Are you building your house with the idea of resale? While it is likely a good idea to keep the concept of saleability in mind, it should not be such a high priority that you end up with a product you are unhappy with, or that is much more or less than you want or need. Unless you are a builder putting together a spec house for immediate sale, resale ease, or value should not be too high on your list. Of course, it would be unwise to build something completely unsellable at a price near what you have put into it.
Keep in mind, that if it is the house you want, there will be many more people who want something similar. The house you build is probably less important than the location when it is time to sell. The more remote a location is, the lower property value is likely to be. This is mostly due to land values being a direct result of the level of demand. Some exceptions are lake or riverfront properties, which have much higher values than would otherwise be expected. However, the values of these properties will also decrease sharply the further you get from a large urban center.
If trying to sell in a small center, it may take much longer to sell at a fair price, than a comparable property in the bigger cities. A poor market may make it even more difficult. Some remote areas may find no buyers at all if the local economy should collapse.
Builders usually build cookie cutter type houses, designed to appeal to a large segment of the buying public. First of all, the people in their perceived market segment must be able to pay for the houses they build. Secondly, the houses will be designed for the average family, two adults and one and a half kids. Only very rarely will you find developments meant for seniors, singles, childless couples, or large families. An exception is the gated retirement communities, in favorable climates, usually targeting the richer class of senior.
So what are you do? Well, if you are seniors, then build your house for senior living. There are more seniors all the time, and one of them is sure to want your house when you sell. If you fit one of the other so-called minorities, the same is true. One caution, the more costly your house is, the fewer buyers you will find. In a poor economic climate, it is the expensive houses that go down in price by the largest percentage and become the hardest to sell. Don’t stray too far from the norm when it comes to providing the basics. A bedroom, bathroom, kitchen and living area must be provided if a house is to appeal to anyone. Try to avoid fads, unless you really like them. Some of us still remember pastel colored appliances and bathroom fixtures. When the time comes to sell your house, there are a few things that are important, if you want the best price the quickest.
Your house should be very clean, and free from bad odors. Fix all the noticeable little things that you have neglected. If the paint is showing its age, repaint, inside and out. If the roof is in need of shingling, then do it, if you can afford it. Don’t forget to mow your lawn, and try to keep the landscaping looking its best. Make sure the windows are clean, and open drapes and blinds, to brighten things up. A lot of emphasis has been placed on neutral colors when trying to sell, but I have seen houses with color schemes that I would consider way out there sell quickly. I remember one that even had some padded walls and mirrored ceilings. Unless you are color blind, there is probably someone out there with a taste similar to yours. Stage your house in preparation for selling. Resale value is all in the appeal of the property.
Get some qualified opinions as to the value of your house, and price very close to the price you arrive at. An agents opinion is not always the best, as they may be only trying to get a listing. An appraiser with no vested interest is likely the best. If you think you can be objective, you may be able to arrive at a good price by comparing other recent sales nearby. Don’t overvalue extras that may not have general appeal.
Decide whether to hire a real estate agent or to sell yourself. Real estate commissions are quite high, and selling yourself can provide a little more bargaining leeway. Agents do considerable advertising and sell houses to clients that are drawn to that advertising. When someone replies to an ad, the salesperson is prepared to show them a number of houses, besides the one that caught the customers interest. Buyers are often from out of town and may use agents to save time, by looking at more houses more quickly. On the other hand, if your house is a little out of the way, or in an area where the market is slow, it may not get much attention from the realtors whose focus is to sell as many houses as quickly as possible.
If you decide to sell yourself, then advertising is key. People must know your house is for sale, and you must entice them to look at it. You may not have to spend a lot of money, but you should be persistent. A prominent for sale sign on your front lawn is essential. Make sure it provides a phone number where you can be reached at any time. Put up posters with pictures in the downtown area where people will see them. Utilize free local advertising such as Kijiji, and move your ad to the top of the list every week or two. If your ad is not getting results, then write a new one and take some new pictures. Throw an occasional ad in cities further afield, if you feel your house may attract someone for any reason. Check the ads of comparable properties and prices, so that you know your competition.
Open houses are an excellent tool for giving your property exposure. Hold one every few weeks until it is sold. Here is where you should spend a little on ads. Place a fairly prominent display ad, in the real estate section, of the paper most likely to be read locally. A local radio ad for the day before, and during your open house, may be worth the dollar. Rent, or buy, open house signs, and place as many as practical, with arrows pointing towards your house. Have coffee and treats available, (preferably some you have baked yourself, so the house smells good). Have descriptive handouts with pictures, for people to take with them, to aid their memory, and to show to friends. Have offer to purchase forms available and partially filled out with details such as address and legal description. Make sure your contact numbers are on all handouts. Above all be friendly and approachable. The best timing is likely the afternoons of long weekends.
When you have found a prospect, don’t be afraid to ask a few questions to qualify them. Not much point wasting time if they cannot afford to purchase your home. In some cases, you may find a buyer who will not be able to qualify for a mortgage, in spite of an adequate and secure income. Perhaps, because they do not have a down payment, have just been divorced, or have been out of the country for several years. If you do not need the money for another house, then providing part or all of the financing, may be an excellent investment for you. After all, you are more familiar with the security, than anyone else. Familiarize yourself with mortgage conditions, terms, and amortizations.
Above all be sure to consult a lawyer before finalizing anything.
If Market conditions are bad, you may be able to rent your property out until conditions improve.
Just be careful of who you rent to, and be aware that it can be difficult to sell a home while it is rented unless it is a profitable revenue type property. The best possible time to sell a home is while you are still living in it, with good furniture in place.
I just sold our home last week, in a difficult small town market, so have a little recent experience besides some real estate background. In a future post, I may tell a little of that story.