Paint your home to sell

First things first.  You all know how important it is to keep your home in showing condition when you have your home on the market to sell.  No clutter, messes, dirty laundry, etc.  But it’s also important to make your home look the best it can in order to move quicker and to get you a good return on investment.  Paint color is key.  

Let’s start with what not to do.  No wallpaper.  I know it’s hard to remove.  I know it matches the bath towels that you special ordered along with the custom faucets.  But it just doesn’t work for most people.  And the buyers that want move-in ready homes don’t want to deal with it, either.  So if you have wallpaper, you’re probably going to benefit the most from this blog post.  I suggest removing it and painting.

No white paint.  This might sound surprising given that it’s neutral.  But having all white walls can make your house look very sterile and not lived in.  It also can appear too bright.  You do want to keep the colors neutral.  So if you’re going to be painting, I suggest light beige or light yellow.  

Don’t go crazy.  I am completely serious when I say that I’ve shown homes where one room is orange, another turquoise, another dark purple, etc.  It looks hideous.  If you have this in your home now and you are planning on selling, you’ll want to paint all the walls neutral to match.  And remember that dark colors make a room look a lot smaller.  So for those of you with navy blue bathrooms, now is the time to go neutral.

Here’s what does work.  Make sure that there are no noticeable scratches or marks on walls.  Touching up paint is very simple to do and can make a huge difference.  It shows buyers that your home is well maintained and cared for.  According to this AOL blog, “Karen Dembsky, president of Peachtree Home Staging LLC and Georgia’s Real Estate Staging Association, as well as a Pro Stager of the Year nominee, has the first and most important piece of advice before even tackling the issue of color.

‘A seller should always make sure that their paint has a fresh appeal, no dings, no marks. If there are any, it should be repainted or touched up because it gives the feeling of a well-maintained home,” she said. “The color has to be livable and appealing, you want a color where the buyer will come in and say that it’s not their first choice but they can live with it.'”

Dembsky suggests food-related colors for the kitchen, such as yellow, red, or orange.  But this is not permission to go out and paint your kitchen bright orange.  You still want to keep it soft and light.  She doesn’t recommend bright colors for the bedrooms because people view bedrooms as a place to sleep and relax, so light and neutral is best.  Dembsky recommends beige and light tan for bathroom walls.  If you’re dying for a bit of color, play it up with colored hand towels, bath mats, and fun soaps.  She does say that you can go for darker and richer colors in a home office, especially to play against a dark wood desk.

I’d love to hear your thoughts on this.  Please leave me a comment or visit my Web site.

Summer selling tips

A couple weeks back I wrote about how to save money by cooling your home.  I’m sure those of you choosing to sell right now would appreciate some tips on selling in the summer months.  While it seems like the housing market is at a standstill, there are plenty of buyers out there now who need to purchase a home.  I just read an article that lots of buyers now are cash buyers, which is good for people selling rentable units, as a lot of these buyers are investors.

1. Keep it cool.  Make sure the air conditioning is on in your home, even if you’re gone – actually, especially if you’re gone.  If the outside air is 75 degrees or higher, I recommending turning on the air.  You don’t have to make it feel like a meat cooler, but make sure it’s cool enough in there so your potential buyers aren’t sweating the second they walk through the door.  If there’s no air conditioning, make sure to put fans in there to circulate the air and open windows.

2. Stage your balcony if you have one.  Make sure you have some colorful flowers and a comfortable place to sit.  A balcony is extremely inviting and not only does it make the balcony look spacious by adding furniture, but it adds to the living space, making the entire unit seem more spacious.

3. Stage the inside.  It’s really hard these days to show a vacant unit.  They seem a lot smaller and lifeless.  You can stage it without spending a fortune by picking up furniture at garage sales or on Craigslist.  You don’t need to furnish it to the nines.  Just enough to put a bed in a bedroom to see how that fits, a dining room table in a dining room, etc.  It really will make the place look bigger.  It’ll be worth the investment.

4. If you live in attached housing, get FHA certified.  This is something that your condo association will need to do, not you individually.  It makes it much more attractive to buyers who use FHA financing, and that represents about 30% or more of buyers these days.  

5. Spread the word.  And this isn’t just for summer.  Yes, it’s your Realtor’s job to market the listing.  But you never know who you might run in to that is looking to move or knows someone looking.  Post ads on your social networking sites, let your colleagues at work know, tell people at church.  

A few more great tips can be found in this article.

Any more tips you can offer those trying to sell in the summer?  I’d love to hear your suggestions.  Please leave me a comment or visit me online.

New program to benefit commuters

With the influx in gas prices, it’s getting more costly to drive your car to work, especially those living in the suburbs commuting to the city and vice versa.  And higher gas prices mean higher-priced tickets for the bus and train, too.  The Chicago Tribune has a new article about a great new program to benefit commuters. I am highlighting some of the main points below.

 There’s a Chicago organization called the Metropolitan Planning Council that is piloting a program called Commute Options.  What they’re hoping to do is recruit 10 to 15 employer this year that would offer their employees incentives to reduce the cost of commuting to work.  Right now a lot of affordable homes are in areas where there doesn’t happen to be a lot of job openings.

According to a council spokesperson, “A lot of communities where people can afford to live in our region are not the places where there’s a thriving job market.  In order to bridge that gap, we’re working with employers to give employees some options.”

So this is important information that can also benefit home sellers.  If you live within 2 minutes to a highway or are a 2-minute walk to the Metra station, you definitely want to highlight that in your home listing.  More and more people find commuting information as important as the number of bedrooms in a home or what type of flooring there is.  

The article also mentions a recent survey of Coldwell Banker agents.  75% said the increase in fuel prices has led their buyers to adjust their thinking on where they want to live.  More and more want to be closer to work or in a location that work is easily accessible and affordable.  

So sellers need to make sure their Realtor knows all the information about public transportation that’s close as well as proximity to highways and major roads.  It’s important to highlight.  

I hope everyone had a nice holiday weekend.  I can be reached via my Web site.

What not to do when selling

It’s hard enough when you’re stuck selling your home in a buyer’s market.  You have so much competition as it is.  But this MSN article also talks about what’s important when selling your home and what not to do.  I wanted to go over the main points because this is so important.

1. No photos.  So you want to get your home listed Friday to make sure it’s available on the weekend but the photographer can’t come out until Monday.  So you’ll list it and just add the photos early in the week.  That’s a bad idea.  Every buyer who sees your home with no photos will not go back once the photos are in to look at your listing again.  They’ll pass over it the first time and won’t remember they wanted to see pictures.  Another bad idea is only listing photos of the exterior of your home.  Buyers will automatically assume something is wrong in the interior that you didn’t want to show.  It will prevent showings.  As always, make sure your home is in showing condition prior to scheduling photos so that it shows in great shape.

2. Not giving all the details.  It’s very common these days to be viewing short sales and foreclosures, just because of the sheer number of them.  But what buyers want to know when something says “third-party approval” is who that third party is.  What’s the estimate on when they’ll hear back if they’re interested?  It’s as easy as saying a home needs the bank’s approval and you’ll get it in 2 weeks.  Even better, if the bank has already approved a price reduction, be sure to mention that it’s at a bank-approved price.

3. Lies or exaggeration.  Do not say your home is “freshly painted” if that paint job happened 4 years ago.  I just had clients visit a so-called “freshly painted” and “meticulously kept” rental that had marks over the walls and cabinets falling off the hinges.  Be honest.  Do talk about the great features of your home, as long as they’re truthful.  While your carpet may not be new, if it’s neutral in color, that’s a great selling feature so people don’t have to worry about their furniture not matching.

4. Selling as is.  While it’s not always the wrong thing to do, if you’re worried about cosmetic repairs or replacing an out-of-date furnace, just be up front about it.  It’s likely that it will come up during negotiations anyway.  I’ve seen plenty of sellers offering a $2,000 carpet allowance or $1500 for the buyer to choose new appliances.  This is better than having the buyer think everything has been removed from the house to the studs.  

I’d love to know what other tips you have for sellers looking to sell their homes at the moment.  What would you suggest they not do?  Please be sure to leave me a comment or visit me online.

Get creative with incentives

This week I saw an extremely creative incentive offered by a home seller in Libertyville.  The home seller, an interior decorator, offered the buyer of her home an interior design package worth up to $40,500 if her home sold before a certain date.  She offered a similar package for up to $25,250 if it closed a month later.  Now this is someone who didn’t need to drop her price and could offer a skill that would help a new buyer with new furniture and design ideas. 

I mentioned in my blog last week how buyers just want to score an amazing deal.  And seeing how many people don’t just want to give their house away, it’s important to be creative in coming up with other ideas to get the house sold, similar to what this interior designer did.

Typical incentives include free assessments paid for a period of time (for those in association communities), parking paid for.  I’ve seen cars and vacations offered.

I was so impressed with this idea to offer an incentive of a skill you possess … You could even offer to pay for the buyer’s attorney expenses in purchasing your home or cover their home inspection for them.  Another great idea is to have a home inspection done at your cost and made available to the buyers looking at your home.  That way there’ll be no surprises when you’re under contract and the buyer goes to do their own inspection (NO MATTER WHAT – DO YOUR OWN INSPECTION!  I’ve heard horror stories of people that skipped it and there’s no recourse against the seller unless they purposely falsified information).

Some other creative ideas could be an appliance package of up to a certain amount of money, a landscaping gift card, a gift card to a popular hardware store or Target, for example.  And while this might work for some, others would just prefer to knock the price down by that amount, which is fine, but you never know.

Another simple gesture for your new buyer is just to leave a bottle of champagne in the fridge when you move out welcoming them into your home.  I’ve had buyers call me so impressed that sellers have done that for them.  It really just puts a nice spin on a stressful situation of moving.

Do you have any other creative incentives you’ve seen or that have impressed you?  I’d love to hear them.  And if you’re selling your home and would like some ideas of what to offer, please contact me via my Web site.

Remodeling mistakes to avoid

I opened up yesterday’s Chicago Tribune and found a great article on the cover of the Money & Real Estate section.  There were some great points that I wanted to share with you.  I’ve talked multiple times before about what’s important when remodeling and where you can get the most bang for your buck.  But this article talks about mistakes to avoid so that you don’t lose money and a potential buyer.  Here’s some mistakes not to make when choosing to remodel:

1. My favorite.  Really bad colors.  I’m not kidding when I tell you that I’ve seen a house like this.  I’ve actually seen several homes like this.  Walls painted bright orange, neon green.  I’ve seen homes with fake grass in the living room.  Avoid it.at.all.costs.  It’s not pretty.  If you’re going to paint, stay as neutral as possible.  If you’re selling your home and your house looks like this picture, paint the walls beige.  It’s only going to help you.

2. Dysfunctional floor plans.  So you want to convert your family room to a garage.  That won’t quite work if the family room is adjacent to the kitchen.  Think things through first.  It might make more sense to add a garage to the front of the home if that’s where the family room is.  But if not, choose another option.  Tandem rooms (where you have to enter one room to get to another) don’t work well.  You don’t want any room accessible only by entering another room first.  Every room should be accessible from a common hallway.

3. Too few baths to match bedrooms.  Some people need more space and decide to split a large bedroom into two smaller ones.  If you’re going to do this, make sure you have enough bathrooms to match.  Homes with 5 or 6 bedrooms and 1 shared bath are hard to sell.  And make sure bathrooms are accessible to bedrooms.  I’ve shown homes where the only bath was right near the front door and the three upstairs bedrooms were in the back of the house.  That’s a long walk in the middle of the night …

These tips should help you understand what buyers are looking for in their home.  And it’s worth talking to an experienced Realtor before any big home improvement project.  You can find out where to best spend your money.  I’m here to help!  Visit me online.

Early 2011 housing trends

I know we’re already into our third month of 2011.  But it’s going to be interesting to see how the year plays out in terms of the housing market.  Will we expect to see many changes?  Or will things stay relatively similar to what we’re experiencing now with sagging prices and high housing inventory? Bankrate.com has come up with a list of some of the most common trends we’ll see in 2011, at least through summer.

1. We’ll see less refinancing of current mortgages.  Some experts say that it’s the higher interest rates that is causing this dip.  But the other side of it is that those homeowners who have equity in their home already took advantage of a refinance within the last two years, as rates steadily dropped.  So there won’t be as many who refinance in 2011.

2. It will still be hard to obtain a mortgage.  And this is just because requirements to get one are tightening up.  Lenders are being very cautious in loaning money.  With Freddie Mac and Fannie Mae requiring some lenders to repurchase sold-off loans and causing them to lose money, they’re less likely to be as easygoing in lending new money unless you have very little risk, such as a high FICO score, solid appraisals on the home, and good income.

3. New homeowners are still unsure about taking that leap and buying that first home.  Yes, interest rates are low.  However, as just stated before, it’s harder and harder to obtain a good rate.  And even though home prices are low, with so much inventory available, buyers are wary about purchasing if they’ll have to sell in the near future and have so much to choose from they often just decide to rent instead.

4. Home sellers will deal with the current economy and we won’t see any change anytime soon.  The market time will continue to stay where it’s at, higher than in the past, because of high inventory and low prices.  Best way to get your home sold is to keep it in showing condition and listen to your Realtor on a realistic selling prices.  Homes do continue to sell.  But don’t expect to get any bites by listing it above market value.

What do you think of these trends?  Are you in agreement or disagreement?  Please leave me a comment with your thoughts below or visit me online.

Wealthy decide to rent, not own

An interesting article on CNBC today.  I had written several weeks back about how people completely capable of affording their mortgages were choosing to walk away from their homes with no intent on paying.  They could afford it but saw no point to do it when they couldn’t make the money back that they invested when they purchased it.

This article is similar.  It talks about how wealthy Americans are choosing to rent homes instead of buying them because of the state of the housing market.  While many wealthy Americans could flat out buy a home in cash without ever having a mortgage, some are worried that a need to move will have them losing money.

And it’s not just a fear of selling down the road.  One of the pitfalls of home ownership can be routine maintenance and the need to fix items or replace those beyond repair.  It’s also keeping up with the exterior maintenance, etc.  With renting, they can avoid all this.

According to the article: “More affluent Americans are opting to rent as oppose to buy,” says Jack McCabe, an independent real estate analyst and CEO of McCabe Research and Consulting in Deerfield Beach, Fla. “Within the last year, so many people have seen their family and friends get burned in real estate. They don’t see it as being a risk free investment as they used to.”

But what about the flip side of the coin?  Isn’t that throwing money down the drain by paying a landlord each month instead of investing?  And isn’t this turn in the housing market great to get a house for a lot less than what it used to be worth?  Maybe that works if you’re planning to stay in your house for a long period of time, at least 5 years.  But for those looking to feel out a new neighborhood or relocating for a short time, renting could be a better option.  A lot of these renters also believe that it’s not the same investment as it once was.

One reader left a comment about the mortgage crisis contributing to this problem.  He suggests that if you want to buy a home you need to take out a personal loan that will automatically be deducted from your paycheck each month so that you can’t default.   If you’re not working or retired, he suggests cash only, or you can’t get a loan.  I think that really takes away from the American dream of home ownership.  While it’s a tough market right now, it can only get better.  And for goodness sake – if you don’t need to sell your home, don’t move!

I’m curious to hear what you think of this reader’s comment and if you think it would work.  And I’m also happy to help you look for a home to buy or to rent.  Please visit me online.

Remodeling not worth as much as it used to be

In a not-surprising news story in the Chicago Tribune, it turns out that those homeowners who choose to do some remodeling in their homes will not make as much money in resale value as they would have in previous years.  Most people are under the impression that if you do an upgrade or remodel to certain aspects of your home, you’ll get most or all of that money back when you sell.  Well, not so much in this market.  Unfortunately, more money is going in the contractor’s pocket than will go back in yours at the closing table.  

Remodeling Magazine has just put out their annual cost vs. value report for 2010-2011.  While you’re able to look at statistics and numbers for all areas of the country, I want to focus in on Chicago.  Let’s use a midrange major kitchen remodel for this year.  With the average job cost of $58,367, the homeowner would have a resale value of $40,126.  The percent of it being recouped is 68.7%, one of the highest values of all the remodeling projects.  However, last year that percentage was 72.1%.  So not a significant decrease, but still noticeable.

What’s interesting is that every single category the magazine studied, the percentage in recouped value was a decrease from last year.  Some examples of those categories include a basement remodel, bathroom addition, bathroom remodel, master suite addition, deck addition, siding replacement, window replacement, and others.  They also break it down into midrange projects and upscale ones.

Kermit Baker, director of the Remodeling Futures program at Harvard University‘s Joint Center for Housing Studies said, “A lot of what drove the (remodeling) market in 2003, 2006, 2007 was the notion that you were playing with house money.  You could get 90, 95 percent of your investment back. It was really a no-risk proposition. The mentality has clearly shifted to, ‘What kinds of features do I want in my home?’ given how long you live there and your lifestyle.”

So what does this mean for sellers in today’s market?  Just be smart about what projects you take on.  You might not have to spend the money on a complete kitchen remodel.  Sometimes just painting the cabinets and changing the hardware can make a world of difference.  You might not need to replace them all.   And if you have linoleum, it’s worth the upgrade to ceramic tile or hardwood.  Not every home needs granite countertops, especially those with small kitchens already.  It’s not worth the extra expense.  But do know that kitchens are the best room in the home to remodel.  While you might think you need to spend the money to finish your basement, that’s not necessarily true.  A young couple could come in and have a completely different idea of what they want it to look like.  See what the feedback is from the potential buyers coming through your home before you make any drastic improvements.  Talk to your Realtor about what he recommends before spending all that money.

For more information or to have me give you a market analysis on your home, please visit me online.

The next problem with the housing market

I read another fascinating article in the Chicago Tribune again this weekend.  Fascinating.  I was telling family, neighbors, and friends about it.  Fascinating.  As if the housing market isn’t in enough trouble as it is.

So the article discusses the ethics of being a homeowner in this time, during the recession, in this housing market.  Foreclosures are all over.  Short sales are overwhelming the banks.  So what’s the problem now?  Homeowners who have no trouble paying their mortgage, those who can afford to, are walking away from their homes.  They call it “strategic default.”  This is what it’s come down to.  With home values at an all-time low and days on the market going up with increasing numbers, people are sadly walking away from their homes.  They can’t sell.  They can’t rent.  What they’d get for their home if they sell is half, or a quarter, or three-quarters of what their home is actually worth and what they still owe on their mortgage.  So what do they do?

The article talks about a man who lives in Florida who has two properties, both with Bank of America.  He told them he’s going to stop making payments because he can’t sell or rent at a price that would cover his payments and he wants to move out of state.  Since the bank refuses to work with him on a modification or a refinance or adjust the terms of his loan, he’s walking away.  Again, what’s a guy to do?  He said he felt guilty at the beginning.  He’s quoted as saying, “It [the guilt] all stopped when I saw them take $90 million in executive bonuses.  They take bailout money and do nothing for the little guy. They wouldn’t do anything for me.”

I can’t agree more with this homeowner.  I’ve talked about clients who couldn’t refinance or those whose modification wouldn’t go through.  And here the banks are accepting bailout money left and right, upping their salaries, and they won’t work with clients to help them stay in their homes?

So this is going to be a huge disaster.  We already have lenders taking months to respond to buyers interested in a short sale.  They’re just going to have a whopping increase in their inventory now.  Response time will be on the rise, inventory will too, and people who do this won’t get back into the market to buy something new because their credit will be ruined from walking away.  So it’s going to be harder for people to sell or for values to get back to where they should be.

As I said, I feel for these people.  They’re in a tight spot.  But at the same time, it’s going to make the housing crisis an even bigger crisis.  How do we get out of it?  The only remedy I see is more lenders willing to work with their clients and modify existing loans.  It will keep more people in their homes and help the entire market.  Readers, what do you think?  I’d love to hear your thoughts.  Please leave me a comment or visit me online.