Ask Tara @Trulia

My doctor recently confided in me that physicians have a golden rule when it comes to getting an accurate estimate of how much alcohol their patients drink on a daily basis. They take whatever number of drinks you enter on the patient information form, then multiply it by a factor of three!

While comedic (if slightly troubling), this rule is not that dissimilar from how home buyers approach the art and science of translating home sale listing-speak into what they think is a more accurate understanding of the property’s characteristics and condition.

Just as property staging creates a somewhat contrived scenario buyers can imagine their own families taking part in, property listing descriptions have evolved into a sort of verbal staging exercise where sellers and agents may create an artificial ‘scenario’ that belies the true state of the property.  Fortunately for savvy sellers, there’s another parallel between physical and verbal home staging: it’s all about the edit.

Removing well-intentioned but counterproductive verbal clutter from your listing is simple, but not easy. It starts with understanding what buyers take away from your words vs. what you truly meant or intended to convey.  Here, to start building that understanding, are four common areas of big-time disconnects between what sellers say and what buyers hear.

Sellers Say:  Comfortable, beloved, in the family for generations.

Buyers Hear:  Lots of room, but probably lots of broken stuff to fix, too. Things probably need to be jiggled or turned twice before you yank hard to get them open.  Think: scuff marks.

In all honesty, most buyers love to hear the story of how the sellers’ Great Granny and PaPa met right before the War, then built this house with their own hands and sweat when he came back, raising a family there and watching the town grow up around them.  But they generally like to hear those stories about spruced up, great looking, well-prepared homes they have already fallen in love with.  Leading with this material in a listing is like waving a red flag that warns of a serious probability that:

·         The kitchen surfaces and appliances were last updated in the 60’s (for some reason, it’s rarely the cute 30’s and 40’s machines that survive – families tend to get stuck on the marigold and pea green formica stage);

·         The furnace is so old it is powered by a team of chipmunks on a treadmill, and that the house has similarly ‘vintage’ electrical and plumbing systems (i.e., the same water pressure as a schoolyard drinking fountain); and that

·         You (Seller) will blubber with tears on closing day (which might actually happen, and wouldn’t even be the worst thing in the world).

Part of the problem is that when people hear “multi-generational family home” they tend to think of Tara from Gone with the Wind, or Hearst Castle – or the house from the 80’s drama Dallas. So when the first “Grandma’s house” they see turns out to be a little old house that someone took great care of for 50 years, but hasn’t been upgraded in the same period of time, it bursts their whole bubble and sours their expectations about similar ‘family’ homes. 

My advice is to avoid leading with these sorts of descriptors unless the place is also recently remodeled, and to be super realistic about pricing this sort of property in accordance with any system upgrades that are overdue.

Sellers Say:  Seller Will Carry, Some Seller Financing for Qualified Buyer, Seller will carry a 10% note.

Buyers Hear:  I’ll offer them $1,000 and they’ll give me their house, with low monthly payments!

This one is all about wishful thinking; there’s just something about a buyer on a mission to buy a home – especially one who has trouble qualifying – that makes many of them willing to suspend disbelief and come up with scenarios that are simply too good (for them) and bad (for you) to be true.  Part of the problem is that for years, many people were brainwashed by those guys on the late night infomercials into thinking that buying a home is and should be just that simple (the other part of the problem is that for a number of years, it actually was – particularly during the subprime era).

Sellers who are willing to carry financing on a home generally need a hefty chunk of change up front in order to pay off the mortgage, make their next move or simply feel comfortable signing any interest in their home over to someone who can’t come up with the down payment or the other qualifications to get a ‘regular’ bank mortgage. 

But offering some seller financing – especially in a market where homes are having a tough time appraising or many buyers are fresh out of foreclosure – is such a strong selling point, that it is worth touting in the listing, if you’re willing to do it. Talk with your agent about how to skillfully state the specifics of your seller financing terms in a way that makes clear you’re not ready to give away the farm and finance it, too.

Sellers Say:  Sweet, charming, darling, cute, cozy.

Buyers Hear: Tiny, shoebox, claustrophobic. Or, overly accessorized, with doilies, lace drapes and flowered/striped wallpaper over pink carpet.

Let me be clear, today’s buyers like a classic look just as much – maybe more – than ever before. But when you use these saccharine marketing terms the visual you paint is much more frilly than today’s popular versions of a traditional aesthetic.  Unless your home actually does feature lots of pink carpet and flowered wallpaper (in which case engaging a stager might be in order), consider going with keywords that trigger images of a sleeker, classic look.  One quick and easy shortcut to spark the visuals you want is to reference the popular stores, home improvement shows and décor magazines that are most similar to your home’s design aesthetic, like Shabby Chic, Pottery Barn or Restoration Hardware.  (Caution: if you choose to go this route, please do make sure that you reference the right brands.  Failing to do so is a quick way to create a disaster. Imagine the scene of a Mad Men-styled, Design Within Reach-loving  buyer being shown a linen-ruffled Shabby Chic home. Quelle horreur!)

And if your home is small – buyers will know it by the square footage entry on the listing!  Calling it cozy is not going to make someone interested in a 400 square foot home if they weren’t in the market for something that small in the first place, so ditch the diminutives.

Sellers Say: Up-and-coming neighborhood, upside potential, amazing investment, sweat equity.

Buyers Hear: This place is falling apart! (And you might just have to dodge bullets on the way in and out, to boot.)

Buyers read this marketing lingo for a place or an area that is not being all that it can be, and two things occur:

(1)    All but the most intrepid fixer-seeker-outer starts doing what my doctor does and multiplying whatever you said by a factor of three, awfulizing the property or neighborhood “issues” on the assumption that whatever is said in the listing is likely a vast understatement.

(2)    They start mentally adding zeros to the budget they’ll need for repairs and visualizing how they’ll negotiate down from the list price before they ever step foot in the property.

The Catch-22 for sellers is that if you actually understate the repairs needed or try to price the place high to account for negotiating room, chances are good you’ll have some very angry visitors come to the property, who will feel misled that you didn’t flag the property problems ahead of time. Or you’ll get no showings or offers at all.

So, what’s a seller to do? Most online house hunting searches are so sophisticated that buyers are searching by street, neighborhood, zip code, radius around a focal point or other geographic boundaries. Since buyers already know where your home is, I’d stay away from neighborhood descriptors unless your neighborhood has already up and come.  Instead, just use the name of your area or district without describing it – and let buyers opt in or out based on their own research into the neighborhood. (And talk with your agent about even naming neighborhood names; this is a sensitive subject in some areas.)

If your home needs a basic cosmetic makeover, do it before you list the home.  Do whatever you can afford.  If your home needs more serious work than that, though, don’t try to make your fixer sound like a fabulous deal unless its location, price or other characteristics actually render it a truly fabulous deal!  Call it like it really is; consider even stating factually, in the listing, what systems need repair, after you mention the strong selling points.  Omitting them in the listing is not going to trick someone who doesn’t want to do the repairs into buying the place, and if your place is a home only a serious handyman or investor could love, then you might actually attract the right people to the property by pointing out that the windows are new but the roof and water heater might need replacing.

Also consider some or all of the following steps – consult with your agent about what makes sense in your situation:

·         obtaining a home inspection report and repair bids in advance,

·         pricing your home to account for those repair expenses the buyer will have to incur (with an extra discount for their trouble, if you’re serious about selling), and

·         asking your agent to include in the agent-only online listing these documents and an explanation of the pricing strategy.

It might sound like a lot of trouble, but the extra work is one of very few options you have to differentiate your home from all the fixer short sales and foreclosures on the market.

Sellers: You may not have participated in writing your home’s description or been aware that it carries that much weight with buyers. If your home is on the market, make sure you visit its online listings around the web and review the listing description your agent has entered, if you haven’t before.

Agents and Buyers: What other home listing marketing lingo do you perceive as a signal of something negative about the property?

Once upon a time, a widely-used rule of thumb among real estate experts and home buyers alike was to buy as 'much' home as you could qualify for, as soon as you could qualify for it: even if you didn't need the space or extra expense. Back then, big homes were en vogue, mortgage money was free-flowing, and all homes increased in value so rapidly that it was seen as foolhardy to buy something smaller and lose out on the potential appreciation you'd get for every extra bedroom or square foot you coulda, woulda or shoulda bought.

Fast forward a few years, and it's pretty obvious that this rule of thumb has definitely changed with the real estate market. The housing market crash turned McMansion-villes across the nation into slumburbias full of huge, vacant, foreclosed homes. Smaller homes closer in to urban job centers have become more desirable than ever, due to their relatively recession-resistant values, and lower associated costs of operating, maintenance and commuting.  At the same time, the zeitgeist has definitely moved toward buying a less expensive home than your maximum approved mortgage amount. And everyday homeowners are more and more concerned with the carbon footprint their daily lives are leaving on the planet.

For those of you facing the prospect of deciding exactly how much house you can handle, here are three buckets of considerations I strongly recommend you incorporate into your process:

1. What do your future family and career look like? Answering the question of how much home is the right 'amount' for you requires putting your visionary hat on. One of the reasons previous generations of buyers have erred on the side of buying too much home was that it seemed easier to deal with the problem of having too much space compared with the challenge of having too little. 

But that's a costly decision-making shortcut, as bigger homes cost more to upgrade and repair (with bigger plumbing and other mechanical systems, and larger surface areas of flooring, wall spaces to paint and things like counters and cabinets) and more to operate (heating, cooling, landscaping and even property taxes are generally more expensive for larger homes). Also, the costs of making the mistake of buying too much home on today’s market can be hard to reverse, as homes generally take longer to offload - especially at a profit - than they did at the top of the market.  

Not only is buying too much home an expensive mistake, it’s also an unnecessary one. The way smart buyers avoid it is by taking the time before they  even begin house hunting to get serious about forecasting the space and activity needs of their families (or other housemates) and how they are likely to evolve over the time you expect to own the home, as well as how their career path(s) are likely to intersect with that timeline.  

Given the tough-to-predict ebbs and flows of home values, today’s smart buyers target homes that should work for the space needs of their growing and shrinking families for at least 7 to 10 years. This helps avoid the trauma and drama of being stuck in an upside down home that is too small or too large for your needs. Actually, with today’s uber-low home prices and interest rates presenting what many buyers feel is a once-in-a-lifetime opportunity, I’m hearing lots of talk from young people about buying homes they hope to stay in for even 20 or 30 years!

Given this rebirth of America's traditional long-term perspective on homeownership, and modern changes in how nuclear families are composed, the space needs analysis of a smart homebuyer are quite a bit more complex now than they used to be. 

In assessing how much house they want and need vs. how much might be too much, buyers must consider any of the following life changes that might happen in the time they expect to own the home:

• marriage or mating up, 
• having or adopting kids and animals (and how many), 
• shipping kids off to college or their own separate households,
• adult kids staying at home or returning home, 
• aging parents or other extended family members moving in, 
• whether and when they might need to move for work,
• what work and other activity needs will need to be able to take place in the property over time, and
• how much - or little - ability to reconfigure, expand or even rent out unused spaces the property will allow.

2. What's your bandwidth for fixing, maintaining and engaging?  The handling that has to happen with a home ranges from minimal to massive, in both cost and lifestyle impact. As such, deciding on the optimal level or ranges of the following is an essential step of your ‘how much home can I handle’ calculus:

• fixing (DIY or otherwise), 
• ongoing home maintenance, and 
• needed involvement with Homeowner’s Associations and the like.

As I see it, the issue of bandwidth is a hybrid phenomenon that is about overall resources: time, energy, interest level and cold hard cash, to name a few. The combinations of these resources are endless though, fortunately, the tradeoffs they pose vis-a-vis each other are relatively predictable. For example, do you have the time, inclination and money to deal with the ongoing maintenance of a sprawling ‘50’s rancher on a big suburban lot?  Or would you rather pay a monthly maintenance fee and dues and limit your largest ‘home work’ obligations, so to speak, to attending the meetings of your building’s HOA?  

Or do you, like me, fall somewhere in between these extremes, with little interest in personally swinging a hammer or engaging with neighbors around shared walls and finances, pointing you to prioritize single family homes that are in tip-top shape (or at least a home you can afford to pay the pros to make that way).

Working through this step is really about knowing yourself, your budget and the sort of lifestyle you want to live for the years your own the property. It's also essential here to work with your local agent to get educated about things like using a home warranty plan to minimize your exposure to big home repair costs, and what any individual HOA does or does not handle for its members.

3. What can your finances sustain, in the short- and long-run? When it comes to homes, ‘muchness’ is not just a matter of space, it’s also a matter of money. In fact, some would actually say that to buy smart is to allow the boundaries of your financial resources to trump all the rest.  I like to take a more holistic approach, first scoping the space needs and bandwidth issues that weigh heavily on whether a fixer or a condo or a single family home or a home in move-in condition makes the most sense, as these factors should also be balanced in the decision-making about what is affordable immediately and over time.

Answering this question of financial sustainability is not as simple as buying a less expensive home than you’re approved for, building in room for an unexpected interruption in income someday (though that’s not necessarily a bad move). It might be complicated, as all the line-item questions, answers and outcomes of questions 1 and 2, above, must be included in the number-crunching that goes on in number 3.  

For instance, if you are buying a low-cost foreclosure fixer, you may need to count on some bulky up-front repair costs and even factor in the increase in property taxes that may occur as a result of your home’s assessed value going up when you secure permits for upgrading or expanding the place. If you are considering purchasing a place with space for an adult child or aging parents to move in, can you factor in their income or some of the proceeds of the sale of their home to the resources available for the purchase or payments of the home you’re planning to buy?

Agents, Buyers and Homeowners: What other questions do you suggest buyers ask themselves in figuring out how much home they can handle?

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