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We've got an offer!

6/17/2014

Your Lake Gaston house has been on the market and your listing agent has just called and said they have an offer. What do you do?

First listen to (your agent may read you the offer over the phone) or read the entire offer. Terms can make a difference. Do these buyers want to close in your time frame? Have they put down a reasonable amount of earnest money to show they’re serious? Is the interest rate in their financing contingency slightly above the current market? And lastly, is the price offered at the current market value?

You can counter on any or all of the terms. But keep in mind, that once you counter, you’ve voided their offer. If they turn down your counter offer and you say “Well, okay, we’ll take your first offer” the buyers are completely within their rights to say “No, you voided that offer when you countered. We’re no longer interested.”

Your agent should discuss each of the terms with you. These buyers want to close in 30 days. Can you pack up and be out by then? If at all possible, try to go along with them on this. Lake Gaston buyers are notoriously eager to get into their new lake houses, particularly as warm weather approaches.

As a practical matter, once the listing agent marks your home “pending” (for contract pending) on the multiple listing system, most agent will stop showing it. The earnest money is to show that the buyers are serious. Your listing agent will tell you if she thinks the amount they put down is adequate or if you should ask that it be increased. Fortunately, it’s rare at Lake Gaston for a buyer to back out regardless of the amount of earnest money they put down.

The financing contingency basically says “If we can’t get this size loan on these terms, the deal’s off.” Of course mortgage rates vary day to day. Thus if current 30 year fixed rates are 6.0%, you’d like to see the contingent rate slightly above this in case rates increase while they’re working with their mortgage lender. But again, it’s rare at Lake Gaston for a buyer to back out because interest rates have risen slightly.

And now, the price offered. In some markets, the buyer’s first offer is frequently far below the asking price. That’s not the norm at Lake Gaston, but if it is the case with your offer, don’t take it personally, simply discuss with your agent what would be a reasonable counter offer in light of how long your house has been on the market, the number of buyers who’ve looked at it, and any other offers you’ve had. Remember, the buyer doesn’t know you, so don’t be insulted by a low offer. As a smart agent once said “This offer is better than the one we got yesterday.” “We didn’t get an offer yesterday.” “That’s my point.”

Now, you’ve accepted the initial offer, or countered, or maybe even re-countered, but at last you have a signed contract! Congratulations! Now, on to "Our House is Under Contract!"

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Our House hasn’t Sold!

6/17/2014

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Your Lake Gaston house has been on the market for several months and hasn’t sold. What should you do?

Hopefully you’ve been talking with your listing agent every month to get her feedback, so you already have a good idea why it hasn’t sold. If not, now’s the time to ask “My house has been listed for sale for 6 months and hasn’t sold. What do I need to do to get it sold?”

This is the time to listen, so please resist the temptation to tell your agent why you think it hasn’t sold “I think it’s priced right, maybe it’s because gasoline has gotten so expensive.” Simply ask the question in a straightforward manner and listen to her answer. I can almost guarantee you she knows why it hasn’t sold.

It’s hard for a listing agent to say “You remember when you listed your home, I suggested you list it for $424,900 and take any offer above $410,000. I believe you felt the home was worth more than that, so we listed it for $449,900. Unfortunately, it appears the market is telling us we’ve overpriced it in comparison to other homes on Lake Gaston and buyers are purchasing them instead. I believe we need to reduce the price to $424,900.”

In an active market, overpricing is probably the cause of a home not selling in 80% of the cases.

In perhaps 20% of the cases, the home is properly priced, but doesn’t show well.

There was a house in Myrick Estates that looked fine from the outside and I was surprised it didn’t sell, although I had never seen the inside. Then a couple showed up that seemed like a good match for the house, so I took them to see it.

As the sellers were leaving, they said “Open the curtains if you like. We leave them closed to save on the air conditioning.” The problem was, by the time I got the curtains open, the buyers had walked into another room. Making matters worse, the house was filled from top to bottom with a doll collection. The buyers said somewhat disappointedly, “It’s too bad the rooms are so small.” I replied, “Actually, I think they’re fairly large. Why don’t you walk down to the water and I’ll go get my tape measure.” While they were outside, I opened every curtain, turned on every light, and lowered the thermostat 4 degrees.

The couple ended up buying the house, but at a price I really thought was below its market value. And I couldn’t help but wonder how many earlier buyers had passed it by just because it didn’t show well.

In that rare case where your listing agent doesn’t seem to know why your house hasn’t sold, you’ll have to make a decision as whether to switch to another firm when your listing contract expires or to talk with the broker in charge of the firm you’re with (your contract is actually with the firm, not the individual agent) and ask that another agent be assigned to handle your house.

In any case, hope you get an offer soon. Now, on to "We've got an Offer!"

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We’ve listed our House for Sale!

6/17/2014

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You’ve listed your house for sale with a Lake Gaston real estate firm. Now what?

First, agree with your agent’s request that he be allowed to put a lockbox on your home. Buyers at Lake Gaston are usually here only for the day, and if the showing agent has to go out of his way to pick up a key or coordinate with the seller being there, he may simply show another home instead.

Then, and I know this is hard, but agree that when an agent calls to ask if he can show your home, the listing company can say “That’ll be fine, go right on.” The listing company will then call your home and tell you, or leave a message on your answering machine, “Lake Country Realty will be showing your house in about 20 minutes”.

You’ll get far more showing with this procedure than with “Have them wait until 3:00pm to show my house.” Lake Gaston has 350 miles of shoreline and at 3:00pm the showing agent may be on the far side of the Lake or even worse, the buyers may have said, “Now we have to leave at 2:30pm”.

Since agents can show your home anytime between 9:00am and 5:00pm, whenever you leave home during those hours, you should leave it ready to be shown. In addition to being tidy, have all the curtains open, the air conditioning/heat at the normal temperature, and the water left on in case the buyers need to use the bathroom.

Also leave the sign-in register on the kitchen counter where it can be easily seen so the showing agent can sign-in and get extra spec sheets if he needs them. And please, once you list your house for sale, no smoking in it. To the non-smoker, a smoked in house seems dirty.

Now you’re at home and you’ve gotten a call that an agent and buyer will be there in 20 minutes. Of course you’ll open all the curtains and start tidying up. But when the doorbell rings, answer it, welcome them, say “take all the time you like”, and go for a drive or a long walk. It’s very hard for an agent and buyer to have the kind of conversation they need to have if you’re in the house. “I couldn’t live with this master bedroom carpeting.” “Yes, it looks like something I’d pick out without my wife. Good carpeting runs about $3.00 a square foot installed, so you could replace it for about $700.”

We agents at Lake Gaston normally don’t call the listing agent after each showing, so don’t be too hard on your agent if you don’t get much feedback. I think the best agreement is to ask your agent to call you on the first of every month and give you an overview. Does he still feel the price is right, does the market seem to be improving or declining, is buying traffic in general good, bad or average; in summary, is there anything we should change?

If not, simply keep doing the same thing and try to be patient. Now, on to "Our House hasn't Sold!"

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How do we Price our House?

6/17/2014

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Naturally every seller wants to know “How much is my house worth?”

When I was in the financial field, people would ask me a question, then usually listen pretty carefully to my answer. Only a few ever said something like “I don’t think you’re right. My uncle, the dentist, said never to buy stocks.”

One of the challenges of real estate is sellers taking “non-expert” advice on what to do. The following are statements prospective sellers have made to me over the years:

“$300,000? My brother said my home is worth at least $425,000.” “What does your brother do?” “He’s a truck driver in Florida.”

“No, no, you’re way low. My uncle said my home is worth at least $50,000 more than that.” “When did your uncle last see your home?” (It was quite run down) “He’s never been to Lake Gaston.”

The key thing, and almost the only thing, that matters in pricing real estate is what similar homes are currently selling for in the local market. The four key words are “similar”, “currently”, “selling”, and “local”.

Similar means if you’re selling your 2 bedroom, 1 bath home that’s on a steep lot and that needs a lot of tender loving care, it’s pretty irrelevant what the Smith’s 4 bedroom, 3 bath home that’s on a flat lot and in immaculate condition sold for. Currently means recently, roughly in the last 3 months. Markets change, and since we’re selling in the current market, we want to know what similar homes sold for recently.

Selling meaning what it actually sold for, not what its list price was. I can’t tell you how many times someone has said to me “Well, the Smith’s house sold for $480,000” but when I searched the records, it turned out it sold for $420,000. Local means in our case, of course, around Lake Gaston. There’s an old saying that’s true that all real estate is local. Thus it’s irrelevant what houses on Smith Mountain Lake (a higher priced lake) or Kerr Lake (a lower priced lake) sell for.

A good realtor will find 3 or so recent sales of similar house to help price yours. And keep in mind, there’s no perfect house. We recently listed a 4,900 square foot home for $990,000 that was immaculately maintained. Looking at it from the outside, I though “The perfect house!” But, it took 8 months to sell in a strong market. Why? It had a lot of small rooms rather than the fewer, but bigger rooms that Lake Gaston buyers prefer.

Your Good Realtor will candidly tell you the pluses (easy to do) and minuses (hard to do) of your house. Beware of the agent who only tells you what you want to hear, pleasant as it is in the short run.

She will then take the 3 or so comparable homes and adjust each one financially so it’s as similar to yours as possible. “This house sold for $380,000, but it doesn’t have a 2 car attached garage like yours. So we’ll add $29,000 to its selling price to get a financially comparable price of $409,000.”

Then, Good Realtor will summarize along the lines of, “I would suggest you list your house at $424,900 and take any price above $410,000. Right now, properly priced waterfront homes are selling on the average in around 4 months.”

Now that you know how to price your home, on to "We’ve Listed our House for Sale!"

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Getting Our House Ready to Sell

6/14/2014

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You’ve enjoyed it, but now it’s time to sell your home on Lake Gaston. Like everyone else, you want to sell it for the highest price in the least amount of time. Here’s how.

Unlike in some places, at Lake Gaston buyers are turned off by fixer uppers. Thus, you’re far better off fixing every defect and raising the price rather than selling “as is” at a lower price. So, step back and walk through your home as if you were a very critical, nitpicking buyer. Then have every item repaired in a professional manner. Thus, if you’re not a good carpenter, you should hire one.

Now you need to stage the house to make a good first impression. And it’s really true, you only get one chance to make a good first impression, so declutter, declutter, declutter. And for hardheads like me, decluttering means getting rid of, not moving around. For kitchen and bathroom counters, the ideal one is empty or only has one item on it. If necessary, rent an off site storage building and move your excess items there. It’ll be the best $45 a month you’ll spend.

There’s no bigger bang for the buck than presenting a slightly under furnished, under accessorized home to its next owner. You’ll be surprised how much bigger and better your rooms look with less in them.

Next add a few cute lake accessories - bedspreads with lake motifs, a few cute lake pictures on the wall, a carved blue heron on the hearth. When we sold our first lake house for several hundred thousand dollars, we spent about $400 on lake accessories. What did the buyers mention? “I just love the atmosphere of this lake house.” So spend the $400.

Then, spend $20 and buy all white plastic clothes hangers for your closets. At a maximum, your closets (yes, the buyers will look in them) should be no more than 80% full.

With your lakeside windows, consider taking the curtains down completely or just having a ruffle or a valance. Buyers want their Lake houses light and airy – the more the better.

Now, the hard part – depersonalize. Pictures of my family are everywhere, but when I get my home ready for sale, I thin down to one per room. Also, put away any extensive collections - plates, dolls, etc. It’s hard for a buyer to visualize your home as theirs if your highly personalized items are everywhere.

Now, clean beyond clean. You know how some homes are just shiny clean? This is the way you want yours. If, like me, that’s not within your capability, hire the best maid you can.

Then, leave the curtains wide open, the air conditioning/heat at the normal temperature, and the water on so the buyers can use the bathroom. The extra energy cost will be worth it to avoid the worst selling scenario - while the realtor’s opening the curtains in your hot, dark house, the buyer says, “I don’t know, this home just doesn’t hit me. Let’s go look at another one.”

Lastly, a final touch. Fresh flowers are unbeatable if you’re able to keep them changed. If not, a few potted plants that you can persuade your neighbor to water if you’re not able to come at least once a week.

Now, on to "How do We Price our House?"

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We've got an offer!

Our House hasn’t Sold!

We’ve listed our House for Sale!

How do we Price our House?

Getting Our House Ready to Sell

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