proactive home selling Archives - Real Estate News and Commentary

July 19, 2018November 23, 2021

Open house and carry on

Open House Still Part of Home Buying Process

The tradition of having an open house, like other real estate customs, has recently become a source of debate over its value and effectiveness. According to Rachel Stults, the tradition began over one hundred years ago when brokers allowed prospective buyers to “inspect” the house by having it open to the public (A Brief History of Opening Our Homes to Total Strangers; realtor.com; April 21^st, 2015). The house was advertised as “open for inspection.” Of course, it was a much different time. Home buyers were not represented, and there was no home inspection as we know it today. Hence, the “open house,” as first conceived, served an important function for the both the buyer and the seller.

As the housing industry evolved, visiting an open house morphed into a Sunday tradition. Open houses were not just for home buyers, as it also became a form of Sunday afternoon entertainment for the general public. The internet changed the tradition by virtually opening the house to the public through pictures and tours and allowing buyers to identify the specific homes they want to visit.

There is disagreement among real estate agents and other housing experts on the merit and effectiveness of the open house. Additionally, home buyers have significantly changed how they use the open house over the last two decades. According to the National Association of Realtors’ Profile of Home Buyers and Sellers (nar.realtor), twenty-eight percent of home buyers surveyed in 1999 indicated they found their home by visiting an open house, compared to only seven percent in 2017.

Adding doubt is a recent study that indicates having a public open house actually decreases the probability of selling a home by about 6.1 percent (Allen, Cadena, Rutherford & Rutherford; Effects of Real Estate Brokers’ Marketing Strategies: Public Open Houses, Broker Open Houses, MLS Virtual Tours, and MLS Photographs. Journal of Real Estate Research: 2015, 37:3, 343-369). The authors indicated that having a public open house can increase your home’s days on market up to twenty-five days.

Although the open house may have lost its clout as a selling tool, it is still a major aspect of the home buying process. Open house data from NAR’s 2015 Profile of Home Buyers and Sellers indicated:

-48 percent of all buyers surveyed used the open house as part of their home search process.
-Repeat home buyers are more likely to find their home from an open house compared to first-time buyers.
-The income bracket most likely to frequent an open house has a median income between $250,000 and $499,999.
-Home buyers below the age of 65 (but older than 24) are more likely to frequent an open.
-The Northeast and West regions of the US have more successful open houses.
-Buyers seeking a new home visit open houses more than those seeking a re-sale.
-Couples (married and unmarried) are more likely to visit open houses than single home buyers.
-And, ninety-two percent of home buyers surveyed indicated that open houses were at least “somewhat useful.”

If you decide to have an open house, put away your valuables and medications so as not to tempt thieves who may wander into your home. Have a discussion with your agent about focusing on selling your home, instead of trying to get more clients. And finally, don’t distract from your home by having an “event,” which employs food trucks, bounce houses, and other open house gimmicks.

By Dan Krell.
Copyright © 2018.

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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.

June 23, 2017July 14, 2019

Selling your home – try, try, again

If your home didn’t sell this spring, it’s ok. Rocky never quit when he lost, and neither should you. No one said selling your home was easy. Take stock and plan for your next sale.

If your home didn’t sell, you’re not alone. Consider that April’s existing home sales dropped 2.3 percent, according to the National Association of Realtors May 24^th press release (nar.realtor). NAR Chief Economist, Lawrence Yun, stated that the April slide was “expected” because March sales were very strong. Additionally, he pointed out that new and existing inventory is not meeting demand. Many prospective home buyers are frustrated because there is not much of a choice and they are not finding the homes they want. When selling your home, does it have features that buyers want?

Pending home sales also declined in April. Based on contracts signed, the forward looking indicator suggests additional decreased sales in the months to come. Yun also attributes the prospect of future decreased home sales to low housing inventory. He stated that the inventory of existing homes for sale decreased about 9 percent from the same time last year.

When selling your home, consider that the appearance of a brief period of slow sales is not necessarily a warning sign of an impending housing crisis. Instead, a slower sales trend may be considered part of a normal economic cycle after a breakthrough sales year. It is a sign of a healthy market seeking balance. The cycle is caused by home buyers and sellers struggling to find equilibrium.

If your home didn’t sell, you may have a better chance in a few months when the cycle changes. However, before going with the same strategy, try to analyze what happened during this listing period. You may find interesting and revealing information, about your home and your agent, that could help you the next time.

First, talk to your listing agent. If they were active in marketing your home, they should have a wealth of information. Start by asking them about showings. The number of showings determines buyer interest in your home. If you had few visits to your home, it could mean the price is too high. It could also be a result of low quality MLS pictures and information. Buyers start with the MLS listing to determine if the home is worth a visit. However, if you had plenty of buyer visits but no offers, there may be other issues that need attention.

Check with your agent for feedback. Agents often communicate about their visits to homes. Home buyers who attend open houses also provide feedback. Skip over the positive feedback because agents and home buyers often offer positive feedback just to be polite, even if it’s not warranted. Look toward critical reviews for help to improve your home presentation and marketing. If the same item is mentioned multiple times, you should take that as an indicator and begin there.

When selling your home, price, presentation and marketing are relatively easy to adjust. However, your home’s condition could be a deterrent. Buyers in the current market are very demanding and selective. They want a turn-key home that has the recent updates featuring the newest technologies. Even though housing inventory is low, many home buyers will not settle for any house. If your home is not updated relative to the top sales in your neighborhood, you may have to consider a major price adjustment. If your home’s condition is holding back a sale, do a cost-benefit analysis. You may discover that selling for less could net you more than if you spent tens-of-thousands on renovations.

By Dan Krell
Copyright© 2017

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September 3, 2016July 18, 2019

Think resale when home buying

A common question, especially among savvy first time home buyers, is what will the resale value be like when they sell? Of course they are not asking for a specific price, but rather they question if the future home buyer will find the home just as desirable as they do. In other words, think resale when home buying.

That is a good question, since your home is one of the largest investments you’ll ever make; and you want to make sure you’re making a sound investment. Some things to keep in mind when buying a home and keeping an eye to the resale includes: focusing on current desirability; keeping the home complimentary to the neighborhood; considering added value; and not going overboard with updates and upgrades.

Ask yourself what attracted you to the home you’re purchasing and you’ll have a number of items that probably will make it desirable to the future home buyer. Most likely at the top of the list is the location. “Location, location, location” may be cliché, but it holds true. Items such as the home’s accessibility to metro and major commuter routes are important, along with its proximity to neighborhood and local amenities. Other top attractors to the home possibly include the living space and back yard.

Consider the future plans for the area, as it could affect the home’s resale. You can view the master plan for the county and specific localities on the Maryland-National Capital Park and Planning Commission’s website (montgomeryplanning.org). You can decide if the home you’re about to buy will be impacted by some future development or zoning change.

Another resale factor is how the home compares to its neighborhood cohorts. Is the home similar or does it obviously different? Has the current owner modified the existing living space in any way? Have they converted a three-bedroom home into a two-bedroom home; or similarly, added a bedroom by taking space from an existing bedroom or living area? Such modifications can make the home feel cramped and smaller and affect future resale.

Think about how the home seller updated and upgraded the home. Although not all updates add value, many will increase the home’s appeal to buyers. Keep an eye on the kitchen, bathrooms, and flooring, as home buyers typically consider these as high cost upgrades and can affect resale value. Ask the seller if they hired licensed contractors for major renovations and additions. Also, check for appropriate permits, and ask for plans and invoices.

Additionally, do your due diligence when it comes to “green” upgrades. Although the home seller may have considered the investment into green upgrades money saving, they are not always reliable and can be expensive to repair. And it may be all the rage among home owners, solar panels may come with lease payments and/or replacement costs with little or no net savings; so it’s a good idea to ask for associated lease agreements and utility bills, as well as replacement and maintenance costs.

When it comes time for you to sell, don’t go overboard when with updates and upgrades. Contrary to belief, doing too much to the home could have a minimal return on your investment, or even decrease the value. Updates and upgrades should be comparable to similar homes in the price range to maximize return on your investment. Also, steer clear from short lived trendy designs. Experts recommend to focus on function and substance when making upgrades.

By Dan Krell
Copyright © 2016

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November 4, 2009October 5, 2019

Get proactive to sell your home!

Proactive home selling

The 2008 edition of the National Association of Realtors “Profile of Home Buyers and Sellers” indicates that a home’s condition and environmental impact are important to many home buyers. In a market where home buyers are hard to come by, your home may stand out from the crowd if you can demonstrate that your home is solid and energy efficient.

Some believe home buying to be an emotional process that is rationalized by making decisions on perceived value. Conducting pre-sale inspections, such as a home inspection and a home energy audit, can not only provide home buyers with the rationale for choosing your home, the physical data may provide home buyers an additional boost of confidence that can make their decision process easier.

NAR surveys indicated that home buyers are more apt to compromise on the price than the condition of a home (NAR Profile of Home Buyers and Sellers 2008). Be prepared by conducting a pre-sale home inspection. The inspection can provide information on the general condition of the home by examining the age and functionality of the home’s major systems including (but not limited to) roof and gutters, heating and cooling, plumbing, electric, and possibly point out any visible structural defects that may need attention. Some home sellers may also decide to conduct additional environmental tests (such as radon and lead) to possibly alleviate further concerns.

As energy prices continue to rise, home buyers are increasingly aware of home energy efficiency. NAR surveys indicated that 43% of home buyers consider a home’s heating and cooling costs important factors in their home search (NAR Profile of Home Buyers and Sellers 2008). You may allay home buyer fears of purchasing an inefficient home by conducting a home energy audit. Besides revealing the energy efficiency of your home’s furnace, A/C, and major appliances, conducting a home energy audit will also provide information on the home’s efficiency of maintaining temperature. Professional home energy auditors use state of the art equipment (such as infrared cameras and blower doors) to identify often hard to detect air loss or penetration from walls, windows, and doors.

Although some home sellers have the financial resources to make major renovations to their homes to attract home buyers, most do not. The pre-sale inspections can provide you with useful information that may assist you in preparing your home prior to listing by allowing you prioritize the items that need attention. The pre-sale inspections can identify the strong and weak points of your home; you can be prepared for making repairs and/or updates of any unsatisfactory conditions that are identified. However, if you are selling your home “as-is,” the inspections can help you price your home by accounting for any necessary repairs or updates.

By proactively attending to necessary repairs, you can limit the amount of negotiating a home buyer may initiate from their home inspections; or avoid having a home buyer walk away from the deal due to an unsatisfactory home inspection. However, you must remember that although you may be enticing a home buyer by providing pre-sale inspection results, you are still required to disclose any known latent defects in your home (defects that would not reasonably be expected to be observed by a careful visual inspection and pose a health or safety threat).

This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of October 26, 2009. Copyright © 2009 Dan Krell