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How do you know when the PRICE IS RIGHT?

06 Wednesday Feb 2013

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House Price2

What’s the “right price” when you’re selling your home?  The longer your home sits on the market the less you’ll ultimately get for it, so you want to sell fast at top dollar; everyone does (and should).  How can we do that?  What’s the ultimate list price to accomplish your objective?  It’s a little trickier in the current environment, where we are low on housing inventory and it’s turning into a seller’s market.  It’s tempting to overprice.  But the key is to determine what price will draw those eager buyers and still get you top dollar for your home.  That’s where we step in.

First, remember that the list price should not be based on what you paid for the property, what you need to pay off the mortgage or what the price to rebuild the home would be today. What truly sets the right price is what a willing buyer is willing to pay RIGHT NOW and quickly, afraid that if they don’t buy it right away someone else will.  So the right list price takes into account a number of factors, including what other homes are out there that you’ll be competing with, and what’s sold recently in your neighborhood.

We do a comparable market analysis (CMA) for your property to help find this value. The CMA will compare your property to similar properties in your area that have sold in the past 6 months. This analysis takes in to consideration size, condition and improvements. Then we take a look at what is currently out there – the homes you are competing against.  Are you the best at the price you are asking?  That is what we are striving for.  You can see from the chart below that CONDITION is as much a factor as pricing.  You want to be the home that’s in the best condition at the lowest price – and that’s how you get “chosen” by a buyer.

Chart 1 - In market

In order to steal buyers’ attention from all the other listings you have to be better than the rest at the price you’ve chosen.  Listing your property as little as 10% above your determined market value will mean that that you will lose many potential buyers (according to the chart below, seventy percent!) who won’t even see your home because it’s overpriced.

Chart 2 - Triangle

The third and last step to price your property “right” is to take FULL advantage of the first 30 days that your property is on the market. Do not fall into the trap of “trying out” an above market price for a few days just to “see if it sells”. Many sellers make this mistake and end up selling below market value. Your listing attracts the most buyers when it first hits the market. All buyers are on the lookout for “Just Listed” properties every day. If your property is listed above market value from the start, it will be missed by all those potential buyers. After even the second week of listing, property showings begin to drop.  So if you don’t have ANY showings the first two weeks, you are clearly overpriced and should drop immediately – it is already almost too late!

Chart 3 - bar graph

If you are ready to sell fast and get a great deal on your property call me today.  I will provide you with a thorough CMA specialized for your unique property so we can determine the “right” price and sell fast.

Frankly, My Dear… Antebellum is Making a Comeback

23 Wednesday Jan 2013

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510 Londonberry FRONT

Atlanta will forever be associated with Margaret Mitchell and the famous novel Gone With The Wind – her tale of the Civil War South and the genteel characters who endured the war and its aftermath. Tara, Scarlett O’Hara’s fictional  home, never existed, and most real homes like it that did exist are themselves “gone with the wind”.  The quintessential architectural style of the period, and of Tara, is the Antebellum home – Antebellum means “before war” in Latin, and the term now applies to the style of certain homes built in the period prior to the Civil War which remain distinctly southern. The style is also known as Greek Revival or Classical Revival.  Not many remain in Atlanta and environs – there’s Bulloch and Barrington Halls in Roswell, but not many other examples.

But the Southern elegance and charm of the period do live on in select homes here.  Take, for example, this gorgeous Southern home on Londonberry Road, in the ritziest part of Atlanta. Scarlett would have died to live here. First, befitting a southern estate, it has a commanding presence from the street and a grand entrance featuring stairs up to a rocking chair front porch. Like many Antebellum homes, it features large Corinthian columns and a symmetrical façade.

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The home was designed by Mitch Ginn, an architect from Newnan, Georgia, for the original owner who specifically requested this style of home. Mr. Ginn and his firm have designed many homes in different styles – but some of their most memorable have been antebellum like this one. According to Mr. Ginn, “We design 150 to 200 homes a year, but the Greek Revival and Classical Revival styles are unfortunately few and far between. Popular styles today with future homeowners include Craftsman, Bungalow, and homes with English or French cottage influences. I guess I could say I look forward to a Greek Revival “revival”. “

Like many architects, Ginn enjoys recreating classic styles from the past: “I have always loved the timeless beauty and grandeur of the classical architectural styles. They are dictated by historic architectural structure and proportions. I am also a romantic sucker for the “image” of the Old South.”

The home Ginn designed on Londonberry parlays that image into the modern day. The lot was perfect for a sweeping driveway – and it made the most sense, given the lot, to place the swimming pool to the front and side of the home.  That showcases it as part of the “estate,  and allows a wonderful view of the pool area from the front porch. A meandering creek also wanders far below the home and to the back of the property, adding to the interest of the landscape.

DSC_3576510 Londonberry - outside

The interior of the home on Londonberry continues the grand southern feel with a sweeping stairwell (can’t you just imagine Scarlett making her grand entrance) and two story foyer. There’s also a screened porch overlooking the back grounds – the perfect place for some iced tea or a mint julep, don’t you think?

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And of course, the style makes way in some respects for the demands of the modern day homeowner – for instance, the kitchen is open to the breakfast and family areas, a must-have for many modern buyers. In addition, there’s a master suite on the main floor with a large master bath. The doors to the master bath and the lighting fixtures are all of grand southern design.

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As a new generation of homebuyers grows into their “dream” homes, the grandeur of the Antebellum style has a new appeal. It does come with a price tag – the home on Londonberry is currently listed for sale for $1,785,000.

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LET’S GO TO COURT – OR NOT…

19 Monday Nov 2012

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Most new construction contracts contain an ARBITRATION PROVISION.  If you’re buying new construction, you’ll notice it because typically it requires a specific initialling at that particular paragraph.  Our resale contracts in Georgia do not contain such a provision.  So the question is raised – is a good idea or NOT to agree to arbitration in advance?  Here are some thoughts from a recent briefing with the law firm of Epstein Becker Green I attended –

First, what IS arbitration?  Often confused with mediation, which is less formal and not binding, arbitration CAN be legally binding.  This means if you choose binding arbitration you may be stuck with the outcome with no avenue of appeal.  There are only very limited bases for appeal of an arbitration provision; as they stated at the briefing, you would need something akin to having a picture of the other party handing a monetary bribe to the arbitrator in order to have a judicial appeal.

One party cannot force another to go to arbitration unless it is agreed upon in advance in writing – hence the provision in many new construction contracts.  So, say you’ve entered into an agreement with an enforceable arbitration provision and there is a dispute.  If you file a claim in court, the other party can legitimately ask the court to force you to arbitrate instead.  When you arbitrate, a private company is chosen to provide the arbitrator or arbitrators (typically there is one arbitrator or three – for obvious reasons, an even number of arbitrators would not make sense).  As a party to the arbitration, you will have the opportunity to strike arbitrators for cause.  You then proceed to a hearing.

WHY arbitrate?  Might you WANT an arbitration provision in your contract?  There are several advantages: typically it is less expensive than litigation, because it is faster.  It is also more certain, since there are only limited grounds for appeal.  On the con side, third parties aren’t bound by the arbitration agreement and cannot be forced to appear.  There are no rules of law or evidence in an arbitration proceeding other than those set by the parties or the arbitration company –thus, what often happens is that “if you can get it through the door, you can get it into evidence.”

As a practical matter, the arbitration provision in many new construction contracts is probably favorable for all concerned.  Filing a lawsuit is expensive.  But most do not add an arbitration provision to the standard Georgia Association of Realtor resale contracts.  Our standard practice in Georgia is to adhere to the form contracts without extensive rewriting of them; rewriting by an agent who is not a lawyer might be considered unauthorized practice of law.  Even if your Realtor IS a lawyer (there are a few of us out there) you will want to carefully consider whether or not adding such a provision makes sense.    Talk to your Realtor about it when you are entering into your agreement – it may or may not make sense for you.  And as always, never hesitate to call the Mary Anne Walser team if we can help in any way!

IN AND OUT OF THE CLOSET

08 Wednesday Aug 2012

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One thing about being a real estate agent – you become very comfortable looking into other people’s closets.  It’s just part of the job.  Closet space is IMPORTANT – we have lots of stuff these days.  The homes built in the 1960s or earlier generally have very very small closets compared to what we’re used to today.   Lots of times, owners have added on closets or expanded closets (one of my relatives even made a small bedroom into a closet).  In any event, closet space, and storage in general, is an important aspect of a home for most buyers.

Now when I go to a friend’s home to socialize I sometimes find myself automatically opening closet doors as I’m getting a tour of the house.  Not cool.  I catch myself right away, and people laugh.  But now I try to remind myself when the house I’m viewing is not on the market to NOT look in the closets unless prompted.  Looking into closets has become an automatic reflex.

When we put my now-husband’s home on the market, in one of the closets we left a piece of artwork that consisted of a stylized hanging skeleton, hoping that buyers would get a kick out of it and feel warmly towards the home.  Okay, it’s a stretch – but the more you can make buyers feel GOOD when they are in your house, the more likely they will buy it!  The house sold, but I have no clue whether or not the skeleton had anything to do with it – I am pretty certain it didn’t hurt, however.

I got the idea for this blog from one of my favorite columnists, Joel Stein, who writes “The Awesome Column” in Time Magazine.  Stein’s article is about “stuff” and “clutter” in general and was based on the book “Life at Home in the Twenty-First Century”, about an 11 year UCLA project studying the homes of 32 Southern California middle class families.  I can’t wait to read it.  If you’re as fascinated as I am about homes, home life, and what people use and keep, I also recommend Bill Bryson’s “At Home: a Short History of Private Life”.  Bryson goes room by room – including the closets – to describe how the modern home got to where it is today.  Happy reading!  Excuse me now, I’ve got to go clean out those closets…..

Notes on Negotiating

26 Thursday Apr 2012

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What does your Realtor do for you? Well, many things, but a lot of what we do is negotiate contracts – either on behalf of the buyer or of the seller in the purchase or sale of a home.  I have taught classes on negotiation skills.  Because I am also an attorney (a former litigator) I have a lot of experience negotiating deals.

But recently I took a class from a professional mediator about negotiating.  Jennifer Keaton owns One Mediation, a mediation firm based here inAtlanta, and she made some great points about negotiation that are well taken, a great reminder, and applicable to any type of negotiations, including real estate.

First, every contact with the other side conveys information – so pay attention to every contact.  Most importantly, you do not have to mean or rude to “win”.  After all, haven’t you heard that you get more flies with honey than with vinegar?  Particularly in real estate, often a more emotional negotiation, this is important.  Being professional and polite does not mean you cannot be tough and represent your client well.  In fact, make sure your agent is one who is respected and liked by other agents.  Agents want to work with other agents who “play fair”, and that will serve you well when coming to agreement.  Also, say you do not come to agreement on a given negotiation.  Timing matters – a seller may get more motivated, a buyer may find a greater source of funds – in other words, the deal may work, just not right now.  If you have kept a congenial relationship, the other side may just come back, offering more.

Another important point is that knowledge is power.  With information, your arguments actually hold weight – without the hard facts, you have no ground to stand on.  When an agent is representing a buyer, that agent should marshall the LOWEST comparables and be able to discuss them with intelligence to convince the seller, hopefully, to accept less than they would otherwise.  Similarly, an agent representing the seller shouldmarshallthe HIGHEST comparables available to help convince the buyer that they are getting a great deal (which every buyer wants and expects).

Also: be creative.  Every negotiation is not all about money.  What else can your client offer that is of value to the other side?  Perhaps a seller will take less for the home if you close quickly.  Or if they need more time, if you will close later.  Your agent needs to ask questions and pay attention to the nuances of the other side’s needs and wants; that can certainly help ease the parties to agreement.

Finally, stick to your plan and stay the course.  Do not walk away without offering your “walk away” offer.  But if you give a “take it or leave it walk away” offer, make sure that is exactly what it is.  If it is not, you lose credibility.

In this market, great negotiation skills mean more than ever.  Make sure your agent has them!

MAKING THE OFFER – when should I ask to close?

13 Monday Feb 2012

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Typically buyers placing an offer do so 1-2 months before they want to actually move.  So the “normal” time for a closing would be one to two months from the date the offer is placed.  In terms of WHEN during a month you should ask to close, if you close at the END of the month, you bring less money to closing – so most buyers want to close at the END of the month.  How it works is like this: unlike RENT, your mortgage payment is paid IN ARREARS.  If you close at the end of March, your first payment isn’t due until the first of MAY – you pay the first of May for the month of April (for rent, as you know, you pay at the first of the month for the month following – for example, rent is due April 1 for all of April).

Another consideration is this: when you own and occupy your home, you qualify for what is called “homestead exemption”.  It’s a partial exemption from property tax for your principal residence.  But in every metro county, you must own and occupy the home as of January 1st in order to qualify for the homestead exemption.  Therefore, if you are looking for a home in the fall or winter, you want to be sure to close prior the end of the year in order to qualify for the exemption.  My husband and I closed on our home at the end of December for this very reason.

Other than that, there really is no “right” time to close.  It’s entirely up to you.  Most sellers are not going to want to accept a contract to close for too long after the contract date, though, because it ties up the property and makes it unavailable to other potential buyers.  You can always try, but know that the seller is probably going to counter with a closing date closer in time.  Their thinking is – what if the property is tied up for those months, and then you, Buyer, fail to close?  During the time they were under contract, they might have found another buyer for the property.

Be aware, also, that if you are making an offer on a short sale OR on a foreclosure, all bets are off, time-wise.  Short sales can take months and months to be approved (if they are approved at all), so even if you ask for a fast close date, it’s not likely to happen.  You will make an offer and then, usually, wait – and wait- and wait.  Foreclosures can sometimes close quickly, but at other times also take some time.  The seller must be sure that the foreclosure deed is recorded and in the chain of title and that other liens have been cleared before they can sell the property to you. (While many liens are extinguished by the foreclosure, some liens, such as tax liens, survive foreclosure and must be dealt with by the seller before they can give you clear title).

MAKING THE OFFER

21 Monday Nov 2011

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Okay, so you’ve looked and looked – and you’ve found the place that you want to buy!  What happens next?  First, have your agents pull COMPS.  COMPS are comparable properties that have sold in the area recently that will help you determine the value of the home that you want to buy.  Typically we start with homes that have sold in the last three months that are within a half mile radius that are “comparable”.  If there aren’t at least three comparable properties within those parameters, we expand the search – going out to a mile and back six months…. And so on.  Your agent can be an invaluable help in determining a fair price for the home and what you should offer.

Once you’ve determined what you’d like to offer, it’s time to put TOGETHER the offer.  We do this by filling out the GAR (Georgia Association of Realtors) Form – there’s one for single family homes, and a different one for condos.  Here are the elements of the offer: 

  • Purchase price you’re offering;
  • Amount of earnest money you’re putting up – standard in Georgia is to put up at least one percent of the purchase price, so for a $500,000 property you’d put up $5,000 in earnest money);
  • Amount of closing costs you’re asking the seller to pay:
    • This must be a SPECIFIC amount.  You can’t just ask the seller to pay “all” closing costs, or 50% of closing costs – you have to ask for a specific amount
    • Make sure the amount you are asking the seller to pay is not MORE than your actual closing costs.  Your lender can help you determine this
  • What DATE you want to close.  Typically you’ll need at least three weeks from making the offer if you are getting a loan (not paying cash) for the lender to underwrite your loan;
  • Due diligence period – this should be seven to ten days, unless there is a good reason to ask for more (say there’s evidence of structural problems, that sort of thing).  During the due diligence period you can terminate for any reason or no reason at all, and still get your earnest money refunded;
  • The closing attorneys you’d like to use; your Realtor can make recommendations for this – it needs to be an attorney who regularly does closings and who in on your Lender’s approved list;

In the stipulations, here are some things (among many) you may ask for (BUT keep in mind, that you might not want to clutter up your offer with lots of ancillary requests, particularly if the offer is a lowball offer):

  • Seller to provide a one year termite bond for Buyer
  • Seller to provide a one year home warranty for Buyer
  • Seller to provide a survey of the property for Buyer
  • Seller to have the property professionally cleaned prior to closing
  • There may be certain items in the property that aren’t listed on the Seller’s Disclosure as staying with the property, but which you want to remain with the property, such as:
    • A porch swing
    • A gas grill
    • A piece of furniture that is custom fit to a certain spot
    • Chandeliers, if not already being left; etc. 

In addition, there are often EXHIBITS to the contract that are necessary: 

  • Financing contingency – if you are paying for the property with a LOAN, you want to be sure that you can obtain financing
  • Appraisal contingency – this assures that the property must appraise for the amount you are paying, or you are able to get out of the contract
  • Lead Based Paint exhibit – if the property was built prior to 1978, you need an exhibit explaining that there may be lead based paint in the property
  • Plumbing disclosure – in some counties, like Dekalb, the county requires that you have LOW FLOW fixtures in order to obtain water service.  In those counties, there should be a plumbing disclosure attached to the contract
  • Seller’s Property Disclosure – this is attached to and becomes a part of the contract
  • Condominium Disclosure Exhibit – sets forth the monthly fees for the condo, etc.

Your Realtor will need your signature on the offer and exhibits, will need the earnest money check IN HAND (the Broker will deposit the check when you’ve reached binding agreement – otherwise, it will be torn up or returned to you) and a prequalification from your lender.

Now, the game begins!  Unless you’ve made a very good offer, chances are that the Seller will counteroffer, and the counteroffers will go back and forth until the parties reach agreement.  At this point, it is INSPECTION TIME – the subject for another blog post in the near future!!!