SELLERS: 5 Musts for Generating Multiple Offers

Selling your home?  Interested in getting multiple offers on your home?  Check out this article from Trulia blogger Tara.

As you might have heard by now, multiple offers are the new black. Well – kind of; if your own home is on the market or soon to be, it can seem like you break your back to prepare your home and it lags and lags on the market while all the cool kids houses and their sellers sit idly by, making champagne toasts while they are inundated with more offers than they can shake a stick at.

Let’s bust one myth: getting multiple offers rarely happens by luck alone. That’s good news for you, as it means that generating multiple offers is more of a science than an art. And that, in turn, means there’s a whole lot you can do to replicate these results with your own home’s listing.

Here are five elements I nearly always see in listings that get multiple offers:

#1. Listed low. As I alluded to last week, homes that get multiple offers are often sold in what industry insiders call an auction atmosphere. If you think back to the last auction you saw on TV or participated in online, you’ll remember this basic element of Auctions 101: the starting price is lower – sometimes quite a bit lower – than the final sale price.

In fact, it’s the low list or starting price that gets people excited about the possibility of scoring a great value, whether they’re bidding on an antique Chinese pug figurine on eBay or on your home.  And when it comes to your home, it’s that same, low-price-seeking excitement that will cause many more buyers to show up and view your home than would have come at a higher price point.

In real estate, more showings are an inescapable prerequisite to more offers.

Now – I’m not at all suggesting you give away the farm, just that you price your home from a retailer or auctioneer’s perspective, rather than the all-too-common backwards reasoning to which home sellers so often fall prey. Work with your agent through the comparable sales data – as recent and as comparable as possible – and then do your best to list your home as a slight discount, not at a slight premium, compared to the recent neighborhood sales.  That will get buyers’ attention.

#2.  Easy to show.  Walk a mile with me, if you will, in the shoes of the average home buyer or their agent. Let’s say there are 50 homes on the market which meet your rough specifications in terms of bedrooms, bathrooms, square footage, price range and location. You can narrow it down to your 30 top priorities to see. But you only have time to see 8 today. Now, of those 30 top priority properties, about 15 are short sales or foreclosures and you can get into them anytime you want. And the other 15 are split down the middle – half of them are available to be seen with nothing more than a single phone call.  The other half require you to hurdle an arcane obstacle course of phone calls, 24 hour notice requirements, strange hours of availability and more phone calls to get an appointment to see the place.

Which would you go see, and which would get ruled out?

I am not exaggerating one iota when I tell you that your home could be priced well and marketed well, but if you make it too difficult for buyers to get in to see it, the statistical probability is that they will (a) find and choose another home from those that are more easily accessible to view, and/or (b) assume you are not motivated to sell, get irritated and pass on your home as a result.

Want multiple offers?  Make sure your home is available to be shown on demand, or as close as possible to that. Inconvenient?  Yes.  Frustrating?  Sometimes.  A challenge to keep the place clean at all times? Assuredly.  But, my dear reader, no one ever promised you a rose garden; decide what your priorities are and, if you decide that getting top dollar for your home is at the top of that priority list, then also decide to be willing to deal with the inconvenience involved in churning up multiple offers and getting your home sold.

#3:  Immaculate look and function.  The homes that get multiple offers (outside of the foreclosure arena, anyway), are those with look, feel and function that can be described in one word: covetable. You’re not trying to create a situation in which your home barely edges out the listing down the street in the hearts and minds of your target buyer. If you want multiple offers, what needs to happen is for multiple buyers to fall deeply in love with your home – enough to brave the competition and put their best foot (and top dollar) forward.

Today’s buyers are no dummies. They’ve just lived through the worst real estate recession anyone can remember, and they’re much more frugal than buyers were at the last peak of the market. To boot, mortgage and appraisal guidelines and their own smart sense of frugality prevents them from just hurling dollars at any old place. Accordingly, they are not easily tricked into competing for a home by a slipshod paint job and a few pieces of Pottery Barn furniture.  

To generate multiple offers, prepare your home by ensuring it is:
*immaculate from the inside out – basements, garages and crawl spaces included
*de-cluttered and staged to the nines – including fresh paint, carpet and other things that need replacing
*in fine mettle – make sure things like doors, windows and systems buyers test (e.g., stoves, faucets, heating and air conditioning) are not creaky, wonky, leaky or otherwise dysfunctional – and if you’ve done any major home improvements or replaced any appliances or systems lately, market that fact to show off the move-in readiness of the place.

#4: Just enough market exposure.  If your home is so lucky as to get an offer the first day or so on the market, count your blessings. But also calculate your opportunity costs: many buyers can’t get out to see homes that quickly – some are unable to house hunt except on the weekends! In my local markets, I’ve seen time and time again that listing agents who are skilled in cultivating multiple offers often plan from the jump to allow the home to be exposed to the market long enough for all qualified and interested buyers to see it and get their offers on the table.

And what’s more, they expressly message the calendar for market exposure, Open Houses and even the offer date and review timeline in the listing, from the very beginning. Here, it’s very common to see a listing come on the market with a calendar of 1-2 Open Houses and an offer date sometime early in the week following the second one. Ask your agent to brief you on the standard practices for market exposure in your local area.

Allowing for ample market exposure – and including the timeline in the listing – lets buyers know that they will be able to get to the property and get their offers considered, and creates some urgency, as well.  Smart buyers interested in properties like this will take care to have their agents contact the listing agent as soon as they think they may want to submit an offer, though; this way, if someone makes a so-called ‘pre-emptive’ offer, you’ll get a call from the listing agent and a chance to compete.

#5:  Sellers who are willing to revise.  If you think most of the tips here are not for you because you’ve already blown your chance to sell for more than asking – think again! A number of times, I’ve witnessed what I call the Sweet Spot Phenomenon, where an overpriced home sits on the market for months with no bites, sometimes even through multiple price reductions. Finally, the seller lowers the price to the ‘sweet spot,’ and it generates multiple offers and sells for more than the final list price.

There are definitely homes whose sellers net more than they expected because they were willing to revise the list price downward in response to market feedback (i.e., no showings, no offers or lowball offers).  

If your home’s been lagging on the market, talk with your listing agent about what sort of price reduction strategy is likely to maximize your net sale price. Hint: many more buyers are attracted by chunky reductions or reductions below a common online search price point limit than by tiny, incremental reductions. For example, you might draw more flies buyers, and ultimately more money, with the honey of a price reduction from $499,000 to $474,000 than with a series of small reductions from $499,000 to $479,000, because there is a set of buyers who may be cutting their search off at $475,000 – so a price cut below that point will expose your home to a whole new group of prospects.

For information about financing or the economy, please contact me at Bill@billnickerson.com   or  978-273-3227

Short Sale vs. Foreclosure

The KCM blog publishes news and information daily about the real estate market.  It’s a great source of what is the hot topic at the moment.  In their blog today, they talk about the Short Sale versus Foreclosure.  The information gives the consumer a better idea of what each of these processes entails.

KCM Blog:  Short Sale vs. Foreclosure – 10 Common Myths Busted

It’s likely you’ve heard the term “short sale” thrown around quite a bit. But what, exactly, is a short sale?

A short sale is when a bank agrees to accept less than the total amount owed on a mortgage to avoid having to foreclose on the property. This is not a new practice; banks have been doing short sales for years. Only recently, due to the current state of the housing market and economy, has this process become a part of the public consciousness.  Click here to read the full article:  Short Sale vs. Foreclosure – 10 Common Myths

Truth in Lending

The History:  The Consumer Credit Protection Act, more commonly known as the Truth-in-Lending Act, went into effect in 1968. The law is intended to protect borrowers from predatory lending by requiring lenders to fully disclose all costs associated with securing a mortgage loan.

Prior to the implementation of the act, borrowers routinely were paying considerably more than what had been initially advertised or agreed upon in the beginning stages of the loan process. Now, lenders must provide the potential borrower with an approximate cost, not only in dollars but percentage terms within a specified period of time prior to the application. Then, the exact costs and interest rate must be provided to the borrower, according to the law, at least, one full business day prior to the closing, in a document known as The Uniform Settlement Statement. This document provides relevant data clearly and consistently laid out, regarding finance charges, the total amount of each payment, the number of monthly payments over the life of the loan, as well as other pertinent financial information to help the borrower understand and manage the loan.

Also notable, a borrower who has applied for an equity loan, refinance of primary home, or a second mortgage has the option to back out of the loan agreement, if he or she does so within three days. However, the rescission option is not applicable for a single home loan, to initially purchase a home.¹

Truth in Lending Today:

The Truth in Lending/ TIL discloses information to address the following items; calculate the Annual Percentage Rate, show the prepaid charges, show the overall finance charge of the mortgage, the amount financed, total payments, a payment schedule, discloses if there is a prepayment penalty, and discusses how the late fee will work.

The Truth in Lending is to give a fair and accurate cost by taking the interest rate, loan term, mortgage insurance, if any, closing costs and producing the Annual Percentage Rate which is the rate to compare all other mortgages to. By taking all these items into consideration, this will produce an average rate assuming all of these factors; otherwise known as the Annual Percentage Rate or APR.  This rate will allow you to shop and compare to all other mortgage offers and programs.

There have been some recent minor changes in the law regarding Truth in Lending known as the Mortgage Disclosure Improvement Act (MDIA).  And these guidelines are continuing to change often.  To find out more details about what the law is saying today please go to this link  http://www.dfi.wa.gov/cs/pdf/mdia-notice.pdf   If you still have questions, please contact me at bill@billnickerson.com

¹ http://www.mortgage101.com/article/what-is-truth-in-lending-act

Featured Open House Recipe

Occasionally I am asked by a realtor to sponsor a luncheon for their open house.  I have found that by making something special for the luncheon, the realtors slow down and take a moment to truly enjoy the lunch which tends to promote more conversation about the home they are viewing.  I greatly enjoy these interactions that occur.  This last week for the luncheon I made Quiche.  Check out my recipe below…Hope you enjoy it!

Bill’s Quiche

Prep time: 30-45 minutes         Serves:  6-8

Ingredients:

1/3 lb. Prosciutto (from any deli ask for ¼ inch thick slice), diced

½ Onion(I prefer Vidalia), diced

5 Eggs, large

1 ½ C Whole milk (Healthy version)

2 ½ oz. Extra Sharp Cheddar, shredded

2 ½ oz. Mild cheddar, shredded

¼ C Parmesan cheese, grated

¼ C Marsala wine

½ C Butter, plus an extra ¼ inch slice

One 9-inch pie crust

In advance:                                                                                                                Preheat oven to 350 degrees.                                                                                        Have all ingredients ready on counter.  Shred cheeses, dice meat and onion.      Remove pie crust from package and drape the crust over a 9 inch pie plate.

In medium sized saute pan, melt butter over medium heat.  Add diced onions; turning occasionally.  Once onions begin to brown; add diced prosciutto and continue browning about 2 to 4 minutes.  Then add Marsala wine and ¼ inch slice butter.  Lower heat and simmer; slowly cook until all Marsala wine has been cooked off (so liquid is mostly gone).

While the onions and prosciutto are cooking, prepare the pie plate by shaping the crust to fit into the plate.  Cover the bottom of the pie plate with extra sharp cheese only.  In a separate dish, whisk 5 eggs until blended;  then pour into whole milk. (I use a large 4 cup measuring cup to save on dishes).

Drain prosciutto and onions in a colander; then spread evenly over the cheese in the pie crust. Pour the egg/milk mixture over prosciutto and onions.  Spread the mild shredded cheddar evenly over the egg/milk mixture.  Sprinkle Parmesan cheese over the top.

Place into oven and bake 30 minutes.  Using a thermometer, you want the pie to be at least 175 degrees and for the crust to be slightly brown.  When done remove from oven and allow to cool for about 15 minutes before serving.  Enjoy!

Home Ownership….It’s still an American Dream

Every so often I come across information from other sources that I feel is relevant to what is going on in the economy in our area.  Today I want to share a great resource: the KCM blog.  In my opinion, their blog post today reaffirms that now is a great time to buy a home!

Source:   KCM blog:  National Housing Survey 2012  by The KCM Crew on April 4, 2012

Each quarter, Fannie Mae releases their National Housing Survey. They survey the American public on a multitude of questions concerning today’s housing market. We like to pull out some of the findings we deem most interesting each time it is released. Here they are for the most recent report:

84% of the general population believes that owning a home makes more sense than renting.

The Most Important Reasons to Buy a Home

When we talk about homeownership today, it seems that the financial aspects always jump to the front of the discussion. However, the study shows that the four major reasons a person buys a home have nothing to do with money. The top four reasons, in order, are:

1. It means having a good place to raise children and provide them with a good education
2. You have a physical structure where you and your family feel safe
3. It allows you to have more space for your family
4. It gives you control of what you do with your living space (renovations and updates)

The Home as an Investment

Though most people purchase a home for non-financial reasons, everyone realizes there is a money component to homeownership. Here is what they said on this issue:

• 63% of the general population believes that homeownership is a ‘safe’ investment.
• 53% believe that homeownership has more potential as an investment than any other traditional asset class.

Rent vs. Buy

We are always interested in the difference people see in renting vs. owning.

• 64% of renters have aspirations to someday own their own home
• 70% of renters think that owning is superior to renting

Bottom Line

Our belief in the value of homeownership grows each time this survey is released.

Do’s and Don’ts of Septic System Care

I recently wrote about Understanding Title V in my blog.  Today, let’s talk about caring for your septic system.  Septic systems must be maintained regularly to stay working.  Any type of neglect or abuse can cause harm to you and others as well as to the environment.  Here are some simple maintenance guidelines to follow.

DO have your tank pumped out and system inspected every 3 to 5 years by a licensed septic contractor. If the tank fills up with an excess of solids, the wastewater will not have enough time to settle in the tank.  The excess solids can then pass into the leach field and clog you drain.  You can find one listed in the yellow pages under Septic Tanks & Systems-cleaning.

DO keep a record of pumping, inspections, and other maintenance. Use a file folder to hold all records and receipts of maintenance.

DO know the location of your septic system and drain field. Keep a sketch of it handy for service visits.

DO practice water conservation. Repair dripping faucets and leaking toilets, run washing machines and dishwashers only when full, avoid long showers, and use water-saving features in faucets, shower heads and toilets.

DO divert roof drains and surface water from driveways and hillsides away from the septic system. Keep sump pumps and house footing drains away from the septic system as well.

DO take leftover hazardous household chemicals to your approved hazardous waste collection center for disposal. Use bleach, disinfectants, and drain and toilet bowl cleaners sparingly and in accordance with product labels.

DO use only septic system additives that have been allowed for usage in Massachusetts by MassDEP.  http://www.mass.gov/dep/water/wastewater/addallwd.htm

DON’T perform excessive laundry loads with your washing machine. Doing load after load does not allow your septic tank time to adequately treat wastes and overwhelms the entire system with excess waste water.   Consult a tank professional to determine how many loads of laundry you can do in a row to keep your tank operating properly.

DON’T use a garbage grinder/disposal, which feeds into the septic tank.  By adding food waste, you decrease your system’s capacity and increase your need to have the tank pumped more often.  If you have a garbage disposal severely limit its use.

DON’T allow anyone to drive or park over any part of the system. The area over the drainfield should be left undisturbed with only a mowed grass cover

DON’T make or allow repairs to your septic system without obtaining the required health department permit. Use professional licensed contractors when needed.

DON’T use commercial septic tank additives. These products do not help and some may hurt your system in the long run.

DON’T use your toilet as a trash can by dumping non-biodegradables down your toilet or drains. Non-biodegradables can clog the pipes.  Grease can also thicken and clog the pipes. Store cooking oils, fats, and grease in a can for disposal in the garbage.

NON-BIODEGRADABLES include:  grease, disposable diapers, plastics, etc.

DON’T poison your septic system and the groundwater by pouring harmful chemicals down the drain. They can kill the beneficial bacteria that treat your wastewater. Keep the following materials out of your system:

POISONS include:  gasoline, oil, paint, paint thinner, pesticides, antifreeze, etc.

And be alert to these warning signs of a failing system:

• sewage surfacing over the drainfield (especially after storms)
• sewage back-ups in the house
• lush, green growth over the drainfield
• slow draining toilets or drains
• sewage odors

Sources:  http://www.mass.gov/dep/water/wastewater/septicsy.htm#care, http://www.marealtor.com/content/title_5.htm

6 Mistakes Sellers Should Avoid

Spring is here!!  It’s a perfect time to make your move to downsize or upgrade.  If you’re considering selling your home, now is a great time to get your home on the market.  And with so many homes on the market for sale, the seller needs to make their home stand out above the rest.   Here are a few suggestions to get buyers interested in your home.

Turnoff mistake #1 – No listing photos

Many buyers browse listings online before deciding to view a home in person.  Great photos showing your home will draw more showings to your home.  Hire a professional photographer if possible.

Turnoff mistake #2 – Unrealistic Pricing

It’s very tempting to list your property at the highest price possible with the intention of lowering it if there’s no buyer interest in the home.  By pricing your home competitively from the start, you will get the most traffic and the quick sale close to your asking price.

Turnoff mistake #3 – Misleading Listing Info

Describing your home accurately allows the right type buyer to look at your home.  Say it’s a ready to move in home when in reality it’s a fixer up sends the message to home buyer that you aren’t trustworthy leading to loss of sale.

Turnoff mistake #4 – Botched Home Improvements

Think a fresh coat of paint will be great to sell your home? Before investing in pre-sale remodeling or painting, find out from your Realtor what type improvements/colors will give you a better chance at a sale.  The wrong choices could be a disaster to your hopes for a quick sale.

Turnoff mistake #5 – Dirty or Cluttered Interiors

Removing clutter and keeping the house clean sends the buyer a strong message; this home has regular necessary maintenance done to it. It also makes the home look more spacious, giving the buyer the chance to visualize the home with their own furnishings.

Turnoff mistake #6 – Hovering Homeowners

A fast way to send buyers running is for the homeowner to be present during a showing.  Buyers want to be left alone to view your home.  And the longer a buyer stays, the better chance of a sale.

10 Things to Remove Before Listing Your Home

Your home is your castle.  The furnishings, accessories, family photos, even the colors of your walls are all reflections of YOU!  When you decide to sell your home, you must take a step back and evaluate what your home will look like to potential buyers.  Most buyers can not see past the red walls, green carpet, personal items:  family photos, books, clutter….  There are some simple steps that you can take to make your home appear neutral…as in the buyer can visualize their belongings in your space.                                                             Please check out this post at Cathy’s Real Estate blog;

Septic Systems: Understanding Title V

If you are not from New England, where it all began…you may not be familiar with Title V Regulation, Septic Tanks, Tight Tanks, Leaching Fields and so on.  ‘Homes that are not connected to a sewer system use septic systems or cesspools, both of which are regulated by the state Department of Environmental Protection (DEP) and local boards of health.’¹

Originating back to France this technology developed by John Mouras was brought to the new country as early as 1883 and used in many towns and cities. ² Most homes in New England that were built in the 1600 and 1700’s were farms, cabins, single family homes in the middle of nowhere and most people would have an outhouse of some form.  In Cities, homes were able to hook up to public sewer systems.  In the late 1800’s rural communities did not have the luxury of hooking up to public water and sewer because of their location  so they relied on a private well for water and some form of a private septic system for disposal of waste.  The most effective private system providing you have the acreage is the septic system that carries the waste away from the home in the form of a leaching field.  The waste comes from the home via a PVC pipe and is delivered to a Distribution Box/Tank (D-Box), from here, the solids will settle to the bottom of the tank and the scum and liquids float to the top.  The liquids are then channeled away from the D-Box into long perforated PVC pipes.  Depending upon the design,  a typical trench system can use drainage pipes as long as 100 feet.  The length of the pipes is a direct correlation of how fast the leaching field will drain as well as how many bedrooms the system can handle.  The liquid waste and lighter material is carried along these pipes and then dispersed along these holes to another drainage system of sand and rock.  As this is biodegradable material, it will continue to break down, some will go back into the ground water, feed vegetation such as  the plants or lawn.   In homes that have no land or are built on a ledge or near bodies of water, a “tight” Tank may be installed.  This is exactly that, a tank, everything from toothpaste, soaps and detergents as well as waste is contained.  Once this gets filled up, it must be emptied of all its contents.

In today’s housing market, before selling your home, you must have your septic system tested by a licensed Title V inspector (The Title 5 regulation, 310 CMR 15.00)³.  They will inspect the system to make sure it has proper drainage, all the parts in are intact and the soil in and around the system remains solid.  A good system can last 20 plus years and can be repaired and updated as anything else in your home.  To maintain your system and to have it pumped regularly will extend the life of the system.

Now, if for any reason your system fails this inspection, you may have a very costly project.  Typically they fail because the land and soil are no longer breaking down the waste and it will no longer drain.  A new system can be designed and built in some cases in the same location but in many will be moved to another location of the property.  An Engineer and Board of Health will determine where the system can go and must adhere to local and state guidelines.  A new system can be as little as $10,000 and up to $40,000.  In a traditional sale of a home where a buyer obtains a mortgage, you cannot convey title (sell your home) until this system has a passing grade.  However, there are mortgage solutions for this type issue that allow for holdbacks and special financing options to cover the costs of the repairs or new system.

 Please email Bill for more information.   bill@billnickerson.com

¹ Massachusetts Association of Realtors. Title 5. http://www.marealtor.com/content/title_5.htm

² http://www.newtechbio.com/articles/history_of_the_septic_system.htm

³ http://www.mass.gov/dep/water/wastewater/buysell.htm

15 Interior Painting Tips and Techniques

It’s the spring market season.  A great time to spruce up your house before putting it on the market.  A fresh coat of paint is inexpensive and can transform a room from so-so to WOW!  I’ve painted many rooms and houses over the years; Here are a few tips that I have learned to help make your next painting project go quickly and easily!

1.  Use canvas drop clothes instead of cotton or plastic.  For an additional buffer to the canvas, you can put plastic under it.

2.  Clean dirty surfaces (walls, ceiling, and window sills) with a TSP spray solution so paint can form a strong bond.

3.  Fill any holes or imperfections with Spackle, wait for it to dry, and then lightly sand the patches.  Also scrape any peeling chipping paint.

4.  Stir your paint before you begin, and don’t paint straight from the can.  Mix several cans of paint together in a 5 gallon bucket for consistent paint color.

5.  Remove hardware, fixtures, closet doors.  Anything that might get in your way of painting.

6.  Taping is optional, especially if you have a reasonably steady hand. Using an angle brush, start slightly away from the edge and then curve in to meet it. This will help you avoid leaving a big blob of paint where you begin.

7.  Use a plastic grocery type bag (check for holes) to put your wet roller into for short term storage.  Wrap the bag around the roller (to create a seal) making sure all air is removed from inside the bag.

8.  Paint the ceiling first.  Whether you paint the walls or the trim next is up to you.  My preference is to paint the trim first because I find that I can get a cleaner line when I cut in to paint the walls. If you like to tape off your edges, you may find it easier to paint the trim last.

9. Use a good quality roller cover. Cheap ones leave a messy edge and can shed little fuzzies all over.  I use a fresh cover for each paint job versus cleaning it.  Cleaning a roller is time consuming and all that paint residue going into the water isn’t good for the environment.

10.  Use a good quality brush. I like a 2.5″ angle brush for most projects.  Any bigger and it’s too tough to have a good grip on the brush for painting.

11.  Only dip your brush about a half or quarter of an inch into the paint, then wipe off one side on the edge of the paint container. This will help you avoid paint runs (from using too much) and keep your brush in good condition.

12. Keep a wet edge, and always paint from dry to wet. This will minimize brush strokes and roller marks.

13.  Paint in long, continuous strokes. Not doing so is one of the most common mistakes.

14. When painting with a roller, aim for covering a three foot wide section at a time. Working from top to bottom.

15.  Put on a second coat. Your paint job may look OK after just one, but it will look better after two. If you’re using a dark or vivid color, you may even need three (or more) coats.

With a little prep and practice, painting a room is an easy, inexpensive DIY project and you can do it!

For more information about this topic or others, please email me at bill@billnickerson.com