Mike's Journal

Does Moving Up Make Sense?

These questions will help you decide whether you’re ready for a home that’s larger or in a more desirable location. If you answer yes to most of the questions, it’s a sign that you may be ready to move.

 1. Have you built substantial equity in your current 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 your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for five or more years, you may have significant, unrealized gains.

 2. Has your income or financial situation improved? If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving. 

 3. Have you outgrown your neighborhood? The neighborhood you pick for your first home might not be the same neighborhood you want to settle down in for good. For example, you may have realized that you’d like to be closer to your job or live in a better school district. 

 4. Are there reasons why you can’t remodel or add on? Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.

 5. Are you comfortable moving in the current housing market? If your market is hot, your home may sell quickly and for top dollar, but the home you buy also will be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home.

 6. Are interest rates attractive? A low rate not only helps you buy a larger home, but also makes it easier to find a buyer.

Pricing and Showings-Some facts and figures

1. A cushion in the price may be desirable, but only if prospective buyers are willing to negotiate.
2. An overpriced home is not likely to be shown.
3. If shown but not sold, a home may be used to make other listings more attractive.
4. A house being shown should receive an offer within 12 to 15 showings. If no offer is received within 15 to 20 showings, a price adjustment should be made as soon as possible to maintain market interest.
5. No showings indicate a house is probably at least 5% overpriced.
6. Showings, but no offers, may indicate a house is overpriced between 3 and 5%.
7. In today’s market the maximum cushion over market value should be no more than 3%.
8. A dramatic increase in showings will occur when a price is adjusted below market value.
9. Market values are determined by buyers and sellers through their negotiations. Agents do not set market values. Agents can only assist in setting effective prices to which the buyers will respond.
10. A house “sold” may not close if the appraised value does not equal or exceed the sales price.
11. Once a house is vacant the economic cost of owning it is 1%  of the value a month or more depending on current interest rates.

Five Deadly Mistakes Home Sellers Make

Sooner or later, most homeowners will be in a position to sell their home. This report summarizes the top five mistakes that home sellers make, simply because the experience is new to them.

 

Mistake #1.  Using a Real Estate Agent Instead Of a Realtor

When you're looking for help buying or selling property, it's important to remember that the terms "real estate agent" and "Realtor" are not synonymous.

To be a Realtor, you must be a member in good standing of the National Association of Realtors (NAR). The equivalent organization in Canada is the Canadian Real Estate Association (CREA).  Both are non-profit trade organizations that promote real estate information, education and professional standards.

NAR and CREA members adhere to a strict code of ethics founded on the principle of providing fair and honest service to all consumers.  Realtor business practices are monitored at local levels.  Arbitration and disciplinary systems are in place to address complaints from the public or board members.  This local monitoring keeps Realtors directly accountable to the individual consumers they serve.

The National Association of Realtors also has earned a strong reputation for actively championing private property rights and working to make home ownership affordable and accessible.

Mistake #2.  Failing to Maximize the "Curb Appeal" of Your Home

When you're preparing your house for sale, remember the importance of first impressions.  A buyer's first impression can determine whether they’ll choose to look inside.  It’s estimated that more than that 50% of shoppers decide to purchase a home even before they get out of their car.  With that in mind, be sure to stand outside your home and take a realistic "fresh look."  Then ask yourself (and your Realtor) what you can do to enhance the "curb appeal.”  It could make a significant difference in your final sales price as well as the speed of your sale.

Mistake #3.  Not Appreciating the Buyer’s Point of View

Unreasonable though it may be, a prospective buyer would like to see a perfect home from top to bottom and inside and out.  To improve the likelihood of an easy, fast and profitable home sale, we suggest that you attend to the following items:

 

On the outside

1. Sweep the front walkway.
2. Remove newspapers, bikes and toys.
3. Park extra cars away from the property.
4. Trim back the shrubs.
5. Apply fresh, clean paint on your home, wooden fence, and outbuildings.
6. Clean windows and window coverings.
7. Maintain sprinkler systems.
8. Maintain sealants around windows and doors.
9. Make sure roof and gutters are clean and in good condition.
10. Mow the lawn frequently and plant flowers.
11. Keep pet areas clean.
12. Take down out-of-season decorations.

 

On the inside

1. The kitchen and bathroom should look and smell clean.
2. Vacuum rugs and carpets (and have them professionally cleaned, if necessary).
3. Place fresh flowers in the main rooms.
4. Put away dishes, unless setting a formal display for decoration.
5. Make all beds and put away clothing.
6. Open drapes and turn on lights for a brighter feel.
7. Straighten closets.
8. Put away toys.
9. Turn off televisions.
10. Play soft music on the radio/stereo.
11. Keep pets out of the way and pet areas clean and odor-free.
12. Secure jewelry, cash, prescription medication and other valuables.
13. Consider removing unnecessary furniture and appliances from counter tops to create a greater sense of space.
14. Consider baking cookies or lighting scented candles to create a homey atmosphere.

 

Mistake #4.  Thinking You Need To be In the Home to Provide Details to Prospective Buyers

Allow your Realtor to do his or her job without you on site.  Most potential buyers feel more comfortable if they can speak freely to the real estate professional without the owner present.  If people unaccompanied by an agent would like to see your property, refer them to your real estate professional for an appointment.

Mistake #5.  Over-Pricing Your Home

Perhaps the most challenging aspect of selling a home is listing it at the correct price.  It's one of several areas where the assistance of a skilled real estate consultant can pay for itself versus trying to sell your home yourself.  

 If the listing price is too high, you'll miss out on a percentage of buyers looking in the range where your home should be priced.  Some people think that if they leave some “wiggle room” in the price, they'll always have the opportunity to negotiate and accept a lower offer.  However, chances are the offers won't even come in, because the buyers who would be most interested in your home have been scared off by the price, and won’t even take the time to consider it.  By the time you correct the price, you've already missed exposure to a group of potential buyers.  

The listing price becomes even trickier to set when prices are quickly rising or falling.  It's critical to be aware of where and how fast the market is moving – both when setting the price and when negotiating an offer.  An experienced, well-trained real estate consultant is always in touch with market trends – often even to a greater extent than appraisers, who typically focus on what a property is worth if sold as is, right now.

Remodeling Projects That Pay!...and those that don't!

Have you ever wondered if the return on investment of a planned remodeling project is there? Or...would it just be for the benefit of your personal enjoyment? These interesting figures were compliled by the Wall Street Journal.

Projects That Pay ...

Project                                  Job Cost*      Resale Value      Cost Recouped 

Bathroom (Midrange)              $10,499        $10,727                102.2% 

Kitchen (Minor)                        $14,913        $14,691                 98.5% 

Siding Replacement                   $7,239         $6,914                  95.5% 

Attic Bedroom Conversion        $39,188        $36,649                 93.5%

... And Projects That Don't

Project                                   Job Cost*        Resale Value     Cost Recouped 

Home-Office Remodel             $13,143           $9,569                72.8% 

Master Suite Addition             $73,370         $60,460                82.4% 

Kitchen (Upscale)                     $81,552       $69,194                 84.8% 

Roofing Replacement               $11,164         $9,456                  84.7% 

* National average. Source: The 2005 Cost vs. Value Report.

10 Steps to Holding a Better Open House

An open house is the perfect way to introduce potential buyers to your home,
but is there a wrong way to hold an open house? Of course there is!

Contrary to popular belief, not everyone should hold an open house if
their house is on the market. If you do decide to hold an open house,
there is a right way and a wrong way to go about it.

A recent MSN.com article gives you tips on deciding if an
open house is for you, and how to hold the best open house possible.

First, how do you know if an open house would benefit your sale?
Ask yourself these five questions to find out:

What is your home’s location? If your house is in a high-traffic area,
such as just off a major road, an open house may have excellent results.
While many open houses are advertised in the newspaper or on the Internet,
by far the most visitors result from drive-bys and foot traffic.

Was your home recently renovated or does it have special features?
If your home has some amazing features, an open house can cause a
casual visitor to turn buyer, and an open house is the best way
to get the most casual visitors.

What is the sale price? Many real estate consultants refuse to hold open houses
for high-price homes because they can be a draw for more gawkers
and thieves than actual buyers. If your home is more high-end,
it may be more beneficial to schedule private tours instead.

How much time and money are you willing to invest? In some markets,
you may be required to spend money on professional stagers or perform
costly upgrades like landscaping or painting to compete in the
open house market. If you aren’t willing to spruce things up,
an open house is probably not a good idea.

Is your real estate consultant supportive? If your agent disagrees with
holding an open house for your home or is not enthusiastic,
the open house may not have great results.

You have answered the questions above and decided that
an open house is for you – now what?

Here are five tips to holding a successful open house:

Clean and repair the home. As mentioned earlier, if you’re not
willing to spend time and money preparing your home for an open house,
you shouldn’t bother. For an open house to be successful, you need to
clean your home as if you were preparing to eat off the floors and countertops.
You should also make any obvious necessary major repairs,
and perform minor maintenance, such as raking leaves, mowing the lawn,
touching up paint and planting flowers.

Remove clutter. In an open house, you want your home to appear
as big as possible to the eye, and clutter makes your home seem smaller.
So store toys, beauty supplies, mail, knickknack collections
and any other sources of clutter.

Remove your personality from the home. It seems cruel,
but a home that is too “yours” makes it difficult for potential buyers
to imagine as theirs. Take down family photos, personal collections,
trophies and even the books on your nightstand or notes on your refrigerator.
The house should be a blank slate ready for buyers to make their own.

Hold an early viewing for your neighbors. Holding an early viewing
for your neighbors is a nice gesture, and also allows your agent to
focus on the most interested visitors when the real open house starts.
If you’re thinking of holding your open house from 2 p.m. to 5 p.m.,
invite your neighbors over from 1 p.m. to 2 p.m.

Promote, promote, promote. No one will come to your open house
if no one knows about it. Your real estate consultant may have suggestions for
advertising, such as posting a notice in your local paper and
putting up signs. Make sure you do everything necessary,
such as posting photos and handing out flyers, to ensure a good turnout!

Contrary to popular belief, not everyone should hold an open house if
their house is on the market. If you do decide to hold an open house,
there is a right way and a wrong way to go about it.

A recent MSN.com article gives you tips on deciding if an
open house is for you, and how to hold the best open house possible.

First, how do you know if an open house would benefit your sale?
Ask yourself these five questions to find out:

What is your home’s location? If your house is in a high-traffic area,
such as just off a major road, an open house may have excellent results.
While many open houses are advertised in the newspaper or on the Internet,
by far the most visitors result from drive-bys and foot traffic.

Was your home recently renovated or does it have special features?
If your home has some amazing features, an open house can cause a
casual visitor to turn buyer, and an open house is the best way
to get the most casual visitors.

What is the sale price? Many real estate consultants refuse to hold open houses
for high-price homes because they can be a draw for more gawkers
and thieves than actual buyers. If your home is more high-end,
it may be more beneficial to schedule private tours instead.

How much time and money are you willing to invest? In some markets,
you may be required to spend money on professional stagers or perform
costly upgrades like landscaping or painting to compete in the
open house market. If you aren’t willing to spruce things up,
an open house is probably not a good idea.

Is your real estate consultant supportive? If your agent disagrees with
holding an open house for your home or is not enthusiastic,
the open house may not have great results.

You have answered the questions above and decided that
an open house is for you – now what?

Here are five tips to holding a successful open house:

Clean and repair the home. As mentioned earlier, if you’re not
willing to spend time and money preparing your home for an open house,
you shouldn’t bother. For an open house to be successful, you need to
clean your home as if you were preparing to eat off the floors and countertops.
You should also make any obvious necessary major repairs,
and perform minor maintenance, such as raking leaves, mowing the lawn,
touching up paint and planting flowers.

Remove clutter. In an open house, you want your home to appear
as big as possible to the eye, and clutter makes your home seem smaller.
So store toys, beauty supplies, mail, knickknack collections
and any other sources of clutter.

Remove your personality from the home. It seems cruel,
but a home that is too “yours” makes it difficult for potential buyers
to imagine as theirs. Take down family photos, personal collections,
trophies and even the books on your nightstand or notes on your refrigerator.
The house should be a blank slate ready for buyers to make their own.

Hold an early viewing for your neighbors. Holding an early viewing
for your neighbors is a nice gesture, and also allows your agent to
focus on the most interested visitors when the real open house starts.
If you’re thinking of holding your open house from 2 p.m. to 5 p.m.,
invite your neighbors over from 1 p.m. to 2 p.m.

Promote, promote, promote. No one will come to your open house
if no one knows about it. Your real estate consultant may have suggestions for
advertising, such as posting a notice in your local paper and
putting up signs. Make sure you do everything necessary,
such as posting photos and handing out flyers, to ensure a good turnout!