Home Selling Tips

Because not all listed homes sell, you should be strategizing how to make the most of your sale. What to do? Here are some home selling tips .

Think about the basics that go into a successful home sale. The first is to price the home according to the comparables in the neighborhood. The second is to consider the condition of the home. The third is to have a marketing plan. And lastly, you should have a close working relationship with your Realtor.

Home selling tips

Of course your home should be priced according to the comparables in the neighborhood, and progress should be gauged with the other homes on the market in the neighborhood. That means besides pricing according to the homes that are comparable, your Realtor should expect results within the parameters based on those sales also. Regardless of what you hear, the seller sets the selling price. Your Realtor is only an advisor providing you the data and opinion.

Sale price

Comparing your home to similar homes that sold is critical in deciding a sale price. Comparables are homes that match your home in style and size. If you have a three bedroom rambler, you should compare your home to other three bedroom ramblers in then neighborhood.  Typically, comparables are restricted within a subdivision or within about 0.5 mile to 1 mile. And sales not older than six months (unless there is a lack of home sales).

Home condition

Why is your home’s condition important when deciding a sale price? If your home has deferred maintenance or hasn’t been updated for twenty years, it’s not going to get the same price as the renovated similar home across the street. Be honest with yourself about the home’s condition.  If your home is not in move-in condition, think about the cost of renovating in the price along with market conditions.  If it’s a buyer’s market, you may have to consider a lower price or the home will languish waiting for a buyer.  If it’s a seller’s market, there are more home buyers willing to buy a home with the intention of renovating it.

Marketing plan

You need a roadmap to success. If your Realtor has not yet presented you with a marketing plan, ask for one. Your Realtor should have a plan of action to sell your home. Putting a sign in front of your home and entering the information in the MLS is not typically enough sell a home. Market conditions frequently change, and your Realtor should have a concrete plan to sell your home. The plan should include not only how the home will be marketed, but how the agent will take you from contract to closing.

Your listing agent

The final aspect that is important in selling your home is the relationship between you and your Realtor. Besides having confidence in your Realtor, you should feel comfortable being honest (for good and bad).  It’s not a good sign if your Realtor is often defensive when you express concerns and needs. Your Realtor, on the other hand, should also be honest, as well as timely with information concerning your home. Besides communicating the activity of the potential home buyers, they should also keep you up to date with the neighborhood market keeping an eye on the other homes on the market.

How will you market your home and what will you do if the market changes? When you are interviewing Realtors to sell your home ask about their marketing plan. Ask about a home pricing strategy.  Ask how your home’s condition affects the price.  Ask how the agent communicates and what you should expect from them.

Disclose disclose disclose

It is not unreasonable for home buyers to seek assurances about the homes they purchase. One method for obtaining a sense of confidence about the home is having a home inspection. Sometimes it is not as much as wanting to know what needs to be fixed as much as wanting to know what they were getting into, as one of my clients casually stated. However, home inspectors are not perfect and there are numerous conditions in the home that could go undetected.  The home seller golden rule is disclose-disclose-disclose.

In the past, it used to be buyer beware. Unscrupulous home sellers racked up complaints. Consumer advocates pushed some legislatures to enact a property disclosure law. Property disclosure laws have been enacted in about thirty states. Here in Maryland, the law has been was around since 1994.

It had been incorrectly thought by home sellers (and some real estate agents), that if the disclaimer is given, the homeowner did not have to provide any information at all about the home- including relevant material facts and latent defects. In fact, some home sellers would wrongly choose the disclaimer statement to not reveal material facts or latent defects.

The disclosure addenda are constantly changing. A significant change at the time of this writing to the required Maryland disclosure still requires the homeowner to provide either the disclosure statement or disclaimer.  Except the added burden of disclosing known latent defects is also required, even if you disclaim.

If you are selling your home or thinking of selling your home in the future, you should discuss with your Realtor the Maryland disclosure/disclaimer statement and recent changes to the disclosure laws. If you have any doubt about your obligations as a home seller or do not understand the disclosure law, you should consider consulting an attorney.

The golden rule of disclosure is to disclose. An issue that is disclosed to a home buyer before they enter into a contract with you is a piece of information that the home buyer will keep in mind as they purchase the home. However, undisclosed issues can come back to bite you, even after the sale.

by Dan Krell © 2005

There are options if you are in Foreclosure

Popular culture has a way of taking an item or an event and making it over simplified for the lay folk so as the item or event becomes a trite expression of a generation or decade. You can spot this happening when certain new buzzwords fly about the air. The event or item becomes trendy and ingrained in the psyche, then eventually becomes passe. This has become the case of trying to buy a pre-foreclosure. A pre-foreclosure is when the distressed homeowner still owns the property, most likely is still living in the home and is facing a sure loss of their hard earned money and home.

As a Realtor, it used to be pretty common for a buyer to say, “Oh, and I am interested in buying a foreclosure,” at the end of the first meeting. Lately, it has become trendy for buyers to assert that they are looking for a pre-foreclosure because it is believed that the home is still in good condition. The main reason for these assertions is that buyers believe they are getting a great bargain. Unfortunately, it is far from the truth. Most people, who buy a foreclosed home, pay a premium because the market is very strong. Even when the home is distressed, the buyer will pay top dollar for a home is a particular neighborhood, knowing that they will have spend another $50,000 to $100,000 to fix the home. Certainly a pre-foreclosure will sell for market value.

The unfortunate player in this scenario is the distressed homeowner who faced a hardship or two and fell behind on their mortgage payments. Many people facing late payments or foreclosure usually lack information of where to get help. The U. S. Department of Housing and Urban Development (HUD) recommends that the first thing the homeowner should do is to call their lender if they are falling behind on their mortgage payments, or they know they will have problems making the mortgage payment. By calling the lender and explaining the situation, the lender will usually provide options to help the homeowner through the hardship. HUD also highly recommends that the homeowner call a HUD-approved housing counseling agency to assist. Information on the housing counseling agencies is available on the HUD website www.hud.gov.

According to BankRate.com, lenders want to help the borrower as much as possible. The last thing the lender wants is to spend thousands on legal fees to foreclose on a property then have to sell it. Some of the options that lenders extend to delinquent homeowners include a forbearance and mortgage modification. These provisions are usually more prevalent with FHA and VA backed mortgages, however, they are also offered for conventional mortgages as well. A forbearance is a special repayment plan where the lender arranges payments such that it will allow the homeowner to make mortgage payments after the financial crisis. Usually this is a fix for a short-term financial crisis.

If the homeowner is seriously behind on your mortgage, the lender can modify the mortgage. A modification is when mortgage payments that have not been paid are added to the principal of the existing mortgage. This allows the homeowner to essentially catch up and get back on track.

Recently, it has become common to see many pre-foreclosure sales. This when the owner has fallen behind in their mortgage payments or is even in the foreclosure process and sells the home on their own or through a Realtor. In most cases, this may be the last resort for the homeowner because they cannot pay the mortgage even with the modifications. Although the homeowner cannot keep the home, this is usually a good arrangement because the homeowner can pay off the mortgage and get the equity out of the home to apply it towards the purchase of a smaller and more affordable home.
If you or someone you know has the misfortune of falling behind on the mortgage, talk to the lender, they want to help.

Copyright Dan Krell 2005.

What happens to your home in a divorce?

What happens to a family home in a divorce?

When divorce is imminent, people tend to worry about the children’s future, how to treat the mother-in-law who was so nice (lucky fellow), how their friends will react. Of course, these should be at the top of one’s mind. There are many concerns to worry about.

Beyond family concerns, finances and real estate are important also. Figuring out who gets what and how much can get messy, antagonistic and litigious. That is why an attorney should be consulted on these matters.

But what about the marital home? There are various options and outcomes. Sometimes the agreement is amicable.  However, there are many times where spouses disagree and rely on their legal counsel.  Sometimes, the court steps in and appoints a trustee to determine the disposition of the home.

It’s common for one party to offer to buy out the other’s interest in the home.  But in doing so, coming up with the money may be a challenge.  “Cash-out” refinance and home equity lines are sometimes a solution if the spouse meets the lender’s underwriting guidelines.   Of course, if the home has no equity, then relying on a cash-out refi may not work.

Selling a home is emotional and stressful. Selling a home during a divorce can compound the stress.  It’s important to be as objective and fair as possible when making decisions about the marital home.   If you are selling your home, hire a professional Realtor who is objective and adept in handling such sales.  Consult with an attorney on matters of separation and divorce.

by Dan Krell © 2005
Copyright Dan Krell 2005.

What happened to afordable housing?

Everyone in the Metro area knows that housing costs have risen at what seems to be an exponential rate in the last few years. If you are a first time home buyer, the shock of Metro area home prices must be like watching the Texas Chain Saw Massacre. But what about affordable housing?

What happened to affordable housing? According to the Greater Capital Association of Realtors (www.gcaar.com), the average sales price for a single family home in Montgomery County in January 2005 was $512,743. Comparatively, the price of a single family home in January 2004 was $435,898. Evidence that it is becoming increasingly harder for a first time home buyer to own a single family home.

Although the price of a home may not seem affordable, there are some ways to make it affordable. Montgomery County has always had some form of assistance to boost home ownership. Some of the programs that have been prevalent for some time now include the moderately priced dwelling unit program (MPDU), special loan programs and closing cost assistance.

The moderately priced dwelling unit program was established in 1974 by Montgomery County to provide affordable housing. The program allows a homebuyer to purchase a home at a special price. The homebuyer must qualify for financing and meet other criteria. There are MPDU’s scattered throughout the county in many communities and exist in many forms, such as townhomes, condos and semidetached homes.

There are restrictions on purchasing a MPDU, as one can imagine. The restrictions include a certificate of use, resale restrictions, and shared profits. The certificate of use requires the owner to live in the property, and not be able to rent to tenants. Additionally, when you are ready to sell your home, the price is restricted. Any profits that incur from the sale must be split with the Housing Initiative Fund (HIF) (which spends the money for additional affordable housing). The current price for a townhome is very affordable (check the website below). Information on qualifying and other regulations for the MPDU program, please visit the Montgomery County Department of Housing and Community Affairs website www.montgomerycountymd.gov/apps/dhca/index.asp.

If you choose not to go through the MPDU program, or if you do not qualify, there are other programs available to help with your purchase. Community programs, such as the Housing Opportunities Commission, offer special financing and closing cost help. If you visit their website, www.hocmc.org, you can see that there are currently two loan programs that offer below rate assistance for qualifying purchasers. One loan program offers a starting interest rate of 3.55%. These loan programs will qualify you to purchase a home that you might not otherwise qualify.

If financing is not a problem, you might need some closing cost help. The Housing Opportunities Commission has a couple of options for this too. One program offers a loan for up to five percent of the purchase price of the home. If you are short on cash, help such as this is a Godsend.

Although the average price of a home may not seem affordable to many first time home buyers, there are programs that are available to help with the purchase. Each program mentioned here does have qualifying criteria, as well as restrictions, and should be checked before embarking on your endeavor. Both agencies mentioned here are very knowledgeable and want to help you with any questions you may have.

by Dan Krell
Copyright Dan Krell 2005