Pricing your home too high can scare off buyers. A common mistake home sellers make is listing their home too high. While it may seem like a better strategy to list high and reduce later, this strategy can actually cost more in the end. Your home may stay on the market for a longer period of time and buyers might start to feel like there is something wrong with the home.
There are two negotiation periods in some home sales. The primary negotiation takes place when the contract is agreed upon that includes the price, closing and possession. Buyers and sellers alike feel relieved once this first round has resulted in an agreement but there may be more negotiations to come if there are contingencies for financing, inspections or other things.
The purpose of an inspection is for the buyer to receive an objective evaluation about the condition of the home and its components to identify existing defects and potential problems. The expense for inspections can be several hundred dollars and it’s reasonable for buyers to not want to spend the money before they find out if they can come to terms with the seller. From a different perspective, sellers want to know quickly if the buyer is going to reject the home due to the inspections.
Sometimes, buyers will expect sellers to make all of the repairs listed on the report and this is where the second round of negotiations begins. If the seller refuses, the negotiations can go back and forth until the other party accepts the offer on the table or the contract falls apart.
When purchasing a new home from a builder, it is expected for everything to be in working order; after all, it is new. However, it is reasonable to expect that existing homes, that are not new, have a different standard. While it’s understandable that buyers would want to be aware about major items that are not in “working order”, normal wear and tear of components based on its age should be expected.
In a highly competitive seller’s market, buyers might do whatever they can to get their contract accepted, realizing that there is another place to negotiate when they’re not competing with other buyers’ offers to purchase.
For this to be a WIN-WIN negotiation, both seller and buyer must feel good about the transaction. Neither party should feel that they have been taken advantage of
during the negotiations.
We’ve all seen it. Two, seemingly similar, homes for sale. One is sold in a heartbeat and the other sits on the market. A recent study conducted by Realtor.com and the National Association of Realtors, identified the main attributes and amenities that are impacting a homes time on the market. Check out this infograpic for all the details.
Real estate lost a lot of value during the recession but most areas have rebounded considerably. In some cases, the homes are worth more than they were before the housing bubble burst.
The dynamics are classic for this type of market: inventories are low, mortgage rates are low and demand is high. All price ranges are on the rise with some at an even higher rate because the short supply is causing competition among buyers.
Another reason many homeowners’ may have more equity is simply not staying current with what is going on in the market. In a recent FNMA study, it indicates that 23% of owners believe they have negative equity in their home when actually, it is 9%. 37% believe they have greater than 20% equity in their home when actually 69% of homeowners do.
Even if you’re not planning to sell your home, knowing the value helps you understand your financial position better. Home equity debt up to a $100,000 limit is tax deductible and can be used for any purpose. Owner’s commonly refinance to eliminate mortgage insurance, consolidate mortgages, pay off higher interest rate debt like credit cards or student loans or to buy out an ex-spouse’s equity.
Be aware that an automated value model like Zillow Zestimates uses algorithms to determine a price and while it might be in the ballpark, AVM results may only be accurate about 20% of the time. A comparable marketing analysis or broker’s price opinion will be more accurate due the subjective approach that will be used by an agent with personal experience in the area. An agent will consider factors like condition, floorplan, marketability and demand.
With all of the storms and severe weather we have experienced this year it is important to ensure you are prepared for whatever may come your way! The Federal Emergency Management Agency (FEMA) recommends that all Americans have some basic supplies on hand in order to survive for at least three days if an emergency occurs. It is recommended that the Ready Kit should be assembled well in advance of an emergency.
The concept is to be able to survive for at least 72 hours until local officials and relief workers arrive on the scene. The disaster could be wide-spread and involve a lot of people that makes it difficult for relief workers to reach everyone immediately.
- Water, one gallon per person per day for at least three days
- Food, at least a three-day supply of non-perishable food
- Battery powered or hand-crank radio and a NOAA weather radio with tone alert and extra batteries for both
- Flashlight and extra batteries
- First aid kit
- Medications (prescription and basic)
- Whistle to signal for help
- Dust mask to help filter contaminated air and plastic sheeting and duct tape to shelter in place
- Moist towelettes, garbage bags and plastic ties for personal sanitation
- Wrench or pliers to turn off utilities
- Manual can opener for food
- Local maps
- Cell phone with chargers, inverter or solar charger
- Family and emergency contact information
- Extra cash
- Emergency blanket
- Pet supplies if necessary
Click here for a print version of this list and additional items to consider adding to an emergency ready kit. The American Red Cross has a suggested list for first aid kits and has other items available for purchase at their online store.
An Automated Valuation Model, or an AVM, is a computer algorithm that looks at public records to make a determination based on square footage, comparable sales and other elements. It is as easy as to get as putting your address in a blank but unfortunately, AVM results may only be accurate about 20% of the time.
It is understandable why so many real estate sites have included AVM’s as part of their offerings. Even if a person isn’t ready to sell their investment, they like to know its value! It is easy to find the price of stocks or mutual funds on any given day, but the value of a home is especially more difficult to determine. This is why having a pair of experienced eyes to consider aspects that are not easily quantifiable can make a big difference.
A skilled professional can tell which properties are truly comparable based on a wide array of factors. A knowledgeable expert can recognize features, floorplans, absorption rates by area and other things that can affect value but are difficult to quantify when using an AVM algorithm. A popular AVM, Zestimate®, states “It is considered a starting point at determining a home’s value.” While an AVM contains some of the same information as a comparable market analysis, it lacks a critical human factor.
Regardless of whether you’re just curious as to how much your home is worth, or if you are ready to monetize your equity, I’m available to give you that information without obligation. Contact me here!