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February 14, 2020February 14, 2020

About Your List Price

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.

November 28, 2019November 28, 2019

Holiday Home Selling

Conventional real estate wisdom used to be that timing the market was the key to listing your home for sale. Most home sellers tried to aim for the spring and early summer months to sell their homes. In fact, June continues to be when most settlements occur. However, selling strategies have changed over the last few years such that home sellers are confidently listing in the fall. Many also hold nothing back to sell during the winter months. But how about holiday home selling?

The holiday season is typically when the real estate industry slows to a crawl. But it doesn’t mean that the housing market is closed! Consider that there were 658 Montgomery County MLS listed homes that went under contract since the beginning of November. This confirms that active home buyers are constantly searching for homes, and will certainly visit houses that are available during the holiday season. The only obstacle for home buyers (and your home sale) is severe weather.

Holiday home selling is not for everyone. If you have not yet listed your home for sale, you may consider waiting to list after Thanksgiving. Or you may just decide to wait until the new year. Your listing strategy should be based on your lifestyle. Although the holiday season is often synonymous with joy and good cheer, many experience increased stress during this time. If the holidays are a hectic time for you, the thought of the additional stress of selling your home may sway you to waiting the holidays out. Keep in mind that, like any other time of the year, you still have to prepare your home for sale (which includes decluttering, repairs and staging).

If your home is already listed for sale, you have some choices. It used to be the rule that if your home was still on the market approaching Thanksgiving that the listing would be pulled from the MLS until spring. And as of the November 1^st, 181 county homes have been pulled off the MLS. You may decide to do the same.

But keeping your home on the market during the holiday season is no longer taboo. As I mentioned earlier, conventional wisdom is passé. Some home sellers see an opportunity to sell during the holiday season as many homes come of the market. Consider that since November 1^st, there were 444 new MLS listings. There are also another 46 homes currently listed as “coming soon.”

Obviously, if your home is vacant it’s easy to show. However, you should still visit the home weekly to make sure it is clean and shows well. But if you’re selling the home where you reside during the holiday season, you may want to think about showings and staging. Talk to your agent about requiring home buyer appointments to view the home so you don’t have inopportune surprise visitors. This will give you the flexibility and emotional space to have your home show its best while you enjoy the holidays.

What about holiday decorations and holiday home selling staging? According to Melissa Dittmann Tracey, writing for the NAR blog (Should You Stage Homes for the Holidays?; nar.realtor; December 19, 2011), most real estate professionals tell their clients to stage with “holiday-spirit and glow.” Although thirty-seven percent of professionals indicated that they advised holiday staging without religious decorations, twenty-eight percent advised their clients to also include their religious decorations. Only eight percent of professionals surveyed advised to do generic staging without any holiday decorations.

Original article is published at https://dankrell.com/blog/2019/11/28/holiday-home-selling/

By Dan Krell
Copyright© 2019

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September 15, 2019February 8, 2020

Autumn Home Selling

What was once considered a winding down period for the year’s home sales, has become housing’s second wind. Autumn is not only a time when the leaves start falling, but it also has become a target selling season for home sellers who miss the spring market. Autumn home selling is also a second chance for those who could not sell their home earlier in the year. In fact, the fall has become an active home selling season.

The general consensus for the autumn home selling phenomenon is that home sale inventory is low. But the truth is that the fall tends to be when home sale inventory begins to decrease anyway. Many home sellers who didn’t sell their home during the spring or summer will be pulling their homes off the market. Sure, new listings are available during the fall, but not as many as there were in the spring. Fall is a time for home buyers and sellers to strike while the iron is hot. The combination of fewer listings along with serious home buyers and sellers makes the fall housing market a brisk selling time.

This year, autumn home selling may be different. Existing home sales have declined year-to-date (compared to last year). The National Association of Realtors reported that as of June, existing home sales are about 2.2 percent behind last year’s sales. Year-to-date Montgomery County home sales are 2.1 percent below last year’s sales. This decline actually started last fall. The home sale drop-off stifled what could have been a record year for 2018 home sales.

Autumn home selling

If you’re selling a home this fall keep an eye on neighborhood home sales. Setting a reasonable list price will be key to getting your home sold. Keep in mind that although home sale prices continue to climb, monthly appreciation is slowing. The S&P CoreLogic Case-Shiller Home Price Index (spindices.com) reported a year-to-date nationwide 2.29 percent increase. You get a sense of the magnitude of decelerating appreciation when compared to 2018’s increase of 4.55 percent, and 2017’s increase of 6.24 percent nationwide. The year-to-date Montgomery County average home sale price is about $554,932, which is only an increase of 1.2 percent from the same time last year (MarketStats by ShowingTime).

Over pricing your home can be a disastrous mistake during the fall market. Don’t be greedy, and be prepared to adjust your pricing strategy. There are many storms brewing that can easily scare home buyers. If the list price is too high, you may end up with low ball offers because of a protracted time in the MLS.

Although having less competition makes it a good time to sell your home, it can also be challenging. Fall weather can be significantly different day to day. Be prepared to adjust the thermostat. Make sure your HVAC system gets a fall service so it will be ready for colder temps.

Don’t forget to keep up with your home’s curb appeal. Although you may want to get lazy about maintaining your lawn, don’t let it grow too high. Also, remove excessive leaves from the ground too, as this can also diminish your home’s curb appeal.

Make accommodations for home buyers to visit your home. Many home buyers will probably schedule tours after work, when it will be getting dark. Open houses are still a good option for a fall home sale. Turnout may be scant, but fall open house visitors are more likely to buy.

Original article is located at https://dankrell.com/blog/2019/09/15/autumn-home-selling/

By Dan Krell
Copyright© 2019

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April 27, 2019December 13, 2022

Home buyer preferences

Homes can vary along a spectrum of many factors. Size, style, location, are just the basic differences and are generally used by home buyers in their home search. However, even similar homes in the same neighborhood can differ depending on the homes’ features. Home buyer preferences and trends toward home features is usually the reason for price differences on similar neighborhood homes. This truth was validated by a study conducted by the National Association of Home Builders (How Features of a Home Impact Its Price; nahb.org; November 30, 2004). If you’re selling this spring, consider home buyers preferences and current home buyer trends.

In past columns, I talked about how most home buyers in the current housing market want a turn-key home. And that still holds true. Home buyers still prefer to buy a new home. However, buying a recently updated/renovated home is the next best thing. Generally, homes with new kitchens, bathrooms, and flooring get multiple offers and sell very quickly. Alas, updating and renovating a home takes time and money. Discuss with your listing agent how making (or not making) updates and renovations affect your sale price. You may have to adjust your pricing expectations accordingly.

So, what tops the list of home buyer preferences? The National Association of Home Builders latest “Trends in Home Buyer Preferences” (nahb.org) indicates that the kitchen is a prime area of focus. Current kitchen trends include a strong preference to either “traditional” or contemporary style cabinets. The styling would depend on the kitchen overall (consulting with a design center would be helpful). Additionally, water filtration has also become a desirable feature. If not already installed, water filtration can be added when replacing a refrigerator, as it is now a common function of modern refrigerators.

In today’s growing awareness of environment and sustainability, it’s a given that home buyer preferences show a strong preference toward energy efficiency. When updating, consider Energy Star (energystar.gov) certified appliances. Energy Star appliances typically use 50 percent less energy than standard models. Additionally, consider having an energy audit prior to listing your home. The energy audit will reveal the home’s energy efficiency. It will also highlight where improvements are recommended. The report itself is useful to the home buyer, even if you don’t follow all the recommendations.

New flooring is also important to home buyers. The preference towards wood flooring has always been strong. However, be aware that there are differences in quality of flooring products, as well as workmanship of installers. Even if you purchase top quality hardwood, poor installation can actually negatively impact the sale price. If you’re installing wood, tile or similar flooring, hire an MHIC licensed flooring contractor. Your flooring contractor can also help with trendy flooring options.

As a home seller, you certainly consider your home as being special. And you probably spent a good amount of money on customizing your home over the years. However, a problem many home sellers encounter is that over customization and personalization can negatively affect the home sale price. The truth is that home buyers have preferences too, and their preferences may not reflect yours.

Home buyer preferences and trends are constantly changing. Your listing agent should be able to help understand how current home buyer preferences and trends impact your home sale. Additionally, consulting with a home staging or interior design professional can assist you with deciding on making relevant updates to your home.

Original published at https://dankrell.com/blog/2019/04/27/home-buyer-preferences

By Dan Krell
Copyright © 2019.

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April 18, 2019August 26, 2019

Short sale is still relevant

Believe it or not it’s been over ten years since the financial crises and Great Recession, and the short sale is still relevant! And this is why…

Coming on the heels of a dismal January, the National Association of Realtors March 22^nd data release announced good news declaring a home sales “surge” during February (nar.realtor). February’s closings increased 11.8 percent, compared to January! But the bad news is that the number of sales also decreased 1.8 percent from last year. If you follow real estate news, you know that homes sales stats were disappointing during the winter. (Consider that 2018’s total existing home sales were lower than the previous year’s total, according to NAR’s statistics). February’s adjusted annual home sale rate of 5.51 million is lower than the same time last year, and pales in comparison to the 6.48 million home sales in 2006.

Although February was indeed a busy month, NAR’s March 28^th data release of the Pending Home Sale Index predicts a slow start to the spring market. Homes that went under contract during February decreased 1 percent from the previous month and decreased 4.9 percent from the previous year. This “forward looking index” indicates that next month’s home sales may disappoint.

But there is a silver lining. Home sale prices continue to rise, meaning that home owner equity is not eroding. February’s median existing home sale price increased 3.6 percent from the same time last year. And according to NAR’s statistics, home sale prices have risen for 84 consecutive months (which equates to 7 years of continued gains)!

There are many reasons for a short sale

Although home sale prices are rising, there are still many home owners who are underwater. According to Attom Data (attomdata.com), distressed home sales still account for 12.4 percent of all home sales. Of course, this is far from the 38.6 percent in 2011. And the percentage of distressed sale continues to decrease. However, the number is still significant.

It’s estimated there are millions of underwater home owners. There are a number of reasons why home owners may be underwater, including (but not limited to) years of deferred maintenance, or a negative equity mortgage. Many short sales today include investment properties. Some home owners don’t know they are underwater until they list the home for sale.

Although not as prevalent as in 2011, the short sale is still relevant! Many underwater home owners don’t have to sell, as they are not financially distressed, and are happy to stay put for many years. However, some are compelled to sell for a number of reasons (such as divorce, bankruptcy, etc.). Some underwater home owners may have a desire to move, but can’t because they are underwater (such as empty nesters and retirees).

If you think your home sale may result in a short sale, get the facts. Question what you hear from others and what you find on the internet. There is a lot of information circulating about short sales. A majority of the information is either misleading, erroneous, and/or outdated. Consult with an attorney who negotiates sales to help you understand the legal aspects. Also consult your accountant for the financial implications.

There is much to consider, and a lot at stake! Be careful when considering your listing agent. Due your due diligence and hire an experienced short sales agent that knows the process and is savvy about appealing lender values. Many listing agents will give up on a short sale, mostly because it’s hard work. So most important, make sure your agent has a track record of getting the short sale to settlement.

Original published at https://dankrell.com/blog/2019/04/18/short-sale-is-still-relevant

By Dan Krell
Copyright © 2019.

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