Billy Looper - SELLING SECRETS YOU CAN'T AFFORD TO MISS.pdf

SELLING SECRETS YOU CAN'T AFFORD TO MISS

Billy Looper, Master of Science in Real Estate

Published by Authorify Publishing Copyright © 2020 Authorify Publishing

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. DISCLAIMER AND/OR LEGAL NOTICES: While all attempts have been made to verify information provided in this publication, neither the Author nor the Publisher assumes any responsibility for errors, inaccuracies, or omissions. Any slights of people or organizations are unintentional. This publication is not intended for use as a source of legal or accounting advice. The Publisher wants to stress that the information contained herein may be subject to varying state and/ or local laws or regulations. The reader of this publication assumes responsibility for the use of these materials and information. Adherence to all applicable laws and regulations, including advertising and all other aspects of doing business in the United States or any other jurisdiction is the sole responsibility of the reader. The Author and publisher assume no responsibility or liability whatsoever on behalf of any reader of these materials. If your property is currently listed with a Realtor, please disregard this notice. It is not our intention to solicit the offerings of other brokers. Printed in the United States of America

Table Of Contents

1.

First Steps To Home Selling

1

2.

Pareto's Principle

9

3.

Staging With Purpose

15

4.

Upgrading With ROI In Mind

23

5.

The Three D's

35

6.

How To Market Your Home

41

7.

Common Seller Mistakes

49

8.

Learn From Other's Mistakes

57

9.

Finding Buyers

65

10. Be A Power Negotiator

67

11. The Dos And Don'ts Of Negotiating

73

12. Bargaining Chips

79

13. Why Hire An Agent

83

Foreword When I first ventured into real estate 35 years ago in Atlanta, Georgia, I didn't know anything - except that being able to determine value was critical. I spent 15 years appraising and determining property values all across the country. I learned from some of the best appraisers and professional coursework. I even got my Masters of Science in Real Estate from Georgia State University. This foundational, analytical background has enabled me to serve my clients as their "Personal Real Estate Broker." Helping my clients avoid headaches often associated with buying and selling real estate is my mission! In my years of experience, not only have I helped alleviate the stress of buying and selling for numerous clients, but I’ve also accumulated years of knowledge to help them get more money for their homes in the least amount of time. I decided to share my expertise in one place with potential clients - that’s why you’re receiving this book. I want to help you have the best possible selling experience. And by that, I mean I 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 my 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

vii

If, after reading through it, you want to hire me to help you sell your home, I’d be more than happy to meet with you to discuss a specific plan to sell your home. Have an amazing day!

vii i

A bout Billy Looper

EXPERIENCE: Thirty-five years of experience in the real estate field including commercial sales and leasing brokerage, investment analysis, commercial & residential property management, commercial appraising, and residential rehab. Licensed Real Estate Broker in Florida since 2003. Buyer’s Broker for $25 million purchase of Heron Bay office complex in Coral Springs, Florida. Managed and leased office complex for 8 years. Primary analytical experience includes fifteen years as Vice- President at Kirkland & Company Real Estate Appraisers and Consultants appraising all types of real estate including Residential (condominiums development, subdivisions, and apartment projects), Commercial (office buildings, shopping centers, assisted living facilities, nursing homes, and hotels), Industrial Facilities (warehouse/distribution, flex, and manufacturing), and various types of land. Qualified to perform discounted cash flows using ARGUS. Appraised properties in 28 states ranging widely from vacant land totaling $250,000 in market value to one of the top 5 regional malls in the country totaling $400,000,000 in market value. EDUCATION: Master of Science in Real Estate and Urban Affairs, Georgia State University, Atlanta, Georgia. Bachelor of Science in Business Administration, University of North Carolina, Chapel Hill, North Carolina. Gold Coast School of Real Estate, Real Estate Salesperson Gold Coast School of Real Estate, Real Estate Broker

ix

Appraisal Institute courses as follows:

PROFESSIONAL AFFILIATIONS: Licensed Real Estate Broker, Florida

If you need assistance in selling your home, finding your perfect home, or building your real estate empire…Billy can help. He has used his down & dirty ‘in the trenches’ experience as a real estate appraiser and investor for over 35 years to help others plan, start, and succeed as a real estate investor. He’s bought single-family homes at foreclosure for as little as $15,000 and appraised one of the five largest malls in the country for over $400,000,000. His largest commercial transaction was a $20 million Class A office complex. He’s bought and sold over $15 million in residential real estate and managed over $2 million in renovations…from growing up in rural North Carolina to becoming the vice president of a national real estate appraisal firm by age 32…from cleaning bathrooms in dilapidated houses to negotiating in corporate boardrooms,

x

Billy has insights into all levels and all types of real estate investments. He has earned a Masters Degree in Real Estate & Urban Affairs from Georgia State University and a Bachelor of Science degree in Business Administration from the University of North Carolina at Chapel Hill. He also holds a Florida Real Estate Brokers license and is President of Mack Lane Real Estate in Fort Lauderdale, Florida.

x i

Testimonials “I wouldn’t buy or sell a property without Billy looking after my interests. He’s professional, knows what he’s doing and gives extraordinary client service.” – Randy Gage “We are in Peru…but Billy found us three investment properties in metro Orlando that we purchased sight unseen. His management and accounting team have enabled us to enter the USA real estate market with confidence and ease. The whole process was extremely professional.” – Luca and Lily Melloni Billy and Mack Lane Real Estate were exceptional advisors and managers as our commercial real estate broker and management company in Florida. From finding our national pension fund clients property, helping us underwrite the purchase, and overseeing the leasing and management of those properties for their multi-year holding period, Mack Lane represented our investment real estate interests with integrity and professionalism. – John Lundsten - Whitestar Advisors

x iii

CHAPTER 1 First Steps To Home Selling

We have all heard "Location! Location! Location!" Well it is true - one of the most crucial considerations 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.” This is the definition I used for 15 years as a Certified Real Estate Appraiser and still do today as a Broker. Essentially, this is a pre-negotiation opinion of what a house should bring in its local market, i.e., its geographical area, generally an area such as a suburb or neighborhood. Appraisal value is an evaluation of a property’s worth at a given point in time that is performed by a professional appraiser .

1

Appraised value is a crucial factor in loan underwriting and determines how much money may be borrowed and under what terms. For example, the Loan to Value (LTV) ratio is based on the appraised value. Where LTV is greater than 80%, the lender generally will require the borrower to buy mortgage insurance. Assessed value is the amount local or state government has designated for specific property and frequently differs from market value or appraisal value. This assessed value is used as the basis of property tax and when a property tax is levied. The assessed value of real property is not necessarily equal to the property’s market value. Approximately 60% of U.S. properties are assessed higher than their current value; however, this does not reflect the home’s value.

WHAT IS YOUR HOME WORTH?

The first step in selling your home is knowing the difference between value, worth, and price. Let’s examine the determining factors at work. Understanding those factors allows them to be leveraged. There are several ways a home’s value is derived. ONLINE HOME VALUATION Online tools will provide you with a very basic estimate of your home’s current value based on recent comparable home sales in your area using a comprehensive database. Note that the assessment is based on available data with no guarantee of accuracy and often uses an algorithm that simply averages comparable sales in the geographic area. These tools might be quick and easy, but they don’t take into consideration factors like location, current local trends and the condition of the property. Be aware that the prices arrived upon might be highly inaccurate. For example, a home in Ohio was put into one such system, Redfin (https://www.redfin.com/what-is-my-home-worth). 2

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.

3

From 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 legal descriptions to onsite inspections 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. ’his is the marke 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. T he seller can use the appraisal as a basis for pricing. T he 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. T he 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 4

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. I 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. 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 5 THE SECOND STEP (SELLING YOUR HOME FOR MORE)

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 and videoed 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. Reminder, we require all prospects to comply with Covid standards.

6

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.

7

CHAPTER 2 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 crashes • 20% of patients account for 80% of healthcare spending

RELATING THE 80/20 RULE TO HOME SELLING

Understanding the 80/20 rule concept can save you time in selling your home. Applying the 80/20 rule, you stop trying to sell people on the entire home. Applying the rule, you can highlight the 20% of your home’s features that make it special. The remaining 80% of your home still affects the buyer’s decision, so do not neglect it, 9

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

10

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

11

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: • 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) • Large attic or garage, swimming pool, or anything else that makes your home stand out such as a finished basement (outside of Florida!)

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.

12

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 to offer full price on the spot. Such is the power of the 80/20 rule.

13

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. On the contrary, it was a brand-new, custom-built home. It sat on the market for over seven months without a single offer. The builder hired a real estate agent who knew the importance of finding that one special feature. He drove out to give the house a thorough investigation. He discovered what the property had that the competition did not. The house had a five-acre yard. Other houses being sold in the area had one- to two-acre lots. Not only was the yard bigger, but it was also more private than the other properties. The real estate agent marketed the property highlighting the five acres along with a description of the house. Because the house was no longer the main selling point, interest in the property increased.

14

CHAPTER 3 Staging with Purpose

Staging is the act of sprucing and setting up a home to make it as visually appealing as possible to a prospective buyer. Creating an eye-appealing home — one that potential buyers can envision themselves living in — is the best investment in the sales effort. Sellers often fail to take full advantage in this regard, as it takes considerable time and work. However, the payoff is proven. Staging is considered one of the most effective marketing strategies to increase the value of your home. This strategy is effective in any market, in any type of home property being listed. It applies equally to single-family houses, apartments, townhouses, and condos. This approach works! Agents and sellers using this tactic have a greater chance of selling the property for more money. In today’s competitive real estate market, selling your home requires hard work and dedication. A motivated seller can bring the home to the marketing forefront.

Staging the home will:

• Distinguish it from the competition • Attract top dollar from homebuyers • Provide a visual edge over the competition

STAGING VS. NON-STAGED CASE STUDY & REPORT

I want to give you the most convincing proof possible. Many 15

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. Two units just sold in September - you could not find a better example of two identical properties that sold for different prices. The details show these two homes are identical in every substantial way: The lots the units sit on are identical as far as the desirableness of the location. 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.

There are two reasons one home sold for $40,000 more than the other:

16

• Townhome A was professionally staged, giving it a more appealing appearance. • The agent selling Townhome A took higher quality, more attractive photos and a professional video of the home. Those two seemingly small actions made the $40,000 difference! The buyers of Townhome A made a higher offer because the agent presented the home in a more appealing and attractive way.

THE POWER OF STAGING WHEN SELLING A HOME

Consider these results from surveys conducted by Coldwell Banker and the National Association of Realtors®: • Staged homes spent 50% less time on the market than homes that were not staged. • Staged homes sold for more than 6% above asking price. • A staging investment of 1% to 3% of asking price generates an ROI of between 8% and 10%. • Homes staged prior to listing sold 79% faster than homes staged after listing.

WHAT DO BUYERS WANT TO SEE?

Most home shoppers are envisioning a fresh start. If they can picture themselves living in the home, the home will be easier to sell. This is known as “interior curb appeal,” where the eyes are drawn to inviting spaces and light, as well as to unique features. Each 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%! 17

NEUTRALIZE FOR EYE APPEAL

The idea is to neutralize the home regarding personal taste or decoration such that buyers can easily envision the home as it would be outfitted in their taste or with their possessions without the distractions of the seller’s taste and possessions. In staging, distractions are removed so the home shopper can imagine living in each space of the house. An effective way to achieve this is to paint all rooms in a neutral color. A wide range of neutrals from soft grays to warm beiges are available. Painting the interior gives newness and freshness and can make the home appear more spacious. Using the same color in visibly adjacent rooms gives the house a seamless look and uninterrupted flow. Changing your window coverings to match the walls can create an illusion of more space. Dark or bold wall colors can dampen interest in a home if used in large spaces; however, they can be used effectively as accent colors.

FOCUS ON FURNITURE: LESS IS MORE

In staging, a visibly inviting space is created so that the home shopper can envision or imagine life in that space. Minimization is the key. The seller’s personal taste and style will be showcased while the home is on the market, which 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.

18

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 on what fills up space and relegating it to a storage unit creates interest by showcasing ample space and storage and not overflowing closets and basement/attic areas. Furniture placement is an easy way to highlight unique house features. A grouping of chairs in front of a fireplace will draw attention to it. Avoid pushing furniture close to the walls. Reposition easy chairs into floating group spaces. Every room must be staged to show function. An empty room used for overflow of boxes, possessions, or unwanted items should be transformed into a usable, desirable space. Clean it out and create an office space with a desk and chair or a reading room with a lamp and recliner. Exercise equipment might be arranged to feature it as a workout room. Every room should have a purpose and be user-friendly. Make your home’s traffic flow obvious so buyers can browse each room without effort.

EMOTIONAL CUES

Once every room has a purpose, creating atmosphere is crucial to making the home desirable. Decorative touches of greenery, flowers, and lit candles give life to a room. Creatively hung wall art can do the same. A bedroom that has one bed with one pillow and blanket may make the room seem bare and lonely. By adding a table with decor and a rocking chair draped with a lap robe, you heighten its appeal. Be sure to add elements of the same color,

19

shape, or texture to unify the room. Any splashes of bold color should appear in wall art or any place you want to draw attention. Learn to strike a balance between staging and living in your home. You can seasonally decorate your home without dashing your appeal. 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. Staging done well is one of those things! You have two options for staging a home: do it yourself or hire a professional home stager. If you are considering hiring someone, I can provide recommendations.

TO STAY OR NOT TO STAY?

Home sellers often ask whether they should stay in their home while it is on the market, or go. There are pros and cons to both and factors that can tip the scale to one side. If the seller has engaged a real estate agent, the burden of showing the home is virtually eliminated. The agent will field all calls, set appointments, and show the home. Relatedly, chances that a buyer’s real estate agent will show your home are increased. Busy schedules often cause agents, as with anyone, to take the path of least resistance. If they have 20 homes to show and 5 are occupied, they may well show the vacant homes because it’s easier. They don’t have to call and make an appointment. They can simply go over and use the lockbox. Further, the continual pressure to keep daily life from affecting the home’s pristine staging presentation isn’t there. The seller is not under constant pressure to keep the home in immaculate showing condition and spotless. If you might be unwilling to keep the home in turnkey condition for showing purposes, consider vacating before putting the home on the market.

20

There are situations in which it’s almost essential to vacate the home during the selling period—e.g., if the sellers’ home is simply too messy to show while the sellers live there. Reasons for messy homes vary. Some sellers are packrats and their home reflects that behavior because boxes are piled everywhere, and rooms are stuffed to the gills with personal belongings. This is a considerable obstacle to getting a good offer. Other sellers have several children, which can obviously present difficulty in always maintaining a clean, show-ready home. Potential buyers should be alerted that the seller has vacated the house to best show it. A vacant home can be interpreted as meaning a “motivated seller” who needs to sell quickly. Often, with an empty house, sellers are motivated! One comment on a real estate online forum tells of making an offer of $30,000 less than the asking price, believing the owners might be getting desperate to sell. They were asking $300,000. The buyer was sold on it anyway and would have paid more, but “haggling” began well below what was expected because the buyer read the fact that the home was unlived in as a clue to a desperate-to-sell owner.

21

CHAPTER 4 Upgrading with ROI in Mind

Making upgrades can be as easy as replacing the handset on your front door or as daunting as remodeling a kitchen or bathroom or even repainting the entire house. The question is always what home improvements give the best return on the remodeling dollar? Return on Investment (ROI) is generally less than 100% in real estate, so the rule of thumb is “less is more.” It is frequently advised in this area that it’s better to update/remodel your home while living in it and not solely at the time it comes to sell. That way, there is more enjoyment in the improvement and less cost in preparing for sale. Some desirable upgrades or home improvements will not return their cost in the sale price. In 2019, a remodeling publication said the best ROI improvement a home seller can make is insulating the attic space, with a 116% return. If your home is worth $275,000 and you spend $25,000 to revamp the kitchen, don’t make the mistake of assuming that the investment will increase the value, dollar for dollar. The remodel may add value to the home, but the return in dollars spent will be around 50%. Smaller upgrades, like replacing outdated fixtures in the kitchen and bath, are certainly worthwhile, but major remodeling of those rooms isn’t wise, just to sell your home. That’s not to say you can ignore necessary repairs that a home inspector would red-flag or mortgage company would demand before issuing a loan to a buyer. If major problems, like a leaking roof or outdated electrical wiring, exist, you may want to repair those before putting your home on the market, or expect to give concessions to the buyer.

23

STARTING WITH THE BASICS

Every listed home should meet the basic expectations of any buyer; it should have a sound roof, functioning gutters and downspouts, foundation without cracks, functioning heating and/ or air-conditioning system, solid subflooring, and safe and secure electrical wiring. With financer-mandated home inspections, any shortcomings may be required to be remedied to get buyer financing approval. It is important to understand that 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, as in the example above, spending $25,000 to remodel a kitchen in an area where comparable homes recently sold for $275,000 will not increase the house’s value to $300,000. While it may be a helpful selling feature, it won’t return dollar-for- dollar value.

MECHANICAL MAINTENANCE IS A MUST

It is easy to get wrapped up in the more eye-pleasing aspects of preparing a home to sell. However, the upkeep of all the more mundane aspects of the home cannot be overlooked.

These mechanical features require consideration:

• Electrical boxes and wiring • Natural gas lines • Plumbing • Central heating and air-conditioning

If these components are old, outdated, or not working correctly, 24

the home’s appeal is lowered, as is the eventual sale price.

According to the National Association of Realtors®, 65% of homebuyers surveyed wanted to be sure their new home had a working central air system. Of the 31 mechanical features inquired about in the survey, this was the most important. People want to purchase a home that reflects their aesthetic tastes and lifestyles, but also one that is safe and sound. Faulty electrical systems do not provide a feeling of safety. Leaky plumbing arouses concerns of mold infestation and sewage problems. These areas can require extensive work and they are extremely important. Overlook them in the preparation stage and you run the risk of trouble later with inspections and appraisals. It aids the sale if professionals certify or remediate any deficiencies in the mechanical systems. Having a professional inspection for buyers to review is a big plus in marketing. • Have a certified plumber inspect the entire water system for leaks. Check the well and septic field, if applicable. • Hire an electrician to check the wiring. • Call an HVAC company and have technicians perform a thorough service checkup. • Contact the natural gas supplier and have them double- check the mechanics of your tank and lines. If you’re looking for an alternative to calling and arranging all the different inspections, certified home inspectors usually cover all items related to mechanical issues (and more). They will be able to identify possible trouble spots. Many buyers hire an inspector, so 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. 25

REPLACING APPLIANCES

New appliances undoubtedly make an impact on buyers. The National Association of Realtors® conducted a survey of buyers and found that: • Buyers were usually “interested” or “somewhat interested” in buying a home that featured new appliances. • Roughly 17% of respondents preferred stainless steel. • The most important factor: available appliances. • 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, 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 specifically for kitchen and bath hardware, making it cost- effective. 26

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 27

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 aim is to make sure each area of the home is effectively lit. 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

28

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 way. 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 BATH

When making upgrades to kitchen and bath, keep aware of what constitutes a substantial investment. The key is to consider the mass appeal for the sake of resale value. One homeowner decided to add a backsplash and more cabinet space in the kitchen and then updated the appliances and refinished the oak flooring. Total

29

cost was $4,000. The seller kept the price comparable to sales in the area and ending up selling for $27,000 more than the asking price because interested buyers started a bidding war! You do not need to bust your budget to sell your home, but you do want to have mass appeal. Kitchens are pivotal in home appeal. Here are some suggestions of what you can do to your kitchen and bath to impress buyers without losing ROI: • Paint neutral colors. • Add a new backsplash in kitchen. • Install new countertops if dated or if you need to bring the home up to current area standards. • Add new, multifunctional kitchen faucets to add mass appeal. • Add cabinet space or increase storage in the pantry. • Replace dated bathroom vanities. Pedestal sinks or trendy cabinet sinks have mass appeal. • Replace toilet seats.

TWO ENERGY-SAVING UPGRADES TO LOWER UTILITY BILLS

• Install an energy-saving smart thermostat (less than $300) that saves on utility bills. • Install solar vents ($500-$700) in the attic space that help expel hot air during summer months.

MAKING A CASE FOR SPACE

When people accumulate an abundance of possessions, they need space to store it. They also want a way to clear the clutter. According to the National Association of Realtors®, most 30

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108 Page 109 Page 110

Powered by