Lies Sellers Tell Themselves

What’s it worth to ya?

            Part of the realtor’s job is something we fondly call a CMA. 

No, that’s not the Country Music Awards.

“CMA”, in real estate parlance, stands for “Comparative Market Analysis”.  It’s a tried and true method of determining the approximate value of a piece of property by comparing similar properties that have sold or are currently active listings.  This little document helps both the realtor and the seller determine how best to list a property for the quickest sale at the most money.

            Because that is the goal, right? 

Seller Quote #1: “My neighbor sold his house for Cash….”

            Rumors fly like Superman on speed.  Sometimes, a seller will have heard that so-and-so down the street got $fill in the blank from a “cash buyer” (from out of state, of course).  I suppose there might have been a time when a buyer from out-of-state would come for a visit, see a property, be so amazed at the price (compared to their own state, of course) that they would plunk down cash to buy it right now.

            In the words of an old song, “Those were the days, my friend”.  

            That buyer is as hard to find as Bruce Willis’s hair.   

            In today’s market, buyers are savvy.  They’ve done their homework and know pretty well what every single house similar to what they’re looking for has sold for, when it sold and whether the current owner is happy in it or not. 

Well.  Maybe not that last one.

            Anything that’s a matter of public record is easily accessible these days.  And sale prices of homes are public record.  Anyone, anywhere, can look it up with the click of a mouse. 

            Cash buyers exist, but they’re just as savvy as everyone else.

Seller quote #2: “You can always go down, but you can never go up.”

            It’s true, that it is difficult to raise the price on the house once it’s on the market, but don’t lose sight of the ultimate goal.  It’s the most money in the least amount of time.

There is no more important element when listing a house than determining the right price. 

Buyers have a different goal.  They want the most house for the money they can spend.  "Most house" might mean the largest, or the newest or the prettiest.  All buyers have different priorities. One thing is certain. If you list too high, you will limit your number of showings and may prevent a potential buyer from making an offer. 

            So, ask yourself this.  Do I really want to keep this house sparkling clean all day every day, seven days a week, for six months -- or nine months -- or a year?

Seller Quote #3: “I know the carpet looks bad, but the buyer can replace it.”

He could. 

But he probably won’t.  He’d rather find a house where he doesn’t have to replace carpet. 

This doesn’t apply to all price ranges, of course. But even in a $70,000 house, if the buyer has two to choose from, and one has fresh paint and one does not, chances are really good he’ll pick the new paint. 

Don’t forget the buyer is choosing a home, not just a house.  The quicker he’ll be able to turn it into the home he’s dreamed of, the quicker your house will sell. 

So if your carpet was installed in 1962 or you have an in-home-day-care and the Kool-aid stains to prove it, you’ll need to replace your carpet to get most money from your home.

            If the price of your home doesn’t justify new carpet or you simply can’t afford to spend the money, have it cleaned by a professional at the very least.  You want to make the best impression you can.

Seller Quote #4: “I Want to Sell “As-Is.”

            No, you don’t.  Really.  You don’t.

            Not only will you limit your buyers to people who have enough extra ready cash to complete repairs, you’ll limit buyers to people who are getting loans that don’t require repairs.  That means, no buyer who qualifies for USDA, FHA, Freddie Mac, Fannie Mae or VA loans would be able to buy your house.  All of these loans now require the appraiser to look for things that need to be repaired.

            And repairs have to be completed before the loan closes.

            “AS-IS” means you’re agreeing to sell your house for less than it’s worth.

            That is not anyone’s goal.

Seller Quote #5:  “I Need at least 24 Hours Notice To Show.”

            Do you really need 24 hours?  Or would you just like to have 24 hours? Often sellers think a buyer can wait till tomorrow to look, but what if he's in town for just today?

            Despite all the stress we realtors put on keeping things neat and tidy, if we can’t show it, we can’t sell it. 

            So, unless your living rooms looks like a team of oxen spent the weekend, don’t say no. Say, give me a couple of hours, or the afternoon, or whatever you need to make things presentable. 

            Whatever you do, don’t turn down a showing.

            Showings are like the raffle tickets of the real estate market.  The more raffle tickets you buy, the better your odds of winning. 

            The more showings your house gets, the better your chances at making a sale. So, never, ever say “no”.

Seller Quote #6:  “So-and-So sold his House the First Day it was On the Market, so It must have been priced too low.”

            Sellers want to get the most money in the least amount of time, right? 

            But not on the first day or even in the first week it’s on the market!  That’s too soon!

            Everyone has a tendency to second-guess themselves.  We all do it.  But if you’ve priced your home with the advice and information gathered by your realtor, you priced it right. What realtor would want your house to sell for less than it’s worth?

            So why did your friend get a buyer so quickly?  Because Realtors are pretty savvy too.  We look several times a day for a new listing that we think would be perfect for our actively searching buyers.  And when we find it, that’s the fun part of the job!       

            As the seller, you have no idea how long that particular buyer has been looking for a house.  You don’t know how many houses they’ve rejected before they found yours. The only thing you know is that they think it’s perfect for them. 

            And that makes it perfect for you, too!

Real Estate and Algebra...

           Most buyers these days are remarkably well informed.  They know they need to visit a lender, get pre-approved and find out exactly what they can comfortably spend for a house.  They know the process will include lots of internet searches, lots of drive-bys, and some open houses.  They research neighborhoods, check out schools and study all kinds of statistics in the hopes that when they actually start looking at houses, they’re prepared.

They also know they need a Realtor to help them.  Because no matter how much research they’ve done, they’re pretty sure they’re in over their heads.

Real estate is complicated like Algebra is complicated. 

Just consider me your real estate tutor. 

Not Algebra though.  Definitely not Algebra.

Wow! You Won Powerball?!

            That’s awesome!  You can buy any house in town!

            Oh.

           

            That wasn’t you? Oh, sorry....

            Then, let’s talk about expectations.  Whatever amount you’ve been approved for, chances are you’re thinking you’re going to find the perfect house. 

            You’re probably not.

            In fact, you’re about as likely to find that perfect house as I am to find a ten carat diamond while planting petunias.  Maybe not impossible, but certainly improbable.

            Every house is a compromise of some sort. Don’t set yourself up for disappointment by expecting perfection. 

            What you can expect is to want to paint or re-do a floor, change out some appliances or add new landscaping.  More than expect it, you should look forward to it. You might think you want a house where you won't have to "do anything", but the truth is you'll do things.  Lots of things.

            Because, the changes you’ll make to the house you buy are how you put your personality on it.  So, forget all about that perfect house.

            Instead, let’s find the right house.

Looking for Love in All the Wrong Places

        

Location, location, location…  Everyone knows it’s the first rule of real estate.  

            When you’re setting your priorities for your home, make sure one of them is location.  It doesn’t have to be at top of the list.  Just make sure it’s on the list.  Location really is important -- important for your home purchase and even more important for a future sale. 

            You can make a lot of improvements to a home, but it’s pretty hard to pick it up and move it.

            Other priorities should revolve around what you actually need for your family.  Not just bedrooms and baths.  Consider your lifestyle.  Whether you home school, or garden or have a wardrobe to rival Jessica Simpson’s, your lifestyle determines exactly what your family needs in a home.

            Make a list.  It will help you cement your priorities in your mind. 

Where is Superman When You Need Him?

            When you’re house shopping it would be nice to have x-ray vision.  Since I’m assuming you don’t have that handy-dandy superpower, you should always have a home inspection.  Your inspector will check for structural and mechanical defects, make sure all the equipment is in working order and even climb on the roof.

            They’re not Superman either, but they sure can save the day.

            It is all too easy for us -- both Realtor and buyer -- to be dazzled by a beautiful gourmet kitchen or spa bath.  Home inspectors are more impressed by updated wiring and plumbing.

           

            There’s just no accounting for some people’s tastes.

                       

It's Not Very Cute, is it?

            Buyers sometimes refuse to go inside a house because they don’t like the exterior.  This is perfectly understandable if the house reminds you of the Adams Family Homestead.  But, here’s a helpful hint:  If your Realtor is encouraging you to see the inside, just do it.  He or she more than likely has seen the house and thinks you’ll be impressed.  Curb appeal is important, but you’re going to live inside.

            And often, improving your curb appeal is as simple as fresh paint or flowers or adding paving stones or shutters. And your Realtor knows that.

            There are lots of other ways you should trust your Realtor too.  He or she really has your best interests at heart and the absolute last thing we want is an unhappy customer.  That’s the kind of thing that leads a Realtor to the Help Wanted section of the local paper.

            Or to buying Powerball tickets…

Trust me, It’s fun!

            In the end, have fun!  It’s fun to look at houses.  Even if you don’t like one, you can still get ideas to use in the one you will like. 

Don’t stress over the fact that you’re spending what seems like a lot of money.  In the end, it’s just one little old payment at a time. Kind of like rent, but with a much better financial return.

            You and your spouse are not on the same page?  No worries.  You will be.  Looking at houses is how you figure out what’s really important to you.  And how you see what’s important to him.

            As I told a first-time home buyer just a few days ago, the process may be frustrating at times, but the pay-off is pretty sweet.

            In the end, it’s not just a house and it’s more than a home.  It’s the place where your memories happen.

                       

Taking Your House from "For Sale" to SOLD!

Some people love their homes and can get downright sentimental about the prospect of selling the place that has been the location of so many important events in their lives.  (Imagine the Huxtables leaving that great two story home where Sondra, Theo, Vanessa, Olivia and Rudy grew up.)

Other people hate their homes. They want more storage, bigger closets, bigger bedroom, new bathrooms and updated kitchens.  They aren’t sentimental at all.  (Think Clint Eastwood escaping from Alcatraz.) 

They want one thing only:  O.U.T.

Whichever category you fall in, you have a vested interest in getting the most out of your home in the least amount of time.  After all, houses are not just a great place to live, but a great investment.

When you put your house on the market, you’re competing against every property in the same price range in town.  You might believe you have the advantage in location or size or amenities, but potential buyers can be as picky as a toddler with a plate full of asparagus.

Here are a few pointers to help make your house appeal to the broadest number of buyers.  Whether you love it or hate it….

1.  Picture this!

          It’s really hard to look at your home from a buyer’s perspective, but this is one of the most important steps.  To make it easier, I recommend taking pictures of each room.  Don’t forget the closets and cupboards, because how much storage space is available is definitely a selling point.  Upload those pictures to your computer and really study your rooms, one by one.  Is there too much furniture?  Have you let your husband fill the table by his chair with his “essential” clutter?  Is that closet so jam-packed that opening the door reminds you of a jack-in-the-box at the end of its tune?

          Oh, wait.  I think that’s my house.

2.   Ride That Broom!

          The most important tip any realtor can give you is to get your house sparkling clean.  Deep clean once, including such things as light fixtures and replacing light bulbs.  Windows need to be clean and sparkling, because you’ll want your house to look light and airy.  When the buyer enters your home for the first time, it needs to be bright, clean, fresh-smelling and comfortable.

          And as you’ve no doubt already figured out, you’ll need to keep it that way.  Buyers aren’t just picky, they’re impatient.  If they can’t see your house in a pretty quick time period, they tend to move on to something else. 

3.  Life is Messy!

          While you’re in the process of cleaning your house, take a look at whether there are items you could pack away for your future move.  The more spacious you can make your home look, the quicker the sale.  We tend to surround ourselves with things that make our home seem homey to us.  But “homey” is really subjective.  A buyer wants to fill that same house with his things.  If yours are gone, it’s easier for him to visualize that space as his.  Things that could be packed away are family photos, knickknacks, collections, any items you rarely use, out of season clothes, etc. 

4.  Evaluate, Determine, Appraise…

Does the front flower bed need to be cleaned out?  Is the paint peeling?  Is that faucet dripping?  Do the shower doors and tile look clean and shiny?  Are the paint colors neutral?  Does the carpet need to be cleaned or replaced?  Sometimes a small expense like fresh paint or flowers in the flower bed can make all the difference.  Sometimes, it’s worth it to spend the money for new carpet, rather than wait months and months for a buyer to come along who’s willing to replace it themselves.

5.  Should I move that over there?

          When you’re evaluating your home, decide if any of the rooms has too much furniture in it.  It seems no matter how much space we have, we tend to fill it to overflowing.  See what items you could store away until you’re in your new home.  Decide how best to arrange the furniture to make the most of the space available.  If you need a second opinion, call your realtor for help.

6.  What’s my Style?

          Because we live in a world of constant change, it’s important to look at your home subjectively and determine if there are items in it that make it seem dated.  Look for items like knickknacks, flower arrangements, curtains, paintings, etc.  Though we might love those things, we are not the buyers.   

7.  A Bath and a Hot Meal…

          Kitchens and bathrooms sell a home, so look yours over carefully. 

Eliminate anything unnecessary on your countertops.  Organize your cupboards, because buyers will open every cabinet.  If they’re overwhelmingly cluttered, pack things away.  Make your countertops sparkle.  This might mean replacing them or refinishing them.  You decide what is necessary. 

But if you’ve hated your countertops for the last ten years, a buyer will probably hate them too. 

          In the bathrooms, look things over with a health inspector’s eye.  If your sink is chipped, check into replacing it.  If the faucets were installed twenty years ago, replace them.  Hang fresh towels.  Keep bathrooms looking and smelling clean and fresh.

8.  I Think She’s Attractive, but…

          80% of buyers decide to look at the interior of a home based on their reaction to the exterior.  If the interior looks like a feature in House Beautiful, but the outside looks like a reject from Mother Earth News, you’ll never get buyers to look past the front porch. Look at the paint, siding and bricks, as well as the decks or patios.  Would power-washing make it look new and fresh?  Clean leaves and weeds out of front flower beds, trim bushes, add flowers if the season is right.  Put children’s toys and bikes away. 

          According to many industry experts, over half of buyers decide whether they’re going to buy a house before they ever get out of the car!

9.  Every Space Matters.

          Closets matter.  Laundry rooms matter.  The back door where you shed your shoes matters.  Dog bowls, cat beds, bird cages matter.  Your kids’ toys matter. 

People notice everything.  Just make sure what they notice is good.

10.  You Need Help, Lady!

          This probably should have been the number one tip on the list, because it’s essential to your success.  If you’re really serious about selling your home, hire a professional.  Homes listed with realtors sell for an average of 16% more money than homes sold by owner.  On a $100,000 house... well, you can do the math.

          Love it or hate your house, who couldn’t use a nice little chunk of change like that?

Real Estate and Hand Grenades

The older I get, the more certain I am. 

            Timing is everything. 

            Whether you’re proposing marriage to the love of your life or throwing hand grenades, timing matters.

A lot.

So, if the number one rule of real estate has always been location, location, location, the second rule should be timing, timing, timing. Sometimes I wonder if they should switch places.

Let me give you an example.

If you wanted to buy a house in the last couple of years, you probably talked yourself out of it.  With the television news throwing terms like “real estate bubble” and talking about prices “bottoming out” who could blame you?

Did it matter at all where the house was located?

Nope.  Not one whit.

“It Would Be Nice if Something Made Sense Here.” Alice in Wonderland

            Does anyone really know what a “real estate bubble” was?  Like a lot of terms used by the media these days, it sounds cool, but it doesn’t exactly explain the situation.

Maybe it's tiny little houses… trapped in soap bubbles… floating over the land --and Pow! -- They fall to earth. 

            I suppose that could be the “bottoming out” part.

         

But, I digress.

            Timing has always played an important role in real estate, but never more than in today’s market.  As a matter of fact, with interest rates at an All Time Low (according to the commercials), it would be surprising if you hadn't wondered if you could buy a house.

            So, let’s try to make sense of whether now might be your time.

If you’re renting and have been for some time, you’re probably spending a sizeable amount of money.  A 3 bedroom/2 bath (in my area) is likely costing somewhere between $850 and $1500 per month – or more. 

Everyone knows you could easily buy a house for that payment per month.

The question is, is this the time to rent, or to buy?

Spoiler Alert! Buying Is Not Right For Everyone…

This is a real estate blog, so this might come as a shock to you, but buying is not always the right decision.

Real estate is the biggest single investment most people make.  Don’t buy unless you’ll be in the house long enough to recoup your expenses (closing costs, down payment, etc.) 

However, that will take much less time than you think.  Most people can break even in three to four years. 

Honey, You Have Issues.

            It should come as no surprise that credit issues will prevent you from being able to buy a house.

            If you’ve just gone through a bankruptcy or foreclosure, buying is probably not on the table right now.  But it will be.  Even bankruptcy won’t prevent you from eventually being able to own your own home. 

            If you’re one of those people who just “assumes” you can’t buy because your credit probably isn’t good enough, do yourself a favor. Go see your local lender.  The “local” part is very important. Trust me on this. Getting a pre-approval for a mortgage is a simple process. 

And if you find out you’re not eligible right now, you’ll also find out what to do to turn that situation around.

           

To Buy or Not To Buy… That Is the Question.

            The other side of the coin is that buying is right for many, many people.

           

            *Anyone who has a credit score of at least 640

            *Anyone who is settled in their job and plans to stay in their community

*Anyone who is interested in investing in one of the most reliable investments of all time. Warren Buffet, Dave Ramsey and many more have continued to invest in real estate -- even during the “bust”.

           

Show Me the Money!

According to my handy-dandy mortgage calculator app (Loan Calculator Plus from the app store), if your thirty year loan has an interest rate of 4.25%, your monthly payment of $150,000 house would be less than $1000 per month.  (FYI – 4.25% is actually kind of high.  At 3.65%, that payment would be about $100 less.)

The down payment and closing costs on $150,000 would probably be somewhere upwards of $9000.  And before you panic, a large portion of your closing costs could come from the seller.   

Brand A or Brand B?

Consider this:

If $1000 per month will buy this:

Or $1200 per month will rent this…

At the time of this writing, the top house is listed in this area for $149,500.  The bottom house was just rented for $1200 per month.

This Isn’t Algebra, Is It?

I don’t know about you, but math is not my strong suit.  Fortunately, it doesn’t take Einstein to calculate that if you pay $1200 per month for rent, in three years you’ll have spent $43,200.

On the other side of the scale, if you purchased a home today for $150,000, and your payment is $1000, you’ll still spend $36,000.  That's a lot of money, either way.

 However, if you sell that house for $150,000, or maybe even a bit more, you’ll walk away with a little money to put down on another, bigger house.  In that case, who has benefited from your home ownership?  You have -- in credit worthiness, in quality of life, and more than likely, financially.

And who benefited from your rent for the last three years? 

Your landlord. 

You Need Professional Help….

           

            There are some easy steps to follow to decide if the time is right.

            1.  Get a pre- approval.  Visit a local lender. Talk to someone who understands the process and can help you understand it as well.  While you’re there, ask questions.  What will it cost me at closing?  What will my payment be?  Don’t leave there without getting all your questions answered.

            2.  Search Online.  Take advantage of offers to notify you if something comes on the market that might meet your needs.  It’s free, it’s no commitment and it can actually help you see what’s going on.  After all, the more you know…

            3. Find a realtor.  Pick someone a friend recommends.  Or pick a company that you respect. (Subliminal message:  Pick Paradigm!  Pick Paradigm!)

            The bottom line is Get Professional Help.  You can search online for months at a time, but you’ll never know if you really like a house until you walk through the door. And you’ll need a professional to help you through that strange and intimidating world of contracts, homes inspections, terminations dates, etc.

            4. Make a list. List what’s really important to you.  You might think you can’t live without that pink bathtub, but….

            5. And Get ‘Er Done!  Before some government blockhead raises the interest rate and your $150,000 house payment is $1100… or $1200… or $1300. 

See what I mean?

Timing is Everything!

Especially in hand grenades.  You don’t want those little suckers going off early, do you?