5 Things Buyers Need to Hear Before They Get into Your Car

Young couple looking for real estate with female realtorAn ounce of prevention is worth a pound of cure, they say. What they don’t say is that prevention is also less painful, less costly and more efficient, especially when it comes to preventing the deal-destroying misconceptions and decision traps that plague hot market home buyers.
Often, the only ‘cures’ for these house hunt ailments involve letting the market educate your buyer client, as it does when they lose one or more “dream homes” before they are able to fully absorb and align their strategies to your advice. This cure not only costs them properties, it can cost them money if home values are increasing in your market. Plus, it certainly costs you hours and hours of your most precious business asset: your time.

So let’s circle back to prevention. There are five critical categories of preventive messages you can – and should – deliver to your buyer clients
before you even kick off their house hunts.
Here they are:

1. How to fill in the blank.

Buyers come to the house hunting process full of questions, wonder, and often even some level of disbelief in their ability to actually become home owners. The process itself seems overwhelming and full of uncertainty, even in the calmest of markets. And the more the market heats up, the more difficult it seems like buying a home can be, logistically speaking.

Buyers crave to understand just how all these pieces of the puzzle will fall into place, in terms of the basic logistics of going from house hunter to home owner. To that end, you should brief them on the basic flow of a transaction, from mortgage pre-approval to close, including things like contingencies, inspections, underwriting and the actual closing and funding ritual.

But they also have questions they might not be able to articulate in the realm of how they can make a smart decision and be successful in a competitive seller’s market. Buyers often come into the transaction with a great deal of unstated internal panic on issues like:

– How they’ll decide how much to offer for a home?
– How they’ll ever be able to compete without throwing too much money on the bargaining table?
– How will they know if a property is a lemon?

If you, as their agent, get out ahead of these questions and proactively provide them with a primer on the steps of the house hunt, today’s market dynamics, and all the tricks, insider secrets and experience-based systems you will offer to help them get to closing, you will save them (and yourself) a great deal of angst. You’ll also avoid having to constantly respond and react to the advice they’ve been given by some relative, friend or random newspaper article they read – and you’ll gain trust and credibility points, all in one fell swoop.

2. What to Expect.

You’ve done many a deal. And surely you’ve spotted patterns around the things that occur in a transaction that catch buyers by surprise, cause them shock or even dismay them to the point that the deal is threatened or derailed. These are the sorts of things you can and should take the time to address and deactivate before you put a buyer in the car.

One rule of thumb is, as you walk through your flowchart or briefing about the steps of the house hunt, to point out all the moments in time where the buyer will be required to (a) come up with cash (e.g., earnest money deposit, inspections, removal of contingencies, prior to funding and close) and/or (b) show up in person during the business day (e.g., inspections, closing, etc.). Mentioning these before the house hunt even starts up in earnest empowers your buyer to plan for these things, and be poised to transfer cash or take a half-day off work more easily when the actual day comes.

Prevention-minded agents also take care to address and manage buyers’ expectations around the market dynamics they will undoubtedly face. If multiple offers are common, let them know that up front. If most buyers have to make offers on 3, 5 or 10 homes before they are successful, telling your buyers that before they begin viewing homes reduces the sting of losing a home. It also builds your credibility and minimizes their resistance to your aggressive offer-price recommendations if and when they do lose a home after making what they thought was a good offer.

3. Mindset Management.

Buyers look to us to help them understand the various angles and smart ways they should be thinking about and approaching the multiple tough decisions they will have to make between the time we first meet them and close of escrow. We also hold a unique level of insight into the decision traps and flawed thinking we’ve seen other buyers apply to their real estate decision-making; sharing common pitfalls with incoming buyers in advance can help them avoid errors that often cost buyers properties, time and money.

4. Freak-out prevention.

A freak-out predicted is a freak-out avoided, in my experience. At least a small segment of your pre-house hunt briefing should be dedicated to helping your buyers understand that it is completely normal for a smart buyer to panic at various points of the transaction. In fact, it might even be slightly abnormal or concerning for a buyer not to have any trepidation, nervousness or anxiety as they move through such a major purchase!

People who are generally calm can sometimes misinterpret fear or anxiety as a sign that they shouldn’t proceed with the transaction or that something is gravely wrong with the deal. Letting buyers know up front that these emotions are completely normal and even a good signal that they understand the gravitas of the commitment they are making can deactivate the derailing power of the freak-out.

I go so far as to tell buyers the precise points in the transaction when they can expect to feel super-jitters, like the moment before they sign the offer, the night they get into contract, the moment they lock in their loan and the day they remove contingencies, to name a few. Then, I share with them any checks and balances I have built into the system to help them make sure their rights, wants and needs are covered before they make these increasing levels of investment and commitment. This solves for and eliminates many a freak-out before it ever rears its ugly head.

5. Data.

As a rule, we brokers and agents are very comfortable using data with sellers during a listing interview, and even with buyers who have found a house and need to understand the comps in the process of deciding how much to offer. I submit that it is just as essential, just as powerful, to back yourself up with data during your pre-house hunt briefings.

Don’t just tell buyers that homes are flying off the market, so that they must make an offer quickly on a home they love – tell them that, and then give them the average number of days homes in their target areas are actually on the market before they go pending. Don’t just tell them that most homes in your area are selling for over asking; given them a list price-to-sale price ratio to render this information more concrete and help them truly wrap their heads around it.

Then, make the data applicable by showing and telling them how you can help them use this data to power a successful house hunt. For example, if the list price-to-sale price ratio is running at 110% and your buyer is looking at homes in the $300,000 range, tell them: “that means that the average home listed at $300,000 is actually selling for $330,000. So, I suggest we actually start searching for homes listed as low as $250,000 so you can make a successful offer without going over your $300,000 limit.”

Your buyer might follow your advice – or they might keep asking to see homes listed at $300,000. But in either event, you deliver on the promise of having an experienced, professional real estate pro in the buyer’s corner when you serve up the market data that should matter to them, and help them understand how to use it to level-up their approach and minimize the common frictions of the house hunt.

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7 Ways to Rethink Your Underused Rooms

Image courtesy Houzz.comAs the Spring real estate season flourishes, and escrows close by the thousands, many home buyer’s fantasies of ownership become reality. For many, the house hunt is a quest for the the holy grail of more square footage. But the reality of home ownership is this: you furnish and decorate the spaces in your home according to their planned purpose (e.g., dining room, kitchen, bedroom, etc.) only to realize that you spend 80 percent of your time in 20 percent of your home’s square footage!

Most homeowners who have formal living and dining rooms rarely use them (Thanksgiving and Christmas are but two days of the year). Similarly, millions of square feet in great rooms, breakfast nooks, laundry rooms and hallways and even “spare” bedrooms go underused – space wasted most or all of the year.

Sometimes this is simply a sign that you have a really great kitchen or bedroom that you love – and love to be in. But it’s often an indicator that there might be a little disconnect between your everyday life and the way you’ve chosen to configure your home. In either case, given the cost of those precious square feet, it is a worthwhile endeavor to do what you can to make as many of them as lovable and livable as possible!

There is a cure for the scourge of wasted space: rethinking your rooms. The fact that a room is called a dining room or a breakfast area does not mean that’s the only function you can do there. In fact, I propose that buyers and owners alike might want to spend some time this Spring rethinking and rearranging your rooms to live to the very edges of your precious square footage. Here are a few ideas for repurposing your underused spaces at home:

1. Too-small bedroom into closet or extra bathroom. If you have a bedroom so tiny that it’s barely usable as such, and only when the occasional guest rolls into town, consider getting a sleeper sofa or making friends with a concierge at the hotel down town and converting the little bedroom into an amazing closet. I did this at my last home – simply opened up the wall between the small room and the master, inserted floor to ceiling closet doors and called in a closet organizing company to help trick my new closet out with shoe racks, sweater shelves, rods at varying heights and drawers.

Best. Closet. Ever. And to boot, I no longer found myself griping about the unusable little room!

If you have a little more money to invest and could use an extra bathroom, a too-small bedroom makes for a good, efficient bathroom – especially if it’s located next to another bathroom, so the plumbing already exists.

2. Wide hallway or under-stairs space into study or storage areas. You might be thinking: “Are you nuts lady? I don’t have any “extra” rooms!” Even if every proper room in your home is spoken for and being used, you might still be able to find underutilized areas and spaces in your home that you can arrange more efficiently and squeeze maximum use out of those square feet. Common culprits are very wide hallways and spaces under the stairs, both of which make excellent spaces for custom built-in storage cabinets or desks. Need some inspiration? Visit online home design wonderland Houzz, where there’s a whole category for under-stair design ideas and pics from real homes.

3. Dining room into office or game room. Probably the number one room conversion I hear homeowners consider is the change of a formal dining room into an office. Think about it – you might use the dining room a couple of days a year – a couple of weeks, max, if you are an avid entertainer or dinner party host. But these days, many people work at home, at least part of the time, and running a household is a job of its own, generating papers, files and bills galore. Kids also need a study area for homework and school projects.

Now, with wifi and laptops, all these work and study activities can happen anywhere in a home. But many families find their best case scenario is to have one room with well-arranged desks, lighting, seating, monitors and office supplies, where one or many family members can contain their work and study activities and clutter. This promotes balance and calm in the rest of the home and minimizes distractions to boost focus.

4. Breakfast nook into computer or bill-paying area. There’s something very sweet and romantic about the notion of a breakfast nook. But if you’re fortunate enough to have a nook and an eat-in kitchen island or other casual dining area, you might find yourself using the nook more for organizing the family calendars and paying the bills than for eating. If this is how things go for you, it might make sense to lean on into what you’re already using this space for and optimize it by bringing organization and storage solutions to the area to cut clutter and make even your bill paying a bit more enjoyable.

Consider installing a bulletin or chalk board, a table with a drawer in which you can stash your laptop and ensure you have drawer storage for your files, checkbook, pens or other objects you need to handle the family business.

5. Too-large great room into living, dining, study and play area.
A surprising number of homeowners with great rooms find that they furnish these massive, vaulted rooms beautifully upon moving in, never to enter more than a corner of the space again. A great room presents the perfect opportunity to carve out and repurpose the space you have in a way that aligns with the activities your family actually does on a regular basis. If you have a great room, but no casual dining space, why not make the area nearest to the kitchen into a breakfast nook-inspired dining area – there are scads of bar-height tables and stools on the market for precisely this purpose. No spare room for an office? Consider setting up a desk, chair and lamps or whatever other office area equipment your family needs in one segment of the great room.

And there’s absolutely no reason you can’t use furniture and carpets to turn your great room into more of a multipurpose room, strategically laying things out and arranging furnishings to host your family’s living, dining, study and recreation areas all within four walls.

6. Basement or laundry room into mudroom or pet grooming area. Many people think “underused space” and what instantly comes to mind is the basement. Basements have been finished with sheet rock, painted, carpeted and turned into living areas as long as human beings have been into home improvement. But here’s the rub: in many parts of the country, older homes were built over raised basements because the builders knew the lower areas were susceptible to flooding in the rain or snow. In such areas and cases, it might not make sense to finish the basement with carpet and other things that will be ruined if they get wet.

That said, basements often have entry doors to the exterior of the home, and many have plumbing. This makes them the ideal site for a tiled mudroom, with racks and shelves for family members to stash their muddy, wet shoes, coats, umbrellas and even sports gear – and a sink or other area where they can clean up a bit so as not to track their wintry messes upstairs. Same goes for oversized laundry rooms that were built in the days before full-sized stacking, front-loaders were even a possibility – if you have oodles of extra laundry room space, rethink it into a mudroom/laundry room combo.

If you live in an area with mild winters, but you have canine family members, the very features which make basements and laundry rooms great mudrooms render them prime sports for installing a pet bath or shower area.

7. Formal living room into library. Are you a book junkie? It’s relatively harmless, as vices go, with one exception: it can be excessively space consuming. By this I mean, it can be excessively clutter-creating, if you don’t get a handle on it. If you have a formal living or dining room that is simply not being used, consider lining the walls with bookshelves – bought or built in – and converting the space into a library. Comfortable, well-lit seating and a desk or writing area will finish the room off.

If books don’t float your boat or you have switched entirely over to e-reading, this same model can be applied to any space-sucking collection that you spend more time enjoying than you spend in your formal living or dining room.


For more info please take a look at Http://stormteamrealestate.com

Housing Market Nears 60% Back to Normal

iStock_000022442937Small-645X250Each month, Trulia’s Housing Barometer charts how quickly the housing market is moving back to “normal.” We summarize three key housing market indicators: construction starts (Census), existing home sales (NAR), and the delinquency-plus-foreclosure rate (LPS First Look). For each indicator, we compare this month’s data to (1) how bad the numbers got at their worst and (2) their pre-bubble “normal” levels.

In March 2013, construction starts and the delinquency + foreclosure rate improved:

  • Construction starts rocketed to a new post-bubble high.Starts were at a 1,036,000 seasonally adjusted annualized rate – up 7% month-over-month and 47% year-over-year – which is the highest level since June 2008. In March, 38% of new starts were in multi-unit buildings, compared with the typical level of 20%. Construction starts are now 55% of the way back to the normal level of 1.5 million from their low during the bust.
  • Existing home sales went down a bit. Sales fell 0.6% in March to a seasonally adjusted annualized rate of 4.92 million homes. That’s a 10% increase over one year ago. Excluding distressed sales, conventional home sales were up 23% year-over-year in March. Also, inventory rose even on a seasonally adjusted basis for the second month in a row. Overall, existing home sales are 66% back to normal.
  • The delinquency + foreclosure rate dropped yet again. The share of mortgages in delinquency or foreclosure dropped to 9.96% in March, down from 10.18% in February and 10.98% in March 2012. The combined delinquency + foreclosure rate is 48% back to normal and at its lowest level since October 2008.

Averaging these three back-to-normal percentages together, the housing market is now 56% of the way back to normal, up from 54% in February and 43% six months ago in September. One year ago, the market was only 33% back to normal – so the last year has been a significant recovery. Furthermore, this month’s improvement is even better than it looks with the shift of sales from distressed to conventional and early signs that the inventory crunch may be easing, which will bring some relief to would-be homebuyers.


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