Tuesday, March 11, 2014

Getting Your Home Ready to Sell

You’ve decided to put your house up for sale but you know that it is not in the best shape to get maximum value. Do you sell the house as is? Or should you make repairs first? Figuring this out will have a big effect on the price of your property.

Here are a few questions to ask yourself that can help you clarify this issue:

How extensive is the house’s damage?

There are two main categories of damage when selling your home. The first type of damage is cosmetic. Cosmetic issues are fixes that do not affect the structure or the overall livability of the property, but it does affect its appearance and is an annoyance to those living in the home. Such cosmetic damage includes leaking faucets, torn wallpaper, dirty areas such as the bathtub or sink, or dilapidated fencing or worn exterior paint. Even easily fixable small structural defects may fall into this category such as missing shingles or holes in the wall. The important thing to note is that they are relatively inexpensive to fix and if these are the only repair problems, a homeowner is better off fixing these issues instead of selling as is. Your objective, after all, is to maximize the value of your home.

The second, and more severe, type of damage is structural. This type of damage can sometimes be so severe that the house is unlivable. Things like broken pipes, electrical wiring issues, HVAC unusable, foundation problems and water issues will all fit into this category. Any one of these things can result in from hundreds, to many thousands, of dollars to fix and it will have a huge impact on the price of the house.

When should you do the property repair?

When a house is generally in good condition but requires cosmetic repairs to spruce it up, a homeowner will receive the greatest return by fixing those issues. If such issues such as a dirty bathtub or a broken fixture are left un-repaired, home buyers will assume that the homeowner has not cared for the property and there could be larger, hidden structural problems that are not necessarily within sight. During the negotiation process, the buyer will point to these blemishes in order to bring down the price, thinking about the cost of these repairs as well as the time and labor to do them. Thus, it is better if the homeowner does the repairs in order to show a pristine home that is move-in ready since it will command a greater price among buyers. Those repairs also include exterior landscaping. If your property is overgrown with shrubs that hide the elevation of your home, have them trimmed to open up the view.  A buyers first impression is very important in sales success.

In some cases it is still best to fix a structural problem before you list the house but that will depend on a few factors. The first one is who is your ideal buyer?  If you are going after buyers that will only have the money to make a down payment they are not going to be able to afford to fix up the house after they buy.  If they have to make repairs like these they are probably going to look elsewhere for another house that is move-in-ready.  These types of buyers will like having a move-in-ready house because they don't have to acquire additional funding to repair any defects with the house. Second, most buyers do not know the cost of repairs and will normally overestimate the cost of those repairs.  If the damage will cost you less to repair than what a buyer is willing to spend then go ahead and repair it.  For example, if you have a gas water heater problem you are probably going to overwhelm a buyer that is looking at your property and knows nothing about fixing a gas water heater system.

When should you sell it “as is”?

You either have so much damage that you cannot get a good return on your investment or you just need to sell your house quickly.  It is better to sell the house as is because repairing the house will take time that you don't have.  You should have a licensed home inspector analyze your home and look for defects so they give you the cost to repair the damage to the house. If you need to sell your home quickly the best thing to do is find one of the companies that buy houses or a real estate investor to see if you can make a deal with them.  If you are willing to take a lower price than what the market will bear, if you do the repairs, these investors may be the way to go or find a buyer who is OK with doing repairs after buying at a bargain price.

Whatever direction you choose to go with repairs, just remember that the most desirable homes are those that are updated and move in ready. Good luck selling your home.

Sunday, March 2, 2014

What Don’t You Know About Selling Your Home?

You want to handle selling a house on your own, but as soon as a difficult question comes
 your way, you realize how much you don’t know.
Here are examples of things that could arise when trying to sell your home. Do you know…
·   Whether you have to disclose that your roof leaked, if you’ve fixed it?
·    How a termination option works?
·    How to determine the highest price for your home without overpricing it?
·    If there’s a time limit for responding to a buyer’s offer?
·  Whether you must respond to buyers’ offers in a particular order?
·    How to know if a prospective buyer can actually qualify for a loan to purchase your home?
·    Who gets to choose the title company?
·     How to handle the sale if the buyer is making it contingent on the sale of her existing home?
·     Whether the refrigerator, drapes, wall-mounted TV, and chandelier are considered part of the sale?
·     What to do if the buyer proposes an amendment to the contract you already agreed upon?
·     Whether you can back out of the contract if a better offer comes along?
·     When you have to get a new survey and who pays it?
·     What to do if the survey shows that your neighbor’s fence is on your property?
·     What happens if an inspection turns up termite damage?

   The list goes on and on. If you've decided to list your home as a "For Sale by Owner", you 
   may want to rethink the wisdom of that decision.