|How to swap|
A step by step guide on selling or swapping real estate in a slow market
Unofficial guide and practical advice with dirty tricks on selling or swapping a house when nothing is sellingOr call it what you will.
Selling in this market takes extra effort. This guide is intended to give sellers some sense of direction where this effort should be directed to increase chances of having their property sold or swapped. Obviously there is an infinite number of ways to market a home for sale, but I emphasize some of the most productive ways plus throw in a few tricks of the trade. Permanently swapping homes is one of the best options in which sellers cannot reduce the price drastically. Trading homes by owner will also save sellers on the realtor's commission.
1. Advertise, advertise, advertise!
Just like location, location, location is important in real estate, advertising is by far one of the most important factors (yet frequently overlooked) when it comes to selling a home in a slow market.UPDATE: As of late 2008, after enactment of the new Buy and Bail law, it is becoming less effective to advertise a property for sale, except if:
Take many fresh quality pics of your house. Then choose the ones that
can inspire or make your listing stand out and submit to all of these
and other sites: http://craigslist.org http://owners.com http://allthelistings.com http://realtor.com (once you submit to one of
the MLS listing services such as http://iggyshouse.com make sure your
listing appears on realtor.com).
One way to simplify the process is to
use our site http://GoSwap.org as the base and most detailed listing
with up to 15 pics, then use the listing sharing tools at the bottom of
your goswap.org listing to submit the same info to other sites. This
reduces redundancy as you will then simply copy and paste the HTML code
we provide on many sites that accept it including pics. Make sure to
write extremely descriptive and long titles, description, and fill out most
fields on all sites. Listing on GoSwap.org is also beneficial as your property
will automatically be submitted to http://trulia.com (quickly becoming
the #3 website in real estate), Google Base, and http://homesbyowner.com
2. MLS, MLS, MLS!
List in the Multiple Listing Service but avoid listing with what I call a "sleepy realtor" who simply submits your listing to the MLS then waits until it sells through other realtors so that he/she can then cash your commission check to pay for his sleeping. Either find an ACTIVE realtor in YOUR AREA (not a national firm) or, better yet, submit your listing to the MLS yourself, then reduce the price by the amount of the commission you will save. There is at least one FREE service at http://iggyshouse.com , but make sure that this service belongs to your immediate area MLS board. For example, Iggyshouse.com does not yet cover all parts of Florida. Even though they will submit your listing, it will appear in the closest MLS system, which is not good enough. You want your property to be listed in your area MLS so that local agents can see it. Do not forget to set a commission. I suggest at least 3%, otherwise realtors will not show or mention your house to prospective buyers.
3. Be creative, be creative, be creative
and look for creative,
alternative, and cost effective ways to promote your sale. So
advertising your house for swap on this website is one of the creative
ways, but open up your other options. Describe all your possible swap
combinations, then search our site for people who want to swap for your
location and email all of them about possible trade. Go a step further,
and email all owners who indicated they will consider swapping for ANY
LOCATION, then please do not stop even at that.
4. Open, open, open!
Hold open houses every weekend, even if just a few people stop by. Remember, you only need one buyer! Constantly advertise your property and open houses in local papers, community forums, craigslist.org, GoSwap.org (of course) and anywhere else you may think of. Use your own imagination to get some traffic through your door. If you are really desperate, consider very desperate measures, such as contacting a local newspaper reporter to do a story about your house not selling even at a greatly reduced price. This would certainly bring some attention.
5. Price, price, price!
Price your property slightly below of what you
think the market price is. Remember that in a low market no one really
knows what the actual market price is, but the only price that matters
is the one that gets your property sold. No, I am not implying selling
short (less than you paid). Buyers will only consider buying from you
if THEY THINK your price is LOW, so make them think your price is low.
One trick of lowering the price without actually lowering it is by
having buyer pay for most of the closing costs, while reducing your
asking price by that amount. So, say the house is listed at $250K and
seller's closing costs will typically run $5K, then lower the price to
$245K and when it comes to signing the contract insist that buyer pays
for closing because the price is great. Do the same by listing in MLS
yourself and apply the savings in commission towards the ASKING price
of your home. A 3% commission savings equals $7,500, then your new
asking price should be around $237.500 ($250K - $5K - $7.5K = $237.5K)
Here you effectively reduced your asking price by $12.5K, while you would
end up with the same amount at closing.
6. Follow up, follow up, follow up!
Create a new folder called "prospects" in your email program and save all your listing related emails there. Keep a detailed log of all callers, too. Keep in touch with all your previous enquirers with any updates or changes in price. If you get a lowball offer, here's another of my dirty tricks. Contact all your prospects saying you have an offer while indirectly inviting them to participate in a bidding war. I am not a psychologist, but it appears people get especially excited when something they consider buying is becoming popular and wanted by other people. In fact, this is precisely why this whole bubble thing popped up--flipping homes has gotten too popular. Someone once said, if even homemakers get involved in buying real estate, it's time to get out as things are just about to get ugly and they sure did.
7. What to do if nothing happens?
If you have done everything above and
are still sitting in your living room and scratching your head, then
repeat some steps above.
Another push towards stabilization of real estate prices should come from foreign investors who suddenly and increasingly view US real estate as undervalued and a good way to diversify their asset portfolios.
Here's an exert from "Foreign buyers see U.S. property as currency play" article published by Reuters, Friday March 7 2008 at http://www.guardian.co.uk/feedarticle?id=7364904 that may add some credibility to some statements above.
"On Friday, the dollar hit a record low of about $1.54 against the euro. The British pound rose to a year's high of more than $2.00.
Commercial real estate investors traditionally have hedged against currency fluctuations.
However, European and British investors remember when the dollar was on top and believe it will happen again as Europe succumbs to an even longer and more painful economic slowdown than in the United States, said Azria, former global partner with investment bank Rothschild Inc.
"Therefore, the exchange rate turnaround is going to happen sooner rather than later," said Azria, whose co-founder Janet Christensen was chief of staff to Blackstone Group LP Chairman Stephen Schwarzman.
"By the time they take their money out of the fund, which is three, four, five years down the road, it will be fully in their favor," he said.
The dollar could begin to strengthen against both currencies in the second half of 2008, said foreign exchange analyst John Normand at J.P. Morgan Securities.
A strengthening dollar could boost the eventual property sales value, as well as the rent, for European property owners who buy now and hold their U.S. investment for several years.
Even half-empty new condo projects and foreclosed houses in Florida have attracted foreign buyers, said Peter Zalewski founder of Condo Vultures, a real estate investment consulting firm in Bal Harbour, Florida.
"They're saying, 'Let's get into dollars simply because we think there's a currency arbitrage play there,'" Zalewski said.
Hedge funds from the Czech Republic, Monaco, Belgium and France, and a Singapore fund looking to recycle pounds earned from London office properties into dollars have contacted him.
One UK fund wanted only single-family homes in southwest Florida markets such as Naples and downtrodden Ft. Myers, he said. "They want to get out of pounds, get into U.S. dollars."
In conclusion, if you absolutely have to sell in order to move, then try everything possible. Swapping is probably your best option especially if you cannot drastically reduce the price. Trading homes will also save you commission, unless your home is listed through a broker. But if you are not hard pressed to move, just wait. Continue what you are doing or start a new business in your hometown. Things may get worse in the short run, but at some point economic forces will kick in and real estate will stabilize. There are investors waiting on the sidelines to snatch up all the deals, don't let your home become their pray.
Written by Sergei N, GoSwap.org creator
P.S. Where is this wisdom coming from?
In late 2006 I personally (without realtors) sold many of my real estate belongings, including our primary residence, and moved into a rental apartment (with a dog and a 1 year old, I might add). During 2007-2008 I managed to sell a few more of the remaining properties including a Florida beach condo located in one of the recession hardest hit areas of Volusia County--all using the techniques described above. I did have this condo listed for swap and received numerous offers, then sold it to a buyer found through Iggys House.