AKA Buying A Real Estate Owned (REO) Property

   

                                                                                                                                                     

Here is a quick summary of the three scenarios:

• A pre-foreclosure where you buy directly from the home owner before the bank takes over.
• At an auction where you may be in competition with other buyers.
• From a Real Estate company or the bank itself. This is known as an REO aka Real Estate owned.

Here is what you need to know about scenario #3 ~ buying a bank owned home.

The opportunity to buy a Delaware bank owned home is one that many buyers often consider due to the fact that there is a prevailing belief that you can buy them for 50 cents on the dollar or less. While as a general rule many bank owned properties do represent a good Real Estate value, you are more likely to be able to purchase one for around 5-20% less than the going rate for a similar comparable property.

Buying a foreclosed home however, is not for the timid at heart and there are many things that buyers need to be aware of going into a REO transaction.

One of the 1st things you should investigate when you become interested in an REO property is the present market value. This is something a skilled local buyer's agent can do to help you.

A Realtor that knows the local inventory and recent sales data should be hired to help you with the transaction. While a banks goal is to get rid of their inventory as fast as they can, don't expect the bank to consider silly low ball offers especially when the home is 1st listed for sale.

In my experience while working as a Realtor, I have never seen a bank accept anything less than 10% under the asking price. In many cases the price has already been set aggressively to begin with. Like every other seller the banks goal is to maximize the price they receive for a property.

What most people fail to understand is that banks have to demonstrate to shareholders, investors and auditors that they attempted to get the highest price possible.

It is not uncommon for a bank to reduce the price of a home in their inventory after it has been on the market for a while. A bank after all is not in the business of holding Real Estate.

Do not make the poor assumption that banks are desperate sellers and will do anything to clear out their properties. This is rarely the case!

In order for a bank to consider accepting your offer you are going to want to make sure you have been pre-approved by a lender. Most banks will not even consider an offer without proper financial documentation. If you are making a cash offer with no financing contingency be prepared to show the bank proof that you have the funds in an account somewhere. Most banks will require this as well.

Some banks may also ask you to get pre-approved through them as well although it can not be a requirement to do so due to RESPA laws. RESPA stands for Real Estate Settlement Procedures Act as is designed to protect consumers.

Often times with a bank owned property patience is a virtue. In many cases the bank will take days to respond to your offer. Also remember that on weekends banks do not conduct business so you are losing a few days in the week. The process can be even longer if you find yourself competing with multi offer on the property.                                                                                                                      

When you buy a bank owned property be prepared to be buying it "AS IS". Most banks will not make repairs to a property unless it would effect the buyers ability to finance the property. Some of the things that more than likely a bank would be willing to remedy could include:

• Termite or other insect problems
• Mold issues
• Plumbing or heating system issues
• Electrical issues especially if it involves a safety hazard
• Septic systems ~ some states require a passing inspection in order to close, but not in DE
• Structural issues

While these are things many banks would consider remedying, don't assume that it would happen in all circumstances. Every bank is different in how they operate and make decisions. Do not expect a bank to make ticky tack repairs - it is not going to happen! You may be able to possibly get a credit for some repairs  at closing but do not expect it.

Most banks have their own contracts that they use. You will be expected to sign their standard form and in most cases you will not be able to make any changes to it! I have seen attorneys try and more often than not they are rebuffed.

The purchase and sale is a more detailed version of the terms and conditions found in the offer. With a bank owned home you will just sign the banks form and that will be considered the Purchase and sale.

In most circumstances you will be given the opportunity to conduct inspections even though the property is being sold "as is".

It is important that your Realtor makes sure that you have proper contingencies in place that cover your ability to inspect the property for such things as the structure, pests, mold, radon , water, and others.

You will want the right to terminate the contract if these do not meet local or national standards. Be aware that the bank is going to want these inspections to be done immediately.

Lastly, banks will prefer that the closing will be sooner rather than later. You will not see the same flexibility that you could possibly get with some traditional home sellers. As a rule of thumb, most banks will want the closing to take place in 6 weeks or less.

Thinking of buying or selling a home, condo or other Real Estate in DE& PA Get in touch I would love to interview for the chance to represent your best interests.

 

How to Increase a Credit Score

Credit scores are one of the largest factors that lenders use in evaluating whether or not to lend money to a borrower. Credit scores are designed to measure the risk of someone defaulting by taking into account various factors in a person’s financial history.

If you are considering purchasing a Massachusetts home one of the things you want to be sure of is the accuracy of your credit report.  The economic down turn of the last five years has vastly changed the mortgage landscape all across the country.If you ask any mortgage broker they will tell you that things have changed in the mortgage industry on a monthly basis. Given the increase in foreclosures and short sales lenders have increased their standards when evaluating the potential for default of every borrower.One of the tools that lenders use to evaluate the borrower to repay a loan is what’s known as their FICO score. The FICO score was developed by the Fair Issac Corporation. The company was founded in 1956 and their scoring programs are often used to assist lenders in managing credit accounts, detecting credit fraud and automating lending decisions. The FICO score is a standardized approach that helps lenders deliver decisions on loans in an efficient manner.

FICO scores can range from 300 to 850 with 850 being the maximum possible score. According to the FICO scoring system there are five factors that determine a borrowers score. Using these guidelines can help you improve a credit score!

• 35% — A borrowers payment history carries the most weight – Late payments on bills including  a mortgage, credit card or automobile loan, can cause a consumer’s FICO score to go down. Paying your bills according to the contract you signed will over time help improve a consumer’s FICO score.

• 30% — The borrowers credit utilization – The ratio of current outstanding debts such as credit card balances to the total available revolving credit ( your credit limit). You can improve your FICO score by paying off  debts and lowering your utilization ratio. The closing of existing revolving accounts will typically adversely affect this ratio and therefore have a negative impact on your FICO score.

• 15% — The length of credit history – As your credit history gets longer, assuming you pay your bills on time, it can have a positive impact on your FICO score.

• 10% — The types of credit used (installment, revolving, or consumer finance) – There is some credit given to having a history of managing different types of credit.

• 10% — A recent search for credit or amount of credit obtained recently-  If you have multiple credit inquiries as a consumer seeking to open new credit, such as credit cards, retail store accounts, or personal loans, it can hurt an your score. Applying for lots of new credit in a short period of time is also viewed as risky and can cause a drop in an individual’s score. What should be noted however is that if you are shopping for a mortgage or auto loan over a short period of time you should not experience a decrease in your scores as a result of these types of inquiries. So if you are buying a home and apply to multiple lenders and they all do their credit checks you are not supposed to be penalized.
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FICO scores do not take into account a borrowers salary, employment history, where they work, rental agreements, child support or other such obligations or interest rates on any current loans.

Generally speaking a credit score that is over 720 is often considered an excellent credit score.  A score of 680 – 719 is considered good. A score that falls between the range of 620-679 will usually make the lender scrutinize the file further. Having a score that falls between 585-619 will typically disqualify you from getting the best rates. A score below 584 will make many lenders question whether or not they want to do business with you.There are actually three companies that report credit scores to lenders. They are Equifax, Experion and Transunion. The scoring of these agencies can often vary quite a bit. Each of the bureaus collects different information on the borrowers which can change the final score. Given how the credit scores can differ from the various agencies if you are falling on the edge of one of the credit ranges it may be prudent to apply to more than one lender. For example if you had a score of 675 at one agency it is quite possible you could be 700 somewhere else which could give you a better rate! It should be noted that the credit scoring model was slightly altered in 2009 and could effect your score either up or down by 20 points.In the new model credit problems and issues will be ranked according to number and magnitude more specifically than before. The new FICO scoring system also focuses less on how many accounts a borrower has and more on the amount of balances carried.

The statistical models that are used for generating credit scores are subject to federal regulation. The Federal Reserve Board’s Regulation B (implementing the Equal Credit Opportunity Act), expressly prohibits a credit-scoring model considering “prohibited biases” such as race,  national origin, sex, religion and marital status. The law also states that credit-scoring models must be empirical and statistically sound. In addition, if a borrower is denied a loan based on credit, the lender must state to the specific reasons for the denial. A statement that the person did not score high enough is not acceptable. Thee reasons for denial must be specific. For example  there were too many late payments of 60 days or longer.So how does one go about improving their credit score to get the best rates that lenders offer? The answers are actually pretty simple!

• Pay all of your bills on time every month.

• Pay off all of your existing debt.

• Unused credit cards should not be closed. This can sometimes lower your credit score.

• Do not open a bunch of new credit card accounts in a short period of time.

A few years ago it was not uncommon to hear of mortgage brokers or credit repair companies doing what was known as “doctoring” a persons credit.

A major portion of the FICO credit score is set by the ratio of credit used to credit limit.  What was happening was they would increase the score by simply increasing your credit limit. Some of the credit-repair agencies, for a fee, would report to the credit bureaus that they have opened an account with a high credit limit. The customer could not actually use this account but it would improve the customer’s FICO credit score due to lowering the balance-to-credit-limit ratio. This is no longer allowed!When you are starting your home search and getting your pre-approval from a lender one of the other things you should do is get a copy of your credit report from each of the three report bureaus. As a consumer you are allowed to get one free credit report each year from Equifax, Experion and TransUnion.With this knowledge is hand you should be well armed to position yourself for the best mortgage rate possible and increasing your credit score!

If you are thinking about selling your home or wonder how much your home is worth, contact me. If you have friend and family member that is interested in buying or selling thier home, please keep me in mind!                 cell: 302-290-1375 office 302-631-1648 e-mail pam.covey@foxroach.com

Low Cost Home Improvements When Selling Your Home

In a very competitive Tri- State Country Real Estate market one of the things that is vital to your success is how well your home shows in relation to the rest of the inventory for sale. There are quite a few simple things that you can do to improve your chances and maybe put a few extra dollars in your pocket at the same time. Maybe you are not even thinking about selling your home right now. When the time comes, however these low cost improvements could make a difference. 1st impressions are always important so you want to make sure the entry to your home shines. As the buyer approaches the front door the last thing they want to see is an old worn door with cob webs hanging from above. Most buyers are going to assume right of the bat if the home is not well maintained on the exterior, the interior will not be much better. The Entry Way Painting the front door or even replacing it if it is beyond paint can make a real difference. A nice shiny door set always stands out as well. If you have vinyl siding and you have not cleaned it in a while mildew, dirt and grime can accumulate. Giving it a quick spray can surprisingly make a big difference in the appearance. Plant Some Color When selling a home, planting some flowers around the entry can really make your property come alive. Choose a variety of colors that really stand out. Adding a few potted plants if you have a covered entry or a large enough stoop is always a nice touch as well. Fix Up The Baths While remodeling a bath is one of the highest returning home improvement projects it may not be in the budget at the moment. If however, you still have your gold toilets and sinks from the 70's it may be time to let go and move on the something that 99% of the population would like better. Have a gold shower too? There are lower cost alternatives to ripping out the shower. There are specially made bath fitters that are designed to be put over a shower. New faucets are another lower cost item that can make a difference. At the moment silver/nickel is back in and brass is less popular. Changing towel ranks, toilet paper holders and shower heads are also nice touches for short money. Paint Those Walls Painting is one of the cheapest most effective improvements you can make in your home especially if the colors are not neutral to begin with. I know you love the pink entry way and purple bathroom but most buyers will not. I know what your thinking painting is cheap...the buyer can just do it themselves. Most people think this way, however, there is a large part of the population that does not have any vision and will not be able to picture what it will look like until it is done. There are many home home buyers that have looked at a property and come back later after a home improvement was completed to find themselves stunned about how the home has changed. Painting your home off white or if you want to be slightly more bold in earth tones, is the best way to go. When selling your home all decisions should be done to appeal to the masses. Address the flooring A little more expensive but one of the better returning investments especially if you are still hanging on to the orange shag. Even if you have more modern carpet but just don't have enough in the budget for new carpeting, a good cleaning by a professional can help out dramatically. The same can be said for wood floors as well. A good scrubbing can go a long way.   Clean Your Windows/Treatments Cleaning your windows can really spruce up your home especially if they have not been done in a while. A bright home always shows far better than a dungeon. Removing heavy drapes and curtains can help as well, especially if they are out of date. It is far better to have nothing than to have a pattern that was popular in the 80's. Change Old Lighting Lighting is one of those things that are subtle but believe me a buyer will notice if the lighting is really dated. There are some great lights that can be purchased rather cheaply in many lighting stores especially if they are looking to restock their shelves with the latest model. Even little things like upgrading to brighter bulbs can help. Most home buyers are turned off by dark unlit rooms. Although a little more expensive to add, recessed lighting can really change the level of lighting in a room. Recessed light work really well in kitchen and baths. Declutter Your Home This one can really go a long way. Buyers like spacious rooms that they can envision their own belongings in. Getting rid of things that you know you will not be taking with you can really change the appearance of your home. Hold a yard sale for those items that still hold value. Have other things you know you want to take with you but know they spoil how well your home shows? Get a PODs (portable storage on site) or even consider putting your stuff in a short term storage facility. Not every improvement has to be expensive. Sometimes it is the small things you do that make the biggest difference in a buyers mind. If you are thinking about selling your home or wonder how much your home is worth, contact me. If you have friend and family member that is interested in buying or selling thier home, please keep me in mind!                 cell: 302-290-1375 office 302-631-1648 e-mail pam.covey@foxroach.com

Prepare Your Home For Sale

Prepare Your Home For Sale

Whenever you are selling a home, accomplishing the goal of making your home stand out from the rest of the inventory for sale is a very important consideration.

Most Real Estate markets around the country are down and the competition is fierce for a buyer pool that has shrunk dramatically. Presenting your home in the best light will give you a leg up on the competition.

"Curb appeal" is often a catch phrase that is tossed around in Real Estate circles. 1st impressions are critical! Most buyers will find your home online and if your Realtor has done a good job with photography your home should look pretty decent.

Don't disappoint them by leaving your yard look like hurricane just took place!

 Here are a few quick pointers for your homes exterior to help create a more timely sale:                                                                                            

• Clean up all debris from this past winter including any tree limbs, branches, and left over leaves.
• Clean the driveway and walkway of any sand and other debris.
• Pay careful attention to have all your landscaping beds raked and weeded out.
• Trim your bushes if needed. Pay attention to keeping them a few feet back from the home allowing for proper ventilation.
• Consider planting some hearty Spring flowers that have lots of color.
• Assess your driveway and get it seal coated if it looks old and worn. Seal coating really does wonders to  give your home a new and appealing feel.
• Clean out your gutters. You do not want your gutters looking that could harbor creatures from the black lagoon.
• Hose down your deck and consider seal coating the surface if needed.
• The entry way to your home should sparkle! A fresh coat of paint on the front door always looks great. Make sure you remove any old cob webs.
   
• Consider a few potted plants at the entry with some nice flowers.
• Use a garden hose and spray down any areas of your siding that may have mold or mildew build-up.

 Just as important is how your home looks on the inside. The properties that are punished the

most in a challenging market are the ones where the buyers have to think about investing their time and money dealing with a previous sellers issues.

Trust me when I tell you that when you and I estimate the cost to repair an item is $500, the buyer is estimating $1000 in their mind. You will not win this battle.

Here are some easy things to consider for your homes interior:

                                                                                                                                                     

• The 1st thing you should consider is taking any unnecessary possessions and remove them from your home. You want to make your home feel as large and airy as possible. De-cluttering old furniture, boxes, and nick knacks go a long way in making a home presentable. I would consider a local storage center in your area for these things, as it is well worth the investment.
• If you can not find out local storage facility I would consider renting a storage unit from PODS(portable on demand storage).
• Next on the list should be a major Spring Cleaning. The bathrooms and kitchen should be spotless! These are the rooms that buyers will pay the most attention to. No big mystery, as these rooms are the most costly to upgrade.
• Clean out all your closets. Buyers are always looking for closet space. Having your closets neatly organized is important.
• Wash down all your windows. Homes always show better when there is plenty of natural light. Don't let years of grime and dust get in the way.
• Consider touch up painting any high traffic areas where scuff marks and worn paint are easily visible.
• Always paint or bleach any old stains away. For example if one of your kids took a shower without the curtain fully closed and there is a large stain in the kitchen ceiling below get it fixed. For one it looks awful and two buyers are going to assume you have a plumbing issue.
• Clean out and organize your garage. A spacious garage will be a consideration for many home buyers.
• In areas of the home where natural light is not the best make sure you have lamps with higher watt bulbs.
• Clear your kitchen counters completely of everything but the bare bones essentials.
• Clean all faucets,mirrors,lights, and ceiling fans.
• Re-caulk any tubs, showers, sinks, or tile work that has loose grout.
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Above all else you want to take your emotions out of all the decision making when it comes to getting your home "staged".

Work with your Realtor and make it a team effort. Remember the goal is to get your home SOLD!

You may be taking pride in your PURPLE bathroom but the next buyer most likely will not.

While you have lived in your home for years and enjoy the way it looks a buyer has not.

If your Realtor does not have much experience is setting the stage for your home consult a professional stager.

Here is an excellent video that illustrates many of the points I have mentioned in this article.

Getting your home to look like something out of Better Homes and Gardens is certainly going to go a long way in getting to the closing table.

Don't forget though that all this effort will be for naught if you do not price your home properly and pick a top producing Realtor to work with. In a challenging market these are the two most important decisions you will be faced with.

If you are thinking about selling your home or wonder how much your home is worth, contact me. If you have friend and family member that is interested in buying or selling thier home, please keep me in mind!                 cell: 302-290-1375 office 302-631-1648 e-mail pam.covey@foxroach.com

Top 5 Reasons to Invest in Real Estate Instead of Paper Assets

1) CONTROL - Many money managers will advise you to diversify your investments in paper assets such as mutual funds and cd's. Yet as investors search for investments with lower risk, they increase the level of risk for themselves by investing mainly in mutual funds. The problem being you have no real control over the assets value since you cannot renovate or improve its value like you would real estate. You cannot control the risk of the asset like you could with real estate by using creative legal structuring, having proper insurance, or protecting yourself against economic cycles through positive cash flow. Due to the lack of control of the asset, mutual funds are some of the worst investments available. On the other hand, real estate can be controlled much easier by investing correctly in assets that are under market value with multiple exit strategies that help increase the return on the investment while decreasing the risk. An increase return on an investment does NOT have to mean an increase in risk.

(2) INFLATION - Paper assets do not have inflation protection. With all of the "funny money" the U.S. government has printed in the past couple of years our economy is in shambles. Just look at the price we pay for commodities and gasoline, inflation is already happening. People’s paper assets primarily stay the same while everything else goes up in value, so most investors are losing money and being left behind by not investing in assets that keep up with inflation. Real estate value generaly goes up even though the demand for it stays the same thus keeping up with inflation, regardless of how much the dollar weakens. By investing in real estate you diversify into another asset class instead of the U.S. dollar which since 1971 is considered one of the worst investments of our time.

(3) DEPRECIATION - Paper asset income does not come with tax benefits like real estate even though taxes are one of our biggest expenses in life. Learning ways to reduce taxes is extremely important, especially in our current economic time. Reducing the taxes you pay to financial predators such as the U.S. government will help you get ahead financially. It's their job to find additional ways to tax you and it’s your job to find ways to reduce or even eliminate those taxes. When investing in real estate you get depreciation benefits which topically equal 60%-80% of your purchasing price divided by 27.5 years. For example, if you purchase a property for $100,000, then $80,000 (depending on the land value) is written off over 27.5 years, which means you get a $2,909 tax deduction on any income that property produces. So if you make $8,000 per year in rental income you are only paying taxes on approximately $5,000 instead of the original $8,000, which is huge when compared to other investments.

(4) LEVERAGE - Rarely can you use leverage with paper assets to borrow money against them and increase your return on investment. When using leverage, assuming it done correctly, you can increase your returns. With paper assets using leverage is extremely risky since there is no control. That's why financial planner and advisors will tell you leverage is risky. However, it's only risky on assets you have no control over or when you over leverage without looking at the cash flow closely after debt service. If you purchase the same $100,000 property (in point 3 above) but get an $80,000 loan at 5.5% for 30 years and put 20% down you now have a monthly payment of $454 per month leaving you with $213 per month in positive passive cash flow ($8,000 / 12 months = $667 - $454 payment = $213).  That means on your $20,000 you are making $2,556 per year or a 12.7% return on investment instead of an 8% return on investment on your $100,000.  Using leverage correctly is a great way to increase returns which is extremely necessary in an inflationary economy.

(5) CASH FLOW - Most paper assets do not produce positive monthly cash flow.  Cash flow is everything.  When you invest in most paper assets you typically invest for capital gains, not cash flow.  Capital gain investment income has higher taxes and do not provide you income when the economy is doing poorly.  You can easily lose your investment or a large percentage of it, like we saw when most American's retirement and 401k accounts lost 40%.  If you invest in cash flow, the value of the property does not matter.  You are seeing your return on investment on the cash flow and no matter what is happening in the economy you are not in danger of losing the asset or your initial investment.  You will typically see your cash flow come rain or shine even with fluctuations in the general overall economy. However, you are much less susceptible to economic fluctuations if you are prepared. By building your cash flow stream over multiple asset classes you will be in a much better financial position where your monthly expenses will be covered by the cash flow. As your expenses rise with inflation so does your cash flow due to rental inflation as well.

Credit to bigpocket.com

If you are thinking about selling your home or wonder how much your home is worth, contact me. If you have friend and family member that is interested in buying or selling thier home, please keep me in mind!                 cell: 302-290-1375 office 302-631-1648 e-mail pam.covey@foxroach.com

5 Ways to Start with No Money and No Credit?

  

One of the Myth’s of real estate is that you have to have money.  This is flat out not true, you can absolutely do deals with no money and credit.  There are a few precautions I want to mention, especially for beginners before explaining how to do deals with no money and no credit.

Having money and credit can certainly make it easier to do deals.  It is crucial however to make sure the deal still meets your criteria.  At no point in time should you bend your criteria and make the deal work by putting in your own money.  For instance, if you are considering putting in 10% of your own money to make it meet your 70% LTV criteria, you should lower your offer or pass on the deal.  The risk has to be warranted, in fact, all deals should be good enough where you do not have to use any of your own money.  Using your own money should just sweatin the deal and improve the return without unneeded risks. 

Here are some ways you can do real estate deals with No Money and No Credit

1. Use Private Money – Cash is king and having private money backing can allow you to do deals without any of your own money
2. Partner – If you have a strong business plan with solid exit strategies and a successful track record there is a ton of money out there to fund 100% of your deals.  Make it a win-win for your partners and make it happen.
3. Find deals with incredible numbers – If you are an expert at finding incredible deals, doing and exiting the deals then people will fight over funding your deals.
4. Wholesale, Bird Dog – There is no risk, money or credit needed in getting a deal under contract or locating deals for investors.
5. Subject To, Seller Financing, Lease Options – Taking title to a property subject to the seller’s existing mortgage, getting the seller to carry financing or lease optioning a property are ways to do no money no credit deals

If you are thinking about selling your home or wonder how much your home is worth, contact me. If you have friend and family member that is interested in buying or selling thier home, please keep me in mind!                 cell: 302-290-1375 office 302-631-1648 e-mail pam.covey@foxroach.com

Credit to bigpocket.com

Prepareing Home For Sale

OVERPRICING

Frankly, the price is the most important factor in getting your home sold, especially with other underlying economic factors affecting consumer confidence.  One of the best ways to prevent your home from selling quickly, or at all, is to list it at a price that the market will not bear.  Most people don't like to overpay for any kind of purchase, never mind the purchase of your home.

This is a sensitive issue for most people, because we tend to get emotionally involved with our homes.  Many people think of their homes as an extension of themselves and their lives.  This is partially true, because our homes are the places where some of the most important events of our lives occur: the baby's first steps, holidays and time with family, cooking and family meals.

While this attitude is understandable, when it comes time to sell your home, it's necessary to take a different view.  A home sale is a business transaction.  Your home, which you value so highly, and may even still somehow see as "basically new," will not be seen as such to potential buyers who are looking for a home in excellent condition, in a good location at a reasonable price.

Keep in mind that market value is determined by what a motivated and qualified buyer is willing to pay for your home, not simply what you feel it should be worth. Carefully looking at comparable sales data is very important.

NEGLECTING NECESSARY REPAIRS

I have had clients who want to get everything perfect before selling, which is a problem in and of itself, but more often as agents we see deferred maintenance items on homes that we are looking to list and sell. 

"What the heck is deferred maintenance?"

What this means is that sellers are saving money in the short-term by allowing things to remain broken, but when it's time to sell, it's time to fix these items.  It's probably best to put yourself in the buyer's shoes for a moment - would you like to buy a home with problems that the seller refused to fix?  Perhaps if it was priced well under market, but otherwise you wouldn't. Homes that are in poor shape tend to get severely penalized when it comes time to sell.

Another common trait among sellers that I have worked with over the years is the idea that you have negotiated a fair price, so the buyer shouldn't ask for any repairs.  Again, put yourself on the other side of the deal. Most buyers today want the right price AND the right condition. Of course on the other side of the coin, a good Realtor is there to protect your interests as well. As a home seller the last thing you want is a 2nd round of negotiations after the home inspection for items that were clearly visible prior to the inspection. In other words we won't be negotiating about the old carpets in the bedrooms or the stained bathroom ceiling that clearly were seen when the buyer made an offer!

NEGLECTING TO STAGE YOUR HOME

This one is certainly more difficult in some cases than in others.  Every once in a while, I see homes that are "showing ready", but usually they need some help preparing to show.  First and foremost, de-clutter!  You may be able to throw away a lot of things, or you may need to rent a storage unit, or both if you are in a serious clutter zone.  Regardless, this is an absolute necessity in a competitive market.  Your agent can usually help with some good ideas, or you may wish to hire a professional home stager (recommended if you can find a good one who is reasonably priced).  

As a side note, you want to make your home as neutral as possible, in order to appeal to the broadest spectrum of buyers.  Home builders have known this for years, which is why they hire professional decorators to assist with the design and staging details.  You want to eliminate any odd decor items that may appeal to your unique sense of style, but which may appear strange to buyers. Crazy paint colors do not help home sales and can often times prevent them with buyers who do not have vision. Earth tones always work well.

 GETTING HUNG UP ON SMALL STUFF

I  have worked on a  few Real Estate sales over the years that had minor issues, yet the sale was almost blown over something that may have cost $500. 

When you are selling your home, keep the big picture in mind rather than allowing yourself to get hung up on something small.  Is it really worth blowing your sale over something small or over a cheap repair? 

  

TURNING A BUSINESS ISSUE INTO AN EMOTIONAL ISSUE

As I mentioned above, a home sale is really just a business transaction, although it can often be difficult to make this distinction when you have so much of yourself invested in your home.  I have had a number of occasions when my clients did not personally like the people buying their home, but I have to gently remind them that they will not have to deal with them very long, and then they can move on with their lives.  Don't allow your emotions to prevent you from getting your home sold.  If you don't like the buyers, it really doesn't matter, as long as the terms are agreeable. 

Keep the big picture in mind and move forward.

                                                                         TRYING TO SELL IT YOURSELF

Nationally, over 80% of the homes listed "for sale by owner" end up listing the property with an agent.  Clearly, this is a very low success rate.  To be sure, there are exceptions, such as when you are in a VERY hot area with good drive-by traffic.  Statistically, you actually stand a better chance of opening a new restaurant than you do of selling your own home.

If you do decide to "go it alone", keep in mind that you are responsible for screening everyone that sees the house, and for being available during the day for showings.  You also need to familiarize yourself with the offer and purchase and sale contracts.  Add to this the relatively new challenge of tighter mortgage guidelines (Can this buyer truly qualify to buy the home?). 

These are all details that your agent can and will handle for you.

  

CHOOSING THE WRONG AGENT TO REPRESENT YOU

If you choose the wrong person to list your home, this is something that is difficult to overcome during the sales process.  If the agent has a bad, pushy or argumentative personality, no matter how experienced they are, RUN the other way!  Having a dishonest agent is another terrible situation to be in as a seller.

Some agents will mislead you by giving you an inflated value for your home in order to get you to list the home with them, or they may try to scare you into thinking that your home won't sell at all unless you drop the price dramatically.

Primarily, you want someone who is friendly, loyal, honest, and who has your best needs in mind. Knowledge of the market is very important - make sure you understand what homes you are competing with and which homes have recently sold. The homes sold being the most important. 

Lastly, an agent with good marketing skills is worth their weight in gold. Make sure the Realtor you choose knows how to market your home online - This is critical. When interviewing a Real Estate agent Google their name. You should see pages and pages of results. If not you may want to continue to look elsewhere...Why? If a Realtor does not know how to market themselves, how could you possibly expect them to do a good job marketing your home!

See why a Massachusetts Home Expires for detailed explanation of what to avoid as a home seller and picking a top producing Realtor.

 

NOT TRUSTING YOUR AGENT (unless it's the guy above)

Now that you have hired the CORRECT agent, trust them to do their job, unless you are given a strong reason to think otherwise.  This includes allowing the agents to communicate on your behalf, rather than attempting to speak directly with the buyers.  In some cases, it is necessary or even advisable for this to occur, but usually it doesn't help matters, especially during the negotiations.

In addition to selling lots of homes, I have watched a bunch of the home-selling shows on TV, and time and time again, I am able to predict the outcome (price, problems, etc.).  This comes from experience, and it is something difficult to teach or to learn from a book.  Trust that the advise your Real Estate agent gives you is solid, as this is what they do every day.

SELLING AT THE WRONG TIME

 
Selling with bad timing can happen at least three different ways:

a. you are selling and you don't know where you are going,

b. you put your home on the market immediately before you have to move, or

c. you are selling at the wrong time of year. 

If you have no idea where you are going to buy next, it's probably not great to put your home on the market, unless you simply cannot afford your home anymore. The inevitable outcome of listing too soon is that you will receive an offer from someone who wants to move in right away, and you are forced to either reject the offer or move to temporary housing, then move again when you find the right home.  If you are like me, you don't enjoy moving, so why put additional stress on yourself?

If you are building a home with a particular time line in mind, or if you are starting a new job and you have some time to prepare, don't wait until it's too late to get your home listed.  You don't want to leave the home vacant or worse have two house payments while you are trying to sell.  It's never too early to contact an agent and ask when you should list, with your particular needs and timing.

We sometimes have clients who spend too much time getting their homes ready to sell, and they miss the big selling window in our market.  Don't spend an inordinate amount of time preparing your home and end up missing the primary selling season in your area. Here in Massachusetts the best time to sell a home is in the Spring.

NOT GIVING POTENTIAL BUYERS ACCESS TO YOUR HOME

 This is a critical point: buyers DO NOT work around your ideal schedule. If it is a reasonable time of day (i.e. you are awake and most normal people also are), LET THEM LOOK.  Even if things are in disarray, LET THEM LOOK.  Even if the buyer's agent doesn't give you any notice, LET THEM LOOK.  Although I always try to prepare for showings the day before they happen (or at least several hours ahead of time), there are times when a buyer will spot a sign and ask about a particular home that is not on the list.  Sometimes, they buy this home.  Keep that in mind when you have your home listed. 

 
Another good point which warrants mentioning here is to get out of the house when buyers are looking.  Preferably, this means going for a walk or going to run errands, but at the very least, go outside and give them some privacy while they are looking with their agent.  Buyers never feel at ease when you are in the home hovering around them.  LET THEM LOOK on their terms.  If you are concerned about valuables, lock them up somewhere. Most importantly a lock box is highly advisable! Don't make a Realtor NOT want to show your home.

 

BUYING THE WRONG HOME IN THE FIRST PLACE

 This is another area where having a good agent comes into play.  A good quality agent will advise against you from buying something that is not a wise decision (near a hazardous waste site, close to a loud highway, etc.). If you can make a smart decision on your purchase, when it is time to sell, you will be much happier.  You can't change the location of your home once you have made the purchase. 

If you are thinking about selling your home or wonder how much your home is worth, contact me. If you have friend and family member that is interested in buying or selling thier home, please keep me in mind!                 cell: 302-290-1375 office 302-631-1648 e-mail pam.covey@foxroach.com