David Hoshaw - MY SECRET WEALTH OF INFORMATION FOR ANY SELLER

MY SECRET WEALTH OF INFORMATION FOR ANY SELLER

David Hoshaw

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 Other's Mistakes

11. Finding Buyers

12. Be A Power Negotiator

13. The Dos and Don'ts of Negotiating

14. Bargaining Chips

15. Why Hire an Agent?

Preface When I first entered the real estate industry years ago, my primary goal was to help sellers like you navigate the everyday challenges of selling a home. Over the years, I have not only assisted hundreds of clients in reducing the stress associated with selling, but I have also gained invaluable knowledge to help them maximize their home's value in the shortest possible time. I have now decided to compile all of my expertise into this book, which is why you have received it. My purpose is to provide you with the best home-selling experience possible. This means I want you to: Achieve the highest possible price for your home, Sell it in the shortest amount of time, and Minimize the usual headaches associated with the home-selling process. Consider this book a gift from me to you. Inside, you'll find insider advice on the home-selling process to help you reach your real estate goals, including: Exclusive strategies to maximize your home's sale price, Marketing techniques used by top agents, Tips on appealing to today's buyers, And much more. If, after reading this book, you are interested in hiring me to help you sell your home, I would be delighted to meet with you and discuss a tailored plan to sell your home. Enjoy the read!

About David Hosha vid Hoshaw David discovered his passion for real estate when he saw the blueprints for his family's future home as a teenager. Seeing those plans become a reality fueled his desire to help others find their dream homes. During his time in the U.S. Air Force, David learned the value of hard work, discipline, and perseverance in achieving his goals. Since 1992, David has been a licensed real estate broker and has successfully guided over 1,200 clients through buying or selling their homes or investment properties. He is known for his excellent communication skills and ability to provide exceptional guidance. David combines his industry knowledge with dynamic marketing strategies to ensure that his clients get the most out of their property. He takes pride in offering personalized service and building a network of satisfied clients and a team of property improvement professionals. David has a team of service affiliates who can assist his clients in their real estate endeavors throughout the country. Recognized as a top-performing agent by both RE/MAX and Keller Williams, David is part of the prestigious RE/MAX International Hall of Fame. He is a certified mentor and a dedicated member of the Veteran Division as well as the Nationwide Hometown Heroes at Fathom Realty. David lives in Poulsbo, WA with his family and enjoys gardening, biking, skiing, hiking, martial arts, exploring, and photography in his free time.

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With years of experience and a deep understanding of the local market, David is committed to delivering excellent customer service and ensuring the best possible outcome in your real estate transactions. You can be confident that working with him will be an exceptional experience.

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CHAPTER 1 Introduction

The most significant investment most people make is their home. Selling a home — whether it's a single-family residence, duplex, or condominium — is the largest and most complex transaction a person will ever undertake. It involves new terms and concepts, financial acumen, and larger figures than most are accustomed to dealing with. Emotions also play a significant role and can affect good judgment. Many sellers think, "Surely, my home where I raised my children and made so many memories is worth more than just the materials it's made of." Real estate transactions involve numerous decisions and substantial investments of time, energy, and money, and emotions often lead to complications in price negotiations. The home seller’s objective is to find that buyer who cannot resist purchasing your house at the highest price. To achieve this, you need to offer potential buyers a striking home presentation that stands out in the market. It requires making a fantastic first impression, creating an instant feeling for buyers that they are approaching their new home, not just visiting someone else’s. It’s about falling in love at first sight, from the curb, in those initial seconds. Most sellers do not venture into selling their homes alone. They find it beneficial to have an experienced real estate professional by their side. I wrote this book to provide some of that comfort without the direct sales pressure of person-to-person contact. My goal is for prospective or active home sellers to gain a better 2

understanding of the home-selling process independently. I’ve also provided actionable insights on how best to market your home, avoid critical mistakes, and maintain the right focus. Let this book be your go-to resource for information, strategies, and techniques that will help you sell your home quickly and at the best price. Take your time going 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, the best listing price, negotiation tactics, and improvements that offer the best Return on Investment (ROI). I sincerely hope this book will help you make the most of your time and efforts to sell your home. In Part 1, we cover the process and importance of preparing your house for sale: how to present it to get top offers, the “80/20 rule,” and which upgrades will make the most difference in ROI. Part 2 delves into marketing your home, highlighting costly mistakes and how to avoid them, as well as finding qualified buyers. In Part 3, we examine the critical topic of negotiations — what to expect and how to conduct them — and conclude with the benefits of engaging a real estate professional in your transaction. After learning the process, requirements, and tips, you will see how an experienced, financially astute real estate professional can significantly reduce the time and increase 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, I am ready to assist you with a Comparative Market Analysis and a solid marketing plan tailored to fit your budget and lifestyle.

CHAPTER 2 First Steps to Home Selling o Home Selling

Location! Location! Location!" is the most crucial consideration in real estate and a major factor in pricing. Novice and experienced home sellers alike must understand the factors that determine a home's price. Setting the price to sell your home is not a simple formula. Many elements factor into the decision. Throughout this book, you will read examples of similar homes that sold for very different prices and the reasons for these disparities. A calculated home value is not necessarily what you believe your home is worth. Recognizing this helps avoid overpricing, which can leave homes languishing on the market or unsold. Familiarity with real estate terms like market value, appraisal value, and assessed value can save disappointment and frustration, allowing the home seller to set a meaningful listing price. Market value is commonly defined as "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 fetch in its local market, generally an area such as a suburb or neighborhood. Appraisal value is an evaluation of a property's worth at a given date, performed by a professional appraiser. The appraised value is crucial in loan underwriting, determining how much money can be borrowed and under what terms. For example, the Loan to Value (LTV) ratio is based on the appraised value. When LTV exceeds 80%, the lender typically requires the borrower to buy 4

mortgage insurance.

Assessed value is the amount designated by local or state government for a specific property and often differs from market or appraisal value. This assessed value is used as the basis for property tax. Approximately 60% of U.S. properties are assessed higher than their current market value. WHAT IS YOUR HOME WORTH? The first step in selling your home is understanding the difference between value, worth, and price. Let's examine the determining factors. Understanding these factors allows them to be leveraged. There are several ways a home's value is derived. PROFESSIONAL APPRAISAL The sale price of real estate is ultimately determined by the price at which it sells. Houses are not identical commodities like cans of tuna on a grocery store shelf or shares of stock traded daily. Real estate appraisal ("property valuation") is the process of developing a perspective of value for real property. This is the market value — what a willing, reasonable buyer would pay a willing, reasonable seller. Real estate transactions generally require appraisals because they happen infrequently, and each property has unique features. 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 to base an offer. Lenders use appraisals to determine how much money to lend. The essential factors in a house appraisal include: Dwelling type (e.g., one-story, two-story, split-level, factory- built) Features (including design) — materials used, type of structure, and construction quality

Improvements made Comparable sales Location — type of neighborhood, zoning, proximity to other

establishments Age of property Size Depreciation Condition

A professional appraiser should be a qualified, disinterested specialist with expertise in your region. Their job is to determine an estimated value by inspecting the property, reviewing the initial purchase price, and comparing it to recent sales of similar properties. COMPARATIVE MARKE TIVE MARKET ANALYSIS BY A REAL ES IS BY A REAL ESTATE PROFESSIONAL This type of 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 four months and 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. It's important to consider the current market when determining your home's value. By utilizing a professional real estate agent, you can rely on proven expertise to market your home at the best listing price. I will be happy to provide you with a Comparative Market Analysis. Please contact me now if you would like to request a free home valuation.

THE SECOND STEP: SELLING YOUR HOME FOR MORE $$$

The seller's time, effort, and investment are critical parts of the process. The seller's willingness to adequately prepare the home for presentation — and maintain it in pristine condition during the selling period — will greatly affect both the sale duration and the final price. A balanced market, where homes typically sell within six months, indicates a good number of homeowners are selling, and buyers are purchasing, with neither having an upper hand. A major company entering or leaving the area can tip the scale, creating a swift market (30 days) or a slow market (up to nine months). Typically, any number below six months is considered a seller's market. LIVING IN A FISHBOWL A house on the market requires keeping the home in a constant "show-ready" condition, with inherent changes in daily life. Sellers receive unexpected phone calls at all hours from prospects and buyers' agents, frequent updates from the listing agent, and scheduling messages for show appointments. They also deal with repair appointments, reconditioning, 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 condition for impromptu visitors — the perfect prospect might drop in at dinnertime. CHILDREN (AND PETS) SHOULD BE UNSEEN, UNHEARD EEN, UNHEARD Children and pets can be distractions for potential buyers. Plan for your children to be elsewhere, your pets crated or leashed, and ensure no toys or pet hair are visible. The dishes should always be done, and the kitchen sink sparkling. The pressure of showing to everyone interested in looking (not necessarily buying) can come from the idea that the more your

home is seen, the more quickly it will sell. Many real estate agents provide clients with dozens of homes to consider without a clear picture of what the buyer wants. Low-interest traffic can be heavy and burdensome on the seller's time, energy, and resources. Since a showing can take an hour or more, finding an interested buyer is what matters most. The home will be shown to many more uninterested buyers than interested ones. Ideally, your property would be shown to serious buyers only. However, many "Sunday afternoon window shoppers" exist in the real estate business. There is no calculable certainty in setting a home's value. There can be vast 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, or even above, the listing price in a competitive market. A good grasp of market trends can help you maximize your investment. So, before making any decisions, carefully evaluate the present state of the market.

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. 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 more examples of 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. His findings led to 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 • 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 10 imbalance is often seen in various business cases: • 20% of sales reps generate 80% of total sales

RELATING THE 80/20 R G 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. Keep in mind, 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 attributes.

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 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 buyer 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 because he had a characteristic shared by fewer than 10% of others — in fact, 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 her 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, and spotlight the unique features of your home in marketing copy, photographs, and showings. 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 vast backyard. If the home has a particular 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, 13

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 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 ME 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 for the buyer 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 this home, he wanted to offer the full 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 the market for months. Unlike the previous home, this one was attractive. It was a brand-new, custom-built home, yet 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 more oversized, it was also more private than the other properties. The real estate agent marketed the property by highlighting the five acres. Because the house was no longer the main selling point, interest in the property increased.

CHAPTER 4 Creating Curb Appeal b Appeal

Someone once said, "a stunning first impression is not the same as love at first sight. But surely it is 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 encourages a

transaction more than first impressions. So, always 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 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 soups and sandwiches they serve (specific desired feature). You do not have much 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 often seen nailed to electric poles. Rehabbers look for ugly houses so that they can pay the least amount possible; homebuyers looking for a deal — not a "basement bargain" — do not want an unattractive home. 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. Likewise, a neglected house can cause a buyer previously excited by the description to cruise right on by. Try this. 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 be more 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. Low-cost investments like power washing the house and concrete, repainting trim, and adding landscaping give your house more curb appeal. Simple improvements like weeding, trimming, and window washing can improve the appearance of a home with little to no expense. Repairs and repainting are costlier, but the payoff is often reflected in the sale price. 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, walkways tidy, and beds weeded • No trash, trash cans, lawn clippings, branches, or general mess in the yard • All outside fixtures and components (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 ENTR AND ENTRANCE

As I mentioned earlier, an essential part of curb appeal is the home's "grand entrance" — the portal to even the most modest house. You want to create a sense 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. The doorknob is the first point-of-touch on a home. Security is critical 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). • Symmetry appeals to the eye and is easy to accomplish. Lopsided landscaping or unevenly trimmed bushes will detract from the curb appeal; the home's overall appearance 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. 19 SOME OTHER CONSIDERATIONS IN CREATING GREAT CURB AP T CURB APPEAL: EAL:

• 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 the walkway to the front door is clear and approachable. Stacked hoses and unruly landscaping interfere with home shoppers walking up and diminish the inviting look. • Try a fresh coat of exterior 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, decks, 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, even if they didn't think they were looking for a home like yours. If you put money into cleaning up the outside of your home, buyers will be far 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.

CHAPTER 5 Staging with Purpose

Staging is the act of sprucing up and setting up a home's interior to make it as visually appealing as possible to a prospective buyer. Creating an 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 of staging, which 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 or 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.

Staging the home will:

• Distinguish it from the competition • Attract top dollar from homebuyers • Provide a visual edge over the competition STAGED 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 lots the units sit on are identical, as far as the desirableness of

the location.

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 more appealingly and attractively.

THE POWER OF STAGING WHEN S G 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 the asking price. • A staging investment of 1% to 3% of the 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 room needs 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 saleability of the home by 75%!

NEUTRALIZE FOR VISUAL APPEAL

The idea is to neutralize the home regarding personal taste or decoration, so 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 is available, from soft grays to warm beiges. 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 to match the walls can also 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 occasionally 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. If the seller's personal taste and style are showcased while the home is on the market, it may be a sale distraction. Preparing for moving is part 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 from living spaces. Store it while the home is marketed. Closets, pantries, and storage rooms must be free of clutter and look organized. Pruning back unnecessary items can create interest by showcasing space and storage in areas such as closets, attics or basements. 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 smoothly, so buyers can browse each room without effort.

EMOTIONAL CUES AL CUES

Once every room has a purpose, creating atmosphere is crucial to make the home desirable. Decorative touches of greenery, flowers, and coffee table books 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 a lamp 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 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 even seasonally decorate your home without dashing its appeal. The main 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. 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 ask whether they should stay in their home while it is on the market, or move out. There are pros and cons to both and factors that can tip the scale to one side.

Pros of Moving Out

If the seller has engaged a real estate agent, the burden of showing a vacant home is virtually eliminated. The agent will field all calls, set appointments, and show the home.

Buyers' real estate agents are also more likely to want to show vacant homes. If agents have 20 home options and 15 are occupied, they may well show the vacant homes out of convenience. They don't have to call and make an appointment and can simply go over and use the lockbox. Further, the continual pressure to keep daily life from affecting the home's pristine staging presentation is eliminated. The seller is not under constant pressure to keep the home in immaculate showing condition. If you're someone who might struggle to keep your home in turnkey condition for showing purposes — for example, if you have young children — consider vacating before putting the home on the market.

Cons of Moving Out

A vacant home can signal that the homeowner is a "motivated seller" who needs to sell quickly. Consider this example found on an online real estate forum. A buyer saw that a home was vacant and offered $30,000 less than the asking price. The buyer was sold on the home anyway and would have paid more, but "haggling" began well below asking price because the buyer assumed the owner was desperate to sell.

CHAPTER 6 Upgrading with ROI in Mind OI in Mind

Making upgrades can be as easy as replacing the handset on your front door and freshening up the paint job, or as daunting as remodeling an entire kitchen or master bath. The question always is, 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 selling. That way, there is more enjoyment in the improvement and less cost and time in preparing for sale. Some desirable upgrades or home improvements will not return their cost in the sale price, so it's better for the owners to enjoy them all along. If your home is worth $675,000, and you spend $45,000 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 30

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 B G WITH THE BASICS

Every listed home should meet the basic expectations of any buyer. It should have a sound roof, functioning gutters and downspouts, a foundation without cracks, a functioning heating and/or air-conditioning system, solid subflooring, and safe and secure electrical wiring. With finance-mandated home inspections, any shortcomings may be required to be remedied to get buyer financing approval. It is essential to understand that the market 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, spending $45,000 to remodel a kitchen in an area where comparable homes recently sold for $675,000 will not increase the house's value to $720,000. While it may be a helpful selling feature, it won't return dollar-for-dollar value.

MECHANICAL MAINTEN CAL MAINTENANCE IS A MUS CE 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 Realtor®, heating and cooling costs were the most important environmental features for recent home buyers, with 83% finding these features at least somewhat necessary. 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 about 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 can be a 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 that you may 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. • 41% percent of home buyers were willing to pay more for a home with stainless steel appliances. • The most important factor: that appliances were available in the home. • Most buyers who were unable to get their sought-after appliances said they would have been willing to pay, on average, nearly $2,000 more for them. Potential buyers want appliances included and will pay more for them, especially if they are new or in excellent condition. New appliances might be what sets a house apart from the home for sale across the street. If new appliances are out of reach, offer immaculately clean and fully functioning existing ones.

UPDATING HARDWARE

Carefully inspect your bathroom and kitchen hardware. If it is unsightly or worn, it's best to replace it. Put yourself in a buyer's shoes. Your home will potentially be their new home. Old, worn- out fixtures are not going to speak to them the way nice, and new shiny hardware will. Unless your knobs, pulls, handles, or hinges are broken, you need not replace them. Get that fresh look simply by thoroughly washing, sanding, and painting them with spray paint made 33

specifically for kitchen and bath hardware, making it cost- effective. Check these hardware items closely and replace, as needed: • Towel bars • Toilet paper holder • Door handles • Dated light fixtures The goal is to touch up your home nicely without excessive spending. The internet has a wealth of do-it-yourself videos that can help you update your bath and kitchen if your budget is limited. If you have broken or worn-out hardware, it's best to replace the entire set. If you can find matching pieces, you can paint the old and new to match.

LET THERE BE LIGHT

Whether natural or artificial, bringing in light is one of the most effective ways to show off your home. Using light to enhance your home's appeal can make a difference. Harsh light is unflattering, even to the best furnishings and features. Dim lighting gives everything in the house a dingy feel. Assessing the lighting in each area of your home will give you a quick idea where to bring in more light. Rooms with abundant windows greatly benefit from natural light, as your home will be seen during the day. Supplemental light is necessary for rooms with smaller windows or little natural light coming in. Increase the wattage of light bulbs in your lamps to improve artificial light. As a rule of thumb, there should be 100 watts for each 50 square feet of space.

There are three kinds of lighting. General lighting or overhead is typically ambient. The pendant light is good for tasks like food preparation or reading. Accent lights are usually on tables or mounted on walls. You can use all three to bring out the best your home has to offer. Key areas, such as foyers, can set the stage by impressing buyers with a dramatic light source. If you do not have an abundance of natural light coming in, a chandelier-type light works if your ceilings are high. Otherwise, wall sconces are impressive in smaller spaces. Do not assume you need to buy new fixtures if you can update existing ones. The goal is to ensure each home area is lit effectively. Kitchen and bathrooms are pivotal rooms. These two areas can make or break a sale. The combination of ambient, natural, and pendant light can bring out the best in your kitchen space. Mounting track lighting underneath cabinets gives the counters a chance to shine aesthetically and functionally. Make sure the light over the sink area is sufficient and working properly. If you have a hood over the stove, install clear bulbs to ensure the brightest light. Lighting in the bathroom needs to be intense without being harsh. Soft lighting enhances any part of the house you want to highlight. Avoid harsh lighting in the bedrooms, as well. Lamps strategically placed will give the bedrooms a peaceful, restful feel. The closet light should be bright, though. One last tip: Lightly painted rooms still need sufficient light so the room does not appear drab.

FLOORING PLAN

Although you want to avoid home shoppers looking down on your home, they will be looking down at what is under their feet. Your home's value can be downgraded by the buyer if your floors are in bad shape. On the flip side, if your home's flooring is well done and in excellent condition, buyers will be more willing to pay more for it. Maximizing profit without compromising investment dollars is the goal, but if flooring and carpeting are not in salable shape, you need to take inventory. There is no point in spending money unnecessarily if the improvements do not add significant value or help the home sell quickly; however, there are options that don't break the budget. Repairing and thoroughly cleaning the floors are the least expensive ways, so start with those. Take stock by examining all floors. Move furniture out of the way and make notes regarding condition, stains, or blemishes. Write down what needs to be replaced, cleaned, or repaired. Carpets can be steam cleaned to eliminate stains and odors. If the carpets are path-worn and dull, you can replace them easily with other kinds of flooring with a reasonable ROI, although carpeting does make a room feel cozy. Laminate floors can be cosmetically fixed with repair kits found at home improvement stores. Hardwood flooring can be easily refinished if the wood is worn or water damaged. Seek the advice of a flooring professional because real wood floors add a level of quality to a home that laminate floors cannot match.

TIPS FOR KITCHEN AND B CHEN AND BATH

When making upgrades to kitchen and bath, be aware of what constitutes a substantial investment. The key is to consider the mass appeal for the sake of resale value. Let's say one homeowner

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