Seed Sales Now on Your Patio, Porch or Deck

As summer blazes on, you are well aware of how your outdoor living space is working for you. Minor changes that make decks, patios and porches more comfortable and convenient can translate to big selling points next spring.

• Consider the 'sitting skyline.' The most important view from your deck, patio or porch is the one you see from your favorite chair.  
• Would a screen or trellis shield you from an unpretty view? Adding one is an easy weekend project.  
• Experiment with clusters of planters, tables and chairs to determine the layout that lets you enjoy plants close up.  
• Can you arrange late-season planters for a pretty view from adjacent windows? Doing so helps you envision arrangements that will draw buyers' eyes to the patio, deck or porch from overlooking windows.  
• If railings, steps or thresholds are becoming wobbly, fix them immediately.

Built-in planters especially appeal to buyers who want handicapped-accessible outdoor space.  

• Built-ins enable people with limited mobility to garden, even if they can't navigate a yard.
• The vision-impaired can easily enjoy a sensory garden planted in built-ins adjacent to seating areas.

Built-in planters can simplify staging your deck or patio.
• It’s easy and quick to swap in blooming annuals so that your deck is always decorated with buyer-pleasing bouquets.
• With seasonal plants in the built-ins , you can clear away freestanding pots and accessories, making your deck or patio open and uncluttered.
• There won't be any confusion about which planters and accessories are included in the sale. Built-ins always stay.

Image courtesy of Morguefile contributor jade.

How To Help Buyers When Down is Up

Foreclosures grab the headlines, but they’re not the only reason why the housing market is stuttering. A recently released report from investment research outfit PIMCO outlined several often-overlooked factors hobbling the recovery of the real estate market:

• High and rising down payment requirements.  PIMCO calculates that the current 20% down payment threshold requires $39,667 for a median priced home. That $39,667 is twice the current national savings rate. Most buyers just don’t have enough for a down payment.
• First time buyers have too much debt. The average student debt for a bachelor’s degree is about $23,118…and starting salaries for recent college grads are down 10%, reports PIMCO, drawing from publicly available sources. The current generation of first-time buyers can’t save that 20% down payment because they’re earning less and already paying back a down payment’s worth of student loans.
• Retirees are likely to dramatically downsize their houses in sync with reduced retirement income.  Investment income is down and Social Security is threatened: many retirees can’t or won’t spend their golden years supporting a house. They’ll rent.

These trends are likely to reshape how Americans sell real estate. For the immediate, here are several  tactics for helping potential buyers. Align your interests with those of your buyer. Abandon the old ‘seller vs buyer’ mentality. Today, it’s about understanding the barriers that stand between your house becoming theirs.

• Throw in furnishings. Grills, patio furniture, lawn equipment, a snowblower,  kids’ play equipment, even area rugs, spell savings to cash-strapped buyers. Instead of reducing your price, bulk up the freebies, and estimate the amount of cash that won’t be coming out of your buyers’ pockets.
• Take your time. A buyer in hand is worth two in the web.  If an genuinely interested buyer needs time to assemble a down payment, can you wait? 
• Understand the complications of buying today, mortgage trends and the lending landscape in your area.

Photo courtesy of morguefile contributor mensatic

How to Snag A Buyer

It’s not pretty out there. And it’s not just us: A recent story in the Wall St. Journal outlined the woes facing buyers:

• Buyers factor in the slide in value they figure they’ll have to absorb in the next few months
• New houses just coming on the market are smaller and less fancy, priced to compete with existing houses – especially bigger, amenity-rich houses built in the last decade. That sets up sellers of existing houses for a no-win scenario competing with builders.
• Even well-qualified buyers can see deals crumble as lending standards change daily.

Of course, we at ForSaleByOwner take the position that trimming out the listing agent’s commission helps sellers price more competitively. But smart negotiating can help you catch and keep a deal, too.

Qualify potential buyers. Househunting is not a tourist activity. Don’t fall into the trap of showing the house to anybody who is interested. Ask up front if the buyer is prequalified for a loan…and when that prequalification occurred. Otherwise, you are wasting your time with folks who are just killing time. Don’t let them kill yours.

Prove that your house is not a money pit. Provide evidence of recent improvements and maintenance, right down to the new furnace filters. When buyers see that they won’t have to fork out cash for tedious home tasks, you have ammo for sticking to your guns.

Save personal property as a negotiating chip. The lawnmower, snowblower, hoses, garden equipment, hammock, picnic table, Christmas lights – all that stuff is probably not worth moving anyway. Award it to the buyer as a hard-won concession that preserves your sale price.

Be flexible on the move-out date. Even if you have to pull an all-nighter to pack, this is one of the easiest ways to support your asking price.

And of course, don’t forget to check the ForSaleByOwner.com Pricing Guide, which equips you with economic sources for tracking trends in your neighborhood. If your neighborhood has held its values, you can build your case using the Pricing Guide – and won’t your neighbors be glad you did!

Why Inspections Can Ratchet Down Your Sale Price

You’re selling your house. You’ve got an offer. But here comes the inspector. Is your deal dead?

Probably not. But you’ll probably have to adjust your price.

Inspectors aren’t supposed to worry about the economic consequences of their decisions. They find what they find. But even if your buyer is not a bottom-feeder pushing for the absolute lowest price, you will probably end up offering a concession or two.

It’s not about the house. It’s not about the buyer’s attitude. It’s about the buyer’s economic realities. As we explain in our new Pricing Guide, buyers are being pushed by lenders to look at all their monthly financial obligations, not just the mortgage payment.

Commuting costs are now a consideration, especially with the volatile price of gas. Homeowners’ association dues aren’t the minor consideration they used to be – especially when some associations have to cover for delinquent members. Utility costs have been steadily rising.

And lenders want to see that the buyers have some emergency money in the bank. Nobody wants to the buyers to blow through their emergency fund fixing a longstanding problem.

We know it’s hard to sympathize with buyers, who seem to wander in a paradise of bargains. But, sellers, just know that when the inspector’s report takes $1,000 or more from your pocket, that the buyers aren’t the villains.

Image courtesy of Morguefile contributor alvimann.

Who's Buying This Year? Aging Boomers

The stock market is back, bringing with it the net worth of aging boomers. True, a rise in investments only offsets a loss in home equity, but that's a better scenario than last year.  

Look for aging boomers to make their final home purchases this year. They'll finally muster the courage to sell the family house -- depreciated as it might be -- and roll over whatever equity is left to a one-level condo, ranch or bungalow.

If you aim to sell a condo, ranch or bungalow, you are already in the sweet spot. Make it even sweeter by adding a few features that 65-year-olds crave so they can 'age in place.' These features make it easy and safe to live at home when it's hard to manage stairs and home maintenance.

• Put the laundry room on the first floor. Even if you have to sacrifice a half-bath or closet to do it.
• Replace door knobs with levers.
• Replace hard-to-grasp knob-type faucet fixtures and cabinet pulls with levers and open handles.
• If the house doesn't have at least one barrier-free shower, remodel one main floor bathroom to include one -- even if it means taking out the bathtub. These days, a house only needs one bathroom with a tub.
• If your bathroom walls are open, add grab bars that screw into studs.
• If you are repairing or renovating entryways, consider making the staircases longer and more gentle.
• Renovate porches and decks with an option to add a wheelchair ramp to one side.  

You'll want to market these improvements tactfully. After all, just because the house is now convenient for seniors doesn't undermine its appeal to everyone else. Consider two listing sheets -- one in the standard format and the other that highlights senior-friendly amenities.

For more ideas, check out this story that recently ran in the Los Angeles Times.

Image courtesy of Morguefile contributor penywise.  

Rent Vs. Buy: The Great Debate of 2011

Everybody’s in a holding pattern.

Housing prices fluctuate, so buyers wait.

Sellers can’t sell, but they have to move.

The universal solution: rent.

It’s where you park while you’re in a holding pattern.

The other day  Trulia released a report that it’s actually more affordable to buy a house than to rent in 72% of the nation’s  cities. (The study was based on two-bedroom condos and townhouses, which represent the entry level of the real estate market,  which limits its value.)

Trulia’s argument is that the demand for rentals is driving up rental rates. That may be so for the moment, but how long will this last?

Not long. House rentals don’t sync with the usual May and October turnovers for big apartment complexes, so Trulia’s recent examination of only the units in its database doesn’t include one of the most important factors in the rental market – those big complexes. Professional managers have more flexibility in pricing individual units than do individual homeowners. 

You can bet that a comprehensive survey of rental rates will reveal that the widespread competition in the market has kept prices level or down. So do plenty of research before you calculate the  rental cash flow you might capture from your house.  One survey doesn’t tell the whole picture.

The Perfect Calm

State attorneys general are on the warpath.

Foreclosures are stalled, throwing sales of distressed properties into chaos.

Congressional committees are weighing new revenue opportunities. Translation: the mortgage deduction may soon be trimmed back.

It’s the perfect calm….if you’re thinking of selling. How’s that?

If you’re not selling short or some variation thereof, your house, and the transaction, will offer a safe harbor for delay-battered buyers.

The home mortgage deduction still stands, and probably will be grandfathered under any future scalebacks, if precedent holds.

The assurance of a continuing deduction offers your buyer a margin of safety.

Mortgage rates are shockingly low. Borrowing now creates a bit of a shock absorber for any future declines in housing values.

Next year will probably be tumultuous for the real estate industry. The wild cards, of course, are sweeping regulatory change and interest-rate craziness. That foreclosure activity will continue is already a given. That’s the storm. Which makes now, the calm.

It's the Agents' Fault, Sez J. D. Power

J.D. Power & Associates has made a name for itself by ranking everything in the business world that emits carbon dioxide. Thus, its 2010 Home Buyer/Seller study.

Hope you’re sitting down. Buyers – who, as you’ll recall, are getting recordbreaking bargains – are oh-so-happy with their agents.

Sellers – who are very reluctantly supplying those bargains – are not at all happy with their agents. Their satisfaction ranking slid 40 points (on a 1,000 point scale) in the past year. Sellers are especially peeved about ineffective marketing, and related transaction services.

Incredibly, J.D. Power tries to soften the blow by dumping blame back on sellers. Though his assertions are not supported by the released data, a Power spokesman asserts that though “selling agents appear to be doing a good job of negotiating and marketing on behalf of home sellers, the tough economic conditions are negatively impacting their overall satisfaction with real estate companies.”

Mr. Power, here’s my point: if agents really were doing a good job, wouldn’t seller satisfaction hold steady or increase? Incredibly, his statement undermines his own company’s business model- measuring customer satisfaction.

Given a choice of believing the spokesman, or the J.D. Power numbers, I choose the numbers. Sellers are angry and upset. Dancing around the truth doesn’t change it.