identity’ – or the personalization you have undertaken to make it ‘your’ home – from the house as far as possible. Retain only the things that actually add value to the flat. A small investment in making your property presentable is more cost-effective than a price reduction. Make the entrance presentable and address issues related to plumbing, water seepages, cracks in the masonry, loose railings and ill-fitting window frames. When there are many options available on the market, buyers will look for homes that are ready to move in rather than units that require significant effort and expense on repairs and refurbishing.
• Be Flexible With Showings
It is essential to keep your home available for inspection throughout the time it is listed on the market. Remember, it takes only one buyer to get your home sold. Keep your home available for viewing at moment’s notice, and do not restrict access solely to the times you are personally available. The more often your home is shown to potential buyers, the likelier is a quick sale. Do not give buyers the impression that their request to see the flat is an inconvenience.
• Engage The Right Property Agent
On a slow market, using the services of a top-of-the-line real estate consultancy can be a faster route to a quick sale than roping in multiple small-time brokers. A first-class property consultancy employs more operatives and has a larger and more dynamic database of prospects, and these capabilities are a major differentiator from smaller brokerages with limited resources.
• Be Flexible On Your Terms
On a buyer’s market, the willingness to be flexible on one’s terms can make a big difference. Buyers know that you want to sell your home, but may also be looking for some scope for negotiation. If a home is priced too high and the owner refuses to negotiate on terms, it is likely to be ignored by buyers. Apart from openness to negotiation on the quoted price, offering flexible financial terms with an extended closing date can do the trick.
• Be Patient
Selling your home is invariably a stressful process, and the stress is inevitably prolonged when the market is slow. Remember that this is a waiting game, and that impatience will work against you. Be flexible, do not display any signs of desperation and use the right resources. At the end of the day, there is always a buyer for every good property.