By Max Havens – Blogger/Marketing Coordinator

Over the past 12 weeks, our experienced agents have guided you step-by-step on what to do to prepare to sell your home.  We’ve discussed goal-setting and plotting a timeline, what to ask when interviewing an agent, and tips on making both the interior and exterior ready for camera, among many other topics (If you’ve missed any of our posts, they are always available on our blog).

After all of that, there’s still one final important step in preparing to sell – one that, if considered carefully, can keep your mind sane and your blood pressure down during an already stressful process.

Understanding the other side.

Follow the wise words of Michael Corleone in The Godfather Part II and “Keep your friends close, but your enemies closer.” Now, although dealing with a prospective buyer may feel every bit as intense as some of the scenes in The Godfather, in reality this is just a business transaction, so stay as emotionally unattached as possible.

However, you need to keep your buyers close by understanding their intentions.  And really, this shouldn’t be too difficult because if you’re selling, it’s likely that you are in the market to buy a home as well.

With all of this in mind, here are some points to consider to try and understand today’s buyer.

Cash is King

Although a buyer may check out a home well-above their budget and torture themselves into considering a purchase, most buyers will have a strict price range that they will look to stay within.  If your home doesn’t fit in that range, they’ll move on.

It’s 2012 – The Internet is Everywhere

The days of driving around neighborhoods and grabbing marketing sheets out of a box on a for-sale sign are slipping away.  A prospective buyer has access to multiple online sources of information for your listing, and the broker’s website is just a start.  Numerous third-party sites such as: realtor.com, Zillow, Trulia, etc. can offer dozens of photos, walk-through videos, and floor-plans in addition to raw measurement and financial data.  Today’s buyer can be self-educated as a supplement to the resources that their agent provides.

It’s Not as Easy to Buy as it May Seem

Yes, as you’re well aware, real estate prices have taken a nose dive due to the recession and interest rates (although starting to climb again) are still incredibly low.  However, banks have also made getting a loan much more difficult than in the pre-recession years.  Although it is a good time to buy, it is important to understand that the supply of buyers is still relatively thin.

The Competition

Obviously your main source of competition is other homes for sale with similar features, in the same area with a similar price.  These are likely many of the same homes that your agent looked at when analyzing comps to set an asking price.  However, not all competition is the same: people who are relocating may be looking at homes from all over your metro area, as they are not as up on the best places to live in town.  Also, many buyers may have renting as a viable solution in the back of their minds should they become frustrated in their attempts to buy.  Have an idea of your competition.

Of course these are just a few aspects to consider, but by getting into the minds of your potential buyers, it is easier to understand their intentions.  Keep your friends close, but your buyers closer…

Be Prepared to Buy

By Liz Rainey – Agent/Relocation Specialist

Chances are if you’re trying to sell your house, you’re also in the market to purchase a new place to call home. If you are planning to do so by taking out a home loan there are several things you should consider before applying.

After working so hard for so long to try and find a buyer for your home, the last thing you’ll want to have happen is find out that you won’t qualify or will only do so at a rate that is much higher than what you had planned.

With this in mind, here are 7 tips to keep in mind before applying for a home loan:

1. Don’t buy or lease an automobile – the lender looks carefully at the debt to income ratio and a large payment such as a car lease or purchase can greatly impact those ratios and prevent the buyer from qualifying for a home loan.
2. Don’t move assets from one bank account to another – these transfers show up as new accounts and complicate the application process, as you must then disclose and document the source of funds for each new account.  You can consolidate your accounts later.
3. Don’t Change Jobs – a new job may involve a probation period which must be satisfied before income from the new job can be considered for qualifying purposes.
4. Don’t buy new furniture or major appliances – wait until AFTER you close to buy.  If the new purchase(s) increase your debt load, it can disqualify you from the loan or deplete your funds to close.
5. Don’t Run a Credit Report on Yourself – this will show as an inquiry on your lenders credit report,  Inquires must be explained in writing.
6. Don’t Attempt to Consolidate Bills – your lender can advise you if this needs to be done
7. Don’t pack/ship financial information needed for the loan application – important information such as W-2 forms, divorce decrees, Form DD-214, Certificate of Eligibility, tax returns, etc should not be sent with your household goods.  Duplicate copies take weeks to obtain.

Make Your Home’s Head-Shot Stand Out!

By Michael Weiss – Agent/Relocation Specialist

The exterior head-shot of a home really can be make or break when it comes to attracting potential buyers.  Every market will always have numeorus outstanding homes that end up not getting the attention that they deserve because they simply do not show as well as they potentially could.

It’s no coincidence that agents use the term head-shot when referring to the primary photo that’s used for marketing a home, as the purpose of the shot is to try and get an audition from a potential buyer, just like an actor sends his or her head-shots out to try and land a role.

An actor certainly wouldn’t market himself with a head-shot that puts him in anything but the best light, but so many homeowners bring their home to market without doing some basic work to make it look more attractive.

While an expensive renovation or restoration would certainly make a home look much more inviting (I’ll spare you a plastic surgery-actor analogy here), there are dozens of simple, relatively inexpensive ways to help your home land a role with a buyer this Spring.

Make the greenery look more lush and appealing:

• mulch
• prune
• plant
• weed
• edge
• cut-down old plants

More importantly, though, make the house more appealing and fresh looking:

• Add a fresh coat of paint to the front door
• Hang new shutters, or give them a fresh coat of paint
• Install new light fixtures in the entry
• Install solar lights along the walkway
• Replace old door knockers and fixtures
• Paint any railings
• Power Wash your siding
• Tuckpoint
• Paint the facade
• Consider adding a storm door to make the entry look more open

It’s finally starting to get nice outside anyway, so spend some time getting your home audition-ready.

Should I Stage my Home?

By Elaine Medve – Agent

The ability to visualize space and all of its potential in terms of size, layout and style is what staging accomplishes.

Most people think they can picture what a property can look like, but a well-staged home takes all of the guess-work out of the equation.  The most important part of the staging is allowing the prospective buyer to view what a room can truly accomodate in terms of size and personalize it as to how their furniture might work in the room.  It really helps to give the buyer that tool.  When professionally done, the first impression is a wow factor which many times pushes the buyer over the edge.  Buyers have a much easier time visualizing themselves in a home when warmed up with accessories and furniture.

A creative stager who has a sense of style and maximizes the space will accessorize and warm up every room.

If a property is furnished and shows well as-is, there is no need to stage it.  An empty home or condominium, even when newly constructed with all of the bells and whistles of granite countertops, stainless appliances, new bathrooms, hardwood floors, still shows better when staged and warmed up with accessories.  Not every room needs staging…sometimes the main living area, a master bedroom and accessorizing baths and kitchens is enough.

Real Estate news outlet, Inman (an outstanding source for anyone that wants to keep up with the industry) took a comprehensive look at Dual Agency last week (read the entire thing here).

For those not aware, Dual Agency is when the buyer and seller are represented by the same agent.

The piece cites a survey in which 58% of respondents thought it unacceptable or undesirable for a single agent to rep both sides of a transaction, but only 25% thought the same if two agents in the same brokerage repped both sides.

One broker went so far as to compare dual agency to “hiring your spouse’s attorney to represent you in the divorce proceeding.”

Of course, there are situations where an agent will take a lower commission if they are repping both the buyer and seller, so in this regard, Dual Agency can be beneficial to both sides.

We want to hear from you: would you hesitate to buy or sell when your agent is also working with the other party?  Do you think Dual Agency is unacceptable overall, or would you be comfortable with it if you had trust in your agent to rep you fairly?

Deep Clean, De-Clutter, De-Personalize

By Jen Ross – Real Estate Agent/Relocation Specialist

Getting ready to list your house this Spring?  There are many things to keep in mind to best “prep” your house for showings – but the core principles all begin with “D”:

Deep Clean, De-clutter, and Depersonalize…

• Deep Clean – From washing the windows to dusting the baseboards and blinds, a sparkling house will shine and sell faster.  Pay special attention to detailing the kitchen.  Clean off all the counter surfaces and put away all small appliances too – even the coffee pot.  Make sure appliances are clean inside and out.  Wipe down cabinets, light fixtures, and switch plates.  If you are able to do any updates, do them in the kitchen and bath(s).

• De-Clutter – Rent a portable storage unit that can be delivered to your house.  No matter who you are, you have extra stuff in your basement and your garage.  Buyers want to see that their belongings will fit into the house.  Too much clutter will detract from the positive aspects of the house.  Focus also on closets.  Half of what is in each closet should go into off-site storage.  Straighten stacks of clothing and neatly hang items with hangers facing all one way.

• De-Personalize – Family photos are personal, no matter how attractive or well displayed.    They are distracting and I have often watched buyers go from room to room looking primarily at photos to see if they recognized the owners.  That is a serious distraction.  When you leave up portraits and framed photos, buyers see you as owners of the house, not sellers of the house and that means that they look past seeing themselves as the owners.  Art can and should be used to enhance the décor of your house, but please take down any and all photos of yourself, other family members, and pets.  It sounds harsh, but you are better off creating a neutral environment than one that invites distraction for potential buyers.

These are some very basic – but essential – tips for getting an advantage over other available houses.  Trust me, just taking the time to follow the above suggestions will pay off tenfold.

Last Thursday, Reuters ran a story discussing whether or not owning a home should still be viewed as a sound financial investment (read the full story here), and the role that emotions can play when discussing home ownership as the American Dream.

The story quotes, Rich Arzaga, an adjunct professor of personal finance, as saying that, “100 percent of the time it was better to rent, rather than own.” This is despite the fact that the article cites Arzaga as being a homeowner himself because he preferred the lifestyle of being a homeowner.

Clearly then, taking such an absolute stance against home ownership is flawed if the same person refers to a superior lifestyle as a reason for still owning a home.

While it is certainly true that renting eliminates many of the headaches that home ownership can bring (namely: maintenance and repairs, home insurance and the dreaded yard maintenance duties), it has yet to find a place in our culture as prominent as ownership.

There certainly is something to be said for the positives of owning a home – after all, it just feels like the American thing to do, right?

What this article really drives at is that maybe it isn’t a good idea to want to own a home just because you feel like you should. At the same time, though, it’s important to understand that even though home ownership can come with many headaches – for most, these don’t even come close to outweighing the positives.

When you figure that it’s currently possible to buy a home at a low price and an incredibly low interest rate, while understanding that rental rates will continue to climb – it’d be foolish to suggest that Arzaga’s 100 percent statement is applicable right now.

But is it just as foolish to dismiss renting as a plausible option just because it doesn’t have the same feel to it that ownership does?

We want to hear what you think – comment below or drop us a comment on our Facebook Page to tell us how you weigh your emotions against financial planning when considering a real estate decision.

Consider a Pre-Listing Inspection

By Liz Rainey – Agent/Relocation Specialist

If you are thinking of selling your home, you might want to consider having a pre-listing inspection.

According to the U.S. General Accounting Office, more than 85 percent of homebuyers who applied for a mortgage also requested an inspection.   In today’s real estate market, homebuyers can afford to be choosy.

A pre-listing inspection, sets the stage for a more qualified sale and provides an opportunity to receive an unbiased, objective evaluation of the current condition of your home by a third party. Like any home seller, you want to get the most dollars for your home in the shortest amount of time. Don’t let repairs be a negotiating tool for your buyers.

Generally, your final selling price is determined long before the inspector ever sets foot inside your door. That leaves a huge question mark lingering over your negotiations — are you going to be forced to drop your final figure again if a major problem is uncovered?

By getting an inspection early, you’ll know what concessions a buyer might request. That allows you to set your asking price accordingly and find out whether or not you’re in a position to play hardball.

No matter how handy you are, there’s always a risk of misdiagnosing a problem, but getting your home pre-inspected could help you avoid wasting money on unnecessary repairs.

Say your toilet hasn’t been flushing quite right, so you pay a plumber to replace it — only to learn upon inspection that the problem was in your septic system. A pre-inspection helps you avoid doing double-duty, since the inspector can pinpoint the problem and recommend the right repair.

While the average home inspection costs a few hundred dollars, it can save time and money in the long run.

Make your Home Shine Without Breaking the Bank

By Michael Weiss – Agent/Relocation Specialist

As we begin to plan for Spring, those of you who are planning to put your home on the market are likely trying to determine which repairs and enhancements you’ll need to make to help make your home shine to a buyer.  While I’m sure you are able to come up with a fully comprehensive dream-list of enhancements, fitting them into your budget is another matter entirely.

With that in mind, I always recommend first considering the 3 cheapest categories of enhancement: Lighting, Cleaning, and Opening.  When done correctly, these objectives can be addressed without spending much at all.

Lighting:

Here are several ways to increase the natural and electrical light of a home.

1) Consider using 75-100 watt light bulbs where safely able to

2) Take down or pull back window treatments and open all shades

3) Paint a room a natural soft color

4) Make use of lamps

5) Check to make sure you don’t have any burned out bulbs needing to be replaced

6) Clean the inside and outside of the windows

Opening:

Here are some simple ways to make a home have a more open feeling.

1) Make sure all windows are fully visible

2 )Take down refrigerator magnets and all items stored on kitchen counter tops

3) Take down excessive art or pictures

4) Re-work furniture to make a more inviting floor-plan

5) Push furniture against the walls or remove large furniture items

Cleaning:

Here are some thoughtful cleaning ideas before putting your home on the market.

1) Re-caulk all tubs, vanities, toilets, and showers where needed

2) Dust all vents, baseboards, behind appliances and furniture

3) Touch up paint in high traffic areas and wipe down doors, sills, and cabinets with Windex

4) Clean out all appliances and cabinets

5) Murphy’s Oil on all wood floors

6) Rent a carpet cleaner and deep clean all carpets

With the spring market on the way, you don’t want your home to be left behind due to simple items that you can easily address.  These recommendations can really transform the look of your home and potentially save you thousands of dollars when it comes to the negotiated price of your house.

If a home is sparkling when a potential buyer walks in, they will walk away with a good impression overall.

Gather Your Paperwork

By Liz Rainey – Agent/Relocation Specialist

In planning your sale, you can get a great head start by pulling together the necessary paperwork ahead of time.

• Disclosure Documents: Your agent will provide you with this form, in which you are legally bound to disclose any problems that you know of in the house. This includes any documentation of anything that might impact a buyer’s decision about your home, whether it’s inspection reports, repair receipts or estimates for repairs you haven’t actually done yet (ask your agent what exactly is needed here).
• Home Documents: These should include the deed to the house, proof of title insurance, proof of homeowner’s insurance, a property survey, a floor-plan with dimensions, and a list of any appliances or other items that you intend to include with the house.
• Mortgage Statements: Before the property’s title can transfer to another owner, the escrow or title company will need your mortgage statements to order payoff demands from any mortgage holder who has to get paid before that can happen
• Financials: If you are planning on a short dale, you’ll have a lot more paperwork to gather in your process – including paycheck stubs, bank and investment account statements and two (2) years’ W-2 forms or tax returns – the bank will review these to determine whether they will authorize you to sell the home for less than what you owe.
• Draw up a list of all your home’s best selling points, as your agent may not notice all of them. Not all of these documents are absolutely necessary, but if you have them handy it will save you time later on.

Keep in mind that it is a good idea to make copies of these documents or scan them into your computer whenever possible.  By preparing these documents in advance you can save yourself some time and headaches later on.

Find the Right Agent

By Jen Ross – Real Estate Agent/Relocation Specialist

There are several key things to be aware of when getting ready to list your house for sale, among them, finding the right agent is first.

Interviewing agents can be like screening for a babysitter: you need to find the one you feel most comfortable with while still having the qualifications to take care of your most important investment.

Choosing an agent should not be based solely on who tells you they can sell your house for the most money.

When comparing agents, their style and personality are good indicators of whether or not you feel they are a good match for you, but what about concrete factors? An agent should be able to produce a biography, their background and past sales history so that you know they have a proven track record.

They should go through their advertising/marketing plan for your house and have examples to show you.

They should offer honest advice for pricing and preparing your home for sale.

They should explain their communication and follow-up procedure as well as the process for listing your house with them, including a timeline for how long it will take to get the house officially “on the market”.

After you have collected all the information and can make a decision about which agent is the best fit, you should expect them to promptly deliver the listing paperwork to you and explain it in detail.  You should expect an agent to ensure that your house goes on the market according to the timeline you were presented and for them to follow up with you and contact you as they said they would during the listing appointment.

You should expect that your house, if priced correctly, will sell and that your agent (always having your best interest at heart) will be there for you throughout the entire process.

By Greg Iverson

Mortgage Banker – Envoy Mortgage

A very important tax benefit disappeared at the end of December that could cost homeowners thousands every year in lost tax deductions.  This tax benefit was for homeowners who pay private mortgage insurance premiums as part of their monthly mortgage payments.

Many homebuyers in recent years have taken advantage of lower down payment mortgage programs, oftentimes with only 5, 10 or 15% down.  These mortgages come with a monthly mortgage insurance premium that protects the lender in the event that the borrower defaults.

Beginning in 2006, these mortgage insurance premiums were tax deductible (similar to mortgage interest) within certain restrictions.  Single borrowers and married borrowers filing jointly with adjusted gross incomes of $100,000 or less could write off 100% of their annual mortgage insurance premiums.  Married borrowers filing singly were able to write off 50% of premiums.  Above $100,000, borrowers were possibly able to qualify for partial deductions on a sliding scale.

As of January 1^st, this tax incentive is no longer available along with 58 other tax code benefits such as tax credits to homeowners making energy-efficient home improvements.

MGIC, a private mortgage insurer estimates that a borrower earning $100,000 per year with a mortgage of $200,000 stands to lose between $600 and $1,000 per year in tax deductions.

There is still some hope that this part of the tax code could be included in an election year package that could be passed later in the year.  One thing is for sure, homebuyers of the last few years will want to keep a close eye on this and possibly look to a loan program with Lender Paid Mortgage Insurance if they are no longer able to deduct the premiums they’ve been paying and still don’t quite have 20% equity in their home.

The ABCs of CMAs

By Michael Weiss – Agent/Relocation Specialist

Doing a comparative market analysis is an important part of both the selling and buying processes.  However, I feel as though many people that I’ve worked with have questions regarding what exactly goes into a comparative market analysis (CMA), so I’ve decided to take this opportunity to describe the analysis further.

Two important factors: Comparable homes (COMPS) should be in the same geographical sub-market and sales data meant to ascertain value ought not be more than 120 days old if possible.  The markets move up and down each month and values can fluctuate depending on the time of year and outside economic factors.  And as we all know (especially in St. Louis), simply crossing a street can see home values soar or plummet, so location is king.

Of course proximity and time are only two factors.  Simply put, the more similar the properties being compared, the better.  Here are some other factors that are often given prominence in a CMA:

• square footage
• number of bedrooms
• number of bathrooms
• lot size
• garage spots
• cosmetic & systematic upgrades

Look to see that the home fits comfortably into its price range and is not an outlier compared to other homes that have recently sold.

Notice how many days it took to sell similar homes and how far off the original asking price they had to come down to sell.  Where homes sell quickly, you can expect people to want to gain entry when it’s time for you to sell.

Ultimately there is no crystal ball as to whether a real estate deal will work out in the end financially, but if you look at real estate values over the last 100 years the average appreciation of a home was right at four percent.  Homes have different values to different people and it all has to do with a million little factors that play into it.

Remember, for buyers a home’s value is based on what they believe is within reason depending on their personal circumstances, financial and otherwise. Meanwhile, for sellers a home’s value is what someone will offer for it on any given day.  What you should sell it for is a totally different question and can only statistically be justified by intelligent use of COMPS.

Study the Local Market

By Elaine Medve – Agent

When contemplating selling your home and putting it on the market, it is imperative to educate yourself as to what is happening in the marketplace.  This is a major decision that can be quite stressful, and having realistic expectations makes the entire process go smoother.  We don’t have a crystal ball to predict what offer may be received, but by studying the market we gain a better idea of the value of your property at this particular time.  Armed with this information, you will be able to make a more informed choice as to whether or not this is the right time for you to sell.

Over the past few years, we have experienced a market correction in terms of value, resulting in an abundance of property on the market, and unfortunately less demand than we used to see.  By studying the market conditions specific to your area, you will gain a much better idea of the value of your home and where to position it in the marketplace.

Meeting with an Upper End agent who is able to provide data and get an idea of value is a great place to start.  We can customize a property report comparing your home to others within a close radius that factors in square footage, bedrooms/baths and lot size and give you an idea of what has sold in your area for what amount.  With this information, you can ascertain a realistic price range for your home to be sold.

Visiting other open houses in your area to compare homes to yours and seeing the advantages of getting your home REALLY ready before listing it will be an eye opening experience.  Doing all the right things to market your home in the best light will truly pay off.

If you’re looking to sell sometime this year, there’s no better time to start researching than now.  We understand that the selling process can be quite intimidating, but the information gained by analyzing the market and setting a realistic price range for your home is an exceedingly valuable early step in the process that can provide great peace of mind.

Put Your Intentions in Writing

By Liz Rainey – Agent/Relocation Specialist

The first step is always the hardest, but this will help make the process run smoother.  Before you decide to put your home on the market you need to make sure you have clear goals and that you are selling the house with someone that has the same goals and expectations.  Unexpected challenges and situations might come up in the course of selling your home, so having a clear idea of your ultimate goals at the outset is imperative to help you make the right decisions along the way and to remind you when you might need to course correct.

When you are working on your goals it is important to be specific.  Drilling down to the details of what result it is you want your home sale to achieve in your life.

Establish where your priorities lie, either with speed or dollars.  Is your goal to sell your house as quickly as possible or to sell your home at the best possible price, regardless of how long it is on the market (no matter how long it may take).

Being as clear as possible from the very beginning on your priorities and ultimate life objectives for the sale will allow you to communicate these crucial things to your agent, and will power your decision on issues like:

• Which home improvement projects, if any, to complete before you list your home
• What offers you would consider and those that you wouldn’t (paying for closing costs, home warranty, etc)
• How aggressively to negotiate counter-offers, and on which points to push back against a buyers offer

If you are considering selling your house in 2012, outlining your goals and establishing realistic expectations is the best first step to take.  It’s already past the first of the year, and Spring will be approaching fast; start today!