Sales Contracts - Discussion Becomes Commitment
When someone agrees to buy your home, it is time for them to take the step that makes so many of us tremble with fear: the sales contract. To take some of the mystery out of the house sales contract, we will discuss what the contract involves and the components of most housing sales contracts.
First, remember that what you are signing is a legal contract. No matter what anyone says, you are not just making an "offer". Most sales contracts will have some paraphrase of the following: "This is a legally binding contract. If not understood, seek legal advice before signing." To put it simply, if what is written on the contract regarding selling price and provisions is accepted by you, you have sold your home. Unlike other negotiable businesses, such as the automobile business, "would you take?" is defined in Real Estate by a legally binding contract backed with a monetary deposit.
Although there will be some variance based on the location of your residence, most Real Estate contracts contain most or all of the following items:
What - A legal description of the property as well as the street address.
How much - The selling price.
Mortgage contingency - Subject to obtaining a mortgage (if applicable) and the specifics of the mortgage--amount, rate and term. Financial commitment to be made in X number of days.
Deposit - How much money accompanies the contract and who will hold it.
Closing - When and where.
Inclusions and exclusions - What is and is not included in the sale of the property.
Home inspection - Contingency for and to be done in X number of days. Do you, the seller, have the right to cure any defects found in the inspection?
Warranties - Any that are included with the house and description of the warranty.
Condominium - If the property is a condo, other provisions will apply.
Well and Septic - If applicable, they must be tested (and pass). Who orders, and who pays?
Pest inspection - Who will pay and if there is infestation or damage, who will pay for repair.
Occupancy Date - When the buyers take possession of the house--before, at or after closing. If before or after closing, will there be an occupancy fee? Whose insurance will cover that time frame?
Acceptance - How long the sellers have to respond to the offer with either acceptance or a counter-offer.
Arbitration - Any provisions for arbitration of disputes.
Property Disclosures - Notices of any property disclosures concerning the house.
The exact wording of the sales contract will vary, but by being prepared to see at least the items listed above, you will be in a better position when it comes time to ask for signatures!
Friday, June 03, 2005
Wednesday, April 06, 2005
Buy or Sell First? The Chicken-and-Egg Question:
Buy or Sell First? The Chicken and Egg Question:
by Michele Dawson
For homeowners aiming to sell their home and buy another, it's the classic real estate, which came first, the chicken or the egg, question - buy or sell first?
If you sell first, you may find yourself under a tight deadline to find another house, or be forced in temporary quarters. If you buy first, you may be saddled with two mortgage payments for at least a couple months. You may need the money from the sale of your original home in order to pre-qualify for a loan for your new home. You may be facing a job relocation and need to sell quickly.
There are many variables involved; there is no universal correct answer. It basically comes down to your specific circumstances.
Dan Gregor, a Realtor in Pickerington, Ohio, says there is generally less pressure when you sell first.
"It really comes down to risk," Gregor said. "It's whether you want the risk of owning two houses, or possibly none at all."
Gregor says that if you have the money to make two mortgage payments, the pressure is off. But if you need to sell your house in order to qualify for a loan, then you have no choice - you'll have to sell first.
"You can write contingent contracts, but if you really want the home, you'll pay a premium - that's if the seller will even entertain a contingent offer," he says.
And if you go ahead with a contingent offer, then you may end up settling for less for the house you're selling in an effort to get it sold quickly.
Gregor says for most people, the stress level is lower when you sell first.
"You have time to get pre-approved for your mortgage and see all the housing options in the price range you'd like to buy," he said.
When your selling house is in contract, he suggests you pick the three best homes of those you've viewed and prepare to make an offer on the one that best meets your needs.
"The absolute worst that can happen is the right home isn't available," Gregor said. "You end up in a short-term rental with the cash in your pocket and pre-approved. Financing for the balance you need. So you look like a cash buyer when you make an offer on the home you finally decide on."
But brisk selling conditions in some parts of the country require more aggressive tactics.
Brett Furman, a broker in suburban Philadelphia, says the strong market dictates that homebuyers focus on buying first, and selling later.
"The housing market in the suburban Philadelphia market is moving very quickly," said Furman. "Normally we advise our buyers to sell their home first and buy second ... However with the faster moving market, we are advising many of our buyer clients to obtain a mortgage commitment that is not contingent upon selling their existing house."
In their book, House Selling for Dummies (Hungry Minds Inc., 1999), Eric Tyson and Ray Brown "strongly recommend" that you sell first.
"Even in good real estate markets, sales frequently drag on much longer than you expect," the authors say. "Selling in a weak market usually compounds the problem. Homeowners tend to overestimate their house's resale value and underestimate the length of the selling process - a fiscally deadly one-two punch."
But selling first isn't the perfect solution. Some of the issues that may come up include:
· Being forced out of your house before you have a new place available. Where will you live? Where will your kids go to school?
· Having to move twice. Do you want to go through the hassle? Where will you store your extra furniture while you live with family and friends or rent an apartment?
· Not being able to find a house you like. How long are you willing to live in temporary quarters until you find a suitable house?
Whichever way you go, it always seems to work out in the end, at least in Gregor's experience.
"I've been in the business for 30 years," he said. "We've never had anyone out on the street and the vast majority of our clients that make double moves are those building new homes that had to have their property sold first."
Published: July 14, 2003
by Michele Dawson
For homeowners aiming to sell their home and buy another, it's the classic real estate, which came first, the chicken or the egg, question - buy or sell first?
If you sell first, you may find yourself under a tight deadline to find another house, or be forced in temporary quarters. If you buy first, you may be saddled with two mortgage payments for at least a couple months. You may need the money from the sale of your original home in order to pre-qualify for a loan for your new home. You may be facing a job relocation and need to sell quickly.
There are many variables involved; there is no universal correct answer. It basically comes down to your specific circumstances.
Dan Gregor, a Realtor in Pickerington, Ohio, says there is generally less pressure when you sell first.
"It really comes down to risk," Gregor said. "It's whether you want the risk of owning two houses, or possibly none at all."
Gregor says that if you have the money to make two mortgage payments, the pressure is off. But if you need to sell your house in order to qualify for a loan, then you have no choice - you'll have to sell first.
"You can write contingent contracts, but if you really want the home, you'll pay a premium - that's if the seller will even entertain a contingent offer," he says.
And if you go ahead with a contingent offer, then you may end up settling for less for the house you're selling in an effort to get it sold quickly.
Gregor says for most people, the stress level is lower when you sell first.
"You have time to get pre-approved for your mortgage and see all the housing options in the price range you'd like to buy," he said.
When your selling house is in contract, he suggests you pick the three best homes of those you've viewed and prepare to make an offer on the one that best meets your needs.
"The absolute worst that can happen is the right home isn't available," Gregor said. "You end up in a short-term rental with the cash in your pocket and pre-approved. Financing for the balance you need. So you look like a cash buyer when you make an offer on the home you finally decide on."
But brisk selling conditions in some parts of the country require more aggressive tactics.
Brett Furman, a broker in suburban Philadelphia, says the strong market dictates that homebuyers focus on buying first, and selling later.
"The housing market in the suburban Philadelphia market is moving very quickly," said Furman. "Normally we advise our buyers to sell their home first and buy second ... However with the faster moving market, we are advising many of our buyer clients to obtain a mortgage commitment that is not contingent upon selling their existing house."
In their book, House Selling for Dummies (Hungry Minds Inc., 1999), Eric Tyson and Ray Brown "strongly recommend" that you sell first.
"Even in good real estate markets, sales frequently drag on much longer than you expect," the authors say. "Selling in a weak market usually compounds the problem. Homeowners tend to overestimate their house's resale value and underestimate the length of the selling process - a fiscally deadly one-two punch."
But selling first isn't the perfect solution. Some of the issues that may come up include:
· Being forced out of your house before you have a new place available. Where will you live? Where will your kids go to school?
· Having to move twice. Do you want to go through the hassle? Where will you store your extra furniture while you live with family and friends or rent an apartment?
· Not being able to find a house you like. How long are you willing to live in temporary quarters until you find a suitable house?
Whichever way you go, it always seems to work out in the end, at least in Gregor's experience.
"I've been in the business for 30 years," he said. "We've never had anyone out on the street and the vast majority of our clients that make double moves are those building new homes that had to have their property sold first."
Published: July 14, 2003
Homeowner Hints for a Successful Sale
Homeowner Hints for a Successful Sale
Exterior
Grass and shrubs
Keep trimmed. Consider a fast-greening fertilizer such as ammonium sulfate inexpensive for a deep green lawn.
Pets
If you have a dog, clean up any dog dirt on a daily basis. Secure pets while the house is being shown. If you have a cat, change the litter box daily.
Fences
Make any needed repairs. A neat, well-painted fence gives a positive impression.
Flowers
Plant seasonal blooming flowers, especially near the front door and in any patio area. A profusion of color can have your home half-sold before the door is even opened.
Bird feeders
Hummingbird feeders and bird houses create a pleasant mood, especially when they are close to any patio area.
Paint:
Front door
Front door should be refinished or painted if it shows excessive wear.
Condition of exterior paint
Often only the trim or, depending on sun exposure, only one or two sides of the house need painting. Keep in mind that paint is cheap compared to the extra dollars a home with a clean, fresh appearance will bring.
Lawn furniture:
Place lawn furniture in an attractive, leisurely manner. A badminton net or croquet set-up gives a positive image as well.
Roof:
If the roof needs to be repaired or replaced, it's best to have the work done. Otherwise, buyers will want to deduct the cost even if your price already reflects the required work. Delaying repairs can actually cost you twice as much.
Interior:
Housekeeping. You are competing against model homes, so your home must look as much like a model as possible. Floors, bath fixtures and appliances must be sparkling. Consider using a car wax on appliances. Make beds early in the day. Unmade beds and late sleepers create a very negative image.
Odors and aromas:
Avoid heavy frying, using vinegar or cooking strong-smelling foods such as cabbage. The odors last and work against the image you are trying to create. On the other hand, some smells have a positive effect on people: Baked bread, apple pie, chocolate cookies and cinnamon rolls are examples of foods that can sell your home. Consider keeping prepackaged cookie or bread dough in the refrigerator. Just before a scheduled showing, the smell of these baking foods can be a great help to us. If you or your family members smoke, don't smoke in your home and don't allow guests to smoke. Stale tobacco odors can be masked with some odor sprays. If the temperature allows it, open windows and air out the house every morning.
Paint:
If you have leftover paint, you can accomplish a great deal by doing touch-ups where needed. If the surface is dark, repaint with light colors such as off-white, oyster, light beige or pale yellow. Light colors make rooms appear fresh as well as larger.
Plumbing:
Repair any leaky faucets. Make certain that you don't have a gurgling toilet. Clean out any slow drains.
Shades and blinds:
Replace any torn shades or broken blinds.
Drapes:
If drapes need cleaning, have it done. If they are old and worn, stained or dark, consider replacing them with either light-colored drapes or off-white vinyl vertical blinds. Large department stores or catalog houses usually have standard sizes.
Carpets:
Dirty carpets should be either professionally steam-cleaned preferred , or you should rent a heavy-duty cleaner. If the carpet is badly worn, replace it with a new carpet and a quality pad in a neutral color. Consider either a plush or berber carpet.
Lighting:
If any room appears dark, increase the wattage of your light bulbs. Before a showing, open the blinds and drapes and turn on the lights, even during the day--you want the house as bright as possible. Be sure that your light fixtures and windows are clean.
Closets:
If closets appear crowded, remove items not needed and put in boxes. They can be stacked neatly in a corner of the basement, attic or garage.
Too much furniture:
Many homes appear crowded, with too many pieces of large furniture and too much bric-a-brac. Consider putting excess furniture in a storage locker.
Garage and basement:
Spruce up your work area. Consider a garage sale to get rid of items you no longer need. Put excess items in boxes and stack them neatly in a corner. Consider using commercial garage floor cleaner on oil and grease marks on the garage floor and drive-way. You might consider a commercial steam cleaner not a carpet cleaner.
Temperature:
On cold days, a natural fire in the fireplace will help us sell your home. Start the fire before the showing is scheduled. On hot days, consider turning the air conditioner four to five degrees cooler than normal. The contrast will seem phenomenal, making a very positive impression. In moderate weather, open windows for fresh air.
Your Best Role during Showings:
When your home is shown, it's best that you disappear for a while. Buyers feel restrained with an owner present. If buyers hesitate to voice their concerns, then their questions cannot be answered and their problems cannot be solved.
If you must remain in the house, try to stay in one area. Excellent places to be are working in the garden, on the lawn or in the workshop. These activities create a positive image. While soft music is fine, turn off the TV.
Never, never follow the agent around the house during the showing, volunteer any information or answer questions the buyers may have. You have engaged professional real estate salespeople. We will ask you questions if necessary.
Exterior
Grass and shrubs
Keep trimmed. Consider a fast-greening fertilizer such as ammonium sulfate inexpensive for a deep green lawn.
Pets
If you have a dog, clean up any dog dirt on a daily basis. Secure pets while the house is being shown. If you have a cat, change the litter box daily.
Fences
Make any needed repairs. A neat, well-painted fence gives a positive impression.
Flowers
Plant seasonal blooming flowers, especially near the front door and in any patio area. A profusion of color can have your home half-sold before the door is even opened.
Bird feeders
Hummingbird feeders and bird houses create a pleasant mood, especially when they are close to any patio area.
Paint:
Front door
Front door should be refinished or painted if it shows excessive wear.
Condition of exterior paint
Often only the trim or, depending on sun exposure, only one or two sides of the house need painting. Keep in mind that paint is cheap compared to the extra dollars a home with a clean, fresh appearance will bring.
Lawn furniture:
Place lawn furniture in an attractive, leisurely manner. A badminton net or croquet set-up gives a positive image as well.
Roof:
If the roof needs to be repaired or replaced, it's best to have the work done. Otherwise, buyers will want to deduct the cost even if your price already reflects the required work. Delaying repairs can actually cost you twice as much.
Interior:
Housekeeping. You are competing against model homes, so your home must look as much like a model as possible. Floors, bath fixtures and appliances must be sparkling. Consider using a car wax on appliances. Make beds early in the day. Unmade beds and late sleepers create a very negative image.
Odors and aromas:
Avoid heavy frying, using vinegar or cooking strong-smelling foods such as cabbage. The odors last and work against the image you are trying to create. On the other hand, some smells have a positive effect on people: Baked bread, apple pie, chocolate cookies and cinnamon rolls are examples of foods that can sell your home. Consider keeping prepackaged cookie or bread dough in the refrigerator. Just before a scheduled showing, the smell of these baking foods can be a great help to us. If you or your family members smoke, don't smoke in your home and don't allow guests to smoke. Stale tobacco odors can be masked with some odor sprays. If the temperature allows it, open windows and air out the house every morning.
Paint:
If you have leftover paint, you can accomplish a great deal by doing touch-ups where needed. If the surface is dark, repaint with light colors such as off-white, oyster, light beige or pale yellow. Light colors make rooms appear fresh as well as larger.
Plumbing:
Repair any leaky faucets. Make certain that you don't have a gurgling toilet. Clean out any slow drains.
Shades and blinds:
Replace any torn shades or broken blinds.
Drapes:
If drapes need cleaning, have it done. If they are old and worn, stained or dark, consider replacing them with either light-colored drapes or off-white vinyl vertical blinds. Large department stores or catalog houses usually have standard sizes.
Carpets:
Dirty carpets should be either professionally steam-cleaned preferred , or you should rent a heavy-duty cleaner. If the carpet is badly worn, replace it with a new carpet and a quality pad in a neutral color. Consider either a plush or berber carpet.
Lighting:
If any room appears dark, increase the wattage of your light bulbs. Before a showing, open the blinds and drapes and turn on the lights, even during the day--you want the house as bright as possible. Be sure that your light fixtures and windows are clean.
Closets:
If closets appear crowded, remove items not needed and put in boxes. They can be stacked neatly in a corner of the basement, attic or garage.
Too much furniture:
Many homes appear crowded, with too many pieces of large furniture and too much bric-a-brac. Consider putting excess furniture in a storage locker.
Garage and basement:
Spruce up your work area. Consider a garage sale to get rid of items you no longer need. Put excess items in boxes and stack them neatly in a corner. Consider using commercial garage floor cleaner on oil and grease marks on the garage floor and drive-way. You might consider a commercial steam cleaner not a carpet cleaner.
Temperature:
On cold days, a natural fire in the fireplace will help us sell your home. Start the fire before the showing is scheduled. On hot days, consider turning the air conditioner four to five degrees cooler than normal. The contrast will seem phenomenal, making a very positive impression. In moderate weather, open windows for fresh air.
Your Best Role during Showings:
When your home is shown, it's best that you disappear for a while. Buyers feel restrained with an owner present. If buyers hesitate to voice their concerns, then their questions cannot be answered and their problems cannot be solved.
If you must remain in the house, try to stay in one area. Excellent places to be are working in the garden, on the lawn or in the workshop. These activities create a positive image. While soft music is fine, turn off the TV.
Never, never follow the agent around the house during the showing, volunteer any information or answer questions the buyers may have. You have engaged professional real estate salespeople. We will ask you questions if necessary.
Tips To Help You Sell A Vacant House
Tips To Help You Sell A Vacant House
The ad looks too good to be true -- a home with all the prerequisites you want is on the market in a fabulous neighborhood. The community is near work, the schools are great, there are lots of activities nearby -- and the asking price is competitive.
But when the prospective buyers approach the newly listed home, hopes plummet -- the place is vacant and filled with scarred walls, dirty floors, and an unkempt yard.
Unfortunately, a home which is merely "lived-in" when furnished and occupied may look bare and blemished when empty. But the good news is that selling a vacant home isn't an impossible task, especially if you follow these pointers:
Remember first impressions. Regardless of whether your home is vacant or not, its appeal from the street is crucial in making a positive impact with potential buyers.
Paint or fix up the front entrance as required.
If you have a lawn, keep it mowed. Hire a neighborhood teen or local landscape service to keep it maintained. If you have an automated irrigation or sprinkler system, you'll want to leave it on, or ask a neighbor to water for you. This is especially crucial in regions with scorching summers.
If your house is on the market in fall, be sure you or someone you hire keeps leaves cleaned up. Likewise, if it's winter and you live in a snowy area, be sure driveways and entrances are cleared.
Spruce up landscaping before you leave. Plant some new shrubs, lay down some fresh ground cover, or brighten it up with some colorful annuals.
Go through every room of your house, paintbrush in hand, and touch up any walls that have been scuffed or marked up. After moving furniture out, you're sure to find a slew of such marks.
Walls painted in bold, bright colors are wonderful attention-getters when complemented by furniture, rugs, and accessories. However, in an empty room, these bold colors may put buyers off. You may want to consider painting neutral colors throughout the house before you sell.
Get carpets professionally cleaned once everything is moved out. If the floors aren't taken care of, the prospective home buyer may wonder, what else isn't?
Clean your house thoroughly in every nook and cranny -- including windows and fireplaces -- before you let potential buyers look at it.
If at all possible, try to leave some furniture in the house. This will give prospective buyers a sense of size and proportion -- and a place to sit down. Empty rooms tend to look smaller than they actually are.
Don't set your deserted house up for potential break-ins. You may want to invest in exterior sensor lights that automatically turn on when it gets dark and turn off at sunrise. Make sure you cancel your newspaper subscription and forward your mail.
If you have a security alarm, use it -- just be sure you leave your entrance code with your real estate broker.
Be sure you review the provisions of your homeowners insurance. Many companies have a cap on how long coverage will last while the property is vacant.
As you prepare a vacant home for sale, also consider this idea: Some buyers like the flexibility that comes with buying a vacant house. They can move in as soon or as late as they'd like, and they don't have to worry about floors getting soiled and walls getting banged up when you move out.
The ad looks too good to be true -- a home with all the prerequisites you want is on the market in a fabulous neighborhood. The community is near work, the schools are great, there are lots of activities nearby -- and the asking price is competitive.
But when the prospective buyers approach the newly listed home, hopes plummet -- the place is vacant and filled with scarred walls, dirty floors, and an unkempt yard.
Unfortunately, a home which is merely "lived-in" when furnished and occupied may look bare and blemished when empty. But the good news is that selling a vacant home isn't an impossible task, especially if you follow these pointers:
Remember first impressions. Regardless of whether your home is vacant or not, its appeal from the street is crucial in making a positive impact with potential buyers.
Paint or fix up the front entrance as required.
If you have a lawn, keep it mowed. Hire a neighborhood teen or local landscape service to keep it maintained. If you have an automated irrigation or sprinkler system, you'll want to leave it on, or ask a neighbor to water for you. This is especially crucial in regions with scorching summers.
If your house is on the market in fall, be sure you or someone you hire keeps leaves cleaned up. Likewise, if it's winter and you live in a snowy area, be sure driveways and entrances are cleared.
Spruce up landscaping before you leave. Plant some new shrubs, lay down some fresh ground cover, or brighten it up with some colorful annuals.
Go through every room of your house, paintbrush in hand, and touch up any walls that have been scuffed or marked up. After moving furniture out, you're sure to find a slew of such marks.
Walls painted in bold, bright colors are wonderful attention-getters when complemented by furniture, rugs, and accessories. However, in an empty room, these bold colors may put buyers off. You may want to consider painting neutral colors throughout the house before you sell.
Get carpets professionally cleaned once everything is moved out. If the floors aren't taken care of, the prospective home buyer may wonder, what else isn't?
Clean your house thoroughly in every nook and cranny -- including windows and fireplaces -- before you let potential buyers look at it.
If at all possible, try to leave some furniture in the house. This will give prospective buyers a sense of size and proportion -- and a place to sit down. Empty rooms tend to look smaller than they actually are.
Don't set your deserted house up for potential break-ins. You may want to invest in exterior sensor lights that automatically turn on when it gets dark and turn off at sunrise. Make sure you cancel your newspaper subscription and forward your mail.
If you have a security alarm, use it -- just be sure you leave your entrance code with your real estate broker.
Be sure you review the provisions of your homeowners insurance. Many companies have a cap on how long coverage will last while the property is vacant.
As you prepare a vacant home for sale, also consider this idea: Some buyers like the flexibility that comes with buying a vacant house. They can move in as soon or as late as they'd like, and they don't have to worry about floors getting soiled and walls getting banged up when you move out.
The Effects of Supply and Demand
The Effects of Supply and Demand
The free enterprise system is alive and well in real estate. Homes may be bought and sold at will with few, if any, governmental restrictions. Sellers may ask any price they wish, and buyers may offer whatever price they are willing to pay. Asking too much for a home is the prerogative of sellers, just as offering too little is a legitimate choice of buyers. Nevertheless, a sale takes place only when the buyer and seller reach a price level acceptable to both. That is the way a free market economy works. The final price, called "fair market value", is defined as "that price which a buyer is willing to pay, and at which a seller is willing to sell, both parties being knowledgeable about the property, and neither party being under any time pressure to act."
Real estate is highly marketable, meaning that there is always a ready supply of both buyers and sellers. Buyers can choose from a wide selection of similar homes, while sellers have free access to all available buyers. Because price must be agreed upon before a sale can take place, there are three reasons for pricing a home fairly from the beginning: A home priced at "fair market value" is more likely to sell at full price. Buyers compare the features and amenities offered by similar homes. They are likely to recognize a fairly priced home, without feeling they must bargain to receive fair value. An overpriced home helps to sell the competition. Buyers will compare the overpriced home with other similar homes, and then buy one of the other homes. Even if a buyer agrees to pay an inflated price, mortgage rejections can occur when a home does not appraise for the purchase price.
Selling your home? Set the price at "fair market value", and then watch buyers compete to purchase it.
The free enterprise system is alive and well in real estate. Homes may be bought and sold at will with few, if any, governmental restrictions. Sellers may ask any price they wish, and buyers may offer whatever price they are willing to pay. Asking too much for a home is the prerogative of sellers, just as offering too little is a legitimate choice of buyers. Nevertheless, a sale takes place only when the buyer and seller reach a price level acceptable to both. That is the way a free market economy works. The final price, called "fair market value", is defined as "that price which a buyer is willing to pay, and at which a seller is willing to sell, both parties being knowledgeable about the property, and neither party being under any time pressure to act."
Real estate is highly marketable, meaning that there is always a ready supply of both buyers and sellers. Buyers can choose from a wide selection of similar homes, while sellers have free access to all available buyers. Because price must be agreed upon before a sale can take place, there are three reasons for pricing a home fairly from the beginning: A home priced at "fair market value" is more likely to sell at full price. Buyers compare the features and amenities offered by similar homes. They are likely to recognize a fairly priced home, without feeling they must bargain to receive fair value. An overpriced home helps to sell the competition. Buyers will compare the overpriced home with other similar homes, and then buy one of the other homes. Even if a buyer agrees to pay an inflated price, mortgage rejections can occur when a home does not appraise for the purchase price.
Selling your home? Set the price at "fair market value", and then watch buyers compete to purchase it.
6 Reasons Homes Don't Sell
6 Reasons Homes Don't Sell
Has your lawn grown up around that "For Sale" sign? Have the wasps moved into the lock box on your front door? Did you just receive an invitation to your real estate agent's retirement party? If so, chances are your home sale fizzled.
Here are the six most-common reasons why homes don't sell and what you can do about it.
1. Your home is overpriced.Optimistic home sellers love to parrot the old adage, "There's a buyer for every home." But they often leave off the qualifier: "at the buyer's price."
The fact is buyers -- not sellers -- ultimately determine the market value of a home. You can ask for the moon and set your listing price well above comparable properties in your neighborhood, but at some point it will be up to you, the seller, to accept what the buyer thinks your home is worth.
Overpricing is the most common reason homes don't sell. When you ask an unrealistic price, it sets in motion a process that often works against you. Here's why:
Most real estate agents, and hence most qualified buyers, will see your new listing within 30 days. If it is overpriced by as little as 5 percent, it will be duly noted and interest in your property will wane, especially if you show no intention of coming off your asking price. You likely already priced out buyers who might have qualified for financing at a more reasonable price. Even if you manage to find a buyer at your inflated asking price, the property may not appraise at that figure and the financing will fall apart.
Your real estate agent may have approved or even suggested the inflated asking price to secure your listing (more on this in No. 4). Conversely, other Realtors often use overpriced properties like yours to help sell their own listings ("Here's what they are asking. Now would you like to take a second look at that first house I showed you?")
If you have a house that really should be priced at $200,000 and you've got it listed at $260,000, you are trying to compete against homes that really are worth close to $300,000 and all of a sudden your home really is not competing well. You want to compete with what is available out there among homes similar to yours.
If your home remains on the market for too long, agents and buyers may begin to wonder if there are other, perhaps more serious reasons why it isn't selling.
It becomes shopworn, the same as a jacket hanging in the store week after week. People are aware that it has been on the market a long time and agents stop showing it.
2. Your home doesn't "show" well.Your home is competing against shiny new houses in those pristine subdivisions out in the suburbs with their attractive prices, incentives and community amenities.
Face it: Even the best old house needs a little makeover if it hopes to attract a qualified buyer.
The good news is most of the work will be cosmetic and relatively inexpensive: a new coat of paint, a few attractive window boxes, a thorough cleaning of floors and carpets. Voila! The place may look good enough to reconsider.
A good real estate agent can advise you on where your time and money are best spent.
Price and condition are two things that the seller can do something about. I think paint is probably a seller's best friend because it makes things smell fresh and look fresh. If it's time to paint, it's time to paint. It's the best return on investment."
3. You're in a bad location.Nothing has a greater impact on your home's value than its location. Your humble abode might be worth a king's ransom were it located in Palm Beach, Aspen or San Francisco. It might even jump thousands in value just two streets over in the next (and far superior) school district.
"If you're in one of the higher-ranked schools around here, you're going to add $50,000 to $100,000 to the price of the same house," according to Lenn Harley, a broker with Homefinders.com Inc. in Maryland and Virginia.
The point is location rules in real estate.
If your home's location is less than desirable, your options are somewhat limited. A good real estate agent will do his best to help you accentuate the positive and eliminate the negative of your circumstances, say by using foliage to screen off offensive adjoining properties or dampen traffic noise.
The best way to compensate for a poor location is to reduce your asking price or offer attractive incentives such as seller financing or a lease option with rent credit.
4. You have a lousy listing agent.Yep, they exist: Real estate agents, who mislead, misfire and misbehave.
Their bad advice can cost you plenty in time, money and the sheer hassle of keeping the place show-ready 24/7.
The agent from hell will allow you to overprice your home ("Here's what I can get for you if you list with me!"), not market it properly (see No. 6), fail to screen for qualified buyers, be unresponsive to interest from other agents (if they sell their own listing, they don't have to split the commission) and keep you totally in the dark throughout the process.
What's more, if your agent is abrasive, arrogant or otherwise difficult to work with, other agents may not want the hassle of showing any of their listings to prospective buyers.
5. You are battling competition or market conditions.We've all heard the terms "buyer's market" and "seller's market." In real estate, market conditions are affected by any number of external forces, some of them predictable (the weather, sort of), some of them unpredictable (the local economy, interest rates, public optimism or pessimism).
In a "hot" or seller's market, homes go fast. Inventory (homes on the market) may be low, meaning less competition for you. Chances are better that you will get your asking price in a hot market; in fact, it is not uncommon to even be offered more than your listing price.
But in a "flat," "cold" or buyer's market, sales slow to a trickle, inventories grow and buyers can find bargains, especially when they know the seller is motivated (i.e., paying on two mortgages).
If you're trying to sell in a flat market, you're not only competing against all that vacant new construction, but against rentals as well. In this case, be prepared to settle for less than top dollar, or wait to sell until the pendulum swings once again in your favor.
6. You have ineffective marketing.Gone are the days when an agent could simply place your listing with the local multiple listing service, hold a halfhearted open house and wait for another agent to bring forth a buyer.
Today's top performers launch a multilevel marketing plan that includes listing tours for area agents, newspaper and even TV ads, weekend open houses, listing fliers and placements in local real estate publications.
Computers and the Internet also have changed the face of real estate. According to the National Association of Realtors, today more than one-third of all home buyers use the Internet for house hunting. The best real estate agents are computer-savvy. They have your listing in color on their laptops to show clients and communicate frequently via e-mail, a particular boon when working with out-of-town buyers.
Suffice it to say that if your real estate agent isn't listing your home online through the company Web site as well as with the local MLS, you may not be getting the exposure necessary to find a buyer.
There are those who just put the listing in the multiple and pray it will sell and those that put a lot of effort into marketing their listings. Unfortunately, with this weird system of compensation we have, they all get paid the same, whether they know nothing or have many years of experience.
Has your lawn grown up around that "For Sale" sign? Have the wasps moved into the lock box on your front door? Did you just receive an invitation to your real estate agent's retirement party? If so, chances are your home sale fizzled.
Here are the six most-common reasons why homes don't sell and what you can do about it.
1. Your home is overpriced.Optimistic home sellers love to parrot the old adage, "There's a buyer for every home." But they often leave off the qualifier: "at the buyer's price."
The fact is buyers -- not sellers -- ultimately determine the market value of a home. You can ask for the moon and set your listing price well above comparable properties in your neighborhood, but at some point it will be up to you, the seller, to accept what the buyer thinks your home is worth.
Overpricing is the most common reason homes don't sell. When you ask an unrealistic price, it sets in motion a process that often works against you. Here's why:
Most real estate agents, and hence most qualified buyers, will see your new listing within 30 days. If it is overpriced by as little as 5 percent, it will be duly noted and interest in your property will wane, especially if you show no intention of coming off your asking price. You likely already priced out buyers who might have qualified for financing at a more reasonable price. Even if you manage to find a buyer at your inflated asking price, the property may not appraise at that figure and the financing will fall apart.
Your real estate agent may have approved or even suggested the inflated asking price to secure your listing (more on this in No. 4). Conversely, other Realtors often use overpriced properties like yours to help sell their own listings ("Here's what they are asking. Now would you like to take a second look at that first house I showed you?")
If you have a house that really should be priced at $200,000 and you've got it listed at $260,000, you are trying to compete against homes that really are worth close to $300,000 and all of a sudden your home really is not competing well. You want to compete with what is available out there among homes similar to yours.
If your home remains on the market for too long, agents and buyers may begin to wonder if there are other, perhaps more serious reasons why it isn't selling.
It becomes shopworn, the same as a jacket hanging in the store week after week. People are aware that it has been on the market a long time and agents stop showing it.
2. Your home doesn't "show" well.Your home is competing against shiny new houses in those pristine subdivisions out in the suburbs with their attractive prices, incentives and community amenities.
Face it: Even the best old house needs a little makeover if it hopes to attract a qualified buyer.
The good news is most of the work will be cosmetic and relatively inexpensive: a new coat of paint, a few attractive window boxes, a thorough cleaning of floors and carpets. Voila! The place may look good enough to reconsider.
A good real estate agent can advise you on where your time and money are best spent.
Price and condition are two things that the seller can do something about. I think paint is probably a seller's best friend because it makes things smell fresh and look fresh. If it's time to paint, it's time to paint. It's the best return on investment."
3. You're in a bad location.Nothing has a greater impact on your home's value than its location. Your humble abode might be worth a king's ransom were it located in Palm Beach, Aspen or San Francisco. It might even jump thousands in value just two streets over in the next (and far superior) school district.
"If you're in one of the higher-ranked schools around here, you're going to add $50,000 to $100,000 to the price of the same house," according to Lenn Harley, a broker with Homefinders.com Inc. in Maryland and Virginia.
The point is location rules in real estate.
If your home's location is less than desirable, your options are somewhat limited. A good real estate agent will do his best to help you accentuate the positive and eliminate the negative of your circumstances, say by using foliage to screen off offensive adjoining properties or dampen traffic noise.
The best way to compensate for a poor location is to reduce your asking price or offer attractive incentives such as seller financing or a lease option with rent credit.
4. You have a lousy listing agent.Yep, they exist: Real estate agents, who mislead, misfire and misbehave.
Their bad advice can cost you plenty in time, money and the sheer hassle of keeping the place show-ready 24/7.
The agent from hell will allow you to overprice your home ("Here's what I can get for you if you list with me!"), not market it properly (see No. 6), fail to screen for qualified buyers, be unresponsive to interest from other agents (if they sell their own listing, they don't have to split the commission) and keep you totally in the dark throughout the process.
What's more, if your agent is abrasive, arrogant or otherwise difficult to work with, other agents may not want the hassle of showing any of their listings to prospective buyers.
5. You are battling competition or market conditions.We've all heard the terms "buyer's market" and "seller's market." In real estate, market conditions are affected by any number of external forces, some of them predictable (the weather, sort of), some of them unpredictable (the local economy, interest rates, public optimism or pessimism).
In a "hot" or seller's market, homes go fast. Inventory (homes on the market) may be low, meaning less competition for you. Chances are better that you will get your asking price in a hot market; in fact, it is not uncommon to even be offered more than your listing price.
But in a "flat," "cold" or buyer's market, sales slow to a trickle, inventories grow and buyers can find bargains, especially when they know the seller is motivated (i.e., paying on two mortgages).
If you're trying to sell in a flat market, you're not only competing against all that vacant new construction, but against rentals as well. In this case, be prepared to settle for less than top dollar, or wait to sell until the pendulum swings once again in your favor.
6. You have ineffective marketing.Gone are the days when an agent could simply place your listing with the local multiple listing service, hold a halfhearted open house and wait for another agent to bring forth a buyer.
Today's top performers launch a multilevel marketing plan that includes listing tours for area agents, newspaper and even TV ads, weekend open houses, listing fliers and placements in local real estate publications.
Computers and the Internet also have changed the face of real estate. According to the National Association of Realtors, today more than one-third of all home buyers use the Internet for house hunting. The best real estate agents are computer-savvy. They have your listing in color on their laptops to show clients and communicate frequently via e-mail, a particular boon when working with out-of-town buyers.
Suffice it to say that if your real estate agent isn't listing your home online through the company Web site as well as with the local MLS, you may not be getting the exposure necessary to find a buyer.
There are those who just put the listing in the multiple and pray it will sell and those that put a lot of effort into marketing their listings. Unfortunately, with this weird system of compensation we have, they all get paid the same, whether they know nothing or have many years of experience.
Friday, March 25, 2005
FSBO - Is Your Buyer Qualified?
Unless the buyer who makes an offer on your home has the resources to qualify for a mortgage, you may not really have a sale. If possible, try to determine a buyer's financial status before signing the contract. Ask:
1. If the buyer has been prequalified or preapproved (better) for a mortgage. Such buyers will be in a much better position to obtain a mortgage promptly.
2. Does the buyer have enough money to make a downpayment and cover closing costs? Ideally, a buyer should have 20 percent of the home's price as a downpayment and between 2 and 7 percent of the price to cover closing costs.
3. Is the buyer's income sufficient to afford your home? Ideally, buyers should spend no more than 28 percent of total income to cover PITI (principal, interest, taxes, and insurance).
4. Does your buyer have good credit? Ask if he or she has reviewed and corrected a credit report.
5. Does the buyer have too much debt? If a buyer owes a great deal on car payments, credit cards, etc., he or she may not qualify for a mortgage.
1. If the buyer has been prequalified or preapproved (better) for a mortgage. Such buyers will be in a much better position to obtain a mortgage promptly.
2. Does the buyer have enough money to make a downpayment and cover closing costs? Ideally, a buyer should have 20 percent of the home's price as a downpayment and between 2 and 7 percent of the price to cover closing costs.
3. Is the buyer's income sufficient to afford your home? Ideally, buyers should spend no more than 28 percent of total income to cover PITI (principal, interest, taxes, and insurance).
4. Does your buyer have good credit? Ask if he or she has reviewed and corrected a credit report.
5. Does the buyer have too much debt? If a buyer owes a great deal on car payments, credit cards, etc., he or she may not qualify for a mortgage.
FSBO - 6 Forms You'll Need to Sell Your Home
1. Property Disclosure Form: This form requires you to reveal all known defects to your property. Check with your state government to see if there is a special form required in your state.
2. Purchasers Access to Premises Agreement: This agreement sets conditions for permitting the buyer to enter your home for activities such as measuring for draperies before you move. This language can be written into your sales contract.
3. Sales Contract: The agreement between you and the seller on terms and conditions of sale. Again, check with your state real estate department to see if there is a required form.
4. Sales Contract Contingency Clauses: In addition to the contract, you may need to add one or more attachments to the contract to address special contingencies—such as the buyer's need to sell a home before purchasing yours.
5. Pre- and Post-Occupancy Agreements: Unless you're planning on moving out and the buyer moving in on the day of closing, you'll need an agreement on the terms and costs of occupancy once the sale closes.
6. Lead-Based Paint Disclosure Pamphlet: If your home was built before 1978, you must provide the pamphlet to all sellers. You must also have buyers sign a statement indicating they received the pamphlet.
2. Purchasers Access to Premises Agreement: This agreement sets conditions for permitting the buyer to enter your home for activities such as measuring for draperies before you move. This language can be written into your sales contract.
3. Sales Contract: The agreement between you and the seller on terms and conditions of sale. Again, check with your state real estate department to see if there is a required form.
4. Sales Contract Contingency Clauses: In addition to the contract, you may need to add one or more attachments to the contract to address special contingencies—such as the buyer's need to sell a home before purchasing yours.
5. Pre- and Post-Occupancy Agreements: Unless you're planning on moving out and the buyer moving in on the day of closing, you'll need an agreement on the terms and costs of occupancy once the sale closes.
6. Lead-Based Paint Disclosure Pamphlet: If your home was built before 1978, you must provide the pamphlet to all sellers. You must also have buyers sign a statement indicating they received the pamphlet.
FSBO - 17 Service Providers You May Need When You Sell:
1. Real Estate Attorney
2. Appraiser
3. Home Inspector
4. Mortgage Loan Officer
5. Environmental Specialist
6. Lead Paint Inspector
7. Radon Inspector
8. Tax Advisor
9. Sanitary Systems Expert
10. Occupancy Permit Inspector
11. Zoning Inspector
12. Survey Company
13. Flood Plain Inspector
14. Pest Inspector
15. Title Company
16. Insurance Consultant
17. Moving Company
Used with permission from Kim Daugherty, Real Estate Checklists and Systems, www.realestatechecklists.com.
2. Appraiser
3. Home Inspector
4. Mortgage Loan Officer
5. Environmental Specialist
6. Lead Paint Inspector
7. Radon Inspector
8. Tax Advisor
9. Sanitary Systems Expert
10. Occupancy Permit Inspector
11. Zoning Inspector
12. Survey Company
13. Flood Plain Inspector
14. Pest Inspector
15. Title Company
16. Insurance Consultant
17. Moving Company
Used with permission from Kim Daugherty, Real Estate Checklists and Systems, www.realestatechecklists.com.
FSBO - Open House Tips
Advertise your open house. Ideally you should advertise both the weekend before and the weekend of the open house. Check with the local paper to see when their ad closing deadlines are.
Create a property summary sheet. This sheet gives prospective buyers an overview of your home. Include dimensions for each room, copies of a property survey, summaries of utility costs and property taxes, and a list of when capital items such as roofs and furnace were added.
Develop a sign-in form for prospects' addresses. You'll ideally want both phone numbers and e-mail addresses to follow up with prospective buyers.
Put up signs. One or two days before the open house, place directional signs at major intersections within three to four blocks of your house. Be sure you check on anti-sign regulations in your area.
Get your house ready. Remove clutter, clean your house, wash your windows, add flowers, turn on lights, open draperies and blinds, remove valuables and breakables, confine pets, turn on soft music, and set up a table for your property fact sheet near the entrance.
Develop a follow-up sheet. Getting feedback on your home from prospects who attended your open house will give you a better understanding of how to make your home more appealing to buyers.
Create a property summary sheet. This sheet gives prospective buyers an overview of your home. Include dimensions for each room, copies of a property survey, summaries of utility costs and property taxes, and a list of when capital items such as roofs and furnace were added.
Develop a sign-in form for prospects' addresses. You'll ideally want both phone numbers and e-mail addresses to follow up with prospective buyers.
Put up signs. One or two days before the open house, place directional signs at major intersections within three to four blocks of your house. Be sure you check on anti-sign regulations in your area.
Get your house ready. Remove clutter, clean your house, wash your windows, add flowers, turn on lights, open draperies and blinds, remove valuables and breakables, confine pets, turn on soft music, and set up a table for your property fact sheet near the entrance.
Develop a follow-up sheet. Getting feedback on your home from prospects who attended your open house will give you a better understanding of how to make your home more appealing to buyers.
FSBO - Tips for Pricing Your Home
- Consider comparables. What have other homes in your neighborhood sold for recently? How do they compare to yours in terms of size, upkeep, and amenities?
- Consider competition. How many other houses are for sale in your area? Are you competing against new homes?
- Consider your contingencies. Do you have special concerns that would affect the price you'll receive? For example, do you want to be able to move in four months?
- Get an appraisal. For a few hundred dollars, a qualified appraiser can give you an estimate of your home's value. Be sure to ask for a market-value appraisal. To locate appraisers in your area, contact The Appraisal Institute (www.appraisalinstitute.org) or ask your REALTOR® for some recommendations.
- Ask a lender. Since most buyers will need a mortgage, it's important that a home's sale price be in line with a lender's estimate of its value.
- Be accurate. Studies show that homes priced more than 3 percent over the correct price take longer to sell.
- Know what you'll take. It's critical to know what price you'll accept before beginning a negotiation with a buyer.
- Consider competition. How many other houses are for sale in your area? Are you competing against new homes?
- Consider your contingencies. Do you have special concerns that would affect the price you'll receive? For example, do you want to be able to move in four months?
- Get an appraisal. For a few hundred dollars, a qualified appraiser can give you an estimate of your home's value. Be sure to ask for a market-value appraisal. To locate appraisers in your area, contact The Appraisal Institute (www.appraisalinstitute.org) or ask your REALTOR® for some recommendations.
- Ask a lender. Since most buyers will need a mortgage, it's important that a home's sale price be in line with a lender's estimate of its value.
- Be accurate. Studies show that homes priced more than 3 percent over the correct price take longer to sell.
- Know what you'll take. It's critical to know what price you'll accept before beginning a negotiation with a buyer.
Understanding Capital Gains in Real Estate
When you sell a stock, you owe taxes on your gain—the difference between what you paid for the stock and what you sold it for. The same is true with selling a home (or a second home), but there are some special considerations.
How to Calculate Gain
In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate this:
1. Take the purchase price of the home: This is the sale price, not the amount of money you actually contributed at closing.
2. Add Adjustments:
Cost of the purchase—including transfer fees, attorney fees, inspections, but not points you paid on your mortgage.
Cost of sale—including inspections, attorney's fee, real estate commission, and money you spent to fix up your home just prior to sale.
Cost of improvements—including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.
3. The total of this is the adjusted cost basis of your home.
4. Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.
A Special Real Estate Exemption for Capital Gains
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria
You have lived in the home as your principal residence for two out of the last five years.
You have not sold or exchanged another home during the two years preceding the sale.
Also note that as of 2003, you may also qualify for this exemption if you meet what the IRS calls "unforeseen circumstances" such as job loss, divorce, or family medical emergency.
How to Calculate Gain
In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate this:
1. Take the purchase price of the home: This is the sale price, not the amount of money you actually contributed at closing.
2. Add Adjustments:
Cost of the purchase—including transfer fees, attorney fees, inspections, but not points you paid on your mortgage.
Cost of sale—including inspections, attorney's fee, real estate commission, and money you spent to fix up your home just prior to sale.
Cost of improvements—including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.
3. The total of this is the adjusted cost basis of your home.
4. Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.
A Special Real Estate Exemption for Capital Gains
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria
You have lived in the home as your principal residence for two out of the last five years.
You have not sold or exchanged another home during the two years preceding the sale.
Also note that as of 2003, you may also qualify for this exemption if you meet what the IRS calls "unforeseen circumstances" such as job loss, divorce, or family medical emergency.
What Is Appraised Value?
It's an objective opinion of value, but it's not an exact science so appraisals may differ.
For buying and selling purposes, appraisals are usually based on market value—what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.
Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value.
Appraised value doesn't consider special considerations, like the need to sell rapidly.
Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer.
Used with permission from Kim Daugherty, Real Estate Checklists and Systems, www.realestatechecklists.com
For buying and selling purposes, appraisals are usually based on market value—what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.
Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value.
Appraised value doesn't consider special considerations, like the need to sell rapidly.
Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer.
Used with permission from Kim Daugherty, Real Estate Checklists and Systems, www.realestatechecklists.com
20 Low-Cost Ways to Spruce Up Your Home
Make your home more appealing for yourself and for potential buyers with these quick and easy tips:
1. Trim bushes so they don't block windows and cut down on light.
2. Buy a new doormat.
3. Put a pot of bright flowers (or a small evergreen in winter) on your porch.
4. Put new doorknobs on your front door.
5. Put a fresh coating on your driveway.
6. Edge the grass around walks and trees.
7. Keep your garden tools out of site.
8. Be sure kids put away their toys.
9. Buy a new mailbox.
10. Upgrade your outside lighting.
11. Use warm, incandescent light bulbs for a homey feel.
12. Polish or replace your house numbers.
13. Clean your gutters.
14. Put out potpourri or burn scented candles.
15. Buy new pillows for the sofa.
16. Buy a flowering plant and put in a window you pass by frequently.
17. Make a centerpiece for your table with fruit or artificial flowers.
18. Replace heavy curtains with sheer ones that let in more light.
19. Buy new towels.
20. Put a seasonal wreath on your door.
1. Trim bushes so they don't block windows and cut down on light.
2. Buy a new doormat.
3. Put a pot of bright flowers (or a small evergreen in winter) on your porch.
4. Put new doorknobs on your front door.
5. Put a fresh coating on your driveway.
6. Edge the grass around walks and trees.
7. Keep your garden tools out of site.
8. Be sure kids put away their toys.
9. Buy a new mailbox.
10. Upgrade your outside lighting.
11. Use warm, incandescent light bulbs for a homey feel.
12. Polish or replace your house numbers.
13. Clean your gutters.
14. Put out potpourri or burn scented candles.
15. Buy new pillows for the sofa.
16. Buy a flowering plant and put in a window you pass by frequently.
17. Make a centerpiece for your table with fruit or artificial flowers.
18. Replace heavy curtains with sheer ones that let in more light.
19. Buy new towels.
20. Put a seasonal wreath on your door.
12 Tips for Hiring a Remodeling Contractor
1. Get at least three written estimates.
2. Get references and call to check on the work. If possible, go by and visit earlier jobs.
3. Check with the local Chamber of Commerce or Better Business Bureau for complaints.
4. Be sure that the contract states exactly what is to be done and how change orders will be handled.
5. Make as small a downpayment as possible so you won't lose a lot if the contractor fails to complete the job.
6. Be sure that the contractor has the necessary permits, licenses, and insurance.
7. Be sure that the contract states when the work will be completed and what recourse you have if it isn't. Also remember that in many instances you can cancel a contract within three business days of signing it.
8. Ask if the contractor's workers will do the entire job or whether subcontractors will do parts.
9. Get the contractor to indemnify you if work does not meet any local building codes or regulations.
10. Be sure that the contract specifies the contractor will clean up after the job and be responsible for any damage.
11. Guarantee that materials used meet your specifications.
12. Don't make the final payment until you're satisfied with the work.
2. Get references and call to check on the work. If possible, go by and visit earlier jobs.
3. Check with the local Chamber of Commerce or Better Business Bureau for complaints.
4. Be sure that the contract states exactly what is to be done and how change orders will be handled.
5. Make as small a downpayment as possible so you won't lose a lot if the contractor fails to complete the job.
6. Be sure that the contractor has the necessary permits, licenses, and insurance.
7. Be sure that the contract states when the work will be completed and what recourse you have if it isn't. Also remember that in many instances you can cancel a contract within three business days of signing it.
8. Ask if the contractor's workers will do the entire job or whether subcontractors will do parts.
9. Get the contractor to indemnify you if work does not meet any local building codes or regulations.
10. Be sure that the contract specifies the contractor will clean up after the job and be responsible for any damage.
11. Guarantee that materials used meet your specifications.
12. Don't make the final payment until you're satisfied with the work.
Remodeling That Pays
Upgrading your home is always appealing, but which enhancements get you the best return for your money when it's time to sell?
The 2005 Cost vs. Value Report by Remodeling magazine and REALTOR® Magazine has the answer.
Visit REALTOR® Magazine Online's Cost vs. Value page to view reports from previous years, order reprints, and find out how you can take part in next year's survey. Here are the national averages for 10 of the projects in the 2005 report:
MAJOR KITCHEN REMODEL
Update an outmoded 200-square-foot kitchen with new cabinets, laminate countertops, and standard double-tub stainless-steel sink with standard single-lever faucet. Include energy-efficient wall oven, cooktop, ventilation system, built-in microwave, dishwasher, and garbage disposer. Add custom lighting and new resilient floor. Finish with painted walls, trim, and ceiling. Include 30 linear feet of semi-custom grade wood cabinets, including a 3-by-5-foot island.
National Average
Job cost: $42,660
Value at sale: $33,890
Cost Recouped: 79.4%
BATHROOM REMODEL
Update bathroom that's at least 25 years old. Replace all fixtures to include standard-sized tub with ceramic tile surround, toilet, solid-surface vanity counter with integral double sink, recessed medicine cabinet, ceramic tile floor, and vinyl wallpaper.
National Average
Job cost: $9,861
Value at sale: $8,887
Cost Recouped: 90.1%
MASTER SUITE ADDITION
On a house with two or three bedrooms, add a 24-by-16-foot master bedroom suite over a crawlspace. Include walk-in closet/dressing area, whirlpool tub in ceramic tile platform, separate 3-by-4-foot ceramic tile shower, and double-bowl vanity with solid surface countertop. Bedroom floor is carpet; bath floor is ceramic tile. Paint the walls, ceiling, and trim. Add general and spot lighting and exhaust fan.
National Average
Job cost: $70,245
Value at sale: $56,257
Cost Recouped: 80.1%
FAMILY ROOM ADDITION
Add a 16-by-25-foot room on a crawl space foundation with vinyl siding and fiberglass shingle roof. Include drywall interior with batt insulation, prefinished hardwood floor, and 180 square feet of glazing, including windows, atrium-style exterior doors, and two operable
skylights. Tie into existing heating and cooling.
National Average
Job cost: $52,562
Value at sale: $42,347
Cost Recouped: 80.6%
WINDOW REPLACEMENT
Replace 10 existing 3-by-5-foot double-hung windows with vinyl- or aluminum-clad, double-glazed, wood replacement windows. Wrap existing exterior trim as required to match. Don't disturb existing interior trim.
National Average
Job cost: $9,273
Value at sale: $7,839
Cost Recouped: 84.5%
ROOFING REPLACEMENT
Remove existing roofing to bare wood and dispose of properly. Install 30 squares of fiberglass asphalt shingles with new felt underlayment, galvanized drip edge, and mill-finish aluminum flashing.
National Average
Job cost: $11,376
Value at sale: $9,197
Cost Recouped: 80.8%
ATTIC BEDROOM
In a house with two or three bedrooms, convert unfinished space in attic to a 15-by-15-foot bedroom and a 5-by-7-foot shower bath. Add a 15-foot shed dormer and four new windows. Insulate and finish ceiling and walls; carpet unfinished floor. Extend existing heating and central air conditioning to new space. Retain existing stairs.
National Average
Job cost: $35,960
Value at sale: $29,725
Cost Recouped: 82.7%
BASEMENT REMODEL
Create a 20-by-30-foot entertaining area with wet bar, a 5-by-8-foot full bath, and a 12-by-12-foot auxiliary room. Exterior walls are insulated. Include five six-panel primed hardboard doors. Main room includes 15 recessed ceiling light fixtures, three surface-mounted light fixtures, and snap-together laminate flooring system. Bathroom includes standard white toilet, vanity with cultured marble top, resilient vinyl flooring, two-piece fiberglass shower unit, a light/fan combination, vanity light fixture, and recessed medicine cabinet. Bar area includes 10 linear feet of raised panel oak cabinets with laminate
countertops, stainless steel bar sink, single-lever bar faucet, under-counter refrigerator, and vinyl floor tile.
National Average
Job cost: $47,888
Value at sale: $36,457
Cost Recouped: 76.1%
SUNROOM ADDITION
Add a 200-square-foot sunroom to a two-story house. Form and pour footings for slab-on-grade foundation. Use exposed post-and-beam framing on interior side and extruded aluminum window frame-and-flashing system with insulated, low-E, laminated, or tempered glazing. Provide for natural ventilation using screens and ceiling fan. Insulate all non-glass areas; provide movable shades for glass area.
National Average
Job cost: $31,063
Value at sale: $22,002
Cost Recouped: 70.8%
DECK ADDITION
Add 16-by-20-foot deck using pressure-treated SYP joists supported by 4-by-4 posts set into concrete footings. Install composite deck material in a simple linear pattern. Include a built-in bench, a planter of the same decking material, and stairs. Provide a railing system made of the same composite material as the decking or a compatible vinyl system.
National Average
Job cost: $6,917
Value at sale: $6,000
Cost Recouped: 86.7%
The 2005 Cost vs. Value Report by Remodeling magazine and REALTOR® Magazine has the answer.
Visit REALTOR® Magazine Online's Cost vs. Value page to view reports from previous years, order reprints, and find out how you can take part in next year's survey. Here are the national averages for 10 of the projects in the 2005 report:
MAJOR KITCHEN REMODEL
Update an outmoded 200-square-foot kitchen with new cabinets, laminate countertops, and standard double-tub stainless-steel sink with standard single-lever faucet. Include energy-efficient wall oven, cooktop, ventilation system, built-in microwave, dishwasher, and garbage disposer. Add custom lighting and new resilient floor. Finish with painted walls, trim, and ceiling. Include 30 linear feet of semi-custom grade wood cabinets, including a 3-by-5-foot island.
National Average
Job cost: $42,660
Value at sale: $33,890
Cost Recouped: 79.4%
BATHROOM REMODEL
Update bathroom that's at least 25 years old. Replace all fixtures to include standard-sized tub with ceramic tile surround, toilet, solid-surface vanity counter with integral double sink, recessed medicine cabinet, ceramic tile floor, and vinyl wallpaper.
National Average
Job cost: $9,861
Value at sale: $8,887
Cost Recouped: 90.1%
MASTER SUITE ADDITION
On a house with two or three bedrooms, add a 24-by-16-foot master bedroom suite over a crawlspace. Include walk-in closet/dressing area, whirlpool tub in ceramic tile platform, separate 3-by-4-foot ceramic tile shower, and double-bowl vanity with solid surface countertop. Bedroom floor is carpet; bath floor is ceramic tile. Paint the walls, ceiling, and trim. Add general and spot lighting and exhaust fan.
National Average
Job cost: $70,245
Value at sale: $56,257
Cost Recouped: 80.1%
FAMILY ROOM ADDITION
Add a 16-by-25-foot room on a crawl space foundation with vinyl siding and fiberglass shingle roof. Include drywall interior with batt insulation, prefinished hardwood floor, and 180 square feet of glazing, including windows, atrium-style exterior doors, and two operable
skylights. Tie into existing heating and cooling.
National Average
Job cost: $52,562
Value at sale: $42,347
Cost Recouped: 80.6%
WINDOW REPLACEMENT
Replace 10 existing 3-by-5-foot double-hung windows with vinyl- or aluminum-clad, double-glazed, wood replacement windows. Wrap existing exterior trim as required to match. Don't disturb existing interior trim.
National Average
Job cost: $9,273
Value at sale: $7,839
Cost Recouped: 84.5%
ROOFING REPLACEMENT
Remove existing roofing to bare wood and dispose of properly. Install 30 squares of fiberglass asphalt shingles with new felt underlayment, galvanized drip edge, and mill-finish aluminum flashing.
National Average
Job cost: $11,376
Value at sale: $9,197
Cost Recouped: 80.8%
ATTIC BEDROOM
In a house with two or three bedrooms, convert unfinished space in attic to a 15-by-15-foot bedroom and a 5-by-7-foot shower bath. Add a 15-foot shed dormer and four new windows. Insulate and finish ceiling and walls; carpet unfinished floor. Extend existing heating and central air conditioning to new space. Retain existing stairs.
National Average
Job cost: $35,960
Value at sale: $29,725
Cost Recouped: 82.7%
BASEMENT REMODEL
Create a 20-by-30-foot entertaining area with wet bar, a 5-by-8-foot full bath, and a 12-by-12-foot auxiliary room. Exterior walls are insulated. Include five six-panel primed hardboard doors. Main room includes 15 recessed ceiling light fixtures, three surface-mounted light fixtures, and snap-together laminate flooring system. Bathroom includes standard white toilet, vanity with cultured marble top, resilient vinyl flooring, two-piece fiberglass shower unit, a light/fan combination, vanity light fixture, and recessed medicine cabinet. Bar area includes 10 linear feet of raised panel oak cabinets with laminate
countertops, stainless steel bar sink, single-lever bar faucet, under-counter refrigerator, and vinyl floor tile.
National Average
Job cost: $47,888
Value at sale: $36,457
Cost Recouped: 76.1%
SUNROOM ADDITION
Add a 200-square-foot sunroom to a two-story house. Form and pour footings for slab-on-grade foundation. Use exposed post-and-beam framing on interior side and extruded aluminum window frame-and-flashing system with insulated, low-E, laminated, or tempered glazing. Provide for natural ventilation using screens and ceiling fan. Insulate all non-glass areas; provide movable shades for glass area.
National Average
Job cost: $31,063
Value at sale: $22,002
Cost Recouped: 70.8%
DECK ADDITION
Add 16-by-20-foot deck using pressure-treated SYP joists supported by 4-by-4 posts set into concrete footings. Install composite deck material in a simple linear pattern. Include a built-in bench, a planter of the same decking material, and stairs. Provide a railing system made of the same composite material as the decking or a compatible vinyl system.
National Average
Job cost: $6,917
Value at sale: $6,000
Cost Recouped: 86.7%
Does Moving Up Make Sense?
The answers to these questions will help you decide:
1. How much equity do you have in your home? Look at your annual mortgage statement or call your lender to find out. Usually, you don't build up much equity in the first few years of paying a mortgage, but if you've owned your home for a number of years, you may have significant unrealized gains.
2. Has your income increased enough to cover the extra mortgage costs and the costs of moving?
3. Is the neighborhood still a good one for your needs? For example, if you've had children, the quality of the schools may be more of a concern now than when you first purchased.
4. Can you add on or remodel? If you have a large yard, there might be room to expand your home. If not, your options may be limited? Also, do you want to undertake the headaches of remodeling yourself?
5. How is the home market? If it's good, you may get top dollar for your home.
6. How are interest rates? A low rate not only helps you buy more home, but also makes it easier to find a buyer.
1. How much equity do you have in your home? Look at your annual mortgage statement or call your lender to find out. Usually, you don't build up much equity in the first few years of paying a mortgage, but if you've owned your home for a number of years, you may have significant unrealized gains.
2. Has your income increased enough to cover the extra mortgage costs and the costs of moving?
3. Is the neighborhood still a good one for your needs? For example, if you've had children, the quality of the schools may be more of a concern now than when you first purchased.
4. Can you add on or remodel? If you have a large yard, there might be room to expand your home. If not, your options may be limited? Also, do you want to undertake the headaches of remodeling yourself?
5. How is the home market? If it's good, you may get top dollar for your home.
6. How are interest rates? A low rate not only helps you buy more home, but also makes it easier to find a buyer.
Moving Tips for Sellers
1. Give your forwarding address to the post office, usually 2-4 weeks ahead of the move.
2. Notify our charge cards, magazine subscriptions, and bank of the change of address.
3. Develop a list of friends, relatives, and business colleagues who need to be notified of the move.
4. Arrange to have utilities disconnected at your old home and connected at your new one.
5. Cancel the newspaper.
6. Check insurance coverage for moved items. Usually movers only cover what they pack.
7. Clean out appliances and prepare them for moving, if applicable.
8. Note the weight of the goods you'll have moved, since long-distance moves are usually billed according to weight. Watch for movers that use excessive padding to add weight.
9. Check with your condo or co-op about restrictions on using the elevator or particular exits.
10. Have a "first open" box with the things you'll need most—toilet paper, soap, trash bags, scissors, hammer, screwdriver, pencils and paper, cups and plates, water, snacks, and toothpaste.
Plus, if you're moving out of town:
1. Get copies of medical and dental records and prescriptions for your family and your pets.
2. Get copies of children's school records for transfer.
3. Ask friends for introductions to anyone they know in your new neighborhood.
4. Consider special car needs for pets when traveling.
5. Let a friend or relative know your route.
6. Carry traveler's checks or an ATM card for ready cash until you can open a bank account.
7. Empty your safety deposit box.
8. Put plants in boxes with holes for air circulation if you're moving in cold weather.
To help calculate your moving costs, visit
http://www.homefair.com/homefair/calc/movecalcin.html?NETSCAPE_LIVEWIRE.src=homestore&dg=pm&gate=realtor
2. Notify our charge cards, magazine subscriptions, and bank of the change of address.
3. Develop a list of friends, relatives, and business colleagues who need to be notified of the move.
4. Arrange to have utilities disconnected at your old home and connected at your new one.
5. Cancel the newspaper.
6. Check insurance coverage for moved items. Usually movers only cover what they pack.
7. Clean out appliances and prepare them for moving, if applicable.
8. Note the weight of the goods you'll have moved, since long-distance moves are usually billed according to weight. Watch for movers that use excessive padding to add weight.
9. Check with your condo or co-op about restrictions on using the elevator or particular exits.
10. Have a "first open" box with the things you'll need most—toilet paper, soap, trash bags, scissors, hammer, screwdriver, pencils and paper, cups and plates, water, snacks, and toothpaste.
Plus, if you're moving out of town:
1. Get copies of medical and dental records and prescriptions for your family and your pets.
2. Get copies of children's school records for transfer.
3. Ask friends for introductions to anyone they know in your new neighborhood.
4. Consider special car needs for pets when traveling.
5. Let a friend or relative know your route.
6. Carry traveler's checks or an ATM card for ready cash until you can open a bank account.
7. Empty your safety deposit box.
8. Put plants in boxes with holes for air circulation if you're moving in cold weather.
To help calculate your moving costs, visit
http://www.homefair.com/homefair/calc/movecalcin.html?NETSCAPE_LIVEWIRE.src=homestore&dg=pm&gate=realtor
What You'll Net at Closing
To find out how much money you'll net from your house, add up your closing costs and subtract them from the sale price of the house.
Closing Costs for Sellers
Mortgage payoff and outstanding interest =
Prorations for real estate taxes =
Prorations for utility bills, condo dues, and other items paid in arrears =
Closing fees charged by closing specialist =
Title policy fees =
Home inspections =
Attorney's fees =
Survey charge =
Transfer tax or other government registration fees =
Brokerage commission =
Total =
Closing Costs for Sellers
Mortgage payoff and outstanding interest =
Prorations for real estate taxes =
Prorations for utility bills, condo dues, and other items paid in arrears =
Closing fees charged by closing specialist =
Title policy fees =
Home inspections =
Attorney's fees =
Survey charge =
Transfer tax or other government registration fees =
Brokerage commission =
Total =
7 Terms to Watch for in a Purchase Contract
1. The closing date. See if the date the buyer wants to take title is reasonable for you.
2. Date of possession. See if the date the buyer wants to move in is reasonable for you.
3. The earnest money. Look for the largest earnest money deposit possible; since it is forfeited if the buyer backs out, a large deposit is usually a good indication of a sincere buyer.
4. Fixtures and personal property. Check the list of items that the buyer expects to remain with the property and be sure it's acceptable.
5. Repairs. Determine what the requested repairs will cost and whether you're willing to do the work or would rather lower the price by that amount.
6. Contingencies. See what other factors the buyer wants met before the contract is final—inspections, selling a home, obtaining a mortgage, review of the contract by an attorney. Set time limits on contingencies so that they won't drag on and keep your sale from becoming final.
7. The contract expiration date. See how long you have to make a decision on the offer.
2. Date of possession. See if the date the buyer wants to move in is reasonable for you.
3. The earnest money. Look for the largest earnest money deposit possible; since it is forfeited if the buyer backs out, a large deposit is usually a good indication of a sincere buyer.
4. Fixtures and personal property. Check the list of items that the buyer expects to remain with the property and be sure it's acceptable.
5. Repairs. Determine what the requested repairs will cost and whether you're willing to do the work or would rather lower the price by that amount.
6. Contingencies. See what other factors the buyer wants met before the contract is final—inspections, selling a home, obtaining a mortgage, review of the contract by an attorney. Set time limits on contingencies so that they won't drag on and keep your sale from becoming final.
7. The contract expiration date. See how long you have to make a decision on the offer.
10 Ways to Make Your Home Irresistible at an Open House
1. Put fresh or silk flowers in principal rooms for a touch of color.
2. Add a new shower curtain, fresh towels, and new guest soaps to every bath.
3. Set out potpourri or fresh baked goods for a homey smell.
4. Set the table with pretty dishes and candles.
5. Buy a fresh doormat with a clever saying.
6. Take one or two major pieces of furniture out of every room to create a sense of spaciousness.
7. Put away kitchen appliances and personal bathroom items to give the illusion of more counter space.
8. Lay a fire in the fireplace. Or put a basket of flowers there if it's not in use.
9. Depersonalize the rooms by putting away family photos, mementos, and distinctive artwork.
10. Turn on the sprinklers for 30 minutes to make the lawn sparkle.
2. Add a new shower curtain, fresh towels, and new guest soaps to every bath.
3. Set out potpourri or fresh baked goods for a homey smell.
4. Set the table with pretty dishes and candles.
5. Buy a fresh doormat with a clever saying.
6. Take one or two major pieces of furniture out of every room to create a sense of spaciousness.
7. Put away kitchen appliances and personal bathroom items to give the illusion of more counter space.
8. Lay a fire in the fireplace. Or put a basket of flowers there if it's not in use.
9. Depersonalize the rooms by putting away family photos, mementos, and distinctive artwork.
10. Turn on the sprinklers for 30 minutes to make the lawn sparkle.
7 Steps to Preparing for an Open House
1. Hire a cleaning service. A spotlessly clean home is essential; dirt will turn off a prospect faster than anything.
2. Mow your lawn, and be sure toys and yard equipment are put away.
3. Serve cookies, coffee, and soft drinks. It creates a welcoming touch. But be sure the kitchen has been cleaned up; use disposable cups so the sink doesn't fill up.
4. Lock up your valuables, jewelry, and money. Although the real estate salesperson will be on site during the open house, it's impossible to watch everyone all the time.
5. Turn on all the lights. Even in the daytime, incandescent lights add sparkle.
6. Send your pets to a neighbor or take them outside. If that's not possible, crate them or confine them to one room (a basement or bath), and let the salesperson know where to find them.
7. Leave. It's awkward for prospective buyers to look in your closets and express their opinions of your home with you there.
2. Mow your lawn, and be sure toys and yard equipment are put away.
3. Serve cookies, coffee, and soft drinks. It creates a welcoming touch. But be sure the kitchen has been cleaned up; use disposable cups so the sink doesn't fill up.
4. Lock up your valuables, jewelry, and money. Although the real estate salesperson will be on site during the open house, it's impossible to watch everyone all the time.
5. Turn on all the lights. Even in the daytime, incandescent lights add sparkle.
6. Send your pets to a neighbor or take them outside. If that's not possible, crate them or confine them to one room (a basement or bath), and let the salesperson know where to find them.
7. Leave. It's awkward for prospective buyers to look in your closets and express their opinions of your home with you there.
Understanding Agency
It's important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transactions. Ask your salesperson to explain what type of agency relationship you have with him or her and with the brokerage company.
1. Seller's representative (also known as a listing agent or seller's agent). A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.
2. Subagent. A subagent owes the same fiduciary duties to the agent's principal as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not representing the buyer as a buyer's representative or operating in a nonagency relationship, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.
3. Buyer's representative (also known as a buyer's agent). A real estate licensee who is hired by prospective buyers to represent them in a real estate transaction. The buyer's rep works in the buyer's best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer's rep may be paid by the seller or by a commission split with the listing broker.
4. Disclosed dual agent. Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to the clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it's vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them is legal in most states.
5. Designated agent (also called, among other things, appointed agency). This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.
6. Nonagency relationship (called, among other things, a transaction broker or facilitator). Some states permit a real estate licensee to have a type of nonagency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.
1. Seller's representative (also known as a listing agent or seller's agent). A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.
2. Subagent. A subagent owes the same fiduciary duties to the agent's principal as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not representing the buyer as a buyer's representative or operating in a nonagency relationship, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.
3. Buyer's representative (also known as a buyer's agent). A real estate licensee who is hired by prospective buyers to represent them in a real estate transaction. The buyer's rep works in the buyer's best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer's rep may be paid by the seller or by a commission split with the listing broker.
4. Disclosed dual agent. Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to the clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it's vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them is legal in most states.
5. Designated agent (also called, among other things, appointed agency). This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.
6. Nonagency relationship (called, among other things, a transaction broker or facilitator). Some states permit a real estate licensee to have a type of nonagency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.
5 Ways to Speed Up Your Sale
1. Price it right. Set a price at the lower end of your property's realistic price range.
2. Get your house market ready for at least two weeks before you begin showing it.
3. Be flexible about showings. It's often disruptive to have a house ready to show on the spur of the moment, but the more often someone can see your home, the sooner you'll find a seller.
4. Be ready for the offers. Decide in advance what price and terms you'll find acceptable.
5. Don't refuse to drop the price. If your home has been on the market for more than 30 days without an offer, be prepared to lower your asking price.
2. Get your house market ready for at least two weeks before you begin showing it.
3. Be flexible about showings. It's often disruptive to have a house ready to show on the spur of the moment, but the more often someone can see your home, the sooner you'll find a seller.
4. Be ready for the offers. Decide in advance what price and terms you'll find acceptable.
5. Don't refuse to drop the price. If your home has been on the market for more than 30 days without an offer, be prepared to lower your asking price.
Tips for Holding a Yard Sale
Use a yard sale to reduce the clutter in your home and get rid of items you don't want to move.
1. Check with your city government to see if you need a permit or license.
2. See if neighbors want to participate and have a "block" sale to attract more visitors.
3. Advertise. Put an ad in free classified papers, put up signs and balloons at major intersections and in stores near your home.
4. Price items ahead and attach prices with removable stickers. Remember, yard sales are supposed to be bargains, so don't try to sell anything of significant value this way.
5. Check items before the sale to be sure you haven't including something you want by mistake.
6. Keep pets away from the sale.
7. Display everything neatly and individually so customers don't have to dig through boxes.
8. Have an electrical outlet so buyers can test appliances.
9. Have plenty of bags and newspaper for wrapping fragile items.
10. Get enough change, and keep a close eye on your cash.
1. Check with your city government to see if you need a permit or license.
2. See if neighbors want to participate and have a "block" sale to attract more visitors.
3. Advertise. Put an ad in free classified papers, put up signs and balloons at major intersections and in stores near your home.
4. Price items ahead and attach prices with removable stickers. Remember, yard sales are supposed to be bargains, so don't try to sell anything of significant value this way.
5. Check items before the sale to be sure you haven't including something you want by mistake.
6. Keep pets away from the sale.
7. Display everything neatly and individually so customers don't have to dig through boxes.
8. Have an electrical outlet so buyers can test appliances.
9. Have plenty of bags and newspaper for wrapping fragile items.
10. Get enough change, and keep a close eye on your cash.
10 Ways to Make Your House More Salable
1. Get rid of clutter. Throw out or file stacks of newspapers and magazines. Pack away most of your small decorative items. Store out-of-season clothing to make closets seem roomier. Clean out the garage.
2. Wash your windows and screens to let more light into the interior.
3. Keep everything extra clean. Wash fingerprints from light switch plates. Mop and wax floors. Clean the stove and refrigerator. A clean house makes a better first impression and convinces buyers that the home has been well cared for.
4. Get rid of smells. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Open the windows.
5. Put higher wattage bulbs in light sockets to make rooms seem brighter, especially basements and other dark rooms. Replace any burnt-out bulbs.
6. Make minor repairs that can create a bad impression. Small problems such as sticky doors, torn screens, cracked caulking, or a dripping faucet may seem trivial, but they'll give buyers the impression that the house isn't well maintained.
7. Tidy your yard. Cut the grass, rake the leaves, trim the bushes, and edge the walks. Put a pot or two of bright flowers near the entryway.
8. Patch holes in your driveway and reapply sealant, if applicable.
9. Clean your gutters.
10. Polish your front doorknob and door numbers, paint front door if necessary.
2. Wash your windows and screens to let more light into the interior.
3. Keep everything extra clean. Wash fingerprints from light switch plates. Mop and wax floors. Clean the stove and refrigerator. A clean house makes a better first impression and convinces buyers that the home has been well cared for.
4. Get rid of smells. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Open the windows.
5. Put higher wattage bulbs in light sockets to make rooms seem brighter, especially basements and other dark rooms. Replace any burnt-out bulbs.
6. Make minor repairs that can create a bad impression. Small problems such as sticky doors, torn screens, cracked caulking, or a dripping faucet may seem trivial, but they'll give buyers the impression that the house isn't well maintained.
7. Tidy your yard. Cut the grass, rake the leaves, trim the bushes, and edge the walks. Put a pot or two of bright flowers near the entryway.
8. Patch holes in your driveway and reapply sealant, if applicable.
9. Clean your gutters.
10. Polish your front doorknob and door numbers, paint front door if necessary.
5 Things to Do Before You Sell
1. Get estimates from a reliable repairperson on items that need to be replaced soon, a roof or worn carpeting, for example. In this way, buyers will have a better sense of how much these needed repairs will affect their costs.
2. Gather together warranties and guarantees on the furnace, appliances, and other items that will remain with the house.
3. Get a pre-sale home inspection so you'll be able to make repairs before buyers become concerned and cancel a contract.
4. Have a home inspection to determine if there are any potential problems that you could take care of prior to selling your house. You can show potential buyers this report to let them know there are no problems with this house.
5. Fill out a disclosure form provided by your sales associate. Take the time to be sure that you don't forget problems, however minor, that might create liability for you after the sale.
2. Gather together warranties and guarantees on the furnace, appliances, and other items that will remain with the house.
3. Get a pre-sale home inspection so you'll be able to make repairs before buyers become concerned and cancel a contract.
4. Have a home inspection to determine if there are any potential problems that you could take care of prior to selling your house. You can show potential buyers this report to let them know there are no problems with this house.
5. Fill out a disclosure form provided by your sales associate. Take the time to be sure that you don't forget problems, however minor, that might create liability for you after the sale.
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