Move Now or Wait?

Dear Esther – We purchased a home and have ours on the market to sell.  We have movers scheduled to empty out our home and move our furniture to our new place.  My friend told me, without furniture, our home will be harder to sell.  What do you think?  Moving on

Dear Moving On,

I agree with your friend that an empty house is harder to sell.  When folks look at your home, most will feel lost in the empty spaces.  It confuses them as they walk through asking, “Where will I put my kitchen table, dining room hutch, bedroom dressers, TV, etc?”  A room without furniture is an empty space without identity.  Most people do not have the imagination to be able to picture themselves there. 

Along with empty rooms is usually flooring that shows every mark, worn carpeting, scratched hardwood, and stained vinyl.  Because the furniture has been removed, the floor is more visible.  The same goes for your walls.  Where pictures were hanging, there are nail holes and every smudge mark or scuff is more noticeable.  With everything out, floors and walls are what people see.

If you decide to move your furniture, I recommend hiring a staging company to furnish, at the very least, the primary rooms in your home – kitchen, living, dining and family rooms.  They are interior designers, so they will do more than add furniture. Knowing what is visually appealing to buyers, they add accessories like wall hangings and flower arrangements. 

If you would rather not hire a staging company, at the very least, paint walls and replace and/or professional clean floors so everything looks clean and sparkles.  Floors and walls are very visible when there is no furniture.

For example, a home I am selling was emptied a few months ago.  Before the furniture was removed, feedback from prospective buyers was positive with “cozy, comfortable, nice” as commonly used descriptions.  After it was emptied, the cozy appeal was lost with consistent negative comments.  The seller understood this and recently moved furniture back into the primary spaces.  We’re back to positive feedback.

It is important to remember that purchasing a home is an emotional decision. Buyers need to love your home before they decide to buy it.  Empty spaces are simply not lovable.

If you have real estate questions, feel free to contact me – Esther Prosser, PO Box 20, Elverson, PA 19520, esther@stoltzfus.com, 484.269.7153.

Does The Program Serve You?

We are planning to move to a retirement home but before we do, we need to sell our home.  Our contact at the retirement home highly recommended a program which lists real estate companies to sell our home.  We’re disappointed that the realtor we had planned on working with is not on the list. Should we go with the program or go on our own when selling?

I understand your concern.  You have planned for a time to move to a retirement village, waiting for them to call when a place opens up.  In the meantime, you meet with an agent you’re comfortable with, who knows your home and the area, someone with a track record for selling in your community.   Then, well into the process, you find out that their agenda does not allow you to use the agent you had planned. 

I am familiar with the program you mentioned as it is something that pops up with folks planning to move to retirement homes.  It is nationwide and promises to provide “senior relocation services experts to work directly with you to ensure the smoothest and quickest move to your new home.”  Consultants are offered to put you in touch with real estate agents, perform a home audit and suggest improvements, connect you with service providers and coordinate this with the retirement community, all at no cost to you.

The problem with this is that the program so vigorously pushed by the retirement community many times serves the community over you, their customer.  They’re interested in your ability to purchase and move on which may not serve your interests in hiring the agent you are convinced knows your property and community. 

A good real estate agent will do what the program claims to do – help you prepare your home to sell and then price and sell it for you.  The best agent is the one who knows your home, your community and has experience selling in your area.  I suggest you use the agent you know and trust, using the resources the agent has, which are many times better than what the national program offers because she has experience with your home, community and town.

If you have real estate questions, feel free to contact me – Esther Prosser, Stoltzfus Realtors, esther@stoltzfus.com, PO Box 20, Elverson, PA 19520 or 610.286.5117.

Appraisal Problems

The buyers of my home were not able to get a mortgage because it was not appraised for what they agreed to pay for it.  I have to either sell it for what it was appraised for or lose my buyers.  What do you suggest that I do?

In this market, when values are down, this problem is more common than you might think.  You meet with an agent to list your home, look at comparables to help you price it, and put a lot of work into getting it ready. You finally get a contract contingent on a mortgage and the appraiser decides your home is not worth what your buyers agree to give you.

You can respond in 1 of 3 ways:

1. Agree to lower your price to the appraised value (assuming you can afford this).  By doing this, your contract is secure, you have buyers and you can move on.
2. Keep your price at the original contract price.  Your buyers may have extra money and still be able to purchase your home.  If not, you’ll lose them.  You may lose them anyway because they may not be interested in paying more for a home than it’s valued.
3. Negotiate a price somewhere in between with information to convince your buyers that the appraised value was not accurate.  This is again assuming your buyers have extra money since their mortgage will only finance the appraised value.

If you have information to indicate the appraised value is inaccurate, I suggest that you begin with option 3.  If your buyers are not convinced and you’re anxious to sell (and can afford to get less for your home), move on to option 1. If you have to take option 2 because you cannot take less for your home, it is important to remember that you may see this problem again when your next buyers sign a contract.

Selling a home in this market is not easy.  A good agent will explain your options and guide you through the process to help you find the solution that works the best for you.

Selling is Not Easy

Dear Esther – I had my home for sale for a few months and finally got a buyer.  However, many things have made it hard after signing the contract – from the buyer’s demands for a quick settlement to costly inspection items.  I was not prepared for this.  Is this just part of selling?

I will be the last to tell you selling a home is easy.  Preparing it to sell by cleaning, de-cluttering and many times updating it is hard work.  Keeping it looking nice and ready for showings can also be stressful.  After you’ve done this for a time, an interested buyer finally submits a 19 page contract.  The contract usually has contingencies which provide a period of a few weeks to resolve inspections and financing.  This contingency period is commonly a stressful time of uncertainty as issues are worked through.

You mentioned a few examples of difficult demands – buyers who need to settle quickly usually because of a job transfer or to coordinate settlement on their home and costly inspection items or things the buyers are requesting the sellers take care of as a result of the inspection report.  These are good examples of items that make it more difficult for you.  It is crunch time as you scramble to get movers and a place to move to while coordinating and paying for work on your house to satisfy the buyer.

Selling is usually not quick and easy in this market.  Buyers are choosy and looking for deals.  A good agent will take you through this step by step.  Her job is to explain the process and answer your questions, feeling your pain along the way.  She should put your interests above hers even if it means you don’t get to the settlement table.

If you have questions, feel free to contact me – Esther Prosser, Stoltzfus Realtors, esther@stoltzfus.com, 484.269.7153.

Is The Market Getting Better?

Dear Esther – I’ve been working at getting my home ready to sell for a year, waiting until home prices go up so I can at least pay off my mortgage when I sell.  The news reports indicate home sales are improving.    Do you see it getting better? Signed, Waiting and Wondering.

Dear Waiting and Wondering – Two important numbers give mixed reviews.  The first is the number of homes presently for sale, called “inventory.”  When comparing inventory nationally from 2011 to 2012, there is almost a twenty percent reduction in the number of homes on the market (according to realtor.com).  Less supply creates more demand and more demand increases prices in time.

The second important indicator of an improved market is whether there is an increase in the median sales price.  Are homes selling for more?  The answer to date is no.  Homes are selling more quickly but what sellers are getting for their homes is about the same.  According to Trend MLS, sales data in the Chester/Berks County region shows similar trends.

There is some optimism.  Statements such as, “Most economists are confident that the worst of home value declines are in the past “(Meg Handley in US News & World Report) are common place.  There are lingering concerns about the job market, economic turmoil abroad and the upcoming elections which are creating uncertainty.  However, most will agree that homes sales have bottomed out.

Whether you can get what you owe on your home is a good question in this climate.  I recommend finding a good agent to help you determine if your mortgage can be paid off when you sell.  On a positive note, with prices and interest rates low, buying another home should be lots of fun!

If you have questions or would like more information, please contact me, Esther Prosser, PO Box 20, Elverson, PA 19520, esther@stoltzfus.com, 484.269.7153, http://www.estherprosser.com.

Let There Be Light

Dear Esther – We’ve done a lot to get our home ready to sell from painting walls to professionally cleaning carpets. My sister dropped in the other day and mentioned that our home seemed dark – that we should brighten it up before we sell. What do you suggest?

Your sister is right in suggesting that you brighten up your home. This is not difficult or expensive. The simple task of switching light bulbs in all of your light fixtures from energy-saving bulbs (which emit a harsh glare) to standard clear incandescent high wattage bulbs can do wonders, creating warmth and openness.  Wall sconces are the exception.  Use 30 watt bulbs in these to produce a softer light setting.  Avoid mismatched bulb types as they make a space appear chaotic.

Now that you have a well lit home with brighter lights, remember to clean the light fixtures (interior and exterior), brushing off dusty lamp shades, scooping up dead flies inside fixtures and removing spider webs dangling from chandeliers.  When lights are on (which they should be when showing a home), folks see everything.  You want them to love what they see.

And don’t forget the windows, which should be clean and visible.  Remove draperies or, at the very least, pull them away so natural light filters in.  Lift up roller shades or blinds completely.  Remove screens so the home looks brighter from inside and out.

HomeGain, a real estate marketing provider, rated do-it-yourself projects.  According to their survey, “Lightening and brightening a home offered the second biggest return to sellers of pre-owned homes, second only to cleaning and de-cluttering.”

For more information on how to prepare your home to sell, contact Esther Prosser, Stoltzfus Realtors, 484.269.7153, esther@stoltzfus.com.

 

New Tax on Home Sales

Dear Esther – A friend mentioned to me last week about a 3.8% sales tax on homes which sell beginning in 2013.  She said this was hidden in the health care bill. I can’t imagine our government adding this at a time when home sales are dragging down our economy.  Can you confirm this?

Your friend is right about a 3.8% sales tax on home sales in the health care bill beginning in 2013.   According to factcheck.org and other sources, it is called a Medicare tax because the proceeds are allocated to shore up the Medicare Trust Fund.  However, the fine print, which is couched in highly technical language, applies to a limited group of taxpayers.  The tax is assessed on those with adjusted gross incomes of $200,000/year or more and only applies to profits over $250,000 from the sale of a personal residence ($250,000/year income and $500,000 profit for married couples). 

For example, if an individual with an income of $225,000 bought a home in 2000 for $300,000 and resold it in 2013 for $700,000, his profit would be $400,000.  The 3.8% tax would be levied on $150,000, the profit over the $250,000 margin.  The tax he will owe is $5,700.

While this tax is unlikely to affect you directly, it will not help boost home sales – another reason why, if you decide to sell, you do all you can to increase your chances of getting the most for your property.  Finding a good agent to help you price your home, assist you in preparing it to sell and marketing your property to get the word out is crucial in this difficult market.