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Price, rather than 'fresh listing,' is top factor
By Edith Lank | Columnist
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Published: 5/29/2010 11:13 PM

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Q. We feel like our home has been languishing on the market. Lately, we've had few open house visitors. Our property has been on the market since January. Should we take it off the market and give it a chance to "cool down" for a few weeks before putting it back on the market? Do you think that fewer people look at a home in the spring if they know it's been on the market for several months?

We are debating as to whether buyers gravitate toward fresh new listings. Would buyers think that we are getting more motivated to sell the longer the property has been on the market? Or maybe we should keep the listing up and lower the price.

Also, we are aware of at least three nearby places that will definitely be on the market within the next six months. We are concerned about the effect this could have on our sale prospects moving forward.

Any feedback would be great. I'm really trying to stay calm about this.

A. Don't waste the best-selling season of the year, especially if you anticipate more competition later on. Buyers aren't so much concerned with fresh listings as they are with finding bargains. They've already voted that you're asking more than they're willing to pay. If you've read this column very long, you know what I'll advise.

Keep the house on the market and drop your asking price till you hit the right level.

I keep seeing you quoted online as saying, "fewer than 1 in 10 homes nationwide sell without a broker." I was wondering where that statistic came from and if you could point me to that original source?

A. That old figure must come from a couple of books I wrote in the 1980s. The estimate came from banks and other mortgage lenders, who know how many of their borrowers are working with agents.

These days, it'd be more accurate to say that roughly two in 10 homes are sold without the use of agents.

We've relocated, but we still have a home in Michigan that is currently for sale. We've been approached by a buyer wondering if we would sell him the home under a purchase-money mortgage (PM). We would love to have your thoughts as PM is new to both our agent and us.

A. I find it hard to believe your agent passed a license exam without knowing about a purchase-money mortgage.

Strictly speaking, it's any mortgage loan used to buy real estate, as contrasted with further borrowing in the form of refinancing or equity loans. But I suspect your prospective buyer is proposing a sort of installment sale. He wants to know if you'll accept a mortgage for part of the purchase price, lending the money yourselves, acting as the bank and receiving your proceeds gradually in monthly payments.

There's nothing wrong with seller take-back financing. If the buyer has dependable income, good credit and will make a substantial down payment, a purchase-money mortgage can work out perfectly well.

At least three things must be considered, though:

First, do you presently have a mortgage on the house? Unless it's a VA or FHA, it would need to be paid off when you sold, so you'd have to find the cash for that somewhere.

Second, and this is related to the first problem, are you willing to wait to collect the largest part of your money - with interest - over a period of years?

Third and most important: How come these buyers are proposing such an arrangement? Is it because they can't qualify for a regular bank loan? And if so, do you want to take a chance on someone that lending institutions find too risky?

Sometimes the answer is "yes," depending on your situation and the buyer's unusual circumstances.

We are selling our house "for sale by owner." We have a buyer asking if we would be willing to accept a VA loan. Should we be hesitant with this type of loan? I did a bit of research and it seems that a lot falls on the seller. Any advice?

A. VA mortgages are just fine. Yes, the government does put in some protections for its veteran/borrowers. But you'll find that sellers have much of the same responsibilities with just about any type of mortgage loan their buyers are seeking.

• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.

2010, Creators Syndicate Inc.