Setting The Price Of Your Home To Sell

I think it is that time again to write about the topic of what you should be using to determine the price of  your home, and what kind of pricing options you have !! This is extremely important because the more homes that go onto the market, the more competition you will have, you want to make sure your listing stands out and gets sold before we have another sudden rush of new inventory ! 

How Real Estate Agents Determine The Value Of Your Home 

All real estate agents should be bringing a Comparative Market Analysis of your home when they come to meet with you to list your home.  Real Estate Agents use a similar system to what the banks will be using to determine your value these are the main characteristics in importance order that you will want to be using.  

• Homes within 1-2 miles of your home that recently sold within the past 90-120 days.
• Homes of the same style (EX: Ranch, Hi Ranch, Cape, Expanded Cape) or similar square footage if there is a lack of comparable style homes.  You can not compare your home to one of an opposite style just because you think your home is just as good, the bank won't allow it.  
• Rarely will you see homes with the exact same amount of bedrooms, baths, or even property size this is where you need to adjust the comps accordingly.
• Take a look at what homes are currently on the market, and compare how your home stacks up to theirs, these homes are your competition.  

In my opinion, if you meet with an agent and they do not bring with them a Comparative Market Analysis than they are not putting in very much effort to help you sell your home since determining the price of your home is really the very first step before listing it.  I always say my job is not to list your home, but to get your home sold ! 

The 3 Styles Of Pricing Your Home 

• Overpriced Home - This type of pricing is not only a waste of your agents time but yours as well.  You are putting yourself behind and unnecessary roadblock, and guaranteeing you will be having the dreaded price adjustment talk sooner than later.  Many homeowners will say "But I am flexible, just bring me an offer!" - There is only one problem with that, and it is that we can not relay that to all of those buyers who aren't a- looking at homes $20,000 above their budget or b- tell those buyers who are in that range that you are flexible.  Remember most buyers find their home online, so presentation including price is a very important factor and we can not write on your listings that you are willing to hear all offers ! 

• Market Priced Home - This is an educated homeowner who has taken the time, and hopefully the advice of their real estate agent and is priced in the same area of those comparable of the recently sold homes.  This kind of pricing will get you showings, and hopefully an offer within 6 months of being listed.  As other homes sell their might be a need to adjust the price of your home to stay in line with what homes went from contract to sold once you were listed.

• Action Priced Home -  Before I explain, let me say this action price does NOT mean pricing the home as if you were giving it away.  When you use this style of pricing you first base it on the comparable homes in the area that sold, but your focus is shifted to those homes that are currently on the market (those that are priced at market value, not of those that are overpriced).  You look at your direct competition and price it anywhere from $8000 - $10,000 below that of your best competition.   Normally on a market priced home once you have received an offer that $8000 - $10,000 is the wiggle room of where you would accept an offer.  What you do by pricing it that bit lower is your drive much more traffic and increase your chance of multiple offers, almost every home that is "action priced" will sell for either the listed price of the home, or possibly more because you have increased the buyers perception of value !   

There are a few things you will also want to keep in mind when you are thinking about where you want to price your home.  The most important questions you should be thinking of when determining the list price of your home are 

1. How much will you need to be able to walk away from your home after the mortgage payoff, brokerage fees, attorneys fees, title transfer fees. If after you total these things up if what you would need to list it for is significantly higher than what your home is worth it is always better to leave it off the market until your in a position to sell rather than have it listed and sit on the market making buyers wonder once wrong with it.  The exception to this is when you are avoiding foreclosure by doing a short sale.  
2. How quickly do you need or want to move ? If you want to move quickly than your best option is to really have your home priced at the "action priced" point so that you can move things along without any delay and a guaranteed end in sight ! 
3. How many times has your home been listed, if your home did not sell chances are it was overpriced which means at the very least you must get in-line with the current market value of your home.  Re-listing it at the inflated price again is working against yourself and buyers will begin to disregard your home because "there must be something wrong with it", and not even the best agent can overcome that ! 

If you are interested in having a Comparative Market Analysis done on your home, please contact me directly.  I will be writing another blog that goes into the specifics between things that will add value to your home verse things that are more features of your home, which can affect the overall listing price of your home in an upcoming blog ! 

                                                                                      

What You Should Look At Before Extending Your Listing !

If your home has been on the market throughout the spring and summer the listing is likely to expire soon, but it may not be in your best interest to pull it off the market just yet.  Now I am not saying to stick with the broker that your using in order to keep it on the market if your not happy with your broker or you want to interview others than by all means do so.  

Anytime I take a listing that will be on the market during the fall/winter season I always let my clients know that business does not stop during these months but you will see less activity.  This is actually better for homeowners, you may not have the quantity of buyers but you will have a better quality of buyers.  If someone is out in snow and cold weather you can bet that they are serious buyers, they aren't just out in the cold for no reason.

Now if you listed during the "busy" season, take into consideration how hard did your broker work for you while he/she had your listing?

• Did you recieve feedback after your home was shown ? It is not always easy to get feedback from other Realtors or Buyers but it is our job to get it for you, a week is more than enough time for your Realtor to inform you of what they thought of the home.   

• How often did you review your market position ? The spring and summer months provide alot of inventory for buyers to choose from so keeping on top of your market is very important.  How often did you and your Realtor discuss your homes position compared to others that were on the market, and those that had come off ? 

• How many open houses did they do, and what was the status of those buyers ? Each Realtor has a different opinion on open houses, I personally think they are important because it gives your buyers an immediate way to see your home.  You should have discussed this with your Realtor before you listed, if you didn't I suggest you do so before extending your contract with them.  You can not be angry if there are none or not enough if you did not discuss what your expectations are.  

• Did you recieve any offers ? Not all offers are good offers, just because your home received an offer does not necessarily mean it was worth you taking.  Did your broker try to work that offer ? Just because someone offers is very low does not mean that this is all they are willing to give.  Sometimes you have to work an offer for quite sometime to make it worhtwhile, but you will never know unless you have someone who is willing to put in the time. 

Before you extend your contract with your Realtor you should take the time to review in detail all of these things regardless.  Pulling your home off the market isn't necessarily a good idea, even 2 or 3 months off the market doesn't change the fact you were trying to sell it. Thanks to technology it takes about a half a minute to find out how long someone has been trying to sell for and buyers do quite a bit of research on their own.  

There are a few things you will need to do if you plan on extending that you may not have thought of, it is not just about signing the report of change form, you will want to update your listing.

• Perhaps re-word the description sometimes less is more, if you have a lengthy description it may be too much or visa versa.  
• Update your pictures, the change of seasons will be upon us sooner than we would like to think so be ready to take updated pictures of your home so your listing doesn't look dated. 
• Update your show instructions with your Realtor, if you think you will need your agent to attend more showings discuss it so when those quality buyers want to see your home they can !

If your new to selling a home than you should refer to my blog which explains the common terms and paperwork that you will need to understand Click Here For Blog.

I will be writing another blog this week reviewing exactly what the difference is between a full service real estate agent, and what other brokerages will offer, I will link it to this blog once it is completed.

What To Expect When Your Looking For A Short Sale !

Many of today's buyers are opting to take advantage of getting a "deal" on a short sale, now I previously wrote a blog explaining the process of buying a short sale.   I want to take a moment to explain a bit further not the process but what you should expect to see, and how you can prepare yourself for looking at these homes.  If you are looking for information on the process please refer to this blog.

So you have decided your going to get a deal, and you are on the lookout for that home you can steal off the market.  Well let me prepare you a little bit for what you may walk into, remember these homes are often time distressed or abandoned.

Before you even start looking at short sales you must remember a few important points.

1. There is still a homeowner involved even if they have abandoned the home, unless they have made other arrangements they first have the right to accept or reject your offer.  
2. You have the right to have a home inspection performed on the house, but that is as far as it will go there will be no repairs made to the home. 
3. Anyone looking into a short sale should also become educated on a what a rehab loan is, some of these homes will not be mortgageable and will require a rehab loan.  
4. "Sold As Is" means just that, many people assume that it just means that no repairs will be made but it also means that any CO issues the home may have not and will not be addressed.  

If that hasn't scared you off from purchasing a short sale, let me give you some reassurance.  Not all short sales are in bad shape and/or have CO issues.  Most of our short sales that are coming onto the market are actually still being lived in by the homeowner so let me prepare you a bit more.

• As I said earlier the homeowner still has the right to negotiate before any offer gets submitted to the bank, the chances of "stealing" one of these homes are slim because the bank will want at least 96% of what the market value is, and the homeowner will want the process to go as quickly and smoothly as possible so submitting a low offer would do nothing but waste everyone time.  

• Not every homeowner will be happy that their home is for sale, and to be quite honest some of them will be flat out rude to you.  Don't take it personal, and do not rush out on their account take your time and look the same as you would if the homeowner was being nice.  Sometimes getting into these homes can be a bit more difficult so you want to make sure you see everything while you are there.  

Those that are well versed in DIY projects, or who have family in construction are the most likely buyers to purchase and mortgage a distressed property.  When you are going out to these homes there are a few important things you should really be prepared for, and this is the most important part of this blog, remember this is specifically for vacant distressed homes.   

• Ladies, this first one is for you and I speak from experience when I am saying this.  DO NOT wear heals/skirts/open shoes when you are going out to look at these homes.  Even in this heat I would recommend wearing jeans or long capris rather than shorts.  Some of these homes have been vandalized and their could be glass, or debris laying around and worst case there can be mold in some of the areas of the house or exposed insulation that can irritate your skin.  

• Bring your flashlights and be prepared to use them, even on the sunniest day these homes can be eerily dark.  Most of the time this is caused by the boarded up windows, and doors but the lack of electricity at night is always an issue.  You will also want to consider bringing some hand sanitizer, some of these houses can be a bit on the dirty size so if you are anything like me you will be very happy to clean up a bit after being inside.  

• View these homes during "normal" hours, this is all about your safety.  You will have to use flashlights to see and your site will be way to limited in the evening hours.  There is no way to know if squatters have been using this home for a warm place to sleep, and viewing these homes in the late evening hours is just not safe.  

• NEVER close the door behind your agent, again this is all about your safety as well as your brokers, you never know what your walking into.  By leaving the front door open you are making it clear to those neighbors and other agents who may be showing that you are in the house, and they will be able to hear you inside god forbid something is to happen.

Now I know that all that may make you think it is not worth looking at short sales at all, but it is rare to see homes in this extreme distress anymore.  It is much more typical that the homes are still being lived in or taken care of by neighbors but I have quite a few buyers who are looking for this kind of project coming to me over the passed few weeks.  The best way to find the short sale that is right for you is to talk open and honestly with your agent, here are a two easy ways we can help you before you even step foot into one of these homes.   

• As brokers we have access to things that you do not, if you would not consider a home that would require a rehab loan we have the ability to check the agent listing to see if the home would require one or not before you go and look at it.  

• Many of these short sales will not have pictures attached to the listing, don't discount them just based on that if you are nervous about seeing these vacant homes because you would only want to do cosmetic work, see if your agent would be willing to preview them for you.   

The best piece of advice I could give you when your buying a short sale is to expect the unexpected ! Short sales are not for everyone.  The good news is that we are not seeing any large amount of short sales coming onto the market at the rate they were in previous years, and we are slowly seeing these homes sold !

If you are looking for additional information regarding the purchase of a short sale property and have additional questions were not covered in this blog please feel free to leave your question as a comment, or email me directly!

What You Must Know When Selling Your Home !

Many homeowners listed their homes back when our spring market started, which was early this year around February when we started seeing alot of buyer activity.  With the summer market quickly approaching those same homeowners are starting to wonder why their home may not have sold yet.  Now some of you may be thinking that is has only been 4 months since buyer activity picked up, but with a home correctly priced we will normally see them go under contract within 60 days.  There are only 3 things you & your Realtor have control over, and if your home is not selling than you should look at those 3 things first and foremost !!

Price

• When a person is searching for a home with the same characteristics as yours (bedrooms, baths), where does your home fall in the list? Look at the homes as if you are a buyer, if you are finding all the homes are priced below yours offer more you may want to consider adjusting your price. 
• Ask your Realtor to pull recent comps, meet with them and discuss market conditions.  This is also important because your Realtor will need to have these to support the price of your home once you have accepted an offer.  

Myth: Not all homes are created equal, sometimes your home may not be selling as quickly as you would like not because of price but because it is for a particular kind of buyer.  An example of this is if the home your selling is a cottage, or a high-end home because there is a smaller buyer pool for that kind of home.  The most important part of selling a home with a small buyer pool is making sure that you have the best exposure, and easy availability to make sure your don't lost out on any buyers.  

Tip: If your home is priced above market value, it will be impossible for your Realtor to get potential buyers to come and view your home.  Many homeowners will agree to taking a much lower offer than the listing price, but there is no way to convey that to buyers who are viewing your house online, they will rule it out simply because of the price.

Availability

• If your home has very strict restrictions on when potential buyers can come and see it, you may want to reconsider how/when you are showing it.  If you are unavailable to show your home during the week because of your work schedule, you should speak with your Realtor about allowing them to accompany showings during the week to take the burden off of you, and allowing more buyers to be able to get in.  
• This next one is something that not all Realtors agree with, but I am a big believer in open houses.  I schedule all of my open houses for the month in advance because I want to give buyers an open invitation to come in and see your home the moment that they see it online.  
• Taking it a step farther you will want to make sure your Realtor is getting back to those that are inquiring about your home in a timely manner. Sometimes it is not always about how quickly buyers can see your home, bu how long it takes for your Realtor to get back to them! 

Myth: Some sellers believe that by requiring 48 hours for their home to be shown gives them a better chance of preparing their home to make sure it shows well.  Unfortunately, not all buyers give their Realtors 48 hours notice that they want to see your home, it is better to ask for a reasonable amount of time to prepare than possibly lose that buyer. 


Tip: When potential buyers are viewing your home whether it is a private viewing, or an open house do not follow them around.  Often times buyers will feel as if they are intruding on the homeowners by being there, you want to give them space to take it all in! 

Condition

• First thing you should do is look at  your pictures, if you took pictures before the spring flowers and grass became green you should ask your Realtor to update your pictures.  Remember you need to sell the house first via the pictures to get the buyers to want to come and see it in person.  
• Spruce up your curb appeal, give the front door a fresh coat of paint or add some solar lights and plants.  Buyers spend their weekends driving around looking for open houses, even if your home is not having one you still want to catch their attention!  
• If you have broken screens/doors/cabinets/tiles take the time the time and replace them if it is not a huge expense those are the things that make buyers look at your home and think of "projects" although they have quick fixes.  

Myth: Many homeowners think fixing up your home is a waste of time and money when you are attempting to sell it. Now this is only somewhat of a myth, doing major renovations may not be the best idea, but doing small projects to fix or update your home is normally recommended to help your homes chance.  

Tip: Take the time to look at your home objectively, remember although you can not make every buyer happy you can help the chances of your home selling quickly by doing some small projects.  The best place to start is by doing all those things that were on your "honey do list" that you hadn't had time to get to! 

There are so many different factors that come into play when getting your home sold, but these are the top 3 that are the most important ! Over the next few weeks I will be blogging more about some tips for sellers, but as always if you have a question I did not cover please feel free to comment or email me directly! 

Listing Your Home, What You Should Know !

This week I am going to write about something I don't talk about very often which is sellers who are new to the process of selling their home.  Now some of you might be thinking this doesn't apply to you but it just might so I have compiled a quick list of sellers that is a sign you should take the time to read this blog:

• You purchased your first home from a For Sale By Owner 
• You have not sold a home in the last 5 + years 
• You inherited a property or are an Executor of an estate 

One of the most important steps to selling your home is the paperwork, not only signing it but reading it and understanding it! I can't tell you how many homeowners who have not sold a home recently are very surprised by the amount of paperwork that now goes along with listing your home. 

NYS Agency Disclosure 

New York State requires that anyone who is buying/selling a home fills out the agency disclosure paper, it clearly defines who it is that the Realtor is working for.  Obviously you will sign that the agent will be working for you, but NYS has changed with the times and they now address Dual Agency before it exists.  

Dual Agency is when your agent works for both you as the seller, but also works for the buyer.  This can sometimes cause a conflict of interest, if the deal requires negotiating it can blur the lines of who your Realtor must disclose what to.  It is my recommendation that when it comes time for you to sign this piece of paper that you require if Dual Agency exists that it is Dual Agency with a designated sales person.  What this means is if a buyer walks into your home and wants to negotiate a deal that your Realtor will have an agent from their office work for this buyer rather than representing both sides of the deal.  

Multiple Listing Service Contract

This is a very important contract for you to read most Realtors will tell you it is standard and direct you straight to the bottom to sign.  They are correct when they tell you it is a standard form, but you should be reading it because this is the detailed description that will be on not only on MLS but all of the additional websites that your home will be listed on.   

You want to check certain things in particular: 

1. Taxes are correct (Ex: If your taxes are not correct you may end up with a buyer who is unable to purchase because they were mis-informed, remember pre-approvals do include the yearly taxes)
2. Make sure the number and descriptions of rooms are correct (Ex: If your kitchen is an eat in kitchen, you must make sure it is accurately inputted. These are things buyers will be placing in their search criteria and you wouldn't want a oversight to cause potential buyers to not see your home.  
3. Be sure your floor plan is accurately described (Ex: If you have an entry hall, or a laundry room you want buyers to know that because these might be important to them)
4. Utilities are described completely (Ex: Some people will have a preference when it comes to these things, again you never want to misrepresent your home, even a simple mistake can turn off a buyer) 
5. This last one may upset some Realtors, but the 2nd page of your MLS Listing agreement is where it shows what the commission will be, and where it will be going.  Remember there are 2 sides to every deal if your agent has told you that they will be taking a 6% listing because they split it equally with the buyers broker make sure that it is written that way in your contract.  

Exclusive Listing 

This is something that you may or may not see, if you are listing your home on Multiple Listing Service you should not be signing this paper unless there is a beginning and an end date filled out.  I will sometimes hold a listing as an exclusive until I have the pictures uploaded, & the virtual tour online but when I do I always write that the end date is at the homeowners request.  You might wonder why I do this, and it is just the way I run my business I want to make sure that my listing is up to not only my standard but to my sellers as well.  Once the homeowner sees the listing and approves it we than release the listing onto MLS for it's big debut !! 

Property Condition Disclosure 

The property condition disclosure is pretty much self-explanatory, it is a semi-large packet that details the history of the property.   Most Realtors, and your Real Estate Attorney will recommend that you do not fill this out. Instead you at closing you provide the buyer with the  $500 opt out credit.  The reason we recommend you do this is to simply protect yourself from future liability, even the most knowledgeable homeowner can be unaware of hidden issues in their home.  

Lead Based Paint 

If your home was built prior to 1978 than you are required to fill this out, and your Realtor is required to give the buyers a informative booklet about Lead Based Paint.  This is a common form that you, the buyers, and all Realtors involved will need to sign and is required.  If you are not sure what year your home was built it is always better to fill one out to be on the safe side.  

Seller Services Guarantee 

Unfortunately not all companies offer this, but if you are going to list your home I would recommend not signing with a company that does not provide you with one.  This is your guarantee that the Realtor will provide you with all the services he/she agreed to do in order to get your home sold.  It also gives you the ability to walk away from the contract with them if they are not providing all the services, I can't tell you how many unhappy expired clients I come across because the Realtor did not do what they had assured the client they would do, always remember that you have your guarantee and if your Realtor isn't doing the job perhaps they need to be reminded of that guarantee.  

Now, I have to take a moment to remind you that in order for you to be able to hold your Realtor accountable for the work that they are supposed to be doing, you must also do your part.  Mis-communication about the marketing plan for your home, can often cause a strained business relationship between Realtor and homeowner so you want to go over the details prior to signing anything.   

Coldwell Banker Residential Brokerage does have some additional paperwork that your average Brokerage does not have.  The reason is very simple, we are not your average company we offer additional services to our sellers that not only get their home sold but to make it a easy and enjoyable experience.

Affiliated Business Agreement

If you are one of my frequent readers than you have heard me talk about all of the additional services we are affiliated with.  For today I will not be going into the description of them, but I will link the appropriate information so you can look at the ones you may not be aware of.  Our affiliated business agreement, is to let you know the different companies and services we offer but we as agents do not profit from our buyers or sellers using them.  The reason each of these are so important to our company as a whole is the difference it makes for our clients.  

Coldwell Banker Mortgage Company

Coldwell Banker Home Warranty

Coldwell Banker Title Services & Insurance

Coldwell Banker Concierge Services

You will also receive a copy of your Comparative Market Analysis, be sure you keep this in your file for future reference.  Also make sure you keep full copies of everything that you signed, as well as additional paperwork you may sign during the time your home is listed.  Coldwell Banker Residential Brokerage, does have a system set up on a secured server that will store copies of all the paperwork you will accumulate during the transaction.  This is a great tool for someone who is on the road for work,  lives out of state, or just prefers keeping documents stored online rather than filed away.  


I hope everyone finds this blog helpful, if you have any additional questions please always feel free to comment and I will respond to your question as quickly as possible ! 

What Happens After Your Offer Is Accepted

You have successfully gotten an accepted offer it may have been a quick simple negotiation or it may have been a bit of back and forth, but either way you have officially gotten passed one of the biggest parts of the home buying process !

Now you must know and any reputable Realtor will tell you that just because your offer is accepted, it does not mean that it will stop being shown so you must move quickly thru the next few steps to secure that home !! It is common that anyone else who views the home will be told that their is a first accepted offer, they can still place offers which will be presented to the homeowner.  Lower offers will be held as "back up" offers, but their is always a chance someone will outbid you and their offer may have terms that the owner may prefer.  I will usually recommend to my sellers to stay with the first offer, mainly because sometimes they may have outbid their first buyer to get in, and could drive the price down with concessions or changes.

That is the reason why time is of the essence so your going to want to get things done as quickly as you possibly can, this is not to rush the sellers but to show them that you are serious !! 

Step 1 - Sales Agreement & Attorney Review

This is a very standard form and is very important to your purchase, this is really sometimes the first step, but if you have had to negotiate and make changes to your original offer you will want to fill out a new updated one to send over to the attorneys.  The buyer and the seller will fill this out independently and receive a copy.  You attorney will review this document normally without any changes, because the contract will have the specifics credits or add-ons.

Step 2 - Call Your Mortgage Broker

Your realtor should have already developed a relationship with your mortgage broker to be sure this is a home that you can afford with the sales price/taxes/insurance.  If they have not spoken to them they shouldn't wait any longer to get that relationship going.  I personally like to have a direct line of communication the moment they give you the okay to go out and start looking.

Sometimes the seller will want you to get a 2nd mortgage pre-approval, this is not unusual in my business, because I work for a company who has their own mortgage company.  A seller can not however tell you who to get a mortgage with, they can only request a pre-approval thru a specific company.

This is not to say that using a mortgage broker your agent has not yet worked with will cause a problem,  I have had many deals go perfectly with mortgage companies I had not previously worked with.

Step 3 - Home Inspection

Many companies will have a preferred list of home inspectors, if you already have someone.  You want to have the home inspection as soon as possible, even with a first accepted offer.  A home inspector should check for of course the obvious red flags: mold, mildew, termite damage, but you also want them to check to make sure of some other things you may not think of.  Most will check to make sure that the hot water, actually gets hot, in older home this will take a bit longer but these are things that once you move in can become important.  They will also check things in the attics, basements and crawlspaces.

Homes that are remodeled it usually only takes about an hour for a full inspection, and others usually take about 2 hours. You will get a full copy of the report, and they will talk to you about it before they leave the property.

Step 4 - Sign The Contracts

Now depending on how your home inspection went sometimes you will be just going in to sign contracts with no changes, but sometimes there will have been more changes because of things that came up during your home inspection.  Remember your offer is still accepted, but now you are going to be changing the terms.

I can not stress what I am going to say enough, and it is what I say to not only buyers but to sellers too, BE REASONABLE!

I can understand a seller does not want to have to do work to the home they are moving out of, but you can't expect a buyer to just ignore problems that may have arose during a home inspection.  Try and work with the buyer, because no matter who the buyer is they WILL have a home inspection and you will more than likely be in the same position.

That being said sometimes buyers should be reasonable, don't let fear of losing the house force you to overlook a major problem but don't let a little problem cause you to loose your dream home either.

Step 5 - Bank Appraisal

This again is where a good Realtor is key, because the bank is going to come in and make sure the house is worth the money that in reality the bank is putting up for it.

This is what in today's market really is an asset to the buyer, because banks are not easily giving out money the way they did 10 years ago when the prices were really at its highest point.  The banks are very careful that the home is worth what your paying for it.  

I personally try and make the bank appraisers life as easy as possible, I bring my comps to the appraisal now we can't force them to use those specifically but most appraisers will appreciate it and many times end up using them. This depends on the bank and the appraiser but if they feel  the realtor has done there due diligence to make sure the buyers are not over paying, than they will use them.

Step 6  - THE HOME STRETCH

Your ready to close, you will have not much else to do till about a month before your closing !

I will write another blog outlining the things you will need to get in order prior to your closing separate from this one, and attach the link!

What Do You Offer For That House !

So you have found that house you know what kind of sale it is,  and you know what kind of bidding style will help you get your offer accepted quickly .  The biggest decision is deciding
WHAT DO YOU OFFER FOR THAT HOUSE!

Let me start off by saying it is YOUR choice what you offer, but you want to put in a strong offer, it requires research and analysis by your Realtor. This is why you must always work with a buyers broker, this is where you believing in there abilites and trust is important. 

A home is not always worth what it is listed for, but on the other hand if the listing Realtor is a reputable agent than the list price will normally be accurate to what the neighborhood and the home is worth.   A low offer is not always the way to go, make sure your offer is fair!

In some towns, there are certain areas that only span a few block that the prices go up higher than other homes within the 1 mile radius that you would normally pull the comps for.  When this is the situation you need your Realtor to explain exactly what it is, sometimes it is simply that the area is more desirable, other times it is school district, or distance to certain amenities a town or village can offer. 

The lack of comps can sometimes cause confusion for the buyer because now you need to do quite a bit of math to add and subtract for the difference, because the comps will not match perfectly to the home they are comparing it to. 

When pulling these comps your agent will try to get it as close to a match as possible but you will still need to tweak these comps accordingly.  Here are some key points to remember when your agent is going over these with you. 

NEW VS UPDATED

NEW appliances have never been used, this means normally you will have the paperwork for the warranties, and they have been put in within 6 months of the home being listed.   

UPDATED appliances have been used by the current homeowner or tenant, these updates have been done usually within 5 - 8 years of the home being put on the market.  So that updated kitchen could already be 5 years old. 

Because of this even when a bank comes in, they will always add value to homes that are new/recently remodeled.  Because of the changes in energy efficiency from the type of insulation that is used to compared to previous years, appliances, and building material these homes have a higher value than a home that has just been updated over the years. 

For a home that is able to boast that it has been completely remodeled, with everything new can add value of anywhere from 8% - 10% compared to other homes that are simply updated.  This is something very important to keep in mind when you are comparing a remodeled home to comps that are not.  As a homeowner I agree that these homes are very much worth the extra money that you pay to own one, your value will rise much quicker, and your out of pocket costs to move in and maintain your home will be less than the average home-owner. 

MAIN RD VS BUSY RESIDENTIAL NEIGHBORHOOD

This is normally quite the debate, I could name many roads that I would consider main roads in a town but when a bank appraiser comes in will not agree, and therefore they will make no price adjustment. 

Location is the one thing you can not change about a home.  You must decide as a home-buyer if this location is right for you or not. 

Keep in mind that when you are putting in an offer, you can reduce your offer if you feel the home is over-priced based on the homes location, but be reasonable when you make this deduction.  This is a time when trusting your Realtor and seeing the comparison is very important, ecspecially if you are not from that specific area. 

Let me also say this, if a location does not work for you for any reason you should never feel pressured to still buy it from your Realtor, they should offer to show you homes in the same area away from your objection area.  Some examples of this can be homes that have busier traffic patterns, sumps, or simply the privacy aspect to your neighbors. 

This will be your home and you will be the one living there for the next 15 years not your Realtor. 

WHAT IS THE BASEMENT REALLY WORTH ?

To me personally they are priceless, to a bank appraiser they don't add any huge value because there are many variables that decide the value for you.   

Let's say someone has a fully finished basement, with no CO, well unfortunately it is worth nothing, because it is not legal. 

For an average size home, with a finished basement with proper permits, the value is suprisingly low. 

If your looking in an area that does not have basements you can not reduce the price of the home because of it lacking a basement, because all of the comps do not have them either.   

This is often a surprise to those who are looking to live closer to the water, most homes will only have crawl-spaces not basements, and there is no reduction that would be considered reasonable. 

THE MAN THAT WAS GIVEN A HOUSE NOT JUST A ROOM   

The garage typically you will have atleast 1 in some cases 2, and in the rare occassion 3 or more. 

When this happens I call it "The man that was given a house", and I unfortuntaly have to break the news to them that yes I personally appreciate their 5 car garage, painted floors, and custom shelving, but that means nothing to the bank and doesn't add anymore value than a nicely maintained 2 car garage. 

A garage that is over the top is not neccessarily considered a "value" when it is is extremely large, but it is considered a selling "feature" because this isn't something that the average buyer is looking for, but some will appreciate and want. 

Things like numbers of bedrooms, bathrooms, kitchens, living rooms, are what add that value to a home. 

WHAT IS A FEATURE WORTH ?

Unfortunately I wish I could put a value on what a feature is worth, but it is practically impossible.  Every feature will have its pros and cons to an individual buyer.   Some features will be worth alot to a buyer, and others will be a drawback. 

My best advice to home-owners is keep in line with your neighborhood when it comes to features.   Do not go overboard because you can not gurantee you can re-coup the investment you made adding features, but you can be sure that your home has simliar characteristics as your competition does, so that buyers will be comparing apples to apples so to speak.   

If all the homes in your neighborhood have beautiful landscaping in the front, than I would suggest small upgrades to be sure you have similiar curb appeal.  If most homes have peeled back their carpeting to expose the hardwood floors beneath, when you put your home on the market either A- Remove the carpeting B- Make sure your agent expresses that their are hardwoods underneath the carpeting. 

For many home-owners their features are not added initially to keep up with the neighborhood, but because they were personal wants and needs for the individual.  If you choose to upgrade your home extensively more so than your neighborhood calls for,  I advise you to stay as conservative as possible because it could be helpful or hurtful in a  home that has been updated, and is not able to be categorized as new. 

 WHAT'S A FEATURE ? WHAT'S A VALUE ?

Features

• Pools, Heated Pools, Sauna's, Hot Tubs  
• 3 Car or more garage
• In Ground Sprinklers
• Brick Pavers
• Outdoor Lighting
• Solar Panels
• Elaborate Fencing, Gardens

Value

• New Renovations & New Construction  
• LEGAL Add Ons (Ex-Basement,Extentsions, Dormers)
• Waterfront/Waterview/Private Beach
• Bedrooms/Bathrooms
• Living Space
• Property Size

Steps To Getting An Accepted Offer Blog 2 of 2

There is another aspect when it comes to deciding what you will offer for any home,  based on which of the 3 categories its price falls into for that neighborhood.  There are some towns that have Villages within a town, it is important to remember that many times homes in these areas have a completely different market although they may be in close proximity to one another.  


This is the case in Babylon Village, because of the different amenities the town offers & many of these homes are historical.  Some may even have strict guidelines on what changes can be made to them, because they are historical to the village.  This can also happen sometimes with homes that are located "South Of Montauk", they are considered more valuable than one perhaps 2 blocks north of Montauk Highway.  


You should always take the time to meet with your Buyers Broker, and be sure that you are not comparing homes outside of the area or other homes you may have seen, with the one you are putting an offer in on.  The term "Location, Location, Location" is still very true! 


Now lets take a moment and talk about the 3 different categories, every home on the market falls into 1 of these 3 no matter what kind of sale it is.  


Above Market Value 
This is thankfully becoming less of a trend, with the market being "down" for quite sometime many homewoners have accepted that their home is not worth what it was perhaps 5 years ago.   Sometimes we still see that overpriced home and I can gurantee you that the listing broker knows that it is, but may be having a hard time getting their seller to see it .  They are more than likely silently praying for a offer close to market value to come in to give them a chance at doing their job, and getting the homeowner to take accept your offer! 


These can potentially be a harder offer to get accepted because the homeowner needs to come down alot in their price, and you may only need to come up slightly to be at fair market value.  Sometimes they may not be in the position to sell their home for what market value is because of how much they purchased it for,  equity loans, or refinancing that they had done.  These kinds of homes are the most unpredictable some sellers will tell their real estate agents they can not go below a certain number, and somehow that bottom line number can drop $50,000 out of no where.  


When placing an offer on a home that is overpriced you should ask your Buyers Broker to present the offer directly to the seller  themselves.  It is your agents job to sell them on your offer, and to be sure that all the information was communicated clearly from your down payment, financing, and terms!  


Market Value
This is where you really need to count on your buyers broker to find out the details, and works hard for you.  They will be able to find out what the sellers motivation for selling is, meaning do they have another home under contract or are they still going need to find a home before you can close ? 


Now you absolutely can offer less on this kind of home, but base your next counter offer on the homeowners reaction and offer.   You do not want them to feel insulted by your offer especially since they have taken the time to be educated sellers and priced their home fairly.   


Always remember a home that is priced fairly means that they will have other buyers viewing their home, and an offer can come in at anytime if you really love the home don't stand in your own way over something that will make a $20 difference in a mortgage payment! 


Below Market Value 
Now let me clear up another silly myth, just because a home is priced below market value does not mean that it is a wreck or falling apart.  What it does mean is the house will be on the market for less than a month and it will more than likely be higher than what it was listed for and the homeowners more than likely had a handful of back-up offers! 


I am asked by so many buyers why would a homeowner price it below the simple answer is they want the house to sell quickly. When your agent calls and tells you about this home, be sure to clear your schedule and get in as soon as you can! Speed can be the difference between you getting a great deal or not! 


Now that you understand what kind of house is for sale, and what pricing category it falls into you are now one step closer to getting yourself an accepted offer! negotiating