How to steer clear of costly seller mistakes.

Everyone wants to get the most money out of the sale of their home, but sometimes in an effort to do just that, you can sabotage yourself without even knowing it.  Here are a few common mistakes that sellers make, so you'll  know what NOT to do when selling your home.

• 1. Basing your asking price solely on the listing price of other properties.  If you see one, or any number of homes on the market for a particular price, don't assume that your home is worth that price as well, even if your home has more to offer. If those homes are on the market, then they haven't sold- and anyone can list their home for sale at any price if an agent is willing to list it for that price. It does not necessarily mean that the home is worth it. See my post on "Street Phenomena"

• 2. Overestimating the value of  upgrades or improvements, and adding the full value on to the asking price.  You may have just remodeled your bathroom and /or kitchen or refinished your basement . Unfortunately, you do not recoup all of the costs in these improvements, and if your home is over-improved for yoru area, you will recoup even less. See my prior post on Home Improvement Return On Investment.

• 3. Listing your home to the agent that gives you the highest price. Some agents deliberately over-value your  home just to get you to sign a 6 month listing agreement. This is truly frowned uponin our industry by professionals, and we have a term for it- it's called "buying the listing"-. Agents that practice  this deceptive tactic assume that once you are under contract, they can always reduce the price to get your home sold. If they come in with a higher price than other agents do, they are more likely to obtain the listing- so the agent that tells you your home is worth the most may be trying to do ust that, or they may be too inexperienced to know better. Either way, you lose.

• 4. Overpricing your home to leave room for negotiating. We all know most people want to try and negotiate. So that being the case, we should a cushion to the asking price so we will get more, right? WRONG. Typically homes in our area are selling for about 95% of the asking price. When you get your market analysis from yoru agent, this infrmation should be included. Adding more to your asking price only puts your home in the next price bracket, where your home will not be able to compete with the other that are fairly priced. Your home just appears overpriced, and you lose valuable market time, and the ability to get even market price for your home by doing this. Even if a buyer does come to see your overpriced home, they   will not place an offer on a home that is priced too high, because contrary to what you might think , they really don't want to submit a lowball offer.

• 5. Basing your asking price on what you need out of the sale in order to purchase your next home. Buyers determine market value. Just because you need "X" amount to putchase your next home, or to walk away from your home without owing the bank anything unfortunately  has no bearing on the price that a buyer will pay for it.  

• 6. Choosing the wrong agent to sell your home. There are many reasons that your agent could not be the best agent to sell your home.  First and foremost, make sure you hire a Realtor and not just a real estate agent. A Realtor subscribes to a strict code of ethics. There are plenty to choose from, so that make that a requirement right from the get-go. You should have the authority to approve the marketing materials that your agent creates on your behalf. If you are not happy with something, it should be addressed with your agent so that it can be fixed. I cannot tell you how many times that I have been to a sellers home after theior listing expired and they never saw what theit actal MLS printout looked like, much less given the ability to okay it. That includes pictures, too. One of these days, agent siwll realize that photgraphng the corner of a room, is just really a picture of the cornetr of a room. Also focusing on the furnishing rather than the house itself is a no- no. Taking the time to move items as necessary for a photo shoot on teh house, and returning the items to where they were shoudl not ever be a big deal to anyone. When I see a picture of a kitchen that has too much on the counter, or magnets and papers all over the fridge, it spells laziness on the agent's part. The internet is powerful, the pictures must be as photogenic of your home as possible, to put it in the best light.

• 7. "Hard selling" to your buyer as they are looking at your home. When an agent is showing your home to their buyer, resist "helping" that agent, and/or following them around your home. When you, as a seller,  point out all of your home improvements, and all of the features of your home, it makes you look desperate to sell. It's a majotr turn-off to buyers, and agents for that matter.  Buying a home can be very emotional for a buyer. They really need the time alone without you breathing down their neck at every move- whether you think you are doing that or not. Everyone has their own privacy limits. It's really best for you to be out of the house, or out of the way during home showings.

Every dollar counts when selling your home. Make your decisions wisely- the right agent make sall the difference for each of these common seller mistakes. and I just happen to know someone :)

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Are Fairfield County home prices stabilizing?

Is it possible to gauge whether home prices in our area are beginning to stabilize, or is it just wishful thinking? The answer is yes, it is possible to gauge market stabilization, however there has to be enough sales to make an accurate judgement- right now, there are not enough sales to back up the rosy outlook that we all want. BUT that does not mean  that the market is all gloom and doom- it's not.

I have always been  fascinated by statistics, and have kept lots of market data throughout the years, and reported market data for various publications. I am not new to this- I have been actively engaged in real estate for 27 years including  selling through  a similar market. Like so many others at that time, we  didn't see it coming. One thing for sure though, I made sure that I paid special attention to what happened as we were getting out of that horrible market.

I won't beat up on the first quarters sales statistics too much. We had  the worst winter on record, here, and buyers and sellers alike waited just for that alone- so the quarterly stats may not look fantastic, but they must be seasonally adjusted, so if  you hear the media speaking somewhat pessimistically about this first quarter sales in the Northeast, I am asking you to remember that they are reporting  news as they see it from a  multi-state region- and honestly, you know as well as I do that even if you hear a report on Hartford CT real estate, it doesn't really have too much of a bearing on where we are in Fairfield County, now does it?  

The first thing that happens in a market rebound is that certain "price pockets" begin to sell in each town. What I mean by a price pocket is (for example)- a range from $500-600K will start to  move more quickly than it has, and at the same time, another price pocket of maybe 1mil- 1.2 mil will start to move. The overall market may not seem to be moving in general- (if you look at that way)  but if you pay attention to certain price points, it is.  What I see right now, is a beginning indicator of better things to come.

One thing that's always very important to remember - Pricing is all relative. If your home is worth less than it was 1 year ago, remember that the house you are buying is also worth less than it was a year ago, too. If you are purchasing a higher priced home, that seller has more to lose than you do- couple that with low interest rates, and you make out pretty good!

I would be happy to analyze your current situation with your home, and give you an honest opinion as to whether it's better for you to move now, or wait a few months, or wait a year. It will not always be the same answer- everyone's situation is different. So feel free to contact me, I love sharing my knowledge and expertise when someone can benefit.

What happens if the house you want to buy does not "appraise", and you can't get a loan because of it?

The bank sends an appraiser out to a property to ensure it is worth the amount you are willing to pay. Consider it an additional unbiased  check on the value. If you require a $500,000 mortgage on a property that is deemed to only be worth $500,000, the bank may  not give you a loan (It would be considered 100% financing) The bank looks at lending  money that is secured on a property as an investment. There would be no equity in the house on that particular scenario, and in case of a default, the bank would have a hard time recouping its investment.

Three  things can happen in this instance. The seller can reduce his price to what the bank feels that its worth. The buyer can put more of a deposit down, or the buyer can walk away from the transaction, with no penalties. Incidentally, there would be no penalty for the seller, either.

Sometimes, if and when an instance like this occurs, the seller may opt to hire an independent appraiser (that is certified through the buyers bank) for another opinion. Appaisers sometimes make mistakes, too- but don't worry too much about this- it's a rare occurrence these days. Years ago, buyers were not represented by agents. All realtors worked for the seller, even if they wrote an offer for the buyer. With buyer representation, the contracted agent holds a fiduciary relationship with the buyer. Justr another good reason to hire an agent to represent you in yuor purchase

How often should your agent conduct a market analysis of your home?

The real estate market changes daily, and certain local, national or even global events can affect your market value.There could be a recent sale that strengthens or even enhances your position in the marketplace, or a recent sale that hurts your possibility of obtaining the price that you and your agent once considered appropriate.

When a bank requests an appraisal (either for a buyer or for a re-finance) the appraiser is instructed to utilize only up to 6 months of prior sales.  So an appraisal conducted last year on your home is not an appropriate analysis for today.  If you look at my market statistics reports, you'll see that  there are changes weekly, and those changes need to be addressed as they pertain to your home's value. So the short answer is AS OFTEN AS NEEDED. That could be 15 days from the time you list your home, or every 30 days that your home remains unsold.

When is it time to reduce the price of your home?

Your home has been on the market for two months. You've had some showings, but no offers. Is it time for a reduction? and how much do you reduce the price to?

You might think to yourself, "well, the market is slower right now, my home is priced fairly- it's just a matter of time and having enough buyers come to see my house. Change your mode of thinking!

I don't care what type of market we're in, if your home does not have an offer within two weeks- a month AT MOST, reduce the price. Buyers flock to a new listing- they are actively looking and any time that something new comes on the market, they will want to see that home if it fits their criteria. Your best opportunity for an offer resulting in a sale comes when your home is first listed.

After that, you just wait for new buyers to come into the market. Your biggest pool of buyers occurs when your home is first listed. The next biggest pool of buyers comes when you reduce the price, and that has to do with two things. Buyers that may have seen your home come on the market  and felt that your price was just a little rich for them and were hoping it might come down, and the buyer pool in your new price range.

As fas ar how much to reduce, here are the hard facts. You may not like it, but here it is. 27 years worth of experience has taught me this much at least. Reduce your home by a minimum of 5% for it to make any dent.

Here's why- A lot of buyers will consider offering 90% of asking price for a home, and they do not feel like it's a lowball offer,- most houses sell at an average of 95% of asking price anyway in our area. If  your house was priced "right on the money",  they would have offered something already by this time. So, reducing your price by that 5% will surely incite someone to make an offer, where you can start to negotiate. No one says that you have to give your house away, and no agent should ever push you into accepting an offer that you are not comfortable with. I know I wouldn't. Just remember,  buyers ultimately determine market value.