Seller's Page

Got a Low Ball Offers on your home?

Are we in the spring market or spring market is around the corner? Lots of seller's are hoping market will pick up and they can sell for more. For buyers its a great time to buy as there is lot more inventory than in the winter. Mortgage rates are still low. Being a buyers market they are getting lot more sellers including seller's paid closing cost. My seller's always make a statement: I don't just want to give my home away.

 We all have emotional attachment to our home. We have memories we cheerish. When we get a low ball offer lot of sellers get mad, offended, panic, loose sleep. As a Realtor I tell my clients ahead of time when the time comes we get an offer don't be surprised with low ball offer. Remember, it's now a negotiation game and the buyer IS serious or he or she would not have made an offer.

Several things have happened before this offer came in. The buyer, with his agent, has researched the market, walked through as many as 30 or 50 properties, conducted a study on the value of the property and written an offer for your house. Remember, you just won the lottery. They could have written on any other house, but they selected yours. So let's get busy.

First of all, do an analysis of your own goals and needs. How much do you really need to come out of this house to meet your goals of moving to your next home? What could you really live with and what amount are you going to counter. Remember this last point -- what are you going to counter? This is assuming that you're not rolling over and that you're going to stay in the game.

Support your number with the market comps. If we let go this buyer we don't know when the next buyer will come through the door and make an offer. Will the offer be better or worst. Always try to work the best what we have on hand.

Be patient with the process. Don't get upset, remember, they're trying to meet goals just like you are. By working together, both can get what they want.

The Facts About FSBOs

A close look at "For-Sale-By-Owner" (FSBO) data from National Association of Realtor's 2006 Profile of Home Buyers and Sellers

Each year a small army of home sellers throw caution to the wind and “go it alone” — without the assistance of a licensed real estate professional.

This ever-decreasing band of risk-takers, ventures into the land of pricing, marketing, screening, scheduling, showing and paperwork, with the goal of saving some money. It's often an experience they find less than rewarding.

The numbers (if not the sellers) tell the story.

In 2006, just 12 percent of sellers chose the FSBO (“For Sale By Owner”) route, down from 13 percent the previous year, according to NAR’s 2006 Profile of Home Buyers and Sellers. This is down from about 20 percent in 1987.

But more telling than the decline in FSBOs is the fact that 40 percent of all FSBOs sold their homes to someone they knew prior to the transaction. This means that only 7 percent of all home sales are open market FSBO transactions. The rest are simply unrepresented sellers in private transactions.


From NAR's 2006 Profile of Home Buyers and Sellers

Eighteen percent of FSBO sellers indicated that preparing the home for sale was the most difficult task when selling without the assistance of an agent, followed closely by understanding and performing paperwork (16 percent) and selling within their desired time frame (15 percent).

As for profit — after all is said and done, FSBOs don’t always come out with fatter wallets. Again, the numbers tell the truth.

Homes sold with the help of a real estate professional in 2006 sold on average for 32 percent more than FSBO sales. The median FSBO selling price in 2006 was $187,200, compared with $247,000 for agent-assisted transactions.

Tax Assessments

With the real estate market softening every home owner's night mare is continuing increase in its tax assessments. I looked my property tax assessment valuation at the public website even before I receive the notice. Loudoun County has raised the assessments last year approx. 25%-30% for the home owner. Thanks to the tax rate cut from $1.04 to $0.89 my assessment remained the same but still save quite some on over all taxes. Many home owners will still think their assessments are higher comparing to the real estate market condition. They do need to remember the assessment is the local government's estimate of what a home would sell for if exposed to the market for a reasonable period of time by an owner who is not acting under duress. In other words, that owner is in no rush to leave because of a pending foreclosure or maybe a last-minute, job-related move. An assessment is not the same as an appraisal, which is an individual determination of the value of a house, usually performed for a mortgage lender. You can always appeal but before you do so ask yourself based on the homes similar to your home is the value worth more or less or same? The assessment is based not only on the physical attributes of the house, but also on how it compares to other nearby houses of a similar age, quality and style. If your assessment is way out of line with that of these comparable houses, that can be grounds for an appeal If you still unsure go the county website. I have links for local government information at my website. Compare similar homes in your area neighborhood and their tax assessments.

Sellers Could Lose Waiting for Buyers to Make Offers

One of the biggest mistakes sellers make in a buyers market is trying to price their houses with a "cushion" in the asking price for negotiation room. In the current market where most sellers find themselves, it's all back to price, condition and location.

Pricing the house from the start is the first offensive strike the seller possesses in his arsenal. The best way to determine price in our market is to start looking at two categories of real estate: solds and actives.

Properties that have sold in the last 30 days provide you a picture of what price range pulled in offers 60 days ago. By looking over those properties, you'll know if you're headed in the right direction with your price. Then, after seeing what's pulled in offers, look at where the competition is priced -- and price lower than the lowest price. If the trend is headed downward over the last 12 months the motivated seller will get in front of that price trend and sell for less than everyone.

This can be an emotional ordeal for sellers. The seller who approaches the sales price of a house like the asking price of a used car -- where negotiation and give-and-take is expected -- will also be calling the movers sooner and get through the transaction with the least amount of emotional turmoil.

Condition is the second part of this equation that sellers have control over in today's market. Folks -- it's got to look new. Period. Here are the steps that MUST be taken for a successful sale.

 

1. New paint. Everywhere. Don't leave one room unpainted. Paint is the cheapest, yet most effective way to give a house a face lift.

    

2. New carpet/flooring. This addition along with No. 1 makes people drop open their mouths with, "Wow."

    

3. Replace the small things. It's the attention to detail that can make a big difference for the buyers. New faucets throughout, new hardware on the doors, and new switches/plugs/plates take the house from just "cleaned up" to new.

    

4. Deep clean. I always have to mention this because a lot of sellers still just don't get it. It's still amazing to me how many people will leave a house in the "un-" condition. Unvacuumed, undusted, unwashed. Invite friends over for a deep cleaning or hire it out. This is a must, no questions asked.

    

5. Do you do windows? Well, somebody better. Get all the windows cleaned and caulked. The house may look great from the inside, but if you can't look outside because of the dusty film over the glass, steps 1 – 4 could be for naught.

Finally, location is what buyers are looking for. I saw a listing the other day that was obviously connected to a realistic agent and seller. It was a lot of house for the price with the 1-plus acre lot -- and it was "priced for location," because the house backed to a very busy 4-lane highway. The comps in the neighborhood were nearly $100,000 more.

While you may not be able to do anything about the location of your listing, you can definitely spin the benefits of where it's located. Near commuter routes means the house is next to big highways, but for some shoppers they just want to get home quick after work and this is going to be a benefit -- but only if you market it that way.

Sell the lifestyle of the house as much as the amenities of the house itself. With prices dropping in some areas, headlines such as "Quit Commuting," "Walk to Everything," and "Cut Your Gas Bill" are becoming more and more enticing. The third- to one-acre lot doesn't look as good after the 75-minute commute. Some commuters are looking to move back in to the work centers.

Market to buyers outside the community who would find your neighborhood attractive. It's amazing how many buyers don't mind a busy 2-lane street -- when they've been overlooking the Beltway for years. Remember to market the benefits that you liked about the house when you bought several years ago.

 

-Source: RealtyTimes

The Hot and the Not

The Hot and the Not
Yesterday's 'Wow' Feature May Be Today's Dealbreaker

By Kirstin Downey
Washington Post Staff Writer

 

Will those gleaming stainless appliances help sell your home? How about that spiral staircase?

Hmmm. Maybe hardwood floors, installed throughout the house, would be a better bet for resale value.

These are the kinds of questions that Chicago-based real estate broker Mark Nash, author of "1,001 Tips for Buying and Selling a Home," posed to 5,000 real estate agents from around the country, receiving some 923 responses. What, he asked them, are the features that are turning for-sale signs into SOLD signs?

The results: Some old favorites, such as spiral staircases, are definitely out, the agents said. You know, the kind of stairs to which kids are magnetically drawn, just before they slip on the rungs and slither down and break their little heads? The kind that, for the same reason, intimidate the middle-aged? The kind that inspire terror in homeowners as they watch a tipsy guest with wine glass in hand stumbling toward them?

But other "old" features, such as old-fashioned plank floors, weathered and recycled woods, and wood paneling over kitchen appliances have more appeal than ever, the agents said. Storage space brings buyer buzz on the spot, and even enhances property values. Think linen closets, dressing areas, pantries, luggage rooms -- all the spaces historic houses had in abundance, even when they were short on closets.

Meanwhile, some relatively new features -- things that were hot just a few years ago -- are starting to feel dated, or are actually inciting a negative backlash at least among some buyers.

Stainless steel appliances, for example, now draw criticism because some models are hard to keep smudge-free. Glass-front cabinets lose their appeal to some neatness-challenged homeowners who have trouble keeping their dishes arrayed in tidy rows. Vessel-style sinks, the sleek bowl-shaped, above-counter bathroom sinks, are still a popular "wow" feature with some buyers, but some real estate agents say they are falling from fashion because they, too, are hard to keep clean.

But glass tiles in kitchens and baths add glisten and glow, at minimal cost, and are a definite yes.

Modern lifestyles, however, require some essential updating of homes. Having two home offices -- one for each half of the dual income required to pay for all this luxury -- is a major selling point, the survey found.

Knowing what is really hot, vs. what used to be hot but has gone cold, is key to understanding the real estate market today, real estate agents say. Although the inventory of unsold homes has dropped from its summer highs, the National Association of Realtors recently reported that there are 3.82 million existing homes for sale in the country, more than double the number on the market in early 2001, before the real estate boom began.

"When people have more choices, they become pickier," said Melinda Estridge, a real estate agent with Long & Foster's Bethesda Gateway office. "People love to move in and not have to hassle with contractors. . . . If a property is done, and updated, people respond to that very well."

The rise in prices in recent years also means that many purchasers are two-income families with little time to spare for overseeing renovation projects, so they want things to be perfect when they move in, said Bob Aronheim, an agent with Long & Foster's Fair Oaks office.

"Prices doubled in the last five years, and people are tentative when they buy," Aronheim said. "They need to be sure it's a good deal with all the basics in place," including updated and fashionable kitchens, baths and closet space.

So what are the new basics?

That's a concept that Theo Thompson, a private chef to a corporate husband-and-wife team, wrestled with as he made his final decisions on the features to be included in the new house he had built for himself a year ago in Vienna.

"You want something that in 10 years will still be desirable," Thompson said. "There are some trendy things that are kind of cool, but look at the houses that were built in the 1980s and 1990s -- people think they need to redo the whole thing now."

Spiral staircases are a fad whose time has passed, according to the survey and many local real estate agents. They are generally installed in small homes, permitting access to precious loft space or converted attics, but they are becoming less popular as the population ages. Now they are a distinct turnoff for baby boomers who make up much of the market for urban condominiums, because they find them hard to climb and descend. They also make it hard to shift furniture from room to room.

Wood floors, however, are high on everyone's list these days. But a particular variety -- bamboo, with its variegated honey tones and unique grain patterns -- is losing popularity in single-family houses, though not in condos that house only adults. The problem? They just aren't as durable as some other kinds of floors.

"People see them as a wonderful new thing, but their day-to-day utility is less than hardwood," Fairweather said. "They're not as sturdy, they're much softer than hardwoods, and if you're raising children, they're not so good. But they are a nice feature for older people who aren't as worried about the wear and tear."

A buyer who was purchasing an almost-new condo loved the beautiful bamboo floors. When the transaction closed and the seller's furniture was removed, though, it became apparent that the flooring had faded with exposure to the sun.

"You could see where every piece of furniture had been," Harden said. "It was a negative to my buyer. . . . [Bamboo] is a nice idea, a renewable resource, and it's new and different, but I wouldn't recommend it," she said.

Fairweather, and many of the real estate agents surveyed, aren't too keen these days on those cool-looking bowl-style sinks, also known as vessel sinks. They look great in powder rooms, they say, but water can splash out on the floor, leaving the owner mopping up over and over, particularly during parties when they are getting a lot of use. Several of Fairweather's clients have ripped out their vessel sinks and replaced them with standard cabinets.

"These fancy sinks are great, wonderful, but when it comes to utility, where do you put the toilet paper and the things you don't want people to see?," said Mark Gude, an agent with Continental Properties in Northwest Washington, who specializes in the D.C. market. "Bowl sinks are on the way out. Shaving in them is not fun -- the gunk, the soap scum, gets everywhere."

But Harden disagreed. "I see them as an 'awe' factor," she said, adding that they remain a valuable selling point in Northern Virginia.

Stainless steel kitchen appliances, not too long ago a must for any kitchen that wanted to be considered luxe, are beginning to get mixed reviews. The real estate agents gave them a thumbs-down, saying that many buyers were irritated by the need to wipe down the steel all the time to conceal fingerprints. Nash, who conducted the industry survey, acknowledges that builders say they help sell houses, but said some buyers who own them have gotten irritated by the upkeep.

"I'm hearing people say, 'I'm tired of it,' " Nash said. "They say: 'I don't have time to polish it. I have kids. I have dogs. It's too high maintenance.' "

But Creig Northrop, Long & Foster's top-selling agent, who is based in Howard County, said buyers in Howard, Carroll and Frederick counties still love stainless.

"It's huge," he said. "It's the biggest hot button. That's what buyers are looking for now."

"People here walk in and see that stainless steel, and it dazzles them," he said.

But to MacArthur, the biggest buyer turn-on today in the Washington market is the dual home office.

"More people want a home office today than anything else I've seen this year," he said. "They want to work from home."

MacArthur suggests that people selling their homes take the smallest of their bedrooms, what he called the baby-bear bedroom, remove the bed, and put in a desk and computer station. To make it really alluring, install fiber-optic cables so people have almost instantaneous Internet connections.

Those who are building new homes and want to ensure maximum resale value should make sure that each of two rooms -- one for him and one for her -- is at least 10 feet by 10 feet and doesn't feel cramped, according to Nash's research.

So how do these trends play out in a real person's house? Thompson, the chef in Vienna, actually wanted some of the items that agents say are dropping in popularity. He had considered all his options carefully and wanted them done his way to add more ease and leisure to his life.

He likes vessel sinks, calling them a "very desirable upscale bathroom feature," and installed them in his house, but he prefers versions made from ceramic and stone, which he said are easier to maintain than glass and stainless steel.

Thompson opted for wooden kitchen cabinets painted antique bisque white, which allowed him to save money to use on upgraded bathroom fixtures. He also chose stainless steel appliances, being careful to select models that are relatively easy to clean.

And he installed hardwood floors through the house. He wanted the popular seven-inch-wide planks, but found that they would add $35,000 to the cost of the home. So instead, he dropped down to a slightly lower quality of wood, with a darker grain. That allowed him to get wood that was still wider than average but cost less than the wide planks of top-grade lumber.

He said, "People think the floors are the most gorgeous thing they have ever seen, and it was a huge savings."

Five Misconceptions of 1031 Exchanges

1.  In order to complete a 1031 exchange, a taxpayer has to find someone to “swap” a property with.

While this is originally how exchanges were structured, taxpayers are now free to sell their property to anyone they wish, and to buy from anyone they wish. Although there are a few issues regarding sales and purchases between related parties, most exchanges are structured not unlike any other typical sale and subsequent purchase commonly found in the industry.

 2. A taxpayer seeking to exchange property has to buy the exact same type of property he is selling in order for it to be considered a “like-kind” exchange.

As long as both the property to be sold and the property to be purchased are held for productive use in a trade or business, or for investment purposes, taxpayers are free to purchase whatever type of property they want. For example, a taxpayer can sell an apartment building and exchange it for an industrial warehouse. Although exchanges are a creation of federal law, taxpayers must also look to state law to determine what is considered real property. Based upon state law, some non-traditional interests in real property such as development rights, air rights and timber rights can also be exchanged in the process.

 3. Taxpayers must complete the 1031 exchange in one completely simultaneous transaction.

By virtue of a favorable ruling to the taxpayer in the now famous case of Starker v. United States in 1979, taxpayers have the ability to complete an exchange on a delayed basis so long as they purchase replacement property within 180 days of selling their first relinquished property. Other structures, including reverse exchanges and improvement exchanges, afford taxpayers other types of flexibility during the exchange time frame.

4.  Taxpayers must use all the proceeds from the sale of their relinquished property to purchase replacement property.

In order to have a completely tax-deferred exchange a taxpayer must follow three essential steps: (1) buy replacement property where the value is equal to or greater than the value of the original relinquished property; (2) use all of the original equity realized from the sale to purchase a replacement property; and (3) obtain equal or greater financing on the replacement property as was paid off on the relinquished property at the time of its sale.

However, while those are the rules for a complete deferral, a taxpayer may violate any one of them and complete a partial deferred exchange. For example, a taxpayer who seeks to buy a replacement property of a lesser value, or with less financing, will recognize a capital gains tax on that amount not reinvested in the new property. Simply put, taxpayers can buy replacement properties for a lesser amount and put cash in their pocket, so long as they don't mind paying some taxes.

5. I don't need a qualified intermediary. I can simply have my attorney or accountant hold the sale proceeds until the replacement property is purchased.

A qualified intermediary is essential to completing a valid delayed exchange. Basically, the IRS disqualifies any person or entity from acting as an intermediary, if that individual has had an existing business relationship with the taxpayer within the past two years.

Although that statement is somewhat broad, some parties who may be considered disqualified parties are the taxpayer's relatives, attorney, accountant and real estate broker. The IRS provides that neither the taxpayer, nor any disqualified person or entity, can come into receipt of the exchange funds during the exchange, or the exchange will be void. Using a well-established qualified intermediary enables a taxpayer to avoid situations that might void an otherwise valid exchange. It is also a good practice to research the expertise and security of the qualified intermediary.

Source-Todd R. Pajonas, Esq., is president of Security 1031 Services, Inc., a national qualified intermediary.

How Much is Too Much to Fix up Your House?

As with any resale product, the person trying to sell said product will usually try to make the product look as new as possible to ensure the highest profit available. In reviewing many of the homes on the market today, however, some sellers don't get that notion.

Don't make the mistake of the seller who, knowing full well that buyers were coming by, not only failed to do a fresh clean up, but also left his underwear on the exercise bike, a pan of crusty macaroni and cheese on the stove and debris throughout the yard.

There are some task items any seller should consider when selling a house. Even if you decide to sell "as is," a little soap and water could put a few more bucks in your pocket. With that in mind, let's look at what sellers should look at doing with any house they want to put on the market; what to do when you want to get a little more money; and how to compete with the Joneses when looking to prepare your home for sale.

Any House

 

1. All homes going on the market should receive a deep cleaning. This is the cleaning that you do when … well, you would never do it unless you're selling your house (or you're just an absolute neatnik. This involves scrubbing every cranny of the house. Nothing goes unscrubbed. I would suggest bringing in a professional group to get this done and plan on spending a couple hundred bucks (maybe more) to get the house ready for your new buyer.

    

2. Next, declutter the house. Go ahead and rent a huge storage unit and fill it up. Plan this with a bunch of pre-made boxes that have lids you can tape shut and label. Take extra kid's toys to charity. Donate all clothes that are even a bit too tight or out of date. Remove excess furniture (or even cover with matching covers).

    

3. Repair and paint where needed. As with most homes that have been lived in, that would be all of them. Walk through a new construction home to see what you're up against and then go and make yours look as best you can on your budget.

    

4. Landscaping. Thankfully, mulch and flowering plants don't really cost a lot of money for those who are just sprucing up. Before going out and paying for a designer-created landscaping job, start with the local garden center and get some free advice on how to spruce up on a budget. Fresh, flowering plants (even in fall and winter) can make the house look oh-so much better.

Even if you're selling as-is, the above four tips are a must. Next is where we spend a little more money.

Redecorating

 

1. Renewed color. Giving your house a makeover doesn't have to cost you a second mortgage. The first item to consider for rehab is your color selection. While the traditional advice is "go vanilla," professionally selected colors (not too bold) can make a "nice" house into a "wow" house.

    

2. Flooring is one of the best moderately priced upgrades a seller can install to make a huge difference. While I like the concept of "choose-your-own-carpet" offers in home listings, think about what else it's saying: "We're too cheap to fix up the house now, so we'll let you walk through our tattered, stained carpeting and let you get it installed the weekend after we leave." Like I said, make your house a "wow" by making that first great impression with new carpet.

    

3. Replacing dated items. Sometimes replacing certain items in the house is really more like maintaining your home instead of upgrading it. Items like windows, doors, light fixtures, faucets, door hardware, etc., need upgrading and replacing periodically. A walk down the light aisle at your favorite hardware store reveals this could be done on a budget. Nevertheless, there's nothing more gross looking than a brass light fixture that's chipping and rusting.

Keeping up with the Joneses

At some point you have to look at what the neighbors are doing and keep up or you'll lose out. If everyone in the neighborhood is ripping out the old and installing the new (kitchen, bath, carpet, doors, etc.) then you may be forced to do the same thing long before you're thinking of putting your home on the market. My wife and I are facing that right now with the kitchen. It's starting to show its age, which means before we put the house on the market in a few years, if I want the best buyer (or any buyer for that matter) the kitchen cabinets need an upgrade.

Redo, Remodel, Relax

As you look around the house, making your list of things to change before putting the house on the market, remember to create some time to enjoy your new digs before selling the place. If a sale is on your horizon and you must redo the landscaping before putting the house on the market -- do it early so you can drive home to the professionally designed flowerbeds and floral creations a few months or years before selling it to someone else.

While you want to repair, paint, remodel and add on to your house because it adds value to your home, every homeowner should especially do it because they want to enjoy the changes as well.