Is It the Right Time to Sell or Stay Put and Wait For Change?

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These days so many homeowners are wondering if it’s the right time to move on and move up into a better home.  So many questions ensue. How long will it take for the market to be back to normal again?  Will today’s interest rates go on indefinitely?  How can I tell before they begin to climb again? If I wait long enough will my home’s value come back up to what it was just a few years ago?  The answers are not so simple but one thing is for certain.  Property values take time to climb up and rebound after bouts of the situation that we are facing at present.  Here are some pointers that will provide further insight as to why selling sooner may make more sense.

When Incomes Go Up – So Do Property Values

Many industry experts believe the only way for home prices to go back up is for buyers to have higher incomes.  Based on this assumption, a good number of homeowners’ expectations that their property will miraculously gain 20% to 30% of value on the market within the next year or so are sufficiently unrealistic. Keep in mind that the average annual income increase nowadays is anywhere from three to five percent, which translates to a waiting period of until at least 2017 before you will regain housing values from a few years ago.

How Long Will It Take For the Job Market To Improve?

As we find ourselves in yet another double dip recession and the nation is struggling to deal with the economy, the unemployment rate in many states continues to plummet or stay where it’s at; a dismally low level. No one can say how long it will take for the job market to improve but analysts predict that though the process will be slow it will happen.

Interest Rates Are At “Go Get ‘Em” Levels

Being able to finance a home was much easier just a few short years ago but having said that the fact of the matter is that now, interest rates make up for the otherwise detailed and careful application and approval process.  While in the midst of a 30-year low, interest rates at about 4-4.5% clearly indicate this is a very good time to buy a home.  Of course, for owners of existing homes this can mean a loss on the property they sell, but by moving into a home that will most likely increase in value in a few years’ time it offsets the loss.

Keep Living But Live Happier

Why not wait for the market to improve before selling your existing property and moving into another?  The return on investment can be significant when you factor in the changed interest rates regardless of improved property values.  Consider this: Sell an existing home for $200,000 today and buy up into a new home worth $320,000 at the current low interest rates, versus wait for 5-7 years to sell the home, which by then might be worth $220,000.  The interest rates by then to purchase the same new house worth $350,000 will be at least a couple percent higher.  The end result is about $12-$15,000 in savings by selling and buying sooner – and that many more years of happiness.

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A few other things to consider are whether or not you are willing or able to maintain your existing home or would you prefer moving into a condominium or relocating to a warmer climate?  Would this be a perfect time to sell your property and invest in a dual home that can also be rented out for some additional income?  Also, how can you be sure your property value will not dip even further as you wait the market out?  Wouldn’t you want the freedom to at least be able to get into a newer home, at a great price because of the current housing prices?
The best way to really know what steps to take is to contact your Realtor for an in-depth consultation and to learn whether now is the perfect time for YOU to sell.

Million Dollar Home Sales Are On the Rise – Market Stability On the Horizon

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As people begin to flock down south to Florida this season there is a lot of interest in how the market is performing lately.  Tourists love our Florida waterfront homes and while it’s cold in many parts of the country we are lucky enough to enjoy fabulous weather tourists want to get in on that warmth and sunshine too.  So what’s happening with our market and how can we expect the coming season to perform?

The biggest news is with inventory.  Though some media reports are inaccurately reporting a 14% jump in housing prices – there is some promising activity that will drive our market toward stronger stability and toward an upswing.

Inventory Down As Much as 40% In Some Areas

At the moment we are reporting inventory levels down about 30% in Fort Myers, Bonita Springs and Estero.  The Cape Coral and Lehigh area is experiencing an inventory drop of a whopping 40%! Even though sales have been strong and we are doing better than just a couple of years ago when there was a plethora of foreclosures and distressed sales, this inventory drop is for a reason.

For much for the previous two years and more – the majority of our inventory down in Florida has been that of bank foreclosures.  As those properties continue to dry up we will continue to see active changes in our inventory levels and a corresponding shift in statistics that might not make sense for a while till things stabilize completely.

High-End Home Sales Up

The most well received change in our market has been the increase of upper-end homes that have recently gone into pending or sale status.  To give you an idea, last year’s home sales in this category were a total of 75 around this time of year.  The same category reported a spike in sales this year with over 126 million dollar homes sold or coming into pending status.  This is almost double the previous year’s sales in this real estate niche!

Condos, Mid-to-High Level Single Family Home Prices Down
This activity is having a stabilizing effect on our prices for most areas of the county.  In fact, we are only seeing property price increases in single-family waterfront homes that are on the low-end of the pricing spectrum.  Single-family homes in the same lower-priced bracket in the rest of the area regardless of not being located on or near the water are also going up in value.  Still hard hit with oversupply, however, are condominiums and homes in most gated communities.  We also continue to experience a slight decline in housing value for vacant land lots in our area.

Reading Between the Lines

With all this activity in one segment of the industry, naturally the statistics will be inaccurate for a while as the rest of the market stabilizes.  In fact, one media source reported a jump in average home prices in this area of as much as 14%.  Though that would be fantastic it is unfortunately not true.  The only reason home prices appear to be higher is because of the spike in high-end sales versus lower priced foreclosed property sales. There are fewer bank foreclosures selling, skewing the numbers down from those of last year and there is increased high-end selling that is skewing the numbers up.

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With low inventory, low prices and low interest rates – the market condition presents a perfect situation for buyers and as the months go on there will be increased selection to choose from.  Sellers are encouraged to list their homes for sale sooner rather than later.  As the holiday’s approach there is a consistent spike of inventory that results from sellers listing their home in the last 90 days of the year in time for the season.  The sooner a home is listed, the better the chances for a successful and prosperous transaction. At the end of the day, it is important to keep our focus on the fact that a lot more expensive homes have sold – news that is promising everybody.

Stuck in a Rut With People You Know Who Want to “Buy” Your Home?

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A lot of us have been through this scenario:  we think of selling our home, in fact we made the decision and before we have even listed it on the market our friends, family and coworkers are aware and someone or the other expresses interest in the home.  Sounds pretty harmless, right?  For the most part yes, except when you consider the fact that nine times out of ten when someone in our social or professional circle shows interest in our property, the sale does not pan out.

So how can you deal with this?  There is a solution, believe it or not: listing your home with a named exclusion. We explain how this works below, but first – it is a good idea to understand the types of issues you may encounter if you do not entertain this type of work-around to this potential problem.

“I Just Need Three More Weeks, I Promise!”

That is a common sentiment heard by sellers entertaining a sale to someone they know or even someone two or three degrees away from someone they know.  The buyers end up repeatedly asking for more time, without ever really putting a solid offer on the table.  They seem to think that because they know you, they can take weeks, even months, to make up their mind.  You, meanwhile, are anxious to sell the home before the value dips even further.

“But I Thought You Would Give Me a Deal Since We Know Each Other”

The natural inclination of anyone thinking of buying from someone they know is to expect some concessions – extra things that may not have been part of a sale to strangers.  The biggest concession buyers are hoping for by going through someone they know is on price.  But you are selling your home and chances are you want the best price you can get out of it – especially in today’s market with continuously declining home prices.

“Can’t You Put the House on Hold For Me?”

The idea that someone will hold off on a sale of something as large as a home is unbelievable but still, there are cases where buyers have actually expected that of sellers who they know.  As a seller, what are you supposed to do if another offer comes along that is serious, a good price and it seems like it will close with a very quick turn-around?  How can you skirt around the careful social stigma of not ruining the relationship with one person or party, without shooting yourself in the foot?

A Solution Where Everyone Is Happy

So how do you handle these situations?  What do you say to your dad’s best friend who really wants to buy your home but can’t decide between your home and the one they were already looking at?  Listing your home with a named exclusion allows you to proceed with a sale as initially hoped with the people you know – with some concessions such as a sale with little or no commission.  The key is that the people you have been engaging with aside from outside offers will benefit if they buy it since it would be outside the listing agreement.  This maneuver forces the buyer to take some action, since the listing is also open to everyone else in the market to buy a new house.
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Using this savvy selling technique, you can get in on offers potentially made by people you know, provide a concession of sorts in case it does sell to them and keep the listing open for others at the same time – all without shortchanging yourself during the process.  And there is no negative social stigma attached.

How To Prepare Your Home For Sale – Spruce It Up and Sell It Fast!

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If you have made the decision to sell your home and will be listing it soon, especially as we continue to experience this challenged market lately, you want your home to sell as quickly as possible and at a price closest to your asking price.  By following these tips, you are sure to be successful in your home-selling endeavor, and most likely with an edge over other sellers who may not have taken the time to prepare their property for sale.

Get Your Home Ready So It Shows Its Very Best

Curb appeal is a very important aspect of attracting serious buyers.  Beginning with what they see as they drive up, to what their experience is walking up to the front door – as a seller, your greatest opportunity to grab their interest lies in those very first moments.  Make sure there are no dirty corners, cobwebs, mildew, stains or other unattractive visible signs of neglect that will catch prospective buyers’ eyes.

Tip: Pressure-wash the area, clean up weeds, add shine to pavement blocks with some sealant, make sure the storm door is in good shape and that the door bell operates.

Clean, Mark-Free Walls and Windows Are Essential

Regardless of whether you are still living in the space or the house is vacant, it’s important to have the house cleaned and devoid of all marks and blemishes.  Windows and glass should be clean and smudge-free.  Walls should be without any scuffmarks, moving dents or other signs of wear and tear.

Tip:  Hire a cleaner to clean the house, the bathrooms, fixtures, kitchen, appliances, floors, walls and windows -- patch up dents in the wall and apply a fresh coat of paint throughout the home.

Address Aged Aspects of the Home

If you have some areas with older appliances, tiles with loose grout or any other things that need some updating, try to do so before putting up the house for sale.  Without taking on too large an expense, do make an effort to make the home presentable.

Tip:  Clean grout on older tiles, have loose tiles re-grouted, and freshen up shower stalls and bathtubs with new caulking.

Don’t Ignore Hard-To-Reach Areas

Pool cages are often ignored within a home because homeowners cannot easily access the insides where mold and mildew can accumulate.  Cleaning the pool cage will make all the difference when a buyer walks through the home and imagines their family using the space.

Tip:  Pressure-wash the inside of pool cages for a quick, bright spruce up.

The Home Should Be Warm and Inviting

Depending on where you are located, keep the temperate of the home at a comfortable level.  If it is too hot or cold, buyers will leave too quickly without getting ample time to walk through, see all the features and visualize themselves in the home.  If the home is still occupied, cook a pot of apples and cinnamon on the stove a few hours before the showing, so there is an inviting aroma throughout the house.

Tip:  In the summers, keep the air conditioning on at a comfortable 68 to 70 degrees.  In winters, leave the heating on at about 73 or 74 degrees.

Exterior Aesthetics Are Also Important

Pay attention to overgrown shrubs, trees, flowerbeds and hedges.  When the outside of a home looks unkempt it can give off a false impression of the rest of the home too.  You want your prospective buyers to see the home and fall in love at first sight – and that begins from the exterior.

Dealing With The Hazards of Chinese Drywall

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RECOGNITION, REMOVAL AND REMEDIATION

Most homeowners have no clue what Chinese drywall is – in fact, if you looked at it, you can’t even tell that it is different than regular drywall.  The key, however, is knowing what the telltale signs are so that if they do show up, you can be prepared to immediately take steps to resolve the problem. If you’re considering a home with signs of Chinese drywall – run for the hills!  Here are some signs for the cheap but ineffective material as well as next steps.

What You See Is Not What You Get

You can’t recognize Chinese drywall just from looking at it – rather you would have to know what the smell is.  The material emits a very strong sulfur smell that is not only potent but also as much as a hundred times stronger than the regular concentration of any sulfur in building materials.  As the name implies, the material is imported from China and the primary reason it is installed is to save money.

Looking Closely To Confirm – A Quick and Informal Test

You can spend at least a thousand dollars to professionally verify the presence of this toxic material in the property but with a few simple steps you can quite easily determine whether it exists, at no cost at all.

- First, turn your power off through the circuit breaker.
- Second, examine your electrical outlets beneath any plates or covers.  If you see green metallic corrosion, you are seeing signs of Chinese drywall.
- Next, review all air conditioner ducts for the same corrosion, which is from the sulfur.
- Take a look at the copper tubing that is installed with plumbing.  Blackened tubing or black plumbing fixtures is another confirmation.

Dealing With Chinese Drywall Once It’s Been Confirmed

CONFIRMATION IN AN EXISTING HOME

If you live in a home that is showing signs of sulfur corrosion, you suspect you have Chinese drywall and are able to confirm it – then you should contact an attorney. Since this is not something covered by homeowners’ insurance, any financial reparations would likely come through legal channels. There may very well be a lawsuit waiting to happen, through which you may be able to recover funds to manage the problem or recover any punitive damages you may have incurred.

Any repairs or renovations you have had completed may be used in your quest to gain legal ground against this violation of safe living conditions, therefore save all receipts that show you attempted to correct some or all of the problem.

Submit an application with your property appraiser’s office to have it reappraised so the assessment can be changed on it.  If the County decides to reassess the value of the home, it can result in lower taxes.

Unless you decide to move out of the property due to the serious health hazards at stake such as bloody noses and respiratory problems, you will need to completely replace any and all systems that are affected by the defective material.  While this will likely be an expensive endeavor – keep in mind that the value of a property can dip as much as 50% when the presence of Chinese drywall is confirmed.  You will need to replace all electrical fixtures, safety devices such as smoke detectors and get to the heart of any corrosion or surfaces where there may have been exposure to sulfur.  Since nearly every material absorbs sulfur, true remediation lies in the complete systemic replacements.  This means new cabinets, appliances, flooring, plumbing and even wiring.

POSSIBILITY IN A POTENTIAL HOME OR PROPERTY

If you are considering the purchase of a home or property that has Chinese drywall, you can safely do one of two things:  first, walk away from the property, as it is completely inhabitable.  Second, you can opt to purchase the property from an investment standpoint, assuming you will resolve the problem and then resell or live in the home afterward.
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The bottom line is that you can never be too safe.  Now that you know what to look for it is always a good idea to keep your eyes open for signs of this hazard so you can be in control if it happens to be present.

How To Win When There Is More Than One Offer On The Home You Want To Buy

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Are you finding yourself in the position of having to deal with multiple offers being made on the home that you want to buy?  Are there others who want that property just as much as you do and you need to find a way to gain an edge over those other prospective buyers?  With these tips, you will have a much better chance at providing an offer to the seller that they can’t refuse.  It does take being a little flexible, but then if you were not willing to bend a little, someone else will and the keys to “your” home will end up with someone else.

Make An Offer They Can’t Refuse

These days, the lines at mortgage companies are lining up with people wanting to seize the opportunity of the current buyers’ market.  Almost everyone will be financing their new home with either FHA or a straight bank loan – both of which take time and involve signing a lot more papers, and a lot more back and forth.  So right off the bat, if you can offer cash instead of financing – do it.  It does not matter what your source of income will be; whether the cash comes from an equity line of credit, your retirement fund or elsewhere, being able to offer cash will definitely set you apart from other buyers.

It goes without saying that the highest offer would most likely be the one to be accepted.  This does not mean that there aren’t sellers out there who base their decision on factors other than price alone, but the general likelihood of the highest offer being accepted almost always rings true.

Demonstrate A Range of Financial Flexibility

If you can increase the size of your escrow deposit, regardless of whether this is done through installments, it will be a major attraction to the other side.   At a time when most home buyers are pinching for every single penny (even obtaining financing that allows them to put down as little as a few percent deposit), try to go higher to as much as ten percent of the purchase price.

The best time to do this is during the initial period after you have made your offer or right after that 7-10 day inspection period.  Offering this extra flexibility and amount clearly demonstrates your ability and strength to perform under the contract.

Handle The Inspection In Advance To Reduce or Eliminate Contingencies

Be sure to complete your due diligence before you make your offer on the home so you can shave off the extra time (and hassle) of going back and forth over inspection contingencies.  This is one of the best ways to stand alone in a group of potential buyers who have made an offer on the property.  If needing to choose from a simple offer with no stipulations as opposed to one that states that X, Y and Z needs to be addressed prior to closing, it is very likely the seller will choose the simpler of the two.  Not to mention that Asset Managers also prefer property offers with no inspection strings attached.

Be Specific About the Closing Date

This may not sound like a big deal but it can make things more convenient for everyone, including the sellers, listing agent and the lender.  Knowing in advance what your expected closing date is and including it on the offer provides a frame of reference for parties.  Further, it is a requirement on most banks’ application forms that, if not completed, can only add additional waiting time to the entire process.  Just like you, the seller, are likely interested in a quick close, chances are the buyer is also anxious to complete the transaction quickly.  Even though all parties would ideally like a close immediately after an offer is made and accepted, it is simply unrealistic.  So one way to add some points to your corner is to provide a realistic but firm closing date on the contract.

Provide Complete Documentation As Required

This is one area where being organized truly pays off.  If the offer you make is accompanied with all the necessary supporting documentation and/or requirements that may be set forth by either the listing agent or the lender, you are making everyone’s job easier. An example where this will apply is supplying proof of your right to enter a contract if you are acting on behalf of a partnership or corporate entity.  For sellers and agents anxious to sell the property to be presented with a complete package of everything they require versus an incomplete one, the choice is an easier one to make.
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Remember that there is only so much you can do, but as long as you do whatever it is that you DO have control over, if the house is meant to be yours there is a good chance you will get it.  Be prepared for a rejection to your offer so that if it does happen, at least you are not so emotionally vested in the would-be property that it hinders your ability to move on and seek another, better one afterwards.

"D.O.M." Your Way to better Value When Buying a Home!

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Generally speaking, the longer a home is on the market, the more willing a seller is to negotiate. And that means you might be able to get a good deal!

However, notice that I said “generally speaking.” I put in that disclaimer because there are several reasons a home might be on the market for a long time.

One is that it might simply be overpriced. If that’s the case, then you’re in an excellent position to negotiate since the sellers may be anxious to sell the home.

A second reason may be someone has already put an offer on the property, but their financing, credit rating, etc. hasn’t met the requirements of the deal. In short, there was something wrong with the buyers, and nothing wrong with the home. Again, there may be an opportunity for you in this situation.

A third reason is that someone made a simple mistake in the Multiple Listing Service (MLS)! Perhaps the home got listed in the wrong ZIP code or the wrong neighborhood, or the price was simply wrong and listed too high. Now, normally, MLS is very accurate, but, as always, it’s dependent on humans entering information into the system, so mistakes happen!

Fourth, the house may have stayed on the market for so long because the owners simply refuse to negotiate! A real estate agent can help you identify these individuals for you so you don’t waste time and energy on a sale that will never happen.

Finally, a home may stay on the market for a long time because there is something wrong with it either structurally or cosmetically or both!

Depending on the situation, this can also be an opportunity for you as a buyer! You can use it as a bargaining tool; that is, either the home seller fixes the defects or lowers the price to account for the cost of repairing those defects.

However, you should always, always get a home inspection done on such houses! (Or on any house you’re considering, for that matter!). It prevents you from buying a “money pit,” in which you have to throw a small fortune in order to get defects repaired.

Here’s the short and long of it: DOM can sometimes get you a great value in a home; however, you need the expertise and guidance of an experienced real estate agent to pinpoint such values! I can provide you with that expertise. Contact me today!