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Category Archive: ‘Thinking of Selling?’

Selling Strategies That Can Backfire

Good tips from realtor.com:

When you’re selling your home, you might imagine you hold all the cards. And you do—sort of. But it’s easy to become overconfident in a seller’s market. If  you don’t do a reality checkpronto, you could end up sabotaging your sale. So much for that straight flush!

Here are six common home seller negotiation tactics that can totally backfire if you don’t approach them carefully.

1. Starting a bidding war

Bidding wars are the stuff of home sellers’ dreams. And there’s nothing wrong with fueling a little competition among buyers in order to get the best deal for you. But this tactic can easily backfire if you bungle it.

“If mishandled, people may assume the worst, and the best offer may walk away,” says Sep Niakan, owner/broker at Miami-based HB Roswell Realty.

Common bidding war bungles include the following:

  • Not clearly explaining upfront how you intend to handle multiple offers.
  • Giving an offer deadline that is too many days away. Some buyers might not want to wait for you to make a decision, especially if other homes are in contention.
  • Already having a strong offer on the table, but then insisting that all potential buyers come back with their highest and best bid. There’s no guarantee buyers will play ball and, if that strong offer walks, you’re stuck with lower offers to choose from.

Bottom line: Proceed with caution before turning up the heat on the competition, lest you risk losing out on a dream deal.

2. Haggling over repairs

What if the buyer completes an inspection and comes back with a long list of requested repairs? If sellers get too tough here, they might send a buyer walking.

The sellers should consider how good the overall package is for them before refusing to do repairs, says Lucas Machado, president of House Heroes in Miami. “When the buyer’s offer is high, and the seller tries to negotiate away from legitimate repairs, the buyer may feel the seller is taking advantage of them.”

3. Threatening to put your home back on the market

If negotiations aren’t quite going your way, you might be tempted to call the buyer’s bluff. Hey, if they don’t want to ante up, you can always put your home back on the market and find another eager buyer to squeeze.Right?

Yes, you might find another taker quickly. But beware of this move—it might not go according to plan.

That’s because there’s often a stigma associated with putting a home back on the market, and it might be harder to get buyers to take a second look, says Realtor® Michael Hottman, associate broker at Keller Williams Richmond West in Richmond, VA.

“Exercise caution with this tactic, because real estate markets can change quickly from hot to cold, leaving you without all those buyers you were expecting,” Hottman says. “And the ones who you had initially thought were legitimate prospects may have moved on to other homes in the time between your property originally going under contract and now coming back on the market.”

4. Being stubborn on the closing date

You’ve decided you’re not going to allow the new people to move in until (insert future date) because that’s when the closing date is on your new home. Or, they can’t possibly take possession this spring because your kids are still finishing school.

Guess what? Your buyers have scheduling issues of their own, says John Powell, chief development officer at Help-U-Sell Real Estate in Tucson, AZ.

“Sellers need to understand that they may have to move twice, since buyer and seller schedules seldom work out perfectly.”

5. Getting greedy over what comes with the house

Planning to take your beautiful custom light fixtures with you? Not so fast, Hottman warns. Often, he finds that sellers have expensive fixtures in place to show the home, but plan on taking them when they move. And that can cause trouble at the negotiating table.

The buyer “might have decided to buy the ceiling fan, and the house happens to come with it, or they get so upset that a fixture they fell in love with is now missing that they won’t buy the home,” Hottman says.

Avoid this confusion by replacing anything that won’t be staying with the house before you show it. If that’s not possible, be prepared to leave the prized fixture behind, or negotiate a comparable replacement.

6. Refusing to pay closing costs

So, you’re coming down the home stretch and this deal is almost done. Congratulations! But the buyer asked you to cover their closing costs.

Before you say “no way,” consider it this way: Buyers sometimes roll the amount of those closing costs into their offer. For instance, let’s say your home is listed for $200,000. A buyer might then submit an offer for $204,000, but ask you to cover the $4,000 in closing costs.

“Some sellers will hold firm at the $204,000 offer and refuse to pay the closing costs because they want this higher price the buyer offered,” Hottman says. “Some sellers can’t see the net is nearly identical between a $200,000 offer with no closing costs and $204,000 with $4,000 in seller-paid closing costs, and they miss out.”

A good deal comes down to doing the math, keeping your ego in check, and putting yourself in the buyer’s shoes. After all, when you sell your house, you’ll probably be buying one, too.

Posted by on Nov 3, 2017 in Jim's Take on the Market, Listing Agent Practices, Thinking of Selling?, Tips, Advice & Links, Why You Should List With Jim | 0 comments

Baby-Boomer Housing

These responses point to a massive downsizing trend!

From realtor.com:

LINK

It’s all about millennials these days. Everything seems to center around these special snowflakes. But what about the original “me” generation? We’re talking about baby boomers, of course. What do these roughly 76 million Americans want when it comes to housing?

Well, they want multicar garages, for one thing. According to a recent survey by national homebuilder PulteGroup, they were the top feature boomers were looking for in a new home, followed by open decks or patios; eat-in kitchens; and a private yard.

About 38% of boomers plan to buy a home within the next three years, according to the report. About 11% expect to purchase a residence within the year.

The survey was of 1,043 folks between the ages of 50 and 65 who plan to buy a home in the next decade.

“Retirement marks a new phase in a baby boomer’s life, and it only seems natural to relocate or move to a new home when transitioning away from their primary career, or from the day-to-day rearing of school-aged children,” Jay Mason, vice president of market intelligence for PulteGroup, said in a statement. “It’s not surprising that the 55+ buyer wants a variety of options and choices in their homes.”

According to the survey, 39% of respondents said the main reason they’re moving is because they want to retire, 33% want to downsize, and 30% want to move to a more desirable location.

“One thing we know about boomers is they are not done yet,” says Amy Lynch, president of Generational Edge, a Nashville, TN–based company that consults with companies on generational differences in employees. “As a group, they are starting encore careers and also going back to school. And they often move to be near their millennial kids, who are having kids.” They also start new families of their own, through divorce or remarriage.

All of these situations may require a move. About 26% of boomers plan to stay in their current cities, but just move to a different home, while 34% want to remain in the state, but in a different city or town. Also, 38% hope to cross state lines.

Their top retirement destination? You guessed it: Florida. It seems you just can’t beat all of that year-round sunshine. The state was followed by fellow warm-weather states Arizona, North Carolina, and South Carolina. The cost of living is lower in these states than on the pricier West Coast or in the Northeast.

About 82% of boomers wanted to be someplace affordable, and 74% want to be close to their preferred health care programs.

But boomers don’t want to just pack up and leave their grandchildren. Being close to kids was their top consideration when choosing a new community. They also want to be near the water and park or other green space.

“We are in a period in this country where family life and family connections are very strong,” says Lynch. “There’s a lot of regret among boomers because they worked so many long hours when their kids were young. With grandkids, there’s a chance to make up for that.”

Posted by on Oct 26, 2017 in Boomer Liquidations, Boomers, Jim's Take on the Market, Market Buzz, Market Conditions, The Future, Thinking of Buying?, Thinking of Selling?, This Is America | 11 comments

This Week’s Disrupter

Talk about buying the listing! This is the UK version of Opendoor, and they are tempting sellers with a promise of a 97% cash advance on their house.  This idea is fantastic, and operators could make a bundle, right up until the market flattens out or declines. Then what?

LINK

An excerpt:

Nested, the U.K. estate agent that provides a cash advance to help you buy a new house before you’ve sold your old one, has raised £36 million in further funding. The round was led by Rocket Internet’s Global Founders Capital, and brings the less than two year old startup’s total funding to just shy of £50 million. Buying and selling houses is a pretty capital intensive business, after all.

Launched in January 2016, Nested competes with high end estate agents by providing all of the services needed to sell your house, but with a key difference. In addition to handling valuation, marketing and sales, the startup will offer you up to 97 per cent of the market value of your property as a cash advance, that way you’re able you to purchase a new home prior to your old one selling.

Not only does this eliminate much of the stress and uncertainty of selling and buying a home, including what your final budget will be, but also ensures that you are never caught up in the dreaded property ‘chain’ and potentially miss out on your desired home, or are kept in limbo indefinitely waiting for your property to sell.

In return, Nested charges a fee from 2-4 per cent (plus VAT) depending on how long it thinks it will take to sell your home, and reduces that fee by half if it fails to sell the property for an amount above its initial valuation (something I’m told hasn’t needed to happen yet). The idea is to incentivise the startup to always try to get you the genuine market price or above. It is also slightly different to the original pricing model that saw Nested split the difference 70/30.

In a brief call, Nested co-founder Matt Robinson, who previously co-founded online payments company GoCardless, told me that the startup’s best sales funnel is people’s bad experience trying to sell their home with a competing agency. He framed the current market as online-only estate agents who are targeting the low end by charging a flat up front fee but with little guarantee they’ll go on to sell your home, and traditional brick ‘n’ mortar agents who no longer add as much value as they used to now that listings and market data has moved online.

LINK

Posted by on Oct 23, 2017 in Jim's Take on the Market, The Future, Thinking of Selling? | 3 comments

Price Reductions

It’s the time of year when we see some price adjustments by agents who have tried everything else, to no avail.  But how much do you need to reduce the price to cause a sale?

Ideally, it needs to be enough to cause buyers who have already seen the house to come back – that’s how you know for sure that the new price is working.

But have you noticed that every price reduction is advertised as ‘Huge’?

Price-Reduction Guide:

‘Huge’ = 10% or more reduction in price.

The minimum effective reduction = 5% reduction.

Typical reduction = 1% to 2%.

Fake reduction = moving the value-range goalposts.

Buyers are already thinking of knocking off more than 1% or 2%, and to be effective, a price reduction needs to create some real urgency in the buyers – to make them think that if they don’t react immediately, somebody else might beat them to it.  The 1% or 2% reductions aren’t enough to create any extra urgency, and as a result, are just throwing money away.

In addition, a new, lower list price will be cross-referenced by the buyers with the days-on-market.  They expect at least one decent price reduction per month to keep them interested.

Want it to work?  Lower your price by an amount that makes you cringe!

Posted by on Oct 20, 2017 in Jim's Take on the Market, Thinking of Selling?, Tips, Advice & Links | 1 comment

Update on Boomer Liquidations

Coming to a neighborhood near you….some day!  From cnbc.com:

LINK

Jeff Swaney is worried about selling his 5,600-square-foot home one day.

In his neighborhood south of Atlanta, demand and prices for large ranch houses like his have declined over the last decade, as more young professionals move to smaller abodes in hipper areas. He doesn’t expect that to change anytime soon.

The 51-year-old real estate investor and owner of Swaney Consulting Group has personal reasons to hold on, at least for now. He may eventually move to a condo at the beach, but wants his future grandchildren to enjoy his pool, yard and basement. For these amenities, he spends about $18,000 annually in lawn maintenance, taxes, insurance and utilities alone.

The housing market, on the rebound since the Great Recession, is increasingly being driven by millennials and first-time homebuyers who “are hungry for starter homes and efficient layouts,” said Javier Vivas, manager of economic research for realtor.com.

The trend may leave some older homeowners in a lurch if they want to retire, downsize and cash in their nest egg.

Large single family homes — defined as the largest 25 percent of all listings on realtor.com and about 2,900 square feet to 4,000 square feet — receive 12 percent to 45 percent less views on realtor.com than the typical home in each market.

This year so far, large, single family homes are selling up to 73 percent (or 50 days) slower on average than the typical home in each market.

The often hefty price tags for bigger homes contribute to their lengthier sale times because there is a smaller pool of buyers who can afford them, said Artur Miller, founder and CEO of Miami-based AMLUXE Realty.

Even Swaney, whose 1994 home appraised for $350,000, thinks he may have a tough time selling.

“The McMansions that soon-to-retire people purchased in the 80s and 90s are a very difficult sell right now,” said Melissa Rubenstein, a former real estate attorney who now sells luxury properties with Re/Max HomeTowne Realty in Bergen County, New Jersey. Many are outdated and may not include a first floor bedroom and bath suite for aging in place or in-laws.

Listings of large homes are also up two percent from last year, suggesting owners are dumping them faster, while listings of all homes are down 10 percent from last year, according to the realtor.com data.

“We’re finding these homes are an albatross for clients,” said Michael E. Chadwick, a financial planner and owner of Chadwick Financial Advisors in Unionville, Connecticut.

“We’ve got several right now who have been trying to sell them and move south, and they’ve cut the asking price by over 30 percent each and they’re still not going anywhere fast,” he said.

Read More

Posted by on Oct 14, 2017 in Boomer Liquidations, Boomers, Jim's Take on the Market, Thinking of Selling? | 5 comments

Best Places to Retire

The 2018 rankings of the Best Places to Retire are out!

San Diego is ahead of other more-typical retirement towns like Charlotte, Phoenix, Las Vegas, and Denver, and the only California city in the Top 50.  But there are twenty places ranked above us, so if you’re thinking of leaving us, here’s a guide:

https://realestate.usnews.com/places/rankings/best-places-to-retire

Posted by on Oct 10, 2017 in Boomers, Jim's Take on the Market, Thinking of Selling? | 2 comments

Moving Out

It might get so bad that we see an occasional flurry of supply!  H/T daytrip:

More than half of California voters say the state’s housing affordability crisis is so bad that they’ve considered moving, and 60 percent of the electorate supports rent control, according to a new statewide poll.

The findings from UC Berkeley’s Institute of Governmental Studies reflect broad concerns Californians have over the soaring cost of living. Amid an unprecedented housing shortage, rents have skyrocketed and tenants have faced mass evictions, especially in desirable areas.

“It’s an extremely serious problem,” said poll director Mark DiCamillo. “People are being forced to consider moving because of the rising cost of housing – that’s pretty prevalent all over the state.”

Of the 56 percent of voters who said they’ve considered moving, 1 in 4 said they’d relocate out of state if they did.

Read full article here:

http://www.sacbee.com/news/politics-government/capitol-alert/article174026561.html

Posted by on Sep 19, 2017 in Jim's Take on the Market, Market Buzz, The Future, Thinking of Selling? | 1 comment

Moving Away

Examples of people who moved away, with good and bad results:

Raya and Michael DeMarquez both grew up in San Jose, got married here, raised their kids here, bought a house here more than 20 years ago and felt settled in the Bay Area life — for life.

Then they lost that house after the 2008 recession, lost their jobs. In the ensuing years, they worked hard to put things back together, rebuilding their careers, renting a house. Yet all the while, they sensed the encroaching costs of change: the tech boom, the swelling prices, the thickening traffic, the culture shift. They started to feel like outsiders in their own home town.

So in 2015 they did something they never would have considered a decade before. They moved. Away.

To Portland, Oregon, in fact, as many Californians have done, often to the chagrin of Oregonians. And while there have been some adjustments and trade-offs (think weather), they’re truly happy they did it.

“We’d never go back to San Jose,” says Raya DeMarquez. “We’ll see if (Portland) is where we’ll stay. We’re giving it through this winter to decide if we can handle the weather — it was rough last year.

“But we’d never move back,” she says. “Never.”

Read full article here:

http://www.mercurynews.com/2017/09/16/leaving-the-bay-area-these-folks-did-it-with-mixed-results/

Posted by on Sep 18, 2017 in Jim's Take on the Market, Thinking of Selling? | 7 comments