COLUMBIA — Sheri Radman walks about the kitchen, scans the dining room and moves into the living room of a home recently listed with her agency in east Columbia.
“They did a great job with this one,” she said about the staging. “This one should go quick.”
This is a strong forecast in this real estate market, knowing there are significantly more sellers than buyers.
The home is indeed immaculate — spacious rooms, updated appliances, contemporary furnishings and neutral paint. Most important, it’s devoid of clutter.
“The climate is good, interest rates are down and there are incentives out there for home buyers,” she said.
Sheri Radman, an agent for 17 years and president of the Columbia Board of Realtors, is used to helping homeowners in a down market. Some buyers, she said, are in a position to wait for incentives.
Selling in a down market presents
unique and challenging problems. Columbia Board of Realtors President Sheri Radman offers some points to consider if you are going to sell
your home in this market:
1. Find a real estate agent who has experience and has worked in a market like this. Find one who knows your neighborhood.
2. Check out the competition. Visit open houses in your neighborhood and price range.
3. Prepare your home to be in “turn-key” or “move-in” condition. Curb appeal is important. You get one chance to make a first impression on a buyer. Show them how great your home is ... don’t leave it to their imagination.
- De-clutter your home. Present good smells, but don’t overpower them. Keep colors neutral.
- Don’t overimprove your home — you may not recover all the costs. Some projects increase the appeal of the home, such as removing wallpaper or installing new carpet, but don’t increase the value.
4. Offer incentives to the buyer. Give them a flat screen TV, a
weekend trip or short cruise or offer to pay some of their closing
5. Be realistic. Set a realistic price and be flexible. Don’t be afraid to adjust your price if necessary. It can attract new interest and different buyers. Don’t be upset with the buyer that brings you a low offer. Appreciate that they like your house enough to make an offer. Be upset with those that don’t bother to make an offer at all.
Radman says the biggest mistake is that people are not being realistic about the pricing of their home. She encourages homeowners to work with a professional and be strategic about setting the price.
One incentive that Radman and others hope will breathe life into the real estate market is the federal first-time credit for home buyers.
In early February, President Barack Obama signed the American Recovery and Reinvestment Act of 2009. It increased the federal first-time home buyer tax credit from $7,500 to $8,000 and waived the repayment of the credit.
That means first-time home buyers receive a tax credit worth 10 percent of their home purchase, up to $8,000. The credit is claimed on the buyer's federal tax return. The buyer receives a refund for the amount of the credit minus any federal tax liability.
Only homes purchased on or after Jan. 1 and before Dec. 1 are eligible for the tax credit.
The Missouri Housing Development Commission has created a tax credit advance that allows buyers to receive the value of the tax credit at the time of closing. The commission gives a second mortgage to the buyer at the time of closing worth up to 6 percent of the home purchase price or a minimum of $6,750, which is used to cover down payment and closing costs.
The MHDC reports interest in the credit advance from real estate agents and lenders.
“We have had 120 borrowers since Jan. 14,” said Greg Spurgeon, a single-family home ownership administrator at the MHDC. “There is a lot of interest out there with decline in price.”
Boone County National Bank is one of five partner lenders in Columbia, but Mary Wilkerson, vice president of marketing at the bank, said they haven't used it.
“Refinancing is our focus right now,” she said.
With these incentives, lenders and real estate professionals say they are gearing up for a busy season.
“Things don’t pick up until, March, April and May,” Wilkerson said.
“A lot of first-time buyers are modest in what they're looking for. They are not stretching their limits. In fact, most are buying below what the bank allows,” Radman said. “They do not want to be caught up in a huge payment.”
Radman added there are more sales from foreclosures since late last year.
“I’ve had buyers buy three foreclosures in the last two months, and I have only sold one in my career before that,” she said.
Columbia has not been hit by the economic downturn like other parts of the country, Radman said. So far, employment tied to the university has provided a cushion.
“The university and types of industry in Columbia are not prone to some of the unemployment that others face,” she said.