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How to Find the Right Contractor

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | December 27th, 2017

Do you plan to sell a home in a torrid real estate market -- a place where prospects line up with offers? Are buyers there so eager they’re willing to waive the right to a home inspection?

If so, you might assume you could take a passive approach to the selling process and do just as well as neighbors who invest time, energy and money to present their place for sale in the best possible condition.

But Dylan Chalk, a home inspector who’s done 5,500 inspections since entering the field in 2003, says homeowners who take a proactive approach to selling fare far better than those who are passive, even in very hot markets.

“Just because your buyers don’t hire an inspector doesn’t mean they won’t be disappointed later when they discover problems with your property. ... If buyers run into problems later, that could ruin an otherwise smooth sale,” says Chalk, who’s affiliated with the American Society of Home Inspectors (homeinspector.org).

“You want to take control of your sale, not have it take control of you,” says Chalk, author of “The Confident House Hunter,” a book for buyers.

It’s true that an experienced listing agent can quite easily identify minor repairs that need to be done before your place is shown for sale. But it often takes the expertise of a home inspector to detect larger issues.

Chalk is a strong advocate for what’s known as a “pre-listing home inspection.”

“Often, simple things can come up on a home inspection that can become much more complicated when the clock is ticking under a pending offer. You want to attack tricky repair items on your own time frame,” he says.

R. Dodge Woodson, author of multiple books on home repairs and remodeling, says many sellers -- especially those in inventory-tight markets -- are reluctant to go forward with pre-sale repairs because of the cost and inconvenience involved.

“Most people are extremely busy and finding the right contractors can be very time-consuming,” he says.

Still, he says it’s important to spend the time it takes to search for the right contractors for your repair work.

Here are a few pointers for sellers:

-- Make a wide search for the best available contractors.

Woodson advises against using online advertising to hunt for contractors. A more reliable approach, he says, is to seek recommendations from friends, neighbors or work associates.

“Ask everyone you know for names. Consider this a treasure hunt,” Woodson says.

Besides those in your immediate circle, Eric Tyson, co-author of “House Selling for Dummies,” says you may wish to garner contractors’ names through the real estate agent with whom you are working to list your home.

“Realtors can be really good sources because they have lots of interactions with contractors. They’ll hear complaints if a contractor does a lousy job,” Tyson says.

Also, contractors may be more attentive to your project if they know you might complain about their work to the agent, which could hurt their chances for repeat business.

Yet another way that Tyson suggests you search for referrals is through an online consumer rating service, such as Angie’s List. This company provides reviews on service providers in more than 200 metropolitan areas.

-- Get an ample number of estimates for large jobs.

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

Why five estimates? Because experience has taught Woodson that consumers need a range of bids to gain perspective on pricing.

“What you usually want is 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 in the pack. The guy at the top is charging too much, and the one at the bottom is probably cutting corners,” he says.

-- Learn more about a contractor by visiting other clients’ homes.

After you’ve narrowed the contractors’ field with a comparison of price estimates, you may think your next step is to ask any company you’re considering for references. But Woodson says this is usually a “pointless exercise.”

“You don’t know if that reference is really someone’s brother-in-law or maybe someone else the company hired to say good things about them,” he says.

Also, Woodson says it’s a mistake to rely on photos the contractor has sent to you via email.

“How do you know that these pictures show the contractor’s real work? Even if they do, the photos could have been doctored,” Woodson says.

To get a truer, better sense of a contractor’s work, ask to visit homes where the firm is now working or has recently completed jobs.

“Sure, someone from the company has to call clients to get their permission for you to come over. But even so, the company shouldn’t balk at letting you see their work. If they do, you’ve got to wonder what they’re hiding. This is a big red flag,” Woodson says.

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

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Buyin' in Winter

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | December 20th, 2017

Are you a longtime renter determined to make your first home purchase as soon as possible?

If so, you need to face squarely the realties that confront all wintertime buyers, says Felipe Chacon, a housing economist for Trulia, which tracks real estate markets across America.

The biggest problem for buyers this season is that prices are continuing to rise, especially for homes in coveted close-in neighborhoods that are walkable and loaded with amenities. Meanwhile, inventories in these popular communities are still lean and, to make matters worse, many sellers take their property off the market in winter.

Moreover, a new statistical report by Chacon shows that those hanging onto a property that’s overpriced rarely take a necessary price cut in early winter. More sellers are willing to cut deals during the warmer seasons.

But all isn’t negative for those who intend to buy a house this winter, says Tom Early, a real estate broker who twice served as president of the National Association of Exclusive Buyer Agents (naeba.org).

“Comparatively speaking, mortgage rates are still breathtakingly low for buyers these days,” Early says.

Another positive, he says, is that a minority of those homeowners who’ve kept their properties on the market in winter are very anxious to sell. Often, these are owners who must relocate due to a job change or other reason.

“These are people who realize that time is money,” he says.

Here are a few pointers for wintertime homebuyers:

-- Search for highly motivated sellers.

As Early says, one key to finding a good deal is to search for owners who are exceptionally motivated.

“Wintertime buyers should look for ‘stale listings.’ These involve owners who’ve been asking too much and therefore have been unsuccessful in selling for months on end. They’re finally getting worn down and are therefore more willing to deal,” he says.

One way of identifying highly motivated sellers is to examine statistics. Ask your real estate agent to determine the average “days on market,” (from list to sale), for properties in the area where you want to live. Then look for homes in that price range that have sat unsold for a longer-than-average period, which gives them a stigma.

Before crafting an offer, also consider another set of numbers: the average list-to-sale price differential. If you note that most properties have recently fetched 95 percent of their list price, you might consider a first bid at a 5 percent discount off what’s being asked -- assuming your research shows this is warranted.

-- Don’t try to negotiate through insults.

Suppose you’re seriously considering a house that suits your needs. But you notice a few minor shortcomings in the floor plan, such as the location of the laundry room and the first-floor powder room.

Sid Davis, author of “A Survival Guide for Buying a Home,” says some purchasers attempt to strengthen their bargaining position by writing a letter that highlights a property's minor flaws or by noting the owners’ poor taste in decor.

Should you take this approach? Absolutely not, Davis says.

“Criticize the owners and you’ll only shoot yourself in the foot. The odds are they’ll take your comments personally and resist dealing with you at all,” says Davis, a longtime real estate broker.

This isn’t to say that you and your home inspector shouldn’t be forthright in itemizing corrections needed to bring the property up to standard. But do so in a manner that doesn’t offend the owners.

“Practice the art of being assertive without being annoying,” Davis says.

-- Launch your quest for a first home at a friendly lender’s office.

Eric Tyson, co-author of “Home Buying for Dummies,” notes that years after the Great Recession, most mortgage lenders are still stringent in their requirements of borrowers. That means all home loan applicants continue to face significant scrutiny.

“Count on your lender looking closely at your credit history and asking lots of questions about your income and assets. This is particularly likely if you’re self-employed or work on commission,” Tyson says.

By seeing a mortgage lender early, you have time to get mortgage pre-approval, which will give you a realistic sense of how much you can afford. A pre-approval letter is also a strong bargaining chip.

“The most important reason for mortgage pre-approval is to get your lender’s blessing that you’re qualified for a loan. This makes you a lot more credible with your sellers,” he says.

-- Stay positive about your push for homeownership.

Will 2018 represent a gradual shift toward more of a buyer’s market? No one knows for sure. In most areas, property values continue to rise, though there are an increasing number of exceptions to this rule. But the new Trulia report offers some hints for better times ahead for buyers. Chacon notes than half of home sellers in the 100 largest U.S. metro areas took price reductions during the year ended this October, which could foretell more price cuts throughout next year.

Early says buyer confidence remains strong among those in the millennial generation, whose earnings are gradually rising.

“Many millennials are late bloomers in their early 30s who are just now settling down and getting married. They’re chomping at the bit to finally buy a house of their own,” he says.

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

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Budget-friendly Tips for Pre-sale Prepping

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | December 13th, 2017

On the national level, property values continue to rise. Indeed, homes in half the country’s metro areas gained more than $10,000 in value within a year. What’s more, there’s a severe scarcity of property in the starter home category.

The statistics come from Zillow, which tracks housing markets throughout the country.

“We’re in the midst of an inventory crisis that shows no signs of waning -- impacting potential buyers all across the country,” says Svenja Gudell, Zillow’s chief economist.

With too many buyers chasing too few available properties, is overconfidence justified on the part of home sellers? Not at all, real estate experts say.

“In every city and every neighborhood, there are always sellers who either can’t get their house sold or who are getting only weak offers,” says Eric Tyson, a consumer advocate and co-author of “House Selling for Dummies.”

Despite inventory shortages, most buyers retain high standards and find it tough to picture themselves living in a house with peeling paint, cluttered rooms or mold-ridden bathrooms.

At a time when sellers are riding high, is it worth it to plunge precious savings into a home just to make it more aesthetically appealing to buyers? Yes, says Dorcas Helfant, the broker-owner of several realty offices.

“For a relatively small sum -- usually under $10,000 -- and a little hard work, sellers can often transform a ho-hum place into a much more likable one. Usually, the return on investment is well worth it,” says Helfant, a former president of the National Association of Realtors (nar.realtor).

Here are a few pointers for sellers:

-- Bring class to your property with interior moldings.

There’s a reason homebuilders make extensive use of decorative interior trim work, such as crown moldings, chair railings and wainscoting. That’s because these embellishments give a home a finished quality that usually exceeds the cost of the work, says Sid Davis, author of “Home Makeovers That Sell.”

“For a few thousand dollars, (homeowners) can get a lot of quality woodwork done,” Davis says.

Davis tells a true story to illustrate the appeal of well-crafted interior trim. He recalls handling two listings for 1950s-era cottages with nearly identical floor plans and price tags. But one had extensive moldings and the other had none.

“A couple in their 20s had been scouring the neighborhood for the perfect starter home. After looking at the two cottages, they immediately picked the one with the moldings," Davis says.

-- Freshen the paint in more rooms.

Replacing bright or unusual colors with neutral shades is standard practice when prepping a home for sale. But to put your place in superior showing condition, further painting could be warranted. For example, Davis strongly recommends you get a first-class paint job on your front door, the most visible surface of your property. Also, have a painter freshen any walls or rooms that need touchups due to wear.

“To give your place a finished quality means every single ding must be filled in, sanded and redone. Search all your high traffic areas for imperfections,” says Davis, adding that professional painting shouldn’t cost more than $200 to $600 per room.

“Remember to ask your contractors to paint your moldings in a light, contrasting tone, such as glossy white, so they’ll pop out and look sensational,” he says.

As a finishing touch to add luster, replace all the hardware on your kitchen and bathroom cabinets, a step that should cost no more than $150.

-- Do an intensive cleaning in your property.

Often when Davis tells clients to make their property immaculate, they respond with puzzled stares.

If you’re unclear what it means to make your house exceptionally clean, Davis recommends you pick up a book on the topic. One reference volume he likes is “Martha Stewart’s Homekeeping Handbook.”

Though books can provide guidance, the best way for most sellers to achieve a lofty level of cleanliness is to hire a professional cleaning company -- one you find through referrals from your listing agent, neighbors or colleagues at work.

“Give the company a complete checklist of everything you need done. Be sure this includes meticulous cleaning of all your chandeliers and light fixtures, as well as deep scouring of bathroom and kitchen tile to remove all the mildew. This whole job should cost no more than $200 to $400, depending on the condition and size of your place," Davis says.

-- Remember the sparkle that comes with clean windows.

Chances are your cleaning crew won’t tackle one piece of work crucial to the look of your home: a thorough window cleaning.

“It’s amazing how well a house can look when the windows are crystal clear inside and out. People see the difference when they first drive up,” Davis says.

The cost of a professional cleaning is typically less than $200, though this depends on local labor costs and the number of windows involved.

-- Keep your home on the market while improving it.

As Davis says, some owners become so discouraged they remove their home from the market because it’s gone unsold for longer than they’d like.

But if your home is correctly priced and is still receiving showings, you still have a good shot at selling it soon, especially if you’re willing to spend the money to do a cosmetic makeover.

“Get all the cleaning, painting and trim work done quickly," Davis says. "Pick the weekdays when visitors rarely come through -- Tuesday through Thursday. Then don’t be surprised if you start seeing greater buyer interest by the time the weekend rolls around.”

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

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