Selling a Home While Living in Another Location: No problem, Just Call Any Local Realtor, Right?

We are witnessing a growing phenomena in real estate sales that begs for a better solution than what I currently observe in the local market. It has to do with out of town sellers attempting to sell a property quickly, and at a good price. The deficiencies in this process are everywhere.

Why the Increase in Such Listings?

Over the last twelve years, we have seen dramatic swings in home prices. Many people purchased their home at a price point near the top of the pricing cycle. Subsequently, they may have moved, either out of town or to a different home for life style reasons. A sale of their existing home would likely result in a significant loss, so many of these people chose to “ride out the cycle” by renting their homes until prices rise again.

Another major group are those who experienced a job transfer, and simply chose to rent out their existing home from afar. Once again, the choice is to “ride out the cycle.”

Yet another group are those who purchased a home with the intent of renting it out ;the investor class. Many in this group have seen prices rebound and wish to sell, or for whatever reason want to raise cash and become more liquid.

 

Sales From Those Not Currently Occupying Their Homes Can Be Significantly Lower and Take More Time

There are two basic reasons why homes sell at a lower price and take longer to sell when the owner is not also the occupant:

  1. The showing condition of the home is nowhere near perfect, and/or the home has the look of a “desperate seller” who has moved out and needs a quick sale. I am amazed at how many homes shown in “vacant” status look and feel inferior. Perhaps there is the stale odor of a home that has not been regularly cleaned. Perhaps it is the hollow, cavernous sound one hears while talking in such a home. Perhaps the home has little more than a For Sale sign out front and a stale MLS listing, and it is obvious the agent has spent time doing anything other than “waiting for an offer.”
  2. The showing condition of the home is hindered by the presence of renters; how a renter keeps your home in showing condition while living there and planning to move is a wild card. Too often, that card turns out to be the Joker. Suppose you have been renting out your home from afar and now need to sell, but the need for income provided by renters suddenly becomes a distraction. Afterall, renters cannot be expected to keep your home in tip-top showing condition, and likely do not have it furnished to do so anyway. They are also unlikely to be as responsive to showing agents as you would be. This is all logical in that they do not “have any skin in the game.” As neat, clean, and responsive as your renters may be, it is highly unlikely that your home will show in the kind of condition you need to attract top dollar. Nor will you be able to properly market and sell your home as you would a new listing in which you were the owner/occupant (see “Listing Strategy for Selling Your Home” in a previous blog).

 

Ways to Alleviate the Problems Stated Above

The first step is simple: hire the proper real estate agent. Relying on a “known brokerage” to provide any sort of advantage because of their “brand” is a concept that was deemed invalid long ago. In fact, many top agents have broken from these legacy firms and the bureaucracies to either strike out on their own or join a more forward-thinking and agent-friendly firm, like Samson Properties. It is essential for you to interview agents who understand the process of promoting your home effectively, and negotiating the best outcome once offers surface. This is NOT something you should take for granted, and do not fall into the trap that says, “all real estate agents are basically the same.”

The second step is: proper staging. In the overwhelming majority of cases, you are better off not listing and showing your home while renters continue to occupy it. The extra money you will extract by showing your home as clean and immediately available by not having renters present is usually significant. By all means, pre-market and promote your sale while tenants remain in the home and are planning to leave; however, it is usually disastrous to begin showing the home until renters are out and the home shows as you want it to show.

There are many firms who specialize in staging homes, but be forewarned on this: many of these forms can be exorbitantly expensive for what you need to accomplish. Your goal is to have your home looking as if in perfect “move in condition” and staged in a way that makes the home feel more pleasant and give the look of comfort. This should not require extensive design and furniture rental.

I have written a separate piece on Home Staging Tips, but let’s summarize the basics here:

1. Photographs of each room. In today’s on-line world, excellent pictures are a must. It is likely you have pics of how your home looked when YOU lived in it (assuming that would put your home in proper perspective). But the biggest negative here would be excessive “clutter”. Have each room shows as spaciously as possible, without looking empty.

2. Remove Excess Decor, But Do Not Be Shy About Adding Some Items That Appear Personal In Nature. I remember in my early days when the emphasis was on showing a home very clean, and that any sign of personal belongings could be deemed “offensive” to some groups, or distracting from the focus on the home. One seller took this literally and painted her entire home white, and had it nearly vacant. In short, it looked like a hospital. So although decluttering is great, and keeping personal items away from view is generally wise, you also want the home to feel warm. A few family pictures showing your pride are good to hang. A few attractive keepsakes can add value and warmth. After all, we are still people, not automatons.

3. The foyer is crucial. We have all heard of “curb appeal.” The exterior of the home should be clean and inviting. But once the front door is open, it is vitally important that the initial appearance is spectacular. This is particularly true in upscale condominiums and in more exclusive home that have a grand foyer as part of its appeal. Depending on your situation, mirrors can aid in making the home look larger; beautiful piece of art that also extracts the colors you want can be invaluable here.

4. The kitchen needs to be spotless and modern  is better. If there is one area in which upgrades will do wonders, this is it. Depending on your location and likely buyers, it may not even be a case of how much will you extract by upgrading a kitchen, but whether your home sells at all. We are trapped in the 21st century, and the world wants granite countertops and stainless steel appliances. Don’t fight the trend. This does not have to cost an arm and a leg to do, and many of you have these in place already, so make sure they are cleaned to perfection.

5. Curb Appeal is crucial for Single Family Homes. No further comment is necessary.

6. No torn, tattered, or aging materials, please. New pillows on a couch cost little. New sheets and bed spreads cost little, if you require this. I shake my head when I see a beautifully cleaned, freshly painted home, adorned with a 25 year old couch, a favorite recliner that has outdated plaid and tattered fabric, or a master bed room that looks less than inviting.

7. Keep It Clean, Once a Week. Get your home thoroughly cleaned before listing. And keep it that way. Every ten days at most. Just do it.

8. Paint. This may be saving the best for last. You undoubtedly have already heard this, but it always bears repeating: Make sure your home is freshly painted, and hire professionals. I have seen this violated too many times with poor results. Once again, just do it.

 

It is Usually Wise to Have Renters Out of the Home Before Selling. I welcome detailed discussion on this point. It is not 100% true in all cases, but it is more often than not. Be ready to “hit the skids running” with your listing on day one, so prepare while tenants remain. However, it is almost always beneficial to allow a quality real estate agent handle the sale from that moment without anyone having to navigate around the life of a renter. I believe the narrative above provides enough reasons to support this conclusion.

 

As always, please call me for a detailed discussion on how to handle this often tricky matter.

 

#RayWedellRealEstate

 

Ray Wedell, Realtor

 Chartered Financial Analyst, CFA

Samson Properties

703-855-7299

 

 

 

 

 

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