Does Your Home Live Up To Its Price Tag?

There is still a great divide in the some phases of real estate. One of the worst is the division of expectation between a buyer and a seller.

A buyer who is willing to pay for a home in a certain prices range let us say over $500,000 for example has the expectation that a home should have certain amenities at that level:

• An upscale kitchen including mid to upper level stainless appliances and granite counter tops.
• Bathrooms that have been updated with tile, new faucets and vanities.

• Flooring of hardwood, tile, or upscale carpeting.
• Professional landscaping

In short the amenities need to fit the expectation at that price level.

A seller needs to understand that when you set a price at that level, buyers expect to be able to move in and have nothing to do but unpack and place their things. Rooms should be neutral so that the new homeowner doesn’t have to undo your taste. They basically are willing to pay a premium for convenience.

If as a seller you are not willing to spend the time, money and effort to bring your home up to the level of expectation, the solution is simple. Keep your price point in line with current competition at that echelon. Just as a savvy shopper would be able to see through a Wal-Mart product with a Sak’s Fifth Avenue price sticker on top, so do real estate buyers know the difference. The quality, sophistication, and style make the difference and it all comes down to price as justification.

Investors Beating Banks at REO Game

Red tape, rehab standards are only some of the reasons for discrepencies. After millions of dollars in investments, adding thousands of new staff positions and even contracting to third-party brokers, the large banks still can’t sell foreclosed properties fast enough to ease the vast overhang of REOs bedeviling their books.

Meanwhile, on the dusty streets of places like Glendale, Ariz.; San Bernardino, Calif.; and Henderson, Nev., independent investors have been buying up defaulted properties, rehabbing them and putting them back into the market at a pace that makes the banks look geriatric in comparison.

“Third-party investors are much faster at reselling foreclosures than banks, though the difference varies by area,” said Sean O’Toole, founder and CEO of ForeclosureRadar. ForeclosureRadar, based in Discovery Bay, Calif., focuses only on Western states, but its research is still very relevant and predicative. According to ForeclosureRadar data, Oregon banks took 156 days longer to sell foreclosure inventory than third parties; California, 104 days longer; Arizona and Nevada, 70 days longer; and Washington, 52 days longer.

“ForeclosureRadar statistics show real estate investors continue to far outperform banks in dealing with distressed properties,” O’Toole said. “Yet, politicians and bureaucrats are putting pressure on banks to become landlords, which will hurt local economic activity as fewer properties are made available to local investors, also impacting their Realtors, contractors and property managers, as well as homebuyers in need of affordable housing.”

The major blank spot in the pure data for me was, why, after so much investment and staffing, big banks still couldn’t get rid of their REOs at a consistent pace. That was the question I posed to O’Toole and to the founder and CEO of another foreclosure Web program, Brad Geisen of Foreclosure.com in Boca Raton, Fla. O’Toole and Geisen agree on a number of key points, the first being that self-interest on the part of investors is a huge motivator. “Investors are doing this on their own behalf; it is their money involved,” Geisen said. “They want to settle as quickly as possible with maximum returns. “O’Toole added, “Investors put forth their own money, and the return correlates with how quickly they get that property cleaned up and back out on the market.”

Certainly, the banks would have the same goals, right? That motivation isn’t as clear for banks, O’Toole said. “Certainly, the banks are saying that is their goal, but the individual managers within the banks and even the Realtors who work for the banks don’t have a couple of hundred thousand of their own money in the deal. If they did, they would have higher motivation. “Most banks pawn off all the work onto independent brokers, who are in the deal for one thing: to get a commission, Geisen said. “They don’t have a financial interest in what a property sells for. They are going to do the least amount of work they can to sell that property. What you have in most cases is the banks relying on what the brokers tell them for their decision-making.”

But haven’t the banks hired Realtors? “The banks have certainly hired a lot of people with great resumes on the real estate front,” O’Toole said. “And they are using experienced Realtors. As an investor, I’ve used REO brokers in the past and they have done a fabulous job. This has more to do with efficiency of a large organization versus the efficiency of the individual. Most productivity happens inside a small business, not a mega-corporation. Individuals and small businesspeople are more motivated and productive.”

The problem with big banks is red tape, Geisen said. “A lot of times the banks set up policy, and things have to go that way. In some scenarios it works well and it other cases it doesn’t. One policy across the board to plan for every asset they have doesn’t take into account differences. “The key point being that investors are quick to adapt to changes in the market.

O’Toole uses the example of cash-for-keys (tenants who are victims of foreclosure receive cash in exchange for surrendering the keys to the house and vacating). “When I was doing foreclosures back in 2003 through 2005, we rarely paid a homeowner more than $500 after a foreclosure,” O’Toole said. “Now, it is not unusual for investors to pay $5,000 for the tenant to move out quickly. Investors are flexible and look at the individual situation rather than put in place blanket rules that are executed by junior managers and dictated to Realtors without giving the Realtors the same flexibility that investors have.”

Perhaps the biggest problem the banks are having is deciding when to rehab a foreclosed home and when not to. Some banks have a policy of ‘We don’t renovate any of our properties,'” Geisen said. “Other banks have policies where they renovate all their properties even in areas where it doesn’t make sense, as renovation costs are far too great. Bank policies need to be flexible, and they just are not.”

In the last housing bust, back in the early 1990s, contractors were sent in to clean up homes, install new carpet and repaint. Investors still do these things, which many will say is a key reason why these homes sell faster. Banks, O’Toole said, “rarely do more than (take the) trash out, (and) rarely do much in the way of repairs, repainting or recarpeting.”

“Our California customers buy somewhere between a half billion and a billion dollars worth of property every month and are hungry for more,” O’Toole said. “The primary issue here is, the banks are not reliable as to how they put this product out through the trustee sale mechanism. They could do a better job.”

Steve Bergsman is a freelance writer in Arizona

Comparative Market Analysis – Did you price your Real Estate right?

Comparing Sales of Existing Homes and How Those Comparables Affect The Real Estate Offer Price

Home pricing is the most important factor to consider in order to sell your home quickly and easily.

The usual mistake made by the seller is that their asking price is way too high. You cannot fool the market. It is best to price your home right because if you overprice it and it stays in the market for a long time, buyers will lose interest, thinking that it has not sold because something is wrong with it, or other homes in your area similar to yours may be selling at a more realistic price. Pricing your home correctly will save you a lot of time and frustration. Generally, most of the best and highest offers come during the first few weeks when the most potential buyers view a home.

It is best to talk to your agent. He will be able to give you a reasonable asking price through Comparative Market Analysis for free. Also known as CMA, Comparative Market Analysis is a listing of recent home sales, pending sales, and current listings of similar properties in a given area, used as a basis for determining the fair market value of a property.

A seller can research this himself by checking public records through the local recorder or assessor’s office, through private real estate information, or the Internet. It can also be done by a real estate agent for free. A number of factors are taken into consideration when preparing a CMA – square footage, age, number of bedrooms and baths, condition, location, and amenities.

The real estate agent will make a marketing plan for your property based on other information about the current market, recent sales in the area, how many homes have been sold in that area, how long they were in the market before they sold, and selling time. After this has been done, the agent and the seller can decide on an appropriate price for the property. Keep in mind: IT IS IMPORTANT THAT YOU PRICE YOUR HOME RIGHT.

Prevent your home from becoming an expired listing. A Comparative Market Analysis will give you a realistic pricing decision and the odds are you will sell your home fast and in the price range you are asking.

Source:  Joe Lane, The Lane Real Estate Team, Washington

Staging your home for curb appeal!

 Curb Appeal in real estate terms used to mean how appealing your home is to potential buyers when they view the home’s exterior. It was the first time they were seeing your home, and it sets the stage for the rest of your home. But this has changed with the use of Web sites such as Realtor.com, Facebook, and the local and national real estate agency Web site that is listing the house for sale.

The appeal of your home comes long before a buyer even gets to your front door — it starts online. And it is not just your front door that sets the stage, it is your entire house that the buyer can see, long before ever getting to your house. So the first item of business: Make sure your photos are capturing your listing from the very best angle!

The photographs real estate agents use for a home on the Web are crucial. It is best to use a professional photographer who specializes in taking photos of homes for sale but if you can’t afford one, there are several things to consider. Real Estate Blogger Web site recently released an article listing the Top 10 Tips of Photographing Your Home for Sale.

Among the blog’s tips:

  • Try a tripod. It will not only help you keep the camera steady, but it will also allow you to concentrate on more important things—like getting that perfect picture.
  •  Watch your lighting. Don’t turn on all of the lighting in the room and close the drapes, you’ll get “halos” around the room’s lamps. Use the camera’s flash to get an even photo. Also, take photos of the outside gardens in the shade—it’ll look better than when taken in the bright sun.
  •  Haul the clutter away. Take down the personal photos, too.

Remember: The photographs are your calling card. So if the photos aren’t representative of your home’s appeal than the buyer will never get to your front door. There’s always another house just a mouse click away!

Once potential buyers are lured by your photos, you’ll want to make sure the home’s curb appeal doesn’t let them down when they’re there in person.

Take these steps:

  • Make sure your porch has adequate lighting and is clean and has easy access. Sweep the porch, remove the cobwebs, wipe off the finger marks from the doorframe, and polish the hardware. If the paint is chipped or cracked, make sure to touch it up.
  •  Make it clutter free. Just like the inside of your home, your outside needs to be clutter free too.
  •  Tend to the landscaping. Remove any overgrowth of landscaping that makes it hard to reach your front door.
  • Take an unbiased look. I actually have the sellers walk out to their curb to look at their home from the buyer’s perspective. It allows everyone to understand what needs to be done.
  •  Add some flowers. Every season has blooming plants. Even if your landscaping isn’t close to your front door, you can always add a pot with blooming plants — whether a few or just one.

I like to use terra cotta pots, which is the most neutral and flattering style pot for any season. In the freezing climates it may be more difficult to place fresh blooming plants outside. So if you can’t, make sure there are fresh flowers greeting buyers once they walk in the door.

Also, when selling a house in the winter (and the holidays have past), I use spring blooming flowers rather than winter blooming plants — this helps to build anticipation and joy for spring.

So before that For Sale sign ever goes up outside your home, prepare your home online. Then your total curb appeal will be ready to draw in buyers!

Source – Joe Lane, The Lane Real Estate Team, WA