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!