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Spruce Up Before You Sell

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | February 19th, 2014

Sid Davis got his broker's license in 1984. Since then, he's listed and sold around 1,800 houses. Yet he's always surprised when would-be sellers balk at doing even minor upgrades to make their property more saleable.

"They don't want the hassle of making any changes to their house. All they want is to show up at closing to pick up their check," Davis says.

As the author of several books on real estate, Davis says that most sellers fall into one of three categories. Roughly one-third are highly resistant to doing any work on their property and want to sell "as is." Another third will do the minimum necessary to make the sale possible. A final third are highly motivated. Davis prefers this last group.

He contends that sellers reluctant to make even the most essential improvements are acting against their own interest.

For instance, Davis tells the true story of one couple who'd painted the entire interior of their split-level property a glossy, fire-engine red. Despite Davis' pleas, the couple refused to replace their idiosyncratic choice with a more neutral color. Davis walked away, the house languished unsold and eventually went into foreclosure.

Simple inertia explains why some home sellers refuse to follow through on their listing agent's checklist. But Davis cites other reasons, as well.

"If several siblings have inherited a property from an elderly parent, there's often rivalry among the survivors and no one wants to get stuck with all the work on the house," he says.

Divorcing couples who must sell a jointly owned property also find it difficult to agree on what improvements should be done and which partner should undertake the work.

Another reason many sellers resist making much-needed pre-sale upgrades is more basic: lack of money. But for something as important as this, solutions must be found.

Here are a few pointers for home sellers:

-- Redo brightly colored rooms.

Debra Attman, a long-time real estate agent affiliated with the Council of Residential Specialists (www.crs.com), says that she's met a number of sellers so devoted to their sports teams that they'd painted a room or two in the team's colors.

"I've seen deep purple, bright red and even orange and black stripes," Attman says.

Given their enthusiasm for their favorite teams, she says some sports fans vehemently resist the need to tone down their colors to make prospective buyers more comfortable.

Also, she says some female sellers cling to favorite decorator colors -- such as pink and lavender -- that make a property less marketable. Rooms painted in such colors should be neutralized, with a soft taupe, say, before visitors start trooping through.

"You don't want to risk offending someone with your paint colors. There are enough obstacles to selling real estate without doing that," Attman says.

-- Invest in a few minor bathroom upgrades.

Kitchen improvements typically give sellers the greatest payback. But bathroom improvements can also help sellers maximize their return for a small investment.

"It's amazing what you can accomplish in a bathroom for under $1,000. For a very reasonable price, you can get a new vanity, bathroom mirror and light fixtures," Attman says.

She also urges sellers to ensure they remove any mold that's accumulated in and around their bathroom tub or shower. Those who are unwilling to do this laborious job themselves should hire a professional tile service.

"Ask your agent for the name of a good cleaning company that's trustworthy but not too expensive," she says.

-- Increase the appeal of your laundry room.

Attman says that in preparing a property for market, many sellers overlook the potential of a laundry room that also serves as a "mudroom."

"It's too bad this room is neglected, especially if this is the way you enter the house through the garage," she says.

She encourages any client whose laundry room looks dingy to paint it in a light, neutral color and to hire a carpenter to install built-in shelving. Then, too, it's often worthwhile to replace worn flooring and upgrade the lighting.

"A cheery laundry room is a big plus for your sale," Attman says.

-- Complete all upgrades before putting your place up for sale.

Some would-be sellers make the mistake of letting buyers visit their property before their remodeling work is complete. But Davis says it's important to wait until all the work is done, including painting and carpet cleaning.

But, just as soon as the upgrades are complete, you and your agent should feel free to open your place to interested prospects.

"A few folks dislike the smell of fresh paint. But many more react to it as a positive than a negative," Davis says.

-- Don't rule out a short-term loan for minor improvements.

For many sellers, especially those who've had to put their property on the market due to a financial setback, a shortage of cash can be a major impediment to making their home look sharp.

But Davis says it can be folly to put a home up for sale without doing at least some basic improvements, such as polishing hardwood floors or resurfacing worn kitchen cabinets.

"Sure, you could give your buyers a cash allowance to cover the necessary fixes after they move in. But, chances are, they'll also demand you agree to a sacrificial price because the house doesn't look presentable," he says.

Though it's not always prudent for cash-short sellers, Davis recommends that those with a decent credit history and a fair amount of equity consider taking out a small second mortgage or home equity loan to cover basic upgrades.

"Borrowing a few thousand bucks for a short period of time, just until you get that house sold, could be a very wise investment. At the bottom line, that's a lot better than letting your place go to vultures who just want to lowball you," he says.

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

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Selling the Old Family Home

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | February 12th, 2014

The U.S. economy may be improving, but countless young adults are still living at home or counting on a childhood bedroom for backup housing should they prove unable to pay rent on their own.

"Many kids now in their 20s to early 30s are in a period of protracted adolescence. They're intellectually, culturally and technically ready to be independent, but not emotionally or financially," says Bruce Tulgan, author of "Not Everyone Gets a Trophy: How to Manage Generation Y."

As Tulgan notes, the continued dependence of young adult children can sometimes seriously complicate their parents' need to liquidate a home.

"Many parents are scrambling financially themselves. Just to make it possible to retire, lots of people have to sell the family house and downsize to a smaller place," he says.

Even parents with lots of financial resources may find themselves in conflict with their grown children over their desire to move elsewhere in the country or to live abroad.

"On the emotional level, lots of kids want the family home where they grew up to be kept like a museum -- a place where they could return at any time and stay in their childhood bedroom," Tulgan says.

Kathleen Shaputis, author of "The Crowded Nest Syndrome," says even young adults who are employed full-time may prefer to live at home if they don't make enough money to support the sort of lifestyle they enjoyed during their growing-up years.

Shaputis says it's not only young adults living at home who may try to intervene and change their parents' minds about selling the family property. Even those living independently may protest.

"Many young people see the family home as their safety net, a place where they can retreat if they lose a job or can't make it on their own," she says.

But she insists that in most cases, parents should put their own housing and financial needs ahead of their children's desires.

"Parents have got to cut the cord sometime. This is not so much about tough love as reality," she says.

Here are a few pointers for the parents of grown kids who plan to sell a family home:

-- Solidify your plans before informing your grown children.

"It's important to make your plans prior to breaking the news to the kids," says Shaputis. "Parents who let their children in on the decision-making process can expect they'll try to influence the outcome."

But Shaputis says that if your grown children are living at home, or are counting on the family domicile as a fallback, it's only fair that you announce to them your decision on moving with as much advance warning as possible.

"Good advance communication is the key. If you spring the news on your kids, you can expect a backlash that could lead to needless conflict within the family," she says.

-- Help your kids make a smooth emotional transition.

Handling change is more of a challenge for some people than others. Just because your children are young adults doesn't mean they won't experience the sale of the family home as a significant loss.

"Tradition is extremely important to some kids. For example, they might be very unhappy that Thanksgiving dinner will no longer be celebrated in the same place where they lived for years," Shaputis says.

You can help your children make an easier transition emotionally with reassurances that they'll be welcome no matter where you live.

"Tell them you're always going to love them and that they're always going to be your kids," Shaputis says.

-- Assist your boomerang children to find a place of their own.

If your grown children are currently living with you, Shaputis says there are several ways you can help your kids formulate their plans for independent living.

"Brainstorm with them about how they could make it on their own financially, including possibly taking a second job. Help them scan the ads to find a reasonably priced apartment and a roommate to share the rent," she says.

Obviously, the preference of parents to make an immediate move sometimes conflicts with the legitimate needs of their grown kids to stay put in the family home for a defined period.

"If the circumstances warrant it, you may have to delay your home sale for a while to do what needs to be done for the good of the family as a whole," Shaputis says.

-- Recognize that good parenting involves more than housing and money.

Tulgan, who specializes in helping companies understand Generation Y employees, notes that some affluent parents can both make a major housing move and help their kids financially during their formative career years.

Still, Tulgan says parents who must downsize and can't afford to subsidize their kids still have a lot to offer in less tangible ways.

"Encouragement is great, as are guidance and support. Anything you do to help them learn problem-solving and decision-making will help them gain the grit and resilience they need to survive on their own, long-term," Tulgan says.

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

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The First Time Doesn't Have to Be a Doozy

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | February 5th, 2014

Some first-time homebuyers are so fearful of making a mistake that they'll reject a well-priced dream property for an unusual reason, says Ronald Woodall, who runs a real estate brokerage that does 80 percent of its business with first-timers.

"I've been in the business since 1999, and have heard some very strange excuses," Woodall says.

For instance, he recalls one buyer who backed out of a deal for a ranch-style house he loved after spotting a black snake in the backyard, which he took as a "bad omen." Another buyer rejected the townhouse he'd chosen after concluding that its dark-green front door would fade too quickly, thereby requiring repainting.

"I suspect it's often due to fear of commitment," Woodall says of such skittish behavior, adding that Buyers are "overwhelmed at the thought of making so big an investment."

He says an important initial step for first-time buyers involves selecting an agent with whom they feel comfortable.

"It's important to find an agent you really trust and believe to be knowledgeable, not just some cousin who happens to be in the business. To get a feel for the agent, sit down with the person over coffee or lunch. Watch out for anyone who dominates the conversation rather than listening," Woodall says.

Here are a few pointers for first-time buyers:

-- View mortgage pre-approval as a time-saver.

Although the mortgage market has loosened up slightly since the worst of the economic downturn, real estate specialists say it's still crucial that all homebuyers visit a lender's office before shopping for a home. There they can gain mortgage "pre-approval," meaning the lender will check their credit and give them a letter indicating the extent of their borrowing capacity.

"Lenders are more regulated now and you can expect more stringent standards," than during the anything-goes pre-bust years, says Merrill Ottwein, a real estate broker for more than 40 years.

Obtaining mortgage pre-approval also helps ensure that you won't waste precious time visiting properties that are above your price range, says Ottwein, a past president of the National Association of Exclusive Buyer Agents (www.naeba.org).

"People who know very specifically how much they can afford can focus their home shopping and avoid shooting too high. That way, they don't get their heart set on a house that's beyond their means," he says.

-- Look for the strongest neighborhood you can afford.

Nearly all young homebuyers face income limitations when it comes to purchasing property. Even so, Ottwein urges buyers to try for the most desirable neighborhood in their price range.

"It's trite but true that location still rules in terms of long-term property values. That's why it's so key to go on a quest for the best area you can afford," he says.

Even if you can capture a bargain price, buying a big house in a weak neighborhood is the equivalent of buying false gold, according to Ottwein.

"Though you may need to compete for property there, look for an area where homes sell quickly once they hit the market. Communities that are highly valued now should retain their popularity in the future," he says.

-- Look out for any "red flags" about the area's future.

There are several obvious indicators of a neighborhood with a bright future. These include strong public schools and attractive recreational amenities. Other, less apparent signs of strength include easy access to high-quality public transit and quiet streets without a lot of cut-through traffic.

"You never want to be too close to an interstate highway. And you never want to pick a house near a junkyard or a landfill," Woodall says.

Ottwein cautions against buying a place in a neighborhood framed by blighted buildings. For example, you wouldn't want to invest in a home near stores that have gone bankrupt and closed.

"You should also be careful to avoid any neighborhood near lots of vacant land with an uncertain future, unless you've investigated and determined that the land is slated for positive development," he says.

To help avoid a regrettable neighborhood choice, Ottwein suggests buyers explore any area they're considering on Google Maps.

-- Focus on selecting the best available home for the money.

Once you've chosen the most desirable neighborhood you can afford, it's time to search for the ideal home within that community.

Ottwein says your best bet isn't necessarily the largest home within your reach. In fact, you're probably better off buying a small to average-sized house in a sought-after community.

"Surprisingly, as time passes, the small houses on a block tend to increase in value faster than the biggest ones. This is a rule of thumb that nearly always applies," Ottwein says

Are you in the market for a detached, family-style house that should be easy to sell in the future? If so, make sure any property you pick meets certain basic requirements, regardless of its size. It should have an easy-to-navigate floor plan and an eat-in kitchen. Also, if possible, it should have at least three bedrooms and a garage suitable for one to two cars.

What features can you afford to trade off to stay within your budget? Ottwein says the house you choose needn't have a fourth bedroom, high-end "professional" kitchen appliances or an extra-large lot.

Although some first-time buyers are so reluctant to commit that they let the home-selection process drag on, Woodhall says others act too hastily.

"If you're moving from a small rental apartment unit to a house, almost any place you visit will seem impressive. This could cause you to fall in love before you've considered all your options," he says.

To avoid this outcome, Woodhall advises first-timers to visit at least seven to 10 properties in their neighborhood of choice before deciding what to buy. If you're in a hurry, this pre-purchase property tour can occur during a single Saturday.

"Take advantage of the power of comparison to confirm that you've made the best possible choice," he says.

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

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