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Tuesday, March 8, 2016

More Than Ever, Now’s the Time to Put a Hard-to-Sell Home on the Market

Some homes are hard to sell in a normal market when they have to compete for buyers’ attention.  With inventory as low as it is, yet buyers more numerous than ever, it’s time to consider putting that hard to sell home on the market.

What makes a home hard to sell in “normal” times?

Traffic noise: That is the single biggest complaint I get from buyers when I’m showing homes.  People do not want to hear road noise when they’re on their porch or patio or when they have their home windows open.

Cigarette smoke:  It is almost impossible to sell a home where the owner has smoked tobacco inside.  Most buyers don’t smoke and find the smell offensive.  It is really hard to rid a home of cigarette smoke.  You have to replace all the soft surfaces in the house — furniture, window coverings, carpeting — and you have to repaint the walls using a primer such as Kilz.

Pet smells:  Cats are the worst, because they tend to pee on carpeting, which gets into the padding and really can’t be completely cleaned out without replacing the carpet and padding. In severe cases, the subflooring is affected and needs to be treated with Kilz before installing new carpet. This brings to mind a practice I see all too often, and that is the use of “Plug-ins” which emit some flowery smell.  Whenever I’m showing a home with these devices installed, I suspect the seller is trying to cover a smell such as from pets.  Don’t use plug-ins!

Marijuana growing: If your home has a grow operation in it, there are several considerations, not the least of which is the possible presence of mold from high humidity.  The electric system may have been over-loaded or possibly altered without the proper permitting.  If it’s a rental that you’re selling, and the marijuana-growing tenants are staying, you will probably have neighbors upset with the smell coming from the operation. 

Below-market lease in effect:  We have two issues here.  If it’s a long lease, the buyer will likely be an investor (and offer less because of the low cash flow).  If the buyer wants to be an owner occupant and is financing the purchase, the lender will require occupancy within 60 days of closing.  The buyer may need to negotiate a buy-out of the remaining lease.

General disrepair: Sometimes you just have to laugh at what you see.  One home I showed had the following showing instructions: “If the screen door doesn’t open easily, stick your hand through the hole in the screen and turn the inside handle.”  This was also a house where there was an ashtray full of cigarette butts in one of the bathrooms, even though the rest of the house was totally empty!  The roof of this house was badly damaged by hail, and the fascia was partly rotted. 

It was this last house that inspired the subject of this column, because even though the home was barely worth renovating — I consider it a scrape off — it was priced at $350,000 and attracted multiple offers above full price, many of them cash and waiving appraisal objection.  It went under contract in less than a week.

The bottom line — if you own a property that is hard to sell in normal times, you really should put it on the market right now, when even a scrape-off can attract multiple offers the first day it’s on the MLS.

By the same token, I advise sellers not to do any repairs or improvements to make their home sell better.  Unless it is of nominal expense, why bother?  You won’t get a return on your investment.  Just sell it “as is.”

The exception, of course, would be high-end homes.  The above comments refer to homes under $300,000 or $400,000.  Even in the high price ranges I discourage sellers from making most improvements.  Some inexpensive cosmetic things can be helpful, but you won’t recover the cost of major improvements when you sell. 

Remember, you still have to price the house right!  Hard-to-sell + overpriced = Forget about it!

Published Mar. 10, 2016, in the YourHub section of the Denver Post and in four Jefferson County weekly newspapers.

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