"Must have" upgrades

It’s a simple formula: upgrades = sold. For a home to sell quickly and for the price desired, it must be “finished” with as many structural and interior design upgrades as possible-and nothing’s too small to leverage in establishing a home’s price point.

From crown molding to faux painting to door handles and cabinet handles/knobs with modern finishes, to more obvious upgrades such as appliances, window, counter, cabinet and floor treatments, to swimming pools and surround sound wiring-any functional or beautification enhancement to a home are considerations in establishing its true value and strategic sale price.

Consider these property value-enhancing upgrade ideas from Robert Jenson, CEO of luxury Las Vegas real estate purveyor The Jenson Group:

–Commercial grade appliances such as Viking or Wolf in a kitchen, along with dual appliances such as ovens, dishwashers, refrigerators and freezers, add greatly to resale value and are always a desirable upgrade.

–The “outdoor living room” concept is extremely popular right now. Whether a palapa, gazebo or other covered section, an outdoor furnished lounge area complete with wiring for lighting, fans, TV and surround sound, fire pit/fire place, and built in BBQ grill will add tremendous appeal - water features will take this asset to the next level.

–Other custom upgrades and finishing such as front entry (or panty) doors with decorative glass inlays, decorative wrought iron stairway balusters, and faux painting treatments will readily set a home apart from the pack…particularly a track home in a master planned community.

–Fixtures should be considered even beyond the kitchen and bath. Door handles, for example, with modern finishes such as brushed nickel, are a great way to add custom appeal to an interior.

–Granite countertops need not be reserved for the kitchen. Master bathrooms in particular, if not all baths in the house, should utilize some kind of stone counter - marble, granite, travertine, etc. - for a particularly notable enhancement that is sure to differentiate a home from others on the market.

11:49 AM - Oct. 15, 2008 - comments {0} - post comment

Understanding Short Sales

Here is part 1 of a 5 part series on short sales and foreclosures by Darryl Davis.  One of the most sough-after speakers in real estate, Darryl Davis has been a Master Trainer and Advisor for the past 15 years. He has been named one of the Highest Rated Speakers at the National Association Of Realtors® Convention for the past 9 years. Darryl has directly impacted hundreds of thousands of real estate professionals with his live events, best-selling books, learning systems and coaching program.

According to the Mortgage Bankers Association, every three months, 250,000 new families enter into foreclosure. One child in every classroom in America is at risk of losing his or her home because their parents are unable to pay the mortgage. One out of every 200 homes will be foreclosed upon. These statistics may be alarming, but they are the reality in today’s market. Fortunately, there is a win-win solution for all parties involved: the homeowner, the bank and the real estate agent.

The recent decline in property values has created many challenges for real estate agents and homeowners alike, but a “Short Sale” could be the key to a happy ending. One of the biggest misconceptions about short sales is that they are difficult and not profitable In fact, while a short sale does indeed help a homeowner tremendously, it is also highly beneficial for the market

So, what is a short sale? A short sale is a loss mitigation solution. The easiest way to explain a short sale is this: when you go into a seller’s house and ask the magic question, “how much do you owe on your home?” the answer is more than what the current value of that home is. Very simply put, a short sale is when the value of the mortgage is greater than the value of the property.

It is said that 90% of homeowners do not understand the difference between a foreclosure and a short sale, and many agents wonder the same thing. A foreclosure is the process of the bank taking back ownership of a house due to the homeowner’s inability to pay their mortgage. The home is now an REO or bank-owned property, and the lender will sell it for the listed price. A short sale, on the other hand, is sold by the homeowner before a foreclosure takes place. The listing price is determined by broker price opinions, recent comps in the area and the condition of the home. And ultimately, in a short sale, the lender agrees to accept less payment than what is actually owed to them.

By definition, any homeowner that is two months late on their mortgage payment and can also demonstrate the inability to pay their mortgage would be considered a short sale candidate. The homeowner is considered pre-foreclosure when the bank officially sends a notice of default or a notice that they’re taking legal action against the homeowner to collect the debt. Contrary to what most agents believe, a short sale can still take place during the foreclosure process. There are only two reasons that a homeowner is not eligible for a short sale:

The foreclosure has already taken place and the home is up for auction
The homeowner files for bankruptcy

According to a recent Freddie Mac/Roper poll, more than six in 10 homeowners who are delinquent in their mortgage payments are not aware of services available to them that would help their situation. Much of the population are unaware of short sales and their process. A short sale is a win-win. It’s a win for the bank because an agent is helping them along their sales process and helping them recapture as much of this non-performing loan as possible. It’s a win for the seller because they’re going to be forgiven for a large portion of the money they owe and are saving their credit. It’s a win for buyers because they can obtain a property that is priced right.

What’s more, stopping a foreclosure before it happens is in fact helping the economy and the real estate market. According to “Collateral Damage: The Municipal Impact of Today’s Mortgage Foreclosure Boom,” written by William C. Apgar and Mark Duda, just one foreclosure can result in as much as an additional $220,000 in reduced property value and home equity for nearby homes. In an already down market, any loss in home value is detrimental to everyone involved.

Another reason a short sale is a better option than foreclosure is because it saves the seller’s credit from being damaged. A foreclosure can drop a homeowner’s credit score by 300 points or more. A short sale will affect a homeowner’s credit score by 80 to 100 points on the average. It reads on your credit report as a paid lien or paid judgment, and is much easier and quicker to repair than a bankruptcy or foreclosure.

According to RealtyTrac Inc., home foreclosure filings more than doubled in the second quarter of 2008 from a year ago. They also stated that nationwide, 739,714 households - one in every 171 - received at least one foreclosure-related notice from April to June, as soft housing sales, declining home values, tighter lending standards and a sluggish U.S. economy left many homeowners with few options.

5:45 PM - Sep. 27, 2008 - comments {0} - post comment

Does the furniture come with it?

With a glut of distress sales having flooded the market, even in the luxury sector, making selling even non-distress real estate a highly competitive and often disheartening endeavor, any competitive edge a seller can garner can mean the difference between closing escrow on a property or it languishing on the MLS in perpetuity.

“One such competitive edge not commonly considered as part of a home’s marketing strategy is to sell a property either fully or partially furnished,” says Robert Jenson, CEO of luxury Las Vegas realty The Jenson Group. “This strategy has been particularly effective in selling million-dollar real estate in the Las Vegas market where many interiors have been professionally designed, but the method could certainly be extrapolated for homes in other pricing categories and regions.”

Consider these findings on sold furnished Las Vegas-area residences: for 2008 YTD 16% of homes $1 million-plus and 20% of homes $2 million-plus were successfully sold fully or partially furnished. When compared to YTD sales data for unfurnished residences, these numbers represent a 10% increase in the incidence of homes sold with contents over those without. In 2007 15.5% of homes $1 million-plus and a whopping 37.5% of homes $2 million-plus were successfully sold fully or partially furnished.

“While bundling furnishings with a home sell is a viable strategy, sellers should not force a home’s contents onto prospective buyers, which can work against them,” says Jenson. “Instead, give buyers the option to procure the property with or without furnishings, and have a pre-established sale price set for either scenario. Also be prepared to put together a bill of sale for the furniture, separate from the home’s sale price.”

“In a marketplace where lenders have tightened their proverbial belts, forcing many home buyers to come to the closing table with more cash, a partially furnished or fully turn-key home can be a very attractive proposition…and the all important deciding factor in choosing one property over another.”

10:35 AM - Sep. 9, 2008 - comments {0} - post comment

Shape up that curb appeal

This article is by David Sobel who is vice president of sales for Home Warranty of America.

- Paint or stain the front and garage doors, especially if they show any weathering. These are the first visuals where a potential buyer focuses. If garage doors are metal and dented, they may need to be replaced.

- Any old, basically abandoned sheds or small structures must be removed, the area graded and the grass replaced.

- Change any dated, outside light fixture(s).

- Fix that driveway. If it is blacktop, make sure cracks and crumbling areas are dug out and filled and then the whole driveway sealed. If it is cement, have large cracks filled and repaired professionally.

- Make sure landscaping bricks are in their proper placement. Mowing and weed-whipping sometimes moves them. While this is something the homeowner rarely notices, it makes the property look unsightly.

- Fill in bare dirt under large shade trees. Plant shade-tolerant plants in defined planters or groundcover. Landscape properly for that area.

- All landscaping beds should be cleaned out and updated for the time of year it is in your region. Place new bedding material down.

- Have trees and bushes pruned and trimmed. If a bush or tree is looking old or about to expire, remove it and replace it with a similar size and type if you can. If there are tree limbs over the roof, have them removed.

- If the house needs painting and a full paint job is not in the cards, have it touched up professionally in the worst, most visible spots. Paint shutters and fix them if they are hanging crookedly.

- If the house is sided, have it power washed and have gutters and windows cleaned. Window cleaning inside and out makes the house feel updated and fresh, rather than old and dingy.

- Make sure grass is in good shape, weeds are removed and trimming is done regularly. So many sellers fall down on this job the minute the house is listed, and this is critical to selling a house quickly. In snowy climates, removal must be done regularly, too. If owners have moved out, make sure you have a home warranty to reassure buyers.

- Decks should be washed and repainted or resealed, plantings around them cleaned, weed-free and looking good. Patio furniture should be in excellent condition. Even though it is in the backyard, this is the area where the family can envision enjoying warm days in the new yard.

- If the roof has missing shingles and they can be replaced inexpensively, suggest this be done as it may save negotiation over a completely new roof.

Remember, most home buyers cannot visualize even these simple changes and clean-ups in a house, and the ones who can, will be looking for a reduced price.

So to sell the house at top dollar and quickly, make it “appeal” to the many who will be seeing it rather than the few who are looking for a “fixer upper.” These people know what they want, go after it and need less assistance.

Finally, have neighbors or friends look at the finished results to see if you or the homeowners have missed anything key that would be quick and easy to do. Use this article in your listing presentations so they can get started right away on these easy, inexpensive fixes and adapt the ideas to their home. When that home looks great, update its picture on the Internet.

Here are some easy, inexpensive fixes that will help create that outside appeal and get you one giant step further to a sale:

2:16 PM - Sep. 3, 2008 - comments {0} - post comment

Cost effective renovation ideas

When the housing market is hot, it seems like just about any project is a good investment for boosting your home's value and appeal. But when the market's tight, you want to be more selective about which projects you undertake and what you expect to gain in return. There's nothing worse than wasting time and money on a major project that barely raises the value of your house.

If you've been thinking about increasing your home's value or just making your living space more comfortable, these ideas can help you start off simple and prioritize your list. Before you start knocking out walls and renovating your roofline, consider these ways to make a difference...cost-effectively!

1. Spruce Up Your Curb Appeal

Buyers often decide whether to look at your house before they even get out of the car. So, before you spend a lot of time and money remodeling the inside, take a good look at the outside. Washing windows, repainting trim, planting flowers and small shrubs, trimming tree branches and overgrown bushes, fixing screens, resealing your driveway, and mowing the lawn can make a big difference. Start out by making a list of 4 to 7 simple projects and then set aside an hour or two each day. In just one week, you - and potential buyers - will be surprised how appealing and welcoming your house looks when driving up.

You may also want to consider larger projects, such as replacing the siding, adding a patio or deck, or even replacing a dilapidated driveway. But remember, although these bigger projects may help your house stand out, they probably won't yield as high of a qualitative return on investment in terms of your home's actual value. So, weigh your options and ask your Realtor® for advice before investing in any of these bigger projects.

2. Does Your Entryway Invite People In?

A cozy first impression is crucial. Now that you've boosted your curb appeal, it's time to turn your attention inside - starting just inside the front door. To make sure your entryway invites people to come in - rather than turnaround and run - try adding a wicker chair and table outside the door along with a fresh coat of paint to your foyer.

For even more impact, replace old light fixtures and update the floor in your entryway with a throw rug or easy-to-apply self-adhesive linoleum squares. These projects are inexpensive and easy enough to do yourself in just a few hours.

3. Spiff Up that Old Bathroom

Remodeling an old bathroom can make a big impact. You should start by simply de-cluttering the countertop. It's amazing how spacious even a small bathroom appears after the styling products, pictures and miscellaneous bathroom decorations are removed.

From there, you can freshen up the paint, replace that old shower curtain, add a new medicine cabinet on the wall, and even a upgrade your faucet and shower head for very little money. For a little more, you can also install a double sink or re-tile the floor.

4. Hot in the Kitchen

Renovating an outdated kitchen is practically a sure thing - as long as you don't splurge on extravagant items like hand-painted Italian tile or built-in espresso machines. Instead, focus on the basics: replacing the handles on your cabinets and drawers, freshening up the paint, installing new flooring, adding a backsplash, and painting or re-facing your existing cabinets. You can also make a dramatic impact by installing new countertops and even replacing your appliances. All of these projects will go a long way to making a new buyer feel at home.

5. Add a Second Bathroom

Perhaps no improvement makes a bigger impact on your family's comfort and your house's appeal than adding a second bathroom. The number of bathrooms is always a big sticking point for potential buyers, especially families with two or three children.

Although adding a bathroom costs more than simply fixing up your old one, it also increases the value of your house more. Plus, having that second bathroom may help you sell your house faster than if it only has one, which is an important point to consider in today's market. So, if you have a house with roughed-in plumbing just waiting for you to take the initiative, you may want to consider adding that second bathroom you've always wanted.

However, if your house doesn't have roughed-in plumbing or floor plans that called for a future bathroom, you'll definitely want to consult a professional Realtor® to discuss how much a second bathroom will add to your home's value. After all, if you have to start moving walls and re-plumbing your house just to add a bathroom, you may find that your time and money are better spent on a handful of smaller projects that will ultimately add more impact.

Plan Ahead and Avoid Headaches

Overall, the best advice about adding value to your home is to start small, work your way up, and always plan ahead. You don't want to get halfway into a renovation only to find that you have to update your entire electrical system or that your time and effort was wasted on a renovation that doesn't add as much value as you thought. With a little planning and prioritizing, you can make your house more comfortable and valuable with very little time and money. Happy renovating!

1:37 PM - Aug. 8, 2008 - comments {0} - post comment

Consider a trade

Today’s market has made the prospect of buying a home a difficult task for most people. Whether you are in the market for a first home, a retirement home or something in between, a home trade may be your best option to get what you are looking for in a timely manner.

Home trading is not a new concept, but one that is often overlooked “as people don’t take the time to understand the process, one that is quite simple,” says Scott Warren, an agent with Villa Sotheby’s International Realty.

Warren, who has been in the industry for over 30 years and completed his first trade in 1979, recently orchestrated a real estate trade that resulted in the highest sales price ever recorded in The Bridges community in California. A $7.75 million custom home was successfully traded for a $2.5 million English Tudor-style home in La Costa in a process that took just 40 days.

A real estate trade is a simple process in which a seller with good equity, good employment and good credit who wishes to “move up” is matched with a seller who has good equity, employment and credit who wishes to “move down.”

“One motivating factor behind a real estate trade is for the financial benefit,” says Warren. “One buyer sees the ability to trade up in a market in order to gain equity and the other buyer who may not want to make the payment on their home-or can’t afford to-has the opportunity to get out of the situation before it is too late.”
The trading process is as simple as “I’ll buy yours and you’ll buy mine.”

“Once the match is made, the procedure turns into two purchase agreements that occur simultaneously,” says Warren.

Home buyers need to understand that trades are not limited to trading a home for a home.

“A successful trade can occur when someone has something of value such as a car, a boat or even diamonds,” says Warren.

One of the most unusual trades that Warren has been involved in was when a client traded a load of gravel for the down payment on a property.

“This goes to show that ‘non-traditional’ trades are just as successful,” concludes Warren. It all depends on how the deal is packaged and what motivates each party.

1:21 PM - Aug. 6, 2008 - comments {0} - post comment

Affordable "green" upgrades

This article by Chris Kaucnik, marketing director for Home Warranty of America, Inc. will give us all some good ideas for 'greening' up the house on a budget.

Offering something unique and timely can always help sell a home more quickly and possibly closer to the listing price. Aside from the usual home-staging techniques, implementing some easy, but key energy and water-saving options, too, might just do the trick. Savvy buyers will ask what utility costs are or to see actual bills-especially in older homes-and be impressed at measures taken to reduce those costs.

Here are some easy, smaller projects that can increase a home’s appeal in a time of high energy costs with an extraordinary focus on being green. And, of course, make sure you market the home with these positive, new features:

-Replace regular light bulbs in permanent fixtures with compact fluorescent light bulbs (CFLs use about one-fifth as much energy as regular bulbs, and last about 12 times longer).
-Install low-flow showerheads, which will save on water heating and use.
-Install an Energy Star-qualified, programmable thermostat.
-Close the damper on the fireplace. It sounds simple, but is often forgotten from season to season and causes drafts and high energy loss.
-Add insulation to an attic.
-Seal basement rim joists. This is along the top of the basement wall where the cement or block comes in contact with the wood frame. This is a common area of air leakage.
-Insulate water heater tanks for energy savings.
-Repair water leaks in tubs, showers and sinks. Not only are they big water wasters, but a leak really shows the home is not cared for anymore.
-Perform duct sealing or hire a contractor. Twenty percent of the air that moves through the duct system is lost due to leaks, holes and poorly connected ducts.

Another visible change that may attract a buyer is using renewable sources in any flooring you might replace prior to listing, such as recycled carpeting, bamboo, cork or other flooring from fast-growing wood sources.

You can also recommend a home energy audit to help your clients identify other easy, but important fixes and demonstrate to potential buyers that sellers are serious about home maintenance and improvement. It will give buyers a fun jumpstart, too, on accomplishing more efficiency improvements in their new home.

Being willing to partner with buyers creates an air of security that the home is still cared about. It sends the message that all parties want the buyers to have as great an experience in the home as the previous family did.

You can see that encouraging these smaller, but important, green ideas with your clients can be very beneficial to a quicker home sale.

12:49 PM - Jul. 31, 2008 - comments {0} - post comment

How is your credit affected by a short sale?

Sellers will take as big a hit on their credit by going through foreclosure as giving the lender a deed-in-lieu of foreclosure according to Tim and Julie Harris, founders of Harris Real Estate University.  Points lost on a FICO score are as follows:

Foreclosure or Deed-in-Lieu of Foreclosure
Both of these solutions affect credit the same. Sellers will take a hit of 200 to 300 points, depending on overall condition of credit. This means if a seller's FICO score before foreclosure was 680, it could dip as low as 380.

Short Sale
The effect of a short sale on a seller's credit report is identical to that of a foreclosure. The ding on credit will show up as a pre-foreclosure in redemption status. Which will result in a loss of 200 to 300 points. This means a short sale with a previous FICO of 720 will see it fall from 520 to 420.

The effect on a consumer's credit report—foreclosure vs. short sale—is the difference between being hit by a train or a bus.

Here's why:

Waiting Period Before Buying Another Home

Foreclosure or Deed-in-Lieu of Foreclosure
A seller who wants to buy another home after foreclosure will end up waiting about 36 months before a lender will offer any kind of interest rate that makes sense.

Short sale
A notation on a consumer's credit profile of 'settled for less than owed' (short sale) precludes the consumer from obtaining an institutional loan for 24 months, depending on the lender's program and regardless of FICO score. Fannie Mae guidelines require 24 months seasoning, and there's no way to get around this.
   
Short Sale/Foreclosure Deficiency Judgments

The bad news is a seller could be subject to a deficiency judgment for the difference between the loan amount and the amount paid. In California, purchase money loans are not subject to deficiency judgments; however, hard money loans, equity loans and refinances are. Some other states have laws regarding personal guarantees, which could also result in a deficiency judgment, if the home owner is held personally liable for loan repayment.

The lender has sole discretion whether to pursue a deficiency judgment in those instances when the judgment is permitted. To determine whether a pending foreclosure or short sale is subject to a deficiency judgment, talk to a real estate lawyer.

2:22 PM - Jun. 5, 2008 - comments {0} - post comment

Is your home "virtual tour" ready?

“Realtors® have experience in staging virtual tours and can offer you tips to attract buyers,” said Virginia “Ginger” Downs, CEO of the 15,000-member Chicago Association of Realtors. “By following a few simple guidelines, you can make the changes necessary to help your home shine above the rest.”

Virtual tours show buyers a 360-degree view of the interior of a home and allow them to narrow their home search conveniently from their personal computer. Since potential buyers will be sorting through hundreds of photos and virtual tours throughout this process, it is important to understand that your home looks different through the lens of a camera than in person.

Just as you would prepare for an open house, prepare for your virtual tour shoot by removing clutter. Move personal belongings out of sight or use this as an opportunity to donate or throw away items that you no longer use. The goal is to maximize the space of your home and depersonalize it enough to allow potential buyers to imagine themselves living there.

Here are some tips to cut down the clutter:

- Remove excess furniture to make rooms look larger.
- Clear off the kitchen counter and hide everyday items, such as kitchen utensils, toasters, hand soap and magnets on the fridge.
- Store children’s toys, bicycles, gardening tools and other clutter out of sight.
- Place toiletries and cleaning products in cabinets or closets. Most virtual tours will only photograph the major rooms in your home.
- Take family photos off of walls and shelves while the home is being shown.
- Recycle old magazines and newspapers that take up extra space throughout the home.

“Realtors have photographed numerous virtual tours, and can act as sort of a producer for the shoot,” said Ginger Downs. “For example, think about the elements of your home that attracted you to it in the first place. Maybe it was the high ceilings or historic features? Work with your Realtor to ensure that the virtual tour really embodies the spirit of your home and shows off its finest characteristics.”

The next step is to give your home a good, thorough cleaning. Since cameras often capture more than the eye can see, it is important to spend some time cleaning your home from top to bottom. Areas that are often overlooked during the cleaning process include windows and stainless steel appliances. Be sure to keep them streak free and clean to ensure the best photo.

Another cheap way to prepare your home for buyers is to brighten it up by replacing old or dim light bulbs. Consider using a higher wattage light bulb in rooms or areas that don’t get direct sunlight. You can also add a brightly-colored throw or vase to lighten up a space that has dark flooring or furniture.

Some other tips to consider for the virtual tour include:
- Take your own digital photographs to see how each room looks on camera.
- Get layout and style ideas from home and design magazines.
- Don’t forget about ceilings and floors. Most virtual tours today show all angles.
- Limit seasonal decorations.
- If exterior photos are included, park vehicles elsewhere and make sure your lawn is freshly mowed and garbage cans are out of sight.

12:53 PM - May. 26, 2008 - comments {0} - post comment

5 tips for selling a vacant home

“Many people think all they have to do is make sure the inside of their home is clean, but it really goes far beyond that when it comes to making sure your home looks its best so that buyers will take a look,” said Thomas Scott, vice president of Operations for Showhomes Franchise Corporation. “That is why we have released five essential tips that can help local residents stay on the right track when preparing their homes for a sale.”

Scott reveals five tips for selling a vacant home:

1. Curb Appeal - the better the curb appeal of your home is, the more attractive it is to prospective buyers.

- Trim overgrown bushes, weed beds and add a fresh layer of mulch
- Clean your front door and repaint if needed
- Add a fresh doormat
- Keep grass cut, edged and blown
- Plant some color in the beds to add contrast

2. Cleaning - for most buyers, dirt equals stress and the last thing most buyers want is more stress in their lives.

- Pressure-wash the driveway and sidewalks.
- Clean windows inside and out
- Pressure wash decks and patios

3. Paint - the condition and color of the paint can make a huge difference in how buyers react to your home. Select light neutrals - creamy kakis, pearly grays or soft greens.

4. Replace Worn Carpet - Dirty carpet is unsanitary and nobody will be able to overlook your worn carpet. Replace the top layer with inexpensive neutral colored carpet and you will always recoup the investment.

5. Stage your home - Buyers who look at vacant homes only see floors, walls and ceilings. With nothing else to look at, they focus on flaws. Because of this, vacant houses are very vulnerable to low-ball offers and often sell for 15-20 percent below list price.

12:05 PM - May. 16, 2008 - comments {0} - post comment

Forbes ranks Denver one of the best places to sell

11:29 AM - May. 12, 2008 - comments {0} - post comment

More reasons to price it right

This article by Paul Pastore with Re/max Achievers in Chandler, AZ gives us more reasons to price it right to start with.

Have you ever seen a dog chasing after a car? To a sadist, it might seem very funny.

No matter how fast the dog runs, it will never catch the car. The dog will never slow the car down. And, the dog will never bite a moving tire. What must the dog be thinking?

Today, many sellers are running after the market, the same way dogs chase vehicles.

What are these sellers thinking? Their home is the only castle for sale? Buyers will love the scent of their lilac bushes so much that it will temporarily cause them to forget the competition? Is it possible the smell of fresh baked bread will cause a buyer to pay yesterday's price in today's market?

In my opinion, it is imperative for a seller to price their property 10% below market in order to sell promptly and avoid being left in the long line of expired listings. It may be an election year, but it will be a long wait for the inventory levels to decrease to a balanced market.

There is a Turkish proverb that says, "No matter how long you are traveling down the wrong road, when you figure it out, turn around."  Overpricing is a two-edge sword. If a property is receiving little activity, it is overpriced. Or, if a property is receiving adequate activity, but no offers; it is also overpriced. The latter problem is called 'always the bridesmaid, never the bride.'

By suggesting a seller has an overpriced property, the real estate agent runs the risk of being the messenger that gets shot. Courageous agents tell the truth. Cowardly agents hope the overpriced property will generate sign or ad calls while the seller reduces the price and stigmatizes the property with additional days on the market.

Say's law says, "No good or service will remain chronically unsold, as long as prices remain flexible." The next time you see a dog chasing a car, hopefully, it will remind you of the futility of  chasing a declining real estate market.

11:25 AM - May. 10, 2008 - comments {0} - post comment

Tips to sell your home this spring

If sellers will just employ some of the basic staging principles it would make a huge difference and leave a much better impression; drawing potential buyers back to the house for a second look. And that’s where a professional stager, or a real estate professional with staging knowledge, can help them get their house in order.

Here are some basic pointers from the Accredited Home-Staging Specialist (AHS) course from RealtyU that will get most home sellers headed in the right direction; changing their “lived in homes” into “houses for sale.”

1. De-Clutter - This one is simple. De-clutter everywhere; inside and outside. If it’s taking up space it is a potential candidate to be thrown out. The sellers need to make that all important mental conversion from “home to live in” to “house for sale.” Personal “things” are a big distraction as you want the buyers to be able to visualize their own belonging in the house.

2. Repair - Buyers want everything working so don’t disappoint them - dripping faucets, broken windows, leaking roofs, damaged walls and doors, etc, beg the question in the buyer’s mind … What else is broken or doesn’t work?

3. Lots of Light - The last thing home buyers want to see is a dark home with all of the doors and windows covered. Let the light in and open some windows to let in some fresh air. Room de-odorizers leave the impression of covering something up as does a window with the blinds drawn.

4. Clean Windows - Buyers want to know and see the view they will have from every room - don’t make them look through dirty windows. If they don’t the impression of a great view is literally going “out the window.”

5. Kitchen and Bathrooms - Two of the most important rooms. They must be spotless and first class. Just cleaning up isn’t going to be good enough - you need to “deep clean” all counters, floors, cabinets and all the fixtures in the bathrooms. In the bathrooms consider new fixtures or countertops and perhaps redoing the shower and tub enclosures.

If new fixtures are not in the budget you may want to consider having them refinished. Think about having all the tile steam cleaned and make sure all grout is free from grease and dirt.

6. Odors - Absolute deal killers are cigarette or pet odors. If this is a problem - have the drapes, carpets and furniture professionally cleaned and “no smoking” in the house. Also, cooking odors are not a good thing. The best bet - fresh air. Often a little lemon oil mixed with water in a spray bottle “lightly used” will add just a bit of freshness without overpowering the house.

7. Paint - A fresh coat of paint on the outside or inside is an excellent way of freshening up your home. Be sure they use neutral colors and avoid accent painting - they are only guessing what the buyer likes. This can be done by the home sellers but in most cases they should use a professional painter. It’s always a bigger job than they think.

8. Yard Work - Deal with overgrown bushes, shrubs and trees. Everything in the yard needs to be trimmed, watered, manicured and “living.” Remove everything lying around the yard including sports equipment, boats, trailers, toys, etc. You may also add some color by placing some annuals in planters in the back as well as in the front. Curb appeal makes that all important “first impression.”

9. Furniture - The bottom line … less is best. If it’s old, worn or dated they should put it in storage. They need to remember they are setting a stage and the actor needs to be the house - not their furniture.

10. Hardwood Floors - Hardwood floors can be a huge plus for buyers unless they look like a 20 year old basketball court. It may be a great investment to have them all refinished - and suggest to them it’s not a simple weekend project.

Staging a home correctly and placing each house in the best possible light has become a must in today’s economy. With spring upon us and summer around the corner, the time has come for you to show your clients the way to prepare their homes for what could be the best selling opportunity they have this year.

7:56 PM - May. 2, 2008 - comments {1} - post comment

Thinking of a short sale?

Tim Harris and Julie Harris are the founders ofHarris Real Estate University.  The nations largest online University for Realtors and real estate investors. Here are their top 10 short sale questions - and answers.

Number 10

I can't make my house payments, but I do have an ability to pay back all or part of the negative equity. Also, I want to preserve my credit score...is a short sale right for me?

Probably, not. In cases where the seller can pay back all or part of the negative equity (usually to the 2nd lien holder), it makes sense for them to work out a repayment plan. The lender will then release the lien and allow the home to close.

Number 9

If I pay mortgage insurance and default on my loan, why wouldn't that cover the deficiency amount?

The mortgage insurance is not there for your protection, just the mortgage lender's.

Number 8

Do I have to have my home "Approved" by the lender prior to offering it for sale as a short sale?

No. Technically speaking there is no such thing as being "Short Sale Approved." The actual approval only happens with an accepted offer.

Number 7

I just missed a payment and I know I will miss more...how long does the foreclosure process take and is there time to do a short sale?

The foreclosure process takes differing times depending on your state.  In the Midwest a foreclosure can take over a year. In California its taking 6+ months.  Generally speaking a well priced short sale being processed by an educated short sale listing agent will sell and close in less than 120 days.

Number 6

Will I still have to pay property taxes if I do a short sale?

Property taxes will always have to be paid as part of any accepted short sale. Whether it's you or the lender, it depends on their policies and the specific agreement you reach while negotiating the short sale.

Number 5

I owe more than my home is worth and I can't make the payment. Do I have to somehow qualify for a short sale?

The simple answer is NO. If someone can't make their payment and they are otherwise insolvent, they qualify for a short sale. Note: insolvent simply means their total debts are great than their assets.

Number 4

Do I have to pay income taxes...I have heard that I will get a 1099. Will the loss the bank takes be treated as a taxable gain to me...the seller...is this true?

It WAS true, now it's not. Consult your Tax Attorney or Qualified CPA.  Very recently the tax law was modified and now most people who do a short sale will have no taxes due.

Number 3

How do you, my listing agent get paid...who pays your commission?

The bank will pay the commission along with all the other usual closing costs.

Number 2

Do I have to miss a payment to do a Short Sale?

No. Late last year most major lenders started accepting short sale offers from sellers who have never missed a payment.

Number 1

I want to do a short sale and have a 2nd mortgage, does this make me ineligible?

7:51 PM - Apr. 30, 2008 - comments {3} - post comment

Home pricing considerations

Jenson notes, “Listings reach the greatest proportion of potential buyers within the initial days and weeks after hitting the market. If a property is overpriced early on, it will be dismissed - or outright missed - by prospective buyers and may result in price reductions that will reflect poorly on the listing. Overpriced properties languish on the market, and most end up selling at a lower price than would have been realized had it been priced properly in the first place.”

To help would-be sellers foster maximum profits with their real estate transaction, Jenson offers these insights on the various elements that must be considered when establishing a fair, competitive and marketable sale price for a home:

1. Square footage: Total square footage is an important consideration when establishing a home’s sale price, but this is usually just a starting point for buyers who will use it to narrow down the field, but make an actual purchase decision based on many other factors. There are some general rules of thumb to know when considering a home’s price per square foot, such as smaller homes generally get a higher price/foot than large homes, and single stories will sell for a higher price/foot than a two story.

2. Location within community: Homes that back up to a busy street get, on average, 10-20% less than homes elsewhere in a neighborhood. Anticipate this type of obstacle and factor it into the original sale price to avoid inevitable price reductions down the road, which reflect poorly on the listing and will likely cause it to sell at a lower price than would have been realized had it been priced properly at the onset. Quiet cul-de sacs, golf or water frontage, lots that offer privacy are value adds that can certainly justify a higher sale price than other homes in a community - or be leveraged as an advantage against competing listings.

3. Views…or lack thereof: Whether it is the ocean, a downtown skyline, the mountains, water or some other desirable landscape, buyers are willing to pay a premium for views and a home should be priced accordingly. Just be realistic. A view that can only be had by standing on the counter from the second story looking out the window to the left simply doesn’t count, and it’s inadvisable to dupe a prospective buyer by adding this to the listing’s MLS description.

4. Upgrades and features: It’s a simple formula: upgrades = sold. For a home to sell quickly and for the price desired, it must be “finished” with as many structural and interior design upgrades as possible…and nothing’s too small to leverage in establishing a home’s price point. From crown molding to faux paining to door handles and cabinet handles/knobs with modern finishes, to more obvious upgrades such as appliances, window, counter, cabinet and floor treatments, to swimming pools and surround sound wiring…any functional or beautification enhancement to a home are considerations in establishing its true value and strategic sale price.

5. Community amenities: Guard-gated communities or those with amenities such as a clubhouse, swimming pool and/or fitness center are also elements that often raise a home’s price per square foot. When pricing a home without these benefits, know whether you are competing against other homes that do offer such value adds so that you can price your home as aggressively and competitively as possible.

6. Comparable sales: Price your home referencing sold comparables -price per square footage of other homes that have already sold in your community - up to 3-months old maximum, as looking beyond 3-months is simply not a realistic portrayal of current market conditions and may steer you in a wrong direction. It’s also as important to compare your listing to active competing listings - homes currently for sale, which is the best tool for honing an effective pricing strategy - particularly for highly motivated sellers.

7. Professional appraisal: Sellers often frown on the idea of paying for an appraisal before there’s even an offer on the table, but doing so is actually one of the most important things a seller can do in pricing a home relative to current market conditions. Want to sell the home quickly? Price it at or below the appraised value as buyers are educated, are shopping deals, and will recognize your fair price and be more apt to pay it with less haggling.

8. Current mortgage conditions: The current mortgage market has tightened its proverbial belt and many lenders now require higher credit scores coupled with higher down payments, which can cash strap a buyer who will most definitely be holding out for the best deal possible. Every seller naturally wants to get the most money for his or her product, but a savvy seller will understand the mortgage industry’s impact on the buyer and will price accordingly.

12:26 PM - Apr. 24, 2008 - comments {0} - post comment

Don't forget the yard

Brad Staggs, HGTVPro.com and DIY show producer and host, and a licensed contractor, offers tips for homeowners preparing to sell their home. “The most important thing is to update the most visible areas, common gathering rooms like the den and kitchen. But don’t forget the front and back yards. Prime home-buying season coincides with spring and summer, and that first impression, your home’s curb appeal, can make all the difference."

1. Molding: icing on the cake.

“It’s amazing the difference a little bit of decorative wood molding can make,” says Staggs. “Frame out a picture window, add deep crown molding to a high ceiling, even a simple chair rail in a guest bathroom changes the entire look of a room.”

2. Front porch first impressions.

Your front porch is often the first thing a potential homebuyer will see. According to Staggs, it should be in perfect shape. “Add a fresh coat of paint to brighten the front of your house. Nice wooden Adirondack-style chairs are welcoming, especially when enhanced by bright flowers in colorful pots. You want your porch to signal the start of something wonderful!”

3. Look behind you.

Don’t neglect the backyard! Outdoor living spaces grow in popularity each year. Impress potential home buyers with a backyard to die for: overflowing garden boxes, some nice wooden outdoor furniture, a charming gazebo and perhaps a new deck. “Spend a few weekends dressing up your backyard before everything blooms,” suggests Staggs.

4. Floor them.

Nothing says “welcome home” like the feel of smooth real wood floors. Easily installed and completely affordable, wood floors enhance any decorating style and evoke immediate “ahhhhs” from guests in your home.

5. Add a visual surprise.

“Find something cool to add to a room in your home, a little visual pop no one will expect,” suggests Staggs. “Like adding beadboard panels to a kitchen island, then painting it a funky accent color.”

Staggs also offers his thoughts on choosing appropriate building materials. “As a consumer, the most important thing you can do is buy sustainable. Choose natural building products, those that truly fit the definition of “green.” One of my favorite materials to use in any home improvement project is Southern Pine. It’s real wood, so it’s not just strong and beautiful, it’s also recyclable. Southern Pine in the U.S. comes from well-managed and well-maintained forests; forests that are in better health now than they were a century ago!”

12:20 PM - Apr. 20, 2008 - comments {0} - post comment

Consider a pre-listing inspection

Dan Steward, President, joined Pillar To Post as President in 2004.  He suggests a pre-listing home inspection might help everyone to a shorter, smoother closing.

Not so long ago, home sellers were being bombarded with multiple offers. They didn't have to worry much about the condition of a home in order to ensure a smooth and quick sales transaction. In today's market, realtors are creating new strategies and are working even more closely with home sellers to sell homes quickly for top dollar. The biggest development in this area is realtors advising sellers to schedule a home inspection prior to putting their homes on the market.

A prelisting home inspection—one that is paid for by the seller or in some instances by the selling agent before a house is put on the market—plays a large part in a buyer's decision to buy. It signals openness about the shape of the house and omits the possibility of unpleasant surprises that could potentially slow the sales transactions and bring the price down. In addition, realtors who require or recommend prelisting home inspections give their client's homes a marketing edge.

These inspections also give the discriminating buyer upfront information on the condition of the home, and in some cases, a preemptive seller's inspection means that repairs, such as a dripping faucet or roof leaks, will likely be fixed. The report also signifies to buyers that the sellers made all efforts to sell the house and cared about selling to somebody who was going to be satisfied with the condition of the home and the repairs made to it. With their own report, sellers can choose, for example, to spend a few hundred dollars fixing a faulty electrical problem that might otherwise result in a claim for thousands off the home price.

Some of the multiple benefits of recommending that a seller conduct a prelisting home inspection include the financial advantage for home sellers to make important repairs. Should a buyer request a specific repair as part of the sale agreement, the seller could easily be placed in the position of having that repair done at the last minute at a higher cost. Alternatively, if that buyer opted to negotiate the price downward due to a repair left undone, they may face typical decreases such as for every $1 of identified repairs, buyers ask at least double or triple that in a price reduction.

Savvy home sellers who, for example, learn through home inspection that portions of the roof need repair may opt to repair that section immediately. Paying $5,000 for the repair is far more enticing than reducing the asking price by $10,000 or more. Buyers typically expect a $2 to $3 price discount for every $1 worth of defects turned up by their inspector.

Most buyers think that buying a home is going to be a lengthy, complicated, and stressful process potentially lasting for months. The prelisting home inspection reduces the stress inherent in such a major transaction as all parties quickly gain a thorough knowledge of the home through a full written home inspection report.

It also reduces time spent on the negotiation process, as all information on the home is given upfront to the buyer. This limits the potential of any surprises and tells to the buyer that problems may have been found and were repaired so the house is in the best condition possible.

Prelisting home inspections are no longer a rarity; instead, they're becoming a valuable part of any seller's marketing. It's estimated that the number of homeowners choosing to conduct a Prelisting home inspection has increased to 85% in the last one to two years.

7:26 PM - Apr. 8, 2008 - comments {0} - post comment

New front entry = quick sale

-When it comes to purchasing a home, buyers do judge a book by its cover, according to a new survey of real estate agents commissioned by JELD-WEN® Windows & Doors.

The JELD-WEN Real Estate Agent Community Trends (REACT) survey found that curb appeal is essential to getting buyers in the door and fostering a sale. Specifically, 82% of agents said they have had buyers decline to look at the interior of a home based on the exterior appearance.

“This research speaks volumes about the importance of window and door curb appeal when it comes to home sales,” said Elizabeth Souders, product manager with JELD-WEN. “It confirms that windows and doors play a major role in the overall home value.”

Other findings from the REACT survey include:

- 90% of respondents felt a buyer’s first impression of the front entry was important to their ability to sell a home; 91% of agents agreed that a prospect’s impression of a home’s outer shell is equally important as the interior.
- Other than first impressions, real estate agents pointed out the amount of a home’s natural light (75%), overall appearance of windows and doors (71%), energy efficient products (63%) and environmentally friendly materials (29%) helps them appeal to potential homebuyers.
- A majority of agents have used energy efficiency as a selling feature. Two-thirds, 66%, said they have mentioned energy-efficient doors and windows in their listings.

Sixty-five percent of agents in the REACT survey said that the number of buyers looking for universal design features, such as a master bedroom on the main floor, has increased in the last few years.

Given the importance of the front entry in the sale of a home, agents were shown pictures of an average 2,000-square-foot home and asked to estimate its value in their area. When shown the same home with updated entry and garage doors, agents estimated the property to be worth an additional $16,000

5:16 PM - Mar. 27, 2008 - comments {0} - post comment

Sell it fast!

6 Tips for Selling Your Home Fast in Today’s Market

1. Price your home aggressively — Look at the other homes in your neighborhood that have sold in the past three months (except for distressed sales) and price your home below the lowest sales price. If there are active listings in your neighborhood the price you select must also be below that of the most comparable home to yours.

2. Make your home the neighborhood showplace — Updated kitchens and baths are what hook most new home shoppers. Look to install granite countertops, stainless steel appliances, and new ceramic or hardwood floors. Carpets should be as nearly new as possible. Add a new coat of paint to your home’s interior and exterior.

3. Enhance Your Home’s “Curb Appeal” — Avoid the appearance of a “drab” yard by planting colorful flowers in selected locations. Seed or plant sod in areas lacking grass. Make certain the yard is mowed, edged and mulched.

4. Clutter Must Go — Even the most up-to-date house will look disorganized if it is filled with unnecessary furniture. Remove all furniture you do not absolutely need. Also, remove personal items (including family photos and portraits). Prospective buyers want to imagine a house with their own things in it, not yours.

5. Make Certain Your Home is Properly Staged — Consider hiring a professional to “stage” your house before prospective buyers begin coming through your door, especially if your house has been vacant for a while. A professional stager will generally charge between $1,000 and $2,000, and arrange home furnishings so that prospects can more easily envision their own furniture in the house. At the same time, an experienced stager can add a touch of class to your home.

6. Don’t Forget Financial Incentives — Offer buyers’ agents a four percent commission rather than the traditional three percent, along with closing cost assistance to buyers. Closing cost assistance is especially attractive now that credit has tightened significantly and 100% loans are next to impossible to obtain.

Homes that take months to sell often require the asking price to be cut multiple times. Additional costs to the seller include continuing mortgage payments, utilities, taxes and insurance, repairs and other associated costs. Following the six tips outlined above can help to greatly reduce the amount of time it takes to sell a home in today’s market.

12:23 PM - Mar. 23, 2008 - comments {3} - post comment

Moving your car

What are my options for transporting a vehicle?

A vehicle can be moved with your household goods or with a separate auto transport company. To ship your car most efficiently and cost-effectively, it’s important to know about the different shipping techniques, such as open and closed trailers. The model of the car, as well as the intended destination, will help determine the type of trailer you will need.

What is an open trailer? An open trailer is the more popular and frequently used trailer. It carries anywhere from 10-12 vehicles at a time.

Advantage: Open trailers are less expensive than closed trailers. The cost is determined by the weight of the vehicle.

Disadvantage: Open trailers are subject to the elements (i.e. rain, snow, wind, dirt and dust).

What is a closed trailer? A closed trailer is a vehicle that has a covered freight area. It is commonly used for shipping expensive or classic cars that need to be protected. If you wish to protect your car from wind-blown sand and heat, this is your best option.

Advantage: The car is well-protected from the elements of nature.

Disadvantage: Closed trailers cost more. Remember, the cost is determined by the weight of the vehicle.

Is my car insured? The company that transports your vehicle(s) should provide adequate insurance to protect against driver negligence. Ask for a copy of the “Certificate of Insurance” and familiarize yourself with the types of coverage provided. Consult with your current auto insurance agent to determine whether you need supplemental coverage.

Turning your vehicle over to the carrier.

Prior to handing over your car to a driver or transport company, be sure you receive an “Original Inspection Report.” This report provides: pick-up and delivery information, current mileage, and most importantly, shows the condition of your car at time of pick-up (pre-existing scratches and dents, cracked glass/mirrors, general paint condition, etc.).

Accepting your vehicle for delivery.

At the time of delivery, inspect your vehicle thoroughly and compare the condition and mileage against the “Original Inspection Report.” Many transport companies also provide a copy of this report at time of delivery. If there are discrepancies, note them as exceptions and be sure the driver signs it. NEVER accept your vehicle at night if you cannot verify the report condition and without being signed by the driver.

What’s in your trunk?

As of 1990 the Department of Transportation ruled that you may not load any items in a vehicle other than clothing. Auto transporters are not licensed to carry household goods or personal items. Damage to your vehicle due to household goods shifting or breaking is not covered by insurance.

12:41 PM - Mar. 11, 2008 - comments {0} - post comment

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