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Items that Repel Home Buyers

The seller’s market that was so prevalent a few short years ago seems to have shifted in favor of the home buyer. Thanks to an overall improvement in the economy and home prices that have risen by 10% or more for the past year, buyers are becoming a bit more selective about their purchase. Here are some items that scare buyers off and what you can do to fix it.

Foul Smells

Certain buyers may like fried food or indoor pets, but most people are turned off by unpleasant odors. This is especially true when the odor is noticeable when a person first walks in to the home.

Odors come in all shapes and forms. Various kinds of food, pets, and tobacco can leave behind distinctive smells. It is important to deep clean the home, the carpets and even the ventilation ducts to get rid of the odors.

Paper on the Walls

For 40 to 50 years wallpaper was quite the rage. Unfortunately, those days are gone. Since most people pick out a very particular wallpaper to go along with certain furniture and trim it is highly unlikely that the next person to buy the home will have the exact same taste. It is better to remove or cover up the paper with paint that is in a neutral tone. Wall paper on one accent wall can be a neat feature however. Using paint and stencils might be the best choice because it would be easy to paint over if it is not to the taste of the buyer.

Dirt

Many sellers fail to realize how important it is to have the home looking as clean as a brand new home. Most buyers do not look past what they initially see in order to understand the potential value of a place. They simply want to walk through and imagine their furniture, heirlooms and personal belongings in various spots in the home. That is tough to do when the sink is full of dirty dishes; the living room is a mess and all the floors need cleaning. Go through every room and thoroughly clean everything.

Sellers Standing Around

The vast majority of buyers prefer to look at a home without the seller present. When a seller is in the home during a showing it presents a bit of awkwardness for the real estate agent and makes the buyer feel pressure. This is easy to remedy: do not be present when the agent shows your home.

Old Items

If the home looks like you stepped back in time 20, or 30 or more years then it will be tough to sell. Old plumbing fixtures and doorknobs that have lost their usefulness scream out “lack of maintenance” and it will make potential buyers wonder if other things in the home are in need of major repair.

Less than the Truth

Thanks to modern technology it is easy to put together a large number of digital pictures and even a video of a home. These items, along with descriptions, need to be as accurate as possible. Putting up a description that omits the fact that a home is mere feet away from a train track or a picture that misleads about the size of a room can turn off not only buyers but agents as well.

We are happy to announce that last week we had another successful Wisconsin short sale closing, this time in Marshall. As you have likely heard, short sale transactions can be complex, and an experienced Short Sale Realtor® is a must.

This was a great home that the new owner is sure to enjoy! If you are thinking of selling or buying a short sale home in Wisconsin, our short sale specialists would be happy to assist you. Give Rock Realty a call at 877-774-7625.

Or, if you are considering a short sale for your home, feel free to fill out our no obligation

Short Sale Home Evaluation Form

Are you in the market to purchase a home this year? Homebuyers and investors are now presented with prices at unprecedented lows and interest rates that have never been so desirable. For those who are now “looking,” the big questions to ask would be, did our housing market really hit rock bottom and should I look into these cream of the crop deals AKA short sales, reo’s & foreclosures?

So, have we hit rock bottom? 

The housing market showed signs of improvement this 2012 year. Non-distressed properties show on average a 1.7% increase in prices according to a recent HousingPulse survey and experts are optimistic for the latter half of 2012.

Does this mean the only direction house prices can go is up from here on out? Not necessarily. One of the key factors that result in house prices increasing is the decrease of supply in the market (less supply, more demand). Although it may seem our nations shadow inventory is decreasing as investors are rapidly buying homes at all-time low prices, a new wave of foreclosures are set to flood the market again as a result of the robo-signing scandal. This incident caused many lenders to lag behind in listing their foreclosure properties and ultimately pushing them through. One could reasonably presume prices to halt its gain again or drop even lower.

However, this does not mean that now is not a good time to purchase a home.  If your financial status suffices to buy, looking into short sales and REO properties can win you an outstanding deal in today’s market. Mortgage rates recently hit another all-time low. According to Freddie Mac’s Primary Mortgage Market Survey released on July 5^th, 30-year fixed-rate mortgages sunk down to 3.62 percent which is a considerable decrease from a 4.6 percent just one year ago. Concurrently, rent prices have gone up on an average of 5.4 percent over the last 12 months according to real estate website, Trulia.

Washington State (Seattle-Tacoma-Bellevue, WA), is in the top 20 nationwide for rising short sale discounts. The average sales price is $224,294 with an average discount of 31.35 percent.

*Before you begin putting offers on properties, I highly recommend following Dave Ramsey’s guide prior to purchasing a home.

Our team of agents specialize in short sale and reo properties and have been extremely successful in helping clients purchase discounted homes in the Washington State area. If you are looking into purchasing a home this year, contact our team of local agents to find the best deals in your desired location(s).

Peter

Many homeowners are now capable of purchasing a home with the all-time low home prices and interest rates. Short sales and Foreclosure/REO properties offer cream of the crop deals that are difficult to simply pass by. If you are looking into the housing market, it is wise to adequately educate yourself especially when looking into distressed properties.

The big question we’ve been getting is, is a short sale or a foreclosed property the better deal? Below is a large pros and cons list for both short sales and REO properties.

*Information derived from Foxbusiness, ABC ActionNews, RealtyStore, WhisselRealty

Pros

• The seller of the property is a bank that has no emotional attachment to the property…they are all about the numbers.
• They are often priced aggressively as the bank wants to sell the property as quick as possible.  They want to stop the business of managing and selling property, and get back to the business of lending money.
• These homes are typically vacant and are very easy to show.
• The banks will usually respond to your offer in 3-5 business days.
• If the home is owned by Fannie Mae, it may qualify for HomePath financing which only requires 3% down and does not require an appraisal or mortgage insurance (MI).

Cons

• Because these homes are aggressively priced, they often received multiple offers.  This is where it becomes important to work with an agent that has a strong understanding of how to write your offer to make it stand out from the competition.
• These homes are sold as-is and the bank will often make no repairs.  As you have probably seen in the news, many of these homes have been stripped by the previous owner and/or vandalized by criminals.  Because of this, they may not qualify for FHA or VA financing.
• You will also have no disclosure forms from the previous owner with REO properties, nor will you be able to get good answers about the neighborhood with repossessed homes as simply as you would through the normal process with a realtor and private seller.
• In these post-bubble days, a bank may also not own the repossessed homes as cheaply as was the norm in previous economies. They may also try to recoup some of their expenses from the foreclosure process as well as the monthly costs of owning and carrying REO properties.

Short Sale Properties: Homeowner sells for less than what is owed.

Pros

• Many agents will not show short sales due to the long response time which opens up opportunities for those buyers that are not in a hurry to buy.
• These homes are typically in better condition than bank owned homes because the homeowner is usually still occupying them and taking care of the home.
• The banks will often accept less than market value because they do not want to foreclose on the home and take on the task of managing and selling the home.

Cons

• The process of negotiating a short sale with the mortgage bank typically takes 1-6 months.
• The bank is under no obligation to approve a short sale offer.  Less than 50% of short sales that are submitted to banks are approved.
• Often times the banks will not pay off all of the liens against the property (HOA dues, property taxes, ….) and the buyer may be asked to pay for these items.

In conclusion, one of the main discrepancies between a short sale vs an REO property can be described by the scenario of buying a used car either from a dealer or from a private owner. If you get it from an owner (REO), you may get the vehicle at a more discounted price but the quality of the asset is a gamble. You may end up spending a lot in repairs because the vehicle’s engine hasn’t been maintained.

In many cases, an REO property is vandalized and/or the previous owner out of spite, trashes the property prior whereas in a short sale, the property is significantly less likely to be vandalized or mistreated prior to transferring the home.

What do you think? Which would be the better deal? Short sale vs Foreclosure

Short Sale Road Rules: Getting Buyer and Seller on Same Page

One of the most neglected, and yet, most important part of a successful short sale is getting both buyer and seller on the same page.  This may stem from the traditional way of thinking on a traditional “retail” sale:  It’s “Us against them.”  This does not apply to short sales, and if you can over come this mentality, your closing success will skyrocket.  Getting the short sale approval is only part of your responsibility; the other part is getting your buyer to the closing table. This is how I do it:

Locking the Buyer Down: The Stick

As I have gone over in my other articles, locking the buyer down into an airtight commitment is part of my “Rules of the short sale.” We do not allow a buyer to have any “outs.” To recap, here are the “Rules:”

1. 90 day contract close date-We need enough time to get approval
2. Ernest money up front
3. Inspection time normal 10 days (NO “upon lender acceptance” allowed)
4. Attorney review normal 5 days (NO “upon lender acceptance” allowed)
5. Proof of funds for cash buyer
6. Mortgage Pre Approval (NO Pre-Grades from loan officers-only banks)
7. Buyer agreement on use of professional negotiator

These rules are non negotiable.  If they are refused, we recommend to our seller that this is not a legitimate buyer and we get another offer.  Period.  Trust me, a buyer that refuses is a buyer that will find some excuse down the road to walk away or not close.  Don’t waste your or your seller’s time with these tire kickers.

Sounds like a tall order?  I hear it all the time…”Joe, out here in (pick an area) my buyers will NEVER go for these rules….”  WRONG!  They WILL go for it, because you are going to DEMAND IT! It’s just that you are going to do it in a way that brings the buyer over to your side and gets them involved and excited about the process. Remember, the time where agents could make money by being order takers is long gone! You need to put on your big boy (or girl) pants and go out and be a salesperson.   We accomplish this by giving them incentives to play by our rules.

The Carrot

We get our buyer on board by offering them incentives. The most obvious one is Price.  Remember, no matter what the objection, Price cures all ills.  Sounds simple, and it is, but like anything there is an art to it.  First, as a listing agent, it is your responsibility to do a detailed CMA on your listing.  We need to know what the true comparable properties are selling for, both distressed and non distressed. As discussed before, we have set our price aggressively at the very low end of the comp range.  This attracted buyers. Now once an offer has been tendered, we set about to find the most important key to our strategy, the buyer’s “All In” price.  This is where you have to get the buyer and their agent on your side. 

Coming Together

How I do this is simple.  I tell them that I have a duty to my seller to get this deal closed, and that if we work together, not only can I help my seller, but we can help your buyer as well. We know that it is in our best interest to make your buyer happy, and to get a great deal for them.  This is why they need to be committed and honest with us.  Remember, WE HELP OUR SELLERS WHEN WE HELP THE BUYERS BUY.  This puts the deal in perspective, and softens the edge a little so we get a more honest answer when we ask for the ALL IN price.  As explained before, no matter what offer was tendered, we need to know the buyer’s absolute, top dollar, price, fees, extra costs, everything price.  This is the ALL IN price.  Once that is established, I then like to ask the buyers to REDUCE their offer by 5%-7%.  You heard that right.  I said drop the offer.  This accomplishes two if things:

1. It gives us negotiating room with the seller’s lenders
2. It gives the buyer and incentive to stick in the deal.

The possibility of a discount is a powerful motivator for buyers, and once you show them that you are allowing them this opportunity, most buyer objections melt away quite rapidly.  In fact, they become your new best friends.

Now, I know many of you are telling to “Hold on, how is this benefiting our seller..” Well, again, we help our seller when we help our buyer buy.  What the seller owes is irrelevant.  Our objective in a short sale is not TO GET THE HIGHEST PRICE, BUT RATHER TO PUT THE SELLER IN THE BEST POSITION TO CLOSE. Of course, we have to be quite clear to the buyer that by lowering their offer, they must be willing to bump it back upwards should the lender counter.  This also means the buyer should be ready to bring a little extra cash to the table to buy out a seller deficiency on a second, pay ancillary fees, or cover any seller cost not paid for by the seller’s lender.  As long as our total amount stays below the ALL IN price, we should be good to go.  If you do this right, you will close at a number somewhere between the low offer and the ALL IN price, and everyone will think you are a hero. If, by chance, we end up beyond the all in price, most of the time it’s close enough that you can negotiate some sort of settlement. For those of you who can’t believe that the seller’s lender will go for this…they can and they do everyday.  What some of you don’t realize is that most investor guidelines allow for up to a 20% variance from appraised value if you know how to work the short sale right…hence the insistence of using a professional negotiator.

Remember, short sales are a strategy.  You should plan ahead because if you don’t, you will be doomed to react to lender actions and that, my friends, is why most agents fail at short sales.  Get the buyer on board and the rest of the deal will follow.

For more Short Sale Road Rules and information about the author, please visit our Facebook Fan Page at http://www.facebook.com/ShortSaleProcessor, and our website at www.josephalfe.com or www.ssprocessors.com

Stepping away from the current economy and its effect on the housing market, lets turn to technology and marketing and how your home should be marketed in today’s techno atmosphere.

The truth of the times is that for the most part print advertising and marketing for real estate is slowly becoming a thing of the past. Not because Real Estate professionals necessarily want that to be the case but because our clients want that to be the case. Buyers and Sellers use home magazines, newspapers and phone book less and less as the internet gives them the instant information that they seek. Customers no longer need to initiate contact by phone conversation. They can simply find a home they like and send a message to an agent. The agent will then call them and initiate contact.

As a seller you should be aware of the new trends your agent should be using to market your home. If your agent begins his presentation with a sign in the yard and ends with an ad in the local newspaper, you may want to start asking some questions. Your listing agent needs to be up to date on all the techniques that buyers use to find homes and know the best ways to get your property in front of potential buyers, regardless of the medium.

A well rounded agent is able to combine the new with the old and develop a strong marketing plan that fits the needs of you, the seller as well as potential buyers that are looking for your property. Utelizing marketing techniques such as listing syndication, text messaging for information, QR codes on marketing flyers, facebook posts, twitter posts, linkedIn posts, writing blog posts about the property listing, and many other options. Those along with the sign that features text messaging options and contact rather than the blow away flyer and a possible empty box is the key to getting your listing in front of as many buyers as possible.

When choosing a listing agent, the marketing plan should be one of the hot button items you discuss. Make sure that whoever is working to list your property has a solid grasp on today’s technology and how he or she plan to use that technology to market your home.

Tim Brown,Owner/Broker, Realtor®, ABR,CRS,CDPE®,
Auctioneer NCAL#8560
Hines & Associates Realty
TeamHeidi
Direct Line: 704-619-1008
Client Care Line: 704-815-3208
www.CarolinaHomes4Sale.com

Tim Brown is a Owner/Broker, Realtor®, ABR,CRS,CDPE®, Auctioneer NCAL#8560 with Hines & Associates Realty. He currently serves buyers and sellers in Charlotte, Mecklenburgh, Cabarrus, Cornelius, Huntersville, and other surrounding communities in North Carolina. Charlotte Real Estate, Charlotte Homes for Sale

Then Senate is poised to approve the ammendment and it will have to get thru the house.

I know all my short sale buyers and sellers are hoping it goes thru! I'm sure yours are too!

If passed buyers will have until Sept 30 to close escrow in order to meet the tax credit qualifications.