Seller Tips
This is a tough market right now for sellers but not impossible. It’s a buyers market, economics 101, supply and demand. There are not enough buyers, a lot of inventory, plus buyers are not qualifying on mortgages like in the past years. With the on-going credit crunch lenders are being more conservative on lending money. Lenders are requesting higher credit scores, full disclosure on documents (W2’s, bank statements, assets) and low debt to income ratios. Tradional conservative lending like 20 years ago.
Our market and economy will continue to deflate until unemployment numbers start drastically start coming down but with good stable paying jobs, Out sourcing of jobs have to stop which are leading to lower hourly wages here at home, higher than normal GDP numbers like 8% to 10%. This is part of the equation to help get out of the recession but with out a doubt wages have to increase to help pay for goods, services and taxes. You are already seeing the increase in Government fees, next will be income and other taxes to make up the difference because of personal income losses due to globalization!
As far as selling your home you need to be the lowest priced home in your market right now (based on square feet, beds, baths, year built & so on) or wait until the market stabilizes/bottoms which could be in 2011. It all depends on what actions are taken by the Government. Homes have not appreciated since 2006-2007. Home prices have dropped 8% to 20% depending on location. When it was a sellers market sellers received top dollar because there were more buyers than there were homes for sale. When sellers took their money from their sale and purchased another home they paid top dollar. In a buyers market sellers are reducing their prices to sell because of more homes for sale and not enough buyers. Sellers received less and paid less on their new purchase.
Sellers you need a strong marketing campaign during this market right now. Here at KUNO Real Estate we research markets and analyze data like no other. We think very creative to get the most money possible for your property with the least amount of days on the market. You will also save on real estate commissions. Consultations are free.
Some Ideas To Sell
Do Not, I Mean Do Not Sell Your Home By Owner: For Sale By Owner (FSBO) is not the best way to market your home no matter how good or bad market conditions are. There were some success stories when it was a sellers market but overall percentage wise the numbers were very low. You do not get the exposure like you do with KUNO Real Estate. Also remember that there are up-front fees with FSBO companies. You will lose all that money if you do not sell. With KUNO Real Estate you pay ONLY when you sell.
Give incentives in this market: Seller to pay for closing costs, home warranty, new appliances, carpet allowance, selling bonus to the selling agent. KUNO Real Estate has this creative marketing approach to help sell your home in the shortest amount of time. You are competing with other homes for sale in your market place. This helps to open your market to all buyers. It sounds like you are going to lose a lot of money, but its not. Its how we play with the numbers.
Stage your home properly: Get rid of clutter and items that collect dust and that is all they do. There are a lot of low income families that can use your items, have a good heart and donate or have a garage sale. Place furniture and other items proportionate to your room size. I can not stress proportions and balance in each room.
Paint: You will be surprised what a coat of fresh paint will do to a room or home. What ever you do if you paint to sell, use a neutral color or keep the color light. You can lose a possible sale because the buyer got turned off to unpleasing colors. Dark colors make rooms look small!
PICTURES, PICTURES AND MORE PICTURES: At KUNO Real Estate we take pictures of the interior/exterior of your home more than any other company. Pictures tell stories like a book. 90% of homes are sold with another (selling agent) Realtor, not your listing agent. When we search for a home on the MLS (Multiple Listing Service) for our clients and see there is only one picture of the outside, we move on to the next home from our list. We have called listing agents to take interior pictures for us (especially when the discription on the listing reads all up-dated everything new-remodeled inside) so I can email them to my interested buyers. Guess what? Not one agent called us back and these agents are working for large real estate companies. If your home has not sold, it may not be your home: it's your Realtor. Pictures help in selling homes, period! 80% to 85% of real estate is sold through the MLS-internet. Anyone looking for a property can get on the internet to view properties. I hear it all the time from people: they will go to the next home on the computer if there are no pictures of the interior and a detailed discription.
Curb appeal: Just like staging the interior of your home, it’s just as important to do the exterior and the grounds of the property. You do not have to go nuts and spend thousands of dollars, just a little sweat equity. Just clean it up. Give your trees and shrubs a hair cut. Make sure the yard and all its contents have proportions and balance.
Realtor Commissions:You have a listing commission that is negotiated between the seller and real estate company that will be listing your property.
EXAMPLE: A total commission of 7% is paid by the seller at closing to the real estate company that listed your property. In most cases there is another real estate company that sells your home in which there is a 50/50 split of the total commission, 3.5% to the listing company and 3.5% to the selling company. The listing side commission is the Realtor that list’s your property on the Multiple Listing Service (MLS). The selling commission is for the Realtor (the other real estate company) that brings their clients in to show and sell your property. On occasion the listing company can also be the selling company, this is called “dual agency”.
All commissions are negotiable!
Home Inspection: Have a inspection done with a licensed professional before you place your property on the market. This way you know what items need to be addressed up front. No surprises later when the buyer has an inspection done. We have seen on the MLS deals that have fallen through because the inspection was not done before the property was placed on the market. If you have an accepted purchase agreement that is contingent on an inspection and problems are found, chances are the buyer will ask for the repairs or credit off the purchase price. If seller & buyer can not agree on who is to pay for what, than the deal falls through and the property goes back on the market. What sellers do not know is an experienced Realtor can see the "history" of your property and all that has happened since you had it listed. Example: One day on the MLS Dave Kuno was looking for a property in your area and he seen your property has a "contingent offer" based on an inspection. A few days later your property shows up on the MLS "Deal Fell Through". He would see this as a red flag and tell his buyers there may be a potential problem with the property. Now your property is less marketable. Why we think it is important to have an inspection done before you sell: LAW SUIT. An inspection cost's from $265 and up depending on the size of the property. If a law suit is filed against you an attorney will ask for a retainer ($5000 to $10,000) up front and that number can easily go up.
TAXES: We are seeing wrong assessments on property values. Assessors are not assessing property at true market values (what they are selling for). Please look into this. Call our office if you need help. Example: We seen an appraisal that showed the subject property appraised at $560,000. The appraisal company was wrong. The only way the appraisal company could come up with this number is what the home was assessed by the county which was $580,000. When I looked at what properties sold for my jaw dropped. The most a property sold for in that area was $400,000 (true market value). The assessed value should have been at or below $400,000. The appraisal company should have done more home work. Your property tax is based on your assessed value. This will seriously place your property un-marketable when you list it. This is another reason why KUNO Real Estate is your company. Our research and data collecting is thorough to give you the best information possible. We caught the mistakes of both the appraisal company and the assessor.
Remodeling to sell: Do not put more money into your home than what the market is selling. If you want to remodel your home call our office first to see if it makes sense for your location and current market conditions. Remember, Dave Kuno was a former builder while helping clients as a Realtor!
Here in the Midwest we do not have huge market swings like they do in California, Arizona, Vegas and Florida. Please do not listen to the media.
Our area has about 4% to 6% average appreciation a year under normal market conditions which we have not had since 2001. Home values are based on economics but values were inflated due to above normal market activity that was created by non-traditional lending practices. We are in a deflationary period and will continue to be for a while. All of 2010 will be like 2009 unless interest rates stay below 4% for a fixed 30 year term, unemployment numbers really start declining but creating sustainable jobs were the average person is earning 75K to 100K, this will stabilize the market. These are the three main points but incomes have to keep up with the price of goods/services and inflation. It will continue to be a buyers market. Some areas have experienced an 8% to12% decline and others 12% to 20% decline. The 12% to 20% declines are homes in the 500K to 1 million and above price range. Why? because of wage earnings. Majority of the homes built were in this price range, hence deflation. The homes up to 400K are selling. We have to keep watching; commodities, interest rates, dollar, economic growth, GDP, employment numbers, wage numbers, how globalization is affecting our area, how many foreclosures in a subdivision and investor confidence.
The more homes that are for sale in a subdivision and no buyers, then that will lead to more deflation in home values. If one home in a subdivision is for sale we do not care what the market conditions are home values will stay high. Supply & Demand! There is always one family looking to live in that subdivision. It's when you have a lot of homes for sale in a subdivision that lead to falling prices because sellers keep lowering their price to sell. As a buyer even if prices come down another 3% to 5% you are still ahead of the game. Especially if you buy a foreclosure! You can not lose because of the equity you have made. But again it’s all about economics in an area!
Hopefully we gave you some points to think about please call us if you have any questions. We are here to help you succeed. We have only scratched the surface on information.
Contact Kuno Real Estate Today
If you need to sell your home to purchase another it can be a challenge but not impossible. Please do not listen to what you hear, every market is different. Dave has 14 years of market research experience. He will take the time to go over all your options in your market and the market you want to be in. This is what sets KUNO Real Estate apart from the rest, Market Research and presenting it to you were it makes sense. An educated consumer is our best customer!
You may lose equity in selling your home but you make it up in buying one. If you were to sell and not purchase anything then you will lose money (equity). Just like when it was a sellers market, you received top dollar when you sold and you paid top dollar when you purchased.
For example, we helped our client purchase a home 4 years ago for $585,000 at the time the market was peaking out. Now our client is married with a growing family and in need for a larger home. We sold their home for $500,000, an $85,000 loss.
As soon as we gathered all the information we needed on what type of home they were looking for we started searching the Multiple Listing Service (MLS) and found 3 different subdivisions with the school system they wanted to be in. Each subdivision homes were selling differently than the other based on age, square feet, beds, baths and so on. We compared all options and told them this particular subdivision will give them more dollar value with the criteria they were looking for plus the "function" they wanted. They purchased a home for $689,000 which sold for $825,000 four years ago.
Now you can see the $85,000 loss on their home gave a total gain of $51,000 on their new one ($825,000 minus $689,000 = $136,000 minus the $85,000 loss = $51,000). It’s researching different markets to get the best value for the dollar. Another example: a home that sold for $500,000 four years ago is still worth $500,000 today. Our clients upgraded to a $700,000 home which 4 years ago sold for $790,000. Our clients did not make any money on the home they sold but they made $90,000 in equity on their new purchase.
The key is when will prices bottom and which markets will bottom first! This is why Dave Kuno will break down everything you need to know. He is the best when it comes to researching markets!
Contact Kuno Real Estate Today