Wednesday, November 15, 2006

How to Sell Your Home in Today’s Buyer Market

How to Sell Your Home in Today’s Buyer Market
by John Occhi

It should be pretty obvious to anyone who has any interest in the real estate market. You should know by now that the ‘sellers’ market we had in Hemet during the first half of this decade has all but evaporated and transformed itself into a bona fide ‘buyers’ market. What this means is that Hemet, like the rest of Southern California and most of the rest of the country has more homes for sale in the MLS than there are qualified buyers in the market looking for a home.

There are a couple of ways to determine that the market has shifted, if you have access to statistical data. If you know haw many days’ homes are sitting on the market, this is a good indicator. An average of 60 days or more tip the scales in favor of buyers. If you look at the article I published earlier this month, I examined statistics for the market at the east end of Hemet, in zip code 92455 and found that the average home that was listed in the MLS in October 2006 was listed for sale for an average of 84.67 days – definitely a good sign for buyers!

Determining the available ‘inventory’ is also very effective. Inventory is simply determining how many homes sold in a month into the number of available homes. Read my article, “Active, Sold & Expired A closer look for October, 2006 of the Hemet Real Estate Market” Last month, there were 40 sales in the 92544 zip code with 291 available homes for sale. Do the math and you’ll figure out that November started with at 7.275 month supply of homes for sale. This will definitely put the buyer in the driver’s seat.

Clean-Up: The First Step in Preparing for a Successful Hemet Home Sale

If you want to sell your home and you are serious, then you need to make your home model ready. I’m not talking about ‘testing’ the market to see what might happen. Testing will only frustrate you and eat up valuable exposure time.

No, if you even think you are a serious seller, then commit to the process and that means work. Now is the time to do ALL of the deferred maintenance. That “honey-do” list we all have needs to get done now. Literally, the most profitable steps a Hemet seller can make is with a cleaning brush, a paint brush or a hammer.

Go ahead and modernize your home with stylish new light and plumbing fixtures. Don’t be wasteful with your money, but if you need new flooring or wallpaper there is never a better time to install them. Don’t go overboard with major renovations that you won’t have the time to enjoy and your buyers may not appreciate – but do brings things up to date.

Perhaps the toughest obstacle I face with sellers is ‘de-junking’ their homes. Yes, I know one mans junk is another mans treasure but now is not the time to show off your collections. I always say, if you are going to list your home, start packing. If you do not have adequate space in your garage to store packed boxes, then rent a self-storage unit, off your property. This will make moving so much easier and your home will look less cluttered and easier for the buyer to imagine taking possession of the space without all of your personal belongings.

One more comment on this theme – de-personalize your space. Eliminate religious artifacts, eliminate any ethnic pride and even family photos. Live without as much as you can. Remember, you are moving and this is no longer your ‘home’, but the house you called home.

Team-Work: Who You Hire Can Make or Break Your Sale

There are a lot of Hemet Real Estate Agents who would love to list your home on the MLS and you have to pick the one that is best for you.

Do you want a discount broker? Maybe, if how much you spend is more important than how much you will net at the end of the sale. Remember, a discount broker can afford to list you home for a low commission because she wants her phone to ring with potential buyer clients. So, the longer her sign is in your yard, the more calls she stands on receiving. If she sold your home in a week, she would lose money.

Do you want a hybrid – mortgage/real estate agent? I don’t know why. It may seem convenient to have one individual do the roll of several professionals. Is that what you want? Or do you want a professional handling each aspect of your real estate transaction – working in harmony with one another. Then I would select a Hemet Realtor who has a strong working relationship with a reputable lender to help pre-qualify your offers when they come in.

Do you want a Hemet Real Estate Agent who will promise you the highest price for your home? Only if you like to hear sweet little nothings in your ear as you are being raked across the coals. Don’t ever listen to an agent who promises more than what your house is worth. Especially in today’s market. You are being set up for a prompt price reduction. Guaranteed!

Do you want a Full Time Hemet Real Estate Agent? I hope so, unless you think you will get better exposure while your part time agent is passing out business cards while working at Sears, or whatever they still call their ‘day’ job, that they have not yet been able to quit, for one reason or another. Work with an individual that has made a full time commitment to their chosen profession and not a part time wanna-be.

Are you really concerned with how much commission you will pay or how much you will walk away with at the end of the sale? If your thoughts lead you to believe that you can save money by working with an agent who will cut their commissions, chances are you are working with an agent that cannot successfully negotiate on their own behalf, so why would you rely on them to negotiate the sale of your most prized and valuable possession – your Hemet home for sale! You must realize that a 3% commissions is a 17% difference in earnings for a Realtor over a 2 ½% commission. Does it not make sense that more REALTORS would be motivated with a 3% or better commission than a 2 ½% or less commission? Yes, you may save a few dollars off of the line item of commissions paid out, but how much longer did it take you to receive a closing statement and for how much less than if it sold quickly when it was first listed.

Does your Hemet Real Estate Agent have a written documented marketing plan that holds him accountable? If not, you may be working with a magician for an agent – someone always ready to pull the next trick out of their sleeve to impress you when you need impressing. You will find that the professionals all have a plan they customize to your unique home and circumstances and then stick with the plan, holding them accountable for each step and each given task on a daily basis.

Does your Hemet Realtor offer any type or realistic guarantee? Will your Hemet real estate agent offer you an easy exit strategy from your listing, if you are not pleased for any reason? Will your Realtor offer to reduce their commission if they do not sell your home with in a specified time period – say 60 days in today’s market?

Consider these questions and others you may have when selecting the right Realtor to sell your Hemet home.

Third Party Inspections: The Key to Setting Yourself Apart from the Pack

Every bona-fide real estate transaction in California is required to have disclosures completed and inspections of the property integrated into the terms and conditions of the purchase agreement. Some of these are state laws while many are lender requirements. It really doesn’t matter who says to do it, if it needs to be done, it needs to be done.

A disclosure is simply letting the buyer know what you know about the property. There are more law suits filed for non-disclosure issues. More often than not, they are innocent oversights, forgetting about the little inconveniences and nuances of our Hemet home. Typically, we all learn to live with something and never give it a second thought once we become accustomed to it. Please spend the necessary time considering every aspect of your home and read through the questionnaires on the disclosure forms very carefully.

A very powerful tool when selling a Hemet home is to have the inspections done prior to placing it on the market. This may cost you several hundred dollars up front, but promises to comeback to you many times over at the close of the sale.

At a minimum, your home should be inspected by a member of the “American Society of Home Inspectors” (ASHI). Your Hemet Realtor undoubtedly has several choices of local professionals that works well with your Realtor. This inspection will avoid surprises when it comes time to close escrow. By having a trained professional put his reputation on the line, a prospective buyer will feel much more comfortable placing an offer on the table, knowing the condition of the home for sale. Coming from an independent 3rd party, some buyers will accept this report at face value, while others will want to go ahead and hire their own inspector. Either way, you have identified each potential problem and how you choose to handle it is your business.

Small repairs are often completed, prior to marketing the home, while others are merely disclosed to the buyer and allowing the buyer to make the repairs.

Another common inspection made prior to the actual marketing of the Hemet home for sale is the termite or pest control inspection. This will eliminate any question about the soundness of the structure of your home and identify any potential termite problems. Again, if there are issues, you have the opportunity to get it right before the buyers ever come to your home or wait and fix it before the close of escrow. Typically, a lender will never fund a loan until the property has been certified by a pest control inspector.

It is also recommended that you have the home appraised prior to marketing. Not only will this solidify your asking price, in your own mind but in the mind of every REALTOR who previews the property and shows it to their buyer clients.

Both the Home Inspection and Appraisal are costs that the buyer typically pays. By completing these in advance, it helps the buyer with closing costs that they don’t have to pay.

Other inspections that may or may not be relevant to your Hemet property could be a well certification, a septic tank certification, a roof certification or anything else that relates to unique characteristics of your property. Remember, the more that is disclosed to the potential buyer about the condition and soundness of your property the more questions are being eliminated and thus the value increases.

ASKING PRICE: Be Real – Remember, this is a Buyers Market

This is such an important topic that I just recently wrote a whole article with extensive discussion to the many principals of pricing a home so it will sell. Please read my article here, so that you will have a clear understanding of the concept.

NEGOTIATE – Never Be the Party to Reject an Offer, Always Counter-Offer

You’d be surprised how many times an offer comes in that may appear to be ridiculous to every one involved, including the buyer’s agent. Please don’t be insulted and don’t say something like, “I’m not playing that game”.

Every offer is an opportunity to negotiate. You now have the opportunity to counter-offer and negotiate on all of the terms of the contract. Remember, money is not the only issue on the table. Perhaps, you lower the price in exchange for additional time at the close of escrow, if it’s needed. Maybe, in exchange for a price concession, the buyer will waive a contingency or two.

Of course price is critical to the process. Negotiations can last w\for a week or two between the parties. With each counter offer, the other side will typically have 3 days to respond; so each full round can take up to 6 days. Remember, every time you counter an offer, you are rejecting the offer on the table and if it is not responded to in a reasonable time frame (3 days) the entire process typically breaks down. My advice is to always counter offer while you continue to look for a new buyer. An open house in the midst of negotiating is a great way to gauge a buyer’s true interest.

Once the deal has been negotiated and the ink on the contracts is dry does not mean the sale is over. Up to now, everything has been fun. It’s all been about sales and marketing and if your Realtor does not find these two activities fun, then find one who does.

Now we have to close escrow. We have to keep an eye on the buyer and make sure they don’t suffer from ‘buyer’s remorse’. Your Hemet agent has to keep on top of the situation and make sure that all of the money is put into escrow as soon as the contract calls. You want to see the buyer conducting inspections and getting involved in the buying process. The buyer will have to perform certain tasks by certain dates and it is your Realtors responsibility to track these events and coordinate with the buyer’s real estate agent and make sure they happen, as agreed so the sale will successfully close escrow on schedule

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