By Robert Jenson (c) 2008
As a homeowner, you play a critical role in the timely sale of yourproperty. Here are 10 tips to help sellers move their homes quickly and withas few setbacks as possible:
1) Do Your Homework Before Hiring a Realtor: Not all agents arecreated equal. Interview at least 3 agents, and come prepared with a listof questions you plan to ask. What is their track record? How do theymarket listings? Do they have a team to help show your home or does theresponsibility fall on one particular agent? Due diligence is key tofinding a representative prepared to work hard and who will be available toanswer your questions along the way.
2) Do Your Paperwork Early: Have listing paperwork and disclosurescompleted at least one-week before your house officially goes on the market.This way your agent can have photos complete, flyers ready, Internet ads upand running, etc. on the very first day your listing hits the market. Alsobe sure to get a copy of your home's MLS listing from your agent so you canavoid a costly error. It's entirely possible a bedroom was missed, orsomething was overlooked. Work as a team to make sure our home's listing isaccurate...and that the description is inspiring!
3) Pre-Inspect the Home: Even before you list your home, hireprofessionals to inspect the home including the roof, pool, and otherstructural elements, as well as for termites and other important buyerconsiderations. Make ALL repairs before you list the house on the market.Today's buyer is discriminating and has many choices - don't give them areason to have concerns. A complete list of the completed inspections andrepairs should be made available to serious buyers, which will go a long wayin expediting the process at large.
4) Stage the Home: Plant fresh flowers, wash the windows and screens,put on a coat of new paint, lay new carpet, add furnishings and décor items,eliminate clutter and remove personal photographs from around the house.It's time to show off your beautiful home and make someone else feelcompletely at home in it. First impressions are critical, so ensure thejunk is packed in boxes, and all boxes are put in storage vs. the garage sothe prospective buyer can properly evaluate and appreciate that part of thehouse, too. Clean out the closets, so they look bigger.
5) Set The Price: Remember you need to "Price to Sell," not "Price toOwn." Remember your goals and why you are moving in the first place. Withthis in mind, price the home at or below market value, not based what youneed, want or were hoping to get. An appraisal can help you discern whatnumber best hits that target.
6) Roll Out The Red Carpet: At all times your home should be ready tobe shown. From the first day your listing hits the market, your beds shouldalways be made, dishes done, socks put in the hamper, toiletries andmedications put away, etc. Be ready for a prospective buyer to walk throughat all times.
7) Showtime: If you know when prospective buyers are going to showup, turn on ALL the lights, open the blinds, light a nice smelling candle,and turn on some mellow music on low volume. In short, set the mood.Appealing to all the senses will leave potential buyers with a good feelingand impression about your home. And, don't hang around. Walk the dog or justtake a walk around the block so the buyers may tour the home unencumbered.Let the professionals do the selling!
8) Feedback: Your agent should be giving you feedback from each andevery showing either he or she makes, or made by other agents. If someonementions pet odors or other such problems, handle it ASAP. If someone seemsto be interested, don't delay as time is your enemy. Strike while the iron'shot and try to make a deal.
9) Think Outside the Box: Consider a "Reverse Offer." Consider thatone buyer who has been back for a second or possible 3rd look, but hasn'tpulled the trigger. Make them an offer! Yes you, as the seller, should putsomething in writing and submit it to the buyer's agent. This will createan opportunity for the buyer's agent to sit down with his or her client andpotentially help close the deal.
10) 4-Week Checkpoint: Still for sale? Time to take a hard look at theprice. Your greatest number of showings will happen within the first 3-4weeks of a listing hitting the market. This is because there is already apool of qualified buyers waiting for new homes to come on the market thatmight match their criteria. So, if you've had no bites by week 4, it's timeto increase your exposure by making a price adjustment. Repeat again every4-weeks, or sooner depending on how urgent or motivated your situation is.
~~~
Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
Wednesday, June 25, 2008
Homeowner Association Due Diligence is Key for Home Buyers
By Robert Jenson (c) 2008
We've all heard tales of woe about "homeowners associations from hell" thatare so militant with enforcing their community's bylaws, the quality of lifefor the home owner is actually diminished.
The Community Associations Institute estimates that nearly one out of everysix Americans lives in a community association and that, in 2007, HOAsgoverned 23.8 million American homes and 58.8 million residents. And withsignificant economic impact, as the institute estimates the real estatevalue of all homes in community associations approaches $4 trillion,approximately 20% of the value of all U.S. residential real estate.
These HOAs have full authority to enforce a development's covenants,conditions, and restrictions (CC&Rs). Before purchasing a condo, townhomeor single family home in a master planned community, it's imperative forprospective buyers to actually read those CC&Rs and understand exactly whatthey encompass to assure they mesh with the buyer's lifestyle and togenerally avoid future hassles.
Below are a few top HOA frequently asked questions and answers to helpwould-be homeowners assure mandates purported to serve the community's bestinterests actually serve their personal best interests:
What are some important questions to ask a HOA before you purchase aresidence?
Before purchasing a condo, townhome or other attached residents, it'simperative to ask a homeowners association about parkinglimitations/restrictions, pet limitations/restrictions with respect toquantity, size and type, restrictions related to outdoordecor/furniture/grilling restrictions (for balcony/patio), and if there areany current outstanding assessments the new owner will be responsible forassuming (on top of normal HOA) and term of those special assessments (1x ofongoing?). Also ask if there is any active litigation, as this may affectbuyer financing, and also indicates possible red flags with property ingeneral you will want your home inspector to do extra due diligence on.
How should you expect the HOA to respond?
HOA should respond to prospective buyer inquiries with full disclosure -meaning they should provide you with all answers you are seeking or, at thevery least, the means for you to find those answers as many will merelydirect the person inquiring to the CCNRs.
What's important to know about published bylaws, covenants and restrictions?
It's important to understand that many aspects of the residence andcommunity property are actually governed, as many vastly underestimate thepower and "reach" of a HOA. Of particular note are any and all bylawentries related to HOA fees and the implications if any given rule is"broken."
Is it wise to ask a lawyer to read over the bylaws/restrictions beforepurchasing the property?
If you have an attorney available, then yes, but no need to hire just forthis purpose unless the development has active litigation going on, in whichcase it would be a good idea to consult with the attorney about thesituation at hand. The attorney could also review the "special assessments"to confirm they do or do not apply to you as a new buyer.
If you don't agree with something in the bylaws/restrictions, do you haveany recourse? Should you consider running for a post on the HOA board so youcan change one or more of these rules?
If you don't agree with HOA bylaws/restrictions, the best recourse is to notbuy the property. If you're flexible on the bylaw and willing to spend thetime and energy required to run for a post on the board, you might be ableto change things once you're a community resident. However, if it'ssomething you feel strongly about at the onset, always go in with theexpectation that "this is the way it is going to be."
Typically, what do monthly HOA assessments/fees cover, at minimum?
HOA fees typically cover common ground concerns such as landscaping, pestcontrol, pool and fitness center maintenance, guard gate/security servicesand common area taxes. They sometimes cover utilities such as trash, wateror cable television.
How often do HOA assessments/fees increase (and at what percentage), so youcan be prepared for rising costs down the road?
As a rule of thumb, HOA fees can change as often as ever 2 to 3 years,usually increasing at a 10% clip (at a minimum). Special assessments mayoccur annually but for different reasons (redoing roofs, new front gates,mailbox upgrades, painting the exteriors, etc.)
Some HOAs get bad publicity for being dictatorial and too restrictive. Whatcan you do to research whether your future HOA has a bad reputation or not?
To find out if a given HOA has a bad reputation, it's always a good idea tospeak with current residents...but don't stop there! Also speak withresidents in neighboring communities who may have heard rumors and may bemore apt to discuss since their community's home resale prospects won't beaffected.
~~~
Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
We've all heard tales of woe about "homeowners associations from hell" thatare so militant with enforcing their community's bylaws, the quality of lifefor the home owner is actually diminished.
The Community Associations Institute estimates that nearly one out of everysix Americans lives in a community association and that, in 2007, HOAsgoverned 23.8 million American homes and 58.8 million residents. And withsignificant economic impact, as the institute estimates the real estatevalue of all homes in community associations approaches $4 trillion,approximately 20% of the value of all U.S. residential real estate.
These HOAs have full authority to enforce a development's covenants,conditions, and restrictions (CC&Rs). Before purchasing a condo, townhomeor single family home in a master planned community, it's imperative forprospective buyers to actually read those CC&Rs and understand exactly whatthey encompass to assure they mesh with the buyer's lifestyle and togenerally avoid future hassles.
Below are a few top HOA frequently asked questions and answers to helpwould-be homeowners assure mandates purported to serve the community's bestinterests actually serve their personal best interests:
What are some important questions to ask a HOA before you purchase aresidence?
Before purchasing a condo, townhome or other attached residents, it'simperative to ask a homeowners association about parkinglimitations/restrictions, pet limitations/restrictions with respect toquantity, size and type, restrictions related to outdoordecor/furniture/grilling restrictions (for balcony/patio), and if there areany current outstanding assessments the new owner will be responsible forassuming (on top of normal HOA) and term of those special assessments (1x ofongoing?). Also ask if there is any active litigation, as this may affectbuyer financing, and also indicates possible red flags with property ingeneral you will want your home inspector to do extra due diligence on.
How should you expect the HOA to respond?
HOA should respond to prospective buyer inquiries with full disclosure -meaning they should provide you with all answers you are seeking or, at thevery least, the means for you to find those answers as many will merelydirect the person inquiring to the CCNRs.
What's important to know about published bylaws, covenants and restrictions?
It's important to understand that many aspects of the residence andcommunity property are actually governed, as many vastly underestimate thepower and "reach" of a HOA. Of particular note are any and all bylawentries related to HOA fees and the implications if any given rule is"broken."
Is it wise to ask a lawyer to read over the bylaws/restrictions beforepurchasing the property?
If you have an attorney available, then yes, but no need to hire just forthis purpose unless the development has active litigation going on, in whichcase it would be a good idea to consult with the attorney about thesituation at hand. The attorney could also review the "special assessments"to confirm they do or do not apply to you as a new buyer.
If you don't agree with something in the bylaws/restrictions, do you haveany recourse? Should you consider running for a post on the HOA board so youcan change one or more of these rules?
If you don't agree with HOA bylaws/restrictions, the best recourse is to notbuy the property. If you're flexible on the bylaw and willing to spend thetime and energy required to run for a post on the board, you might be ableto change things once you're a community resident. However, if it'ssomething you feel strongly about at the onset, always go in with theexpectation that "this is the way it is going to be."
Typically, what do monthly HOA assessments/fees cover, at minimum?
HOA fees typically cover common ground concerns such as landscaping, pestcontrol, pool and fitness center maintenance, guard gate/security servicesand common area taxes. They sometimes cover utilities such as trash, wateror cable television.
How often do HOA assessments/fees increase (and at what percentage), so youcan be prepared for rising costs down the road?
As a rule of thumb, HOA fees can change as often as ever 2 to 3 years,usually increasing at a 10% clip (at a minimum). Special assessments mayoccur annually but for different reasons (redoing roofs, new front gates,mailbox upgrades, painting the exteriors, etc.)
Some HOAs get bad publicity for being dictatorial and too restrictive. Whatcan you do to research whether your future HOA has a bad reputation or not?
To find out if a given HOA has a bad reputation, it's always a good idea tospeak with current residents...but don't stop there! Also speak withresidents in neighboring communities who may have heard rumors and may bemore apt to discuss since their community's home resale prospects won't beaffected.
~~~
Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
Real Estate Commissions Exposed
By Robert Jenson (c) 2008
:::Myths and Truths About Home Sale Commissions:::
A real estate agent's commission as a percent of a property's final saleprice represents thousands upon thousands of dollars. Sellers can andshould leverage this bargaining chip to gain a significant strategicadvantage - or simply ensure they retain as much of the sale proceeds aspossible.
To help sellers make informed decisions, consider the followingcommission-related myths and truths:
Myth: All real estate agents charge the same commission percentageTruth: Not all agents - and agent packages - are created equal. From fullservice agents to discount agencies, make sure you know the type ofprofessional you are hiring and what EXACTLY they are going to do to sellyour home. An agent that can professionally market your home above andbeyond the MLS listing will increase your exposure within the marketplace,which will lead to a higher selling price and less days on the market. Willyour agent incur costs to give your home that visibility? Find out, so thatyou may take everything into consideration when establishing the commissionpercent. Despite what an agent might say otherwise, commissions are always100% negotiable.
Myth: It's admirable when an agent offers to lower his or her commissionTruth: Agents that are quick to cut their fee to keep your business are alsoquick to cut the all-important marketing budget for your home - often attime when it needs it most. If an agent is that amenable to giving awaytheir own money, imagine how quickly they will give away your bottom linewhen negotiating a deal with the buyer's agent purportedly in your bestinterest. Realtors can and should be paid on results. If you're housedoesn't sell, they don't get paid and it's your prerogative to move on toanother representative if need be - it's as simple as that.
Myth: One dedicated agent is better to sell your homeTruth: In real estate, a team approach is far more effective than one lonesoldier for getting the job done expediently. Commonly referred to as a"co-op", ensure your agent is offering other agents a financial incentiveshould they bring in a buyer. Make sure it is at least on par with whatyour competition is offering. You may even want to offer a bonus to enticeother agents to show your home. Ask to see your home's MLS "Detail View,"so that you can make sure your agent isn't decreasing your exposure bywithholding a competitive co-op.
Myth: Agents should set the list price based on the seller's needs, desiresand recommendationTruth: Most agents will know the fair market value for your home in thecontext of current market conditions, but beware an agent willing tooverprice your home. He or she is likely willing to do so not only in anattempt to get the seller their desired bottom line, but also to help themjustify the agent's full commission fee upon signing. A common scenario isthat an agent sets the price at a price higher than is reasonable, knowingit won't sell and anticipating future price reductions - but with the agreedupon commission percent in tact. The overpriced home will likely languishtoo many days on the market, which puts it at a strategic disadvantage andmay ultimately force the home to sell for a lower price than it would haveotherwise. Be wary of agents telling you what you want to hear. Seek out anagent who is honest, even if reality is disappointing.
~~~
Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
:::Myths and Truths About Home Sale Commissions:::
A real estate agent's commission as a percent of a property's final saleprice represents thousands upon thousands of dollars. Sellers can andshould leverage this bargaining chip to gain a significant strategicadvantage - or simply ensure they retain as much of the sale proceeds aspossible.
To help sellers make informed decisions, consider the followingcommission-related myths and truths:
Myth: All real estate agents charge the same commission percentageTruth: Not all agents - and agent packages - are created equal. From fullservice agents to discount agencies, make sure you know the type ofprofessional you are hiring and what EXACTLY they are going to do to sellyour home. An agent that can professionally market your home above andbeyond the MLS listing will increase your exposure within the marketplace,which will lead to a higher selling price and less days on the market. Willyour agent incur costs to give your home that visibility? Find out, so thatyou may take everything into consideration when establishing the commissionpercent. Despite what an agent might say otherwise, commissions are always100% negotiable.
Myth: It's admirable when an agent offers to lower his or her commissionTruth: Agents that are quick to cut their fee to keep your business are alsoquick to cut the all-important marketing budget for your home - often attime when it needs it most. If an agent is that amenable to giving awaytheir own money, imagine how quickly they will give away your bottom linewhen negotiating a deal with the buyer's agent purportedly in your bestinterest. Realtors can and should be paid on results. If you're housedoesn't sell, they don't get paid and it's your prerogative to move on toanother representative if need be - it's as simple as that.
Myth: One dedicated agent is better to sell your homeTruth: In real estate, a team approach is far more effective than one lonesoldier for getting the job done expediently. Commonly referred to as a"co-op", ensure your agent is offering other agents a financial incentiveshould they bring in a buyer. Make sure it is at least on par with whatyour competition is offering. You may even want to offer a bonus to enticeother agents to show your home. Ask to see your home's MLS "Detail View,"so that you can make sure your agent isn't decreasing your exposure bywithholding a competitive co-op.
Myth: Agents should set the list price based on the seller's needs, desiresand recommendationTruth: Most agents will know the fair market value for your home in thecontext of current market conditions, but beware an agent willing tooverprice your home. He or she is likely willing to do so not only in anattempt to get the seller their desired bottom line, but also to help themjustify the agent's full commission fee upon signing. A common scenario isthat an agent sets the price at a price higher than is reasonable, knowingit won't sell and anticipating future price reductions - but with the agreedupon commission percent in tact. The overpriced home will likely languishtoo many days on the market, which puts it at a strategic disadvantage andmay ultimately force the home to sell for a lower price than it would haveotherwise. Be wary of agents telling you what you want to hear. Seek out anagent who is honest, even if reality is disappointing.
~~~
Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
Expert's Top 10 Real Estate Blunders
By Robert Jenson (c) 2008
Buying and selling real estate in today's tumultuous, highly demandingmarketplace is not for the faint of heart. While tricks of the trade aboundto give buyers and sellers a leg up on the competition, there are also anumber of basic pitfalls buyers and sellers should be aware of lest theycommence their real estate venture on shaky ground.
First and foremost, do your homework before hiring a REALTOR®, either as alisting or buyer's agent, as not all are created equal. Interview at least3 real estate professionals, and come prepared with a list of questions youplan to ask. What is their track record? How do they market listings?What services do they provide as a buyer's agent that their competition doesnot? Due diligence is key to finding a representative prepared to work notjust hard - but smart - on your behalf and who will be available to answeryour questions along the way.
For Sellers
It's also wise to have listing paperwork and disclosures completed at leastone-week before your house officially goes on the market. This way youragent can have photos complete, flyers ready, Internet ads up and running,etc. on the very first day your listing hits the market. Also be sure toget a copy of your home's MLS listing from your agent so you can avoid acostly error. It's entirely possible a bedroom was missed, or something wasoverlooked. Work as a team to make sure our home's listing is accurate...andthat the description is inspiring!
Those whose homes have languished on the market for longer than anticipatedshould start thinking outside of the box and contemplate making a "ReverseOffer." Consider that one buyer who has been back for a second or possible3rd look, but hasn't pulled the trigger. Make them an offer! Yes you, asthe seller, should put something in writing and submit it to the buyer'sagent. This will create an opportunity for the buyer's agent to sit downwith his or her client and potentially help close the deal.
House still for sale 4-weeks later? It's time to take a hard look at theprice. Your greatest number of showings will happen within the first 3-4weeks of a listing hitting the market. This is because there is already apool of qualified buyers waiting for new homes to come on the market thatmight match their criteria. So, if you've had no bites by week 4, it's timeto increase your exposure by making a price adjustment. Repeat again every4-weeks, or sooner depending on how urgent or motivated your situation is.
For Buyers
Also early on, if you intend to secure a mortgage loan you'll want to getpre-qualified, which determines how much you can afford. It allows you tomove swiftly when you find the right home - especially when there are otherinterested buyers. It also indicates to the seller that you are serious andcan afford to buy the property. If you plan to cover the transaction incash, you'll then need to provide advance proof of available funds.
Buyers should also spend the time needed to shop for the most favorablerates and terms. A difference of even half a percentage point can mean aconsiderable savings over the life of a loan. For example, the difference inthe monthly payment on a $100,000 mortgage at 8 percent vs. 7.5 percent isabout $35 per month. Over 30 years, that's $12,600.
Once the finances are in order, there are many other things to consider whenbuying a home, including its resale potential. For example, inneighborhoods with attached three-car garages, a two-car or detached garagemay adversely affect the home sale and future value. Number of bedrooms,floorplans, location, and proximity to noisy streets are among other factorsthat can prove problematic for a future sale.
The bottom line? Take a macro approach to evaluating homes before signingon the dotted line.
What blunders should buyers and sellers avoid at all costs? Consider theseall too common property pitfalls:
Buyer:
--Not Getting Loan Pre-Approval: Many buyers want to find the "perfect"home before having their credit pulled, which can backfire when an offer ison the table and time is of the essence. It's wise to get pre-approved fora loan even before you view your first home. Your credit report may containinaccurate information that you were not aware of, which can be a timeconsuming process to rectify. Or, you might not like what loan program youqualify for, or you might qualify for a higher loan value than you thought.Ultimately, you will need a pre-approval letter with your offer, so doyourself a favor and do this in advance. It's free, after all.
--Having Unclear Goals - Create a realistic idea of the property you'd liketo buy. What features are most important to you? Make two lists: one of theitems you can't live without and one of the features you would enjoy. Refinethe lists as the house hunt progresses, but remember that no place is goingto be 100% perfect. It is going to be up to you to put the finishingtouches on and call it home.
--Forgoing Home Inspections - After your offer is accepted, set up a homeinspection. It's not uncommon to find problems, including leaky roofs,cracked walls, insect infestations and foundation problems. Hire a reputableinspector, and negotiate to get you the most for your money once theinspector's report is final. If you negotiate repairs as part of thepurchase, ask for a "walk through" before finalizing the paperwork to assureall issues are resolved to your satisfaction. Also inquire about homeprotection plans as part of the purchase, which may save you money in theshort and long-term future.
--Not Shopping Mortgages - A difference of even half a percentage point canmean a considerable savings over the life of a loan. For example, thedifference in the monthly payment on a $100,000 mortgage at 8 percent vs.7.5 percent is about $35 per month. Over 30 years, that's $12,600. Be asmart consumer and comparison shop for the most favorable mortgage rates andterms.
--Not Using a Buyer's Agent - Purchasing a home could be the most importantand complex financial transaction you engage in, and going it alone isrisky. Indeed, a buyer's agent can save you time, hassle and thousands ofdollars. Take time and care when selecting a real estate buyer's agent -find someone you can trust, and that you have a good rapport with.
Seller:
--Overpricing - Every seller naturally wants to get the most money for hisor her product. The most common mistake that causes sellers to get less thanthey hope for, however, is listing too high. Listings reach the greatestproportion of potential buyers shortly after they reach the market. If aproperty is dismissed as being overpriced early on, it can result in laterprice reductions, which reflect poorly on the listing. Overpriced propertiestend to take an unusually long time to sell, and they end up being sold at alower price than they likely would have had they been priced properly in thefirst place.
--Limiting Showings - Are you serious about selling your home? Then youneed an open door policy and to ensure the home is ready to be shown at thedrop of a hat...even if you're not around. Pack up your valuables andprovide an outdoor lockbox that real estate agents may access at theirdiscretion. Most showings are fairly spur of the moment, and you don't wantto miss out on any qualified prospect.
--Failing to Stage: When attempting to sell your home to prospectivebuyers, do not forget to make your home look as pleasant and fresh aspossible. Plant flowers, wash the windows and screens, put on a coat of newpaint, lay new carpet, add furnishings and décor items, eliminate clutterand remove personal photographs from around the house. It's time to showoff your beautiful home and make someone else feel completely at home in it.First impressions are critical, so ensure the junk is packed in boxes, andall boxes are put in storage vs. the garage so the prospective buyer canproperly evaluate and appreciate that part of the house, too. Clean out theclosets, so they look bigger.
--Offering Repair Credits - Would you buy a Ferrari with bent rims, stainedrugs and cigarette burns in the seats, even if the seller was offering a"repair credit"? Doubtful, as the buyer would have an understandable poorimpression of how the vehicle was treated and assume the worst. When sellinga home, eliminate any need for such credits in advance. Even before you listit for sale, hire professionals to inspect the roof, pool, and otherstructural elements, and for termites and other important buyerconsiderations. Make ALL repairs before you list the house on the market tothwart anticipated objections in advance.
--Being Ill-Informed: It is extremely important that you are well-informedof the details of your real estate contract. Real estate contracts arelegally binding documents, and they can often be complex and confusing. Notbeing aware of the terms in your contract could cost you thousands forrepairs and inspections. Know what you are responsible for before signingany contract. Can the property be sold "as is"? How will deed restrictionsand local zoning laws affect your transaction? Your real estate professionalshould ensure you know the answers to these kinds of questions, which cansave you a considerable amount of money
~~~
Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
Buying and selling real estate in today's tumultuous, highly demandingmarketplace is not for the faint of heart. While tricks of the trade aboundto give buyers and sellers a leg up on the competition, there are also anumber of basic pitfalls buyers and sellers should be aware of lest theycommence their real estate venture on shaky ground.
First and foremost, do your homework before hiring a REALTOR®, either as alisting or buyer's agent, as not all are created equal. Interview at least3 real estate professionals, and come prepared with a list of questions youplan to ask. What is their track record? How do they market listings?What services do they provide as a buyer's agent that their competition doesnot? Due diligence is key to finding a representative prepared to work notjust hard - but smart - on your behalf and who will be available to answeryour questions along the way.
For Sellers
It's also wise to have listing paperwork and disclosures completed at leastone-week before your house officially goes on the market. This way youragent can have photos complete, flyers ready, Internet ads up and running,etc. on the very first day your listing hits the market. Also be sure toget a copy of your home's MLS listing from your agent so you can avoid acostly error. It's entirely possible a bedroom was missed, or something wasoverlooked. Work as a team to make sure our home's listing is accurate...andthat the description is inspiring!
Those whose homes have languished on the market for longer than anticipatedshould start thinking outside of the box and contemplate making a "ReverseOffer." Consider that one buyer who has been back for a second or possible3rd look, but hasn't pulled the trigger. Make them an offer! Yes you, asthe seller, should put something in writing and submit it to the buyer'sagent. This will create an opportunity for the buyer's agent to sit downwith his or her client and potentially help close the deal.
House still for sale 4-weeks later? It's time to take a hard look at theprice. Your greatest number of showings will happen within the first 3-4weeks of a listing hitting the market. This is because there is already apool of qualified buyers waiting for new homes to come on the market thatmight match their criteria. So, if you've had no bites by week 4, it's timeto increase your exposure by making a price adjustment. Repeat again every4-weeks, or sooner depending on how urgent or motivated your situation is.
For Buyers
Also early on, if you intend to secure a mortgage loan you'll want to getpre-qualified, which determines how much you can afford. It allows you tomove swiftly when you find the right home - especially when there are otherinterested buyers. It also indicates to the seller that you are serious andcan afford to buy the property. If you plan to cover the transaction incash, you'll then need to provide advance proof of available funds.
Buyers should also spend the time needed to shop for the most favorablerates and terms. A difference of even half a percentage point can mean aconsiderable savings over the life of a loan. For example, the difference inthe monthly payment on a $100,000 mortgage at 8 percent vs. 7.5 percent isabout $35 per month. Over 30 years, that's $12,600.
Once the finances are in order, there are many other things to consider whenbuying a home, including its resale potential. For example, inneighborhoods with attached three-car garages, a two-car or detached garagemay adversely affect the home sale and future value. Number of bedrooms,floorplans, location, and proximity to noisy streets are among other factorsthat can prove problematic for a future sale.
The bottom line? Take a macro approach to evaluating homes before signingon the dotted line.
What blunders should buyers and sellers avoid at all costs? Consider theseall too common property pitfalls:
Buyer:
--Not Getting Loan Pre-Approval: Many buyers want to find the "perfect"home before having their credit pulled, which can backfire when an offer ison the table and time is of the essence. It's wise to get pre-approved fora loan even before you view your first home. Your credit report may containinaccurate information that you were not aware of, which can be a timeconsuming process to rectify. Or, you might not like what loan program youqualify for, or you might qualify for a higher loan value than you thought.Ultimately, you will need a pre-approval letter with your offer, so doyourself a favor and do this in advance. It's free, after all.
--Having Unclear Goals - Create a realistic idea of the property you'd liketo buy. What features are most important to you? Make two lists: one of theitems you can't live without and one of the features you would enjoy. Refinethe lists as the house hunt progresses, but remember that no place is goingto be 100% perfect. It is going to be up to you to put the finishingtouches on and call it home.
--Forgoing Home Inspections - After your offer is accepted, set up a homeinspection. It's not uncommon to find problems, including leaky roofs,cracked walls, insect infestations and foundation problems. Hire a reputableinspector, and negotiate to get you the most for your money once theinspector's report is final. If you negotiate repairs as part of thepurchase, ask for a "walk through" before finalizing the paperwork to assureall issues are resolved to your satisfaction. Also inquire about homeprotection plans as part of the purchase, which may save you money in theshort and long-term future.
--Not Shopping Mortgages - A difference of even half a percentage point canmean a considerable savings over the life of a loan. For example, thedifference in the monthly payment on a $100,000 mortgage at 8 percent vs.7.5 percent is about $35 per month. Over 30 years, that's $12,600. Be asmart consumer and comparison shop for the most favorable mortgage rates andterms.
--Not Using a Buyer's Agent - Purchasing a home could be the most importantand complex financial transaction you engage in, and going it alone isrisky. Indeed, a buyer's agent can save you time, hassle and thousands ofdollars. Take time and care when selecting a real estate buyer's agent -find someone you can trust, and that you have a good rapport with.
Seller:
--Overpricing - Every seller naturally wants to get the most money for hisor her product. The most common mistake that causes sellers to get less thanthey hope for, however, is listing too high. Listings reach the greatestproportion of potential buyers shortly after they reach the market. If aproperty is dismissed as being overpriced early on, it can result in laterprice reductions, which reflect poorly on the listing. Overpriced propertiestend to take an unusually long time to sell, and they end up being sold at alower price than they likely would have had they been priced properly in thefirst place.
--Limiting Showings - Are you serious about selling your home? Then youneed an open door policy and to ensure the home is ready to be shown at thedrop of a hat...even if you're not around. Pack up your valuables andprovide an outdoor lockbox that real estate agents may access at theirdiscretion. Most showings are fairly spur of the moment, and you don't wantto miss out on any qualified prospect.
--Failing to Stage: When attempting to sell your home to prospectivebuyers, do not forget to make your home look as pleasant and fresh aspossible. Plant flowers, wash the windows and screens, put on a coat of newpaint, lay new carpet, add furnishings and décor items, eliminate clutterand remove personal photographs from around the house. It's time to showoff your beautiful home and make someone else feel completely at home in it.First impressions are critical, so ensure the junk is packed in boxes, andall boxes are put in storage vs. the garage so the prospective buyer canproperly evaluate and appreciate that part of the house, too. Clean out theclosets, so they look bigger.
--Offering Repair Credits - Would you buy a Ferrari with bent rims, stainedrugs and cigarette burns in the seats, even if the seller was offering a"repair credit"? Doubtful, as the buyer would have an understandable poorimpression of how the vehicle was treated and assume the worst. When sellinga home, eliminate any need for such credits in advance. Even before you listit for sale, hire professionals to inspect the roof, pool, and otherstructural elements, and for termites and other important buyerconsiderations. Make ALL repairs before you list the house on the market tothwart anticipated objections in advance.
--Being Ill-Informed: It is extremely important that you are well-informedof the details of your real estate contract. Real estate contracts arelegally binding documents, and they can often be complex and confusing. Notbeing aware of the terms in your contract could cost you thousands forrepairs and inspections. Know what you are responsible for before signingany contract. Can the property be sold "as is"? How will deed restrictionsand local zoning laws affect your transaction? Your real estate professionalshould ensure you know the answers to these kinds of questions, which cansave you a considerable amount of money
~~~
Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
The 7 Deadly Home Sale Sins... and Virtues that Cultivate a Rapid, Profitable Transaction
By Robert Jenson (c) 2008
Selling a home expediently and profitably takes far more than faith...ittakes keen insight. Successful real estate ventures don't happen "on a wingand a prayer," but rather by knowing what specific pitfalls to avoid inworking toward closing a heavenly deal.
Homeowners play a critical role in the timely sale of their property - theextent to which most don't appreciate or vastly underestimate. While a realestate agent is essential to ensure you get the best price for your homeamid current market conditions and with as few hassles as possible, sellersthemselves are integral in moving their homes quickly and efficiently.
Even before you list your home, hire professionals to inspect the homeincluding the roof, pool, and other structural elements, as well as fortermites and other important buyer considerations. Make ALL repairs beforeyou list the house on the market. Today's buyer is discriminating and hasmany choices - don't give them a reason to have concerns. A complete listof the completed inspections and repairs should be made available to seriousbuyers, which will go a long way in expediting the process at large.
First and foremost when you're ready to list, remember you need to "Price toSell," not "Price to Own." Remember your goals and why you are moving inthe first place. With this in mind, price the home at or below marketvalue, not based what you need, want or were hoping to get. An appraisalcan help you discern what number best hits that target.
"Staging" the home is another consideration that is often overlooked. Plantfresh flowers, wash the windows and screens, put on a coat of new paint, laynew carpet, add furnishings and décor items, eliminate clutter and removepersonal photographs from around the house. It's time to show off yourbeautiful home and make someone else feel completely at home in it. Firstimpressions are critical, so ensure the junk is packed in boxes, and allboxes are put in storage vs. the garage so the prospective buyer canproperly evaluate and appreciate that part of the house, too. Clean out theclosets, so they look bigger.
Once staged, be prepared to show your home at all times - even at the dropof a hat should a prospective buyer be "in the neighborhood." From thefirst day your listing hits the market, your beds should always be made,dishes done, socks put in the hamper, toiletries and medications put away,etc. Be ready for a possible buyer to walk through at all times.
If you know when prospective buyers are going to show up, turn on ALL thelights, open the blinds, light a nice smelling candle, and turn on somemellow music on low volume. In short, set the mood. Appealing to all thesenses will leave potential buyers with a good feeling and impression aboutyour home. And, don't hang around. Walk the dog or just take a walk aroundthe block so the buyers may tour the home unencumbered. Let theprofessionals do the selling!
Your agent should be giving you feedback from each and every showing eitherhe or she makes, or made by other agents. If someone mentions pet odors orother such problems, handle it as soon as possible. If someone seems to beinterested, don't delay as time is your enemy.
Strike while the iron's hot and try to make a deal.
The following list of "7 Deadly Home Sale Sins" details key offenses sellersshould avoid at all costs to get on the path toward the promise land ofprofitability:
1. Pride. Buying a house is always an emotional and difficult decision. Asa result, resist the urge to "hard sell" and excessively boast about yourproperty, instead allowing prospective buyers to comfortably examine yourhome - without you present if at all possible. If you're there, while aprospective buyer is inspecting, don't try haggling or forcefully sellingbased on your subjective views of how great your home is. Instead, befriendly and hospitable and largely out of sight. Pointing out any unnoticedenhancements and amenities is fine. Being receptive to questions isadvisable, but this is not the time for negotiation and salesmanship.
2. Envy. Don't be jealous of what the other homes in the neighborhood soldfor, as the intention to fare better financially with your real estatetransaction than others have realized in your community can - and will -negatively impact your judgment and objectivity as it relates to YOUR homesale. As most markets have declined over the past couple years, it is verycommon for sellers to covet what others have garnered in the past. Currentmarket conditions play a large role in setting the sale price, so ratherthan reviewing sales over previous months and years it's wise to considerthe currently available inventory of homes comparable to yours relative topricing, days on market and other such indicators.
3. Anger. If an offer comes in lower - way lower - than expected, stay cooland consider the opportunity for what its worth. Don't let a low offerinsult and anger you to the extent that your objectivity is impaired and yourender an emotion-driven response. Indeed, don't let a bout of righteousnesscloud your judgment in considering all of your options. Many deals cometogether that, at first, seem unlikely to have a chance. When that lowoffers comes in, appreciate that someone has thrown their hat into the ring.Continue sending counter offers until both you and the prospective buyerfind some kind of middle ground...or you feel it's time to fish or cut bait.
4. Greed. Every seller naturally wants to get the most money for his or herproduct. The most common mistake that causes sellers to get less than theyhope for, however, is listing too high. Listings reach the greatestproportion of potential buyers shortly after they reach the market. If aproperty is dismissed as being overpriced early on, it can result in laterprice reductions, which reflect poorly on the listing. Overpriced propertiestend to take an unusually long time to sell, and they end up being sold at alower price than they likely would have had they been priced properly in thefirst place.
5. Sloth. Simply put, complacency and laziness have no place whatsoever inthe high stakes game of real estate. When attempting to sell your home toprospective buyers, ensure your home looks as clean, tidy and generallypleasant as possible. Make sure everything looks presentable at all times sothat you're ready for last-minute showings. Remove as many personalpossessions as you can from around the home, including photographs, so theprospect can better envision themselves living in the space. A poorly kepthome, or one with too much clutter, will make it dramatically more difficultfor buyers to become emotionally interested in your property.
6. Gluttony. When selling a home, resist the urge to be penny wise andpound foolish. You may need to spend some money in order for the property torealize its full sales revenue potential. Even before you list your home,hire professionals to inspect the roof, pool, and other structural elements,and for termites and other important buyer considerations. Make ALL repairsbefore you list the house on the market. Also, don't forget to stage thehome. Plant fresh flowers, apply a coat of new paint, lay new carpet, addfurnishings and décor items. Today's buyer is discriminating and has manychoices - don't give them a reason to have concerns. Make the best firstimpression possible.
7. Lust. An overly intense desire to secure a specific, non-negotiable saleprice can - and will - adversely impact your home sale. Sellers shouldalways be willing to negotiate price with a prospective buyer, and resistthe urge to improve their profit margin by cutting corners or generallyover-pricing With such price flexibility and a competitively pricedlisting, the house languish too many days on the market, which puts it at astrategic disadvantage and may ultimately force the home to sell for a lowerprice than it would have otherwise.
~~~
Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
Selling a home expediently and profitably takes far more than faith...ittakes keen insight. Successful real estate ventures don't happen "on a wingand a prayer," but rather by knowing what specific pitfalls to avoid inworking toward closing a heavenly deal.
Homeowners play a critical role in the timely sale of their property - theextent to which most don't appreciate or vastly underestimate. While a realestate agent is essential to ensure you get the best price for your homeamid current market conditions and with as few hassles as possible, sellersthemselves are integral in moving their homes quickly and efficiently.
Even before you list your home, hire professionals to inspect the homeincluding the roof, pool, and other structural elements, as well as fortermites and other important buyer considerations. Make ALL repairs beforeyou list the house on the market. Today's buyer is discriminating and hasmany choices - don't give them a reason to have concerns. A complete listof the completed inspections and repairs should be made available to seriousbuyers, which will go a long way in expediting the process at large.
First and foremost when you're ready to list, remember you need to "Price toSell," not "Price to Own." Remember your goals and why you are moving inthe first place. With this in mind, price the home at or below marketvalue, not based what you need, want or were hoping to get. An appraisalcan help you discern what number best hits that target.
"Staging" the home is another consideration that is often overlooked. Plantfresh flowers, wash the windows and screens, put on a coat of new paint, laynew carpet, add furnishings and décor items, eliminate clutter and removepersonal photographs from around the house. It's time to show off yourbeautiful home and make someone else feel completely at home in it. Firstimpressions are critical, so ensure the junk is packed in boxes, and allboxes are put in storage vs. the garage so the prospective buyer canproperly evaluate and appreciate that part of the house, too. Clean out theclosets, so they look bigger.
Once staged, be prepared to show your home at all times - even at the dropof a hat should a prospective buyer be "in the neighborhood." From thefirst day your listing hits the market, your beds should always be made,dishes done, socks put in the hamper, toiletries and medications put away,etc. Be ready for a possible buyer to walk through at all times.
If you know when prospective buyers are going to show up, turn on ALL thelights, open the blinds, light a nice smelling candle, and turn on somemellow music on low volume. In short, set the mood. Appealing to all thesenses will leave potential buyers with a good feeling and impression aboutyour home. And, don't hang around. Walk the dog or just take a walk aroundthe block so the buyers may tour the home unencumbered. Let theprofessionals do the selling!
Your agent should be giving you feedback from each and every showing eitherhe or she makes, or made by other agents. If someone mentions pet odors orother such problems, handle it as soon as possible. If someone seems to beinterested, don't delay as time is your enemy.
Strike while the iron's hot and try to make a deal.
The following list of "7 Deadly Home Sale Sins" details key offenses sellersshould avoid at all costs to get on the path toward the promise land ofprofitability:
1. Pride. Buying a house is always an emotional and difficult decision. Asa result, resist the urge to "hard sell" and excessively boast about yourproperty, instead allowing prospective buyers to comfortably examine yourhome - without you present if at all possible. If you're there, while aprospective buyer is inspecting, don't try haggling or forcefully sellingbased on your subjective views of how great your home is. Instead, befriendly and hospitable and largely out of sight. Pointing out any unnoticedenhancements and amenities is fine. Being receptive to questions isadvisable, but this is not the time for negotiation and salesmanship.
2. Envy. Don't be jealous of what the other homes in the neighborhood soldfor, as the intention to fare better financially with your real estatetransaction than others have realized in your community can - and will -negatively impact your judgment and objectivity as it relates to YOUR homesale. As most markets have declined over the past couple years, it is verycommon for sellers to covet what others have garnered in the past. Currentmarket conditions play a large role in setting the sale price, so ratherthan reviewing sales over previous months and years it's wise to considerthe currently available inventory of homes comparable to yours relative topricing, days on market and other such indicators.
3. Anger. If an offer comes in lower - way lower - than expected, stay cooland consider the opportunity for what its worth. Don't let a low offerinsult and anger you to the extent that your objectivity is impaired and yourender an emotion-driven response. Indeed, don't let a bout of righteousnesscloud your judgment in considering all of your options. Many deals cometogether that, at first, seem unlikely to have a chance. When that lowoffers comes in, appreciate that someone has thrown their hat into the ring.Continue sending counter offers until both you and the prospective buyerfind some kind of middle ground...or you feel it's time to fish or cut bait.
4. Greed. Every seller naturally wants to get the most money for his or herproduct. The most common mistake that causes sellers to get less than theyhope for, however, is listing too high. Listings reach the greatestproportion of potential buyers shortly after they reach the market. If aproperty is dismissed as being overpriced early on, it can result in laterprice reductions, which reflect poorly on the listing. Overpriced propertiestend to take an unusually long time to sell, and they end up being sold at alower price than they likely would have had they been priced properly in thefirst place.
5. Sloth. Simply put, complacency and laziness have no place whatsoever inthe high stakes game of real estate. When attempting to sell your home toprospective buyers, ensure your home looks as clean, tidy and generallypleasant as possible. Make sure everything looks presentable at all times sothat you're ready for last-minute showings. Remove as many personalpossessions as you can from around the home, including photographs, so theprospect can better envision themselves living in the space. A poorly kepthome, or one with too much clutter, will make it dramatically more difficultfor buyers to become emotionally interested in your property.
6. Gluttony. When selling a home, resist the urge to be penny wise andpound foolish. You may need to spend some money in order for the property torealize its full sales revenue potential. Even before you list your home,hire professionals to inspect the roof, pool, and other structural elements,and for termites and other important buyer considerations. Make ALL repairsbefore you list the house on the market. Also, don't forget to stage thehome. Plant fresh flowers, apply a coat of new paint, lay new carpet, addfurnishings and décor items. Today's buyer is discriminating and has manychoices - don't give them a reason to have concerns. Make the best firstimpression possible.
7. Lust. An overly intense desire to secure a specific, non-negotiable saleprice can - and will - adversely impact your home sale. Sellers shouldalways be willing to negotiate price with a prospective buyer, and resistthe urge to improve their profit margin by cutting corners or generallyover-pricing With such price flexibility and a competitively pricedlisting, the house languish too many days on the market, which puts it at astrategic disadvantage and may ultimately force the home to sell for a lowerprice than it would have otherwise.
~~~
Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
8 Key Considerations for Pricing Residential Real Estate to Sell, Not Own
By Robert Jenson (c) 2008
Most sellers have an emotional connection to their home and feel it deservestop dollar when being sold. Everyone naturally wants to get the most moneyfor his or her product, but "sellers must not be hasty with thisall-important decision," cautions real estate expert Robert Jenson, founderand CEO of The Jenson Group. "Indeed, the most common mistake that causessellers to get less than they hope for is listing the sale price too high."
Jenson notes, "Listings reach the greatest proportion of potential buyerswithin the initial days and weeks after hitting the market. If a property isoverpriced early on, it will be dismissed - or outright missed - byprospective buyers and may result in price reductions that will reflectpoorly on the listing. Overpriced properties languish on the market, andmost end up selling at a lower price than would have been realized had itbeen priced properly in the first place."
To help would-be sellers foster maximum profits with their real estatetransaction, one must consider a combination of elements - most namely thoselisted below - to establish a fair, competitive and marketable sale pricefor a home:
Square footage: Total square footage is an important consideration whenestablishing a home's sale price, but this is usually just a starting pointfor buyers who will use it to narrow down the field, but make an actualpurchase decision based on many other factors. There are some general rulesof thumb to know when considering a home's price per square foot, such assmaller homes generally get a higher price/foot than large homes, and singlestories will sell for a higher price/foot than a two story.
Location within community: Homes that back up to a busy street get, onaverage, 10-20% less than homes elsewhere in a neighborhood. Anticipate thistype of obstacle and factor it into the original sale price to avoidinevitable price reductions down the road, which reflect poorly on thelisting and will likely cause it to sell at a lower price than would havebeen realized had it been priced properly at the onset. Quiet cul-de sacs,golf or water frontage, lots that offer privacy are value adds that cancertainly justify a higher sale price than other homes in a community - orbe leveraged as an advantage against competing listings.
Views...or lack thereof: Whether it is the ocean, a downtown skyline, themountains, water or some other desirable landscape, buyers are willing topay a premium for views and a home should be priced accordingly. Just berealistic. A view that can only be had by standing on the counter from thesecond story looking out the window to the left simply doesn't count, andit's inadvisable to dupe a prospective buyer by adding this to the listing'sMLS description.
Upgrades and features: It's a simple formula: upgrades = sold. For a hometo sell quickly and for the price desired, it must be "finished" with asmany structural and interior design upgrades as possible...and nothing's toosmall to leverage in establishing a home's price point. From crown moldingto faux paining to door handles and cabinet handles/knobs with modernfinishes, to more obvious upgrades such as appliances, window, counter,cabinet and floor treatments, to swimming pools and surround soundwiring...any functional or beautification enhancement to a home areconsiderations in establishing its true value and strategic sale price.
Community amenities: Guard-gated communities or those with amenities suchas a clubhouse, swimming pool and/or fitness center are also elements thatoften raise a home's price per square foot. When pricing a home withoutthese benefits, know whether you are competing against other homes that dooffer such value adds so that you can price your home as aggressively andcompetitively as possible.
Comparable sales: Price your home referencing sold comparables -price persquare footage of other homes that have already sold in your community - upto 3-months old maximum, as looking beyond 3-months is simply not arealistic portrayal of current market conditions and may steer you in awrong direction. It's also as important to compare your listing to activecompeting listings - homes currently for sale, which is the best tool forhoning an effective pricing strategy - particularly for highly motivatedsellers.
Professional appraisal: Sellers often frown on the idea of paying for anappraisal before there's even an offer on the table, but doing so isactually one of the most important things a seller can do in pricing a homerelative to current market conditions. Want to sell the home quickly? Priceit at or below the appraised value as buyers are educated, are shoppingdeals, and will recognize your fair price and be more apt to pay it withless haggling.
Current mortgage conditions: The current mortgage market has tightened itsproverbial belt and many lenders now require higher credit scores coupledwith higher down payments, which can cash strap a buyer who will mostdefinitely be holding out for the best deal possible. Every seller naturallywants to get the most money for his or her product, but a savvy seller willunderstand the mortgage industry's impact on the buyer and will priceaccordingly.
~~~
Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
Most sellers have an emotional connection to their home and feel it deservestop dollar when being sold. Everyone naturally wants to get the most moneyfor his or her product, but "sellers must not be hasty with thisall-important decision," cautions real estate expert Robert Jenson, founderand CEO of The Jenson Group. "Indeed, the most common mistake that causessellers to get less than they hope for is listing the sale price too high."
Jenson notes, "Listings reach the greatest proportion of potential buyerswithin the initial days and weeks after hitting the market. If a property isoverpriced early on, it will be dismissed - or outright missed - byprospective buyers and may result in price reductions that will reflectpoorly on the listing. Overpriced properties languish on the market, andmost end up selling at a lower price than would have been realized had itbeen priced properly in the first place."
To help would-be sellers foster maximum profits with their real estatetransaction, one must consider a combination of elements - most namely thoselisted below - to establish a fair, competitive and marketable sale pricefor a home:
Square footage: Total square footage is an important consideration whenestablishing a home's sale price, but this is usually just a starting pointfor buyers who will use it to narrow down the field, but make an actualpurchase decision based on many other factors. There are some general rulesof thumb to know when considering a home's price per square foot, such assmaller homes generally get a higher price/foot than large homes, and singlestories will sell for a higher price/foot than a two story.
Location within community: Homes that back up to a busy street get, onaverage, 10-20% less than homes elsewhere in a neighborhood. Anticipate thistype of obstacle and factor it into the original sale price to avoidinevitable price reductions down the road, which reflect poorly on thelisting and will likely cause it to sell at a lower price than would havebeen realized had it been priced properly at the onset. Quiet cul-de sacs,golf or water frontage, lots that offer privacy are value adds that cancertainly justify a higher sale price than other homes in a community - orbe leveraged as an advantage against competing listings.
Views...or lack thereof: Whether it is the ocean, a downtown skyline, themountains, water or some other desirable landscape, buyers are willing topay a premium for views and a home should be priced accordingly. Just berealistic. A view that can only be had by standing on the counter from thesecond story looking out the window to the left simply doesn't count, andit's inadvisable to dupe a prospective buyer by adding this to the listing'sMLS description.
Upgrades and features: It's a simple formula: upgrades = sold. For a hometo sell quickly and for the price desired, it must be "finished" with asmany structural and interior design upgrades as possible...and nothing's toosmall to leverage in establishing a home's price point. From crown moldingto faux paining to door handles and cabinet handles/knobs with modernfinishes, to more obvious upgrades such as appliances, window, counter,cabinet and floor treatments, to swimming pools and surround soundwiring...any functional or beautification enhancement to a home areconsiderations in establishing its true value and strategic sale price.
Community amenities: Guard-gated communities or those with amenities suchas a clubhouse, swimming pool and/or fitness center are also elements thatoften raise a home's price per square foot. When pricing a home withoutthese benefits, know whether you are competing against other homes that dooffer such value adds so that you can price your home as aggressively andcompetitively as possible.
Comparable sales: Price your home referencing sold comparables -price persquare footage of other homes that have already sold in your community - upto 3-months old maximum, as looking beyond 3-months is simply not arealistic portrayal of current market conditions and may steer you in awrong direction. It's also as important to compare your listing to activecompeting listings - homes currently for sale, which is the best tool forhoning an effective pricing strategy - particularly for highly motivatedsellers.
Professional appraisal: Sellers often frown on the idea of paying for anappraisal before there's even an offer on the table, but doing so isactually one of the most important things a seller can do in pricing a homerelative to current market conditions. Want to sell the home quickly? Priceit at or below the appraised value as buyers are educated, are shoppingdeals, and will recognize your fair price and be more apt to pay it withless haggling.
Current mortgage conditions: The current mortgage market has tightened itsproverbial belt and many lenders now require higher credit scores coupledwith higher down payments, which can cash strap a buyer who will mostdefinitely be holding out for the best deal possible. Every seller naturallywants to get the most money for his or her product, but a savvy seller willunderstand the mortgage industry's impact on the buyer and will priceaccordingly.
~~~
Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
Often Overlooked Considerations for Home Buyers
By Robert Jenson (c) 2008
Amid a glut of large, more obvious decisions that need to be made whenbuying a home, there are a litany of smaller considerations that should alsobe taken into account before signing on the dotted line.
To help would-be homeowners make more informed decisions here are some oftenoverlooked real estate concerns to consider:
Home Orientation - To minimize electric bills and direct sunlight degradinghome furnishings and décor, it's important to consider which direction ahome's backyard sliders and larger windows face. West-facing back yardsreceive the most direct sunlight and, hence, heat and UV ray exposure.
Energy Efficiency - Dual pain windows with a vacuum in the middle, such asLOW - E, can go a long way to reduce a home's energy usage and electricbills. Interior and/or exterior window treatments are another important wayto keep heat out and protect the home's interior contents - valuablefurniture, carpets, rugs, and art work - against sun damage.
Seasonal Expenses - While home buyers should estimate the annualized coststo cool a home during the hot spring and summer months, they should alsoconsider what it will cost to winterize the home, such as ensuring exposedpipes, pool equipment and other outdoor plumbing fixtures are appropriatelyshielded.
Water - Many areas have hard, highly mineralized water that is tough onclothes, dishes and pipes, among other things, so a water softener will beneeded if the home does not have one already. And, if it doesn't, ensure theinspector assesses the plumbing very carefully. Also, unless the buyer wantstheir water to taste like coins, they're wise to install a reverse osmosiswater purification system hard plumbed into both the sink and therefrigerator in-door water dispenser and ice maker.
Landscaping - One should not underestimate the extent to which trees, shrubsand lawns will need to be watered and otherwise maintained. Those landscapeswith native trees and shrubs will minimize water usage and, thus, costs,while a lush lawn will require much more effort and expense to maintain. It'salso imperative to know what the watering guidelines and/or restrictions arein the area to conserve water and avoid fines.
Pest Extermination - Simply put, it's mandatory to hire a professional toensure the residence remains as bug-free as possible. From spiders to antsto roaches to bees among other creepy crawlers, bugs are one sure fire wayto undermine a home's enjoyment factor, not to mention the resident's safetyand well-being from those pests packing a poisonous punch.
Pets - Dogs and cats that spend time outdoors are also greatly affected byharsh sun, wind and cold weather extremes. It's important to ensure thesepets will have a shady, sheltered reprieve from these elements also withaccess to ample water. Hot concrete and tiled patios can burn an animal'svery sensitive paws, so lay area rugs where it's feasible.
Pool Safety - For homes with pools, safety is a top priority.particularlyfor those families with pets and small children. Aside from a smaller, moreflexible safety gate one might erect, understand that in many states the lawrequires a 5-foot barrier to separate your pool from neighboring yards. Itit's not already there, one will need to be constructed.
Property Taxes - When calculating mortgage and other significanthome-related expenses, be sure to include property taxes. They will likelybe more - potentially far more - than what the current owner is paying asthis tax is based upon a percentage of the home's most recent sale price andassessed land value. Neglecting to include this in your budgetconsiderations is a costly mistake.
Resale Potential - There are many things to consider when buying a home, notthe least of which is its resale potential. For example, in neighborhoodswith attached three-car garages, a two-car or detached garage may adverselyaffect the home sale and future value. Number of bedrooms, floorplans,location, and proximity to noisy streets are among other factors that canprove problematic for a future sale. No matter how much you love a home, don'tlose sight of the fact that it's potentially the largest investment youmight make in your lifetime.
~~~
Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
Amid a glut of large, more obvious decisions that need to be made whenbuying a home, there are a litany of smaller considerations that should alsobe taken into account before signing on the dotted line.
To help would-be homeowners make more informed decisions here are some oftenoverlooked real estate concerns to consider:
Home Orientation - To minimize electric bills and direct sunlight degradinghome furnishings and décor, it's important to consider which direction ahome's backyard sliders and larger windows face. West-facing back yardsreceive the most direct sunlight and, hence, heat and UV ray exposure.
Energy Efficiency - Dual pain windows with a vacuum in the middle, such asLOW - E, can go a long way to reduce a home's energy usage and electricbills. Interior and/or exterior window treatments are another important wayto keep heat out and protect the home's interior contents - valuablefurniture, carpets, rugs, and art work - against sun damage.
Seasonal Expenses - While home buyers should estimate the annualized coststo cool a home during the hot spring and summer months, they should alsoconsider what it will cost to winterize the home, such as ensuring exposedpipes, pool equipment and other outdoor plumbing fixtures are appropriatelyshielded.
Water - Many areas have hard, highly mineralized water that is tough onclothes, dishes and pipes, among other things, so a water softener will beneeded if the home does not have one already. And, if it doesn't, ensure theinspector assesses the plumbing very carefully. Also, unless the buyer wantstheir water to taste like coins, they're wise to install a reverse osmosiswater purification system hard plumbed into both the sink and therefrigerator in-door water dispenser and ice maker.
Landscaping - One should not underestimate the extent to which trees, shrubsand lawns will need to be watered and otherwise maintained. Those landscapeswith native trees and shrubs will minimize water usage and, thus, costs,while a lush lawn will require much more effort and expense to maintain. It'salso imperative to know what the watering guidelines and/or restrictions arein the area to conserve water and avoid fines.
Pest Extermination - Simply put, it's mandatory to hire a professional toensure the residence remains as bug-free as possible. From spiders to antsto roaches to bees among other creepy crawlers, bugs are one sure fire wayto undermine a home's enjoyment factor, not to mention the resident's safetyand well-being from those pests packing a poisonous punch.
Pets - Dogs and cats that spend time outdoors are also greatly affected byharsh sun, wind and cold weather extremes. It's important to ensure thesepets will have a shady, sheltered reprieve from these elements also withaccess to ample water. Hot concrete and tiled patios can burn an animal'svery sensitive paws, so lay area rugs where it's feasible.
Pool Safety - For homes with pools, safety is a top priority.particularlyfor those families with pets and small children. Aside from a smaller, moreflexible safety gate one might erect, understand that in many states the lawrequires a 5-foot barrier to separate your pool from neighboring yards. Itit's not already there, one will need to be constructed.
Property Taxes - When calculating mortgage and other significanthome-related expenses, be sure to include property taxes. They will likelybe more - potentially far more - than what the current owner is paying asthis tax is based upon a percentage of the home's most recent sale price andassessed land value. Neglecting to include this in your budgetconsiderations is a costly mistake.
Resale Potential - There are many things to consider when buying a home, notthe least of which is its resale potential. For example, in neighborhoodswith attached three-car garages, a two-car or detached garage may adverselyaffect the home sale and future value. Number of bedrooms, floorplans,location, and proximity to noisy streets are among other factors that canprove problematic for a future sale. No matter how much you love a home, don'tlose sight of the fact that it's potentially the largest investment youmight make in your lifetime.
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Please contact me, Robert Jenson, for more information on this or any otherreal estate related matter at Rob@TheJensonGroup.com or through my Web sitelocated at www.TheJensonGroup.com.
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