Family. When you’re in grade school your parents and extended family are ‘uber’ important. Then you grow up some (high school) and can’t wait to get away.
You may head off to college or join the military. But the goal was the same…to get away.
Life was simple. Get an education. Get a job. Live far, far away. Get married, have kids. See grandparents at Christmas.
But then, LIFE happens. And for many of us, you could say **** happens and have it mean the same thing.
We all have are own examples of ‘life happening.’
‘Life happening’ is causing an increase in homes being purchased with the express purpose of combining multiple generations under a single roof.
Lower rent/mortgage costs. Easier to find childcare. Easier to make sure grandma and grandpa are safe. Help with raising children in this crazy society. The list goes on…
The take away:
Buyers: do you foresee yourself taking care of grandparents? Will your new home support extra residents? Could the basement be remodeled?
Sellers: Could your home support a larger family? Do you have egress windows in the basement? If so, it becomes easier to market your home as having the potential for more bedrooms. Or a separate area/bedroom for extended family?
It can feel overwhelming with all the things you need to think about when buying or selling a home and adding more to your list is never fun. But being able to support a multi-generational family is another way to broaden your list of potential buyers. I’ve talked before about casting a wide net and this another example.
Foreclosures, the hottest new trend in real estate. Everyone envisions purchasing a foreclosure for pennies on the dollar. Instantly gaining thousands of dollars in equity.
On paper it sounds like the perfect way to purchase your next home.
But there’s a problem. It can become quite expensive… Here’s how:
In a normal real estate transaction every seller fills out a Property Disclosure form. This is a bunch of questions asking the homeowner if they are aware of any major problems with their home. Water leaks, electrical issues etc. It behooves the homeowner to be honest in answering these questions because if it becomes apparent that they lied there can be repercussions for the homeowner.
Obviously with a foreclosure that homeowner does not own the home anymore, the bank does. And because the bank has not lived in the home they do not complete a Property Disclosure form.
That’s a hassle but not a deal breaker. It just means you have no background information as you begin your due diligence…
Next, as a Realtor I’m not allowed to do many things. One of which is to give legal advice. Another of which is to give advice on the status of the mechanicals of the home. The plumbing, electrical etc. I’m not a professional electrician or plumber. Nor did I sleep at a Holiday Inn last night… My role is to handle the negotiations and contracts. The closing and legal transfer of title is then handled through your lender and a lawyer.
Lets back up for one second. In a normal situation the homeowner will do everything in their power to make sure the home is in the best possible condition to sell. In a foreclosure, the homeowner is beyond upset about losing their home and in many cases will damage and leave the home in worse condition than when they lived there. Often times the damage will go unnoticed by you and your real estate agent.
This leads you to hire a property inspector to thoroughly inspect the property from top to bottom looking for issues and things that need to be repaired.
So, the property inspector does their thing and finds a problem(s). One major issue is the electrical is not up to code. You get an estimate and find out that it will cost you upwards of $1000. And this is on top of you having to paint because many walls have scuff marks because the previous homeowners moved as fast as they could with no regard to damaging the home. Plus there’s a hole in the wall that needs to be fixed. You get the idea.
All of this adds up. Property Inspection + Electrical Upgrade + Other Fixes = More money than you’re comfortable paying out.
So you decide to pass on this home, but you’re now out the money you spent to have the property inspection and you’re no closer to finding your next home.
And that is how purchasing a foreclosure can become expensive.
Staging. The next big thing in real estate. You’ve probably seen the TV show all about staging or this other one which more subtly works staging into the equation.
But it’s definitely not hocus-pocus.
You see pictures of a home or walk through a home and it just looks “Nice.” Your mood is happy. You can see yourself living there.
Lets back up a second. You know how you feel when a home doesn’t cut it… All you see are problems. Things to fix. Colors to change. Things to replace. Nothing works…
But if you feel good walking through a home. If the furnishings are top notch. If the colors work. If the rooms flow. If they make sense. And once this happens you stop looking for problems and start seeing all the good things the home has to offer.
And guess what? You’ve just experienced a properly staged home. Do you need to hire a professional stager to have your home looking its best? Absolutely not.
I’m definitely not an expert home stager, but I’m getting better. For some help from people a little more knowledgeable take a look at this article by FrontDoor.com entitled: Staging Secrets: How to Dress Your House for Success.
I wholeheartedly subscribe to staging your home when you sell. The easier you make it for buyers to want to live in your home the better your odds of receiving offers. Plus those offers are closer to your asking price. And that’s what you want, right?
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Happy tax day! Hopefully today has found you in a happy mood because you have a little cash coming back to you… Today I have a little light reading for you to enjoy.
Following are two articles that are worth your time:
My take:
The byline for the first article hits the nail on the head: “The longer your house sits on the market, the less cash it commands.” That’s it. If you have a number in your head of an offer you’d accept, you need to sell it quickly. No, it doesn’t have to be in a week. But 120 days is definitely too long. The longer it sits, the more concessions you’ll have to make.
You need to have your home ready to be lived in by someone else… to be sold right out of the selling gate. My suggestion: wait to have your home listed until you have it in the best shape possible. Remember: patience is a virtue.
Should a dark room be repainted? The carpet cleaned? By waiting a few days you may gain thousands of dollars because it shows well instantly.
Next, determine if there are other homes in your neighborhood for sale. This is key in determining the listing price for your home.
Do you want to price it lower than other homes in your neighborhood? That way if it comes down to just price for a buyer, you win.
Or do you price it according to the amenities in your home? Do you have upgraded counters? Cabinets? Finished basement?
That way if a buyer compares multiple homes they can plainly see why your home is priced higher. You’ll come out ahead in this situation if the buyer’s comparing more than just the price of each home.
But, the problem with this strategy is often times, because of our current economy, price is playing a larger role for buyers than in years past.
In the end, both you and I need to be comfortable with the listing price. Pricing is not rocket science and many times small things will go far. Be patient, take an honest look and proceed full-bore. Or something like that.
I recently ran across this article posted at FrontDoor.com.
I found a few tips especially interesting:
- Research = Savings. They state “agents will almost always tell you the time to buy is now.” I agree. It seems to be either a great time to buy or a great time to sell… What can you do to sift through all the talk? They say to “look for average for sale time that the home is on the market and average selling prices.” I wonder where you can find local real estate information?
- Price your home correctly from the get-go. You may have a gut feeling about what your home is worth… But you must trust your agent. But, make sure your agent can back it up with comps from homes that have sold as well as currently on the market. Use these comps as part of your research… My thoughts on pricing: your home must be memorable in order to sell. If your home is memorable at $125,000 but ho-hum at $140,000…will it sell at $140,000?
- Looks do matter. The prettiest girls at the dance are the ones who get to choose. Improve your home so it’s move-in ready at the right price.
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PHONE: (715) 572-8372
My name is Adam Holberg and I’m a Realtor with First Weber of Wisconsin Rapids. This website is designed to inform and help bring conversation to a topic I love, real estate.