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Ask Tara @Trulia

make smart decisions w/Tara's real estate + mortgage need-to-knows

By Tara-Nicholle Nelson | Broker in San Francisco, CA
  • 4 New Year’s Resolutions for 2014 Home Buyers

    Posted Under: Home Buying  |  December 19, 2013 10:46 AM  |  39,472 views  |  24 comments

    There are tons of different approaches to setting resolutions. A resolution can be a goal - an action or accomplishment you propose to achieve in the year to come. Or a resolution can be a declaration – a commitment you make, a stance you take.

    If you’re hoping or planning to buy a home in 2014, there are some action-type resolutions you’ll need to make, whether you call them that or not: getting your credit and money matters in order, linking up with the right real estate and mortgage pros - that sort of thing.

    But I propose that there are some declaration-style resolutions you should make as well, to make the very most out of your home buying experience. Here are the top four:

    1. Resolve to do your own reading, ‘r’ticulating and ‘rithmetic. If you plan to close escrow on your home in 2014, you’ll have plenty of documents to sign in the year to come. I encourage you to get out in front of all these commitments you make to others with 3 critical commitments to yourself:

    • #1: Read everything,
    • #2: Speak up for yourself, and
    • #3: Do your own math.

    Reading. Depending on how many homes you view and how many offers you make before you find “the one,” you could end up being asked to review and acknowledge thousands of pages of disclosures and contracts over the coming months. Do yourself a huge favor that seems obvious but is harder than it sounds: read them. All of them.

    Maybe you don’t have to read a completely pre-printed/boilerplate form you’ve signed 5 times before every single time you sign it. But even if you have made offers on 7 homes before, you do need to actually read the 8th home’s offer before you sign it. Same goes for seller’s disclosures, inspection reports, HOA documents and loan closing paperwork. 

    Ask your agent to help you get documents via email, throughout the process, as early as possible before the deadline for signing them. You can read them at your convenience, without feeling pressured, in the comfort of your own home. This allows you to make a list of your questions and concerns and to send them to the appropriate parties to be addressed while there’s ample time.

    ‘R’ticulating. Once you read documents, or even while you’re physically in a home or meeting with one of your professionals, make it a practice to speak up for yourself. That could mean simply asking questions, even when you think they should be obvious. It could mean asking the same question you’ve already asked twice, if you don’t understand the answers you were given. It could mean pushing back when you have strong, nagging concerns about moving forward with the deal for any reason - making sure you’re comfortable with the totality of the transaction before you remove contingencies, rendering your deposit non-refundable. 

    Whatever it looks like, no matter how mellow and non-confrontational your personality normally is, decide that in you’ll be an assertive advocate for your own interests and needs in the context of this transaction.

    ‘Rithmetic. Figure out your own monthly income and expenses, budget for what you can spend on housing every month without skimping on your savings and investing, and go into this home buying experience telling your professionals what you can afford. Don’t rely on others to do your math for you, no matter how much you hate math. Sit down and just do it. There’s a 90% chance it’ll be less painful and less time-consuming than you think.

    2. Resolve to take a long-term view. It’s super tempting, when a market is rising, to try to hurry up and buy out of the fear of being priced out. I’ve begun to hear some buyers take shortcuts in their planning process, counting on the rise in market values to make it easy for them to sell if they need to, in the short term. This is foolhardy – given the costs of simply doing a real estate transaction, in most markets, it’ll be difficult to sell and cover even transaction costs if you are forced to do it in the year or so following your purchase (even longer, in some areas).

    Don’t fall prey to this decision trap. Instead, resolve to buy a home based on:

    • how much space you’ll need
    • what sort of property will work for your family
    • where you’ll want to live, location-wise, and
    • what you’ll be able to afford for at least the next 5 to 7 years.

    If you think any of these things will change significantly in that time frame, and you know how you’ll expect them to change, buy your home for what you’ll need at the end of that period. If you think they’ll change significantly in that time frame and you have no idea how they’ll change, consider whether it’s sensible to buy at all – your agent, mortgage broker and financial planner can help you make a decision based on your market and your personal life.

    3. Resolve to respectfully ignore the peanut gallery. On real estate matters, you’ll find that everyone has an opinion. Doesn’t matter if they’ve never owned a home. Doesn’t matter if they live in your town. Doesn’t even matter if you know them or not. Even mention that you’re in the market for a home and you’ll find that even the most milquetoast, quiet folks in your life will chime in and have something to say, regardless of whether you requested their opinion.

    You might have certain folks in your life who know you well, who care about your best interests and whose opinions you respect. There’s certainly nothing wrong with that. But here’s the deal – everyone who offers an opinion is not qualified to give it. And many folks will attempt to spread their fear and cause you to second-guess your own plans out of their own personal traumas, dramas and poor past decision-making or – worse yet – out of their own views about you and how you might change if you move forward with becoming a home owner.

    My advice is to take in what’s helpful, benefit from others’ mistakes, and then ignore the rest. Take their opinions with a grain of salt. And take great pains to ensure you’re not attempting to escape the scariness of taking personal responsibility for this momentous decision by allowing your personal peanut gallery to pepper you with their opinions. If you already know the nervous Nellie in your life will try to talk you out of even the best-laid, smart home buying plan, protect your dream by not sharing it with them.
     
    4. Resolve to enjoy the ride. So many people brace themselves for tension, drama and upset before they buy a home. And you know what? They find it! It’s wise to expect the unexpected, commit to going with the flow, and build in cushions of time and money to all your estimates and expectations. That flexibility can help you to retain your sanity, and might even make the difference between the ability to close your transaction or not, in extreme cases.

    But I’m going to suggest you take it one step further and actually commit, in advance, to enjoying the home buying process. If you look for what you can be thankful for and excited about in every situation, you will encounter dozens, maybe even hundreds of insights and opportunities that you’d otherwise miss. Buying a home presents opportunities to:

    • learn a lot about yourself and your family
    • explore your town
    • grow closer to your spouse or co-buyer
    • level-up your financial knowledge and status
    • create and put into play a holistic vision and plan for your life. 

    Buying takes a long time, so deciding to enjoy it is to make a decision not to put your life on hold for months or years on end, but rather to flourish and thrive right where you’re planted, engaging with life and gathering up the multitude of powerful takeaways you can find in the process (on top of the home itself!). I know buyers who took advantage of the home buying experience and leveraged that momentum into changing careers, taking up new hobbies and skills, starting small businesses and rehabilitating longtime, chronically bad financial habits.

    So seize the moment (or the year), and make a resolution that if 2014 is going to be The Year of the Home for you, it’s going to be enjoyable, not just at the end – but throughout, come what may.

    ALL: Are you setting resolutions this year? What are they, and what do you need to be successful?

    PS: You should follow Trulia and Tara on Facebook!

  • 4 Home Buying Ducks to Get in a Row for 2014

    Posted Under: Home Buying  |  December 18, 2013 11:14 AM  |  57,395 views  |  11 comments

    Most Moms I know have a mental checklist they run through with military precision before they leave the house to take the kids to school:

    • Teeth and hair – check
    • Homework in backpacks – check
    • Jackets zipped – check
    • Lunch handled – check
    • Sports gear, musical instruments or (in my Mom’s case) oratorical soliloquies, drum major regalia and History Day accouterments – check, check, check, check and check.

     But never did I realize that this maternal preparation drill was a cross-species instinct until one day last Spring, at the lake near my home. I was bopping along, walking my pugs when they both stopped still and began looking quizzically from the shore to me, back and forth, heads on rotation. Finally I saw what had them completely barkless: a Mama duck, literally putting her ducklings in a row. These baby ducks, which looked something like what a loosely-packed cotton ball might resemble if it had legs, were being nudged and jostled into a surprisingly straight line by their Mom, who then led the whole adorable crew on a little promenade into the reeds.
     
    Now, when it comes to putting your own ducks in a row in advance of buying a home, a few things are key. First, start early. Whenever you think you should get started doing the actual prep steps, work backwards about 3 or 6 months before that on the calendar and start then.
     
    Secondly, be bold. I find that many buyers-to-be hesitate to get into the not-so-adorable territory of credit and savings, out of a fear that they’ll learn something that will kill their dreams. The bolder you are about going into scary territory, the faster you’ll learn the truth of what work lies ahead of you - and the more time you’ll have to do what it’ll take to overcome any challenges. Also, just the knowing will make anything scary less so. Here are four ducks you’ll want to start getting lined up and comfortable with now if you hope to buy a home in 2014.
     
    1. Get a vision. The real estate market is a complex system of constantly evolving dynamics, information and realities. Going in with a clear vision for the outcome you want to create is essential to helping you stay moving in the right direction, especially given that you’ll need to be flexible and make some compromises throughout the process. I encourage you to take a time-out from the busyness of your day-to-day life and devote an hour or an evening to putting, in writing, all the elements of your vision for the life you’ll have - and your family will have - once you move into your next home. 

    At this stage, don’t be too narrowly focused on what the house itself will look like. Instead, deal with everything you can think of in terms of how you want to experience your daily life, including things like where you work, how you get there, and how much you work - and how you would like this to change over time, and what you want to do with your spare time and money. Getting a vision for this will help you drill down into the more granular details of the specifications for a home that will successfully, sustainably serve as the backdrop for the life you’re trying to create, while allowing you to flex and flow with the realities of the real estate market.

    2. Put your team in place. I believe that the agent and mortgage broker you select are two of the most important decisions you’ll make in the course of buying a home. The right agent can create a transcendent experience in which you not only buy a home, but are exposed to possibilities for your life you would otherwise never have even considered. A great agent can coach you, advise you, mediate disputes for you and execute on your action plan with you. A great mortgage broker, similarly, can surface options and issues you would otherwise not have appreciated.

    And the opposite is true: being represented by professionals who don’t get you or don’t have the expertise you need can really sour your experience of buying a home. 

    So, work now - way in advance - to get your team in place. Ask your friends and family members if they have an agent or broker they just loved, and when someone says “yes!” ask for an intro. Check out your list of agent suggestions online: check their Trulia reviews and profiles, review any answers or blog posts they’ve put up on Trulia or elsewhere, follow them on Facebook to get a sense for their approach and personality flavor, and reach out to them via whatever communication medium you prefer (e.g., phone or email). Then book a few meetings and, while you have the luxury of time, get to know them each a bit better, essentially interviewing them for the position of your personal real estate or mortgage advisor. While you’re talking, look for a fit in terms of: the types of buyers they have served in the past, the types of recent successes they have had in representing buyers like you, the areas and property categories in which they have experience, and whether their approach to giving advice and education works well for you. It’s not overkill to check references, either, so ask your interviewees for a few recent references of buyers they have worked with.

    3. Credit check yourself before you wreck yourself. I know, I know, you’ve heard it a million times - go to AnnualCreditReport.com (the government-mandated free credit report site) and pull your credit at least a year before you buy. This gives you a chance to review all 3 reports, flag any inaccuracies, dispute them and get them corrected way before your home loan weighs in the balance. It also gives you the opportunity to have your mortgage broker flag any issues that might make it difficult for you to get a loan, so you can work on them with ample time to correct the situation. That might mean paying down some bills, resolving any outstanding collections, making sure you don’t create any new bills and even, in some cases, establishing credit lines.

    The challenge here is that we’ve all heard it so much, it’s quite easy to simply ignore this advice. Let me urge you not to do this. I’m not even in the market for a home, but I just ordered my own credit reports just to review them and follow my own advice. I was stunned - stunned! - to see about 7 – SEVEN – glaring inaccuracies. Multiple accounts that had long been paid off were still being reported as open and having balances due, and there was even one account I had never even heard of before! A woman in my office just did the same and realized that someone has been committing identity fraud in her name, opening accounts of which she was totally unaware.

    These sorts of findings are concerning no matter when you find them. But if you don’t find out about them until you’re already in love with a home, the 30 days it can take to resolve them can seem like an eternity - and can even be the deal-killer on allowing you to actually close on your dream home. The reality is that sometimes it can take much longer than that to resolve inaccuracies - and it will almost certainly take much longer than that to pay bills down and to execute on other line items on your mortgage pro’s action plan for you. 

    So, don’t wait until the last minute. Actually, do the reverse: pull your reports asap and spend your downtime over the holidays working through them, disputing anything you need to and calendaring a call with your mortgage pro to get a briefing on what you need to do to present yourself in the best light to lenders.

    Side note: For small issues, some lenders can facilitate what is called a rapid rescore, which allows you to dispute and correct inaccuracies within a shorter time frame, for a fee - but you should not count on it eliminating every inaccurate report in a couple of days. Sometimes it takes a couple of rounds of disputes.

    4. Cash to Close. Coming up with all the cash you need to close a home purchase simply takes time. And sometimes, it’s hard to know whether you’re truly ready to start your house hunt in earnest without knowing with some precision how much you’ll really need. You might be trying to save up 10% of your target purchase price, which is great, but that strategy overlooks the fact that you might also need to be stockpiling funds for additional fees and costs of closing the deal, like: inspections, appraisals, title insurance, escrow fees, mortgage closing costs and property transfer taxes, to name a few. When you pick your mortgage broker, work with them to get a better understanding of what your savings target should be for cash to close, given what sort of property you’re aiming to purchase and what you can afford to spend on it, from a purchase price perspective.

    AGENTS:  What are the most commonly overlooked preparation steps you see in incoming buyers?

    BUYERS:  Here’s a checklist to help you get an even more detailed preparation plan in place.

    SELLERS:  Want to get your own ducks in a row to sell your home next year? This checklist should help!

    PS: You should follow Trulia and Tara on Facebook!

  • 3 Costly Cases of Wishful Thinking in a Buyer's Market

    Posted Under: Home Selling  |  December 3, 2013 10:09 AM  |  25,831 views  |  5 comments

    You’d think that wishes would be welcome in real estate. I mean, they call it your “dream home,” right? And even the fairy tales and fables are full of real estate imagery. There are towers, huts, castles and houses made from straw, wood, brick - I seem to recall one that was even made from a shoe!

    Reality check: the real-world real estate market does not operate on wishes and dreams. While it's fine to put a vision in place for the outcome you'd like to have from your home's sale, there is a line some sellers cross that ends up costing them significant amounts of time, money and opportunities to get their homes sold and move forward with their lives.

    Sellers, how can you make sure that you are setting up an actionable plan, complete with targets and timelines, vs. playing in a fantasyland of costly denial and wishful thinking? Here are a few red flag scenarios. If you find yourself mentally lingering in any of these fantasies, you might want to course correct your thinking.

    1. Wishing a wealthy buyer would just fall in love with your home enough to pay an above-market list price, all-cash, no questions asked. While I understand the thinking behind this one, that thinking is flawed - deeply flawed. The rationale goes: a wealthy buyer will be able to pay cash, so they won’t get an appraisal - or won’t be bound by it if they do get one. If they just love the place enough, they’ll be willing to do what rich people do, and indulge their heart’s desire by paying what I want for this place (even though my agent says that’s way too much).

    Let me count the flaws in this thought process.

    First, there’s a reason the average wealthy person stays wealthy, and that reason is because they are good stewards of the money they have. The classic book The Millionaire Next Door went so far as to provide proof points for the proposition that the average, everyday wealthy person is actually quite frugal, preferring low-budget wine to costly vintages and Timexes to Rolexes.

    They make no exception for their real estate dealings. Well-off buyers still want to get every bit of value out of their dollars, so are maybe even less likely to pay a list price unsupported by comparables than a buyer with less cash on hand. And many wealthy folk will mortgage their homes, to keep their cash liquid and take advantage of the mortgage interest deduction, whether or not they have enough cash to buy your home outright - so the fantasy of no appraisal showers of cash is simply that: fantasy.

    The very best way, in any market climate, to get top dollar for your home is to price it in a way that in an online search, it stands out from the competition as a strong value.

    2. Wishing your home would just sell already. After all, the neighbor’s house did! If your home is lagging on the market while others fly on and off, wishing will not solve your problem. Strategic action will.

    I once read an old Dale Carnegie book in which he gave the advice to put a “stop-loss order on your worries.” It’s always stuck in my mind as a simple, but vivid, reminder that the best practice in life is to refuse to waste your valuable time and energy worrying and wishing about things that have already happened or are inevitable. Instead, he said, accept what’s already done and get on the stick doing damage control or, even better, making lemonade from your lemons.

    Some 70 years after Carnegie wrote it, this advice is still highly appropriate for sellers in buyer’s markets who find themselves with a case of this type of wishful thinking. Truth is, a large segment of buyers who are active at this time of year have tax, financial and lifestyle goals they are trying to meet by closing escrow before year’s end. Spending your - and their - precious moments of time on wishing is a setup for frustration and for missing out on the opportunity to sell your home to one of these urgent buyers.

    Instead of worry-ridden wishing, get on the calendar for a course-correcting, action-planning strategy session with your agent. Go in understanding that their goal is to get your home sold, too. Throughout the meeting, keep an open mind and ear to their advice about the staging, pricing and marketing changes they recommend making, and don’t end the session until you have an agreed-upon calendar for completing them.

    3. Wishing you had listed your home earlier in the year. October data from the National Association of Realtors® revealed that pending home sales nationwide have dropped for the fifth month in a row, due to interest rate and home price increases. This is not cause for alarm, as sales are still up year-over-year. In fact, these slight declines in buyer activity might simply reflect an expectable rollback in homes going into contract after the fever-pitched buyer activity pace we saw at the beginning of 2013.

    Here’s how one analyst explained it to Bloomberg News: “'When mortgage rates went up, people got spooked and rushed into the market to seal deals,' Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said. . .. 'The numbers that we’re seeing for pending home sales are payback for the stronger numbers earlier this year.'" 

    Maybe you originally thought about listing your home last year or this Spring, but you’ve just now gotten all your ducks in a row to get the place on the market. Or maybe it took you a while to realize that your once-underwater home is now in the black, empowering you to list it for sale - and now you regret not having listed it sooner.  In any event, wishing you were doing something you didn’t do at a time you didn’t do it has never been a fruitful strategy, no matter what the context.  In fact, I believe that things happen when they are supposed to happen. Bemoaning that they didn’t happen on some other timeline can cause you to overlook advantages that might operate in your favor, if only you opened your eyes to them.

    There are buyers out there for well-prepared, clean, well-priced and smartly marketed homes in every market, no matter the time of year or the climate of the weather. Pay attention to the average number of days recently sold homes in your area took to sell, and don’t get upset or panicked about your home’s sale until you and your agent feel that your home is lagging, compared with the average.

    Keep in mind that buyers who continue house hunting during the holiday season and in inclement weather tend to be some of the most serious, qualified and motivated buyers of the entire year. As well, seller competition can be lower this time of year, when many sellers are holding off to list or re-list their homes after January 1st. And stay mindful of the power you wield to control your home’s listing and sale. If you are convinced that selling at the beginning of the year is advantageous to selling at the end, you can take heart in the fact that the beginning of a whole new year is just around the corner!

    SELLERS: Have you found yourself engaging in wishful thinking? What specific wishes come to your mind?

    AGENTS: How do you help your seller clients get and stay grounded in reality?

    PS: You should follow Trulia and Tara on Facebook!

  • 3 Costly Cases of Hot Market Wishful Thinking

    Posted Under: Home Buying  |  December 3, 2013 10:07 AM  |  102,117 views  |  54 comments

    “Oh, how I wish. . .” started no wise real estate decision ever. There’s a reason they call it real estate, folks. That’s because we’re dealing with the most tangible type of property around - land - and the buildings that, formally speaking, represent improvements to that land. 

    Attempting to apply fantasy-realm wishes to real-life, real land situations is never a setup for success. But when the market is hot and you have a goal or a timeline, engaging in wishful thinking is not just foolhardy - it can be costly.

    As evidence, here are three common, costly cases of wishful thinking that tend to arise in areas where the market is hot, offers are plentiful and prices are rising. Consider these red flags and take heed in the event you find yourself engaging in any of them:

    1. Wishing the house you’re seeing was in a different neighborhood. You’ve seen 2 dozens houses, and put in offers on a dozen. No dice. And your agent keeps pushing you to look in a lower price range, assuring you that you can find what you want. And then they show it to you: safe neighborhood, good school district, good commute to work, just the house you wanted, really - but not in the tony hills or hot downtown district you’ve been trying to get into.

    Wishing that you could “pick the place up and set it back down” in your desired neighborhood will not make it so, no matter how many times you say it. The reality is that when you have been outbid a double-digit number of times, something about your approach is not working. You either have to downgrade your specs in terms of the property you seek, maybe looking for something smaller, a condo instead of a single-family home or something in less-pristine condition or you need to shift your location criteria - and that can mean a neighborhood change.

    Part of the reason this wish is dangerous is that the white-hot markets in many towns are hyper-localized in the Most Desirable Neighborhood in Town. That’s where the competition among buyers and bidding wars are the most intense. If you’re not prepared to house hunt for homes quite a bit lower than your top dollar to set yourself up for success, or if there simply are no homes in that neighborhood listed below your top dollar, you might need to face the reality check that you simply can’t afford to buy there now.

    Stop wishing the home you can afford were in a different neighborhood, because if it were, chances are good you wouldn’t be able to afford it, either! Understand that you’ll be able to level-up your neighborhoods as time goes on and you buy your next home - and the one after that - and don’t let your inflexibility paralyze your house hunt so long that prices all over town rise even more.

    2. Hoping that perfect house gets no other offers, even though every other house you’ve bid on has had 54. There’s a fine line between wishing something were true and denying the reality of what actually is true. Facing reality, even when it’s painful or means you can’t have what you want, allows you to make your own action plan for getting the best possible results with the resources you have - or a plan for getting more resources, whichever route you choose to go.

    As a buyer in a seller’s market, actually as a buyer in any type of market, it’s ultimately up to you and only you how much you offer on a home. Your mortgage broker can try to get you qualified as high as your income will allow, your agent can get you the comps and give you strategic advice on the average list price-to-sale price ratio, but you are the be-all and end-all decision-maker on offer price, and that’s as it should be.

    But if you wield your weighty decision-making power to make lowball or at-asking offers in situations where you are virtually guaranteed to run into high levels of competition, that’s a poor use of your powers. Not only do you set yourself up for failure, you do so at the near-certain likelihood of adding to the demotivating, depressing, discouraging momentum of the times when you get overbid despite giving it your legitimate best efforts. That frustration often leads to analysis and calling a house hunting time-out. And that, in turn, often leads to buying at a time when prices are even higher, and getting ultimately even less home for your money.

    3. Wishing prices weren’t going up so fast. Here’s the deal: when prices were flat or falling, buyers were (understandably) stressed at the prospect of buying a depreciating asset. Now that they’re ascending, it’s not at all uncommon to hear buyers bemoan that, too. The fact is, the moment escrow closes and your Facebook status changes from house hunter to home owner the fact that prices are rising, and fast, will shift in your mind’s eye from curse to blessing, quick-like.

    Rising prices and a recovering market might be what emboldened you to buy, empowered you to sell a formerly underwater home, and certainly have been inextricably intertwined with the increase in jobs. If prices weren’t rising, many of these other things might not be materializing, either, and that wouldn’t be so great. 

    Wishing prices weren’t going up so fast contributes to a costly form of denial - denial of the reality that they are. This can cause buyers to persist in making lowball offers and wasting their precious time on homes they can’t compete for within in their budget range, all while their smart targets are appreciating rapidly - and that’s how people get priced out of the market, right under their noses.

    Don’t let your home buyer dreams fall prey to this costly wish-based pitfall. Work with your agent to stay in the loop about how prices are trending throughout your house hunt, and use that knowledge to power your decision-making about what price range to house hunt in and what price to offer for target properties.

    ALL: What are your real estate wishes, and how do you ground yourself in reality?

    PS: You should follow Trulia and Tara on Facebook!

  • Waste of Time or Time Well Spent: 4 Open House Truths

    Posted Under: Home Selling  |  November 26, 2013 3:26 PM  |  105,897 views  |  82 comments
    Talk to people who have been around the real estate block a time or two, and you’ll get surprisingly strong opinions on a seemingly innocuous topic: Open Houses. Camps are divided pretty neatly between:
    • those who think that Open Houses are a total waste of time, never actually lead to sales and are mostly a way for agents to meet up with brand-new buyers who are too early in the process to be suitable prospective buyers, and
    • those who think that Open Houses are a fundamental building block of fully exposing a property to the market which, in turn, is a must for getting a home sold at top dollar and top speed.

    So, which is it: waste of time or time well-spent?

    While my personal vote is for time well-spent, here are a handful of truths about Open Houses you can use to make up your own mind:

    1. There are different types of Open Houses, and type matters. There are two basic types of Open Houses: Broker’s Opens and public Open Houses. Public Open Houses are the traditional Sunday afternoon affairs where local buyers, neighbors and looky-loos alike peruse your property. (We’ll come back to public Open Houses in just a minute.)

    Broker’s Opens are held for the ostensible benefit of the real estate brokers and agents in town, who can stop by one-by-one or may visit in groups or “caravans”. (In most areas, non-brokers are to be welcomed into Brokers’ Open Houses in the event they show up, but the majority of attendees are still brokers and agents.) Most often, listing agents will hold the Broker’s Open house on the day of the week that brokers usually tour the neighborhood, and will try to time it very soon after your home goes on the market - before the public Open House.

    Over ninety percent of qualified buyers will start their house hunt online, so it’s essential to make sure your home is well-marketed, digitally speaking. But over eighty percent of qualified buyers will ultimately work with an agent or broker, so you can’t afford to miss them, either!

    Broker’s Opens are an efficient way to expose your home in its best light to a large number of brokers who are on the lookout for their buyer clients at one moment in time, early in the life of your home’s listing. They also create a rich opportunity for local brokers to see your home in close succession to similar, nearby listings - so if your home is well-prepared, well-staged, and well-priced against the competition, Broker’s Opens make that very clear.

    On the flip side, if your home is staged, marketed or priced in a way that puts it at a competitive disadvantage, local brokers and agents will often give your agent that feedback during the Brokers’ Open - giving you the opportunity to course-correct or put some final touches on your home’s staging before most buyers see it.

    Verdict: Broker’s Open Houses = Time Well Spent.

    2. The role of the Open House has shifted. As the market warmed, and then heated, up this year, serious buyers had to face a few truths of their own: intense buyer competition, multiple offers and over-asking sale prices, among them. As a result, many learned that to maximize their chances of successfully finding a property that meets their needs, they have to see a lot of houses - and they have to get out and view properties regularly, as soon as possible after they come onto the market.

    At the same time, though, buyers live busy lives, and so do their agents, which makes the prospect of making an individual appointment to see every listing that comes on the market daunting, to say the least. If a buyer views 30 or 40 properties before they buy, imagine how many individual appointments that is to wrangle! One strategy many smart buyers and buyer’s agents are adopting is this: to keep a standing appointment every Sunday afternoon during the time homes are normally held open, and view as many properties as possible in one fell-swoop.

    Open Houses aren’t just to help early-stage buyers discover listings anymore, they serve as a convenient way for serious buyers to access and view them, too.

    Verdict: Time well-spent.

    3. Few homes are actually “sold” at the Open House, but occasionally one is. You can talk to 100 people who have sold their homes, and less than a handful will report back that their home’s ultimate buyer was someone who found the place through an Open House. And that precise fact is often trumpeted by folks in the “waste of time” camp. No doubt, Open Houses take a lot of time and energy to prepare for, and it can be anti-climatic to do all that work, have a well-attended Open House and end the week with no offers.

    But think about this: you only need to find one buyer, the just-right buyer, for your home. And what if - just what if - you would have been one of those handful of sellers who did sell their home via the Open House? Is the inconvenience of having to clear out for a couple of afternoons worth missing the potential opportunity to find your home’s ultimate buyer? 

    Most sellers think it’s not.

    Also, there are loads of other ways Open Houses can indirectly lead to a sale. As you now know, buyers use homes not just to discover new listings but to actually access and view homes they’ve seen online. And sure, those neighbors you see as looky looks might be curious about our home decor choices, but they also might have friends, colleagues or relatives who’d be interested in buying your place. 

    Verdict: Could go either way, but the chances the time is well-spent are greater than they seem at first glance.

    4.  Prepping for your Open House is time well-spent no matter its outcome. Truth is, the time you’ll need to invest in sprucing and primping and cleaning and de-cluttering and de-odorizing and beautifying your home to prepare for an Open House is not incrementally greater than the time you would ideally invest in doing these things to put your home on the market even if you weren’t holding it open! 

    Setting a time and date for an Open House and marketing it widely is a powerful “forcing factor”: it provides both a hard deadline for your property preparation efforts and sets a higher bar for the prepping and staging of your home than you might set otherwise. It’s similar to all the housework you find yourself doing in a flurry before you have house guests: the week before they arrive is often the most productive home improvement week of the year!

    Verdict: Time well-spent.

    Ultimately, if you hold an Open House and it doesn’t result in the sale of your home, it might still feel like a waste of time to you. If you are worried about this, talk with your agent to get a good sense for the standard Open House practices and buyer expectations in your area, and to explore the factors weighing for and against holding your home open. Understanding the benefits of holding it open even if it doesn’t help a buyer discover your listing and the potential for missed opportunities if you forego having one might just be enough to tip your own personal verdict from waste of time to time well-spent.

    SELLERS: Did you have your home held open? Was it a waste of time or time well spent? 

    BUYERS: Do you attend Open Houses? Do you use them for window shopping or for serious house hunting - or both?

    ALL: You should follow Trulia and Tara on Facebook!

  • 4 Questions To Surface the Best Neighborhood for You

    Posted Under: Home Buying  |  November 20, 2013 3:48 PM  |  75,238 views  |  40 comments

    I’m a bit of a logistics nerd when it comes to planning my days, even on the weekends. I try to pack my days to the gills with the projects and people I love, so I need things to run like clockwork, frictionlessly. I’m also a creature of habit, and pride myself on finding and working with the best local merchants.

    So, it’s fortunate for me that I live in a neighborhood that is all about the call-ahead. My favorite brunch spot has an hour-long wait - unless you call ahead (FYI: day-of calls only, no reservations in advance, ask for Sam). Same with my nail lady and my tire guy.

    They’re the best in town, so they’re very oversubscribed, but they give me VIP treatment because I’ve struck upon the VIP formula: long-time repeat business and calling ahead.

    But I didn’t really know this when I moved here - it just so happened to work out that my neighborhood and I are a perfect match. (Don’t even get me started about the regional park down the street, where the rangers take - and post! - almost as many pictures of my pugs as I do.) Of course, this is my third home, and the neighborhoods I landed in on my first two tries were decidedly less well-matched to my lifestyle. They weren’t bad neighborhoods, by any means. Just nowhere near as delightful on a daily basis as my current digs.

    When we house hunt, we spend so much time worrying about the basics, like home style, pricing and school district scores, that we don’t always notice the nuances that can differentiate a match made in heaven from something that’s decidedly more meh. If you’re in the process of vetting neighborhoods and want to optimize the match, here are 4 questions to ask yourself, your agent and your prospective neighbors:

    1. What do people around here like to do in their spare time? I’m not suggesting that you need to be every-weekend running buddies with your new BFF next door. But if you run into the neighbors while you’re viewing a property, this can be a very revealing question to ask. It’ll help you get a feel for the general connectedness of people in the area. If no one you ask knows what anyone else likes to do, it might be the sort of place where people keep to themselves, which might or might not jive with the sort of lifestyle you’re hoping to build.

    Even if people have very different interests, neighbors who talk to each other will know a little bit about each others’ interests. For example, I don’t spend a ton of time with my next door neighbors, and we are very different in age, ethnicity and household composition. But they know I go to yoga, dance a lot and walk my dogs on the regular. And I know they are active in their kids’ schools, run a catering side-business and have delightful-smelling extended family barbecues lots of weekends in the summertime.

    If you ask even a few people in the area this question, you might even uncover hidden treasures within a short walk or drive from the property which would have taken you months or even years after closing to find on your own. Maybe there’s a little pocket park on the next street over, a Master’s swim club that meets early AMs at the neighborhood high school, a Baby Boot Camp that meets at a neighbor’s house or a series of cooking classes that meets in the back of the tiny grocery store on the corner. I’ve known buyers-to-be who found everything from their future photography buddies to their future deck-builders simply by getting friendly and chatty with their future neighbors while they were visiting and viewing a home.

    2. What do you want your [your family’s] ecosystem to look and feel like? Get real with yourself about what you even want out of your neighborhood. I find it useful to think of your family or household as a living, multi-member, dynamic and ever-changing organism that will thrive in the right ecosystem.

    That “right ecosystem” is your neighborhood.

    If you are a busy career professional buying a home in a bedroom community of the urban area to which you commute, your biggest priorities might be convenience to the freeway, quiet, low-crime rates and neighbors who have just as much pride of ownership in their homes as you do. If you crave to be able to have your kids walk to school, walk to their extracurricular lessons and walk to their play dates with other kids who walk to the same school, that information will give you and your agent a great deal of direction to the neighborhoods that could be the right ecosystem for you - and a great deal of course-correction away from those that could never fit the bill.

    Whether you see your just-right ecosystem as one that will allow you to keep bees and goats in the backyard or one that will allow you to hail a cab or get to the subway at any time of day or night, this question can help you get an actionable vision in place for finding the just-right neighborhood.

    3. What do I need to know about this neighborhood that I’m not asking? What is not obvious? If you’re working with an agent who has experience in a neighborhood, they’re probably really good at breaking down the standard selling points about the area: great schools, great views, great local shops - that sort of thing. But when you’ve heard that basic briefing and you’re done getting your specific questions answered, I recommend that you ask your agent this open-ended question.

    Throughout the course of your house hunt, your agent will get to know your personality and will get a feel for whether the flavor of person you are is a good fit with the flavor of the neighborhood.  So asking them this open-ended question gives them a great opportunity to fill in the blanks in your understanding of the neighborhood based on what they know about both you and the neighborhood.

    If your agent has a particularly long history working in that part of town, this question can also sometime serve as the little prompt that reminds them to give you deeper, more nuanced information than you might not get otherwise, like:

    • sharing the colorful commentary about the past and present history and residents of the neighborhood
    • connecting you with former clients who live there, and even
    • telling you a deeper history of the home values in the neighborhood than might be evident from the comps, with the context of various homes they’ve worked with in the area over years and years.

    4. Are there any common issues you frequently see with homes in this area? Inspectors know so much more information than they can ever put on a page, some of it comforting and some not. One thing they often know is how the geography, topography, soils, climate and environmental factors tend to impact homes in an area or even on a street over time. 

    For example, my town’s soils tend to be clay, not rock, and because clay expands and contracts with the weather, homes tend to get little settlement cracks and fall out of plumb over time. Up the hill from here, many of the homes have bridge driveways that span the gap from the hill to the home, and those need to be replaced every 20 or 30 years. And just up the street, homes tend to be very different and have different issues as they are mostly new construction that was built after a major fire a decade ago - compared with the 50 year old average age of homes at the bottom of the street.

    Of course, by the time the average buyer talks to a home inspector, they’ve already tentatively settled on a neighborhood match. But occasionally, an inspector’s answers to this question can help you feel great about your choice. And on other, more rare occasions, their answers can help you get the right bids and improve your property preventively to avoid the area-specific issues that have caused nearby home owners to regret their choice of neighborhood.

    Home Owners: How did you find the just-right neighborhood for you?

    Agents: Beyond the basics, what neighborhood-finding questions do your clients find useful to help them pick the best match between two good neighborhoods?

    ALL: What do you think separates a ‘good’ neighborhood match from a GREAT one?

    PS: Don’t forget to like Trulia and Tara on Facebook!

  • 3 Soothing Insights for Anxious First-Time Sellers

    Posted Under: Home Selling  |  November 12, 2013 2:25 PM  |  67,888 views  |  37 comments

    I grew up just a couple of hours from Disneyland. So as a kid, one of my greatest joys (and greatest anxieties) revolved around the Pirates of the Caribbean ride (this was pre-Johnny Depp, folks). I loved that ride - especially the big drop at the end - but I also feared that ride, especially the big drop at the end. Fast forward a couple of decades and I found myself standing in line for the ride with my own kids, with bated breath and anxious fear/anticipation. We got on and I continued to hold my breath. Just a few minutes later, we sailed gently back to the starting point. 

    I walked up to an attendant and asked: “When did they take the dip out?” The guy looked at me quizzically and said that the ride’s course had never been changed. The ride didn’t change. But I had - I had grown taller, and so my perspective had shifted. Nothing about the ride was worth even a moment’s anxiety now that I’d grown taller and impervious to the dips and twists and turns.

    Selling a home is a bit like Pirates of the Caribbean was to me. It’s one of those life experiences that comes only after a long period of anticipation, and has lots of twists and turns. And - especially on your first ride - it occasions lots of breath-holding moments where you can do little but wait and see how your decisions will turn out.

    But that doesn’t mean you have to experience your first time selling a home as a full-time emotional rollercoaster for the duration.

    Here are a few perspective shifts that can minimize the anxiety and maximize the outcomes of your first home-selling experience:

    1. It only takes one. The goal of your pricing, marketing and property preparation efforts should be to give your home as much appeal to as broad a segment of qualified buyers as possible. That’s why, if you read this blog often, you’ve heard me beg and plead for you to get rid of your sequined kitty cat tiles and turn your dedicated jai-alai court back into 3 bedrooms before you list your homes for sale: highly personalized customizations can often limit your home’s appeal. The chances you’ll find another buyer who has always wanted a series of permanent shrines to Twinkies surrounding the headboard nook in the master bedroom are, simply put, slim.

    That said, don’t get discouraged if you set what your agent feels like is a rational list price, have a well-attended open house, show your home to 10 buyers and the sun goes down with no offers. You might have heard some other seller crow that their home sold before the sign could even go up. But in real estate, as with most other areas of life, comparing yourself with someone’s else’s experience is a setup for upset.

    Work with your agent to get a good understanding of the average length of time a home in your area stays on the market, and use that as a benchmark or signal that it might be time to revisit pricing or otherwise course-correct your home selling plan of action. In the meantime, understand that while your task is to market broadly, your ultimate success at this endeavor of home selling only requires that one qualified buyer fall in love with your home - so don’t get discouraged or panic while your agent goes about the process of exposing your property to the market and the population of local buyers.

    This fundamental truth of real estate also brings up one more success factor that is well within your control: make a commitment to only show your home in its very best light. Don’t slack off on the cleaning and clutter-clearing just for this one showing or that one: you don’t know which of the buyers who comes to see your home will be “the one,” so make sure your home’s smell, preparation and presentation shines for all prospective buyers who come to see it.

    2. Facing reality takes courage, but is less painful than the alternative. One of my favorite authors of all time, Dr. Henry Cloud, writes in one of my favorite books of all time, Integrity: The Courage to Meet The Demands of Reality (HarperCollins, 2006), that the definition of integrity is the courage to see and face reality. Yes: courage.

    • Facing the reality that your home needs a serious investment in sprucing, cleaning and staging before it goes on the market might take courage.
    • Facing the reality that your home might be worth less than you hoped, and that listing it at your fantasy price is a setup for failure can also take courage.
    • Facing the reality of the feedback from buyers and buyers brokers who have seen your home and passed on it? That definitely takes courage.

    But here’s the thing about integrity and exercising the courage to face all these realities: they empower you to do something to change your reality and dramatically increase your home’s saleability. And here’s the other thing: if you don’t face these realities, 9 times out of 10, at some point, “attention will be paid” (to quote Dr. Cloud).

    That simply means that you can pay attention to the blind spots about your home’s readiness and pricing and marketing up front, when your agent begs you to, or you can pay attention to them later, when your home fails to sell and you’ve gone through all the stress and drama of showing it and listing it and you’re getting low ball offers from buyers who assume you must be desperate. 

    Facing such realities before your home ever goes on the market might take courage, and might be a little painful, but it’s much less painful and costly than allowing yourself to keep living in fantasy land.

    3. You have the power to prevent much of what you fear. Fear is often the result of feeling powerless over your fate. When the fate we’re talking about is the speed and price of the sale of your largest asset, perceiving yourself to be at the mercy of the market can give rise to fear at a very intense level. Here’s the good news: feeling powerless about selling your home is only perception.

    The truth is that you have a great deal of power to influence the outcome of your home’s sale. Only you can:

    • take a deep-dive into your financials to understand whether you can afford a move up - or whether you need a move down - and how much you can afford to spend on housing after your sale
    • make the ultimate decision about when to sell and when to stay put
    • find, vet and select the just-right agent for you and your home (our Find an Agent tool can help you get started, as can asking your friends and colleagues who love their agents)
    • paying attention to and understanding the comparables and making a reality-based pricing decision
    • do the work of getting your home prepared for sale - and make the final call about what work to do and what to leave for your home’s next owner
    • provide abundant access to your home for buyers who want to come see it - and make sure it’s buyer-ready before every single showing
    • course-correct your pricing, marketing or property preparation decisions as needed based on feedback from the market
    • make the final negotiation decisions when you do get an offer, in order to get into contract
    • cooperate with your home’s buyer, appraiser, inspectors, contractors, escrow providers and even your local authorities to get your home sale transaction closed smoothly

    Every time you get the feeling that things are spiraling out of your control, think on these things and all the other ways you actually do have control over your home’s sale and how it turns out. And loop your agent in: experienced agents can often propose alternative solutions to almost any problem that might not otherwise even occur to you, especially during your first experience selling a home.

    SELLERS: What causes you anxiety around selling your home? How do you deal with it?

    EXPERIENCED SELLERS: What did you do differently during your second (or third, or fourth) time selling a home than you did on the first go-round.

    PS: Don’t forget to like Trulia and Tara on Facebook.

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