Home selling basics

home selling basics
Preparing for a home sale (infographic from nar.realtor)

It’s that time of year again.  Many home owners, just like you, are getting ready to put their houses on the market.  One thing I’ve learned over sixteen-plus years of home selling is that there are different strategies to achieve the same result.  Basically, there is no “one way” to sell your home.  But, if you look beyond the gimmicks and tactics promising to sell a home faster and for more money, the basics are essentially the same.  In other words, focus on home selling basics to increase home buyer traffic and possibly get a better price.

Prepare for home selling

Most would be home sellers don’t realize that selling a home is a process.  Preparing your home can seem overwhelming, but it doesn’t have to be.  Focusing on home selling basics will not only get you excited about selling your home, but can help your home sale results.

Preparing your home to sell can be a costly endeavor, especially if your home has a lot of deferred maintenance or lacks updates.  However, the obstacle of selling when your home is in need of attention can be overcome by pricing it with its condition in mind.

Regardless of your home’s condition, it should still be neat and clean.  This means decluttering.  Decluttering is a process of prioritizing and clearing out unnecessary items from your home.  Removing unneeded items and furniture from your home will make your home feel larger and organized.  You don’t necessarily have to throw out these items, you can decide to make charitable donations and/or store them until you move.

People talk about “Neutralizing” a home to take away personal affects from the home.  It basically strips away the things you did to personalize your home.  Neutralizing applies to paint schemes, decor, wall hangings, flooring, etc.  It may sound extreme, but neutralizing your home will allow home buyers to envision how they can live there. Although your proud how to show your personal touch by displaying trophies, awards, diplomas, family and personal photos, these should be removed because they can distract home buyers’ attention.

Should you stage your home?  Maybe.  Staging can be another home selling expense you’re not prepared for, but it can help sell your home faster.  You can hire a professional stager or interior designer for the total staging experience.  However, staging doesn’t have to be expensive.  Some staging or design professionals can provide you a list of recommendations for a nominal fee.  If you’ve already decluttered and painted a room or two, you’re well into the first phase of staging.  Although some home sellers decide to rent furniture for their home staging (which can also be expensive), it’s not an absolute.  Once you remove the unnecessary furniture, the remainder may just need rearranging.

Don’t let your home’s exterior can turn away potential buyers before they get inside.  Even if you spend lots of time and money on preparing your home’s interior, it may not matter if home buyers don’t make it inside.   Many home buyers decide if they like a home by its exterior appearance.

Improving your home’s curb appeal is similar to preparing the interior.  Take care of deferred maintenance and declutter the exterior.  Believe it or not, landscaping is a key factor to attract buyers when home selling.  Make sure the lawn is cut regularly, and don’t over-crowd the flower beds and shrubs.  Trimming back trees will not only add to your manicured landscape, but it will also make your home easier to see from the street.

Once your home is one the market, consider having an open house.  The open house is more important today than it has been in decades.  Consider that contemporary home buyers are taking control over their home search.  Besides searching listings on their own, many will visit open houses on their own as well.  Deciding to not have an open house eliminates many potential home buyers from seeing your home.

Home selling basics is about safety too.  Selling your home means having people whom you don’t know visit your home, mostly when you’re not there.  Having unknown people walking through your home increases the chance of things going missing.  Don’t tempt would be thieves by leaving money, jewelry, medicines, or any other valuables on display.  Don’t just put your valuables away, lock them in a safe place.

But in the end, home selling basics comes down to the price.  Home buyers are savvy and know value.  In this market, it’s easy to get big eyes and over-price your home.  Making the mistake of over-pricing your home can stretch out the days-on-market and test your nerves.  Instead, decide on a list price that is consistent with recent neighborhood sales of homes that are similar in size, style and condition.

Home selling basics

1. Make repairs
2. Declutter
3. Improve the curb appeal
4. Staging
5. Open house
6. Find a buyer

Copyright© Dan Krell
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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Neighbors affect home values

good neighbors
Good Neighbors (infographic from appfolio.com)

The housing market has been fairly good in recent years.  In fact, the shortage of homes for sale has shown how competitive home buyers can be as they try to outbid their cohorts for hot properties.  Even homes that are in need of “tlc” or have been neglected in some way have found new owners too.  But, as I have mentioned in the past, not all homes sell.  And for some home sellers whose homes have not sold, they only need to look their neighbors.

That’s correct.  Your neighbor may have more sway over your home sale and property value than you think.  A 2013 news item from the Appraisal Institute warns home sellers and buyers about the neighbor factor (Bad Neighbors Can Reduce Property Values, Appraisal Institute Warns; appraisalinstitute.org; January 30 2013).  Not only can bad neighbors affect your sale, but can “significantly reduce nearby property values.”

Former Appraisal Institute President Richard L. Borges II, MAI, SRA stated:

I’ve seen many situations where external factors, such as living near a bad neighbor, can lower home values by more than 5 to 10 percent…Homeowners should be aware of what is going on in their neighborhood and how others’ bad behaviors could affect their home’s value.”

“Bad neighbors” are often characterized as inconsiderate, if not sometimes belligerent.  Typical neighbor complaints stem from pets, excessive noise, and poor exterior home maintenance.  In high density neighborhoods (such as townhomes and condos), parking and trash/recycling debris can also be a source of neighbor conflict.

Neighbor disputes are often resolved by talking it out.  However, if you find that your neighbor is not receptive, you may have other avenues of recourse.  If you live in a Homeowners or Condo Association, your association may offer assistance in resolving your issue.

Montgomery County addressed the issue by enacting “Good Neighbor” ordinances in 2011 “to preserve the quality of life” in the county.  The purpose was to reduce the influx of commercial influences into residential neighborhoods, and maintain their domiciliary character.  These ordnances were directed at home based businesses, parking of commercial vehicles, off street vehicle parking, and paving of front yards.

If you believe your neighbor issue arises from a code violation, you can contact the appropriate county department to investigate a complaint.  For example, Housing Code Enforcement can investigate such things as housing and building standards, overgrown weeds, and excess debris in yards.  Whereas the Department of Police – Animal Services Division can investigate common pet complaints such as an unleashed pet roaming the neighborhood, or a neighbor not cleaning up after their pet does their business on your yard or common areas.

Unfortunately, there are occasions where trying to resolve your neighbor issues civilly comes up short.  In extreme instances, however, you may have to seek legal counsel.

Being a good neighbor is a two-way street, often requiring some compromise and offering assistance.  Housing experts suggest that you can resolve your neighbor issues by talking to them.  All too often, neighbors who seem neglectful of their homes are actually in need of assistance.  Regardless of their issues, they may be too proud to ask for help, they don’t know where to get help, or they are so overwhelmed they don’t know they need help.  Talking to your neighbors and lending a hand can not only mend fences and build a stronger community, but may also increase the value of your home.

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Buyer’s market home selling

Buyer's Market
Home Selling Mistakes (infographic from floridarealtors.org)

As winter approaches, many home sellers will be contemplating their next move after their homes have not sold.  It is likely that a volatile housing market awaits home sellers during the first half of 2018.  If you’re planning to list your home, you should have a selling plan that is able to adjust to market conditions quickly.  In other words, know about home selling in a buyer’s market.

The good news for home sellers is that this year’s home sale prices continue to climb, as the September 26th 20-city composite of the S&P Corelogic Case Shiller National Home Price Index (spindices.com) revealed.  The national index during July increased 5.8 percent compared to the same period last year, while the Washington DC area realized a 3.3 percent year over year gain.  However, there is expectation home sale prices may moderate or even slightly decrease in the first quarter of 2018 because of Fed policy and other market forces.

David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices stated in the release:

“While home prices continue to rise, other housing indicators may be leveling off. Sales of both new and existing homes have slipped since last March. The Builders Sentiment Index published by the National Association of Home Builders also leveled off after March. Automobiles are the second largest consumer purchase most people make after houses. Auto sales peaked last November and have been flat to slightly lower since. The housing market will face two contradicting challenges during the rest of 2017 and into 2018. First, rebuilding following hurricanes across Texas, Florida and other parts of the south will lead to further supply pressures. Second, the Fed’s recent move to shrink its balance sheet could push mortgage rates upward.”

Of course, home sale price indices only show sale prices for homes that sell.  And while home sale prices are increasing back to record levels in many areas, the volume of homes sold during 2017 so far is disappointing.  According to a September 20th NAR news release (realtor.nar), August’s existing home sales dropped 1.7 percent.  The Pending Home Sale Index for August dropped 2.6 percent, which made the NAR revise their 2017 home sale forecast to be “slightly below the pace set in 2016.”  Home sale volume in the first quarter of 2018 may also lag due to continued lack of inventory and anticipated increasing mortgage interest rates.  Lawrence Yun, cheif NAR economist, quipped

“The supply and affordability headwinds would have likely held sales growth just a tad above last year, but coupled with the temporary effects from Hurricanes Harvey and Irma, sales in 2017 now appear will fall slightly below last year…The good news is that nearly all of the missed closings for the remainder of the year will likely show up in 2018, with existing sales forecast to rise 6.9 percent.”

Since these are August sales figures from the NAR, it is an unfortunate truth that August sales were not really affected by hurricanes. Mostly because hurricane Harvey hit Texas the very last days of August and Irma hit Florida in September. The main affects of the hurricanes disruption to existing home sales will be seen in September’s statistics. And “missed closings” is a euphemism for phantom closings, because they don’t really exist. So, with regard to sliding home sales, you should take Yun’s “headwinds” of supply and affordability very seriously.

Home selling in 2018, a buyer’s market?

Home sellers positioning themselves solely on this year’s home sale prices may be in for a rude awakening next year.  Sellers may feel as if the market is getting soft, however that may change the latter half of 2018 as home prices moderate.  Sellers will need to be reasonable.  They will need to have awareness of many factors besides home sale prices, including existing home sales volume and neighborhood sale trends.  Including home selling in a buyer’s market.

If you’re planning to sell your home, you will need to play to your audience (home buyers), and listen to their feedback.  Know how to sell in 2018.  Prepare your home before listing it in the MLS by repairing deferred maintenance and possibly making updates.  Home buyers have a track record of paying more for a home that has been totally renovated.  However, if you don’t completely repair and/or update your home, be prepared to lower your sale price.

Be flexible to quickly adjust to the market.  Feedback is highly important to get other’s perspectives about your home.  However, take Realtor feedback with a grain of salt.  Instead, have your agent collect buyer feedback at open houses. Home buyers tend to be more honest when giving feedback, and it can be especially helpful in a buyer’s market.  If the consensus is that the price is too high, the price may actually be too high.  If buyers are turned off by the condition and/or curb appeal of the home, consider making repairs or lowering price to reflect the condition.  If they are focused on your décor, consider hiring a professional stager to make the home more appealing.

Rather than a soft market, we are experiencing the struggle for a balanced market due to an inventory shortage and sharply decreasing affordability.  The last year and a half has been all about the home seller.  However, 2018 will be about the home buyer.  Home selling in a volatile or buyer’s market can be challenging. If you’re planning a sale, be realistic about your home’s condition and value. Over pricing your home from the start can make your home languish on the market, which could get you a much lower price if it sells.

Copyright© Dan Krell
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Attract home buyers – Zillow listing

attract home buyers
Attract home buyers (infographic from blogs.realtor.org)

If you’re selling your home, check your Zillow listing.  You may find that the information may not be complete.  Or worse, the information posted is from a previous sale.  But don’t worry, Zillow now gives you the tools to take control, attract home buyers, and improve your sale.

Most of the information you see on your Zillow listing is syndicated from the MLS.  This means that your listing agent uploads information to the MLS and the MLS sends it to other websites.  If you’re not happy with the listing, your agent can change some information via the MLS, and/or log into the Zillow listing to make changes.  However, if your listing agent is too busy to service your listing or does not know about logging into your Zillow listing, you can now take control and attract home buyers.

Zillow offers home owners the opportunity to “claim” their home to access features to personalize information to help home buyers (and Zillow) to get a better picture about their home.  The “Personalized Owner Dashboard” gives you control of your listing (zillowgroup.com/news/personalized-owner-dashboard).

Of the many available tools, online metrics is useful to see how much attention your home is getting from home buyers.  You can view your home listing’s online activity, including how many times the listing has been viewed compared to your competition.

Improve on the house description by adding “What I love about the home.”  This feature conveys to home buyers what attracted you to your home.  Elicit the home buyer’s emotions to visit it and attract home buyers by adding your story.

The MLS limits the number of pictures on your listing.  So, solely relying on the MLS feed can also limit your Zillow listing.  Increasing the number of pictures and adding video can make your home listing more robust, and attention getting.  Zillow allows you (and your agent) to upload additional pictures.  You can upload, arrange, and describe additional photos to help give home buyers the best view of your home.  Zillow even lets you upload a video that you record from your smartphone!  Besides including a link to the MLS virtual tour, Zillow added the “walk through” video feature last year.

Not happy with your Zestimate?  You’re not alone.  Zillow’s Zestimate tool has received mixed reviews since its inception.  Many home buyers and sellers have used the tool as a guide in to help their buying and selling by looking at house and neighborhood trends.  However, there has been criticism from home owners and real estate agents saying that home valuation tool is not inaccurate and does not correctly portray their homes and listings.  As a response, Zillow has changed the algorithm over the years.  And this year, Zillow announced a $1,000,000 prize for the best model to improve the Zestimate tool (zillow.com/promo/zillow-prize).  But that hasn’t stopped a class action suit that complains that the Zestimate is “misleading” home buyers (Rachel Koning Beals; Do Zillow ‘Zestimates’ mislead home buyers? Lawsuit claims yes; marketwatch.com; May 23, 2017).

Improve your Zestimate.  Yes, you can improve your Zestimate.  The dashboard allows you to update the facts about your home.  Updating your home’s information will give home buyers a better description, and it can possibly improve the Zestimate.  Since the Zestimate is based on public records, all your home’s information may not be current or complete.  Telling Zillow about the extras, such as bathrooms, a finished basement, a deck, etc. can be a plus and attract home buyers.

Copyright© Dan Krell
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Vacation homes declining

vacation homes
Vacation homes sales decline (infographic from nar.realtor)

According to the National Association of Realtors 2017 Investment and Vacation Home Buyers Survey (nar.realtor), last year’s vacation home purchases plunged 21.6 percent!  Last year’s decline in vacation homes sales comes at the heels of a huge drop in 2015, and has tumbled about 36 percent since the post-recession high marked in 2014.  Are the statistics telling us it’s a good time to buy that vacation home you have been thinking about?  Or is it that Americans are rethinking their view about vacations and retirement?

Of course, Lawrence Yun, NAR chief economist, feels that the decline is due a very tight vacation homes market that may likely make a comeback in the ensuing years. In an April 11th NAR press release he stated that “In several markets in the South and West – the two most popular destinations for vacation buyers – home prices have soared in recent years because substantial buyer demand from strong job growth continues to outstrip the supply of homes for sale. With fewer bargain-priced properties to choose from and a growing number of traditional buyers, finding a home for vacation purposes became more difficult and less affordable last year.”  He added, “The volatility seen in the financial markets in late 2015 through the early part of last year also put a dent in sales as some affluent households with money in stocks likely refrained from buying or delayed plans until after the [2016] election.”

However, another explanation given by the NAR is short term rentals, including airbnb.  Short term rentals allow people to visit vacation and resort towns without committing to buy a home.

To give perspective about the tight vacation homes market, NAR stated that vacation home sales were only 12 percent of all transactions in 2016, a decrease from 16 percent in 2015 (and close to the recent low of 11 percent in 2012).  Additionally, low vacation home inventory pushed sale prices higher.  The 2016 median vacation home price increased 4.2 percent, which is a decade high of vacation home price growth.

A lack of inventory and rising home prices are sure to put a damper on the vacation homes market.  But the slump could be a manifestation of something else.

Bloggers and columnists have reported a shift in the younger generation’s home buying habits for about a decade.  The trend seems to be a rejection of the accepted industry standard home buying cycle set by older generations.  For decades, the Baby-Boom generation has set the bar for home sales.  Their views on home ownership and vacation homes have guided the experts.  However, millennials have a different perspective, having a more conservative take on home buying and exhibiting a strong sense of value.

The NAR’s 2017 Investment and Vacation Home Buyers Survey pointed out that that the top two reasons to purchase a vacation home are for a family retreat and for retirement.  However, just like the trend in home buying, millennials are redefining their retirement and vacation needs.

Expecting to work longer, Millennials’ idea of retirement is not perceived the same as the Baby-Boomer’s vision of retirement.  Staying relevant and engaged is now more important than leisure.

Having a regular spot for the family to congregate and vacation is no longer highly desired.  Millennials want the option to travel rather than visiting the same vacation spot every year.  Millennials are also savers. They may view vacation homes as exorbitant and expensive.  Even though the vacation is only a small portion of the year, there are regular expenses that may include a mortgage, property taxes, HOA fees, and maintenance.

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