Dream Home or Nightmare? How To Buy A Fixer-Upper First Home

image of a house next to a tree on a hill of grass

Last updated on August 4th, 2018 at 09:50 am

image of a house next to a tree on a hill of grass

Image courtesy of Pixabay

Are you considering a fixer-upper for your first home?  While you may be thinking it’s an inexpensive way to land a dream home, or even a quick way to pad your bank account, fixer-uppers aren’t for everyone.  Here are some things to consider before you take the leap.

How To Buy A Fixer-Upper First Home

Understand the process.

Before you can decide if a fixer-upper is right for your situation, it’s important to understand the homebuying process.  First, you need to set aside funds for a down payment.  Most lenders require a down payment of 20 percent, although some mortgage loans require less money or no money down.

Another step toward purchasing a home is to check your credit report, and you should do this early in the process.  Your lender will review your credit history as part of your loan application, and sometimes repairing bad credit can be a time-consuming proposition.  Any incorrect information can be disputed with the reporting party.  Unpaid debts and late payments can be more of an undertaking, so allow sufficient time to address issues.  You also may need to reduce the amount of your debt to improve your credit score.  Depending on your situation, this could also be time-consuming.

Once your credit is in order, you should apply for pre-qualification and then pre-approval for a mortgage.  Pre-qualification provides a snapshot of your financial picture and can often be done over the phone.  Mortgage loan pre-approval gives more firm numbers for your budget, and tells sellers you are serious.  In order to be pre-approved, you will make an appointment with your lender and provide paperwork proving your income, debts and employment history.  This is also when the lender will review your credit history.  Once you receive pre-approval, you can connect with a real estate agent and begin serious house hunting.  Note that conventional mortgages don’t cover renovations, so you need to find other ways to pay for repairs to a fixer-upper.

Consider the cost.

If you opt for a fixer-upper, you have several funding options for making repairs.  One is with existing cash, although for most homeowners the down payment and other costs associated with purchasing a home depletes accounts.  Some homeowners opt for a personal loan or another form of financing.  There is a special loan called the Limited 203(k) Mortgage, which was designed by the government to allow homeowners to renovate and repair properties.

The costs involved with fixer-uppers are one of the biggest drawbacks to purchasing.  While a fixer-upper may be an inexpensive way into a desirable neighborhood or a way to land more square footage or another characteristic you crave, the repairs can be cumbersome to your finances, time, and energy.  Even if you make repairs yourself, as US News & World Report notes, sometimes the work isn’t cost-effective.  You may end up with a property you put more money into than it’s worth, which isn’t too bad if you love it and intend to stay.  However, if you plan to “flip” a home you can get into trouble quickly.

Selecting a fixer-upper is another challenge.  You should search out fixer-upper properties in your area to be familiar with what’s available, learn neighborhoods, and explore price ranges.  For instance, the average listing price for a fixer-upper home in Colorado Springs, Colorado, is $350,000.  You should consider areas that are either growing in desirability or maintain value well if you hope to use the property as an investment or if your renovations will take time.  Remember markets can fluctuate, so if you intend to purchase a property to sell in a few years, you can end up taking a hit if renovations are extensive and costly.

Think about the repairs.

As The Washington Post reports, completing repairs is another ballgame.  Carefully evaluate your personal abilities and skill as well as your finances.  Have a home inspection completed before committing to the project so you can compare what the property requires with what you’re ready to invest.  Weigh the costs of making repairs with your budget and potential property value.  If you can do the work yourself, complete it quickly, and your fixer-upper is in a great location, you could come out a winner whether you opt to remain in the home or sell it to recoup your funds.

You can save money by living in the home while doing work if you plan to do the work yourself and you have the tools and know-how.  Tools can be rented or you may decide to buy your own.  Depending on the extent of renovations, you will need power tools such as drills, sanders, and jigsaws. If you plan to live in the home right away you may have crucial work immediately, such as a roof replacement, or septic or foundation repair.  Some work can require specialized expertise and even licensing, which also means hiring contractors and the possibility of permits.  All these factors weigh into your budget and time frame, so be careful in making your assessment.

Our upcoming book How to DIY Damn Near Everything lays out project steps, needed tools and provides photos to lead readers from step to step.

First home fixer-upper?

Deciding on a first home is challenging, and taking on a fixer-upper can make it even more so.  Depending on your situation, a fixer-upper can either be a terrific investment or a major headache and financial drain.  Consider your circumstances carefully to ensure a fixer-upper is a good match for you.

This article is a guest post written by Bret Engle of DIYGuys. You can check out their site, blog, and content at www.diyguys.net

What Is The True Cost Of Selling A House?

the true cost of selling your home

Last updated on August 4th, 2018 at 09:52 am

true cost to selling your home

Your home sale is one of the biggest financial decisions you will ever make. You may be thinking of selling because you’ve outgrown the space, need to relocate, or have decided to try your hand at investment properties. Whatever the reason, we are going to focus on a seller’s best return on investment.

If you think selling your home will be easy and quick, think again. Even in a sellers market, some homes can stay on the market for weeks and months, while other homes in their neighborhood get under contract within days. “Price and condition are the two biggest reasons a house doesn’t sell, but mostly it’s price, price, price!” says Hope White, a Colorado Springs broker. For more information on what you need to know about selling your home, check out this comprehensive article.

Let’s take a look at some quick statistics from the 2017 National Association of REALTORS® Profile of Home Buyers and Sellers regarding home sales in the US.

Home Seller Facts:

  • 89% of sellers used a realtor to help them sell their home
  • Sellers typically lived in their home for 10 years prior to putting their home on the market
  • The typical home seller was 55 with a median income of $103,000
  • Homes were listed on the market for about three weeks prior to sale
  • 8% of homes sold were listed as For Sale By Owner (FSBO)
  • Homes sold through a real estate agent averaged $249,000 per sale vs. $190,000 as FSBO

 

The below video compares the two main ways a homeowner can sell their property.

Using a Realtor vs. FSBO (For Sale By Owner)

89% of home sellers still use a realtor to assist in selling their home

According to the 2016 National Association of REALTORS® Profile of Home Buyers and Sellers, almost 90% of sellers engage a realtor to help them sell their properties. There are many contributing factors to the importance of using a realtor instead of listing your house as for sale by owner; complex, ever-changing real estate laws and regulations, accurate home estimates and listing pricing, and confusing contracts and negotiations are a few factors.

While realtors are expected to adhere to strict regulations, there is more you need to know about selling your home. A great realtor will provide an accurate and in-depth market analysis so your home is priced to sell. They will know the neighborhood and have experience selling your type of home. They will have exceptional negotiating skills and be in constant communication with you.  The sign of a great realtor is that they make it seem so easy, you think you could do it yourself.

New study shows realtors sell homes for more than FSBOs

If You Have to GO FSBO…

The studies and statistics all confirm that a seller’s best return on investment comes from employing a realtor. Despite the stats, more individuals want to sell their homes themselves. This means that you take on the added responsibility of a realtor for researching, listing, marketing, negotiating, meeting critical deadlines for inspections & appraisals, making sure buyers are pre-approved, following up with the buyers lender and agent, title companies, and closing procedures and figures. In addition to that, you still have to get the property cleaned up, fixed, and staged, and manage your moving process through it all.

A Colorado realtor wrote a great article on how to sell your house as a for sale by owner that is pretty comprehensive and accurate. It touches on how to go about researching, getting your home ready, listing your home, and getting it sold.

Before we get into selling specifics, let’s touch on the most common reasons why your house might not be selling quick enough.

Why a Home Doesn’t Sell and How to Reduce Time on Market

Pricing

Pricing your home to sell the first time is imperative. According to a study by Redfin, a homes first two weeks on the market are the most crucial with it getting 4x as many hits than a month later. After that, offers will slow down, as the traffic is limited to only new buyers entering the market. And the longer your home sits on the market, the more buyers will think you will reduce the price to below market value to get it sold. Overpricing your home is a sure way to end up selling it at a much lower price in the future.

Don’t: Don’t assume that just because your neighbors’s house sold for $500, 000 that yours will too. Specifics like year built, lot size, living area square footage, bedrooms, bathrooms, updated kitchens and bathrooms, and much, much more goes into determining price. Don’t set a higher price thinking you can always reduce it later either! The first 10 days on the market is the most important for a house being sold as it gets the most exposure within that time.

Do This Instead: Request an in-depth Comparative Market Analysis (CMA) by a real estate professional who has experience and who knows the market. Some brokerages and realtors will offer this as a free service, while others may charge a fee.

Looking to sell in Colorado Springs? Request a free CMA here.

Condition

Buyers prefer upgrades and new finishings. If your home isn’t upgraded it may not sell for as much as other properties in your area. Don’t go crazy trying to make everything new, but rather focus on upgrading kitchens or bathrooms as these give you a better return. We have an excellent guide to a sellers best return on investment that will help you pinpoint areas to target for update or remodel.

Don’t: Don’t start remodeling or updating everything you think is wrong with your home! Chances are that you will spend way more money than you should, and you will be fixing things that bother you instead of things that may bother a potential buyer.

Do This Instead: Get in touch with a realtor or industry professional who understands what is most important to focus on. Kitchens and bathrooms typically net the a sellers best return on investment, while other areas such as flooring, walls, or windows do not. Read on below for our detailed Remodeling for Selling Checklist for the complete scoop on what to remodel and when.

Location

You have no control over this factor but it’s important – where your home is located makes a big difference. People don’t just want to move into a nice home, they want to move into a nice neighborhood. Recognize the pros and cons about where your home is located so you can list it accordingly.

Don’t: Don’t lie to potential buyers about where your home is located or omit important details about the neighborhood.

Do This Instead: Instead, be honest about your home’s location and let the price reflect that. DO definitely highlight the good things about your neighborhood or how close it may be to local amenities such as the grocery store, movie theater, restaurants, or more.

Terms

Loan amounts and interest rates, current market trends, comparable properties and amenities are additional factors that make a big impact on your sale. Keeping up with these details will help you stay ahead and potentially sell your home quicker. We have a great mortgage calculator tool that can help buyers determine their numbers, and help sellers understand the financials.

Don’t: Don’t show your home to individuals unless they’ve been pre-approved or pre-qualified through a quality lender.

Do This Instead: Make sure your realtor gets a letter from the lender regarding pre-approval or pre-qualification; better yet is a buyer who has an Earnest Money Check in hand.

What You Should Know Before You Update or Remodel

Updating and Remodeling

Firstly, it’s important to understand the difference bewteen updating and remodeling it. Updating typically denotes taking something old and making it look newer – such as painting old, worn walls or re-lacquering wood surfaces; whereas remodeling tends to replace things, such as cabinets or bathroom fixtures. Most people typically update and remodel and call it a remodel project. For the purposes of this article, we’ll be calling it remodeling as well.

Looking to update or remodel? Live in Colorado Springs? Let us help you figure out what to do next

Remodel Preparation Checklist

A seller’s best return on investment comes from knowing what and when update. There are three main areas to be concerned with before upgrading or remodeling your home. The general rule of thumb is to start outside and move your way in – looking first at curb appeal, structural damage or roofing issues, then moving into the interior such as kitchens, bathrooms, and appliances. Here’s the list, which we will explore in detail after.

Cleaning

  • Outside/Property
  • Windows
  • Ceilings and Walls
  • Floors/Carpet
  • Kitchen
  • Bathrooms
  • Garage

Maintaining

  • Roof
  • Structural
  • Heating & Cooling
  • Electrical
  • Appliances

Testing

  • Lead Based Paint
  • Radon
  • Asbestos

Important: get the professionals involved by hiring a home inspector who will determine any maintenance or testing issues. It’s a cost-effective way to find out what may need work.

Remodeling Your Home to Get it Sold

Why it’s Important to Prioritize

When remodeling or updating, it’s important to set a priority list.  Another Colorado realtor shares her experience on why:

“A very well intentioned seller’s father died so they remodeled some things in his home prior to speaking with any realtor.  This was a very nice home in a very nice neighborhood and the value would be close to $800,000 in today’s market. Hardwood floors were installed in two rooms and walls were retextured, among other things. The exterior of the home was not painted and the paint was probably 10-15 years old.  It took nearly a year to sell the home and I guarantee you it was due to money being put into the wrong areas for return. The seller spent close to $30,000 for those “fixes” that bothered her and could have put in a new kitchen or remodeled the bathrooms plus more for the same amount of money.”

Bottom line? Fixing everything that’s wrong won’t necessarily get you the price you want or the home sold in a reasonable amount of time. Consult a knowledgeable professional who understands what makes a home sell and who has experience with the local housing market.

remodel checklist before selling your home

CLICK HERE to download our FREE Remodeling Checklist!

Remodeling for Selling Checklist

After following the Remodel Preparation Checklist above, the priority list below will help you get the most bang for your buck where your home investment is concerned. There are two main areas of concern on this list, remodels or updates that net you additional value to your home and remodels or updates that will net you your current home’s value.

Additional value items will increase the pricepoint at which you can sell your home and current home value items will allow you to maintain the pricepoint your home is currently at. For example: if your exterior paint is old, you’ll need to re-paint or risk having to lower the asking price of your home because overlooking this item will take away from your home’s current value.

Additional Value Items

  • Replacing exterior siding
  • Replace or install brand new outside deck(s)
  • Updating windows/window trim (only will net you additional value if you install custom upgraded wood windows or something along those lines)
  • Replacing kitchen surfaces
  • Replacing bathroom surfaces
  • Upgrading/Replacing flooring (hardwood, carpet, or tile)
  • Upgrading light fixtures
  • Replacing cabinet and plumbing fixtures in kitchen
  • Replacing cabinet and plumbing fixtures in bathrooms

Current Value Items

  • Exterior painting and/or repairing siding
  • Wash, re-stain, or re-paint outside deck(s)
  • Replacing or repairing windows/window trim
  • Refinishing kitchen surfaces
  • Refinishing bathroom surfaces
  • Deep-cleaning/Refinishing flooring (hardwood, carpet, or tile)
  • Re-painting or touching up walls and ceilings
  • Re-painting or touching up trim around windows, doors and floors
  • Replacing outlet covers, switch covers & light covers

DIY or Hire a Pro?

The decision to do-it-yourself might seem like an easy one. Besides, in the age of YouTube anyone can figure out how to do anything right?

While you may think you can get it all done yourself, you may want to think twice. Many homeowners who choose to remodel their home end up paying more in the long term. Things like electrical, plumbing, and roofing may require permits to be filed in order for it to be determined “up to code.” If you end up doing the work yourself and have no permits to show for it, this will harm your ability to net a higher asking price.

Other items such as painting, laying flooring, or replacing lighting might not require permits, but it’s easy to tell when a rookie has done the job. Painting is a very cheap and easy fix if you paint it yourself, however, if you aren’t a skilled painter, don’t do it! Crooked lines and “tagging” walls and ceilings are a no-no. A bad paint job is not a clean look and will only repel potential buyers.

Advice from Hope:

Hope White has some actionable tips on remodeling that has proven useful to her clients in the 25 years she’s been in real estate.

First of all, any remodeling or updating you do in bathrooms and kitchens typically will net you a better return than any other remodeling or updating.  Light fixtures are a very cheap way of updating a room or rooms starting at only $10 each. 

If your wood floors are not damaged and don’t need to be replaced, but appear to need a new coat of lacquer, you can clean them and put a good mop on “finish” to brighten them up.  I have used Holloway House’s Quick Shine Floor Finish. I really like the way it looks and lasts as long as you do not put an excessive amount down and give it time to dry. 

Updating is the next best return on investment where you clean all surfaces in a room and update by cleaning and painting and just replacing whatever is the oldest. Cleaning carpets is extremely important but replacing them is more important if they don’t come clean.

Obviously, if you have abilities in the construction trades, put those skills to work and improve your home!

Colorado Springs sellers: request a free personal home review to get your home value maximized

Don’t want to or can’t go through the hassle of upgrading or remodeling? Read on to learn about how to sell your home in its current condition.

Selling Your Home “As Is”

Remodeling vs. Selling As Is

There are pros and cons to remodeling or selling as is. Most homeowners will opt to update or remodel when needed instead of trying to sell as is. The amount of time, energy, and financial backing you may have determines whether you should remodel or try to sell your home in its current condition. Light updating or remodeling can be done by you, but if you don’t have the resources to make major repairs on your home, you may find yourself in a position to sell without putting the work into it.

Should you fix up your home or try to sell as is? You may need to consult an experienced realtor or industry professional that can give you advice on how to proceed. Either way, always make sure to do as much DIY work as possible.

If you can’t (or won’t) put the time and resources into upgrading, selling your home without fixing it is your next best option. A seller’s best return on investment in this circumstance comes from knowing the condition of your home and pricing it accordingly.

Impact of Condition on Price

Like we mentioned earlier, the condition of a home is a huge factor in it’s listing price. For example: if the home you are trying to sell needs a new roof, it can typically cost about $10,000 to replace. A potential buyer may not want the hassle of replacing the roof themself, so if your home is worth $100,000 you won’t attract many buyers if you reduce the price to only $90,000.

Homes that require a lot of work or heavy remodeling or upgrading  draws investment buyers or people who want to “fix-and-flip” houses. These individuals are looking to make a profit, so the pricing of your “as is” home will need to be attractive to them.

You Can’t Avoid Fixing These

Even if you decide to sell your home as is, there are some things you won’t be able to avoid fixing or talking about. You are required by law to disclose known issues with your property, and the buyer has the power to come after you down the line if problems arise after the sale. This doesn’t mean you have to detail out every crack or flaw, but anything you’ve been made aware of through home inspections or use of the home has to be reported. Getting ahead of the game by ordering a home inspection first can help you while negotiating price.

Most lenders won’t provide financial backing to buyers if the home has structural, safety, or health issues. The good news: investment buyers typically pay in cash and thus you can avoid strict lending laws and regulations. The bad news: these types of buyers are going to want a sizeable discount on price if there are major problems that need to be corrected. Even investment buyers may want you to fix some things before they will consider buying the property. Bottom line – know what the issues are and be ready to affect the asking price.

Making a Smooth Transaction

Even when selling as is, make sure to get it thoroughly cleaned as it goes a long way towards interior and exterior appeal. Also, remember to highlight your homes selling points and amenities to get the most out of your sale. You may also want to get a market analysis of similar “as is” homes or do walkthroughs of them yourself to get an idea for what they are going for.

While you may need to come down on price based on what may be wrong with your property, don’t blindly accept low offers. Engage the advice of a trusted realtor to help you determine how low is too low. The types of buyers you will be marketing to will likely bring lowball offers to the table right away. Have a plan in place for how you will respond, or better yet, hire a realtor with excellent negotiating skills and a great track record.

A Seller’s Best Return on Investment

Whether you decide to put the time and resources into a remodel or navigate the challenges of a quick and cheap sale, being knowledgeable and flexible is critical.

Sellers on a longer timeline with resources should focus on knowing what they can do themselves and what they should hire a pro to do.

Sellers on a shorter timeline with limited resources should focus on being flexible with pricing based on the condition of their property.

Hire a realtor, get advice from an industry professional, or do your research. There are hundreds of authoritive sources online and offline, and many free tools to get you started.

The Smart First Time Homebuyer Guide

first time homebuyer guide

Last updated on August 4th, 2018 at 09:52 am

first time homebuyer guide

Home Buyers Need Realtors Too

88% of buyers purchase a new home through a real estate agent or broker, according to statistics from realtor.com.  Approaching a new home purchase can seem like an easy process because of the technology available online to home buyers; however, this is not the case. Talking to a realtor early on, even up to five years before a purchase, can be a great way to start preparing for your future home and avoiding common mistakes. 1 out of every 4 home buyers regret their purchase, according to a recent survey by Redfin, a real estate brokerage firm.

A great realtor knows how to listen to your needs and also know what’s available in the market and how to find what you are looking for in your price range. They also can help you get the best offer for what you’re spending, what features you can DIY, and how to get out of a contract if you are uncomfortable. Make sure you choose to work with someone who has lived and worked in your target area so they are familiar with the neighborhoods, amenities, property conditions, and pricing.

What to Look for in a Home

  • Location
  • Condition
  • Terms
  • Price

Show What You Can Afford

Get Pre-Approved…Not Just Pre-Qualified

A good realtor knows the difference between getting pre-qualified and getting preapproved…as well as timing for both. If you are serious about purchasing a home, it’s important to get pre-qualified right away. Most realtors can provide you with referrals to lenders, lawyers, title companies or sub-contractors. Once you find a trusted lender, get pre-qualified right away. While you can start your home search after getting pre-qualified, it’s generally a best practice to be pre-approved prior to attending showings or making offers.

Realtors, lenders, and sellers want to know if you have the financial stability to purchase a new home before starting the required processes.

Know What You Want & Where to Negotiate

It’s important to be patient when searching for a new home, as the market availability isn’t always where you want it to be. Employing a little patience in the short term can actually get you what you want for the best deal in the long term. Knowing what features you can and cannot compromise on is key. A realtor is your best bet to knowing what the best deal is in the market, but below is a short list of critical systems not to skimp on and updates you can do yourself later:

Critical Systems Possible DIY’s
Electrical Colors or Paint
Plumbing Countertops
Heating/Cooling Storage & Shelving
Roof Carpets & Flooring
Structural Trees & Landscaping

Have you fallen in love with a home that has beautiful countertops, but has issues with the water heater? Critical systems such as electrical and plumbing should not be looked over. It may only take a hundred or so dollars to replace or install the counters you love, whereas replacing a hot water heater may cost thousands.

Feel Uncomfortable with a Contract?

Once you’ve located a home you are interested in, don’t feel locked down. The buying process can be stressful and you may feel like everyone is pressuring you to get it done quickly. A great realtor listens to your needs and doesn’t get pushy when you change your mind or don’t like an offer.

Sell Your Home With These 5 Strategies

image of open house sign

Last updated on August 4th, 2018 at 09:54 am

Are you ready to sell your home? It can be extremely frustrating. Many homeowners believe they can do it themselves. After all, you just have to make it look nice, list it online, and wait for people to call right?

A great realtor can make selling a home look so easy you might think you can do it yourself. However, there is more that goes into getting it sold than just the basics. We’ll cover how to boost your home’s visibility and attractiveness to buyers in a bit. Let’s first take a quick look at why you should use a realtor and why a home sells.

Why Use a Realtor

image of NAR 2017 Buyer and Seller Research

According to the 2017 National Association of REALTORS® Profile of Home Buyers and Sellers, almost 90% of sellers engage a realtor to help them sell their properties. There are many contributing factors to using a realtor instead of listing your house as for sale by owner. Complex, ever-changing real estate laws and regulations, accurate home estimates and listing pricing, and confusing contracts are a few. While realtors are expected to adhere to strict regulations, there is more that goes into selling your home.

A great realtor provides an accurate and in-depth market analysis so your home is priced to sell. They will know the neighborhood and have experience selling your type of home. They will have exceptional negotiating skills and be in constant communication with you.

The sign of a great realtor is that they make it seem so easy, you think you could do it yourself.

Why a Home Sells

There are four main factors that affect the ability to sell your home in the current housing market.

image of why a home sells graphic

Price, Price, Price
Pricing your home to sell the first time is imperative. Redfin reports that the first week a home is listed on the market is the most crucial with it getting 4x as many hits than a month later. After that, offers on your home slow down, as the traffic is limited to only new buyers entering the market. And the longer your home sits on the market, the more buyers will think you will reduce the price to below market value to get it sold. Overpricing your home is a sure way to end up selling it at a much lower price in the future.

Condition
Buyers prefer upgrades and new finishings. If your home isn’t upgraded it may not sell for as much as other properties in your area. Don’t go crazy trying to make everything new! Focus on upgrading kitchens or bathrooms as these give you a better return. We have an excellent Home Remodel Checklist that will help you target areas for a remodel or update.

Location
You have no control over this factor but it’s important – where your home is located makes a big difference. People don’t just want to move into a nice home, they want to move into a nice neighborhood. Recognize the pros and cons of where your home is located so you can list it accordingly.

Terms
Loan amounts and interest rates, current market trends, comparable properties, and amenities are additional factors that make a big impact on your sale. Keeping up with these details will help you stay ahead and potentially sell your home quicker.

Selling Strategies for Homeowners

image of selling strategies flowchart

1. Don’t Buy a New Home Before You Sell Your Home

Some individuals prefer to buy a new home before they sell their old one. However, not everyone has the means and the finances to do this. If you need the money from the sale of your current home to fund a purchase you want to make in the near future, you’ll want to make sure you list and sell your home first. Selling and buying simultaneously is stressful! Doing this can easily cause you to feel pressured into making quick decisions about listing price.

Secure a short-term rental or temporarily move in with friends or relatives to save money. While it may not be as comfortable, you’ll be able to focus on getting your home sold before the added stress of looking for a new one. Vacant homes also are easier to show and sell than homes that are occupied! Also, studies show that the quicker a home sells, the more money you get out of the sale.

2. Price it Right to Maximize Buyer Interest

When you are ready to sell your home, chances are you don’t want it to sit on the market for too long. The longer a home stays on the market, the more flexible you’ll need to be on pricing. That’s why it’s important to have realistic listing prices and terms. Factors like your homes condition, terms, location, and price should be your focus.

Other reasons you should price your home right from the start:

  • The longer a home is listed, the less interest it gets. This increases the likelihood that you will have to reduce the price.
  • Competing properties in your area are not all alike
  • You may be missing out on buyers who should be looking at your home, but it’s out of their price range
  • If the home appraisal comes back less than your asking price, buyers can back out of the contract leaving you to start the whole process over again
  • You as the seller cannot demand nor expect the buyers to pay the difference or settle on a price in between your asking price and the appraisal price

If you’ve priced your home at market value for condition and location, about 60% of buyers who are home searching will be interested in your property.

image of buyer interest statistics

Do your homework and select only experienced and knowledgeable realtors with proven track records. Make sure they know the market and have sold previous homes in a reasonable amount of time. Don’t know what to look for in a realtor? See our blog post on why finding the right realtor is crucial to getting your home sold.

3. First Impressions Last

A little bit of home staging goes a long way. Making sure areas or neat, uncluttered, and well lit will make your home stand out during open houses or showings.  Below are a few tips for making a great first impression prior to photographing and showing.

4. Want to Sell Quickly? Sell Your Home at Auction

Typically, homes sold at auction are properties that are:

  • bank owned
  • distressed properties
  • tax foreclosures
  • fix n’ flip
  • owned by homeowners who need to sell quickly

If you are more interested in selling your home quickly rather than getting the top sales price, selling your home at auction may benefit you.

Here’s how it works.

Real estate sold in an auction is reviewed for value. Typical factors in an evaluation are home appraisals, tax information or comparative market analysis (CMA). The seller and auctioneer service agrees on a price after the market value is determined. Then the type of auction is chosen, depending on different variables. Trulia has an article listing different types of real estate auctions you may find helpful.

Benefits to sell your home by auction:

  • Auctions are events
    Events are easy to market and typically generate more interest than a usual open house or showing. If you are holding an event, it’s implied that multiple people are going to be there, which encourages more people to show up.
  • Auctions create urgency
    A sense of urgency helps get homes sold quickly. Auctions set a specific date and time. Buyers interested in your property will have to act before the deadline. Depending on what type of auction it is, buyers may be able to snatch it up before the auction occurs.
  • Can set a reserve price
    Most home auctions allow you to set a reserve price so that you still get money for your investment. This can be 10%, 15% or more below market value depending on how little you are willing to take and how many people you want to come.
  • Few conditions, less work
    The good thing about a home auction is that there are few conditions and less work you need to put into the property. Most are sold “as is” with little to no upgrades, fixes, or cleaning.
  • Speedy closing
    This is where a real estate auction shines. You may have moved out of state, inherited a property you don’t want to keep, or just want to get out from under a bad investment. Closings for a home auction are generally quicker than a typical sale.

5. Consider Carrying the Lease

In an owner carry/lease option, the owner agrees to continue to hold the title and mortgage of the property. Potential buyers will then take over the payments. This is called seller financing. Some buyers who cannot secure traditional financing will favor this option. It gives them an opportunity to move into a bigger place right now while building up their credit and finances.

In this scenario, terms such as down payment, interest rate and the number of years are more flexible to the buyer. Closing costs are usually cheaper because the bank’s fees get removed from the closing. The closing will be faster as lender requirements aren’t slowing the process down. The monthly payments the seller gets from the buyer is less than a lump sum which also allows the seller to avoid tax liabilities.

Make sure to use a title agent or real estate attorney to research any potential issues. Don’t forget: be clear about the terms and conditions. In some instances, seller financed properties can have large balloon payments that the buyer is not able to afford.

Other Important Facts to Consider

It can be challenging to sell your home even in the best of times. Take it slow, and make sure your documents are in order. Important documents such as the deed, mortgage agreements, tax & utility bills and rental agreements need to be easily accessible. Being familiar with tax and real estate laws can go a long way living towards selling your home. Also, understand that it’s difficult to predict the housing market.

Approach your home sale with logic whether you need to sell now or you are looking at your options. Selling your home is a highly emotional experience! Even the most stoic individuals can have trouble letting go. Use these strategies to sell your home under the most favorable conditions for the best price.

Why Use a Realtor: Finding the Right Realtor is Crucial

reasons why you should use a realtor

Last updated on August 4th, 2018 at 09:55 am

Why Use a Realtor

Why Use A Realtor

Whether purchasing now, months from now, or years from now, finding the right realtor is key when looking to buy or sell your home. Almost 90% of buyers and seller today still rely on a realtor to guide them through the home buying or home selling experience. Complex, ever-changing real estate laws and regulations, accurate market pricing for listings, confusing contracts and strict deadlines are a few reasons why it’s important to use a realtor.

Using a realtor vs for sale by owner

89% of home sellers still use a realtor to assist in selling their home

According to the 2016 National Association of REALTORS® Profile of Home Buyers and Sellers, almost 90% of sellers engage a realtor to help them sell their properties. There are many contributing factors to the importance of using a realtor instead of listing your house as for sale by owner; complex, ever-changing real estate laws and regulations, accurate home estimates and listing pricing, and confusing contracts and negotiations are a few factors.

While realtors are expected to adhere to strict regulations, there is more you need to know about selling your home. A great realtor will provide an accurate and in-depth market analysis so your home is priced to sell. They will know the neighborhood and have experience selling your type of home. They will have exceptional negotiating skills and be in constant communication with you.  The sign of a great realtor is that they make it seem so easy, you think you could do it yourself.

88% of home buyers still use a realtor to assist in a new home purchase

88% of buyers purchase a new home through a real estate agent or broker, according to the same report from realtor.com.  Approaching a new home purchase can seem like an easy process because of the technology available online to home buyers; however, this is not the case. Talking to a realtor early on, even up to five years before a purchase, can be a great way to start preparing for your future home and avoiding common mistakes. 1 out of every 4 home buyers regret their purchase, according to a survey by Redfin, a real estate brokerage firm.

Related: 1 in 4 American Homeowners have Buyer’s Remorse About Current Home, According to Nationwide Survey

A great realtor knows how to listen to your needs and also know what’s available in the market and how to find what you are looking for in your price range. They also can help you get the best offer for what you’re spending, what features you can DIY, and how to get out of a contract if you are uncomfortable. Make sure you choose to work with someone who has lived and worked in your target area so they are familiar with the neighborhoods, amenities, property conditions, and pricing.

Don’t Go it Alone

There are many reasons not to try to sell your home on your own. Realtor.com has a great article listing the top 6 Reasons You Should Never Buy or Sell a Home Without an Agent. The most important thing to remember is to do your research and not to be pressured into making snap decisions.