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Tips for Picking an Agent When Selling

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | January 20th, 2021

For those wishing to sell a home this coming spring, expectations are exceptionally high.

On the one hand, the new administration in Washington promises to promote housing with a proposed $15,000 tax credit for first-time buyers, among other steps. Meanwhile, home values are still ascendant, inventories are tight and demographic demand is strong.

Yet on the other hand, uncertainty abounds as the nation navigates uncharted waters both politically and economically. The latest worry: Mortgage rates, though still very low, are beginning to creep upward.

“The traditional spring selling season was a bust during the initial months of the outbreak in 2020, though the market recovered nicely later in the year. Sellers should still have a lot of leverage this spring, but they can’t afford complacency,” says Eric Tyson, a consumer advocate and co-author of “House Selling for Dummies.”

Most housing analysts are optimistic for 2021 sellers.

“While we can expect to see lingering effects of COVID-19 resurgences and subsequent shutdowns in the early months of 2021, vaccine distributions and stimulus actions should revitalize economic activity and keep home purchase demand and home price growth strong,” says Frank Martell, the CEO of CoreLogic (corelogic.com), which tracks housing markets across America.

Still, Karen Rittenhouse, a real estate investor who’s bought and sold hundreds of properties, cautions sellers against overconfidence. In particular, she urges them to select a listing agent thoughtfully.

“Who you pick as an agent is a really big deal because you’ve got a lot of money riding on your sale. You need to ask for referrals, check references and interview every agent you’re considering,” says Rittenhouse, author of “The Essential Handbook for Selling a Home.”

Many successful agents hire assistants for much of their routine work, and Rittenhouse doesn’t necessarily disapprove of this practice. But she says it’s important that your primary agent handle such core functions as negotiating on your behalf when offers come in.

“There’s nothing wrong with assistants handling a lot of the day-to-day work, like arranging showings or holding open houses. But good agents perform the key functions themselves,” she says.

Tyson says it isn’t always easy to determine in advance whether an agent will give your listing the attention it deserves.

“The last thing you want is an agent who disappears the day after landing your listing. So before you sign a listing agreement, you’ve got to investigate,” he says.

Here are a few pointers for sellers:

-- Examine a potential listing agent’s selling record.

Maybe the agent you’re thinking of hiring is known for being a prodigious seller. Even so, this could be the wrong one for you.

“Just because the agent is a ‘big producer’ in sales volume doesn’t mean they have expertise selling in your specific area or your type of house,” Tyson says.

He recommends that sellers obtain an “activity list” from any agent they’re considering. This should itemize all sales closed in the previous 12 months and show the property locations, as well as list and sale prices.

“You can’t beat this raw data when you’re sizing up an agent,” says Tyson.

Agents don’t just specialize in particular areas -- they also specialize in certain price categories.

“You wouldn’t want an agent who’s earning most of their commissions from suburban houses worth over $1 million to list a condo worth much less than that. In that case, your condo might fail to get the attention it deserves,” Tyson says.

-- Consider the implications of hiring “partner agents.”

Some agents, including married couples, like to work as a professional team. They bill themselves as two interchangeable parts of a qualified whole.

“In theory, such a partnership has big advantages for clients because you get a doubling up of talent, with two people devoting themselves to your sale,” Tyson says.

But in practice, the two-agent arrangement is only advantageous to sellers if both partners are fully committed to their work.

“Sometimes the two halves don’t equal a whole, and the clients are shortchanged,” Tyson says.

-- Make sure the agent you select is responsive.

Starting the day your property goes up for sale, you need to get a regular stream of feedback from your listing agent.

For example, if your agent stages an open house for real estate professionals in the area -- known as a “broker’s open” -- you’ll want to receive their comments about the price and condition of your home. Also, you’ll want timely feedback from potential buyers who come through your place for showings.

Why is timely feedback essential to a successful sale? Because it allows you to correct course quickly. For instance, immediate feedback that your home is overpriced would let you adjust your price before your home is stigmatized.

Your listing agent should be the one giving you feedback on a regular basis. To ensure this happens, you need an agent who is meticulous about collecting comments and passing them on.

You can increase your chances of finding a conscientious communicator by asking the references your agent gives you whether they got regular feedback. Plus, you can insist that your listing agreement specifies how often, and whether by phone, email or text, your agent will contact you.

“When it comes to selling your home, good communication with your listing agent isn’t a luxury, it’s crucial,” Tyson says.

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

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Buying Your First Home in the Post-Pandemic Era

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | January 13th, 2021

The pandemic has motivated those who own starter homes to trade up to still larger properties with oversized kitchens, home gyms, dual home offices and yards big enough for a custom fire pit. But even more eager to move are young renters who fantasize about escaping apartment living to buy their first house.

What’s propelling this present push for first-time homeownership? Much of the momentum is coming from the younger adults now forming households and having kids.

“The demographic tailwind has arrived, as Generation X and millennials drive housing demand,” says Frank Nothaft, chief economist at CoreLogic (corelogic.com), which tracks housing trends.

It’s understandable that as the nation emerges from the pandemic, first-time buyers who’ve been living in cramped quarters for months will want to move hurriedly toward their goal. But veteran real estate specialists urge novice buyers to exercise caution as they think through their priorities.

“Any house in the burbs seems like utopia to people burned out on living the limited apartment life. But it’s very unwise to jump for the first affordable place you encounter because your choice of a house has so many implications,” says Michael Crowley, who’s represented buyers in Spokane, Washington, since 1997.

One factor is that most detached houses are more spacious than apartments.

“Anything bigger can seem thrillingly large to long-time apartment dwellers -- tempting them to decide quickly. A swift purchase is especially likely if they’re in a hot area where houses are flying off the market,” Crowley says.

Just because a house gives you plenty of space for the money doesn’t mean it’s a good choice. He encourages novice purchasers to shop thoughtfully before making a decision. That means being selective about both their target neighborhood and the target house within that neighborhood.

“On occasion, first-time buyers do locate the perfect property at the front end of their search. But even then, it’s important they view alternative options before solidifying your choice,” Crowley says.

Here are a few pointers for first-timers:

-- Look for a place that would work for your future lifestyle.

First-timers sometimes make the mistake of expecting to keep their property for just a few years before moving on.

But Tom Early, a longtime real estate broker who specializes in helping buyers, strongly advises clients to buy with a time horizon of at least five years, due to the high transaction costs associated with selling one house and moving to another.

“These days, you can’t necessarily count on tons of appreciation in home values to bail you out if you wind up selling in just a couple of years,” he says.

Young buyers should also consider their personal plans when selecting a house.

“If you’re thinking of having kids in the near future, for instance, it’s a good idea to pick a house with extra bedrooms and play areas for young children,” says Early, a past president of the National Association of Exclusive Buyer Agents (naeba.org).

-- Avoid buying an offbeat property.

“You don’t want to buy a contemporary in a neighborhood full of colonials,” says Mark Nash, author of “1001 Tips for Buying and Selling a Home.”

The problem with what Nash calls “the odd man out house” is that one day it could be hard to sell.

“We live in a society where housing is increasingly homogenized. Most people feel safer about their investment if the place they buy looks like all their neighbors’ homes,” he says.

-- Put your priorities in writing.

“Nearly everybody has to make trade-offs when they buy a home,” Early says.

Before you go home shopping, Early encourages you to compose two lists. One should itemize “must have” home features and the other -- a “wish list” -- should include features you could live without if trade-offs must be made.

-- Seek out a place with appeal for multi-generational buyers.

Assuming you can afford it, one excellent investment is a house with an extra bedroom that has its own “en suite” bathroom, meaning a private bath. The reason is that more homebuyers want a space suitable for elder family members, according to recent research on resale trends from Zillow, the national real estate company.

“People are increasingly looking for ways to add space and make homes more comfortable -- and safe -- for multigenerational living,” says Haley Johnson, a Zillow spokeswoman.

-- Don’t buy the biggest house in the neighborhood.

Though extra bedrooms are a valued feature, it’s usually a bad idea to choose one of the biggest houses in a neighborhood. Early explains that the so-called “king on the hill” house is unlikely to gain as much value as an average-sized place in the same area.

Granted the biggest house will likely appreciate --assuming it’s located in a popular area. Still, its owners will get less of a boost in value on a per-square-foot basis than will the owners of a smaller house. That’s because the median home will set the standard for the area.

“Sometimes it’s smarter to be in the middle of the pack rather than an outlier,” Early says.

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

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Pandemic Fallout: More Boomers Postponing Moves

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | January 6th, 2021

For years, a finance officer for a large university had planned to leave her California-style contemporary upon retirement in 2021. Once retired, she had expected to sell her 4,000-square-foot suburban place in favor of a low-upkeep city condo. But living through the pandemic changed her mind.

“Working from home for months, she fell in love with her house and garden all over again. That’s why she’s postponing her sale in favor of renovations she can enjoy for several more years,” says Stacy Berman, her future listing agent.

The finance officer is focusing much of the remodeling project on her dated kitchen. There she’s replacing dark granite countertops with those in bright white quartz and renewing her flooring with a sparkling marble glaze. She’s also updating her master bath with all new tile and fixtures. For these and other improvements, she expects to spend no more than $20,000.

“Because she still plans to move in a few years, this owner is limiting her changes to those in good taste that will pay her back when she sells. Nothing odd or gaudy,” Berman says.

Unlike the finance officer, many boomers are planning to pursue their long-held plans to sell their big family house as soon as the pandemic clears.

“For many older people, downsizing isn’t just a preference, it’s economic necessity. As soon as it’s safe and easy to move, they’ll do so,” says Eric Tyson, a personal finance expert and co-author of “House Selling for Dummies.”

But a minority of boomers are now treating themselves to the pleasures of renovating their properties several years in advance of a sale. These are homeowners with the discretionary funds to cover remodeling costs.

According to researchers at Harvard’s Joint Center for Housing Studies, remodeling expenditures are one major factor explaining the surprising resilience of housing markets, despite COVID-19, says Chris Herbert, the center’s managing director.

“The remodeling market is bouncing back from the initial shocks caused by the pandemic as homeowners continue to spend significant time in their home,” Herbert says.

One risk facing boomers who are renovating several years in advance of a sale is that they might invest in upgrades that won’t enhance their property values.

“You don’t want to overspend on unnecessary renovations unless you’re going to stay more than five years,” says Kathi Fleck, the author of “Renovate, Remodel ... Relax!”

Here are a few other pointers for renovators with delayed selling plans:

-- Seek guidance from local real estate specialists.

Mark Nash, a real estate analyst and author of “1001 Tips for Buying and Selling a Home,” says by consulting a knowledgeable real estate agent before heading into a remodeling project, homeowners can often avoid major errors.

Owners who are unsure when they’ll move are often reluctant to ask for advice until they have a certain timetable. But Nash says good agents won’t pressure you to list your property until you’re ready.

“Look for agents who truly know your local market. They’re probably in touch with well-priced contractors who might be cheaper than the ones you hired,” Nash says.

-- Keep improvements within neighborhood standards.

Tom Early, who twice served as president of the National Association of Exclusive Buyer Agents (naeba.org), says most purchasers are reluctant to pick up the tab for renovation work that raises a property above neighborhood standards.

“Even though many markets are now strong, buyers are still selective. They remain very focused on property values and hate overpaying,” Early says.

What sorts of upgrades constitute “over-improvement”? For example, you’re unlikely to recoup the cost of adding a three-car garage in a neighborhood where most homes have no garage at all.

-- Avoid overly personal improvements.

Nash tells the true story of an architect who owned a colonial house in a desirable city neighborhood. Given his plans to retire and sell his high-end place, the man spent $150,000 for an ultra-modern kitchen renovation that suited his taste alone.

“What he ended up with was extremely minimalistic and included a bunch of tiny pin lights in his 12-foot ceilings. The buyers who came through thought it looked like an embalming room,” Nash recalls.

-- Back off of pricey over-the-top renovations.

If you think you’ve arranged for too much remodeling, Nash suggests you phone your contractors to negotiate alternative scenarios. For example, you might decide to forgo top-of-the-line kitchen and bathroom appliances and fixtures.

“Most buyers aren’t looking for the finest slabs of granite or super-brand stoves or refrigerators in the kitchen. It’s usually the overall look they want, not the famous brands,” Nash says.

Often, real estate agents can suggest less expensive products than those recommended by contractors.

-- Avoid rushing into renovation work.

As the architect with the ultra-modern kitchen discovered, a thoughtless pre-sale renovation can be costly. Nash says the design was so objectionable to buyers that the owner had to discount his property by 10% to close a deal for the house.

“People looked at that kitchen and groaned. All they could think of was how much they’d have to spend to bring it back to normal,” he says.

One reason the architect made his expensive mistake was that he launched the kitchen redo without thinking through its implications.

“When you rush renovations to suit your personal taste, you’re at risk for one day putting a white elephant on the market,” Nash says.

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

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