So you’re thinking of selling your house and going “for-sale-by-owner.” I know it sounds like a good idea: you know, saving on all those real estate agent fees. In theory, that may sound like a good idea, but here’s why most for-sale-by-owners regret the decision and why you might want to reconsider.
Pricing is huge. This is the key factor to selling in a reasonable amount of time, and it isn’t as easy as you might assume. Yes, you can go online and check out your Zillow Zestimate and look for what homes around you recently sold for: but are you comparing apples to apples? Just because your neighbor sold her 1500 square foot rancher two blocks away for $280k doesn’t mean that your 2000 square foot split-level house on a busy street is the same. A good Realtor can put together a market analysis that takes all kinds of features into consideration: from condition differences to improvements and desirability. Because do you know how to account for square footage differences or how much the pool affects price or that brand new carpet you just put in? You don’t want to leave money on the table, but you also need to price correctly to stay competitive and not stay on the market for so long that potential buyers skip over your home because they assume something is wrong with it.
Throwing up some yard signs and marking it “for sale” on Zillow isn’t going to cut it. Buyers are tech-savvy and for the most part they aren’t just aimlessly driving around looking for yard signs. The sign is really just a locator. And yes, it is important to be “live” on Zillow… but almost every single buyer uses an agent. And agents use the all-powerful MLS to check for their listings and send out emails for listing to their clients. In order to have your home seen by the most amount of buyers (and more eyeballs means potentially more offers!) you need to be on the MLS – aka the number one way buyers find homes.
Agents are good filters
And let an agent be the filter for you. A good majority of buyers don’t like contacting sellers directly. It’s weird and uncomfortable for them. An agent is a good, approachable “middle man” to them. Plus, let them be the filter for YOUR benefit, too. Craigslist can be creepy. There are a lot of scammers and criminals and dangerous people on there who are searching for your name, your phone number and other pertinent information. They might call you and set up a showing, when really they aren’t interested…they just want to look at what you have in your house. When you have an agent representing you and your home, any potential buyers only see the house in the company of an agent who is in good standing with their association – which includes frequent background checks, history, etc.
Don’t waste your time!
This leads into not wasting your time, too. If you’re your own agent, how do you decide who’s a serious buyer and who’s just wasting your time? Everything goes through your agent, so they can vet potential buyers BEFORE they see your home. They’ll ask about the buyer’s pre-approval letter, how long they’ve been looking, etc. to make sure they are serious about potentially putting in an offer and they aren’t just looking for the fun of it.
Legalities and paperwork
And finally, all that legal mumbo-jumbo and paperwork. Once you have verified a potential buyer and they put in an offer, you have to attend to all the details and make sure the sale goes through. But what happens if you forget a mandatory disclosure or form? It’s more than just the loss of the sale at that point…we’re talking the potential for serious legal repercussions, too. Agents are trained on the legality of this paperwork, can explain anything you are confused about and make sure everything is in order to protect you from any legal ramifications.
It all boils down to the hope of saving around 3%. It isn’t the normal ~6% because any buyer with an agent will likely require you to cover their agent’s ~3% fee or they have to pay it themselves. And yes, saving around 3% sounds really great! But when most people only sell a home a handful of times in their life, a professional guiding you along the way can take away SO MUCH HEADACHE. Let the pros pay for the photography and all the marketing, and let them deal with the hassle of negotiation and paperwork and vetting of buyers. I assure you, it is worth it in the end.
We are in full winter-mode: I’m talking hot chocolate, snow and Santa. It’s not typically a time most people consider putting their house on the market. Around this time of the year, lots of people say “we want to list our home, but we’re going to wait until spring.” So today we’re diving into the market and answering the question: “when is the best time to sell a house?”
First off, this isn’t a simple question. If I had to give a short answer, it’d be: it depends. A lot of sellers assume that spring and summer are the best times to list a house. The biggest benefit of listing in warm months? There are just more buyers vying homes. This brings up the likelihood that you may get yourself into a multiple-offer situation, driving up the listing price. Buyers are more active in spring because a) moving in the snow is not appealing to many people, b) moving when the kids are out on summer break is appealing and c) houses just have a lot more curb appeal when the sun’s out.
On the other end of the spectrum, a big benefit of selling in winter? There’s less competition and inventory. Since a lot of sellers do gravitate toward listing in the spring, your home will really stand out and might get more attention if you list in the winter because there’s less inventory. There are serious buyers looking for a home year-round. Which brings me to point number two: the buyers who are on the prowl in winter are likely more serious. Yes, there are less buyers looking overall, but the ones who are searching are the real-deal. Less “window-shoppers,” if you will.
One caveat I’d like to mention? “Spring” in Spokane started in February last year. Things started getting really going again in February and by March, we were seeing the amount of inventory turnover that we typically see around May. So if you are considering getting your house on the market right when things get “going,” reach out to your agent in early February so you can start discussions to get on the market by March.
Every market is different and every single seller has his or her own goals for selling a home: whether it’s getting the most money possible, selling ASAP or something else entirely. I recommend chatting with your real estate agent and they will help you decide if you should list now or wait a couple months to be in the best position possible.
You’ve heard the news: it’s a seller’s market and homes are flying off the shelves. You decided to list your house, but its been on the market for a few weeks now with no offers and only a handful of showings. Why is that? Here are some reasons your house might not be selling as quickly as you thought it would.
This is the number one reason a house sits on the market for longer that it should. Homes sell when they are priced correctly and a house is only worth what a buyer is willing to pay for it. It doesn’t matter what price tag you slap on it. When you list your house for $10,000 dollars above what it should be listed at, you’re not going to get any offers. Just because it’s a seller’s market, the sky is not the limit, and it can be a costly mistake to assume so. Say for example your agent says your house could sell for $225k-235k. So you decide to push the envelope to $250k. Well, you’re going to miss out on your key market: buyers looking to spend about $230,000, which is where your house really should be priced at. They won’t even look at a $250k house because it’s too expensive for them. Buyers who ARE looking for a home at $250k are going to compare your should-be-$230k house to other homes at $250k and dismiss your house because it isn’t up to par to the others. So it sits there. By the time you reduce your price to where you should be, buyers assume there’s a reason it’s been on the market for so long, and they won’t pursue it. I can’t stress the importance of pricing right enough. It is impossible to list too low right now in this market. There are so many buyers competing for each listing, meaning if it is low? It will get in a pricing war and get bid up to where it should be. However, it is VERY possible to list too high.
Your house could need a little (or a lot) of TLC. I know it’s hard to pay for home improvements that you may not enjoy for long, but if you want to sell for full price your house need to be in a condition that warrants it. If the bathtub is dripping or there’s a hole in a wall you’ve always been meaning to patch? Fix it. Buyers will see any repairs as time and money they don’t want to spend. You also need to clean your house from top to bottom. Every window sill, wall and cabinet needs to be wiped down. Dust the blinds and the fan. Touch up any paint chips. Scrub that tub. Don’t allow a buyer to turn up their nose and pass on your house just because it isn’t clean. Oh, last thing… if you have a perpetual smell in your house – you HAVE to address. Whether it’s smoke or pets or mold…you need to get rid of the smell before opening it up to buyers. That is one guaranteed way for a buyer to leave just as soon as they walked in.
When 95% of buyers start their search online and decide whether or not to come see your house based on a quick skim – your pictures need to be top notch. If there aren’t many of them or they weren’t taken by a professional, chances are most buyers will say “pass.” Make sure your house is listed on all the major website: realtor dot com, zillow, trulia, brokerage sites. Have your agent hold an open house. Each agent has their own marketing plan: ask yours what he/she is doing to actively market your home.
If you’re getting frustrated with the time you’ve been on the market, make sure to chat with your agent about it. Maybe your agent has an answer, or they can suggest a new way to market it or recommend a price adjustment. It’s something to have a serious conversation with them about and make sure your concerns are heard.
Life just seems to slow down during fall time in the Pacific Northwest. Here are a few local day trips that are fun for the whole family:
It’s all about harvest time up at Green Bluff right now. Green Bluff is a grower’s association of about three dozen family farms (plus many more vendors and shops), sitting on 12 square miles just north of Spokane. You can pick your own produce, enjoy food from some of the best food trucks around, and experience all sorts of activities for the kiddos.
The Apple Festival is a huge draw. It’s every weekend in September and October, featuring every kind of apple imaginable available for picking, freshly-pressed cider, and of course caramel apples. Another big draw during the fall? The many pumpkin patches. Pick your perfect pumpkin, enjoy a hay ride and wait in a ridiculously long line for pumpkin donuts: it’s worth it!
Next up, take a couple hour trek to Sandpoint for the day! Known for gorgeous views of Lake Pend Oreille and Schweitzer Mountain, this can be a wonderful weekend getaway. It’s not quite skiing or boarding time, but you can still get active on the mountain by going for a hike or a bike ride. Plus, shopping in Downtown Sandpoint or the Sandpoint Shopping District won’t disappoint! If some down time is more your style, enjoy a beer at one of Sandpoint’s craft breweries.
Scenic Pend Oreille River Train
And finally: head to Newport to hop on a train! The Newport and Priest River Rotary Club runs a family-friendly scenic train ride that runs most weekends until the end of October. The Scenic Pend Oreille River Train heads along the Pend Oreille River, while the crew tells the history of the area: from Native Americans to fur trappers, gold rushers and gamblers. The trip’s about an hour and a half roundtrip. Make sure to book in advance, though, as there are only a couple weekends left! Tickets are $15 for children and seniors and $20 for adults. Head to SPORTtrainrides.com to check out available dates and book your tickets.
Some neighborhoods have this little thing called a homeowners association. Some people believe HOAs are a helpful organization to keep everything in the neighborhood uniform and looking its best. Others see them as an annoying $200-ish bill you have to pay to have someone tell you what you can’t do to your own property. Today we’re exploring what an HOA actually is, where your money usually goes, and what could happen if you were to stop paying the bill.
If you make an offer on a home that has an HOA in place, you’ll eventully get these papers called “covenants, conditions, and restrictions” or CC&Rs. When you sign on your house, you’re also signing off on these CC&Rs – promising to abide by them. It’s the HOA’s job to monitor homes and make sure everyone’s following the rules. Those CC&Rs can cover everything from the color of your house, to the type of fencing you can put up, and even the breed of your dog. They can require you to have a tree in your front yard or a certain type of curtains on street-facing windows. The goal of an HOA isn’t to be annoying or micromanage people, but just to make sure the neighborhood keeps its “look” – if you will.
HOAs also maintain common areas. For instance, if there’s a community swimming pool and the heater breaks…someone has to pay for that, and that’s where the HOA comes into play. Sometimes they hire out to maintain parks or plow the neighborhood’s streets, they may cover city service’s like water, sewer and garbage, or manage the neighborhood’s security system and gate.
Typically HOAs are about $100-200 a month, but they can be as low as $200 a year. The price typically depends on the services the HOA offers. Members of an HOA are usually charged a bit more than the monthly expenses, so that a reserve can be built up, in case of an emergency or big-ticket items.
If you get fed up with the HOA and start breaking rules or stop paying dues, you could get hit with a big fine, sued, a lien may be put on the home or it may even be foreclosed on.
HOAs aren’t for everyone. So before you make an offer on a home that has an HOA in place, look over those CC&Rs and make sure you are okay with everything your HOA will do and monitor.
So you want a house that is 2,000 square feet – but does that include the garage? How about the unfinished basement? Or the attic? Today we’re diving in to what’s included in square footage and what isn’t.
How square footage is typically measured by an appraiser:
- Measure the shell of the house from the outside (just the first story)
- If the second or third stories are the same footprint as the first? Easy, double or triple it. If they aren’t? Then they measure the interior of those stories, adjust for the thickness of walls
- Then remove spaces that don’t count as living space
- And add that all up
What’s “livable space”?
Here are some examples of what doesn’t count:
- Below grade spaces (most basements, finished or not)
- Garages (even if it’s attached)
- Outside buildings (sheds, guest houses and pool houses)
- Porches or decks
There are usually two square footage components on a listing: assessed and approximate. Assessed is what the assessor or an appraiser deems as square footage. Approximate square footage is really anything that makes up the house, so a basement could count in this scenario.
If you are thinking about putting your house on the market and are not sure where your square footage stands, ask your agent. They should be able to help you figure out what counts and what doesn’t.
Before listing your house, there are always things to do: a little paint, get the carpets shampooed, clean every nook and cranny, etc. But there are additional things you can do to wow potential buyers and maybe even get some extra dough. Here are some small updates with major returns:
This is where people love to spend their time and gather. Kitchen renovations are always good and I’m not talking a complete overhaul/remodel. Updating the appliances, painting the cabinets and even updating the hardware on those cabinets will go a long way.
Bathroom updates are next on the high-returns list. Re-grouting the tile and updating the hardware will go a long way in making your home look top-notch.
Curb appeal is huge because first impressions are everything in the real estate world. Put down some fresh mulch. Repair or replace missing or cracked stepping stones. Give the front door a fresh coat of paint. Make buyers really excited to step into your house. Oh, and a good power wash goes a LONG way. The exterior of your house goes through a lot out in the elements. Make it sparkle and shine with a good spray down.
Buyers typically just want a home that is move-in-ready and doesn’t scream “fix me immediately”. Taking care of anything unsightly or that seems like you didn’t care about the place is a must. Before you do anything major, though, check with your agent to get their thoughts on what you’ll get back on resale.
When listing your house and trying to figure out the “magic price,” a lot of people assume they should list higher than what they’d like to get because they can just come down in price. In other words “leave some room for negotiations.” We’re diving into why that is not the best technique and can actually end up costing you more money.
When a house is priced well, it will sell quickly and close to the listing price. If you go 10- 15,000 higher than you should, your house is likely going to sit on the the market for awhile – until the price comes down. If you adjust your price after your house has been on the market for 30 days, there go 30 really precious days. Especially in a high-demand seller’s market (like we have today), buyers will look a house that has been on the market for a month or two and assume “something must be wrong with it.” That translates to less showings, less offers and (likely) a signed around offer below listing price.
Think about it this way: almost all homebuyers start their search online. If they are looking for homes between $250 and 275k, but yours is listed at $300k (when it should be $275k), those buyers (exactly who you are looking for!) aren’t going to see your home or even know it’s on the market! And someone who is looking for a house between $300k and $325k? They are going to see your house and compare it to others for $300k – quickly determining that your house for $300k isn’t quite up to par to the others. They will eliminate yours from the running. That means your home won’t appeal to that higher price range and the people who DO want your house won’t even see it.
Generally, you’ll get the most activity the first two or three weeks your on the market. Even following a price adjustment, a house will lose its interest and buzz much beyond then. Trust me, you will know if your house is priced too high.The general rule is: if you have less than 10 showings in 10 days, you’re likely too high and should talk with your agent about readjusting the price. If you have a lot of showings but no offers, your agent should be able to contact the other agents who have shown it to get some feedback.
When a house isn’t selling, it usually boils down to two things: price and the condition.
This week is about the value of houses. What is the assessed value, what’s market value and what is the appraisal value…and why are they all different numbers?!
The market value is whatever a buyer is willing to pay for something. When you first decide to sell your house and you hire an agent, the agent will put together a CMA (comparative market analysis). This will determine what similar houses in your area have sold for lately and what the market says you can likely get for yours. You could put your house on the market for whatever price you want, but if no one is willing to pay that much for it, that value isn’t the market value.
The banks hire out an appraiser to make sure the loan they are giving out is an appropriate amount of money for what the house is worth. The appraiser determines the appraised value. It’s an unbiased estimate, separate from the listing or negotiated price. Sometimes this value will be the exact same as the market value, other times it’s radically different. If it’s lower than what a buyer offered, the bank will only loan out the appraised value. If it comes to that, there are a few options: the buyer will need to come up with the difference, the seller will have to drop the purchase price to the appraised value or they will have to meet somewhere in the middle. The latter is usually the case. In a today’s hot seller’s market, this is becoming a common problem.
And finally, the assessed value. It’s only used for tax purposes. They take the assessed value of your home – per a county assessor – and multiple that number by the local tax rate to determine yearly taxes. The assessed value of your home does nothing to affect what your home is worth on the market. It could be a whole lot higher or a whole lot less.
Every homeowner wants to know what their home is worth. Unfortunately, this frequently asked question can’t be responded to with a generalized answer. The good news? Finding out how much your home is worth is as simple as asking a local real estate agent.
The best way to find out the value of a house is by putting together a comparative market analysis. A CMA (as us agents lovingly refer to them as) is an in-depth evaluation of recently sold “comparable” homes. It isn’t a crystal ball that determines exactly what a home will sell for, but assuming it’s prepared by a well-versed agent, it will narrow the sale price range. Then you and your agent can strategize and make an informed decision on what that “magic price” likely is.
Here are some of the aspects a CMA takes into account:
- style of house
- upgrades throughout the house
- square footage
- number of bedrooms and bathrooms
- kitchen and bathroom upgrades
- window quality
- age of the roof
- size of the lot
- traffic of the street it’s on
- type of flooring
- overall condition and cleanliness
Some aspects of a house just are what they are: the location, lot size, style of house…but there are ways to increase your home’s value. The items that produce the highest returns on investment are: minor kitchen and bathroom upgrades (new appliances, giving the cabinets a facelift and/or updating countertops) and anything improving the curb appeal of your house (exterior paint and landscaping).
The best investment you can make is on the condition of your house and regular home maintenance. If your carpet is heavily worn or damaged? Replace it. If your roof is on the verge of going out and/or it’s leaking? Fix it. These are big red flags to homebuyers and unless they are getting a great deal, 99% of buyers won’t want to mess with it, in turn driving down your home’s value.