Molly from @C21 has an excellent post concerning items most sellers overlook when preparing their home for sale: http://blog.century21.com/2011/08/trying-to-sell-a-house-do-this-first/.
Molly from @C21 has an excellent post concerning items most sellers overlook when preparing their home for sale: http://blog.century21.com/2011/08/trying-to-sell-a-house-do-this-first/.
Here in North Texas, our company had the most closings we had experienced in over three years in May and June...but then came July! I don't know whether it was the oppressive heat we were dealing with, or countless other factors, but everyone seemed to start getting cranky. That's when Realtors put on their counselor hat, and in July we wore that hat a lot. That comes with the territory, however, and that's why this article struck a chord with me: http://www.texasrealestate.com/web/2/21/more/080511.cfm.
There are a thousand little things that can develop during a real estate deal that can potentially "derail" the transaction. Your Realtor has seen it all if they've been around for a while. Put your faith in them, and they'll keep your deal on the tracks.
Seth Godin is one of my favorite bloggers, as I have said many, many times over the last several years. I'm beginning to think that Seth has had one or more bad experiences with real estate brokers over the years, because it seems to me that each post he writes about real estate has a little bit of an edge to it. But, Seth's crafty. I can't really point to anything directly. He's built in plausible deniability.
In his latest real estate article, there are some truths, some half-truths, and some, shall we say, misinterpretations. First, let me deal with the obvious point that I, as a real estate broker, would differ with: number nine. Seth, I can't really speak to the laws of agency in New York, but in Texas, the first piece of paper an agent has to get signed, at the first substantive conversation about real estate, is a document called: Information about Brokerage Services. This document spells out clearly that a broker (all listings are considered to belong to the sponsoring broker here, as opposed to a particular agent) can represent the seller or the buyer, or can represent both in house through a process called intermediary. Intermediary would mean that both sides of a deal is being handled in-house. Intermediary requires the broker to appoint two agents - one to represent the interests of the buyer, and one to represent the interests of the seller, with the broker becoming the intermediary. Personally, I'm not a fan of intermediary, but it does happen.
Seth, I agree that no man can serve two masters, however, in our agency we clearly tell everyone involved who we represent, up front. When an agent walks into my office to ask me a question about a particular deal, the first question I ask is, "Who are we representing?" This clears up a lot, because we are legally bound to represent the interests of our client, just like an attorney. (Seth, why don't you pick on attorneys more often?)
Bottom line on number nine: you can't pretend that our "marketing" leads innocent lambs to slaughter. We are doing our job, and buyers buy houses because they want them, and agree to pay the price because that's what they have to pay to get the seller to agree to sell the house to them! We can talk all day about why people buy houses, but very little of it has to do with merely obtaining shelter from the cold, wind and rain. (See Seth's point number five.)
Now, I believe a lot of his other points are good ones, and deserve thoughtful reflection, except number eight. Nobody has a guarantee of being able to make a big house payment, even one with a "steady job." Boy, didn't this last recession prove that? What's the solution?: put more money down, and keep the payments low enough that you can survive any lull in income. Or, pay 100% down. But then that puts you in a neighborhood where you may not want to live, and that brings us back to...number five!
Seth, you of all people should understand that we all buy emotionally and justify rationally. The idea that a home is a great investment is how we as buyers rationalize the purchase we are making and that rationale applies not only to homes, but everything else we buy, like books on marketing, which could actually be more entertaining than factual, but we rationalize that the purchase is really an investment for our business.
Seller's Disclosure Notice
One of the requirements of home sellers is filling out a "Seller's Disclosure Notice", disclosing the past and current condition of the property. Sellers often don't want to disclose certain items because they believe it will scare off potential buyers, for instance, a repair that was made on a foundation. Sellers naturally believe that buyers will shy away from their home if they disclose that foundation work had been done. Their thought process is something like, "If it's been repaired, then why do I have to disclose it?"
I'll See You in Court
Mike Statler is a long time property inspector I know who loves to say, "buyers don't mind problems, but they hate surprises." After a buyer moves in, and something goes wrong with the house, the first thing that buyer is going to do is check their inspection report (to see if he missed something) and then check the Seller's Disclosure (to see if you hid something). If they determine that you didn't fully disclose something, well, you've got a potential problem. However, it's hard to pin the blame on the seller if the disclosure was filled out properly.
But, I've Never Occupied the Property
There are cases where the seller is not required to fill out a Sellers Disclosure, primarily if the property is bank owned (foreclosure). In Texas there are eleven instances where a disclosure is not required. Check with your agent if you are uncertain.
If They Love it, They'll Buy it
We buy emotionally, and we justify rationally. This is a universal truth. My experience with buyers is if they really love a certain property, they're going to overlook many potential problems. I've never seen an accurate seller's disclosure scare off a buyer who really wants the property - in fact, I'm certain that in many instances, buyers never even read the sellers disclosure, they simply sign it. So in the end, I believe the actual use of a Seller's Disclosure Notice is to keep the seller out of court after closing. If you're a buyer, please read it, and show it to your inspector!
My wife Roslyn and I are in the process of selling my our current home and buying another. Therefore, I've been paying close attention to the processes and the pain of doing both so I can further relate to what our buyers and sellers go through.
I'll focus in on our buy side, for a moment. Roslyn and I looked all over for our next home - in a price range. We ran searches online, ran comps and looked, looked, looked at potential new homes until we found the one we (she) really wanted. (Happy Valentine's day, dollface!)
I received this really, really nice booklet in the mail today advertising higher end homes for sale. It occurred to me that during our entire buying process, I never once looked at a piece of print media to find our next house. All those homes-for-sale magazines at the grocery stores were wasted on me. I never once opened a newspaper and flipped to the real estate section (or any section of any newspaper for that matter). In our agency, I can't remember the last time an ad like that actually sold a property. So why do homes for sale ads still exist in these medias? Because we're scared if we're not there we're not being marketed as thoroughly as we should be. It gives us a false sense of security.
Believing in outdated marketing models can be a critical mistake leading to more time on the market, and ultimately, lower offers for your property. If you're going to spend money, spend it where it counts. Fix up everything that is broken, clean the place up and declutter, take more (better) pictures and put it on the internet, priced right - where people will actually find you. OBTW, after taking my own advice, I sold my house in 45 days (in a 90 day+ market) without a graphic box, without a sign (only because I live in a gated community and it would do me no good) and with absolutely no print media advertising. But, my house sure would've looked good in those pretty magazines.
If you are thinking about buying or selling in the near future, you should start paying attention to articles like this one. All good things must come to an end, and if you don't know the effect an additional 1% on your interest rate has on your buying power, go here and run a quick mortgage calculation.
If you don't have time for that, here are some quick numbers: on a $271,000 loan (FHA loan limits in North Texas), a 1% difference in the monthly principal and interest payment when you go from 4.95% to 5.95% equals $169.56 per month. Times 360 months that comes out to $61,041.60!
There are several great articles on the web concerning home pricing. The one I read this morning from Zillow has a lot of solid thoughts on the subject.
One thing that isn't talked about enough is showings. Experienced agents know that showings are the real indicator of whether your market price is fair value. Buyers will pounce on homes that are priced right. Bottom line, in every market, whether a $50K home or a million, a home that is priced right for it's market will generally see 12 - 15 showings in a month. There is truly a magic pricing point where buyers will find you. OBTW, looking for unique buyers for your unique property is pretty much over for now.
Sellers ask all the time: "Why don't buyers just send me a lower offer if they think I'm priced too high?" It's an understandable question. The answer is, they haven't found you, yet. Agents set up searches for themselves and for their buyers. If a buyer tells their agent: "Look up to $700,000," and you are priced at $700,001, you are essentially invisible. In practice, many agents search over their buyer's upper limit, but it's not necessarily a common practice. Take this a step further and ask any active home buyer you know, "What price range are you looking in?", and it will generally be a round number, like $750K or $700K, rounded by $25,000 increments.
You need showings in order to sell. Are you invisible?
Amy Burger of the Post Dispatch wrote an article that applies to almost every home seller these days - except for those who don't have a basement!
By Amy Burger
SPECIAL TO THE POST-DISPATCH
With a minimal budget and a little sweat equity, your home can go from a "so-so" to a "wow" in no time. Whether you want to update your existing living space or add value to a house you are trying to sell, investing in some basic home renovations can make a huge impact.
So what home improvements will provide the biggest bang for your buck and make the strongest impression on guests and potential buyers? We interviewed two local contractors and a local real estate agent as well as John DeSilvia, host of the DIY Network's series, "10 Grand in Your Hand." They recommended 10 projects for the new year.
"The key is to more refresh than remodel when you're working on a budget," says Andy Burgio, owner of Burgio Remodeling. "Plan ahead and know that it will take more time and money than you initially think. Be realistic about what you can complete."
Kitchen and bathroom renovations provide the most equity and top the list for buyers, according to Joe Naert, owner of St. Louis-based Naert Realty. You don't have to replace your entire kitchen though; basic improvements make a big difference. Try replacing dated laminate countertops with granite or slate.
"Although it can seem costly, making this one change can often be as effective as an entire kitchen remodel," says Bryan Sonderegger, owner of True Construction of St. Peters.
Consider refacing outdated or worn cabinets and adding new hardware rather than fully replacing them. Adding crown moldings and under-cabinet lighting are another inexpensive way to give basic cabinets a more custom look.
DeSilvia suggests saving money by installing, painting or staining cabinets on your own if you can. If you are using a contractor to remodel your kitchen, ask what tasks can be taken out of the contract to help save you dollars.
DeSilvia recommends checking prices and shopping online for cabinets, fixtures and other items. "You can often get the same quality cabinets as a specialty shop will offer online for up to 50 percent less, especially if you're willing to install them yourself," he says.
As long as the layout of your bathroom works, just replacing the vanity, faucets and fixtures can give it a whole new look without breaking the bank. Add a cool new above-the-counter sink for a modern look or paint a small powder room a bright color. Think outside the box. "I've been doing a lot of chandeliers in bathrooms lately, which gives more of a spa feeling," says Sonderegger.
There's nothing like a fresh coat of paint to instantly perk up a tired-looking house — inside and out. If you can afford to do nothing else, just repaint your walls, trim, doors and even the outside of your house, if needed. If you are trying to sell, stick with neutral colors (white, cream, beige); otherwise experiment with color. "Faux-finishing an accent wall with a suede finish or simple rag finish can be a dramatic way to get oohs and ahhs," says Sonderegger.
MOLDINGS AND TRIMS
Updating the baseboards and trim or adding crown moldings throughout your house is an inexpensive project that, like a fresh coat of paint, gives your home a clean, new look. Replace small, builder-grade base molding with taller custom-looking base trim. Add crown molding to any room for a more high-end look. You can do this for $100-$200 in most rooms.
"There are inexpensive molding products offered now that are actually made of Styrofoam and can easily be cut with a utility knife, making them simple to install yourself," suggests Andy Burgio, owner of Burgio Remodeling of West County.
Adding wainscoting or a chair rail with raised panel-style molding in a dining room, formal living room or foyer is another way to get a very high-end look easily and inexpensively. And home stores such as Lowe's and Home Depot often offer free clinics to teach you how to do these projects
Replace outdated brass fixtures and old ceiling fans with more modern ones. Add landscape up-lights and footpath lighting outside to show off your house and provide added security. Consider additional accent or puck lighting in bookshelves and other spaces for a custom look.
Aside from in bedrooms, carpet is outdated and difficult to keep clean, especially with kids or pets. Consider removing carpet in main living areas and installing hardwood floors or refinishing hardwood that may be under carpeted areas. Add area rugs for style and comfort. Replace dated linoleum in kitchens and baths with tile or hardwood as well. Doing tile (yourself) in a small space, such as a bathroom can cost as little as $200 and makes a huge impact. Consider a unique tile border or pattern.
"Curb appeal" is something every homeowner should strive to have. "Your house can be great inside, but it doesn't matter if they don't even make it to the front door," says Naert. Investing in landscaping, no matter how large- or small-scale, can provide significant return. Start from scratch or look for ways to improve existing landscaping. Consider using native plants, trees, shrubs and perennials that will flourish in our climate with little maintenance. If you have an old, weathered deck, DeSilvia suggests just replacing the decking itself to make it look brand new if the overall structure is intact, as that's where the majority of the labor lies.
Did you know that, in addition to saving money on utility bills and being environmentally conscious, you can get tax credits for making energy-saving improvements to your home? Through the Environmental Protection Agency's Energy Star program, tax credits are given for buying Energy Star products such as major appliances, water heaters, roofing, siding, HVAC products, doors and more. Visit Energystar.gov to learn more. Ameren UE's UEfficiency program promotes Energy Star qualified manufacturers and provides links to local retailers and contractors at UEfficiency.com.
Old, worn out doors can make a house look shabby, especially if you are trying to sell and competing with newly built homes. If your interior doors are no longer in pristine condition, consider replacing them with finished or unpainted six-panel doors. A new front door (or a fresh coat of paint and new hardware) can give a "facelift" to a house and add curb appeal — and don't forget the tax breaks for buying one with an Energy Star label.
Basements are big in the Midwest, and finishing one can, in some instances, nearly double your living space. "People and especially families need more space," says DeSilvia. "So rather than building additions, they are turning unused space in the basement to useful space such as a play room, office or family entertainment room." Full basement remodels may require the help of a contractor, unless you are more highly skilled. If you choose to do the major construction yourself, Burgio suggests leaving things like electric, plumbing and HVAC to the experts to ensure they are safe and installed correctly. Burgio also suggests saving money by renting larger tools. "If you spend half your budget on tools for the project, you are losing money. You can rent almost any tool you need inexpensively."
The battleground for getting more money for your home begins with decluttering, and it is generally the most painful task you have to go through. Paula Massey is the stager we have used for years, and decluttering is the number one item on her list of recommendations - she often calls it "prepacking".
When you declutter, you make your house look bigger and decluttering enables you to take possible next steps like re-arranging furniture to create the right focal points in each room. Peronally, my favorite staging TV show is Clean House. It is remarkable how different a home can look after it is cleaned up! You know the old saying, "You can't see the forest for the trees?" Buyers are like that. A cluttered house leads to fewer and lower offers, every time.
Not to leave you without resources, I found a blog with ideas for what to do with all your "stuff". I believe my son prefers the dumpster option over the mini-warehouse option, by the way. As we were moving items into multiple mini-warehouses, he told me that he had a solution for dealing with all the items we were storing: "It's called a match, Dad."