September 15, 2014

Real Estate Tips: Convincing Sellers to Lower the Price

Filed under: Real Estate — Chuck @ 11:00 am

There are fewer things in the real estate business that are more frustrating than working with a seller who has a perfectly good listing but a price that is unreasonably high. This time of year, with the busiest months for homes sales fading quickly into the rearview mirror, it is more urgent than ever to convince sellers to be smart about pricing.

Here are three strategies to help you do that in order to get better sales results, prove your value to sellers, and avoid losing clients who blame you when their house languishes on the market for months and months.

#1 Schedule Price Resets When Taking the Listing

• Before you ever accept a listing, make sure it is reasonably priced. Otherwise you can work hard and never succeed at closing a sale and earning a commission, because buyers will just go elsewhere in search of a comparable home at a better price.

• That can damage your reputation and brand and cost you future business. So don’t fool yourself into thinking that getting the listing at any cost is a measure of success. Realtors who accept overpriced listings actually hurt themselves and do a disservice to the seller.

• If the seller wants to fish for a higher price, fine. But take out a calendar and mark two or three week intervals. Get the seller to agree that if the home has not gotten any serious offers by those benchmarks, they will lower the price by a certain amount.

• That prepares them for the eventuality that they may need to lower it to attract a qualified buyer. It also protects you from being accused by the seller of not doing your job, because you already informed them of this strategy and got their agreement ahead of time

#2 Clearly Convey the Cost of Overpricing the Property

• You also have an obligation to be straightforward with sellers who are misinformed about pricing or are just too emotionally or psychologically attached to getting a certain price.

• Print out good “comps” and show them data on recently closed homes that are similar to theirs. Educate them about the reasons why pricing is about market dynamics, and show them the range of prices – from low, to medium, to high- that homes like theirs are selling for right now.

• But this time of year you should take it a step further by also compiling data, based on the last 12 to 24 months of utility bills, to show them how much extra it will cost them to heat their home this winter. Add to that the cost of taxes, insurance, and maintenance. That gives them a more realistic picture of the net cost of holding out for a higher price.

• If they face expenses totaling $8,000 just because the home is priced too high and won’t sell over the sluggish winter season, then explain the logic. By lowering their asking price $5,000 to help facilitate a quick sale, for example, they actually save $3,000.

#3 Strike a Mutually Beneficial Bargain

• Discounting your commission should be a last resort. But sometimes it is the smartest option if you find yourself stuck with an overpriced listing that is more work than it is worth. Selling and putting it behind lets you move on and focus on new listings, plus the buyer and seller will both be happy and recommend you to their friends and colleagues.

• Nobody likes to compromise on their paycheck, but if lowering your share of the commission helps to close the sale successfully then you have cut your losses. You are free to invest in a new, better-structured deal with a more compliant and financially savvy home seller.

• Keep in mind, though, that the only way to make this last-resort tactic worthwhile is if you learn from it and don’t repeat the same mistake in the future. Then you can chalk it up to tuition for lessons learned in the business that will pay off for years to come.

• If you wind up with a difficult listing or client, it almost always comes down to pricing. When you find yourself in that situation go back to step one. Prepare the seller before accepting the listing with education and insight, so that they do not make the blunder of pricing their home out of the market.

Home Inspection Issues: Bathroom ventilation or mildew problems.

Filed under: Property Inspection — Chuck @ 10:57 am

Although it may seem like a minor issue, lack of proper ventilation in any of the bathrooms in a home can lead to more serious problems. So you may find that the inspector you hire to evaluate the health and safety of a home makes recommendations for upgrades or repairs related to bathroom venting.

Potential Problems & Red Flags
• Almost all building codes call for ventilation in the form of a window or a vent fan in every bathroom, to remove moisture from the room. Without adequate ventilation that moisture, which is produced, for example, every time you take a shower, usually will not dry out sufficiently.

• The presence of moisture in the enclosed space encourages the growth of mildew and mold while it simultaneously leads to the premature deterioration of building materials in the floor, ceiling, and walls of the bathroom.

• Oftentimes there will be a vent, but it will either be inoperable or it will only vent the air into the ceiling or wall, not all the way outdoors. That doesn’t solve the problem of trapped moisture, but simply concentrates it in the area behind the vent fan.

• Another type of ventilation takes odors away from the waste pipe in the bathroom that is connected to the toilet. These pipes typically extend straight up through the roof to quietly remove foul odors, but if the vent pipe is installed too far away from the toilet or at the wrong angle of incline then it may not work as it should.

• Other issues that can contribute to mildew in bathrooms are the use of latex caulk and the wrong type of backing board behind bathroom tiles. Only silicone caulk should be used in a bathroom, because it resists the growth of mold of mildew which can and will grow on latex caulk.

• Tiles should ideally be attached to a type of backing board that is reinforced with concrete. This kind of “hardy board” or “cement board” helps reduce the build-up of mildew, whereas using ordinary sheetrock, plywood, or other inappropriate materials may allow for unwanted mildew as well as overall structural deterioration.
What to Do Next
• Review the inspection report. If there are recommendations for repairs or for a contractor to do a closer evaluation regarding issues the inspector observed in a bathroom, pay close attention to those. If you have questions, talk to the inspector to get clarification.

• Depending upon what kinds of issues were raised in the report, you should then contact the appropriate kind of qualified contractor and have them give you an estimate for remedying the situation.

• In some cases, if the problems are particularly serious, your inspector may recommend that you have a specially trained environmental inspector come to the home and test for the presence of toxic mold.

• There are molds that can grow in bathrooms that will make you sick if you breathe them, and some are even potentially lethal. So have a professional do the proper tests to ensure your health and well being.
After Receiving Repair Estimates
• If the repairs are relatively minor and only involve, for example, replacing latex caulk with silicone caulk, that could possibly be a do-it-yourself project. But be sure you know what you’re doing, otherwise if your repair is inadequate it will simply complicate things and could jeopardize the sale of your home with further delays and negotiations.

• When selling a home you can refuse to do the repairs, which may cause the sale to fall apart when the potential buyer backs out of the deal. Or you can pay to have the repairs done to the buyer’s satisfaction and complete the transaction.

• The third option is to negotiate with the buyer regarding the cost of repairs and who will pay for them. Then, for example, you might deduct those costs from the sales price. With the third option the buyer usually agrees to do the repairs themselves after they buy the home. In that case the new buyer may also want to hire a home inspector to check the work after it is done and ensure that it meets health, safety, and professional construction and repair standards.

Homeowner Tips: How to Prepare Your Home for a High Winds

Filed under: Home Owner Tips — Chuck @ 10:44 am

School is back in session and the summer holidays are behind us, but many homeowners are still experiencing hurricane season. If you live along the Atlantic seaboard that could mean fierce storms, flooding, and potentially dangerous weather brining everything from structural damage and power outages to possible injuries or deaths. But even if you aren’t in a typical hurricane-prone region, September can still invite plenty of high winds, gale-force gusts, and lots of rain.

Here are some helpful tips on how to prepare for that kind of weather so that you can ride it out safely and with minimal loss or damage to your property.

Police the Yard
Always keep trees trimmed so that there is no dead or rotten wood that become dislodged in high winds. Start by bringing small, loose items like bird feeders, sports and recreation equipment, flower pots, and landscaping tools indoors and storing them in a secure place like a basement or garage. But take special precautions with propane tanks. They are not safe for indoor storage, but you also don’t want it flying around outside.

Propane Gas
The best compromise is to store propane outside but secure it by staking or tying it down. If you have a small outdoor tool shed or a solid retaining wall, place it against that structure and secure it.If your house uses gas, learn how to turn off the main valve going to the house, because that may be critical in the event of an emergency.

Storm Windows
If you have storm windows they will have “weep holes” to allow any water trapped inside them to drain out safely. But those small holes can get clogged with dirt and debris, so go around the house with a piece of wire or other thin object that you can insert into those holes to clear them out and ensure they are operable.

Covering Windows with Plywood
If you are in the path of a hurricane you may want to cover windows with sheets of plywood – unless your home has old-fashioned storm shutters. You need to use the proper kinds of screws though, otherwise they won’t hold in high winds. A smart option is to use Plylox clips, which are fasteners especially designed for installing plywood over windows in an emergency. You can find them at most home improvement stores, and their advantage is that they won’t damage your siding or walls the way it will if you drill screws into the side of your house.

Sandbagging
You may have doorways or garage doors that are susceptible to flooding from high water, and the same may be true for low-level basement windows. In that case you can help to encourage the water to flow away from your home by staking lengths of lumber turned on their side, to create a kind of dam. You can reinforce this simple structure with think plastic drop cloth or even by wrapping it in plastic bags. For a more robust defense, buy some plastic bags of masonry sand at a home improvement store and stack those. To save money you can even make your own sand bags out of heavy-duty trash bags that are secured where they tie with duct tape to ensure a watertight seal.

Power Outages
Every home should have a portable, battery-powered weather alert radio, which will continue to broadcast emergency weather updates even if the power grid goes down. If your electrical power fails, be sure that that all of your appliances – especially stoves, ovens, space heaters, coffee makers, and toasters – are turned to “off.” Otherwise when the power comes back on they will too, even if you are not at home. That could create a fire hazard.

Check the Roof and Gutter System
Before it is too late, check your roof and gutters. You want to patch or replace any loose, curling, or missing roof shingles, for example, and ensure that flashing around vents and dormers is intact and properly sealed. Similarly, check to make sure that the gutters are supported and secure, not sagging or bent out of alignment. If they are clogged, clean them. Otherwise they won’t do their job of diverting water away from your home.