What to Do With Hard to Sell Homes
Even in the best real estate markets, some homes are harder to sell. Perhaps they are unique, have a hard to reach location or there is another feature which is not appealing. Whatever the reason, there are many things you can do in order to promote a hard to sell home.
First, make sure your real estate agent is doing everything they can to promote your property. With a home that is not selling, it is hard for the agent not to decrease his/her promotional efforts due to budget constraints and general discouragement. There are many things you can insist the agent do as part of his/her role as the listing agent–
⇒Hold an open house on the weekend;
⇒Hold a “broker-open” to introduce the property to other agents;
⇒Include the house in his/her regular advertising efforts, including the web and social media;
⇒Make sure the agent has call-capture technology (an 800 number that can track callers) so that the listing sign is encouraging those who pass by to call and get more information.
Second, offer special financing. You can continue lowering the price, but a special loan program may cost you less and actually attract more browsers. One such alternative is buying down the interest rate. This may be combined with offering to pay the closing costs for a potential buyer.
If all else fails, you can rent the property. You may not be thrilled with the prospect of becoming a landlord. However, this may not only help you with your cash-flow, but also put you in a position to sell the house later when the home is more marketable. There are many factors you should consider before you make a move to rent. These considerations include:
•Cash flow–will the rent cover the mortgage and what happens if the property is vacant for a few months?
•Tax ramifications. Tax benefits for renting may not be available for those in higher income brackets. You also may be subject to capital gains when you sell in the future.
•You will need to screen potential renters and keep up maintenance on the property. For some, that means hiring a property manager.
•If you have equity in the property, you may need a home equity loan to access this equity if you need a down payment for another purchase.
•Your insurance coverage will have to be updated.
In addition, you may consider refinancing your home to lower the payments or move out of an adjustable rate mortgage. This can be done in order to help you stay in the property or to take cash out to finance another purchase if you are going to rent the property. Keep in mind that some loan programs may not let you refinance a home that recently has been or is currently for sale. We recommend you check with your loan officer before attempting such strategy.
There is one last issue. What if you can’t sell and are unable to rent or refinance? Foreclosure is always the last resort. If you are having trouble making your payments, we recommend you talk with your present lender as quickly as possible—before you become late with payments. The lender may be able to help in a few ways. Certainly, putting you in a new mortgage or modifying your loan is less costly for them than having to sell your property in the foreclosure process.