We have a newer agent in our office who is also a licensed appraiser. I had an interesting discussion with him recently about the differences in “values” of homes, depending upon who was making the call. I’ve concluded that there are four distinctly different views of a homes value—all of them correct from the point of view of the person doing the value analysis—the four faces of a homes value.
The first and closest to the heart for most readers, I’m sure, is the homeowners view of the value of his/her home. Homeowners tend to come up with a value based upon combining what they think the place is on the local tax books for, plus adding the value for any improvements that they’ve made. A homeowner who finished his basement at a cost of $20,000 and replaced windows at a cost of $6,000 and put on a new roof for $5,000 thinks that they should get all of that money back in the price of the house when they sell. As you will see, that is not how the other three faces of value see it.
The second value arbiter is the local government assessor—the person who determines what your house is on the books for at the township/city level. These folks start with an appreciation formula that is a mystery to most. It combines state and local economic factors to determine how much the government says your house has appreciated over the past year (no matter what the market says). These folks are looking more at replacement cost than anything. What would it cost to build a replacement house of equal quality and features today. If you have been honest and done improvement work with permits, they will be more than happy to increase the “”value” of the house to include the cost of those improvements.
The next two faces are fairly close in the end number that they come up with, but with differing approaches. The mortgage appraiser is looking at your house in the context of the market, comparing it to other houses with similar features and size and trying to determine what is a reasonable number for the mortgage company to put at risk. Your realtor is trying to determine where your house fits in the current active market and how much someone might be willing to pay for it. The appraisers’ numbers might be a bit higher than the realtor, because appraisers tend to “bake in” a year or two of normal appreciation, albeit that is a low number these days. The appraiser might look at your $20,000 basement and give you $2,000-3,000 added value for it on his appraisal.
It’s not unusual for me to hear from a potential listing customer that he/she had an appraisal done for a recent re-finance and it came out higher than my recommended price. They normally go on to give me a whole list of improvements that they’ve made, some stretching back over years, as further “proof” that their house is worth more than I have suggested. Those are all nice marketing points, but usually I have baked them into my market evaluation already and I’m looking at the value today, not in two years. Trust me! I’m the only face (other than what you see in the mirror) that is working for you.
Saturday, June 30, 2007
Friday, June 29, 2007
Before you drop the price
Items to Consider Before Dropping the Price
When a house won’t sell, the answer is often to drop the price, but is that the right answer or just a knee-jerk reaction? Maybe you haven't taken care of the 3-C's yet (see posting below). Make sure that those buyer criteria aren't the source of no offers. This may be the case if you are getting a reasonable amount of showing traffic but no second visits or offers.
If price is the issue, then how much and when should it be lowered?
1. Price the house right to begin with — it will get the most activity when it first goes on the market. Agents love "new" listings, something that they haven't already shown to their buyers. Buyer these days also hover on real estate search sites looking for new listings. Get it priced right when this first wave of buyer interest hits.
2. Lower the asking price sooner rather than later while it's still fresh in buyers' minds. It used to be that lowering the price might carry a "what's wrong with this house" meaning. Not anymore. Now it's more likely an indication that the seller "got real"on the price.
3. If there has been no offer in one to two months — six at the most — consider dropping the price, then re-evaluate every two to four weeks. You can also look at the showing activity for guidance. No showings or offers means that the market doesn't perceive the value to be in sync with the price. In a Buyers Market, like we have in Michigan right now the buyers just have too many choices available to nave to put up with overpriced houses. They just move on and quickly.
4. When you drop the price, lower it by enough to make the home the top house in a lower price range rather than the bottom house in a higher range. Remember that real estate search engines use rather broad price ranges (normally $25 or 50K increments), so try to get into the next lower price band on the search engines.
5. The more expensive the house, the greater the decrease needs to be to attract new buyers. a $5,000 decrease is OK on a house costing under $100K, but you may need to move $50-100K on upper end homes to make a difference.
When a house won’t sell, the answer is often to drop the price, but is that the right answer or just a knee-jerk reaction? Maybe you haven't taken care of the 3-C's yet (see posting below). Make sure that those buyer criteria aren't the source of no offers. This may be the case if you are getting a reasonable amount of showing traffic but no second visits or offers.
If price is the issue, then how much and when should it be lowered?
1. Price the house right to begin with — it will get the most activity when it first goes on the market. Agents love "new" listings, something that they haven't already shown to their buyers. Buyer these days also hover on real estate search sites looking for new listings. Get it priced right when this first wave of buyer interest hits.
2. Lower the asking price sooner rather than later while it's still fresh in buyers' minds. It used to be that lowering the price might carry a "what's wrong with this house" meaning. Not anymore. Now it's more likely an indication that the seller "got real"on the price.
3. If there has been no offer in one to two months — six at the most — consider dropping the price, then re-evaluate every two to four weeks. You can also look at the showing activity for guidance. No showings or offers means that the market doesn't perceive the value to be in sync with the price. In a Buyers Market, like we have in Michigan right now the buyers just have too many choices available to nave to put up with overpriced houses. They just move on and quickly.
4. When you drop the price, lower it by enough to make the home the top house in a lower price range rather than the bottom house in a higher range. Remember that real estate search engines use rather broad price ranges (normally $25 or 50K increments), so try to get into the next lower price band on the search engines.
5. The more expensive the house, the greater the decrease needs to be to attract new buyers. a $5,000 decrease is OK on a house costing under $100K, but you may need to move $50-100K on upper end homes to make a difference.
Thursday, June 28, 2007
The 3-C's of Real Estate
After Location and Price, the most important things that aid or deter the sale of a specific house are referred to as the 3 – C’s of Real Estate - Condition, Clutter and Cleanliness. You can’t do anything about your location and hopefully you’ve heeded the advice of your agent and set the price to reflect the market that we are in. Likely your agent already has factored the current condition of the 3-C’s into his/her pricing recommendation; but, you can increase the probability of a sale or hasten the sale by focusing your attention on the 3-C’s.
Condition has as much to do with how the home looks as a potential buyer walks through it. Chipping and peeling paint, overgrown flowerbeds, holes, scars ands marks on walls, doors that don’t close properly, cracked windows or mirrors, missing shingles or overgrown rain gutters, soiled, worn or ripped carpeting and many more easy to spot issues can immediately give the prospective buyer the impression that there’s likely much more wrong with this neglected house. I don’t advise major update projects as part of getting a house ready for market, but doing all of the little repair jobs that you’ve been putting off is advised. It’s not so much that it will improve the value of the home; so much as it is that not attending to those things will detract greatly from the value that you want the buyer to perceive.
Clutter is something that sneaks up on almost everyone. It’s all about having to much stuff in the house. Stuff lake furniture and knickknacks and tools and clothes and shoes and boots and pictures and stuff and stuff and stuff. Most people tend to have too much furniture in most rooms. That makes the rooms look crowded and smaller. Buyers should be able to freely move through each room without having to run through and obstacle course. And, buyers don’t really care all that much to look at every family picture that you’ve ever taken. Your Hummel figurine collection is another thing that few buyers may share an interest in seeing. Less is better is the mantra that you should adopt when getting ready to sell, even if it means renting a storage unit somewhere to put a bunch of your stuff in until the home sells.
Cleanliness is the final factor and likely the hardest for many, especially those with pets. Buyers don’t necessarily go looking for your dust bunnies, but they often stumble upon them while looking in places that you may seldom visit. Dirty floors, dirty dishes in sinks, unclean bathtubs and toilets, unmade and disheveled beds, pet hair all over the furniture or floors, pet odors, dirty windows, dirty carpets, dusty shelves, cob webs in ceiling corners, dirty overhead fan blades, cluttered and dirty panty shelves and anyplace else where someone might look that is currently unclean are definite turn-offs for buyers. I’d even suggest hiring a cleaning service at the front end of a listing and asking them to do a thorough top-to-bottom cleaning of your house. Then try to keep it that way, ot have them come back at least once a month.
Condition has as much to do with how the home looks as a potential buyer walks through it. Chipping and peeling paint, overgrown flowerbeds, holes, scars ands marks on walls, doors that don’t close properly, cracked windows or mirrors, missing shingles or overgrown rain gutters, soiled, worn or ripped carpeting and many more easy to spot issues can immediately give the prospective buyer the impression that there’s likely much more wrong with this neglected house. I don’t advise major update projects as part of getting a house ready for market, but doing all of the little repair jobs that you’ve been putting off is advised. It’s not so much that it will improve the value of the home; so much as it is that not attending to those things will detract greatly from the value that you want the buyer to perceive.
Clutter is something that sneaks up on almost everyone. It’s all about having to much stuff in the house. Stuff lake furniture and knickknacks and tools and clothes and shoes and boots and pictures and stuff and stuff and stuff. Most people tend to have too much furniture in most rooms. That makes the rooms look crowded and smaller. Buyers should be able to freely move through each room without having to run through and obstacle course. And, buyers don’t really care all that much to look at every family picture that you’ve ever taken. Your Hummel figurine collection is another thing that few buyers may share an interest in seeing. Less is better is the mantra that you should adopt when getting ready to sell, even if it means renting a storage unit somewhere to put a bunch of your stuff in until the home sells.
Cleanliness is the final factor and likely the hardest for many, especially those with pets. Buyers don’t necessarily go looking for your dust bunnies, but they often stumble upon them while looking in places that you may seldom visit. Dirty floors, dirty dishes in sinks, unclean bathtubs and toilets, unmade and disheveled beds, pet hair all over the furniture or floors, pet odors, dirty windows, dirty carpets, dusty shelves, cob webs in ceiling corners, dirty overhead fan blades, cluttered and dirty panty shelves and anyplace else where someone might look that is currently unclean are definite turn-offs for buyers. I’d even suggest hiring a cleaning service at the front end of a listing and asking them to do a thorough top-to-bottom cleaning of your house. Then try to keep it that way, ot have them come back at least once a month.
Wednesday, June 27, 2007
The June Swoon
We had a pretty good April and May this year in the Milford area, at least good for the current Michigan market; but, we've since experienced a "June swoon". I attribute a part of this to school getting out and people being busy with graduation parties and maybe taking early vacations. As we head into July I kind of expect this swoon to continue until late August. At that time we'll see another pickup as people try to get settled into new homes for the next school year.
A recently released study by the local real estate multi-list service gave proof to what most of us in the business have been seeing and have been telling our sellers - home values are down in most areas, some quite dramatically. The report, which I will post on my main Web site - www.themilfordteam .com - is sorted by Zip code and shows that the average prices in most zip codes are down by anywhere from 5 - 20%. Another interesting stat from this report is the % of asking price that home sellers are getting. In most Zip codes that percentage has slipped to 95% or below.
Anecdotal input from the market also indicates that 75-80% of offers that we're seeing right now have Seller's concessions in the terms of the offer - often 3% of the offer price. These concessions are used to cover the buyer's closing costs and are usually limited to 3% maximum. In many cases, when you see sold prices that are above the asking price, it is because the 3% is tacked onto the offer price and then taken back off again as a Seller's concession. What interesting web's we weave in real estate.
A recently released study by the local real estate multi-list service gave proof to what most of us in the business have been seeing and have been telling our sellers - home values are down in most areas, some quite dramatically. The report, which I will post on my main Web site - www.themilfordteam .com - is sorted by Zip code and shows that the average prices in most zip codes are down by anywhere from 5 - 20%. Another interesting stat from this report is the % of asking price that home sellers are getting. In most Zip codes that percentage has slipped to 95% or below.
Anecdotal input from the market also indicates that 75-80% of offers that we're seeing right now have Seller's concessions in the terms of the offer - often 3% of the offer price. These concessions are used to cover the buyer's closing costs and are usually limited to 3% maximum. In many cases, when you see sold prices that are above the asking price, it is because the 3% is tacked onto the offer price and then taken back off again as a Seller's concession. What interesting web's we weave in real estate.
Wednesday, June 20, 2007
How you can help with showings
I get asked all the time by home sellers - "How can I help with the showing process?" My answer is simple - Get out of the way!
No kidding. Make it as easy as possible for the Realtor to do his/her job. Not only should you allow a lock-box to be placed on your house, you should make the showing instructions as painless as possible. That may mean that you must take on a lot of inconvenience. You must be able to get out of the house on short notice and make it easy for the selling agent to schedule showings for others. The easiest house to schedule for a showing is one that is already vacant; although, vacant houses are harder to sell, so make it easy to schedule an appointment to show your house
If you don’t already have either an answering machine or voicemail service on your phone, get one or the other. Be prepared to check those frequently and allow the selling agent to book and appointment by just leaving you a message and giving the showing agent the lock box combo. Any time that you’re out, even to church or for dinner, check the machine or voicemail before you go home, there may be a showing in progress or scheduled for about the time that you would get home. You don’t want to be there during a showing. The showing agent doesn’t want you there and the buyers would feel awkward if you were there, so take a drive, go to the movies or store - just go. Let the real estate professionals do their jobs.
You really can’t help directly with this aspect of the process. There are some tips for things that you can do before you leave to make the showings go better.
Turn on all the lights. Make it easy to see the house, especially during the darker winter months.
If you have a gas fireplace and it is winter, you might turn it on. If you have one or two very safe (in glass containers) fragrant candles, you might light them.
We’ve seen other tips like bake bread or pop popcorn or do other things in the kitchen to leave a nice odor in the air. We’ll let you be the judge of how much you want to do. Just try not to leave bad odors in the air. Heavy cooking odors can be as bad in a house as heavy pet or smoking odors.
Also remember to take your dog with you and your cat too if possible. Buyers don’t really want to be accosted by your pets and many may have allergies to pets so get them out of the house. Hopefully your house doesn’t smell like a full cat box or like your dog, but if it does, deodorize the place as you leave and perhaps put the litter box out in the garage. Yapping dogs or cats trying to make the buyer's leg a scratching post are definite turn-offs.
The other thing that I normally caution sellers about is leaving anything of value out where a visitor could take it. Smaller items of value - jewelry, CDs pens and such should be put away. The showing Realtor is responsible to try to make sure that his/her client doesn't take anything or damage anything, but it's best to just remove the temptations.
No kidding. Make it as easy as possible for the Realtor to do his/her job. Not only should you allow a lock-box to be placed on your house, you should make the showing instructions as painless as possible. That may mean that you must take on a lot of inconvenience. You must be able to get out of the house on short notice and make it easy for the selling agent to schedule showings for others. The easiest house to schedule for a showing is one that is already vacant; although, vacant houses are harder to sell, so make it easy to schedule an appointment to show your house
If you don’t already have either an answering machine or voicemail service on your phone, get one or the other. Be prepared to check those frequently and allow the selling agent to book and appointment by just leaving you a message and giving the showing agent the lock box combo. Any time that you’re out, even to church or for dinner, check the machine or voicemail before you go home, there may be a showing in progress or scheduled for about the time that you would get home. You don’t want to be there during a showing. The showing agent doesn’t want you there and the buyers would feel awkward if you were there, so take a drive, go to the movies or store - just go. Let the real estate professionals do their jobs.
You really can’t help directly with this aspect of the process. There are some tips for things that you can do before you leave to make the showings go better.
Turn on all the lights. Make it easy to see the house, especially during the darker winter months.
If you have a gas fireplace and it is winter, you might turn it on. If you have one or two very safe (in glass containers) fragrant candles, you might light them.
We’ve seen other tips like bake bread or pop popcorn or do other things in the kitchen to leave a nice odor in the air. We’ll let you be the judge of how much you want to do. Just try not to leave bad odors in the air. Heavy cooking odors can be as bad in a house as heavy pet or smoking odors.
Also remember to take your dog with you and your cat too if possible. Buyers don’t really want to be accosted by your pets and many may have allergies to pets so get them out of the house. Hopefully your house doesn’t smell like a full cat box or like your dog, but if it does, deodorize the place as you leave and perhaps put the litter box out in the garage. Yapping dogs or cats trying to make the buyer's leg a scratching post are definite turn-offs.
The other thing that I normally caution sellers about is leaving anything of value out where a visitor could take it. Smaller items of value - jewelry, CDs pens and such should be put away. The showing Realtor is responsible to try to make sure that his/her client doesn't take anything or damage anything, but it's best to just remove the temptations.
Monday, June 18, 2007
Two Clowns and a Sign
There are some ideas that just don’t translate well to other uses. One example is the idea that a couple of people who happen to have real estate licenses (one would have to be a broker license) can set up shop as a full service real estate company - sort of Two Clowns and a Sign.
In many cases this is the definitive “mom and pop” shop, since it really is mom and pop. But is this really doing a disservice to the unsuspecting customer who happens to employ this “real estate company?” I would argue, yes.
When a person hires what they believe to be a real estate agent and company to help them with the sale of their home there are likely some expectations that have been formed over time about what the services are that they will be receiving from this company. Certainly the real estate industry and it’s various associations are trying very hard to educate the public as to what those expectations should include.
In addition to the agent taking full fiduciary responsibility for the client, a customer might well expect that the company has some form of advertising and marketing operation in place that will attract buyers. That goes beyond just having a sign to stick in the front yard or the ability to put the listing on the local multi-list service. In too many cases, that is really about all you get with these operations. They operate on the "real estate is a numbers game" theory. Put lots of listings out there are wait for buyers to show up. Many times these operators work from their homes with just personal cell phones and voicemail as their communications infrastructure. By Michigan real estate law, they must have a separate office space (separate from a home office) from which they are supposed to conduct business. Many times that is nothing more than a mailing address.
Things like having a real office, manned by real people who can answer your questions or set up appointments are important. Things like having enough advertising clout to get your agent a good rate so he/she can advertise your house are important. Things like having a significant Internet presence and agreements in place with other major Internet real estate sites to display your house are important. Tools like 24-hour phone hot lines for the house or agreements with the various TV real estate shows are important. These are the kinds of things that companies like Real Estate One bring to the table. Even smaller, local franchise operators for some of the "big name" real estate companies get some benefit from the umbrella advertising campaigns of the parent company. Many of these "independently owned and managed" operations just aren't capitalized well enough to do much on their own and few have any real clout with local media - papers, TV, whatever.
Real Estate one does over $2 Billion (with a BIG “B”) worth of business just in Michigan each year. That’s 1/3 again bigger than our next closest competitor. That gives Deidre and me great leverage with the media, with the Internet companies and with everyone else of importance to the marketing of your home. What kind of attention does the operation that does $40-50 Million in sales a year get compared to that? You figure it out.
So the next time that you see some strange looking sign, with a company name that you cannot recognize, or one that sounds more like a piano duo that a real estate company, ask yourself, “Is this two clowns with a sign and would I want to try to do business with them?” Check out their office and their "staff" to see what kind of service you are likely to get. Then, when it’s time to sell your house, call me, I have a sign, too, and I bring $2 Billion worth of Real Estate One infrastructure and advertising clout behind my efforts! There is a difference and you deserve to get what you expect when you hire a Realtor.
Sunday, June 17, 2007
Feng Shui
How’s your house’s Feng Shui?
Until a couple of years ago, I would have told you that Feng Shui is probably something that is on the menu at a Chinese place between Egg Foo Young and Moo Goo Gia Pan. Feng Shui (pronounced "fung schwee" and meaning literally "wind water") is part of an ancient Chinese philosophy of nature. Feng Shui is often identified as a form of geomancy, divination by geographic features, but it is mainly concerned with understanding the relationships between nature and ourselves so that we might live in harmony within our environment.
Feng Shui is related to the very sensible notion that living with rather than against nature benefits both humans and our environment. It is also related to the equally sensible notion that our lives are deeply affected by our physical and emotional environs. If we surround ourselves with symbols of death, contempt and indifference toward life and nature, with noise and various forms of ugliness, we will corrupt ourselves in the process. If we surround ourselves with beauty, gentleness, kindness, sympathy, music and various expressions of the sweetness of life, we ennoble ourselves as well as our environment.
Alleged masters of Feng Shui, those who understand the five elements and the two energies such as chi and sha (hard energy, the opposite of chi), are supposed to be able to detect metaphysical energies and give directions for their optimal flow. Feng Shui has become a kind of architectural acupuncture: wizards and magi insert themselves into buildings or landscapes and use their metaphysical sensors to detect the flow of good and bad "energy." These masters for hire declare where bathrooms should go, which way doorways should face, where mirrors should hang, which room needs green plants and which one needs red flowers, which direction the head of the bed should face, etc. In short, Feng Shui has become an aspect of interior decorating in the Western world and alleged masters of Feng Shui now hire themselves out for hefty sums to tell people such as Donald Trump which way his doors and other things should hang. Feng Shui has also become another New Age "energy" scam with arrays of metaphysical products from paper cutouts of half moons and planets, to octagonal mirrors to wooden flutes, offered for sale to help you improve your health, maximize your potential and guarantee fulfillment of some fortune cookie philosophy.
5 Feng Shui deal breakers for buyers
Buyers who believe in the principles of Feng Shui will avoid homes with the following characteristics:
· A home with the bathroom located in the central tai chi area, the area of the home where all of the energies are in perfect balance
· A home with a spiral staircase in the center
· A home with a staircase directly in front of the front door
· Property located at a “T” or “Y” junction road with heavy traffic
· An excessively oddly shaped home
Sellers should be aware of the following:
· Pay special attention to the front door, which is considered the “mouth of chi” and one of the most powerful aspects of the entire property. It’s also the first impressions that potential buyers will have of how well the owners have maintained the property. Make sure that this is a clean, clutter free area with all lighting working. Focus also on the path leading to the front door to make that appealing too.
· Chi energy can be flushed away wherever there are drains in the home. To keep the good energy in, always put the toilet seats down and close the doors to the bathrooms. [A can of air spray isn’t bad either]
· The master bed should be in a place of honor, power and protection, which is farthest from and facing toward the entryway of the room. It’s even better if you can place the bed diagonally in the farthest corner. Paint the room in colors that promote serenity, relaxation and romance, such as soft tones of green, blue and lavender.
· The dining room symbolizes the energy and power of family togetherness. Make sure the table is clear and uncluttered during showings. Use an attractive tablecloth to enhance the look of the table whole softening sharp corners.
· The windows are considered to be the eyes of the home. Getting the windows professionally cleaned will make the home sparkle and ensure that the view will be optimally displayed.
Whether you believe in Feng Shui or not, these aren’t bad tips to make your home more appealing.
Until a couple of years ago, I would have told you that Feng Shui is probably something that is on the menu at a Chinese place between Egg Foo Young and Moo Goo Gia Pan. Feng Shui (pronounced "fung schwee" and meaning literally "wind water") is part of an ancient Chinese philosophy of nature. Feng Shui is often identified as a form of geomancy, divination by geographic features, but it is mainly concerned with understanding the relationships between nature and ourselves so that we might live in harmony within our environment.
Feng Shui is related to the very sensible notion that living with rather than against nature benefits both humans and our environment. It is also related to the equally sensible notion that our lives are deeply affected by our physical and emotional environs. If we surround ourselves with symbols of death, contempt and indifference toward life and nature, with noise and various forms of ugliness, we will corrupt ourselves in the process. If we surround ourselves with beauty, gentleness, kindness, sympathy, music and various expressions of the sweetness of life, we ennoble ourselves as well as our environment.
Alleged masters of Feng Shui, those who understand the five elements and the two energies such as chi and sha (hard energy, the opposite of chi), are supposed to be able to detect metaphysical energies and give directions for their optimal flow. Feng Shui has become a kind of architectural acupuncture: wizards and magi insert themselves into buildings or landscapes and use their metaphysical sensors to detect the flow of good and bad "energy." These masters for hire declare where bathrooms should go, which way doorways should face, where mirrors should hang, which room needs green plants and which one needs red flowers, which direction the head of the bed should face, etc. In short, Feng Shui has become an aspect of interior decorating in the Western world and alleged masters of Feng Shui now hire themselves out for hefty sums to tell people such as Donald Trump which way his doors and other things should hang. Feng Shui has also become another New Age "energy" scam with arrays of metaphysical products from paper cutouts of half moons and planets, to octagonal mirrors to wooden flutes, offered for sale to help you improve your health, maximize your potential and guarantee fulfillment of some fortune cookie philosophy.
5 Feng Shui deal breakers for buyers
Buyers who believe in the principles of Feng Shui will avoid homes with the following characteristics:
· A home with the bathroom located in the central tai chi area, the area of the home where all of the energies are in perfect balance
· A home with a spiral staircase in the center
· A home with a staircase directly in front of the front door
· Property located at a “T” or “Y” junction road with heavy traffic
· An excessively oddly shaped home
Sellers should be aware of the following:
· Pay special attention to the front door, which is considered the “mouth of chi” and one of the most powerful aspects of the entire property. It’s also the first impressions that potential buyers will have of how well the owners have maintained the property. Make sure that this is a clean, clutter free area with all lighting working. Focus also on the path leading to the front door to make that appealing too.
· Chi energy can be flushed away wherever there are drains in the home. To keep the good energy in, always put the toilet seats down and close the doors to the bathrooms. [A can of air spray isn’t bad either]
· The master bed should be in a place of honor, power and protection, which is farthest from and facing toward the entryway of the room. It’s even better if you can place the bed diagonally in the farthest corner. Paint the room in colors that promote serenity, relaxation and romance, such as soft tones of green, blue and lavender.
· The dining room symbolizes the energy and power of family togetherness. Make sure the table is clear and uncluttered during showings. Use an attractive tablecloth to enhance the look of the table whole softening sharp corners.
· The windows are considered to be the eyes of the home. Getting the windows professionally cleaned will make the home sparkle and ensure that the view will be optimally displayed.
Whether you believe in Feng Shui or not, these aren’t bad tips to make your home more appealing.
Saturday, June 16, 2007
Know who you're with!
Don’t Talk to Strangers! Don’t get in a car with a stranger! Don’t give strangers your personal information!
Those are all phrases we might use with our children to give them good advice. They are also good real estate advice. You’d be surprised how many people will get into a car and go see a house, or meet someone that they’ve talked to on the phone once or call on a sign and then meet the person who shows up. And in all these cases, the unsuspecting buyers make the assumption that they can trust the real estate person who shows up to protect their best interests—to work for them. WRONG!
Now, I’m not saying that the Realtor® who shows up is dishonest, untrustworthy or somehow out to do these buyers harm. In fact, the opposites are usually true and, in most cases, things work out OK. But, the buyers have made an erroneous assumption that, because they called the realtor and that person agreed to show them a particular house, that, somehow, that realtor has magically become “their agent”. In fact in almost all cases like those described, the agent who shows up to show them the house is, in fact, working for the sellers.
Why is this distinction important? Because human nature will inevitably lead the buyers to reveal information about themselves, their financial condition or their motivation for buying and/or liking the house that could work to their disadvantage. A real estate transaction involves quite a bit of negotiations between the buyers and sellers. The agents who work for one side or the other are constantly trying to find out anything about the other side that will help their side in those negotiations. And, you may have just jumped in the car with their negotiator and blurted out things that will come back to haunt you later.
So what should you do? For starters, know for whom the agent that you are with is working, before you go. If you do not have a contract with that agent, he/she cannot be working for you! By default, under Michigan’s real estate laws, that agent is working for the seller. Only the existence of a contract creates agency—the fiduciary responsibility between the real estate person and another party. If you don’t have a contract, you don’t have agency. Since the sellers do have a contract (the listing contract), the agency that they established with that contract extends to any other agent who might show the house (called sub-agency).
So that friendly, chatty, and inquisitive person sitting next to you in the car on the way to the house is an agent for the seller, if he/she isn’t signed up to be your agent. Watch what you say until you have a contract! That is why a good agent will inform you about agency and have you at least sign an agency disclosure that indicates that you understand who he/she is working for.
For more on real estate agency, go to http://www.MIHomeBuyer.com and click on the Real Estate Agency link.
Those are all phrases we might use with our children to give them good advice. They are also good real estate advice. You’d be surprised how many people will get into a car and go see a house, or meet someone that they’ve talked to on the phone once or call on a sign and then meet the person who shows up. And in all these cases, the unsuspecting buyers make the assumption that they can trust the real estate person who shows up to protect their best interests—to work for them. WRONG!
Now, I’m not saying that the Realtor® who shows up is dishonest, untrustworthy or somehow out to do these buyers harm. In fact, the opposites are usually true and, in most cases, things work out OK. But, the buyers have made an erroneous assumption that, because they called the realtor and that person agreed to show them a particular house, that, somehow, that realtor has magically become “their agent”. In fact in almost all cases like those described, the agent who shows up to show them the house is, in fact, working for the sellers.
Why is this distinction important? Because human nature will inevitably lead the buyers to reveal information about themselves, their financial condition or their motivation for buying and/or liking the house that could work to their disadvantage. A real estate transaction involves quite a bit of negotiations between the buyers and sellers. The agents who work for one side or the other are constantly trying to find out anything about the other side that will help their side in those negotiations. And, you may have just jumped in the car with their negotiator and blurted out things that will come back to haunt you later.
So what should you do? For starters, know for whom the agent that you are with is working, before you go. If you do not have a contract with that agent, he/she cannot be working for you! By default, under Michigan’s real estate laws, that agent is working for the seller. Only the existence of a contract creates agency—the fiduciary responsibility between the real estate person and another party. If you don’t have a contract, you don’t have agency. Since the sellers do have a contract (the listing contract), the agency that they established with that contract extends to any other agent who might show the house (called sub-agency).
So that friendly, chatty, and inquisitive person sitting next to you in the car on the way to the house is an agent for the seller, if he/she isn’t signed up to be your agent. Watch what you say until you have a contract! That is why a good agent will inform you about agency and have you at least sign an agency disclosure that indicates that you understand who he/she is working for.
For more on real estate agency, go to http://www.MIHomeBuyer.com and click on the Real Estate Agency link.
Thursday, June 14, 2007
The sleaze factor in real estate
Every profession or workplace has the potential for some level of sleaziness to creep in, just due to human nature. There are, by nature, always those willing to cut every corner, bend every rule, ignore ethics and pursue success at all costs - the sleazeballs of the world. You most likely know one or two or have run into them somewhere - maybe at a car dealership or at a carnival.
The real estate profession has its share of sleazeballs too. These are the operators who lie about the square footage of a house, hoping to lure unsuspecting buyers in or conveniently forget to disclose some known issue or problem with a house, hoping that the home inspector will miss it. Taken to its extreme, these are the people who were in cahoots (what a great old word that is) with the dishonest loan officers to perpetrate loan fraud. Often these folks sign exclusive agency agreements with clients, giving themselves an unfair advantage i the market and putting their clients at a disadvantage, too. Many times they take what are called "pocket listings" - contracts to sell the property that are not entered into the Multi-list Service, so that only they know that the property is for sale. They then go out and try to find a buyer themselves, so that they can "double-dip" the sale - taking the commissions on both the buyer and seller sides of the deal.
We have some real sleazeball Realtors in our area and some are fairly "big names". You'll likely recognize these crafty operators when you meet them because you'll want to go home immediately and wash your hands afterwards. Their fast, slick talk is not a very effective cover for their true nature, but it does intimidate many into dealing with them anyway. If you hit one of these operators, just say NO and go get an honest agent. It really doesn't do you any good and it may even hurt your chances of selling to be represented by a sleazeball.
The real estate profession has its share of sleazeballs too. These are the operators who lie about the square footage of a house, hoping to lure unsuspecting buyers in or conveniently forget to disclose some known issue or problem with a house, hoping that the home inspector will miss it. Taken to its extreme, these are the people who were in cahoots (what a great old word that is) with the dishonest loan officers to perpetrate loan fraud. Often these folks sign exclusive agency agreements with clients, giving themselves an unfair advantage i the market and putting their clients at a disadvantage, too. Many times they take what are called "pocket listings" - contracts to sell the property that are not entered into the Multi-list Service, so that only they know that the property is for sale. They then go out and try to find a buyer themselves, so that they can "double-dip" the sale - taking the commissions on both the buyer and seller sides of the deal.
We have some real sleazeball Realtors in our area and some are fairly "big names". You'll likely recognize these crafty operators when you meet them because you'll want to go home immediately and wash your hands afterwards. Their fast, slick talk is not a very effective cover for their true nature, but it does intimidate many into dealing with them anyway. If you hit one of these operators, just say NO and go get an honest agent. It really doesn't do you any good and it may even hurt your chances of selling to be represented by a sleazeball.
Wednesday, June 13, 2007
Perceived Value - What is your home worth
There is always some level of disconnect between what the owner of a home thinks it's worth and what the market (in the form of a buyer making an offer) thinks the house is worth. Often this is a wide gap. The old saw that something is worth what someone else is willing to pay for it is certainly true for real estate. There is no intrinsic value in real estate. The closest you could come would likely be the "value" of the land; however, that,too, is subject to what a buyer would pay. Here are some of most basic mistakes a home owner makes when mentally putting a value on his.her property:
1. My (insert brother, uncle, neighbor, friend, whatever here) sold their house just like this one for $XXX,XXX just last year.
It's obviously impossible to compare condition, evaluate the differences in location or factor hundreds of other things into this argument, much less take into consideration what has happened to the home market in the intervening time. A Realtor will usually go back no more than 6 months and will try very hard to find comparable homes that have sold - homes with similar features and located within reasonable distance from the home being priced.
2. I bought this house for $XXX,XXX 20 years ago and it's been appreciating X.X% per year, so it should be worth $YYY,YYY now.
Well it probably did appreciate X.X% per year for the first few year of the time span that this seller owned it; however, we haven't had any real appreciation in the Michigan market (at least in the Detroit area) for at least the last 5 years. In fact, we've been going the other way - depreciating- in many areas for the last 2 years. The only people continuing to show appreciation on your home are the tax assessors and they get paid by the tax collectors!
3. I went on Zillow and it said my house was worth $XXX,XXX. Why is your number different?
Zillow and all the other Internet real estate valuation sites depend upon the same inaccurate public records that the Counties publish. They do nothing to take condition into consideration, nor do they have a clue about location and any issue that come from that. You are only slightly better off using one of those sites than you would be puttingup a dart board with numbers on it and throwing darts to see what the price should be.
4. My sister (cousin, aunt, uncle, etc.) is a realtor in another state and they tell me that I should be asking more.
First see No. 1 above and then ask yourself what they could possible know about our local market that has somehow eluded your local Realtor. No other state in the Union has undergone the economic problems that we have in Michigan and few others are facing as dim long term prospects as are we facing right now.
5. Well, I owe $XXX,XXX on the place, so I need to ask at lease enough to get that an a little more out of it.
First off, the market doesn't care what you owe. Secondly, you may currently owe more than the place is worth. many people took full advantage of cheap, easy re-finances to take out equity in their homes. effectively their homes became giant piggy banks, to be robbed whenever needed. Many, many people are now "upside-down" on their homes - they would have to bring money to the table to sell the house. Your agent should be able to quickly tell you what your break even point is on a sale.
6. I know that the last three houses in this neighborhood sold for $XXX,XXX, but my house is better than any of those, so it should sell for $YYY,YYY.
First off, how is your house better? Do you know what the condition of those houses was at the time of the sale? Were you familiar with the improvements that those owners might have made? How long ago did those sales take place? Almost every owner wants to believe that they have the best house in the neighborhood. Some do. some have just never been in the other houses that they think they have some advantage over.
7. My home is worth more because I finished the basement, replaced the roof and remodeled the kitchen myself.
Some sellers, quite honestly believe that the do-it-yourself fix-ups or make-over that they did really added value to the homes. In some case it did, but in many cases it was just a schlock job that buyers will look at and figure that they have to tear out and have re-done by a professional. Not only that, but most do-it-yourselfers fail to pull permits, so the job is not only not well done, it is illegal. There is a place on the Seller's Disclosures to look for that.
So, my advice is to get a professional opinion or two from local Realtors and then take their advice. They know the local market and they know what to look for in a home and how it compares with other homes on the market and with what has sold recently. An honest realtor has no reason to inflate the value of your home just to stroke your ego. He/she really doesn't want to be saddled with another overpriced listing.
1. My (insert brother, uncle, neighbor, friend, whatever here) sold their house just like this one for $XXX,XXX just last year.
It's obviously impossible to compare condition, evaluate the differences in location or factor hundreds of other things into this argument, much less take into consideration what has happened to the home market in the intervening time. A Realtor will usually go back no more than 6 months and will try very hard to find comparable homes that have sold - homes with similar features and located within reasonable distance from the home being priced.
2. I bought this house for $XXX,XXX 20 years ago and it's been appreciating X.X% per year, so it should be worth $YYY,YYY now.
Well it probably did appreciate X.X% per year for the first few year of the time span that this seller owned it; however, we haven't had any real appreciation in the Michigan market (at least in the Detroit area) for at least the last 5 years. In fact, we've been going the other way - depreciating- in many areas for the last 2 years. The only people continuing to show appreciation on your home are the tax assessors and they get paid by the tax collectors!
3. I went on Zillow and it said my house was worth $XXX,XXX. Why is your number different?
Zillow and all the other Internet real estate valuation sites depend upon the same inaccurate public records that the Counties publish. They do nothing to take condition into consideration, nor do they have a clue about location and any issue that come from that. You are only slightly better off using one of those sites than you would be puttingup a dart board with numbers on it and throwing darts to see what the price should be.
4. My sister (cousin, aunt, uncle, etc.) is a realtor in another state and they tell me that I should be asking more.
First see No. 1 above and then ask yourself what they could possible know about our local market that has somehow eluded your local Realtor. No other state in the Union has undergone the economic problems that we have in Michigan and few others are facing as dim long term prospects as are we facing right now.
5. Well, I owe $XXX,XXX on the place, so I need to ask at lease enough to get that an a little more out of it.
First off, the market doesn't care what you owe. Secondly, you may currently owe more than the place is worth. many people took full advantage of cheap, easy re-finances to take out equity in their homes. effectively their homes became giant piggy banks, to be robbed whenever needed. Many, many people are now "upside-down" on their homes - they would have to bring money to the table to sell the house. Your agent should be able to quickly tell you what your break even point is on a sale.
6. I know that the last three houses in this neighborhood sold for $XXX,XXX, but my house is better than any of those, so it should sell for $YYY,YYY.
First off, how is your house better? Do you know what the condition of those houses was at the time of the sale? Were you familiar with the improvements that those owners might have made? How long ago did those sales take place? Almost every owner wants to believe that they have the best house in the neighborhood. Some do. some have just never been in the other houses that they think they have some advantage over.
7. My home is worth more because I finished the basement, replaced the roof and remodeled the kitchen myself.
Some sellers, quite honestly believe that the do-it-yourself fix-ups or make-over that they did really added value to the homes. In some case it did, but in many cases it was just a schlock job that buyers will look at and figure that they have to tear out and have re-done by a professional. Not only that, but most do-it-yourselfers fail to pull permits, so the job is not only not well done, it is illegal. There is a place on the Seller's Disclosures to look for that.
So, my advice is to get a professional opinion or two from local Realtors and then take their advice. They know the local market and they know what to look for in a home and how it compares with other homes on the market and with what has sold recently. An honest realtor has no reason to inflate the value of your home just to stroke your ego. He/she really doesn't want to be saddled with another overpriced listing.
Tuesday, June 12, 2007
The People's Choice Award
I should have put this first. We are all proud at our Milford office to have been chosen as the Best Real Estate Agency in Milford in the 2007 People's Choice Awards that are run annually by the Milford Times.
The Milford Times is our local, weekly newspaper and it conducts a reader poll every year in a whole variety of categories, to determine the "best" in each category - as voted by the people in the community who use or frequent those establishments and services. There are categories for individuals, as well as organizations. Our agency is one of 5 in the Village, so it was nice to be voted best.
So, if you want the best agency in MIlford, ask for Real Estate One. An if you awant the best agent there, ask for Norm!
The Milford Times is our local, weekly newspaper and it conducts a reader poll every year in a whole variety of categories, to determine the "best" in each category - as voted by the people in the community who use or frequent those establishments and services. There are categories for individuals, as well as organizations. Our agency is one of 5 in the Village, so it was nice to be voted best.
So, if you want the best agency in MIlford, ask for Real Estate One. An if you awant the best agent there, ask for Norm!
Monday, June 11, 2007
Real Estate Stats
For those who are into statistics (and I certainly count myself in that number), I have some great stats about the market in the Milford area. The best way to get to them is to follow this link to my Milford Team Web site - www.themilfordteam.com/market_stats.html I track what's sold recently in the market, what the market inventory is right now and how long (Days on Market) it's taking to sell in this area.
What can you tell from these charts and stats? Well, for one, you can clearly see where the houses in each price band are (price bands by $100K increments) and where they are selling. For another, you can get a pretty good quick feel for how long it might take to sell a house, again by price band. You can see what sold last week and so far this month in the ares that make up the "Milford area" market. And you can see the inventory and market velocity stats for the entire region (at least for the 4-5 counties that we track as a company).
Statistics are a good starting pint towards understanding a market. You can see trends in them and you can spot "hot spots" and dead zones. Go see what's on my sites. I think you'll enjoy them. and let me know what you think and if there are other stats that you'd like to see.
What can you tell from these charts and stats? Well, for one, you can clearly see where the houses in each price band are (price bands by $100K increments) and where they are selling. For another, you can get a pretty good quick feel for how long it might take to sell a house, again by price band. You can see what sold last week and so far this month in the ares that make up the "Milford area" market. And you can see the inventory and market velocity stats for the entire region (at least for the 4-5 counties that we track as a company).
Statistics are a good starting pint towards understanding a market. You can see trends in them and you can spot "hot spots" and dead zones. Go see what's on my sites. I think you'll enjoy them. and let me know what you think and if there are other stats that you'd like to see.
What's happening in Milford real estate
I've set up this blog as an adjunct to my Web sites - www.themilfordteam.com, www.MIHomeBuyer.com and www.MoveToMilford.com, which I invite you to visit. I'll be discussing the real estate scene in Milford, Michigan and I invite your comments or additions.
I work for Real Es ate One in Milford and have been selling real estate in the area for about 5 years now. I live in one of the historic homes juts a couple of blocks from downtown Milford and specialize in representing the fine old homes of the Village. My focus is Milford, Highland, White Lake, Commerce and Orchard Lake/West Bloomfield. I include Orchard Lake and West Bloomfield because I spent 23 years living in Orchard Lake, before I moved to Milford, so I'm familiar with it and still have lots of friends and contacts in the West Bloomfield/Orchard Lake area.
So, what about the Milford real estate scene? We have not escaped the current doldrums brought about by the economic downturn in the state. We too are in a "Buyers market", which means that we have too much inventory on the market, too few buyers and dropping prices. Property values have dropped 8-10 percent over the last year. We've also experienced fairly little appreciation over he last 3-4 years, so the net is that sellers are getting far less than they expected for thie homes. Buyers, on the other hand are getting some pretty good deals. Owners who are selling to downsize are at least getting the advantage of being able to buy their new home in this down market, so they are probably braking even on the deal. Owners who have been taking advantage of the "cheap money" come-on from mortgage companies ove rth last several ytears, and who now need to sell, are in the most trouble, since their homes are likely worth less today than when they last refinanced. They are "upside down" on their homes. We also have outr share of foreclosures out here in Milford, mainly in the more upscale houses. We're probably tracking to the state statistic that shows 1 in 23 houses on the market is in foreclosure.
What's selling right now are the starter homes - under $200K and homes in the $200-275 range. Of course, lakefron homes are still selling, if the lake is a good all-sports lake. The market above $300K for non-lake-front is very slow and the market above $400K is nearly dead. To sell an upper-end home, it has to be in tip-top shape and the pricing has to be aggressive. Sellers in this upper end may have to plan on bringing money to the closing table to sell or they have to be willing to wait out this slow market. I'm telling my clients that it's a 1-2 year process right now in that upper end.
Let me hear from you on your selling expereince or with any questions that you might have.
I work for Real Es ate One in Milford and have been selling real estate in the area for about 5 years now. I live in one of the historic homes juts a couple of blocks from downtown Milford and specialize in representing the fine old homes of the Village. My focus is Milford, Highland, White Lake, Commerce and Orchard Lake/West Bloomfield. I include Orchard Lake and West Bloomfield because I spent 23 years living in Orchard Lake, before I moved to Milford, so I'm familiar with it and still have lots of friends and contacts in the West Bloomfield/Orchard Lake area.
So, what about the Milford real estate scene? We have not escaped the current doldrums brought about by the economic downturn in the state. We too are in a "Buyers market", which means that we have too much inventory on the market, too few buyers and dropping prices. Property values have dropped 8-10 percent over the last year. We've also experienced fairly little appreciation over he last 3-4 years, so the net is that sellers are getting far less than they expected for thie homes. Buyers, on the other hand are getting some pretty good deals. Owners who are selling to downsize are at least getting the advantage of being able to buy their new home in this down market, so they are probably braking even on the deal. Owners who have been taking advantage of the "cheap money" come-on from mortgage companies ove rth last several ytears, and who now need to sell, are in the most trouble, since their homes are likely worth less today than when they last refinanced. They are "upside down" on their homes. We also have outr share of foreclosures out here in Milford, mainly in the more upscale houses. We're probably tracking to the state statistic that shows 1 in 23 houses on the market is in foreclosure.
What's selling right now are the starter homes - under $200K and homes in the $200-275 range. Of course, lakefron homes are still selling, if the lake is a good all-sports lake. The market above $300K for non-lake-front is very slow and the market above $400K is nearly dead. To sell an upper-end home, it has to be in tip-top shape and the pricing has to be aggressive. Sellers in this upper end may have to plan on bringing money to the closing table to sell or they have to be willing to wait out this slow market. I'm telling my clients that it's a 1-2 year process right now in that upper end.
Let me hear from you on your selling expereince or with any questions that you might have.
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