AN OPEN LETTER TO SELLERS:
Dear Sellers:
Don't for a minute take seriously the articles in all the papers about how the real estate bubble is bursting, prices going down, etc., etc. As a real estate seller, the market is still tilted your way even though there are fewer multiple offers than last year. So ... from square one, you still have more POWER than a buyer and you can maintain it by maintaining certain PRACTICES:
1. YOU make the rules. To begin with, you and your agent need to grab the bull by the proverbial horns and prepare your marketing strategy, well in advance of any presentation to the public. You must decide when and how showings will occur, offers be reviewed. You set a schedule and do not deviate from it, even if you are tempted by a so-called "preemptive offer," in which buyer's agents try to get their offers looked at prior to the date you have set. Unless you stand firm, you are giving away your power to the other side. Worse yet, if you don't wait until your previously specified offer date, how will you ever know if you got top dollar?
2. ALWAYS utilize multiple listing services, since research has shown over many years that MLS remains the most probable source of the buyer for your home. If your agent suggests a "pocket listing," get a new agent because such a listing is held back from the market as a whole-thereby decreasing mathematically your chances of obtaining the most offers, while increasing the chances of the listing office to sell the property and not have to share the commission.
3. ALWAYS gather all relevant information on the property prior to marketing. This includes inspections on the property, disclosures, etc. Never allow anyone (including a buyer) to tell YOU about your own property. Knowledge sure is power! If you don't believe me, just look at the cost of ignorance.
4. INSIST that all disclosures be read and approved by the buyer PRIOR to making an offer. This is the time when you will have the greatest negotiating strength because the buyer is putting on the best face you will see throughout the entire transaction. This is the time to nail down the offer, with no loose ends saved for later. Once you are in contract with a buyer, you have inevitably given over some of the power in the transaction to that buyer; you now have some degree of need for her/him.
5. ACQUAINT yourself with the services offered by your agent and company in order to obtain the best possible product from the Realtor. For example, is there ALWAYS someone in the listing agent's office to provide information on your property (during business hours, of course)? Do they have a live person answering the phone? Are there office managers, transaction coordinators and so on? This is a complex transaction, and you must have all your T's crossed and I's dotted, as well as presenting a good face to the public. Make sure there is an experienced sales manager available seven days a week as well-questions will arise and they require answers NOW.
6. SELECT your agent carefully-very carefully-because that is the person you will be interfacing with throughout the transaction. You are paying a lot of money for that agent's services and not for holding open houses, publishing fancy brochures, etc. What you are paying for is the SELF of that person--skills, integrity, experience, humility and sufficient strength of character to say No to other agents and in general, to keep every teeny weeny speck of power in your corner!
7. DISCOUNT the discount brokers. Think about it ... why are they charging you less? If you understand #6 above, then you realize that you are not hiring an agent to "do" something ... you want your agent to BE something-courageous, creative, and absolutely dedicated to your best interests. Like the ads say, some things are PRICELESS. Check out the PEOPLE. If the full-price agents couldn't do a better job and get you a better price, they wouldn't be in business.
8. CONSIDER hiring an INDEPENDENT real estate company. That way, you can meet the owner of the company, since he or she is not in some corporate office back east churning out cookie-cutter formulae designed to make the company more money. Speaking of money, independent companies are better prepared to negotiate the commission with you (though they won't like it!) since they do not have to pay a big chunk of the funds received to the corporation.
9. PRICE your property modestly. The market will let you know how much it is worth, as long as it is fully marketed. It is wise to ask a bit less than what you really want for many reasons, particularly since under-pricing has been a standard practice (in our local marketplace, anyhow) for many years. Buyers have certain expectations, and it is foolish to price your property without considering these.
10. SPEND money
to prepare your property for sale! You will get it back a thousand-fold.
After all, isn't this one of the largest financial transactions you
will undertake in your entire life? Don't nickel and dime yourself-not
only because you will make less money but also because people don't
like cheap and are turned off when they find it.
Sincerely, Lee Bender
SUGGESTIONS
TO BUYERS AND SELLERS
OF BAY AREA REAL ESTATE
by
Lee Bender, PhD
Written
by Lee in 1985 - still applicable today?
1. GET INVOLVED IN REAL ESTATE: While there are risks and costs, very few people make it financially without owning real estate. In the Bay Area we are dividing all-too-quickly into the "haves" who have real estate and the "have-nots" who do not. With interest rates extremely low, now is an excellent time to buy. (Note: A drop of 2.5% in the mortgage rates means a reduction of $500 per month on a $250,000 loan!)
2. HIRE AN AGENT, NOT A COMPANY, and commit to that agent. This is the person whose primary concern is you! So choose wisely an agent with whom you are comfortable, who can be trusted, and who will represent you well at the negotiating--table because that is the only person you will see when it counts.
If you are a BUYER, establish a committed relationship with the agent of your choice because most successful agents will not devote themselves to your cause unless they have a good reason to think they will be paid.
If you are a SELLER, you probably already have an agent, or at least know that you should be getting one soon. Research shows that people who sell their homes obtain, on the average, approximately 10%-15% less than people who hire licensed realtors. That's a high price to prove you can do it on your own, isn't it?
3. Hire an agent whose company has an ERRORS AND OMISSIONS insurance policy. None of us likes to think about it, but lawsuits happen and you must be prepared. All it takes is one angry person to result in litigation, no matter who is at fault. No one who has this insurance will tell you that you don't need it. And ZEPHYR offers additional insurance to sellers who occupy the homes they are selling.
4. BUY A HOME-WARRANTY PLAN: Tell your agent, whether you are a buyer or a seller, that you want a standard one-year policy that provides basic coverage on the major systems of the home you're selling or buying. (Some even offer roof coverage, but I have never used that particular feature so I can't speak about it.) If your agent has a long-standing relationship with a particular warranty company, then you stand a very good chance of having problems covered both before and after the sale--even if the defective system is not up to local code!
5. OBTAIN WRITTEN INSPECTIONS: No home warranty can ever repair the damage likely to be done by not having your home properly inspected by a licensed contractor who puts his or her findings on paper. If you are a SELLER, I can almost guarantee that you will realize more profit in your home sale if you obtain inspections before marketing your home--rather than waiting for the buyer to hire one. If it's true that "knowledge is power," then you and your realtor had better be darned sure of what you are marketing or you will not have the upper hand!
A popular legal opinion holds that if you hire and pay for your own inspections and subsequently sell the house "as is and as disclosed," then your liability for future defects is greatly minimized.
6. If possible, insist on YOUR OWN ESCROW AGENT: This team member can be crucial to the transaction's success. If you're a seller in a seller's market, or if you are looking for something the buyer can trade to you, you might consider choosing an escrow agent. This is the person who will be handling every last detail from the point of sale to the moment when you receive either the house or the money, so choose wisely.
7. TELL YOUR AGENT WHAT YOU WANT: Your agent's job is to attain the mutual goal of closing escrow. However, it is important for you to understand the job your agent is doing so you will know for yourself what is going on--that is, you must perceive the service provided to you or else no one will be pleased. How often do you want your agent to call you? How active a role in the sales process do you want to assume? Some people want to be taken care of and others want to participate in almost every decision.
8. If you are a seller, CREDIT THE BUYER so you don't have to do the work for agreed-upon repairs. If you are a buyer, TAKE THE MONEY and have the work done for less than the amount of the report; make a few dollars!
9. ASK WHAT'S NEXT: There is nothing special you must know, have, or do in order to have a successful real-estate transaction. People who go to home fairs, read detailed books on sales strategy, etc., are probably wasting their time. A good agent should keep you informed every step along the way, so there will be no surprises other than the ones life springs us in its daily course. Remember: "There is no substitute for experience."
10. TIPS TO SELLERS:
(a) LIGHT UP your house like a Christmas tree. People buy homes that make them feel good, and lighting does just that. Turn on every light in the house (yes, in the bathroom and garage too). Open the drapes. And wash the windows, especially if one of the house's main assets is a great view.
(b) PLANT TREES in front of your house if there aren't any. Friends of the Urban Forest may be happy to assist you, and you can double your home's "curb appeal" overnight. Also, hire gardeners to add bright and cheery flowers inside and outside your home. Gardening "stagers" can take care of the whole project for you. MAKE IT LOOK HAPPY!
(c) EXTERIOR PAINTING can be costly, but you will usually get your money back--if done well (consider hiring a color consultant). If you're going to paint, do it right because buyers make many negative buying decisions from the sidewalk and never even set foot inside.
(d) GET RID OF CLUTTER. Make your home look like no one lives there! I don't know why this works, but it does. Just put it all in boxes and hide it away. Then, when you are actually packing to move, you'll find that you don't need or want much of it anyway.
(e) SELECT THE ASKING PRICE WITH CARE. Many people believe they can ask whatever they want for their home and then come down when they get a lower offer. This is absolutely irrevocably false in 99% of cases. No one will make an offer on your home who hasn't seen it, and only buyers looking for a home in the range of your listed price will see your home. If a home is listed above what it will actually sell for, the buyers who might have afforded it will be looking at lower-priced properties. Your home will be viewed only by those who will find better homes than yours at your listed price, and you will literally make the others look good!
Also, a seller with a home that's new on the market is in the strongest negotiating position. Buyers know they have to make a good offer to impress you and induce you to sell early on. Once you've been on the market a while, the seller is in a weaker position relative to the buyer--who will always want to know how long has this house been on the market. The observable fact about time is this: The longer your home is on the market, the less money it will sell for.
The last thing you should worry about is under-pricing your property! As long as it is fully marketed--i.e., posted on the Multiple Listing Service, shown on brokers' tour, and given enough exposure to bring in multiple offers--you will do fine.
11. NO PAIN, NO GAIN. This is a difficult transition for most people, so expect to be inconvenienced, disappointed, frustrated, frazzled, insulted, chastened, and ultimately rewarded--because most who have gone before you have experienced the exact same things. No matter how smart or tough, you can and will have these experiences, and you will get through them. The awful truth is that you are not in total control.
12.
LEARN THE STRESS CHART (above): If you can accurately anticipate when
the hardest times will occur, you will be far less vulnerable to events
as they arise. You'll know it's all part of the process, and you won't
take it personally.
13. ACCEPT THAT YOU WILL STRETCH--financially and personally. BUYERS will
stretch as far as they can possibly go. SELLERS usually receive less than
what they had expected. The old saying is: "Buyers think high, sellers
think low." And all of this is contrary to our natural inclinations,
isn't it?
to get your house ready to sell
by
Lee Bender, PhD
1.
If you have a lawn, water it. REALLY water it for a week before the first
open house or agent's tour. Most lawns will get green after a week of
watering. If so inclined, feed it too. A little nitrogen works wonders.
2. Polish anything shiny (brass, chrome). Use only CHROME POLISH on chrome-available
at any car parts store. (Regular metal polishes can trap moisture in the
chrome and lead to pitting.)
3. Yes, wash the windows! Especially view windows.
4. Wash off any moldy or mildewy surfaces.
5. Remove trash and debris. Store away as many decorative objects as possible--especially
personal ones like photographs.
6. Clean visible light bulbs--especially clear bulbs and bulbs in chandeliers.
Obviously, replace all burned-out bulbs. (You'd be surprised how many
sellers do not!) And clean any hanging light fixtures while you're at
it. (The first thing people usually notice in a room is the light. If
it's funky, it will set the WRONG mood.)
7. Clean the oven. Nobody wants to see someone else's greasy oven.
8. A coat of paint never hurt a darned thing ... EXCEPT if you pick a
color that will not stand the tests of time or divergent taste. Tangerine
may be a personal favorite, but it may irritate the heck out of a buyer.
Stick with a "rich" neutral color--like Kelly-Moore's Navajo White (#36)
or Bone (#27) or Frost (#14). And the trim color should white but not
be too stark: Consider Kelly-Moore's Swiss Coffee (#23) or White Shadow
(#45).
9. If the front-door lock sticks or won't close easily, adjust it and/or
oil it. The door helps form the first impression of the house. (Often
the strike plate-the thing the latching bolt hits as the door closes--needs
just a little adjustment with a screwdriver.)
10. Clean the carpets-or at least the high-traffic areas and spots.
10
things you can do
to help prevent dryrot and mildew damage
by
Lee Bender, PhD
1. Maintain the roof! Leaks can cause major dryrot damage to wooden parts.
2. Install simple (and cheap) vents toward the bottom of stucco walls and overhangs to release any built-up moisture. Improperly vented siding can also trap moisture over time.
3. Make sure windows are properly caulked. Condensation from fog and cold weather can collect on windows and drip down into the framing.
4. Don't allow any part of the house's framing to have direct contact with the earth.
5. If your house was built on a slab directly on the earth, be especially alert to the presence of standing water near the slab. You may have to invest in a French drain (a drainage trench) around the perimeter--but that's very expensive.
6. Make sure roof gutters drain well away from the foundation or are connected directly to the city's drainage system (per local codes).
7. Make sure gutters aren't clogged with debris and spilling over where they shouldn't be. Ditto for separated or rusting sections of gutters.
8. If the house has stairs, be especially careful to make sure the stairs are properly painted and/or regularly sealed to prevent water intrusion. Exterior stairs are notoriously vulnerable to water damage. Consider an awning if the stairs are exposed to harsh or wet weather chronically.
9. Get an inspection by a professional pest-control company before undertaking serious repairs or renovations. It may save having to re-do the work.
10. Incorrectly installed insulation (especially foil-backed) can actually trap moisture within a house's framing over time. This is particularly true in unheated spaces like a garage. Check with the manufacturer or a pro before insulating in unusual places.