Tag Archive for 'seller'

Home Improvements Sellers Should Avoid

Published on May 23, 2011 in Selling Properties. 0 Comments Tags: , , , , , , .

It’s fairly obvious there are certain home features that can break or make a home being sold.  When selling a property, there are a few home-improvements projects that shouldn’t be on the agenda.  It’s important to know the difference, so money and time will not be wasted.

Before selling a property, take a look at some of these home improvement not-to-do tips:

Expand. A common mistake sellers make are creating extreme add-ons to the home.  Fixing the property up to where it’s larger and more expensive than the neighbors is superfluous.  Major additions can price the home out of the market, and increase property taxes for the future homeowner.

Home office. Many people tend to do work at home or work from home.  To build an entire office can be a waste of perfectly good square footage.  Custom made bookcases and big built-ins are extremely difficult and expensive to change or remove.  The homeowner can view this as a project they don’t want to deal with.

Landscape. Having a beautiful front or backyard will immediately attract the buyer.  If the garden is too elaborate, the buyer will start thinking about the time and maintenance it will foresee.  Keep the yard simple with easy maintainable plants that offer a lot of color.

Swimming pool. Surprising enough, one the most common project that can turn buyers away is a pool.  Families with young children view it as a safety risk.  Others don’t want to be bothered with the maintenance.  Also, pools take over valuable backyard space.

Unnecessary improvements. It’s not necessary for a roof to be replaced when it only needs a few fixes.  Also, upgrading a plumbing system is pricey, and the seller will not get that money back.  On the contrary, staying on top of routine repairs and home-maintenance responsibilities will inform the new owner on what important upgrades they will need to make.

Unfinished projects. If a project is not going to be complete for open house and/or a walk-through, then don’t start it.  Either hire a professional, or just don’t do the project.  If small fixes are feasible then stick to that.  The idea of rearranging or revamping a project that won’t be completed is not going to bring any extra value to the property.



Negotiating a Home Offer

Published on May 16, 2011 in Selling Properties. 0 Comments Tags: , , , , , , , , , , , .

It doesn’t happen very often the initial offer is accepted.  Almost always there is some sort of counter offer and that is where the negotiations begin.  The negotiations can vary from solely the price or to including particular appliances.  The key is to always be ready for haggling.

Here are a few tips when it comes to negotiating a home offer:

Fix it. Make sure to analyze the home carefully.  If there are obvious blemishes then correct it.  Start with improving minor fixes.  If the home needs to be painted or cleaned up, then do it.  The carpet or the landscape is also very crucial.  By fixing up anything the buyer can point out right away will help strengthen the seller’s negotiation.

Competition.  Always review the competition to know what is out there.  By knowing what other people are getting for their home will give a realistic idea of an asking price.  Setting the price too high will not attract buyers.  Setting the price too low will affect the possibility of getting the true value of the home.

Marketplace.  Once knowledge of the local market is set in place, begin researching the larger real estate market as a whole.  Having an understanding if the property is located in a buyers’ or sellers’ market, offers a better idea of how fast the home will sell.  It’s always a good idea to ask an agent for information on the home sales in the area.  If possible, try speaking with former neighbors to get an idea on their experiences selling a nearby home.

Negotiate. An important factor on selling the home is to look beyond the price.  Remember that everything is negotiable.  If the buyer will not match your price then discuss who will pay for upgrades, closing costs, warranties, appraisals or inspections.  By understanding the transaction can have many pieces; the agreement among both parties can be much more satisfying at the end.

Common Mistakes Made By Sellers

Published on April 26, 2011 in Selling Properties. 0 Comments Tags: , , , , , , , , , , , , , , , .

The seller should always look at the listing as if they were purchasing the property.  Would you purchase this home if you saw the listing?  What attracted you the most and what makes you want to pursue more information?  Was it the pictures?  How it was described?

Here are few tips on common mistakes that sellers make when listing a home.

No Photos. It should be a no-brainer that including photos can set one property above the rest.  Many sellers commonly list properties with no pictures.  They prefer their personal items and valuables not to be visible in the photos.  This could raise a red flag immediately for the buyer.  They may assume automatically there is something dissembling with the property that has no pictures available.

It’s always a good idea to have about dozen photos.  It will portray an idea of what the buyer could expect, and persuade them to physically visit the property.  If the listing talks about great views or spacious living areas, the photos can confirm what is being described.

Transaction Details. The past few years, it’s not a secret the economy has been doing poorly.  This allowed buyers to have a mini course in purchasing distressed properties—short sales and/or foreclosures.  The experience has not always been positive, and the red flag can arise again.  A distressed listing without any transaction specifics may be avoided immediately.   If the listing doesn’t mention whether the lender has been informed and a price has been agreed upon, most buyers will not want bother.

Owners of a distressed property that are upfront about the details have a better opportunity to attract the buyers that are ready to move forward.

Exaggerations. There is nothing wrong with using creative statements when listing a property, but outlandish claims is where the line is drawn.  When writing, “best home on the market” is not doing any favors for the seller.  When the buyer enters the home, they could be set up for disappointment if the claim doesn’t meet their expectations.

Sellers should avoid using hyperbolic claims.  Developing a more sensible strategy focusing on flattering adjectives leaves room for the other opinions.

Perfect Pricing. A low price is always a great idea to grab the attention of buyers.  However, going too low on the asking price may backfire.  Normally a property will attract multiple buyers at the low asking price.  The price will climb as the offers are coming in.  This is a good strategy, but it doesn’t come without risk.  Also, the low price could potentially attract unqualified buyers as well.  If this happens, the house will not sell, and the seller will have devalued the property with that low asking price.

If the seller wants to take the risk with the low listing price, make sure to have done the research and gained the knowledge of current market conditions.

Everything to Know About a Rent-To-Own

Published on April 18, 2011 in General. 0 Comments Tags: , , , , , , , , , , , , , .

 

When the housing market is being difficult to sell a home, one can consider Rent-To-Own as an option. For those that are not familiar, here is a quick run down on how it works.

The process normally begins where the owner of the home puts the property for sale because they may not be able to afford the payments anymore. The home has been on the market for months, and the finances are becoming too much. Now the owner is getting desperate to sell, but doesn’t want to lose any money. This would be the time to consider a rent-to-own option.

Before an agreement, the owner has to make a decision on the sale price and rent they are charging for the house. Both amounts are open to negotiation, similar to a regular sale. The owner must remember that once they sign an agreement, the sale price is locked in until the end of their rental term. The term can be between one and three years. Even if the housing market prices rise or fall during that time, the original agreed-upon sale price is final.

The renter will also pay rent premium and an option fee. The rent premium is an amount just above the typical rent. A part of that money goes towards a down payment. The option fee is a set amount the renter will pay the owner. If, at the end of the lease, the renter buys the home, the option fee converts as a portion of the down payment. If the renter decides not to buy the home, the option fee becomes income for the owner.

Some general tips when choosing a renter are:

  • Make sure to have a thorough contract. The contract should be reviewed by a real estate attorney or expert. A good contract will address any possible issues that may arise during the agreement. The contract should include who will be responsible for home repairs, maintenance and any missed payments.
  • Check the background of the renter. The owner should run a background check on the renter reviewing their credit, employment and salary history.

Advantages

  • If the value of the home is dropping, the owner can lock in the higher price at the beginning of the agreement.
  • The owner can ask for higher rent because of the flexible financing terms.
  • Renters that are looking to own treat a home and community better.
  • If a renter backs out of the agreement, the owner still has the option fee and rent premiums as income.
  • While the owner still owns the home, they can take advantage of tax benefits.

Disadvantages

  • If the value of the home is going up, the owner already locked in the lower price at the beginning of the agreement.
  • If a renter breaks the agreement, the owner is back to paying the mortgage.
  • If the renter doesn’t pay, then the owner needs to prepare for eviction.
  • The owner should regularly check the home to make sure the renter is treating the property well.
  • The seller is still responsible for the home.