Take it or leave it

take it or leave it
Home staging (infographic from nar.realtor)

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/

If you like this post, do not copy; instead please:
link to the article
like it on facebook
or re-tweet.

Protected by Copyscape Web Plagiarism Detector

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.

Creating home staging vision

home staging vision
Creating home staging vision (infographic from nar.realtor)

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 14th 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.

If you like this post, do not copy; instead please:
link to the article
like it on facebook
or re-tweet.

Protected by Copyscape Web Plagiarism Detector

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.

Curb appeal science

curb appeal science
How to increase curb appeal (infographic from keepingcurrentmatters.com)

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.

If you like this post, do not copy; instead please:
link to the article
like it on facebook
or re-tweet.

Protected by Copyscape Web Plagiarism Detector


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 sale choices

home sale choices
Home seller snapshot (infographic from nar.realtor)

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

  1. Don’t stick to conventional wisdom

    Explore your options. There is no “one size fits all” home sale plan.

  2. 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.

  3. 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?

  4. 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.

  5. 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

By Dan Krell. Copyright © 2019.

If you like this post, do not copy; instead please:
link to the article
like it on facebook
or re-tweet.

Protected by Copyscape Web Plagiarism Detector


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.

Occam’s razor home selling

Occam's razor and selling a home
Staging is one of the four basics of home selling. (infographic from nar.realtor)

Many home owners are preparing to sell their homes this year.  And in doing so, home sellers are looking for new and exciting ways to sell their homes fast and for top dollar.  But the reality is that selling a home is not rocket science.  There really isn’t a secret trick or approach to selling a home.  Rather, it’s more like magic, where properly performed fundamental tasks can set the stage for a satisfying experience. If you don’t know how Occam’s razor (or what it is) can help you get the most from your home sale, pay close attention.

Unfortunately, it’s a human trait seek a complex solution to a simple question.  In other words, applying Occam’s razer to your home sale can save you time and allow you to get out of your own way.  Occam’s razer is a tool that is often used to figure out solutions and devise scientific theories.  It has become popularized as the “keep it simple stupid” method.  However, Susan Borowski’s history and explanation of Occam’s razor, written for the American Association for the Advancement of Science, gives it teeth (The Origin and Popular Use of Occam’s Razor; aaas.org; June 12, 2012).  Borowski states, “Occam’s razor doesn’t necessarily go with the simplest theory, whether it’s right or wrong; it is not an example of simplicity for simplicity’s sake. It merely tries to cut through the clutter to find the best theory based on the best scientific principles and knowledge at the time.”

In other words, focus on the tried and true fundamentals of selling a home.  Anything above and beyond may not necessarily help to sell the home faster or for more money, but could help make the process more enjoyable.  That in mind, let’s consider these four basic concepts:

First, consider the condition of your home.  Do you have deferred maintenance issues?  Does your home need a makeover?  Homes that get top dollar are “turnkey.”  Many home buyers are willing to compete and pay more for recently upgraded and renovated homes.  Selling a home with deferred maintenance or lacking recent updates can not only turn off many home buyers, but can encourage low-ball offers.  A pre-listing home inspection can help you identify maintenance issues.  Also, consider consulting with a design professional to help you understand which updates (if any) are necessary to help your home sale.

Next, work on the home’s presentation to give it a clean and spacious feel.  Decluttering is one of those tasks that can be overwhelming, but it’s importance cannot be overstated.  Decluttering will force you to decide which items to keep in the home.  Additionally, staging your home can help balance space, furniture and décor.  This can help home buyers envision living in the home.

Deciding on a list price is often a conundrum.  Although enticing, don’t be seduced by the agent who tells you the highest sales price without understanding their rationale.  The housing market can turn on a dime.  If your home isn’t priced correctly, it can languish on the market.  There are many aspects that go into deciding a price, so work with a respected seasoned agent to go through the market details and scenarios. 

Finally, when the home is ready to list, how is it to be marketed?  Today’s MLS listing syndication takes advantage of the fact that most home buyers actively search homes on the internet. Don’t rely on gimmicks that promise activity on your listing.  A complete marketing plan will take into account the factors we discussed here, and apply strategies to attract motivated home buyers.

Original published at https://dankrell.com/blog/2019/01/12/occams-razor-home-selling/

By Dan Krell. Copyright © 2019.

If you like this post, do not copy; instead please:
link to the article
like it on facebook
or re-tweet.

Protected by Copyscape Web Plagiarism Detector


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.