home sale Archives - Real Estate News and Commentary

October 15, 2019October 15, 2019

How to Market a Home Sale

Some homes seem to sell themselves while others need help. If your home needs help, understand that effective use of marketing tools can increase your home’s appeal, as well as communicate your home’s value to sell it faster and for more money. Home sale marketing tools have been used ever since real estate brokerage began. Although marketing tools come and go, some have stood the test of time. So you might be wondering how to market a home sale…

How to market a home sale according to a Realtor

If you ask your Realtor how to market a home sale, they may tell you about open houses, print ads, and the internet.

Probably one of the most effective marketing tools an agent has is the open house. Unfortunately, the open house is under-used, as well as often misused for the agent’s personal gain. Although the open house routine has changed, brokers have been holding open houses for over one-hundred years. The open house is the ideal time to communicate directly with home buyers and their agents about your home’s appeal and value. Try to avoid the use of open house gimmicks (such as cook-outs and carnivals) because they detract from the home sale message. Furthermore, make sure your agent is focused on selling your home during the open house, instead of focusing on signing-up new clients.

Although not as prevalent today, print advertising was a home marketing staple for over a century. Today, the majority of home buyers search for homes online, so it’s not likely that a print ad will have a wide audience. However, agents will uses post cards and door hangers to announce their new listing. Nonetheless, print advertising is still used to market niche homes and agent self-promotion.

You might be wondering how to market a home sale online? Internet and digital marketing is the most widely used form of advertising today. Internet marketing is easy because the MLS syndicates your home listing across numerous websites automatically! Although the syndication is automatic, your agent still needs to check how the listing appears. If the listing has incorrect information, it needs to be fixed or can hamper results.

There are a variety of other internet advertising opportunities, including a dedicated webpage, pay-per-click, and video. However, results, if any, may be limited if not used effectively.

One of the most important marketing tools to relay your home’s appeal and value is the camera. Technological advances in MLS feeds and digital photography now allow home buyers to see many pictures of your home and its surroundings in crystal clear clarity. However, don’t solely rely on new photo technologies for virtual tours, as the viewing ability may be limited.

Virtual reality (VR) is a cutting-edge tech being touted for virtual tours. Let alone that most home buyers don’t own a VR device, many buyers are likely to search homes when wearing a VR device is not appropriate, such as at work or on the metro. Even though VR marketing sounds cool, it’s reach is still very limited.

Although VR is yet to be an effective tool, augmented reality such as 3D virtual tours are coming of age. Although there are still limitations, updated internet browsers, broadband, and new 5G allow home buyers to view your home as a 3D model.

The basics.

Regardless of what real estate agents will tell you, the best marketing tools for your home are the list price, your home’s condition, and its location. However, a high list price, poor condition and/or location can be helped by your agent’s marketing tools. Effective marketing tools can also help increase your home’s appeal and communicate the home’s value. But ultimately, the nitty-gritty of selling your home depends on your agent’s savvy, ability to facilitate an offer, and negotiate a price.

Original article is published at https://dankrell.com/blog/2019/10/15/how-to-market-a-home-sale/

By Dan Krell
Copyright© 2019

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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.

July 29, 2019August 2, 2019

Take it or leave it

If you’re listing your home for sale with a Realtor, you will likely encounter a one-page disclosure that’s important yet often neglected. The purpose of the “Inclusions/Exclusions Disclosure and Addendum” is to communicate with the home buyer what conveys with house and what you intend to take. This helps you decide to “take it or leave it.” If completed as intended, the disclosure can help you avoid a dispute with the buyer after closing.

It’s understandable that, after completing a stack of listing documents and disclosures, home sellers want to quickly check the boxes of the obvious items that convey with the sale. However, in their haste, many sellers overlook or forget about the fixtures they intend to take it or leave it when they move. Common items that home sellers take include the chandelier (and other lighting fixtures), bathroom mirrors, brand new washer/dryer, or the extra freezer.

The up-to-date GCAAR Inclusions/Exclusions Disclosure and Addendum helps you decide what fixtures and personal property convey. The first paragraph states: “The Property includes the following personal property and fixtures, if existing: built-in heating and central air conditioning equipment, plumbing and lighting fixtures, sump pump, attic and exhaust fans, storm windows, storm doors, screens, installed wall-to-wall carpeting, window shades, blinds, window treatment hardware, mounting brackets for electronics components, smoke and heat detectors, TV antennas, exterior trees and shrubs. Unless otherwise agreed to herein, all surface or wall mounted electronic components/devices do not convey…”

You’ll notice that the disclosure specifically mentions wall mounted electronics and mounting brackets. This wording was added because new norms emerged with new technologies that created disputes about what was considered “permanently” attached. As wall mounted TV’s became commonplace, home buyers expected plasma TV’s to convey and unsightly wall mounts to be removed.

A more recent technology incorporated into a home that has become commonplace is the solar panel. Do they convey or not? Many home owners who install solar panels don’t actually own them, they are leased. Of course, confusion and disputes regarding solar panels have occurred, and are now listed in the Lease Items and Service Contracts section. To help clarify what leased items convey and transfer, the Inclusions/Exclusions Disclosure states: “Leased items/systems or service contracts, including but not limited to: solar panels & systems, appliances, fuel tanks, water treatment systems, lawn contracts, security system and/or monitoring, and satellite contracts do not convey unless disclosed here…”

It’s not uncommon for a dispute to arise at the walkthrough because the home seller decides to take a fixture or appliance that is not listed as an exclusion. Regardless whether the seller misunderstood or had a last-minute change of heart, the home buyer may be demanding the return of the item(s). And since the Inclusions/Exclusions Disclosure and Addendum is part of the contract, the buyer may have recourse.

Take it or leave it?

If you’re selling your home, deciding to “take it or leave it” may be the last on your mind. But take the time to read and complete the disclosures carefully. When completing the Inclusions/Exclusions Disclosure don’t be afraid to over communicate your intentions about taking or leaving fixtures and appliances. Make sure you list items you will take as “Exclusions.” It also helps to tag these items indicating “Does Not Convey,” so home buyers are on notice when they visit. Also, don’t forget to identify older appliances or fixtures that are staying, so the buyer doesn’t assume you are removing them. And of course, ask your agent for assistance if you’re unsure if specific items are fixtures and should be listed in the disclosure.

By Dan Krell
Copyright © 2019

Original located at https://dankrell.com/blog/2019/07/29/take-it-or-leave-it/

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March 21, 2019May 3, 2019

Creating home staging vision

Although home staging has become entrenched in the home sale process, it doesn’t have to be a pricey way to prepare your home sale. Not only has it become part of the home seller experience, the home staging vision is now expected by buyers and their agents when they visit homes.

The spring home sale season is the perfect time for the National Association of Realtors to roll out the results of their 2019 Profile of Home Staging survey (nar.realtor). In a March 14^th press release, NAR President John Smaby summed up this year’s profile by stating, “Realtors understand the importance of making a residential property as welcoming and appealing as possible to potential buyers. While every Realtor doesn’t use staging in every situation, the potential value it brings is clear to both homebuyers and sellers.”

Staging may affect a home’s time on market, and it’s likely due to visual cues. Meaning that home staging vision helps the home buyer picture themselves living in the home. More than half of the agents who responded to the survey indicated that home staging reduces time on market. Forty percent of buyer agents said that home staging effects most buyers’ perceptions of a home. Eighty-three percent of buyer agents believe that home staging vision makes it easier to visualize living in the home.

It’s not surprising that agents agree that the most staging attention goes to the living room, kitchen, master bedroom, and the dining room. It’s not that these rooms have special significance, but rather it’s because it’s where people spend most of their time in the home.

The NAR survey also found that real estate TV shows has impacted home buyers’ views and expectations. Thirty-nine percent of buyers indicated that they experienced a more difficult home buying process than what they expected. Twenty percent of buyers reported being disappointed that homes they visited didn’t look like the ones portrayed on TV. While ten percent believe that homes should look staged as they are depicted in TV shows.

Not all agents stage the homes they list for sale. Only twenty-eight percent of listing agents said they staged all sellers’ homes prior to listing them for sale. Compared to the thirteen percent of agents who confessed that they only stage homes that they deem difficult to sell.

Does home staging affect sale price? It was noted that all agents surveyed indicated that home staging affected their home sale positively. Twenty-two percent of the agents reported an increase of up to five percent in buyers’ offers, while seventeen percent reported offer increases up to ten percent. Only two percent of the agents responded that it increased offers up to twenty percent.

But the idea of staging your home to get top dollar may just be traditional wisdom, as evidenced by NAR’s survey. One of the few studies on staging revealed that indeed, staging does not have a significant impact on sale price. Lane, Seiler & Seiler’s 2015 study (The Impact of Staging Conditions on Residential Real Estate Demand. Journal of Housing Research, 24,1. 21-35) concluded that although staging affects the home buying process and the buyer’s opinion and perception of livability, it’s not enough to result in a higher sales price. The authors stated, “These results stand in stark contrast to the conscious (stated) opinion of both buyers and real estate agents that staging conditions significantly impact willingness to pay for a home. As such, the findings are new and useful to a large group of stakeholders (sellers and agents).”

Original published at https://dankrell.com/blog/2019/03/21/creating-home-staging-vision/

By Dan Krell
Copyright © 2019.

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March 14, 2019May 3, 2019

Curb appeal science

Curb appeal is one of those “intuitive” topics that only gets media attention in the spring and maybe the fall. If you search the internet, you’ll find millions of websites that talk about curb appeal. Because the concept is based on accepted lore, my guess is that most of those sites regurgitate the same ideas. Everyone has some understanding of curb appeal. And if asked, they will give you their opinion on improving it to get a higher home sale price. Everyone agrees that curb appeal can increase home buyer traffic. And most agree that curb appeal can increase the home’s sale price. But is there a curb appeal science?

I often present empirical studies to help you understand if widely accepted real estate traditions and principles are accurate. Unfortunately, curb appeal science is one of those subjects that doesn’t get much academic attention. Notwithstanding, there are two very compelling studies about curb appeal science.

One of the first studies to empirically confirm the connection between home sale price and curb appeal was published in 2013. Chen, Evans-Cowley, Rutherford, and Stanley (An Empirical Analysis of Effect of Housing Curb Appeal on Sales Price of Newer Houses. International Research Journal of Applied Finance. 2013, Vol 4 No 11, p1407-1419) examined how a home buyer’s preferences of a home’s exterior influenced the sale price. Not a surprise, they concluded that there is a connection between a home’s exterior and the sale price. They also quantified the relationship, saying that even small improvements to curb appeal can increase the value by as much as eight percent.

It’s not just the yard and exterior home maintenance. Chen’s study also discovered that architectural elements also determine the home’s sale price. They discovered that the demand for higher cost “modern” homes is relative to what’s contemporary. Meaning that today’s highly desirable new homes and floor plans could be less desirable and sell for less in the future.

A more recent study went further and developed a measurement of a building’s curb appeal. Freybote, Simon and Beitelspacher (Understanding the Contribution of Curb Appeal to Retail Real Estate Values; Journal of Property Research. 2016, Vol 33, No 2, p147–161) found that there are three dimensions of curb appeal that can be measured: atmosphere, architectural features and the authenticity of a building.

A home’s atmosphere describes the general landscape maintenance as well as emotional aspects, such as how relaxing, inviting, and vibrant the home feels. Architectural aspects rate the visual aesthetics of the home, highlighting modern design and interesting features. A home’s authenticity relates to its charm and how “genuine” it feels. In other words, can the home buyer picture themselves living there? The study concluded that curb appeal and sale price is not only connected, but can also be accurately measured. The two dimensions that affected sale price the most were atmosphere and architecture. The authors also suggested that the atmosphere dimension has a social component (which may be associated pride of ownership).

Although authenticity was not found to be as influential on sale price, it is notable. A home’s authenticity (as described in this study) is probably one of the least thought of aspects when preparing a home for sale. If the home staging, including landscaping and exterior elements, is over-the-top or does not portray the home accurately, a home buyer may be less interested in making an offer and negatively affect the home sale price.

Original published at https://dankrell.com/blog/2019/03/14/curb-appeal-science/

By Dan Krell
Copyright © 2019.

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February 18, 2019October 20, 2020

Home sale choices

Having a choice is good. For many, have having a choice represents freedom. For others, choice creates angst out of fear of making the wrong selection. Dr. Barry Schwartz wrote about this phenomenon in his book The Paradox of Choice. Dr. Schwartz describes that having too much choice can create negative well-being. This phenomenon also exists in real estate. There are many home sale choices!

Consumers have more home sale choices today than ever before. However, choosing the best option for you can be confusing. Making the wrong selection can result in remorse. How do you choose between a full-service agent, a limited service broker, à la carte broker, private placement broker, or sell by owner? How do you know decide among your home sale choices?

Recently published research further supports the value of hiring a full-service real estate agent. A study conducted by Rutherford, Rutherford, Springer, and Mohr (Limited Service Brokerage: Positive Broker Intermediation?; Journal of Real Estate Research: 2018, Vol. 40, No. 4, pp. 551-595) compared the outcome of using a limited service brokerage to a full service real estate agent. The results indicate that although the limited service brokerage time on market is similar to the full-service agent, your home sale price is likely to be less with a limited service broker.

Although there have been conflicting studies in the past, Rutherford’s recent study confirms that using a limited service brokerage is likely to sell your home for less. The authors concede and discuss other factors that may influence results, such as housing market conditions. Studies that reported positive outcomes of limited service brokerages may have occurred during the go-go market prior to 2007.

How much commission should you pay?

Conventional wisdom says that full service agents are “full-price” (whatever that is) and expensive. However, that’s no longer true. Many full service, high quality agents charge as much (or as little) as discount brokers. A 2015 study by Barwick & Pathak (The costs of free entry: an empirical study of real estate agents in Greater Boston; The RAND Journal of Economics; Vol 46, No. 1, Spring 2015, p.103–145) indicated that increased Realtor competition has forced average commissions to decrease over the last few decades. Of course, they found that the decreased commission structure of the full-service agent good for consumers and the housing market. They also concluded that decreased commissions would increase quality by decreasing entry into the industry for the wrong reasons.

To make better home sale choices, educate yourself.

Understand what services are available and what it costs. You should ask yourself if the services can meet your expectations of helping you through the process of selling your home? And, how will it impact your sale, time on market, and price?

Unfortunately, the National Association of Realtors doesn’t do enough to educate consumers about their choices when buying and selling a home. Including negotiating reduced commissions and buyer rebates. And I wouldn’t expect they will any time soon because of their mission statement (posted on their website nar.realtor): “The core purpose of the National Association of REALTORS® is to help its members become more profitable and successful.”

So how do you choose among your home sale choices? Be a savvy home seller. Don’t stick to “conventional wisdom.” Explore your needs and expectations. Investigate your choices and ask questions. Don’t fall for sales tactics. And don’t be afraid to negotiate commission.

Be a savvy home seller

Don’t stick to conventional wisdom
Explore your options. There is no “one size fits all” home sale plan.
Search for an agent that meets your needs and expectations

What are your plans? How fast of a sale do you expect? In what condition is your home? Interview several agents with different approaches to your home sale.
Ask Questions
Every agent has their own process. Some are hands on and responsive, while others hand off your sale to their “team” and you never see them again. Can you call anytime, or are their limited times? How will the agent meet your expectations?
Don’t fall for sales tactics
Many real estate agents spend lots of time and money learning sales tactics to get the listing. Many have developed polished presentations that are very convincing. Call the agent’s past clients to find out if they over promise and under deliver.
Negotiate listing commission
It’s a very competitive market. Although some agents won’t negotiate their commission, many will. Some will limit their services when they reduce their commission, while others offer full service.

Original published at https://dankrell.com/blog/2019/02/17/home-sale-choices

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