7 ways to make sure the price is right

“You’ve got to know more than you would have if you’d sold a year ago,” says William Poorvu, professor emeritus at Harvard Business School and author of the upcoming book “Creating and Growing Real Estate Wealth.” “If you want to protect yourself, you have to become knowledgeable.”

1. Recognize that housing markets are local.

Home prices are like the weather — very different in different areas. In many markets, home prices have actually gone up from last year, says Dick Gaylord, president of the National Association of Realtors.

In addition, demand will change depending on the price range and even the neighborhood. What you need to know: What’s the demand for a house like yours in your area?

“You have to look at what’s being sold and at what price,” says Poorvu. “That’s important.”

Look at comparables for similar houses. Study prices and sales for one year ago, six months ago, three months ago and current numbers, says Gaylord.

What are the trends? Are prices going up or down — and by how much? How many days are homes staying on the market? If they are on the market longer, how much of that could be seasonal? In many areas, spring and summer are the busy seasons.

Pay special attention to “the delta between the list price and the sales price,” says Ron Phipps, broker with Phipps Realty in Warwick, R.I. That is, look for a meaningful relationship between list price and sales price. Perhaps most homes are selling for 5% less than the list price.

“An agent who works the market will be in the best position” to find “the tipping point between nice, attractive and interesting — and being sold,” Phipps says. You want to find the point between, “Hey, that’s interesting,” and “It’s too good to pass up.”

2. Analyze who is buying and selling in your market.

What’s your competition? Who are the buyers, and why are they shopping?

Do you live in an area like Phoenix, “a growing market with people coming in,” says Poorvu. Or are you living in an area that doesn’t attract a lot of new residents, where many shoppers are “bottom fishers” who don’t have to buy but are “looking to pick up a bargain,” he says.

Are you competing against a flood of new houses from builders eager to sell, or are you selling a newer home in an area where most of the housing stock is older?

3. Ask the professionals.

When you interview real estate agents, ask about the market conditions for your area and price range.

Specifically, ask about the “absorption rate” says Phipps. What that means: In the current conditions with the current inventory, how long would it take the market to absorb or sell, all the houses on the market?

If the supply is much larger than the demand, ask potential agents how they would “price to offset that inventory,” he says.

4. Know what your house is worth.

Talk to a handful of agents. Get an appraisal from a certified professional appraiser. Look at your comparables. Taken together, that information will give you a pretty good idea of what your home is currently worth.

5. Consider strategic pricing.

Here’s how it works: If prices in your area are dropping 1% each month, and you want to sell within the next three months, you take 3% off your price right off the bat, says Phipps. So if you were going to put your home on the market for $400,000, you set the price at roughly $388,000.

The upside: You’ll have the competitive edge over the guy who’s dropping his price every month, without the air of desperation. Plus, in a market where prices are falling, you’ll make more money if you sell quickly.

The downside: Predicting the market is a tough call, even for the pros. And it’s really difficult to raise the price if your market starts to rebound, Phipps says.

6. Evaluate whether you really have to sell now.

If you want to get the best possible price for your home and the local market is tanking, “see if you can delay the sale,” says Poorvu. Otherwise, in a lot of markets, sellers have “to be willing to accept a pretty good haircut over what they thought their home was worth last year,” he says.

The downside of waiting: The market could decline or your circumstances could change to the point that you might need to sell quickly.

But for situations where the move is optional (or you might be able to rent the property until your local market improves), waiting is a solid option.

Just because you’ve already planted that “for sale” sign doesn’t mean you can’t change your mind if you’re not seeing the interest you anticipated.

“If you know there are no sales or sales are decreasing, and you have the opportunity,” taking it off the market is a decent solution, says Healy. “I think we’re seeing a lot of that.”

7. Assess the market where you plan to buy.

If you’re selling one house and buying another, look at the market where you plan to move. Says Poorvu, “It might be that, with the housing there, it’s a great time to buy.”

1:13 PM - Feb. 18, 2008 - comments {0} - post comment

17 ways to get the Buyer inside the house

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

1. 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.

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

3. Change any dated, outside light fixtures.

4. 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. The buyer must at least feel they can drive the moving truck in confidently!

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

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

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

8. 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 is a tree limb(s) over the roof, have them removed.

9. 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 crooked. At least this may help get your buyer in the front door, even if they negotiate a full paint job into the sale later.

10. 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.

11. Make sure grass is in good shape, weeds are removed, trimming 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, especially one where the owners have already moved out. In snowy climates, removal must be done regularly too. If owners have moved out, make sure you have an HWA Home Warranty to re-assure buyers.

12. Keep garbage and recycle containers inside the garage, along with all toys and equipment. Make sure the garage is neat and organized. Painted walls and floors also go a long way in this area and are inexpensive to do.

13. Decks should be washed and repainted or re-sealed; 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 the warm days and the new yard.

14. If the roof has missing shingles and they can be replaced inexpensively, this should be done as it may save negotiation over a completely new roof. Roof repair needs and costs should be minor or the homeowner might as well replace the entire roof.

15. If you want to do a bit more, try adding solar lights lining the driveway or installing a more attractive front door with lead glass inserts and replacing plain doorknobs with something more custom.

16. If you have an evening showing, make sure lights are on outside and inside the house. This is warm and inviting.

17. If it’s a holiday season, by all means decorate the home! Just like sugar cookies or vanilla scent on the inside of the house, this really says “it’s a home” and I can see myself enjoying life here! In the least, always have some greenery or flowers for the season on the front step or porch; even a birdbath with a little garden around it says home.

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.

1:03 PM - Feb. 16, 2008 - comments {0} - post comment

It pays to get a pre-inspection done

In most areas it's a buyer's market, so people can be picky. "Most buyers in this market will try to re-negotiate based on the findings of their home inspection. If the seller is unwilling to make repairs or lower the price, they walk away," says Kathleen Kuhn, president and CEO of HouseMaster.

With approximately two million home inspections collectively performed by its franchise offices, HouseMaster noticed a number of conditions that are more likely to scare buyers away. And sellers do not have to stand by with their fingers crossed to secure a fair sale.

"More and more home sellers are getting a pre-listing home inspection that helps identify potential deal-breaking issues before the house is listed on the market," Kuhn says. "This way, sellers can fix problems and worry less about a buyer walking away later in the deal process."

According to Kuhn, the following are "The Fearsome Four" when it comes to real estate deals:

Roofing Concerns: A new homeowner does not want the expense of roof replacement shortly after closing. Many sellers believe that if their roof is not leaking it is in acceptable condition. However, underlying issues can exist.

Electrical Problems: Some panel models were discontinued and might even pose a fire hazard. Although they are straightforward to replace, the potential fire risk can be scary for prospective buyers.

Structural Issues: Fortunately, major structural issues are the least common defect found in homes, but when they do occur, they can be costly to repair. Note that a professional home inspector won't assess the extent of repairs needed when these conditions are found. Structural engineers and other professionals should be consulted to get specifics on the scope of repairs needed.

Synthetic Stucco or Exterior Insulation Finish Systems (EIFS): Overall EIFS can be effective, economical alternatives to traditional stucco. Unfortunately installation issues often lead to trapped moisture behind the siding, causing mold and extensive deterioration. In many cases the siding has to be replaced, often with a different type of siding which can cost tens of thousands of dollars.

"Sellers lose some advantage when they are caught off guard by issues, even minor ones. In a market where every edge counts, sellers can use tools like pre-listing home inspections and repair records to show that they are conscientious and have taken appropriate steps to sell responsibly and competitively," Kuhn says.

8:50 AM - Dec. 18, 2007 - comments {0} - post comment

Don't really want the house to sell? Here's how

Paul Pastore, is a broker with Re/max Achievers in Chandler, Arizona. Here is his take on how Sellers can insure that their homes won't sell.

Here are the top ten ways any seller can practically guarantee their home won't sell:

1. Not serious about selling. A sage once quipped, "Money is only important when you don't want something enough." Real estate expert R.L. Brown said that if half of the 58,000 sellers in Maricopa County (Arizona) removed their for sale signs we would be at normal inventory levels. Actions speak louder than words in this market. Discretionary sellers should wait for a less competitive environment.
   
2. Improper pricing. A home properly priced is half sold. No amount of full color ads, glossy flyers, multiple photos, virtual tours, agent luncheons, Goodyear blimps, pom-pom girls or Saint Joseph statues will compensate for the wrong, timid retail price.
   
3. Not listening to your agent. Attorneys believe if you represent yourself, you have a fool for a client. Doctors don't self-diagnose. Professionals use professionals. Even though most people believe they are experts on raising kids and real estate; full-time, career pros usually know what's best. Listen very carefully.
   
4. Micromanage the marketing. Just because you sold cookware in college, carts in California, or carpeting in Cranston does not qualify you to second-guess your agent. If you had a real estate license years ago, tell your children about the "good old days." Share your concerns and timelines, but leave the details to the listing pro.
   
5. Don't stage the property. Someday shag multi-colored, sculptured carpeting will come back. Whitewashed cabinets, Navajo white walls, linoleum flooring, southwest décor, lots of personal photos and Elvis paintings on black velvet should be removed. And, oh by the way loose the long sideburns.
   
6. Let Fido run loose. Recently, I entered a house and two frisky, friendly black Labs ran to sniff me. Unfortunately, I had light gray dress slacks on that day. Both wet stains lasted for hours. Until that day I didn't realize dogs enjoyed chewing the tassels on expensive loafers.
   
7. Talk to the buyers. Life gets lonely at times. Why not ask the buyers where they grew up? Or how much they qualify for. Tell them about the vacant rental next door. Or, the sex offender who left the area. Maybe they could baby-sit next weekend! Why not share war stories, horror movies or meatloaf recipes?
   
8. Sell personal items. Wow, maybe the buyers want to buy the patio furniture, rotary lawnmower or life size statue of Saint Anthony. You only have four more boxes of Girl Scout cookies to sell. Why not ask for a donation for the March of Dimes, the Humane Society or the local PBS station. Remember the saying, "loose lips sink ships?"
   
9. What's that smell? My house doesn't smell of pet odors, baby diapers, curry powder, garlic, fried fish, coconut incense, cigars, manure, mulch, dairy farms or low tide. The buyer must be confusing my castle with a track home.
   
10. Avoid feedback. What do buyers know anyway? Imagine the fact they don't appreciate my barbed wire fence, heavy duty rebar, backyard bomb shelter, airport runway views, lights from the power plant, hum from the high voltage lines, railroad tremors, scorpion skeletons, termite mud tubes and pet snakes.

3:08 PM - Dec. 10, 2007 - comments {5} - post comment

First time home seller's guide

Kinan Beck of One Source Realty in Austin, TX, has some Real Estate 101 to pass along to first time home sellers.

When it comes time to sell your home, you will likely have a number of questions racing through your head all at once. First, you will be concerned about what you need to do in order to increase your chances of finding someone to buy your home. Second, you will likely feel a bit overwhelmed when selecting your agent. By following a few simple steps, however, you will find that it can actually be quite easy to sell a home for the first time.

Making Your Home Into a House

One of the most important steps you will need to take in order to sell your home is to de-personalize it. When you are shopping to buy a home, you want to find a piece of property you can picture yourself living in. The same holds true for your prospective buyers. Therefore, you don't want them to see the house and you have personalized it. Rather, you want to remove personal items so your potential buyer can see himself living in the home.

In order to de-personalize your house, you should remove knick-knacks and other items of a personal nature. In addition, if you have transformed a bedroom into a music studio, a pet room or something else, you should change it back into a bedroom. Otherwise, potential buyers may have a difficult time seeing the room as something other than what you have turned it into.

Adding Curb Appeal to Your Real Estate

In order to improve your chances of selling your home in a short period of time, you need to take steps to improve the curb appeal. Curb appeal refers to the way the home looks when the person first sees it from the road. In order to improve curb appeal, you might need to invest a bit of cash. But, the investment will be well worth it. Some simple ways to improve curb appeal include:

• add flowers or other landscaping elements to the front of the house,
• apply a fresh coat of exterior paint,
• add shutters, window boxes or other decorative elements to the outside of the house and
• repair any broken windows, hanging address numbers or other noticeable problems.

Each of these improvements are simple and cost less than a few hundred dollars. Yet, taking these steps can increase your profits while also helping you sell the real estate faster.

Picking the Best Real Estate Agent

Your agent is going to play a major role when it comes to selling your home. As such, you want to take care in selecting the agent to work with you. To that end, it is best to interview a few different real estate agents. Don't be suckered into going with the agent who appraises your home at the highest value. Although this may seem as though the agent has your best interest in mind, some will use this tactic in order to win over new clients and will later talk them into lowering their price. Rather, go with the agent who seems to be the most honest and you are the most comfortable with. By taking steps to improve the appearance of your home and by selecting the right real estate agent, it shouldn't take you long at all to sell your house and move into a new place you can now call home

2:30 PM - Nov. 30, 2007 - comments {0} - post comment

Here's what to do to spruce up the house for sale

Home Is Where You Hang Your Hat...Not to Mention a Few Light Fixtures, a Screen Door, and Maybe a New Deck

When the housing market's hot, it seems like just about any remodeling project is a good investment and adds value to your home. 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.

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

First Things First. Buyers often decide whether to look at your house before they even get out of the car. Before you spend a lot of time and money remodeling the inside, you may want to look at the outside. Washing windows, repainting trim, planting flowers, and fixing screen doors can make a big difference. For even more impact, you may want to consider replacing your siding or even adding a patio or deck. The added value for these bigger projects won't yield as high of a return on investment, but may help your house stand out. So, weigh your options and ask your Realtor® for advice before starting a big project.

Come On In...Make Yourself at Home. Making a cozy first impression is critical. To make sure your entryway invites people to come in--not turn away--try adding a fresh coat of paint to your foyer or a wicker chair and table outside the door. For even more impact, replace those old light fixtures and update the floor in your entryway.

Sparkle Up That Old Bathroom. Remodeling an old bathroom can make a big impact. For very little money, you can add a new faucet to your sink, a new medicine cabinet on the wall, and even new paint or wallpaper. For a little more, you can update the bathtub, add a double sink, or re-tile the floor.

Even Better: 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 bathroom...an important point to consider in today's market.

Make it 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: installing new flooring, adding a backsplash and a new coat of paint, re-facing existing cabinets, installing new countertops, and possibly installing new appliances. These go a long way to making a new buyer feel at home.

Remember, 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 you forgot to apply for a permit. So, check your local zoning codes before starting any remodeling project. But with a little planning and prioritizing, you can make your house more comfortable and valuable with very little time...and money.

7:30 PM - Nov. 22, 2007 - comments {0} - post comment

You CAN sell your house in the fall

"It's impossible to time any market," said Piero Orsi, president of the Realtor® Association of NorthWest Chicagoland. "Realtors have worked with buyers and sellers in all types of markets and know what changes or improvements can generate the quickest sale at the best price."

A common mistake for sellers as the market slows is to set an unrealistic price for their home. A house that is priced appropriately for the market will be taken more seriously and will sell more quickly than one that's overpriced.

One of the easiest ways to properly price your home is to request a comparative market analysis (CMA), or a report telling you how much your house is worth comparable to other homes sold in the area in the past year. A local Realtor not only has experience with these types of reports, but access to the sales records in your area and can complete this analysis upon request. Once you have a proper price for your home, you can spend some time preparing it for sale.

The changing colors of the fall season can make for a beautiful landscape for a listing. Since most buyers tend to be more inclined to request a showing if a home's exterior is visually appealing, focus some of your time on improvements to your curb appeal and add interior touches. Even small adjustments can make or break a sale.

Here are some quick tips:

- Keep the lawn tidy. Rake up excess leaves that may distract buyers.
- Add some seasonal accents to your home. Hang a fall wreath on the door or place pumpkins on your front porch.
- Consider baking a pie before your open house. Or burn a candle to fill the home with the scent of cinnamon or apples.
- Open blinds and turn on the lights to brighten the home.
- Emphasize your fireplace if you have one. Light a fire if the weather is cool to create a sense of warmth.
- Trim any bushes or trees that might obstruct the view of your home.
- Move pets to another location before showings.

"The value of your home does not depend on the season," said Piero Orsi. "Set a competitive price, familiarize yourself with the current market and be patient. Your sale will follow."

7:18 PM - Nov. 18, 2007 - comments {0} - post comment

Support repeal of "phantom tax"

"NAR is encouraged by today's House Ways and Means Committee vote to adopt this measure and send it to the full House for consideration," said NAR President Pat V. Combs of Grand Rapids, Michigan, and vice president of Coldwell Banker-AJS-Schmidt. "Changing the IRS code for these situations will relieve a tax burden for families who are already in financial distress and are most likely unable to pay additional taxes."

With many families affected by resetting interest rates on subprime mortgages and the ongoing rise in foreclosures, NAR has been working to help more homeowners and their families keep their homes.

"Clearly it is unfair to tax people on phantom income when they most likely have no cash with which to pay that tax," said Combs. "Realtors® don't just sell homes; we build communities, and NAR is committed to efforts that will help make the nightmare of losing a home less burdensome for families."

The current tax code requires a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower has been forgiven. This disclosure applies whether a short sale, foreclosure, deed in lieu of foreclosure or any similar arrangement relieves the borrower of the obligation to pay some portion of his or her debt. If the property is sold at foreclosure or is sold for less than the amount borrowed, that difference is considered income and is subject to the tax.

H.R. 3648 would ensure that any mortgage debt secured by a principal residence will not be taxed. "NAR stands strongly with Chairman Rangel, D-N.Y., and Ranking Member McCrery, R-La. Their relief proposal addresses a fundamental unfairness that affects the lives of those who find themselves in truly unfortunate circumstances. We must all work together to prevent the dream of homeownership from becoming a nightmare," said Combs.

The legislation includes a provision to safeguard against abuses. The provision, similar to one that already exists for commercial real estate owners, would treat commercial and residential property equally. In addition, NAR supports the proposed offset, which tightens the requirements for taking advantage of some tax benefits while retaining all of them.

1:01 PM - Oct. 25, 2007 - comments {1} - post comment

A short course in short sales

Tim Ray from Apollo Mortgages gives us this short course in short sales.

Economic experts have said that the real estate market is not a major factor in the Federal Reserve's true goal of keeping inflation in check – and its recent activity seems to bear this out. By strategically infusing billions of dollars into the banking system and unexpectedly cutting its discount window rate for 30 days, the Fed has clearly attempted to "bail out" the financial and credit markets. The real estate market, however, continues to suffer nearly double the number of foreclosures as it did this time a year ago – one in every 693 US households. In some states, the statistics are even worse, with foreclosures claiming one in every 199 households!

If you or someone you know has an ARM that is scheduled to adjust in 2007 or 2008, please schedule an appointment with a mortgage specialist right away. Don't let a foreclosure or default situation sneak up on you. Remember, even if the Federal Reserve does lower its Fed Funds Rate later this month (which does seem likely), the majority of these ARMs borrowers will not be positively affected or "saved" by this move. For many borrowers, a short sale or a foreclosure will be the only available option.

What is a Short Sale?
A short sale, defined as an "agreement" to allow a home to be sold for less than the amount that is owed, can be a helpful compromise for everyone involved. For debt-ridden homeowners or those who owe more than the house is currently worth, a short sale could save them some of the enormous pain, embarrassment, and major credit challenges associated with bankruptcy and/or foreclosure. For lenders, it helps avoid some of the hassle and expense of seizing and auctioning off delinquent real estate. Lastly, for potential homebuyers and real estate investors, a short sale offers a great opportunity to purchase property at a significant discount in today's tight-fisted credit environment.

And, while short sales are not by any means common or easy, inventory levels of unsold homes are now exceeding a 36-month supply in some parts of the country. Add to that the increasing number of foreclosures, and lenders are much more eager to negotiate with borrowers who are having trouble paying their mortgages.

Short Sale Requirements
It's important to note that short sales occur at the sole discretion of the existing lender or servicing company. This is not like negotiating the price of a home under normal circumstances. Would-be buyers need to accept and understand this concept completely prior to entering into any purchase agreement on a short sale transaction. While a buyer and seller may come to some sort of agreement on their own, the lender in a short sale will ultimately have final approval of this legally-binding arrangement.

Remember, lenders are not looking to bail out borrowers who simply overextended themselves during the recent real estate boom. In most cases, a lender will only consider a short sale if a borrower has clearly suffered a serious financial hardship that directly caused him or her to default on the mortgage. This means the loss of a job, a serious illness, or the death of a loved one – something devastating and "unforeseen" that can justify such a state of financial disrepair. If you're a "flipper" with 2 or 3 homes that you weren't able to unload before the market turned, or if you have other assets or income that could easily cover your mortgage debt, it's not likely that a lender will accept a short sale proposal.

A written declaration and supporting documentation demonstrating financial hardship and an inability to make payments will definitely be required by the lender in order to even consider a short sale. This may include pay stubs, tax returns, and liquid asset statements – including those for retirement accounts – among other documentation. In addition, the borrower must be at least 91-days delinquent before a lender will even discuss a short sale.

In some cases, the lender's hands may be tied, depending on how the borrower's loan was sold into the open market through mortgage-backed securities. If the mortgage in question was not sold by the lender, but rather retained in its own portfolio, the lender may have more flexibility. However, don't expect a lot of help from the lender without first providing a sales contract from a qualified buyer and all the information required by the lender's loss mitigation department. This is where an experienced real estate professional becomes invaluable to your cause. A good real estate agent has not only successfully negotiated short sales in the past, he or she will also have access to qualified investors who are well-versed in the substantial risk and reward involved in this extremely complex and often drawn out process.

Important Additional Considerations:

• The lender will likely issue a 1099 to the seller for the difference between what is owed and the final amount the lender collects after the costs of the sale, including real estate commissions and possibly other charges. This means that the "deficiency" (the difference between the short sale price and the original loan amount) can be considered as taxable income to the borrower. Some lenders may even attempt to get the existing homeowner to sign a note for the remaining amount due.
  
  
• If there are currently multiple liens against the property, all lien holders will have to be involved in the negotiation process, not just the first lien holder. Therefore, communication and patience are essential components of any short sale.
  
  
• There is no guarantee of success. With several parties involved, it's difficult to please all sides all of the time. Short sales require expert advisors who know precisely what is to happen at every stage.
  
  
• A number of scams resembling short sales currently exist and, because of the obvious intensity of emotion involved with this process, borrowers can quickly become vulnerable to new scams.

In other words, be proactive. If you have an ARM that is scheduled to reset in the near future, or if you're facing foreclosure because of unexpected life events, don't wait until a short sale is your last viable option – and don't count on the Fed to "bail out" the real estate market any time soon.

12:57 PM - Oct. 3, 2007 - comments {0} - post comment

Problems for today's sellers

Steve Harney is a mortgage and real estate expert gives his view on the problems faced by today's sellers.

The days of quick home sales, selling for top dollar and pricing wars on homes are gone.  The challenge is the homeowners' perception of what their home should sell for. As recent as June 2007, a survey by the Boston Consulting Group found that fifty-five percent of American homeowners believe their home is worth more today than it was one year ago. In reality, in many locations, home values have gone down.

Following are the five pricing considerations you need to educate yourself on. By taking these points into consideration when pricing your property, you'll be able to put that sold sign on faster.

1. Increased Inventory

Yes, more houses are for sale right now than in recent years, meaning buyers have a lot more choices and negotiating room. But why are there so many houses for sale today? Because we are witnessing the consequence of a pent-up selling demand. In other words, a lot of sellers waited to list their property because they wanted to catch the top of the market. They waited and waited and waited. Now that they see the market declining, they list their homes in an attempt to still sell at a high price before the market bottoms out. As a result, we have an overabundance of inventory, up approximately thirty-nine percent than at this time last year.

2. Increased Mortgage Rates

News and advertising tells us mortgage rates are at an all-time low, and that's true in a historical context. But short-term, over the past three months, mortgage rates have been increasing. And every time the mortgage rates go up, even a quarter of a percent, a large number of potential buyers are disqualified from the marketplace. Additionally, a number of mortgage companies are going out of business, with American Home Mortgage company - the tenth largest in the country - as the latest to close their doors. Mortgage companies are getting nervous about what's taking place in the mortgage market, and that's making money tighter. When money gets tighter, sellers are affected because buyers have less buying power. Less buying power means fewer home sales. It's as simple as that.

3. Increased Mortgage Restrictions

During the past few years, mortgage companies granted mortgages to just about anyone, including those who couldn't or wouldn't prove their income, those with no down payment and even those with very poor credit. But today, with foreclosures climbing steadily, almost all mortgage companies have re-enacted the tight lending restrictions that were common decades ago. John M. Robbins, Chairman of the Mortgage Bankers Association, says that he's happy about the restrictions, but that this is a strong statement that will help curb abuse and will likely constrain consumer credit choices. Because mortgage companies are nervous about the current real estate market, buyers do need down payments now. A co-signer may not be enough, and credit scores need to be high. Each one of those factors and many more disqualify some people from buying, which in turn affect sellers.

4. Increased Vacancy Rates

During the real estate boom, many people and investors bought spec homes with the hopes of flipping the house for a big profit. Today, vacancy rates on these homes are up over fifty percent. Since most of these people don't want to act as landlords, they have a strong desire to sell the home rather than rent it out. As a result, many are selling these vacant investment properties for rock bottom prices, grudgingly taking a loss. This greatly affects other sellers in the neighborhood, because when one home sells for a low price, it sets a precedent for the other sales to follow suit. With the surrounding comps having low sales prices, the current listings in that same neighborhood decline in value.

5. Increased Foreclosures

Statistics from First American Real Estate Solution show if one house forecloses in a neighborhood, the average house in that neighborhood loses five percent of its value. If eight percent of the houses in the neighborhood foreclose, the value in that neighborhood goes down twenty percent. No one can deny that bank-owned properties drive prices down. Unfortunately, the real estate and mortgage market is now bracing for the tsunami of foreclosures that is expected to hit. According to the web site www.foreclosures.com, three out of every one thousand homeowners have already lost their home to foreclosure in the first half of 2007.

Experts predict that there's going to be a crash of foreclosures over the next two-and-a-half-years of more than two million homes. So if your clients get a flood of foreclosures in their neighborhood, it's going to lower the home values drastically. Additionally, no neighborhood - no matter what the geographic location - is immune from the foreclosure fact. Simply go to http://realestate.yahoo.com/foreclosures to see all the foreclosures in your city or area.

The New Era of Real Estate Sales

The bottom line is if someone wants to sell their home for a decent price, they have to list now - not three months from now and certainly not a year from now. In fact, no one is predicting the market will be back before the end of 2009.

12:45 PM - Oct. 1, 2007 - comments {0} - post comment

Make your house easy to show

Ki Gray is the broker for Escapesomewhere Austin Real Estate in Austin Texas.  He gives the following ideas for Sellers to make their home easier to show.

Many Sellers ask for advice on how to sell their homes. There is the standard good advice... Hire a professional stager to make the home be on the level of a model home. Paint the house. Or install granite in the kitchen to have a little more upgrades than the one down the street for sale. Hire a cleaning service. You can do all kinds of things on the level of presentation. One thing I think many people overlook is making the home accessible and making the showing experience a pleasant one. This is some advice I commonly give Sellers:

1. Try to be inviting to everyone who calls on the house.

It is definitely inconvenient for people to be romping through their daily lives, but it is unfortunately part of selling a home. When someone calls to see the home, I advise something like: "Sure, we were heading to the park, so feel free to look around." Jjust let the potential Buyers feel like they are not bothersome. This helps set the mood of the home being inviting instead of starting off the showing with a feeling of intrusion.

2. Try to leave when the home is being shown (and take any distracting animals).

This seems kind of obvious, but many Sellers still seem to stick around despite the advice. Buyers just do not feel comfortable if someone is there, and they usually rush through the home without spending some time looking at where their furniture will go or how big the closets are. In addition, if they have dogs or animals that would be distracting during the showing experience (i.e. barking or jumping), try to take them with you, or if you are at work, keep them in the backyard. Let the Buyer concentrate on the home.

3. Don't let Sellers give a personal tour of their home.

It is hard for some Sellers to resist sharing their personal experiences, but when it comes down to it, Buyers should daydream about the overall home being theirs, not concentrate on some upgraded sink faucet the Seller installed last week. You want the people to become interested in the home on a personal level, thinking of how they will go about their daily lives in it rather than notice every detail. Noticing every detail will come later.

4. List the house with the easiest showing instructions.

List with easy showing instructions so that the home is accessible without much effort. Sometimes Sellers will need to make appointments due to certain situations like the elderly or newborns. But if possible, have the Buyers phone / leave a message and head to the home. Our MLS system calls it "Call 1st - Go". This makes it possible for anyone to come by, even if they were just driving by and admiring the home. It allows these drive-by people to come in, and the more people that come through, the more chance it will sell.

5. Check on the house cleanliness.

Many Buyers will say that they can imagine beyond a mess, but most cannot. Messy homes end up being distracting from what the home is offering. It is definitely hard to keep a model home look while trying to live in it, but it helps sell the home.  A cleaning service can be a good investment.

In summary, you want as many people looking at your listing as possible and the showing experience to be as comfortable for the Buyers as possible. So, try to make the showing access as easy as possible and keep distractions (like animals, messiness, & even the Sellers presence) to a minimum.

12:18 PM - Sep. 15, 2007 - comments {0} - post comment

Make your relocation easier

Michael Del Duca of Prudential Properties New Jersey has these tips if relocation is in your future:

A new career opportunity sometimes means relocating your family to another city. Careful consideration of various factors, such as your partner’s career, the effect on the children’s educational and recreational activities, and financial constraints all impact the decision to move.

Additional responsibilities crop up when moving to a new home, including getting the house up and running, finding the right school for the kids and getting them acclimated, and getting adjusted to life in a new town. These tasks can be incredibly overwhelming, especially in a new location without the aide of family and friends.

Here are some tips to help relieve the stress of relocation and turn your move into a successful endeavor.

Take your time.  As with all moves, there are so many things you need to do once you relocate into your new home. From dealing with utility companies, to finding a new doctor, to unpacking and decorating the new residence, your to-do list may seem endless. Don’t try to accomplish everything at once. Make a list and divide it into three categories: immediate, secondary and down the road. Set your own timetable because you are the boss of this project and the only person you have to please is yourself.

Get out and meet people.  More than likely, you won’t know many people in your new community. Besides introducing yourself to neighbors, you can find a place of worship, volunteer in a community organization, join a social club or gym, or just say hello to people.

Reevaluate your career goals.  If you had to leave a job behind, check to see if your company offers any employment assistance for relocating partners. Many companies have formal and informal programs, offering as little as resume support to as much as arranging job interviews.  If you’ve desired to make a career change, this could perfect opportunity to do so.  You may even want to consider an entrepreneurial career that you can take anywhere.

Talk to your real estate professional.  Your real estate professional can be a great resource as he or she has a strong understanding of the area you just moved to.  They will have insight on the area’s job market and may be able to give you names of career counselors or just help you feel comfortable in your new surroundings. 

Most importantly, don’t push yourself by setting unrealistic goals. Moving is a process and it will take time for you to get acclimated to your new home and community.  So, make this move not only a golden opportunity for your partner, but for yourself as well.

12:11 PM - Sep. 13, 2007 - comments {0} - post comment

Get rid of the pile of crunchy bugs

The National Association of Exclusive Buyer Agents (NAEBA) recently conducted an online survey of its members to rate the items they found most annoying when searching for a new home with buyers. The results of the survey are revealing, surprising, and sometimes downright weird.

Here are the top five things exclusive buyer’s agents find most annoying when previewing a home:

1. Broken door locks preventing access to the house
2. Pet deposits in the backyard or dirty cat boxes
3. Missing light bulbs in the basement
4. Sellers that ask you to remove shoes and then have wet carpet or dirty floors
5. Having loose stairs on a stairway or missing banisters

Other reported annoyances include:

Low-hanging dining room light fixtures in a vacant home
Closet doors that fall off or are not adjusted properly
Going into a vacant home and hearing animals in the walls
Halloween decorations that are left out
Dangerous children’s toys left out
Dead cars in the driveway or yard
Homes on large lots without a survey or description of the  lot boundaries
Political signs
Graffiti on a home for sale
Dead birds or animals in or around the home

11:55 AM - Aug. 30, 2007 - comments {0} - post comment

Making sense of the current mortgage industry

Anyone watching or reading the financial news over the last few days and weeks has seen a lot of angst and consternation over the state of the mortgage industry. In fact, one of the larger lenders in the US, American Home Mortgage, was forced to shut down operations last week. But why? What is happening, and most importantly, what does all this mean to you? Let's unpack the definitions and details, so that you really understand the truth behind the headlines.

Over the past several years, many loans were made to homeowners with somewhat non-traditional or "non-conforming" situations, be it a poor credit history, inability to document income, or any number of factors that do not fit within the traditional "box" for home loans. These loans are often called "Sub-Prime", or "Alt-A", meaning that they were somewhat riskier in nature than A credit, prime, or traditional loans. Another type of "non-conforming" home loan is one where the credit and income might be perfectly fine, but the loan amount is higher than $417K, which is the current maximum loan that can be done using pools of money from mortgage giants Fannie Mae (FNMA) and Freddie Mac (FHLMC). If the loan amount is higher, it can certainly be done - it's called a "jumbo loan" - but the end money comes from private institutions, not from the large government sponsored entities of Fannie and Freddie.

Most non-conforming loan product rates popped significantly higher in the last week. Here's the scoop.

The end investor for Subprime or Alt-A loans will charge a premium for taking on a pool of these loans, because they know that traditionally, they might have a higher rate of default and delinquent payments within that risky pool. But lately, default and foreclosure has been on the rise - partly due to the fact that with credit tightening and a soft real estate market, many troubled homeowners are unable to refinance or sell in order to get out of trouble. So now, these end institutions are demanding a much higher "risk premium" for taking on these pools of loans, as they see the rates of default are climbing higher.

But since these institutions are purchasing these pools of loans sometimes months after the borrower has actually closed at a given rate, this increase to the risk premium means that instead of paying $101K for a $100K loan that will bear interest, they may only be willing to pay $95K for that $100K mortgage to account for the risk. Multiply that times thousands upon thousands of loans...and you have millions upon millions of dollars in loss for the company trying to sell the pool at a much lower price than they were expecting. This is called a "liquidity crisis", and is exactly what happened to American Home Mortgage - there was no mismanagement, but they simply got caught holding too many "hot potato" loans, forced to sell them at massive losses...and eventually they had to make the decision to close the doors and stop the bleeding.

Further, even when a lender is able to take some losses, they may be subject to a "margin call". This means that as their losses and risk premiums increase, the value of their loan portfolio decreases. As the value decreases, the credit lines that are secured by those portfolios begin to issue margin calls as the value of the asset that they are secured on is now diminished. This is exactly like margin calls in the Stock market. If you have a loan against a Stock that is losing value, you will get a "margin call" and need to pay down the loan, as the underlying Stock is losing too much value to be considered adequate collateral any longer. So for the big lenders, as their portfolio is losing value due to increased risk premiums and losses...the margin calls start coming in, and they are required to pay down their balances. In turn, this means that they have less availability to fund their new loans, which then exacerbates the problem.

In response to seeing this situation play out in the demise of American Home Mortgage, lenders of other non-conforming loan products increased their interest rates dramatically almost overnight to be better prepared - and likely over-prepared - for increased risk premiums down the road. Even though loans above $417K are not presently suffering from increased delinquencies like the Subprime and Alt-A loans are, these rates popped higher as well, because they are being purchased by smaller private entities that can't afford to take on any margin of risk.

What happens next, and what should you do now?

The present situation will likely settle out over the coming year, and the rates on products that have moved so significantly higher now should trend lower down the road as delinquency rates stabilize. But here are a few important things to do right now.

First, even if you are not presently in the market for a home loan of any type, call me to make sure that your credit standing is as solid as possible. Many people I talk to about home loans didn't expect they would have a need, and didn't plan in advance to ensure their credit would qualify them for the best possible financing. With no immediate need for a home loan, time is on your side...why don't we take a few minutes together and just make sure you are prepared, should a need arise down the road?

Next, if you are in the market for a home loan, or know someone who is - know that now is time to be working with a real qualified professional who can keep you informed of changes in the market and get your loan funded quickly. Now is NOT the time to be playing the risky game of trying to scour the entire nation to find someone who promises to save you a paltry amount on costs, or deliver a rate that seems too good to be true. Your home and your financing are just too important, and times have changed.

11:33 AM - Aug. 24, 2007 - comments {0} - post comment

Price it to Sell

This article by Jim Remley tells it like it is.  If you want your house to sell, here is what your listing agent wants you to understand.

Contrary to popular belief, when selling your home its value is determined by one thing and one thing only - what a qualified buyer is willing to pay for it. No more and no less. Sure, many sellers will argue that their home has an insurance replacement value, or an appraised value, or a tax assessed value, but unless your insurance agent, your banker, or your tax assessor is willing to write you a check for the home - guess what? None of that matters. A home without a buyer has no value in the market place. Sure it might have a value to you the seller, and it might have a value to your banker, and to your insurance agent, and to your appraiser. But none of these people are buyers.

So here is the secret to pricing your home to sell - It's not what you think the home is worth that matters, it's what a reasonable buyer will think your home is worth that will ultimately determine if your home will sell.

Now you maybe thinking - Hey wait, if I left it up to a buyer, they would pay me as little as possible for my home. True, they would. But in the real world every buyer knows that you, the seller, have no obligation to sell your home at any price. To purchase your home the buyer will have to make you an offer you can't or won't refuse. One that will motivate you to pack up your Ken and Barbie collection, hire a local mover, and wave good bye to a home full of memories.

But here-in lies the trap that many sellers fall into (myself included), which is the mistaken idea that we can hold out for an inflated price and eventually the market will come to us. Wrong! Buyers are under no obligation to buy any particular home, and no amount of marketing, open houses, websites, or signage will motivate a buyer to purchase an overpriced home. Why? Because they can buy one of your neighbors homes for less! This reveals one of the most important considerations in pricing your home - Price VS Time.

Understanding Price VS Time

The age old dilemma that has faced buyers and sellers since the dawn of private property rights is a simple question: What is more important price or time? Believe it or not this conundrum underlies and controls every sellers decision to sell, and every buyers need to complete a purchase. For sellers this boils down to the need to sell within a set time frame or instead to hold out for the best possible price, and as you might guess, for buyers it's the need to buy within a set time frame or to purchase a home for the lowest possible price.

A seller who would like to sell for top dollar should be prepared to potentially wait longer for a buyer willing to pay a premium price. Like trying to sell ice during December, a seller might have to give the stuff away just to get rid of it, but if they wait long enough, say until mid-August when temperatures crest over 100 degrees suddenly that same ice can have real value. On the flip side, a seller who needs to sell quickly, and doesn't have time to wait, should expect to discount their price somewhat because of the limited time they have to expose their home to the market.

What's the difference? Timing!

Buyers are in the same boat. A buyer who has the luxury of shopping for a home over a long period of time can probably wait to find a bargain, while another buyer who must buy a home in the next few weeks will probably be willing to pay a premium. Again it boils down to price vs time. So you might ask yourself what is your highest priority - Selling quickly or selling for a higher price?

To be honest when I pose this question to my own clients they often smile coyly and then answer - I want both! The funny thing is that they aren't kidding! This sticky situation often reminds me of one of my first jobs after graduating high school, which was working graveyard at a local lumber mill. Like clock work every night, the foreman would come by to monitor my production. We called him Perry, which could have been his last name or his first name because he never clarified it. Over the roar of the machinery Perry would cup his hands together and yell "You need to put out more wood!" Finally after an especially tough day, I looked him back in the eye, and yelled back "Do you want quantity or quality?" Throwing his yellow hard hat down on the concrete floor and then kicking it for emphasis he snarled back "I want both!"

Like Perry, most of my clients want their cake with the icing generously slathered on top. Because of this, many homeowners will attempt to put the responsibility of getting both top dollar and fast sale on the back of their hired gun, the real estate agent. The result can be summed up in one word - frustration. Why? Because no matter how much a seller yells, screams, and kicks a real estate agent, they don't do miracles. This is why successful sellers understand that while a real estate agents job is to provide marketing, expert advice, and negotiating services, in the end they don't own the property. They don't make the final decisions on pricing. The seller does, and ultimately the seller's asking price will in large part determine how slowly or quickly the home will sell.

To frame this discussion in a different way, consider what you will do should you arrive luggage in hand at the end of your listing period and the home has not yet sold. At that point are you more likely to give it a little more time or adjust your price? I know - Neither, I'll just fire the agent! To be honest, this is exactly what many sellers' do, they fire their agent and reboot the marketing. Does it work? Sometimes it does, but often these sellers end up three months later in the same slow boat to nowhere. Successful sellers on the other hand take ownership of their pricing decisions by making a clear decision about which is more important to them, selling quickly or selling for top dollar.

Successful sellers have learned that to price their home accurately means they need to think like a buyer, they need to get inside a buyers skin and look at the world through a buyers eyes. For instance, imagine for a minute that you are moving to another area of the country, to a city that you are completely unfamiliar with. If you were faced with buying a home in strange city what would be your first step?

If you're like most buyers you would probably start online by viewing listings at websites like www.realtor.com or www.yahoo.com/realestate to get a general feel for local home prices. Next you might narrow your search down to a specific community or neighborhood by comparing utility costs, school reports, and crime statistics with other online tools like www.homefair.com or www.neigborhoodscout.com. Feeling good about your findings you might then venture out into the real world to begin viewing homes in person.

As a typical internet empowered real estate buyer you will look at an average of nine homes over eight weeks with the assistance of a real estate professional. By the end of your journey, like many buyers, you become so knowledgeable about the market that by the last showing you are able to guess, with reasonable accuracy, each homes listing price before your agent can even tell you.

So what happened here? As a buyer you went from a blank slate, with no impression of the market to having the ability to predict listing prices. A big leap sure, but this description is exactly what most buyers' experience. But this is only the build up, the next step for buyers who have found their dream home is to review a Comparative Market Analysis.

A Comparative Market Analysis is a report that compares a specific home, often called the "subject home" with other homes in a specific neighborhood. This analysis is then used to provide an anticipated sales price or price range for the subject property. Although not formally called an appraisal, the report provides a similar function by giving home buyers and home sellers a clear understanding of the market data that might affect their opinion of value. To learn more about using a CMA to help price your home talk to your local REALTOR®.

12:30 PM - Aug. 6, 2007 - comments {0} - post comment

Forget the gimmicks - focus on the house

“Serious buyers are looking for a place to buy a home, not a trip to Tahiti,” said Dave Ledebuhr, owner/broker of Musselman Realty in East Lansing, Mich. On top of that, lenders are leery of gimmicky incentives, fearing that they’re built into the price of the home and that loan dollars are being used to pay for that tropical trip, he added.  Instead, effective incentives get to the heart of what’s on the minds of potential buyers — the overall cost of the home and the monthly payments they’ll have to manage, he said.

Help in bringing down the interest rate of the mortgage for a year or two by paying points, for example, can go a long way in giving one home an advantage over another, said Dave Dalzell, owner/broker of Dalzell, Realtors in Abilene, Texas. Contributions to the down payment and common closing costs could especially be of help to a first-time home buyer, said Greg Zadel, owner of Zadel Realty in Firestone, Colo.  Incentives can be considered when the home is first listed as a way to distinguish it from the start, Dalzell said. They can also be added when the home hasn’t sold in two or three months as a way of enticing a buyer without lowering the cost. Or incentives could arise in negotiations, when a buyer needs that one extra little nudge to commit.  Make no mistake, the location and condition of a home are going to be its main selling points. But if sellers “put on their buyer’s cap” and really consider what issues the buyer might have, it could make all the difference, Dalzell said.

“I tell my seller to look at his bottom line,” said Susan Ramsey, a Realtor with Re/Max Integrity Realtors in the Phoenix area. A seller should figure how low he or she is willing to go, factoring in both the selling price and other incentives used to get a buyer to commit.

But also be aware that most seller concessions need to be disclosed. “Everything should be in writing and attached to the contract,” Dalzell added.

In addition, buyers and sellers need to make sure that they don’t exceed the lender’s allowable seller-paid assistance, Ledebuhr said.

Below are six of the most common incentives being used in markets today:

1. Reducing the price

A price reduction might be the most common buyer incentive, and often it is the one that is looked at first, said Delores Conway, director of the Casden Forecast at the University of Southern California’s Lusk Center for Real Estate.

“The price is something that is a common currency — it appeals to everybody,” she said.  Gene Rivers, who owns four Keller Williams offices in Florida, agreed. If a buyer has in her mind that she’ll pay $350,000 for a home and the seller won’t budge from $375,000, “$5,000 in closing costs and a plasma TV ain’t going to get it done,” he said.

But those extra little perks can grab the attention of a buyer; it also might inspire a commitment from someone on the fence between two similarly priced properties, Dalzell said.  “What we usually recommend before you reduce the price … think about what you can do with the same dollars in an incentive,” Dalzell said.

2. Paying points

Sellers can offer to pay mortgage points for a buyer, an incentive that Dalzell tends to use in environments like today’s, when rising interest rates are at the front of a buyer’s mind. One point is 1% of the loan amount, charged as prepaid interest.  For example, instead of having an interest rate at, say, 6.5%, a seller might be able to pay points so that the rate is at 4.5% for the first year, Dalzell said.

“When a buyer sees a lower interest rate or monthly payment, that’s something they can relate to,” he said. The setup makes sense for a buyer who has furnishings to buy for the new place; it also can make for an easier monthly-payment transition for families that are upsizing. A word of caution to buyers considering this tactic, however: This assistance doesn’t last forever and usually spans about one to three years. Before accepting, understand and plan for the point in time when the window closes and payments return to their normal levels.

3. Down-payment aid

For some buyers, the hardest part of entering the ranks of homeownership is the down payment — also an area where a seller can help. It’s mostly first-time home buyers interested in this kind of assistance because they’re often the ones lacking in funds to complete a deal, Zadel said.  “It gets people into homeownership,” he said. “The disadvantage is that the buyer is financing that additional amount,” he added, because a seller would likely come down in the price of the home if a chunk weren’t dedicated to down-payment assistance.

4. Help with closing costs

Closing costs include items ranging from taxes to title insurance and can add up, ranging between 2% and 7% of the loan value, according to Freddie Mac. So many buyers, especially those stretching to make a down payment, will be interested in having a seller help out.  In Phoenix, buyers in every price range have been asking that these costs be covered, according to Ramsey. “They ask for it because they know that they’ll get it,” she said.

5. Adding a home warranty

A residential service contract is sometimes thrown in as an incentive because it acts as insurance for a home’s systems, often including plumbing, heating and cooling.  At a cost of a few hundred dollars, some real-estate agents consider it an inexpensive add-on that affords a buyer a little extra peace of mind, Dalzell said. That peace of mind can be especially welcome during the first year in a house. Others take a different view, and say there’s often confusion over what elements are covered. If a problem is considered a pre-existing condition, assistance could be limited. Plus, a warranty might not be necessary for a handy buyer who would likely take on projects himself, or ” if you’re buying a condo that’s two years old, a home warranty might not be that big of a deal,” added Zadel.

Those who accept a warranty should read the service contract and call the 1-800 number to ask questions, Dalzell said. If the seller pays for this add-on, he recommends having the buyer choose which company to use.

6. The little things

Other perks will appeal to buyers, too, ranging from the common to the unique. Payment of homeowner association fees — typically associated with condo developments — are sometimes offered. Ramsey said that sellers with pools might also offer a year’s worth of upkeep for it, a welcome help to those worried about the maintenance of the backyard attraction.

Or maybe if a corner of the home was designed to fit a grand piano, leaving that instrument behind entices a buyer to go through with the deal, Conway said.  The important thing for buyers to remember, Conway added, is that they should honestly want this add-on. Translation: A homeowner with no interest in music probably should give up a piano for a more personalized incentive

12:26 PM - Aug. 4, 2007 - comments {0} - post comment

Price it right and get it sold

The most dramatic improvement is found in the asking price vs. sale price category:  Eighty-six percent of respondents said their clients are getting at least 90% of asking prices. Of this figure, 55% say their clients are getting more than 95% of asking prices. The asking price-sale price percentages are even higher in California (94%), the West, Metro Chicago and Texas, all reporting 93%, and the Midwest (91%).

In home price appreciation over the past year, 40% reported an increase in value of between zero and 20%. Another 19% reported no change in value. Only 41% reported a decrease in value between zero and 20%. Seventy-nine percent of respondents in Texas – especially in the Dallas-Fort Worth metroplex – reported appreciation of 0-20% in the past year. 

In measuring the amount of time needed to sell a home, 43% of respondents said it is now taking 90 days or less, on average.  Of this figure, 18% said it is taking less than 60 days from listing to contact.

Buyer-seller ratios are also improving, although buyers are still in the driver’s seat in most areas of the country. Second quarter survey results show that home sellers outnumber buyers by 54% to 29%. The remaining 17% report an equal number of buyers and sellers in their marketplaces. In Texas, 69% of respondents reported more buyers than sellers and that 83% of listings are selling within 90 days. 

Fifty-nine percent of member agents report that the inventory of unsold homes in their exclusive ZIP code territories is up over a year ago and is 18% higher than the first quarter of 2007. Twenty-one percent said the number of unsold homes is about the same as a year ago. 

“Our latest national survey results certainly counter the gloomy real estate reports we’re seeing from some financial prognosticators,” said Michael Bearden, president and CEO of HouseHunt, Inc., a consumer-oriented Internet firm that supplies free information and services to homeowners, home buyers and home sellers in 47 states through more than 1,500 member agents and its primary Web sites, HouseHunt.com and moveUp.com.

Bearden added: “The fact that 86 percent of sellers are getting at least 90 percent of asking prices tells me that marketplace reality is replacing unrealistic home seller expectations. Potential buyers who have been sitting on the sidelines for the past 18 months are finding good value and lots of choices in their local marketplaces. Inventories of unsold homes are slowing building again in many parts of the country after leveling off in the first quarter of this year. Tougher mortgage loan qualifications will be a short-term negative factor for first-time and marginal buyers.”

12:21 PM - Aug. 2, 2007 - comments {0} - post comment

Spend a little, sell your house

Experts warn that there’s a fine line when it comes to how much money sellers should spend on their homes to prepare them for sale. Do nothing and sellers might have a hard time attracting buyers. Spend too much and sellers won’t recoup their expenses.

How much is too much?

Statistics show that the best bang for your remodeling buck comes from bathroom and kitchen renovations. According to a 2006 survey by Remodeling Magazine, a bathroom remodel that costs about $13,000 could get the seller about an extra $11,000 in the house — recouping about 85%.

Other renovations may not allow the seller to recoup as much. For example, according to the study, the addition of a sunroom to the house would only recoup about 66% of the additional cost.

Instead of the high-priced renovations, there are a variety of low-cost options to help spruce up a home.

Add a new coat of paint inside and outside if needed. A simple paint job can do worlds of good to improve the look of your house, Begin said. She suggests more neutral colors.

– Spruce up the kitchen and bathroom. Instead of high-cost remodeling, simple changes in the kitchen and bathroom can go a long way. Install modern-looking faucets and new handles and knobs on cabinets and drawers.

– Improve the “curb appeal” of your home by making the front look as welcoming as possible. Make sure the lawn looks great, plant a few flowers and replace anything unsightly such as an old mailbox. Make the front door look welcoming, perhaps with an updated doorknob.

– Complete all of those little problems that you have probably been living with for years. All of those little idiosyncrasies in a house like drawers that stick or banisters that are loose can add up for potential buyers.

– De-clutter the house. Excess furniture and knick-knacks often can make a home feel smaller than it really is. Before selling, you probably also want to take down a lot of personal items so buyers can envision their own lives in the home.

–  Make sure the carpets look great. Rent a steam cleaner or hire a professional, but make sure carpets look as if they are in tip-top shape when the seller comes by. If worst comes to worse, they may need to be replaced.

A lot of these low-cost changes can go a long way when considering selling a home. Still, don’t over-do it. Sellers should probably save much of the time and effort of renovations on a home they plan to live in for awhile, not on a place they plan on getting rid of.

Quick tips to make your home appeal to buyers

– Add updated faucets and kitchen knobs in your bathroom and kitchen. These simple things can change the whole look of the room.

– Put flowers in front of the house, especially near the front door. Add a pot of bright flowers at the doorstep. The color red tends to be appealing to buyers.

–Bake fresh bread or chocolate chip cookies before you have an open house. This may sound crazy but the smell gives the house a homey-feeling that appeals to buyers.

How much will you get back for your remodeling investment?

Job cost–Resale value % cost recouped

Basement remodel  $56,724  $44,685  78.8%
Bathroom remodel  $12,918  $10,970  84.9%
Deck addition   $14,728  $11,307  76.8%
Major Kitchen Remodel $54,241  $43,603  80.4%
Minor Kitchen Remodel $17,928  $15,278  85.2%
Sunroom Addition $49,551  $32,854  66.3%
–Reflects national averages

3:12 PM - Jul. 19, 2007 - comments {2} - post comment

Upgrade now - get rewards later

Our friends at bankrate.com have put together the following article on the best upgrades to install with an eye toward resell.

Whether the target date for listing your home on the market is a few months or a few years away — or whether you simply like to make decisions with an eye toward the future — you may well be wondering how putting some money into the house now will pay off later.

The hottest trends in home improvement feature environmentally friendly living, recycled products, and high-tech innovation — all in a warm and inviting space.  Judging by the number of television shows devoted to the subject, it seems like nearly everyone is interested in remodeling or renovating their home. In some ways, it's reasonable: Two-thirds of owner-occupied homes are at least 25 years old, research by the Harvard University's Joint Center for Housing Studies found — and that means there are millions of homes in need of an update.

To find out what's popular — and what's not — in the world of home improvements, we talked to several architects and designers to find out what trends they were seeing in the home renovation market.

Everything old is new again

Old houses might need updates, but a bit of the space's original character can remain, says Robin Wilson, CEO of Robin Wilson Home. Antique doors, lighting, hardware and floors can be preserved and restored to their former glory, even while adding the latest technology and materials. It might be time to ditch the fake wood paneling in the rec room, but the wide-plank hardwood floors in the den can be refinished to give an old room new sheen.

Recycled products are also making their way into home renovations: Kitchen countertops can be made from recycled aluminum, glass and even paper. Kitchen and bathroom sinks are made from recycled aluminum and bronze. Even the stuff you don't see in a home renovation — such as insulation — can include a significant percentage of recycled materials.

While recycled products have been around for some time, there's been a surge in interest, says Eric Phillips, vice president and general manager at DreamMaker Bath and Kitchen in Apex, N.C. Prices have come down and aesthetics have improved. "You don't have to sacrifice form or function for these products," he says.

Green solutions

There's a growing interest in environmentally friendly renovations — which makes both ecological and economic sense.

"People understand that using green products and systems can make their home more energy efficient and improve indoor air quality," says Maureen Ness, a project architect at the Minneapolis architecture and interior design firm LHB. "It saves money and makes their house healthier."

Phillips notes that people are beginning to choose eucalyptus woods, a fast-growing tree with wood that can be used for flooring and countertops. Water-saving devices in washers and toilets and energy-saving products from lighting to Energy Star appliances are getting a boost as well.

Kitchen upgrades

Kitchens have long been the family gathering spot, and home renovations continue to reflect this trend with added features to keep people entertained and content. Televisions and computers — with waterproof, wireless keyboards — are being integrated into cabinetry and freezer doors.

Wilson says many homeowners are hoping to achieve a seamless look to their appliances by matching the materials in appliances and cabinetry. "Refrigerators and dishwashers have interchangeable panels that can be used to hide appliances and make them blend into the kitchen," she says. That olive green fridge that used to seem adorably retro? Now it just seems old.

Along those same lines, Phillips says people have shown more interest in integrating appliances that used to sit on the countertop.  "People are building things like high-end coffeemakers into the cabinetry," he says. "It's a luxury item that has become more affordable."

Spa baths

Remodelers are eager to bring the spa experience home, says Phillips, and that doesn't just mean enormous tubs.

"We're seeing whirlpool tubs with added aromatherapy" components, he says. Speakers are often integrated into designs so homeowners can put on a soothing tune while they soak. Some even go so far as to add mood lights — large, color-changing LED light panels that cycle through a full spectrum of colors.  Another popular upgrade is a flat-screen television placed behind a two-way mirror; people only see an image when it's turned on.

Upgrading laundry rooms

Once sequestered to the corner of the basement, laundry rooms are moving up — they're often found on the same level as bedrooms. That's partly because washers and dryers are a lot quieter than in years past, and partly because they're more attractive, too. As a result, homeowners are paying more attention to the looks of these spaces.

Wilson says homeowners are considering a wide array of options to outfit their laundry spaces.  "People have hanging racks, folding areas, appliances that let them dry clean their own clothes, and machines that let them steam their own clothes," she says. "It's a much more luxurious space."

Warming trends

The cool, sleek look of modern design is making way for a warmer, more inviting look, says Phillips. "Stark and sterile is out," he says. "We're seeing people who want to have welcoming and comfortable spaces. They don't want to feel like they're in a museum." Golden hues are growing in popularity, and the brightest colors are taking a back seat to more muted, natural colors and tones.

Of course, the key to a great home renovation is making sure it fits your needs — a souped-up space is only worthwhile if you'll use it.

11:59 AM - Jul. 5, 2007 - comments {0} - post comment

Curb appeal is key

As the saying goes, you never get a second chance to make a first impression. This adage certainly holds true when it comes to the curb appeal of the home you're selling. Buyers these days make decisions quickly and might not even take the time to go inside your home if at first glance, they don't like what they see on the outside.

"The homeowners themselves aren't always in the best position to judge their own curb appeal given that they see the property everyday," said Holly Slaughter, editor-in-chief of RealEstate.com Tips and Tools. "This is why I always recommend that homeowners invite a real estate agent or a friend over to give an honest assessment of a home's curb appeal before putting it on the market."

If prospective buyers pull up to what might be their new home, only to be turned off by chipped paint and a shaggy lawn, chances are they'll move on quickly to the next listing.  So what can you do to increase a home's curb appeal? Here are some easy projects to include on your to-do list:

- Maintain the lawn. Seed the bare patches in your lawn and keep the rest mowed and nicely edged. If you don't have time to do this, hire a service as the lawn is the first thing prospective buyers will notice.
- Consider whether your house could use a good power washing. This doesn't cost much and will quickly take away the years of dust and grime that has collected on your home.
- Make sure the doorbell works and that the front door opens and shuts smoothly without creaking. Creaking can indicate aging or disrepair - things no prospective buyer wants to be greeted with.
- Keep clutter to a minimum, meaning no bikes or toys on the lawn and no garbage containers in sight of the street.
- Repaint any areas where paint may be flaking.

A home's curb appeal is the "face" that everyone sees. Prospective buyers will be certain to stop and take a peak if a home is clean and welcoming so make sure you do what you can to make the home shine through great curb appeal.

2:39 PM - Jun. 25, 2007 - comments {0} - post comment

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