11 Renovations That Pay Off When You’re Selling

Let’s assume the furnace and AC in your house are in good condition, the roof is solid, and the windows go up and down.  In this situation, you have the luxury of thinking about cosmetic renovations that will increase your return on investment.   Here are the ones I would suggest:

renovations

  1. A fresh coat of neutral color paint in the main living areas.  Zillow says to paint the bathroom blue…but I’m not sold on that yet.
  2. Change the cabinet doors or paint the existing cabinet doors in the kitchen (update the hardware too).
  3. New light fixtures in the bathrooms and kitchen.
  4. Stone veneer countertops in the kitchen (a bit pricey but a super return on investment).
  5. New carpet in the main living areas and high traffic areas such as hallways to the bedrooms.  At a minimum, clean the carpets!
  6. Refinish wood floors in the main living areas.
  7. New garage door (or at least power wash it, along with any siding that has dirt or mold).
  8. Landscaping, even if it’s only trimming the hedge, planting some brightly colored flowers and adding some fresh mulch.
  9. Freshen up the basement, literally.  No one wants to smell a musty basement (reminds them of a horror movie).
  10. Remove wallpaper, particularly prints.
  11. Change the shower door or remove it completely and live on the edge!

Six Pricing Myths Sellers Must Ditch Now (Part 3)

5.  A low ball offer isn’t worth considering.  Don’t waste my time.

Selling your home is a process.  An offer, even a low offer, is the start of that process.

When a seller is offended by a low offer, I usually respond by asking what the seller would do, if s/he were in the buyer’s place.  Would s/he offer top dollar right out of the gate?  Probably not.  So, don’t be offended when someone does exactly what you would do.

You can’t take a low offer personally.  It’s not an insult; it’s an invitation!  Don’t be stubborn….make a counter offer, for heaven sake.

Everyone wants a deal, so we start at market value and add a little bit of cushion for negotiating and for unexpected repairs.  And certainly, most homes will not sell above the list price unless it’s a super-hot seller’s market or the house is truly one-of-a-kind.

Take Away:  Don’t get emotional about the first offer.  It’s an invitation and you need to RSVP!

6.  My home needs updates, but buyers will look past that. Won’t they?

In a word, no.  No, they won’t look past dated features, unless the price encourages them to do so.

If your listing price doesn’t account for the floral wallpaper with coordinating border, the navy blue toilets, and the harvest gold carpet, the buyer will account for it.  As they tour the house, you can just hear their mental calculator making deductions….

strip the wallpaper and repaint  $_____ ching!

update the bathrooms                  $_____ ching!

replace the flooring                       $_____ ching!

MENTAL TOTAL                      $_____ cha ching!

And that MENTAL TOTAL will be deducted from the listing price when they prepare their offer.   I guarantee it!  I have this discussion with buyers all the time.  This is exactly how their minds work.

My advice: Look at a few decorating magazines and watch a couple episodes of Flip or Flop, or Fixer Upper.   If the “bones” of your house don’t look like these homes, be realistic and price your home with the needed updates in mind.  It’s not unusual to need updates, nor is it a reflection on you or your taste.

Take Away:  Home styles change pretty dramatically from one generation to the next.  (I know my kids wouldn’t want to live in my house!) Price your home with the reality in mind.

6 Pricing Myths Sellers Must Ditch Now (Part 2)

Part 2 of a 3-part Series entitled Six Pricing Myths Sellers Must Ditch Now

3.  If we price the home right at market value, we will be leaving money on the table.  Oh no!

This hasn’t been our experience!  Sellers react negatively to homes that are not priced in line with the market.  They either don’t tour the home; or when they do tour the home, they go out of their way to find, point out and put a price on every flaw:  “They should deduct $2500 for that ugly carpet”

What really happens, especially in a low inventory market like Evansville, is that buyers are eager to see reasonably priced homes.  So much so, that multiple offer situations are not unusual.  Multiple offers often result in above-market sale prices as the result of the bidding war that develops between hungry buyers!   Buyers of reasonably priced homes are willing to overlook the flaws that doom overpriced homes as buyers feel the pressure to make an offer or lose the house.

 Take Away:  You won’t sell a house no one looks at

4.  If I don’t get the price I want this spring, I’ll relist. No worries.

 The price of homes that sit on the market is like your favorite pair of jeans—they just get softer with time.  The longer a house is for sale, the more likely a buyer will think something must be wrong with it and chose to not even look at it.  Occasionally we even get the intrepid buyer who thinks:  Awesome—something must be wrong with it….I’ll get it way cheap!   (And that’s just what the frustrated seller starts to think too:  This offer is way too cheap!)  Your local multi-listing services show DOM (Days on Market) as do Zillow, Realtor.com and others.  It’s hard to hide this info from buyers and realtors.

Sellers also have to look at the costs of several more months of paying a mortgage, maintaining the home in tip top shape, and perhaps repairing the furnace when fall rolls around and the motor is burned out!

And when fall rolls around, your tired looking house will be out there competing with all of the gorgeous, newly listed homes that hit the market right after the kids went back to school.  Your competition has increased because you waited to right-price your house, making you worse off than you were last spring.  Sigh.

Take Away:  Home prices age like blue jeans….the older they are, the softer they get!

Six Pricing Myths Sellers Must Ditch Now  (Part 1)

 

Six myths that plague sellers:

  1. Let’s price the home above market value and see what happens.  Buyers love to negotiate and think they are getting a bargain!
  2. If I stand my ground, the buyer will eventually come to my price. So there!
  3. If we price the home right at market value, we will be leaving money on the table. Oh no!
  4. If I don’t get the price I want this spring, I’ll relist in the fall. No worries.
  5. A low ball offer isn’t worth countering. Don’t waste my time….
  6. My homes needs updates, but the buyers will look past that. Won’t they?

Let’s debunk these myths right now!  Getting to the truth now will save time and money when you list your house.  This is the first of 3 articles about myths that keep home sellers from getting great deals quickly and easily!

1. Let’s price the home above market value and see what happens.  Buyers love to negotiate and think they are getting a bargain!

Granted, there is some truth to the idea that everyone loves a bargain, but that assumes buyers won’t be put off by the asking price and exclude your home from their search.  The vast majority of sellers won’t look too far beyond their comfortable price range.  And, they won’t want to waste time looking at something the bank won’t qualify them for.  So overpricing your home will actually deter buyers.

This is not to say that you don’t want to leave a little wiggle room for the deal seekers. You also may need to make concessions for unexpected repairs discovered by the home inspection.  (Which makes the case for a pre-listing inspection.  But more on that at another time.)

But don’t be greedy, my dear sellers. (Remember this:  Pigs get fat, but hogs get slaughtered!).  The market is driven by what similar properties are selling for, or comps.  Comps are easier to find than ever …. they are found on the local MLS, Zillow, Trulia, Realtor.com and assessor’s websites, etc.  Buyers and the realtors will find them.  You can’t hide from the market.  Work with it, not against it.

Take Away 1:  You can’t negotiate with a buyer who never comes to see your house.  Price it appropriately from the get-go.

2. If I stand my ground, the buyer will eventually come to my price.

I wish this was true!  Self-proclaimed negotiation gurus often spew this kind of advice:  never split the difference; always be willing to walk away; aim high and expect the best.

I respectfully disagree.  Unless you are in a multiple offer situation, the seller usually has to negotiate on price, at least a little.  Nothing is worse that letting a buyer walk away, assuming there will be more on the doorstep tomorrow, only to see an empty doorstep tomorrow after tomorrow after tomorrow.

In my world, we often split the difference.  We often decide to not walk away but to submit another counter offer.  And while we expect the best, we settle on reasonable.

Take Away 2:  If you arbitrarily stand your ground, you may end up standing…all…alone!

Watch for upcoming posts on Myths 3-6!

 

Great Home Inspector Saved the Sale!

We almost lost a sale this week to a sump pump! If you’ve never been in a crawl space with a sump pump, it’s actually kinda interesting. But that’s not the point of this story.  My point today is to thank our great home inspector who went above and beyond, and helped me solve a problem for an anxious buyer client.

Crawl+Space+5+-+Sump+Basin

The quick story is that because of lousy weather, the contractors ran up to the day before the closing with the trenching in the crawl space and installation of a new sump pump.  My buyer, understandably, wanted to make sure the everything was OK before he signed the paperwork.  So, Damon Barnett, from Barnett Inspections, met me at 8:30 AM the morning of the closing to do the re-inspection.  He slid into the muddy window well and down into the crawl space, inspected the work, took pictures, and wriggled back out.  He quickly prepared a report, and he also joined me on a call with the buyer.  Damon reassured him and the sale was saved.  Thanks to Damon for the extra effort!

At NextHome Hahn Kiefer we can assist by recommending experienced home inspectors, contractors, mortgage loan professionals, mover and more.  Let us take the anxiety out of the moving process!

4 Reasons Why Winter Is a Great Time to Sell Your Home!

shutterstock_550974616

You may be cold, but the market is hot in the winter.

The Internet has no seasons.  Today’s buyers do the bulk of their home searches online, and that’s especially true when the weather outside is not so cheerful.  So, while spring is still the busiest home-buying season, serious home buyers are always checking out the latest listings, on the lookout for the home of their dreams.

The buyers are as serious about buying as you are about selling. Wintertime buyers are usually serious buyers.  Springtime sprouts buyers who have no timeline and want see dozens of houses, whereas winter buyers often have a motivating force behind them. They are looking to find the right house now. 

You face less competition for buyers.  There is usually 15% less competition on the market if you list your home during the winter!  Buyers have fewer homes to choose from, which means you could sell your house faster.    

You’re not competing with as many buyers for your next house.  If you’re selling your house because you’re looking to buy another, you have the benefit of less competition in the winter months when you’re the buyer.  And with fewer buyers competing against you, you are more likely to more successfully negotiate a contingency that your house sells before you’re obligated to buy.

How Some Millennials Afford to Buy a House

shutterstock_403414

Posted 2-12-19  How Some Millennials Afford to Buy a House

Millennials aren’t giving up the dream of owning a home.  They are just going about it a little differently than their parents!  And no, they aren’t dumpster diving to save on food costs.

Actually, I was impressed when I read that they consider being a landlord one way to achieve their goal of home ownership.   By purchasing multi-family properties (duplexes, etc.) the rent they collect covers their mortgage and expenses.  But, you have to be a landlord…something not everyone relishes!

They are also willing to buy fixer-uppers.  Perhaps the HGTV shows are spurring them on? Remodeling isn’t for the faint of heart. But if it’s the way to accomplish your objective, then you’ll learn to enjoy eating breakfast with the construction crew or (heaven forbid) you learn to take advice from your dad as you tackle the work yourself.

Click here for a quick read about Millennials and home buying.  It’s insightful whether you’re a Millennial or a beleaguered parent of a Millennial.

A Mortgage You Must Check Out–A Small Down Payment and No PMI!

shutterstock_279373463 (1)

Posted 1-30-19  A Mortgage You Must Check Out

During a delightful coffee break today with Ben Sparrenberger from Peoples Trust and Savings Bank, he told me Peoples offers a conventional mortgage that requires only 10.1% down payment and no PMI.  What’s the big deal, you may ask?

PMI is private mortgage insurance.  It protects a lender in case you stop making payments on you loan and end up in foreclosure.  Since it’s protecting the bank against your potentially bad behavior, you, the borrower pay for it. (No surprise!)

Lenders usually require PMI as part of a conventional loan, because there is no government insurance as there is with FHA or VA loans (FHA = Federal Housing Administration and VA = Veteran Affairs).  PMI is usually required if your down payment is less that 20% of the cost of the house.

PMI is calculated as a percentage of the loan amount.  So, let’s assume you borrow $150,000, and the rate is 3% a year.  The total premium is $450 a year.  So, the loan product Ben was talking about is a great deal for someone without the cash for a big down payment.  It will save you thousands over the life of your loan!  That’s a big deal!

Check Your Credit Score Now–Even Bad News Isn’t Doomsday

I just had an interesting discussion with Joey Fuller from Top Flight Financial about ways people can improve their credit scores in advance of applying for a loan.  It’s easier than you might think.  In some cases, you can jump 60 points in 30-45 days without doing a whole lot.

The take-away on this for me was–don’t be afraid to check your credit score just because you think it will be bad!  You can probably fix it, unless you’ve been really naughty…

So why do we care about credit scores?  Your credit score can affect your loan amount, interest rate, the required down payment, and whether you can be approved for a conventional mortgage.

Where does your credit report come from anyway?  There are three major credit reporting agencies who do nothing but collect information about a person’s credit history: credit cards, auto loans, student loans, mortgages, court judgments, bankruptcies and so on. They maintain this credit history for years, but the last two years (24 months) is the time frame of most importance.

A perfect credit score is 850 and almost possible to achieve.   A fabulous credit score is anything over 800 and these folks will get the best possible loan terms.  (Oddly enough, they probably don’t even need credit!)

About the lowest credit score a bank or credit union can work with is 620.  Mortgage brokers can work with 580 but they will have limited options.

So relax!  Even a “low” credit score doesn’t necessarily prevent you from getting a loan.  And if it does, you can work on fixing your credit and apply again in a few months.  (P.S.  You definitely don’t have to pay someone to fix your credit!  Talk to a lender first—they are a great source of information and help.)

credit-score-small

NextHome’s Exponential Growth

I knew NextHome was growing quickly and all throughout the country, but I wasn’t aware of just HOW MANY FRANCHISES there were until I saw this article.  We delighted to be part of this phenomenal growth but even more pleased to offer all of the NextHome products and services to our clients.  For example, a buyer can text a home-code to my cell phone and I can send them information about the home in under 5 minutes.  In today’s world, faster is better!

NextHome Franchises Map