4 New Year’s Resolutions for 2014 Home Sellers

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Some people like resolutions, others hate them. And according to one recent survey, as many as 80% of people who set them fail at them.

But I’ve found that many people – maybe even most people – love a challenge. Getting your home sold is one of those experiences that ranks as a complex business challenge and a series of emotional, logistics and financial challenges all rolled up into one.

If you plan to sell your home in 2014, you might be inventorying your action items or drafting your action plan as we speak. (If not, you should be – here, we’ll give you a kickstart.)

Beyond the basics tasks and actions involved in pricing, preparing, marketing and selling your home, there are a number of umbrella approaches and perspectives you can choose whether or not to take – each of which has the power to make or break your deal and make or break the angst or awe with which you experience the year ahead. If you’re not the resolution-setting type, or you are and you’re open to new approaches, consider challenging yourself to start and finish your home selling process with these next-level resolutions:

1. Resolve to do your own due diligence – cutting no corners.Here’s the thing no one tells you about selling your home: it’s exhausting. You have to:

  • spend hours interviewing agents

  • review all the neighborhood sales and try to figure out where your home fits among them

  • nitpick everything that’s wrong about your home

  • figure out what you can afford to fix and what makes sense not to

  • source contractors or gear up to DIY

  • have a bunch of little projects – and maybe a few big ones done

  • deal with staging and decor projects

  • then clean your home to within an inch of its life every single day, in some markets, sometimes for weeks or months on end.

And that’s all before you get offers.

Knowing that other sellers find this list daunting, too, helps. You are definitely not alone. But the sheer scale of this list causes some sellers to take shortcuts at some or all points along the path. They don’t meet with more than one agent, or they don’t check references, and end up with an agent they less than love. They don’t pay attention to the detailed questions the disclosure forms ask them and end up omitting some crucial detail that comes back to bite them later, in the form of a lawsuit. They fail to tidy up before showings and buyers report back that the place smelled funny or was so cluttered during the viewings that they were too distracted to seriously “try on” the home in their mind’s eye.

Make it your resolution not to be that shortcut-taking seller. Decide up front that if you’re going to do this, you’re going to do it right and pass your home onto the next buyers with pride. That might seem silly, but I can assure you that the sellers I’ve known who took exactly that stance almost always received the reward of a fast sale at top dollar. Buyers can sense the pride you take in your home and your disclosures. It’s a good look.

2. Resolve to keep your eye on the prize – and the priorities. What is your mission for moving?  What is the vision you’re trying to create? When you decided you wanted to sell, you were in some state that motivated you to make a change – your home had grown too small, too large, too costly, too old, too new, too fancy or not luxurious enough for your life, or because the location no longer worked for you. But that’s only one side of the vision equation.  On the other end, there’s an ‘after’ picture: some state you want to be in. Maybe it’s another neighborhood or a new-and-improved set of amenities or a totally different look of a home.  Maybe it’s a totally different school district, city or state, or a chic condo when your last home was a sprawling ranch house.

Whatever it is, get very clear on the ‘before’ and ‘after’ of your vision for this life change you’re trying to create by selling your home, and resolve to stay that way until escrow has closed. Focusing on your vision will force you to focus on your priorities. In turn, that will help you resist the urge to overprice your home, underprepare it or bicker with the buyer over silly small issues and amounts. It becomes much easier to let things that would normally irritate you roll right off your back when you realize that doing so will serve your own personal priorities of getting your home sold quickly for a great price, so that you can move on to the next exciting stage of your life.

3. Resolve to think things through from the other side of the table. By definition, a first-time buyer has never been in the seller’s shoes. But as the seller, chances are good that you have been in the buyer’s position before. It is to your strong advantage to hearken back to those days when you were desperately seeking a home of your own. That perspective shift is the closest you’ll be able to get to momentarily detaching emotionally; you can walk through your home, view it’s marketing and even think about how it is priced from the perspective of the very buyers you want to attract.

Remind yourself of how you felt when it seemed like you’d never wade through all the mortgage paperwork, when you felt like the lender wanted to know your mother’s shoe size, when you were frustrated with what you saw on the market in your price range or when you couldn’t access the information or get into the property you wanted to, at a time that was convenient for you. Don’t let your home be the listing that causes these frustrations for your target buyers. Instead, from the time you start looking at comps to price your home to the time you start reviewing offers and buyer’s requests for repairs, try to think things through from your perspective and then to put yourself in the buyer’s shoes.

Even if you don’t slash the price or give them everything they ask for, chances are good that you’ll end up creating more win-win situations if you take the other side’s wants and needs into account.

4. Resolve to keep your head out of the sand. The truth hurts, the saying goes. I think that’s misleading, in the context of selling your home and in life. You see, sometimes the truth does hurt, the way a shot of penicillin or getting a tooth filled hurts. But even when it does hurt a bit, the truth never harms you. On the contrary, avoiding the truth about what your home is worth or the truth of buyers’ and agents’ feedback about it is akin to avoiding a shot if you need it, or avoiding the dentist if you have a cavity. It causes something much worse than hurt: real harm.

Confronting the truth that the comparable homes in your neighborhood are selling for lower than you’d hoped to get might hurt, but once the sting is gone that knowledge empowers you to make an appropriate pricing decision, stage your home to the nines or even decide to stay put for awhile longer.

Facing the truth that your home needs a lot of repairs and upgrades compared to the nearby Open Houses you’ve toured might hurt. But after the hurt, you’re in the power position, with the knowledge about either what to do to your home or to its price to get the leg up on the competition.

Acknowledging the truth that you have borrowed so much against your home that you won’t be netting as much cash on the sale as you’d hoped to definitely hurts. But after the pain passes, you have the power to make wise decisions about how much to put down on your next home and to avoid overleveraging it the next time around.

In all of these cases, avoiding the truth poses the potential for real harm: the harm that you’ll overprice your home, underinvest in its preparation for the market or commit the same financial errors with your next home. Make it your resolution to keep your eyes wide open, head above the sand and boldly face the truth throughout the course of your home’s sale, no matter what might happen.

ALL: What are your real estate-related New Year’s Resolutions?

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4 Home Buying Ducks to Get in a Row for 2014

Most Moms I know have a mental checklist they run through with military precision before they leave the house to take the kids to school:

  • Teeth and hair – check
  • Homework in backpacks – check
  • Jackets zipped – check
  • Lunch handled – check
  • Sports gear, musical instruments or (in my Mom’s case) oratorical soliloquies, drum major regalia and History Day accouterments – check, check, check, check and check.

But never did I realize that this maternal preparation drill was a cross-species instinct until one day last Spring, at the lake near my home. I was bopping along, walking my pugs when they both stopped still and began looking quizzically from the shore to me, back and forth, heads on rotation. Finally I saw what had them completely barkless: a Mama duck, literally putting her ducklings in a row. These baby ducks, which looked something like what a loosely-packed cotton ball might resemble if it had legs, were being nudged and jostled into a surprisingly straight line by their Mom, who then led the whole adorable crew on a little promenade into the reeds.

Now, when it comes to putting your own ducks in a row in advance of buying a home, a few things are key. First, start early. Whenever you think you should get started doing the actual prep steps, work backwards about 3 or 6 months before that on the calendar and start then.

Secondly, be bold. I find that many buyers-to-be hesitate to get into the not-so-adorable territory of credit and savings, out of a fear that they’ll learn something that will kill their dreams. The bolder you are about going into scary territory, the faster you’ll learn the truth of what work lies ahead of you – and the more time you’ll have to do what it’ll take to overcome any challenges. Also, just the knowing will make anything scary less so. Here are four ducks you’ll want to start getting lined up and comfortable with now if you hope to buy a home in 2014.

1. Get a vision. The real estate market is a complex system of constantly evolving dynamics, information and realities. Going in with a clear vision for the outcome you want to create is essential to helping you stay moving in the right direction, especially given that you’ll need to be flexible and make some compromises throughout the process. I encourage you to take a time-out from the busyness of your day-to-day life and devote an hour or an evening to putting, in writing, all the elements of your vision for the life you’ll have – and your family will have – once you move into your next home.

At this stage, don’t be too narrowly focused on what the house itself will look like. Instead, deal with everything you can think of in terms of how you want to experience your daily life, including things like where you work, how you get there, and how much you work – and how you would like this to change over time, and what you want to do with your spare time and money. Getting a vision for this will help you drill down into the more granular details of the specifications for a home that will successfully, sustainably serve as the backdrop for the life you’re trying to create, while allowing you to flex and flow with the realities of the real estate market.

2. Put your team in place. I believe that the agent and mortgage broker you select are two of the most important decisions you’ll make in the course of buying a home. The right agent can create a transcendent experience in which you not only buy a home, but are exposed to possibilities for your life you would otherwise never have even considered. A great agent can coach you, advise you, mediate disputes for you and execute on your action plan with you. A great mortgage broker, similarly, can surface options and issues you would otherwise not have appreciated.

And the opposite is true: being represented by professionals who don’t get you or don’t have the expertise you need can really sour your experience of buying a home.

So, work now – way in advance – to get your team in place. Ask your friends and family members if they have an agent or broker they just loved, and when someone says “yes!” ask for an intro. Check out your list of agent suggestions online: check their Trulia reviews and profiles, review any answers or blog posts they’ve put up on Trulia or elsewhere, follow them on Facebook to get a sense for their approach and personality flavor, and reach out to them via whatever communication medium you prefer (e.g., phone or email). Then book a few meetings and, while you have the luxury of time, get to know them each a bit better, essentially interviewing them for the position of your personal real estate or mortgage advisor. While you’re talking, look for a fit in terms of: the types of buyers they have served in the past, the types of recent successes they have had in representing buyers like you, the areas and property categories in which they have experience, and whether their approach to giving advice and education works well for you. It’s not overkill to check references, either, so ask your interviewees for a few recent references of buyers they have worked with.

3. Credit check yourself before you wreck yourself. I know, I know, you’ve heard it a million times – go toAnnualCreditReport.com (the government-mandated free credit report site) and pull your credit at least a year before you buy. This gives you a chance to review all 3 reports, flag any inaccuracies, dispute them and get them corrected way before your home loan weighs in the balance. It also gives you the opportunity to have your mortgage broker flag any issues that might make it difficult for you to get a loan, so you can work on them with ample time to correct the situation. That might mean paying down some bills, resolving any outstanding collections, making sure you don’t create any new bills and even, in some cases, establishing credit lines.

The challenge here is that we’ve all heard it so much, it’s quite easy to simply ignore this advice. Let me urge you not to do this. I’m not even in the market for a home, but I just ordered my own credit reports just to review them and follow my own advice. I was stunned – stunned! – to see about 7 – SEVEN – glaring inaccuracies. Multiple accounts that had long been paid off were still being reported as open and having balances due, and there was even one account I had never even heard of before! A woman in my office just did the same and realized that someone has been committing identity fraud in her name, opening accounts of which she was totally unaware.

These sorts of findings are concerning no matter when you find them. But if you don’t find out about them until you’re already in love with a home, the 30 days it can take to resolve them can seem like an eternity – and can even be the deal-killer on allowing you to actually close on your dream home. The reality is that sometimes it can take much longer than that to resolve inaccuracies – and it will almost certainly take much longer than that to pay bills down and to execute on other line items on your mortgage pro’s action plan for you.

So, don’t wait until the last minute. Actually, do the reverse: pull your reports asap and spend your downtime over the holidays working through them, disputing anything you need to and calendaring a call with your mortgage pro to get a briefing on what you need to do to present yourself in the best light to lenders.

Side note: For small issues, some lenders can facilitate what is called a rapid rescore, which allows you to dispute and correct inaccuracies within a shorter time frame, for a fee – but you should not count on it eliminating every inaccurate report in a couple of days. Sometimes it takes a couple of rounds of disputes.

4. Cash to Close. Coming up with all the cash you need to close a home purchase simply takes time. And sometimes, it’s hard to know whether you’re truly ready to start your house hunt in earnest without knowing with some precision how much you’ll really need. You might be trying to save up 10% of your target purchase price, which is great, but that strategy overlooks the fact that you might also need to be stockpiling funds for additional fees and costs of closing the deal, like: inspections, appraisals, title insurance, escrow fees, mortgage closing costs and property transfer taxes, to name a few. When you pick your mortgage broker, work with them to get a better understanding of what your savings target should be for cash to close, given what sort of property you’re aiming to purchase and what you can afford to spend on it, from a purchase price perspective.

AGENTS:  What are the most commonly overlooked preparation steps you see in incoming buyers?

BUYERS:  Here’s a checklist to help you get an even more detailed preparation plan in place.

SELLERS:  Want to get your own ducks in a row to sell your home next year? This checklist should help!

check out more at http://stormteamrealestate.com

3 Costly Cases of Hot Market Wishful Thinking

“Oh, how I wish. . .” started no wise real estate decision ever. There’s a reason they call it real estate, folks. That’s because we’re dealing with the most tangible type of property around – land – and the buildings that, formally speaking, represent improvements to that land.

Attempting to apply fantasy-realm wishes to real-life, real land situations is never a setup for success. But when the market is hot and you have a goal or a timeline, engaging in wishful thinking is not just foolhardy – it can be costly.

As evidence, here are three common, costly cases of wishful thinking that tend to arise in areas where the market is hot, offers are plentiful and prices are rising. Consider these red flags and take heed in the event you find yourself engaging in any of them:

1. Wishing the house you’re seeing was in a different neighborhood.You’ve seen 2 dozens houses, and put in offers on a dozen. No dice. And your agent keeps pushing you to look in a lower price range, assuring you that you can find what you want. And then they show it to you: safe neighborhood, good school district, good commute to work, just the house you wanted, really – but not in the tony hills or hot downtown district you’ve been trying to get into.

Wishing that you could “pick the place up and set it back down” in your desired neighborhood will not make it so, no matter how many times you say it. The reality is that when you have been outbid a double-digit number of times, something about your approach is not working. You either have to downgrade your specs in terms of the property you seek, maybe looking for something smaller, a condo instead of a single-family home or something in less-pristine condition or you need to shift your location criteria – and that can mean a neighborhood change.

Part of the reason this wish is dangerous is that the white-hot markets in many towns are hyper-localized in the Most Desirable Neighborhood in Town. That’s where the competition among buyers and bidding wars are the most intense. If you’re not prepared to house hunt for homes quite a bit lower than your top dollar to set yourself up for success, or if there simply are no homes in that neighborhood listed below your top dollar, you might need to face the reality check that you simply can’t afford to buy there now.

Stop wishing the home you can afford were in a different neighborhood, because if it were, chances are good you wouldn’t be able to afford it, either! Understand that you’ll be able to level-up your neighborhoods as time goes on and you buy your next home – and the one after that – and don’t let your inflexibility paralyze your house hunt so long that prices all over town rise even more.

2. Hoping that perfect house gets no other offers, even though every other house you’ve bid on has had 54. There’s a fine line between wishing something were true and denying the reality of what actually is true. Facing reality, even when it’s painful or means you can’t have what you want, allows you to make your own action plan for getting the best possible results with the resources you have – or a plan for getting more resources, whichever route you choose to go.

As a buyer in a seller’s market, actually as a buyer in any type of market, it’s ultimately up to you and only you how much you offer on a home. Your mortgage broker can try to get you qualified as high as your income will allow, your agent can get you the comps and give you strategic advice on the average list price-to-sale price ratio, but you are the be-all and end-all decision-maker on offer price, and that’s as it should be.

But if you wield your weighty decision-making power to make lowball or at-asking offers in situations where you are virtually guaranteed to run into high levels of competition, that’s a poor use of your powers. Not only do you set yourself up for failure, you do so at the near-certain likelihood of adding to the demotivating, depressing, discouraging momentum of the times when you get overbid despite giving it your legitimate best efforts. That frustration often leads to analysis and calling a house hunting time-out. And that, in turn, often leads to buying at a time when prices are even higher, and getting ultimately even less home for your money.

3. Wishing prices weren’t going up so fast. Here’s the deal: when prices were flat or falling, buyers were (understandably) stressed at the prospect of buying a depreciating asset. Now that they’re ascending, it’s not at all uncommon to hear buyers bemoan that, too. The fact is, the moment escrow closes and your Facebook status changes from house hunter to home owner the fact that prices are rising, and fast, will shift in your mind’s eye from curse to blessing, quick-like.

Rising prices and a recovering market might be what emboldened you to buy, empowered you to sell a formerly underwater home, and certainly have been inextricably intertwined with the increase in jobs. If prices weren’t rising, many of these other things might not be materializing, either, and that wouldn’t be so great.

Wishing prices weren’t going up so fast contributes to a costly form of denial – denial of the reality that they are. This can cause buyers to persist in making lowball offers and wasting their precious time on homes they can’t compete for within in their budget range, all while their smart targets are appreciating rapidly – and that’s how people get priced out of the market, right under their noses.

Don’t let your home buyer dreams fall prey to this costly wish-based pitfall. Work with your agent to stay in the loop about how prices are trending throughout your house hunt, and use that knowledge to power your decision-making about what price range to house hunt in and what price to offer for target properties.

ALL: What are your real estate wishes, and how do you ground yourself in reality?

 

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