Contingent Sale

I had a question from one of my listing owners the other day about how contingent sales work.  Seems that it might make sense to write a brief post to clear this particular option up for folks. I would imagine there are more of you out there with the same questions.

First, let me say that in a sellers’ market we rarely need to consider such an offer. But in a buyer’s market, with a lot of competition and few offers showing up, sellers might want to consider this approach as a viable one. As with any North Carolina real estate transaction process, the standard forms used have some safeguards built in for both parties. As a seller, here’s some things to understand about a contingent offer:

Once you have accepted a contract that hinges on the buyer selling a home, you may continue to market your property and accept a backup offer. If you do get a backup, you have to notify the contingent buyer and give them a specified time to respond by either waiving their contingency and closing without selling their home, or terminating their contract. If the contingent buyer terminates the contract, they are entitled to their earnest money back. 

One thing to remember is if you get a backup offer for more than the contingent offer, you cannot renegotiate the first agreed-upon price. You can only make them decide to “fish or cut bait,” as it were.

As for the contingent buyer, the important thing to remember is that you will agree in the contract to a date by which you will have your home sold. Miss that date, and the seller may terminate your contract. The operative word here is “may.” The seller does not have to take that action.  Also important for the buyer is to pay close attention to the specified dates in the contract. There are timelines spelled out in this document that you must meet.

In today’s market both parties may want to consider using this option to find or sell a home. It isn’t the best scenario, but it might be better than no scenario at all. We need to be flexible and creative in a tough market such as we now are seeing. If you have other questions about this topic or another real estate subject, contact me and I will be glad to help you get your answers.

Pricing Your Home Correctly

One of the hardest realities of today’s economy for people to grasp is the effect the recession is having on home prices. In discussion with people in a group, everyone agrees that home prices are falling, albeit much less here in the Lake Norman area than in other parts of the US. But cull one person out of the pack, and start discussing the price of their home, and it’s a different situation. It’s easy to speak without emotion about the housing market, but very difficult to talk about your house.

Some folks like to do their own research to determine their home’s value. Unfortunately this research is usually flawed, inadequate, and not free of emotion. For instance, you cannot determine what your home will sell for by looking at the prices of the other homes for sale in the neighborhood. They may be priced incorrectly, different in size or features than yours, or what is referred to as less than an arm’s length sale, ie; a foreclosure or short sale. Computer savvy people that figure out how to gather up the sold and/or active properties in their neighborhood from an online source are even more prone to making errors in their calculations. An example of this would be simplifying your price calculation by using an average dollars per square foot number. Generally ranch homes will sell for a higher $/sf number than two story homes. This is a poor way to try to determine your home’s value.

Unless you have an understanding of how an appraiser will determine a home’s value, you cannot understand how a Realtor will prepare a Comparative Market Analysis of your property’s value. There are intricate dollar adjustments that need to be made to make comparable properties look as much like the subject as possible. Number of baths, interior features, exterior features, and more play a part in the analysis. So do age of properties, location, condition, etc.

Finally, the one argument I hear a lot from folks considering listing their home is “I’ve been in that house down the street. Mine’s worth more because…” This is the hardest objection to overcome, because it is emotion-based and subjective.

My recommendation to anyone thnking about listing their home for sale in this market is to get a qualified, experienced Realtor to provide you with a thorough market analysis. If you select an agent that says the analysis can be done without seeing your home, select again. If you need help with this important step and don’t know who to call, I would be glad to do the analysis. There is never a charge for this service. Call or email me and I will be glad to help.

What About A Home Warranty?

This question comes up in every real estate transaction anymore, and people want to know if they are worth the money or not.  I make the following points to my clients when the subject comes up:

As a buyer, if you have any concerns about age or condition of systems in a home you plan to purchase, you should consider asking for a warranty. There are several levels of warranty available, from a basic one that covers only certain kinds of problems on certain appliances and systems in the home, to more expensive coverages that will pay for repairs caused by rust and corrosion, or even neglect, in some cases. If you aren’t buying a new home, and the property you are considering is more than a few years old, I’d ask for a home warranty.

As a seller, there are two points to consider. The first point is that if you purchase and offer a home warranty for the buyer, you are covered by the warranty until the home sells, and you don’t pay for it until closing. The second point is if you don’t offer one, the buyer will ask for one, and you won’t be covered, just the buyer. It is a good selling feature, and can give you peace of mind as well.

The company I use for home warranties is American Home Shield. They have a good track record among warranty providers,  and they offer several options for coverage. If you are considering a warranty, take a look at AHS, and give me a call or email me to find out more.

Showing Your Home at Its Best

Between readying my newest listings for showing and visiting other listings for sale in the Lake Norman region, I have seen some things that make me think I need to write a post about common mistakes folks make when they have their home for sale.

We’ve all done this before: Pan frying brussel sprouts, broccoli, garlic or some other pungent food, even boiling shrimp in Old Bay seasoning. Sure tastes good at the table, but the cooking odors can linger for days, despite the best vent hood or fan.  Think twice about the dinner menu if you may have prospective buyers showing up at the door. I would consider toast as an alternative….

….but wait: on second thought, take the toaster off the counter altogether while the house is listed. Go to Panera or the Bagel Shop to get your toast fix. Avoid dealing with the crumbs a toaster can leave behind.

It’s winter, even here in North Carolina. If you want buyers to spend time in your home, (and you do), turn the furnace on! When I walk into a house that’s no warmer than the outdoors, my tendency is to get in and out as fast as I can.

Getting back to house odors: There are also pleasant odors that can be offensive if they are too strong. While a plug-in air freshener can make a home smell inviting, one or two in the house may be plenty. Don’t put one in every room. And please use the same scent wherever you put them. 

One last thought:  It doesn’t take much furniture to make an unoccupied house seem cozy. If you are not living in your house, maybe because you were recently married or are combining two households, chances are you have some extra furniture. Left in the home, strategically placed, those odd pieces can make a big difference in how a house shows.

Just a few thoughts to help you rethink the broccoli tonight….

Selling Your Home?- Top Five Mistakes to Avoid

As I promised on April 16 in my post about buyer’s mistakes discussed on HGTV, here are the top five mistakes according to my ranking sellers need to avoid:

5. Failing to market your home in different ways: The days of finding your home in the newspaper or a home search magazine have all but passed. Today, over 80% of home searches begin on the internet, before an agent is contacted. If you don’t have a strong presence on the web, your home is all but hidden from the majority of buyers. Don’t believe that just because your home is listed in your local listing service that you have widespread internet coverage. That’s just the beginning. Presence on mutliple search sites, with loads of pictures, virtual tours, and lengthy descriptions are critical if you want to stand out amng the thousands of homes with which you compete.

4. Failing to stage and showcase your home: Once you list your home, it is no longer yours. You must begin to think objectively about how it looks to others. A professional home stager can help with this task. Stagers can be totally objective, and can help you see things you might miss.

3. Not making access to your home easy for prospective buyers: HGTV talks about this in terms of making it easy for buyers to park at the property. That’s just the tip of the access iceberg. Using a professional contracted showing service for scheduling showings is the best way to make sure access is provided. Another big mistake is cancelling or rescheduling showings to accommodate your life, instead of accommodating the potential buyer’s needs. Generally, if you refuse a scheduled showing, the odds are strong that the buyer will not reschedule.

2. Not hiring an agent, or the wrong agent: This is actually a combination of two HGTV mistakes, but they are so closely related that I cover them here in one section. Today more than ever, with high inventories of homes for sale in the MLS, attempting to sell your home yourself will cost you time and money. When we are in a seller’s market the odds of a FSBO going under contract are much better than when the tables are reversed. To sell a home now with all the competition you must be prepared to not only seek the aid of a real estate agent, but you need to make sure the one you decide to use can help you avoid the mistakes mentioned in this post.

1. Setting your list price too high: This can kill you. I rank it more dangerous than not hiring me. A lot of folks make two mistakes in their thought process that lead them to believe they can get away with this; 1) they over estimate the value of the things they have done to the house, like fresh paint, or shampooing carpets. Belive me, having CAT5 cable wire run throughout your home may have been an upgrade when you built the place, but you are not going to recoup a dime of the money you paid for the option. Sorry. 2) they rationalize that if they start high and get no offers, they can always drop the price later. You can drop the price, but you will have lost your best audience. The first two weeks are critical to the marketing of your home. It’s when the agent spends the most money to market it, and it’s when the most buyers and their agents see it. If you aren’t priced right out of the gate, you will decrease your chances of selling, and add weeks to your days on market.

Here’s the good news for you potential sellers. By using a reputable, experienced agent to guide you through the selling process you can avoid these deal-killers, and any other ones that HGTV may have mentioned that I didn’t. If you would like to see a marketing plan customized for your property that will keep you from making these kinds of mistakes, call me or email me and we can find a time to sit down and talk. Century 21′s Seller Service Pledge is my guarantee that you will be pleased with how we market your home.

Selling Your Home in a Slow Market

Some folks would say it’s better to wait until after the holidays to list your home for sale, because of all the other things that consume our time and energy during November & December. But for a lot of people, the time is now. After all, people do still search for homes, and people still look for the next best place to live, and companies transfer people all year long.

Here in the Lake Norman Region of North Carolina, we are fortunate to be one of the most desireable areas in which to relocate. Many people from the northeast and Florida begin searching this market, sometimes well in advance of their actual moving timeframe, just to look for that perfect property. The Mooresville, Cornelius, Denver and Huntersville communities around Lake Norman offer plenty of opportunities to live near or on the water.

If you are thinking of selling your home, and either can’t or don’t want to wait until spring, here’s a few thoughts:

Don’t try to go it alone – Despite the numerous “Do it yourself” real estate shows you see on TV, in a slow market a real estate professional can make the difference between selling and sitting there.

Cheaper  isn’t better – If you want to compete and win, you need the best tools and experience available. If you are considering a discount broker, be sure to ask what services will not be included in an agreement. Talk to a full-service broker so you have a benchmark for comparison. You get what you pay for. How much more will it cost you if your house sits on the market two or three months longer than it has to?

Set your home apart – The two best ways to get your home sold are price and appearance. And the two are connected in an inverse proportion. The better the home shows, the more value the buyer will impart to it. Inversely, appearance problems, or as they are sometimes called, incurable defects, can be remedied by adjusting the price. (An example of an incurable defect would be a five bedroom home with only one bath). Either way, by appearance or pricing, you need to make your home stand out in the competition for the buyers’ attention. If you need help with the appearance part of the equation, email me at fpark@c21hecht.com and I can connect you with some staging and/or organizing professionals.

You don’t have to wait until spring to market your home. You just have to stack the deck in your favor. Visit the staging page of my website, www.franparkrealestate.com, to learn more about making your home show at its best. For a look at the Century 21 Hecht Realty Customized Marketing System, just give me a call at 704-578-4778.