O & A from the August issue of the Mammoth Real Estate Times, on newstands everywhere as of this morning.
Q: We’ve been reading your columns and blog and we ARE owners in Mammoth who really do need to sell. We have equity in the property and we are listed (not with you) and we aren’t getting any bites or offers. What are we missing?
A: The days of easy selling here in Mammoth are becoming a distant memory. As I have been repeating, we’re back to fundamentals. Don’t expect that to change. Except for a few rare and highly desirable (and reasonably priced) properties, most are destined to be on the market for awhile even if careful strategies are put into place. And increased print advertising, and more talk about airport this-and-that, and promotion over soon-to-be-built “luxury” hotels isn’t going to help. Today’s Mammoth buyers, and they’re still out there, aren’t buying hype anymore. They are watching the vast amount of information online and are prudently waiting for “special” properties or are hesitating to see how the prices and values shake out.
Many sellers are having a hard time adjusting to the reversal of the Pavlovian-type selling of the early 2000’s–ring the bell, list the property and go to escrow. Selling now is going to take some work and preparation, and a little humility too. We’ll get to pricing in a minute, but the first thing is to get the property ready for sale. Whether you live in the property or it is a vacation rental or just a second home, the first rule is to get rid of almost everything that isn’t necessary. Some like the term de-clutter, I prefer the term de-crapify.
Get a dumpster, start donating to the Cast-Off, or get a storage unit. Buyers are now very turned-off at looking at the all the seller’s junk. One man’s treasures are another man’s junk in this market. There are a handful of homes on the market right now in Mammoth where the sellers keep lowering their prices because they can’t get it through their heads that all their junk is impeding a sale. The new rule in real estate–either get rid of the junk or leave money on the table.
Many older rental condos and vacation homes get the same way and the owners either prize the clutter or have lived with it so long they can’t even see it. And get rid of “stupid” things. Sometimes people are so enamored with oddities–grandpa’s old invention or creation, ingenious storage solutions, never-used gym equipment that takes up half the room, etc. (You just can’t believe some of the stuff you see in properties here in Mammoth. Of course it is probably worse in other markets.)
Once all of the unnecessary junk is gone, then some reasonable sprucing up and staging. A little paint, a carpet cleaning, windows cleaned, etc. can all make a big difference. The most important goal is CLEAN, CLEAN, CLEAN. I’m especially picky about the caulk and grout lines in the showers, clean shower door tracks, and a good pumice stone cleaning of the toilets (Mammoth’s hard water can discolor them quickly.) New toilet seats are almost a no-brainer. Experience has shown me that super clean bathrooms can be a “make or break” with the female side of the prospective buying team. So to ignore the bathrooms can be fatal.
Staging has become a popular concept in the real estate industry. In my opinion a 40-year old condo doesn’t really need staging. It is what it is. But a newer, empty home will really come to life with a good staging. Many buyers in the Mammoth market do like to buy properties in turn-key condition. A seller needs to strike a balance. A great way to bring a property to market is clean, not overdone, but ready to use. Let the new owner add the personal finishing touches. Ultimately, your agent should be making some recommendations about minor (or major) improvements to make the property “show” to its best potential. But some sellers don’t listen. Apathy in this market will cost you. Today, a property brought to market in top-notch condition doesn’t get you a higher price, but it may get you a transaction.
Next comes the pricing. Sales numbers show we are generally back (?) to values of the 2004-05 era. No big deal. We never went beyond that with actual closings. It was just the 10, 20, 30 percent everybody added to the asking prices after Starwood hit the headlines. The market didn’t support it. And doesn’t look like it will, at least not in the near future. Every seller needs to look at the competition. And if they really need to sell they need to price under the competition. Some market segments have “bunches” of listings–like 10 to 20 percent of a condo project is listed for sale. If you find yourself in that boat then pricing is crucial.
This new era is bringing out some old tricks. Incentives are coming back, both for the buyers and the agents representing the buyers. Sellers in Mammoth are starting to offer allowances or credits for deferred maintenance, special assessments, etc.–things they wouldn’t have thought of in the past few years. Commissions (and bonuses) offered to the agent representing the buyer are moving back up. This is normal in the overall real estate cycle. Sellers need to be aware that buyers just don’t show up and buy like in years past. We’re back to longer-term relationships.
The new reality of the market has caught many by surprise. The era of very low interest rates and easy qualifying is over and not likely to be repeated. Meanwhile, some sellers will continue to look for gimmicks. But we’re all back to fundamentals. Like balloons on the open house signs, it’s all for naught if the property is not presented well and priced competitively–very competitively in today’s market. Otherwise, you may be waiting for the next scheduled flight out of Mammoth Airport.