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

    Posted Under: Home Selling  |  December 3, 2013 10:09 AM  |  25,709 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!

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

    Posted Under: Home Selling  |  November 26, 2013 3:26 PM  |  105,716 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!

  • 3 Soothing Insights for Anxious First-Time Sellers

    Posted Under: Home Selling  |  November 12, 2013 2:25 PM  |  67,757 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.

  • 3 Hot Market Horrors - and How to Make Them Go Away

    Posted Under: Home Selling  |  October 30, 2013 9:26 AM  |  76,951 views  |  34 comments

    Our homes create the context for so many of the happiest moments of our lives. But sometimes, the process of buying or selling a home gives rise to some pretty fright-filled experiences. We all have heard loads of stories about the nightmarish moments that are part and parcel of buying or selling a home in a down market. But a rising market doesn’t exempt any of us from becoming the character in our own real estate horror story.

    This Halloween week, here are a few of the more common hot market horror stories we hear about here at Trulia, along with some “tricks” for making them go away.

    Horror #1. The Headless House Hunt(er). When you’re constantly running into rising prices and multiple offers, it’s critical to be flexible with your house hunt wish list. But that flexibility sometime results in so many changes to your wish list that you end up feeling aimless, directionless, and like you are letting the market dictate what sort of home you can buy. And that’s not a great feeling, when what every buyer wants is to approach their house hunt with intention, direction and clarity on their wants and needs. 

    That feeling of directionlessness is very ungrounding, and sometimes even results in near-immediate buyer’s remorse. That scenario looks like this: your 42nd offer is (finally) accepted, you turn to your agent, spouse or yourself in the mirror and say or wonder, “Wait: do I really even want this house?!?!”

    There’s a fine line to walk between wisely conforming your house hunt to the reality of the market and being aimless or, headless, so to speak. One way to help manage the emotional discomfort and potential for post-purchase regret is to invest some time documenting your intentions and vision for your next home and the life you’ll lead in it, in writing, before you ever even go meet with an agent. 

    Before you start thinking about your house hunt in terms of specific neighborhoods, bedrooms and square footage, put pen to paper (or fingers to keyboard) and detail how you want to live in your next home. Touch on everything from:

    • How you’ll get to work (examples: by car, public transport or working at home)
    • How you’ll spend your spare time (examples: entertaining, doing DIY fixing, at the neighborhood yoga studio or wine bar)
    • What sorts of activities you envision your family engaging in (examples: traveling the world, training the dog, skiing every weekend in winter and hiking in Summer)

    Getting the big picture vision down on paper does two things. First, it creates strong clarity and direction about the more granular details of the homes that should fall within your search and also empowers your agent to suggest properties and neighborhoods that could fulfill this vision which you might not otherwise have gravitated toward.

    Second, it creates a reference document that allows you to check in with your own gut once you’re in contract, minimizing buyer’s remorse and wayward, in-the-moment decision making. If you make lots of changes to your property criteria during the house hunt and are concerned that the home you’re buying reflects too many compromises, consult with this document. If you can envision most of these life wish list items taking place in that property, you’re probably in good shape. If you can’t, at least you’ll know that before you remove your contingencies, so you can make a conscious decision that you’re okay with the compromises or that you want to back out of the deal, before doing so becomes costly or irrevocable.

    Horror #2. Hot Market, Cold Listing. Few real estate matters are worse than reading that your market is hot, hearing your friends are putting in over-asking offers, seeing your neighbor’s house fly off the market, and watching your own lag on the market without a single offer in sight. I find that sellers in these situations often overcomplicate and overthink things, when the reality is actually simple and stark: 8 times out of 10, a home that is taking much longer than similar listings to sell is overpriced. 

    [The other two out of 10 include homes that really do have some serious issue or flaw which makes them inappropriate for most buyers, and the occasional home that is undermarketed: no photos online, hard for buyers to get into, or poorly staged for sale (e.g., dirty, smelly, etc.). It does make sense for you to do a quick audit of how your home is appearing on Trulia and other real estate websites, if your home is lagging. And it also makes sense to listen hard to property preparation advice your agent is giving you. But most of the time, overpricing is the issue.] 

    Understanding that your home might be overpriced is simple. But understanding the comps and adjusting your price to hit the sweet spot of local buyers is more complex. That’s why you have an agent, who is happy and has the skills to a) help you understand local buyer demands, inventory levels, seasonal market dynamics and comparable sales data, and b) wrap all of these indicators into an appropriate pricing strategy. 

    And that’s why it’s important that you select a listing agent with a track record of selling homes in your area. It’s a bit less harrowing to trust an agent’s frank pricing advice, even when it hurts, when you know it has worked for many sellers before you.

    If you’re horrified at the prospect of a price reduction, ask your agent to walk you through comps of recent listings with a history of price reductions in your neighborhood, exploring questions like:

    • What price did they start at, and what price did they sell at?
    • Where was the pricing sweet spot?
    • What level of reductions were effective at getting homes sold?
    • Which reductions were followed by a series of additional reductions before sale?

    Fixating on the facts and figures around recently sold comps can help you make price reductions driven not by desperation, but by smart, data-driven strategy well-calculated to end the nightmare.

    Horror #3: A New Flavor of Stuck. When the market is rising, an aura of exuberance can take hold. There’s a feeling of freedom among those sellers who patiently waited out their underwater status and finally start to feel their heads (and mortgages) rise above water. That freedom is the freedom to sell without penalty and to move freely, whether in town or about the country (or the world, for that matter).

    And so we’ve seen it happen, that as the market has begun to thaw, so have many homeowners’ feelings of being stuck in their homes. And as they have started to sell, a new conundrum begun to rear its ugly head, and it goes like this: the hotter the market, the easier it is to sell - but also, the more difficult it is to buy. If you stand to get dozens of offers on your home, and you’re aiming to buy an even bigger, better place in the same town or neighborhood, you could very well face the same level of buyer competition, bidding warfare and over-asking sale prices as you benefitted from on the “sell” side. 

    We’ve seen sellers get unstuck from an upside down home, sell and then end up renting or - gasp! - moving in with the in-laws when they get a taste of this new flavor of stuck: being finally able to sell, but unable to buy.

    Fortunately, there are a few methods your agent can help you deploy to avoid this seller-side Catch 22:

    • Seller contingencies. It is an increasingly common practice for sellers in hot markets to make their home’s sale contract contingent upon their ability to find and secure their next home. Talk with your agent about how this works and the advantages and disadvantages of seller contingencies.
    • Buy first. Finances permitting, you might be able to actually buy your next home first. This is not without risk, as there’s never a 100% guarantee of what you’ll be able to sell your home for - or when you’ll be able to sell it. But if your ability to buy is not strictly dependent on your ability to sell, if you are financially comfortable with holding both properties for a period of time, or if you’re otherwise willing and able to weather the risks given what you know about your own home’s likelihood of selling, it might make sense for you. Have this conversation with your agent, as well as your mortgage broker, and tax or financial advisors.
    • Seller rent-back. Selling first is the least financially risky option. But if you want or need to close escrow on your old home to get the cash for your new one, talk with your agent about negotiating a rent-back into your contract. A rent-back allows you to close escrow on your home’s sale, but rent it back for a few weeks or longer from your home’s buyer while escrow on your next home is closing. Rent-backs often give rise to mortgage, contract and insurance issues, but most experienced agents and brokers can help you address them, especially if you only need to be in the property for a short time after closing.

    All: What hot market horrors, if any, have you encountered?

    PS: You should follow Trulia and Tara on Facebook!

  • 4 Ways to Know Whether to Sell or Stay Put

    Posted Under: Home Selling  |  October 23, 2013 8:36 AM  |  110,469 views  |  71 comments

    Every real estate market creates its own buyer and seller personas, or profiles. When the market is slow and prices are low, it brings out 'the wheeler-dealer' and 'the lowballer,' as well as the 'paralyzed panicker' in some buyers.

    But sellers aren’t immune. 

    And in a warm or hot market climate, the rise in home prices makes some sellers wonder whether they should exercise the freedom of finally having some home equity and make a move, or if it's a better idea to stay put in hopes they can sell for more, next year or later.

    Truth is, whether any given person should sell their home or stay put at any given time is a highly personal decision. Market dynamics should come into play, but that should be considered in the context of your personal life, career, family and financial plans.

    Trying to figure out whether to sell or stay put? Here are four ways to know which decision is right for you.

    1.  Sign You Should Sell: You frequently crave a neighborhood upgrade. I have known people who have liveed in “up and coming neighborhoods” for 20 years, and are still waiting for it to up-and-come. Others own homes on streets or in subdivisions they used to love that have changed dramatically because the city has been built up in a different direction, the area was rezoned, or because a school, freeway, commercial development, airport or train station was brought in. And still other home owners fall out of love with their neighborhoods because their job has moved, making their commute a pain.

    In any event, if your home’s location is seriously misaligned with your life or your tastes, that fact is one you face all day, every day, for the duration of the time you live in the property. It can become a serious source of life dissatisfaction and resentment that rears its ugly head every time you make your monthly mortgage payment. As I see it, dissatisfaction with your neighborhood or a serious neighborhood-life disconnect can be a strong reason to sell and move, assuming you can make a move to a neighborhood that would better serve your life in a financially responsible way.

    2.  Sign You Should Stay:  You can totally afford a new house - if you sell a kidney. A few years back, a friend of mine wrote a book called Life Would be Perfect if I Lived in That House (Vintage 2011). In it, she told how her mother was so addicted to the grass-is-greener promise of moving to a new home that she would actually take her family Open House hunting, even when they were visiting towns they had no interest in moving to! She went on to relate her inherited real estate addiction to the national trend of “moving on up,” so to speak, with financial recklessness - the trend that many believe led to the Great Recession.

    There’s nothing wrong with being a real estate aficionado, but it’s important to watch to make sure grass-is-greener-at-that-house syndrome isn’t motivating you to make a financially unwise decision to sell and move. 

    If you are considering selling your home and moving up, do your own financial home work. Run your own budgets, income and expense reports and other financials to understand what level of increased financial obligation, if any, your household finances can afford to take. Consider whether you might want to set up some savings, investing or debt elimination targets before making a move. Work with your financial planner, tax professional and your real estate and mortgage pros to fully understand all the financial implications, short- and long-term, of selling and moving before you put the sign up in the yard.

    3.  Sign You Should Sell: Space-wise, your family is too close for comfort. (And things will get worse before they get better.) I marvel at how much stuff the smallest infant seems to need.  I once went to a baby shower that generated so many strollers, packable playpens and sheer gear that it took 2 SUVs and a station wagon to cart it all home - for a kid that ultimately weighed in at 6 pounds and some-odd ounces.

    If you have very young children and you’re already tripping over each other, chances are good that their space needs will grow as they do, even after all the baby gear is gone. School-aged kids and teenagers develop their own hobbies and need space for studies and sports - and on top of that, many parents of young children can realistically anticipate moving their own parents in at some point in time.

    If you’re struggling to find a space for everything (and everyone), project your space needs out five years into the future. If you think you’ll need less space in five years (e.g., because your kids will likely move out in that time frame), it might not make sense to buy a bigger home now. But if it looks like you’ll need more space before you need less, that can be a sound rationale for making a financially rational move.

    4.  Sign You Should Stay:  You could fix what ails your home with relatively modest remodeling projects.  If your home is bothersome primarily because things don’t function very well or its aesthetics are out of whack with your style, you might be tempted to sell and move.  Here’s a tip-off: your “dream home” is the Open House one block over that is nearly identical to your home in location, size, architecture, bedrooms and baths, but is impeccably decorated and updated. If you find yourself in this situation, you might very well be able to resolve your issues by investing less than you would spend on the transactional costs of selling and buying another home into some small-to-medium-scale remodeling projects on your current home.

    On a budget, painting, landscaping, replacing exterior trims and interior hardware and updating your kitchen appliances will likely give you the biggest boost in home love for your buck. Similarly, you can get a major enjoyment boost out of your home for very little money by bringing a handyperson in to fix all those niggling little items that make a home seem worn out, including:

    • drawers that stick
    • handles you have to jiggle
    • drafts that need stopping up, and
    • scrapes and scuffs that make a place look rundown.

    That said, when you consider what you would spend on commissions and closing costs to sell one home and buy a nearly-identical new one, you might be able to justify a larger updating/upgrading budget. If you have a little more dough to spend, consider a kitchen or bath remodel, having some custom organizers built in, or putting in the wood floors or deck you’ve always wished for. You might be surprised how fast home hate can turn to love when you start pampering your property.

    Sellers: What factors influenced your decision to sell?

    PS: You should follow Trulia and Tara on Facebook! 

  • 4 Outside-the-Box Ways to Sell Your Home

    Posted Under: Home Selling  |  October 15, 2013 12:43 PM  |  70,012 views  |  55 comments

    Real estate people often say that this business is “hyperlocal.”  That’s just another way of saying that whether your market is a buyer’s market, a seller’s market or otherwise can vary state to state, county to county, town to town and even in various neighborhoods in the same town.

    But when it’s your own home for sale, “hyperlocal” takes on an all new meaning.  Your perspective on the market zooms all the way in and it can suddenly seem like nothing matters except how many buyers show up to your open house, how long your home has been on the market, whether any offers have come in on your house and, if so, precisely which numbers appear on those digital sheets of paper.

    Bottom line: it doesn’t matter how hot the market is or how many multiple offers your neighbor’s house got, unless and until yours sells.  Times might not be desperate overall, but if it’s your house lagging on the market you might need to do something more than just hang a sign in the yard to get your home sold. And the only thing you can control in that process is YOUR actions: your choice of agent, your pricing, your property preparation and your marketing. 

    If you’re a seller committed to doing everything within your power to sell your home and it’s not coming as easily or instantly as you’d hoped, here are a few outside-the-box strategies for getting your home sold:

    1.  Put your network to work.  Anywhere there are people who know you or know your neighborhood, there might be the ultimate buyer for your home - or someone who knows them.  In particular, social networks like neighborhood email lists, NextDoor.com and even your personal Facebook feed are great places to make sure you are publicizing your home’s listing. 

    If your home is well-located vis-a-vis your workplace, don’t hesitate to also make your colleagues aware of the listing. If you work for a very large organization or institution, you might even go so far as to let your Human Resources team know of the listing: many HR departments actively help new hires relocate and find housing as part of their services.

    2.  Offer incentives or inclusions. If you want to distinguish your home above the rest of the homes for sale, you must do what other sellers won’t. On today’s market that might simply mean offering even a modest incentive, which can get your home noticed and turn a looky-loo serious, in short order. Offering a year’s prepaid HOA dues or closing costs when your competition is not making such offers can be magnetic to the buyer who is frugal or tight on cash. 

    Similarly, you’d be surprised at how the prospect of including customized furnishings, home electronics, or other high-value items that homes are usually sold without can sweeten the whole package your home presents to buyers. This is highly situationally-specific, though, as it tends to be the most appealing to entry level buyers who otherwise might not be able to afford the included items or very high-end buyers who simply don’t want to be bothered with furnishing a house.  Discuss whether this strategy makes sense for your home with your listing agent.

    3. Make a reverse offer.  A lot of what is outside-the-box for today’s market are strategies that get put to use in slower market climates. Speaking of having lots of viewings, but no offers - in a reverse offer, the listing agent calls up the agent from a buyer who has expressed an interest in the home and makes an offer from the seller to the buyer.

    If you’ve had a particular buyer who has been to your home more than once but has given the feedback that the price is too high, HOA dues too steep or the necessary repairs too extensive, talk with your agent about making a reverse offer directly to that buyer to sell your home to them at:

    • a lower list price
    • with an HOA dues credit
    • with the agreement to conduct repairs before closing or provide a repair credit.

    4.  Write a love letter about your home.  When bidding wars abound, it becomes common for buyers to write what I like to call “love letters” to sellers, counting the ways they love the home (Shakespeare-style) and trying to woo them into letting the buyer become its next owner. But sellers whose homes aren’t moving would do well to channel the Bard themselves.  Buyers appreciate a home that has been cherished, and like to hear the lore of lovely family memories a seller had in the place. I’ve actually witnessed firsthand a buyer walk through a home, deem it “cute” with nonchalance, then warm to the property as they come across a binder full of a seller’s notes about the place, the neighborhood and even local vendors and parks, from the rosy viewpoint of someone who loves them.

    In this post, I went into greater detail about how to pen a seller love letter about your home. Make sure you also connect with your agent to gather their experienced input on what matters the most to local buyers, before you write a love letter about your home.

    ALL: What outside-the-box home selling strategies have you seen in your area?  Did they work?

    PS: You should follow Trulia and Tara on Facebook!

  • 4 Strategies for a Surprise-Free Sale

    Posted Under: Home Selling  |  September 16, 2013 9:52 PM  |  47,085 views  |  38 comments
    Selling a home is an odyssey. From the moment you decide the time is right in your life and in the market to make a move to the time you scrub out the crumbs from the very last kitchen drawer, you will be called upon to make literally hundreds of decisions. And to complicate matters, each decision you make is connected to dozens and dozens of other decisions.

    As a smart home seller, you take great pains to get and stay informed and create a strategic plan of action for your home’s preparation, listing, marketing and eventual sale.  But you know what they say about the best laid plans, don’t you?  One of the scariest prospects to sellers is that of surprise glitches, twists and turns to their carefully laid transactional plan.  Here are a few strategies for minimizing those surprise prospects.

    1. Sell your home on the range.  Part of the horror of a home selling surprise is in its potential to derail your plans.  You expected to get X number of dollars, and a surprisingly low price makes your move-up plans impossible.  You expected to sell by X date so you could be in your new hometown by Y date – and you did sell on time, but the new buyer isn’t closing escrow until well after your target moving date.

    Real estate, generally speaking, is not a precision sport – particularly when it comes to expectations around time and money. Even when it comes to closing, it’s not bizarre for sellers to get a little refund check after escrow or to have closing delayed by a couple of days because of little glitches with the buyer’s mortgage lender.

    You can prevent avoidable upset and plan derailment by approaching your entire transaction with the mindset and practice of planning for time and money ranges.  Your agent can help you figure out how wide a time frame and how wide a dollar range you should be prepared for on any given decision and at any given point in the transaction. 

    Your agent can also help you get educated about the full range of options available to you at every stage of the transaction.  Knowing up front that you might have the option to ask your buyer to go ahead and close escrow and then rent the property back from them for a couple of weeks so you can have the cash for your buy and the extra time in your home, for example, can help you keep your home selling plan flexible and reduce the drama that can arise when things don’t go precisely according to plan.

    2. Make sure your math stays up to date.  Again, in selling a home, the math around what you can expect to net on your home’s sale can be a bit of a moving target. Most sellers have some ballpark number around what they owe on their mortgage in mind, and keep that number in mind as they do the mental math to estimate what they expect to recoup from their home’s sale. 

    But it’s not unusual for sellers to get close to closing and express surprise at having their proceeds reduced by:
    • Property taxes
    • City and/or county transfer taxes they didn’t realize were quite so high
    • Old, unpaid HOA dues or assessment
    • Liens from old IRS collections, unpaid waste collection fees or other debts that must be paid off at the time of closing.
    Your escrow holder or title insurer will surface many of these things at the time you open escrow in the format of the preliminary title report, so it’s important to pay close attention to the line items listed when you receive this document.

    And even beyond these items which sellers can inadvertently omit from their math, real-time issues like the precise day escrow closes, repairs that come up during the transaction and even city ordinances that require certain property conditions at closing can have a last-minute impact on your net proceeds. Work with your agent and your escrow officer or attorney to keep an updated understanding of how your home sale figures evolve over time.

    3. Understand that recent history is the best predictor of your home’s fate.  Surprise prevention is yet another compelling reason to stay focused on the recent sales of similar homes as you make your decisions about how to stage it and how much to list it for.  Want your home to sell fast?  Look at the recent comparable sales that flew off the market and emulate their marketing and pricing strategies.  Want to hit a specific price target?  Your best bet would be to look at the similar homes in your area that are selling for top dollar and do what they did. 

    Truth is, in home selling, often the homes that sell fast are the homes that sell for top dollar, but they are also the homes that are the best prepared and priced aggressively enough to present a great value to buyers.

    And the opposite is true, too: if you want to avoid being surprised by a super low sale price, don’t set your expectations wildly out of line with the sale prices you’re actually seeing nearby homes sell for. Reality is a surprise to those who choose to live in a land of fantasy.

    4.  Have a contingency plan.  In real estate, we most often reference contingencies when we’re talking about buying, not selling.  But there are two types of contingency plans home sellers can leverage, too, if avoiding unpleasant surprises is a high priority.

    First, the formal contingency plan.  Sellers do have the option of negotiating a seller’s contingency into the contract for their home’s sale, which allows them the right to back out of the contract if they are not able to purchase a replacement home to move into.  Sellers in strong seller’s markets might have the bargaining power to negotiate this, and it can alleviate the no-longer-uncommon surprise of closing your home’s sale and being unable to buy your next home due to bidding wars.

    Sellers who get into contract on their existing home before buying a new one might also be able to negotiate a rent-back, which allows them to stay in the home for a few weeks or even longer, in some cases, after close of escrow – giving a longer time cushion for finding a home and moving out.  Both seller’s contingencies and rent-backs have a number of legal and mortgage implications. Talk with your real estate professional to find out about common practices in your area.

    Buyers/Sellers: Every home sale presents its own, unique surprise. What unexpected occurrence came up in your last home sale or purchase?

    All: You should follow Tara and Trulia on Facebook!
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