Sell Your Arizona Mountain Home - Insight - A Sellers' Real Estate Blog

Show Me a Five Dollar Bill,

2007-07-14T08:57:00.001-07:00

And I'll Show You Why Your Listing Expired

This piece is admittedly "tongue-in-cheek", but there's some important lessons to be learned nonetheless!

Sometimes it's hard for sellers to understand why their listing expired. Sellers typically enjoy many fine years in their home, so they sometimes price their homes subjectively.

To understand why listings expire, it helps to imagine a listing expiring on something we understand has an objective price. So let's imagine for a minute that you had a five dollar bill, but -- perhaps for some twilight zone reason -- five dollar bills were suddenly more difficult to sell. Because of this, you give a bill-salesman a 90-day listing on your five dollar bill, but it doesn't sell, and the listing expires.
Now let's imagine I'm there with you and you show me your five dollar bill and say, "John, why did my listing expire"? Here are some possible reasons based on my experience.

You wanted six dollars for the bill. One of the bill salespeople told you it was worth five, another told you she could get you six because she "sells so many bills every year". You hired the salesperson who told you she could get you six dollars.

You listed the bill for five dollars, but insisted that your bill seller not show the bill to anyone unless you were there.

You listed the bill for five dollars, but told your bill seller not to put a sign up on the bill, because you didn't want the other five dollar owners to know anything about your business and chat about you in the neighborhood.

The bill was torn in half and had maple syrup on it. Your bill seller suggested $4.75 but you knew other bills sold for $5.50, so you agreed to list it for $5.25.

You owed $4.00 to a lender for the bill, and wanted to buy a bill for $7.00, so you felt you needed to get $6.00 for it. With this in mind, you instructed your bill seller to list it for $6.00.

Someone down the street got $10.00 for a "similar" bill with Alexander Hamilton on it. Based on that, you figured your bill should be worth at least $8.00.

You paid $20.00 for a wallet for the bill.

Eight months ago, people were getting six dollars for such bills. Your bill person told you that the most recent sales of such bills were for five dollars. You listed your bill for six dollars.

You list the bill for $5.00. Your bill salesman doesn't enter any marketing data in the MLS, and puts up a sign in the yard and a flier box with no fliers in it. You get an offer at $4.95 and want to accept it, but your bill salesman writes a counter-offer asking for a different title company, and the transaction falls apart.

You wanted eight dollars for the bill. You don't really need to buy another bill. You told your bill salesman to list it for $9.00 to "see what happens".

Your bill salesman lives 300 miles away from the bill, so they can't be there readily to let buyers in or help answer questions from other agents.

Your bill salesman is a family member, who's going to not only give you a break on the commission, he's going to list the bill for $6.50 for you.

You know bill salesmen get too much money for what they do, so even though many bill salesman are getting 5% and 6% to list bills, you save money by hiring Help-You-Sell-Your-Bill. You agree to pay them 3% total. They offer 2% to the bill-buyer's agent, who won't show your bill because they can get 2.5% and 3% to show other bills. Nevertheless, a buyer is interested and is ready to see your home, but you hired Help-You-Sell-Your-Bill, so your agent doesn't show it for you, you have to show it yourself. You make an appointment to show the interested buyer your bill on Saturday. On Thursday they see another bill they like better, call the agent on the sign and see the bill that day, write the offer, and they're in escrow on Friday. They don't call to cancel the Saturday appointment, but when you call to ask why they're not there they tell you how excited they are about the bill they bought. Aren't you excited for them?

You wanted eight dollars for the bill. Your bill salesman suggested selling it for five. You listed it for $7.50 and told your bill salesperson that if someone wants it they could "make you an offer". No one makes an offer.

You wanted eight dollars for the bill. Your bill salesman suggested selling it for five. You listed it for $7.50 and told your bill salesperson that if someone wants it they could "make you an offer". Someone offers you $5.00 and you're insulted by this "lowball" offer, so you reject it. Two months later you ask your bill seller if that buyer is still interested, but meantime they've purchased another bill for $4.90.

John Lockwood is a California Real Estate Broker and author of
http://www.sacramento-home.com.
Article Copyright, 2005, John Lockwood. Published by permission under John's Free Content License Copying, publishing or distribution of the article without the author's express permission is forbidden.

Vacation Home Sales Rise

2007-06-22T12:18:00.000-07:00

If you're a White Mountains Arizona vacation home owner, you're still in the driver's seat! Although you may have to concede a little price-wise in acknowledgement of the perception of an overall buyers' market, your chances of selling are greater than new construction or existing neighborhood homes.

In 2006, more than one million people bought vacation homes. These million home sales represent an increase of 4.7 percent over the preceding year. This according to the National Association of Realtors (NAR), industry experts who say that this data from NAR is good news for people who want to buy a vacation home.

According to Christine Karpinski, author of "How to Rent Vacation Properties by Owner", 2nd Ed: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment (Kinney Pollack Press, 2007), vacation home sales and investment home sales together accounted for 36 percent of all new and residential transactions. With these results, is it really a good time to sell a vacation or investment property?

The general public tends to view the real estate market as a whole. But Karpinski points out that that there are different segments to the real estate market, and not all of the segments respond in the same manner or at the same time.
Residential sales, i.e. a house bought as a primary residence and investment purchases are two separate and distinct markets. So don't let the gloom-and-doom-sayers discourage you, and don't let the sluggish real estate market in your area do so either. You are on a whole different playing field, says Karpinski.

While vacation home sales are up, investment home sales are down by nearly 30 percent since 2005. This can be good news for vacation homebuyers because fewer speculators in the market means less demand and lower demand equals a drop in prices. Get realistic with your pricing, and ensure buyer attention. It's what they expect-- so don't violate their expectations by digging your feet in, demanding yesteryear's prices. Capitalize on the rising vacation home market!

Buyers buying a vacation home for personal use, not having to compete with speculators allows buyers to take their time and make a thoughtful purchase that they can feel good about. To vacation home sellers, that means careful pricing, and much more patience waiting for buyers to make up their minds. Bruce & Pam Wachter with Sell Properties, LLC, will counsel you on your wait and watch approach, and also give you valuable information about making your vacation home stand out. How to negotiate successfully with hesitant buyers is an art form, too. Bruce & Pam can give you invaluable support and help with negotiating successfully.

Vacation homes that can be rented typically hold their value better because more people are able and willing to buy such a house. Think about offering your vacation home furnished or partially furnished. Think about selling your vacation home complete with tasteful cabin decor-- make it look more like a mini-resort!

Selling In a Buyers' Market

2007-05-03T19:20:00.000-07:00

Most reliable reports across the U.S. suggest that in most areas of the country real estate is no longer appreciating at the rates seen in the past few years. But, admittedly, the past few years were unusual, and the real estate market is correcting. The National Association of Realtors reports that nationwide August 2006 existing home prices were actually down 1.7 percent from a year earlier. The beginning of the correction, it would seem.

None of this news is dreadful or exceptionally bad unless you bought last year and you now need to sell. For those who have owned for several years and are considering selling now, the current market puts you well ahead of the curve in most communities.

Consider that in the year 2000, according to the National Association of Realtors, the typical existing home sold for $111,800 versus $225,000 in August of 2006. About double. Not surprising.

So, what constitutes the most likely successful scenario to insure a sale in today’s market? Consider these high-notes:

1. Buyer scarcity relative to home supply. (A buyers’ market).
Sellers have been in the driver’s seat for the past few years; but that’s no longer the case in most markets, let’s just face it. And so, sellers need to adjust, it’s that simple. But make a positive adjustment by making your home the most attractive, best-priced home in the neighborhood.

In the recent past, we noted that pre-market “prep” of homes was pretty much just a lick and a promise, if not totally ignored. In today’s market, painting, clean-up and repairs, large and small, all must be made prior to listing. Your home must stand out from all the competition like a buyer beacon. We have many valuable tips for just that purpose here in our Insight Blog. Check them out and employ them.

MLS pictures must be selected with care. Now more than ever, real estate is a visual medium first, via pictures that prospective buyers can and do view and scrutinize via the Internet. We cannot emphasize this one successful sales ingredient enough. If your Realtor or real estate agent takes lousy pictures OR no pictures at all (read this important post on the “no pictures” agent gambit), you’re dead right out of the gate, period. We cannot tell you how many worthy homes have been discarded from the mix of buyer choices because they don’t care for the pictures of the home. Nothing we can say or do can overcome this initial objection to a showing. And the more good pictures, the better. Buyers want to see as many pictures as possible. Make sure that your Realtor or real estate agent has a portfolio of pictures to send prospective buyers in addition to those permitted on the MLS.

2. Remember cash is always an issue. Use this to your advantage.
While home prices may have become only slightly more reasonable, real estate purchases will always be an extremely expensive proposition for most buyers—especially first-time buyers who lack much equity from prior sale. Answer that need in your offer. You can counter a reduced sales price by offering to pay buyer closing costs and lessening the dreaded out-of-pocket buyer cash requirements. Look like an angel to buyers. And, put this offer in your public offer. State an amount that you will pay towards closing costs.

3. Choose the right Realtor.
Choose a Realtor who demonstrates market savvy in attracting buyers. A Realtor or a broker who simply has lots and lots of listings may not actively market to buyers. It’s one thing to put a lot of inventory in your front window and just sit back waiting for buyers. It’s another thing entirely to be able to attract buyers. The only thing you need for selling your home are buyers, and lots of them.

In a slow market picking the right listing agent becomes especially important. Not only does the listing agent have to possess a keen knowledge of the area market in general, he must know what buyers are looking for and why. He must have active buyers feeding him information about price ranges, amenities desired in price ranges, buyer turn-ons, turn-offs. He must have lots of buyers who would consider YOUR home.

4. The numbers game.
Real estate sales are directly related to exposure. If the odds of selling a home are 100 to one, and it takes 100 inquiries and visits to get that one buyer, then the quicker you get those inquires the better. If you can get more than the 100 inquiries the odds of getting a top price and terms ratchets up.

That means that when you consider a listing agent, you need to review the proposed marketing methods with care. What is the listing agent going to do in terms of advertising, open houses, MLS placements, online marketing, broker relations, etc.?

Marketing plans that work for one property may not work for another. Your listing agent needs to be a skilled marketer. He needs to be able to pinpoint what makes your property unique and attractive, and he needs to market heavily. He needs to be thoughtful and energetic in his marketing plans. He cannot rest on recent past selling models. He must be imaginative.

5. It's a business deal. Unemotional and practical.
Things that don’t work:
• "I have to get this amount out of this sale because I need it to purchase the new property." The truth: Prices are established by the marketplace, not seller needs.
• "Similar homes across the way (in that subdivision or area) command this particular price; my house should sell for the same price, too." The truth: What is happening elsewhere is irrelevant. What is happening in the immediate neighborhood/area is what is really happening.
• "The people down the street got $750,00 for their home so I should be getting at least that much." The truth: This is not about the people down the street and your ego. It’s about bricks and mortar. The people down the street may have had an objectively better house. Face it.
• "The buyers’ offer asks that we leave the pool table – Who do they think they are asking for our “stuff”." The truth: Homes are all tied up with our psychological identity, who we are, our social status, etc. The market simply reflects supply and demand. It’s a market with a lot of inventory and lots of lookers, few takers. Leaving the pool table may be a lot cheaper than not getting a sale for months and months and months.
• "Last year this house would have sold for $750,000 and we will not accept a lower price!." The truth: It's not last year. It's now and the marketplace reflects current supply and demand.

Sellers can be successful in any market so long as they clearly understand the conditions and dynamics of the marketplace.

Declutter! A Must for Successful Home Sales

2007-03-23T15:33:00.000-07:00

Your home may be in very good condition, well-built and attractive-looking. However, simple clutter will create feelings of chaos, confusion, and disorder. One of the most important things a home seller needs to keep in mind is that the decision to purchase a new home is both an emotional and intellectual response. You want your home to imply trust. When buyers see clutter, they consciously or subconsciously register that the home has been neglected, with more to fix than meets the eye. This undermines your home's marketability.

So, declutter. Before you put your home on the market, have a garage sale, throw things out, and box stuff up. Use off-site storage. Your potential move will be easier, and you will create that open, spacious, simplified look that buyers love. We’ve said it before: When it comes to marketing your home, less is more.
Front Yard

Carefully mow and trim your front yard. Remove all toys, clutter, pots, etc. Fertilize the grass a month or two ahead of time for that green grass buyers love. Trim and/or remove dead, tired growth. Make sure no shrubs block interior light by blocking windows. Place all tools out of sight, and coil all hoses neatly. Remove any extra cars, boats or trailers.
Mulch your garden. Keep flowering pots to a minimum, keep them large and bountiful with healthy plants.

Entryway

The buyers' first impression is critical, and shapes their attitude throughout the showing.

Put down a brand-new welcome mat. Clean all stains, repair all scratches on entryway. If the front door is worn, dirty, or mildewed, in need of refinishing, this is one of the most important care areas for you. Fresh paint or stain will make a great difference.
Consider having your whole house power washed to remove stains, spider webs and other clutter. If the paint is shabby, outdated or worn, invest in paint. It’s the quickest and easiest way to improve curb appeal.

If the entryway has a foyer, it needs to be spotless, clear of shoes, coats, etc. Create a focal point with an attractive table or a simple, yet attractive painting or artwork.
Living Areas

Keep rooms sparsely furnished. They will appear larger and brighter. Move large pieces of equipment, such as weight benches, treadmills, drumsets, ect. - off-site.

Do not allow furniture to impede traffic patterns or block windows. Do not permit stereo/tv wires to be seen or to cross traffic patterns.
Choose one or two elements as the main points of interest in a room - wood floors, a view, a table or piece of furniture, a nicely made bed, etc.

Remove ALL personal items, family pictures, memorabilia, collections, hobby/craft things, trophies, hunting trophies, etc. This is crucial. Remove any and all things that lend YOUR personality and interests from the home. Buyers are put off by YOUR STUFF. It’s hard for them to imagine themselves in YOUR home. Many times hunting trophies “taint” a home for buyers. Remove and store these.
Only the most healthy and vibrant of houseplants should be permitted. And, keep these small.

Bookshelves add a warmth to a room, but remove most of the books. Leave lots of empty space.

Open window blinds/drapes/curtains and leave on a few lamps for warm, low, pleasant lighting.

1.   Kitchen

The kitchen is the heart of the home and plays an important role in attracting the heart of a buyer. This area needs special attention.

Clean, finished cabinetry is a must. Add new paint or stain, if necessary. There are products that will restore finishes to marred or worn cabinets. Invest in these.

2.   New cabinet pulls are inexpensive and can help tie the room together in terms of colors and finishes.

Remove purely functional items - such as baking pans, small appliances, vitamins, phone books, plastic bags, etc.

Remove all notes or photos or magnets from the door of the refrigerator.

Clean and clear the counters completely, then add back a few decorator items.

Choose decorative pieces that contribute to a warm, elegant, organized look.

Organize and clean the areas under the sink. Store these items in the garage in boxes.

Remove all trash containers.

3.   Bathrooms

It is important to de-clutter bathrooms to give them a touch of elegance or romance.

You will give up some privacy during the marketing phase.

Remove everything from the counters.

Remove any toilet brushes or bathroom cleaners that are visible.

Put items that you use daily - toothbrushes, soaps, razors - in a container, and place the container inside in a cabinet.

Decorate with fresh soaps, flowers, bowls, photos, or designer bath items.

Invest in new towels and fold them carefully.

Never leave medicines on display.

Remove all lingerie, bathrobes, slippers, etc., from hooks.

4.   Bedrooms

Bedrooms should appear restful and serene. Sparsely furnished is best.

Use your best covers, or invest in new ones if yours are worn.

Clear off bedside tables, and add back just a few books or nice items.

Bedside lamps add a warm ambience for showings.

Remove excess paintings or photos from the walls.

In some cases, old curtains do more harm than good. Take them down and clean the windows for a fresh look.

Children's bedrooms usually need to be simplified. Take down posters and box up toys. Avoid an overcrowded look.

Never leave jewelry, adult magazines, guns, medications, etc., on display.

5.   Closets

Organize your pantry with everything facing forward. Remove excess food and containers.

Relieve your closets if they are stuffed. Leave only your favorite shoes, pack items that are not needed for this season. Make closets as roomy as possible.

The laundry room often functions as a spill over room with junk on the shelves. Clear everything out, and have just a few soap boxes visible. Paint the laundry area with a bright, happy color. Make sure it is spotless.

Lowering the Asking Price - Asking for Trouble Part III

2007-03-15T16:08:00.000-07:00

When you start out with an over-priced asking price, then drop it later -- your house becomes sad "old news." You won't be able to experience the initial activity you would have had with a realistic price. Your house very well may take longer to sell.

But let's just say you've been successful selling at an inflated market price to an uninformed buyer. The buyers' mortgage lender will call for an appraisal. If comparable sales (which you were shown originally but rejected) for the last six months and the market conditions don't support your sales price, the house won’t appraise and your house falls out of escrow. You could chase the buyer, offering to renegotiate, but for him/her, the deal is tainted and they most likely will respond with an even lower than appraisal offer.

Your house could go "back on the market."

Either scenario (dropping the price or failed appraisal) means your house sits on the market month after month and it's harder to get a good offer. Buyers will think you might be getting desperate, so they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received.

Realtors talk to each other. And if your selling agent has "bought" your listing by telling you what you wanted to hear, they will know. This can mean two further problems for you: other Realtors may not want to "do business" with your selling agent because of his practices, and/or they may not want to do business with you because they worry you are inflexible and demanding and that negotiations might be unpleasant. After all, you've had to lower your price and you are not very happy about your experience.

So, when a Realtor backs up a proposed selling price with comparable sales, market conditions, etc., and gives you his/her professional and honest advice on how to price your home, it's best for you to listen to his/her professional advice. It will save you money and heartache!

Setting the Asking Price Too High - Part II

2007-03-15T16:06:00.000-07:00

Asking Price Too High - Asking for Trouble!

What's Going on Behind the Scenes

It's important to know that the listing agent does not usually attempt to sell your home directly to a homebuyer all by him/herself. That would be inefficient.

Instead, Realtors market and promote your home to the multitude of other local agents who are also working with homebuyers, and this increases your "personal sales force" exponentially. That's the beauty of the MLS Service! Hopefully, during the first couple of weeks a home is on the market, buyers' agents may be calling and coming in to preview the home so they can show it to their inventory of clients.

If the price is right.

If you and your agent have over-priced your home, fewer (if any) agents will preview your home. As Realtors it is their job to know local market conditions and home values and they know when a home or property is overpriced. If your house is dramatically above realistic market values, why waste time their time, and more importantly, why do a potential disservice to their homebuyers? Their time is better spent previewing homes that are priced realistically.

Even if Realtors don't typically preview new listings, they do scan the MLS for suitable listings for their buyers and your over-priced home will be completely passed over for consideration time and again. Think about it: How many Realtors would think about showing your property when they are bound by their Code of Ethics to protect their buyer by giving them their best advice and that advice would be to offer you a much lower price? They know they run the risk of insulting you and exposing the buyer to a potential flat rejection or worse. So, they just pass you by. You're somebody else's problem. Your Listing agent. And he/she has plans to ask you to lower your price when you call and ask, "What's going on?"

Lowering The Asking Price - New Troubles

TO BE CONTINUED...

Selling Your Home - Setting the Asking Price Too High - A Series

2007-03-15T16:03:00.000-07:00

So you’ve decided to sell your home and have your idea of what you think it's worth. Armed with this you call at least three area Realtors and schedule appointments. And one by one, they stop by, each coming prepared with a "Comparative Market Analysis" and other supportive documentation for setting the asking price of your home.

But, to your anger and disappointment, two of the Realtors have come up with prices that are lower than the figure you had in mind. And although they back up their recommendations with recent sales data of similar homes, you remain convinced your house is worth more.

When you review the third agent’s figures, they are much more in line with your own figures or maybe even higher. "Ah ha," you say, "Now that's more like it!" And you list with the highest "bidding" Realtor and start counting the money you're going to make on the sale. But, have you really just shot yourself in the foot?

"Buying a Listing"

If you’re like many people, you pick Realtor number three. This is an agent who seems willing to listen to your input and work with you. This is an agent that cares about putting the most money in your pocket. This is an agent that is willing to start out at your price and if you need to drop the price later, you can do that easily, right? After all, everyone else does it!

The truth is that you may have just met an agent engaging in a questionable sales practice called "buying a listing." He "bought" the listing by suggesting you might be able to get a higher sales price than the other agents recommended. Most likely, he is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price.

Why do some agents "buy" listings this way?

There are basically three reasons. A well-meaning and hard working agent can feel pressure from a homeowner who has an inflated perception of his home’s value and feels uncomfortable "insulting" the seller. Or, the agent simply wants lots and lots of listings to appear to be very popular. On the other hand, there are some agents who engage in this sales practice routinely. However, over-priced homes are a recipe for disaster.

TO BE CONTINUED - What's going on behind the scenes

Selling Space - Your Home Becomes "Just a House"

2007-03-15T16:00:00.000-07:00

Selling your home can be an emotional roller-coaster ride, but only if you let it be. While you can't take your emotions out of the process, you CAN control them.

Initially, begin thinking of your home as a "house", a place, a space. Sure, you've got wonderful memories imprinted on your home, but now it's time to let someone else build their wonderful memories, too.

All around your house you probably have things you love, things you've collected, things you cherish and are very proud of; but you have to look at them in a completely different light when you begin to show and sell the house. You most probably need to pack them up. Why? Because your cherished possessions may distract potential buyers from seeing the space you want to sell. They may spend time admiring and encouraging you to talk about your collections or your special pieces when you want them to look at the house, itself and the possibilities it offers the buyer.

Many sellers believe that these special objects enhance the sale of the home, but most times they are a buyer distraction. What you want to do is offer space for the buyer's imagination, for places he can put his special things. Think space. Clear away/move/store whatever you can to create space for the buyer, for his collections, his pictures, his furniture.

Showcase the house itself, not the contents. Selling time is not the time to display YOUR stuff, but the time to accept the fact that the buyer has his stuff, too, and you'd very much like him to buy your house to put it in!

The Real Estate Selling Process

2007-03-08T16:19:00.000-08:00

Selling real estate may be the largest single investment — and one of the greatest satisfactions — of your lifetime. Along with a substantial financial commitment, such transactions usually involve risks, technicalities and legal considerations.

The following is intended to provide you with general information about the basics of buying and selling real estate. It explains essential steps in the process and suggests guidelines for avoiding pitfalls, but it does not attempt to provide specific legal advice. Therefore, if you are not knowledgeable or experienced in negotiating terms, arranging financing, analyzing tax consequences, or handling related details, you may want to consult a lawyer or a Real Estate Professional.

Starting the Process

Before signing any document or paying any money, you should carefully examine your requirements, resources and needs for professional help.

An experienced, reputable real-estate broker may be indispensable. Although the seller ordinarily hires the real- estate broker and agrees to pay the fee, it is possible for a buyer to make such arrangements.

The Arizona Department of Real Estate requires agents to disclose whether they represent the buyer or seller (or both). Verbal and/or written disclosure is required before showing homes for sale. In addition, the disclosure must be confirmed in a separate paragraph in a written purchase and sale agreement.

When you buy or sell real estate you may also come into contact with bankers or other lenders, title and mortgage officers, inspectors, or other authorities whose function you should understand. Of all your advisers, your lawyer is probably in the best position to assist you with each phase of the transaction.

Types of Documents Used

Various documents are used to specify rights and obligations in real-estate transactions. Preprinted forms, individually drafted forms, or a combination may be used; your lawyer can assist you in determining which are best for your situation. Typical documents include listing agreements, purchase and sale agreements, and financing agreements.

Listing Agreements

The usual form of contract between a seller and broker is a listing agreement. It is usually a printed form, but the amount of commission, the duration of the agreement and duties of the broker are all items that may be negotiated. There are several forms of listing agreements, with great variation in terms, liability, duties and services rendered.

Most brokers request an exclusive listing (or "exclusive right to sell"), a written agreement entitling the listing agent to a commission regardless of who sells the property. The agreement may also provide for a commission even after the listing agreement has expired, if the property is sold to a prospect produced by the broker during the term of the contract.

An exclusive agency listing designates one broker as the "exclusive agent" with entitlement to a commission unless the owner effects a sale without assistance from any broker.

An open listing contract may be given to any number of agents, and often allows the property owner to sell the property directly. In the event of a sale, only the broker who has found a buyer receives a commission.

A multiple listing association enables participating brokers to pool listings and share commissions in order to give maximum exposure to the property.

A broker who produces a purchaser who is ready, willing and able to buy the property on the terms specified in the listing agreement (or otherwise acceptable to the seller) is normally entitled to a commission. The fee (typically a negotiated percentage of the selling price) should be stipulated in the agreement.

Although contracts may sometimes provide for payment of a commission only if a sale is completed (or "closes"), the seller usually must pay a broker who performs according to an agreement, regardless of whether the sale was ever consummated. In other words, if a sale fails to close because a seller reneges, the seller generally must pay the commission.

A broker's role may be negotiated by the parties to the agreement, but the broker is usually the seller's agent. In representing the seller's interests, a broker must report all offers and proposals. The broker or agent sometimes acts as an intermediary, delivering offers and counteroffers between the buyer and seller. Rates, terms and services vary with the type of listing, geographical area and other factors.

Purchase and Sale Agreements

Often called the "earnest money agreement," a purchase and sale agreement is prepared to specify all the terms and conditions of the transaction. This document states the price and terms under which the buyer is obligated to buy and the seller is obligated to sell. It is a legally binding contract which establishes the respective rights and responsibilities of the purchaser and seller. An agreement for the sale of real estate is void and unenforceable unless it is in writing and signed by the buyer and seller.

The buyer often makes a deposit, known as an earnest money deposit. This "evidence of good faith" is usually in the form of a cash deposit, but it may also be a promissory note (or signed acknowledgment to repay a debt at a later date). The amount can vary and the deposit is usually applied to the down-payment obligation or to the buyer's share of the closing costs.

The importance of the purchase and sale agreement cannot be overstated, and it is advisable to have a lawyer review the document before signing. If this is not possible, a condition can be included to provide that the transaction is subject to the approval of the buyer's (and/or seller's) lawyer within a specified number of days.

A buyer may lose the deposit and be liable for damages if an agreement is signed and he or she fails to abide by its terms. A seller who fails to perform after signing the agreement may also be liable for damages.

A preprinted form is frequently used for purchase and sale agreements, with specific terms added by completing blanks on the form. A specially prepared agreement or addendum may also be used in place of, or to supplement, a preprinted contract.

In addition to naming the parties, price and terms of the purchase, a purchase and sale agreement should also include the following items:

legal description of the property;
cond
Real Estate Selling Process

Buying or selling real estate may be the largest single investment — and one of the greatest satisfactions — of your lifetime. Along with a substantial financial commitment, such transactions usually involve risks, technicalities and legal considerations.

The following is intended to provide you with general information about the basics of buying and selling real estate. It explains essential steps in the process and suggests guidelines for avoiding pitfalls, but it does not attempt to provide specific legal advice. Therefore, if you are not knowledgeable or experienced in negotiating terms, arranging financing, analyzing tax consequences, or handling related details, you may want to consult a lawyer or a Real Estate Professional.

Starting the Process

Before signing any document or paying any money, you should carefully examine your requirements, resources and needs for professional help.

An experienced, reputable real-estate broker may be indispensable. Although the seller ordinarily hires the real- estate broker and agrees to pay the fee, it is possible for a buyer to make such arrangements.

Types of Documents Used

Various documents are used to specify rights and obligations in real-estate transactions. Preprinted forms, individually drafted forms, or a combination may be used; your lawyer can assist you in determining which are best for your situation. Typical documents include listing agreements, purchase and sale agreements, and financing agreements.

Listing Agreements

The usual form of contract between a seller and broker is a listing agreement. It is usually a printed form, but the amount of commission, the duration of the agreement and duties of the broker are all items that may be negotiated. There are several forms of listing agreements, with great variation in terms, liability, duties and services rendered.

Most brokers request an exclusive listing (or "exclusive right to sell"), a written agreement entitling the listing agent to a commission regardless of who sells the property. The agreement may also provide for a commission even after the listing agreement has expired, if the property is sold to a prospect produced by the broker during the term of the contract.

An exclusive agency listing designates one broker as the "exclusive agent" with entitlement to a commission unless the owner effects a sale without assistance from any broker.

An open listing contract may be given to any number of agents, and often allows the property owner to sell the property directly. In the event of a sale, only the broker who has found a buyer receives a commission.

A multiple listing association enables participating brokers to pool listings and share commissions in order to give maximum exposure to the property.

A broker who produces a purchaser who is ready, willing and able to buy the property on the terms specified in the listing agreement (or otherwise acceptable to the seller) is normally entitled to a commission. The fee (typically a negotiated percentage of the selling price) should be stipulated in the agreement.

Although contracts may sometimes provide for payment of a commission only if a sale is completed (or "closes"), the seller usually must pay a broker who performs according to an agreement, regardless of whether the sale was ever consummated. In other words, if a sale fails to close because a seller reneges, the seller generally must pay the commission.

Purchase and Sale Agreements

In addition to naming the parties, price and terms of the purchase, a purchase and sale agreement should also include the following items:

warranties of title (restrictions, rights or limitations)
condition of property and of zoning or use rights (if applicable);
prorations of taxes, special assessments, obligations and prorations regarding insurance premiums
stipulation of who bears costs for such items as transfer fees, state revenue stamps, etc.;
financing, if it is a contingency of the purchase
complete terms and documents to be used if the seller is supplying financing and receiving security for such financing (with copies of any such documents attached);
items of furnishings, fixtures or appliances to be included or excluded;
right of inspection (if any) given the buyer;
date of possession; and
conditions under which an offer may be canceled, as well as provisions for return or forfeiture of the deposit.

In the purchase and sale of an existing home, the sellers must complete a disclosure statement regarding the home. Disclosures cover a variety of topics, including the condition of legal title, the availability of essential services to the home such as sewer and water, and a listing of the history of significant repairs or changes in the condition of the house. Unless the buyer waives review of this statement, the seller must deliver a completed statement to the buyer for review within a certain time after the purchase and sale agreement has been signed by both parties. The buyer then may elect to terminate the transaction by giving timely and appropriate notice to the seller. If the buyer does not object, then the disclosures are deemed to be acceptable to the buyer.

Financing Agreements

Banks, savings and loan associations, mortgage or insurance companies, some credit unions and other institutions are in the business of lending money to finance the purchase of real estate. Some financing, such as FHA-insured and VA-guaranteed loans, is insured by the federal government and may offer lower financing charges or extended terms of repayment.

As an alternative to a conventional lending institution, a buyer may find a seller who is willing to finance the transaction. Under these arrangements, a seller receives a promissory note from the buyer and uses a mortgage, deed of trust, or similar instrument to secure payment and guarantee performance.

Other financing options, such as the use of a land sales contract, assumption of the seller's mortgage, graduated payment plans, and adjustable-rate loans may also be worth investigation.

Specific terms and requirements for loans vary widely and are influenced by money market conditions, the quality of the borrower's credit, income sources or assets, and other factors. Loan costs can also vary, and may include service charges, appraisal fees, survey costs, title insurance, escrow and legal fees.

If financing is required to complete a transaction, a buyer should be sure the purchase and sale agreement specifies that requirement as a condition of the purchase. Furthermore, the buyer usually has the responsibility for finding a financing commitment by a certain date.

The agreements used to secure a debt with real property are usually lengthy and complex. Such agreements affect the payment of money to a seller, a lender, or both, and establish a security interest in your real property or home. Even with a "standardized" form, legal advice may be necessary to fully understand the details, obligations and legal consequences of the documents. It may also be necessary for your lawyer to tailor certain items to meet your requirements.

Use of Security Instruments

Several methods and various security instruments may be used for real-estate loans, each with different obligations and consequences.

A mortgage and a deed of trust are security instruments that pledge to the lender an interest in your real estate to secure payment of a promissory note. A mortgage is the instrument, usually held by the lender, by which the property is pledged to secure the payment of a debt or obligation. A deed of trust has similar functions, but is usually held "in trust" by a trustee. The promissory note acknowledges a borrower's formal obligation to repay the loan. Under some types of security instruments, a buyer who fails to pay on time can lose the pledged property or may be required to pay additional amounts on the loan.

A real estate installment sales contract or a land sales contract is an agreement between the seller and buyer that states the purchase price and method of payment, as well as other rights and duties.

The buyer usually does not receive a deed (or legal title) to the property until all required payments are made. In the event of default, payments may be forfeited, and the buyer's interest in the property may be lost.

Expenses

In addition to the loan, there may be other costs involved in buying property. These costs will usually be itemized at the time of closing. In general, estimates can be provided at the outset of a transaction or before service is rendered. Along with understanding what fees and expenses are owed, you should also be aware of when the amounts are payable and who (buyer or seller) is responsible for specific charges. Typical items include: lender's fees, appraisal fees, inspection fees, title search, insurance, taxes, escrow and lawyer fees.

Taxes

Every real estate transaction has certain tax effects upon the parties involved. Steps may be taken when negotiating the initial purchase and sale agreement to reduce or adjust tax obligations or postpone payments. Federal income tax, estate taxes, excise taxes and other consequences are complicated and the laws frequently change. Whether buying or selling real estate, advice from your lawyer or accountant is essential in understanding and dealing with tax considerations.

Real Estate Title

Real-estate title is evidence of legal ownership. When buying real estate, it is important to assure your right to occupy, use or eventually resell it without interference. Previous ownership and a title's "marketability" can be verified by a title search. Multi-unit ownership (such as condominiums, cooperatives and time-sharing arrangements) may involve special considerations.

Title insurance offers protection against financial loss and expense of defending your title in court. Issued by a title insurance company following a search through records of previous ownership, such policies have various terms, provisions and types of coverage. Some risks, such as unrecorded easements or zoning and use restrictions, may not be covered by title insurance. A lawyer can explain policy exceptions and conditions and may help a buyer determine whether additional protection is desirable.

Closing the Sale

The final stage in the purchase of real estate is called closing or "settlement." This sometimes complex procedure occurs when the parties submit the final documents required to complete the sale according to terms of the purchase and sale agreement. Money and documents are usually exchanged at the time of closing, and the function may be attended by the parties and their lawyers.

Mortgage brokers, private escrow or title insurance companies, and lawyers usually provide escrow services. Escrow or Title companies will charge a fee for their services.

Escrow services by a neutral third party are essential to the proper closing and recording of instruments and delivery of monies. It should be remembered, however, that escrow agents obtain information and take their instruction from the parties; they do not guarantee or protect the rights of either party in assuring that documents are consistent with purchase and sale agreements or either party's understanding of the transaction.

The escrow agent must prepare and obtain approval by the parties of "truth in lending" and "closing" statements as required by the federal Real Estate Settlement Procedures Act (RESPA). These forms and disclosures are required to advise borrowers of the cost and interest rates in the transaction. You may wish to have your lawyer review the documents and explain the content and consequences.

One of the most important instruments for closing is a deed, which transfers ownership of property from the seller to the buyer. There are several types of deeds, such as "warranty deed," "special warranty deed," "bargain and sale deed" and "quit claim deed." The type of deed affects the buyer's rights against the seller. The manner in which the buyer's name appears on the document is also important, since it may affect the form of ownership and the tax liability of the owner.

Filing Documents

All documents of ownership of real property and those reflecting a security interest in real property should be recorded (officially filed) in the county where the property is located. This procedure is necessary to protect one's ownership of property. To be eligible for recording, the documents must meet certain statutory requirements. For example, the document must contain a legible and correctly stated legal description and an official acknowledgment (notarization) of the signatures. All documents pertaining to your transaction should be kept in a secure yet accessible location, such as a safe-deposit box. These important papers may be useful when preparing tax returns or if planning to sell that property.

The Selling Process - What to Expect

2007-03-03T13:33:00.000-08:00

...And what does it all mean? Just a few key aspects of the selling process, terms and situations:

Answers to frequently asked questions

What is title insurance?
Title insurance protects the named insured against loss because of defects, liens, encumbrances, adverse claims or other matters not shown or disclosed to the new owner that attach before date of policy.

What is a wood-destroying organism inspection report?
A wood-destroying organism inspection report is a written opinion by a qualified state licensed structural pest control inspector based upon what was visible and evident at the time of inspection. The inspection report does not in any way represent or guarantee the structure to be free from wood-destroying organisms or their damage, nor does it represent or guarantee that the total damage or infestation is limited to that disclosed in the report. Wood-destroying organisms include subterranean termites, dampwood termites, carpenter ants, wood boring beetles and wood decay fungus.

What are the hazards of lead-based paint?
All buyers and sellers are required by law to receive and read a pamphlet outlining the hazards of lead-based paint for homes built before 1978. Be sure to ask your real estate agent for a copy.

What are closing costs?
Closing costs are an accumulation of charges paid to different entities associated with the buying and selling of real estate. For sellers, they are usually about 9.5-10% of the total sales price of a property. Some of the closing costs you might encounter are: discount points, escrow fee, documentation fee, homeowners' association fees, pest/rot inspection, real estate commission and title insurance premium.

What is the difference between "pre-qualified" and "pre-approved"?
If a buyer is "pre-qualified" it has been determined, with a loan officer, what price the buyer can afford based on the down payment, debts and the amount the mortgage company will approve for the mortgage. Being "pre-qualified" is only a determination of probable credit. If "pre-approved", credit, employment and funds have been approved by the lender.

Simple Fix-Ups Make Your Home Look Exceptional!

2007-03-03T13:18:00.000-08:00

Simple tips and tricks to change ordinary into extraordinary!

Be realistic pricing your house. If it lacks amenities that an equally-priced comparable house has, discount the price of that item.

Make sure the key to your house is available to the agent and your house is accessible to be shown at a moment's notice. Be flexible. Clients and agents need that accessibility to make a deal.

Get rid of any junk. If it has value, take it to a recycle establishment, have a yard sale or donate it.

Trim the shrubs, weed the flower beds, mow the lawn, rake the leaves, sweep the walkways. A clean front yard makes the first impression. Make it look sharp. Plant some flowers that are in season to liven up appearances.

Put potted flowers on the front steps. Water them and keep them healthy looking.

Fill and repair holes or cracks in the driveway or walkways.

Paint the front door and front entrance. The door is the face of the house; one of the first things people notice. Make sure front entrance lights work.

Paint the shutters. Paint or touch up the trim.

Clean the outdoor furniture. Paint the rust or toss it.

Straighten gutters, planters, mailbox, or things that sag or tilt.

Clean the house thoroughly - squeaky clean. Keep it that way while selling.

Shine the appliances, vacuum the carpet, polish the cabinets. Get dust, flies and moths out of light fixtures. Minor dirt, odor and lack of cleanliness are a turnoff!

Get rid of any odors. Get rid of ashtrays. Use an air freshener if the house does not smell right. Eliminate the smell of dogs, cats, kids, spicy food, etc. Odors are hard to explain away and are always noticed. If necessary, bake cookies or an apple pie - - a good smell for the open house!

Clean the windows outside and inside.

Find the best real estate agent in your area from an unbiased reliable source.

Move clothes out of your closets so they do not appear full -- busting at the seams.

Remove clutter from the kitchen. Keep the sink clean, free from dishes. Clean the refrigerator, degrease the oven. Take drastic action to get a Spartan look.

Remove personal items that are conspicuous. You want to show off the house not yourself.

Tighten and repair loose knobs, sticky doors and windows.

Replace burnt out bulbs. Repair light switches that do not work.

Fix cabinet doors that do not work right. Oil hinges. Repair minor flaws. You don't want the little things that do not work to leave questions in a buyer's mind.

Repair caulking and grout in bathroom. Fix leaky faucets. Equip with fresh soap and neat towels. Keep the bathroom spotless.

If repainting, a fresh coat of paint that is neutral enhances the decorating detail to a home. Paint smells clean.

Replace faded wallpaper.

Shampoo carpets, polish floors. Consider replacing carpet that is faded, excessively worn or out of date.

Repair cracks in the dry wall. A five-dollar repair job may keep a buyer from raising an alert flag on a major repair and be worth $2,000 in his eyes.

Repair cracks in cement blocks. Likewise, a ten or twenty-dollar repair job may be worth $3,000 in a buyer's eyes.

Close the garage door. Hide the garbage cans. Put away toys. Remove extra cars.

Take extra furniture out so that the room looks larger. That also goes for pictures on the wall too.

Leave light, soft music playing. It creates atmosphere and leaves a good subconscious impression.

Turn on the lights and open the curtains and let in the light. Obscure unappealing views. Show all rooms bright. Increase the wattage if necessary. On overcast days take special care to show it bright. Keep the room temperature comfortable. Consider mirrors to make a dark room look larger as well as reflect outdoor light.

If you have a garden or patio area, leave the door that leads to it unlocked.

When your house is shown, leave. Take a walk, go to McDonalds - leave the clients with the agent. Don't interfere with the agent and possibly hurt the selling opportunity.

A vase of fresh flowers adds to the atmosphere.

If the house is somewhat vacant, staging antiques appropriately can create a dramatic emotional statement. There are professional companies that do just that, usually for more expensive estates.

It Won't Sell! Top Three Reasons Why

2007-03-03T13:13:00.000-08:00

The top three reasons that a house does not sell are:

1.   It is in poor condition.
2.   The house is priced too high.
3.   There exists a poor housing market.

Sprucing up areas that need improvement generally pays for itself, especially in areas of higher priced homes. By all means, avoid a negative home inspection report. Unfavorable home inspection reports have and will pour cold water on many a hot deal. Not everyone has the mentality to fix up a house - they may consider pricey adjustments for repairs out of their league. Making the effort to get your home in top condition eliminates these loopholes. Look in this web site for information concerning inexpensive fix-ups as well as survey results for seller fix-up projects.

Don't expect top dollar for your home if it is not in the right neighborhood. You've heard it said, "location, location, location." A good location commands the high price when it comes to real estate. Houses appreciate faster in a good market and decline slower in a bad market when they are in better communities. Better communities have better schools, amenities and your neighbors generally are working professionals.

If the housing market is hot, houses sell fast. If not, there is a longer wait for the average house to be sold. Everyone agrees, 20% of the agents sell 80% of the houses. They have better personalities, make less mistakes and give better service. Under any market condition, choosing a highly rated top producer is your best bet. You'll get the better end of the deal and have less stress.

Screening Your Realtor - Ten Questions to Ask

2007-03-03T12:39:00.000-08:00

Most of us sell only a small number of homes in our lifetimes. With limited experience in real estate how are we to be capable of maximizing the profits from our home sale? Many home sellers make the critical mistake of thinking all Realtors are the same.

They list with the first agent who comes along. Does it make good business sense to put the responsibility of selling your home with someone who has no plan or qualifications? This special report will educate you with valuable information that will help you make the best decision concerning: Which real estate agent should you list with?

Start by doing a few hours of research. Ask around... get to know who has the most signs, ads and marketing material in your neighborhood. Who’s the most active agent? Compile a list of agent names and use these questions to help you determine which agent is right for you.

Could you send me some information about yourself? - You can often get a good idea of which agents are the most professional by looking at their promotional materials. If their own materials aren’t professional, how well are they going to market your home? Track how long each agent takes to respond to your request and how quickly they follow up. If they don’t respond efficiently to your listing requests imagine how they’ll handle potential home buyers.
How many homes have you listed and how many homes have you sold in the last six months? - Look for an agent who has experience with homes similar to yours and is active in your area. If your home has special features look for an agent with experience in those areas. Your agent should have a good record of selling homes, not just listing them. After all, this is your ultimate goal.
What is your average length of time from listed to sold? - Don’t automatically assume the shorter time on the market the better. That could reflect selling homes quickly at lowball prices. Look at what the asking price was compared to the selling price. An agent who sells close to the asking price and quick is effective at helping clients determine the right price and helping them get it.
How long have you been in business and what professional organizations do you belong to? - The length of time a real estate agent has been licensed is not a sure fire sign that they’ve been an active seller. They may have been in business for 10 years but only part time, whereas an agent who’s been in business for 2 years may be a real top producer. So take into account what professional organizations they belong to. The minimum should be a licensed professional who’s a member of the local real estate board and multiple listing service as well as the state and National Association of Realtors. Local community groups and associations are also pluses in terms of networking and commitment.
Do you have an assistant or support staff? - By employing someone to handle the details of their business the agent can spend more time servicing your needs. However, make sure you know how much time an agent will spend and how much time their assistant will spend on the sale of your home. It may be fine if the assistant does most of the legwork as long as the agent is there at the most critical times of the transaction period.
How often will you hold open houses? Will they be public or by appointment only? - Simply putting a sign on your lawn and holding open houses every Sunday will not sell your home. Too frequently open houses make the property a target for low ball bidders. Look for an agent with a specific plan for each open house. The plan should be just one facet of a complete marketing plan.
What listing price do you recommend and what is that price based on? - Pricing is the most critical step to selling your home. Take great care in choosing an agent with the knowledge to price your home effectively. Keep in mind the selling price should attract prospective buyers to your home, get you top dollar in the current market and reflect the condition of your home. Be realistic and avoid ‘yes agents’, who will say ‘yes’ to any request or price while your home languishes on the market. Lowball agents will try to talk you into an artificial price simply to sell as fast as possible.
What does the listing agreement entail, what are the beginning and expiration dates, and what are the fee amounts I will be paying? - Have your agent go over every detail in the listing agreement with you until you understand it completely. Make sure the beginning and ending dates are on the agreement; a good standard for length is three months. Know exactly what fees you will be paying and remember that less is not always better. If the agent stands to make very little commission you can bet it will be reflected in the amount of time and effort that is spent marketing your home. If the agent reduces their commission to get the listing it may mean they intend to spend very little money promoting the property. The normal commission is between 5 and 7 percent for residential and more for vacant land.
What disclosure laws apply to me and what do I need to be aware of? - Make sure your agent helps you with locating professional inspectors for the various mandatory home inspections required in your area. Create a home marketing file including a property fact sheet, a property transfer disclosure statement, pest control report, applicable C.C.& R’s , applicable study zones report, structural engineering report, property profile from the title company, plans for alterations or additions, and special equipment report for pools, spas, sprinklers and alarm systems. Your agent should be able to handle this for you.
What types of things separate you from your competition and will you give me some feedback? - How effectively will they advertise? Do they have 24-hour advertising capability? Will all the leads be followed up on by your agent’s team or will they go to other agents who may have other listings they would prefer to show? Agents who are innovative and offer new methods of attracting home buyers will measurably outperform agents who rely on methods of the past. Marketing effectively requires progressive strategies that add value and service for both buyers and sellers!

Mistakes to Avoid When Selling

2007-03-03T12:18:00.000-08:00

Saving yourself a lot of time and heartache when selling your home-- here is a discussion of what NOT to do!

Mistake #1 - Pricing Incorrectly
Every seller wants to realize as much money as possible when he sells his home. But a listing price that is too high often gets the seller less than a price that is at market value. If your house is not priced competitively, people looking in your price range will reject your house in favor of other, larger homes for the same price. At the same time, the people who should be looking at your house will not see it because it is priced over their heads! Overpricing usually increases time on the market, and that adds to the carrying costs. Ultimately, many overpriced properties sell below market value.

Mistake #2 - Failing to "Showcase" the Home
Buyers look for homes, not houses, and they buy the home in which they would like to live. Owners who fail to make necessary repairs, who don't spruce up the house inside and out, touch up the paint and landscaping, and keep it clean and neat chase buyers away as rapidly as Realtors can bring them.

If you were selling a car, you would wash it, or maybe even detail it to get the highest price. Houses are no different.

Mistake #3 - Using the "Hard Sell" During Showings
Buying a house is an emotional decision. People like to "try on" a house and see if it is comfortable for them. It's difficult for them to do that if you follow them around pointing out every improvement that you made. It may even have the opposite effect you want, by making them feel they are intruding on your private space.

Resist the temptation to talk the entire time a buyer is there, and let them discover things on their own. Try a tasteful sign to point out some hidden amenity that they might miss.

Best bet is to remove yourself during a showing-- leave, take a walk! Let your agent or the showing agent show your home.

Mistake #4 - Mistaking Lookers For Buyers
For Sale By Owners always get more activity than houses listed with an agent. No question about it! Realtors will only bring qualified buyers, and these will be fewer than if you open your front door to every one who walks down the street.

A qualified buyer is one who is ready, willing, and able to buy your house. We find that most people who go looking at For Sale By Owners are just starting to think about moving. They may be good buyers, but they're just 6-9 months away from being ready. They don't want to bother an agent yet, so they call the "By Owner" ads to get a feel for what's available. They may have a house to sell first, or may need to save some more, or may have credit that needs fixing. When everything is in place, that's when they go out looking with a Realtor.

An agent will ask a buyer how much he can really spend for a house, how much he has to put down, how good his credit is, how much he can pay each month, how much he will realize (realistically!) when he sells his present home - and about a dozen other questions like that. But unless your Realtor finds all the facts first, you must ask all these questions before the buyer crosses your threshold. Otherwise, you may have a parade of Sunday afternoon shoppers with a dream of owning a home some day.

Mistake #5 - Not Knowing Your Rights & Obligations
Real estate law is extensive and complex; the contract for sale and purchase is a legally binding document. An improperly written contract can cause the sale to fall through, or cost you thousands for repairs, inspections, and remedies for title defects. You must be certain which repairs and closing costs you are responsible for. You must know whether the property can legally be sold "as is", and how deed restrictions and local zoning will affect the transaction. If there are defects in your title, or if your property is in conflict with local restrictions, you or your Realtor must remedy them, or you might have to pay plenty.

Mistake #6 - Signing a Listing Contract with No Way Out
Many times an agent will have good intentions about marketing your house, but circumstances can change. There might be a death in the agent's family, or the agent may decide to quit the business. In these cases where the agent couldn't or wouldn't perform, you should have the right to fire your agent. In some companies the broker will assign your listing to someone else in the office, someone new in the business that you didn't personally select. Always protect yourself by getting a guarantee of performance with the right to cancel.

Mistake #7 - Limiting the Marketing and Exposure of the Property
The two most obvious marketing tools (open houses and classified ads) are only moderately effective. Surprisingly, less than 1% of homes are sold at an open house. Agents use them to attract future prospects, not to sell the house!

Advertising studies show that less than 3% of people purchased their home because they called on an ad. And if a machine answers, most callers just hang up without leaving a message.

The right Realtor will employ a broad spectrum of marketing activities, emphasizing the ones he believes will work best for you. There are dozens of more effective ways to find buyers than just open houses and advertising. By the way, he or a trained member of his staff will be there every time the phone rings. Did you know that most calls come in during business hours when sellers are away at work, and most home showings are between 9:00 and 5:00 Monday through Friday?

Mistake #8 - Believing that a Re-fi Appraisal is the Market Value of Your Home
An appraisal is an opinion of value for a certain purpose. If the lender wants to lend you the money, they are motivated to have the appraisal come in high. The appraiser may ignore foreclosure or distress sales in order to justify the high value. But a real buyer in the real world will not ignore these properties. They are your competitors when you try to sell.

I can't tell you how many ridiculous re-fi appraisals I've seen. Don't make the mistake of thinking that the value you were told 6 months ago when you refinanced is what a real buyer would pay. Ask your Realtor for ALL the solds in your area, then decide.

Mistake #9 - Choosing the Wrong Realtor, or Choosing Him for the Wrong Reasons
It's likely that you don't interview people very often. And yet in order to find the Realtor who is right for you, you may interview several. The quality of your home selling experience is dependent upon your skill at selecting the person best qualified.

It's interesting that in the real estate business, someone with many successfully closed transactions usually costs the same as someone who is inexperienced. Bringing that experience to bear on your transaction could mean a higher price at the negotiating table, selling in less time, and with the minimum amount of hassles.

The world is populated with Realtors who are wrong for you. For example, the housewife who sells an occasional house because she needs a little pocket change, or the insurance salesman who believes he can handle two careers. Or perhaps your cousin George, who really needs your business.

The sale of your home could well be the most important financial transaction you have ever been involved with. The person you select can make it a satisfying and profitable activity, or a terrible experience. It's your home, and your money. The choice of your Realtor is up to you. Make that selection carefully!

Considering For Sale By Owner (FSBO)?

2007-03-03T12:07:00.000-08:00

Why People Are Afraid To Buy From You!

Many homeowners believe that to maximize their profit on a home sale they should sell it themselves. At first glance, they feel selling a home is simple and why should they pay a broker fees for something they could do themselves? In fact, close to 25% of all the homes sold last year were sold for sale by owner (FSBO).

However, close to half of the FSBO’s said that they would hire a professional next time they sold. Thirty percent said they were unhappy with the results they achieved by choosing FSBO. Why?

Many FSBO’s told us that the time, paperwork and everyday responsibilities involved were not worth the amount of money they saved in commissions. For others, the financial savings were even more disappointing. By the time they figured the amount of fees paid to outside consultants, inspectors, appraisers, title lawyers, escrow and loan officers, marketing, advertising... they would have been better off having paid the broker’s fee which would have included many of these charges up front.

Selling a home requires an intimate understanding of the real estate market. If the property is priced too high, it will sit and develop a reputation for being a problem property. If the property is priced too low, you will cost yourself serious money. Some FSBO’s discovered that the lost money as a result of poor decisions outweighed the commission.

Before you decide to sell FSBO, consider these questions and weigh the answers of assuming the responsibility versus employing a professional. A little time spent investigating up front will pay off tenfold in the end.

Questions To Consider:

Do I have the time, energy, know-how, and ability to devote a full forced effort to sell my home?

One of the keys to selling your home efficiently and profitably is complete accessibility. Many homes have sat on the market much longer than necessary because the owner was unwilling or unavailable to show the property. Realize that a certain amount of hours each day is necessary to sell your home.

Am I prepared to deal with an onslaught of buyers who perceive FSBO’s as targets for low balling?

One of the challenges of selling a home is screening unqualified prospects and dealing with lowballers. It often goes unnoticed... how much time, effort and expertise it requires to spot these people quickly. Settling for a lowball bid is usually worse than paying broker commissions.

Am I offering financing options to the buyer? Am I prepared to answer questions about financing?

One of the keys to selling, whether it’s a home, a car... anything, is to have all the necessary information the prospective buyer needs and to offer them options. Think about the last time you purchased something of value, did you make a decision before you had all your ducks in a row? By offering financing options you give the home buyer the ability to work on their terms and open up the possibilities of selling your home quickly and more profitably. A professional real estate agent will have a complete team, from lenders to title reps for you to utilize...they’ll be at your disposal.

Do I fully understand the legal ramifications and necessary steps required in selling a home?

Many home sales have been lost due to incomplete paperwork, lack of inspections or not meeting your states disclosure laws. Are you completely informed of all the steps necessary to sell real estate? If not, a professional would be a wise choice.

Do I have the capability of handling the legal contracts, agreements and any disputes with buyers before or after the offer is presented?

Ask yourself if you are well versed in legalese and if you are prepared to handle disputes with buyers. To avoid any disputes it is wise to put all negotiations and agreements in writing. Many home sales have been lost due to misinterpretation of what was negotiated.

Have I contacted the necessary professionals....title, inspector (home and pest), attorney, and escrow company?

Are you familiar with top inspectors and escrow companies? Don’t randomly select inspectors, attorneys, and title reps. Like any profession there are inadequate individuals who will slow, delay and possibly even cost you the transaction.

Buyers are coming! What to do?

2007-03-03T11:36:00.000-08:00

What to do when the buyers are coming?

You have just received a call telling you that buyers are coming to tour your home. What should you do? Well, first get dressed and then check out this list of tips.

Let in as much daylight as possible. Turn on lights, open drapes. If it's dark outside, turn on outside lights.
Open inside doors so that the house will have an inviting feeling as the buyers move through.
Turn off the TV to avoid distractions and turn on quiet "elevator music."
Pick up clutter and put dirty dishes in the dishwasher. Take trash out if needed.
Get pets out of the way. Not everyone loves animals and your buyer may be allergic.
Bathrooms should be clean, towels folded, toilet seat down.
Leave! Make every effort to NOT be in the house during the showing. Buyers feel very uncomfortable when the owners are present. They typically will not voice anyo bjections and will hurry through the home. Agents can be much more effective when they can handle objections on the spot or feel free to let the buyers spend time in the home.
Take the dog with you. Pets can be a nuisance when strangers come to see your home. If you can't isolate your pet, take it with you.
Tell your agent who showed the house and when, so that they can follow up and get feedback that will be valuable to you
If you are not going to be home always leave it ready to be shown. You never know when just the right person will be looking at your home so we must always be ready!

Add On or Buy a Bigger Home?

2007-03-03T11:31:00.000-08:00

Consider these questions before making a choice between adding on to an existing home or moving up in the market to a bigger house:

How much money is available, either from cash reserves or through a home improvement loan, to remodel the current house?
How much additional space is required? Would the foundation support a second floor or does the lot have room to expand on the ground level?
What do local zoning and building ordinances permit?
How much equity already exists in the property?
Are there affordable properties for sale that would satisfy housing needs? Ultimately, the decision should be based on individual needs, the extent of work involved and what will add the most value.

What Sells a Home - Price, Condition, Market Value

2007-03-03T11:25:00.000-08:00

Price and condition are the two most important factors in selling a home, even in a down market. The first step is to price your home correctly.

Use comparative sales information from your agent, to objectively evaluate your home's worth. Second, go through the house and repair any obvious cosmetic defects that could deter a buyer. In a down market, you may have to consider lowering your price and/or making a major repair, such as replacing the roof, in order to lure a buyer. Also, make sure that your home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage and a listing on the local multiple listing service or online listings provider.

What is the difference between market value and appraised value?

The appraised value of a house is a certified appraiser's opinion of the worth of a home at a given point in time. Lenders require appraisals as part of the loan application process; fees range from to . Market value is what price the house will bring at a given point in time. A comparative market analysis is an estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker. Either an appraisal or a comparative market analysis is the most accurate way to determine what your home is worth.

What repairs should a seller make?

If you want to get top dollar for your property, you probably need to make all minor repairs and selected major repairs before going on the market. Nearly all purchase contracts include an inspection clause, a buyer contingency that allows a buyer to back out if numerous defects are found or negotiate their repair. The trick is not to overspend on pre-sale repairs, especially if there are few houses on the market but many buyers willing to buy at almost any price. On the other hand, making such repairs may be the only way to sell your house in a down market

Selling In Tight Markets - Timely Advice

2007-03-03T07:43:00.000-08:00

Whether you're a seller in a "hot" housing market, or a "cooling" one, put your home's "best foot foward" to maximize saleability and return on investment. Get the most for your home. It's important to remember that buyers do judge books by their covers. Sellers, before putting your home on the market, consider a home facelift!

To make your house look as neatly presented as possible, roll up your sleeves and clean and scrub diligently. If fancy renovations and repairs that often make resale prices jump are just out of the question, one thing's for sure: a sparkling clean home is one of the finishing touches than can give your return a potential boost.

Think "curb appeal", or the details that make a model home. Bright, clean, squared-away presence. If your home has cobwebs in the eves, door has a hole and the paint on the fence is peeling, your bargaining power drops.

But, if your flowerbeds are tidy, and everything is clean and fresh and bright, you'll likely be rewarded with buyers who want to come in and see more. Why?

Because a prospective buyer can get a very clear impression of how well the home has been maintained by the first sight of it as he drives by. Clean, neat, cultivated, squared-away is everything, and curb appeal hits the buyer's hot buttons like nothing else. Think model home. When a buyer sees a model home, it makes a huge difference in what they're willing to pay.

To get your home in the best possible shape for sale, consider tackling a few of the projects below.

Find your green thumb or hire one!

A scrupulously well-kept, green lawn decorated with colorful, healthy seasonal flowers makes a great first impression -- and in the World of Real Estate, first impressions go a long way-- they can make or break you.

If the lawn and landscaping looks good, a buyer will walk into the house and be automatically in it. That first impression is a lasting one, and will carry a buyer right through the front door.

Mow the lawn and keep it mowed. Trim your shrubs-- a "buzzcut" can work wonders for making the landscaping look sharp. Weed those flowerbeds! Even a few errant weeds/grass in a flowerbed can send negative signals of neglect that you DON'T want to make the crossover to impressions about neglect of the home! A few pretty flowers can work wonders, and remember to mulch and water. Be sure that the first impression of your home is one of ongoing care.

Consider planting flowers both in beds and in containers. Don't miss the opportunity of expanding your colors and depth and sight-of-eye perspective. Using containered flowers is a great way to lead the buyer's eye. Lining porches and walkways with flowers in containers is a welcoming touch and expands your range of colors and form to create a great first impression for a buyer.

Remember, landscaping work yields a dollar-for-dollar return!

Learning to add and subtract

Hoarders listen up! Reducing clutter is essential -- less of your "stuff" means more space, and buyers like to see space. Remember, they're imagining where their "stuff" will go-- so move your's out, pronto! Piles of trunks and boxes, towers of books, shoeboxes, bags, boxes in your closet must go. Go visit Katie Hamilton, co-author of "Home Improvement for Dummies" and co-creator of Do it Yourself...or Not?, a website to help homeowners decide whether to tackle home improvements, for invaluable tips.

Ms. Hamilton advises: "Take at least half the junk in your closet out. The more you can take out the better, especially in storage spaces," she said. "That also goes for furnishings, if you're a pack rat. People have a hard enough time visualizing space as it is."

Remember, all buyers want to know they'll have plenty of room, so clean out cabinets and closets, any and all storage areas, and will appear to the buyer that there is just nothing but space!

Wipe out everything? No! There is the "coziness factor". Little touches that let the buyer know he's "home". Nothing like a pretty welcoming wreath on the door, a fresh, new welcome mat, etc. Do avoid "personal statement" types of decorations-- keep your homey touches generic and warm. Avoid humorous or off-color decorations such as, those painted wood cutouts of people bending over...

Repaint your home

A simple paint job can make a major. Doing it yourself can be tough and frustrating. But, with patience, you can do it. And, you'll get good exercise, plenty of fresh air and sunshine! (Tanned and healthy-looking sellers doesn't hurt, either!) Painting the outside of your house can raise your home's resale value by 10 percent it has been estimated. And, a freshly painted home, or a possible 10% increase in sales price, aint' too shabby!

And don't forget the inside paint! Touch-ups or fresh-all-over paint can work miracles for your bottom line. Some say it doesn't compete evenly with what an outside paint job can mean, but still, a mini-facelift with interior paint is a very good idea. It can only help.

Fresh, clean scents-- take a whiff!

"Looks good, smells good!" Be sure that your home smells clean and fresh. Don't load up on potpourri or scented floral/cinnamony candles, but rather ensure that the home smells fresh. And avoid antiseptic odors. Even though you've become used to pet odors that you no longer detect, buyers will. Make sure your air filters are pristine and clean-- when the air conditioner turns on, it cannot smell dirty or musty. Eliminate pet odors, too.

Get carpets steam-cleaned by a professional and get a professional house cleaning from top to bottom. The cost will come back to you!

Steam cleaning uses a hot water extraction that goes up to 200 degrees and helps extract the dirt more easily. What needs to be done will depend on your carpets and how much traffic they get, if you have pets, if you eat in your TV room, and, becoming more and more important, if you smoke. You should consider limited your smoking to outdoors several months prior to putting your home up for sale. Make sure that when buyers enter your home, they get a breath of fresh air! Makes quite a difference in their attitude towards your home.

Kitchens and bathrooms

Within the home, the first places potential buyers check are kitchens and bathroom(s). Major renovation projects in the kitchen yield the biggest bang for your buck in resale value. But tiny upgrades in the kitchen and the "convenience" go a long way as well.

Restain or repaint your cabinets for a great face-lift.If you don't want to refinish your cabinets, be sure to clean the doors completely. Make sure all smudges and fingerprints on high-use cabinets are gone.

Bathrooms need your attention. Installing new faucets or retiling a surface is an easy way to add some gleam and glam. Faucet sets start at under $100 at hardware stores. Tile prices can vary widely, from $3 per square foot to as much as $30 a square foot. And, you'll need adhesive and grout.

Tiling isn't something everyone can do. So, if you've gained a little know-how and confidence over the years-- go ahead and DIY. If not, consider hiring a professional-- a poor tile job is the worst. So, if you can't do a professional-looking job, bring in the experts!

Preparing Your Home to Sell

2007-03-02T19:29:00.000-08:00

How do you prepare a home to sell?

Doing whatever you can to put your home's best face forward is very important if you want to get close to your asking price or sell as quickly as possible. Short of spending a lot of money, here are several ideas for making your home show better:

Sweep the sidewalk, mow the lawn, prune the bushes, weed the garden and clean debris from the yard.
Clean the windows (both inside and out)and make sure the paint is not chipped or flaking. And speaking of paint, if your home was built before 1978, new federal law gives a buyer the right to request a lead inspection. If you think you might have some problems, do the inspection yourself beforehand and make any fixes you
can.
Clean and spruce up all rooms, furnishings, floors, walls and ceilings. It's especially important that the bathroom and kitchen are spotless.
Make sure the basic appliances and fixtures work. Get rid of leaky faucets and frayed cords.
Make sure the doorbell is working!
Make sure the house smells good: from an apple pie, cookies baking or spaghetti sauce simmering on the stove. Hide the kitty litter.
Put vases of fresh flowers throughout the house.
Having pleasant background music playing in the background also will help set your stage.