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July 29, 2016July 12, 2019

Home selling don’ts

When preparing for a home sale, the devil is in the detail. You probably already know about the “do’s,” de-cluttering, curb-appeal, staging, and making necessary repairs. But here are a few home selling “don’ts” that often trap home sellers into making mistakes:

Home selling is not about you. Don’t make a statement. Now is not the time to be bold with renovations and staging; but rather stay focused on getting your home sold. Stay away from trendy features, and bold designs. Although bright and dramatic colors seem tempting, stick with neutral color schemes. Besides making rooms feel awkward, making a statement with trendy fixtures and bold colors may turn off home buyers. Bold style statements make home buyers fixate on the style, rather the space and potential of each room.

Home selling is not about being cheap. Don’t hire a contractor because they are the cheapest. When it comes to home repair, the idiom “you get what you pay for” typically holds true. Home buyers have a discerning eye and can spot poor workmanship. Don’t be tempted to hire the unlicensed handyman to save a few dollars either; you and the future buyers won’t have recourse if there is a problem with the repair. Don’t also be talked into a cheap renovation that is meant to appear as a luxury amenity. Poor workmanship, sloppy installation, and/or inferior materials will turn away many home buyers.

Home selling is not about being amateur. Don’t assume all house painters are alike. A good paint job can make a room look terrific and create positive emotions; while a poor paint job makes a room appear shabby and unstylish. And even though you may be tempted to save a few dollars, don’t paint your home on your own – hire a professional. The amateur paint job appears sloppy and has the telltale uneven edges, painted over light switches and receptacle covers, and painted shut windows.

Home selling is not about guessing. Don’t assume your prepping will bring you a big return on your investment. If you deferred regular maintenance, you may have to make repairs regardless of the return. Likewise, if your home is outdated, you may consider making some updates to lure home buyers. Before getting in too deep on a prepping project, have a budget in mind and do a cost benefit analysis.

Consider checking out this year’s Remodeling Magazine’s Cost vs. Value Report (costvsvalue.com) to find out what updates and renovations make sense and which ones can bring you the biggest returns. Although most renovations won’t bring you a dollar-for-dollar return, they may add to the overall aesthetic and make your home more appealing. However, some renovations may not only lose money but can also blemish your otherwise beautiful home. For example, adding a backup generator may seem as if it is a much needed amenity, however, the report indicated that for the Washington DC region, you would only recoup about 57.5% of the cost. And it is possible that the home buyer will remove it because of it was poorly installed and too noisy.

The purpose of preparing your home before a sale is to not only to compel home buyers to make a top-dollar offer on your home, but to also get it sold quickly. Consider planning out how you will prepare your home. Do the research. Don’t fall into the traps that ensnare many home sellers because it can cost you. You may not only have to correct poor workmanship, but your negotiated sale price may be lower than expected.

By Dan Krell
Copyright © 2016

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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.

May 27, 2016December 13, 2022

Get top dollar for your home

The guarantee of “Getting top dollar for your home” is a theme in many real estate ads, as well as being promised by many agents. Of course the goal of every home owner is to get top dollar is the goal for every home seller! But why is this meme still prominent, and is it still meaningful?

What does “get top dollar” mean anyway? Getting top dollar on your sale may be relative to other home sales during the same period. Market conditions and timing are variables that may dictate your sales price; home sale prices are lower when home buyer demand wanes, as well as sales that occur during winter months. However, other influences on sale price include your home’s physical location and condition. For example, homes that sit on (or are in close proximity) to a main thoroughfare typically sell for less; as well as houses with deferred maintenance and a lack of updates.

Is “getting top dollar” just about listing at a high price? The key to a successful sale is pricing your home correctly. Proper pricing includes analyzing your local market, and comparing your home to the most recent neighborhood sales that are most similar to your home in style, size, age, and condition. Also, looking at market trends in three and six month segments will determine a seasonal effect.

How can you tell if your home sold for top dollar? Certainly if your house sells for more than others in the neighborhood, you might think you got “top dollar.” But if your neighbor sells immediately after you and sells for more; your claim to getting top dollar is now in jeopardy. There is also the home sale price conundrum: If your house sells fast with multiple offers, you might think that the list price was too low; However, if you price your home too high, you risk over pricing such that the house might languish on the market and miss the window of opportunity.

Maybe the promise of “getting top dollar” is just a marketing ploy by real estate agents to get your listing. A top complaint by home sellers is that their agent misled them; often citing the promise of a high sales price, only to be coerced into reducing and/or accepting a lower price at a later time. Regrettably, there are real estate agents who resort to questionable sales tactics to get business; and unfortunately, they learn these tactics from real estate trainers, and/or develop them on their own and share with other agents.

Maybe “getting top dollar” for your house is a metaphor for being satisfied. Although you might think you could be satisfied with just selling for a high price; customer satisfaction includes other factors too, including level of service. It has been determined that many consumers are less interested in hiring agents whose focus is about being “#1;” rather, consumers want to be treated as if they are “#1.”

Maybe “getting top dollar” is about your bottom line. Consider that many home buyers in today’s market are seeking “turnkey” homes, where they won’t have to worry about immediate maintenance issues – and some are willing to pay “top dollar” for such a home. Be honest about your home’s location, condition and features. Making some modifications can increase the sales price, however at a cost. A cost-benefit analysis of pre-listing repairs and updates may help you decide on the projects that will add to your sales net.

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May 20, 2016July 12, 2019

Presidential election and home sales

Elections have vastly changed in mood and intensity. It used to be that the candidates debated about substantive issues looking for win-win solutions, including housing. Maybe some of you remember how both the Clinton and Dole campaigns showcased their ideas of expanding the capital gains exemption during the 1996 election. Housing and home sales doesn’t seem to be a platform issue anymore. Elections have become divisive and nasty, even among the electorate; and for many Americans, the trending (real estate) election issue is – whom is moving to Canada!

That’s right, moving to Canada. Maybe you’ve heard someone at work or at the store proclaim they are moving to Canada if “the other candidate” wins the election. The theme of moving to Canada after the election has become a mantra so much so that it’s become part of pop culture. The idea has even been satirized by the likes of South Park. And of course there is the growing number of celebrities who vow to move to Canada if the election outcome isn’t to their liking.

Of course the threat of moving to Canada is tongue in cheek (for most), or is it? Nevertheless, leave it to astute real estate agents who realized that people considering such a move is now a target market. Agent ads and blog posts popped up in recent weeks reaching out to those disaffected home owners asking for their business. Reporting for Buzfeed, Craig Silverman reported on two agents who posted such an ad on their Facebook pages (Leaving Because Of Trump? These Texas Realtors Want To Sell Your House; buzfeed.com; May13, 2016). Although both agents received a lot of attention for their seemingly whimsical posts, there was a mixed response; some did not get the humor. It was reported that one of the two agents interviewed was asked to remove her post; and of course neither reported any new business from the posts.

Every four years, people wonder if presidential elections effect the real estate market. During the 2012 election cycle, the real estate portal Movoto took it upon itself to find an answer (David Cross; Election Years Are Bad for Home Prices; movoto.com; May 12, 2012). They analyzed historical data from the California Association of Realtors® and found that there is indeed a direct effect of a presidential election on home prices (at least in California). They determined that the average home sale price during an election year is lower than that of the years preceding and following an election.

Movoto’s hypothesis was: “Presidential election years are stressful for the American people and in times of uncertainty people are less likely to take chances—this includes making large purchases such as a new house.” While the National Association of Realtors® comment on Movoto’s findings was, “We’ve observed no correlation between levels of home sales and an election year. The market responds to a wide range of economic factors, including jobs, interest rates and consumer confidence.”

Although there maybe anecdotal evidence that presidential election years affect home prices; there is no doubt that the outcome of a presidential election effects policy, which as a result affects the economy and the housing market (see Experts: Housing to Grow Steadily, But Maybe Less So if Trump, Cruz or Sanders is Elected President; Zillow.com; May 17, 2016). But no one has yet suggested that US elections would have an effect on Canada’s real estate market.

By Dan Krell
Copyright © 2016

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May 13, 2016November 23, 2021

Real estate agent robots

Many erroneously describe Gordon Moore’s prediction as the doubling of computing power every two years. “Moore’s Law” is more accurately described as the doubling of transistors on a chip every two years. The point is that computer power is on steep path of improvements; and the prediction has been accurate since Moore’s 1965 paper “Cramming more components onto integrated circuits” (Electronics; April 19, 1965). What does Moore’s Law have to do with real estate? Everything. Many industries have benefited as computer processing power increased – including real estate. Will we see real estate agent robots in the future?

It is often said that a smart phone has thousands more computing power than the Apollo guidance computer. Consider how far computing power has increased over the last fifty years; common computer processors today exceed 1 billion transistors per chip with average clock speeds over 2.5 GHz (the Mac Plus I had in graduate school had an 8MHz processor with only 68,000 transistors!). The ever growing processor power has allowed major developments in artificial intelligence (AI) and robotic applications we are witnessing today. And the promise of quantum computing is expected to make our current computers seem like abacuses.

A cutting edge 2013 paper by Carl Benedikt Frey and Michael Osborne, of the University of Oxford, discussed the effects of advancements computerization and robotics on employment and the labor market (The Future of Employment: How susceptible are jobs to computerisation? Oxford Martin School – University of Oxford; September 2013). The authors concluded that about 47% of the US workforce is at risk of being “automated soon” (which is in the next ten to twenty years). Workers expected to be affected include, “…transportation and logistics occupations, together with the bulk of office and administrative support workers, and labour in production occupations…” The service industry, including real estate, was singled out as being affected by AI and robotics.

Included among the top occupations most at risk included: real estate broker, real estate agent, property manager, and real estate appraiser. The increasing reliance on automated property valuations by lenders, real estate agents, and consumers is a testament to the advancement of AI in the industry. Back in April, Inman (a leading real estate information publisher) devised an experiment to see if a computer algorithm would best a real estate broker in choosing homes for potential home buyer. The results announced May 10^th revealed that the computer program did a better job than the real estate agent (Broker vs. bot: And the winner is…; inman.com; May 10, 2016). Of course, there were limitations to Inman’s test; but still a notable result nonetheless demonstrating how AI is affecting the real estate industry. Robotics is making significant advances too.

Recent developments have made self-driving cars real, along with Honda’s Asimo; and even artificial companions. You can now purchase your own service robot, if you can afford it. Just like AI, robots may also take over real estate agent tasks in the near future. Imagine walking into an open house and being greeting by a friendly and helpful robot! We often talk of how quickly the internet has developed and its impact on the real estate industry. And it’s partly due to rapidly increasing computer processing power and Moore’s Law. Imagine how AI and robotics will change home buying and selling in ten or twenty years. And once quantum computing becomes commonplace, you may even experience a real virtual tour via a holodeck.

Original at https://dankrell.com/blog/2016/05/13/real-estate-agent-robots/

April 21, 2016November 23, 2021

Coping with today’s market

It’s that time of year again; the real estate market is getting hot along with the temperature. And that’s about the only thing most are able to predict about this year’s real estate market. Since the Great Recession, early forecasts about home buying and selling trends have typically missed the mark; the trends have varied, sometimes significantly, from year to year. Notwithstanding a very active season, many will be in for a surprise; some will be pleased about their home sale, while others not so much. And if you are selling a home, I’ve provided some tips to help you cope with today’s market:

Home buyers in today’s market

The most important point to remember this year: many home buyers are looking to buy a home, but not necessarily yours. The notion that your home appeals to all home buyers is false. If your home isn’t selling as fast as you thought it would, consider stepping back for a moment to re-evaluate your home and marketing plan.

Most home buyers are looking for a “turn-key” home and won’t settle for just anything on the market. Additionally, most are not willing to spend time and money updating a home they just purchased. Know your home before marketing it and consider making repairs if your home has considerable deferred maintenance.

Prepare your home for today’s market

The next item to remember this year, is that no matter how well your home shows: be prepared for a less than complimentary home inspection. Because there are a number of systems and many components to your home; chances are that there are items that need attention, repairing, and/or replacement – which the home inspector will cheerfully point out. Home inspectors will visually inspect your home, probing structural components when necessary; a detailed report indicates their observations. Most home inspectors are not experts in all aspects of home construction; and commonly recommend other professionals to examine items more closely.

As a home seller, you should understand that buyers in today’s market are under pressure about the investment they are undertaking; and are willing to walk away based on the home inspection findings. Sometimes, it’s not what – but how it’s said that will rattle buyers. Regardless, an uncomplimentary report does not have to blow up the deal. Be prepared for extra rounds of negotiating after the home inspection. Every transaction is different, and your agent should provide guidance on what’s reasonable and appropriate.

A final thought: don’t get greedy, but don’t leave money on the table either. Although inventory remains an issue in a number of areas, don’t feel compelled to over price your home based on the lack of homes for sale. However, don’t be complacent with the “average” home sale price of the neighborhood either. When comparing recent neighborhood sales, you should make pricing adjustments (plus and minus) depending on differences in your home’s age, amenities, size and other factors.

A word of caution: There is a growing trend in the reliance on automated valuations by real estate agents. AVM (automated valuation models) are helpful, but not always accurate. These reports are based on public information about your home and may not include correct information. If your agent recommends a sale price based an automated valuation, you should review the report attentively. If the report confidence level is low to medium, be prepared to carefully review the report and comparables, making adjustments as needed.

Original located at https://dankrell.com/blog/2016/04/21/home-sale-tips-on-coping-with-todays-market/

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