- The Washington Times - Friday, April 14, 2000

It's not the best situation, but sometimes it happens. You buy a new home in a beautiful new community. Two years later, you have to move. Now you are trying to sell a "used" home while competing with a builder offering the same model just three blocks away.
What's a seller to do?
"Well, I always tell buyers to think about this before they buy a new home in the first place," says Michael Sims of RE/MAX Capitol's Uptown office. "Buyers should find out how many units will be added to the community, and how long they anticipate being there."
If you are moving into a 350-unit community where construction has just begun, moving in two years might not be a great idea. You may not recoup the investment you made on all those optional features, and now you have to pay the Realtor's commission, which you didn't do when you bought.
Still, plans do change. So how do savvy agents help their clients tackle this problem?
"If I am working with folks who simply have to sell, I advise them to familiarize themselves with the builders and the models they are offering," Mr. Sims says. "Put the buyer's hat on, and look at the models through their eyes. Then, walk back into your 'used' home, and see how it compares. Is the paint fresh? Are the floors waxed? Is the carpet clean?"
Many buyers are drawn to new homes because of the pristine condition of a new property. They want everything to be brand new. Even a little wear and tear on your home can weaken your position as a seller. So what do you have on your side?
You may have a pricing advantage. Due to labor and material shortages during the past couple of years, builders have been forced to raise prices. This could mean you paid thousands less just a few years ago.
"Someone selling a 'used' home will probably have a little breathing room," says Ken Wormald, sales and marketing director with Wormald Builders in Maryland. "We've had to raise our prices incrementally, so the new homes in such a situation might be selling for more."
If the builder has raised prices significantly, from $200,000 to $240,000, for example, you now have some bargaining power. Remember, however, that you have some added expenses as a seller. Expect selling to cost you between 7 percent and 10 percent of the final sales price. That money goes to pay the Realtors' commissions and to cover closing costs and the like.
"This seller is definitely going to pay closing costs, because the builder is," Mr. Sims says. "To compete with a builder, you have to offer the same incentives he is."
Remember, too, that 7 percent to 10 percent doesn't include any painting or cleaning you may need to do to make the home presentable. Buyers who are comparing your home to a new property might expect a significant discount from you because you are offering something used. These are the factors that make it tough to break even in such a situation.
If you are lucky, the builder has been forced to raise prices enough to cover the cost of selling, plus you might even take a little money away from the settlement table. Unfortunately, even a bargain-priced home won't help sometimes.
Price isn't foremost in the minds of many buyers. New-home shoppers often want a new property because of the options available, and they'll pay extra to get them.
"We may have lost a sale or two because a nearby resale was priced lower," Mr. Wormald says. "But we always remind them that just a few thousand dollars more will get them their choice of flooring, light fixtures, carpeting and paint all in a brand new house."
That strategy works with many buyers who find choice attractive. To compete, you may want to offer some choices, too.
Consider including an allowance for redecorating, or offer to paint the home in the buyer's choice of colors.
Yet again, you may find all this unnecessary. Many families today are short on time. Buying a home that already has been landscaped and decorated can be attractive to some buyers.
"Good landscaping is a great incentive," says Sally Swanson of Century 21, Laughlin, in McLean. "Be sure the home is decorated in neutral colors just like the new homes are. Purple carpet just won't work."
Perhaps the biggest advantage a seller has in today's market is time of delivery. You are offering your home for sale right now, while builders these days are often delivering five to six months after the sale. This gives sellers of "used" homes a distinct edge with buyers who are ready to move.
"Sellers have a definite advantage in this spring market," Mrs. Swanson says. "Supply and demand is governing this market right now, no doubt about it. There is a severe shortage of supply right now homes on the market are getting a lot of attention from buyers. And that will work in a seller's favor."

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