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Pre-Sale Repairs and How to Do Them

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | April 29th, 2015

Home sellers beware: Buyers are much more alert to property defects than they were in the past.

"Repeat buyers are especially wary if they once bought a house that proved to have serious problems after the deal closed," says J.D. Grewell, a veteran home inspector.

Grewell, who's affiliated with the American Society of Home Inspectors, says when he first entered the field in 1972, just 5 percent of buyers engaged the services of a professional inspector, compared with more than 60 percent now.

Eric Tyson, a consumer expert and co-author of "House Selling for Dummies," says it's critically important for sellers to address repair issues prior to hiring a real estate agent and putting their place up for sale.

He says it's always better to remedy your property's issues in advance of your listing than to risk a botched deal due to a problem that could be discovered by your buyer's home inspector.

One reason many sellers are reluctant to undertake pre-sale repairs is that they can be expensive. Another is that many people are unsure how to find reliable contractors, says R. Dodge Woodson, author of "Tips & Traps for Hiring a Contractor" and other home improvement books.

Here are a few pointers for sellers:

-- Consider hiring a home inspector to identify your issues.

Most homeowners can catalog small repair problems that must be addressed. Yet most lack the expertise to detect larger issues such as those involving a home's electrical, plumbing, heating or cooling systems. And they're ill equipped to diagnose a roof that's reached the end of its functional life.

Major problems are best detected by a qualified home inspector. To avoid late-stage revelations, Woodson recommends that sellers arrange for a pre-sale inspection to do an inventory of repair issues. One source for inspectors' names is the website of the American Society of Home Inspectors (homeinspector.org).

"An in-depth home inspection can be costly. But your money is well spent if it protects you from unpleasant surprises that could surface later and ruin your sale," Woodson says.

-- Search widely for the best contractors.

Woodson recommends against random Google searches or the use of Yellow Pages to hunt for contractors. A more dependable approach, he says, is to seek out recommendations from friends, neighbors or co-workers.

"Think of this as a treasure hunt that involves everyone you know," Woodson says.

In addition to those in your immediate circle, Tyson says you may wish to gather contractors' names through the real estate agent you've chosen to list your home.

"Realtors have a lot of dealings with contractors. They'll know if a contractor is doing a lousy job," he says.

Also, contractors may be more attentive to your project if they're aware you could complain to your agent about the quality of their work.

Besides seeking contractors' names from your listing agent, Tyson recommends you consider using an online consumer rating service such as Angie's List (angieslist.com). For a monthly or annual fee, this company provides reviews on service providers in metro areas throughout the country.

-- Seek multiple estimates.

Woodson, who's spent much of his career as a licensed plumber and has also run his own home improvement company, advises homeowners to obtain five estimates for any job expected to cost more than $1,000.

Five sounds like a lot of estimates. But Woodson says experience has taught him that consumers need a range of bids to gain perspective on pricing.

"Generally, you want a contractor in the middle of the pack on price. You can throw away an estimate from anyone who comes in 25 percent or more above or below the others. The company at the top is charging too much and the one at the bottom is probably cutting corners," he says.

-- Scrutinize a contractors' work by visiting other clients' homes.

After you've created a short list of contractors, you might assume that your next step is to ask any company you're considering for references. But Woodson calls this a "pointless exercise."

"What if the reference is someone's cousin or uncle? Such references are hardly objective," he says.

Also, Woodson says it's a mistake to rely on photos the contractor sends you through email.

"You'll never know if those photos have been doctored or if they show work done by a different firm," he says.

The best way to assess the quality of contractors' work is to check out their recently completed projects. Suppose, for instance, that the interior of your home needs a pre-sale paint job and a neighbor has recommended a painter.

"In that case, ask your neighbors if you can come over to examine the painter's work. They might be friendly and welcome your visit. Or they might be too busy to show you around. But either way, there's no harm in asking," Tyson says.

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

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How to Sell a Roughed-Up Home

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | April 22nd, 2015

After a widow in her 80s died in an assisted living facility, it fell to her four grown daughters to prepare for sale the dated cottage where she'd raised her family.

Two of the sisters wanted to let the place go immediately in "as is" condition. Meanwhile the other two -- worried that the passe kitchen would be a problem -- proposed spending a small fortune on upgrades. To resolve the deadlock, the women called in Sid Davis, a veteran real estate broker.

Davis, the author of "Home Makeovers that Sell," recommended a middle course. For only a few thousand dollars spent in the kitchen, he suggested they replace chipped linoleum countertops with mid-grade Corian ones. Also for a low price, they could replace dated metal cabinets with generic wood ones from Home Depot, which they could paint white.

"The kitchen -- which screamed 1940s -- had to be improved. But in the working-class neighborhood where the cottage was located, it was a fantasy to think they'd recoup the cost" of a top-grade remodel, he says.

The sisters were persuaded by Davis' reasoning, and the house eventually sold for full market value.

"When it comes to prepping to sell, everybody must de-clutter, clean and do basic repairs. But lavishing so much on upgrades that you raise your home above neighborhood standards is a colossal mistake," Davis says.

Ashley Richardson, a longtime real estate agent affiliated with the Council of Residential Specialists (crs.com), advises sellers to be attentive to cosmetic issues yet to limit their pre-sale spending to high-priority projects, such as minor improvements to their kitchen, bathrooms and front entrance.

Here are a few other pointers for sellers:

-- Look for an experienced agent for candid advice and guidance.

Those planning to market a home in poor condition are wise to search for a listing agent willing to serve as a project manager, says Eric Tyson, a personal finance expert and co-author of "House Selling for Dummies."

Richardson says a trustworthy agent should give you a to-do list of tasks that are both reasonable and relatively inexpensive.

As the initial step in the agent-selection process, Richardson recommends you interview three candidates, asking each to critique your home and itemize cost-effective projects to make it more saleable.

"Don't be impressed by someone who pours on the flattery. Rather, you want an agent who looks you straight in the eyes and tells you what's real," she says.

-- Seek out assistance for the de-cluttering process efficiently.

Many longtime owners trying to sell a home in poor condition feel overwhelmed by the magnitude of the tasks facing them. De-cluttering is a particularly daunting project for those with health problems.

"What if you lack the energy, time or willpower to take on this large task? In that case, ask friends or neighbors to pitch in," Richardson says.

Davis tells the true story of a busy family that needed to sell the large home where they'd lived for more than 10 years. To speed the purging process, one of the teenagers in the family enticed his basketball teammates to help with the offer of doughnuts, unlimited pizza and soda. The teammates brought along cheerleaders, who also pitched in.

But what if no volunteers step forward? In such cases, Richardson suggests that sellers pay students or others looking for temporary, part-time work.

"Run an ad that asks for help 'pre-packing for a move.' And always be sure to check background references for any new person coming into your house," she says.

Richardson recommends you give your assistants a series of manageable tasks.

"For example, they could pack up the contents of an overloaded bookshelf or a china closet," Richardson says.

-- Help buyers envision how good your home could look.

Though many owners of rundown properties lack the funds for major improvements, Richardson says it's crucial that they make their place at least minimally appealing.

"Before going to see a house in person, nearly all buyers will preview the property online. If the place doesn't show well on the Internet, they'll never go out to see it," she says.

Besides clearing out clutter, you'll want to remove dated-looking furniture and drapes that can make your place look crowded, dark and dreary. In their place, your agent might lend you a few attractive pieces.

"Agents often have a stock of good furniture, rugs and lamps that their sellers can use during the showing period," Richardson says.

Besides adding cosmetic touches, she says those with limited funds may wish to provide visitors with mock-ups and contractors' estimates for needed improvements.

"You can always assume that buyers need help to visualize how great your home could look with the upgrades you can't afford," Richardson says.

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

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Getting Your Priorities Straight When Buying a Home

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | April 15th, 2015

Before selecting a home to buy, many people spend hours wrestling with less-than-perfect alternatives. Their struggle focuses on finding a house with all the features they want without exceeding their budget.

"For a lot of people, the choice is between a house with more space ...in a suburban setting versus one closer to a city and their workplace," says Ashley Richardson, a long-time real estate agent.

The conflicts are especially intense for buyers with school-age children who think that suburban schools are better than urban ones.

"Almost all buyers shop first by school district, even if they don't have kids. That's because they know good schools lead to stronger property values," says Richardson, who's affiliated with the Council of Residential Specialists (crs.com).

But what about the trade-offs for those who opt for a suburban home? Lengthy commutes can be expensive, stressful and time-consuming. Are a larger house and a better school worth that time and unpleasantness?

Tom Early, a real estate broker who's spent most of his career working solely with homebuyers, estimates that just 15 to 20 percent of older buyers will accept a smaller, dated house to gain closer access to their workplace. But he says younger buyers are increasingly city-focused and have a low tolerance for long commutes.

"Though most of these young folks grew up in the suburbs, they consider suburban living really boring and desolate," says Early, a former president of the National Association of Exclusive Buyer Agents (naeba.org).

Fred Meyer, a veteran real estate broker who sells property near Harvard University, says there's no one right answer for homebuyers who face incompatible priorities.

"Where you live is a very personal matter. So don't worry about what other people think of your priorities," Meyer says.

Here are a few other pointers for buyers:

-- Try out a potential commute before you commit.

Alan Pisarski, author of the "Commuting in America" book series, has done extensive work documenting the time Americans spend on the road. His research reveals that average commuting times have increased every year since 2004.

In high-cost areas especially, more people now face what Pisarski terms an "extreme commute," which means it's both lengthy and grueling. They do this because they can't afford the large home they want closer to work.

"I call this 'driving to qualify,'" he says.

Pisarski urges those considering a move to a far-flung suburb to do a test drive of the prospective commute during the rush-hour periods. They'll get a false picture if they try the drive on Saturday or a Sunday.

-- Notice the major difference in floor plans between old and new.

As Early points out, many houses built during the big construction surge following World War II are laid out very differently than those built in recent decades.

The differences are most evident in the core of the house. Though many newer homes have a tiny living room -- or none at all -- they often feature an oversized "great room," which involves a spacious and well-equipped kitchen that flows directly into a big family room. Most people aren't really comfortable with the kind of small or narrow kitchens found in older houses, he says.

Unlike Early, who relies on his microwave and rarely cooks, many homebuyers refuse to give up a showplace kitchen.

-- Seek the services of a highly qualified home inspector.

Early says that those considering the purchase of an older property in a close-in neighborhood should be especially careful when selecting a home inspector.

"You have to face the reality that older houses are more likely to have serious defects in terms of their plumbing, electrical and structural systems," he says.

Early suggests you look beyond the names of inspectors provided to you by your real estate agent. One source of referrals that he recommends is the American Society of Home Inspectors (homeinspector.org).

"Create a short list of inspectors and then be conscientious about calling and asking for references from past clients," he says.

-- Take account of the full costs of a "teardown" project.

Buyers who have a tough time deciding between an old house in a close-in community and a roomier one in an outlying suburb often ponder a third option: building a new home in an established part of town.

But given that empty lots are typically rare and costly in desirable neighborhoods, this plan usually means they must tear down a home to get the lot they need for their new house. Teardowns are occurring with increasing frequency in many areas where land values are high.

If you're sufficiently well off to do a teardown, this plan could give you the best of both worlds: a new house with direct city access.

But Early warns that a teardown can prove far more expensive than many people anticipate. Not only must you pay for the original house and lot, but you also have to cover the cost to build the new property. In addition, unexpected expenses often surface before the project is over.

"The hidden costs for a teardown can rob you blind," Early says.

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

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