Real estate agents have a role

real estate agents have a role
hire a professional

Last year, at the height of the latest sellers’ market, I talked to a friend about selling his property. He gleefully quipped “Haven’t you heard? Nobody uses a real estate agent anymore [to sell a home].” To be honest, I hear that every seller’s market…and it’s a false statement.  In fact, most home sellers hire a real estate agent to sell or buy a home. So, in response I asserted that Real estate agents have a role in the real estate transaction.

The National Association of Realtors’ 2021 Profile of Homebuyers and Sellers indicated that 90 percent of home sellers hired a real estate agent.  The reasons for hiring an agent to list your home apply in any market, and include assisting you to set the list price, to prepare the home, and to facilitate the sale process.

Setting the right sale price is important in any market. During a sellers’ market, it may be tempting to set a high sale price. But the fact is that you can still turn off home buyers with an unrealistic price.  A real-life example comes from a listing appointment I had last year.  The seller was disappointed in the price range I suggested for her home (her home was smaller than other homes in the neighborhood). She was clearly dissatisfied with what I shared and said, “In this market, all homes sell for more than the last one that sold.” This is also a false statement. In a market where homes sold on average 7 days, she wasted 30 days on the market only to sell for a price that was in the range I suggested based on comps and adjustments.

Home preparation is also a key factor in any market. Home preparation entails decluttering, staging and sometimes repairs.  Let’s face it, the better the home presents, the quicker it sells. In a seller’s market, a well-prepared home can elicit a bidding war, raising the sale price above list price. 

Hiring a real estate agent is not for everyone.  But the stats revealed by NAR’s 2021 Profile of Homebuyers and Sellers indicate that real estate agents have a role in the real estate transaction. Real estate agents are housing-market experts, recognizing and anticipating trends.  Agents can provide detailed market analyses to assist in formulating a home’s listing or sale price.

Furthermore, from the time your home is listed to the day of settlement, agents are facilitating the transaction. Starting with marketing your home, the agent will work to procure offers on your home and assist in negotiation. They will also assist in helping completing the sales contract and follow up on contingencies. They will also work alongside other professionals to ensure any bumps in the journey to settlement are worked out.

By Dan Krell
Copyright © 2022

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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.

Home Selling Strategy

home selling strategy
What’s a Seller’s Market?

There is an idiom that says that the “Map is not the territory.”  One interpretation is that you shouldn’t confuse theory with reality.  And in real estate, that means you shouldn’t confuse the strategy with the market cycle. And as this seller market cycle continue, some home sellers are confusing it as the implementation of a brilliant home selling strategy.

Low home sale inventory seems to be the new normal since the Great Recession.  Home owners are staying in their homes longer, and first-time home buyers are putting off buying a home to save money.  And the current market cycle highlights how pent-up home buyer demand can drive home prices.  In this market, appropriately priced homes sell fast, usually within a week.  Many times, homes will get multiple offers and sell over list price.  The truth is that current conditions are a manifestation of the market.  However, home sellers come to expect homes to sell in a week for over list price, even when the market changes.  The answer to a successful sale in any market is to create a home selling strategy. 

Regardless of the housing market conditions, you need a home selling strategy (also known as a marketing strategy) to sell your home.  The marketing strategy will determine the best way to position your home to get your home sold in an expedient way at the best price.  It’s a map that you create to get you to a successful closing. 

Your home selling strategy research should be focused on your neighborhood, as well as competing neighborhoods.  Many begin with a comparative market analysis (or CMA).  A CMA is a process of determining a potential home sale price by evaluating neighborhood sales of similar homes in style, size, and age.  In a buyer’s market, when homes are taking longer to sell, you should get a 30-60-90 day analysis to determine the trend of sale price and days on market.  In a seller’s market, the trend is usually where homes sell relatively quickly.  However, the CMA can assist in understanding pricing trends.

One of the interesting aspects of a detailed CMA is the comparisons of characteristics and features between your home and other homes that recently sold.  From the analysis you can begin to see what makes your home stand out from the others.  You may discover your home has more or less amenities than other neighborhood homes, which should be considered in your pricing strategy.

List price is everything.  Your home sale strategy hinges on pricing your home correctly.  Regardless of market conditions, if the house is prices too high it will likely take longer to sell (relative to the average time on market).  Homes that are prices correctly tend to sell faster than over priced homes.  Many home sellers trying to reap “top dollar” have made the mistake of setting the list price too high expecting a home buyer to make an offer.  The truth is that buyers are savvy and will likely skip the over priced homes.  Your strategy, no matter how clever, can’t overcome overpricing.

Preparing your home should also be part of your strategy.  Decluttering and deep cleaning is a must for all home sales.  Whether or not you live in the home, you should consider staging. “Home staging” is a term that is used to describe the process of making your home as appealing as possible to potential home buyers to sell the house quickly. This may include rearranging and/or removing furniture.  Some home sellers rent trendy furniture to replace their own items. 

By Dan Krell
Copyright © 2021

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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.

Short Sale Home Selling

short sale home selling
Housing Market Expectations 2021

As you probably know, it’s been a sellers’ market with many listings getting multiple offers.  With such a strong housing market, it would seem unthinkable that some home owners would be underwater on their mortgages when selling their homes.  But the fact remains that there are many home owners who have to go through the short sale home selling process to sell their homes.

On the face of it, the January 14th press release from ATTOM Data Solutions (attomdata.com) seems to add credence to the housing market’s strength, touting that foreclosure activity is the lowest in sixteen years.  The report stated that default notices, auctions, and repossessions decreased 57 percent from the previous year, and decreased 93 percent from 2010’s peak would seem to be terrific news.  But the low foreclosure activity stats are actually a manifestation of a government moratoria on foreclosure activities that was imposed due to the pandemic emergency. 

Rick Sharga, Executive Vice President of RealtyTrac, an ATTOM Data Solutions company, stated “The government’s moratoria have effectively stopped foreclosure activity on everything but vacant and abandoned properties. There is a backlog of foreclosures building up – loans that were in foreclosure prior to the moratoria; loans that would have defaulted under normal circumstances; and loans whose borrowers are in financial distress due to the pandemic.”  Further commenting on the foreclosure backlog, Sharga believes that the foreclosure wave won’t be as bad as what occurred prior and during the Great Recession.  But he cautioned that we won’t know how large the foreclosure wave will be until the moratoria expires. 

So, in the face of a strong housing market, there are many home owners who need to sell (due to job loss, job relocation, divorce, etc.) but can’t because the proposed sale price is short of the amount needed to cover the costs of selling (which typically includes mortgage, closing costs, realtor & title fees, etc.).  This is where a short sale can be considered.

A short sale is basically when your sales net isn’t enough to pay the mortgage(s) on the property.  In many cases, short selling home owners don’t have the funds to make up the shortage needed at settlement.  Instead, they seek lender approval to allow a lower mortgage payoff in order for the transaction to close.  Because short sales have become a common form of transaction in the real estate landscape, the process has become more standardized since the Great Recession.  Although the typical time to complete a short sale can take three to six months, short sales can take as little as forty-five days.  However, it’s important to note short sale approval can also take more than six months. 

Although the core process is the same, lenders have different requirements when collecting information and conducting their due diligence.  Having a professional negotiator helps facilitate your short sale.  Seasoned short sale listing agents typically work with experienced attorneys to negotiate and handle the process. 

If you are thinking of short sale home selling, interview several experienced and local short sale agents.  Ask about their track record for successful short sales and how they work on your behalf to get the job done.  Also talk to their negotiator, and ask about their track record in successfully negotiating short sales.   

When considering a short sale, consider all your other options as well and get professional advice from an attorney and CPA to determine your best solution. 

By Dan Krell
Copyright © 2021

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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.

Home Selling with Pets

home selling with pets
Home renovations (infographic from census.gov)

We love our pets, they’re part of the family!  If you’re home selling with pets, you’ll find home buyer pet owners will likely be drawn to your pet accommodations.  According to the 2020 Animal House: Pets in the Home Buying and Selling Process report (nar.realtor, April 2020) many home buyers make decisions with their pets in mind.  Some highlights include: 43 percent of pet owners would move to find a better home for their pet; paramount to 18 percent of pet owners is outdoor spaces and convenience to a vet; 68 percent of home buyers’ decision to buy or rent was based on the community’s animal policy.

But there are many other buyers who don’t have pets.  Non-pet home buyers are often turned off by a “pet home” for various reasons.  Some have pet allergies, and can be affected when they enter the home.  Others are turned off by pet odors.  And some are distracted by free-roaming pets while touring the home.  Is there a home selling with pets strategy that can make your home more appealing to all home buyers?

Professionally deep-clean your home. 

One of the most common obstacles home buyers encounter when viewing a home is that their allergies are triggered when they enter a home where a dog and/or a cat live.  A common cause for this is pet dander and odor.  These issues are typically addressed by hiring a professional to clean carpets and furniture.  Refusing to do this could devalue the home and stay on the market longer. 

Repair pet related damage.

Pets are wonderful, but they sometimes scratch walls, doors, and furniture. Carpets sometimes get ripped and stained.  Wood floors can also be scratched and stained.  Pets can also dig holes in the yard and garden beds. If your pet has done any of these things to your home, consider making repairs. Failing to repair pet related damage can turn off potential buyers, and devalue your home. 

Before a buyer visits a home.

Before buyers visit your home, vacuum rugs and furniture, and sweep up dander in any other areas.  Inspect your home to make sure there are no surprise droppings from your pet.  Put away your pet’s toys.  Professionals recommend placing non-toxic flowers and plants through the home to help provide a fresh environment.  Because not everyone is a dog lover, take your dog out for a walk while buyers tour your home.

Many professionals advise pet owning home sellers to hide traces of their pets as much as possible.  However, it many feel this is more work than they signed on for.  Is there a balance where you don’t have ot remove your pet while selling?

Melissa Dittmann Tracey, in her NAR article Can You Stage the Household Dog? (March 26, 2012; nar.realtor) relates her experience about selling her home by getting her dogs in on the sale.  The staging is basically making the pet area more homely.  Tracey dressed her dogs for a photo to be placed in their area. The photo said “Welcome to our home.”  She related that when she removed her pets, she didn’t get an offer.  However, when the pets where in the home, she received two offers.  Of course, Tracey’s experience is purely anecdotal, but it’s something to think about as an alternative staging idea.

By Dan Krell
Copyright © 2021

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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.

About Your List Price

list price
Where are home buyers finding their homes?
(infographic from nar.realtor)

When you’re selling a home, a consequential decision is your list price and pricing strategy.  Deciding on your price can be confusing because, sometimes, what you hear from the media is not exactly what your real estate agent is telling you.  Additionally, making matters worse is hearing disparate information from different real estate agents.

For example, your home’s market value is not the same as a list or sale price.  It’s a common mistake to assume that your home will sell for “market value.”  However, market value is an appraisal term that describes a probable price that a home buyer would pay in any given market.  Market value can vary depending on the scope and purpose of the appraisal.  Knowing the “market value” for your home can build up expectations for your sale that may not be realized.  However, until you do an analysis of comparables and market conditions, you won’t have a realistic list price. 

Adding to the confusion is hearing that your list price may not necessarily be the sale price.  In a buyer’s market, your sale price could be less than list price.  In a seller’s market, your sale price could be more than list price.

There’s definitely a science when deciding on a list price, where you can work with real numbers.  Unfortunately, the “science” of home pricing is inexact.  Determining a list price is much like baking cookies.  The end result is similar, but expert bakers have their own recipe.  So, although listing agents don’t always agree, there’s some commonality in determining a list price.  And much like baking, some pricing “recipes” are better than others.

Part of the inexact science of home pricing is creating a market analysis.  The market analysis will guide you in deciding a list price by providing a price range.  Although there are basic guidelines for collecting data, agents don’t always agree on the process.  However, once you pinned down a price range, then you can decide your pricing strategy by considering your selling motivation, the economy, and housing market conditions.

Basically, the market analysis is deciding which recent sales are most similar to your home.  The best comparables are homes in your neighborhood that sold in the previous three to six months.  The homes in your neighborhood are likely very similar to yours, and recent sales are an indicator of market conditions.  However, it’s common to go outside your neighborhood when similar neighborhood sales are not available.  These comparables provide a price range.  The more adjustments made to comparable sales, the less exact your analysis.

Besides looking at recent sales, you should also look at neighborhood homes that are actively on the market.  Active home sales are your competition.  These sales can reveal additional market conditions by comparing price and days on market with your sale comparables.  You should also consider recent withdrawn and expired sales because they provide insight about pricing strategies that may not work in the current market. 

Your pricing strategy is how you decide to position your home in the market.  Your goal is to sell for top dollar and least amount of time on market.  In determining your pricing strategy, you need to consider your competition, as well as your motivation, economy, and housing market conditions.  Also remember that the list price may have to be adjusted as days on market accrue, while keeping an eye on your competition.

Original article is published at https://dankrell.com/blog/2020/02/14/about-your-list-price/

By Dan Krell
Copyright© 2020

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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.