SECRETS EVERY HOME SELLER NEEDS TO KNOW
• • • Ronald Cooks
Published by Legacy Media Networks
Copyright ©2017 Legacy Media Networks
All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. While all attempts have been made to verify information provided in this publication, neither the Author nor the Publisher assumes any responsibility for errors, inaccuracies, or omissions. Any slights of people or organizations are unintentional. This publication is not intended for use as a source of legal or accounting advice. The Publisher wants to stress that the information contained herein may be subject to varying state and/or local laws or regulations. The reader of this publication assumes responsibility for the use of these materials and information. Adherence to all applicable laws and regulations, including advertising and all other aspects of doing business in the United States or any other jurisdiction is the sole responsibility of the reader. The Author and Publisher assume no responsibility or liability whatsoever on behalf of any reader of these materials. If your property is currently listed with a Realtor®, please disregard this notice. It is not our intention to solicit the offerings of other brokers. DISCLAIMER AND/OR LEGAL NOTICES:
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Table of Contents
Intro | 1 INTRODUCTION
PART 1: Preparing Your Home One | 5 FIRST STEPS TO HOME SELLING Two | 13 THE 80/20 RULE Three | 19 CREATING CURB APPEAL Four | 25 STAGING WITH PURPOSE Five | 33 UPGRADING WITH ROI IN MIND Six | 45 THE THREE D’s PART 2: Marketing Your Home Seven | 53 HOW TO MARKET YOUR HOME Eight | 59 COMMON SELLER MISTAKES Nine | 65
LEARN FROM OTHERS’ MISTAKES Ten | 71 FINDING BUYERS
PART 3: Negotiations Eleven | 75 BE A POWER NEGOTIATOR Twelve | 81 THE DOS AND DON’TS OF NEGOTIATING Thirteen | 87 BARGAINING CHIPS Fourteen | 91 WHY HIRE AN AGENT?
About Ron Cooks Ron Cooks is a real estate broker in the state of Texas with over 12 years experience. Previous to real estate he served in the United States Army for 25 years. It was the military training that taught him the discipline and honor he employs in his real estate business. Ron currently overseas a team of 75 agents in the central Texas area and is a coach/mentor to dozens throughout Texas. The key to Ron's success is his servant heart; whether with his clients or his agents Ron's humble approach to business puts the needs of others before his own.
The largest investment most people make is their home. That makes selling a home — whether a single-family residence, duplex, or condominium— the single largest, most complex transaction a person will ever undertake. It involves new terms and concepts, financial acumen, and larger figures than normally dealt with. It is also one in which emotions may come into play to the detriment of good judgment. Surely , the seller thinks, my home where I raised my children and made so many memories is worth more than the bricks and mortar it contains. Real estate transactions involve dozens of decisions and substantial investment in homeowners’ time, energy, and money, and emotions almost always lead to problems in a sales price negotiation. The home seller’s objective is to find that home shopper who cannot resist buying your house at the highest price. To do this, you need to offer potential buyers a striking home sales presentation that outshines other homes on the market. It requires making a fantastic first impression, creating in the buyers an instant feeling that they are traveling up the front walkway of their new home for the first time, and not visiting someone else’s. It’s about falling in love at first sight, from the curb, in those initial fleeting seconds. Most sellers do not venture alone into selling their home. They find it better to have an experienced real estate professional with whom the owners are comfortable. This book was written to provide some of that comfort without the direct sales stressors of person-to-person contact. I want the prospective or active home seller to independently achieve a better understanding of the home-selling process. I’ve also provided actionable insight into how best to market your home, avoid critical mistakes, and maintain a proper focus. Let this book be your go-to resource for information, strategies, and techniques that can be put to work to sell your home quickly at the best
price. Take time looking through the chapters and master the secrets of successful home sellers. For example, discover why comparable homes sell for considerably different prices. Be ready to sell by knowing your home’s market value, best listing price, how to negotiate, and what improvements have the best Return on Investment (ROI). My sincere hope is that this book will help you make the most of your time and efforts to sell your home. In Part 1, the process and importance of preparing your house for sale is examined: how to present to get top offers, the “80/20 rule,” along with which upgrades will make the most difference in ROI. Part 2 delves into marketing your home with a look at costly mistakes, avoiding those mistakes, and finding qualified buyers. We examine the critical topic of negotiations — what to expect, and how to conduct them. In Part 3, we finish with a look at what engaging a real estate professional brings and the process of getting the most dollar in your residential real estate sale transaction. After you learn the process, requirements, and tips, you will see that an experienced, financially astute real estate professional can vastly cut the time and raise the economic value of your transaction. Reading this book is your first step to selling your home for the best price in the shortest time. After you read it, you might want to talk with me. I stand by to assist you with a Current Market Analysis and a solid marketing plan to fit your needs and lifestyle. • • •
Part 1: Preparing Your Home
FIRST STEPS TO HOME SELLING “But You Gotta Know the Territory” — and Terminology Location! Location! Location! is the most crucial consideration in commercial real estate and a major factor, if not the predominant one, in commercial real estate pricing. Likewise, novice (and not-so-novice) home sellers must know the considerations — such as location — that determine a home’s price. Setting the price at which to sell your home is not a simple formula, nor mathematical. Many elements factor into the decision. Throughout this book, you will read examples of similar and similarly situated houses that sold for very different prices, along with the reasons for the disparities. A calculated home value is not necessarily what you believe your home is worth. Recognizing this helps avoid overpricing, amajor factor that leaves homes languishing or unsold. Familiarity with the real estate terms market value , appraisal value , and assessed value can save disappointment and frustration, and allow the home seller to more meaningfully engage in setting a home’s listing price. The most-used definition of market value is “the most probable price a property should bring in a competitive, open market under conditions requisite to a fair sale.” Essentially, this is a pre-negotiation opinion of what a house should bring in its local market, i.e., its geographical area, generally an area such as a suburb or neighborhood. Appraisal value is an evaluation of a property’s worth at a given point in time that is performed by a professional appraiser. Appraised value is a crucial factor in loan underwriting and determines how much money may be borrowed and under what terms. For example, the Loan to Value (LTV) ratio is based on the appraised value. Where LTV
is greater than 80%, the lender generally will require the borrower to buy mortgage insurance. Assessed value is the amount local or state government has designated for specific property and frequently differs from market value or appraisal value. This assessed value is used as the basis of property tax and when a property tax is levied. The assessed value of real property is not necessarily equal to the property’s market value. Approximately 60% of U.S. properties are assessed higher than their current value; however, this does not reflect the home’s value. WHAT IS YOUR HOME WORTH? The first step in selling your home is knowing the difference between value , worth , and price . Let’s examine the determining factors at work. Understanding those factors allows them to be leveraged. There are several ways a home’s value is derived. ONLINE HOME VALUATION Online tools will provide you with a very basic estimate of your home’s current value based on recent comparable home sales in your area using a comprehensive database. Note that the assessment is based on available data with no guarantee of accuracy and often uses an algorithm that simply averages comparable sales in the geographic area. These tools might be quick and easy, but they don’t take into consideration factors like location, current local trends and the condition of the property. Be aware that the prices arrived upon might be highly inaccurate. For example, a home in Ohio was put into one such system, Redfin (https://www.redfin.com/what-is-my-home-worth). The home last sold for $180,000 in 1998; it was appraised for refinancing in 2015 at $275,000. In 2017, Redfin’s calculator valued this 1890 Victorian home (4 bedrooms, 1.5 baths, and 2,100 square feet) in a four-block area of “Grand Old Ladies” at $158,000. The apparent reason is that the six “comps” (comparable recent sales) included only 2 homes in this desirable neighborhood (over $300,000), while four others outside this small neighborhood, although close, sold for $150,000 to $199,000. Because the systemdoesn’t understand the makeup of the area and simply pulled
prices from a broader geographic area, the arrived-upon price was far belowwhat it should have been.These tools are worthwhile for obtaining “comps” of area sales; however, they are not highly accurate in arriving at a listing price. PROFESSIONAL APPRAISAL Nothing determines the sale price of a piece of real estate but the price at which it sells . Houses are not same-priced identical cans of tuna on the grocery store shelf or shares of stock valued and traded every day on the stock exchange. Real estate appraisal (“property valuation”) is the process of arriving at developing a perspective of value for real property. This is the market value — i.e., what a willing reasonable buyer would pay for the property to a willing reasonable seller. Real estate transactions generally require assessments because they happen infrequently, and every real property is unique in features and characteristics. An appraisal helps in various decision points. The seller can use the appraisal as a basis for pricing. The buyer can use it as a gauge on which to base an offer. Lenders use appraisals to know how much money to credit to their borrowers. The important factors in a house appraisal are: • Dwelling type (e.g., one-story, two-story, split-level, factory- built) • Features (including design) — materials used and the kind of structure present and how they were built • Improvements made • Comparable sales • Location — type of neighborhood, zoning areas, proximity to other establishments • Age of property • Size • Depreciation
Condition, of course, is a crucial factor in valuation. Location is also a factor; however, as property cannot change location, upgrades or improvements to a residential property often can enhance its value. A professional appraiser should be a qualified, disinterested specialist in real estate appraisals, with expertise in your region. His or her job is to determine an estimated value by inspecting the property, reviewing the initial purchase price, and weighing it against recent sales with the same purchase price. CURRENT MARKET ANALYSIS BY A REAL ESTATE PROFESSIONAL This home valuation is free from real estate professionals and more helpful than automated online offerings. It provides detailed information on each house sold in your area over the last six months, along with the final sale price. It also includes the specifics of all the houses for sale in your area, including the asking price. These homes are your competition. The real estate professional will also answer any questions and help you price your home realistically. Along with an understanding of how the worth of a home is determined, the current market must be considered. By utilizing a professional real estate agent (like me), you can rely on proven expertise to market your home at the best listing price. I will be happy to provide you with a Current Market Analysis. Please refer to the last page of this book if youwould likemore information on how to request a free home valuation. THE SECOND STEP (SELLING YOUR HOME FOR MORE) Prior discussion showed that there is no calculable certainty in setting the value of a home. There can be wide differences between the seller’s assessed price, the asking or listing price (market value), and the price at which the home sells (sale price). Let’s turn to what the homeowner/ seller can do to elicit offers at the listing price, or even above, in a competitive market.
EXAMPLE OF DIFFERING HOME VALUATIONS
A buyer is interested in a home listed at $420,000. The online valuation determines the house is worth $440,000. Based on that estimate, the buyer offers the asking price. When a professional appraisal comes in at $400,000, and the existing tax records assess the home at $300,000, the buyer wonders why the values are so different and whether he overpaid. The house was listed at $420,000 because at that price, the home would sell in a reasonable amount of time. Why would the appraised value not be whatever a buyer was willing to pay? The fact that they paid $420,000 does not mean that is the true value of the home. Certain factors may weigh in — undesirable businesses locatednear the property, for example. Online valuations cannot take into consideration the condition of the property or the qualities of the neighborhood. Since an assessedhome value is for taxing purposes only, it can bemuchmore ormuch less than themarket value. Ideally, they should be the same, but usually they are not; it is based on a percentageof the appraisedvaluedeterminedby aprofessional. From legal descriptions to onsite inspections to comparable home-selling prices, the assessor will take all these things into consideration when appraising a home. Location near industry, high traffic, or potential development will also affect the appraisal.
The seller’s time, effort, and investment are the most important parts of the process. The seller’s willingness to adequately prepare the home for presentation by improving, freshening, landscaping, and generallymaking the home pristine—and to live in that presentation-readiness state for the time it takes to sell the property —will greatly affect both the sale period as well as the price at which the home sells. A market in which homes normally sell in no more than six months of listing is considered balanced or neutral, which means a good number of homeowners are selling and buyers are purchasing; therefore, neither has an upper hand. A variable, for instance, like a major company entering — or moving from— the area will tip the scale toward homeowners to make a swiftmarket or toward buyers to make a slowmarket. The typical selling time in a swiftmarket might be 30 days, while that of a slowmarket may be up to nine months. Typically, any number below six months is considered a seller’s market. LIVING IN A SWIRLING FISHBOWL A house on the market requires keeping the home in a constant “show- ready” condition, and adjustment to changes in day-to-day life that are inherent in the process. Sellers get out-of-business-hours phone calls from unrepresented prospects and buyers’ agents to show the home; frequent updates by phone, email, and text and show appointment scheduling messages from the listing agent; repair and reconditioning appointments; and inspections. The house may be photographed for online, periodical, or brochure presentations. There are repeated showings when the home first hits the market. Keep your home in pristine showing condition for impromptu visitors — the perfect prospect might just drop in at dinnertime. Rude, perhaps, but necessary to accommodate. CHILDREN (AND PETS) SHOULD BE UNSEEN, UNHEARD Children and pets are distractions for potential buyers, affecting their experience of your home. You should plan for your children to be elsewhere and your pets crated or leashed, and no toys lying about or dog hair on the sofa. The dishes should always be done and the kitchen sparkling.
The pressure of showing to everyone even mildly interested in looking (not necessarily buying) may come from the idea that the more your home is seen, the more quickly and easily your home will sell. Many real estate agents provide their clients with dozens of homes to consider without a clear picture of what the buyer wants. Low-interest traffic can be heavy and a burden on the seller’s time, energy, and resources. Since a showing can take an hour or hours, finding an interested buyer is what matters most. The home will be shown to many more uninterested than interested buyers. How many times will you have to show your home? In an ideal world, your property would be shown to serious buyers only. However, many “Sunday afternoon window shoppers” exist in the real estate business. You shouldn’t waste your time trying to appeal to uninterested buyers. This is where planning, organizing, and the professional help of a qualified real estate agent enables you to handle even the most intimidating tasks without wasting efforts. • • •
THE 80/20 RULE
“Eighty percent of results will come from just twenty percent of the action.” This is the Pareto principle, attributed to Italian economist and philosopher Vilfredo Pareto, who in 1906 observed an intriguing correlation. The story is that he began work on the “80/20 rule” with the observation that 20% of the pea plants in his garden generated 80% of the healthy pea pods. This observation caused him to explore uneven distribution. He discovered that 80% of the land in Italy was owned by just 20% of the population. He investigated different industries and found
that 80% of production typically came from just 20% of the companies. The generalization became the concept that 80% of results will come from 20% of the action. While it does not always come to be an exact 80/20 ratio, this imbalance is often seen in various business cases: • 20% of sales reps generate 80% of total sales • 20% of customers account for 80% of total profits • 20% of the most reported software bugs cause 80% of software crashes • 20% of patients account for 80% of healthcare spending
RELATING THE 80/20 RULE TO HOME SELLING
Understanding the 80/20 rule concept can save you time in selling your home. Applying the 80/20 rule, you stop trying to sell people on the entire home.
Applying the rule, you can highlight the 20%of your home’s features that make it special. The remaining 80% of your home still affects the buyer’s decision, so do not neglect it, but in photographs and showings, feature the elements that make your home special.
Your selling point won’t be the common features your home shares with the other properties on themarket. Instead, use your home’s unique features to grab the attentionof buyerswho are interested in those distinctive features. BUYER’S STORY When Vince and Sue were shopping for a new home, Vince wanted an ocean view. They looked at many desirable properties but didn’t find any that were right for them. Some were overpriced; others had obstructed views. The search went on for almost a year until they found an older home a short walk from the ocean. The neglected exterior and dated interior were not encouraging, but when Vince stepped out onto the third-floor balcony off the master suite, he was sold. Any shortcomings in wall color or fixtures faded away when he took in the view. He could now see the sunrise from his bedroom window every morning. What 20%of the home caught the eyes of Vince and Sue? The magnificent third-floor view of the ocean!
SELLER’S STORY When Cam and Kate listed their home, they needed a buyer who wasn’t concerned that the house was on an unpaved road. Though the home was over 10 years old, the interior was updated with fresh, neutral wall colors and carpeting to look brand new. The towering trees and established yard gave the home a welcoming appeal. The buyers had also looked at a homewithinmiles of Camand Kate’s that had towering trees as well as a koi pond and patio. This home was comparable in interior and exterior, but it was on a busy street. What 20%of the home caught the buyer’s eye and prompted him to choose Cam and Kate’s home? The buyer loved the secluded country feel of the home. The 1.8-acre property was surrounded by pastures, with grand oaks dotting the landscape. LOCATION MATTERS A buyer paid extra for a townhouse because of its location in the complex overlooking woods instead of the parking area. Another seller took advantage of the fact that most of the surrounding homes didn’t have yards; only a few shared a half-acre grassy area. An owner whose townhouse bordered this yard area sold his home for a higher price than other townhouses in the complex on the market because his had a characteristic shared by fewer than 10%of others. He had the only available listing offering that feature. He pointed to that feature inmarketing the townhome. With this attractive point of difference, the house sold for a higher price. Another townhouse seller in the same complex found a different unique feature. Although she did not have a yard, she was still able to use location to advantage. Her property backed up to a lake and fountain. This unique feature helped her to sell the townhouse quickly and for a better-than- average sales price.
THE 80/20 RULE IN ACTION: BUYERS ARE SEARCHING FOR UNIQUE FEATURES
Decide upon, improve, if necessary, and spotlight the unique features of your home in marketing copy, online and print photographs, and in showing the house. Do not spend much time explaining how the storage room can be converted to another full bath; instead, lead the dog-owning prospect to the fenced-off dog run in the unusually large backyard. If the home has a certain feature a buyer is specifically looking for, highlighting this aspect inmarketing efforts will attract interested buyers willing to pay the asking price.
Each house will have its unique features. Here are some suggestions if you aren’t sure of yours: • Hilltop views or high vantage point, offering a spectacular view of the surrounding area • Open fields frequented by wildlife • Unobstructed views of sunrise and sunset
• Patios, decks, dog runs, garden areas, and gazebos—highlight items neighboring houses don’t have, or differences in size or quality; that one vital feature could help you sell your home • Location can set a property apart, even in the same area, adding value to a home on a cul-de-sac or corner lot • A private location or lot partially concealed by trees • Aunique, shady, or larger backyard; a fenced backyard is a big selling point (if your yard can be fenced, but is not, consider making that improvement) • Finished basement, large attic or garage, swimming pool, or anything else that makes your home stand out
LOOK FOR THE 20% DIFFERENCE AND MARKET THE FEATURE
Following the 80/20 rule can lessen time showing to people who aren’t interested. Instead, you will be showing your home to buyers who are motivated to make a purchase. You won’t have to show as frequently. You also won’t have to sift through low-ball offers fromcasual shoppers. Keeping this inmind, youmust take the time to uncover your home’s most attractive and unique features and improve them to their highest potential. Compare your house with others in the neighborhood to see what makes yours stand out. Work with that. • • •
HOW THE 80/20 RULE APPLIES TO HOME SALES
An out-of-town home shopper with no specific requirements contacted a real estate agent to look at available homes for sale. Theagentdrovehimfromhouse tohouse. Ineachcase, thebuyer suggested offers 10% to 20% below the asking price without budging. As the day progressed, the agent’s chances of finding a suitable home were dwindling. They stopped at one last house as the sun set. The exterior of the house was dated and the yard untended. This agent and her client had spent the entire day looking at houses that shared 80% of the same features. Nevertheless, once the buyer walked into the room, he wanted to buy the home for asking price. What set this house apart from the others? He wasn’t too interested in the kitchen, bathrooms, and bedrooms. A bedroom was a bedroom as far as he was concerned. He fell in love with the one remarkable feature of this otherwise uninspiring house. >>>
>>> The house sat on a hill with a beautiful view out a large window. As they entered the great room, the sun was setting below the distant tree line. That view sold the buyer. The remaining parts of the home could be improved. The home buyer based his decision to buy on the window view from the hillside. The 20% of the home’s features motivated him to offer full price on the spot. Such is the power of the 80/20 rule. In some cases, the 80/20 rule may help people make a sale without even conducting a showing. The house in the following example had languished on themarket for months. Unlike the previous home, this onewas attractive. On the contrary, it was a brand-new, custom-built home. It sat on the market for over seven months without a single offer. The builder hired a real estate agent who knew the importance of finding that one special feature. He drove out to give the house a thorough investigation. He discovered what the property had that the competition did not. The house had a five-acre yard. Other houses being sold in the area had one- to two-acre lots. Not only was the yard bigger, but it was also more private than the other properties. The real estate agent marketed the property highlighting the five acres along with a description of the house. Because the house was no longer the main selling point, interest in the property increased.
CREATING CURB APPEAL Someone said, “a stunning first impression was not the same thing as love at first sight. But surely it was an invitation to consider the matter.” This could not be truer than in selling a home. First impressions matter. Sometimes they are everything.
Nothing sets the tone of a relationship or transaction more than first impressions. So, consider what a potential homebuyer may think as he or she drives up to your property for the very first time. Think of “curb appeal” as the
home seller’s shop window. Like picking a lunch place on a busy avenue in a tourist spot, it’s either the outside presentation or, as we saw prior in the 80/20 rule discussion, some particular feature that brings in the customers. For most lunch seekers, it is the way the place looks (“curb appeal”), and to others, the clams they serve (specific desired feature). You do not have a lot of time to establish a curb appeal relationship with a prospective homebuyer. Whether cruising the web to view online photos from across the country or cruising by your home in the family SUV on a Sunday afternoon outing, home shoppers will decide at a glance whether they want to see more. “We buy ugly houses” is a sign seen nailed to electric poles. Rehabbers look for ugly houses so that they can pay the least amount possible; homebuyers looking for a deal —but not a “basement bargain” —do not.
Creating curb appeal is essential to attracting interest in your home. How your home looks from the road is so persuasive that a well-prepared house may catch the attention of buyers who did not find the written description particularly compelling, or a neglected house can cause a buyer previously excited by a printed or onlinemarketing listing a specific desired feature to cruise right on by. Try it. Go out into your street and look — I mean really look — at your home and see if you can spot any imperfections. Is it appealing, pristine, and well-kept, or are there necessary repairs that you have been putting off? After you’ve lived in a home for a long while, you’re not likely to examine it objectively. Listen to suggestions from real estate experts, your friends and/or potential home buyers about how you can make your house show better. Then, take a drive around your neighborhood and surrounding area and see which homes for sale appeal to you and note why. Well-tended houses with trimmed bushes, groomed lawns, attractive landscaping, and a “grand entrance” (discussed shortly) will bemore impressive than homes with an unkempt walkway, uncut grass, and a paint-peeling front door. The outside appearance of a property needs to be an invitation to come inside. Potential homebuyers are drawn to welcoming entries and uncluttered yards. They are unlikely to be attracted to a home with dead shrubbery and a weather-worn exterior. It is no stretch to think a buyer will believe the home is neglected on the inside as well. Look at your home as a prospect would. Drive up to the curb and take inventory of everything that needs attention. Simple improvements like weeding, trimming, and window washing can improve the appearance of a home with little to no expense. Repair and repainting are costlier, but often tell in time-to-sale or sale price. Low-cost investments like power washing the house and concrete, repainting trim, and adding landscaping also give your house more curb appeal. The goal here is to get more money for your home. Homebuyers generally aren’t interested in a home that needs work unless you want to sell below market value.
Look around your yard and make a written list of everything that could be improved: • Shrubs trimmed, flower gardens tended, and walkways tidy; beds weeded • No trash, trash cans, lawn clippings, branches, or general mess in the yard • All outside fixtures and components working and in good repair (door and yard lights, garage door, porch rails); functioning properly and looking their best • Outdoor features such as patio furniture or the deck updated with staining or painting Make all major and minor improvements to update the exterior of your property. There might be a long list of things to do. It takes hard work to get a home ready to sell. Anyone can put a house on the market, but not everyone sells quickly or with great profits. Then, await the prospective buyers who will be drawn to the inside of your home when they see how beautiful it is from your curb! CREATING A GRAND ENTRANCE As I mentioned earlier, an important part of curb appeal is the home’s “grand entrance” — the portal to even the most modest house. You want to create a sense in the buyer of a great place to come home to. Impressing the home shopper at the front door is a vital part of the home sale. This means more than putting out a welcome mat and potted plants. You want prospective buyers to feel welcome, safe, and secure when they open the door. It might be arranged that the prospective buyer be the one to open the front door to enhance the feeling of a “coming- home” experience. The doorknob is the first point-of-touch on a home. Security is important to homebuyers. A flimsy lock or handle on the front door will make potential homebuyers uncomfortable and they may not even know why. Replace a worn or loose entry handset. Consider replacing the
door handle with a heavy-duty deadbolt and knob combination. This investment of less than $100 will make your home more visibly and practically secure, and everyone wants to be secure in their home. The front door is a focal point; make it impressive. Freshen it up and add a dash of color. Choose a paint that complements the color of your home. Replacing a wooden door with a steel entry door is worth the cost with a 91% ROI (Return on Investment). SOME OTHER CONSIDERATIONS IN CREATING GREAT CURB APPEAL: • Symmetry appeals to the eye and is easy to accomplish. Lopsided landscaping or unevenly trimmed bushes will detract from the curb appeal; the overall appearance of the home needs balance . • The mailbox should complement your home. If it is worn, dated, or unsightly, replace it. This doesn’t cost much and is worthwhile. • Use outdoor lighting to add to landscaping appeal as well as a perceived safety feature. • Use flower boxes and raised flower beds to add instant color. This is an easy, inexpensive way to enhance curb appeal. • Spruce up the landscaping. Eliminating weeds and adding fresh mulch can really make a difference and shows homeowner care and maintenance. • Consider enhancing architectural appeal by adding molding to the tops and sides of the doorway or around windows. • Keep shutters and trim in excellent shape. Repainting them adds to the attractiveness. Fence gates, arbors, and fencing panels should be clean and fresh. • Clean downspouts and gutters. Repaint or touch up to eliminate rust spots. • Ensure walkway to the front door is clear and approachable. Stacked hoses and unruly landscaping interfere with home shoppers walking up, diminishing the inviting look. • Paint or stain railings (if weathered).
• Try a fresh coat of paint; faded or chipping paint, siding, or trim will always detract from curb appeal. If exterior paint is good, ensure door and window trim are, too. This simple upgrade is well worth the cost. • Power washing the house, walkways, and driveway can be almost as effective as repainting, at a much lower cost. Power washers are easily rented from hardware stores. • Adding some stone or stone veneer to the face of the home is an inexpensive way to instantly update your home if it complements the design. • Add a “smart” doorbell. Eight of 10 home doorbells are outdated or not working, so if you invest $200 in a doorbell equipped with a camera and speaker, you will gain the approval of home shoppers who are looking for security measures. Curb appeal is one of the most essential elements in selling your home quickly and successfully. You can create interest in your home before buyers even step out of the car, no matter how uninterested they might have been initially. If you put money into cleaning up the outside of your home, buyers will be more likely to want to see the inside. Your home’s curb appeal draws buyers in, maintains their interest, and sets your home apart from the competition. Remember that unless you are willing to lower your home’s price well below market value, prospective homebuyers typically won’t want to take on a major renovation project. • • •
STAGING WITH PURPOSE
Staging is the act of sprucing and setting up a home to make it as visually appealing as possible to a prospective buyer. Creating an eye-appealing home — one that potential buyers can envision themselves living in — is the best investment in the sales effort. Sellers often fail to take full advantage in this regard, as it takes considerable time and work. However, the payoff is proven. Staging is considered one of the most effective marketing strategies to increase the value of your home. This strategy is effective in any market, in any type of home property being listed. It applies equally to single-family houses, apartments, townhouses, and condos. This approach works! Agents and sellers using this tactic have a greater chance of selling the property for more money. In today’s competitive real estate market, selling your home requires hard work and dedication. A motivated seller can bring the home to
the marketing forefront. Staging the home will:
• Distinguish it from the competition • Attract top dollar from homebuyers • Provide a visual edge over the competition
STAGING VS. NON-STAGED CASE STUDY & REPORT Dear Reader,
I wanted to give you the most convincing proof possible. Many people find it hard to believe that the simple act of staging helps one home sell for more than another, similar home. In my research, I looked for examples of similar houses being sold for differing amounts of money where only one of the two houses was staged. The clearest example I could find was in the case of these two listings. This development has 200 equivalent townhouses. Every single townhome in the neighborhood is three stories with three bedrooms and three bathrooms. Every unit has the same floor plan. I looked for two sales there, and found these: Townhome A sold on August 26. Townhome B (5 doors down) sold on July 26, for 40,000 dollars less. I visited this neighborhood, and I am familiar with these properties. You could not find a better example of two identical properties that sold for different prices.
The details show these two homes are identical in every substantial way:
The lots the units sit on are identical as far as the desirableness of the location. >>>
STAGING VS. NON-STAGED CASE STUDY & REPORT >>> Both units had the same kitchen plan with the same cabinets and a tile floor. Both units had nice hardwood floors in the living room and carpeted bedrooms. Every important detail of these townhouses was identical. I studied every aspect of these sales to find what made the difference. There are two reasons one home sold for $40,000 more than the other: Townhome A was professionally staged, giving it a more appealing appearance. The agent selling Townhome A took higher quality, more attractive photos of the home. Those two seemingly small actions made the $40,000 difference! The buyers of Townhome A made a higher offer because the agent presented the home in a more appealing and attractive way. *B Curry, Realtor. Used with the permission of the author.
THE POWER OF STAGING WHEN SELLING A HOME
Consider these results from surveys conducted by Coldwell Banker and the National Association of Realtors®: • Staged homes spent 50% less time on the market than homes that were not staged. • Staged homes sold for more than 6% above asking price.
• A staging investment of 1% to 3% of asking price generates an ROI of between 8% and 10%. • Homes staged prior to listing sold 79% faster than homes staged after listing. WHAT DO BUYERS WANT TO SEE? Most home shoppers are envisioning a fresh start. If they can picture themselves living in the home, the home will be easier to sell. This is known as “interior curb appeal,” where the eyes are drawn to inviting spaces and light, as well as to unique features. Each roomneeds a purpose or suggested use. The home must feel new to reflect ease of upkeep. The goal is to create a clean, simple, and contemporary feel. Painting, updating fixtures, and eliminating stained carpets and popcorn ceilings can affect The idea is to neutralize the home regarding personal taste or decoration such that buyers can easily envision the home as it would be outfitted in their taste or with their possessions without the distractions of the seller’s taste and possessions. In staging, distractions are removed so the home shopper can imagine living in each space of the house. An effective way to achieve this is to paint all rooms in a neutral color. A wide range of neutrals fromsoft grays towarmbeiges are available. Painting the interior gives newness and freshness and can make the home appear more spacious. Using the same color in visibly adjacent rooms gives the house a seamless look and uninterrupted flow. Changing your window coverings tomatch the walls can create an illusion of more space. Dark or bold wall colors can dampen interest in a home if used in large spaces; however, they can be used effectively as accent colors. FOCUS ON FURNITURE: LESS IS MORE In staging, a visibly inviting space is created so that the home shopper can envision or imagine life in that space. Minimization is the key. The seller’s personal taste and style will be showcased while the home is on the market, whichmay be a sale distraction. Preparing for moving is part the saleability of the home by 75%! NEUTRALIZE FOR EYE APPEAL
and parcel of selling a home; it might as well be done at this stage of the process to enhance the property’s saleability. Shortly, we will examine depersonalizing the home, a key step. First, however, we must examine the concept of creating space by minimizing furniture. Buyers are attracted to homes flooded with light and roominess. They are equally put off by cramped homes filled with unnavigable spaces. Home shoppers want to walk through a house without obstacles in the way. Space and storage are high on the list of buyers’ desires, so every area of the home should feel spacious. Remove all unnecessary furniture fromliving spaces. Store itwhile the home ismarketed. Closets, pantries, and storage roomsmust be free of clutter and look organized. Pruning back on what fills up space and relegating it to a storage unit creates interest by showcasing ample space and storage andnot overflowing closets and basement/attic areas. Furniture placement is an easy way to highlight unique house features. A grouping of chairs in front of a fireplace will draw attention to it. Avoid pushing furniture close to the walls. Reposition easy chairs into floating group spaces. Every room must be staged to show function . An empty room used for overflow of boxes, possessions, or unwanted items should be transformed into a usable, desirable space. Clean it out and create an office space with a desk and chair or a reading room with a lamp and recliner. Exercise equipment might be arranged to feature it as a workout room. Every room should have a purpose and be user-friendly. Make your home’s traffic flow obvious so buyers can browse each room without effort. EMOTIONAL CUES Once every roomhas a purpose, creating atmosphere is crucial tomaking the home desirable. Decorative touches of greenery, flowers, and lit candles give life to a room. Creatively hung wall art can do the same. A bedroom that has one bed with one pillow and blanket may make the room seem bare and lonely. By adding a table with decor and a rocking chair draped with a lap robe, you heighten its appeal. Be sure to add elements of the
same color, shape, or texture to unify the room. Any splashes of bold color should appear in wall art or any place you want to draw attention. Learn to strike a balance between staging and living in your home. You can seasonally decorate your home without dashing your appeal.Themain goal is to keep your home clean and free of clutter that distracts would-be buyers. Even simple things can make a big impact on the final sale price of a home. Staging done well is one of those things! You have two options for staging a home: do it yourself or hire a professional home stager. If you are considering hiring someone, I can provide recommendations. • • • TO STAY OR NOT TO STAY? Home sellers often askwhether they should stay in their home while it is on the market, or go. There are pros and cons to both and factors that can tip the scale to one side. If the seller has engaged a real estate agent, the burden of showing the home is virtually eliminated. The agent will field all calls, set appointments, and show the home. Relatedly, chances that a buyer’s real estate agent will show your home are increased. Busy schedules often cause agents, aswith anyone, to take the path of least resistance. If they have 20 homes to showand 5 are occupied, theymaywell show the vacant homes because it’s easier. They don’t have to call and make an appointment. They can simply go over and use the lockbox. Further, the continual pressure to keep daily life fromaffecting the home’s pristine staging presentation isn’t there. The seller is not under constant pressure to keep the home in immaculate showing condition and spotless. If you might be unwilling to keep the home in turnkey condition for showing purposes, consider vacating before putting the home on themarket. >>>
TO STAY OR NOT TO STAY? >>>There are situations inwhich it’s almost essential to vacate the home during the selling period—e.g., if the sellers’ home is simply toomessy to showwhile the sellers live there. Reasons formessy homes vary. Some sellers are packrats and their home reflects that behavior because boxes are piled everywhere, and rooms are stuffed to the gills with personal belongings. This is a considerable obstacle to getting a good offer. Other sellers have several children, which can obviously present difficulty in always maintaining a clean, show-ready home. Potential buyers should be alerted that the seller has vacated the house to best show it. A vacant home can be interpreted as meaning a “motivated seller” who needs to sell quickly. Often, with an empty house, sellers aremotivated! One comment on a real estate online forum tells of making an offer of $30,000 less than the asking price, believing the owners might be getting desperate to sell. They were asking $300,000. The buyer was sold on it anyway and would have paid more, but “haggling” began well belowwhat was expected because the buyer read the fact that the home was unlived in as a clue to a desperate-to-sell owner.
UPGRADING WITH ROI IN MIND Making upgrades can be as easy as replacing the handset on your front door or as daunting as remodeling a kitchen or bathroom or even repainting the entire house. The question is always what home improvements give the best return on the remodeling dollar? Return on Investment (ROI) is generally less than
100% in real estate, so the rule of thumb is “less is more.” It is frequently advised in this area that it’s better to update/remodel your home while living in it and not solely at the time it comes to sell. That way, there is more enjoyment in the improvement and less cost in preparing for sale. Some desirable upgrades or home improvements will not return their cost in the sale price.
In 2016, a remodeling publication said the best ROI improvement a home seller can make is insulating the attic space, with a 116% return. If your home
is worth $275,000 and you spend $25,000 to revamp the kitchen, don’t make the mistake of assuming that the investment will increase the value, dollar for dollar. The remodel may add value to the home, but the return in dollars spent will be around 50%. Smaller upgrades, like replacing outdated fixtures in the kitchen and bath, are certainly worthwhile, but major remodeling of those rooms isn’t wise, just to sell your home. That’s not to say you can ignore necessary repairs that a home inspector would red-flag or mortgage company would demand before issuing a loan to a buyer. If major problems, like a leaking roof or outdated electrical wiring, exist, you may want to repair those before putting your home on the market, or expect to give concessions to the buyer.
STARTING WITH THE BASICS Every listed home should meet the basic expectations of any buyer; it should have a sound roof, functioning gutters and downspouts, foundation without cracks, functioning heating and/or air-conditioning system, solid subflooring, and safe and secure electrical wiring.With financer-mandated home inspections, any shortcomings may be required to be remedied to get buyer financing approval. It is important to understand that themarket value of a home is determined by the prices of comparable homes recently sold in the area. Extensive remodeling to sell the home or to increase the value may not pay off. The property needs to be up to the standards of neighboring homes, so while the kitchen has to be comparable to others, as in the example above, spending $25,000 to remodel a kitchen in an area where comparable homes recently sold for $275,000 will not increase the house’s value to $300,000. While it may be a helpful selling feature, it won’t return dollar-for-dollar value. MECHANICAL MAINTENANCE IS A MUST It is easy to get wrapped up in the more eye-pleasing aspects of preparing a home to sell. However, the upkeep of all the more mundane aspects of the home cannot be overlooked. These mechanical features require consideration: • Electrical boxes and wiring • Natural gas lines • Plumbing • Central heating and air-conditioning If these components are old, outdated, or not working correctly, the home’s appeal is lowered, as is the eventual sale price. According to the National Association of Realtors®, 65% of homebuyers surveyed wanted to be sure their new home had a working central air system. Of the 31 mechanical features inquired about in the survey, this was the most important.
People want to purchase a home that reflects their aesthetic tastes and lifestyles, but also one that is safe and sound. Faulty electrical systems do not provide a feeling of safety. Leaky plumbing arouses concerns of mold infestation and sewage problems.These areas can require extensive work and they are extremely important. Overlook them in the preparation stage and you run the risk of trouble later with inspections and appraisals. It aids the sale if professionals certify or remediate any deficiencies in the mechanical systems. Having a professional inspection for buyers to review is a big plus in marketing. • Have a certified plumber inspect the entire water system for leaks. Check the well and septic field, if applicable. • Hire an electrician to check the wiring. • Call an HVAC company and have technicians perform a thorough service checkup. • Contact the natural gas supplier and have them double-check the mechanics of your tank and lines. If you’re looking for an alternative to calling and arranging all the different inspections, certified home inspectors usually cover all items related to mechanical issues (and more). They will be able to identify possible trouble spots. Many buyers hire an inspector, so youmay be saving them a major step in the sale process. If you have mechanical issues and decide to sell your home “as is,” it may be necessary to negotiate with the buyer. REPLACING APPLIANCES New appliances undoubtedly make an impact on buyers. The National Association of Realtors® conducted a survey of buyers and found that: • Buyers were usually “interested” or “somewhat interested” in buying a home that featured new appliances. • Roughly 17% of respondents preferred stainless steel. • The most important factor: available appliances.
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