Ins and outs of real estate fees
From an article by Ellen Roseman
published in the Toronto Star
In most real estate transactions, the commission to the buyer's broker is paid from the proceeds of the sale. But in some transactions, the buyer may be required to pay commissions directly to the broker.
Some people refuse to sign a buyer agency agreement for this reason. They're afraid they may have to pay their broker all or part of the commission normally covered by the seller.
When is this likely to happen?
It's not something you should expect if you buy a home that is offered through a real estate company and listed on the multiple listing service (MLS) system.
"If the seller or agent is offering to pay a fee, it is rarely not paid," said Richard Forster, a registered sales representative with Sutton Group Old Mill Realty Inc. (He was a Toronto Real Estate Board director when buyer agency was introduced and later served as MLS chairman.)
The money for commissions is processed by the listing agent in the total fee collected by lawyers at the time of closing — and held in trust as a further protection.
However, there could be a problem if you buy a property from a private seller or a builder that doesn't pay fees to real estate agents.
You could also be liable, as well, if you buy a property from a seller who uses a discount real estate broker.
On a $300,000 house in Toronto, the real estate fee is usually 5 per cent or $15,000. It's split between the listing agent and the selling agent.
(The 7 per cent GST also applies to real estate fees. So, you can add $1,050 to the commission on a $300,000 house.)
Some real estate brokers try to gain a competitive edge by offering low-cost alternatives.
Suppose you sign a buyer agency contract that says your agent is entitled to a 2.5 per cent commission. However, the listing broker who sells the house offers only a 2 per cent commission.
There's normally a clause in the contract that says you have to pay your agent any shortfall in commission. On a $300,000 house, that means $1,500 out of your own pocket.
Helen Moreland, a partner in NetPlus Realty Sales Inc. in Toronto, offers a flat fee commission to sellers. On a $300,000 house, it works out to about $10,000 — instead of $15,000.
"Buyers who fall in love with one of my listings feel they're being held for ransom," she says.
"The buyer's agent says he'll sue them for the shortfall because it's a legal contract."
Sometimes, a buyer's agent will convince the buyer to pay more than the asking price to cover the commission, says Moreland. (She was a Prudential Realty agent for 21 years before starting her own real estate firm).
In one case, she listed a house that sold for $3,000 above the list price. The buyer's agent had structured the deal that way in order to receive a 2.5 per commission, instead of the 2 per cent she was offering.
This hurts buyers, she says. Not only do they pay more for the house, but they spread the cost over the 25-year life of the mortgage.
Real estate commissions are not set by the Ontario Real Estate Association or the local real estate board. They're negotiable.
The federal Competition Bureau has shown it will go after real estate brokerages that try to stop agents from cutting prices.
Re/Max, Canada's largest real estate network, decided last year to let its agents advertise the commission they charge for selling homes.
This came as the result of a settlement with the Competition Bureau after a three-year investigation.
Realtysellers (Ontario) Ltd. is one of the fastest-growing discount chains. It has 50 agents in Toronto, Hamilton, Burlington, Ottawa, Barrie and Windsor. (The London, Ont. office opens on Dec. 1.)
While its listing fee is 2 per cent, the firm offers 2.5 per cent to buyer's agents. "We've always done that," says co-owners Steve Moranis and Lawrence Dale. "Boycotting has never been an issue."
When acting for buyers, Realtysellers gives back a portion of its commission. On a $300,000 house, the rebate would amount to $1,500.
Moranis and Dale don't like to talk about "discounting," which is a dirty word in the industry. They prefer to talk about value.
"With the price of houses the way they are, we don't need to charge the traditional high fees to service buyers and sellers successfully," they say.
Real estate lawyers don't charge as much as they once did. Neither do real estate appraisers. Why are real estate agents the only professionals that are getting higher compensation?
"We have agents that used to work for other firms and moved over to us because they recognize it's a changing industry," Moranis says. "They feel the market is moving to provide more value to consumers."
November 14, 2004 in Selling a Home | Permalink | Comments (0)
Real Estate Staging ...
"It's better to be looked over than overlooked!" (Mae West)
You only have one chance to make a good first impression. When selling your home you want to insure someone does not overlook that it may be the home for them. Our homes are usually the most valuable thing we own and yet many people do not take the necessary steps to guarantee that their home "shows" in it's best possible light.
This relatively new industry may be called, home staging, real estate merchandising, real estate enhancement, decorating to sell, just to name a few. The real estate stager will analyze every detail of your home from the front door and curb appeal to the storage issues inside your home. Whatever it is called, this service will help you to realize the most profit on your property.
October 26, 2004 in Selling a Home | Permalink | Comments (0)
Strategy for the housing bubble
An article by Ellen Roseman published in the Toronto Star:
A few weeks ago, my neighbour's house was put up for sale. It's listed at $789,900.
"This beautiful semi-detached home in one of Toronto's most desirable neighbourhoods has been completely renovated," said the feature sheet.
On seeing the sign go up, I could think of nothing else for a few days. I was obsessed.
Our house, while not completely renovated, does have a garage. Our neighbour's house has no parking at all.
I went as far as calling a real estate agent, Elli Davis of Royal LePage, to ask whether it was a good time to sell.
"Wait till you're ready," she advised. "Don't do something just because your neighbour is doing it."
The next-door house is still up for sale. No one made any offers at all during the evening set aside for bids.
My panic has subsided. I'm no longer preoccupied with locking in a tax-free capital gain.
My family would have to find somewhere else to live. And we'd find nothing substantially cheaper in our neighbourhood, even if we downsized.
We're not ready to rent at this stage in our lives. So, why sell if we can't free up equity?
It's hard to ignore the frenzied real estate market activity, especially when so much of your net worth is tied up in your principal residence.
But mortgage rates have started inching up. And real estate pros, such as Elli Davis, have felt a change in the air.
Last week, she and her buyers lost out on a house that had three offers.
"The sellers took the bid that was right on the asking price, which had a certified cheque. Ours was $36,000 above the asking price, but didn't have a certified cheque. We could have gotten one the next morning."
In her view, sellers are getting nervous — and not only because of higher mortgage rates. Many more homes are coming up for sale.
"The list of open houses is longer and the ads are more plentiful," Davis tells me. "And I'm seeing fewer sellers who will entertain offers only at a certain date and time."
That tactic may work in a red-hot market, but not when things slow down, as my neighbour found out.
Aside from anecdotal evidence, there are concrete signs of change. Without low rates, many economists say, real estate can't sustain its current growth pace.
Clayton Research, a Toronto consulting firm that specializes in residential housing, analyzed census data to compare the latest housing boom with the one in the 1980s.
"Home sales have exploded in 2001 to 2004," says the latest Clayton Housing Report. "According to our estimates, sales of both new and existing homes have totalled almost 600,000 units a year — well above the 423,000 sales on average during the housing boom in the latter 1980s.
"Prevailing lower interest rates have been an important factor in the relative strength of home buying now, compared to the 1980s."
The RBC housing affordability index measures the proportion of pre-tax income needed to own a home. It rose to 31.7 per cent in the second quarter of this year, compared to 30.1 per cent in the first quarter.
What caused the bump? House prices went up 6.9 per cent in the April-to-June period, the strongest pace of acceleration since early 2003.
Meanwhile, posted mortgage rates went up 0.6 of a percentage point to 6.45 per cent — a level not seen since the end of last year.
Given the double-whammy of higher home prices and higher mortgage rates, RBC's indicator fell to its lowest level since the last quarter of 2000.
"Housing sales in the third quarter could fall by as much as 10 per cent, reflecting the second-quarter erosion of affordability," the bank said.
Is the prediction coming true? I checked in this week with Carl Gomez, a Royal Bank economist, who said housing starts are coming off their peak and house prices are slowing as well.
"We've reached a saturation point, especially in Toronto, which has had such a long run."
Rate increases have hurt, he said. But things are still better than in 1990, when the affordability index hit 50 per cent.
Another factor: There's a declining pool of first-time buyers.
"First-time buyers are the grease that makes the housing market spin. But we've had such great affordability that those who wanted to buy already have," Gomez says.
""We also seen less migration into Ontario from other provinces. From April to June, about 1,200 people left the province and weren't replaced."
Many renters bought homes because of lower interest rates. That led to a greater supply of rental units in Toronto.
Gomez expects the latest statistics from Canada Mortgage and Housing Corp. to show a rental vacancy rate of about 4 per cent, up from zero in the late 1990s.
With more vacancies and cheaper rents, there could be a shift back to renting.
The housing market won't die without first-time buyers, Gomez says. Older boomers will be trading up or trading down, selling to younger boomers just behind them.
"We'll see a slow, cool progression, a moderation of activity, rather than a pop," he says.
Isn't there a real estate bubble ready to burst? Can anything cause inflated housing values to explode?
An unforeseen spike in interest rates could do it, Gomez says, or a terrorist event that wipes out piles of jobs.
But home sales won't be affected greatly by any economic threats now on the horizon, such as oil at $55 (U.S.) a barrel, in his view.
House prices and interest rates influence people's decision to buy — not fuel costs, which are a smaller component of ownership.
Well put Ellen.
October 17, 2004 in Selling a Home | Permalink | Comments (1)
Things to do before you move
Use this checklist as a reminder of the things you need to do before you move.
Book the movers. You can choose to have the movers pack everything, or just the breakables, or you can pack yourself. It's a good idea to obtain estimates from several different companies.
If you own your present home:
- Arrange to have our gas, water, and electric meters read on the day you leave and have the bills forwarded to your new address.
- Have your oil tank read and filled before your sale closes, and provide a receipt to your legal professional if required.
- If the water heater or furnace is rented, arrange for a transfer of the rental agreement to the purchaser.
- Disconnect your telephone, cable TV, and water softener.
If you rent your present home:
- Give necessary written notice to your landlord and make arrangements for the return of any monies you have on deposit.
At your new home:
Make arrangements for the gas and electric utilities, water softener, telephone and cable TV to be connected on the day the sale closes.
General:
- Get "Change of Address" cards from the post office and send out well before moving day.
- Have the post office forward your mail to your new address.
- Cancel any contracted services and pre-authorized cheques.
- Inform gardening, dry cleaning, garbage pick-up, newspapers, magazines, diaper and other home services. Arrange for service at your new address.
- Obtain a letter of introduction from your current branch to help establish new accounts. Transfer trust or bank accounts and securities.
- Cancel or transfer social, athletic, civic, religious or business affiliations and memberships.
- Arrange for transfer of medical, dental, prescription and optical records.
- Change the address on your driver's license(s) effective the day of the move.
- Collect all items out for cleaning, repair or storage. e.g. fur coats, dry cleaning.
- Make special arrangements for the moving of perishables, such as plants.
- Make special arrangements for the moving of your pets.
- Dispose safely of all flammable liquids as it is illegal for movers to carry them
October 15, 2004 in Selling a Home | Permalink | Comments (0)
Preparing for a home inspection
One step which is inevitable in the home selling process is a visit from a professional house inspector.The following are steps which should be taken to ensure your inspection is a success. It is a good idea to be aware ahead of time of any serious problems which may be present in your home so you will be prepared to deal with them.
1. Ensure that past home renovations have not damaged the structure the home. Other structural damages to look for are whether termites have caused extensive damage, if settling of the home over time has caused damage to the foundation, and/or whether support beams and joists are strong and sturdy or cracked or otherwise damaged.
2. Ensure that the electrical and wiring systems are safe and acceptable. Loose wires or incorrectly installed or wired receptacles, switches or electrical box problems are all hazardous and should be corrected. All homes should have a minimum of 100 amp service.
3. Ensure there are no leaks evident. Water can run and leak into odd and unexpected places, causing extensive damage over time. If there are signs of water leakage, they can quite be often spotted by examining the underside of sinks and dishwashers, along ceilings, on floors or along basement walls. Plumbing fixtures, water-using appliances, drain pipes, water supply inlets and outlets and basements and roofs can all be causes and sources of water damage.
4. Ensure that safety issues are resolved in your home. Trim foliage which may impair a safe view of the area around the home, ensure that windows open easily and close and lock securely and that entrances/exits to the home are able to be securely locked. Hazards such as hidden curbs, loose railings and/or stairs, unused wells which are not capped, etc., should be corrected.
5. With respect to plumbing, ensure that all fixtures are in good working and free from large cracks. Faucets should run easily and shut off completely, proper grouting and caulking should be present around bathtubs, toilets and other fixtures should be bolted down securely and drains should be clog free. The home's water heater should be in good working condition also.
6. All heating and cooling systems may have to be checked to ensure they are relatively up to date, clean, in good working condition and have clean filters. Refrigerant should be checked in any air conditioning units and may require proper servicing.
7. Also, a general, unbiased overview of your home by a neighbour or friend may reveal matters which need to be dealt with that you may overlooked.
October 14, 2004 in Selling a Home | Permalink | Comments (0)
Peak year for Toronto home sales
High inventories keeping market from overheating
The Toronto housing trade saw more balanced conditions in September, as the number of listings hit the highest level of the year, helping to moderate a heated market.
Last month saw the second-best September for home resales on record, with 6,588 units changing hands through the Toronto Real Estate Board's Multiple Listing System, according to figures released yesterday. That figure missed the September, 2003, all-time record by 163 sales.
Analysts are forecasting this will be the peak year for home resales in the Toronto area, breaking last year's record.
"Interest rates remain low, income growth is strong, and I don't see anything in the near future that will curtail construction spending," said Peter Norman, vice-president of housing firm Clayton Research.
Inventory levels reached the highest level of the year in September, which is helping to keep the market from overheating, said TREB president Ron Abraham. With 24,293 active listings, this represents a 15 per cent increase over last September and a significant 9 per cent increase over August.
"A higher level of inventory should put some constraints on price increases going forward," said Abraham. As a result, "sellers may not experience such quick transactions."
With the record number of new homes being built in the Toronto area, move-up buyers are placing their homes on the market to move into new digs.
Year-over-year, the average price of a home is up 8 per cent from last September to $320,911 from $304,509.
Meanwhile, building permits in the Toronto area remained healthy, with $1.076 billion in permits secured by developers in August, a decrease of less than 1 per cent over the previous month, according to figures released yesterday by Statistics Canada.
Building permits are seen as an indicator of future construction intentions by builders. While residential permits were up by 12.5 per cent month over month, the non-residential permits slid 22.5 per cent, triggering the overall decrease. Dips in the institutional sector, such as educational buildings, and the industrial sector were to blame, said Statistics Canada.
"The numbers tend to be quite volatile," said Norman. "While the numbers are down for the non-residential sector, there are some projects in the pipeline that should put some life back in the market over the next while."
The residential sector remained the stellar performer in August.
"It is well above average monthly levels," said Statistics Canada economist Étienne Saint-Pierre. Building permits for the year in Toronto keeping pace, down only by 0.5 per cent compared with last year, which was an all-time record.
"It will be interesting to see what happens over the next few months," said Saint-Pierre. "There is some pressure on affordability as the cost of building materials goes up, and you also have interest rates possibly going up further."
Canada-wide, intentions cooled in August from exceptional levels in June and July. The value of permits fell 4.6 per cent to $4.5 billion with residential and non-residential sectors both declining. Despite the monthly volatility, the total value of building permits to date is still 9 per cent higher than the same time last year.
"Despite August's decline in permits, the Canadian residential market is chugging along splendidly, and there are certainly enough construction intentions in the pipeline to ensure an above-consensus reading for housing starts in September," said Carl Gomez, RBC Financial Group economist, in an economic update.
Still, Gomez said he did not see the market continuing with the same kind of strength. "What the building-permits report does suggest, along with other recent housing-related releases, is that Canadian housing market activity has peaked and a steady moderation of building and sales is in the cards for the months ahead."
October 8, 2004 in Selling a Home | Permalink | Comments (0)
Pets can "soil" chances of selling
Pets are often so loved by their owners that they are allowed the run of the house. At their worst, doggie and kitty dictators mark their territory with pungent odors and unsightly stains.
When you love these little furry friends, it's hard to realize how much these pets may be hurting your marketing efforts in selling your home. If you are like most pet lovers, you may be a little on the sensitive side.
If your listing agent is having a hard time communicating with you about your pets and their effect on buyers and other agents, perhaps a look at this neutral third-party list of suggestions may help you understand the problem better:
1. If it smells, it won't sell. Your pet may be perfectly well mannered, but that doesn't mean your home is odor-free. Most pet odor comes from fur and dander. Pets mark their territory by rubbing their fur on objects. That's why your kitty rubs your ankles with her sides. Minimize pet odors by not allowing your pets to sleep on couches and carpets. Provide them with a cuddly bed of their own and reward them lavishly whenever they use it. Deodorize often with Febreze, a product found on most grocery store shelves. Keep pets bathed and groomed more often than usual, so as not to add to existing pet odor.
2. Stains don't have to be permanent. There are many good products to clean pet stains. Just visit your local pet store or key "pet stains" into your favorite search engines. What you will find are companies with advice and products, such as Planet Urine, featured on The Tonight Show with Jay Leno. Pet stores sell a product called Nature's Miracle which also works beautifully. Hospital supply companies are also a great source for heavy duty stain and odor control products.
3. Vacuum daily. While your home is being marketed, vacuum the carpets daily with an odor deodorizer. You can find them in the cleaning supplies section of the grocery store. Remember to change bags more frequently than usual. Treat your home to a professional carpet cleaning. Also, open the windows and let some fresh air in. Pull back the drapes. Open vents. A closed in home will hold more odor than it should.
4. Keep pets from showings. Many buyers are suggestible. If they don't see a pet, they'll look at the home more objectively. If they spot your dog or cat, they will be alerted to look for stains and odors. Arrange to have your pet off the property for showings, and put their food dishes and toys out of sight, too. Keep cat boxes and backyard doggie loos scooped daily. If you have to board your pet to it from doing further damage or soiling new replacement fixtures, do so. You will be rewarded with a higher selling price for your home. When you are in your new home, you can welcome your pet back from its "holiday" with a favorite treat and lots of snuggles.
5. Perception is everything. If your home doesn't pass the sniff or stain test, it will adversely affect the way agents and their buyers perceive your home. Your agent is depending upon other Realtors to show your home to their buyers. Many Realtors insist on showing only pristine homes to their clients. Once word gets around, you may find yourself with few showings which will cause the value of your home to drop.
6. Be realistic about your home's value. A home is only really worth what a buyer is willing to pay. If your home has suffered damage due to your pets, it may be devalued in the marketplace. The only cure is taking action to eliminate the problem before your home goes on the market. Listen to your Realtor and follow his/her advice about the most cost-effective ways to manage your pet's damage to the home. She or he will have suggestions and solutions that will put you right back on the marketing track.
September 28, 2004 in Selling a Home | Permalink | Comments (0)
Get ready for the fall market
The fall real estate season is gearing up, and if you are planning to put your house on the market soon, you need to start getting ready.
Here are some things to think about.
First impressions, no matter what kind of market it is, can make or break a sale. The professionals call this curb appeal. The idea is to make the exterior sparkle.
Sparkle can be achieved in a variety of ways. The most obvious is by cleaning, painting and landscaping.
Clean the mildew off the porch surfaces and the window frames, and paint them if they need it.
Rake leaves and pick up papers. Buy plenty of mulch to give the still-empty flower beds a warm, inviting look.
If you do not have a front porch or front yard, consider window boxes, or put some heavy-duty pots by the entrance and fill them with flowers.
If the house does not have shutters, and shutters do not clash with the architectural style, buy some. Polish the brass doorknobs, knockers and mail slots until they glow.
Prospective buyers feel no constraints about looking in the windows of houses for sale. That means the interior of the house must look inviting, with pictures on the wall and furniture, and no clutter. Even the window treatments should say, "Take a longer look at me." If the exterior is lovely, but there are plain white shades in the windows, then it is time to get something new.
And make sure you wash the windows. There are firms that you can hire to do it, and by removing years of grime, you can fill the house with natural light.
The trick to getting your house ready for sale is to look at it first through a buyer's eyes.
Why? Well, in general, buyers do not see the house through the same eyes as the seller. The seller has years and memories tied up in the house. Buyers are looking for a sound structure at a good price. These days, especially, the typical buyer is interested in value -- how much house they can get for their money.
Drive or walk around your neighborhood or community and take a good look at others' houses, regardless of whether those houses are for sale. Go home, stand across the street, and look at your house and yard. What makes your house better or worse than the others?
Then accentuate the positive, eliminate the negative, and do not mess with in-between.
If you improve the exterior, or "polish the apple," as some real estate agents put it, it could add as much as 10 percent to the sale price of your house.
After you take a look at your house, check out your neighbors'. Will they help sell your house or drive buyers elsewhere? If your neighbor tends to tinker with two or three old cars on his front lawn, someone might think twice about living next door.
There are two ways to handle the problem. You can appeal to your neighbor's better nature, telling him that cleaning up the yard will boost everyone's property values. Or you can make his life so miserable that he will clean the yard so you can sell the house and get you out of his life for good.
Either way, you will win.
Who should do the work you need to get the house ready for sale? Most real estate agents keep a list of plumbers, plasterers, painters and cleaning firms, in case their clients need them.
Often, small tasks, such as touch-up painting, tree-trimming or replacing light bulbs, remain undone because the homeowners just tend to get used to things. It's the basic cosmetic stuff, but it can make a difference in sale price.
Do not overdo the preparation, though. Most agents believe that if a house has an old furnace that is working fine, it should be up to the buyer to replace it. If a buyer takes issue with that, then provide the name of a heating contractor to the buyer to deal with it.
One thing agents do not tolerate is clutter. Consultant Lauren Harper Haden calls this the "cut in half" concept, in which the agent tells the seller, diplomatically, of course, to get rid of at least half of the stuff in every room. "Walk them through each room," Haden urges agents. Emphasize that the less clutter, the larger the house looks and the easier it will be for prospective buyers to see themselves living there.
September 21, 2004 in Selling a Home | Permalink | Comments (0)
House fluffing for fun and profit
To get the most for your home, you need potential buyers (and their agents) to feel it's a "hot property".
If a potential buyer is emotionally invested in your house from the first time they walk in, and they feel there is a lot of interest from others, they'll be more motivated to make a quick decision and pay close to (or even above) your asking price.
While at one extreme Home Staging or House Fluffing involves renovations or re-furnishing, at the other extreme are basic steps that greatly improve the presentation of a home.
Here are 10 low cost steps to enhance the look of your home. Even if you're not moving, you will find they make your home more relaxing and enjoyable to live in.
1. Consider the curb appeal.
Landscaping would be nice, but it's not in everyone's budget. At minimum, lawns should be freshly mowed, leaves raked, or snow shoveled. Consider a hanging or potted plant for the entrance. Sweep the porch, deck and all walk ways and ensure garbage and recycling are tucked neatly away from the front of the house. Naturally, there shouldn't be toys or junk lying around outside.
Spend at least 30 minutes with a bottle of Windex or some bleach and clean your front door, porch, outside railings and steps. This is cheaper than repainting (or renting a power washer) and often makes a world of difference. Once the outside entrance is clean, decide if the paint really needs a touchup.
2. Get rid of clutter!
Pick one closet or area at a time so the task isn't as daunting. Look at every item with a very critical eye and ask yourself why you're keeping it.
Forget about hanging onto stuff until you get around to holding that big garage sale. Pick your favorite charity and donate it all. You paid for these things long ago, why not just give them away to people who REALLY need them? I like to take things to women's shelters— they need household goods, clothes and kid's stuff. For women starting over, "interview" clothes are also a big help!
You'll probably have to edit the same closets a number of times to really whittle them down to the "essentials".
Removed clutter from the desk top and credenza. It's also important to get those piles of "stuff" off the floor and into storage or recycling. Here a large painting provides a stunning focal point for the end wall and emphasizes the generous size of the room.
If rooms and closets still look cramped after the purge (after all you're moving because you need more space, right?), consider renting a storage locker. I have even resorted to storing items in the trunk of my car.
Eliminating clutter includes putting away many of your personal items. Is your fridge covered in photos and school notes? Does the edge of your bathtub look like a drugstore shampoo aisle? Please put these things away! They all make it harder for potential buyers to imagine themselves living in your space.
Built in cabinets and shelving should be especially free of clutter. Edit the items on display to organize the space. This enables potential buyers to immediately appreciate how much space they will have for their own treasures.
3. Turn excess inventory into cash.
If you have a collection of items for projects you never got around to, return them. This also applies to the two-year supply of light bulbs, canned goods or paper products sitting in your basement. Without a receipt you won't get cash, but you will have a store credit that you can use once you move. Less clutter and less stuff to pack, move and unpack again!
4. Watch where the eye goes.
There are speedy and low cost solutions to many of the little problems that together make a home seem shabbier than it needs to. Here's a great example of a bathroom transformed in a day for minimal cost.
Walk along each corridor and into every room and check where your eye is drawn (better yet, ask a critical friend or family member). If the eye is drawn to the chipped white paint on the door frame, take some "white out" and fill it in. If it's those old nail holes in the wall, see if you can hang a picture to cover them or camouflage it some other way. I've used "No More Nails" to quickly fill holes and craft paint to match the wall colour.
Glue any peeling wallpaper. If it's really horrible and you can't afford the time or money to fix it properly, hang pictures and strategically place baskets. You won't cover the problem entirely (which would be wrong anyway), but you will draw your audience away from the problem by giving their eyes something more visually pleasing to focus on.
Sometimes it's as easy as adding the right piece of art, a fluffy coordinating towel and some fresh flowers, as seen in this powder room.
5. Find a fix-it person.
Ensure cupboards open and shut and that no taps are dripping. Look in all rooms for things you never got around to fixing and decide which ones might be distracting to potential buyers. No, it's not OK for door handles to fall off, even if you have learned to ignore it!
I recently visited one home that's been sitting on the market while those around it sold. Now this was not a cheap house being sold as a "handyman's special". Among other glaring problems, there was a big hunk of plaster missing on a wall off the master bedroom. I guess I'm not the only one that wouldn't pay over $400,000 to look at old lath!
6. Clean, clean and clean again.
Most mortals can't live in a spotless environment all the time. This can be one of the more stressful aspects of having your home on the market— but it's worth the effort to sell your home for top dollar. You can hire a professional service to come and deep clean everything; then take 20-30 minutes each day to maintain it.
Appliances should sparkle even if you're not including them with the house. After all, you might throw them in later as a negotiating tool. Countertops, taps, sinks and bathtubs should be shiny and free of water spots.
If you have a pedestal sink, don't forget the dust that collects on top of the plumbing where it attaches to the wall. I'm serious! If the whole sink is spotless and the taps aren't dripping, it will look new!
Dust shelves and vacuum or "Swiffer" the floors. Naturally, all beds should be made. At a recent open house for a Beach area home listed over $500,000 (and over 60 days on the market), they hadn't even bothered with these two simple steps! It made me— and no doubt others— wonder what bigger things had been neglected.
Remember that clean windows let in more light and they look newer. Hire a service if you have to— it's worth the investment. When arranging items remember that symmetry brings a sense of order and calm to the space.
If all this attention to detail seems too over the top, remember that a very clean home leaves the impression that the house is well cared for. This helps put buyers at ease— especially a first time buyer who may be worried about the responsibilities of owning a house.
7. Let in some air.
Open some windows for at least 10 minutes. There is nothing worse than walking into a stuffy house or one that smells of smoke and pet odors, yet I've seen hundreds of them over the course of my real estate hunts in four cities. Well, I haven't really seen them; I always walk out as soon as I feel like I can't breathe.
8. Let in some light.
It might be mood lighting to you, but if you're trying to sell your home, keep it bright! Dimly lit rooms tend to look small and dingy— especially during the day. If you have a particularly dark room, consider investing in a floor lamp that will bounce light off the ceiling. Ikea has nice and inexpensive ones in a variety of styles.
It's important to open all window coverings and lights prior to house showings. Don't assume the agent showing your home will take the time to do this.
You can also request that any agent showing your home leave the lights on for the next showing. Even if there isn't another showing booked, it creates the impression of lots of activity. This is especially effective if you announce it on your way out so the potential buyer hears you.
If your walls are so dark that they're sucking up all the light, consider repainting. You can even buy a small can of a lighter shade of your wall colour, mix it with glaze and rub it onto the wall. It will reflect light and give the room a more open feeling. This approach saves much of the preparation and clean up involved in repainting.
9. Don't forget fresh flowers.
You don't need to spend a fortune to have fresh flowers throughout your home. Even a daisy in a bud vase brightens a bathroom counter. Ask your florist which blooms last a week. Avoid lilies— they look great but their powerful scent causes an allergic reaction in many people. While cut flowers look best, you can also use potted flowering plants that are in season for a low-cost solution.
10. Carefully consider music.
Soft background music can help create a soothing environment and camouflage neighbor and traffic noise. But make sure the volume is very low. Blaring TVs are definitely a no-no, but you'd be surprised how many people leave them on for showings!
September 21, 2004 in Selling a Home | Permalink | Comments (0)
Mistakes in selling your home
When you are getting ready to put your property on the market, there are a myriad of things to think about, to prepare for and to organize. Here's a short list of some of the pitfalls to watch for:
Deadly Mistake No. 1 - Pricing Incorrectly
Every seller wants to realize as much money as possible when he sells his home. But a listing price that is too high often gets the seller less than a price that is at market value. If your house is not priced competitively, people looking in your price range will reflect your house in favor of other, larger homes for the same price. At the same time, the people who should be looking at your house will not see it because it is priced over their heads! Overpricing usually increases time on the market, and that adds to the carrying costs. Ultimately, many overpriced properties sell below market value.
Deadly Mistake No. 2 - Failing to "Show Case" the home
Buyers look for homes, not houses, and they buy the home in which they would like to live. Owners who fail to make necessary repairs, who don't spruce up the house inside and out, touch up the paint and landscaping, and keep it clean and neat chase buyers away as rapidly as Realtors can bring them.
If you were selling a car, you would wash it, or maybe even detail it to get the highest price. Houses are no different. Ask for our video "Dress for Success," explaining the six steps to get the highest price for your home. We'd be happy to send it to you.
Deadly Mistake No. 3 - Using the "Hard Sell" during showings
Buying a house is an emotional decision. People like to "try on" a house and see if it is comfortable for them. It's difficult for them to do that if your follow them around pointing out every improvement that you made. It may even have the opposite effect you want, by making them feel they are intruding on your private space.
Resist the temptation to take the entire time a buyer is there... let them discover things on their own. Try a tasteful sign posted on a door or wall to point out some hidden amenity that they might miss.
Deadly Mistake No. 4 - Mistaking lookers for buyers
For Sale By Owners always get more activity than houses listed with an agent. No question about it. Realtors will only bring qualified buyers, and these will be fewer than if you open your front door to everyone who walks down the street.
A qualified buyer is one who is ready, willing, and able to buy your house. We find that most people who go looking at For Sale By Owners are just starting to think about moving. They may be good buyers, but they're just 6-9 months away from being ready. They don't want to bother an agent yet, so they call the "By Owner" ads to get a feel for what's available.
Many potential buyers may have a house to sell first, or may need to save some more, or may have credit that needs fixing. When everything is in place, that's when they go out looking with a Realtor.
An agent will ask a buyer how much he can really spend for a house, how much he has to put down, how good his credit is, how much he can pay each month, how much he will realize (realistically!) when he sells his present home - and about a dozen other questions like that. But unless your Realtor finds all the facts first, you must ask all these question before the buyer crosses your threshold. Otherwise, you may have a parade of Sunday afternoon shoppers with a dream of owning a home one day.
Deadly Mistake No. 5 - Not knowing your rights and obligations
Real estate law is extensive and complex; the contract for sale and purchase is legally binding document. An improperly written contract can cause the sale to fall through, or cost you thousands for repairs, inspections, and remedies for items included or excluded in the offer. You must know whether the property can legally be sold "as is," and how deed restrictions and local zoning will affect the transaction. If there are defects in your title, or if your property is in conflict with local restrictions, you or your Realtor must remedy them, or you might have to pay plenty.
Deadly Mistake No. 6 - Signing a listing with no way out
Many times an agent will have good intentions about marketing your house, but circumstances can change. There might be a death in the agent' s family, or the agent may decide to quit the business. In these cases where the agent couldn't or wouldn't perform, you should have the right to fire your agent. In some companies the broker will assign your listing to someone else in the office, someone you didn't personally select. Always protect yourself by getting a guarantee of performance with the right to cancel.
Deadly Mistake No. 7 - Limiting the marketing and exposure of the property
The two most obvious marketing tools (open houses and classified ads) are only moderately effective. Surprisingly, less than 1% of homes are sold at an open house. Agents use them to attract future prospects, not to sell your house!
Advertising studies show that less than 3% of people purchased their home because they called on an ad. And if a machine answers, most callers just hang up with out leaving a message.
The right Realtor will employ a broad spectrum of marketing activities, emphasizing the ones he believes will work best for you and your particular property. There are dozens of more effective ways to find buyers than just open houses and advertising.
Deadly Mistake No. 8 - Believing that a bank mortgage appraisal is the market value
An appraisal is an opinion of value for a certain purpose. If the lender wants to lend you the money, they are motivated to have the appraisal come in high. The appraiser may ignore foreclosure or distress sales in order to justify the higher value. But a real buyer in the real world will not ignore these properties. They are your competitors when you try to sell.
Deadly Mistake No. 9 - Choosing the wrong Realtor
It's likely that you don't interview people very often. And yet in order to find the Realtor who is right for you, you may interview several. The quality of your home selling experience is dependent upon you skill at selecting the person best qualified.
It's interesting that in the real estate business, someone with many successfully closed transactions usually costs the same as someone who is inexperienced. Bringing that experience to bear on your transaction could mean a higher price at the negotiating table, selling in less time, and with the minimum amount of hassles.
The world is populated with Realtors who are wrong for you. For example, the part-timer who sells an occasional house because he or she needs a little pocket change, or the insurance salesman who believes he can handle two careers. Or perhaps your cousin George, who really needs your business.
The sale of your home could well be the most important financial transaction you have ever been involved with. The person you select can make it a satisfying and profitable activity, or a terrible experience. It's your home, and your money. The choice of your Realtor is up to you. Make that selection carefully.
September 21, 2004 in Selling a Home | Permalink | Comments (0)
