The housing market is rough right now, but the market for vacation homes is even worse.
People aren't buying many vacation homes these days. So how's a second home owner supposed to unload that property? Stand on a street corner with a sign that reads, "Selling vacation home, please help?" That's one tactic, but there are other strategies that could be more fruitful.
A 2008 report by the National Association of Realtors (NAR) indicates that vacation home sales dropped by almost 31 percent last year. And the prices dropped, too: the median price of a vacation home in 2008 was $150,000, a $45,000 dip from the median price in the prior year.
Know where you stand
If you're a second home owner, selling your vacation home in this environment obviously could prove to be challenging. Start by analyzing your current situation. If you want to sell the property because your mortgage is strangling you, you'll likely face some tough decisions. Find out what the home's current value is, and compare it to your loan balance. Discounting the price for a fast sale is one option, if you have room financially to do that. But if your loan balance is close to or more than the property value, you may have to pursue a loan modification or short sale with your lender. Be prepared for a battle, though. Lenders have been reluctant to take those measures on second homes.
You have more flexibility when you can afford to hang onto the second home for a little while longer. If the house isn't currently rented, consider offering it as either a long- or short-term rental. Interview local property managers to evaluate the demand and rent prices. Then, make an informed decision about how much income the property can produce, relative to the expense you'll incur by keeping it. You could rent the property on a month-to-month basis, and then put it up for sale as soon as sales and prices stabilize.
Sweeten the deal
Another tactic is to jumpstart a sale with big incentives. You could throw in the furnishings, or offer cash toward closing costs. A 2008 article in Forbes magazine listed even more extravagant incentive ideas, such as a car, the promise to match future price declines, or points on the buyer's mortgage.
Reposition the property
Depending on where the property is located, you can avoid the slowdown in vacation home sales by making your property into a primary residence. Look at your home and its location objectively, and ask yourself if you can play down its resort appeal. Does it need more closet space or better appliances for year-round living? Consult with an experienced realtor to discuss small changes that will add to the primary residence appeal.
If you still can't sell the home, go ahead and pull out that "selling vacation home" sign. Maybe you'll get a spot on the evening news, and the exposure will draw buyers out of the woodwork.