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How to Sabotage Your Sale

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | September 8th, 2017

There’s nothing more offensive than a seller hovering over a would-be buyer when he or she is looking at the house.

Well, maybe there is. Here are four overlooked ways sellers sabotage the sales of their homes:

-- Access. If a prospect can’t tour the place, they probably won’t buy it. Sellers must be as flexible as possible when it comes to showings. Yes, life often gets in the way: kids, ballgames, family is here from out of town, blah, blah, blah. But if you want to sell it, people need to see it -- on their terms, not yours.

“Access is huge,” says agent Kathleen Daniels of K.D. Realty in San Jose, California. “It won’t sell if people cannot see it.”

Access also refers to a buyer’s ability to actually get into the house. So fix the front door if it sticks, and make sure the screen door or storm door works properly. While you’re at it, make sure the keys work easily. People don’t want to hear something about having to jiggle it, or turn it just this way or that to make it work. If it doesn’t work smoothly, change the lock.

“I don’t have time to figure out the idiosyncrasies of your lock,” says Travis Parker of Team Linda Simmons in Enterprise, Alabama.

-- Smells. You love your two dogs and three cats, and you also love to cook. That’s great, but remember that animals and dinners give off odors -- sometimes pungent ones that can send would-be buyers running for the exits. You live with these smells every day, so you probably don’t notice them. But prospects will.

Smoking also offends the olfactory nerves of many people, so if you can’t quit altogether, light up outside until the house is sold. And be sure you clean up your butts. Would-be buyers don’t want to see your leftovers any more than they want to smell them.

“Smoking drives me crazy,” comments Elyse Berman of Realty Associates Florida Properties in Boca Raton. “Maybe I am oversensitive to it, but most buyers ... will agree.”

Speaking of stink, don’t burn scented candles every time the house is being shown, or fill every room with a plate full of potpourri. Your intentions are good, but many people find the smells unpleasant. And they can easily prompt buyers to wonder what you are trying to cover up.

Want to kill your sale? “Put lots of plug-in air fresheners in your house,” says Holly Weatherwax of Momentum Realty in Reston, Virginia. “A lot of them.”

-- Pets. Not everyone loves your dog or cat -- or pet snake, for that matter. Some folks fear them; other folks are allergic. So get them out of the house when showing the place. This even goes for your friendly little pooch who never, ever bites. You don’t want a would-be buyer to be the first to prove that untrue. And most people don’t like the idea of cat dander on their pant legs from your friendly feline rubbing against them.

It’s not enough to stick your pets in the garage or the backyard. After all, buyers will want to see the garage and backyard. Plus, a yapping mutt outside is a big distraction.

Instead, take them to a friend’s house if you can, and try to remove any reminders that you have a pet at all. Get rid of the litter box, the dog beds, the food and water dishes and the piles of dog, er, residue in the yard.

“One of my worst showings ever had everything, including a barking dog, a live chicken on the kitchen countertop, cat poop on the floor, boxes everywhere and who knows how many people upstairs,” says Barbara Bartell-Kamp of Keller Williams in White Plains, who didn’t bother going upstairs to find out.

-- Stuff. Most longtime homeowners have too much stuff. Their places literally overflow with it: furniture, knickknacks, family photos, collections, books, etc. So pare it down. You live with your stuff every day, so you may not notice it. But visitors do.

“Having to blaze your own trail through a showing is not helpful,” says Carol Lynn Johnson of RE/MAX Elite Realty in Franklin, North Carolina, whose pet peeve is too much furniture.

Remember, when your house is for sale, it is on stage. You want buyers to notice the big picture window, for example, but they may not if it’s covered by a massive set of drapes or blocked by a pile of best-sellers. And they may not realize just how large your secondary bedrooms are if they’re filled with boxes of stuff.

Pay particular attention to the kitchen counter. People can’t see how much counter space you have if it’s covered by coffeemakers, breadboxes and the like. Also, pay attention to other spots where stuff tends to accumulate, including the pantry, fireplace mantel and bookshelves.

The bottom line: “It takes a lot of work to sell your house,” says Weatherwax. “It is very difficult to pay attention to the house when there are so many nonessential things vying for a buyer’s attention.”

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Quick Takes: From Millennial Priorities to Roman Remains

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | September 1st, 2017

Housing choices are going to the dogs. Literally.

That’s the gist of a new Harris Poll, which found that a third of millennial-aged first-time homebuyers made their decision of where to buy based largely on the desire to have a better space for their mutts.

Dogs ranked third among the top motivators for rookie buyers -- cited by more millennials than marriage or the expected birth of a child, according to the poll, conducted on behalf of SunTrust Mortgage.

The desire to have a yard for their pups was named as the prime motivator for 33 percent of first-time buyers ages 18 to 36. Only the desire for more living space, at 66 percent, and the chance to build equity, at 36 percent, were identified as more important.

Wedded bliss was rated as the major decision-maker by 25 percent of the respondents, and just 19 percent said their first kid was the game-changer.

“For (millennials) with dogs, renting can be more expensive and a hassle,” said Dorinda Smith, president and CEO of SunTrust Mortgage. “Homeownership takes some of the stress off by providing a better living situation.”

The bond between millennials and their four-legged friends is strong, even among young adults who have never purchased a home. The survey found that 42 percent of renters say that their dog -- or the desire to have one -- is a key factor in their wanting to buy a home in the future.

Fueled by a substantial increase in sales-dollar volume from Canadian buyers, foreign investment in U.S. residential real estate skyrocketed to a new high this year, according to the National Association of Realtors (NAR). Nearly half of all foreign sales were in just three states: Florida, California and Texas.

NAR found that between April 2016 and March 2017, foreign buyers and recent immigrants purchased $153 billion of residential property, which is a 49 percent jump from 2016 ($102.6 billion) and surpasses 2015 ($103.9 billion) as the new survey high. Overall, 284,455 U.S. properties were purchased by foreign buyers (up 32 percent from 2016), and these purchases accounted for 10 percent of the dollar volume of existing-home sales.

Although China maintained its top position in sales-dollar volume for the fourth straight year, the significant rise in foreign investment in the survey came from a massive hike in activity from Canadian buyers. After dipping in the 2016 survey to $8.9 billion in sales (down from $11.2 billion in 2015), transactions from Canadians this year totaled $19 billion -- a new high for Canada.

NAR attributes the notable rise in activity to Canadians opting to buy property in U.S. markets that are expensive, but still more affordable than in their native land. While much of the U.S. continues to see fast price growth, home price gains in many cities in Canada have been steeper, especially in Vancouver and Toronto.

Buyers from China exceeded all countries by dollar volume of sales at $31.7 billion, which was up from last year’s $27.3 billion. Chinese buyers also purchased the most housing units for the third consecutive year (40,572, up from 29,195 in 2016).

The credit scores of approved borrowers are dropping. So does that mean it’s getting easier to purchase a home?

The median FICO score for borrowers approved for agency-originated loans (those backed by Fannie Mae, Freddie Mac and Ginnie Mae) has declined from 742 in June 2016 to 725 in April 2017. The present level represents a new low after the 2008 housing crisis; the previous low was 726 in November 2015.

But this drop in FICO scores does not necessarily indicate that credit availability is improving. An analysis of agency FICO scores by loan purpose shows that the decline was driven almost entirely by refinance scores. Refinance credit scores fell 27 points from October 2016 (752) to April 2017 (725). Purchase FICO scores, in contrast, declined only 4 points (729 to 725).

One explanation for the refinance-driven reduction in FICO scores is that lenders, in the wake of rising rates, are approving more refinance applications from slightly less creditworthy borrowers to maintain volumes amid a shrinking pool of in-the-money refinance borrowers.

In the remodeling version of Murphy’s Law, once you remove a wall or floor, you never know what you’ll find. Ditto for homebuilding, where Murphy has it that once you put a shovel into the ground, you never know what you’ll dig up.

To wit, builders at a South London residential development recently unearthed a rare Roman sarcophagus. Only two other sarcophagi have been unearthed in England in recent years -- one in 2006 and the other 1999.

The excavation revealed a large “robber trench” around the coffin, and the lid had been moved, suggesting that the coffin was discovered and robbed in the past. However, it is possible that only the precious items were removed, and the less valuable artifacts, such as the body itself, still remain within the stone sarcophagus. The find is being taken to the Museum of London for further study.

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Backup Contracts Sometimes Win

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | August 18th, 2017

It’s always best to come in first when it comes to buying a house. But if the seller accepts another buyer’s offer on the house you want, there’s nothing wrong with coming in second.

If you ask the seller to hold your offer as a backup, there’s a fair chance you could move up if the first contract falls through. And make no mistake: Deals fall through all the time.

Perhaps the buyer couldn’t obtain financing, or is unable to sell his current house. Perhaps a home inspection revealed problems the buyer doesn’t want to deal with, or that the seller refuses to repair. Or maybe the buyer didn’t meet the contract’s timelines for financing and inspections.

If the house you want is a short sale, which often takes two to four months to complete, there’s always the possibility the buyer won’t want to play the waiting game.

“Four out of five buyers who make offers on short sales eventually pull their offers because they get tired of waiting or they find another house,” reports agent Rich Cederberg of eXp Realty in Albuquerque, New Mexico.

I bought a house in Florida a few years ago when the buyer who outbid me backed out. She had thought the house was move-in ready, but it wasn’t. So the bank that had foreclosed on the place came to me, because I had requested that my offer be held as a “just in case” backup.

“We are seeing more homes come back on the market” that had contracts that fell through for one reason or another, says Jeannette Karis, an agent with RE/MAX in Spokane, Washington.

Backup contracts are handled differently in different places. So what follows is a basic discussion of the technique. In such situations, you should align yourself with a quality real estate professional, and perhaps even an attorney versed in real estate law.

Sellers often agree to take other contracts as backup offers as insurance -- a safety net, in you will -- should the accepted offer fall through. This keeps them from having to ever again deal with potential buyers traipsing through their homes. Jane Kontoff, an agent with Keller Williams in Concord, Massachusetts, once listed a property for which the buyer backed out one morning; by the afternoon, the house was under contract with someone else, without ever going back on the market.

Indeed, a backup may be a seller’s secret weapon, used as leverage in keeping the buyer from asking too much in the way of repairs or other concessions.

The mere existence of another offer just sitting there, waiting for the first one to crumble, could have a psychological impact on buyers, pushing them to move forward despite issues they’re not comfortable with. After all, a buyer who plays hardball could end up in a stalemate with the seller, who could decide to hold his ground and move on to the next contract.

Asking for your offer to be held as a backup is a smart move: It doesn’t cost anything, first of all. And if the first buyer’s inspection uncovers significant flaws in the property, the seller has to disclose them, and you will know about them without having to pay for your own examination.

But buyers who find themselves in second place must be careful. If you keep looking at other houses (which you should), and find one you like just as well or better, you could find yourself in the precarious position of having contracts on two places. It’s a good idea to put a time limit on the first offer -- say, 30 or 45 days.

At the same time, a time limit puts added pressure on the seller to swim or cut bait with a first buyer who is stumbling around financing or inspection issues. And if your offer happens to be higher, it could put pressure on the first buyer to move forward because he’s getting a good deal.

Backup buyers also should put a “right of first refusal” clause in their offers. That way, you’ll be first in line if the other deal fails, but you won’t be bound to move forward if your situation changes or other unforeseen issues come to light.

In some places, though, sellers have the right to accept backups right up to the day the first buyer closes. And should one of those backups be without any financing or inspection contingencies, the seller has the right to give the first buyer anywhere from 24 to 72 hours to remove the contingencies in his contract. If the buyer doesn’t, that contract becomes null and void and the seller can move on to yours.

Some realty pros advise against backup contracts because when the first contract fails, the value of house tends to decrease, at least technically. As a result, you could be locking yourself into a purchase price that is too high. At the same time, though, in many markets, values are marching higher every day -- so someone whose backup contract moves up to first could be getting a bargain.

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