Mac Miller
Roomy contemporary houses like Severin's start old-house owners thinking about trades
Sell him on the new house, then trade, says NAHB officer
"Prospective buyers often hesitate to accept a realistic appraisal because of the sentimental value they attach to their homes," says Nels G. Severin of La Mesa, Calif., nahb second vice president.
"It's most important to sell the customer on the merits of the new home. That way he will be ready to accept a realistic appraisal of the old one. The more a customer knows about the details of the trade-in plan, the easier it becomes to get him to accept a realistic
appraisal." Severin is so sold on trading, he has set up a separate realty company to handle that end of the business.
Severin's company has taken 92 trades in the last six months. They get a 5% commission plus a $750 capital risk fee. They also require a deposit of $100; $20 is used for appraisal, is not refunded. Severin uses an outside appraiser. He paints and spruces up the old houses, up to about $275 worth, doesn't remodel.
"Trades really move fast"
R. O. Woodson of Corpus Christi, Texas, surveyed 2,500 families. Seventy per cent said they would trade for a new house, providing they could get their money out of the old house.
Woodson offers a $500 discount for cash on his $12,000-$ 14,000 houses to encourage old-house owners to sell their house to buy one of his.
He had traded about 50 times in the past six months, has taken title on some houses and fixed up some: painting, refinishing floors, repairing roof.
"We sell 75% through trade-
Wayne Guthrie of Spokane builds houses in the $12,000 to $20,000 price range. Of 200 houses he will build this year, he says 75% will be sold on trades.
In cases where the owner of the old house accuses him of setting the price too low, Guthrie suggests that the owner list the house with other realtors to get an idea of the market value.
About one fifth of the houses need fixing, but Guthrie spends a maximum of $500 or $600. He paints, but doesn't try to do structural remodeling.
This is typical of houses Mullendore takes Two-car garage model shows type of house in his trade-in deals. Mullendore sells by trading.
"Occasional trade-in profits offset any los- Knoxville builder
William Mullendore of Knoxville, house is taken on trade in a good loca-
Tennessee has Don Simpson of Simpson tion, the selling price can be raised a
Realty handle his trade-ins. Mullendore few hundred dollars to offset any losses
says: "Trade-ins won't make the builder taken on other trade-ins."
money. But it's like the used car market: "We do very little remodeling and re-
it lets the builder or realtor sell his new painting since the trade-in value is so
house." close it prohibits very much work being
He also says: "When a good, sound done."
"Paint covers multitude of sin
Phil Herriges of Milwaukee trades on 15 out of his 50 new house sales per year. He tries to sell the old house before the new house is ready.
"When I take title", says Herriges: "I camouflage the old house. Paint covers a lot of faults. I fix up the stoops. I tear out an old fashioned pantry, fix up kitchen cabinets, fix up bathrooms."
Trade-ins have publicity value
Tn Tucson, Ariz., J. H. Watson, secretary of the L & W Construction Co. says: "We used the Trade-Ure-Home Plan on the initial opening of a new tract of 270 units . . . had a very excellent response to our advertising. It wasn't a profitable venture (in terms of money made on old houses). But from a publicity standpoint, we were able to create a tremendous amount of interest and to get a new area under way.
This house cost Helf $15,500 He'll get about $16,900 for it
To get a better price for this trade-in house, Helf has made the following repairs: 1) checked and adjusted the heating and plumbing systems; 2) repainted the interior; 3) replaced kitchen cabinets, doubling cupboard space; 4) replaced kitchen linoleum; 5) installed new kitchen sink.
"We know from experience. Used houses are more salable when renovated, even though the cost of the renovation must be added to the price of the house," says Marvin Helf of Cleveland.
Even so, Helf tries to keep repairs to a minimum. But he knows chances for a sale are better when a house looks attractive and in good repair.
Helf has been taking trades for two years. Old homes are sold by the brokerage department of Helf's realty organization, which is separate from the sales department which handles his new house sales.
In two years, Helf has had to take title to only six houses. Usually, the deals have been made before the completion of construction of the new house./end