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How to Sell Smart

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | May 15th, 2013

When the custodial company manager and his schoolteacher wife put their ranch-style house on the market, the place was completely prepped: clean carpets, new kitchen cabinets and fresh paint throughout. Still, the sellers fretted.

"Just one day into the listing, I got a call from the sellers saying they were losing lots of sleep. Right out of the gate, they were frantic their house wouldn't sell and they couldn't contain their anxiety," recalls Sid Davis, the real estate broker who listed the property.

Davis says the couple's worries were baseless. Year after year, houses sell well in their coveted, middle-income neighborhood. Given the strong schools in the area and the excellent condition of their property, Davis knew the couple would also do well on the sale of their place -- a solid 1970s-era three-bedroom house with a big family room and a sizeable backyard.

As it turned out, the couple didn't have long to worry. Their house sold in just two weeks and for nearly their full asking price, allowing them to move forward with their dream move.

Davis, the author of "A Survival Guide to Selling a Home," says it's common for home-sellers to worry and that anxiety is prevalent in strong real estate markets as well as weak.

Real estate prices are rebounding in many communities, and inventories are shrinking. Logically, such positives should help calm sellers' nerves. But many anxious sellers still call their listing agent several times a day in search of reassurance.

Davis says sellers caught in a web of worry only make it tougher to deal with the selling process.

"Fear can make it much harder for you -- not to mention your agent -- to get your home sold," he says.

Here are several pointers for sellers:

-- Resist the urge to pressure your listing agent.

In the early days after his family's ranch-style house went up for sale, the Davis' custodial manager fretted that he should have made more improvements to the property.

"He kept asking me if he should have replaced his carport with a two-car garage, because many neighbors' houses had garages. But I told him he would have recovered only 60 percent of his investment in the garage. Unfortunately, this was just one of his many queries," Davis recalls.

Putting pressure on your listing agent might seem helpful at the time. But it can backfire if the agent feels harassed and starts to resent your non-stop calls and emails, Davis says.

-- Don't view open houses as a panacea.

The longer a home stays on the market, the more likely it is that the owners will ask the listing agent to conduct repeated open houses.

But many real estate pros, such as Dorcas Helfant, a former president of the National Association of Realtors (www.realtor.org), say that open houses provide little benefit.

Instead of pressing your listing agent to conduct more open houses, Helfant says you might consider asking for an "office caravan" to gain tips on making your place more saleable. During such an event, a number of agents from the same office will come through to critique the property and offer low-cost ideas for a better presentation.

Davis says the reason it's rare for homes to sell during a public open house is that few who visit are serious buyers.

"Lots of these folks are just 'looky-loos.' They're curious neighbors or, believe it or not, they're people who make a hobby out of going to open houses every weekend," he says.

-- Face the reality that asking too much is a self-defeating strategy.

Prices are rising currently in many neighborhoods. But Davis says some owners -- who've been sitting on the sidelines waiting to sell for several years -- are now tempted to overprice. This is especially likely if their home has been "underwater," meaning they owe more on the mortgage than the home is worth.

"They get excited and go overboard on price. They think it's a good idea to test the market. But they go too far, and it backfires," Davis says.

Pricing correctly has always been difficult, particularly in neighborhoods where values are changing rapidly. In such areas, a careful review of very recent sales of similar properties -- known as "comparables" -- is all the more important.

"Remembering the economic downturn, buyers are still worried they'll overpay. They're very educated on home values, so you can't trick them into overpaying. If you ask too much, they'll just ignore you and never make an offer," Davis says.

-- Let go of stress with a cleaning blitz.

Davis has sold property since 1984, and during that time he's observed a gradual decline in the cleanliness of homes shown for sale. His explanation? There are more single-parent and dual-income families who are too busy to keep up with housework. Yet more than ever, current buyers want a property that's exceptionally clean and free of clutter.

Homeowners who are anxious their property won't sell would do well to channel some of their nervous energy into an old-fashioned cleaning blitz that covers every inch of their property, according to Davis. That's because showing a home in sparkling condition can give you a competitive edge over less-tidy properties in the same area.

"You get a huge return on your time when you do the work to ensure your home is spotless. Believe me, you'll stand out if your house is super clean," Davis says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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Trading Up, With a Boom

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | May 8th, 2013

She's a high school teacher; he's a petroleum engineer. Both are in their late 50s -- near the front end of the baby boom generation. Their four kids are all married and out of the house. But at a time when many boomers are downsizing, this couple is moving to a much larger, more luxurious property.

"They're buying that 'last hurrah' house -- a place with more breathing room and a better view. They also want vaulted ceilings, a gourmet kitchen, a master bedroom suite on the first floor and a three-car garage," says Linda Steis, their real estate broker.

Steis, who specializes in helping senior buyers, allows that only a minority of boomers -- people born between 1946 and 1964 -- are upsizing. But she says an increasing number in this generation who can afford to live larger are now opting to do so.

"They want a house with all the features they've dreamed about for years. They're looking at the unbelievably low mortgage rates available now and saying 'let's finally go for it'," Steis says.

Despite rising property prices, Steis says her clients -- the teacher and engineer -- found they could afford more house than expected. With a relatively small increase in monthly payments, they're planning to move from a 3,000-square-foot house with four bedrooms to a 5,000-square-foot place with seven bedrooms.

"They're very family-oriented. And although they don't yet have grandchildren, they'll have plenty of space for the kids when they do," Steis says.

Debra Attman, an agent affiliated with the Council of Residential Specialists (www.crs.com), says some baby boomers wish to fulfill a "trophy house" fantasy.

She adds that many people who wouldn't consider buying a big property during the depths of the latest recession are now going forward as the economy improves.

Attman estimates that more than 35 percent of upper- end homes -- those in the top 20 percent of the price range -- are now purchased by boomers with no kids at home.

Though many boomers are still struggling to amass enough money to cover their basic needs in retirement, others are very comfortable financially -- due to savings, inherited money or both.

Given the size of the baby boom population, real estate agents are gearing up to serve the housing needs of both downsizers and upsizers. According to the U.S. Census Bureau, the population of Americans over age 65 is expected to more than double in the coming decades.

Are you a boomer seeking a larger home? If so, these pointers could prove helpful:

-- Look for sellers who are highly motivated.

As with those selling property at any price point, the sellers of high-end homes vary in their level of motivation. Some are much more driven than others.

Some homeowners -- called "discretionary sellers" -- feel no urgency. They will hold out indefinitely until they get the price they want.

In contrast, motivated sellers have serious reasons for wanting or needing to move. Some are facing a financial setback or serious illness. Others are under contract to buy another home and can't afford to carry two mortgages.

Yet another reason for strong seller motivation involves a divorce in which a property must be liquidated to meet a court requirement.

As a buyer, why should you care if the sellers of a property you like are motivated? Because those under pressure are much more likely to bargain in earnest.

It's often quite easy to determine sellers' level of motivation, particularly if they're facing money problems.

"Sometimes there are flags to show that the owners can no longer afford to keep the house up. Maybe the floors are in poor condition, the kitchen cabinets are worn or some appliances aren't working," Attman says.

She recommends that buyers not waste time trying to negotiate with unmotivated sellers. You're much more likely to get a good deal from those who must move on.

-- Don't rule out listings that have gone "stale."

Some motivated sellers are nonetheless unrealistic about the market value of their property. This causes them to hang on to their inflated list price for a lengthy period, discounting it only after they've become desperate.

Sellers usually get a wake-up call that their price is too high only after a lengthy period with no showings or bids, indicating that their property has developed a stigma. Buyers who are the first to bid after a major price reduction occurs can sometimes snag an exceptional deal, she says.

-- Try to make your offer as condition-free an offer as possible.

Are you seeking to buy in an upper-end neighborhood where the demand for available homes exceeds the supply? If so, Attman recommends you try to make your offer as free of contingencies as possible.

Though you shouldn't waive your right to a professional home inspection, you could remove any clause that makes the purchase conditional on your sale of another property. Even stronger as a negotiating tool is a "cash contract" that doesn't require you to get mortgage approval.

Older buyers, especially those who have amassed substantial savings or have inherited money, can sometimes buy a move-up property with cash. As Attman says, this is a powerful bargaining chip.

"Sellers love cash offers, because they're usually quick to close and there's no fear an appraisal will come in low," she says.

-- Keep your eye on your ultimate goal.

Though most boomer buyers are empty nesters, Attman insists it's not irrational for them to buy a big property that will likely prove their last major real estate purchase. Perhaps they still want to fulfill their urge for a gourmet kitchen or a three-car garage to store classic cars, for example.

"They're saying if not now, when will I buy my dream home?" My response is, "If you can really afford it and really want a big house, why not go for it? The big advantage of being older is that you finally know what you truly want," Attman says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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Buying a Home That's Right for Your Family

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | May 1st, 2013

With real estate values on the rebound and competition intensifying among homebuyers seeking to live in neighborhoods with top-rated schools, those with young children are finding it tough to snag an affordable home that meets their kids' educational needs.

"The bidding wars have started in neighborhoods with strong public schools," says Fred Meyer, a real estate broker who sells property near Harvard University, where parents are hyper-focused on quality education.

Meyer, who's been in real estate since 1964, has counseled family buyers through many market cycles.

"Schools should trump every other consideration when you're buying a family home. That's because the world is a lot more competitive now. In the old days, you could make a living without a good education. That's not true anymore," he says.

Dorcas Helfant, a realty company owner and past president of the National Association of Realtors (www.realtor.org), says homebuyers with kids must set priorities when choosing a property.

The rising cost of raising kids is one reason why most young families have a limited budget for housing. After-school care, music lessons and sports programs are all pricey. Then, too, there are pediatricians' bills, tutoring expenses and family vacation costs.

She says it's better for homebuyers with young children to select a community that's reasonably close to their jobs, even if that means accepting a smaller or older home than they could afford in an outlying area.

"If you're spending two hours in traffic commuting each day, your kids aren't going to see enough of you. It's better to be home more than to give your kids a big beautiful house," Helfant says.

Here are a few pointers for homebuyers with young kids:

-- Look beyond test scores when comparing schools.

With students now subjected to an increasing number of standardized tests, most public school systems now post their scores online. That makes it relatively easy to compare schools based on statistics.

But William Bainbridge, president of the SchoolMatch Institute (www.schoolmatch.com), which helps parents select schools, says test scores alone don't tell the whole story. Besides checking scores, he urges parents to visit schools and pose questions to teachers and administrators. That way, they'll get a gut feel for the atmosphere at each school and whether its internal culture supports and encourages its students.

"Also, talk to the parents of other students at the school. Ask them if the school's focus is only on drilling for tests or if they're also teaching the kids problem-solving and how to get along with others," Bainbridge says.

In addition to academics, he recommends you consider your children's special talents and interests and whether they would be served by a prospective school. For example, if your child has a passion for art, you'll want to know if the school has had to lay off art teachers due to budget cuts.

Bainbridge says you'll want to shop widely and compare neighborhoods at different price levels to find schools with the best possible mix of academic and extracurricular activities for your kids.

"There are lots more options these days. Besides comprehensive public schools, you should consider the charter and magnet schools open to your children," he says.

-- Decide whether a big yard is important to you.

As Helfant notes, many parents -- remembering their own happy childhoods in suburban settings where big yards were the norm -- want to replicate that experience for their kids.

"Pets are a huge deal, and lots of people want a big yard for a dog. Family gardening is back. And some suburban folks are even raising chickens in their backyards for the fresh eggs," Helfant says.

But Helfant advises homebuyers with kids to think through the implications of owning a property with a big yard. If you're part of a dual-income family, will you have ample time to tend your property, or to supervise the landscaping crews who do? And how much time will your kids have to frolic in the back yard?

"Lifestyles have changed dramatically for our kids. Parents are spending more time at work. And whether it's soccer or any other structured activity, children are a lot more programmed, too," Helfant says.

-- Find a floor plan that functions well for your family.

Helfant says it's more important for people with children to have a floor plan that encourages togetherness than to own a place with formal living and dining rooms.

"Nowadays, people don't live as formally as past generations. In fact, many people who have a house with big dining and living rooms are re-purposing these spaces into home offices or playrooms," she says.

What works for many families with young children is a full-sized kitchen that flows directly into a large family room or den. For families with two working parents, the advantage of this floor plan is that it encourages everyone to spend more time together. For example, the kids can do homework in the den, near parents cooking in the kitchen.

"With everyone so busy, you want those family moments together. A big area where all are comfortable hanging out is a lot better than having kids holed up in their rooms. This way the kids get more parental involvement," Helfant says.

-- Seek a home with as many bedrooms as you can afford.

Newly constructed houses with lots of square footage typically feature spacious master bedroom suites. Secondary bedrooms, designed for children or guests, are also large, often with their own walk-in closets.

But it's more critical for families to have a sufficient number of bedrooms than to have very large bedrooms and an opulent master suite, says Meyer, a seasoned real estate appraiser as well as broker.

"Over the long run, houses with more medium-sized bedrooms appreciate more than those with just one or two large bedrooms in the same location," he says.

Meyer acknowledges that sharing a bedroom helps children become adaptable. But he says there are also downsides when a child has to share with a sibling.

"As psychologists point out, it's very important to have a bedroom for each child. Every child needs a place to retreat and be alone at times of family stress," he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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