Buying & Selling Homes - 2/12 - Bob Vila

Category: Buying & Selling Homes


The Right 5 Questions to Ask a Prospective Selling Agent

These 5 questions will help you figure out whether the agent vying for your listing is really the one who can get your house sold.

How to Choose a Realtor

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Groomed and energetic, the real estate agent seated on your sofa seems like a perfect fit for the job of helping you sell your property. She loves your house and neighborhood, and having promptly delivered a complimentary marketing analysis, she hints that she may already have a buyer in her back pocket.

But how can you be sure that she’s capable of making a sale in a timely manner and for the best possible asking price? The questions that follow will help you identify the top-performing realtors among the handful of professionals you are considering.

Related: 10 Simple Home Staging Tips Every Seller Should Know

1. What percentage of her listings does the agent actually sell? 
This number, the agent’s sell-through rate, is the percentage of houses an agent successfully sells within a given time period out of all the listings she represents. Check to find out how this agent’s rate stacks up against the average maintained by the local realty association. Consider only those candidates whose sell-through rate exceeds the norm.

2. Among the sales the agent has made, what is the median ask-to-sale ratio?
This figure lets you know to what extent the agent discounts her listings to make deals. Realtors are notorious for initially setting a high asking price, then later recommending a lower figure. If you discover the agent routinely sells houses at a discount of 5 percent or more, that means her modus operandi may set you up for a disappointing sales price.

How to Choose a Realtor - Sold Home

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3. How will the agent market this house to its most likely buyers?
Whom do you envision as the most likely buyer of the house you are selling? If you think your place would appeal most to an existing homeowner in the area, that’s a good reason to opt for an experienced agent with ties to the community and a network of local connections. If, however, you would like to reach first-time buyers, an agent who is more adept with online marketing, even if she is less experienced, might prove more effective. If you think your property would appeal most to younger house hunters, ask the agent you are vetting whether she has a social media strategy or whether she intends to cross-post the listing. Knowing that 92 percent of home buyers rely on online sites like Zillow and Trulia, many agents expect houses to sell themselves on the Web, when in fact more aggressive tactics generate better results.

4. In online listings, what key metrics does the agent collect, and to what end?
Agents collect an array of metrics from online real estate listings. Perhaps the most important is known as the conversion rate: What proportion of those who look at the listing ultimately go ahead and ask to see the place? And here’s a follow-up question: When a given listing has a low conversion rate, how does the agent diagnose and fix the listing so that it invites more interest?

5. Will you sign a three-month contract?
Because the market undergoes so many rapid shifts, the last thing you want is to be locked into a long-term contract with a realtor who has given up on selling your house. For a talented agent representing a well-priced home, three months is long enough to get at least one qualified offer.


Selling to Seniors: How to Win Over Older Home Buyers

Looking to sell to an older home buyer? Thoughtful improvements both inside and outside the home could help seal the deal.

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In the past, retirees have fled south, eschewing the Northeast, Mid-Atlantic, and Midwest in favor of sunnier, more benign climates. But for older folks today, it’s a different story: Aging baby boomers might be downsizing, but with greater frequency, they are opting not to relocate geographically.

What does all this mean for home sellers? Traditional enticements, such as a generously sized backyard, may not be effective in drawing interest. Rather, thoughtful improvements like grab bars and wheelchair ramps might, in fact, do more for the marketability of your real estate listing.

• Design counts. No matter how practical the improvement, if it flies in the face of buyers’ style sensibilities, you are not likely to see a return on your well-intentioned investment. Translation: Instead of awkwardly propping a plywood ramp over the stairs on your front porch, take the time (and spend the extra money) to usher in accessibility without alienating those who don’t want or need assistance.

• Enlist pros. When building home conveniences to facilitate the day-to-day lives of seniors, don’t ignore the expertise of architects and/or landscape designers, especially if your remodeling work includes the addition of an access ramp. On the one hand, an architect can make sure the project adheres to standard specifications. On the other hand, a landscape designer can minimize the extent to which the curb appeal of your property is impacted as a result.

Related: Senior Moment: Boost Home Value by Enabling Independent Living

• Bragging rights. One homeowner had an elevator installed—in her ranch house. The lift ensured that her husband could reach the finished basement, often the venue for family get-togethers. The elevator also proved handy in the course of entertaining, as serving platters and dirty dishes could be easily carted between the kitchen and party space. A $20,000 investment, reports the homeowner, the elevator is as much an accessibility measure as it is a lifestyle amenity.

• Integrate accessibility. No longer purely practical, accessibility features have taken on aesthetic value, too. Makers of bathroom fixtures and finishes now offer such things as wheelchair-height toilets with sculptural panache, or grab bars that look like classy towel hangers. If you insist on accessible elements in line with the quality of choices made elsewhere in the home, the accessible features will be obvious to those who need them, transparent to those who don’t.


Don’t “Fall” Down: Surviving Autumn’s New Real Estate Rules

Whether you're buying or selling, these familiar tips may help you navigate the unfamiliar territory that characterizes real estate this season.

Fall 2013 Real Estate Tips

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Well, that didn’t last long. The buoyant housing market of this past spring has already sputtered out, and mounting evidence suggests that autumn won’t go easy on either buyers or sellers. Real estate activity fluctuates in keeping with a slew of factors; in the best times, those factors strike a delicate balance.

Right now, things are a bit off kilter: Mortgage rates are high, and the number of homes for sale is low. New data from the agency Redfin show that in the spring, 50 percent of survey respondents thought it was a good time to buy. Months later, at the beginning of fall, only 25 percent retained a positive outlook.

The only certainty is uncertainty, as the market changes gears again and again over time. Those looking to buy or sell a home this season are wise to ignore countrywide trends. Focus not on what you have no hope of changing, but on those elements that are within your power to control.

Tips for Sellers
Rattled by higher mortgage rates and unexpected fees, buyers are likely to be attracted to any guarantees you can give them. Set a firm move-out date, commit to paying a percentage of closing costs, or promise a sweetener—say, $1,000 towards new appliances. Meanwhile, assure buyers that your house is a solid investment: For instance, create a chart illustrating the stability of home values in your neighborhood over the past several years.

Related: Selling This Fall? Court Millennials and Empty-Nesters

Tips for Buyers
Gain as much clarity as possible as to what closing costs you can expect. The Consumer Financial Protection Bureau provides a comprehensive list that should enable you to generate an accurate estimate. Plus, heed the following best practices and money-saving strategies:

  • Clamp down on spending to insulate yourself from undesirable swings in your credit rating.
  • See if you can combine your auto and home insurance to get a lower rate.
  • Negotiate a lower rate for a midweek move.

Anticipating costs and, when possible, minimizing them affords home buyers a rare bit of breathing room in this unpredictable housing climate.


Quick Tip: House Hunting

When you're out visiting homes on the market, these house hunting tips can help you distinguish between properties with potential and mistakes waiting to happen.

If you’re house hunting, here are some things to keep in mind on your walk-through. Check for structural integrity. Excessive damage could indicate more serious problems. Look for updated wiring and note the age of the heating and cooling system. Look for architectural details that could add value, and check out the condition of the kitchen and baths. If you like the house, get a professional inspection with a written report.

For more on buying and selling homes, consider:

House-Choosing Checklist
5 Pro Tips to Help You Find the Perfect Fixer-Upper
10 Things to Consider Before Buying a Foreclosed Home


Selling This Fall? Court Millennials and Empty-Nesters

Looking to make a quick sale before winter arrives? Target the types of buyers who drive the market in autumn.

Fall Home Selling Tips

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If you’re planning on putting your house on the market this fall, be aware that folks at different stages of life enter the market at different times of the year. For example, the lively spring real estate season thrives on families wishing to relocate while their kids are on break from school. Home sales in autumn, however, are driven mainly by millennials and empty-nesters. As we near the end of the summer, many would-be home sellers are wondering whether either of those populations can be counted on to be active in the coming months.

Related: 10 Simple Home Staging Tips Every Seller Should Know

Millennials. What’s keeping millennials from moving out of their parents’ basements? Only money. To scrape up a down payment, young and financially insecure house hunters are likely to seek loans either from family members or the federal government. But are they actually going to obtain those loans?

Watch the stock market for clues. If investment returns are strong, waffling parents might feel rich enough to subsidize their adult children’s dreams of homeownership. Less vulnerable to uncertainty are government home loans, namely those offered by the Federal Housing Administration. As we’ve reported in the past, the FHA makes loans that combine purchase and improvement expenses. Mention those programs in all of the materials you prepare to market your property. Hey, it’s a worth a shot: You might end up informing a potential buyer of something he doesn’t already know.

Here are a few tips to help you court millennials:

• If someone visits your open house with parents in tow, pay as much attention to the parents as you do to the apparent buyer himself.

• Supplement the listing with a document that highlights the amenities that millennials view as must-haves (for example, wireless Internet infrastructure).

• Allow plenty of time for the loan to be approved. The average millennial’s credit history lacks a landlord’s verification of his ability to meet payments.

Empty-Nesters. Having already raised children, empty-nesters understand the value of good school districts, but nowadays they are more interested in amenities that suit their child-free lifestyle. If you have a hunch your house may appeal to empty-nesters, here’s how to play up that attraction:

• Emphasize multipurpose space—for instance, stage one bedroom as a home office-cum-hobby room—because empty-nesters crave flexibility for the future.

• Provide a map to points of interest within walking distance. To the extent possible, aging baby boomers wish to integrate exercise into their daily habits. 

• Showcase quality. Without teenagers around, empty-nesters can enjoy more delicate finishes and fine details, so give them something to brag about. They want to upgrade as they downsize.


Moving? 5 Ways to Minimize Surprise Costs

As if moving weren't stressful enough, it can also carry with it a host of unanticipated costs. Prepare yourself with our rundown of surprise fees and hidden expenses.

SHARES
Moving Costs

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In the weeks before you close on a new house, it’s tempting to think you’ve overcome the most challenging financial hurdles of real estate. The truth is that in the run-up to moving day—and heck, even after you’ve completely relocated—unexpected fees and expenditures can pile up. Here are a few steps you can take to keep costly surprises to a minimum.

1. Protect Your Credit
Moving involves a litany of expenses that can have you reaching again and again for your Visa or MasterCard. Be careful: Eating up your available credit can throw off the assumptions that shaped the terms of your pending mortgage. If you start maxing out your credit cards, your lender might be forced to deem you a greater risk, which could in turn make your mortgage rate go up. So hold off on charging any big-ticket items (for example, new furniture) until after you close.

2. Research Municipal Fees
Believe it or not, some municipalities require a payment from outgoing homeowners, while others slap a fee on those who are just joining the local population. You might even get dinged by both the place you are leaving and the place you are moving to. There’s no way around municipal fees like this, but because they can amount to thousands of dollars, take the time to determine whether you’ll be facing any.

Related: Moving 101: Easy Ways to Make the Most of Any Move

3. Avoid Building Fines
If you’re moving out of a condominium or apartment building, check with the board or management company well in advance of your move. Outgoing occupants are most likely required to follow an established procedure. It’s possible, for example, that your building enforces quiet hours or that moving trucks are permitted to park only in designated spots. Failing to observe the rules could mean a hefty fine, so be sure to find out what the regulations are.

4. Beware of Outstanding Payments 
Directly question the home seller about any outstanding or impending fees, assessments, special taxes, or improvement costs. If there is money owed, it’s not your obligation to pay it—at least not prior to the closing. Settle all questions of debt before taking formal ownership of the property, or else you could be stuck picking up the previous owner’s tab.

5. Expect Mortgage Add-Ons
Thanks to the ongoing realignment of lending norms, the Federal Housing Authority (FHA) has boosted the fees it charges buyers at closing. The FHA guarantees about one-third of mortgages each year, so don’t assume that your new loan is going to resemble your old one. Identify the differences between the two and know what you’re getting into.

Finally, a tip about tips: Don’t forget to have plenty of cash on hand for those folks who will make your life a bit easier as you go about the always-tedious task of moving. Everyone appreciates a little appreciation.


3 Steps to an Easy Mortgage Approval

If you think you'll be in the market for a mortgage in the near future, now is the time to make sure your life and your finances conform to a few commonsense rules.

Getting a Mortgage

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Risky practices consigned to the past, mortgage lenders are now returning to applying the same standards that your parents had to meet when they purchased their homes. In this landscape, hewing to three commonsense rules will help you receive swift approval of your mortgage application.

1. Maintain a high credit score. Will you pay the money back? That’s really all the lender wants to know. If you have a solid track record of repaying past loans, then you are likely to repay this one. Each credit reporting agency—Experian, Equifax, and Transunion—calculates your credit score. That figure summarizes your reliability as borrower. The higher your credit score, the lower your mortgage rate. The lower your mortgage rate, the lower your monthly payments. So at least in the context of mortgages, good guys finish first.

2. Prove that you earn what you earn. Traditional employment makes loan officers smile because their ideal mortgage candidate has always had the same job, working for the same employer, and enjoying a yearly raise. That level of stability may seem boring to you, but in the eyes of a mortgage broker, change equals risk. Self-employment, career transitions, or periods of unemployment, therefore, present challenges. None of these make it impossible to secure a mortgage, but you may need to work a bit harder to make your case.

3. Make a juicy down payment. Typically, 10 percent is the minimum down payment required for a mortgage, but if you can swing it, putting forward more than 20 percent gets you off the hook for some exasperating expenses—for instance, mortgage insurance. The business of borrowing money can become pretty complicated, but this part couldn’t be much simpler: The more money you put down, the less risk there is for the lender. The less risk for the lender, the greater your chances of getting a mortgage.


5 Pro Tips to Help You Find the Perfect Fixer-Upper

On the hunt for that elusive diamond in the rough? Real estate wizard Randy Florke shares his top tips on buying a fixer-upper.

As founder and president of The Rural Connection, a real estate company based in Upstate New York, Randy Florke has purchased and restored more than 40 old farmhouses, creating gracious and comfortable homes from these diamonds in the rough. When scouting a property, which qualities catch his eye, and what are the red flags that make him walk away? Read on for pro tips on buying a fixer-upper.

 

1. Location, Location, Location

Buying a Fixer-Upper - Location

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“If a house has an amazing location, there’s almost nothing in the way of renovation hurdles that get in my way,” Florke says. “My dream location is all about privacy. I love a house that’s set back from the road. If it’s also got a great view or a water feature, such as a pond or creek—those are both bonus features.”

 

2. Budget for Renovation Costs

Buying a Fixer Upper - Budget

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“When I first tour a house, I’m thinking about what I’d like to change and what needs to be done,” says Florke. “By the time I walk back out the door, I already have a preliminary idea of what the renovation costs might be.” These costs, Florke continues, have to be factored into your overall budget. If you’re unsure about the costs yourself, ask someone you trust to come along and offer you an honest estimate. “It’s essential that you know what you’re getting into.”

 

3. Focus on Roofing and Foundations

Buying a Fixer-Upper - Roofing

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Issues with roofs and foundations often scare off potential buyers, according to Florke, but if you adore the house, ask a contractor to take a closer look. “I’ve bought many houses with both of these issues,” he says. “Provided the cost to fix them properly is within your budget, it could be a great opportunity.”

 

4. Know Where to Draw the Line

Buying a Fixer-Upper - Wood Rot

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Repairable roof and foundation problems aside, Florke would pass on an old home with termites or significant rotting. “If a roof has been left in disrepair for too long, a house will rot from the inside out. That’s not worth an investment.” But don’t rush to dismiss the land on which the tear-down is sitting. “It you’re in love with the location and your budget allows, you can raze the old house and rebuild a new one in a similar style.”

 

5. Stay Positive

Buying a Fixer-Upper - Stay Positive

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If you’ve found an old home you feel is perfect for you but have reason to believe the renovation costs will not realistically fit into your budget, “walk away,” Florke advises. “There will always be another house to fall in love with.”


A Good School District Is Worth How Much?

All homeowners, even those who aren't parents, benefit from living in a good school district.

House Prices and School Districts

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You don’t need children to understand that good public schools support the value of homes in their district. And while higher quality schools usually are accompanied by higher property taxes, homeowners in such districts are eventually “paid back” through a higher home sale price.

Getting paid back sounds great, but how much are we talking about? New research from Realtor.com shows that for entry to a desirable school district, 9% of buyers say they would pay 11% to 20% above budget. Separately, 17% report they’d pay extra to be close enough that their kids could walk to and from school.

Related: 7 Renovation Tips to Boost Resale Value

In the showdown between amenities for adults and education for kids, you guessed it: the kids win. Realtor.com found that 62% of buyers would pass up a home spa if it meant getting into the right school district. 50% would concede easy access to shopping, while 44% would give up space in the form of a bonus room.

If the house you plan to sell is located in a highly coveted school district, do everything in your power to highlight that fact in all of your real estate marketing materials. Many potential buyers are the parents of children currently in the school system, so be sure to get the word out among neighbors and local friends.

If you are buying a home, make use of a search tool that enables you to filter by school district, as district boundaries don’t always align with town, village, and city lines. After all, you cannot assume that your children will be assigned to attend the same school as the kids down the block or even next door.


How To: Attract First-Time Home Buyers

Marketing your listing to millennials? As 20-somethings slowly enter the market for the first time, they bring different priorities than did previous generations of home buyers.

How to Attract First-Time Home Buyers

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Millennials can’t seem to catch a break. Saddled with student loan debt and facing some tough employment challenges, 20-somethings today are finding it more difficult than previous generations to get a foot into homeownership. In 2013, first-time buyers have accounted for only 28 percent of home purchases, down from 34 percent in 2012. If you’re selling a house with appeal for younger house hunters, here’s how to make it even more enticing:

Show how it lives smart. Millennials are OK with less space, so long as that space is multifunctional and intelligently organized. If possible, show how rooms can be used in different ways. For instance, move a fold-out sofa into the home office to demonstrate its potential as an occasional guest room.

Wire up. Millennials are said to be a mobile group. At home, that mobility takes the form of a wireless internet connection. Include in your marketing materials an explanation of local internet service quality and costs (and of cell phone reception on your property).

Map out commuting routes and alternatives. Bikes, public transit, and car-sharing services like Zipcar are catnip for millennials, enabling them to minimize day-to-day costs and save for monthly housing fees. Create a map that situates the proximity of your house to available transportation amenities.

Introduce them to the community. In today’s erratic and hypercompetitive market, buyers often parachute into unfamiliar neighborhoods, chasing affordability. Provide background on the features and culture of your neighborhood, since harried buyers may not have time to investigate on their own.

Be ready to respond on a moment’s notice. Millennials are likely to pull up in front of your house and review your listing from the screen of a smartphone. If they want to see your place, they want to see it right away. Be ready to show it at a moment’s notice.