I got a Buyer's lead from my Broker about a condo the other day. It was a women who was interested in downsizing from her house to a condo. She was asking some questions about the property which I promptly answered after looking up the listing on the MLS.
When I asked her if she wanted to see the condo, she told me that she wasn't sure yet, since she didn't really know what she would be doing with her current home. She informed me that she would consider selling it, if she could cover her mortgage. I asked her if she was behind in payments, she told me "no". She ended up asking me "What happens if the house is valued at 180k and I owe 200K Do I have to pay that back?"
I tole her that if that situation was true, then she would have to pay the mortgage company back the 20k at the time that the property conveys. If she was behind in her mortgage payments, then she would qualify for a short sale. We would then negotiate with the bank to get them to take less than what is owed. The downside of this option is that she would no be able to qualify for a mortgage for at least 3.5 years.
What to do in this situation is a popular discussion topic of today. According to Suze Orman and Clark Howard (amongst other financial Gurus of today), stay in your home and ride it out if you can. Don't create a bad credit situation unless you ultimately can't avoid it.
Saturday, April 25, 2009
A Few Things Before Selling a Home
There are a few things that a Seller can do to act as a "quick fix" to making their home look presentable. First things is, get rid of clutter and all personal items. As a Buyer, I personally can get distracted and side tracked by too much of this stuff. I will often find myself looking at the family photos instead of the water damage in the corner of the room that is hidden by an overstuffed arm chair with great upholstery. Personal items or too much furniture can make a room feel too busy or stuffed. This leads the Buyer to conclude that the room is too small and they ended up not being able to picture their own furniture in the space. So box up some of that stuff and don't bring it out until you have moved into your new place.
Painting is also another inexpensive way to give your home a face lift. Take a look at your walls. When is the last time that they have seen a paint brush? Are their smoke stains from burning too many candles? Do you have soot trailers from forced hot air heat? Clean it up and paint it. It makes the room feel as if it was "re done" in a Buyers mind and they won't have to do it when they move in.
Remove any old or offensive carpeting. Do you have orange shag? Cat smell in the carpet? Rip that puppy up, tack strips too. You might be surprised to find that you have hardwoods under them. Buyers LOVE this, plus wood floors are hypo allergenic, since they don't hold onto allergens. Don't have hardwoods? Put down some inexpensive neutral Berber for a clean, updated feel.
Overgrown shrubs in the front of a home can mask windows and entry ways. Trim those bushes to give the outside appearance a tidy looks. Bushes that are large and in front of a window can darken a room on the inside. Aesthetically trim those bushes and watch the offers come in.
Lastly, if you are stumped on what your house needs, invite a neutral third party in to give you their honest opinion. Make it a delivery guy, a friend who loves to dish "reality checks" or the mailman. It doesn't matter. Ask them to identify the top 5 things that stand out to them as offensive. It will be painful to hear, but your Buyers will be seeing what they see and end up not making good offers because of it.
Painting is also another inexpensive way to give your home a face lift. Take a look at your walls. When is the last time that they have seen a paint brush? Are their smoke stains from burning too many candles? Do you have soot trailers from forced hot air heat? Clean it up and paint it. It makes the room feel as if it was "re done" in a Buyers mind and they won't have to do it when they move in.
Remove any old or offensive carpeting. Do you have orange shag? Cat smell in the carpet? Rip that puppy up, tack strips too. You might be surprised to find that you have hardwoods under them. Buyers LOVE this, plus wood floors are hypo allergenic, since they don't hold onto allergens. Don't have hardwoods? Put down some inexpensive neutral Berber for a clean, updated feel.
Overgrown shrubs in the front of a home can mask windows and entry ways. Trim those bushes to give the outside appearance a tidy looks. Bushes that are large and in front of a window can darken a room on the inside. Aesthetically trim those bushes and watch the offers come in.
Lastly, if you are stumped on what your house needs, invite a neutral third party in to give you their honest opinion. Make it a delivery guy, a friend who loves to dish "reality checks" or the mailman. It doesn't matter. Ask them to identify the top 5 things that stand out to them as offensive. It will be painful to hear, but your Buyers will be seeing what they see and end up not making good offers because of it.
Monday, April 20, 2009
Garbage, Cat Urine and the Low Offer
I had a short sale listing last year. The owners, who were filing bankruptcy, had some issues with pricing. It was 2800 sq feet, on a busy road and in an ok area. They had taken all the equity out of their home 5 years ago, did a major renovation and couldn't pay the monthly note. They owed almost 400k on it, but with a short sale, it is negotiated with the bank for less than what they own. I worked with the husband on the listing, as his wife had moved out west. The Seller stated that he felt my list price of 250k was adequate. I felt it was a good price to start out with after running comps in the area. His wife felt otherwise. She wanted me to list the house in the 300's, which I did, knowing that the number of house showings would not support a house of this cost.
The house was on the market for approximately 5 months before it generated some serious interest. I had worked hard for 5 months, carefully getting the sellers to agree to drop the price little by little. In a short sale, time is of the essence, and we don't have time to dilly dally with the price point.
There was also the condition of the home. The Sellers had moved out and left a ton of stuff behind. When it was finally at the price which warranted many showings, the Agent's feedback was all the same…."The place is a mess", "garbage is left everywhere" etc. I sighed, and shook my head. The Sellers had taken such a long time getting to the right price; they failed to mention that they moved out but left most of their junk. The house is an hour away from me, so I haven't been since they moved out. I had only the Agent's words to go by. I thought about paying for garbage removal, but with the lost time due to the pricing, I wasn't confident that it wouldn't get foreclosed on.
We ended up getting our offer a week after we dropped the price to somewhere that was appropriate. Only problem was that the offer was considerable less than asking price. We have forwarded it to the bank and are presently awaiting their answer.
The house was on the market for approximately 5 months before it generated some serious interest. I had worked hard for 5 months, carefully getting the sellers to agree to drop the price little by little. In a short sale, time is of the essence, and we don't have time to dilly dally with the price point.
There was also the condition of the home. The Sellers had moved out and left a ton of stuff behind. When it was finally at the price which warranted many showings, the Agent's feedback was all the same…."The place is a mess", "garbage is left everywhere" etc. I sighed, and shook my head. The Sellers had taken such a long time getting to the right price; they failed to mention that they moved out but left most of their junk. The house is an hour away from me, so I haven't been since they moved out. I had only the Agent's words to go by. I thought about paying for garbage removal, but with the lost time due to the pricing, I wasn't confident that it wouldn't get foreclosed on.
We ended up getting our offer a week after we dropped the price to somewhere that was appropriate. Only problem was that the offer was considerable less than asking price. We have forwarded it to the bank and are presently awaiting their answer.
A Big Price
I am always being asked my opinion on the market. So much that in fact, I know I have blogged on it before. If I honestly knew what was happening in the market, I would be rich. This blog would be funded by countless advertisers and I would be sitting pretty in my huge home complete with staff.
Ha! As I am sure you know, the market it flooded by homes short sales and REO's. This has created a wonderful opportunity for investors and first time home buyers, if they can qualify that is. There are a number of investors out there that can buy a home with cash or hard money. There are also some first timers rolling around, but qualifying is even harder than it was 2 months ago.
New construction homes are even coming chock full of added bonuses just so the builder can get them off their hands since they have carrying costs too. I am frequently asked "what should I offer" when a Client is thinking about putting in an offer on the home. I tell them that I cannot tell them what to offer, as it is a personal decision. They should know what their limits are and work from that. A client, who had recently seen a 650k home, asked me what to offer. It had been on the market for 2 years and had already come down in price by 200k. It was new construction and the Seller had been trying to ride the coat tails of a trailing market and had never priced it right. I informed My Client that he needed to know what his limits were. What did he qualify for?
At the present time, homes are being priced more realistically than ever. The right price is what sells a home. It used to be location, location, location…now its price, price, and price.
Ha! As I am sure you know, the market it flooded by homes short sales and REO's. This has created a wonderful opportunity for investors and first time home buyers, if they can qualify that is. There are a number of investors out there that can buy a home with cash or hard money. There are also some first timers rolling around, but qualifying is even harder than it was 2 months ago.
New construction homes are even coming chock full of added bonuses just so the builder can get them off their hands since they have carrying costs too. I am frequently asked "what should I offer" when a Client is thinking about putting in an offer on the home. I tell them that I cannot tell them what to offer, as it is a personal decision. They should know what their limits are and work from that. A client, who had recently seen a 650k home, asked me what to offer. It had been on the market for 2 years and had already come down in price by 200k. It was new construction and the Seller had been trying to ride the coat tails of a trailing market and had never priced it right. I informed My Client that he needed to know what his limits were. What did he qualify for?
At the present time, homes are being priced more realistically than ever. The right price is what sells a home. It used to be location, location, location…now its price, price, and price.
Is a Client Relationship Only as Strong as Three Showings?
What is it about Agent and Clients relationships that work? Some Clients I meet I do not connect with, whereas others I may feel that I have known them forever. For the Clients that do not connect with me, they eventually move on, as they should. I firmly believe that Real Estate Clients need to work with Agents that they are comfortable with and that they believe in. It helps to have common interest, but it is not necessary. It takes time to develop a rapport and to "feel out" the Client. Where are they coming from? Where are they going? Do they know what they really want?
I had a Client whom I knew through some people. He asked to work with me after he learned that I had just obtained my license. "You need the experience" He told me. I thought he was being nice for allowing me to try out my new skills. He wanted to see some houses the weekend after my daughter had skull surgery. My Mom was visiting from NY and I had to drive her back on Sun. I had told my Client that I was "booked all weekend". He reportedly told his mortgage broker (whom I know) that if I couldn't show him houses this weekend, and then he was going to another Agency. The Mortgage Broker called me and let me know what he said. He also stated that he was already pre-approved and it wouldn't be hard to close a deal, once he found the house that he wanted.
I ended up calling My Client and told him that my "schedule suddenly freed up" and would he be interested in seeing some property on Sun? (The same day that I had to drive my Mom back to NY after playing nurse to my daughter and I). With Mom in tow, we drove around for 3 hours looking at houses. I felt it went well and I continued to work with them on 2 more home showing occasions. I knew they knew what they wanted, so finding a home shouldn't take very long.
After not hearing from them for a week or so, I saw My Client and he told me that he "had been sick". I told him that I was sorry to hear that and if he wanted to see any more homes, to let me know. A few weeks went by and I heard around the grapevine that he was closing on a house the following week. Wow! And it wasn't even with me!
I have tried to think back to our relationship and I have wracked my brain on what could have possibly gone wrong. Did my commitments to my daughter's health get in the way? Did it turn them off? Oh well, I can't beat up a bowl of fruit over it. It is what it is and it wasn't what it was suppose to be.
I am currently working with a great couple that LOVES me. They have even told me that! I was flattered and wondered what about me they liked. I think it just boils down to personalities clicking. I can only be myself and they can only be them.
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