Friday, September 30, 2011

5 Home Improvement Projects That Will Get You Top Dollar For Your Home

It’s a highly competitive market for home sellers right now. More homes to compete with means that the impression your homes makes - from the curb, and on the inside - matter now more than ever. You can increase your chances of selling faster - and at today’s top dollar - by investing in a select few home improvement projects that have been shown to make a big impact on buyers.

Bad news alert: it might cost you a little time, effort and cash. The good news, though, is that the best projects for quickly increasing your home’s resale value tend to be cosmetic and fairly simple and inexpensive to do. Here are five projects with big-time return on investment for home sellers-to-be, in terms of their power to attract buyers, and to attract dollars from those buyers.

1. Painting: Adding a fresh coat of paint to ceilings and walls is a tried and true way to increase your home’s appeal to buyers. Go for white or neutral tones that help lighten your rooms. (Now is not the time to show off your fascination with fuschia and lime green.) Buyers will have an easier time envisioning how they will infuse their own personalities into your home if they’re looking at a relatively blank slate.

Painting lightens and brightens rooms, instantly removes scuffs and dings and gives every room a fresh, polished feel.

Fresh exterior paint - even if your time or cash budget limits your efforts to accents like eaves, shutters, doors and trims - is also a quick, inexpensive way to polish the look of your home from the curb.

2. Landscaping: Everything you’ve heard about curb appeal is true. First impressions matter - especially if your house is one of eight or nine a buyer has seen in one day. Buyers will be more excited to look at the inside your home if the outside looks clean, charming and inviting. Mow the lawn, trim the hedges, pull the weeds and plant some flowers, bushes or shrubs for the biggest impact - and be diligent about keeping your landscaping very well-manicured throughout the time your home is on the market.

Be sure to keep it low-key, relatively low maintenance and neutral, though. This is not the time to indulge your personal fantasies of living in an exotic paradise, unless that matches the existing look and feel of your home, nor is it the time to install a time-intensive English garden that buyers will love, but not want to take on. Think clean, simple and elegant for the biggest boost in value.

3. Cleaning and de-cluttering: Start by removing all your family photos from the walls and all sorts of tchochkes and clutter from the tops of tables, desks, dressers and counters. Buyers want to be able to envision their lives in the house, not yours. Personal items - and the visual clutter they create - have been shown time and time again to block buyers’ ability to create this vision.

Also, remember that buyers are coming to see the house and evaluate its space, not to bear witness to all the fabulous furniture that means so much to you (no matter how amazing your personal taste). Remove furniture that takes up too much space and fills up rooms. Get rid of clutter such as clothes, boxes, piles of mail and other items.

And then clean - and keep cleaning obsessively, the entire time your place is on the market. Kitchens, bathrooms and bedrooms should look unlived in when they are shown. And don't forget to clean less obvious places like windows, walls, doors and and floors, to dust off shelves and furniture, and to polish appliances.

4. Plumbing repairs and water stain/damage repair: Paying a plumber to make a few stops throughout your home can be well worth the investment. Leaky faucet in the master bathroom? Get it fixed. Does the space under your kitchen sink look like a science experiment? Leaks and water stains definitely provoke disgust and exasperation on the part of the buyers you want and need to impress. And they can be pretty cost effective to fix - ask your agent for a referral, if you need one.

5. Staging: Staging your home can make a dramatic difference in the price for which your home sells. Good staging is equal parts:

(a) removing your personal belongings and replacing it with more artwork, decor and cleaner-looking furniture,

(b) and tweaking the home’s paint, wall coverings and even landscaping to show the place in its very best light.


When done well, staging can convert your home from just another listing on a buyer’s list to the setting for a fresh, new start to the fresh, new life of their dreams. Professional stagers, in particular, have special skills and materials they use, from convincing you to get rid of a bunch of things you value (but read: junk to a buyer), to items like mirrors, plants, art work, lamps, pillows and even furniture that tells a visual story of the life buyers can fantasize about living in your home.

Talk to your agent about staging - some agents have the skill to do this on their own, while others might have a professional stager they frequently work with.

In some cases, you might want to take on even larger projects. Before you go that route, talk with a local real estate agent; they are well-positioned to know what sort of updates and features will make the most impact on local buyers. Not all major, non-cosmetic upgrades to your home will create a significant difference in the price it commands, so take advantage of your agent’s expertise as you make decisions about whichproperty preparation investments to make (and which to forego).

Tuesday, September 27, 2011

Tips to Get Your Stale Listings Sold

today’s market, most listings aren’t instantly flying off the market. While we all know price is one of the most important factors in the sale of a home, there are other factors they can improve the saleability of your listings. Here are a few tips to get that stale listing sold plus a handy download designed just for sellers.

(1) Offer incentives or alternative financing options
Incentives can make a big difference for buyers who are stretching to find the down payment to buy a home or who may be sitting on the edge of loan limits. Seller incentives such as paying for closing costs, inspections, or repairs, or providing allowances or credits for home upgrades after closing can make a big difference to home buyers short on cash. Other alternatives could include pre paying taxes, homeowners dues and insurance. Consider offering buyer incentives to encourage on the fence buyers to take action on your listing.

(2) Make it accessible
Take a hard look at the accessibility of a home. Today’s home buyer is impatient. They want to see homes and they want to see them now. Make sure your listings are simple and easy to show. Carl Medford, an agent with Prudential California Realty in the San Francisco Bay Area believes home accessibility is the #1 reason homes don’t sell. “If we can’t get in, we can’t show the house. If we can’t show the house, we can’t sell it. We frequently end up showing less than six homes because we can’t get access to homes on the list.”

(3) Expose it- everywhere!
We are often surprised by the number of homes with property addresses undisclosed on the internet. It’s no secret homebuyers are looking on the internet for homes, make sure they can easily find it. Two popular search filters we see prospective homebuyers using on Trulia.com are filters for listings with open houses and filters for listings with price reductions. Want more eyeballs on your listings? Make sure they are updated weekly on popular real estate search sites like Trulia and Craigslist and be sure to list your open home times to get the max exposure for your listings. Want more info? Check out 3 free ways to rank higher on Trulia.

(4) Refresh your photos
Today’s homebuyer spends a lot of time online. As your listing becomes stale, so does the property photos. Consider retaking the photos, especially if seasons have changed. If taking new photos is out of the question, you may want ot consider changing up the order your photos display online to give it a fresh appearance for web browsing buyers. Many agents start their photos with a picture of the front of the house when they would be better served displaying the huge backyard or the amazing chef’s kitchen.

(5) Put some zing in your marketing copy
In addition to stale photos, your marketing copy may be putting prospective buyers to sleep. “Check out my 3 bedroom, 2 bath home in a great location.” Yawn. Add some zing to your headlines and descriptions to draw the attention of homebuyers. Your marketing copy needs to tell a story that appeals to the people most likely to buy your listing. Your copy can get old too. Simply freshening it up frequently is a good way to capture more attention to your listings.

Friday, September 23, 2011

The Top 3 Real Estate Deal-Killers-and How Buyers Can Avoid Them.

Once upon a time, homebuying was a much less dramatic affair then it is today. The house hunt was fun, if suspenseful, and then there was another exciting whirlwind of inspections, closing and moving in. Today, though, as soon as buyers get the gumption to jump off the rent vs. buy fence, they find themselves on another edge - the edge of their seats, through the entire escrow process waiting to see what obstacle will emerge next, and whether their transaction will survive it.

Deals get killed all the time, and buyers can't relax until they have keys actually in hand. Here are three of the most common real estate deal-killers, and some steps buyers can take to deactivate them.

1. Appraisal too low. Some buyers incorrectly believe that the best thing that could happen to them is for the property to appraise below the agreed-upon purchase price, expecting that a low appraisal forces the seller to bring the price down. In fact, so many of today’s sellers are barely breaking even, that a low appraisal is probably the most common deal-killer around. If an appraisal comes in just a tad bit lower than the contract price, usually the seller will come down if they can, or the buyer will kick in a few extra bucks. But when it comes in 5, 10 or even 20 percent low, most sellers can't - and most buyers won't .

Low appraisals also seem like the most difficult deal-killer to avoid, as this process is entirely out of both buyer's and seller's control. But there are two things buyers can do to minimize the risk. First, check the comps - i.e., recent comparable homes that have sold in the area - before making an offer; your agent will help you do this. Then, don't make an offer bizarrely above the average range of the comparables, even if the property has multiple offers, unless you're prepared to deal with a low appraisal a couple of weeks out.

Also, consider working with a local mortgage broker who also originates loans through its own bank (vs. walking into a large bank's branch off the street); these lenders have the ability to choose from a smaller pool of appraisers that they know are qualified and knowledgeable about your area.

2. Property condition dramas. When the market melted down, lenders found themselves with a lot of decrepit homes on their hands. This explains two things: (1) why lenders are more concerned about property condition now than ever, and (2) the raggedy condition of so many of the "distressed' homes on the market. Homes that have extensive wood rot, dangerous decks or electrical systems, or peeling paint and missing systems (sinks, stoves and the like) are highly unlikely to pass muster when the appraiser walks through, even if they do qualify as being worth the purchase price. And while an individual seller might be willing to do some work, many just can't afford to; short sale and REO sellers simply refuse to make fixes, 9 times out of 10.

Prevention is the best medicine for curing this transaction ailment. If you are buying a short sale or REO property, be aware that when the selling bank says as-is, it really means as-is. Ask your mortgage broker and agent to brief you on what sort of shape your lender will require your home to be in, at minimum, and keep that standard in mind during your house hunt. Your agent can help manage your expectations about which properties will and won't likely pass muster.

3. Loan approval takes too long. Every buyer knows they must get preapproved for a mortgage before they start house hunting, but many don't know that preapproval is just the first in a long list of steps that have to happen before the loan becomes a sure thing. In fact, it's common now for buyers to get their loan preapproval many months before they end up in contract, and lots can change in the interim - further extending the time it may take for their loan approval to come in.

It's common for contracts to include a standard loan contingency period of 17 days, give or take a few. But the appraisal might take longer than that to come in, or the underwriter might have lots of questions and seemingly random nitpicks about the appraisal, or about you: they want to see your driver's license, then your marriage license, then your divorce decree, and after that, a letter from your employer agreeing that you'll be keeping your job even though you're moving an hour away. It never seems like they ask for everything at once, thus it can take longer than 17 days to obtain all the requested items, turn them in and get the underwriter to sign off on them.

Until you get that green light, it's foolhardy to remove your loan contingency, as that step renders your earnest money deposit non-refundable, under most contracts. Many a buyer is forced to either secure an extension from the seller or to let the transaction die, rather than forfeiting their deposit funds. And again, some sellers understand and will play ball, but bank sellers can be particularly resistant to loan contingency extensions, especially if there are backup offers on the table.

Best practice for buyers to minimize the chances of an overtime loan approval process killing the deal? Be ready: be ready for lots of bizarre documentation requests, be ready to provide things you've already been asked for, and be ready to do so quick-like - without pushing back. The faster you can turn around the things the underwriter wants, the better.

Also, it can be very helpful to work with a mortgage broker and agent that have worked together before and have close communications, so that your agent can stay abreast of any and all loan process glitches and keep the listing agent apprised of the legitimate reasons you may need an extension throughout the contingency period, rather than assuring them everything's speeding along then having to ask for a last-minute extension.

Thursday, September 8, 2011

4 Incentives that Sell Homes

On today’s market, it’s pretty easy for a seller to find themselves in a serious state of stuck: home stuck on the market with no bites from buyers, and family stuck in the home until the home sells. And that doesn’t even account for the feeling of stuck that comes from having gone just about as low as you can go on price without turning your transaction into a short sale. If you’re trying to sell, and you’ve lowered the price but still find your home struggling to compete against a bunch of other, similiarly priced homes with similar features, selling can seem difficult at best, impossible at worst.

The worst part of this particular flavor of stuck is the feeling that the whole situation is out of your control, that there’s nothing within your power that will move your home off the market. You’ve already painted the place, replaced the carpet, tricked out the curb appeal and lowered the price as far as you can go. So what else is a seller to do?

Offer incentives.

Incentives are perks - they can be big or little - that a seller offers to their home’s eventual buyer. The most outlandish incentives are the ones that make the headlines, like the Ferrari one Malibu owner threw in with the sale of their condo last year, or the year’s worth of cookies that actor George Hamilton reportedly negotiated into the sale of his home from a bakery owner. But the incentives with the most power to get your home sold tend to be much less exciting perks thatactually fill a real need the average home buyer has.

Here are four basic, incentives you should consider offering if you’re having a hard time getting your home sold:
1.Interest rate buy-down. When you hear sellers say they will “pay points,” what they are doing is offering to award the buyer a certain number of percentage points of the sales price, which will, in turn, be paid to the buyer’s lender as discount points that bring the buyer’s interest rate down. For the buyer, this is a big deal, as it decreases the pressure they feel to guess the right day to lock in their interest rate (a common source of serious stress among buyers), and sends the message that if they buy your home, they’ll automatically beat the market rate. And what buyer doesn’t want that?!
Seller-paid rate buy-downs also save buyers money on their monthly payment over the entire lifetime of their loan, and the seller-paid points are usually tax deductible, to the buyer, the next time they file taxes. You can see why these incentives are so powerful at attracting buyers!
2.Closing cost credit. Many buyers trying to break into the market while prices are low are already scraping the bottom of their savings account barrels to come up with their down payment money. With most home loans, the buyer will have to come with anywhere from 3 to 6 percent of the loan amount, in cash, on top of their down payment, to cover closing costs like loan fees, escrow services and title or mortgage insurance. (And strangely enough, the buyers putting the 3.5 percent minimum down payment on an FHA loan are likely to have to come up with the higher end of the closing cost range, 6 percent, to cover their mortgage insurance.)
Some smart sellers (and their agents) include in their home’s listing and marketing materials the offer to pay a credit of 3, 4, 5 or even 6 percent of the home’s sale price at closing, to defray the buyer’s closing costs. A closing cost credit is a great financial help to buyers and a strong differentiator that can make your home much more attractive than nearby listings. Your listing agent can help you run the numbers on how much of a credit you can afford to offer, and how to make an overall package - listing price and credit - that will be maximally magnetic to prospective buyers.
3.HOA dues credit. If you are selling a home that is in a homeowners’ association (HOA) that charges monthly or even annual dues, then surely you recall buying that home and being overwhelmed at the prospect of going from rent being your sole monthly housing expense, to having a laundry list of expenses starting with your mortgage, including property taxes and insurance and then having HOA dues as the unpleasant cherry on top.
One way to overcome that concern in the minds of buyers and to differentiate your unit from all the other, similar units for sale in your complex is to offer a credit at closing that covers the buyer’s HOA dues for 6 months, a year, or even longer. Talk with your agent about how to do this strategically, in a way that will offer the maximum lure for buyers but will not run afoul of any guidelines for seller credits imposed by the buyer’s lender.
4.Broker incentives. Some savvy sellers who can’t afford to offer buyers several percentage points’ worth of the proceeds of sale toward closing costs take a different route, offering to pay a bonus percentage point (or more) in incentives to the eventual buyer’s broker or agent - on top of the commission, rather than to the buyer themselves. Over 90 percent of buyers who are ready, willing and able to buy a home on today’s market are represented by a broker. And brokers have to sort through sometimes hundreds of pretty similar listings to decide which ones to show a buyer any given Sunday.
Offering a broker’s incentive makes your home stand out among all those listings to the brokers and agents who put buyer’s property tours together. While these aren’t “buyer incentives,” strictly speaking, but they do operate to boost the number of buyers that come view your home - in turn, boosting your home’s likelihood of getting an offer.