The holidays can be an exciting time of year. Parties, family visits, fresh snow, shopping and bright lights all contribute to this being a time of high energy.
It can also be the perfect time to slow down. A time to reflect on the past and dream about the future. A time to take stock of your life and make adjustments.
If you are a home seller, it can also be a good time to take a break from the market. I often recommend this to seller clients, especially if any of the following are true:
1) You’ve been on the market 6 months or more.
2) You’ve been on the market a short time “testing the waters” to see if you can get an optimistic price.
3) You’ve not received any written offers.
4) The holidays are a busy time for you—parties, family get-togethers, shopping, travel, etc.
5) It’s difficult to keep the house clean and uncluttered for showings because of #4 above.
6) You were planning to complete some of those fix-ups to make the home show better.
7) There is not a compelling urgency to sell now versus 2 months from now.
8) You’re just tired of living in home for sale and a break would be refreshing.
The days between Thanksgiving and the end of January are the traditional dog days of the residential real estate market. While it is true that homes can sell at any time of the year, it is also true that this time of year is the slowest. Especially if you’ve already spent considerable time on the market, taking a break at this time of year is a low-risk undertaking—if buyers haven’t been breaking down the doors during the more active times, chances are you won’t be missing them over the next 6-8 weeks!
Another reason to take a break is to reduce the perception of being “shop-worn”. Buyers usually know how long you’ve been for sale—they ask their Realtor—so taking a break and starting over gives your property a bit of fresh look. It actually does look better to have been on 6 months and off 2 months then back on 2 months than it does to have been on continuously for 8-10 months. The reality is that once you are “on the market”, market time is your enemy—the longer you have been out there without selling, the more likely a buyer is to shy away. Right or wrong, the perception of buyers is often “No one else has bought it—so there must be something wrong.”
True, there is the risk that a buyer may come along that would have been suitable for your home had you still been active on the market. It’s a strategy call. Do you risk missing that buyer or do you risk showing up to all prospective buyers as a home with lots of market time without a sale? If you can stand the wait, I recommend the latter. It gives your home a fresh start. It gives you a fresh perspective. It’s worth considering, at least.
Tuesday, December 18, 2007
Monday, December 3, 2007
CHANGE THE DECOR? OR LEAVE IT TO THE NEXT OWNER?
Selling “as is” vs. redecorating
The following are phrases heard from home sellers over the years when the subject of pre-sale fix-up comes up:
“I don’t want to guess what the new owner might prefer. I’m sure they would rather make those choices.”
“I know the carpets are dated and not in the best of condition, but wouldn’t most buyers prefer carpet to the hardwood floors underneath?”
“Yes, the drapes are dated and restrict light in the rooms, but isn’t it better to provide a buyer with some privacy for moving in?”
“It’s really not a big problem. We’ve lived with it that way for years”
I almost always disagree. Here’s why.
Competing well: Fact is, most home buyers prefer homes that are “turn-key”, ones they can move into without making a lot of changes. The home buying and moving process is complicated enough as it is—without throwing a remodeling project on top. To compete well with other homes “for sale” on the market, make moving into yours look like the easy choice.
Cash flow to make changes: Most home buyers are using all (or nearly all) of their available cash resources for their down payment and loan closing costs. Once they move in, they simply do not have a lot in reserve. When you require that buyers remodel after moving in, you have eliminated the majority of buyers that would otherwise consider your property. This is particularly true in the first-home-buyer market. Chances are they are borrowing, or receiving as a gift, some or all of the money they need to close on a home purchase.
Exaggerating the cost: You may know that a project will cost $1000. If that is the case, chances are good prospective buyers will guess twice that. The buyer for your house likely has less experience with home repairs and remodeling than you and, therefore, has less ability to accurately estimate costs. So spend the money and get it done. It removes objections in the buyer’s mind.
Having choices isn’t necessarily a marketing plus: Choice can be perceived as either good or bad. It can be wonderful to have choices and it can be terrible to have choices. The new home market provides a good example. Most new homes are bought as built and marketed by the builder—with all the choices made ahead of time by the builder. Far fewer are bought as custom homes with most or all of the choices made by the buyer. The reasons are many. For starters, most people are not that good at visualizing what a home will look like once it is finished—they need to see it and touch it to feel confident that it will satisfy them. Also, with choice comes responsibility. Most new home buyers would rather walk into a fresh-feeling, newly-completed home than bear the burden of hundreds of decisions. The same goes for the existing home market. Make it easy.
The “hassle” factor: Think about it: You don’t really want to paint, remove carpets and refinish hardwood floors. Most people don’t—especially when they already have enough on their plate. Forcing a buyer to take on projects only hamstrings your marketing efforts. You’re better off with the hassle of remodeling than the hassle of not selling..
Buyers who want you to sell “as is”: Those who are looking for a project are also looking for a bargain. In a market where prices are flat or falling—even when the buyer is an owner-occupant—restricting your potential buyer pool to re-modeler/speculators only enhances your prospects for a lower price.
In summary, make the choices and complete the work before going on the market—or take a break from the market and do the work before resuming your marketing efforts. It will pay you back in price and time on the market. Your property will compete better. Call us for advice in what to do and what colors to use.
The following are phrases heard from home sellers over the years when the subject of pre-sale fix-up comes up:
“I don’t want to guess what the new owner might prefer. I’m sure they would rather make those choices.”
“I know the carpets are dated and not in the best of condition, but wouldn’t most buyers prefer carpet to the hardwood floors underneath?”
“Yes, the drapes are dated and restrict light in the rooms, but isn’t it better to provide a buyer with some privacy for moving in?”
“It’s really not a big problem. We’ve lived with it that way for years”
I almost always disagree. Here’s why.
Competing well: Fact is, most home buyers prefer homes that are “turn-key”, ones they can move into without making a lot of changes. The home buying and moving process is complicated enough as it is—without throwing a remodeling project on top. To compete well with other homes “for sale” on the market, make moving into yours look like the easy choice.
Cash flow to make changes: Most home buyers are using all (or nearly all) of their available cash resources for their down payment and loan closing costs. Once they move in, they simply do not have a lot in reserve. When you require that buyers remodel after moving in, you have eliminated the majority of buyers that would otherwise consider your property. This is particularly true in the first-home-buyer market. Chances are they are borrowing, or receiving as a gift, some or all of the money they need to close on a home purchase.
Exaggerating the cost: You may know that a project will cost $1000. If that is the case, chances are good prospective buyers will guess twice that. The buyer for your house likely has less experience with home repairs and remodeling than you and, therefore, has less ability to accurately estimate costs. So spend the money and get it done. It removes objections in the buyer’s mind.
Having choices isn’t necessarily a marketing plus: Choice can be perceived as either good or bad. It can be wonderful to have choices and it can be terrible to have choices. The new home market provides a good example. Most new homes are bought as built and marketed by the builder—with all the choices made ahead of time by the builder. Far fewer are bought as custom homes with most or all of the choices made by the buyer. The reasons are many. For starters, most people are not that good at visualizing what a home will look like once it is finished—they need to see it and touch it to feel confident that it will satisfy them. Also, with choice comes responsibility. Most new home buyers would rather walk into a fresh-feeling, newly-completed home than bear the burden of hundreds of decisions. The same goes for the existing home market. Make it easy.
The “hassle” factor: Think about it: You don’t really want to paint, remove carpets and refinish hardwood floors. Most people don’t—especially when they already have enough on their plate. Forcing a buyer to take on projects only hamstrings your marketing efforts. You’re better off with the hassle of remodeling than the hassle of not selling..
Buyers who want you to sell “as is”: Those who are looking for a project are also looking for a bargain. In a market where prices are flat or falling—even when the buyer is an owner-occupant—restricting your potential buyer pool to re-modeler/speculators only enhances your prospects for a lower price.
In summary, make the choices and complete the work before going on the market—or take a break from the market and do the work before resuming your marketing efforts. It will pay you back in price and time on the market. Your property will compete better. Call us for advice in what to do and what colors to use.
Wednesday, October 17, 2007
Ready, Set, Sell !!!!
GETTING READY TO SELL
I get quite a few calls from homeowners asking me to look at their home and tell them what they should do prior to placing it on the market. I am always glad to get those calls. For one, it’s an opportunity to go to work and earn a living. More important, it’s an opportunity to go to work on marketing a home that is putting its best foot forward. Homeowners that set aside their own perspective have a distinctive leg up on the competition!
SUCCESSFUL SELLERS LEARN TO THINK LIKE BUYERS
A difficult notion for many homeowners to understand is that how their home looks when they are living comfortably in it is probably not how it should look to sell quickly and for the most money. Put another way, once that “for sale” sign goes up, your home—with all of its history and emotional meaning to you—is no longer your home. It’s a product for sale. When it is at its best, it shows up not as your personal domicile, but as a new set of living possibilities for prospective Buyers.
OPEN UP SPACE
The starting point is almost always the removal of your “stuff”. It’s time to de-clutter: less furniture is better; fewer things hanging on the wall is better; less stuff in the garage, basement, yard . . . everywhere. If you’re moving, you need to get rid of stuff anyway. The three year/three month rule is a good starting place: anything you haven’t used in the past 3 years—and cannot imagine a use for in the next 3 months—should go. Give it away, donate it, recycle it or trash it. The main reason, though, is to make your property more of a “blank slate”. You want prospective Buyers to be able to imagine how they will use your space—you don’t want them to be distracted by your possessions. Less stuff makes a home feel larger, also. Very important!
PAINT
There is no single better investment than pre-sale painting. Patch the drywall cracks and nail holes and give your home a fresh coat of paint—certainly inside—and outside if needed. Paint has a way of making a home feel fresh and clean. It cleans up the visual landscape, making the home feel larger, more comfortable. You’ll always get more out of painting than you spend.
CLEAN IT UP
Now is the time for deep cleaning. Carpets, kitchens, bathrooms, plumbing fixtures, windows. Again, a clean home just feels more comfortable, more inviting, larger.
JUST WHAT YOU ALWAYS WANTED
A sad truism in the world of residential real estate is that you get your home just the way you always wanted—just to hand it off to someone else. When I sold our first home, I installed the last couple replacement windows, put on a new roof, put in a new well, moved the water softening equipment out of the crowed utility closet it had occupied, replaced all the carpet, painted throughout and put on a new front deck. It looked great! It hurt to not be able to appreciate it ourselves, but it made for a quick sale and a good return on our investment.
BE SMART
The focus should be on making changes that cost less than what you will gain in sale price. A new kitchen or bath makes sense if yours is clearly obsolete or dysfunctional, but usually major expenses are not necessary or advisable. That’s where we can help. Give us a call before you spend too much.
I get quite a few calls from homeowners asking me to look at their home and tell them what they should do prior to placing it on the market. I am always glad to get those calls. For one, it’s an opportunity to go to work and earn a living. More important, it’s an opportunity to go to work on marketing a home that is putting its best foot forward. Homeowners that set aside their own perspective have a distinctive leg up on the competition!
SUCCESSFUL SELLERS LEARN TO THINK LIKE BUYERS
A difficult notion for many homeowners to understand is that how their home looks when they are living comfortably in it is probably not how it should look to sell quickly and for the most money. Put another way, once that “for sale” sign goes up, your home—with all of its history and emotional meaning to you—is no longer your home. It’s a product for sale. When it is at its best, it shows up not as your personal domicile, but as a new set of living possibilities for prospective Buyers.
OPEN UP SPACE
The starting point is almost always the removal of your “stuff”. It’s time to de-clutter: less furniture is better; fewer things hanging on the wall is better; less stuff in the garage, basement, yard . . . everywhere. If you’re moving, you need to get rid of stuff anyway. The three year/three month rule is a good starting place: anything you haven’t used in the past 3 years—and cannot imagine a use for in the next 3 months—should go. Give it away, donate it, recycle it or trash it. The main reason, though, is to make your property more of a “blank slate”. You want prospective Buyers to be able to imagine how they will use your space—you don’t want them to be distracted by your possessions. Less stuff makes a home feel larger, also. Very important!
PAINT
There is no single better investment than pre-sale painting. Patch the drywall cracks and nail holes and give your home a fresh coat of paint—certainly inside—and outside if needed. Paint has a way of making a home feel fresh and clean. It cleans up the visual landscape, making the home feel larger, more comfortable. You’ll always get more out of painting than you spend.
CLEAN IT UP
Now is the time for deep cleaning. Carpets, kitchens, bathrooms, plumbing fixtures, windows. Again, a clean home just feels more comfortable, more inviting, larger.
JUST WHAT YOU ALWAYS WANTED
A sad truism in the world of residential real estate is that you get your home just the way you always wanted—just to hand it off to someone else. When I sold our first home, I installed the last couple replacement windows, put on a new roof, put in a new well, moved the water softening equipment out of the crowed utility closet it had occupied, replaced all the carpet, painted throughout and put on a new front deck. It looked great! It hurt to not be able to appreciate it ourselves, but it made for a quick sale and a good return on our investment.
BE SMART
The focus should be on making changes that cost less than what you will gain in sale price. A new kitchen or bath makes sense if yours is clearly obsolete or dysfunctional, but usually major expenses are not necessary or advisable. That’s where we can help. Give us a call before you spend too much.
Monday, August 27, 2007
HOW'S THE MARKET???
It’s a question posed daily to nearly every real estate agent, especially in the last few months with headlines rich in real estate “news”.
The answers are many and varied: It’s awful! It’s not that bad. It’s OK. It’s great! It’s been lots worse! All can be true—all at the same time. It depends and what part of the market you’re asking about . . . and whether you’re a buyer or a seller!
The fact is that—while there are forces nationally that influence all parts of the real estate market: the “sub-prime” market troubles . . . foreclosure increases . . . mortgage banking failures . . . Federal Reserve discount rates—how real estate is doing where you are depends on specifically where you are and what you are doing. Your community. Your neighborhood. Your school system. Your price range.
In the Greater Kalamazoo market, generally, if you are a buyer, it’s a pretty darned good market—there are lots of choices, financing is available and affordable and bargains are there to be had. If you are a seller, the competition is fierce—there are more homes on the market now than at any time in the last 25 years.
Still, there are exceptions and a wide range of variability. For instance, in Portage in the $100,000 - $125,000 price range, the current inventory of homes for sale is only at a 6.7 month supply—meaning that if the current rate of sales continued and no more homes entered the market, how long it would take to run out of homes? To put this in perspective . . . a balanced market carries about a 6 month supply of homes . . . in 1993 we carried a 4 month supply (very much a seller’s market) . . . and in 1981-1982 (with interest rates in the 14-17% range) the inventory hovered around 15 months!
Here’s snapshot of the current inventory levels in a smattering of other market segments in our area: Vicksburg area: $100,000 – $150,000 (7 months), $200,000 - $300,000 (12 months); Richland & Ross Townships $200,000 -300,000 (21 months); Plainwell area $175,000 - $225,000 (16 months); Gull Lake homes over $500,000 (25 months).
The bottom line: Each geographical and price segment of the market is its own mini-market. The experts and the media can say what they will about the national real estate picture—and it is always interesting—but what matters is what’s happening in the micro-market surrounding the home you own or the area you want to buy in.
All The Best,
Jared
P.S.
(I use the quotes around news because my perception has long been that what shows up in newspaper or TV or magazine or internet headlines as “news” is not really new—it’s been going on for quite some time. All media outlets, rightly or wrongly, think that they cannot get your attention and sell you something without sensationalizing the everyday.)
The answers are many and varied: It’s awful! It’s not that bad. It’s OK. It’s great! It’s been lots worse! All can be true—all at the same time. It depends and what part of the market you’re asking about . . . and whether you’re a buyer or a seller!
The fact is that—while there are forces nationally that influence all parts of the real estate market: the “sub-prime” market troubles . . . foreclosure increases . . . mortgage banking failures . . . Federal Reserve discount rates—how real estate is doing where you are depends on specifically where you are and what you are doing. Your community. Your neighborhood. Your school system. Your price range.
In the Greater Kalamazoo market, generally, if you are a buyer, it’s a pretty darned good market—there are lots of choices, financing is available and affordable and bargains are there to be had. If you are a seller, the competition is fierce—there are more homes on the market now than at any time in the last 25 years.
Still, there are exceptions and a wide range of variability. For instance, in Portage in the $100,000 - $125,000 price range, the current inventory of homes for sale is only at a 6.7 month supply—meaning that if the current rate of sales continued and no more homes entered the market, how long it would take to run out of homes? To put this in perspective . . . a balanced market carries about a 6 month supply of homes . . . in 1993 we carried a 4 month supply (very much a seller’s market) . . . and in 1981-1982 (with interest rates in the 14-17% range) the inventory hovered around 15 months!
Here’s snapshot of the current inventory levels in a smattering of other market segments in our area: Vicksburg area: $100,000 – $150,000 (7 months), $200,000 - $300,000 (12 months); Richland & Ross Townships $200,000 -300,000 (21 months); Plainwell area $175,000 - $225,000 (16 months); Gull Lake homes over $500,000 (25 months).
The bottom line: Each geographical and price segment of the market is its own mini-market. The experts and the media can say what they will about the national real estate picture—and it is always interesting—but what matters is what’s happening in the micro-market surrounding the home you own or the area you want to buy in.
All The Best,
Jared
P.S.
(I use the quotes around news because my perception has long been that what shows up in newspaper or TV or magazine or internet headlines as “news” is not really new—it’s been going on for quite some time. All media outlets, rightly or wrongly, think that they cannot get your attention and sell you something without sensationalizing the everyday.)
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