Spring Has Sprung

Posted: 22 Mar 2012 04:00 AM PDT

 

Here comes Spring, historically the time of year when buyers awake from the winter slumber of the holidays and snowfall, and go on their pilgrimage to look for new housing. Houses look better in Spring with green grass, blooming trees, and flowers.

Plus, buyers who find a home in the next 60 days can close after the school year ends and enjoy the summer months in their new backyards. It’s almost a rite of passage; baseball teams go to spring training, buyers go look at homes, and the birds fly back north.

But this Spring is different than those of recent memory…

• Because of the warm weather we experienced here in the Northeast for most of this past winter buyers have been out for months – making offers and buying homes.
• Many sellers have finally come to understand that they need to have a compelling price on their home to attract buyers. The days of listing your home and negotiating down are over because there are homes on the market already priced correctly, and those are the homes that buyers are going to. The overpriced inventory doesn’t even get their chance to negotiate down.
• Rates have ticked up as economic news (like unemployment numbers) has improved. That, coupled with rising mortgage insurance premiums and guarantee fees, seems to have given some sense of urgency to buyers.
• The looming shadow inventory, which most certainly will keep downward pressure on home prices (when added to easier short sale approvals), has tended to encourage home sellers to be more realistic in their expectations.
• The abundance of information available to consumers has further increased their need for sound advice from top-notch real estate and mortgage professionals. The cream is certainly rising to the top in those professions.

Low interest rates, a tremendous selection to choose from, and the seasonality of it all makes for an exciting next 60-90 days. My advice to anyone looking to buy or sell is that waiting to be aggressive could be a fatal mistake if you hope to find the best deal. From my experience, the best deals come when more people are competing for them…and that time is NOW!

I’m sorry. I’m sorry that I wrote a very sarcastic, not professional blog post this morning about why you should use a Realtor to sell your house. You see I was very busy this morning with a million things I needed to get done, I was over my head in paper work, I had a closing get rescheduled, I was mad at myself for publicly saying I’d write a blog on why to use a Realtor (because I know I’m too busy) and to be honest I was crabby that I should have to defend my profession. Now that I’ve reread my post, I know that I owe all of you an apology. I shouldn’t take my frustrations out on anyone, I should be happy to defend & promote my profession and its a legitimate question!

Just because I believe in my profession doesn’t mean that everyone does. It also doesn’t guarantee that everyone knows or understands what I do for my clients. So now I’ve consulted the world-wide web and am going to give you a more dignified view of why you should use a Realtor to sell your home!

For Sale By Owner (FSBO) Statistics (from Realtor.org)

• FSBOs accounted for only 10% of home sales in 2011.
• The typical FSBO home sold for $150,000 compared to $215,000 for agent-assisted home sales.

FSBO Methods Used to Market Home:

• Yard sign . . . . . . . . . . 44%
• Listing on Internet . . . 33%
• Friends/neighbors . . . .27%
• Open house . . . . . . . .19%
• Newspaper ad . . . . .  17%
• For-sale-by-owner Web site . .12%

Most Difficult Tasks for FSBO Sellers:

• Getting the right price . . . 12%
• Understanding and performing paperwork: 11%
• Having enough time to devote to all aspects of the sale: 6%
• Preparing/fixing up home for sale: 5%
• Selling within the planned length of time: 5%

Reasons to Use a Realtor to Sell Your Home (from Realtor.com)

When the time comes to sell your home, it seems like your To Do list is a mile long. The house has to be immaculate inside and out, the hoards of potential buyers are beating on your door, and the legal and financial details of the home sale process loom. Don’t be tempted to handle this situation by yourself; instead, make your life infinitely easier and use a Realtor to help you sell your home.

The lure of saving money is a strong one. Most Realtors charge between 5% and 7% on commission. As the seller, this comes out of your proceeds at closing. I know you’re doing the math right now, and thinking that there’s no way that using a Realtor is worth anywhere near this much money. However, it truly is worth every penny; here are the top 3 reasons why you should use a Realtor when selling your home.

1. The Security of Your Family and Home

You cannot put a value on the security of your family and home. You want your family to be safe in your home without having to worry. But remember when I mentioned the hoards of potential buyers for your home? If you sell your home yourself, you have to meet with each one of these buyers by yourself. The problem is you never know who these people really are. It’s horrific to consider, but it has happened where people have gone to a home on the premise of looking to purchase it and instead have committed a crime.

When you use a Realtor, you don’t have to meet with the potential buyers and thus expose yourself and your family to possible harm. Instead, each person that enters your home is accompanied by a licensed Realtor. This helps you twofold. First, because the person is in your home with a Realtor, you and your family don’t need to be there. This mitigates the risk of someone harming you while in your home. Secondly, the chance of someone committing a crime against your property, either through theft or vandalism, is drastically reduced by their Realtor being present.

2. The Value of Your Time

Let’s backup for the moment to a point I mentioned previously – the hassle of dealing with potential buyers. When you sell your home yourself, you’re the sole contact with potential buyers. If someone wants information, they contact you. This means your phone will be ringing constantly. And you can’t just ignore these calls; if you do, your house will take even longer to sell.

Even better – remember the part about keeping your house immaculate? When you sell your home yourself, this has to be true 100% of the time. People can and will pull up outside your home and demand to look inside at any time of the day or night. If you ask them to come back at a more convenient time, you could easily lose a sale.

But by using a Realtor, this hassle is saved and your time is reaffirmed to be as valuable as you and I both know that it is. Your Realtor handles all the phone calls, and is specially trained in how to answer these calls professionally without compromising the sale of your home. And your Realtor coordinates the showings with other Realtors, leaving you with specific times for the showings. This will allow you to relax and enjoy the time you have remaining in your home.

3. The Value of Peace of Mind for the Future

Selling a home is a complicated legal and financial prospect. Sure, you can buy generic forms to fill out for the Purchase Agreement and everything else needed. But what assurance do you have that they’re filled out in a way that protects you for the future? After all, you certainly don’t want to deal with a lawsuit five years from now with your buyer saying that you made an error in the paperwork on the transaction.

When you hire a Realtor, they shoulder this burden. Realtors are required to carry what’s known as Errors & Omissions insurance. This insurance protects you from such little errors. If there’s a problem, the insurance company is who works to resolve the situation, not you.

So don’t succumb to the lure of saving the commission money. Hiring a Realtor is the absolute best thing you can do as you prepare to sell your home.

Yesterday morning I had a FSBO (for sale by owner) ask me “…why would I use a Realtor? I talked to a lawyer & he said he could do it for $500.” It’s a great question and I’ll admit he caught me a little off guard. After all… can I really justify the difference between $500 and $20,000? So I started thinking about what I do for a living, why people use Realtors and if I can justify my occupation. So I said I’d write a blog about it… here goes!

Let’s start with a couple of quick analogies before I get into the hardcore facts… The majority of people wouldn’t let someone off the street “doctor” their child when they’re sick, they take them to a pediatrician (a doctor who specializes in children). Most people would consult a dentist to have a tooth pulled  or see a dental surgeon for a root canal and not just have a friend do it. The same theories apply to real estate, yes you can sell/buy a home yourself with some minimal help or you can consult a professional, who specializes in real estate. Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney?

Real estate is my full-time job. It’s what I think about all day and frankly all night. I read about it, I go to classes on it, I had to pass a test & keep up a license to do it, I’m held to a set of ethics regarding it, I deal with buyers and sellers every day, I could go on for hours about how all-encompassing the real estate world is in my life. But the best part is that I love it. I love what I do and I love my clients (99.9% of them anyway!) and many of them have become lifelong friends. Real estate is what I do, it’s all I do. I specialize in real estate. Now let’s get down to the nitty-gritty…

Pricing – I know, I know… FSBOs know exactly what homes have sold for in the area, what properties they’ll be competing with, that their property is always better and the perfect price they should ask for the property. Did I mention this information changes weekly?

Marketing – as a FSBO do you have the time or the access to put your property on over 200 websites. Oh and don’t forget if you decide to change the price, have an open house, take more pictures, do a video, get it sold, change the terms, offer a promotion – you’ll need to go into each of those websites and change the listing information. Don’t forget you’ll need to create brochures & buy a brochure box to put by your for sale sign, start with 20, but in the first week you should plan on 20 per day and then when it rains you’ll need new ones and any time you change anything you’ll need new ones…  Back to for sale signs, make sure you have a big enough one  in your yard that it can be easily seen and you should probably put something on every corner leading to your property too. Make sure your personal cell phone is on the sign, buyers want immediate information and you’ll need to be available 24/7 to answer all of their questions and show them your property on a moments notice. Oooh and don’t forget to buy lots of print advertising for your house, your open houses, etc.

Security – now here is one item most FSBOs don’t think about when selling on their own. How comfortable are you with showing your property at 8pm to the complete stranger who just called 5 minutes ago, is sitting outside and really wants to see your house right now. Do you know anything about them? Or let’s say you’re lucky enough to spend your Saturday afternoon having an open house and people actually show up… are you ready to follow them around your house & watch them open your closets & look in your cabinets? Have you thought about the fact that your personal cell phone number is now publicly advertised on a street sign, all over the internet and in print?

Negotiation – so you have your pride & joy home for sale by owner, a nice young couple pulls into your driveway, knocks on the door & asks to see your home, you graciously show it to them even though you’ve had no notice & you’re in the middle of supper and the bathrooms aren’t picked up and woohoo! they love it! It’s exactly what they want for their first home. Perfect you think, this is soooo easy! Then the nice young man offers you $50,000 less than asking price… what? I thought it was perfect and you wanted it you say. Well yes he says but the carpets are worn, we don’t like your paint colors, the bathrooms need remodeled, we’d like granite counter tops and its way over what we can spend, we figured since its FSBO you’d take less. Still think you want to do this on your own? Keep reading.

Follow up – make sure you set aside time every week to call back everyone that called on the sign, all the email inquiries and especially to everyone that has stopped in to see the home. I find that it usually takes 5-7 calls/emails before you get a real response so don’t lose faith, keep trying! Ok, so you finally have someone who actually wants to buy the home, you’ve spent 4 days haggling over price and finally have an agreement on price & when you’ll close. Ok great, now what… well now you need a contract for both you and the buyer to sign, as a seller in Iowa you need to fill out a seller disclosure and possibly a lead based paint disclosure, you need to get your abstract updated… that should do it for now. As Realtors we usually say a minimum of 30 days is needed to close but as a FSBO you better go 60 days since everyone involved will be new to what they are doing.

Financing/Re-negotiation – Super! You’re a couple of weeks into the deal and you are soooo happy you’ve saved all this money, I mean really this  is so easy! Then the buyer calls and they want to bring their parents and a home inspector to see the house. What? A home inspector? You didn’t agree to that! Well the buyers just assumed you knew that everyone has a home inspection and their parents are in town for the weekend and really want to see the house so you’ll need to be out of the house for about 4 hours tomorrow. It’s a little bit of a hassle but you let them do the inspection,  after all your house is in great shape. Then you get the call Monday morning… well the inspector says the roof only has a few years left, there’s some windows that are bad and it looks like you’ve had water in the basement, oh & her parents think they paid way too much for a house with a furnace & a/c that’s 20 years old. Better yet, the buyers didn’t know what to do so they gave a copy of the inspection to their banker who turned it in to the underwriter who now is requiring a full roofing inspection, a quote on replacing the windows and want a physical engineer to check the stability of the basement before they approve the loan. But this could all be avoided if you’d just take $30,000 less for the house or repair all of those items before closing. I’m not even going to go into all of the items & problems that can come up with a title opinion, that needs its own blog post.

Closing – Congratulations! You’ve finally made it to the week of closing! I’m sure by now you’ve had a deed created, you’ve filled out a Ground Water Hazard form and a declaration of value, you’ve scheduled the actual closing with the buyers, the lawyer and yourself. Don’t forget to bring the updated abstract. Whatever you do make sure the buyers have clear to close from their lender, and a cashier’s check for the exact amount you got from your lender two weeks prior to closing but give yourself at least two weeks extra on the interest since you’ll need to overnight the proceeds to your lender and then they’ll have to process it.

Well I know that I sound very snotty about all this. I didn’t even go into all of the benefits this is just what spewed off the top of my head for now. I’ll try to do another post that’s more upbeat & truly shows the benefits of using a Realtor this week. But until you’ve had a transaction go badly I’m not sure you can truly appreciate what a Realtor does day in and day out. More importantly if you’ve had a transaction go perfectly with no problems at all that seemed so easy, then you can rest assured there was a Realtor behind the scenes taking care of all these things, crossing the t’s and dotting the i’s.

So I guess my answer is… You certainly can sell your property on your own, but why on earth would you want to?

Warren Buffett: It’s Time to Buy Real Estate

Posted: 29 Feb 2012 04:00 AM PST

It’s promotion time – time to be busier than ever! Here’s a recap of my new promotions for you to take advantage of … but don’t wait, they won’t last forever!

#1) List your home for sale with me by Feb 29th and you’ll get a free home warranty to give to a buyer. ($450 value)

#2) I created 4 new Facebook ads that will run along the right side of your page. Let me know when you see my ad & if you like it (click or scan if you’d like too!) and you’ll get an entry (each time) into a drawing for a $50 gift certificate. Offer ends next Friday, Feb 24th.

#3) I love referrals! Refer a buyer or seller to me between now & March 31st and  you’ll be entered into a grand prize drawing (still a surprise!) and I’ll buy you lunch! It’s a win-win. They don’t have to buy or sell yet, just refer them to me & let me to the work! Oh and you can refer multiple buyers & sellers – you’ll get multiple entries & multiple lunches!

#4) HOT! Properties! You’ll see special deals on a few of our listings each week… these deals won’t last, the properties will change weekly and you’ll need to move fast. If you’re not interested its ok, but feel free to pass the information on to family & friends. Current HOT! Properties are 21001-290th St. Hubbard, 340 Grand, Story City and 45 Latrobe, Mc Callsburg… get an accepted offer on one of these properties by Monday, February 20th and you’ll get a $250 gift card of choice.

#5) Open Houses- it’s that time of year again, open house time. Traditionally opens aren’t well attended in our area so we are going to make some major changes. You’ll WANT to attend! There will be gift cards, drawings, special offers, grand prizes…stay tuned for locations, dates & times.

#6) “Like” Brandi Nelson Real Estate… get one entry, follow @brandinelson get one entry or subscribe to my blog Me vs The Market and get two entries into a $50 gift card drawing on March 17th (yep St. Patrick’s Day!)

#7) Random drawings & give aways – past & current clients, Facebook friends, twitter followers & blog subscribers may be pleasantly surprised at any time by a few random drawings & give aways!

Disclaimer time: As always some limitations and rules do apply. Family and friends ARE eligible to win. I reserve the right to offer more promotions during this time and make any or all prizes even bigger & better. Call for any details you think you are missing out on!