Monthly Archives: December 2013

6 Common Selling Mistakes That Could Lose You Money

6 Common Selling Mistakes That Could Lose You Money

Overpricing and waiting too long for reductions.  You’ve contacted a realtor to list your home and they give you prices of comparable homes’ selling prices. You’re not in a rush, so why not list your house at the high end, or even more? I’ve heard this many times before … and your rationale is almost always one of these three:  it only takes one buyer who is willing to pay more;  your house really is nicer than those “comps” probably were; or if someone really wants your house, they’ll be willing to pay a little more to get it. And of course, you can always lower the price at some point.

Well, there are many reasons why your realtor is not doing you any favor by pricing your house high for the market. Buyers are doing lots of looking and comparison-shopping these days, and quickly gain the ability to gauge a house’s market value. Remember, they are not looking at your home in a vacuum. Pricing your house too high only helps your competition sell. The longer your house is on the market, even if you do start reducing the price, buyers view it as “stale” and wonder why no one else wanted it. Even the best marketing strategies won’t sell a house that is priced unrealistically high.

Trying to pick the ideal time to market your home . Here are some need to know points about market timing:

The best month to make an offer on a house is January.

The best day of the month to make an offer on a house is the first Tuesday.

The best time of the year to sell a house is the Spring.

The best day of the week to list your house for sale is Thursday.

Forgetting that everything is negotiable.  The words, “I have an offer for you” from your realtor are music to your ears – that is, until you hear the number following the dollar sign, and (gasp!) the conditions that accompany it. Before you panic, remember that buyers assume that their offer is a first step in a back and forth dance between buyer and seller. Try not to personalize the issues – the buyers have never even met you, and this is, ultimately a business deal. It is important to work with your realtor who is used to the real estate negotiation process and with some patience and perhaps a little compromise a deal can be reached.

 Underestimating the importance of “Showing Condition” You’ve undoubtedly heard the phrase, “curb appeal.” The same type of instant and overall impression occurs inside your home as well. You want your home to show as positively as possible, and that means the rooms should be as light, bright, and large as possible. One way to do that is to cut down on clutter or extra furniture that makes a room seems smaller than it is. The more uncluttered a room is, the more spacious it feels to a house hunter. Unfortunately, housekeeping counts too. The cleaner a home is it both makes a positive impression and creates an impression that the house has been well maintained. Many housecleaning companies offer a one time top-to-bottom cleaning for people putting their houses on the market. Sellers have said to me, “But they’re not buying the house furnished – they’ll be redoing it anyway,” or “They’re not hiring me as a housekeeper, so what do they care?” Although those are logical arguments, buyers tend to not be able to get past things that make an immediate negative impression. Also, many people do not have the “vision” to be able to see a room or house differently than it appears in front of them.

Staying Home During Showings.  Your instinct may be to be present during showings for any number of reasons: to assess the buyers’ reactions, to supervise, or to point out tiny details the showing agent may not know to mention. I can tell you in no uncertain terms from experience, both my own and that of my clients, that this is one of the worst things you can do. As a buyer, it is quite uncomfortable and leads to two common results: a quicker than normal walk through without paying attention to details and an unwillingness to ask questions or make comments that are part of their decision making process.

Not Listening to Feedback. Whenever you house is shown, the realtor will get feedback from the buyers (or their realtor) about what they liked about your house, and what shortcomings they may have perceived. There are some things you can do nothing about – for example, the fact that your backyard slopes steeply, the amount of traffic on your road, or that your house is next to a business building. Some things, however, you can change, and if a specific item comes up several times it is a good idea to address it. Buyers often assume that an area of your house that shows neglect or disrepair reflects on the same lack of attention to unseen areas. Your goal is to sell your house, not to win an argument defending why your side yard fence is unpainted and rotting.

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8 Ways to Succeed as a Buyer

8 Ways to Succeed as a Buyer

Here’s my list of must-do’s when you want to buy a home.

Get pre-approved for a mortgage.  This lets you know how much house you can afford and gives your agent a realistic price range of homes to show you. When you find a home you really like a solid pre-approval makes your offer to buy much more compelling to a seller. Most listing agents will not accept any offer without a pre-approval for an amount equal to or above the amount of the offer. I usually recommend you get a few pre-approval letters at differing amounts. That way you can match the pre-approval to your offer and not put all your cards on the table to the seller.

Don’t wait too long to act on a house you love.  While you don’t want to be impulsive, being overly cautious can cause you to miss out on the house you want.  Also, remember that there’s no law saying that the right house for you can’t be one of the first ones you see.  It’s also been my experience that even if a house is on the market for a year, the day you like it someone else does too.

Work with a realtor who is capable and whom you get along with.  My laid-back style tends to make seller’s agents initially underestimate me, (something I must admit I cultivate) and when they realize their mistake it’s often too late. Again, you want a skilled realtor, but you also have to feel some level of comfort and connection with them.  If you’re not comfortable with your agent, seek out another realtor, but be careful that you don’t violate any contractual obligations you may have agreed to with your current agent.

Don’t skip the inspection process.  This is your only opportunity to have an expert point out any structural, mechanical or environmental problems before you buy your house.  Sellers assume that you have taken anything apparent to the naked eye into account when you made your offer, but hidden defects may be found in the inspection process. (I will be doing a blog post about inspections soon)

Don’t buy a home that you will have trouble selling when you eventually move.  Sometimes a house has some very unique features or a setting that many buyers might find undesirable, so the seller sets a “bargain” price.  Although it may be a good deal now, that bargain may become your headache in a few years.

The principle of “caveat emptor” is the guideline for real estate transactions and long story short,  a buyer has the chance to use his/her knowledge to be careful or accept the cost of his/her inattention. No warranties are implied to assure the quality of the goods you are going to buy and only a seller making a false statement can be sued in tort for deceit.   Don’t be afraid to ask questions of the listing agent and investigate the neighborhood around the house you’re looking at.  Listing agents are generally very good at disclosure but just in case, it’s important to know that they are required by law to answer direct questions honestly and to the best of their knowledge.  For example, you want to know if there’s a kennel on the block behind your backyard that you can’t see but you’ll surely hear all summer. A seller’s agent is not required to disclose this, but if you ask it they have to tell you if they know about it. Having a Buyer’s Agent helps tremendously with this, since their priority is to help you rather than working for the seller.

Don’t buy the most expensive home on the street.  You want a house on a street where many of the houses are fairly comparable.

When you find the house you love, put in a reasonable first offer.  Negotiation is common and even expected, but you don’t want your first bid to be so low that the seller may be offended and it could create an adversarial situation.

Does a Swimming Pool ADD Value to a Home?

Does a Swimming Pool ADD Value to a Home?

I’ve been asked “how much value does a swimming pool really add to your home?” many, many times, and my answer always is … it depends.

If you’re thinking of adding an in-ground pool or buying a home with an in-ground pool you’ve probably heard that tired old saw that a pool adds $10-15k value to a home and limits the buyer pool for your home when you go to sell it. While true as a sweeping generality, there’s more to this topic than meets the eye.

 

high-end-poolNobody will argue that the swimming pool in the photo shown to the left will add considerable value to the home it accompanies. The reason is that it speaks to art and craftsmanship and quality … three important considerations for a pool or for that matter any addition or expensive home improvement. The design marries absolute unity with absolute variety and will be almost universally considered beautiful by most who encounter it. The scale also suggests that it is attached to a larger home on a larger piece of land … the other two key considerations when discussing similar improvements and their value.

Now most pools look like the one showninexpensive pool to the right. They are pretty ordinary, well-done, and cost somewhere in the under $50k range depending on it’s liner (plaster or vinyl). Included is a small hardscape area, cast concrete, pavers or exposed-aggregate concrete, and fenced enclosure around the pool area or the yard, depending on the local building codes. This is your classic in-ground pool and this one does add the $10-15k that any realtor will tell you. If you look at this picture you will see it is located in a fairly good sized yard, so it’s value would be in the upper end of the range. If it were on a small lot and took up most of the back yard it’s value would be in the lower end of the range.

mid-range-poolThe pool shown to the right is one that while costing in the $50-150k range will not add it’s full cost to the value of the home will add significantly more than the $10-15k typically bandied about. The natural stone hard-scape and the addition of an integrated hot-tub and gas-fired outdoor fireplace are desirable features that add value individually and add more combined value when integrated into a unified design. Again, as you can see, the pool is a small part of a larger yard and suggests it’s attached to a larger home with superior fit and finish.

Okay, so how can one determine what a pool adds in value.

For this exercise I took the price per square foot for homes sold in the last six months for million dollar properties in the inner suburbs of metrowest Boston.  If you compare the price per square foot across the six selected towns you will see that there is a significant increase in the price per square foot in the selling price of homes sold with pools. You will also see that the overall increase for all the towns is pretty constant. So, as you can probably imagine, for these towns, pools that have a high degree of fit and finish and are in not outsized in proportion to their lot size add about 11% to the value.Pool-Charts-PSF

Then if we take the number of homes sold with pools and compare them to the total market for their towns, we see a strong desire for them in some towns, in other towns not so much. For example, in Lincoln homes with pools represented almost half of the market, Weston homes with pools represented about a quarter of the market,  while in Lexington they represented only about 10% of their market. So it could be figured that putting a pool in Lincoln or Weston is a much better investment than putting one in Lexington.Market-Share-pools

So as you can see, the real answer to the question is determined by two things: 1. how nice the pool is and 2. is it considered a valuable feature in the town where it is located.

Should you have questions about a specific application and location feel free to give me a call, I will be glad to help you out. Call or text 978-580-1069.

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