11202013 Vivian Newsletter [Read More]
11202013 Vivian Newsletter [Read More]
Posted under: Home Selling | September 16, 2013 9:52 PM | 42,675 views | 38 comments Email AlertsSend to a FriendPost to FacebookPost to Twitter RSS Selling a home is an odyssey. From the moment you decide the time is right in your life and in the market to make a move to the time you scrub out […] [Read More]
As a smart home seller, you take great pains to get and stay informed and create a strategic plan of action for your home’s preparation, listing, marketing and eventual sale. But you know what they say about the best laid plans, don’t you? One of the scariest prospects to sellers is that of surprise glitches, twists and turns to their carefully laid transactional plan. Here are a few strategies for minimizing those surprise prospects.
1. Sell your home on the range. Part of the horror of a home selling surprise is in its potential to derail your plans. You expected to get X number of dollars, and a surprisingly low price makes your move-up plans impossible. You expected to sell by X date so you could be in your new hometown by Y date – and you did sell on time, but the new buyer isn’t closing escrow until well after your target moving date.
Real estate, generally speaking, is not a precision sport – particularly when it comes to expectations around time and money. Even when it comes to closing, it’s not bizarre for sellers to get a little refund check after escrow or to have closing delayed by a couple of days because of little glitches with the buyer’s mortgage lender.
You can prevent avoidable upset and plan derailment by approaching your entire transaction with the mindset and practice of planning for time and money ranges. Your agent can help you figure out how wide a time frame and how wide a dollar range you should be prepared for on any given decision and at any given point in the transaction.
Your agent can also help you get educated about the full range of options available to you at every stage of the transaction. Knowing up front that you might have the option to ask your buyer to go ahead and close escrow and then rent the property back from them for a couple of weeks so you can have the cash for your buy and the extra time in your home, for example, can help you keep your home selling plan flexible and reduce the drama that can arise when things don’t go precisely according to plan.
2. Make sure your math stays up to date. Again, in selling a home, the math around what you can expect to net on your home’s sale can be a bit of a moving target. Most sellers have some ballpark number around what they owe on their mortgage in mind, and keep that number in mind as they do the mental math to estimate what they expect to recoup from their home’s sale.
But it’s not unusual for sellers to get close to closing and express surprise at having their proceeds reduced by:
Your escrow holder or title insurer will surface many of these things at the time you open escrow in the format of the preliminary title report, so it’s important to pay close attention to the line items listed when you receive this document.
And even beyond these items which sellers can inadvertently omit from their math, real-time issues like the precise day escrow closes, repairs that come up during the transaction and even city ordinances that require certain property conditions at closing can have a last-minute impact on your net proceeds. Work with your agent and your escrow officer or attorney to keep an updated understanding of how your home sale figures evolve over time.
3. Understand that recent history is the best predictor of your home’s fate. Surprise prevention is yet another compelling reason to stay focused on the recent sales of similar homes as you make your decisions about how to stage it and how much to list it for. Want your home to sell fast? Look at the recent comparable sales that flew off the market and emulate their marketing and pricing strategies. Want to hit a specific price target? Your best bet would be to look at the similar homes in your area that are selling for top dollar and do what they did.
Truth is, in home selling, often the homes that sell fast are the homes that sell for top dollar, but they are also the homes that are the best prepared and priced aggressively enough to present a great value to buyers.
And the opposite is true, too: if you want to avoid being surprised by a super low sale price, don’t set your expectations wildly out of line with the sale prices you’re actually seeing nearby homes sell for. Reality is a surprise to those who choose to live in a land of fantasy.
4. Have a contingency plan. In real estate, we most often reference contingencies when we’re talking about buying, not selling. But there are two types of contingency plans home sellers can leverage, too, if avoiding unpleasant surprises is a high priority.
First, the formal contingency plan. Sellers do have the option of negotiating a seller’s contingency into the contract for their home’s sale, which allows them the right to back out of the contract if they are not able to purchase a replacement home to move into. Sellers in strong seller’s markets might have the bargaining power to negotiate this, and it can alleviate the no-longer-uncommon surprise of closing your home’s sale and being unable to buy your next home due to bidding wars.
Sellers who get into contract on their existing home before buying a new one might also be able to negotiate a rent-back, which allows them to stay in the home for a few weeks or even longer, in some cases, after close of escrow – giving a longer time cushion for finding a home and moving out. Both seller’s contingencies and rent-backs have a number of legal and mortgage implications. Talk with your real estate professional to find out about common practices in your area.
By: G. M. Filisko Published: March 19, 2010 While you’d like to get the best price for your home, consider our six reasons to reduce your home price. These six signs may be telling you it’s time to lower your price. 1. You’re drawing few lookers You get the most interest in your home right […] [Read More]
By: G. M. Filisko
Published: March 19, 2010
While you’d like to get the best price for your home, consider our six reasons to reduce your home price.
These six signs may be telling you it’s time to lower your price.
1. You’re drawing few lookers
You get the most interest in your home right after you put it on the market because buyers want to catch a great new home before anybody else takes it. If your real estate agent reports there have been fewer buyers calling about and asking to tour your home than there have been for other homes in your area, that may be a sign buyers think it’s overpriced and are waiting for the price to fall before viewing it.
2. You’re drawing lots of lookers but have no offers
If you’ve had 30 sets of potential buyers come through your home and not a single one has made an offer, something is off. What are other agents telling your agent about your home? An overly high price may be discouraging buyers from making an offer.
3. Your home’s been on the market longer than similar homes
Ask your real estate agent about the average number of days it takes to sell a home in your market. If the answer is 30 and you’re pushing 45, your price may be affecting buyer interest. When a home sits on the market, buyers can begin to wonder if there’s something wrong with it, which can delay a sale even further. At least consider lowering your asking price.
4. You have a deadline
If you’ve got to sell soon because of a job transfer or you’ve already purchased another home, it may be necessary to generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in your area. Remember: It’s not how much money you need that determines the sale price of your home, it’s how much money a buyer is willing to spend.
5. You can’t make upgrades
Maybe you’re plum out of cash and don’t have the funds to put fresh paint on the walls, clean the carpets, and add curb appeal. But the feedback your agent is reporting from buyers is that your home isn’t as well-appointed as similarly priced homes. When your home has been on the market longer than comparable homes in better condition, it’s time to accept that buyers expect to pay less for a home that doesn’t show as well as others.
6. The competition has changed
If weeks go by with no offers, continue to check out the competition. What have comparable homes sold for and what’s still on the market? What new listings have been added since you listed your home for sale? If comparable home sales or new listings show your price is too steep, consider a price reduction.
Posted under: Home Buying, Home Selling | August 13, 2013 11:57 AM | 118,949 views | 47 comments Email AlertsSend to a FriendPost to FacebookPost to TwitterRSS In real estate, we often use the term “under market” to describe a home that is priced or purchased for less than it’s fair market value. But I […] [Read More]
Posted under: Home Buying, Home Selling | August 13, 2013 11:57 AM | 118,949 views | 47 comments
Email AlertsSend to a FriendPost to FacebookPost to TwitterRSS
In real estate, we often use the term “under market” to describe a home that is priced or purchased for less than it’s fair market value. But I sometimes see an unrelated real estate phenomenon I think Webster would rank as a second definition for “undermarketing”: to list a home and fail to mention features the homes have, which buyers would have been attracted to, had they seen them in the home’s listing description, flyer or online marketing.
For example, my first home was a very modest rancher, lots of fixing needed, located in a quiet part of town that I’d never heard of. At my agent’s insistence, I finally went to see it. Only then did I realize that the property just so happened to be situated with panoramic views of the San Francisco Bay. Bizarrely enough, this massive selling point had not received even a passing mention in the listing!
If your home has commercial-grade European appliances, sits on acres of land, or is in the most prestigious neighborhood in town, it’s pretty easy to know what to lead with in your marketing. But if you have a normal house in a normal neighborhood, there could very well be things you take for granted which a first-time or relocating buyer might be magnetically drawn to – if you mention it in the listing.
1. Storage. When aiming to avoid undermarketing, keep this in mind: showcasing your home in its best light is not just about what you love about it. You might already have outgrown the place, and started to see its flaws more than its finer points: that’s why you’re moving. But the goal of good marketing is to highlight the things that will allow your home to shine in the eyes of your target buyers and against the competition.
So, it’s important to know what buyers care about and how your home offers a more comfortable lifestyle than the competition. First-time buyers, for example, are not simply comparing your home to other homes, they are also comparing it to the lifestyle of being a renter and to every bad rental property that inspired them to move forward with becoming a homeowner. One very common beef of renters is that rental homes lack storage, which leads to belonging overflow and a cluttered life. The vision of having a place for storing everything is a big motivator for many first-time home buyers. So, if your home has been tricked out with extra closets, pantries or other built-in storage amenities that you plan to leave, make sure your agent boasts about that in your home’s marketing materials.
2. Organizing systems. In the same vein, if you have made the investment in upgrading your home with customized or built-in closet, kitchen or garage organizer systems, desks or bookshelves make sure buyers see and know this from your home’s online listing. From the first-timer craving to have a clutter-free existence to buyers who are moving up into a family home and want each family member’s space to have at least the possibility of order, built-in organizers can represent value and appeal to a wide range of prospective buyers.
3. Proximity. You might be thinking the right buyers for your home will be finding it online precisely because of where it’s located, so it’s silly to call out the property’s proximity to amenities and attractions. Not so fast. First, some buyers simply might not know to search for your zip code, or might not be aware that your hidden gem of a neighborhood also happens to be tucked within a half mile of a subway station, entrances to 3 freeways and 2 regional parks. Second, buyers’ proximity wishes might be different than the location requirements of their online search. They might be looking at all homes in town in their price range, but the fact that yours is walking distance to a major employer or university could push yours to the top of the list.
Finally, relocating buyers might not have the core knowledge of the area that would allow them to connect the dots about the property based on location basics you are assuming everyone in the market for a home like yours will know. Don’t assume: if your home is particularly well-located vis-a-vis major employers, universities, recreational amenities or walkable shopping and dining districts, talk with your agent about showcasing this in your home’s marketing.
4. Senior-friendly features. Boomers are not necessarily looking for homes with built-in disability features, but they are often looking for homes they could live in for the rest of their lives, “aging in-place,” without necessarily being located in senior-only communities. That means homes with level-in entrances (no stairs to the front door), single story layouts and low-maintenance landscaping have a massive new audience attracted to these features which would otherwise not warrant a mention in a home’s marketing, especially if homes near yours tend to have loads of stairs or other features that are difficult for people to navigate as they age.
Similarly, the movement toward aging-in-place has caused many more families to move aging relatives in with them, versus moving them out to retirement homes. These extended families often are looking for homes with a very well-appointed “mother-in-law” or “outlaw” units or a second master suite located on the home’s ground floor. If your home has multiple bedrooms with bathrooms en suite or completely independent living quarters, marketing these features to extended families is a must.
5. Energy efficiencies. If your home runs entirely off-the-grid or on graywater, chances are good you’ll be mentioning that. But even buyers who don’t identify as hunting for a “green” home can be attracted to the budget-friendliness of energy-efficient features of the less extreme sort. So, if your home is a pretty no-frills property but has a tankless water heater, dual-paned windows and new insulation, mention it! If you’ve managed to get your energy bills down way below what’s normal in your area, this could be a selling point you don’t want to overlook–your agent can help you navigate how to broadcast this message to buyers.
6. “Light” green lifestyle features. That said, if you have configured your home to allow inhabitants to live a greener life, beyond just the energy bills, these might warrant a mention in your marketing. You might think things like your little organic kitchen garden, backyard compost bin or that $50 recycling center you installed are so low in cash value they don’t rate a line in your listing materials. But there are loads of buyers out there who are attracted to these sorts of features already being in place in a home, so calling them out (especially if you’re in a market with tons of competition) can call your home to their attention.
7. Natural, chemical-free and hypoallergenic home maintenance. In a similar vein, if you have a hypoallergenic HVAC system or have only used non-chemical cleaning products for the last few years, you might want to call these sorts of things out, as well. Marketers say today’s consumers are careful about not just what they put into their bodies, but also what they put on and around their bodies. Your home and the cleaning and maintenance products you’ve used may implicate both “on” and “around,” so if you’ve taken care to create a home that works well for people with physical or philosophical sensitivities to common household chemicals, make sure light-green buyers know it!
By: G. M. Filisko Published: March 12, 2010 Understanding how appraisals work will help you achieve a quick and profitable refinance or sale. 1. An appraisal isn’t an exact science When appraisers evaluate a home’s value, they’re giving their best opinion based on how the home’s features stack up against those of similar homes recently […] [Read More]
By: G. M. Filisko
Published: March 12, 2010
Understanding how appraisals work will help you achieve a quick and profitable refinance or sale.
1. An appraisal isn’t an exact science
When appraisers evaluate a home’s value, they’re giving their best opinion based on how the home’s features stack up against those of similar homes recently sold nearby. One appraiser may factor in a recent sale, but another may consider that sale too long ago, or the home too different, or too far away to be a fair comparison. The result can be differences in the values two separate appraisers set for your home.
2. Appraisals have different purposes
An appraisal being used to figure out how much to insure your home for or to determine your property taxes may rely on other factors and arrive at different values. For example, though an appraisal for a home loan evaluates today’s market value, an appraisal for insurance purposes calculates what it would cost to rebuild your home at today’s building material and labor rates, which can result in two different numbers.
Appraisals are also different from CMAs, or competitive market analyses. In a CMA, a real estate agent relies on market expertise to estimate how much your home will sell for in a specific time period. The price your home will sell for in 30 days may be different than the price your home will sell for in 120 days. Because real estate agents don’t follow the rules appraisers do, there can be variations between CMAs and appraisals on the same home.
3. An appraisal is a snapshot
Home prices shift, and appraised values will shift with those market changes. Your home may be appraised at $150,000 today, but in two months when you refinance or list it for sale, the appraised value could be lower or higher depending on how your market has performed.
4. Appraisals don’t factor in your personal issues
You may have a reason you must sell immediately, such as a job loss or transfer, which can affect the amount of money you’ll accept to complete the transaction in your time frame. An appraisal doesn’t consider those personal factors.
5. You can ask for a second opinion
If your home appraisal comes back at a value you believe is too low, you can request that a second appraisal be performed by a different appraiser. You, or potential buyers, if they’ve requested the appraisal, will have to pay for the second appraisal. But it may be worth it to keep the sale from collapsing from a faulty appraisal. On the other hand, the appraisal may be accurate, and it may be a sign that you need to adjust your pricing or the size of the loan you’re refinancing.
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