Less Is More

Dear Esther – We recently met with a real estate agent about selling our home. She gave us a very long “to do” list which includes removing lots of what she called “clutter”, even mentioning that we should get rid of some of our furniture. Is this typical? What do you think?

A good real estate agent will do much more than take photos and put a sign in your yard. The agent who met with you to sell your home understands that your home will sell more quickly and for more money if it is appealing to prospective buyers.

This is not a personal assault on your taste. Much of what is near and dear to you, sad to say, is clutter to the rest of the world. Pack up knick knacks, photographs, refrigerator magnets, vacation mementos and anything personal. These items are distractions when buyers walk into your home. They get in the way of their appreciation of the space. Your tables, counters and mantels should have very little on them. Less is more.

If a room has too much furniture or furniture that is too big for the space, the room appears smaller than it should and may be confusing to buyers. A large sofa in a small den can crowd the room and make it look cramped. Every room should have a purpose. Buyers are confused if a tread mill is next to the desk. Is it an exercise room or office? Stage the room as one or the other.

Another important task is cleaning out and organizing closets, drawers and storage areas. Buyers are nosy and rightfully so as they want to make sure there is enough room for their stuff. Closets which are too full, piled floor to ceiling, tell buyers there is not enough storage. Throw out, give away or find a storage unit for things you are not using. Less is more.

Then clean, clean and clean some more. Your home should pass the white glove test beginning at the front door. Sidewalks and exterior siding should be pressure washed, light fixtures working and cleaned, windows and mirrors windexed, walls and doors wiped and carpet stains removed. If you’re not into cleaning, hire a cleaning service.  

I suggest you take your agent’s list seriously.   Folks need to feel that life will be better for them if they live in your home. A beautiful place will do that for them.

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A LEASE TO PURCHASE

Dear Esther – I really would like to buy a home since I have a good job and want to stay in the area.  I talked to a bank representative who told me that I do not have sufficient credit to get a mortgage.  A friend said I may want to look into a lease to purchase.  Can you explain what that is? 

A lease to purchase is an excellent option for someone in your situation.  You understand the benefits in putting your money towards purchasing over renting.  You plan to stay in the area.  Your job is secure and supportive. Your one problem is the ability to get financing now to purchase probably because you’ve experienced some credit issues in the past, you have not established a history of credit or your job is new.  A lease to purchase is a perfect fit for you if you find a property you want to purchase within your price range.

I suggest you find a real estate agent who has a track record of selling and buying properties in your purchase area.  She will contact agents of for sale and lease properties you are interested in to see if their owners will agree to a lease to purchase. When you’ve found one, she will help you sign a purchase contract. Your decisions are the same as for any purchase contract – what you will pay for the home, when you can settle (how long before you have the ability to purchase),  inspections  and your mortgage information. At the same time, you will also sign a lease agreement, deciding on the lease term (when to begin the lease and when it will end). You will also need to decide what your monthly lease amount will be and how much you can give up and above that, which will go towards the purchase of the home when you settle. 

This can be a win/win for sellers and buyers. The seller has income from a house he was formerly paying the bills on (utilities, taxes etc) and eventually a buyer and the buyer has a permanent place to live while working towards purchasing.

 

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Make Sure It’s Done Right

Dear Esther – We have been looking for a while for a home with a realtor we have come to know and trust.  Yesterday we were discussing our search with friends and found they have friends who would like to sell.  Their friend’s home fits what we are looking for.  Since their friend’s home is not listed with an agent yet, we’ve contacted them directly to see their place.  How should we address this with our realtor?   

If you’re thinking of your realtor as someone who only finds you a home, you are missing much of what she does for you. Buying a home is more than looking at a few and deciding which one you want.  Your agent is much more than a taxi driver. She is trained and experienced in, not only helping you find the best home for the best price, but guiding you through decisions about financing, inspections, contingencies, insurance – the many ins and outs of buying to get you to the settlement table as easily and comfortably as possible. 

Because of her expertise and your trust in her, it is important to let her know about the home so she can contact the sellers to find out if they’re willing to work with a buyer’s agent. If so, your agent will contact them directly to look at the home, working for you to purchase (assuming you want to buy it).

If the sellers are not interested in cooperating with your agent by paying a percentage of the purchase price at settlement, you will either need to decide to pay her or go it alone.  If you signed a buyer’s agency contract, this decision has already been made for you as this contract commits you to using your agent to purchase. 

With no contract, you may be tempted to go it alone to save a few dollars.  However, purchasing a home is usually the largest and most important purchase folks make in their lives.  I believe it’s worth using a professional who is experienced, trust worthy and hard working to make sure it’s done right.

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Is Our Agent to Blame?

Dear Esther – My house has been for sale for 4 months and, although we’ve had a few people look at it, we have had no offers.  People say they like it so we’re confused about why no one has placed an offer.  Is our agent to blame?  Signed – Confused

Dear Confused ,

When you hire an agent to sell your home and it does not sell, it is easy to blame the agent.  She is the expert, trained and hopefully experienced in how to sell homes.  In your confusion and probably also frustration, I suggest you review price, condition and marketing with her.  Make sure all three are in line and eventually your home will sell. 

Price – Before deciding on a price, your agent probably showed you properties similar to yours, called comparables, which sold recently. It is important to price your home leaning heavily on the comparables and NOT on the amount of money you have put in the home.  An overpriced home is a waste of everyone’s time.

Condition – If you’ve updated your home and maintained it well so it is move in ready, you can price it on the higher side of these comparables. If it’s a bit run down and old looking, the price should be on the lower end.  Buyers think about what it will cost to make it work for them and figure that amount into their offer.  If the condition does not match the price, they will not be interested.

Marketing – A good agent will take excellent photos preferably hiring a professional photographer.  Most buyers are looking online for properties and photographs are what draw them.  In addition, the unique features (such as views, fire places, walk out finished basements, desirable location etc) are important to emphasize.  Many times the same reasons you love your home are why buyers will also want it.

If you feel your agent has a good understanding of these three and is working hard to sell it, I suggest listening to her advice by adjusting the price, improving on the condition and/or emphasizing features possibly over looked.  In no time, you will be signing a contract and moving on.

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Ready to Move On

Dear Esther – We just received a contract on our home and we are excited about packing and moving on.  But our agent mentioned there are contingencies and that we should probably wait to pack until these are worked out.  The buyers have an inspection and mortgage contingency.  Does this mean they could back out on buying and get their money back? Signed – Ready to move on

 

Dear Ready to move on,

I think we all wish, once a contract was signed to purchase, that that would be the end of it.  In buying a home, an agreement of sale is often negotiated three times.  The first is the purchase price, settlement date and terms.  The second time is often the inspection resulting in a report about the condition of your home.  Agreeing on what you as a seller will fix as a result of this report is negotiable.  The last is the mortgage contingency which, in this market, can be a problem since property values are substantially lower.  Most mortgages require that your property appraise for the sales price.  If not, you may need to negotiate a new price, usually the value given by the appraiser.

Your buyers can get all of their deposit money back and walk away from the signed contract if agreement cannot be made on inspections or if they are not able to get a mortgage.  There are dates in the contract which provide deadlines for completion of the inspections and commitment of the mortgage.   I suggest waiting to pack until you are satisfied that these items have been resolved and all deadlines are met.

Usually, when a contract is signed on a home, buyers are excited about owning the home. They’ve pictured themselves there, visually placing their furniture. They want to work through these issues to finally own it.  Not only that, but agents and mortgage brokers are also working with you as they all benefit from the settlement of your home; which means, you will usually be packing and moving on.

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Private Septic Systems

Dear Esther – We’ve been looking at houses for a few months and the one we are in love with has a septic system instead of public sewer.  My dad told me they’re nothing but trouble so we’re having second thoughts.  Do you agree?

A house in a rural setting with more acreage many times has a private or onsite septic system.  This system is usually an underground tank buried in the yard with a drain field. As wastewater comes into the tank from pipes in the house, it displaces the water that is already there which then flows out into a drain field. If the system has been well cared for, the ongoing cost to maintain it is about $200-$300/year to hire someone to pump out the tank.

If a home has a private septic system, it is important to have the system inspected as part of purchasing the home to insure it is in good working order.  If the inspector’s report shows that it is working fine, your costs to maintain it may not be as much as what the municipality charges for public sewer.  The use of garbage disposals is discouraged.

Homes closer together with smaller lots are usually served by public sewer systems managed and maintained by local municipalities.  The homeowner’s cost for these vary from $80 to $200/quarter depending on the municipality.  Any problems with the system are the responsibility of the municipality. 

If you’re not familiar with private septic systems, you may be reluctant to venture into new territory.  Your father may have had problems with a system in the past so perceives them negatively.  But like most things in life, there are advantages and disadvantages.  Is the responsibility for the system worth the possible cost savings?  Perhaps your love for the property will put this argument to rest!

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Is It A Good Time to Sell?

Dear Esther – We bought our home a few years ago when prices were high.  In the 5 years we’ve owned it, our family has grown so we need a larger place.  I’ve heard that the housing market is getting better so I’m wondering if it’s a good time to sell?

There’s a lot being said about improvements in the housing market.  “Six years after prices collapsed, housing has begun to climb out of its hole,” is the lead sentence in a piece entitled – Selling your home: the cards are in your favor from cnnmoney.com.  Other information reiterates that finally sellers will get what they want for their homes.  Optimism abounds.

In Chester and Berks counties, sold prices in May 2013 for single family homes were about 1.5% higher than they were 1 year ago.  This is good news for sellers.

It is important to remember the following when selling:

  1. Price your home right.  Look at the recent sales in your area and price your home accordingly.  Overpricing will only lengthen your selling time.  If a home is on the market too long, buyers will wonder what’s wrong with it.
  2. If you want to move to a larger place, act sooner rather than later.  While you may be able to sell your home for more if you wait, the appreciation on the trade-up home will be greater.
  3. Do all you can to improve the condition and appearance of your home before putting it on the market.  Fix leaks, replace the roof, clean carpets, empty closets, trim shrubs.  This increases value.
  4. Get the best photos possible.  Web appeal is the new curb appeal.  Appearances are everything.  Add a virtual tour and interesting description.  Buyers are searching online before they schedule showings.

A good agent will help you through each step to make sure the price, condition and marketing of your home are done right.  Before you know it, you’re packing and moving to a larger place and the hard work of selling is a dim memory.

 

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