Articles
Keeping It R.E.A.L.!
(Real Estate Affects Lives)
by Lisa R. Conner, CRS
907.244.2013
Homeowner Tips for a Quicker Sale
You’ve heard it before, but it’s worth repeating Benjamin Franklin’s advice, “an ounce of prevention is worth a pound of cure.” I’m one of those people who would rather over prepare and be pro-active versus skipping vital steps and be reactive to situations. I am similar to most people and like to reduce and avoid stress as much as possible.
Last week I received multiple offers on a client’s home, currently on the market for sale, the very first day it was listed. I agree that instant success is not something that occurs every day, but I’m happy to report that this homeowner completed every single pre-sell step that I recommended and it paid off. Several weeks were spent preparing the home for the market and that was key to getting a quick offer and more profit for the seller.
Let’s review the short list of ways to prepare your home for the market always remembering that you want your property to appeal to the largest segment of the population. Your personal taste in design and décor may be interesting to you, but might be a style that only a small percentage of people find acceptable. It’s best to have the home turn-key and move-in ready, so buyers can see the value in your home and how easy it will be to make it their own. If you spend the time upfront to complete these valuable steps in the process you will save time, money, and energy after it goes on the market. The property I mentioned will be used as the example here:
Pre-inspection
The home was pre-inspected by a local, reputable home inspection company and the recommended repairs (health/ safety and significant items) were completed by a licensed contractor. The contractor offers a five-year warranty on his work for the new buyer and an itemized list of all repairs which makes it easy for a re-inspection. The home even needed a new roof and that work was completed the day before it went on the market.
Staging
The homeowner removed all personal items and de-cluttered the home. A few larger pieces of furniture were left behind and were strategically placed to accentuate the positive features of the space. Splashes of color were used throughout the home to add interest by placing pillows, plants, and small objects on or near furniture. A fresh coat of paint in a few rooms, newly installed curtain rods and inexpensive window coverings, a couple new throw rugs and shower curtains really made the home appear fresh.
Cleaning
Once the repairs and staging were complete a professional cleaning crew arrived and cleaned the home from top to bottom including the windows inside and outside. Brighter bulbs were used and light fixtures were thoroughly cleaned to allow the light to shine through.
Pricing it Right
The home was not the most remodeled on the street, compared to a neighbor who recently sold their home, but it was more move-in ready. There was little doubt left in the mind of potential buyers, because surprises and questions had been addressed right up front. Challenges can still occur in this transaction, but every possible surprise has been eliminated at this point.
Photos
Photos were posted online with the listing which highlighted features and gave buyers a sense of the floor plan before even entering the home.
Home warranty
The seller offered a home warranty for the buyer for added peace of mind and all pertinent documentation to sell the home was readily available for review (as-built survey, property disclosure, property profile, etc.).
All in all, the cost to complete this entire process was less than $1200 excluding repairs. The money was well spent, an offer was agreed upon the first day, and the seller can expect a smooth transaction.
Short Sales are anything but Short
There is a lot of confusion surrounding the term short sale and hopefully this information will help. The term itself is misleading to anyone who has not experienced a short sale transaction. The term short would lead you to believe that it’s a short process and that is a common misconception. The official definition, according to the National Association of Realtors, is a “transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.” Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses. A short sale impacts credit rating less than a foreclosure and that might be important to the homeowner.
We all know that real estate is local, but due to current economic conditions nationwide, the number of short sale properties on the market is rising. This situation presents challenges for buyers, lenders, and real estate professionals in every market due to the complex nature of the transaction. The federal government and the real estate industry have worked diligently to streamline the process and educate the public. If you are in trouble with your home mortgage, or know someone who might be, there are programs available to help you through the process.
In March 2009 President Obama rolled out the Home Affordable Modification Program (HAMP). This program was designed to enable borrowers that met eligibility requirements to avoid foreclosure by modifying loans to a level that was affordable for borrowers and sustainable for the long-term. On April 5, 2010 a newer version of the program (HAFA) was introduced which is designed to streamline the process even more and help homeowners in trouble hold onto their homes under the old plan.
The Home Affordable Foreclosure Alternatives Program (HAFA) may make a short sale or a deed-in-lieu of foreclosure a viable option to help avoid foreclosure. HAFA provides additional options to avoid costly foreclosures and offers incentives to borrowers, servicers and investors who utilize a short sale or deed-in-lieu (DIL) to avoid foreclosures. HAFA alternatives are available to all HAMP-eligible borrowers who: 1) do not qualify for a Trial Period Plan; 2) do not successfully complete a Trial Period Plan; 3) miss at least two consecutive payments during a HAMP modification; or, 4) request a short sale or deed-in-lieu. HAFA simplifies and streamlines the short sale and DIL process by providing a standard process flow, minimum performance timeframes and standard documentation. The guidelines for HAFA are detailed further in the documents online at www.hmpadmin.com/portal/index.html.
If you, or someone you know, are in trouble with a home mortgage, the best advice is to talk to your lender immediately. Do not delay! The sooner you work out a plan the better the end result will be. Consult a real estate professional to help walk you through the process of selling your home via the “short sale” route. It’s a good idea to partner with your lender and real estate professional to ensure the quickest and least painful way of getting your home sold and starting a new chapter in your life.
The Value of Home Maintenance
If you think home maintenance is an unavoidable series of weekend-eating chores, remember the age-old advice of Benjamin Franklin: “An ounce of prevention is worth a pound of cure.” The fact is, proactive maintenance is essential to preserving the value of your home—without it, your home could lose 10% of its value. Regular, routine maintenance enhances curb appeal, ensures safety, and prevents neglected upkeep from turning into costly major repairs.
Maintenance affects property value
Outright damage to your house is just one of the consequences of neglected maintenance. Without regular upkeep, overall property values are affected. According to a professional appraiser, “If a house is in worn condition and shows a lack of preventative maintenance, the property could easily lose 10% of its appraised value and that could translate into a $15,000 or $20,000 adjustment.”
How much does maintenance cost?
Some years, routine tasks, such as cleaning gutters and changing furnace filters, are all that’s needed, and your total expenditures may be a few hundred dollars. Other years may include major replacements, such as a new roof or new appliances. Various lending institutions agree, placing maintenance costs at 1% to 3% of initial house price. That means owners of a $200,000 house should plan to budget $2,000 to $6,000 per year for ongoing upkeep and replacements.
Proactive maintenance strategies
Knowing these average costs can help homeowners be prepared and it’s a good idea to set aside a cash reserve that’s used strictly for home repair and maintenance. That way, routine upkeep is a snap and any significant replacements won’t blindside the family budget.
Play offense, not defense. Proactive maintenance is key to preventing small problems from becoming big issues. Take the initiative with regular inspections. Create and faithfully follow a maintenance schedule. If you’re unsure of what needs to be done, a few hundred dollars paid to a professional inspector can be invaluable in pointing out quick fixes and potential problems.
Plan a room-per-year redo. Pick a different room every year and go through it, fixing and improving as you go. That helps keep maintenance fun and interesting.
Keep track. Keep a notebook of all your maintenance and upgrades, along with receipts, because this is a powerful tool when it comes time to sell your home. This simple step eliminates any doubts for the buyer, and it says you are a meticulous, caring homeowner.
Source: NAR
