home sale Archives - Page 11 of 17 - Real Estate News and Commentary

December 16, 2015November 23, 2021

Selling a home with when you have pets

How to sell a home fast — From FLRealtorMagazine

According to the American Veterinary Medical Association (avma.org), 36.5% of households own a dog and 30.4% of households own a cat, and many households have other types of pets. Of course having a dog or cat can fill many needs, such as companionship, security, socializing, and even fitness. However, selling a home where a pet lives can be tricky.

Pets often leave telltale signs they live in a home. Many people associate strong odors or dander on the floor with a home where a dog or cat lives. However, many pet owners keep clean homes; and odor or dander may not be the giveaway. Home buyers notice many things when wandering a home, and can associate water and food bowls, pet beds, cat litter boxes, and toys with pets. The psychological association could trigger an allergic reaction, even in the cleanest of homes.

Although an increasing number of households include dogs and cats, not all home buyers are keen on pets. And for some it’s a health matter, as many have sensitivities and allergies and such that they ask if a dog or cat lives in the home when scheduling a showing. And it’s not just allergies that can put off a home buyer: pets left inside the home (roaming or crated), pets left in the yard (free roaming or tied up), and pet odors are three of the top four home buyer turn offs, as ranked by Realtor®Mag’s Melissa Dittmann Tracey (Top 10 Worst Home-Showing Offenses; realtormag.realtor.org, October 2012).

Ask someone who is honest with you if your home has an odor; you may be surprised with the answer. It’s common to become used to odors in your home. Don’t make the common mistake of placing heavily scented air fresheners throughout the home, as it only adds another layer of odor; which, by the way, can also trigger a reaction in those with odor sensitivities. Instead, try to identify if the odor has a source and remove it if possible (it may not even be pet related). Consider using natural solutions such as baking soda to absorb light odors; however strong odors may require commercial cleaning.

And about those home buyers who visit your home…don’t assume they are pet friendly. Pet behavior can be misinterpreted. Even if you believe your pets are friendly and well behaved, buyers who are not familiar with dogs or cats can misperceive them as being aggressive and decide to leave. If the buyer does not know how to approach your pet, and they bring small children along, the dynamics can create an agitated pet.

Limit distractions and keep your pets and buyers at ease. Consider putting away your pet’s water bowl, toys, and other signs of your pet. If you have a cat, make sure the litter box is clean. Locking your pet in a room is not recommended by experts, as it can cause distractions and upset your pet. If you have a dog, take them for a walk while the buyer is visiting. At the very least, arrange for someone who is familiar with your pets to be home to manage them.

Selling a home where pets live can be challenging. Although you may think that the best scenario is to sell to another pet owner; nonetheless you should strategize with your agent about your home for sale and managing your pets during the listing.

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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.

December 11, 2015August 17, 2019

Short sale marketing strategy

According to the Corelogic Insights blog, the volume of distressed home sales is declining. Consider that during the peak of distressed sales, which occurred in January 2009, the volume of distressed sales nationally comprised 32.4% of total home sales. Compare those figures to Corelogic’s December 2^nd report, which indicated that nationwide distressed sales volume accounted for about 10% of all home sales during September 2015. However, distressed sales volume varies from state to state; Maryland recorded the highest volume of distressed sales (20.7%) among all states during September.

Distressed home sales include bank owned properties (REO) and short sales. It’s important to note that prior to the housing bust in 2007, nationwide REO sales were below 6.2% of all sales. September nationwide REO’s accounted for 6.4% of all sales; while short sales accounted for 3.3% of all sales, and have maintained below the 4% level for over a year.

The plateau of short sales may be due the many home owners who remain underwater. In a June 11^th press release, Zillow announced that the slow pace of increasing home prices are leaving many home owners underwater. The nationwide rate of negative equity among mortgaged home owners was 15.4% during the first quarter of 2015 (which is down from 18.8% a year ago); the negative equity rate in the D.C. metro area was reported to be 17.2%. For about half of all underwater home owners, home prices would need to increase 20% or more for them to break even (zillow.com/research).

If you are underwater on your mortgage, check with your lender, they may have some options to help you. However, if you are planning a move, a short sale may also be an option. Simply put, a short sale is asking your lender to take a lower payoff and “forgive” the difference.

If you decide to go through the short sale process, you should know that your sale will be subject to your lender’s approval. The lender will decide if they will accept the buyer’s offer based on the home’s “fair market value.” Many lenders use broker price opinions to assist them in determining a sale price; however some lenders may use other avenues.

You should be aware of a recent trend used by some lenders, which is bypassing the short sale process and forcing home sellers to list short sales on auction websites – even if there is an existing contract of sale! The given rationale is that the internet auction process provides a fair market value for the short sale. However, this stance by some lenders may lead some home sellers to breach of contract. In a recent conversation with several local (Maryland) state regulators, the present consensus is that “…they are aware of the situation, but there is nothing they can do about it;” however, they welcome consumer complaints: MD Commissioner of Financial Regualtion and Consumer Financial Protection Bureau.

Even though the concept is straightforward and the government has provided lenders guidance on short sales, the process can still be lengthy and full of surprises. The process does not guarantee a sale, and the lender could still foreclose if you stopped paying the mortgage. Additionally, the short sale may negatively affect your credit; and there may be legal liabilities to consider. So, before you embark on a short sale, you should consult an attorney about all of your options (which may include and is not limited to a loan modification, deed-in-lieu, or bankruptcy).

By Dan Krell
Copyright © 2015

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December 2, 2015August 27, 2019

Feng shui and your home sale

Staging a Home — From greenhomegnome.com

It didn’t seem that long ago when feng shui was important to almost every home buyer and seller. And if Google Trends is an indication of relevance, the diminishing number of searches for feng shui over the last decade indicates reduced interest. Perhaps the bursting housing bubble shifted everyone’s attention; buyers’ were determined to get distressed properties at a deal, while sellers were determined to get a model home look through staging. Although seemingly having lost significance in the housing market, feng shui is once again becoming a top concern for buyers and sellers.

If you’re not familiar with the concept, Merriam Webster (merriam-webster.com) defines feng shui as “…a Chinese system for positioning a building and the objects within a building in a way that is thought to agree with spiritual forces and to bring health and happiness.” The International Feng Shui Guild (ifsguild.org) adds that feng shui is derived from the Chinese philosophy of Taoism and has been practiced for aver 5,000 years. Furthermore, it is based in science and nature to help you live a healthy and prosperous life!

You may already be familiar with some feng shui principles, as a few basics of home staging share similar tasks. For example, de-cluttering, maximizing space and creating a “light filled home” are some of the preparations prescribed to stage a home for sale. And according to feng shui principles, these undertakings are vital in channeling a home’s energy flow. Although there may be some crossover, take caution not to confuse home staging with feng shui; staging a home is not the same as following feng shui principles.

From Realtor.org

One of the reasons for the surging focus in feng shui is the increase of home buyers from China. According to the National Association of Realtors® (realtor.org), buyers from China represented about 16% of international home buyers, while purchasing an estimated $28.6 billion of real estate in 2014.

Feng shui is also important to Chinese-Americans, according to a recent survey conducted by Better Homes and Gardens® Real Estate and the Asian Real Estate Association of America (Feng Shui a Driver of Home Selection and Investment for Chinese-Americans; bhgre.com; August 11, 2015). The survey revealed that 76% of respondents are familiar with the principles, and half of those respondents practice feng shui, which is “…considered to dictate spatial arrangement and building design to produce a harmonious flow of energy.” When it comes real estate, consider that 81% of respondents indicated that feng shui influenced their buying decisions; and that 79% of respondents indicated that they would pay more for a home that follows feng shui principles. And if you’re selling a home, you should take notice that 75% of respondents indicated that they experienced at least one “deal breaker” conflict of feng shui principles in a home.

If your home doesn’t exactly correspond with feng shui principles, consider offering a “Feng Shui Contingency.” Such a contingency was highlighted in a 2014 Realtor®Mag article about the Seattle housing market and the high concentration of buyers from China (Why You May Need the ‘Feng Shui Contingency; realtormag.realtor.org; September 22, 2014). Much like a home inspection contingency, many buyers are including a contingency to have a feng shui master approve the house. The good news is that some conflicting elements may be remedied (such as landscaping); however, others cannot (such as the home’s physical location and direction).

By Dan Krell
Copyright © 2015

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November 24, 2015November 23, 2021

Home marketing may be limited due to agents’ personal wealth strategy

From stagingworkstoronto.ca

If you ask a real estate agent about their home sale strategy, you may get a sanctimonious presentation of the best way to sell a house. However, if you question why they advocate specific procedures over others, chances are they will answer “experience.” Even in the face of an abundance of research, many continue to hold on to old and outdated beliefs about how to sell a house. Furthermore, consider that a real estate agent’s strategy to sell your home may not necessarily benefit your bottom line.

The latest study by Allen, Cadena, Rutherford & Rutherford (2015. Effects of real estate brokers’ marketing strategies: Public open houses, broker open houses, MLS virtual tours, and MLS photographs. The Journal of Real Estate Research, 37(3), 343-369) is the most recent extension of home sale strategy research. The study reinforces the outcomes of some strategies, while shedding light on others; and asks a compelling question about agent motives.

The study looked at home sale price, time on market, and the likelihood of a sale in relation to: broker open houses, public open houses, MLS photos, and MLS virtual tours. The results indicated that all four tactics positively influence home sale price. Additionally, conducting public open houses and having MLS photos have a positive influence on time on market. However, there is little evidence that having more than six MLS photos increases that positive effect. Surprisingly, MLS virtual tours and conducting broker open houses have a negative influence on time on market. The authors conclude that as a package all four strategies may be worthwhile to consider when home sale price is the goal, even though the time on market may be slightly extended.

However, if your goal is a successful home sale, you may consider another strategy. The study concluded that the probability of your home sale success increases when you have broker open houses, MLS virtual tours, and eight or more MLS photographs. The study found that public open houses actually decrease the probability of a successful home sale.

In light of these findings about home sale price and success of sale, the authors rhetorically ask: “Why do all sellers/brokers not use these marketing strategies in every transaction effort?” They propose that, “Perhaps the answer is that brokers follow a wealth maximization strategy that may result in an agency problem with sellers.”

It should come as no surprise that there are agents who have a “wealth maximization strategy” for themselves, and place their own needs before their client’s. However, the authors’ suggestion about agent motives could be problematic with respect to the National Association of Realtors® Code of Ethics (realtor.org). For example, Standard of Practice 11-2 indicates that, “The obligations of the Code of Ethics… shall be interpreted and applied in accordance with the standards of competence and practice which clients and the public reasonably require to protect their rights and interests considering the complexity of the transaction, the availability of expert assistance, and, where the Realtor® is an agent or subagent, the obligations of a fiduciary.”

If you’re selling your home, one takeaway you might have from this study is that you should exercise due diligence when choosing your listing agent. Consider discussing the sales strategy, and getting it in writing. Additionally, protect yourself by ensuring that your listing agreement can be terminated without penalty and within a reasonable amount of time.

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September 30, 2015November 23, 2021

Herding behavior and real estate decisions

Have you ever wondered why real estate trends develop? When we’re buying and selling a home, we like to think we act rationally and with intention. However, our decision making is influenced externally. We are affected by the attitudes of the experts, family and friends, from whom we solicit advice. We are also consciously and unconsciously influenced by information we get from TV, the internet, social media, news papers, and even from eavesdropping conversations. Your decision making may be based on others’ behaviors that signaled it was the correct thing to do, and in turn magnifies and strengthens the signal to others – which is described as herding behavior.

Herding behavior plays a large role in our daily lives, as well as in our real estate choices and conclusions. Decisions about home buying and selling, which agent to hire, sales prices, and even whether or not we should default on our mortgage can be influenced by herding behaviors.

A 2013 study of herding behavior in strategic default revealed significant findings about our vulnerability to information (Luchtenberg & Seiler (2013).The effect of exogenous information signal strength on herding. Review of Behavioral Finance, 5(2),153-174). To refresh your memory, strategic default (allowing a home to go to foreclosure when financially able to pay the mortgage) became a significant trend that was widely covered in the media during 2010-2012. Luchtenberg & Seiler’s research into decision making and herding behavior suggested that those who are susceptible to information can be easily swayed. Their findings among professionals revealed that low consensus information (“weak information signals”) caused herding when asked to make a personal choice; while high consensus information (“strong information signals”) caused herding when providing advice to a friend.

The notion that the housing and financial crises were caused by herding behavior is not new. However, economist Christian Hott researched if housing bubbles are caused by herding behavior (Hott, C. (2012). The influence of herding behaviour on house prices. Journal of European Real Estate Research, 5(3),177-198). Citing others, Hott explains that herding behaviors are formed by those who are “imperfectly informed” and “learn from the decisions” of others; and that people tend to “overestimate the likelihood of an event” to occur to them when they hear it happened to someone else (expecting the same experience that someone else had). Although Hott concluded that herding was not the only contributor to the housing market collapse, and suggested that mortgage banking was also likely responsible; the findings indicated that herding behavior does play a role in home price fluctuations and housing bubbles.

Cognitive dissonance may also be at work to reinforce your herding behaviors. You may act on information that is not widely acknowledged just because the source is significant to you (such as a relative, close friend or co-worker). And the stronger your belief in the information, the more likely you will in turn confidently give the same advice to others, even though it may be inaccurate and/or irrational.

Breaking away from the herd is difficult; buying and selling a home may not seem to be a rational process – even when confronted with facts. People don’t always base decision of logical choices, but rather base decisions on psycho-emotional needs and/or fears (such as status, acceptance, and avoidance of failure). However, seeking balanced information and becoming aware of your motivations may improve your decision making.

Original published at https://dankrell.com/blog/2015/09/30/herding-behavior-can-interfere-with-real-estate-decisions/

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