When Jan Hlavacek put her Aurora home up for sale a month ago, she wasn't the first "for sale" sign that went up on the block. Her next-door neighbor and good friend beat her to the market by a few weeks.
Her home is on a wooded golf course lot. So is the neighbor's. Her home has a grand foyer, so does the neighbor's. Her home has four bedrooms, so does theirs. And each carries a price tag of more than $1 million.
"They are two totally different homes," Hlavacek said. "It's not going to appeal to the same buyer."
The message from real estate agents like Hlavacek is clear: When it comes to selling your house versus the neighbor selling theirs, it doesn't matter which house went on the market first. What matters is the house itself.
Two types of homes are selling right now—houses that are great values and houses that are great. The key is to make your home both, edging out whatever competitors might be next door, in the same neighborhood or in the same community. Sellers can't change their property's location, but they do control condition and listing price.
Real estate agents say they've seen plenty of cases where competing homes turn into a case of keeping up with the Joneses, and that's a risk in the current buyer's market. Depreciating home values mean sellers are unlikely to recoup all of their spruce-up costs. The key is to listen to advice and do what it takes to improve the home's chances of sale.
That means if a neighboring house gets new carpeting laid, it's worth considering for your own home. The same goes for paint and curb appeal.
Even if the houses are exactly the same, sellers need to accentuate the differences between theirs and others on the same block, whether that be any upgrades made, the home's location or little tidbits of extra information detailed on the listing sheet.
"Which has the best location? If you have it, tout it," said Jeff Matheson, at agent at Baird & Warner Libertyville. "You've got to highlight the positives and you can't avoid the negatives. If the basement is orange, say you will paint it and the buyer can pick the color."
Selling strategy is even more important in newer subdivisions where builders may have models on the market that they are able to sell for less than a homeowner needs to make on a sale to retire a mortgage.
Go through the competition and then go home and make your home the prettiest on the block. But agents have different theories when it comes to setting a listing price.
"Maybe you are at the top of the heap and you can justify your price," said Lisa Byrne, a real estate agent at Baird &Warner Naperville. "You need to be priced the best but that doesn't necessarily mean you're the cheapest."
However, Janet Knight-Carey, an agent at Prudential Preferred Properties in Libertyville, advises a more aggressive stance. "You have to be priced at or below what the best home on the block is like," she said. "We're going to be helping them sell their home because when we overprice, we help others sell.
"You never stop being competitors [with your neighbor], especially in this market."
Matheson worries that sometimes the competition between neighbors just goes too far, and the price-chopping hurts the overall market. "Unfortunately they're competing and there's no one to compete for," he said. "Those who have to sell are forcing the hands of those who don't."
THE LOCAL SCENE