Strategies for selling a house in the Washington region

May 22, 2012

Real estate broker Morgan Knull took reader questions on ways sellers can better position themselves to get a fair offer on their homes. (For those of you who were looking, here is the article Morgan mentioned: http://www.washingtonpost.com/realestate/even-in-dcs-hot-market-sellers-need-to-make-their-houses-stand-out/2012/05/16/gIQAqm05YU_story.html)

Hi everyone. Looking forward to answering your questions during the next hour. The Post's excellent real estate series this month has covered a lot of territory, literally and figuratively, and today we'll focus on sellers. But happy to broadly construe that!

I have a condo in an area that is popular and continues to grow (U Street) so based on location alone, I don't think I'll have trouble selling. The bathrooms have been updated, but the kitchen is still about 15 years old - functional, just not brand new. How critical is it to have all the latest bells and whistles in a place where you know the location is going to be a big seller?

Two thoughts.  First, it depends on the comps.  In some buildings and neighborhoods right now, it's possible to do less and still sell, assuming there's demand and you price appropriate to the condition.

Second, when it comes to remodeling kitchens (and bathrooms), you don't gain much advantage by doing partial renovation.  Buyers are not impressed by an old kitchen with new granite counters.  So avoid piecemeal remodeling because it doesn't add value, but it still costs you money that you probably won't recoup.

I own a condo in downtown Silver Spring that I would love to sell but don't think I could get enough for to pay off my mortgage, despite the efforts to revitalize downtown Silver Spring. While the market seems to be improving in some areas of the region, this does not seem to be true for 1) condos and 2) the Silver Spring area. Is the best strategy in this case to wait it out a while longer or are the low mortgage rates the best impetus to try selling now? Thanks!

A familiar story, I'm afraid.  The condo resale market remains the weakest component of the local housing market right now. Owners who bought in 2006-ish are still upside down in most places, even in otherwise "hot" neighborhoods. 

While low interest rates are stimulating buyer demand, they don't alter the fundamentals of the market, in terms of what condos in your neighborhood are selling for.  Unless you can sell for enough to recoup your purchase price and transaction costs (broker commissions and transfer taxes), it's best to stay put, rent, or consider a short sale if you qualify.

Hi Morgan. I'm getting ready to sell a condo in the Reston area that I've owned for several years. The unit is 20 years old, but is in a well-maintained development and is in good condition. Can you give a short list of things someone in my position typically needs to do to spruce it up sufficiently before going to market? I am willing to spend some money, time and sweat but don't want to do more than the typical new buyer is expecting. I also want to fix things that make potential buyers think "ick".

Condos in Reston seem to continue to be in a slump, which is perplexing considering the visible evidence that Metro is finally coming, at least as far as Wiehle Avenue.

More than anything else, the best recoup on pre-listing improvements comes from fresh paint and new flooring if carpeted (or refinishing hardwood, if needed). Beyond that, declutter, declutter, declutter! If the bathrooms are dated, sometimes you can make some inexpensive improvements to give it more of the "spa" look --- new vanity, new flooring (tile is not expensive in small areas, or tasteful vinyl that looks like tile), new fixtures (avoid chrome and embrace the brushed-metal look).

Is is better to list your house in advance of a holiday weekend (like, Memorial Day, for instance), or in advance of a regular weekend? Thanks much!

Funny you should ask.  I'm discussing that with a seller client right now.  I've sold properties on Christmas Eve, the Fourth of July, and last year over Memorial Day Weekend.  However, if a seller, I would hold off reviewing offers until the Wednesday after a long holiday weekend, in order to catch anyone who was away or who needs time to freshen up a lender letter. Good luck!

What are the best inexpensive things to do to enhance an unfinished basement laundry room?

Normally not the selling point of a house, whether finished or unfinished. But fresh paint if it's already drywalled and maybe some roll-down vinyl flooring that looks like real tile. Get  rid of the cobwebs and any dead insects or lint. Just try to make it look clean and presentable.

Morgan - Thanks for doing this chat! I'm thinking of selling my updated townhouse, and it looks my neighbor might be selling his non-updated townhouse first. Will his lower price scare off my potential buyers, or will they see the value in my (cost-effective) updates? Does it make sense to wait? For what it's worth, I'm planning to list for less than my realtor suggested.

I think most buyers (and their agents) are prepared to acknowledge the value of improvements a seller has made. In fact, it's much harder to sell an unimproved property right now than one that is "turn-key." The unimproved property isn't your competition, as counter-intuitive as that may seem, assuming that the difference between its listing price and yours isn't too much at variance. A basic townhouse kitchen remodel is worth 10K and each bathroom $5K. Flooring and paint another $5K or so.  A finished basement is $10-15K. Buyers should understand that. Even appraisers finally are coming around to that.

How long does a seller typically have to wait to find out if there's buyer interest in a home?

It depends on what the prevailing sales time is in your neighborhood.  Bidding wars usually only happen the first week or two, unless you subsequently do a price reduction and thereby "renew" the listing. You also should be able to gauge from buyer traffic. Are buyers even coming? And, if so, why aren't they buying? Make sure your agent solicits feedback from buyers and buyer agents, because that often helps you connect the dots.

Morgan, no one wants to move to a neighborhood that is unsafe even if the house is low priced. So what do I tell prospective buyers when they ask about the crime and situation in my neighborhood?

True enough. You have to embrace reality. We are running out of "up-and-coming" neighborhoods in the DC area, so if you can't sell the extrinsics of the neighborhood, you have to hope that the intrinsics of your home are compelling. And then make sure you have marketing material that explains the positive trends in the neighborhood and redevelopment that may be occurring. The more marginal the neighborhood, the more marketing that is required.

Haven't put it on the market yet, and I probably earn too good a living to get any help or have the bank work with me on accepting a short sale ... but the difference between what I can sell it for and what I owe is probably $70,000+ ... an old house in good shape ... Do I sell for what I can and write a check for the rest? Options?

Tough question. I think the most regrettable short sales are those in which a seller isn't upside down by much, but is enough that it becomes a Catch 22.  Short sales almost always sell for less than a regular sale, so there's an argument for writing a check if you can. One of my clients, a dear childhood friend, brought a check for more than $100,000 to a settlement in Loudoun County last year. But that is an individual choice and, of course, depends on your financial wherewithal and also whether you'd even qualify for a short sale hardship.

We are going to put our house on the market at the beginning of June. A house around the corner recently sold in less than a week with multiple offers, and they did not have an open house. Rather, they allowed their realter to show by appointment only as well MLS. Hearing about people coming into our home and going through our dressers, closets and lying on our bed to "get a feel" for the house makes us reluctant to do so. We are in the staging process at the moment, so the house is uncluttered. Your opinion is valuable, as well as any other staging suggestions!

Redfin recently released a study suggesting that open houses aren't particularly effective in the DC market. My experience is otherwise, and I am a big proponent of them. Not only because my buyer clients sometimes first find the house they ultimately buy through attending an open house but also because it shows that the seller and listing agent are aggressive about marketing. The one exception would be more rural places where open houses don't generate much traffic. In these cases, it's probably a wasted effort.  Remember that virtual photo tours have become "the new" open house, and most buyers' first introduction to a home for sale.

What do you wish neighbors would do to keep up their homes and the market value of their neighborhood?What makes a neighborhood attractive to buyers?

Most people are not so different from one another. Buyers frequently tell me that they want to be near Metro, shopping and restaurants. They want to live in a neighborhood that is well-maintained and with good schools and sidewalks. They look to see if the neighbors are maintaining their property in good condition. Of course, most of these things can't be controlled by a seller!

Good afternoon. I have a 3200 square foot townhouse approximately 1.5 miles from the new McLean station on Metro's silver line. What is a reasonable expectation as far as increase in property value with the arrival of Metro? A smaller unit is currently on the market in my neighborhood for $875K

I don't think we know the answer to that question yet. The Silver Line has been discussed for a decade nowand under construction for several years, so we don't know how much pricing already has begun to factor in the "Metro premium" that buyers are willing to pay. Of course, in the case of Tysons, there's a lot of other redevelopment that intrigues potential buyers but also scares them because of Tysons' reputation for traffic congestion.

Basement is finished. Connecting stair only right now. We are considering adding egressed doors to create a walk up basement. Is this something that would increase the value of my home if we are to sell in the future? If so, is there a ball park ROI for something like this?

If this a potential "English basement" type scenario, with potential rentable space? Or more a matter of aesthetics of having a more pleasant basement that functions as a family room or in-law suite? I don't know that a new exterior egress adds value except if the basement is potentially rentable.  Otherwise it's a traditional basement, egress or not.

So the house two doors down is similar to ours, and they are asking at least $30,000 more than I and my agent on my soon-to-be listed home thinks is realistic. Is this good news for us, or could it be bad if the higher priced home doesn't move?

In sales, it never hurts to undercut the competition. Most buyers will look at both houses and if yours is the superior value, it'll sell first. Overpriced neighboring houses work to your advantage.

Hi, I live in the Columbia area of Howard County. Can you give me any insight as to how prices are faring in my area? I would like to sell my townhouse in a 2-3 years, and in major renovation mode, but fear that I may be spending too much. On the other hand, I've noticed houses with no upgrades tend to sit on the market for a long time, so I don't want to do too little either. We have upgraded the kitchen and all three baths, flooring and paint throughout. Next year we'll work on "curb appeal." We live in a very nice, established neighborhood, and good schools nearby, but there are still several short sales in our neighborhood that are dragging prices down. Will these short sales/foreclosures be a problem in the future do you think, and what other upgrades can you recommend? Thanks!

HoCo is still a recovering housing market. Hopefully BRAC will be good to Columbia in particular. There is minimal demand right now for houses that aren't upgraded but which are priced as if they are (or priced nearly as if they are). My advice, since your time horizon for selling is a few years off, is to make incremental improvements that add value for you (i.e. enjoy your improvements now) and which will translate into value when it's time for resale.  That means kitchens and baths, flooring, fresh paint, new light fixtures and bathroom fixtures, curb appeal. But be sensible about how much you spend. You usually recoup spending $10-20K on a kitchen remodel, but you won't fully recoup spending $50K.

Hi - I've had my 1 BR condo on the market since November. I'm in a convenient location close to the Beltway. I've only had one offer, which just recently fell through because they didn't like the condo/association's balance sheet (or so they said). I've painted, installed new granite in the kitchen, and done multiple other small/minor 'fixes' based on the recent inspection. Granted, I don't have the latest kitchen cabinets or bathroom, but they are all in good condition and clean (built in '86). It shows well and I get good feedback, but no bites. I've lowered the price twice but it's difficult to price b/c there are no other comps either in my complex or the neighborhood. Other buildings in the area are older and smaller, but are marketed for much less. I don't need to sell but would like to in order move up and buy larger. I'm priced at about $9K higher than what I bought it for in 2003. What else can I do without "giving it away" or simply breaking even?

Annandale remains a tough market.  If you're off Americana Drive or Gallows Road, especially so. What kind of feedback has your agent gotten from visiting buyers and agents? Not to point fingers, but since you've invested in the finishes of the house, is there something with the presentation that is holding buyers back, like dated decor or furnishings?  This could be a case where some staging would help, or even paying $300-400 for a stager to do a "walk and talk" and give you some advice on the presentation of the interior. 

What advice do you have for condo owners who want to upgrade to a house? What are the indications of a good time to sell a condo? We would love to upgrade, but would need to sell our condo to buy a house.

Always a Catch 22.  If you hold onto your condo, it'll probably sell for more in the future. But, by then, so will detached homes.  If you're buying up, the cost-benefit-analysis may weigh in favor of selling now and buying now, as you'll be locking in an amazing interest rate for the next 30 years.

My husband and I will be putting our house on the market later this year. We have two small kids and one cat, and try to keep the place pretty clean, but when it's on the market, does it have to be "showplace" clean at all times? Also, can I expect that people will look in our bathroom cabinets and closet drawers and so forth, so I should clean these out? Also, our kids' room are both painted in kid-friendly themes. Do we have to paint over both rooms with neutral tones before putting it on the market? One kid will be brokenhearted. We'd be happy to paint over it after it's sold.

Selling homes occupied by kids and/or pets is never easy. It exhausts sellers because buyers will want to come and look at the least convenient time.  Or so it always seems. But if you do it right, you'll compress the marketing time so you're not doing it for months and months. The more you "front load" the process, the less you'll be playing defense once you list publicly for sale. For kids rooms, I recommend decluttering as much as possible (you don't need 50 stuffed animals or books or toys) and removing some of the extraneous decor that may be present. But it's okay for it to still look like a child's room, since it is.

Does the strategy for getting a fair price depend on the specific location of the house? For instance, Md vs. DC vs No. Va?

All real estate is local, and much more local than state-level boundaries.  You really have to look at your specific neighborhood, zip code, etc. Looking at the recent micro trends in your immediate vicinity is going to be more instructive here. How long are houses taking to sell? Are they selling at, below, or above list price, on average?

What kinds of improvements are likely to make a house sell faster, and which ones are a waste of time?

Deborah Dietsch's piece in the Post last Saturday did a great job discussing this. The quick answer is this: The least expensive things are the most essential, and then everything else is secondary.  If you do nothing else: Repaint, recarpet, declutter, clean, stage either with your own things or professionally, freshen up the curb appeal. These things are more labor-intensive than cost-intensive.

I survived the process of buying a home for the first time, but now I'm thinking of selling and feel like a fish out of water again. I've read that you should interview three or so realtors to find one to help you sell, but I'm unsure of what questions I should ask. And is this a common enough practice that a realtor wouldn't just think that I'm wasting his or her time?

I find that most sellers don't interview multiple agents before signing up with one, although they usually tell us that because they want to make sure it's a good fit first. There is an argument for hiring a neighborhood expert who sells in your community; there's also an argument for hiring a top producer who doesn't have any other listings in your neighborhood because they'll be motivated to sell your house first. When a listing agent already has five other listings in the same neighborhood, selling yours first isn't always a priority.

Morgan, I would be interested to hear your thoughts about how the market conditions of the past few years have affected the number of real estate agents in the DC area. I would think that the tougher conditions have really shaken out a lot of the less competent, "wanna-be" agents out there. As such does that make it easier for buyers/sellers to get in with the agents that are at the top of their games in this area?

A fun question.  I've been in the business 11 years.  For the first 5 years, frequently people would say to me, "I've thought about becoming an agent." Then, for the next five years, no one did.  Friends would ask me in hushed tones if I'm okay. But, lately, in my office and in other brokerages, I've seen new agents joining the business, so that's an indication that the market is improving. The other interesting change is that most commission discounters have gone away or changed their business model. Discounting only works with high volume. Right now, inventory is selling again but volume is low because many sellers are holding off listing. So the volume of sales isn't sufficient yet to make discounting a viable business model again.

How do I find a good real estate agent? The last time I sold my house, I interviewed several realtors before committing to one, and the experience was not positive. In short, in the interview she said she thought we could get $X for our house, then when the time came to list it, she wanted us to list at a price $80K below $X. She also committed (in writing) to a certain # of open houses, and then resisted the idea of having any. She seemed more interested in redecorating my home than actually selling it. I've asked around to my friends and coworkers, and no one would recommend their realtors. I'm sure there are great realtors out there - how do I find one?

I find that homeowners receive two kinds of referrals to agents --- those to enthusiastically embrace and those to avoid like the plague.  One of the tricks with listings is to overpromise the seller on list price and secure a six-month listing agreement, and then belatedly --- like after 2 or 3 or 4 months --- tell the seller that the house is overpriced. It flatters sellers initially but doesn't sell the house. You should ask any potential listing agent these questions: How much should we list for, and how much do you think we'll actually sell for? These numbers are not always the same, but there needs to be some logic and methodology to it.

Hi Morgan, We've been thinking about putting our townhouse up for sale but afraid to because of the foreclosure and short sale properties nearby. Do we have to price our house in the same price range? What can we do to make sure ours sells?

If short sales and REOs predominate in your neighborhood, that's basically the normative baseline and your house, even as a regular sale, won't sell for what it would if you were in a neighborhood in which there is a steady turnover of both distressed properties and regular sales.  If you're in the latter kind of neighborhood, ignore the short sales and REOs because they're not your competition; they're a different product altogether. Appraisers see it similarly. You house should be "comped" against "like" properties, not "unlike."  You just have to be realistic about whether there is a large enough data set of "like" properties to use for your pricing and leveraging during subsequent contract negotiation.

Hi, I have a house in Arlington that has been on the market for about 50 days now. It has "location, location, location" working both for and against it -- it is walking distance to a metro station, but it is located across the street from a busy car wash. Do you think it is better to mention the car wash in the listing so people know before they come look, or is it better to just wait and let them be "surprised"? Also, the car wash offers those who live nearby perks so it actually really nice having it there -- what do you recommend as far as letting buyers know about these perks? (I've been afraid to let my agent tell potential buyers about them since I don't want to upset the car wash, have strangers ask for similar deals, etc)

I don't think a car wash is ever a selling point for a neighborhood. Ditto with gas stations. You can't avoid the fact that it exists in proximity but better to emphasize the other amenities that actually attract buyers to Arlington. Back before the days of GPS and Google Street View, real estate agents used to carefully give directions designed to avoid nearby eyesores, but that's not really possible any longer. But you have Metro!  That's a huge selling point.

Hi, you mentioned that it doesn't make sense to do piecemeal kitchen renovations. Does that requiring upgrading appliances, too? My kitchen was renovated about 6 years ago with an open floor plan and good cabinets. I plan to replace the formica countertops with something much nicer, as well as sink/faucetry, but I wasn't planning on buying new appliances. They're white or white and black, and in good, though not great shape. Would they detract too much from an otherwise new-looking kitchen? It just seems like a waste to get rid of functioning, decent appliances solely for looks. Do they really have to be stainless steel? (I'm not a fan of SS, and they are definitely $$). FWIW, I'm in a moderate neighborhood and need to sell next spring or so. I won't get top dollar, and my neigborhood isn't fancy (good schools and location, but the housing ranges from nicely modest to dumpy). I'm willing to spruce for a faster sell, but I don't want to put in higher end stuff that won't really help.

My friend and fellow Realtor Michelle Morris, who professionally stages all her listings, often surprises sellers by showing them how inexpensively a kitchen can be remodeled. She advises painting older cabinets if you can't replace them, and installing new appliances, which needn't cost top-dollar. Stainless has become the norm but it isn't essential, although the price difference for stainless is not usually significant.  Run the numbers and if you can upgrade appliances for $2-3K, it's probably money well spent, if you're upgrading the rest of the kitchen already.

There are no recent comps in our condo complex - but the last sales of comprable units were under what we paid for our two bedroom unit. However, the condo complex across the street has a 1 BR with a loft for sale (in poor shape and in a poor location) for higher than we paid for our 2 BR. Can this be considered a reasonable comp?

Probably not. What are other 2BRs selling for in the immediate area? One strategy for a condo like yours is to make the pitch "Two bedrooms for the price of one bedroom elsewhere nearby." That's the value proposition. There's actually more demand for 2BR condos in the close-in suburbs right now; 1BRs are still hot in North Arlington and NW DC. 

Our home with a basement au-pair/in-law suite with a kitchen, bath, separate bedroom, and living room. Several potential buyers have commented that they don't like the basement, that they want an open basement. We must sell this house because we are building a new one with a delivery in September. It's been on the market for 3 weeks with only one low ball offer. Does it make sense to tear down some of the walls to open up the space, or should we hope for someone who either wants a in-law suite or someone who can look past it and see the potential. We figure someone could remodel for $10-$15k.  Should we reduce the price or hope for a differrent buyer?

Hard to say without seeing your basement. "It is what it is" is one of the adages of our business. It's not like you've promised an open basement and then duped buyers when they actually show up and see that it's compartmentalized.  What is the norm in your neighborhood? What are the demographic trends? Is it a matter that you haven't found the right buyer yet, or do you have a basement that is functionally obsolescent? That's a question for your agent and also your knowledge of the competition. Real estate is an inefficient commodity to sell because it often takes a lot of "near misses" before you find someone looking for exactly what you have to offer.

Hi Morgan - We are about to put our house on the market at the beginning of June. Is it necessary to have an Open House? We are afraid of people going through our house sitting on the beds, looking through closets etc. Isn't an open house for the neighbors to come see your house?

Open houses are not necessary but there is no downside to them that I'm aware of.  I answered an earlier question that voiced similar concerns about privacy. Typically open houses attract three distinct groups --- actual, active buyers; your neighbors; and what I call "professional open house hobbyists." 

How much will the new Dakota Crossing development help revitalize the Ft. Lincoln neighborhood and the New York Ave corridor?

Michelle and I recently sold one of the Pulte resales in Dakota Crossing and we received three offers on it. Ryan is building the new ones right now. This is a niche market because there's nothing like Dakota Crossing --- in terms of new construction --- in NE DC, except for EYA's Chancellor's Row in Brookland, which is selling for a lot more money. I think it's a good investment if you're going to stick around for the next five years.

We have a 1960s home with original bathrooms, and we plan to stay for another 10 years. We plan to enlarge the small master bath, for our benefit. One potential contractor stated that some buyers don't even want baths in the master bath anymore, that the rage is high-tech showers. I want a nice soaking tub, so I am getting one (along with a separate shower), but this is the first I have heard of this. (The other bathroom will have the standard bath/shower combo, so the house already has a bath.) Any opinions? Thanks.

You need one bathtub, minimum. For a master bathroom, a spa-style shower (rain shower head, frameless glass, tile backsplash, etc.) is a very smart way to maximize constrained space. The soaking tub thing is only beneficial if you have adequate space for it, and if you think buyers are going to expect it. In Arlington, Bethesda, DC, my buyer clients are appreciative just to see a second full bathroom on the bedroom level, rather than being down in the basement.

If I can afford to keep my current home and rent it out, am I better off doing that for the next couple of years and selling to down the road? I am concerned with doing that because the home is in great shape right now (fresh paint, redone floors, etc), and I don't want it to look "like a rental" in a few years when I go to sell. The house is in Arlington, near Ballston.

What is the advantage to renting?  Would it have positive cash flow?  If so, renting can be a smart placeholder strategy.  If not, you are losing more money every month that you rent. If you can sell and breakeven (or better) now, that's an option because, as you say, in a few years the property will have incurred more wear-and-tear, to what benefit? If you're thinking a long-term rental, then none of this matters, if it's cash flowing. With most long-term rentals, you only fix what is broken, when it breaks.

I'm getting to retirement age and we are looking to downsize when I do. To that end we are looking at things to do to our house that will make it more attractive in three years when hopefully the market will be better. We have put a new roof and siding on the house, are getting ready to redo the landscaping and driveway. However, I am wondering whether we should invest in redoing the kitchen and bathrooms. These seem to be very big expenses that really do not recoup what they cost when we sell. Do you have any advice as to what types of things we should do with a goal of selling the house in a three to five year window down the road?

Kitchens and bathroom remodels usually recoup their cost ... to a degree.  It's hard to recoup a $50K kitchen remodel, but you don't need to spend that kind of money to freshen up the space. Tasteful moderation is the name of the game.

We're in this neighborhood (walking distance to metro) and development is go, go, go. Should this affect potential buyers in a positive way?

Yes, the Mosaic District has big things happening in it. Just make sure that potential buyers have access to the redevelopment plans.

Are there ways to non-actively put a condo on the market? We want to get a larger space but we are not under a time crunch right now. Also, we're in the Alexandria area where it seems many new condos are being built so how can we stand out as an older unit.

I think Zillow has a "make me an offer" FSBO feature, but not sure that really is compelling unless you're priced competitively (or slightly under) market. Otherwise, when selling a house, you should hold nothing back with the marketing. The more buyers who know about it, the better. In terms of older in a neighborhood with newer competition, it's hard to compete except by selling the value of your place (in terms of price, or the greenery of the landscape if it has a yard). You also will want it to be updated enough that it resembles "new wine in an old bottle."

I have read that Realtors like open houses because a lot of the traffic is neighbors wanting to see what your house looks like, and that the realtor gets a lot of referrals that way. When I sold my suburban townhouse condo 3 years ago, I specified no open house (discussed with the agent that this could always be done later if it didn't seem to be selling quickly). I replaced kitchen appliances, carpeting, and painted. That's it, but I cleaned, decluttered, and cleaned and decluttered, and shined my pots and pans in the cabinets, and borrowed a few items to really tie the house decorations together. There were 17 showings in 48 hours, and a few more the 3rd day. I had six offers, 3 of them came within $2000 of my asking price. Agents were calling mine asking what I wanted, to sweeten their offer. The secret? It was a well-maintained (but no renovation in the previous 8 years) 25 year old townhouse condo close to VRE, in a neighborhood where mine was the only unit that was not a short sale.

Congratulations.  Personally, I don't run open houses to ingratiate myself with neighbors (I don't even use an open house sign-in sheet).  Your experience underscores another reality of selling a house, which is that the marketing plan must be specific to the house and to the neighborhood. Virtual tours, incidentally, are "the new" open house.

We're underwater on our townhouse and are considering renting it out when we go to buy our next house. We've been pre-approved for a mortgage that takes into account our current mortgage payments, even though we know realistically we would need a tenant in place to cover the costs, so we don't have to worry about showing the rental income on our taxes for the first two years. Considering all the issues around becoming landlords, I think this is the best option for us as we'd like to move sometime in the next year and aren't willing to wait around for the market to pick back up. We also don't have enough saved up to bring a $100k check to our closing to cover the difference if we were to try to sell our house. Are there any red flags we should be looking out for when choosing this option? Our townhouse is in a nice area and I think it would appeal to a family looking for an affordable rental.

One of the things about real estate is that sellers sometimes have contingency plans, such as staying put or renting. If the particular circumstances in your case weigh in favor of renting, that may be the right way to go, especially if you think you'll be able to sell for more later.

Hi - I have the Annandale condo, just off Heritage Drive/Little River Tnpk in side the beltway. Just to follow up, my condo is decorated w/ ZGallerie artwork, Pottery Barn, Crate & Barrel, etc. It's definitely not dated.

Thanks.  The Pottery Barn look is good.  Have you gotten any helpful feedback from visiting buyers and agents? You might want to try some incentives like prepaying a year of condo fees or something. It's a gimmick but sometimes gimmicks work.

If there aren't a lot of comps in your area, how do you know when it's a good time to sell?

Ah, a tough question. If there aren't a lot of comps, does that mean things aren't selling?  Or that you live in a rural area? Or that prices are still depressed from the 2006 height? It's hard to answer without knowing why there aren't many comps. If it's a desirable neighborhood, inventory scarcity should work to your favor.

Our agent suggested having a "broker's open" to show other agents the house, get their feedback on pricing and any necessary repairs, etc. I have never heard of this before. What are your thoughts?

I haven't attended a broker's open in 10 years. I look at the online photos, and I think my buyers do, too. There are two instances in which a broker's open might be helpful. One, if the house is difficult to price, it could be beneficial to ask a large group of agents to offer their opinion of the price/pricing. Two, if it's a unique property or if access is difficult for some reason. Brokers enjoy checking out unique properties, but doing a broker's open at a cookie-cutter condo or tract house isn't likely to attract much turnout.

Thanks to everyone for your questions. Sorry we ran out of time.  Feel free to follow up with me directly if you'd like to chat more!  Morgan

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