Archive for the 'Selling Thoughts' Category
Over the last month my buyers have seen the rejection stamp from more than one seller. In fact it seems they are collecting them in larger numbers than they did in 2003. Of course then it was because the offer didn’t escalate enough to be the highest bidder. Now the rejection stamp is coming because the offers are deemed to be to low to be a fair price for the property.
Last July when the market showed that it was going to slide downward and the first indications of lowering values really became apparent I penned a post entitled “You Want to Offer me What?” At the time it seemed like good advice to sellers who had their homes listed at “above market” values. Today the advice is just as valid and perhaps with added twists that weren’t apparent then.
Neighborhoods where foreclosure properties are rampant, neighborhoods where the builder is slashing prices to sell inventory and homes that are surrounded on either side by mega mansions are just a few examples of 
where last years prices are not going to hold up to buyer’s scrutiny in 2008. And that is before the buyer opens the door to your home. Once a buyer is inside if your price doesn’t reflect the condition of your home you can see the calculators working in their heads. But you say I just added a fantastic Jacuzzi tub, new bathroom tile and freshly painted the house! Did you over improve the house for the value of the neighborhood? Sometimes you can go too far and the value of what you added doesn’t add up to an over inflated price.
No matter how you cut it this market is hard for sellers to wrap their arms around. However homes are selling. Buyers today are savvier than ever. They know the value of the home; they’ve done the research and with the guidance of a good buyer’s agent are making realistic offers. Sellers who understand this end up with contracts, sometimes multiple and they are able to move on. For sellers who are still holding out hope for prices from the past they are finding it easy to stamp rejected on an offer and wait for the next one. And wait and wait and wait.
So sellers before you pull out that rejection stamp take another look at the offer in front of you. It might be painful to see but it might also be closer to reality than you know.
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Will This Affect the Resale Value of My Home-Foreclosures
February 22nd, 2008 Categories: Auctions & Foreclosures, Selling Thoughts
Earlier this week I posted “Will This Affect the Resale Value of My Home” looking at the issue with power lines and water towers as possible issues with the resale value of your home. Today I’m going to look at a serious issue in many Northern Virginia neighborhoods, foreclosures and how they may affect the value of your home.
Foreclosures vary from community to community. In some areas you might not be able to tell a home is in foreclosure from any other for sale in the neighborhood. In others you may find signs that announce the property is a foreclosure or see homes that who obvious signs of neglect. So how do you know whether a foreclosure in your neighborhood is affecting the value of your property? One of the key components of determine the value of your home when it is being sold is a professional appraisal. In a neighborhood where foreclosures are few and far between the chances are an appraiser will not need to use a property that has sold as a foreclosure as a comparable property and there won’t be any issue. However in a neighborhood where there have been a signicant number of foreclosures, appraisers have to include those sales in their comps. Most appraisers will try and discount the value of a foreclosure property but where they are a majority of the sales in the neighborhood then they will affect the value of your home.
If you live in one of the areas where there are a large amount of foreclosures you can expect to see a slight drop in your value. It may not always be about lower prices but also about buyer’s feelings about the area. If they perceive the area is showing signs of neglect they will automatically discount the value of your property even if it is in top shape and you will need to make a tough decision about pricing your home to reflect an issue you have no control over.
A secondary affect of foreclosures in areas with HOA and condo associations is the impact of the uncollected dues and fees on current homeowners. Usually before a property goes into foreclosure the owners stop paying their monthly HOA or condo assessments. Over time depending on the number of unit in distress the association’s budgets can take a hit and current owners may end up being tasked with making up the shortfall. As a result association fees rise and that increase in fees may make a property less desirable to a future buyer. Condo buildings are at the highest risk for lower values due to foreclosures as they are often the only comps an appraiser can use.
Foreclosures can affect the value of your home and you need to be aware of what is going on in your neighborhood. A professional Realtor® is the best source of information on how many foreclosures are currently in your neighborhood, how many have sold and current strategies for getting your home SOLD in today’s market.
More information on Northern Virginia Foreclosures
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Will This Affect the Resale Value of My Home?
February 18th, 2008 Categories: Buyers Corner, Selling Thoughts
Buyers today are often thrown for a loop when they look around a neighborhood and see so many FOR SALE signs. The sign riders advertising foreclosures or short sales don’t help. However in the case of some buyers it has nothing to do with the home values in the neighborhood, they can see past the market today and know that in the Northern Virginia area prices do recover. What throws them for a loop is whether the large utility right away, electric poles and water towers will affect the value of their home when they go to sell.
My answer is always YES. Now some may disagree with that answer but if a buyer is asking the question today, then other buyers will ask the same question when the house comes up for sale again in the future. Given a choice to buy a home without the power lines running through the backyard or not then I will always advise a buyer on the side of NOT. Now if the poles can only been seen in the dead of winter perhaps there is another answer but when they are what you will look at 365 days a year. NOPE.
Today while looking through a neighborhood with plenty of options on homes for sale I came across a home that made me stop and wonder, how will they be able sell the property in the future? Perhaps the developer made them a deal they couldn’t refuse, perhaps they thought that during the next big drought they would have a secret stash of water or perhaps they didn’t have a Realtor® looking out for their best interests. Whatever the reason their resale value has a big red question mark around it.
So buyers if you are out driving around a neighborhood and see a home that catches your attention, stop and look carefully around you. If what you see is something you can fix then keep the home on your must see list. If what you see is something that you can’t change like a power line or water tower then you might want to consider another property.
If you aren’t currently represented by a Realtor® and are interested in learning more about buying a home in Faifax County, Prince William County or anywhere in Northern Virginia give me a call. I’ll help educate you on the home buying process, what to consider when buying your home and protect your interests both for today and into the future.
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You have decided that you need to sell your Northern Virginia home and are wondering how can you make your home standout from all of the other properties listed for sale.
If you haven’t read the first two parts of “If You List It They Will Come” you should start there:
If You List It They Will Come-Getting Your Home Ready
If You List It They Will Come-Pricing Your Home to Sell
If the Realtor® you are talking to suggests that all you need to do to get your home SOLD is list it in the MLS and buyers will come running to your house, then once again you need to show them the door.
Today’s buyer is internet savvy! It doesn’t matter what source you read they all tell you the same thing. Over 80% of today’s home buyers search for a home on the internet. The variety of sites and tools available make it easy for a buyer to browse from the comfort of their own home, on their own time and at their own pace. Many buyers spend months on-line before they ever contact and agent to represent them.
So how do the Realtors® you are talking to get your home in front of the most buyers? First and foremost you need to make sure they have an active and current website that has your listing available. Second you need to find out how well linked is their website to other websites that showcase listings. Links to sites that are not about showing your home on line are of little value to you. You want someone who is surfing the internet to find your home on as many real estate listing sites as possible.
Does the Realtor® you are considering work for company that has a presence outside of Northern Virginia? Not everyone looking for a new home already lives in the area. Making sure that your home can be found on national websites such as RE/MAX.com and Realtor.com are critical to making sure you home is seen by buyers no matter where they currently live.
Will your listing have its own URL and will that be featured on a sign rider in front of your home making it easy to find on the internet?
(click sign to go to listing)
Will the agent upload multiple good quality photos of your home as soon as it is active in the MLS?
How often are the websites and MLS updated to keep your home in front of buyers?
Does the agent maintain one or more real estate related blogs where they write about your home?
It goes without saying that your home should have color brochures available on day one and professional signage in the front yard. Each home has individual needs and depending on your home their may be other options such as coverage in the local press, featured home status in Friday Home Guides and more. Make sure that the company that the agent works for spends significant money on national advertising to bring more people to their website and more leads to their agents.
So as you consider all of your options for picking a Realtor® to list your home make sure that the internet is a large part of their strategy. Today’s buyer is online and your home should be too.
Be like one of the good citizens of the great state of Missouri and say SHOW ME!
If you are getting ready to list your home this year give me a call. I’ll be glad to show you all of the ways I work to get your home in front of as many internet savvy buyers as possible. With a personalized marketing plan for your home and the Power of RE/MAX we can get your home SOLD!
Stay tuned for Part IV. My Home is Listed Now What?
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If you are just joining us please read Part I of If you List It They Will Come before you read this post.
Buyers in the Northern Virginia market are looking for a good deal. They won’t buy a house that is overpriced no matter how you try to entice them. Forget the free lease on a Mercedes or cruise to the Bahamas those aren’t going to bring any offers to the table. Price your home right and offer the right incentives (closing cost assistance) and you may be on the short list.
Just as in Part I of If You List It They Will Come don’t be swayed by the agent who comes in the door and tells you the highest listing price for your home and asks you to immediately sign a listing agreement. Every agent you interview has to be able to back up what they say with detailed information. Check it carefully and make sure they can justify the price they are suggesting. If not show them the door!
So how do you determine the right price? Forget the crystal ball. The most accurate way is by having a professional appraisal of your property done. Most sellers don’t go to the expensive of having an appraisal done on the property when they first put it on the market instead they rely on a Realtor® to help them come up with the correct price. In a market where prices have declined you should start with the most recent sales in your neighborhood and then work back only as far as you need to find a baseline price.
Why do I say baseline price? It has nothing to do with the price you will list your home for but instead a baseline for you and your Realtor to begin making the necessary adjustments to come up with the list price of your home.
Did the last sale in your neighborhood have granite counters and you don’t? Adjust your price downward.
Does your home have a finished walk-out basement and the last sale didn’t? Adjust your price upwards.
Do you only have three bedrooms above ground and the neighbor has four? Adjust your price downward. But wait I have a legal bedroom in the basement doesn’t that count? Yes, but not the same value in an appraisal as the one above grade.
Now you and your agent need to take a look at what is currently for sale. How long has it been on the market, have they lowered their price since listed, what are the features of the current listings as compared to yours? A good Realtor® will have already scoped out the competition before they came to your house and I always recommend to my potential sellers that we make a quick tour of a few of the listings to talk about the pros and cons.
Armed with all of this information and a few intangibles that your Realtor® can talk to you about you can set your listing price. The first time a buyer walks in the door is when you are going to capture them for a return visit and a future offer. The first 10 days your home is on the market are the most critical. If your home is overpriced buyers and their agents will know it and pass you by. Price it to low and the will also wonder what the problem is. Price is right and they will come!
Stay Tuned for Part III-Marketing Your Home For All It’s WorthRelated Posts
Pricing Your Home To Sell in Today’s Market
Is Your Home A Certified Pre-Owned Home?
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At least that was the depth of the advice that most agents needed to give their sellers a few years ago. However in today’s market if you interview an agent and this is the best they can do then you need to show them the door.
In the current market in Northern Virginia sellers need to step up to the plate and take a look at their homes in a different light. If you are getting ready to put your home on the market you need to take an honest look around you and make what might be some tough decisions. Everyone has heard it before but it is even more important than ever, your home needs to be impecible for a buyer to even consider putting on the top of their list. Some of what you may need to do is simple and depending on your home you may have to make some big decisions.
Everyone has heard it before but it always bears repeating. DECLUTTER your home. This sometimes may be all that your home needs. Cleaning out the closets, the kitchen cabinets, the bookshelves and the drawers is your first big step. It is amazing how much bigger your house will look just by tackling the clutter. If it is something you are going to need in the future but you don’t need today, box it up, label it and store it out of the way.
The next step is next step is repair what you know is broken. We have a tendency to overlook the dripping faucets, the missing door stops and the grungy bathroom caulking in our busy everyday lives. Now is the time to spend a few hours going room by room and taking care of the “honey do” list.
Now clean. If you don’t want to clean then hire a team to come in and take care of it for you. In fact if you lead the crazy hectic lives of so many families in Northern Virginia it might be worth a few extra dollars to hire a cleaning crew to keep your house clean while it is listed for sale. Since many showings take place on the weekends you might want to have a cleaning team come in on Friday’s so that your house is ready for weekend showings.
For my clients these are the recommended basics before we even set the right price for your home. For clients who are willing to go the extra step I recommend making your home a Certified Pre-Owned Home. For less than $1500 you can right up front take away any questions a buyer may have about the condition of your home and improve your bargaining power when the offers come rolling in.
Stay tuned for Part II. Setting the Right Price for Your Home in 2008
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As sellers still struggle with the decline in housing prices throughout Northern Virginia the question is “How do I price my home to sell?”
The first part of the process is setting the right price.
Most sellers think of price first, condition second and market third. In a buyers market that order needs to be re-thought. Market and condition are going to determine the price. Buyers are not going to overpay and the lenders appraisal will not support an overpriced home. Don’t confuse what you paid for some of the improvements to your home with a 100% return. A new roof or heater is a maintenance item and doesn’t necessarily equal a higher price. If you over improved your home for the neighborhood that could count against you as well. Well done improvements that show quality of workmanship are what impress buyers the most.
Setting the right price at the beginning is critical. As this chart shows buyers and their agents know when a home is overpriced and will pass it by. If it is under priced you may see more traffic but it will also raise questions as to “why?”
So how do I determine the right price?
The most reliable way to determine the right price is to have a professional appraisal of your property done. For about $350 you can hire an appraiser to come and take a look at your house, run the comps and give you a value. Appraisers use a set of evaluation standards that are recognized nationwide. The only time you may see a different appraisal situation is if your buyer is using an FHA loan. There are some different requirements that FHA appraisers are required to use to comply with HUD guidelines.
If you don’t want a professional appraisal prior to listing your home then remember that a home listed for sale is not a good comp for your home. Homes that have SOLD are the only comps you should be concerned with. The more recent the sale the more reliable the comp will be for you. If the values in your neighborhood have decreased in the last six months then a home that sold a month ago is a more reliable indication of current value than one that sold six months ago.
“We’ve set the price-what else can I do?”
The obvious first answer is to make your home “showroom ready.” As hard as it is to do you need to disassociate yourself from you home and look at it through a buyer’s eyes. You need to de-clutter and de-personalize. Sometimes it can be tough since you don’t know how long it will take your home to sell. But starting off on the right foot will impress more buyers and we all know the old adage “you only get one chance to make a first impression.”
The second answer is to look at how you might be able to sweeten the deal for a prospective buyer. Can you move quickly, could you carry part of the down-payment or pay the buyers closing costs? If so then let them know up front. The more flexible and creative you are the more likely you are to attract the right buyer.
Third is to select an agent who understands how to market your home to the widest audience of buyers. You need to look for an agent who is internet savvy, who knows how to negotiate successfully and will keep you informed throughout the transaction.
If you follow these steps it will set you in the right direction to get your Northern Virginia home SOLD. For more information on selling your Northern Virginia home give me a call to talk about your options. Together we can build a selling plan that is right for you.
Additional information on Making Your Northern Virginia Home standout from others on the market.
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Home Equity-Is it Real or Is it Memorex?
December 9th, 2007 Categories: Real Estate Ramblings, Selling Thoughts
Yesterday while talking to a prospective client the discussion turned to the “equity” they had in their home. They had purchased their current home in Northern Virginia in 2002 and over the five years the value of their home has of course appreciated from their original purchase price.
They were however distraught that they had not sold their house last year when they could have walked away with $250,000 but now the best they could hope for might be $175,000. Since they are interested in buying a larger home the prospects of a higher mortgage due to the loss of equity was worrisome for this young family.
This isn’t the first time this conversation has happened over the last few months. With the value of homes in Northern Virginia having decreased over the last year there are many families thinking the same thing about their equity. It is interesting to listen to the rationalization of how much money they have lost by waiting to make the decision to move.
Of course the equity that they have “lost” isn’t real. It is the same concept that follows traders in the stock market. When you see the stock price is up you think of all of the money you have and when it is down you think of all the money you have lost. However until you sell you haven’t done either. It is all imaginary.
The good news for homeowners in Northern Virginia is that even though you may not have the same amount of equity that you had a year ago the price of the home you want to buy has also come down. As a result most likely the deal is a wash. Today’s equity will go as far as it did a year ago and in some cases it might even go farther depending on the neighborhood where you want to buy.
So don’t let the idea that you have lost money keep you from making the decision to sell your home. If it is the right time to make a move then let’s get to work to get your house on the market and SOLD. If it isn’t time to make a move don’t spend your days fretting over the latest housing reports. They don’t mean anything to you until you actually sell your home and are holding your HUD-1 in your hand.
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Now that our regional MLS is offering agents the opportunity to upload 30 free photos it will be interesting to see if more agents will take the leap and post multiple photos or in at least one! Believe it or not there are listings that don’t even get an exterior photo which can only mean that the agent has clicked the option to “upload all” and then doesn’t bother or has no clue. When the MLS was charging for uploading additional photos the price was so cheap that it wasn’t a big deal and agents who passed were just hurting their clients.
In a time when buyers are spending more time previewing homes on the internet before they even call an agent, listings without photos are quickly passed by in favor of those with photos. One of my current buyers is completely frustrated because most of the properties he is finding in his price range don’t have pictures and because he also is looking for a house with a place for a pool table so the lack of room sizes (which could be it’s own blog post) is driving both of us crazy.
As a seller in a market with significant competition for a buyer’s attention make sure your agent is maximizing the use of the MLS and other online resources for getting your home the most on-line exposure possible. There are so many tools available for agents to use to get your home noticed in today’s market that the excuse I’m waiting to get the film developed just doesn’t cut it anymore.
Example of New MLS Tour
Example of Virtual Tour attached to MLS Listing
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In today’s market when buyers have multiple choices in a neighborhood how do you make you home stand out? Certainly every Realtor® will talk to you about pricing your home to sell and talk to you about making sure your home is free of clutter. A good agent will make sure that your home has the best quality photos in the MLS and your agent may even bring in a professional stager for a consultation if it is necessary.
We hear the commercials for the high end car dealers talking about the benefits of buying a “certified pre-owned” car. They lure you to the lot with guarantees of 32 point inspections or free vehicle reports to show you the car wasn’t salvaged from a flood. So why don’t you make your home a “certified pre-owned home”? Instead of waiting for a buyer to conduct a home inspection, after you have already negotiated what you thought was the sales price of your home, take the first step and have the inspection before you list your home for sale!
When we live in our homes we tend to overlook some of what we think may be cute quirks and don’t realize that the next owner of the home may consider them to be a excuse to ask you to lower the sales price even further or jump through hoops to make repairs. So the fan in the attic quit working at the end of the summer and the shower valve leaks, no big deal right? Wrong according to the Virginia sales contract all electric and plumbing must be in working order. Both of those items would fall under the category of MUST FIX.
How about the rotting trim around the back door, loose roof shingles and wobbly stair railing? The new buyers are going to ask you to fix them or credit them with some cash to have them fixed themselves. Do you see where this is going? If you are pro-active and have the home inspection conducted on your own and find out what issues there are you can fix them on your terms or be prepared to set your price accordingly. If you have an older home and haven’t had a termite protection plan in place go ahead and have the termite company come by too.
The next part of being a “certified-pre owned home” is to provide a home warranty for the buyers. They are going to ask for one anyway so buy it when you list the home and SURPRISE if anything breaks during the listing process you are covered by the warranty as well. The final part of the process is to consider an upfront property appraisal. No matter how many ways you look at the competitive properties in your neighborhood the bottom line is going to be what the bank says your home is worth. Appraisers take a different approach to valuing your home than a Realtor®. They are the final word on pricing no matter whether we like it or not.
So of course you are thinking how much is all of this going to cost me? Home inspections prices are generally based on the price, size and type of the home so for a mid range let’s say $500. A termite inspection will be another $50. Home warranty will be around $400 and the appraisal will be around $350. So for less than $1500 you can put a different spin on your home. The $1500 you spend up front to become a “certified pre-owned home” will save you more in time, hassle and aggravation than waiting to re-negotiate your home sale after the fact.
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