“Easy to Show”- Music to my ears!

When I’m hunting down properties to show to buyers I love to see the words “Easy to Show” in the listing. Another good phrase is “Vacant-Show anytime”.

On the other hand, making showings difficult is a good way to keep your house from selling. How about these:

-Make Offers Contingent Upon View Interior
-Do Not Disturb Tenants
-Day Sleeper- No showings before 4 pm
-Agent Must Be Present For All Showings

I know that sometimes the circumstances can sometimes make showings terribly inconvenient, however, please know that putting any kind of restrictions on showings when your home is for sale will reduce the number of buyers that see your home. Even something simple like requiring 2 hours notice.

I also know you can’t always show your home at the drop of a hat, but again and again I’m out showing homes in a neighborhood and the buyers notice one for sale across the street and want to see it too! I hate to tell them that we’ll have to wait and do it another day.

The goal is to make it easy to show, at least as easy as possible.

On a side note, I believe this is even true for investment properties. These are often difficult to show if there are tenants involved. That's understood, but at least try to upload some interior pictures to see it it's worth the hassle to show. Even just a couple pictures of the inside help buyers get an idea of the home and decide to take a look. Without any interior pictures, people assume the worst and skip it. They assume that it looks terrible; otherwise there would be pictures, right?

So, the home-selling lesson for today is…
1. Make it “Easy to Show”
2. Have lots of fantastic pictures

Thinking about it? Give me a call.
-Peter

www.NashvilleCityHomes.com

Good Bones Make a Great Fixer Upper

I enjoy working with clients who have the passion to take a neglected home and renovate it. Make no mistake, this is a BIG job. It will consume your life if you aren't careful, which is why it's so important to look for good bones.

"Good bones" is a way that people describe the fundamental parts of a home that are difficult and expensive to change. Things like floor plan, room sizes, electrical/plumbing systems, ceiling heights, etc. You can paint and add granite counters to any home, but if it’s missing some of the fundamentals, you may have trouble selling it later.

I was exploring some of East Nashville’s fixer-uppers this morning with a wonderful client of mine. We looked at some that needed hardly any work and others that needed complete renovation. Since I try to attend every home inspection personally and I've renovated a home myself, I’ve learned quite a bit about the systems in a home and where the common problems are. Sometimes I probably point out too many things to my clients, but I want to help them understand what their getting into.

Here are some bones to look out for:

Floor Plan- Watch out for funkiness. Does the layout make sense? Is one of the bedrooms a walk-through? Are there closets? Where will the fridge and dining room table go? Where is the washer and dryer? A home with a great floor plan will be easier to sell down the road.

Structure of the Home- How is the foundation? Are the floors level? Is there water damage? What’s causing it and is it easy to repair? Is the roof in good shape? Is there a basement or crawlspace? Any water problems down there? (BTW- water issues are the #1 killer of a home, reminding us all to clean out our gutters!)

Systems- Are the systems outdated? What about the HVAC? Are there old ducts wrapped in Asbestos tape? Is the wiring grounded? Fuses or circuit breakers? Any knob & tube wiring? Galvanized or copper plumbing? How’s the water pressure?

Location- This should probably be at the top of the list, since it cannot be changed. More than anything else, location will greatly affect the value of the property. Don’t think you can overcome it by dressing up a home in the wrong neighborhood!

Lastly, when you’re considering a fixer-upper, you have to know the numbers going in. What are other homes in the neighborhood selling for? How much money and time will it take to renovate it? How quickly are home selling? What are the trends in the area?

It’s a lot to think about, but when you’ve made a thoughtful choice, renovating a home can be an enjoyable and profitable experience. Otherwise, you may lose your shirt…

-Peter

www.NashvilleCityHomes.com

3 Ways FSBO's are Missing Out

I was talking to someone this afternoon who is trying to sell their home by themselves without an agent. She said that her main reason for doing this was that they couldn't afford any extra fees for Realtors. They owed too much on the home and were already behind on their payments.

This is a sad story that is happening too often right now. However, I'd say that situations like this are the most important times to work with a Realtor. Especially when the market is slow and buyers are few. Let's examine why I think this seller is missing out...

1. Who knows that her home is for sale??
This is a biggie. She has a sign in her yard. Even if she's on a for-sale-by-owner website, the most qualified buyers- those using a Realtor and needing to buy quickly- are searching the MLS and missing her home. I only knew about it because my client drove by.

Contrast this to how I market homes. Not only are my listings in the MLS with professional pictures and a virtual tour, but it's broadcast to numerous other home home searching websites and promoted by me through everything I do. People searching for homes online (which is where people look nowadays) will find my listings and they will look great.

2. Agents will not show your home. This is true mainly because they don't know it's for sale! In this case, the sellers were not offering any commissions even to the buying agent. In effect, they are actually discouraging me from showing their home. We may eventually take a look, but it will be at the bottom of the stack.

3. What risk is the seller taking by being unrepresented?? As a Realtor, I believe that much of my value comes as I help negotiate the contract and then keep things from falling apart to the closing. Even so-called easy deals can have things pop up that can cost lots of money or ruin the entire agreement. My experience will help you avoid these issues and be prepared for each step of the process. Even if a FSBO doesn't hire me, I try to encourage them to hire somebody. It's just not worth the risk.

I appreciate a seller wanting to make more money on their own. It just seems that selling your home is a time when it's best to work with a professional. If you try it, please be careful and willing to be very patient. If you'd like some help, give me a call. :)

-Peter

www.NashvilleCityHomes.com

Perceptions More Important Than Facts?

I've been reading articles from leading minds in the real estate market who are attempting to forecast the beginning of a recovery. Here's an interesting one from the Wall Street Journal entitled, "The Housing Crisis Is Over". In it, the author, Cyril Moulle-Berteaux, says that we've hit bottom and "...that the trend is no longer getting worse, which is the critical factor."

Moulle-Berteax goes into the historical data and has a lot of good reasons for his statements, but will he be right?

I tend to be an optimistic type, but I also strive to know the truth and look at the facts of the situation. However, in this case, perceptions may be more important than the facts.

I took a minute to read over a few of the comments to the accompanying blog and the overall tone was that we have NOT hit bottom yet. Further, an NBC/WSJ poll on April 30th reported that 81% believed that the US was currently in a recession.

By the formal definition, we are not in a recession, however, with 81% of the public believing that we ARE in a recession, then for all intents and purposes, we are.

Gary Keller makes this exact case in a recent white paper released to Keller Williams associates:

Wisdom of the crowd, perception is reality, what you see is what you get. If it’s true for you, it’s true – any way you want to posture it. We’re saying that if it walks like one and talks like one, it is one, and we might need to face that reality.

What does all of this mean? Here are my two thoughts for the day:
1. It has become even more important to be an expert on the LOCAL market. Keller also says, "What’s happening within your local markets is all that’s relevant." Even within the broader Nashville market, different neighborhoods have different dynamics going on.

2. Buyers are super-cautions right now. I can't blame them for that. Buyers are looking at more homes and being picky. They want to know that they are making a sound investment and making good choices.

I guess we'll wait and see when we hit the bottom. Of course, we probably won't know it when it happens, but since we all need a place to live, it will happen.

-Peter
www.NashvilleCityHomes.com

Advice From the Mystery Man

I was having breakfast with a friend this morning at my favorite greasy breakfast spot, the Hermitage Cafe. We were talking about business and were probably too boisterous when another gentleman joined in with our conversations. I'll call him the 'Mystery Man' because he didn't introduce himself and he was dressed to hop on his motorcycle and speed away.

The Mystery Man wanted to comment on how important it was to form relationships with clients. He said that people wanted to do business with people who would take care of them. He spoke against emailing and said that people don't just have conversations anymore.

I took note of this stranger because even from behind his dark sunglasses I could feel his passion for business. He later said that he was retired from insurance sales and just loved doing business. I have no idea how successful he was, but I could tell he was living large.

This brief encounter was a timely event for me as I'm working on deepening my relationships. It affirms to me that people like to work with people who sincerely care for them. The Mystery Man reminded me how much fun it can be to do business and be a part of people's lives.

Let's live large,

Peter
www.NashvilleCityHomes.com

Myth-busting FHA Loans- A Success Story

With the tightening of loan qualifications with most lenders, the 100% financing of yesteryear is all but gone. However, there is a way with FHA. In fact, I had some clients close last week who bought a home with nothing to pay except a little earnest money.

FHA loans are quite mystifying until you worked with them a couple times. I’m not mortgage guy, but let me explain the basics from my experience, both on the buying and selling side of them. First, a couple myths to bust:

MYTH 1- FHA will require lots of repairs
Years ago this may be a concern, but the revisions made in January 2006 loosened many of the guidelines, requiring fewer items to be repaired. The inspection for these repairs is done by an FHA approved appraiser as part of the appraisal.

MYTH 2- Sellers will have extra hidden costs to pay
As with any contract, everything is negotiable. It is very common that the sellers will assist with the buyer’s closing costs or possibly contribute to a charity like Ameridream to give the buyers some down payment assistance, but this is all negotiated upfront. Before we have a binding contract, the seller will know their net proceeds from the sale without fear of surprise costs due to the FHA financing.

MYTH 3- Financing for FHA buyers is more likely to fall through
I doubt it’s any more likely than with any other financing. I’m not sure about the exact stats, but the strength of a buyer’s pre-approval is always suspect until the lender has actually collected the required paperwork to make sure that they qualify and that no surprises lurk beneath the surface. It’s always good to work closely with the lenders to make sure that the buyers really are qualified, but sellers who are worried about this should probably just be thankful to have a buyer, right? :)

To achieve a 100% loan through FHA, the seller or possibly a family member contributes to a charity such as Ameridream who will, in turn, contribute toward the buyer’s downpayment. Sellers are often uncomfortable with this at first, but I always try to explain it upfront so that they understand how it works. The funds are built into the sales price and negotiated upfront. It’s completely legal, but still a little complicated. I wrote more about these programs in this article from Jan. 2007.

Back to real life… My clients last week bought a historic home built in 1932. It hadn’t been renovated, but has been in the same family since the ‘60’s. It wasn’t in major disrepair, but still had some old knob & tube wiring, and all the plaster walls intact. Very low funk factor. The only FHA repair we had to do was to replace a portion of the roof that had an obvious leak that had come through the drywall in a back addition on the house. This was no problem, since the buyers were going to fix that anyway. (It helped that their Realtor [me] occasionally does some roofing and drywall, eh?)

The lending bank was a slow mover that I’ll avoid in the future, but otherwise, the process went smoothly. In the end, the buyers were thrilled and excited to finally own a home of their own. They’ve already started ripping up carpet to reveal some well-preserved hardwood floors.

After a few successful closings involving FHA financing, I’m a fan. They do require some extra work and sometimes a lot of patience, but a qualified buyer can still own a home without a down payment.

Just make sure you work with a great lender and Realtor who can get it done for you. Thinking about it? Give me a call.

-Peter
www.NashvilleCityHomes.com

My Best Investment

Last weekend I took off a couple days to go on a short vacation to Chattanooga. Every time I attempt such a crazy thing, I have loads of work to do before I leave and even more to catch up on when I get back. But it's worth it.

Relationships are worth the investment.

Something I'm learning is that whatever the market does and however business is going, the most important thing is to tend to my relationships. Some of this I'm learning the hard way because I'm not very good at it, but I AM learning.

It's part of having good balance, or being correctly 'counter-balanced' as my business coach would say. In many ways, Realtors are connectors within communities. I bring people together, from home buyers and sellers to roofers and whatever.

So, back to my vacation. Not only is it nice to spend time with my family away from home for a few days, but it's nice to catch that excitement for coming back home and getting back to work refreshed.

My advice... take a vacation!

-Peter
www.NashvilleCityHomes.com