What to Do When You Can't Sell Your House
Your options, from bad to worse.
Not getting any offers on your home? Try these strategies. (iStockPhoto)
Your house is cursed. Not really, but you may think that if you have a home that's been on the market for a year or two – or more.
Having a house that isn't selling now can be especially painful, since the housing market appears to be healthier than it has been for some time. For instance, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development released a joint report on Aug. 23, showing that July was a very good month for the industry, with a 31.3 percent jump over the number of homes sold one year earlier.
If your house isn't selling at all, and you're losing hope that it ever will, these are your most probable options.
[See: 10 Tips to Sell Your Home Fast.]
Keep improving your home. It isn't what you want to hear, but maybe people aren't buying because they don't like what you're selling. So make your home better.
"In the fall, contractors are looking for smaller jobs to complete before winter. Winterizing a porch or adding a deck might be cost-effective and also might bolster your asking price," says Colby Sambrotto, the New York City-based president of USRealty.com, a real estate website.
And if you can't afford to put more money into your home or lack the will to do it, here's another idea from Sambrotto:
"Get plans, estimates and outline the permit process for adding, say, a second bathroom. If buyers can see exactly how much hassle and money it will cost to address the defect, it might not look so scary," he says. (This, of course, assumes it won't be too much hassle and money.) "Plus, you then have hard numbers for negotiating the cost of the fix into the price."
Slash the price. If your home is really the pits and you almost don't care what you get for it, as long as it's something, you may want to do that and see what happens.
"We had a first-floor loft we were selling two years ago next to a very loud nightclub and facing a busy street," says Ari Harkov, a licensed associate real estate broker in New York City. Making matters worse, he adds, the bedroom wasn't considered legal, and it was in the basement, which means it was considered a studio apartment.
"We finally got a buyer and signed a contract only to have the deal fall through two months later as they could not get financing. The loft with no bedrooms made it impossible for an appraiser to comp out anywhere near the price," Harkov says.
So that's when they started slashing.
"We made a big price cut, got several good offers and ended up selling to a cash buyer who didn't mind the drawbacks," he says.
Harkov adds that money always talks: "There is always a buyer at the right price."
Rent your home. It may be the best of your options if you desperately want to move, or, say, need to move due to a job offer.
And renting out the space a good option, according to Bill Golden, an Atlanta-based real estate agent with RE/Max Metro Atlanta Countryside. But he warns: "Renting is the first option, though it's one with which you should proceed with caution."
For starters, ask yourself how badly you really want to be a landlord. But even if that doesn't bother you, Golden points out that if you think your house is hard to sell now, it could be even more difficult after your tenants leave.
"No matter how well you screen tenants, they are never going to maintain it the way you did, so you have to be prepared, both emotionally and financially, to deal with that once they move out," he says.
But Golden says if you're willing to take those chances, it can be a lucrative way to make money on your house in the meantime.
Golden notes that if you can keep your home furnished, you could utilize a service like Airbnb and offer temporary rentals to generate some income. But if you do a lot of short-term rentals, he says you may still deal with similar wear-and-tear issues.
Embrace the defects. There's no use pretending a defect doesn't exist. If your house is next to a garbage dump, ignoring the problem won't make it go away. In fact, there's even a name for that problem.
"Flaws like a location under a flight path are called 'incurable defects,'" Sambrotto says. "There's nothing to be done except offset the defect with other features. For instance, you might show how you have installed extra-soundproofed windows on the side of the house facing a highway."
You could even market your house to a niche category of buyers who might not care about a problem or may even like it, he points out.
So if your house is under a flight path, you could boast in an ad that you're selling the perfect home for an aviation enthusiast.
Highlighting the defects is a risk, Sambrotto admits, since you will turn off more buyers than you will attract. "For instance, that faraway garage might be perfect for noisy hobbies like woodworking, but many buyers won't be interested in woodworking," he says.
But if these are desperate times ...
[See: The Best Apps for House Hunting.]
Walk away. You may be tempted to move, anyway, and keep trying to sell the home. That's probably your least desirable option, though it may work out well enough if you have someone mowing the lawn and looking after the place while a real estate agent brings in prospective buyers whenever. But if you plan on leaving without a process in place to get your house sold, you will likely regret putting your house out of your mind for any period of time, Golden cautions.
"Just letting it sit there empty is very rarely a good idea. There are always carrying costs [like property taxes and homeowners insurance], even if you have no mortgage, and it's much harder to keep it properly maintained without someone living there on a daily basis keeping an eye on things," he says. "If it didn't sell before, giving it even less TLC is not going to help matters."