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Selling on Lots Big and Small

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | September 3rd, 2014

James Hughes is one of a cohort of Americans who still loves owning a large plot of land, no matter how long a commute it imposes. He lives on a 13-acre parcel a full hour's drive from his office.

"Some people just like the sanctuary feel of lots of land," says Hughes, a real estate expert and dean at Rutgers University.

Hughes has no intention of selling his place anytime soon. But if he did, he believes he'd face considerable difficulty finding buyers who value living on a big, high-maintenance property as much as he does.

"Country settings have lost their allure for a lot of older people. They want to live where they can walk to restaurants, movie theaters and museums. They don't want to be trapped in an auto-dependent area," Hughes says.

But just as the sellers of remotely located properties and their listing agents often find it problematic to locate buyers, so do those who own a house in a city setting with only a postage stamp-sized lot or smaller.

The reality is that many current homebuyers want the best of both worlds -- the convenience of in-town living along with a patch of ground they can call their own. This makes it tough for sellers on both ends of the land-size spectrum.

Here are a few pointers:

-- Stress the best features of a city property with a tiny yard.

Maybe both the interior and exterior of your property are diminutive in size. Even so, your place could still be very saleable due to its urban setting.

Does your city home offer easy commuting access to major employment centers? Are neighborhood schools close enough that children can walk? Also, are popular shopping venues just a short distance away? If so, you and your listing agent should talk up these advantages in your marketing materials.

As Hughes says, one way to help potential buyers appreciate your location is to create a colorful map that puts your home in context with neighborhood amenities. This could be placed on an easel on display in your dining room.

You may also want to exhibit photos showing nearby parks and biking trails, which are increasingly important to fitness-minded homebuyers, as well as to those with small children.

"In city parks, there are now more and more jogging strollers in use," Hughes says.

-- Highlight your interior space if your city lot is tiny.

Mark Nash, a longtime real estate broker and author of "1001 Tips for Buying & Selling a Home," says a "surprising number of family buyers can be persuaded to accept the trade-off of a very small lot if the house is loaded with bells and whistles inside." A large kitchen that flows into a high-ceilinged family room would be one such plus.

Another big draw is lots of storage space, he says, "so if you have great walk-in closets and huge kitchen cabinets, don't keep all that a secret."

-- Market your country home through a "broker's open."

Perhaps your property is surrounded by several acres of land in a bucolic area with flowering gardens, yet it's located far enough outside the city that it's hard to draw prospects to your distant location.

If that's the case, Nash recommends you ask your listing agent to stage one or more "brokers' opens" at the place. These are open houses to which real estate agents throughout the general area are invited. They typically feature food, entertainment or both.

"If your place looks gorgeous and gets exposed to many agents, they'll spread the word and bring interested clients by," Nash says.

-- Tout highway access to the country house you're selling.

The cost of gas isn't the only factor that discourages many buyers from considering a property in a country location. It's also the time a long commute can absorb.

"Dual-career couples are more time-stretched than ever. They don't want to get stuck in bumper-to-bumper traffic when they could get back and forth to work a lot faster," Nash says.

But as any long-distance truck driver will tell you, not all roadways are created equal. If your property has easy access to a major highway that's not traffic-ridden, then Nash says you should make sure potential buyers know this.

"You'll never attract hard-core urbanites to a rural location. But you can ease the minds of country dreamers who would consider your place," he says.

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

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Selecting a More Functional House

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | August 27th, 2014

Fewer Americans now seek a "show-off" house than a few years ago, real estate market observers say. That means oversized houses are less popular than in the past, in large measure due to cost.

"Middle-class people are far more price-aware, and that's led to a strong pushback against McMansions," says Karen Rittenhouse, a realty firm owner and author of "The Essential Handbook for Buying a Home."

Through her company, Rittenhouse stakes out and buys eight to 10 houses each month. These are soon remodeled and then typically occupied by young families. The business gives her a keen awareness of what people want in a property.

"Buyers are more realistic now," says Stephen Melman, who oversees buyer surveys for the National Association of Home Builders (www.nahb.org).

John Rygiol, a real estate broker since 1971, says it's wise for all buyers to define their search criteria thoughtfully rather than simply visiting an indefinite number of properties.

"The goal is to find a house that excites you. By first creating a short list of houses to visit, you should get to that goal faster," says Rygiol, who's affiliated with the National Association of Exclusive Buyer Agents (www.naeba.org).

Here are a few pointers for buyers:

-- Use price per square foot as a general guide.

Although mega-sized houses have lost their luster for many buyers, Rygiol says square footage remains a useful metric to judge value when comparing properties.

Rygiol says his home-buying clients are often surprised to find that a large house will often sell for less per square foot than will a smaller place in the same neighborhood on a same-sized lot.

"In popular locations, land costs are rising, which makes lot size an important factor influencing sales price. The lot around a house is the one thing you can't change or replace," he says.

If for any reason the square footage of a home you like isn't shown its listing, Rygiol suggests you check the local property tax assessor's website.

-- Count bathrooms before deciding which homes to visit.

In decades past, it wasn't uncommon for several people in a family to share the use of a bathroom. People simply waited their turn to take their daily bath or shower. But these days, many buyers have lost patience with this waiting game.

Granted, homes in older neighborhoods are likely to have fewer bathrooms than those in recently built subdivisions. But wherever you're looking, he says it's smart to favor homes with multiple bathrooms.

"Even if you personally don't mind sharing, the house you buy will hold its value longer if it has more bathrooms," Rygiol says.

-- Take an aerial view of properties that interest you.

The task of screening homes is much easier for the current generation of buyers than for their parents. That's due to Google Maps, an online tool that lets you pinpoint properties by simply typing in an address.

"This aerial view lets you rule out a house that backs up to something unpleasant,like an industrial park, a busy street, a discount store or an apartment complex," Rygiol says.

What about living across the street from a school? For most buyers, he recommends against it, because "schools generate a lot of traffic from parents dropping off and picking up their children."

You can further narrow your search if you drive by available homes in an area that interests you. That can help you preview homes for exterior appeal, another critical factor in helping you decide which homes to visit.

-- Look for a place with "good bones."

There's lots of hidden value in a house that's well designed and structurally sound. As architects say, such a property has "good bones."

Perceptive buyers can readily sort through available homes to find those with good bones, says Rittenhouse. These properties typically give buyers more for their money than do homes that are superficially appealing but have fundamental issues.

"It doesn't cost much to repaint a room or replace carpet. But the owners of homes with serious issues, like structural flaws, can spend huge sums to remedy those problems," she says.

-- Make lifestyle a primary consideration.

Before the recession, Rittenhouse says some house hunters, particularly those in the trade-up market, allowed ego to determine what they bought. But she says your lifestyle should be a more important selection factor.

"It's silly to buy the showiest house in the neighborhood just to impress other people. You're the one who will live there," she says.

When visiting homes, she encourages buyers to trust their instincts. Upon passing through the front door, the place should give you a feeling of harmony. The rooms and major features, including window sizes, should be in proportion.

Notice especially the layout of any home you're visiting because the floor plan can be influential element in your lifestyle.

For example, an empty-nest couple that often has dinner parties will likely want a formal dining room. But a family with young children will probably make better use of a large family room that flows into a country-sized kitchen.

"You've got to go by your own personal needs," Rittenhouse says.

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

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How to Make Sure the Price Is Right

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | August 20th, 2014

If you offer your home for sale this fall, would you be doing so in a market that favors sellers or buyers? That will depend heavily on the neighborhood where you live, the timing of your sale and intangible factors that even the most seasoned observers can't predict -- like buyers' moods.

"The tea leaves of real estate markets are always evolving," says Mark Nash, author of "1001 Tips for Buying and Selling a Home."

Since the financial collapse that brought down real estate more than a half-decade ago, many homeowners have been happy to see much -- if not all -- of their lost equity restored. Indeed, some neighborhoods have enjoyed sharply rising values in recent years. But in other neighborhoods, values are flattening or even slipping slightly.

This year, one factor that's had a significant effect on home sales has been the tightening of federal regulations on mortgage lenders. These have made lenders more cautious about their underwriting practices, which in turn has made it harder for would-be buyers to qualify for home loans.

But other factors are improving the picture. In particular, the gradually improving employment rate has helped more young families move into homeownership.

"The housing market is currently in pretty decent shape throughout the country. But some pockets of weakness remain," says Eric Tyson, a personal finance expert and co-author of "House Selling for Dummies."

Because real estate values are so variable, it's tough for would-be sellers to peg the right asking price for their property. To avoid guesswork, Tyson says there's no substitute for a listing agent with an ear-to-the-ground knowledge of price trends in your immediate area.

Here are a few pointers for sellers:

-- Avoid overpricing like the plague.

Sid Davis, a real estate broker and author of "A Survival Guide to Selling a Home," says that even in markets where the supply and demand for property are roughly in balance, buyers are very price-conscious.

As Davis notes, some home sellers want to "test drive" the market with an high price during the first couple of weeks of a listing, figuring they can simply cut the price later with no harm done. But he says that's a mistake.

"People who overprice on the front end quickly find that their property gets a stigma at the very time when buyers are most excited about the listing," Davis says.

-- Seek a general idea on local values before engaging a listing agent.

There are now a number of websites that offer free and instantaneous assessments of home values. Among the best known are Zillow (zillow.com) and Trulia (trulia.com).

It's unrealistic to look to such "fast pricing" sites for a definitive answer on the current worth of your place. After all, they typically rely heavily on publicly available data on recent home transactions. And some jurisdictions restrict or delay the release of such statistics. Still, Davis says such sites can be a good starting point.

"At least they'll help you get into the right ballpark on the current value of your house. This should give you a starting point for a pricing discussion with the agents you interview," he says.

Another way to gain a feel for prevailing prices prior to hiring an agent is to attend open houses in your neighborhood.

-- Interview multiple agents before engaging one.

When it comes time to sell, many homeowners instinctively turn to a friend or relative in the real estate business. But Tyson cautions against hiring someone in your inner circle -- even if that person is an active agent in your neighborhood.

"We all want to hear how wonderful our house is and how much it's worth. That makes it very hard for your friend or relative to recommend a realistic price tag," Tyson says.

He says prospective home-sellers should interview at least three agents working in their area before selecting one to list their home.

"Tell each one you want an honest evaluation of both the condition of your property and its present value. Also, make sure you ask each agent to show you the comparable sales they used to make their price recommendation," Tyson says.

-- Review each agent's track record on pricing.

Given that real estate markets are always subject to change, many sellers don't receive their full asking price at the closing table. But if their property was marked accurately from the start, they should still come fairly close.

One way to assess an agent's pricing capability is to look at a few key numbers that reflect his or her track record. If the agent is routinely making accurate price recommendations, there should be relatively little disparity between the original list price and the final closing price, Davis says.

"Sellers shouldn't have to knock down their price just to get their property sold. In most cases, their home should sell for no less than 5 percent under the asking price," he says.

He suggests you ask prospective listing agents to show you "list-to-sale" numbers for all the homes they've sold during the last 90 days.

-- Don't let your pride get in the way of accurate pricing.

Some people assume that real estate agents are motivated to underprice with an eye to quick sales. But Davis says the greater risk is that they'll recommend too high a price in hopes of flattering you into working with them.

"We call that 'trying to buy a listing,'" he says.

Overpricing can be particularly costly to homeowners trying to sell in a community with an excess inventory of unsold properties. But it can also hurt sellers in an area with very few homes on the market.

"It doesn't matter if you're selling in a neighborhood that's hot, cold or lukewarm. Asking way too much can easily kill your chances for a fast and successful sale," Davis says.

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

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