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Seller Prep: Why It's Smart to Highlight Your Home Office

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | November 18th, 2020

For 30 years, Kate Lister has been a big advocate for telecommuting. For just as long, she’s worked from a spacious home office overlooking the Pacific Ocean near San Diego. She even embellished her workspace with a hot tub.

“It’s a great gig working from home. Because you spare yourself commuting and office politics, it’s a wonderful way to save your sanity and comfort,” says Lister, the president of Global Workplace Analytics (globalworkplaceanalytics.com), a think tank that tracks telework trends.

It’s no secret that COVID-19 has dramatically increased the population of telecommuters. Lister predicts that even after the pandemic clears and children are back in school, many employees will continue to work from home, if only part-time.

“Finally, bosses realize people working from home can be trusted and productive. In fact, our research shows teleworkers give back to their companies at least half the extra time they would have spent commuting,” she says.

The quest for a property with ample and attractive space for at least one home office is a major force driving the current housing market and pushing up prices, according to Danielle Hale, the chief economist at Realtor.com, the home listing company.

These days, home offices are so important to buyers that owners wishing to sell should do all they can to emphasize the desirability of their telework space.

What features do buyers most covet in a home office? Lister says many hanker for a private room with a door they can close, sparing them intrusions that could impair their concentration while working.

“The open-floor plan concept is good in theory. But it’s hard to work in an area with no separation from the rest of the household,” she says.

If the home you’re selling offers a room with a view suitable for home office use, it’s wise to stress this in your marketing materials.

“The reality is that people who telework spend more time in their home office than in their bedroom, so it makes sense to work in a space that feels open to the outside world,” Lister says.

Here are a few pointers for sellers:

-- Streamline your office operation.

Of course, many home sellers already use an extra room as a dedicated home office and wish to continue doing so until their place is sold. In that case, real estate specialists say it’s crucial the room be kept clean and clutter-free while the place is on the market.

“Nowadays, buyers want perfection in every part of the house. For the home office, that means no shelves bulging with books, no file cabinets, and certainly none of those clunky old desktop computers,” says Ashley Richardson, who sells homes through the Long & Foster realty company.

The problem is that many who work from their home on a regular basis tolerate a degree of chaos unacceptable to potential buyers. For instance, they accept a space with piles of papers, files and binders sitting on various surfaces around the office.

“Before your house goes on the market, you have to clean up the home office so buyers can envision themselves working comfortably there. This can take many hours of decluttering,” says Richardson, who’s affiliated with the Residential Real Estate Council (crs.com).

Professional organizers, such as Susan Pinsky, author of “The Fast and Furious 5 Step Organizing Solution,” say many sellers who operate a home-based business find the chore of decluttering intimidating.

“They have to figure out how to keep the company running while the house is on the market, which is extremely hard,” she says.

Pinsky points to a paradox: At a time when vast quantities of information are instantly accessible online, many people still save more papers, magazines and books than they need. They also hang on to lots of obsolete technology.

-- Make paper culling to a high priority.

Many people who have home offices are plagued with boxes and bags filled with unsorted papers. These include business reports, computer printouts, junk mail, utility bills, credit card statements and clippings from magazines and newspapers.

Ironically, very few of the papers that people keep have value to their careers, says Pierrette Ashcroft, a productivity consultant who operates her own home-based firm.

“More than 80% of the papers people save are never referred to again,” she says.

The problem for home sellers is that any kind of clutter, including papers, makes a home look untidy. That can cause visitors to conclude that the house has more problems than meet the eye, says Mark Nash, a real estate analyst and author of “1001 Tips for Buying and Selling a Home.”

“Less is always more when it comes to selling your home,” Nash says.

-- Employ a scanner to store papers, rather than filing cabinets.

Many teleworkers struggle to stay organized with extensive filing systems. But Ashcroft says that filing all but the most important papers is usually a waste of time and energy.

She urges those trying to declutter a home office to scan many of their documents into their computer rather than trying to store them in filing cabinets.

“I’m practically paper-free in my own home office. I use a rapid scanner and can scan up to 200 papers in two minutes,” Ashcroft says.

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

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Tips on Timing the Sale of Your Home

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | November 11th, 2020

For months, home sellers have been flying high. For many, an extreme shortage of properties has meant multiple bids -- with pandemic-weary buyers especially keen on acquiring spacious havens in suburbia and exurbia. Meanwhile, prices have been steadily rising.

The hot seller’s market has created a high level of confidence among homeowners, according to economists at Zillow.com, the national real estate firm. They report that nearly 40% of those planning to sell in the next three years expect a more favorable price if they wait.

But consumer advocates caution that the torrid seller’s market could cool in the U.S., at least somewhat, after the first of the year. Mortgage rates are predicted to remain low. Yet due to economic uncertainties, home values could plateau or possibly even moderate.

“If you truly plan to sell your house soon, I wouldn’t postpone on the hope of still higher prices. No one knows for sure, but by late next year, there might be fewer eager buyers,” says Eric Tyson, a personal finance expert and coauthor of “House Selling for Dummies.”

One indication of slightly diminished interest in homebuying came just days ago, when the Mortgage Bankers Association (mba.org) reported on the continuing, multi-week slump in applications for new home loans.

“Inadequate housing supply is putting upward pressure on home prices and is impacting affordability -- especially for first-time buyers and lower-income buyers,” says Joel Kan, who oversees the association’s economic forecasting.

Tyson urges those planning their timing to take into account their own lifestyle needs and preferences.

“No one has a crystal ball, so don’t stay up all night trying to figure out the perfect season to sell. Just discuss the matter with a trusted listing agent and then decide what works for you,” he says.

Here are a few other pointers for sellers:

-- Try to sell when few homes are available in your area.

If your neighborhood is experiencing a significant shortage in available homes, you may wish to go forward with a planned sale within 30 days or so, says Ashley Richardson, a veteran real estate agent affiliated with the Residential Real Estate Council (crs.com).

“You’re always better off being the only one out there because a dearth of competition can drive prices upward,” says Richardson, who sells homes in Maryland through the Long & Foster real estate company.

Are you unsure about the supply-demand ratio for real estate in your neighborhood? If so, Richardson says the most efficient way to obtain information on local inventory levels is to request statistics from the listing agent you’ve chosen.

“You need to know whether your market is strengthening or weakening for sellers. If it’s weakening, you may wish to move forward with your sale as promptly as you reasonably can,” she says.

-- Delay until repairs and decluttering are complete.

Do you have a seriously stained carpet that needs replacement? Is there peeling paint on your front door? Are you still sorting through the contents of an overstuffed bookshelf?

Make sure all this work is done before giving your agent approval to list your place. She says buyers typically show little interest in any home where renovation work is incomplete.

Likewise, a cluttered house can be very hard to market to prospects, who often underestimate the size of rooms ridden with excess furniture and cardboard boxes. Also, closets crammed full of clothes and shoes make a bad impression.

“When your closets are crowded, people think you have less storage than you really do,” she says.

-- Avoid the weekend to launch your listing.

Richardson believes no one should obsess about the day of the week their agent lists their property in the Multiple Listing Service. But she says it’s better to avoid having it appear on a Saturday or Sunday.

“During the workweek, buyers monitor their email from the office for new listings sent them by their agent. But on weekends, they’re often too busy running errands and driving kids around to pay much attention to email,” Richardson says.

In her opinion, the ideal time for sellers to have property listed is a weekday, preferably early in the week. Then if the place still catches the interest of buyers when they view it online or drive by, they’ll have sufficient time to plan a tour of the interior.

“In reality, most serious home shoppers search with buyers’ agents. So it's prudent to consider the rhythm of their work when choosing the best day to hit the market,” Richardson says.

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

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How to Get a Fair Deal in a Torrid Market

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | November 4th, 2020

Every autumn, home sales typically plummet as families focus on the upcoming winter holidays.

But this year the seasonal decline is greatly diminished due to COVID-19 and the widespread quest for larger living space to accommodate home-based work and schooling. Indeed, pending home sales registered only a minor decline of 2.2% in September, after four consecutive months of robust growth.

“The demand for homebuying remains super strong, even with a slight monthly pullback in September,” says Lawrence Yun, chief economist for the National Association of Realtors (www.nar.realtor).

Buyers are thrilled by the availability of low mortgage rates -- as low as 3% or less for a 30-year fixed-rate mortgage. Yet many are extraordinarily frustrated by two interlocking factors: a severe shortage of inventory and galloping price increases.

Real estate specialists don’t necessarily advise that buyers postpone their purchase plans until 2021, given the likelihood that demand will remain strong next year. Rather, they suggest that this year’s holiday season could be as good a time as any for buyers to move forward in a high-demand market.

“There’s zero point in delaying. People selling houses in November and December are highly motivated to move, and hence will usually negotiate in good faith,” says Michael Crowley, a real estate broker in the field since 1992.

Crowley tells the true story of one client who just now acted decisively in a competitive market to beat out rival bidders.

The client -- a 36-year-old physician determined to buy a house near her own place for her elderly parents --used an “escalation clause” in her offer to ensure she’d have the winning bid for the small blue split-entry house her folks picked out.

“This doctor won against four other competitors by offering to top any other offer up to a finite amount. Ultimately, this escalation clause cost her just $2,000 over her original bid. Because her parents put her through medical school, she was extremely pleased to thank them with the house they wanted,” says Crowley, a past president of the National Association of Exclusive Buyer Agents (naeba.org).

Still, he only recommends that clients attempt the escalation-clause strategy if they’re found a place they truly covet.

“It’s a funny thing, but people will sometimes fight to outdo other bidders for a property they don’t really like. You never want to fight for a lemon just for the sake of winning,” he says.

Here are a few other tips for buyers:

-- Inform yourself on local property values before you bid.

Though there are many neighborhoods where would-be buyers outnumber willing sellers, real estate specialists caution buyers against generalizations.

“It goes without saying that all real estate is local. That means the national picture is irrelevant, and your local market could be dragging when others are soaring,” says Eve Alexander, a veteran real estate broker who specializes in luxury properties.

She urges buyers to educate themselves on local property trends in the area of their choice before venturing a bid, particularly if their bid has an escalator clause attached.

“For comparisons, try to identify five to 10 comparable properties that have sold recently in the area where you’re looking,” Alexander says.

If you’re seeking to buy in a neighborhood with widely varied properties, it’s helpful to compare the homes on your list on a price-per-square-foot basis. Then adjust for differences in size and home features, such as garage size.

After estimating the current market value of the home you wish to buy, it’s time to decide how aggressive an offer you want to make. Alexander says that will depend on how enamored you are with the home.

“You won’t want to push the limits if you’ve fallen in love with the property and feel it’s a ‘do or die’ situation,” she says.

On the other hand, you might choose to make a lower offer if there are other available homes in the area that would meet your needs equally well.

“It’s always easier to negotiate without emotion if you can find second- and third-choice houses you also like,” Alexander says.

Once you’ve made a firm decision on your bid, she recommends you attach a brief but friendly letter that explains your position and draws on comparable sales data to support it.

-- Reject comparables from “market testers.”

Eric Tyson, co-author of “Home Buying for Dummies,” says in every market there are a few sellers who won’t budge from an unrealistically high price.

“It’s a given that some supposed sellers aren’t really motivated to make a fair deal,” he says.

How can you tell which sellers are merely testing the market and will never negotiate seriously with anyone who bids less than their lofty list price?

Tyson recommends you ask your agent to find out if previous offers have come in on the property you want. If the owners have already rebuffed one or more decent offers without so much as a counterbid, this indicates they’ll probably resist reason with you, too.

The good news for buyers is that information on past offers is often readily available through the listing agent.

“Agents are inherently outgoing people. Some have very loose lips and will talk candidly about their clients’ negotiating position and whether it’s worth your while to do a low bid,” he says.

-- Try to discover the sellers’ equity position.

Are you seriously interested in a home but have yet to submit an offer on it? If so, Alexander says it’s wise to inform yourself on the sellers’ ownership stake before you bid. As she says, those with more equity have more potential room for compromise.

“What you’re looking for are insights into the mindset of the sellers,” Alexander says.

One source of clues on the owners’ equity position can be found by searching local government land records. At the minimum, these records (usually available online) should tell you when the current owners purchased the property and the original price they paid.

“If the sellers brought the house a couple of decades ago and haven’t refinanced, they should have a lot more equity,” Alexander says.

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

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