The Mark and Mel Team - SELLING SECRETS YOU CAN'T AFFORD TO MISS

SELLING SECRETS YOU CAN'T AFFORD TO MISS

The Mark and Mel Team

Table Of Contents

Introduction

First Steps To Home Selling

Pareto's Principle

Creating Curb Appeal

Staging With Purpose

Upgrading With ROI In Mind

The Three D's

How To Market Your Home

Common Seller Mistakes

10. Learn From Others' Mistakes

11. Finding Buyers

12. Be A Power Negotiator

13. Dos And Don'ts Of Negotiations

14. Bargaining Chips

15. Why Hire An Agent?

Foreword When we first ventured into the real estate industry years ago, we did so with the hopes of helping sellers like you avoid the headaches often associated with the home-selling process. In our years of experience, not only have we helped alleviate the stress of selling for numerous clients, but we’ve also accumulated years of knowledge to help them get more money for their homes in the least amount of time. We decided to share all of our expertise in one place with potential clients. And that’s why you’re receiving this book. We want to help you have the best possible home-selling experience. That means we want you to 1. Get the most money possible for your home, 2. Sell in the least amount of time, and 3. Avoid the headaches most commonly associated with the home-selling process. Think of this book as our gift to you. It contains insider advice on the home-selling process to help you achieve your ultimate real estate goals, including: • Secret strategies to sell your home for more money • Marketing techniques employed by top agents • Advice on how to appeal to today’s buyers • And much, much more If, after reading through it, you want to hire us to help you, we’d be more than happy to meet with you to discuss a specific plan to sell your home. Happy reading!

The Mark & Mel Teal mel@markandmel.net 480-462-7355

About Mark and Mel Mark Bonds was raised in Phoenix, Arizona with 3 siblings. As a child, Mark loved outdoors sports and broke records in Track and Field, which led to a College Scholarship. Mark was studying to be an Accountant and didn't imagine that he’d go into the Real Estate Industry, but you can’t always predict where or when you’ll discover what you’re meant to do in life and Mark ended up excelling as a Real Estate Professional. Mark was taught at a young age that if you want something in life, you have to work for it. So that’s what he did. And he worked hard, being mentored by his seniors that could see he would excel as a Real Estate Professional. As the years went by, Mark worked his way from Agent to Team Lead and Mentor, sharing his fix and flip knowledge, short sale knowledge and real estate investment knowledge, never wavering in his resolve to become the best version of himself with each client and each situation. Mark has over 30 years experience as a Licensed Real Estate Professional, first licensed in 1985. That experience means extensive market knowledge that he utilized for clients and the Agents he trains, as a Certified Mentor. He has helped hundreds of clients buy and/or sell over the years, in virtually every community in the Phoenix metro area, with all types of properties and price ranges. Mel became a Licensed Real Estate Professional in 2018 but had a long previous history as a Licensed Real Estate Appraiser since 1988. This background makes Mel uniquely qualified to assist both sellers and buyers, in determining the most accurate market value of a home. Mel's extensive market knowledge was utilized by the Lending Institutions, during the Great Recession,

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to review other Appraisals for accuracy and due diligence. When Mark and Mel met in 2013, they decided to utilize each others knowledge and experience to fix and flip homes, and help other investors do the same. As time when on, they combined their careers to grow a team, The Mark and Mel Team, advancing their career and utilizing their extensive knowledge and experience to set them apart from other Agents. Throughout their careers they have each earned numerous awards and accolades. However, the most recent Mentor title means the most, as they are both able to now pass on a legacy of years of service in the industry, to the next generations of Real Estate Professionals to come. Mark and Mel live in Mesa, Arizona where they are very involved in their community events and helping others people in the community, as just a way of life. Together, Mark and Mel have 4 daughters and 10 grandchildren in 4 different states. In their free time they enjoy time with family and friends, dancing, singing, mountain biking, kayaking and boating. Mark and Mel aim to provide the highest level of service to their clients and they take deep pride in helping them achieve their real estate goals.

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Testimonials & Reviews for The Mark and Mel Team Here’s a list of people whom we have helped buy or sell a home, and what they said about working with us: "Mark and Mel were absolutely phenomenal in both helping us buy a new home in this crazy market but also in getting us the price we needed on the home we sold. We had been looking for a few months for a new home and Mel came across a listing that was somewhat different than what we were looking for, but she encouraged us to look at it...the home turned out to be our dream home and we are sooooo happy with our new neighborhood! We would probably have missed this wonderful opportunity if Mark & Mel hadn't thought outside the box! On the sale of our home, Mark and Mel did a lot of research on comps in the area and put together some supporting information for the listing and sale price - talk about going above and beyond! We highly recommend the Mark and Mel Team for your next real estate transaction....they will work extremely hard to make sure you are happy!" Cathy Valenzuela "Our real estate experience with Mark and Mel has been second to none! Their experience and knowledge has helped us to sell and buy multiple homes quickly without a lot of stress. Real estate is one of the largest investments most people make in their life-we're confident and secure in their ability to provide excellent service and sound guidance!" Darrin & Roxanne Carrothers "My siblings and I, had to sell our Mom’s house after her passing. Mark and Mel were so professional! We were impressed with the initial meeting and the comparisons they had to show us! He and his team helped us with everything. It was a pleasure ix

working with them!" Lynn Campbell

"Mark & Melissa are the best realtors ever! Really, their expertise & experience was so helpful with all the details. We sold the house super quick and above market value. They would be a prime choice when selling or buying. Thanks M & M!" Kenny Roberts "Mark and Mel helped me sell my house. They helped stage it and brought in the staging materials themselves. It looked amazing! I got a full price offer the first day! I couldn't be happier! They are definitely the right team to sell your house." Tony Aimonetti ""5 stars! Outstanding couple and support staff with additional great resources for finessing everything in real estate transactions from buying or selling to financing to the oversight of repairs and renovations. I have both sold and bought with them and found 100% of every aspect of their managing a potentially emotionally exhausting experience extraordinary .Trustworthy area specialists with a bonus invested expertise in FOS where they reside as neighbors and friends.You will not be disappointed!" Gretchen Jacobs "I met Mark and Mel over a year ago with no intention of buying a home. Over the subsequent year, I got to know them and was impressed with their overall knowledge of the real estate market. When I decided to consider buying a home, I started a conversation with Mark and Mel about my targeted market and price range. Although I have had years of experience in real estate, I recognized that the local knowledge they have is invaluable in finding and buying the right home for me." Dennis Kroft "Mark and Mel are a fantastic team to help find the property you are looking for. They are extremely knowledgeable about the process and bring a personal touch to the buying experience.

This was my first time buying a property and it was great to feel like I had Mark and Mel on my team looking out for my best interest. I had a fantastic experience with them and would highly recommend them as realtors to anyone that asks." Ethan Corrothers "Two years ago my girlfriend introduced me to Mark and Mel. We briefly spoke about real estate and M&M was nice enough to offer their services. And now 2 years later, I was on the hunt for a home purchase and remembered The Mark & Mel Team. Mel was such a great Realtor to work with and she was so patient. We looked at a on of homes and finally decided on the perfect house for my fiance and I. Mark & Mel made the entire home buying experience so smooth, easy and fun. I had my complete trust and confidence in them, knowing that they had my best interest at heart. I can't thank this Dynamic Duo enough for all the hard work they put into my home shopping adventure. They truly are a one / two punch combination. Mark's knowledge and expertise in the real estate business will make you feel secure that you are in great hands. They are a Godsend." Edwin G. "Fantastic team, their suggestions and recommendations were very professional. It really made my house pop! Glad I chose them to sell my house! The first day it was on the market, Mel held an Open House. The feedback was excellent. She made the Open House fun and very beneficial. My house was sold the first day. Fantastic job. I'd recommend them to anybody" Jerry Christensen "I have known Mark and Mel for over 10 years and you cannot find a better in sync team! They helped us sell our home in Mesa which had issues. Their experience in real estate was definitely a plus! I learned so much from them and now my son will be using their expertise in buying his first home. Very personable and honest. Marks expertise in home repair and upgrading is also a plus!! So Grateful to have them both for my family's real estate needs." Lisa Magnani Malone

Resources The process of selling a home can be stressful, even if you’re working with a professional real estate agent, like myself. Chances are, you’ll have to hire various professionals throughout the process, either to prepare your home for sale, or to fix any of the numerous issues that can pop up in a home inspection. The last thing you want to do is hire an unreliable contractor who delays — or even ruins — your home sale. We have experienced firsthand the work of numerous local contractors and professionals. We know which companies will produce the highest-quality work, and which ones to avoid. Because we want our clients to have the most stress-free and successful real estate experiences possible, we recommend only the best professionals in a variety of specialties — from home-staging experts to general contractors, plumber, electricians and more. We have personally worked with each contractor endorsed in this book, and each one comes with my highest recommendation. You can confidently hire any one of these companies or individuals, knowing you’ll be in great hands. In this section, We have provided you with a list of resources, along with a brief explanation of how each one can help you have the ultimate home-selling experience.

Have You Gone “Nose Blind?”

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“What is that smell?”

Is that the first thing you want buyers to say when they walk through the door to your beautiful home? Despite how much you may vacuum — and even scrub — your carpets, there’s a chance you may have gone “nose blind” — to quote Febreze — to all the odors they contain. But that doesn’t mean you need to spend hundreds, or even thousands, tearing up and replacing your carpets. A deep carpet cleaning can restore even the oldest, dingiest carpets. Sure, you can rent a unit from a local hardware store to clean them yourself, but if you really want to eliminate troublesome odors and remove any deep, set-in stains, you really should turn to a professional. These companies have been helping our clients make a great first impression for years. They use the best in carpet-cleaning technology to restore your carpets and stomp out any odors you may not even realize you have. You’ll be breathing easy — and so will your buyers — knowing your carpets are in tip-top shape!

Mesa Carpet Cleaning (480) 268-0747

Oxi Fresh Carpet Cleaning (480)422-6144 Citrus Bright Carpet Cleaning (480)689-3509

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You may think that to sell your home, you need to do major kitchen renovations, install hardwood floors, and knock down a bunch of walls. And while those changes aren’t necessarily a bad idea if you want to sell for top dollar, they’re not always worth the return on investment.

But do you know what is? Cleaning .

Cleaning and organizing your home before a sale is the easiest way to ensure it sells quickly — and for the most money possible.

So what should you do to get your home in tip-top shape?

• Deep clean every surface — floors, walls, carpets, countertops, cabinets, appliances, toilets, tubs, etc. • Organize and remove clutter. • Consider investing in a storage unit to store knick knacks, toys, tools, old furniture, unused small kitchen appliances, and piles of paperwork. If this sounds like a lot of work, that’s because it can be. You’re much better off leaving these tasks to professionals. You wouldn't go on a date in dirty clothes, and you shouldn't show your home when it’s not looking its best. We recommend the following professionals to take the handle the stress of deep cleaning and organizing your home.

Made 2 Kleen 480-238-1214

House Cleaning Solutions 602-617-9951

Why Curb Appeal Matters They say you can’t judge a book by its cover — but it’s also true that books with worn out or torn covers tend to stay on the shelf. When you’re trying to sell your home, you know you have to prep and clean the inside to get it ready to show. But did you consider how your home might look from the outside? When potential buyers pull up to your property — or even when they’re checking out photos online — the exterior is the first thing they see. If your landscaping is in disarray, or your exterior paint is peeling, buyers may not even venture inside. So what should you do to get the outside of your home buyer- ready? The National Association of Realtors® offers the following tips to enhance your curb appeal:

• Clean exterior walls and windows • Apply a fresh coat of exterior paint • Keep grass green and trimmed • Clean and repair your roof

Luckily for you, we have worked with lots of reliable contractors who are experts in creating curb appeal. These professionals can help you increase the value of your home and sell for top dollar, fast!

We recommend landscaping maintenance to take your property

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to the next level. Whether your yard needs a full overhaul or just some fresh mulch and shrubbery.

Pristine Green Landscaping (480)620-9154

Dream Retreats (480)507-8872

A fresh coat of paint can transform your home from dull and dingy to bright and welcoming. Our providers use only the highest-quality products to transform your home to its most pristine state.

Ricky's Economy Painting (586)489-0774

Arizona's Best Family Painting (602)606-2200

Electrical Issues Can Ruin Deals

Electrical issues are some of the most costly — and potentially dangerous — issues uncovered in any home inspection. In fact, the American Society of Home Inspectors counts electrical issues as one of the top deal-killers in the home-buying process. Some of the most frequent electrical issues found include:

• Undergrounded three-prong plugs • Painted outlets • Double tapping of circuit breakers • Reversed polarity • Improperly modified electrical panels

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• Knob and tube wiring • Aluminum wiring • Federal Pacific breaker panels • No GFCI protection

Unless the extent of your electrical issues is a burned-out lightbulb, all electrical work should be handled by a licensed professional. Besides being too complicated for most homeowners to handle, electrical repairs pose a huge risk of electrocution and fire. We recommended the below to many of our clients in the past. Not only are they affordable, but they perform top-quality work, ranging from fixing faulty outlets to completely rewiring older homes.

There’s no one we trust more to work with our clients.

David Pros LLC. (480)284-2007 Journey Electric (480)626-0400

Are Your Floors Buyer-Approved? If you’ve watched any HGTV show in the last several years, you know one of the first things home buyers are likely to notice is the type of flooring running through the house. If your flooring is dirty, chipped, worn, outdated — or an unappealing color — chances are, buyers will take notice — and move on to the next house.

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When buyers see bad floors, they immediately see dollar signs. And no one wants to see extra dollar signs before they even purchase a home.

So what kind of flooring should you get?

Based on data from the National Association of Realtors®, 54% of home buyers were willing to pay more for wood floors. But if you can’t afford wood floors, there are many options for wood- look tiles, vinyls and laminates — some even waterproof — that will more than satisfy picky buyers.

Carpet Rite (480)236-1281 Carpet Source (480)251-0571

Your Front Door: The Ultimate First Impression

Your front door is the gateway to your home.

A freshly stained or painted door, with shiny new hardware and clean glass, says “Welcome home!” to buyers who come to see your house. A front door with peeling paint, rusted hardware and fingerprinted glass might just leave them out in the cold. First impressions matter, and your front door is the ultimate first impression.

Stand outside your house, and if you’re less than satisfied with

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how your front door looks, change it up!

Consider a fresh coat of paint or stain — one of the newest trends in real estate is to make your front door pop with a bold, contrasting color — replace old hardware, and clean any glass surfaces on the door. With something as important as your front door, you may want to put your DIY skills on hold. A professional painter has access to the most durable, weather- resistant materials and will create a pristine finish. We always recommend proven Professionals to our clients. Their painters are professional and highly skilled. You won’t have to worry about patchy work or unsightly drips. While you’re having your front door painted, walk through your house and consider the impression your paint colors might have. That bright orange you painted your living room in the early 2000s might have seemed like a cool, bold move back then, but it’s likely to turn off buyers who view your home now. Any pick of these referral would be more than happy to take care of all your painting needs!

Ricky's Economy Painting 586-489-0774 ricardo.moreno.0774@gmail.com Arizona's Best Family Painting 602-606-2200 azbestfamilypainting.com

Get a Handyman on Your Side

When you finally accept an offer on your home, you may think the hard work is over.

But unfortunately, that’s not always the case.

Once your buyers order an inspection of your home, chances are, they’re going to come back with a list of demands — or ask for a price reduction based on the list of repairs the inspector says they need. But rather than dropping your price, you can turn to a great handyman to make any last-minute repairs and salvage your deal. When it comes to hiring a reliable handyman, you can’t trust just anyone. As real estate agents, We have worked with dozens of local contractors, and we know exactly who you should call.

Randy Murray (480)250-6569 Dave Meddock (406)590-7102

Read This Before You Sign a Contract With a Buyer

Imagine taking your home off the market for 60 days while a prospective buyer tries to buy it. Then, 60 days later, the buyer finds out they can’t get a loan. You just wasted 60 days of marketing time! Now, imagine that during the 60 days, another buyer wanted to buy your home. But the buyer couldn’t purchase it. Why?

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Because you signed a contract with the first buyer.

By the time you find out the first buyer could not obtain financing, the other buyer has already bought a house! Ouch! You just lost a sale! This is why it’s so important to make sure a buyer is able to obtain financing before you sign a contract. Fortunately, we work with a mortgage lender who can pre- qualify any prospective buyers. and will tell you whether they’ll be able to obtain financing. It costs you nothing to get prequalify your buyers. Their lenders can help buyers get a loan with the most competitive interest rates available. You can rest easy, knowing they’ll be able to obtain financing. This is a free service. They’ll help buyers get the best loan for their financial needs: • Conventional—A conventional mortgage can lead to a low fixed rate or adjustable rate for your primary home, secondary home, or investment property. • FHA—An FHA mortgage is a great program for buyers. Its advantages are a low down payment without private mortgage insurance. The lender process can be streamlined, with no appraisal and reduced loan documentation to qualified applicants. • VA—A VA Mortgage offers many benefits, including no down payment and lower interest rates. • USDA—These are only available in certain areas deemed “rural” by the United States Department of Agriculture. Surprisingly, many properties on the outskirts of a metro area will qualify for these loan programs. The advantages of a USDA Mortgage are lower interest rates and zero xxii

down payment.

Because these companies are familiar with all of these loan programs, they can pre-qualify your buyers and ensure they obtain financing. That way, you avoid wasting time with buyers that will not qualify for financing. Before you sign a contract with a buyer, make sure you give them a call.

AmeriFirst Financial Tom Koon Senior Mortgage Loan Officer (602)818-7323 Finance Of America Brian Szabo Senior Mortgage Advisor (602)332-3997

Is Your Faucet Leaking?

No one wants to find themselves knee-deep in plumbing issues — both literally and figuratively. And even worse, no seller wants a home inspector to discover those issues when they’re just about to reach the finish line of a great deal. That’s why we always recommend our clients have their plumbing inspected by a professional before they put their homes up for sale. This gives our clients peace of mind in the home-selling process. Our sellers know going into the inspection process that everything will check out and won’t delay — or even destroy — their sale.

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Whether you have a leaky faucet or some strange hissing noise you just can’t place, put your trust in these companies to get to the root of the issue and fix it for good!

Erik at CTR Plumbing (480)589-4127

Dan Harper Knock Out Plumbing (602)284-5499

Next Lvl Services (602)439-4771

Cartrights Plumbing and Septic (480)987-8051

Pool Worries, Be Gone!

If you own a pool, you know how much work can go into maintaining it. That stress doubles when you’re preparing to sell your home and want your pool to look like the relaxing oasis buyers imagine it to be. Having a pool can be a major selling feature for the right buyer. But buyers looking for a pool don’t want to see your pool and immediately think, “This is going to be a lot of work.”

Before you sell your home, you should consider the following:

• Is your pool clean? If it’s an above-ground pool, are the parts rusting and liner showing signs of wear and tear? If it’s an in-ground pool, are the cement, tile and grout spotless?

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• Are there any broken parts or leaks? Does it have broken tiles or cracked cement? • Is it fenced in? You may run into zoning code issues if you don’t have a proper fence installed. • Is it low on water? If buyers don’t notice these issues themselves, a home inspector will be sure to point them out. You’re better off handling any potential issues before you put your home for sale, rather than scrambling to fix them later on. Pool maintenance can be stressful — and costly — if you don’t know what you’re doing. This is one job you’re better off leaving to a professional. For all of your pool maintenance needs, we recommend the following.

R&R EverClear (480)502-2890

Gilbert Pool Service (480)497-1945

Will Helm Water Works (503)724-8018

The Roof Over Your Head The old saying goes, “As long as you have a roof over your head, clothes on your back, food on the table, and good friends and family, you have all you need to live a happy life.” But if your roof is leaky, old, or missing a few shingles, buyers won’t be happy making an offer on your home. Roof issues can be a major sticking point for buyers — and will xxv

100% turn up in a home inspection. Likewise, many home buyer programs won’t finance homes with old or broken roofs. If you want to save yourself the hassle of scrambling to make repairs at the last minute, we recommend having your roof checked out by a licensed professional before you put your home up for sale. Whether your roof needs to be completely redone or you just need to replace a few shingles, our preferred vendors list are the best local professional to handle your roofing project. Dozens of former clients have put their trust in them, and we are confident you’ll be pleased with their work.

Don Brackney (602)696-6502

Arizona Watertite Systems (480)733-0488

Tabo Ortega (602)390-7663

Ensure Your Closing is Smooth and Easy

Here is everything Old Republic Title can do to ensure you have a stress-free, smooth, and easy real estate closing: • Solid Communication. They keep you updated on what’s happening at all times and respond to your inquiries in a timely manner. • No surprises. They work hard to get everything lined up properly early on in the transaction, so there are no

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surprises later. • Convenient closings. They work hard to close at a time that is convenient to your schedule. If you can’t make it to the closing, they’ll handle it with a convenient “mail- away” closing. • Competitive Rates. They work hard to offer their services at a competitive, affordable price. • Knowledgeable. They understand that real estate is a complicated industry. If you have any questions throughout the process, they’ll answer them for you. Here’s the first step to get started on your stress-free, no-hassle closing.

Find Out Exactly How Much Money You’ll Receive on Your Sale.

A title will put together a free, no-obligation closing cost estimate to show how much money you’ll receive from your home sale. The free estimate will itemize all of your projected closings costs and fees.

Old Republic Title Jen McLarty: jmclarty@ortc.com (480) 697-4566 American Title Lynn Martinez: Lmartinez@atsaaz.com (480)559-6400 Cleartitle Terri Heidel: Theidel@cleartitleaz.com (480)278-8440

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CHAPTER 1 Introduction

The largest investment most people make is their home. That makes selling a home — whether it’s 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. There are also many emotions at play that can affect good judgment. Many sellers think, Surely, our home where We raised our 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. 1

We want the prospective or active home seller to independently achieve a better understanding of the home-selling process. We’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). Our 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. In Part 3, we examine the critical topic of negotiations — what to expect, and how to conduct them — and finish with a look at what engaging a real estate professional brings to your 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 us. We stand by to assist you with a Comparative

Market Analysis and a solid marketing plan to fit your needs and lifestyle.

CHAPTER 2 First Steps to Home Selling “But You Gotta Know the Territory” — and Terminology Location! Location! Location! is the most crucial consideration in real estate and a major factor, if not the predominant one, in real estate pricing. Novice (and not-so-novice) home sellers alike 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, a major 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 5

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. 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 system doesn’t understand the makeup of the area and simply pulled prices from a broader geographic area, the arrived-upon price was far below what 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.

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 located near the property, for example. Online valuations cannot take into consideration the condition of the property or the qualities of the neighborhood. Since an assessed home value is for taxing purposes only, it can be much more or much less than the market value. Ideally, they should be the same, but usually they are not; it is based on a percentage of the appraised value determined by a professional.

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.

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. COMPARATIVE 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. We will be happy to provide you with a Comparative Market Analysis.

Please refer to the last page of this book if you would like more

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. 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 generally making 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 swift market or toward buyers to make a slow market. The typical selling time in a swift market might be 30 days, while that of a slow market 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.

CHAPTER 3 Pareto's Principle

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 crashes20% 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 13

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 the market. Instead, use your home’s unique features to grab the attention of buyers who 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 home within miles of Cam and 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 in marketing 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 in marketing 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 • A unique, 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 from casual shoppers. Keeping this in mind, you must 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. The agent drove him from house to house. In each case, the buyer 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

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