The Winter Market

We’ve been checking out homes online and drove by a few and feel like we are ready to begin looking more seriously.  However, since it’s the winter, we’re not sure if it’s a good time to purchase a home.  Should we wait until spring?

The perception that the real estate market is slower in the winter because people are preoccupied with holidays and football is real.  There are fewer homes for sale since some have sold or been taken off the market to give sellers a holiday break.  Other homeowners interested in selling are waiting for the spring when the grass is green, flowers are blooming and the weather is comfortable.

But this does not mean that the winter is a poor time to purchase.  The winter months showcase areas of a home not always considered during the warmer climates. When temperatures dip below freezing, it is a great time to evaluate how warm a home feels, how well the wood or pellet stove works or the coziness of the fireplace.

And because not as many people are looking during the winter months, it is a great time to find a deal as there are fewer buyers to compete with.  The lower demand will work in your favor.  Sellers may be more motivated.  Since they are not busy with showings, each one matters more and increases their desire for a contract.  Real estate agents are not as busy so have your undivided attention to get the best price for you.

The ideal time to purchase is the time that works for you, whatever the season. If you’ve done your homework online, I suggest finding a good agent who knows the community where you want to purchase and has a track record of success in that area.  She will guide you to the properties that fit your criteria and your search will begin.  Then, before you know it, you will be packing and moving on, very possibly paying less for a home because you bought in the winter.

DAYS ON THE MARKET

We’ve been looking at homes with an agent and have found some to be for sale for a few months while others are selling in a couple of days.  I’m wondering if we should only look at the new ones on the market as maybe something’s wrong with the others?

Since days on the market is well known in the digital age when home sale information is readily available to anyone with a computer, it has become an indicator that leads to a perception that, the longer the market time, the less desirable the home.  And, although this is often true, it is not always the case.  Some homes have features which attract a specific population – features like an in-law suite, in ground pool, an added apartment or detached garage.  Others may have floor plans not as attractive or more bedrooms than most buyers need.  Location can affect market time as homes not easily accessible to major highways or those next to traffic noise may take longer to sell.

If the homes which have been on the market a while have the features you are looking for, I would definitely recommend taking the time to view them with your agent.  Because they’ve been out there a number of days, the sellers may be eager for a contract so it could be an invitation to a great deal.  If your agent knows the area and what is appropriate, you may be saving money by buying the one with more days on the market. And then before you know it, you are packing and moving to the home of your dreams.

STUCCO PROBLEMS

We have a home with mostly stucco on the exterior.  Friends who recently sold their home in our neighborhood with the same stucco experienced some problems with selling because of it.  Do I have reason to worry?

Stucco is a preferred exterior product for a home, a step or two above vinyl siding.  Homes with stucco are usually more expensive and desirable since stucco is more costly to install and considered to be durable.

In the past few years, some builders installed stucco incorrectly with devastating results for owners who only discovered their problems when selling their homes.  Home inspections began recommending stucco inspections which periodically showed that moisture had penetrated vapor barriers.  Many times, expensive fixes were necessary in order to sell.  Word gets out and now stucco is suspect to many looking to purchase.

Because of this, sellers sometimes ask if they should get their stucco inspected before listing their home.  In their thinking, this would offset any problems that might pop up during the inspection process.  Unless your home is in a community that has experienced rampant stucco issues, I suggest you wait until a buyer is interested and deal with it during the inspection process.  The reasons are that stucco inspections cost up to $1,000 and if you get one before you list, that is your expense.  If your buyer decides to have one done, he pays for it.  The other reason is that some buyers are not concerned with the stucco and so may not request a stucco inspection which frees you from any expenses you may incur if something were found.

Selling your home is a step-by-step process best guided by an experienced real estate agent who is familiar with the process, the community and the area.  A good agent will help you not only list your home and market it well.  She will also lead you through each step so that before you know it, you are packing and moving on.

Use The Hometown Team

We are planning to sell our home and my husband and I have not decided who should list it for us.  He has a cousin who is in the real estate business but whose office is out of the area.  There is a local agent who sells most of the homes in our town.  Does it matter as long as the person is hard working and honest?

Hard working and honest are very important traits when hiring a real estate agent.  Others include good communication skills, knowledge of the business and proven success in the profession.  But one essential to success (and sometimes overlooked) is familiarity with the area.  The old mantra of location, location, location applies to real estate agents as much as homes.

I would recommend interviewing a few agents, asking them questions about their strategies and track record.  Interviews many times give sellers an opportunity to not only get a feel for the competency of the agent but if they like her.  An important question during the interview is, “How many homes have you sold in this neighborhood?”  If an agent doesn’t know the real estate landscape in your neighborhood, she will not be as effective in marketing your home.

Selling homes is like selling products.  Product knowledge is key to success in selling.  You don’t want a real estate agent cutting her teeth on your property.  The agent who is not only hard-working, honest and likeable but also an expert with a track record in selling in your local neighborhood is the person who will do the best job in working for you.  Use the hometown team.

A Great Time to Sell

My neighbor told me that there aren’t many houses for sale so now may be a good time to get ours on the market.  We have been waiting for prices to go up before listing.  Have you seen an increase in what you can get for homes recently?

It happens to be the talk of the town in real estate right now that the amount of homes on the market is lower than it has been for a decade.  Econ 101 taught us that when supply is down, prices go up which is exactly what is happening, especially for lower priced homes.

Not only are there fewer homes for sale, but the amount of time those homes have been on the market has decreased as well.  If priced correctly, the typical home should sell quickly which is a huge relief for sellers trying to keep a home show-ready, waiting for a contract.

Mortgage rates remain low which also encourages buyers to buy now.  Rates have been ticking up since last October but continue to be in the four percent range.  Knowing they won’t stay this low much longer, buyers are eager to find a home so they can lock in their rate.

One more reason to sell now is the strengthening job market.  As unemployment decreases and wages increase, buyers feel more confident about the future and a big ticket item like a home purchase appears possible.

For all of these reasons, now is a great time to sell your home.  If show-ready and priced right, you will be packing and moving on before you know it.

Buyers Are Not Looking for a Project

Dear Esther – My husband and I are ready to sell our home.  We would rather not spend time and money painting walls and replacing carpet.  Selling and moving is hard enough without all that extra work.   What would you suggest? 

This question is frequently asked by sellers before listing their home.  It’s hard enough to empty closets, purge personal items, organize drawers and clean.  Painting and replacing just adds to the demands and puts a strain on budgets.  How necessary is it, really?

In my experience in selling homes, I find that if sellers want to get market value for their home, it is very necessary.  You may think that buyers will see past these surface items and appreciate your desirable features like finished basement space or your extra-large garage.  Instead, when they walk through your home, odd colored or dirty walls, and stained or worn carpets communicate that you have not taken care of it.  They immediately wonder if the heating system is also on its last leg or the roof is leaking.  They have lost interest before getting to your finished basement or garage.

Although the market is tipping in the seller’s favor, buyers continue to expect homes to be move-in ready.  Most interpret cosmetic eyesores as neglect on behalf of the seller. They anticipate purchasing a home with fresh walls and clean, new floors at the very least.  Buyers are not looking for a project.

Sell Now or Wait until Spring?

Dear Esther – We feel we have our home ready to sell but hear from friends and family that this time of year is not a good time to put it on the market.  Is it better to wait until spring to sell?

This is probably the most frequently asked question this time of year when the weather is cold and snow may be in the forecast. Is anyone really going to venture out and look for a home when sipping hot tea by the fireplace is what many want to do in January?  Because most are waiting to sell until spring, there are fewer homes on the market which makes January an appealing time to list yours.  It may, in fact, be easier to sell your home in the winter because yours may be the only game in town.  While everyone else waits until the spring, yours can be there and available for buyers who need one now.

And frankly, winter buyers are usually more serious about purchasing which is why they’re leaving the comforts of their home to look.  Most often, they need to find a new living situation out of necessity and so arrive, looking at yours, with intentions to purchase.  And all this cold weather encourages them to pull the trigger on a home sooner because going out is not all that much fun in January. This is probably why statistics show that homes sell more quickly in the winter.

If you decide to list in January, it is important to have your holiday decorations neatly packed away and your home clean and decluttered.  Make sure your walkways and driveway are cleared of snow and ice.  If you are concerned about buyers tracking in with messy boots, add a “please remove shoes” sign at the door and/or provide booties to cover shoes.  Keep your heat at a comfortable temperature (in the 60s since buyers arrive with coats on) and light your fireplace if possible.  You want buyers to stay, becoming attached to your home, in love with it and feeling like life will be better for them if it’s theirs.

Listing after the New Year is a way to get a jump on the spring market before everyone else is putting up for sale signs.  Supply and demand is on your side so that, before you know it, you will be packing and moving on.

Waiting to Pack

We finally have a contract on our home after a long, hard selling period.  After signing, I thought I can begin to pack as we have a home already purchased.  Our agent told us to wait as the contract gives our buyers a chance to change their minds if they don’t like the inspection report, the homeowner’s association documents or if they can’t get a mortgage.  How long do we have to wait?

 

Almost every contract on a home has contingencies and a time frame for them.

  • Inspections – Most buyers hire a home inspector who generates a report that reflects the condition of your home. Your buyers can change their mind if they are not happy with the condition or negotiations in fixing what they feel is important.  The contingency period for home inspections is in your contract.  It is usually 10-15 days.
  • Homeowner’s Association – If a property is governed by a homeowner’s association, the seller is responsible to get homeowner associations documents, financials and insurance to the buyer with 15 days from signing the contract. Upon receipt, your buyers have 5 days to change their minds about purchasing.
  • Mortgage – Your buyers most likely provided a preapproval letter from a mortgage company when they submitted the contract, showing they are qualified to purchase at the agreed upon price. Also, your contract specifies who they are using for financing and the terms of their mortgage.  This information shows you that they are well on their way to getting the financing they need to purchase your home.  In today’s market, one concern is the appraisal.  If this value comes in lower than the contract price, you are back to negotiating price.   I suggest that you wait to begin packing until the appraisal report is issued.

A good real estate agent will talk you through each one of these bumps in the road, answering your questions and informing you when the contingencies are satisfied.  Usually within 3 weeks of an agreed upon contract, sellers feel comfortable to pull out the boxes and begin packing.  It is important, however, to wait until your agent gives you the okay because the very last thing you want is a home full of boxes that is back on the market.

PRICE IT RIGHT

We recently met with a real estate agent to discuss selling our home.  After meeting with her, we talked with friends about the price she suggested we list it for.  They agreed with us that it was low.  What should we do?

Pricing your home right is one of the most crucial steps in successfully selling it.  Most real estate agents understand the importance of a realistic pricing strategy.  For that reason, a good agent will research your property and study past sale statistics for homes similar in your area.  None will be identical, of course, but understanding the true market value is the first step in establishing list price.  She will spend time showing you these, answering questions about marketing time, lowered prices and the history of these properties we call comparables.

It is important to remember that a good agent wants to get the most for your home.  She is working with you (not against you) to get top dollar.  Her experience has taught her that overpricing it will add market time to your sale and in the long run, discourage buyers. After a few months on the market, your home is old news and folks are wondering what’s wrong with it.  Why hasn’t it sold?

If you feel unhappy with what you consider to be a low price given to you by an agent, ask her to justify her price.  If you are not satisfied with her answers, contact other agents selling in your area and get other opinions.  In gathering information, remember that agents are professionals who help others sell and buy homes for a living.  When was the last time your friends, eager to lend their opinion, sold a home?

Not All Improvements Are Created Equal

We are thinking of selling in a year or two. We want to do all we can to improve our home so it sells for the most money and quickly.  What advice can you give to guide us in this?

This is a very good question because not all improvements are created equal.  Projects with the highest resale value are kitchens, bathrooms, outdoor improvements, roofs and windows.

Kitchens – Unless your home is falling down around you, the smartest place to put your money is in your kitchen.  If you can’t afford to replace counters and appliances, at the very least update hardware and light fixtures.  When renovating with a return in mind, it is smart to go with the mid-range options unless you’re in a very high end home.  Your kitchen is king.

Bathrooms – Bathroom remodels are second to kitchens in importance especially if you have colored sinks, showers and tubs.  Again, at a minimum, replace cabinet pulls and lighting and ensure the grout is clean.  Hanging a framed mirror is also an inexpensive way to give your bathroom a new look.

Outdoor improvements – In addition to cleaning the siding, stucco, sidewalk and roof, also plant flowers/shrubs in the front, replace lawn bare spots and any sidewalk that is damaged.  Repave your driveway if it appears cracked or worn.  In the case of home improvement, a book is always judged by its cover.

Roofs and windows – These are expensive to replace but if they need it, they should be done as not replacing them will significantly decrease the value of your home.  The same holds true for your heating/cooling system.  Buyers expect these items to be in good condition and if they are aging and/or beginning to fail, they will factor in their replacement cost in their offer.

Other obvious improvements are fresh paint, new floor coverings, wall paper removal and decluttering and cleaning, all of which give buyers the message that your home has been well maintained.  Then, when you list your home with an agent, if she is a good one, she will advertise your improvements so that those who have interest will know that not everything in the home is as old as the home itself.