You can’t lose if you don’t play

You can’t lose if you don’t play

            The Real Estate market is coming back and gaining speed.  With stronger opportunities for sellers to succeed, many are itching to sell and just get it over with already.  However, I’ve seen many listings recently sell for below fair market value, pocketing the seller less for no reason other then bad strategy.  These sellers may have sold, but many lost because they chose to play the game.  Losing in Real Estate can mean upwards of tens of thousands of dollars, and as the market gains steam I am reminding my sellers– “you can’t lose if you don’t play”.

So don’t play

            It’s an odd phrase, I understand.  What I am trying to portray however is that you can’t sell at a loss if you don’t “play” around with negotiations.   Your list price as well as price changes must be strategically decided on before you go to market. Have a firm understanding of what your realistic goals are.  This includes knowing how much of a loss from anticipated sales price you are willing to accept.  Having a solid plan in effect will allow you to simply not “play the game” if a buyer is trying to low ball you.  Many sellers will get anxious and may have agents pushing them to sell – but if you’ve made your mind up already as to what your true bottom dollar is you can avoid the game, pick up your ball and proclaim, “I’m not playing”

Be sure your agent is on your team

            I run into it often; sellers who become frustrated with their agent constantly asking them to lower the list price and/or push them to accept a low-ball offer.  Your Realtor® has to be by your side and have your proverbial “back” each step of the way; WITH the same playbook you possess.   Agents don’t get paid unless you sell or buy, so be sure your Broker or Agent is working for YOU and not their commission.  If the strategy of the sale is agreed upon at the start of the sales process, there should be no pressure to accept an offer your gut simply says no to.

Prove your point

            The information available to buyers and sellers alike has become almost infinite.  Hearsay is a thing of the past; and all facts, sales and trends can be checked and verified – often then and there on a smart phone.  Because of this we must be prudent in obtaining and presenting our “side of the story” relating to list price.  The number one factor today in gaining top dollar is the ability to prove your worth.  Your Realtor® should be able to help you with this by providing comparable sales in your immediate area.  Remember, we ALL think our homes are worth more – when it comes to pricing be honest with yourself and what you are offering.   If you know what your home is worth – there is no need to play the negotiation game, you might be able to steal a page from CarMax and have “no haggle pricing” !!

            I hate to see sellers sell for less out of fear, pressure or simply because they didn’t have the correct information at hand (unless I’m buying the house of course).  Take these thoughts into consideration when selling, stick to your guns and laugh your way to the bank.  With proper preparation you can make the rules in your negotiation game, and possibly win without even playing!

Need an agent? GO Local!!

Need an agent? GO Local!!

No, not Loco – Local!

        I’ve run into and across a lot of non-local agents in recent months.  With the market getting back on track and choo choo chooing us out of the recession many homeowners are once again eager to sell.  A common mistake in the Real Estate market is simply choosing the wrong agent – the non-local.  As within any industry you are bound to know of a friend, family member or acquaintance in the business.  While this can be appealing and may seem like the easy choice, if they are not local to your property -  it is often the wrong choice.   By choosing “feelings” over your success you can easily put yourself and your transaction in Jeopardy.

“Like the back of my hand”

        It’s a term we are all familiar with; an agent with complete knowledge of your local area gives you a tremendous leg up in your sales process.  A local agent can and will answer all pertinent questions regarding shopping, schools, entertainment available and more.   Today’s buyers are savvier then ever, giving just as much importance to lifestyle as you’d expect they would give to the home itself.   Your listing agent MUST know the surroundings and what is offered in your exact location.  Having an immediate answer instead of a “….ugh… let me ask the owners and get back to you” can and will increase your odds of a successful and profitable sale.  If your agent doesn’t know or isn’t familiar with your area, how can you have faith that they will sell and market your home properly?  You can’t.

“More show = More dough”

        I personally like to show all of my listings and don’t believe in lock boxes, others do and that’s fine.  However, using an agent outside of your territory only adds time and frustration to a market that moves rapidly.  People’s schedules in these times are very different.  The standard 9 to 5 workweek is becoming a thing of the past, and if your agent is not available to show buyers when they are ready – your proverbial cart is in front of your horse.  Agents whom are not local may tell you that they are available at all times, but we need to be realistic.  There are not many people ready to leave at a moments notice for a 45-minute commute with the hopes and prayers that this will be the buyer.   A local agent can easily access and show your home when buyers want to see it, as they’re just a hop/skip/jump away.  Speed is the name of the game here sellers – closeness in proximity simply equals greater speed.

“Local agents swim in your pool”

..when you are at work.   All joking aside, a local Realtor will be “swimming” in the same pool of buyers that you are trying to entice and obtain.  An agent from Weston is not very likely to meet a buyer looking for a Parkland home, so why go in that direction?  Local offices, local media, local advertising, these are the ways we gain our cliental, and generally speaking agents are going to market and promote in the area closest to them.  Setting yourself and home up with an agent who is marketing in a different territory would be like trying to sell cars at the Parkland Farmers Market – you’re not going to have much luck, it’s just not what the buyers are looking for.  Don’t be a fool - Stay within your pool!!

    Local agents are what truly drive the Real Estate market, by knowing the area as well as recent sales trends a local agent will net you more and will be able to do so in a timely manner.   So remember, when selling... Don’t go LOCO – Go LOCAL!

Navigating your transition period

Navigating your transition period

         The market is heating up and the right homes are selling fast!  Recently selling a listing of mine after only 9 days on market I was asked by an immediately anxious seller…“What do I do now”?  It’s a common question whether you’ve been on the market 9 days or 90.  Homeowners, in general, have settled and are often not ready for the transition to a new home or living situation.  Keeping a few of the following things in mind should, hopefully, make it less stressful for you and your family.

Become a Tenant!

         If you don’t have your next home under contract or already purchased, I recommend finding an acceptable short-term rental once you’ve gone to contract and passed inspection and appraisal.  You don’t want to rush the purchase of your next home, and delaying a closing because you’re unsure of your next step can be risky and costly.   A perfect scenario would be a furnished short-term rental, which you could occupy while you search for your next home.  The simplicity of a furnished unit is great, nothing to move!  An open-ended lease option will also allow you to relax and negotiate with less emotion when purchasing.   You don’t want to be “pushed” to buy due to current living situations.

Pull out the ole’ Piggy Bank!

         If you’re lucky enough to still have equity in this market, be sure to put your proceeds in safe keeping during your transition time.  No matter who you are, an injection to the bank account can be tempting.  A great idea is to keep your net proceed funds in escrow with your broker or title agent.  Most of these funds will probably be used on your next home purchase anyway and doing so will give you the ability to go to contract with pre-deposited escrow funds.  Cash is tempting; protect yourself from you.  You don’t want to be looking at your new Rolex at your next home closing wondering what you can hock it for. 

Having to Downsize?

         The phrase I seem to use most often in this market is, “relax, you’re not alone”.  If you are in an unfortunate situation and have to leave your home for financial reasons, keep one thing in mind.  You are NOT alone.  We should all be aware by now of the hardship most of America is under.  Moving forward with the sale of the home should simply be seen as closing a chapter of your life; make it a relieving moment rather then a mournful moment.  Life moves forward, not back.. One of my favorite quotes is “It will all be OK in the end, if it’s not OK, it’s not the end”.  Keep this in mind as you move forward, downsizing is simply a move, not a basis of personal character.

     No matter what your transition period involves, it is likely to be stressful without preparation. Anything in life without proper preparation is simply a risk.   Get your ducks lined up and you’ll sail through your transition period!!

Beating Investors to the Punch

Beating Investors to the Punch

Many buyers in this market are running into the same wall, the cash investor.  While investors are a crucial part of our Real Estate market, they can be a bit of a pain for buyers in the $100k - $300k range.  With the ability to act swiftly and wads of Benjamin’s at their disposal, how can a regular buyer compete?

Run Forrest Run…

You have to be fast to beat an investor to the finish line, so even if you think you can’t... run Forrest run!  If you know what you are looking for, with the speed of this Internet run world there is no reason you can’t come out on top.  Once a property hits the market that is within your criteria, view it.  If you can’t view it have your agent view it for you and text, email or even facetime you!  That thing in your pocket that rings can do some really nifty things, use them!  The goal here is to get to it first, no matter what; early bird gets the what?

But the cure for most obstacles is, Be decisive.
-George Weinberg

What separates investors from “standard” buyers is their ability to decide, on the spot at times, whether to purchase or not.  They have a black belt in decisiveness.  If you plan to beat them to the punch, you MUST be ready to make a decision right then and there.  Do your research ahead of time; answer your questions prior to walking in the front door.  You should be at the house for a yes or no – not a checklist of questions that need to be answered before you decide.   If you want to be really quick, go equipped with an iPad and submit the offer while you are there.  Take THAT investor!

Put your comb over away – You’re not Donald Trump

This is not the time to play hardball, puff your chest and offer 50% of list.  You may have seen some great late night infomercials, but properties today are selling much closer to list price then you may think.  We all want a great deal, but you need to be realistic with yourself and the nature of the market.  There are definitely times to strike, but be honest with yourself whether this is the time or not.  Trying to “steal” the home can and may cost more in the end.  While slow, prices are definitely rising – think smart and act accordingly. 

Don’t let the investors out there get you down.  Most are going to upgrade the home and put better inventory on the market or will offer housing for great people in our community.  You may not think it’s a fair fight out there, but you can certainly make it one.  Put your ole’ ducks in a row, get out there and make it happen!

Synchronized Buying and Selling

Synchronized Buying and Selling

            One of the most stressful aspects of a Real Estate transaction can be trying to close on one home while you are purchasing another; especially if you are using proceeds from the sale to do so.  Although there are many more hurdles to be cleared when trying to coordinate this, it can be done successfully if you plan accordingly.  Take these three factors into consideration and you will be sure to make the transition smooth and stress free. 

Don’t search for a new house until your home is under contract!!

            Doing so will drive you crazy.  Until your home is under contract you really don’t know where you stand as a buyer.  Feel you won’t have enough time?  Let buyers know right off the bat that you will need an extended closing 60-90 days is generally sufficient.  Buyer locked in a rate and has to close in a specific time frame?  Offer to rent the house back for a monthly fee or a reduction in sales price until you can close on your next property.  There are ways to work things out for both buyer and seller, but until you are under contract, don’t even window shop.  Things change daily in the market; you don’t want to fall in love with that cute doggy in the window if you aren't ready to take him home yet.

Get your purchase mortgage in line

            The biggest mistake you can make when purchasing your next home is to assume you will be approved for a mortgage prior to selling your current property.   A closed sale isn’t much to celebrate when you don’t have a place to throw the after-party.  Be sure to talk with your mortgage broker about your plans as well as your financial ability to do so.  Times, rates and requirements can change rapidly and you need to be sure that your next purchase is fiscally possible.  Crossing these “t's” is imperative prior to even listing your current home.  You cannot negotiate the sale of your property properly without knowing what your next step will be. 

Price Correctly!

            If planning a sell/purchase transition your best bet is to price correctly at fair market value.  This will increase your chances of not only obtaining a quick sale, but also in procuring a cooperative buyer.  A buyer who doesn’t have to go through a lengthy and stressful negotiation process is more likely to grant you more time in the home, or approve an extended closing.   This is NOT the time to let greed get in the way – be honest with yourself and be sure to work with an agent who truly understands fair market value for your particular home.

            Keeping these points in mind will help you transition from your current home to the next with less stress.   Not keeping these factors in mind can hurt both your sale and your purchase.  I’ve seen people rush to buy for fear of not having a place to call home as well as sellers whom have sold for less just so they don’t lose a home they’ve fallen in love with.   A home sale and purchase can be a very emotional experience, it’s always a good idea to mentally prepare and stick to your game plan.  Remember, prepared people succeed!

Why should you work with a Realtor?

Why should you work with a Realtor?

            The availability of information on-line has made the home buying and selling experience a bit easier then it was just a decade ago - however, this has NOT in any way negated the importance of the Real Estate agent.  Why should you work with a Real Estate agent?  Let’s make it simple; let’s make it rhyme…  Direction, Protection and Attention.
 

Direction

            A professional Real Estate agent will direct you through the ever-changing maze of the sales process.  It takes full time knowledge and experience to know what pitfalls to be aware of, as well as how to handle them when they do arise.  A “virgin” homebuyer or seller simply isn’t familiar with the procedures necessary and will often put himself or herself at risk.   Not knowing the correct “direction” to move in a transaction can quickly put you back to square one and may quite possibly end up costing you money as well.  Having a guide direct you throughout the process not only puts you in a better position for success, but it also protects your best interest, ie.  your money baby!

Protection 

            An agent also serves as true protection in your Real Estate transaction.  Even if you know the way, if not properly trained a buyer/seller can easily find themselves slipping down a slippery slope.  I've dealt with horror stories throughout my career that would make your head spin, but with knowledge and patience I have been able to get through them all – while protecting my clients the whole way.  Without my expertise in those situations my customers would have been out not only a home, but in a few instances tens of thousands of dollars as well.  Without the ability to react in the right way at the right time when issues arise, you are simply hoping nothing goes wrong.  An agent will protect you when something does.

Attention

            We all need attention in this fast paced world.  Cell phones, email and G4 speeds have made our world move Usain Bolt FAST.  An agent’s job is to stay on top of the entire transaction from contract to close.  As I keep reminding you all, finding or selling the home is NOT the hard part, CLOSING it is!  And a successful closing procedure has become tougher for sellers/buyers to maintain on their own.  With most buyers/sellers having full time jobs themselves - keeping up with the transaction is not only a headache, but can be simply impossible.  Without having a "wing-man" giving you the attention you need and deserve you may put yourself in a situation that can become unsolvable, costing you money honey!   A professional Realtor will be there each and every step of the way, giving each step of the process the full attention needed for success.  While many may think they have the time, skill and knowledge necessary to give attention to the transaction, this is not the time to “hope your right”.   

            As American’s we love to save a buck, I wouldn’t be alarmed if it was somehow in our DNA.  However, this is not the time or place to try to save a few bucks.  If purchasing or selling Real Estate be sure to obtain the service of a professional Realtor.  Going it alone may be possible – but is it really worth the risk?

Selling? Get a leg up on the competition!

Selling?  Get a leg up on the competition!

            Selling in today’s market has become less of a struggle then it was 12 months ago, but there are certainly still homeowners out there struggling to get their home sold in a timely and profitable manner.   If you are currently having trouble getting to a closing table, these three “leg up” ideas may help.

Pre Sale Seller Inspection

            Many sellers and agents alike appreciate the idea of an As-Is sale.  It’s less to worry about and more money in the pocket, right?  Maybe not.  As we are struggling to get this market back on track, many buyers are adamant about purchasing a true move in ready home.  While many will go to contract with an as-is contract, if anything comes up at inspection the buyer will generally ask for repairs to be made or request a price adjustment to equal out repairs deemed necessary.  A good way to stay ahead of the game is to pre-order an inspection report.  Averaging $300, the cost will be worth it.  Knowing ahead of time what needs to be done will not only allow you to correct issues prior to buyer knowledge, but will also allow you to promote a true move in ready home knowing that you will not have to decrease your sales price due to repairs necessary.   Buyers with knowledge that the home has been inspected and repaired will immediately have more interest in your home over your competition.  One leg up!

What do your buyers want?

            A constant problem with the state of our financial environment is the fact that banks are requiring larger down payments.  This puts a substantial percentage of buyers in a cash poor position after purchase.  Using all of their cash resources to purchase a home leaves them with no reserves to add things they may deem necessary to purchase.  If buyers are turned off by the lack of a fence, add a fence!  If the carpet is worn, replace it!  Spending these additional funds may feel like a waste of cash when selling, but you need to see it as a loss leader.  A contract today will net you much more then a contract 7 months from now.  Adding that fence today can actually end up netting you more!  Give ‘em what they want..  Two legs up!

Re-Educate your buyers

            With the numerous on-line resources available today, buyers are extremely educated in today’s market.  This information can be helpful, but can also be a deterrent to a successful sale.  You must keep in mind that buyers have a ton of information at hand, and though it may be wrong, it is what they will be basing negotiations on.  It is imperative that you are familiar with comps in your area and have true data to base your pricing off of.  Be sure that your marketing material educates the buyer on where your pricing came from and why it is true fair market value for your particular home.  Hopefully you didn’t just make up a number, explain to your buyers how and why you are priced correctly for a successful sale.  Three legs up!

            Using these three simple steps can and will help you sell in a more timely and profitable manner.  Think of your sale as a business transaction, do your homework, listen to your prospects and you will get to a closing table - I guarantee it. 

Contracts 101

Contracts 101

            If selling or buying, contracts will be involved, it is prudent to be familiar with all you are signing.  I know that many of you are guilty of simply signing documents without reading the fine print.  I know do it myself!  If signing a gym membership or a waiver to rent a jet ski you just glance and sign, right?  However, it is crucial that you fully understand the points of your contract for sale and purchase.

Dates

            Dates on contracts are well laid out, but some buyers/sellers may have trouble fully understanding due to one common misunderstanding - ‘business days’.  The term ‘business days’ is well known to be the standard Monday through Friday business workweek; and while Florida contracts did at one time refer to time periods as ‘business days’ they no longer do.  All Florida contracts are now time framed as ‘calendar days’.  Don’t let this be your misunderstanding of the contract.  A 14 day ‘business day’ period can be 20 calendar days!

Escrow Funds

            All contracts will have a section outlining the amount of funds to be escrowed.  These funds are held by a third party and may not be released unless both buyer and seller agree.  Escrow will often be placed upon acceptance of an offer with an additional payment made within an agreed time frame.  As these funds are in place to protect the seller as well as show buyers promise to perform, it is important that dates are met as drafted on contract.  A lack of depositing funds by agreed upon dates can and will void the contract, putting both buyer and seller at risk.

“AS IS” vs. “FAR/BAR-1”

            While there are other options, there are generally two contracts to purchase that you will run across when buying or selling Florida Real Estate.  While familiar to each other, there are certain terms within both that you need to be aware of.  An “AS IS” contract is just that, the home is sold as is.  There are no repair credits to be made by seller, but buyer can walk for any reason deemed within the specified time frame.   Make sure you are aware of the inspection expiration date and that it does not exceed an acceptable period.  If you are going to contract with a FAR/BAR-1 you must be aware that if left untouched the seller states they will pay up to 4.5% of purchase price for any repairs/WDO/open permits.  That’s $13,500 on a $300,000 home.  It’s not a number a seller wants to learn about at closing.

            Keep these traps in your radar when going to contract, and be sure once under contract that you stay on top of them all.   An educated buyer/sellers is protected buyer/seller!!

Summer time sellers

Summer time sellers

            Alice Cooper said it best – “Schooooools out for summer”!!  If you are selling in these summer months there may be more to think about and prepare yourself for then you’ve had in mind.   We often prepare our household for summer; let’s talk about preparing our home for a summer sale.

Please wipe your feet…

            Summer as you know is our rainy season, and while “summer showers bring May flowers” – they can also bring a quick mess to your floors.   Nothing is worse then a showing that ends with dirty floors throughout your home.   To prevent this ever-present summer occurrence, be sure to place a floor mat or towel at your entrance as well as a sign politely asking the buyers to remove their shoes.   Buyers will appreciate that you care about your home and in turn will be certain to treat it with respect throughout the showing.

Caution – Children At Play!

            With the kids out of school there is a good chance that many will accompany on buyer tours of your property.  The last thing you want to worry about is a Bull in a China Shop, so be certain in summer times to remove valuable breakable items that may be at easy reach for young children.  Not only as insurance of your belongings but to also allow your buyers to truly view the home.  We’ve all seen parents trying to control their children in a new environment.  If they are consistently monitoring their children’s behavior, they are not giving 100% attention to your home.  By thinking ahead and leaving less distractions, you in turn make for a more show ready home.

A/C – Keep ‘em KOOL!!

            Summer in Florida….  There’s a reason snowbirds flock home before it hits. it’s H-O-T  HOT!  If selling in these hot summer months be sure to keep your home at a reasonable temperature to assure buyer comfort, which will lead to longer showings in return.  No one wants to stay in a hot house, no matter how great it looks.  If you don’t mind the heat and enjoy the summer months be sure your agent notifies you of all showing times and simply turn down the air a half hour to hour before the buyers arrive.   

            Thinking ahead and preparing for these summer months can and will have an effect on your summer time sale.  By taking these easy tips into consideration, you can make your summer time sale more enjoyable AND more successful for all!

The importance of getting pre-qualified for a home loan

The importance of pre-qualifying

            With the technology available today, once the thought “let’s buy a house” jumps into your head there is generally a B line to the World Wide Web.   The excitement and fun in looking is all well and great and to be expected.  Please keep in mind however that it is essential that you also get pre-qualified for a home loan as quickly as possible.

Shopping without a budget

            You certainly wouldn’t (or shouldn’t) buy a car without a pre planned monthly payment or total out of pocket expense already factored, doing so would be a deterrent to yourself and negotiation tactics.  The same holds true when purchasing a home, truthfully, even more so.   Each and every home is going to carry separate and sometimes vastly different hold costs.  Factoring in taxes, millage rates, HOA fees, insurance premiums, etc. will have a big impact on your monthly payments.   Not having a firm understanding of what your true monthly budget and/or out of pocket expenses will be simply makes you unready to pull the trigger when it’s go time.

Pre-Approval Letters

            Any seller’s agent with the goal of protecting their clients as well as the transaction will ask for a pre-approval letter with an offer or once a contract is completely executed.   As the market continues to rise, quality homes are seeing fewer days on market.  You don’t want to lose the home you’ve been searching for because you didn’t have your paperwork in order.  What you expect you are able to afford and what the bank is willing to allow may differ significantly. Be sure you speak to a qualified mortgage broker and obtain a pre-approval letter prior to even searching for a home.  This will place you in a position to win once the prize is in sight!

Better Negotiation Techniques

            Many buyers and sellers like to play the negotiation game when purchasing.   As homes are generally not priced “firm”, and it is common that a buyer will submit a first offer much lower then list without being demeaning to the home or owner.  This offer is in attempt to start the negotiation process and get a feeling of where the buyer’s actual “sell price” sits.  Without knowing your true purchase power and manageable monthly costs you can’t logically negotiate prices and terms of a contract.  Educating yourself and being prepared for true anticipated costs puts you in a much better position to negotiate and allows you to do so in a safe way. 

            Buying without first qualifying is like driving without a seatbelt, you may make it to the destination ok – but risk WILL be involved.  It only takes a phone call; if you are thinking of or ready to purchase a home, make the call.   Get pre-qualed and then search for your perfect home!!

Market on the move?

Market on the move?

           

            I’d have to say that the #1 question I get asked is “so… when do you think the market’s going to come back?”, and while I don’t have the proverbial crystal ball, I do have a gut instinct that we’ll start to see increases soon.   If this Nostradamus like prediction is correct, how should buyers and sellers prepare?

Seller Preparation

            The best thing you can do as a seller in the midst of a recovery is dig in.  Be honest with your value and understand that homes with upgrades that are well cared for and move in ready carry a very strong premium in these times.   If you’ve got what people are looking for, be sure you price correctly to maximize your profit.   Selling in a short time may be fun to talk about, but selling fast in this market is generally a red flag of an undervalued property.  Be sure to do your research, or be sure your listing agent does so for you.  What is your competition, and what are buyers willing to spend in this market for your home?   Find, understand and stick to Fair Market Value.  It may be higher then you think.

Buyer Preparation

            I’ve run into some very savvy buyers recently.  Buyers with good knowledge of what the market is doing and how to act accordingly.  This in general is a good sign for the market.  Educated buyers are finding and obtaining great deals because they understand today’s values.  To be prepared for this market the best advice I can give a buyer is to see at least 10 homes before placing an offer on anything.  Having a full understanding of the market you are in is step 1.  This will have two instant effects.  One, you will know a great deal when you see it.  Two, you’ll be less likely to low ball a great home which can lead to significant negotiation issues.    An educated buyer is a successful buyer!

Take advantage!!

            Many people try to time the market.  In my mind this is akin to timing the wind – though Tiger does claim he can do it, it’s an impossible task.  You may get lucky once in a while, but the house always wins.  The best way to take advantage in any market is with knowledge. Research, Understand, Commit and Re-Act!! 

           

And if you don’t believe me…….  Just ask Warren Buffet……

BOOST your appraisal!!

BOOST your appraisal!!

            In this depressed market many sellers have anger due to lowered values that just don’t seem to be on the rise.  If you are selling in today’s market and wish to obtain the highest price possible, it is mandatory that you fully understand the value of your home as well as what features you offer above and beyond your current competition and more importantly what sets you apart from your recent sold comparables.   Sold comparable information is driving the market, and while it is important that we maintain fair market value it is just as crucial that we understand and educate buyers and appraisers on what exactly WE are offering.

Knowing and understanding your comps

            Any agent worth his or her weight is going to refer to sold comparables the instant a buyer has interest.  This is par for the course in terms of protecting your buyers as an agent.  However, many agents don’t fully understand each and every comp.  How could they?  We certainly can’t expect them to know the ins and outs of each recent sale in our area.  We can however educate them.  If a home similar to yours recently sold for 20% less then your anticipated sales price, it is your listing agents job to explain this to buyers as well as appraisers.  The low sale could have been a gut job flip opportunity, or could have had mold damage, or was possibly an uncared for short sale.  Without understanding these factors yourself and making them known to the buyer/appraiser you are faltering out of the gate.

Non-MLS Sales

            The MLS is without a doubt the driving force in the Residential Real Estate industry.   However, just as not all cars are sold at dealerships, many homes are sold without the help of the MLS.  While this may not be a huge “oh yea” moment for you (I’ve heard of FSBO’s before) many agents forget to do their research outside of the MLS.   If a great comp does exist that is not being factored into your appraisal or comparative market analysis you could easily be giving money away.  Be sure either your agent or yourself understand what has happened outside the MLS.  There may be nothing there, but panning for gold can be a big payoff for a bit of time.

Lot Premiums

            Some of you may have shopped for new homes in the past.  Many will remember the big Plexiglas overhead map showing available lots as well as sold properties.  It is normal and expected to pay an additional fee for a premium lot.  In some communities a water lot can sell for as high as $100,000.  In “normal” sized communities that number may be $45,000.  The point is that premium lots always have a premium cost attached to them.  While this theme may continue in resale values, it is never equivalent to builder premiums.  If you have a premium lot, either on water, or oversized, or backing zero neighbors – whatever it is, promote it!  Remember, it’s not only the house you’re selling – it’s also the property.

            Selling in this market can be demanding, but the best way to strategize is to be prepared.  Knowing and understanding TRUE MARKET VALUE for your particular home will better prepare you for success.

Tough Market? Get Creative!!

Tough Market?  Get Creative!!

            As buyers and sellers try to navigate our current Real Estate market many are found distraught by a lack of offers, or an inability to find the “perfect” house.  While this market does have it’s disadvantages to both parties, either can be successful by being more creative with their offerings and/or offers.  It never hurts to be creative and think (how cliché) out of the box.  Doing so can bring you to the finish line with your needs and wants fully in tact.

Seller Creativity

            As the economy crumbled, largely due to the Real Estate burst, many buyers in the market were left with fewer funds available for purchase.  Whether their savings, 401 or portfolio declined or their ability to finance has been reduced, these buyers just don’t have the ability to renovate or rehab a home the way they’d like.   Seller contributions are not a new trend, but being creative with these contributions can be.  A buyer will gladly finance a new kitchen, pool or roof within a 30 year mortgage rather then coming out of pocket.  If your home lacks a certain “panache” that today’s buyer desires, it may be a good idea to contribute these features either before or after closing.   The thought of taking a task like this on can be intimidating, but in this market it can and will pay off.

Buyer Creativity

            Regardless of market, buyers and many agents are scared to ask for sufficient contributions.  Feeling that the request may leave a bad taste in sellers’ mouth, most won’t even ask.  We need to remind ourselves that this is in fact a buyers market, and many sellers do understand this.  While they are all trying to achieve the highest price possible, you simply don’t know until you ask.  A contribution of closings costs, or a renovation credit may not be the norm, but are generally open to discussion in today’s market.  If you’ve found that house would be just perfect if…..  let the sellers agent know what your thinking, we are here to make the deal work, give it a go, you don’t know unless you ask.

Financing Creativity

            Lynn Whitefall of Goldstar Financial is one of the most creative mortgage brokers I know and had this to say about staying creative with financing in this market – “some creative things I use to help buyers qualify are using money that would be used for down payment to pay down credit card debt to qualify for their desired price range.   A lot of time credit card debt eats too far into the debt ratio and eliminates the purchasing power; so this allows them to qualify for more and have an overall lower monthly obligation. With Interest rates so low we can reduce the principal quickly. “

           
            Success in this market simply calls for creative thinking; don’t be afraid to do so.  Work with a team that pushes the limits and remains creative.  Staying on the forefront of people’s minds while offering them what they want is step one to success.  Break out of that box and throw some “crazy” ideas out, you never know what’s going to work until you try!

Surviving the buyers market in a sellers shoes

Surviving the buyers market in a sellers shoes

            It’s no secret that we have been in a buyers market for quite some time now.  While this can be extremely frustrating for the seller in today’s market, there are ways to prepare and triumph.  With a sound strategy in place, anyone can sell in this market; but like most things in life, it takes work, care and time.  So hike up your pants, roll up your sleeves, and let’s get that home SOLD!

Know your hold costs

            The #1 factor to be aware of in a buyers market are your monthly hold costs.  As days on market climb, your potential net descends.   As shelf life is inherently longer in a buyers market this is a factor that cannot be ignored.   When factoring in hold costs, an offer of $340,000 in your first week is greater then $350,000 6 months from list.   A $3000 monthly hold cost is a fair average for a $350,000 home.  That’s $18,000 after 6 months.  In essence, the 2^nd offer 6 months later is a relative $332,000.  If you had settled for $340,000 on the first offer you would have saved $8000!  It is imperative that you know your hold costs and factor them into all negotiations.

Get Real

            The biggest problem we face in today’s Real Estate market is the continuing effect of the bubble bursting.  While it’s unfortunate, it is, as they say, what it is.   We cannot fool ourselves into believing our homes are worth what they were in the good ‘ole days.  We HAVE to be realistic with today’s market and price accordingly.  We always want to maximize our potential dollar but pricing out of market is simply the wrong way to do so.  Understanding true market value, pricing accordingly and making your home stand out is the way to success in a buyers market. 

Market effectively and consistently

            Marketing mediums have and continue to change at a rapid pace.   A buyers market clearly carries more inventory then is standard.  Thus we need to STAND OUT from the crowd!  With so much competition around be sure to work with an agent who understands marketing to not only today’s buyers, but to your specific buyer base.  This is not the type of market where one ad in a Sunday paper is effective. There needs to be a consistent flow of effective marketing until you reach your goal.  Without it, you are going to be lost in the pack.

            We cannot control the markets we find ourselves in we can only act accordingly.  Remember that selling is possible in any market.  Make a plan, hire the right agent and your sale will be a success! 

Make sure your FLIP isn’t a FLOP

             With the market in the proverbial port-a-potty there are many opportunities available for the savvy investor.  Flipping homes has become a trend popularized by TLCA&EHGTV.  It looks SO easy doesn’t it?  Even Vanilla ICE is doing it!  A little extra coin in the savings account, a story about how you once helped your neighbor build a tree fort and you’re off.  Let’s make some money!!  

Whoa there big fella….

Ok, ok, I know you hung your new flatscreen and have every episode of “Flip this House” Tivo’d, but there may be a chance – just a chance – that you’re going to get in over your head.  Let’s get a plan in order first huh?  How about a little due diligence?  Fair enough?

Whether a certified general contractor, Donald Trump, or a driving range pro, there are variables that must be accounted for prior to putting pen to paper, or shall we say putting your money where your mouth is.  Without completing your due diligence you are simply putting yourself in a compromised situation.  You may come out unscathed, but why start off in the wrong direction when you don’t have to?

Your first concern is a true and realistic budget.  In these preparations I prefer to be overly conservative to better protect my investors and myself.   Your obvious first calculation needs to be your pre determined total budget.  Be fair and be realistic.  If you are lucky enough to have access to unlimited funds, don’t take the approach that “funds aren’t an issue”.  Funds are ALWAYS an issue, without a firm loyalty to the budget you set yourself up for nothing but failure.

We now need a “Flipping Itinerary”, and this is not the time to remember that episode when the HGTV crew flipped a house in under 24 hours.  Take into consideration actual sale timelines in your area for comparable homes – then add 30%.  Patience is a true virtue in this game, and being prepared ahead of time only makes it easier.  I’m sure you have the absolute best intentions in hand and will renovate in the most attractive way possible.  However, there are variables that can and probably will arise that you can’t prepare for.  The best way to prepare for the unknowns is to build in additional time.   Time is money, so calculate all hold costs and be precise.  Hold costs are a valuable piece of information as time progresses.

            It’s renovation time!  The hands are dirty and the journey has begun.  We’ve stuck to our itinerary and our budget is in tact, this isn’t so bad!  While you sink into the rehab be sure to always keep quality in check.  Just as you got this wonderful idea to flip, chances are high that your buyers are watching the same program.   Today’s buyer is incredibly savvy, researching on line is second nature to most, if you try to “cheat” you will probably pay for it in one way or the other.  So make sure your permitting is correct and deeds and liens are cleared.  A great idea for a little extra money is to have an inspection done on the home by and unknown source.  These inspections are in the $300 range and will save you a lot of headaches in future negotiations.

            Flipping can be fun and it can certainly be profitable.  Just be sure to keep your ducks in a row and remember, in the end, it’s business; and you need to be prudent.