Tag: #sellingahome

Happy Clients Realty Group - Ali Palacios > #sellingahome

What are earnest funds?

Posted on by Ali Palacios - Broker

Earnest funds are one of a few funds you will need before you close on your home. It can be found in section 5 of the sales contact.

Earnest money is a deposit made to a seller showing the buyer’s good faith in a transaction. Typically it’s equal to 1% of the sales price. These have to be deposited with the title company within 3 days or less of an executed contract. These funds are held by a title company in an escrow account.

Once a buyer and a seller enter into a contract. The buyer may or may not be able to reclaim his or her earnest money, depending on how the contract is phrased. Contracts will typically have contingencies written in to protects the buyer and allows them an out if the home’s inspection is unacceptable or if the home does not appraise for the agreed upon sales price.

The contract does not protect the sellers from these unknowns but they take the home off the market while the home gets inspected and appraised. To prove that the buyer is serious, they will offer earnest funds, in good faith for the time the home is off the market. If the seller terminates the deal, the earnest money will be returned to the buyer.

These funds are not in addition to your sales price; The buyer receives a credit for these funds at closing. 

  • Never give an earnest money deposit directly to the seller. The check should never be made out to the seller. It should be made out to the title company.
  • Get a receipt.
  • Don’t pay the earnest funds in cash. These need to be paid by personal check or cashier’s check

There are ways that you can lose your earnest money deposit.

  1. Default of contract. Are you trying to cancel the contract outside your options? This might be default and could cost you the earnest funds
  2. You waived your contingencies –  If the buyer waives their contingencies, they will lose their earnest funds if they should cancel or not be able to obtain financing.
  3. The buyer does not meet the deadlines specified within the contract and the seller and buyer can’t reach an agreement for the contract expires. Extension must be made in writing and signed off by both the seller and the buyer
  4. The buyer gets cold feet and he/she cancels the contract outside of their option period.
  5. The buyer wasn’t able to get financing due to reasons that could have been avoided:
    1. An increase in buyer’s debt (purchase a new car, purchased furniture, made any large purchase before closing)
    2. Quits his/her job
    3. Make a mystery deposit into their account and won’t explain why
    4. Co-signs a loan
    5. Opens new credit cards
    6. Spend the funds earmarked for your down payment and closing costs

When in doubt speak to you lender!

Upon cancellation, the sellers and buyers are asked to sign mutual earnest funds release form. If an agreement cannot be reached, the party holding the earnest money deposit will continue to hold it until an agreement is reached.

Remember before you sign a contract, chat with your agent and make sure that you cover all your options.

sample 1-4 resale contract

Sold! A First Timer’s Checklist For Selling Your Home

Posted on by Ali Palacios - Broker

As a homeowner, the selling process can be an overwhelming experience – especially for first timers. Since they’ve never been through the experience of selling a home, many homeowners feel a bit lost as to what they need to do before they can pass their keys over to the next owners.

But not to worry! Here’s a checklist that covers all the essentials for homeowners getting ready to sell their first property:

Sprucing Things Up

Before homeowners list their home, they will want to handle any minor fixes that might keep them from getting top dollar for their property and spruce things up to make the home more attractive to potential buyers.

While every home is different, some areas that homeowners will want to revamp before listing their home include:

Painting

Painting is a relatively easy and inexpensive fix, but it can really make a difference in how a home presents. Before listing, homeowners should plan to refresh both the exterior and interior paint.

It also helps to use neutral colors when repainting a house that’s about to go on the market. Bold colors can be off-putting or distracting to potential buyers. Using neutral colors like white, beige, or gray, will help potential buyers see the property, not the paint.

Landscaping

The first thing potential buyers will notice when viewing a home is the landscaping. If the yard is in shambles or there are human-sized weeds sprouting from every corner, it can be a deal breaker.

Investing in landscaping upgrades will add to a property’s curb appeal and can help land a higher selling price. If the outdoor area hasn’t been landscaped, adding flowers, small trees and greenery can go a long way. If the property already has a garden, cleaning the area up (including raking, pruning and adding additional plants to fill in any visible gaps) will suffice.

Cosmetic Repairs

If there are minor and/or inexpensive repairs that need to be done to the property, it can be helpful for the homeowners to take care of them prior to listing. Small repairs, like steam cleaning the carpets or fixing a leaky shower, are quick, easy and inexpensive fixes, but can make a big difference when showing the home.

While homeowners will want to leave more major repairs and remodels for the potential buyers, cleaning up small problems will yield big results when they put their home on the market.

Staging

It’s important for homeowners to stage their home in a way that’s appealing to potential buyers. Staging can either be done with the help of a professional organizer and decorator or independently, but proper staging should include:

  • Decluttering the home
  • Removing any personal items
  • Reorganizing, rearranging and/or removing furniture to make the home feel more open and spacious
  • Thoroughly cleaning the home
  • Arranging the home to highlight the property’s best features (for example, pulling back curtains to showcase a gorgeous view or moving any furniture that blocks interesting architectural details)
  • Adding decorative items to enhance the space

Staging a home in a way that appeals to buyers can have a huge impact on the selling process. Professional stagers typically cost a few thousand dollars, but if homeowners want to save the extra cash, HGTV has some great tips on how to best stage a home for maximum impact.

Choosing An Agent

Once the property is ready to be shown to potential buyers, it’s time to find an agent.

Choosing the right real estate agent is HUGELY important, particularly for first time sellers. Having the right real estate agent representing the property can mean the difference between a quick, painless and positive selling process and a long, drawn out nightmare.

When choosing a real estate homeowners should consider:

Does this agent specialize in this type of property and in this area?

Whenever possible, homeowners should work with an agent who possesses a wealth of knowledge and experience selling the type of property they’re looking to sell within their market.

Different types of properties and different markets have different nuances, and working with an agent who understands those nuances can help homeowners sell their home quicker and for a higher price than working with an agent who isn’t as knowledgeable.

What’s the agent’s track record?

One of the best predictors of future success is past success. When choosing a real estate agent, homeowners should ask what their track record of success is. How many homes have they sold in the past year? What’s the average time their properties stay on their market? What percentage of their deals come in at the asking price or above?

Understanding a real estate agent’s past performance can help homeowners understand what they might expect during the selling process and helps to set up proper expectations for both the homeowners and the agent.

What’s the agent’s plan for selling the property?

Homeowners should also ask what their agent’s plan is for selling the property. What marketing channels will they leverage to make sure the property gets in front of the right people? How aggressively do they plan to market the property? What’s their backup plan should they not be successful with their typical marketing strategies?

It’s an agent’s job to sell a property, but there are many ways to do that. Homeowners will want to find out upfront what their agent’s plan is to make sure it’s in line with what they’re looking for.

Selling a property can be overwhelming for first time sellers. But by following the steps in this checklist, homeowners can take the necessary steps to selling their home quickly, easily and with as little stress as possible.

Source: http://www.bestrealestateblog.com/sold-first-timers-checklist-selling-home?m=JnojPGPgYwNqRUqKIeuc

Why You Should Only List Your House Once

Posted on by Ali Palacios - Broker

Let’s change the meaning of YOLO from “you only live once” to “you only list once”.

When you decide to list your house for sale, list it like it is the first, last, and only time you are going to.

Because, if you list it more than once…it’s going to hurt you.

Selling your home begins in a hopeful manner.

When you decide to list your home for sale, you probably don’t expect it to not sell the first time you list it for sale.

Quite the opposite…

Most people think their house will sell quickly. And hopefully in a bidding war.

You hire a real estate agent. Pictures are taken. The house is entered into the multiple listing service. Open houses are scheduled for the first weekend. Ads are run…

…and the house gets put on the Internet in more places than you can ever imagine, with just the click of a few buttons.

How could it not sell?

Avoid withdrawing or expiring.

But a lot of times, homes don’t sell quickly. Or at all…

If a house doesn’t sell quickly, many homeowners start to get discouraged, even after just a few weeks.

It gets worse if it starts stretching into months and months.

Many homeowners start to wonder if their real estate agent isn’t getting the job done. And they start considering either “withdrawing” their listing, or letting their contract with the real estate agent “expire”, and plan on hiring a different agent.

Some homeowners have total faith in their real estate agent. They want to stick with the agent they have hired. But they think it would be good to withdraw their listing, and pop it back on the market so it looks like a new listing, hoping to get buyers’ attention.

This is a mistake. Back in the day, this little trick could work. But, it isn’t fooling anyone anymore, and it can have a less than desirable effect.

Big brother is watching.

Remember this from earlier? With just a few button clicks, your house gets distributed all over the Internet…

In some ways, this is great. Your house is exposed to the entire market quickly and efficiently.

In some ways it’s bad, though…

Not too long ago, it was pretty difficult to figure out if a home had been listed more than once, or for how long it was on the market. Real estate agents had access to the information, but consumers did not.

Now, everybody and anybody can see:

  • If a house has been listed before.
  • How many times it has been listed.
  • How long it’s been on the market.
  • And even more information…like if there’s any pending foreclosure, for instance.

Basically put, more information is available than you would ever want made available. And you have no control over it. Nor does your real estate agent.

All of this information is “scraped” and aggregated by real estate websites, like Zillow and Trulia.

Back in the day, it was no big deal to withdraw your listing, or let it expire, and relist it. Few people would be aware of it, unless a real estate agent dug up the information and chose to share it with their client.

Now, a buyer would almost have to deliberately avoid seeing this information.

So, what’s the big deal?

Whether it’s right, wrong, or somewhere in between, the number of times your home has been listed, and the length of time your house has been on the market, affect how buyers perceive your home and its value.

This stinks, because you can have absolutely valid reasons why your home isn’t selling quickly…

Perhaps it’s a supply and demand issue. (Too many houses available and too few buyers buying houses.)

Or maybe you have a high-end home, and there just aren’t many sales in the price range, so it takes quite some time to sell.

Those sorts of reasons are valid. There’s nothing you can do to affect that.

And it’s awful (for sellers at least), but the Internet and available information can cause buyers to sense that the house isn’t selling because “something is wrong”.

Or buyers may feel like, “since the house has been on the market for so long, the owner has to be negotiable or desperate.”

There’s plenty of other legitimate reasons a house may linger longer on the market…

But way too often, the reason houses linger on the market is because homeowners list their home for way too much money. And, quite often, don’t reduce their price to be in line with the market and actual value.

That you can, and should control…

Otherwise, you’re causing buyers to dismiss, overlook, or undervalue your home…because the Internet.

So, here’s what you do…

Control what you can control.

  • Make sure you hire a real estate agent who gives you an honest assessment of your home’s value.
  • Do not hire an agent that simply says your home is worth the amount you want to hear. Or one who agrees to list your house for a higher price than they recommend, just to appease you and get your listing.
  • Price your home appropriately within the market. Price it to sell…not to linger. (This does not mean “give your house away”. There’s a fine line and balance. A good agent will help you find that perfect balance.)
  • Don’t withdraw your listing, or let it expire, if at all possible.
  • If your home is not selling, assess whether the price is reasonable for the market. If it’s, be patient. Keep it on the market. Stay the course.

Ignore this advice if…

If you have hired a good real estate agent, and he or she disagrees with this, listen to them.

Real estate is “local”. Your agent will know what may help or hurt you in your area, more than a general article.

But, if you and your agent are discussing withdrawing or relisting your property, maybe you should bring up what you have read here. Your agent may never have even thought about this angle.

At least it can lead to an in depth conversation about the pros and cons of withdrawing or relisting your home, before just doing it because it seems like a good thing to do.

Again, there are valid reasons a home can linger on the market. Things you and your agent can’t control. It’s not the end of the world. It doesn’t spell doom for your sale.

A good agent isn’t going to let a buyer get your house for a steal, just because of some information the buyer has seen on the Internet.

However, what they find and see on the Internet will certainly fill their mind with thoughts. So, try not to give them anything to think about, other than making a full price offer as quickly as possible.

Source: http://www.bestrealestateblog.com/why-you-should-only-list-your-house-once?m=JnojPGPgYwNqRUqKIeuc

3 Tips On Timing The Sale And Purchase Of A Home

Posted on by Ali Palacios - Broker

If you’re like most people, you’re probably concerned about selling your house before having one lined up to buy.

You don’t want to sell your house first, not having somewhere to go.

But, at the same time, you know you can’t buy another house, without selling the house you already own.

Ideally, you want to time the sale and closing of the house you have to sell, with the purchase of the house you’re moving to. Ideally…

But, it isn’t always easy, or even possible. You certainly can’t bank on it. So, it’ll help you to have a few tips to up the chances of timing the sale and purchase as much as possible, or at least have a plan just in case it doesn’t…

1. Negotiate time to find a home.

Probably the easiest solution is to sell your home to a buyer who’s willing to give you some nice terms in the contract.

You can negotiate in that the sale of your home is contingent upon finding and buying the home you’ll move to.

Not all buyers will be willing to agree to this, though. And you may have to budge a bit on your price or other terms of the agreement.

But, if it makes your life better, less stressful, and costs you less than any other alternative, it makes a whole lot of sense to give a little to get a little.

Note: This can be hard to pull off if your buyer is also selling their own home and need to time the sale and purchase on their end as well. There’s a whole “trickle down” you might need to be sensitive to. This approach works best if you’re selling to a first-time home buyer.

2. Get a bridge loan.

These aren’t the easiest thing to find, but you might be able to find a bank who will lend you money without selling your home, or as long as you have a viable contract on your home. It could be a bridge loan. Or it could just be that the lender feels you can carry both mortgages for a short period of time.

Of course, you can do away with all of these concerns if you have enough cash on hand, or own your other house outright. But most people aren’t in that position.

Note: Don’t look into these options once you have your house under contract and have found one you want to buy. Do this before you even start the process. Look into different lenders and the options they may have for you. You might be happily surprised.

3. Have a back-up plan.

Most people don’t have so much extra money that they can just rent a hotel room and storage for all of their furnishings while they’re in between the home they sold, and the home they’re buying to close.

But, if you have that kind of money, that’s a good option. Go on a local “vacation” for a while, and send your stuff to a storage facility.

Or, maybe you can find a short-term rental in your area. But, again, this might not be budget-friendly for everyone.

If you don’t have that kind of money, line up a place to stay with someone in your family. No, this isn’t ideal, but it can do the trick.

Note: Having any of these as your back-up plan can take the pressure off of you to just buy whatever house happens to be available and line up with your timing. It can buy you time to wait a bit for the perfect house, and take some of the pressure off when you are negotiating. If you are pressed for timing, you may be forced to pay a higher price for the house you are buying. So having a plan for where to stay “just in case” can cost you…but it could also save you in other ways. So, look at the silver lining.

First things first…

No matter what, don’t expect to just wing it and hope everything works out for the best.

Come up with your game plan beforehand.

Maybe you don’t even have to worry all that much. That depends on your local real estate market. It may just be that the house you have to sell will be easy to sell, and have such demand that you can call the shots in regard to the terms of the agreement and get time to find the perfect home. And, who knows…maybe there are plenty of houses for you to buy that are just sitting there waiting for you, and the owners would be just fine helping to time the closings with you.

And the best way to find that out, is to call your real estate agent, and work hand in hand with your agent from the get-go.

Real estate agents deal with these concerns day in and day out and can help you make the best decision and plan considering your wants, your needs, your situation, and the local market.

 

Source: http://www.bestrealestateblog.com/3-tips-timing-sale-purchase-home?m=JnojPGPgYwNqRUqKIeuc

Why Your Home Isn’t Getting Shown As Much As You Think It Should

Posted on by Ali Palacios - Broker

Picture having your house for sale, and you feel like it isn’t being shown enough. Or maybe it isn’t really being shown at all.

You expected lots of buyers coming through. Ideally, you even expected an offer (or multiple offers!) to come in pretty quickly.

But instead, not that many people seem to even know your house is for sale. Otherwise, they’d come out and see it. If people would come and see it, the house would practically sell itself, because it’s so nice.

You’re discouraged, frustrated, and angry…

You wonder if your real estate agent is doing his/her job.

Isn’t your agent supposed to be showing the house to their own buyers? That doesn’t seem to be happening.

Aren’t the other agents in your agent’s office supposed to be showing the house to their buyers?

Not one agent from his office has shown it yet.

Isn’t your agent supposed to be spreading the word to other real estate agents at other companies, and getting them to show the house to their buyers? Again…not happening. At least not as much as you anticipated.

And, isn’t your agent supposed to market your home, so that buyers that neither he, she, or any other agent even knows about, will come out and see your house?

Your agent probably isn’t doing anything wrong.

While it’s natural to be frustrated, it won’t do you much good. It will do you less good to be angry, or disappointed with your real estate agent.

You’ve probably expressed your frustration, and all your agent seems to be doing is making excuses. Or pushing you to do something you don’t want to do…like lower your price. Your frustration, and pushing to see more showing activity, may very well be forcing your agent to react that way, when in fact all you need is some perspective.

What may help you most in this situation is some third-party, objective thoughts. So, here goes.

First, here are some basic things many homeowners do not know.

  • There are only so many buyers in the market at any given time.
  • Not all of the buyers are even ready, willing, and able to even buy your house right away.
  • Some buyers are just getting started looking, and much of that begins online.
  • Most of the buyers who are truly ready, willing, and able to buy are the only ones you need to care about.
  • And most of them are represented by, and working with a real estate agent.
  • Maybe an appropriate, ready, willing, and able buyer is working with your listing agent…but, most likely not.
  • And, there’s a good chance that the most appropriate buyer isn’t even working with another agent within your listing agent’s office.

OK, with that under your belt, let’s get into a few more thoughts.

  • Not that many years ago, people had to call the listing agent or their office for even the most basic information about your house…like the price, or address. Or at least have a buyer’s agent who represented them to get them the information.
  • If they saw a picture of a home for sale, it was likely just that…a picture. Of the outside of the house.
  • Both of the above caused buyers who were at even the earliest stages of buying to come out and see a house for sale. It was the only way to rule out a house. It was the only way to get their feet wet and get a handle on what they could afford.
  • None of that is necessary anymore, now that the Internet has allowed so much information to be available to buyers at all stages of the process to see from the comfort of their own home.

The Internet has cut down on showings.

Buyers at all stages of the process (just beginning, all the way to needing to make a decision immediately) see a house that goes for sale immediately, in real time, as it pops up on the market. Pictures and all.

They can even see maps of the location, aerial views, street views, videos, etc. They can literally see inside the property, with all of the pictures made available nowadays!

There’s virtually no need to go out and physically see a property…unless it’s of actual interest to them. Before, they had to go out just to rule out houses. So, almost every house on the market would get more showings back in the day. Every buyer, at every stage of looking, would come out just to get a peek. Now they do it remotely.

This cuts down on how many buyers come out to see your home.

And only the most interested, most serious, ready, willing, and able buyers are coming out to see your home.

This is a good thing…it’s efficient.

So why isn’t your house being shown?

It’s natural for an owner to want more showings. But, be careful what you wish for.

Just creating traffic through your house isn’t entirely beneficial. You should only want serious, ready, willing and able buyers coming through. And remember, there aren’t endless amounts of them in the market.

What’s the use of harassing your agent to create traffic and showings if the buyers have no ability or intention of actually buying the house? You are tasking your agent with creating a bit of a dog and pony show for you.

Instead, sit down or hop on the phone with your agent and get down to what the real root of the problem is. The most sensible thing to do is for you and your agent to analyze what the cause is, and hopefully generate more showings.

Go over things like the following:

  • Is it the overall market? Are there not that many buyers actually buying in your area and price range? If so, maybe just be patient.
  • Are the buyers who have seen your house buying other homes? Then, maybe your house is overpriced, or not as appealing as other choices in the area and price range.
  • Is your house not being shown at all? Good chance that it’s either your price is too high, or there are no buyers in the market. Again, look to see if there are other houses comparable to yours selling.

More often than not, the reason a house isn’t getting shown is due to either the market being a bit slow, or the price being too high. It’s that simple.

Pricing appropriately within the market should get your house shown and sold quickly to the ready, willing, and able buyers in the market…as long as there is at least a buyer who is ready, willing and able in the market.

So, just take a moment to truly understand that creating more showings won’t solve the problem of getting your home sold. You can have showings every hour of every day, but there are only so many true buyers in the market, and they are aware of every house on the market the minute it comes on.

If nobody is coming, and / or nobody is buying it…it’s either price, or a lack of buyers altogether.

 

Source: http://www.bestrealestateblog.com/home-isnt-getting-shown-much-think?m=JnojPGPgYwNqRUqKIeuc

Why Do Houses “Expire”?

Posted on by Ali Palacios - Broker

You’ve seen this happen…

A house sits on the market forever, and it doesn’t get sold.

You see an agent’s for sale sign sitting in the yard for months and months. And then, all of a sudden, another one appears.

Sometimes, the new agent will get the house sold.

But sometimes, no matter how many different agents list the house, it just never sells.

You’ve been watching that house “expire”.

That is industry-speak for when a house doesn’t get sold during the time frame an owner has a listing contract with a particular real estate agent.

When a listing expires, it’s not uncommon for the owner to hire someone new to list their home…figuring the first real estate agent just didn’t have what it takes to get their home sold.

But, it usually isn’t the agent that was the problem. There are a few common problems that cause a house to expire.

However, it almost always boils down to one specific issue…and one specific solution.

So, here’s a list of the typical problems that lead to a house “expiring”, so you don’t make the same mistakes when you sell your own house. We’ll end with the one that is the overall problem and solution.

You can’t sell what people can’t see.

Sometimes it just boils down to buyers being unable to get in and see the house easily. Some homeowners make it too difficult for buyers and their agents to come in and view the home.

It’s fine to have some limits. But if a homeowner requests that all buyers give 24-hour notice, and will only allow the house to be shown on Thursdays between 11:30AM and 2:23PM, that makes it pretty tough to go see.

The maid is on permanent vacation.

It can be tough to keep your house spotlessly clean while it’s for sale. People wake up and run out of the house for the day having left some dishes in the sink, or beds unmade. That happens. It isn’t the worst thing in the world.

But some houses are just a mess. Buyers and agents come in wondering how anyone lives there, or even lives like that. There’s stuff everywhere. It smells.

No matter how much imagination a buyer may have, it’s hard to truly look at a house that’s extremely cluttered, or downright dirty, and picture themselves living there.

Location, Location, Location

The location of a house might just be undesirable.

If a home is located on a main road, or under power lines, or train tracks…or across the street from a firehouse…it can be harder to sell and may take some time for the right buyer to come along.

Supply and demand

If the market is “slow”, or a “buyer’s market”, it isn’t uncommon for houses to expire.

Sometimes it’s just a simple matter of supply and demand.

If there are a lot of houses on the market, and only so many buyers buying, there’s only so much you can do.

Sometimes it’s just a matter of buyer preference. A house could be easy to show, clean, and priced well against the competition. But if there’s only one buyer for ten houses that are equal in appeal and priced similarly, there’ll be nine disappointed homeowners, and one happy one. That buyer may have just chosen the house they chose because they knew someone who lived on that street. Or liked the paint color, or layout a little better.

There isn’t much a homeowner or agent can do about this.

To be fair…

It could just be that the real estate agent (or agents) the homeowner hired stink at selling houses.

That could be the case. But that usually isn’t really the problem. And another agent usually isn’t really the solution.

Most of the time agents are advising their client to make the home as easy to show as possible. And to declutter, and keep it as clean as possible.

And they take into account the location of the home and supply and demand.

That doesn’t mean that their clients listen to them in regard to the biggest problem and solution that takes all of the above into account…

Price

You may have heard this before: In real estate, price isn’t always the problem, but it’s always the solution.

Sure, a house could be worth every penny a homeowner is asking. It might very well be justified by recent comparable sales in the area.

But price will always get a home sold. And if a home isn’t selling, it’s almost always due to the price not being appealing enough to overcome any of the above factors.

  • It can overcome having strict showing times. If a homeowner wants to limit their house to being shown one day a week at a certain time… Fine. If you price the house aggressively, buyers will go out of their way to adjust their schedule.
  • It can overcome clutter and messiness. It doesn’t matter how awful the house shows, or how smelly it is…if it’s priced appropriately for the condition.
  • It can overcome supply and demand. If few homes are selling, and there are a lot of similar choices for buyers to choose from, a lower price will certainly make the buyers choice easier.

As much as real estate agents are perceived as being pushy, most are not. And they get blamed for houses not selling — for expiring — when most of the time it’s because the homeowners they represented didn’t listen to their advice about pricing their home. Price takes into consideration every factor.

So, when you see a real estate agent’s sign linger for too long… Or watch their sign disappear, and another one take it’s place…

Don’t be too quick to judge the listing agent for the lack of success.

It’s more than likely due to a homeowner who isn’t listening to good advice, that would help them avoid these common issues, and get their home sold.

 

Source: http://www.bestrealestateblog.com/why-do-houses-expire?m=JnojPGPgYwNqRUqKIeuc

Should you offer a bonus when selling your house?

Posted on by Ali Palacios - Broker

Sometimes people wonder whether offering a bonus to the buyer’s agent will help their home sell faster or for more money. Good question. Even real estate agents are divided about it. Some say no. Some say yes. Ultimately, it’s your decision as a homeowner. So here’s a list of pros and cons for you to think about before you make the decision.

The Pros

Let’s be honest, offering a bonus to the buyer’s agent is meant to incentivize the agent to sell your house. It’s basically playing on the desire of a real estate agent to make more money than they would make selling another house. Money certainly motivates people. And real estate agents are people… So, ideally, this is what offering a bonus might do for you:

  • It might get a buyer’s agent to really want to sell your property.
  • It might make your house sell more quickly.
  • It might make it sell for more money (if it makes more agents clamor to get their buyers to make offers and creates heightened demand…or, if an agent feels compelled to urge their client to offer more money to make the deal happen.)

The Cons

Above, we mentioned people are motivated by money, and that real estate agents are human… However, many real estate agents are somewhat superhuman. There are a lot of agents who simply aren’t driven by money. They certainly aren’t going to put their clients’ needs behind their desire or need for money. Agents tend to have a high degree of ethics and put their clients’ needs before their own. So, there’s a good chance this is what will happen when you offer a bonus:

  • It could be wasted money (many agents won’t take it, or will pass it along to the buyers.)
  • It won’t sway most agents from endorsing, or not endorsing your house. If your house is a good fit for their client, they will show it. If it is not, no amount of bonus will get them to show it.
  • It won’t sway a buyer. The buyer is not likely to buy a house, let alone pay more for it, because of a bonus being offered to their agent. If anything, if a buyer’s agent starts pushing a buyer to buy your house, it may actually backfire. Many buyers will put on the brakes if they feel they are being pushed.

Making your decision…

This article is just food for thought. Certainly listen to your real agent’s perspective and advice. Also, get comfortable with your own perspective and thoughts before offering a bonus. Ultimately, a well-priced home, which is exposed to the entire market, is what gets a home sold for top dollar and as quickly as possible. But if you have some extenuating circumstances, and your house is hard to sell for some reason, you might want to consider offering a bonus so agents pay attention to a house they may otherwise have ignored.

How Selling Your House Is Like Making Lasagna

Posted on by Ali Palacios - Broker
How many layers are there in a lasagna?
There’s no right or wrong answer to that. Other than, “more than one” probably. Even two is pretty skimpy.
So, let’s say three is minimal for argument sake. (But, four or more is better.)
The number of layers probably just boils down to using up all the lasagna noodles and sauce you have, or getting to the top of the pan you have to use. No exact amount. Use what you’ve got.
But, if all you’ve got won’t stretch to make three layers in the size pan you have, perhaps you should use a smaller pan. At least have the three layers.

This isn’t a lasagna lesson.

You could say that it doesn’t really matter how many layers there are, as long as it tastes good.
And, there really isn’t any rule that you can’t have a one or two layer lasagna. So, you’d be “right”.
It just wouldn’t look exactly right. Not a big deal. It’s lasagna.
But, this article isn’t really about lasagna, it’s about real estate. Specifically, the critical “layers” you you need to have when you list your house for sale.
Like we were talking about above with lasagna, for the sake of argument, you definitely need three layers. More would be better.
So, let’s look at the three most important layers when listing your home for sale.

The 3 layers

The three “layers” you need to have when you list your home for sale are:
1- Price
2- Exposure
3- Ease of access

Price

The price of your home is the first, and most critical layer when you are listing your home. If you don’t nail the pricing, the next two layers won’t matter a whole lot.
It won’t matter how much exposure your home has if the price isn’t in line with the market. Buyers have a good handle on values, and they won’t waste their time looking at a house if the price is way out of whack.
There’s certainly a little room to be on the “high” side. You don’t need to “give your house away”. But, you really need to be priced well against the current competition, and justifiable against similar homes to yours which have recently sold.

Exposure

Exposure has gotten easier over the years because of the Internet. But the easiest way to ensure you reach every single buyer in the market is to make sure you’re on the local multiple listing service (MLS).
Beyond that, you want to make sure your listing “populates” or “syndicates” to all of the real estate sites out there. Again, the easiest way to do this is typically to list your home on the local MLS. Most agents have a system that then allows your listing to be picked up by more real estate websites than you can imagine.
Beyond that, it doesn’t hurt to have some other exposure in terms of marketing. This will vary from agent to agent, and company to company.
But the bottom line is this — your home needs to be easily found. And since most buyers are actively looking online, make sure it’s on there as “everywhere” as possible.

Ease of access

Your home needs to be easy for buyers to come and see.
Sounds simple enough…
You want your home sold, so of course you figure you’ll make it easy to come and see.
But not everyone does. More people than you can imagine make real estate agents and buyers jump through hoops to schedule a showing.
Saying no to a showing, or trying to corral every showing into a tight window of time during the week is going to hurt you.
So, just make sure you keep your house ready to show at any given moment, and say yes to any request to come see the house. (Within reason, of course…)
If you just do all three of those things, you’re in pretty good shape to get your home sold for as much as the market will bear, in as short a time as possible.
But, it won’t necessarily be as good as it could be, if you were to add just a few more layers to your “listing lasagna”.

The “extra” layers.

While the first three layers are more or less non-negotiable, and will most likely get you as close to the highest offer as possible, as quickly as possible, you may want to consider these extra layers.
Adding these into your mix will increase your chances of getting the highest and best offer possible, as quickly as possible.
1- Hiring an agent who knows and understands the market.
2- Hiring an agent who is a strong advisor.
3- Hiring an agent who can negotiate.
4- Hiring an agent who keeps things together.

Knows and understands the market

It’s easy enough to hire a real estate agent. There’s plenty of them. But, you should really make sure to hire one who truly knows and understands your local real estate market.
You want one who can analyze the activity on your house, and the overall market, so that the agent can…

Advise you

There’s a lot of talk about selling homes “as quickly as possible”. The key words there are “as possible”.
Sure, you and your agent want your home to sell, and sell quickly. But “quickly” depends on the market. And you want an agent on your side who, after analyzing the market and activity, can advise you on what to do…
Should you stay firm on your price and just be patient?
Should you lower your price? If so, how much?
Is there something you can change about your house that buyers are getting hung up on? If so, is it worth doing, or will the cost be too much for it to make sense?
There’s way more than that to list, but those are just a few examples of advice your agent should be relied upon for, and be able to provide to you.

Negotiate

This is another thing that gets a lot of lip service. But an agent who negotiates well is a huge asset.
Sure, you want one that will negotiate a “win-win” enough to make a deal come together. But, you really want one that gets you the fatter end of the win. And that isn’t always just about price.
A good negotiator will get you the best price and terms.
And, more importantly, it’s important to have an agent who will…

Keep the deal together

There’s a lot of time, and a lot of things that can lead to a deal falling apart between signing the deal and a closing.
Things go wrong. People get cold feet. Buyers get greedy and ask for credits and repairs, or threaten to bale on the whole deal. Appraisers throw their opinion into the mix.
Again, just to name a few examples… but there are so many things that can make a deal fall apart.
Having a strong agent on your side, who can almost predict and nip problems in the bud beforethings get out of control, is a huge layer to add to your listing lasagna. And, if things do get dicey, you want an agent who can wrangle it all in and get things back on track.

Looks can be deceiving.

People often look at selling a house as pretty simple. And the truth is, it is pretty simple…in terms of the first three layers.
But that doesn’t necessarily make the best “lasagna” possible. It might look OK enough to be called lasagna, but it’s not gonna be quite as tasty as it could be, if you take enough care to add the next four layers.
Source: http://www.bestrealestateblog.com/selling-house-like-making-lasagna?m=JnojPGPgYwNqRUqKIeuc

 

 

Getting your home ready for a home inspection

Posted on by Ali Palacios - Broker

Your home is usually your largest asset. A buyer’s agent will use an inspection report to re-negoicate the terms of the contract. With a little preparation you can avoid further negotiations (price reductions and repair credits) or “deal breakers”.

In most cases cosmetic issues and normal wear and tear usually don’t have to be fixed. That doesn’t mean the buyer won’t want a paint credit to cover a purple wall :).
That said, there are issues that come up that involve structural defects, building code violations, or safety issues. These are issues that can impair or make financing on your home conditional on repairs. As a seller you don’t have to complete any repairs or offer credits in lieu of repairs but keep in mind that it’s always better to negotiate. If your current buyer has a problem with it, you will most likely have issues with other future buyers. If your contract is cancelled and you have been given a copy of the inspection report, you must disclosure this inspection report to future buyers. 
Below you will find the most common items that come up during an inspection report. Keep in mind that every home is different and this is not an all encompassing list but it’s a great starting point. For more info on a home inspection
When preparing your home for sale keep in mind: Repair, Replace or Remove
  • Repair when ever possible. It will usually cost you less to repair in advance than it will after inspection.
  • Replace if it’s a necessary component of the home (such as roof shingles)
  • Remove if broken and not a necesary home’s component (example: a non functioning ceiling fan)
TOP 5 ISSUES
1. Plumbing
Major issues will include plumbing leaks under the foundation. This issue will require a plumber to find the leak with a camera then they have to dig a trench under the slab foundation to repair the leak. This is very costly and can be a deal breaker for most buyers. More info on slab leaks
Other issues include:
Leaks – If it’s leaking, fix it. This is usually a cheap fix that can be more costly after an inspection. Remember to address any water damaged caused by these leaks.
Water Pressure – A home inspector will check water pressure by turning on multiple faucets and flushing toilets at the same time.
Backed-up lines – does water flow well down the drains? A home inspector will fill up the sinks and bath tub and then release the water. Slow draining water in sinks and bathtubs usually means there is a clog somewhere. If the water is slow to drain, have the drain checked. There might be a backup
2. Electrical
Serious electrical issues on a home inspection report can include things like faulty wiring, old wiring, bad junction box connections, spliced wiring, and defective electrical panels. If you think there is an issue in these areas, it’s best to have an electrician check them out.
Electrical codes change constantly so you won’t be able to avoid all issues. Before listing your home check to see if all electrical outlets are working. Replace burned out light bulbs. Replace non-working light fixtures. Do you have GFCI outlets in wet areas?
3. HVAC
We can not live without air conditioning in the Houston metro area. During a home inspection, the inspector will visually check the units and the furnace.  Common issues will be rusted pans, clogged drain lines, not enough walkway space to and around the units, dirty filters and temperature differential (Large gaps in temperature differential can signal a potentially major problem to the HVAC system).
I’d recommend to have your HVAC serviced before listing the home. Almost every inspector will request that the HVAC system be serviced. Might as well do it in advance.
 
4. Foundation
Most homes in the Houston metro area are on pier and beam or the slab (concrete) foundation. Most homes in our area will have foundation issues at some point. Most of the soil in Houston has a high content of clay, which is usually very sensitive to moisture fluctuations. Water will make the soil expand and drought will make the soil contract. The contraction and expansion in the soil under a home causes the house to settle, shift, crack and potentially move.
Concrete does not give much without breaking. Signs of potential foundation issues: sloping floors, difficulty opening and closing windows, doors not latching properly, separation of brick from the home, large sections of missing mortar from the brick, etc. If you are concerned, let’s chat about your options.
One thing you can address that shows up in every report is grading. The soil (mulch/rock) around your foundation should slope away from your foundation not towards. A slope away from the foundation will allow water to flow away from the foundation and not pool along the foundation. The concrete foundation should not be completely covered by soil, mulch or rock. More info
5. Roofing
A roof can be a major issue and could deter financing. Certain loans will require that the roof have a certain number of years life left in it. Redflags:
  • Evidence of prior leaks. The decking is the plywood layer of roofing to which the felt and shingles are attached.  You (and your inspector) can visually inspect the decking from the attic where the underside of the plywood will be exposed.  Large water spots, dark areas, and rotted plywood will be evidence of a prior leak.
  • Missing Shingles. The inspector should physically climb onto the roof and “walk it” to inspect its condition or they will position a ladder close to the roof to visually inspect the roof with binoculars.
  • Loose or missing nails on shingles
Other smaller red flags:
  • Caulking: Caulk every area that should be caulked. Around windows (inside and out), tubs, sinks, showers, counters and backsplashes.
  • Foggy windows. Double pane windows have a gas within the two panes. This gas with time will escape and cause condensation within the two panes. For more info
  • Sprinklers: Run your sprinkler system and adjust or repair any broken sprinkler head.
  • Wood rot in the exterior of your home. This problem is best to remedy before you put the home on the market. There are types of loans that will not permit financing until this is repaired.
  • Exhaust fans: In the past builders would vent the exhaust fans into the attic. New codes don’t allow this because in theory the exhaust fans could be pumping moisture into the attic.
  • Window: Missing screens, windows that will not open or close properly. The windows must open for safety.
  • Chimney: is it gas fireplace? does it work? Do you need a key to turn on the gas? Do you have the key?
  • Doorbells: Does it work?
  • Water heater: The T&P values on your water heater are recommended to be changed every 3 years. For more info on this
  • Appliances: The stove, dishwasher, microwave and range typically stay with the home unless it’s excluded. Do they work?
  • Pests: do you have pests? I would recommend you treat your home before putting it on the market. Check for termites. This can be a big expense to treat. For more info

It’s Time We Had A Realistic Discussion About Your Home’s Value

Posted on by Ali Palacios - Broker

When you go to sell your house, there’s a good chance you’re not going to agree with what a real estate agent suggests for a list price.

It’s one of the most common issues real estate agents deal with, and help homeowners understand.

Problem is… many homeowners don’t necessarily see it as agents trying to help them, so much as convince them to do something they don’t want to do.

Naturally, you want as much as you can get for your home. And, you’ll certainly have your own opinion on the value of your home. You’re totally entitled to your opinion. And it’s totally your call to ignore the agent’s advice, and list your house for as much as you like… if the agent is still willing to work with you.

But if the agent is not willing to, it doesn’t matter, you can always find any number of agents who will put it on the market for as high of a price as you want.

But, it might be the biggest mistake you can make…

In the least, you’ll just waste your time. (And the agent’s time.)

But, it could also lose you money, instead of makeing you money…

There’s lots of ways this happens, but one of the biggest reasons is that the longer you are on the market, the more it impacts how buyers perceive your home, and what it is worth.

And that is hard to hide…

It has become more and more of an issue as so much data and information has become available online. Like, how long a house has been on the market, and how many times it has been listed without selling.

So, the best thing to do, is list your home based upon the current market data… not what you want, wish, or think.

When it comes to pricing your home for sale, Jack Welch, former CEO of General Electric, has such an appropriate quote…

“Face reality as it is, not as it was or as you wish it to be.”

Let’s break that down and apply it to pricing your home… starting in reverse.

As You Wish It To Be

This is so human, isn’t it? Everybody has things in life they wish were different and better.

 

And so it is when many homeowners want to sell their home.

Not to say that everyone thinks that their home is worth a million dollars. But almost every owner feels like their home is worth a good amount more than the actual market value. Usually by tens of thousands of dollars. Regardless of price range.

But the market value is based upon what buyers have paid for similar homes recently. So you need to base your price against the prices similar homes have sold for.

You can’t expect your 3 bed, 1 bath Ranch style home, to sell for as much as a 4 bed, 3 bath Colonial in a similar (or better) location and condition than yours.

You can wish it would. But it probably won’t.

Not As It Was

A lot of times, when they hear how much their home is worth in the current market, say something along the lines of…

“There’s no way my house is only worth $525,000. Back in 2005 my house would have gone for $700,000! And, sure, I know that the market was crazy high back then, and the market took a dive. But the market is bouncing back now. So, I can’t see asking anything less than $650,000.”

OK. Deep breath. Phew. Here we go…

But, let’s just say it was worth $700,000 back in 2005. And now it truly is only worth $525,000. That is the reality. Now. And that is all you can deal with. You can decide not to sell. Wait out the market until prices go up to a point you are happy with.

You cannot, however, turn back time. You can’t price your home based upon such distant history… as it was. It won’t do you any good.

Face Reality As It Is

It is that “simple”. But yet, so hard.

So many homeowners overprice their homes, and lose money in many ways by not facing reality as it is.

And a lot of real estate agents reluctantly allow homeowners to do it. It takes a pretty special agent to be firm about pricing with a homeowner.

Because many agents will do as you wish. And they’ll put your house on the market and wish right along with you.

First, they’ll wish for a miracle…

Then, they’ll wish they were firmer with you on the price to begin with…

And the whole entire time, they’ll wish that you would just lower your price already…

And they will bring up lowering your price. Constantly. And you will be annoyed. And feel like that’s all they are doing. And you’ll start thinking about who the next agent you hire will be, once your listing contract expires with the agent who did as you wished.

So, save yourself some time, aggravation, and make as much money as you can and should on your home, by facing reality as it is, not as it was or as you wish it to be.

You’re better off listening to and hiring an agent, who is firm about your market value, and helping you face reality, than you are working with an agent who is, well… wishy-washy.

Source: http://www.bestrealestateblog.com/time-realistic-discussion-homes-value?m=JnojPGPgYwNqRUqKIeuc