home sale Archives - Page 7 of 15 - Real Estate News and Commentary

April 21, 2017December 13, 2022

Curb appeal can boost home sale price

If you want to increase the sale price of your home this spring, you will no doubt focus on the interior. But how does the home’s exterior look? You’d be surprised about the amount of necessary cleaning, decluttering and repairing around the exterior of your home. But don’t skimp on the exterior home preparations before your sale – research conclusively shows that improving your home’s curb appeal can increase the sale price by as much as 8 percent!

An empirical study conducted by 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) was the first to demonstrate the relationship between a home’s sale price and curb appeal. The authors also discussed how home buyers’ preferences in a home’s exterior influence the home’s sale price. Besides curb appeal, they suggest that the home’s architectural elements could also be important in the final sale price. The idea that today’s modern designs are more desirable, and likewise costs more money, is only transitory; such that today’s designs could become trite and tired in twenty years.

The study used a seven-point “attractiveness” scale to determine how respondents viewed the attractiveness of a home’s exterior. They concluded that there is a relationship between a home’s exterior attractiveness and the home’s sale price. In fact, they reported that a one-point increase in their scale corresponded to an 8 percent increase in the home’s value!

Home buyers make assumptions about your home’s interior based on the appearance of the exterior. An unattractive exterior can repel home buyers before they even see the beautiful and updated interior. Attract home buyers and boost your home sale price by focusing on cleaning, repairing, and “finishing” your home’s exterior.

Basic landscaping can make a huge difference in your home’s attractiveness. Having too many plants, or letting them grow too much can make the home’s exterior appear crowded and unkempt. Make sure your lawn is full but manicured throughout your listing. Properly trimmed trees not only look tidy, but allow home buyers to see your home from the street. Appropriately placed and trimmed shrubs and flower beds can accent the home’s architectural design.

Check your home’s siding. Replace and repair any missing or broken siding pieces. Freshen up siding by power cleaning, or painting. Even if your home has artificial materials as siding, inspect window frames and fascia boards; these areas are often neglected and may need urgent repair.

How does the deck look? Unless you maintain the deck regularly, chances are it may seem dull and tired, and may need to be re-treated. Even if your deck is made of artificial decking, check the railings. Hire a licensed contractor to repair and secure the deck as necessary.

How about the sidewalks and patio? The sidewalk and patio can be easily cleaned by power washing. Cracks in the sidewalk and patio are not only unsightly, but can be a trip hazard. Cracks are typically caused by rain and water runoff, but can be repaired. Consider also sealing the sidewalk and patio to prevent further water damage.

Finally, consider finishing the exterior to make your home more appealing and cordial. Much like staging the home’s interior, you can use similar principles to increase the exterior’s attractiveness; such as placing appropriate chair(s) and potted plant(s) on the porch, deck or patio.

By Dan Krell
Copyright© 2017

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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.

March 18, 2017October 20, 2020

Misguided house makeover

Do you really need to spend money to make money? Deciding what renovations and updates to make prior to your home sale can be tormenting. It’s easy enough to say that your home needs a facelift; but, the repairs, updates, and painting costs money – and usually lots of it. The suggestion of making renovations and updates to your home before you sell is everywhere, it’s on TV, the internet, and magazines. And if you ask friends and real estate agents, they will also give you a list of “must do’s.” Regardless of how you decide to do a house makeover before the sale, chances are that you’re not doing it right.

There is no doubt that many home buyers are looking for a turn-key home. If your home is not “out of the box brand new,” you probably need to freshen it up, as well as make some repairs and updates. But before you embark on the house makeover by making those renovations, you need to ask yourself two important questions: “How much money can I realistically allot for a makeover?” and “How much am I expecting to net from my home sale?”

Does a house makeover really get you top dollar? Spending money on renovations will certainly make the home sell faster, but not necessarily make you more money. And there is no guarantee that the house makeover renovations you make are to home buyers’ tastes. So if you’re goal is to get top dollar, don’t look at the sale price. Instead keep your eye on your estimated net (the amount you’re left with after the sale minus total renovation costs).

Of course, the best way to maintain your home’s value is to perform regular maintenance. It would certainly make the home prep easier too! But the reality is that many home owners defer maintenance until they feel it’s absolutely necessary. Deferring maintenance can actually cost more in repairs down the line, and lower your home sale price. Spending money to correct all the years of neglected repairs and updates prior to the home sale won’t necessarily get you top dollar.

Not all buyers are looking for renovated homes. One of Stephen B. Billings conclusions in his recent research (Hedonic Amenity Valuation and Housing Renovations; Real Estate Economics; Fall 2015, 43:652-82) was that during the past “healthy” housing market, there was a balance between renovated and non-renovated homes that sold. However, he also found there was an increase in renovated home sales during the housing downturn of 2007.

Selling your home “as-is” would certainly decrease your sale price, but could net you the same or even more if weighed against extensive renovations of the house makeover. Consider that you would only recoup a fraction of the cost of a minor kitchen and bathroom remodel; which averages about $20,122 and $17,908 respectively (according to 2016 Cost vs Value Report; remodeling.hw.net).

Concentrate on the basics of decluttering first. Decluttering can make your home look different and feel larger. Decluttering can set the stage for fo you decide on renovations, and maybe even home staging.

If you decide on freshening up your home before the sale, start with the basics. Focus on deferred maintenance, and make necessary repairs. Consider a fresh coat of paint, and maybe new carpets. Wood floors don’t necessarily have to be replaced or sanded; flooring professionals use state of the art processes to “renew” wood floors.

If you decide on a house makeover, focus first on making repairs and freshening your home. Work out a budget and get several quotes from licensed contractors. Don’t automatically go for the cheapest quote, even if you’re on a tight budget. Focus on quality, even if it means limiting the scope of work. Poor workmanship can sabotage your home sale by making your home look shabby and in need of additional repairs and updates.

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February 25, 2017June 3, 2020

Protect your valuables when selling your home

Preparing your home sale is more than just deep cleaning, decluttering, and minor repairs. Prepare and plan how to protect your valuables during the sale.

I often write about preparing your home for a sale. Of course, that preparation is to make your home sell quicker and get the best price. However, preparing your home is more than just deep cleaning, decluttering, and minor repairs. Preparing and planning how to protect your valuables will not only keep the prying eyes of nosey home buyers focused on your home’s spaces – it can also thwart would-be criminals.

Homes for sale are prime targets for thieves, and your home is not an exemption. Don’t make it easy for them. It may sound obvious – use common sense. However, you’d be surprised how many home sellers don’t lock up their valuables. In my many years of selling homes, I have seen how home sellers can be careless by leaving credit cards, cash, medications, and financial statements on counters and desks. There was one instance where the owner left their gun cabinet open!

And theft doesn’t only occur during open houses. Your possessions can go missing at any time. Anyone can have “sticky fingers,” even rogue real estate agents (agents have been arrested for stealing from a listed home). A Washington State agent was caught stealing prescription medications last year. Another agent faced criminal charges for stealing jewelry.

Additionally, criminals take the opportunity of an open house (and even virtual tours) to stake out your home; only to strike at a later time. So think about laying out your expensive china just to stage your home.

Yes, thieves are looking for anything of value in your home. Besides jewelry and cash, they will take anything they think they can personally use or sell. Medications are a commodity to thieves; and anything with personal identification can be used in ID theft.

I am often asked, “Should I install surveillance cameras?” A few years ago, a home with surveillance cameras was not typical. Seeing the cameras often turned off home buyers because they felt “creeped out” and didn’t like the idea of being watched. However, in today’s cyber-world, where surveillance cameras are nearly everywhere, surveillance cameras have become increasingly commonplace. Before you go out and install cameras in your home, you need to understand the legal implications by consulting with an attorney or privacy legal expert.

Don’t just put away your jewelry and other items of importance, lock them up! If you’re not one of the millions of home owners who has a safe or strongbox, there are other options such as storing items in other locations (safe deposit boxes; someone else’s home; and even a rented storage unit).

Burglar alarms are a mixed blessing. Besides deterring crime, real estate agents often set them off; which can be a nuisance and possibly result in a fine for you (more info on false alarms and fines can be obtained from the Montgomery County Police False Alarm Reduction Section).

If you haven’t already deployed crime deterrents in and around your home, consider using interior and exterior lighting. Exterior lights can help identify night time visitors, as well as possibly deterring would-be thieves. Consider using timers or motion sensing lights. Motion sensing lights will activate the light when people approach your home.

Would-be thieves casing your home look for easy entry points. Lock up your ladders and secure your shed so as not giving criminals the tools to get inside.

And although you may be told that lockboxes are fool proof, only allowing agents in your home – it’s the user that is the weak link. Careless agents sometimes leave doors unlocked or open, or do not fully close the lockbox, leaving the key free to be used by any passerby.

Your agent can be part of your protection plan. Consider having your agent accompany all showings. Additionally, have more than one person during an open house. This can not only help protect your valuables, but the direct agent contact may be influential in your home sale.

For more information on protecting your valuables, check out Montgomery County Police’s brochure “Home Security, Safety Tips to Keep Your Home and Valuables Safe.”

Original published at https://dankrell.com/blog/2017/02/25/protect-your-valuables-home-sale/

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January 12, 2017January 13, 2017

Best home sale?

As the housing market strengthens, consumer confidence in real estate increases. Along with a stronger home sale market comes the increase of for-sale-by-owners (FSBO). The obvious upside to selling a home on your own is to increase your net. And a study conducted in 2009 may support your FSBO yearnings. But is FSBO the best home sale?

Research conducted by Hendel, Nevo, and Ortalo-Magné (2009; The Relative Performance of Real Estate Marketing Platforms: MLS versus FSBOMadison.com; American Economic Review; 99:1878-98) found that homes that sold on a FSBO website sold for as much as homes that were listed in the MLS. However, homes that sold on the MLS did so with significantly fewer days on market. The authors also found that a significantly higher proportion of home buyers bought homes listed on the MLS. The research concluded that “FSBO attracts a particular type of seller…” A FSBO seller is very patient to wait for someone to pay for their higher priced home.

The research conclusion about sale price is contrary to annual surveys reported by the National Association of Realtors. For example, the National Association of Realtor’s 2015 Profile of Home Buyers and Sellers reported that the average home sale price for a FSBO was $185,000, while the average home sale price for an agent assisted home sale was $240,000. Of course, the 2009 research indicated that homes that did not sell on the FSBO website were promptly sold on the MLS. Besides being limited to a specific market, excluding “failed” FSBO sales from their data set could have skewed results and could explain 2009 study’s conclusion about sale prices. From NAR’s Field Guide to Quick Real Estate Statistics:

For Sale By Owner (FSBO) Statistics

FSBOs accounted for 8% of home sales in 2015. The typical FSBO home sold for $185,000 compared to $240,000 for agent-assisted home sales.

Most difficult tasks for FSBO sellers:

Getting the right price: 18%

Preparing/fixing up home for sale: 13%

Understanding and performing paperwork: 12%

Selling within the planned length of time: 3%

Having enough time to devote to all aspects of the sale: 3%

Going FSBO sounds simple and maybe the best home sale; but going it alone is not for everyone. Selling a home is much more than putting a sign in the yard – especially if you are demanding top dollar. Take your efforts up a notch to increase the probability of realizing your sales goal. Among the many tasks that are essential for a successful home sale, consider a basic marketing plan. Attract more buyers with professional high quality photos. Prepare for buyers to visit your home by decluttering and making minor repairs. You should also have a contract ready in case there is no buyer agent. Even though you are selling FSBO, you still have to comply with federal, state, and local disclosure laws. Be prepared for the details of the transaction, which include: negotiating home inspection repairs; providing sale comps to appraiser; dealing with the buyer’s lender and title company.

If going FSBO is intimidating, consider hiring a real estate agent that offers à-la-carte services. The agent can assist you in many areas of your sale, only charging you for the pieces you need. You can even pay a flat fee for a MLS placement of your sale.

If you’re like many FSBO’s, you’ll realize the value of a Realtor. Real estate agents are housing and marketing experts that can assist you in setting a realistic sale price. Besides freeing up your time, experienced agents can facilitate offers and are expert negotiators. They know of latest home sale trends and are aware of any new legislation that can affect your sale.

The best home sale

You may find selling FSBO attractive. But selling a home is in the details that are executed throughout the transaction. The best home sale may actually be through a Realtor. The research supports the notion that hiring a Realtor can provide a more successful and satisfying home sale than doing it FSBO.

As I wrote about FSBO’s in 2005:

How much money can you realistically save? …there as been a trend of negotiated commissions, so actual savings for a FSBO have been reduced….Additionally, FSBO’s are contracting and paying commission with more Realtors and their homebuyers in this environment of limited home inventory. In the end, the FSBO’s savings from Realtor commissions may be marginal.

… there are some real negative aspects of selling your home FSBO, such as time, expense, and contractual obligations.

How much is your time worth? Selling a home requires the application of time to tasks. Among the many tasks of selling a home, the top things that a FSBO may do include (and is not limited to) preparing the home for the open house, contacting the paper to advertise, putting up signs, meeting potential homebuyers, and negotiating contracts. The time quickly adds up.

Selling your home FSBO is supposed to save you money right? Well, there is a bit of expense that is necessary. A FSBO must have signs in the yard, as well as directionals (the small arrow signs) to point homebuyers in your direction. Additionally, you might consider paying the local paper for advertising, as well as paying for an internet advertisement (although there are many websites that will allow you to post for free). Another expense may be to have your attorney to prepare and review the contract…. It seems that the expenses also quickly add up.

…even FSBO’s are responsible to adhere to certain federal and local laws pertaining to the sale of real estate (i.e., equal housing, lead paint, Maryland disclaimer-disclosure, etc). This is the one area that FSBO’s get themselves in trouble because of the lack of knowledge and expertise. There is an increased liability potential.

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November 22, 2016October 20, 2020

A hot winter housing market

Winter is not usually a time of year when you would think of selling your home. After all, everyone gets into holiday and hibernation mode. Between Thanksgiving and New Year’s Day (during the winter housing market), home sale inventory is usually trimmed by an average of 50 percent and contract activity is significantly reduced.

But this winter will be different. Rising interest rates and pent up demand could make the housing market very active this winter.

Consider that mortgage interest rates are on their way up. Freddie Mac (freddiemac.com) reported last week about a mortgage interest “spike” that can get fence-sitters to jump into the winter housing market. The rate for the 30-year-fixed-rate mortgage averaged 3.94 percent, which jumped from the prior week’s average of 3.57 percent. On the face of it, the increase doesn’t seem significant. But the difference is about $70 per month on a $300,000 mortgage.

Last week’s interest rate surge could be the beginning of interest rate increases we’ve been anticipating (for five years). Speculation is that the bond market is anticipating and pricing in a Fed interest rate hike at next month’s Open Market Committee meeting. Of course, the next sixty days could be a lead up to new mortgage rate expectations, which could exceed 4.5 percent by the end of next year.

Historically low interest rates for a 30-year-fixed-rate mortgage have become part of our lives. Upward movement will be met with hyperbole and excitement from the media, claiming reduced home sales and a faltering real estate market. However, let’s put it in perspective. Mortgage rates averaged above 4 percent throughout 2014. The last time we had an average mortgage rate above 5 percent was 2010. In fact, the average mortgage rate at the height of the go-go market during 2006 was above 6 percent.

What does it mean for you if you’re planning a sale? Don’t wait until spring! Consider selling during the winter housing market. You won’t have much competition; and serious home buyers, who are sensitive to interest rates, will be looking through the holidays and winter.

If you decide to sell during the holidays and the winter housing market, make sure your home is ready. Decluttering is the most important aspect of home preparation. However, winter decluttering may be more difficult because of the colder weather and our desire to slow down during these months. Besides our inclination to “nest,” it’s easy to accumulate items in the house that make us cozy and comfortable. But winter clutter can be minimized by organization and a daily straightening-up for incoming buyers.

Check your home’s systems. Have licensed professionals inspect your furnace and roof. Besides keeping the house warm and dry for buyers who visit, checking these systems can prevent surprises when a home inspection is performed.

After a weather event, clear your walkways and driveway of ice and snow. Besides making it easier for home buyers to visit your home, it lessens the possibility of someone falling and getting hurt.

If your home is vacant, have a licensed professional winterize it. Winterizing your home can reduce the risk of bursting pipes and damaging plumbing fixtures. If you are out of town, have a trusted person check on the home regularly (even if you are listed with a real estate agent). Your “stand-in” should also be available to take care of any house related issues that occur in your absence during the winter housing market.

By Dan Krell
Copyright © 2016

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