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Sellers Should Do the Prep Work

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | January 8th, 2014

After spending more than two decades selling RVs, a sales manager in his early 60s wants to retire, buy a big motorhome and take the cross-country trip of a lifetime. To make that dream possible, he must first sell his suburban house -- a plan he hopes to accomplish this spring.

But like most would-be home sellers, the RV salesman has lots of prep work to do, says Sid Davis, the real estate broker representing him. He must de-clutter, clean carpets, paint and arrange for a myriad of small repairs.

"It's always an uphill battle making a house market worthy, especially if you've lived there a long time and have lots of junk," says Davis, author of "Home Makeovers that Sell" and other books on real estate.

Of course, not all sellers have the luxury of ample lead time. But he says sellers who do have sufficient time should take full advantage.

"When you have so much money at stake, why risk razor-thin timing? Remember, too, that selling a house in "as is" condition puts you at a tremendous disadvantage," Davis says.

So long as the economic recovery shows sustained strength, Davis predicts that this year's spring housing market should remain a positive one for sellers in many areas. Still, he says those who prepare now to jump-start an early spring sale will probably fare better than those who delay.

Here are a few pointers:

-- Engage a listing agent as early as possible.

"Ideally, you'll start prepping your property at least three months before you expect to list," Davis says.

Once you know you're definitely going to move, he says it's prudent to begin interviewing prospective listing agents and then to promptly select one to represent you.

"People who have enough time to get all their ducks in a row and use it wisely have a huge advantage over those who start late," Davis says.

One reason to start early is to give your listing agent enough time to help you strategize on the best steps to maximize your sale, whether these involve replacing a worn kitchen floor or rehabbing a deck. Also, the agent can exercise more care in selecting the right listing date.

"People who try to line up contractors to squeeze in their job at the last minute are more vulnerable to exploitation and can't be as picky about who they hire," Davis says.

-- Request data on selling times.

Suppose you're an IT specialist for a national consulting firm who's accepted a promotion in a faraway state. You have seven months to relocate. How can you estimate the time needed to go from list to sale?

Dorcas Helfant, a former president of the National Association of Realtors (www.realtor.org) recommends you ask your agent for statistics on the average selling times for homes in your neighborhood.

"Keep in mind that the only numbers that are relevant are those for your own community. National statistics don't matter," Helfant says.

Take these local numbers, known as "days on market," and chart them over a six-month period.

"If your market is cooler than before, you'll want to give yourself at least one extra month beyond the average selling time to ensure a smooth transition," Helfant says.

-- Begin your packing process early.

In his experience, Davis says a majority of home sellers don't see the point of packing early for their move.

"Let's face it, we humans usually wait until the last inning to mobilize. We're a deadline-oriented species," he says.

Besides painting and repairs, nearly all sellers need to go through an exhaustive clearing-out process to ensure their property doesn't seem crowded. Your first step, Davis says, should be to remove any excess furnishings, like a large recliner or an oversized china cabinet. Then box up smaller items and position them neatly in your garage or a rented storage unit.

"It's very easy to underestimate how long it takes to go through all your personal things ... trust me, you won't miss all that extra stuff you've packed away," Davis says.

-- Give yourself extra selling time when moving to a brand-new home.

These days it's uncommon for a builder of new homes to sign a sales contract with a prospective buyer that's conditional on the sale of the buyer's property. This is called a "contingent contract."

"If the builder has a hot subdivision, he doesn't want to mess with contingent buyers," Davis says.

Consequently, those who seek to buy a place in a popular new subdivision take the gamble that they'll sell their current property before the builder has completed the new one. But that's better than the alternative.

"Buyers who don't have a contingent contract and can't afford to carry two homes at once are putting themselves in financial jeopardy. If they can't go forward with the new home purchase in a timely way, they could both forfeit their deposit and lose their dream home," Davis says.

Because it can take months to construct a house, some new-home buyers wait longer than they should before trying to sell their current property, according to Davis.

"The sales contract may let the builder finish construction late but give you little grace time to get your old place sold," he says.

Many listing agents urge sellers who intend to move to a brand-new home to be extra cautious in estimating how long they'll need to sell. It's better to be ready to move early, they insist.

"Granted, if you sell earlier than expected you might have to take a short-term rental or move in with family temporarily. But the hassles of interim housing are a lot better than the disappointment of surrendering your chance for a wonderful new house," Davis says.

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

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How to Buy an Overpriced Home

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | January 1st, 2014

With the economy on the upswing, most homebuyers aren't in the catbird seat of a few years ago. It seems like ancient history when buyers could practically dictate terms to sellers. Now the tables are turned in many, though not all, areas.

"Sellers clearly know they're in a much stronger position now," says Fred Meyer, a veteran real estate broker who sells property around Harvard University.

One manifestation of seller strength is that the owners of special properties, including homes with stunning views or special historical significance, are willing to wait it out rather than compromise on price.

As a rule, and even in strong sellers' markets, homeowners who list their property for an unreasonably high price are eventually punished for their greed. However, the owners of some rare and truly exceptional homes can sometimes get away with pricing high and refusing to bargain.

One example involves an aeronautical engineering professor who owned an elegant beachfront property on a lake in a suburban enclave where lakeside properties were scarce. The professor and his wife, a social worker, had vague plans to retire but were under zero pressure to move. They waited for more than a year with no price cuts yet ultimately found buyers willing to pay their high asking price.

"Even in a strong sellers' market, that wait-and-see strategy only works for the owners of houses that are truly extraordinary in some way -- such as for their architecture or unique setting. An overpriced house that's not exceptional will just languish unsold until steep discounts are taken," says Meyer, who's a real estate appraiser as well as a broker.

Do you love a home you believe to be overpriced? If so, these pointers could prove helpful as you seek to shape an offer:

-- Update yourself on local property values.

The asking price isn't always a reliable measure of a property's value, says Eric Tyson, the co-author of "Homebuying for Dummies." Rather than relying on the owners' opinion of their home's worth, he suggests that buyers increase their own knowledge of neighborhood values.

Prior to offering a bid, Tyson says buyers should ask their agent to prepare a "comparative market analysis." To do this, the agent should gather data on transactions that sold recently on homes in the immediate area. Then these should be adjusted -- adding value, for instance, if the place you're seeking to buy has a larger yard than the others.

Your evaluation of neighborhood sales should yield a general estimate of the value of a property that interests you. Then, if you're opening with a low starting offer, Tyson encourages you to attach comparable sales data to support this. This is usually a better approach than complaining that the sellers are asking too much --criticism that could backfire if they take it personally.

-- Try to find out about the owners' level of motivation to sell.

Not everyone with property on the market wants to sell immediately, says Tom Early, a real estate broker and former president of the National Association of Exclusive Buyer Agents (www.naeba.org).

"(Some) sellers ... are really just testing the market to see if their excessive expectations can be met," he says.

How can you find out what's caused the sellers to put their place on the market? Often your agent can obtain answers by simply asking the sellers' agent direct questions, according to Early.

How can you get less-than-eager sellers to bargain? One idea is to volunteer a late closing date in exchange for a price cut on the property.

-- Don't be too hasty when responding to a seller's counter offer.

Apart from the exceptions, most sellers are eager to move promptly, particularly if their home has gone unsold for weeks. But that doesn't necessarily mean they'll let their property go without a struggle over price.

"Nowadays, in neighborhoods where real estate has yet to rebound, it's not unusual for negotiations between buyers and sellers to go for several rounds before an agreement is reached. If you really want the house, it's worth pursuing the process, so long as the sellers are bargaining earnestly," Early says.

As Early notes, most sellers have their egos tied up in their property. That can cause them to make unreasonable counter offers, even when they have an urgent need to sell. Should you respond to such a challenge on their terms? Not necessarily, says Early. In fact, failing to answer immediately could be an effective way to cause them to become more realistic. He calls this tactic the "walk-away."

Temporarily disappearing from negotiations won't cause unmotivated sellers to yield on price. But it might prompt motivated sellers to take a serious second look at your latest offer, especially if their property has sat unsold for a long time and they've received no other bids.

-- Recognize the signs of inflexible sellers.

Early, who's sold homes for more than two decades, says he can tell immediately when his clients become enamored of a home.

"Their eyes light up and their excitement becomes obvious. For most people, home selection is an incredibly emotional thing," he says.

Just as some people believe in a "one and only" in marriage, so others believe in a "soul mate" home.

But what should you do if the owners of a home you love demand a price you know to be excessive and all attempts to negotiate seem futile? In that case, Early recommends that, hard though it is may be, you let go of the property and begin seeking another one immediately.

"Don't fret about your 'lost' house. Even today, with the real estate recovery well underway, chances are you'll find an even better house for a fair price," Early says. (To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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Pointers for Prepping Your Home for an Involuntary Sale

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | December 25th, 2013

Are you obliged to sell your home due to an involuntary job transfer to a faraway state? If so, you might find yourself resisting your real estate agent's advice that you rid your place of excess belongings before it's shown to homebuyers.

Still, Eric Tyson, a personal finance expert, says it's critical that you take on this arduous challenge in order to improve your odds of a timely and successful sale.

"These days everyone spends so much time indoors on their computers or other electronic screens. Due to all those inside hours, we want open, spacious houses with lots of natural light -- not a place that seems crowded because it's filled with clutter," says Tyson, co-author of "House Selling for Dummies."

Most homeowners are still living in their home while it's on the market. Nevertheless, he says it's imperative you remove a large volume of belongings to make your property appealing.

What are some of the items that pile up in typical households?

Kristin Bertilson, the owner of a professional organizing company, says her clients -- including many involved in an involuntary home sale -- have closets filled with seemingly endless clothes and accessories. Also, numerous kitchen gadgets cram their countertops and toiletries crowd their bathrooms.

"Lots of people cling to many sentimental things -- including piles of greeting cards sent to them from loved ones and their children's artwork," Bertilson says.

For home sellers, Tyson says the best plan is to cull through all their accumulations before their property is shown for sale, packing away anything they can live without until they move.

Some unneeded items can be sold -- if not at a neighborhood sale, then perhaps on eBay. And discards contributed to charities -- such as the Salvation Army or Goodwill -- could yield a tax deduction.

To those who are unconvinced it's worth the time to purge themselves of excess belongings before they move, Tyson suggests they call a moving company for an estimate on the cost of hauling their extra belongings to the new location.

"It can be shockingly expensive to pay movers. Even if your company is helping to pay for the move, you're still going to get hit with a lot of extra costs," Tyson says.

Here are a few pointers for home sellers:

-- Equip yourself with all the gear you'll need for the job.

Martha Webb, a home-staging specialist and author of "Dress Your House for Success," says an effective de-cluttering program starts with the right equipment.

To stash away items you've decided to keep for your next home, she says you won't need fancy storage containers. Cardboard boxes are fine. But ideally you should use boxes of uniform size -- like the "bankers boxes" sold at office supply stores -- that can be stacked neatly.

After pre-packing the items that will go to your next property, Webb says you should place them out of sight, preferably in a temporary storage unit. Alternatively, if you aren't willing to pay the rental cost for a storage unit, place the boxes in your garage.

"Buyers will be more understanding if you have boxes stored neatly in your garage than if they're stashed in your living space. But they may still question whether there is enough storage space in your property," Webb says.

-- Tackle just one room at a time.

Webb says it can be nerve-racking to go back and forth from one room to another, trying to clear clutter from multiple fronts simultaneously. Rather, she advises you to take on just one room at a time -- starting with your master bedroom and clearing out closets first.

"Buyers who come to look at your house will definitely open every closet door in your bedrooms to look inside, just as they'll open every drawer and cabinet in your kitchen. So all these storage areas must be free of clutter," she says.

-- Use tact when clearing out your kids' bedrooms.

In many cases, young children feel anxious about the moving process -- and all the more so if the family is making an involuntary move. Their anxiety usually starts when their belongings must be packed. Because of this, Webb says they need reassurance that their most treasured possessions will still be available to them once the family has moved.

She says one way to help relieve children's fears is to involve them in choosing which of their items will go to the next home.

"Let the kids select their favorite toys and books and then give them markers to decorate at least one box that can stay in their room until the house is sold," Webb says.

-- Give priority attention to your kitchen.

In many homes, the kitchen now serves as the center of family life. For that reason, you'll want to impress buyers that your kitchen is large enough to meet their expectations.

"Lots of kitchen storage is a huge selling point for any property. The last thing you want is for buyers to think your kitchen is so crowded that there will be insufficient space for all your dishes and food," she says.

She recommends that sellers remove all superfluous items from both their kitchen countertops and their kitchen storage areas. Then thoroughly clean all the cabinets, replacing only those pieces you truly need for regular use. Everything else should go to storage or a charity.

-- Remove any controversial or questionable items.

Most families have possessions in their home that they resist removing -- especially if they're involved in a move they'd rather not make. But Webb says that as a home seller, you don't want anything visible that might distract attention from the positive attributes of your property.

For example, she urges you to remove any items that convey your political or religious opinions -- or even that reveal which sports teams you favor.

"Otherwise, in effect you're asking buyers to agree or disagree with your opinions. And I can almost guarantee that if they disagree, they'll reject your house," Webb says.

-- Look forward to the cathartic feeling that comes from purging.

Obviously, few people relish the demanding chore of sorting through years' worth of possessions. And this task can be especially unpleasant if you're being compelled to move involuntarily -- for example to accept a job transfer or lose your job altogether.

But Tyson says many who've gone through any household downsizing process discover -- often to their surprise -- that they feel less burdened with fewer possessions to manage.

"With less clutter, you live in a less stressful environment. And that can feel very refreshing," he says.

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

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