by Starla Ross

Created on: September 08, 2008

Today's real estate market has left some homebuyers in a quandary of sorts. With foreclosures at an all-time high, good deals abound in real estate. Houses in some areas are selling for 25 to 50 percent less than they were one year ago. Those ready for an investment or a move up the property ladder see an opportunity for an investment in equity, but the question remains. If prices are low, how can you sell your own home in this market?

CONSIDER AN AUCTION

In years past, real estate auctions seemed to apply only to estates or desperate homeowners. The rules of the past don't apply today, and real estate auctions are becoming a popular way to sell for all homeowners. Why? There are several benefits.

First, the auction company takes the time to market your home and creates excitement for your property. In addition, you can set a "reserve" price for your property - the magic number that you must have in order to complete the sale. If bidders don't bid up to your reserve price, you're not obligated to sell. This eliminates all the risk in losing money on your home.

The cost of selling by auction is almost always competitive with current real estate fees. If real estate fees in your area average seven percent commission, it's most likely the auction fees in your area will not be any higher than that amount.

Most importantly, there is a set date when you will sell your home. With this real estate market, houses in some areas of the country may sit for six months or more. With an auction, your house could be sold in as little as six weeks.

REDUCE THE PRICE

If you've already purchased a new home and you have quite a bit of equity in your current home, drop your price. Don't just drop it a little, drop the price drastically. When you consider the carrying costs of keeping an empty home (mortgage expenses, insurance, taxes, utilities, lawn maintenance, etc.), you can often come out ahead by dropping the price in the beginning and selling quickly.

PICK UP TENANTS

If you would like to keep your current home as an investment or you can't sell your home for what it is worth, consider renting it out to good tenants. This should be an option only if your income would be more than your expenses. Consider your mortgage payment, insurance, taxes, and maintenance expenses. If you can generate enough rent to cover these costs, renting may be a good alternative to selling.

BRIDGE THE WAY

Although they are getting harder to qualify for, some banks still do finance "bridge" loans. This type of loan helps cover the gap between your new purchase and the sale of your current home. To qualify for a bridge loan in today's market, you need to have good credit and a lot of equity in your current home (usually at least 50 percent of the home's value). If you do qualify, a bridge loan can help bridge the gap between home purchase and sale from several months to up to one year.

Purchasing a home in today's market is possible, and it may be a great time to purchase. With a little planning, you could find yourself with a new address in just a few short months.

Learn more about this author, Starla Ross.
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