Friday, July 18, 2014

Simple Staging Tips that Make Buyers' Dreams Come True

Paula Ramos has no idea how she accumulated so many magazine pages, newspaper clippings and website printouts, but she can tell you that they no longer fit in one box.

Or two, for that matter.

In fact, Ramos' collection of home decor ideas now fills three filing boxes stowed under the kitchen table in her Tampa, Florida, home. "I like to dream, as my husband says. I like to be ready to try something new and different, and all these clips come in handy when I'm feeling inspired," says the 31-year-old occupational therapist. "One of these days, I'm going to build my dream house, and I'll put ideas from a lot of these clips to good use."

Until then, Ramos says she's more than willing to tell others how to use their residential space, including buyers who have looked at the last two homes she and her husband have sold without an agent.

"One of the best things about not working with a real estate agent is you don't have to necessarily play by their rules," Ramos says. "I know all the conventional wisdom, and how sellers are told to downplay the cool things they've done with their space, or the cool things they want to do, but if I'm showing my house, I want to give my potential buyers some ideas. I want to see that spark in their eyes if I suggest something or show them a picture of something that might work."

Ramos says she always asks the buyer a few questions before she schedules a showing. Nothing too intrusive, she adds, mostly just the basics. "I just ask how many people might be moving in, what their ages are, real baseline stuff," Ramos says.

The answers to those questions give her a place to start when she begins showing those prospective buyers around. "It's easy to get people to tell you how they'd like to use the house, or how they use the house or apartment they live in now," she says. "When I walk into a den, I don't say it's a den to a family with small kids. I say it's a game room or a playroom or a family room. Then I might show them a picture I cut out of a magazine and say, 'If we had kids while we were here, I was planning on doing a chalkboard wall right here because there are no windows and it's a great big open canvas.'

"All of a sudden, they see your house as their house, and that's pretty much the goal."

Ramos says her most successful selling suggestion occurred last year, when she and her husband sold their home in Sarasota before moving to Tampa. "Our house had a nice big garage that we used for our cars, but there are some people in Florida who use their garages as an extended living room," she says. "I found these great photos of man caves online and basically laid out how our garage could be a great place for the man of the house to hang out with his friends."

The buyers agreed, adding a portable air-conditioning unit, indoor-outdoor carpeting, a big-screen TV, a sound system, a leather couch, a few chairs and a poker table before they even moved in. "The guy was a retired cop from New York who wanted a place to watch Yankees games with his friends," Ramos says. "It's a perfect spot for him."

Read more: Home Improvement Projects with the Biggest Payoff

Thursday, July 17, 2014

6 Simple Summer Selling Tips for FSBOs

This unique Kansas home is listed on ForSaleByOwner.com.
The summer season often means jam-packed schedules. School vacations, backyard barbecues and baseball games don't leave a lot of time left over for preparing, marketing and selling your home. Following these six easy tips can help make summer selling a breeze.

1. Hit the Refresh Button. Midsummer is the ideal time to add beautiful photos to your property ad. Pick up our tips for crafting a picture-perfect online listing.

2. Make Showings Count. It's prime open house season, so make sure visitors leave with a positive impression. Get your home ready for a stellar showing with this printable checklist.

3. Don't Break the Bank. Spruce up your home before a sale without going broke. Check out these tips for staging on a budget.

4. Play Nice with Buyers' Agents. Welcoming real estate agents who bring buyers to your door is just good business sense. Here's how to create a pain-free and profitable relationship with buyers' agents.

5. Consider the MLS. Maximize your listing's exposure to reach more buyers during the summer selling season by getting your home on your local Multiple Listing Service.

6. Tap Into the Social Network. Each week, we showcase one home on ALL of our social media pages. Send us a Facebook message, or email socialprofiles@forsalebyowner.com with your listing ID and a few sentences about what makes your home so special. We'll be in touch if your home is chosen!

Attention All Successful Home Sellers: Did you sell a home on your own between January 1 and May 14, 2014? Congratulations! You're eligible to enter our Home Seller Sweepstakes to win up to $25,000.

Wednesday, July 16, 2014

Due Diligence: 10 Steps to Take Before You Buy

Rick Sharga is executive vice president of Auction.com. As one of the country’s most frequently quoted sources on foreclosure, mortgage and real estate trends, Sharga has appeared on NBC Nightly News, CNN, CBS, ABC World News, CNBC, FOX and NPR. He has briefed government organizations such as the Federal Reserve and Senate Banking Committee and corporations like JPMorgan Chase, Citibank and Deutsche Bank on foreclosure trends, and done foreclosure training for leading real estate organizations. Sharga shares his advice on how to protect yourself before you buy any type of property.

Due diligence is one of the most critical periods in any real estate transaction. But many buyers cut corners in the due diligence process in their haste to have their bid accepted. Here are 10 due diligence steps you shouldn't skip, especially if you're considering a foreclosure, bank-owned property or short sale.

1. Do a title review. Always get a preliminary title report on any foreclosure property you're interested in buying, and look for any secondary liens or tax liens. Make sure there aren't any hidden liens or encumbrances on the property that will blossom into unpleasant surprises later.

A lot of paperwork got lost during the real estate crisis as companies like New Century went through bankruptcy. The courts are still unwinding cases where people sold properties they didn't own. That's why it's so important to ensure that the title is clear and that the property really is for sale. You'd be surprised at how many investors decide they're not going to get title insurance, but it's just not worth the risk.

2. Inspect the property thoroughly. You may not be able to get inside a foreclosure property that's still occupied. But if you can, have a licensed professional inspector review the house for evidence of structural defects, water damage or other major problems.

But most importantly, make sure everything is functional. I know of one case where an owner who had lost his home to foreclosure did what some owners do in that situation: He ripped the wiring out of the walls and took the piping. But then he did something different: After he was done, he put up new drywall. So when they did an inspection of the house, it looked fine, but there was no wiring or piping behind the walls.

3. Consider the surrounding property and neighborhood. Don't confine your inspection to the structure itself. Look around at the landscaping. Does the property back up against a bank that has no vegetation? Will the drainage work in the event of a heavy storm?

Check out the surrounding neighborhood as well, as its condition can affect the value of your property. Do you see pride of ownership in the other homes? Or do you see abandoned properties in the area? And note that abandoned houses aren't just a problem in "bad" neighborhoods. Because of the recent housing crisis, you might find abandoned or unfinished homes even in relatively new housing developments.

4. Examine recent sales activity. Look at how many days homes have stayed on the market. Are properties moving quickly or languishing? What are the buy vs. rent trends in the neighborhood? How many of the homes sold were distressed inventory? Too many sales overall could suggest that people are leaving the neighborhood — see if there's an underlying reason why.

5. Review price trends. Are they going up? Have they plateaued? How do they compare to what they were during the last peak? That information should give you an idea of whether property values are going up or down, and help you figure out what you should be spending.

6. Find out how many homes in the area are in foreclosure. Too many suggests price weakness over the near term. Are there a disproportionate amount of distressed properties in the area? Before the crisis, only about 1 percent of properties went into foreclosure in any given year — or one home out of every 100. In today's environment, you might see maybe three or four. But more than that might indicate a problem and a reason the property is priced as attractively as it is.

7. Look at the upside potential. Are you near a good school? Are you near a transportation hub? Are there new businesses that are popping up or being launched in the area? Those are potentially all good upside opportunities for you. Conversely, has there been a plant shutdown recently? That will probably lower property values. The local chamber of commerce can supply some of this information; it also helps to have some local connections.

8. Go to open houses. See what the standard of quality is in other homes that are currently for sale. Are tile countertops fine, or do I need to install granite or do other home improvements? This is a good thing to do whether you're planning to flip the home or rent it. It doesn't mean you have to overspend. But you want to meet the neighborhood standard or be slightly above it, and spend as little as you can to attain that standard.

9. Research zoning requirements. If you're going to rent out the property, consult with a real estate attorney to see if there are any local ordinances or laws that might make it difficult to be a landlord. Some areas aren't zoned for rental property. Some developments limit the number of rentals in the neighborhood; others have limits on the number of adults who can live in a single house, which could be a problem if you plan to rent to people who want to room-share (like college students).

10. Check your liability insurance. If you're going to be a landlord, check with your insurance agent to find out how much liability and property insurance you'll need.

While these 10 steps may sound like extra work, they'll pay off in the long run. Whether you're going to occupy it, flip it or rent it, real estate is one of the most expensive investments you'll ever make. It makes sense to protect it.

This information was originally published on Auction.com, LLC, the nation's leading online real estate marketplace. Founded in 2008, the company has sold nearly $20 billion in assets since 2010. Auction.com has more than 900 employees and offices in Irvine and Silicon Valley, California as well as offices in Atlanta, Austin, Denver, Miami and Newport Beach. Visit us at www.auction.com, or on Twitter, Facebook and LinkedIn.

Tuesday, July 15, 2014

How FSBO Sellers Work With a Buyer's Agent

Although a few by-owner sellers are able to completely bypass agents, it's generally in your best interest to not only seek them out, but use them as partner who, like you, are leveraging the power of the local MLS.

"The key to these relationships is that it's all about cooperation," says Derek Morgan, manager of broker services at ForSaleByOwner.com. "Licensed brokers join together and create a local MLS for the sole purpose of creating a consistent marketplace where sellers can offer homes to buyers," Morgan explains. The only difference with FSBO sellers who list on the MLS is that they pre-pay their agent for specific services.

A Marketplace of Cooperation
Because more than 80 percent of homes sold are listed on the MLS, it makes sense for a by-owner seller to have a presence there — and services like ForSaleByOwner.com make it easy and inexpensive to do so.

"Even when deciding to sell on your own, you have the opportunity to use the MLS provided that you understand it's a marketplace of cooperation," Morgan says. In doing so, the FSBO seller gains access to an additional pool of buyers represented by agents.

By-owner sellers have a responsibility to follow established MLS practices, Morgan emphasizes. In terms of your MLS listing, this means keeping it current to indicate whether your home is "active," "pending," "contingent" or "sold," and ensuring that the list price itself reflects any changes you've made.

Far from undermining a FSBO seller's autonomy, agents perform a valuable service in recommending that prospective buyers look at the listed property, Morgan says. As an added bonus, these are likely to be good leads, since agents are in the business to make money and don't want to waste a seller's time — or their own.

How Agents Funnel Buyers to FSBO Sellers
First off, Morgan reminds by-owner sellers that the benefit of listing on the MLS means you'll reach both types of buyers: those who don't yet have agents and those who have committed to working with one. Keep in mind that 42 percent of buyers look for homes online as a first step, according to the National Association of Realtors.

Although it's possible to sell a home to an unrepresented buyer, the fact that 88 percent of buyers purchase their home through an agent (according to the National Association of Realtors) means that most FSBO sellers will be working with agents at some point.

Morgan says there are two key times when this is especially important:

• When, based on contact information in the MLS listing, the buyer's agent will contact the FSBO seller to arrange for a showing.
• Then, after the showing, when the seller will ask the prospective buyer's agent to let them know when and if an offer will be submitted to the flat-fee broker handling the FSBO listing.

But that's not all a by-owner seller needs to do. "A FSBO seller should manage their buyer leads the same way regardless of whether they're dealing with an agent," Morgan says. "This means collecting contact information and then reaching out after the showing."

Questions to ask prospective buyers and their agents include: When are you looking to buy? How often are you looking? How is your home search going? What type of home are you looking for? Is my home the best you've found so far and are you considering submitting an offer? Or should I cross your name off my list?

"The answers to these questions determine how often you contact them," Morgan says. "And re-contact everybody whenever you update the listing price to see if that increases motivation."

Keep It Professional
The real estate business is built on networking and maintaining relationships, so the vast majority of professionals a FSBO seller meets will be exactly that: professional.

"Still, the by-owner seller needs to be aware that not every agent is going to view their model of selling favorably," Morgan says. "Your decision to sell and show your property yourself might be a new concept to a buyer's agent."

His recommendation is that FSBO sellers focus on answering questions about their property and making sure that prospective buyers and their agents know what your home has to offer.

In the unlikely event that a buyer's agent becomes assertive in his or her dislike for the FSBO process, Morgan says that the seller should stay calm, not allow themselves to be baited and to stay on point.

He also reminds FSBO sellers that they are under no obligation to discuss their relationship with their flat-fee listing broker with a buyer's agent.

You Can Do It
"At the end of the day, a real estate transaction can be easy — even a FSBO," Morgan says. He points to the many resources offered by online services, which are a great guarantee against the unknowns.

"Don’t be intimidated," he says. "Selling a home yourself can be a simple, financially rewarding process. It's simply a matter of following time-tested steps, conducting yourself as professional and realizing that if you've chosen to work with a full-service online service, experts can talk you through any stressful moments."

Read more: The Best Ways to Reach Home Buyers Online

Friday, July 11, 2014

Cracks in Your Foundation Can Derail a Home Sale

Erin Walton learned a lot selling four houses in the past 10 years — the first two with a real estate agent, the next two on her own — but the last sale taught her the most important lesson: Be honest with yourself.

Walton, a 41-year-old attorney in Iowa City, Iowa, says she had listed her home in Joliet, Illinois, far above its appraised price because she felt that it was undervalued. "It was a beautiful house," she says. "Open space, lots of windows, very bright."

And there was one more thing, but it wasn't exactly something Walton bragged about in her home's MLS listing or online ad: The house had serious foundation problems.

"There were some pretty major cracks and a little settling — maybe a lot of settling," Walton says. "I knew it when I bought it but just asked for some money off instead of having the previous owners fix it. I guess I assumed it wouldn't get much worse and that the next buyer would make me the same deal I made the previous owner."

It didn't turn out that way. In fact, two prospective buyers bailed at the last minute because they refused to budge on who had to fix the foundation. "They didn't want money off," Walton says. "They wanted it fixed. There was no compromise."

Walton neglected to consider that the cost of repairing the foundation might have increased dramatically — and when she obtained an estimate, she learned it would run $10,000 to $15,000. What was she offering the potential buyers?

"Well, that was probably part of the problem," she says. "I offered them $5,000 off of their final offer. That's what the previous owner offered me and I had been dumb enough to take it."

Walton shouldn't be so hard on herself. She has a receipt with an estimate for the foundation work from the previous owner for $5,500. "I should have taken care of it then," she says. "The work doubled and tripled in price."

After two strikes with potential buyers, Walton knew she had to take matters into her own hands. "I found a contractor who repaired my foundation for about $11,000, and he was gracious enough to take half the money up front and the other half after I sold the house," she says, adding that the payment schedule was part of the contract and included a provision that the work had to be paid off regardless of a sale within 18 months.

Once confident that her home stood on terra firma, Walton told the first two prospective buyers that the foundation work had been completed, but both had already purchased new homes. One, however, told Walton about a friend looking for a house. Walton contacted the friend, set up a showing and had an offer within a week. Eight weeks later, the buyer closed on the house, Walton paid off her contractor and put a down payment on a house in Iowa City, where she had accepted a new job to be closer to her boyfriend.

"I got pretty lucky," says Walton. "I could have sat on that house for a while — and knowing that I had lost two buyers would have killed me."

Read more: 7 Tactics for Preparing to Negotiate

Thursday, July 10, 2014

5 Most Popular Homes For Sale By Owner in June

The 4th of July is now in the rearview mirror, meaning midsummer is upon us. Spring and summer are traditionally considered the hot home selling season, but the real estate news this year has been mixed. With at least one industry expert deeming the housing market volatile (Karl Case, co-creator of the S&P/Case-Shiller home price indexes, recently shared some interesting insights with CNN Money), it pays to be savvy with your sale marketing efforts. These five home listings proved to be the most popular on our site in June, so much so in fact that two of them are already under contract!


1. 100 Kaywood Dr., Benton, KY 42025
Price: $284,900
Highlights: Featuring five bedrooms, four bathrooms and lots of Southern charm, this home underwent a complete remodel six years ago, including new flooring and a revamped kitchen. The in-ground pool and big backyard guarantees popularity in the neighborhood, and the nearby Benton Golf Course is another draw for active families.


2. 26286 TR 1161, Warsaw, OH 43844
Price: $156,000
Highlights: A gracious gazebo, screened-in porch and two decks are built for outdoor entertaining at this welcoming, ranch-style home. Four bedrooms and three bathrooms join a spacious finished basement complete with family room, a bar area, wood-burning stove, shower/jetted tub and convenient walkout access.

3. 62 Lee Road 2124, Phenix City, AL 36870
Price: $149,000
Highlights:
Located on a quiet cul-de-sac, this home sits on almost an acre of land one of the largest properties in this subdivision. The lot features a sprinkler system and a large shed for tools and toys. Home upgrades abound, including stainless steel kitchen appliances, wood and ceramic tile floors and vaulted/tray ceilings. 


4. 210 Stoneburg Dr., Duson, LA 70529
Price: $134,000
Highlights:
This charming cottage-style home is already under contract! The covered front porch welcomes guests, while the beautiful backyard pergola provides room to entertain. This accessible one-level home offers three bedrooms and two bathrooms, along with an open living area and vibrant paint colors throughout.


5. 388 Glen Elm Dr., New Cumberland, WV 26047
Price: $289,500
Highlights:
Also under contract, this two-story, all-brick home boasts an open, airy floor plan and ample living space. Attractive new features include carpeting in the master bedroom and finished basement, a remodeled master bathroom, new lighting and a freshly painted interior. The multi-use bonus room lets in the sun through a large skylight.



We want to know: What are your predictions for this year's housing market?