Tag Archives: seller

Are You READY to Sell?

23 Monday Jan 2017

Posted by in real estate

≈ Leave a comment

Tags

, , , , ,

Are You READY to Sell?

By Mary Anne Walser, Realtor & Attorney, 404-277-3527, maryannesellshomes@gmail.com

How do you know when it is time to sell and move to your next home? For some of my clients, it is easy. They are outgrowing their current home and have more children than bedrooms. Or on the opposite end of the spectrum, the children have left and the home is much too big without them. Other clients just like to move every five to seven years or so. And sometimes it is a major life event – a marriage, a job change, a death – that creates the need to sell. But one of my first steps as a Realtor is to gauge your motivation to move. (Or, if you are an investor wanting to sell property, to gauge your motivations in selling so that we can target your goals.)

One client, Martine, seemed eager to put her home on the market. We staged, photographed, listed, marketed, and soon she got a full list price offer on her home – but then would not sign it. She panicked – all of a sudden, she decided that moving might not be the best idea after all. She was not finding a home to purchase that she liked better (within her price range) and she was second guessing whether she wanted to move at all.  She asked me if she HAD to sell just because she received an offer at list price for her property.

If she refuses to sell, is Martine in breach of contract? Stated another way, if a buyer offers exactly what the seller asks for the property, is the seller legally obligated to sell? The answer is NO.

When we put your home in the multiple listing service and offer it for sale to the general public, in legal parlance the listing is not an “offer” – it’s an “invitation to offer.” This means that even if a buyer offers your exact list price and doesn’t ask you to pay any of their closing costs, you are not obligated to accept the offer. And this is because the listing itself does not contain all of the elements necessary to create a binding contract. For instance, the listing doesn’t state exactly when the deal will close, where it will close, how the deal must be financed, or any of the conditions of sale.

So as a seller, you can refuse even an offer that is above list price. You aren’t required to sell just because you listed your home. Of course, it’s advisable not to list your home unless you are certain you want to sell your home. And depending upon the listing agreement, you may be responsible for paying a commission if you receive a full price offer but refuse to sell. But thinking through things before it gets to that point can save a lot of heartache.

What I recommend for clients who are not entirely sure about a move is that we test their motivation by going out to see just a few properties currently on the market that they might wish to purchase. If we find properties that they can live with and live in, it makes it easier for them to agree to a sale when an offer comes in. Sometimes the “water testing” can take place entirely online; the seller does not feel as if they need to go look at properties in person in order to determine that the right property for them is out there. But one way or another, having a plan and knowing the purpose of the move makes for a smoother transaction all around – and no frustrated buyers threatening to sue.

There are also sometimes alternatives to selling that make more sense. If what you need is more space, you may want to add on or renovate your existing home. One thing that makes that very attractive is the deductibility of home mortgage interest.  If you take out a normal consumer loan – to buy a car, say, or to pay for a wedding – the interest is not tax deductible. But for a loan that is secured by your primary residence, all interest IS tax deductible (at least currently. Things could change as national fiscal policy changes). This is a bigger deal than most people realize.

The best time to meet with a Realtor is early in the process. We can help you evaluate your options and determine whether selling your home and moving or staying and renovating is best.

So KNOW BEFORE YOU GO. Know why you are moving and have a plan for where you are going to move; and keep your purpose in mind as you move forward. Knowing what you want is the only way to get what you want, so let’s figure that out before you put your home on the market.

 

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential & commercial real estate and her legal expertise allow her to offer great value to her clients. Mary Anne is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

 

Invitations to Offer & Reverse Offers – How Atlanta Home Sellers Make Offers to Buyers (instead of the other way around)

28 Thursday Jul 2016

Posted by in real estate

≈ 1 Comment

Tags

, , , , , , , , , ,

INVITATIONS TO OFFER & REVERSE OFFERS – how Atlanta Home Sellers make offers to Buyers (instead of the other way around)

By Mary Anne Walser, Realtor & Attorney, 404-277-3527, maryannesellshomes@gmail.com

 

When you LIST YOUR HOME for sale, is this an OFFER that a buyer can accept by agreeing to the terms you present? What does it take for a buyer to have a binding contract to buy a home? This surprises some people – but legally, even if you as a buyer offer list price or more for a home, it doesn’t mean the seller has to sell it to you.

By way of example, let’s say you see a home on the market for $500,000. You offer $500,000 and do not ask the seller for anything specifically, other than the property itself – it’s just a clean, straightforward offer for exactly what the seller is asking for the property. You even offer CASH and you don’t have to sell something in order to buy, so there’s no financing contingency. Do you have a contract at that point? NO. Although a lot of buyers think that it should work that way. Why is there no contract?

A binding contract requires agreement on all basic terms. A property listing – in this example, the listing that offered the property for $500,000 – is not an “offer” that can be accepted, because there are many key terms that are not present. What DATE will you close, for instance? Will there be earnest money and if so, in what amount? Is there a right to inspect? What fixtures are included with the property?

Because there is so much that must be determined between the parties other than the price, the property listing is not an “offer” that can be accepted – it is what is called an “invitation to offer.” It’s asking for buyers to make offers, but it’s not guaranteeing that the property will be sold even if the seller receives a full price offer. Indeed, many sellers purposefully price the listing at LESS than they would take because they want to start a bidding war on the property. They hope the low list price will get a buyer feeding frenzy going and that therefore the property will sell for MORE than list price.

The listing as invitation to offer isn’t the only “invitation” the seller can extend the buyer. Many sellers overlook a very powerful tool for selling their home – the reverse offer.

Here is how a reverse offer works. Say you are eager to sell your home, and a buyer has been to your home multiple times and is obviously interested, but is hesitant to make an offer. Have your agent call that buyer’s agent and find out WHY the buyer hasn’t made an offer. If there are reasons you can do something about, make an offer TO THE BUYER and get them off the fence.

Recently I had an adorable listing and one of the buyer’s agents who showed it told me that her client LOVED the home, but was about to make an offer on another home in the same neighborhood instead. “Why the other home?” I asked. There were multiple reasons. “Why NOT my listing?” I then asked, and gathered even more information.

There were some objections the buyer had that we could do nothing about. We were a smaller home than the other one they were considering. But there were some pluses we had that the other listing did not. For one thing, my listing is right across the street from the awesome neighborhood park! For a buyer with a child (as this one was) it just doesn’t get better than that. We were also better priced than the other listing. One thing the buyer did NOT like was that our floors were scratched up and well worn.

But my seller was motivated to sell and I WANTED THIS BUYER. There was a great buyer about to purchase in the very neighborhood where my listing was located. My sellers were moving out of state and really wanted to be able to go ahead and make an offer on a home in their new state – but couldn’t do so until their current home was under contract.

SO, we made a reverse offer. We offered a lower price and refinished floors PLUS my sellers wrote perhaps the best reverse offer letter in the history of reverse offers, we came down from list price a bit, and we offered to finish the floors after closing, but before the buyer moved in. Here is a revised and edited bit of my seller’s reverse offer letter, just to give you an idea of what a seller might write in this situation:

We are so thrilled that you are considering our neighborhood for your new home. It truly is a special neighborhood. Our neighbor and friend next door (to the left as you face the house) is the best neighbor you could ever ask for. He’s quiet, hosts fantastic happy hours, and is always willing to lend a hand. I’m not sure you could borrow a cup of sugar from him, but I can speak from experience that we have borrowed a bottle of wine on occasion! And I hope you took a look at the great park across the street. I understand that you have a dog – the field is an unofficial dog park where neighbors take their dogs to run and play after work and on weekends. Having the park across the street has been like an extension of our yard and we have made much use of it over the years – and I hope that you will, too.

We’d like to offer you a reduced price on the home as well as the promise to refinish the floors to a stain of your choice. We are relocating and your timeline works extremely well with our proposed summer move date. We really feel that our home would be a wonderful fit for you!

Who WOULDN’T want to buy this Seller’s home after reading that letter? And in this instance, THE REVERSE OFFER WORKED. The Buyer purchased my Seller’s home rather than the other one she was eyeing in the neighborhood.

Real estate is an art as well as a science. The key whether you are buying OR selling is to be flexible, open, and creative!

 

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

 

Staging to Stay

15 Friday Jan 2016

Posted by in real estate

≈ 1 Comment

Tags

, , , , , , ,

Staging

As a Realtor, I help people sell and buy homes… but today I’m going to talk about staying IN your home.  Since most of you will sell or buy sometime in the next 5 to 7 years, today most of you are probably planning to stay where you are for the time being.  If you’re not, call me immediately and let’s sell your home!  But if you’re not planning to move in the very near future, what I’m telling you today will help you regardless.

When I go on a listing appointment with a potential seller, sometimes the house is perfect for selling.  Perfectly staged and ready to go.  You know the home – the one that looks like it belongs in House Beautiful or in the pages of Dwell.  But this is the exception rather than the rule.  If I can come in, get the listing agreement signed, have the pictures taken and get the listing in the system right away, that’s marvelous – but more often there’s work that needs to be done.  And often after the work is done, the seller will tell me that they wish they had done the work long before OR that they now don’t want to move!

SO let’s talk about the advice I’m going to give you when you go to SELL your home – if you do these things now you’ll be way ahead of the game and when you’re ready to really sell, you won’t have as much work to do; if you plan to stay, you’re going to LOVE your home all the more.

  1. CURB APPEAL. It’s everything when you go to sell – the first impression of your home is the most important.  So spend some money on landscaping and make sure you keep it up (this means an irrigation system if you don’t plan to water your plants yourself).  Don’t have too much “stuff” in the form of yard art and the like.  This will be a common theme as we move inside.  While we are out here, keep these in mind:
    1. A fresh coat of paint goes a long way in terms of curb appeal. A home’s exterior should be repainted every 7 years or so.
    2. A new welcome mat IS welcoming. And not that expensive.  Spring for a welcome mat you love.
    3. Consider adding seating somewhere in the front yard – some place welcoming, a place to rest, a place to enjoy the yard. You will meet a lot more neighbors if you hang out in your front yard!
    4. Along those same lines, if you have a front porch, use it! You’d be surprised how many people have awesome front porches and don’t use them.  For a small front porch, a small cafe table and chairs will do wonders.
  1. CLEAR THE CLUTTER. Moving inside, remember that most of us have way too many “things” for comfort.   Clearing your possessions also helps to clear your mind, as pointed out by that great NY Times bestseller “The Life Changing Magic of Tidying Up”.  Because so much of it is relevant to real estate, it’s worth mentioning here:
    1. Only keep things that are useful and which you love. If it’s in a box that you haven’t opened or unpacked in more than a year, chances are you never will and it needs to GO.  Same with clothes!  I recommend a rotation system.  When an item of clothing comes to the front of your closet, you either wear it or donate it.  After it’s worn, it goes to the back. This way you avoid the trap many fall into of wearing the same thing over and over and over and never wearing half of your closet.
    2. The general rule for closets is that they should be HALF full with NOTHING on the floor whatsoever and if there are shelves, nothing folded on the shelves. Instead, use baskets and put extra items in there.
    3. Visual clutter kills a sale, and it makes you feel unorganized and unfocused. The best thing to do is to CLEAR EVERYTHING off horizontal surfaces – that is, from shelves and bookcases and tabletops, then come back and put only a few items back.  Ideally, your home should feel a little sparse to you.  Believe me, you’ll get used to it and you’ll love it.
    4. Much of the psychological difficulty about getting rid of stuff, I find, is that people don’t want to WASTE things. But you don’t have to THROW THINGS AWAY.  Give them to Goodwill.  Make it a goal to go to Goodwill with a bag of items at least once every two weeks until you feel you have clutter under control.
    5. Clearing clutter includes FOOD. How many of the items in your pantry are EXPIRED?  I am guilty of this, and after my son-in-law pointed out a few expiration dates, I went to work clearing out pantry and fridge.  It feels marvelous!
  1. TAKE PICTURES. My stager, after she’s met with my sellers and given a list of things for them to do which includes enhancing curb appeal and clearing the clutter, recommends that they go around their home with a camera or their iPhone and take pictures of each room from multiple angles.  Do this!  Then go back and take a close look at the pictures you’ve taken.  There will be lots of things you don’t notice with your straight eyesight that will pop out in a picture.  There are many reasons for this, but among them that you are USED to seeing your own home.  Seeing your home through a camera lens gives you a new perspective and you’ll notice things you wouldn’t otherwise, like cords that add visual clutter.  Taking pictures will give you a whole new perspective.
  1. REPAIR LIST. This is less visible, but an important part of making your home wonderful for yourself!  Keep a list of all those “little” repairs that need to be done.  You know – the ones that you notice only at certain times but which always bother you when you notice them.  The door that sticks; the drawer that doesn’t close all the way; the dimmer switch that heats up too much; the wood rot on the exterior.  It’s well worth your investment to hire a handyman at least two times a year to take care of this stuff.  Most of them will charge you by the hour plus materials.  And while you’re at it you can have them change the lightbulbs you have trouble changing or install that new light fixture you’ve been eyeing at Home Depot.  If buyers see a stuck door or dripping faucet, they are going to wonder if the home is well cared for and will be looking for other “problems.”  You want them focused on what’s RIGHT with the house.  The same goes for you!

That’s just a start of things I suggest for “staging to stay”.  In a future blog post, I will cover renovations – how to plan renovations that will pay off when you go to sell, but will increase your enjoyment of your home in the interim.  And never hesitate to call me, your Realtor, for advice and counsel.

 

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne serves on the Committee that drafts and reviews the contracts utilized by all REALTORS in the State of Georgia. In addition, she is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

THE WEATHER TURNS COOL, BUT THESE ATLANTA NEIGHBORHOODS ARE HOT!

28 Wednesday Oct 2015

Posted by in real estate

≈ Leave a comment

Tags

, , , , , , , , , ,

Hot NeighborhoodsAtlanta has SO many great neighborhoods!  But here’s a quick take on what are some of our hottest (of the moment) neighborhoods and those that are HOT VALUE neighborhoods NOW, this Fall, 2015, in Atlanta.  Note the distinction.  When a neighborhood is “HOT” – i.e., very popular at the moment, oftentimes prices will rise rapidly as buyers bid against each other in their rush to move in.  A HOT VALUE neighborhood is one that is not yet “RED HOT” but which WILL be hot in the coming years, and so there are still bargains to be had.  Now, if you’re bidding in a HOT neighborhood and prices are rising, there is no need to fear overpaying as long as it’s a neighborhood that is likely to hold or increase in value in the coming years.  Usually a neighborhood is HOT either because of location, schools, or both; the location isn’t going to change and if the schools are good, residents always fight to KEEP them that way.

Don’t be concerned that I am leaving out your favorite HOT neighborhood – know that I’m not addressing CLASSICALLY HOT neighborhoods… I’m not addressing them in this particular blog post because they are always hot.  This would include Decatur zip 30030, Midtown, Va/Hi, Morningside, and many northern suburbs such as Alpharetta, Roswell, Johns Creek, and East Cobb in its great school districts.

And also know that there’s no way to address all the “hot” areas in one blog post – I’ll just touch on a few to whet your appetite, and I’ll cover different areas of town.

Let’s start in Ashford Park, just east of Peachtree Road – Ashford Park is HOT.  The elementary school is awesome and there’s lots of new construction.  While several years ago one could get a pretty decent home for $300,000 here, I just sold a teardown LOT for $500,000 with multiple offers in one day.

HOT VALUE near there is CHAMBLEE.  While Montgomery Elementary is not yet par with Ashford Park, it’s getting there, and the City of Chamblee is making great strides in developing retail areas.  THE ASSEMBLY huge mixed use development is going in where the old GM Plant used to be and that’s exciting.  Because it’s up and coming, there are still values to be had.

NOW, let’s go to the Beltline, which is of course driving values everywhere it touches.  We’ll start with Old Fourth Ward, O4W in local parlance, and its neighbors, Inman Park and Poncey Highland.  HOT because of the Beltline (and that’s a continuing theme – the Beltline has made many Atlanta neighborhoods “HOT” so it is important to know where the Beltline IS, where it will be, and where it’s going…. ).  Quick aside = the Beltline is a 22 mile bike/walk/run path being built in a huge Atlanta circle.  Only parts of it are complete, other parts are underway, and some sections may be years in the making. But the O4W portion is complete and with it O4W Park, Ponce City Market, Krog Street Market – the list of “cool” things that have come with it are legion.

HOT VALUE is south of there, in Reynoldstown, Edgewood, and East Atlanta.  There’s also Ormewood Park, nestled between Grant Park and E Atlanta on the Southside (Grant Park has been and continues to be a “hot” area).  The beltline goes right through this great neighborhood of old bungalows and great diversity.  There is section 8 housing a block from $700,000 homes.  There are still a lot of values to be had – I just sold a $250,000 adorable house one block from the Beltline.  The Beltline here is not yet finished, so prices haven’t risen SO high SO fast.

For more hot values, seek out Capitol View Manor, Mechanicsville, and Adair Park – neighborhoods to the west of the afore-mentioned neighborhoods.  These are nestled in west of I-75/85 and south of I-20, and the Beltline goes right beside and through them.

Let’s leave the Beltline for a minute and head down towards to the Airport to stop at The Manchester Arms in College Park for a meal.  Marvel at what College Park is becoming.  Because Woodward Academy is down there, some northern suburb dwellers have built weekday homes for one spouse and the kids to live in before they go back to the northern burbs for the weekend.  PORSCHE moving into the airport has meant even more wealth moving into the area.  College Park is hot; East Point just to the north of it is still a hot value neighborhood.

Back on the Beltline and moving North; HOT is BRANDON SCHOOL DISTRICT = you’ll pay a premium for great public schools in Atlanta, and Brandon is a good indicator of that.  One of my favorite neighborhoods is CHANNING VALLEY, where prices have risen 22% over PRE recession prices; it’s a small friendly diverse neighborhood in a great convenient spot.

HOT VALUE is West Midtown = Howell Station is an example.  It’s near BELLWOOD QUARRY, which saw thousands of zombies in the season premiere of Walking Dead.  Now that the zombies are gone, that park will be the crown jewel of the Beltline.  Because that area is still very industrial and the Atlanta Jail is nearby, prices are still low, but demand is rising.

And finally, up North to just outside the Perimeter.  Smyrna west of 285, just outside Vinings, the area nicknamed “Smynings” is hot but there are also still a lot of value priced properties.  With the new Braves Stadium going in, it’s becoming even more desirable as a place that will be close to the action and the new development; and yet far enough west that residents can still get places without running too much into Braves traffic.

Again, these are just a FEW of the “hot” areas that I am seeing.  Please email me YOUR favorites so that I can feature them in a future blogpost!

 Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne serves on the Committee that drafts and reviews the contracts utilized by all REALTORS in the State of Georgia. In addition, she is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

Frankly, My Dear… Antebellum is Making a Comeback

23 Wednesday Jan 2013

Posted by in real estate

≈ Leave a comment

Tags

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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.

DSC_3705DSC_3622

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?

DSC_3567_68_69_70DSC_3606_7_8_9

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.

DSC_3438_39_40_41

510 Londonberry - KitchenDSC_3442_3_4_5

DSC_3490_1_2_3

DSC_3495_6_7_8DSC_3587_88_89_90

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.

DSC_3409_10_11_12

DSC_3405_6_7_8DSC_3355_6_7_8

DSC_3524_5_6_7DSC_3528_29_30_31

IN AND OUT OF THE CLOSET

08 Wednesday Aug 2012

Posted by in real estate

≈ Leave a comment

Tags

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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…..

DO YOU WANT CONTRACTORS OR CASH? – A look at money in lieu of repairs

03 Friday Aug 2012

Posted by in real estate

≈ Leave a comment

Tags

, , , , , , , , , , , , , , ,

Image

During the due diligence period, the buyer does an inspection and asks for repairs.  The seller may prefer to give money, and not want to actually do the repairs because (1) they fear that the buyer will not be happy with the repairs and will ask the seller to redo them; (2) they may not have sufficient time to schedule repairs, pack, and move; (3) they simply do not want to have to take the time and effort to have them done.

The buyer may also prefer that the seller give money in lieu of repairs because (1) the buyer can oversee the repairs and be sure that they are to the buyer’s liking; (2) the buyer may want to do other modifications related to the trade at the same time and the money can simply go towards the larger bill; (3) the buyer may find it worthwhile to postpone the repair and use the money now.

In the instance where both sides agree to money in lieu of repairs, the buyer has several choices: he/she can reduce the purchase price by the agreed-upon amount, or have that amount added to seller-paid closing costs. Previously, we could have checks written at closing to third party vendors for the repairs to be performed later, but with the tightened mortgage restrictions that is generally not possible.  Which is preferable – reducing the sales price or increasing the closing costs?  Here are the pros and cons:

  • Either way, the buyer brings less cash to closing.
  • The lender typically will limit the amount of closing costs the seller can pay on behalf of the buyer.  For most loans, it’s three percent of the purchase price.  So just be sure that if you’re increasing the closing costs paid by the seller, you’re not running afoul of this limit.
  • If you decrease the purchase price, the purchase price is reflected in the tax records and future buyers will see that you paid less for the place. The plus side is that the tax commissioner also looks at the purchase price in determining taxable value, so a lower purchase price may result in a lower      property tax burden.

Either way, be sure your lender knows of the change in the contract.  Any changes – particularly those that change the purchase price of the property – must go through underwriting and you want to be sure there is plenty of time before closing to take that step.

Notes on Negotiating

26 Thursday Apr 2012

Posted by in real estate

≈ Leave a comment

Tags

, , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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!

Buying a Short Sale can be a Tall Order

09 Friday Mar 2012

Posted by in real estate

≈ 1 Comment

Tags

, , , , , , , , , , , , , ,

A short sale is usually anything but short.  Sort of like the attorney’s “legal brief” which is never brief, a short sale is very rarely “short”.  The term refers to the situation when the seller OWES more on the property than the property is worth, and is attempting to persuade the lender to take less than is owed on the property in full satisfaction of the loan.  You have probably heard the term “underwater” – a short sale seller is underwater on the house (has borrowed more against it than is supported by its current market value) and is trying to sell the home without having to cough up the difference at closing. 

A short sale can take MONTHS and MONTHS (although I HAVE had one approved in two weeks – that is very unusual).  The lender generally doesn’t WANT to take less than is owed, as you might imagine.  Therefore it’s somewhat of a fight, and if/when there are multiple lenders and lienholders (as there often are) it is often next to impossible to get them all to agree.  We agents sometimes say that it’s the THIRD short sale buyer who actually gets the house, meaning that most buyers who make an offer on a short sale get tired of waiting for the approval and just go on and buy something else.  Of course, the short sale may or may not EVER happen.  The seller may just stay and pay – or it may end up as a foreclosure.

Even when the short sale lender or lenders approve the short sale, they will sometimes reserve the right to disapprove the short sale at any time before closing – which poses another problem; it could fall through at the last minute.  In fact, you can be sitting at the closing table when the word comes that the lender has decided to withdraw approval and foreclose instead.

Other potential snafus are that the seller usually wants a release from any and all liability with respect to the loan, while the short sale lender(s) will often require that the seller sign a personal note back to the lender for the remainder owed.  Another problem I have seen is when the seller does not realize that they may be TAXED on the forgiveness of debt (why the seller’s agent did not bring up this issue to the seller prior to getting a contract is beyond me, but it happens).  The IRS considers forgiveness of debt taxable income, and the seller will be responsible for paying that tax.  A side note – if you are the seller, please consult your accountant on this one – because if it is your personal residence you are selling, the forgiveness may be excludable, much as GAIN from the sale is excludable if you have lived in the house as your main residence for two of the past five years.

In other words, short sales are a PAIN, but you CAN get a great deal.  It’s best to look for PREAPPROVED short sales where only one lender is involved.  Pre-approved means the lender has already agreed to accept a short pay-off, and these deals are much more likely to go through.  In any event, I usually counsel buyers to go ahead and make an offer on a short sale if that is the property that they really like, but the to KEEP LOOKING.  You can always terminate your short sale offer if you find something better in the interim. 

We agents are all ready for the day when regular sales again outnumber foreclosures and short sales, but I am also glad to see those sales moving through the system.  The quicker we turn over the troubled properties to buyers who can handle the payments, the faster the housing market will recover.

MY HOUSE IS UNDER CONTRACT – WHAT HAPPENS NOW?

22 Wednesday Feb 2012

Posted by in real estate

≈ 1 Comment

Tags

, , , , , , , , , , , , , ,

CONGRATULATIONS!  You have a contract on your home.  You have a willing and able buyer and you have come to terms on the sale of the home.  What happens between now and closing?

Unless the buyer is purchasing “as is” (usually not the case) the buyer has a “DUE DILIGENCE PERIOD” – typically somewhere between 7 and 14 days.  During that time the buyer can terminate the contract for any reason or no reason at all.  The buyer can simply send a notice of termination and the deal is over – you are left with an unsold house and a search for the next buyer.

But do not worry – it does not often happen like that.  Instead, the buyer will have an INSPECTION – by a certified home inspector.  The inspector’s job is to find anything and everything that is wrong with the place, so don’t be surprised or offended.  Also, the standard inspection report is about 30 pages long – so don’t panic about that either.  It contains a lot of OTHER information in addition to any “problems” the inspector has found with your home.

After the inspection, the buyer will provide the inspection report to you and ask you to fix items that the inspector says need to be fixed.  They might ask for EVERYTHING, so be prepared for that – but more often the buyer will pick what is most important to THEM.  You can either agree to fix these items, or you can negotiate a dollar amount to compensate for the things you don’t want to fix.  You don’t have to agree to do ANYTHING, but it’s best to be as reasonable as you can – because again, during this period, the buyer is able to TERMINATE the contract for any reason or no reason at all. 

Once the due diligence period ends, the buyer cannot back out of the contract (except under a different, applicable contingency – financing or appraisal, for instance).  If they back out prior to closing and no other contingency gets them out of the contract, they lose their earnest money.  You, the Seller, can then claim that earnest money OR you can sue for damages.  But rest assured – a vast majority of the time buyers do NOT back out once the due diligence expires.

There may also be the aforementioned FINANCING and/or APPRAISAL contingency associated with the contract.  The financing contingency gives the buyer an OUT from the contract if they are unable to obtain financing.  The period can be anywhere from 7 days to 30 days.  As a seller, you have likely insisted on a prequalification letter from a lender – so you know the buyer at least HAS talked to a lender – and have negotiated as short a period as possible. 

The appraisal contingency is sometimes a longer contingency.  Sellers attempt to negotiate as short a period as possible, of course, but the problem is that many lenders are ordering multiple appraisals – sometimes even the day prior to closing.  So imagine the buyer’s dilemma.  They think that the property has appraised and there’s no problem – and then the lender orders ANOTHER appraisal and it comes in low.  As a seller, all we can do is keep in contact with the buyer’s agent and make sure that at least the first appraisal is ordered in a timely manner.  There’s no way to know in advance if the lender is going to order multiple appraisals.  It is not the norm, but it can and does happen.

Say the property does NOT appraise for the contract price – it appraises for less.  In that instance, if we are still within the appraisal contingency period, the buyer can (and will) ask the seller to sell the property for the lower price.  If the seller refuses, the buyer can walk from the contract.  But if the seller AGREES to sell for the lower price, the buyer is bound (unless another contingency applies).  One sticky issue here can be when the seller has agreed to pay for some of the buyer’s closing costs.  Say the contract is for $100,000, seller paying $5,000 of the buyer’s closing costs, and the appraisal comes in at $95,000.  Well, that’s what the buyer is REALLY paying, right?  Because they are effectively getting $5,000 back.  STILL, the buyer has the right to insist that the seller lower the purchase price AND keep the closing costs in.

What happens NOW?!?!  All contingency periods are up.  We are waiting for closing.  Time to have all your utilities disconnected as of the day of closing, except for water.  It is common to leave water on for three days after closing.  The reason for this is that the buyer must present a closing statement to get water service – and, of course, they won’t have the statement until the day of closing.   In addition to scheduling the disconnection of utilities, do not forget to put in a change of address with the postal service – www.usps.gov – and notify your credit card companies, magazine subscriptions, and the like of your new address.

What can you leave in the place?  Best to leave nothing except what was agreed to in the contract (with the exception of any manuals for left appliances or the neighborhood directory).  If you want to leave anything else, or think the buyer might want you to, get your agent to get the okay from the buyer.  A typical issue here is that you cannot leave old paint cans unless the buyer says it is okay, for instance.  (Paint is not always easy to dispose of).  Then, hire someone to do one last, final, deep cleaning.  All that is required under the contract (unless there is a special stipulation) is that the home be left “broom clean” – floors and carpets swept, horizontal surfaces wiped down, ovens and fireplaces cleaned, etc.  But you don’t want to have an issue the day of closing over dirt; simpler to pay someone to do one last sweep.

Then, to closing it is!  Your job at that point is to bring all keys and remotes to the closing table.  Most of the documents will be signed by the buyer – you will have only a few.  You can give the buyer a forwarding address and/or email if you so choose – but that is by no means required.  You can always ask them to contact your agent if mail arrives for you after closing.  If you have gain from the transaction, you will be given a check at the closing table or you can have it wired directly to an account (this can be arranged ahead of time).

And you are done!!  CONGRATULATIONS!!!  You have sold your home in a difficult market!