Slow market forces agents, homeowners to wheel, deal
October 9th, 2006 - Category: Condo, Real EstateAsluggish residential real estate market is prompting more homeowners to use creative marketing tactics, offering incentives such as gift cards and sports tickets to attract potential buyers.
Sales of existing homes are down 10 percent to date compared to this time last year, according to Tom Campensa, president of the Akron Area Board of Realtors.
“When buyers have so much to choose from, they can afford to be picky,” said Katie Fenwick of Howard Hanna Smythe Cramer. “Homeowners have got to be creative in today’s market.”
She said sellers can cover some of the buyer’s closing costs or agree to pay condo fees for a year in advance to help close the deal.
“The more recent incentive for creative financing is offering no money down,” Campensa said. “I’ve been in the business for 30 years and nowadays I’m seeing people walk away from a good deal if the home doesn’t fit all their needs. If they don’t like the wallpaper or the carpet color, they just move on.”
Campensa said there are currently 4,411 homes on the market in the area served by the Akron Multiple Listing Service, which covers Summit, Medina, Stark, Portage and part of Wayne County. The average time a house stays on the market in the Akron area is 78 days, according to the Akron MLS. In 2005, it was 72 days.
Sherri Costanzo of Stouffer Realty Inc. said some frustrated homeowners whose homes have been on the market for a long time have pulled their listings and replaced their “for sale” signs with placards reading “for rent” or “for lease with option to buy.”
Some real estate agents are even using land contract agreements that could develop into a sale.
Campensa said a land contract is used primarily because the buyers don’t have the best credit. It’s a contract agreement between the buyer and a private seller of a property, where the seller holds the title or deed to the property until all agreed-upon payments are made in full.
Costanzo said real estate agents don’t want to see homes on the market a long time, either. But the main thing is pricing the house right.
“The days of adding a 3 to 4 percent (annual) inflation rate to the price are over,” she said. Most homes are looking at a 1 or 1 ½ percent inflation rate, if that.”
She said another reason homes aren’t selling fast is that not many people are relocating to this area, and those who are staying say they’d rather take their home off the market if they absolutely don’t have to move right now.
Other sellers frustrated with the slow real estate market have taken matters into their own hands.
Former Canton residents Robin and Jeff Norton, who now live in Lexington, Ky., found no takers for their Portage Lakes home after several months on the market.
That’s when they came up with the idea of a one-day sale.
They bought the home purely as an investment last year and made improvements so they could resell it. They added a new roof, replastered the walls and painted. At first they listed the home with a Realtor, but after three months and no offers they decided to sell it themselves.
The Nortons put up signs on trees and poles throughout the area and took out newspaper ads to promote the one-day sale.
They held open houses for two weekends and closed the bidding on Oct. 1. But when no offers came for the four-bedroom, 1 ½-bath waterfront home on the Portage Lakes, they said they will rethink the plan.
“We thought for sure this would work. The market goes up and down, but people always need housing,” said Robin Norton, who has been staying with relatives until the house sells. “We’re going to have to powwow again and determine our next step.”
Milton Bates of Realty One said there are other incentives homeowners can offer to try to hook a buyer.
“Sellers can offer free home inspections or get their homes pre-appraised,” he said. “Some sellers offer decorating allowances.”
Bates said buyers are taking longer to make a decision and are a lot more educated than in the past. “They are more careful — (and) no matter what the price range is, they want a perfect home,” he said. “Buyers are looking at interest rates and the condition of the home and whether they are getting a good price.”
Fenwick said buyers are also more energy conscious than they used to be and are not willing to drive as far from home to work. They want to know how new the furnace is and whether the home is well-insulated.
Group open house
The proliferation of for-sale signs in some neighborhoods has prompted some sellers to plan streetwide open houses.
Michael and Tracy Reiss of Thayer Street in Akron’s North Hill neighborhood said six homeowners have scheduled open houses together. All six homes are still on the market.
She and her husband did their best to help their home stand out, including having a mortgage broker on hand at the open house to discuss financing on the spot.
“We also offered to clean the carpet, even though it didn’t need it, a $250 gift certificate at the store of their choice and a $150 dinner certificate to their real estate agent at a restaurant of their choice. We also agreed to pay closing costs.”
She said they have lowered the price for the second time and now it’s $15,000 under the original asking price of $94,000. “I’m a real estate appraiser and I know how much my house is worth,” Reiss said.
“The real estate agent is doing all she can — I know, because she’s my mother. We just can’t seem to get rid of the house.”
In Towpath Village, a small development of homes in the middle of the Cuyahoga Valley National Park, James Sheppard Jr. of Markley Realty coordinated a group open house to draw traffic.
He also catered lunch one day to entice other agents to bring in prospective buyers. Sheppard said he has also given away $50 gas cards to attract people to open houses.
Costanzo said she wishes she knew the magic sale incentive besides having the best product out there at a realistic price.
“I hate to bring gloom and doom to an already gloomy housing market, but if the game tickets and other added incentives were working, we’d all be doing it.”
