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How to Sell in a Buyer's Market

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | February 8th, 2017

In many popular neighborhoods, starter homes continue to sell at a healthy pace. After all, such available properties are in extremely short supply in such areas. Still, there are signs that, relatively, buyer interest is now weaker in some expensive communities.

It’s all about supply and demand.

“The dismal number of listings in the affordable price range is squeezing prospective first-time buyers the most,” says Lawrence Yun, chief economist for the National Association of Realtors (www.realtor.org). But he notes there are many more homes available in pricier communities.

“In fancy neighborhoods, home prices have been escalating for so many months that some high-income people are delaying a purchase for the time being,” says Tom Early, a real estate broker and former president of the National Association of Exclusive Buyer Agents (naeba.org).

Early says that while there are no magic bullets for sellers of homes in an unfavorable market, there are a few steps you can take to speed up the process.

Here are a few pointers for sellers:

-- Hire a professional “stager” for a minimal level of advice.

Staging is the art of transforming a property so potential buyers can visualize themselves living there. Properly done, staging accentuates a home’s attractive features and minimizes its drawbacks.

Working under a full-service contract, most stagers will provide an array of services. They’ll remove excess furniture and personal items and rearrange the remaining pieces. Often, they also supplement the owners’ furnishings with eye-catching accessories of their own.

Unfortunately, the cost of hiring a professional stager for a full contract menu of services can run $500 or more and exceed the amount many home sellers can afford, says Michelle Minch, the owner of a staging company called Moving Mountains Design (movingmountainsdesign.com).

But Minch says for a much lower price, perhaps around $100, budget-conscious sellers can obtain an abbreviated consultation and receive pointers they can execute themselves.

“For just an hour or so of consultation time, a good stager can tell you about furniture arrangement and also recommend mild, pleasing paint colors for your walls. You’ll get a road map for making your house move-in ready,” she says.

How can you find a competent stager who will work on an “a la carte” basis? Minch suggests you visit the website of the Real Estate Staging Association (realestatestagingassociation.com). Look for stagers in your area and be sure to check out their websites for examples of their work before you give them a call.

-- Hold a home-selling party with friends.

Sometimes, the owners of a property that’s lingered on the market will pressure their listing agents to conduct several public open houses. That way, they hope to increase their odds of selling promptly.

But traditional open houses rarely lead to a sale, says Lisa Atkinson, an agent affiliated with the Council of Residential Specialists (crs.com). That’s because these events typically attract few qualified home-buying prospects and are more likely to draw curiosity seekers. Most serious buyers see homes on an appointment basis, during a tour led by their agent, she says.

A better way to ignite renewed interest in your place is to throw a “home-selling party,” inviting your close friends and relatives. Such a party is more likely to lead to a sale. That’s because those close to you will be more motivated to promote the sale of your home than are strangers.

“In any case, the party can help revive your excitement about your home-selling goal,” Atkinson says.

-- Request that your listing agent spread the word about your property.

In extremely strong seller’s markets, well-priced properties practically sell themselves and listing agents have relatively fewer marketing duties. But in posh neighborhoods now, the well-honed marketing skills of an experienced listing agent are critically important.

One key marketing skill your listing agent can use is to “talk up” your place to other real estate agents who have home-buying clients of their own, Atkinson says.

“Strong agents will respond to your request to step up informal marketing of your place by spreading the word. They’ll make personal phone calls to other agents. They’ll also take flyers about your house to their professional meetings and hand them out. This way you should get more people over to visit your house,” she says.

“By alerting other agents to your property, your listing agent will enhance your chances of finding a buyer,” Atkinson says.

-- Take full advantage of blooming plants.

It’s nice to have fresh-cut flowers on display throughout your home’s interior. But if average market times in your neighborhood are quite long, the cost of keeping fresh flowers in your home can add up to a substantial sum.

One less expensive alternative is to display flowering, potted plants indoors and then, as the temperatures warm, to later install such blooms in your outdoor gardens, especially in the front of your house.

The color of bountiful, blooming plants is a great way to make any home more attractive, according to Minch, the staging company owner.

“Correct pricing is tremendously important. But every house that’s up for sale is an entrant in a beauty contest. And prettier is always better,” she says.

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

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Take the Stress Out of Applying For a Mortgage

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | February 1st, 2017

No matter your income or wealth, when you’re buying your first home, the mortgage process can seem bewildering.

“With so many moving parts, the process is nerve-racking for many folks not in the finance field. First, you’re under pressure to gather all your personal financial information. Then you worry your loan could fall through, which could cost you the chance to acquire your dream home,” says Keith Gumbinger, a vice president at HSH Associates, which tracks mortgage markets throughout the country.

Another factor that’s stressing buyers is recent uncertainty over the direction of mortgage rates. If rates rise significantly before their deal closes, buyers fear they could lose the ability to afford the house they’ve selected.

“Rates have been very volatile in recent weeks and could be more so as 2017 progresses,” says Gumbinger, who’s worked as a mortgage market analyst since 1984.

Given the difficulties facing first-time buyers, he says that finding a mortgage lender who offers personalized service can be very helpful.

Here are a few tips for buyers:

-- Initiate your mortgage search early.

The mortgage market is always evolving. With mortgage rates still hovering near historic lows, the overwhelming favorite choice of most homebuyers is a fixed-rate mortgage. Still, new products are constantly developing to appeal to a divergent set of buyers.

“Keep an open mind and explore your mortgage options,” says Sid Davis, a veteran real estate broker and author of “A Survival Guide for Buying a Home.”

Most mortgage innovations involve adjustable-rate mortgages of one type or another. But they can differ dramatically relative to their names, terms and conditions.

“There are many puzzling twists and turns, especially with adjustable loans. That’s why it’s critical you know what you’re getting into before you commit to any mortgage product, fixed or adjustable,” Gumbinger says.

He says that both first-time buyers and those with more experience need as much lead time as possible to educate themselves on mortgage basics, to cull through alternative home loan choices, and to compare lenders and rates.

-- Look for a lender willing to get you started with tutorials.

Gerri Detweiler, a consumer advocate and author of “The Ultimate Credit Handbook,” encourages first-time buyers to seek out a mortgage lender who will instruct them on the intricacies of home loans.

“A good lender won’t think it unreasonable to spend a couple of hours teaching you the basics and helping you deal with potential flaws on your credit reports,” says Detweiler, who offers free credit pointers on her website, www.gerridetweiler.com.

But how do you find a sympathetic lender willing to usher you through your first or second attempt at home finance?

Gumbinger says real estate agents are usually a good bet for sound advice on finding a qualified lender. But he says you should look well beyond the suggestions of agents.

“For referrals, I recommend you use what I call the Satisfied Customer Index, also known as friends and family,” he says.

-- Go into the lender’s office fully prepared.

To maximize the use of your time and that of the lender you’ve chosen for your preliminary tutorials, there’s no substitute for gathering key documents in advance of your meeting. Ideally, these should include recent pay stubs, your latest W-2, a couple of years’ worth of federal tax returns, and bank account statements.

Using these documents, your lender should be able to quickly calculate your top borrowing limit and also assess your eligibility for various lending programs.

“Well before you’re ready to apply for a loan, you can bring the whole mortgage picture into much clearer focus by supplying basic documents related to your financial life,” Gumbinger says.

-- Determine your credit standing to make sure you get the best possible rate.

Under federal law, you're entitled to one free credit report each year from the three largest credit bureaus: Equifax, Experian, and TransUnion. You can easily request these online at www.annualcreditreport.com.

Besides your credit reports, you'll want to access your credit scores. Such scores, which draw on data from the credit bureaus, seek to provide lenders with a quantitative measure of a person's credit risk. Most lenders still use FICO scores, pioneered by the Fair Isaac Corp. In most cases, you'll need to pay a fee to obtain your credit scores. One way to get them is through the Fair Isaac website: www.myfico.com. You can also receive credit scores through the three large credit bureaus.

Once you’ve chosen a property you want to buy, it’s time to get serious about making your mortgage application. And with your credit scores in hand, you can readily begin the process of comparison shopping on rates.

As Gumbinger says, you may wish to start the rate-shopping process with the lender who tutored you in the basics of home finance.

But he strongly suggests you extend your rate hunt well beyond the first lender you consulted. And he recommends you include community banks and credit unions in your search.

“It sounds like overkill. But it’s smart to take the time to make enough extra phone calls to collect at least a dozen rate quotes before going forward with a formal mortgage application,” Gumbinger says.

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

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How to Sell a High-End Property

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | January 25th, 2017

The house looked like a castle -- a French provincial on a large yard in a cushy gated development. But its owners were exhausted by their long commutes and wished to move closer to their jobs.

Unfortunately, it took them more than a year and two price cuts to finally sell their mansionlike property. This didn’t surprise their listing agent, Ashley Richardson, who often represents the owners of such high-end homes.

“The luxury market is always a limited market. That’s because there are relatively fewer buyers with enough income to support payments on an upper-tier house,” says Richardson, who’s affiliated with the Council of Residential Specialists (www.crs.com).

Other factors are also contributing to the situation. “In some big costly markets, there’s been a lot of new construction in the premium segment,” says Ralph McLaughlin, the chief economist for Trulia (www.trulia.com), the online real estate service for buyers, sellers and renters.

He advises those with a luxury home to sell to make sure they locate a listing agent with in-depth knowledge of their local turf -- someone who has the capacity to price accurately and in accord with neighborhood market conditions.

“The last thing any homeowner should do is price too high. An overpriced house can linger on the market for a long time, making people wonder if there’s something wrong with it,” McLaughlin says.

Here are a few other pointers for luxury home sellers:

-- Don’t let hubris affect your pricing decisions.

If you're proud of your house and the luxury features it offers, you may be tempted to set your asking price higher than most of the homes in your immediate vicinity.

But Dorcas Helfant, a veteran real estate broker-owner, warns against doing so, lest you scare away price-conscious home shoppers.

“Your first step is to determine the current market value of homes with the same floor plan in your neighborhood. Then go no higher than the top of that price range,” says Helfant, a former president of the National Association of Realtors (www.realtor.org).

-- Select a listing agent skillful in creating strong visuals.

“Anyone who owns a home in model condition should be doubly sure it looks good in all its online advertising and marketing materials,” Helfant says.

As Helfant relates, a growing number of agents have become skillful users of digital photography and can now produce the kinds of pictures sellers need to appeal to prospects.

“Before buyers tour houses, they’ll go online and maybe also go to their agent’s real estate office to pre-screen photos of available listings on a wall-mounted monitor. If your house doesn’t show well in pictures, many buyers will simply decline to go see it,” Helfant says.

Before photos are taken, she says all sellers, including the owners of premium properties, should be attentive to the clutter in their rooms.

“Everything shows in photos. So you’ll want to remove every bit of clutter, including those decorative magnets on the refrigerator and the dish towels hanging over the oven,” Helfant says.

-- Consider a community-wide open-house event.

Many real estate agents downplay the value to sellers of open houses, saying they rarely attract serious buyers. But Helfant says there’s a way to maximize the impact of a public open house conducted for your premium property: encourage other sellers in the neighborhood to hold open houses ON the same day, thereby increasing your potential draw.

She suggests you ask your listing agent to call the other agents representing all the available listings in your neighborhood and try to coordinate your open houses.

“With more traffic, you have a better chance of drawing in serious buyers,” Helfant says.

According to Helfant, a neighborhood-wide open house event can be especially helpful to the sellers of a premium property, which will stand out in comparison with other available homes.

-- Remain steadfast on your selling plans.

Understandably, the owners of homes in showcase condition often have mixed feelings about letting go of a property they’ve babied through the years of their tenure. This is especially likely in hot neighborhoods where sellers figure they can afford to delay.

But before letting emotion cause you to back off from your selling schedule, it’s important to look at the big picture of your personal and financial plans to see if it would be in your interest to postpone your sale.

Tom Early, a past president of the National Association of Exclusive Buyer Agents (www.naeba.org), says owners who plan to sell and then make a move-up purchase to a still costlier property may wish to accelerate their timing to avoid the potential for higher mortgage rates.

“We’ve been slumbering for a while with very comfortably low mortgage rates. But with a new administration in Washington ... you can never be sure what will happen with the economy and how that could translate to higher rates,” Early says.

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

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