Pricing the Home

Taking the House Off the Market

You may find that it simply isn’t feasible to your organization at this time to sell a certain property to an owner-occupant. The following are all reasons that other organizations have reluctantly reached this conclusion:

  • The market for homebuyers in the organization’s price range is too weak at this time, and the property or neighborhood doesn’t have enough competitive edge.
  • The neighborhood in which the home is located is too troubled and needs to pursue safety and community organizing strategies before it can successfully attract owner-occupant homebuyers.
  • The credit market is too restrictive for potential buyers in the organization’s price range, who cannot secure a first mortgage. The organization may find it more appropriate to work with its pool of buyers for the next year or so to help them get mortgage-ready.
  • The block or neighborhood in which a property is located has too many other vacant and abandoned homes, which are dissuading any potential buyers from considering the property. In this case, the organization may need to get more properties under control in some way (demolished or rehabbed) before it’s possible to pursue a sales strategy.
  • The neighborhood’s image is too negative and buyers won’t look at a house for sale there. The organization may need to partner with neighborhood leadership to begin implementing a neighborhood marketing strategy before owner-occupant sales are feasible.
  • The organization can no longer sustain the carrying costs associated with holding and marketing a vacant property.

Some organizations budget a certain number of months for the property to sell, and if it doesn’t, it’s automatically moved to a scattered-site rental program. In today’s market, there is increased demand for both lease-purchase and rental because of the tightened credit market and the uncertainty of the economy. Offering safe, attractive, affordable homes in either of these tenure types will likely have a bigger market and be an asset to your community.

Certainly, there are neighborhoods that may be at a point of decline or destabilization for which they need a more comprehensive redevelopment strategy than an acquisition-rehab and -resale program alone. In neighborhoods with more intensive needs, quality rental and lease-purchase can be very effective parts of a strategy to get more properties occupied and under the control of a benevolent, neighborhood-friendly investor such as a nonprofit.

If you are considering whether to take the house off the market, review again the questions listed in the previous section on dropping the price. If you have corrected everything that is under your control or influence, it may be an appropriate time to switch from an owner-occupied sale strategy to a lease-purchase or scattered-site rental strategy here are some planning resources to assist you in planning such a change:

Scattered-Site Rental: NeighborWorks America has an online Scattered-Site Rental Toolkit at its website devoted to community stabilization, www.StableCommunities.org.

Lease-Purchase: HUD has an online Lease-Purchase Toolkit its Neighborhood Stabilization Resource Exchange website: www.nsphelp.info.

The next chapter focuses on promoting the product benefits to your target markets through marketing messages and marketing strategies.