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Selling Your Home Appraisals and Market Value How can someone find out how much a house is worth? Property owners traditionally turn to either an appraisal or a comparative market analysis when determining a property's value. An appraisal is an expert's "estimate of a property's monetary value on the open market; an estimate of
a property's type and condition, its utility for a given purpose or its highest and best use," according to Stapleton, Moran and Williams. authors of "California Real Estate Principles."
The results can be presented to the client in various ways ranging from a brief summary on a preprinted form, to a more thorough narrative appraisal report showing all factual materials,
techniques, and appraisal methods used in setting forth the appraisers conclusion of value, or as a letter of opinion simply giving only the appraiser's conclusion of value, with no supporting data, Stapleton,
Moran and Williams write. Comparative market analysis is an informal estimate of market value performed by a real estate agent
or broker. Many agents offer a free analysis or property profile in hopes of acquiring a new client.
A seller's advertised or list price should be treated as only a rough estimate of what he or she would like to receive. Some deliberately overprice, while others ask for close to what they hope to get and a few
actually underprice their houses with hopes that potential buyers will compete and overbid, according to the book, How to Buy a House in California.
The appraisal price is another estimate of value, The appraised price is how much money a professional appraiser estimates the home to be worth and usually is based on "comps," or sales of comparable
homes in the same area. Purchase price and sales price are the same thing. Both terms mean the amount of money the successful buyer actually pays out to purchase the home. Competitive Market Analysis Our Complimentary Competitive Market Analysis gives you a solid foundation for the realistic pricing of your property. With NO OBLIGATIONS
An Important Message About the Value of Your Home
Source: It's critical to price your home right in relationship to the current real estate market and to the
conditions prevailing in your local marketplace. Since the real estate market is continually changing, and market fluctuations have an effect on property values, it's imperative to select your list price based
on the most recent comparable sales in your neighborhood. A Comparative Market Analysis (CMA) provides the background data on which to base your list price
decision. Study the comparable sales material presented to you by the different agents you interviewed initially. If the CMAs are over two or three months old, have your agent update the report for you. If all
agents agreed on a price range of your home, go with the consensus. Experts recommend that more than one agent come and do the analysis.
Watch out for an agent whose opinion of value is considerably higher than the others. What are the ways to determine exactly what a house is worth? Traditionally, people turn to two methods for determining home value - appraisals and something called a comparative market analysis (CMA).
Appraisals vary in cost depending on the price of the home, though they average about $300 for a $250,000 house. Appraisers review numerous factors including recent sales of similar properties,
location, square footage and construction quality. An appraisal is "an estimate of a property's monetary value on the open market; an estimate of a
property's type and condition, its utility for a given purpose or its highest and best use," according to Charles O. Stapleton, III, Thomas Moran and Martha R. Williams, authors of California Real Estate
Principles, 3rd Edition. Comparative market analysis is an informal estimate of market value performed by a real estate agent
or broker. It is based on like sales and generally offers a range of values including probable market value. Many agents offer a free analysis or property profile in hopes of acquiring a new client. What is the best time of year to buy or sell a house?
Since many buyers prefer to move in the spring or summer, generally the market starts to heat up as early as February. Families with children are anxious to buy so they can move during summer vacation,
before the new school year begins. "To attract the largest number of potential buyers, put your house on the market in late winter or early spring," according to
How to Sell Your House, Condo, Co-op, Amy Sprecher Bly and Robert W. Bly, Consumer Reports Books, Yonkers, N.Y., 1993.
The market tends to slow down in the summer. July is often the slowest month because a strong spring will put pressure on rates and slow down the market.
However, the market usually picks up again in the fall- making it the second-best time of year to list a property for sale and possibly the best time to buy.
"In the past, the most difficult time to sell a home was in November and December, when most people are busy with the holidays. But astute home buyers now realize they can get better buys during the off-peak
season, so this is no longer the case. And houses can look more attractive and inviting when they are decorated for the holidays," write the Blys. Personalization People may have very different tastes in wallpaper and wall coverings. While you may have always loved
that flowered and flocked wall paper, all a buyer with different tastes thinks of is how big a job and how much it will cost to take it down. Most buyers don't want to deal with unknowns and they will always
overestimate the cost and labor. Walls should be a neutral color so the prospective buyer can visualize his/her furnishings without walls dominating.
Pets can be a BIG deterrent. Some people are allergic and some are afraid. Pet or tobacco odors can turn people off. Their thoughts are of how difficult will it be to rid the carpets, basement and garage of
these odors..Consider boarding or having a relative keep the pet at least during showings. If you must, restrain the pet and/or lock them in the laundry room or garage and put a note on the door. In any event,
get rid of any odor and have a non-smoking neighbor without pets go through your home and see if any odors are apparent.
Unusual art or furnishings can dominate the display and detract from the surroundings. They can confuse people. The buyers will have trouble visualizing their furnishings. Remember, you're not the one buying. Grating sounds can cause people to not even enter. While you or your children may like loud, music, or loud TV's, buyers don't as a rule. Nor do they want to hear a baby crying or children fighting. Nice
muted background music is recommended. Any of the above may create a feeling on the prospective buyer's part that the house is dominated by
someone else and interfere with the ability to "feel at home" and negate any opportunity for a sale. First Impression
You've probably heard how important the first impression is to the value of your house. But did you know that within 15 seconds a potential buyer has already developed an attitude toward your property?
What is needed therefore is for you to create the best and most favorable first impression possible.
Your property's landscape includes not only the lawn and shrubs, but also everything from the street to
your doorstep. We call this "curb appeal." If it's attractive, people will come in. If it provides a decrepit appearance, prospective buyers will likely pass your house up.
Make sure there's no trash or debris in the street and bring your trash cans in as soon as the pickup occurs. Sweep your driveway and sidewalk and remove any weeds growing in the expansion cracks.
Don't leave cars parked in the driveway if you have a garage. If you must park in the driveway, wash the car.
A freshly painted fence gives a crisp look to your home. Don't let peeling paint and a squeaky gate detract from an otherwise positive first impression. And trim the grass along the bottom. A quick coat
of paint on your mailbox will show you care about the details. Neatly trimmed shrubs are essential, and don't forget the weeds in the landscaping. Maybe add some fresh mulch. Keep the lawn mowed. Add some
fertilizer and keep it watered. Take a walk around your house with a pencil and paper. How about the siding? If the vinyl or painted
siding is OK, at least wash it off with a hose and brush. A fresh coat on the trim and garage door goes a long way. Make sure the screens are undamaged. Fix them if necessary. Fix any cracked windows too,
and don't forget to wash them. Repaint your front door if needed and clean porch light fixture. Put a flower pot with blooming flowers
on your porch. If your roof is old and needs replacing, and especially if it leaks, consider replacing the roof before showing the property. Finally, check your gutters and downspouts for leaves and debris, and
make sure they're straight and any defects won't be noticed. Packinging the Interior
There are many ways to create a more exciting and saleable interior, which can be achieved at surprisingly little cost. Light
It is proven that people react more favorably to property shown under bright light than dark, so keep windows clean and the blinds open. Use bright bulbs in the light fixtures. Use mirrors to magnify the
feeling of light and space. Use light and neutral wall colors, and turn on the lights and open the drapes for showing. Color
A fundamental rule when selling your house is to keep colors neutral and light. White is the most popular exterior color, and shades of white such as off-white and ivory are the safest choices for the
interior. Avoid highly patterned wallpaper. Smell Smell has much more impact than you might expect. Offer to clean carpets for any buyers. The smell of
newness is positive. Fresh flowers can be effective, or use some potpourri in the room, but sparingly. Don't overdo it. Avoid smells like strong pet odors, tobacco, oil, and heavy cooking odors.
Rooms on Display As you walk into the home, the entry way provides the first impression. Here you have the opportunity to
make a big statement in a small area. A light, bright and freshly painted entry gives a positive image. The kitchen is perhaps the most important room in the house. Make sure the room is clean and smells
fresh. Chipped or damaged counter tops should be repaired or replaced. If your linoleum floor is badly worn, replace it with neutral no-wax flooring or tile.
The look of the basement can say more about the condition of your house than you may think. A buyer who sees a meticulously clean and organized basement will have much more confidence in your
property then if it were in a state of disarray. The following ideas will help:
A well organized garage speaks well of your house. You should take these steps to show your property:
Some Factors Are Beyond Your Control
Some Factors Are Within Your Control:
Steps you can take for your house to look its best for broker previews, open houses, and buyer showings: Prepare each room.
It is usually best if you can leave while your house is being shown. Potential buyers tend to feel more
comfortable if the owners are not present. Trust the real estate professional to show your property to its best advantage. You get something special when you list your property with Coldwell Banker, our 18-point Best Seller Marketing Services Guarantee. It's our written promise to you that we'll do everything we can to market your property, or you can terminate the listing. Our initial action steps to find a buyer are:
Immediate Actions
And this is just the beginning. See our exclusive Best Seller Marketing Services Guarantee for a complete description of our guaranteed marketing services. The purpose of our action plan is to sucessfully market your property. The tactics we recommend are
designed to give your property the strongest possible position in the market:
By following our Action Plan, we can help you sell your property for the highest price, in the shortest time, with the least inconvenience to you. ADVERTISE HERE!
All of our choice listings are advertised every day on our website until they are sold. If you would like more imformation, E-mail us at bdevlin@bobdevlin.com or call us at (908) 233-6207 ext. 166. 24 hour voice mail.
What is the Real Estate Buyer's Guide
? The Real Estate Buyer's Guide is Coldwell Banker Schlott, Realtor's approach to marketing homes in the New York metropolitan area. The Real Estate Buyer's Guide
is a compilation of all Coldwell Banker Schlott listings currently available. It is published in 10 regional editions, each with all the Coldwell Banker Schlott listings in that area. What makes this publication any different from the other books of homes for sale?
This magazine contains every Coldwell Banker Schlott listing in a region...something no other company has ever attempted. Because it contains only Coldwell Banker Schlott listings, the houses can
be organized by town and in order of price, making it much easier for prospective buyers to find what they're looking for. It is also updated each month, so the listings are always current. How can the Real Estate Buyer's Guide help to sell my home? The Real Estate Buyer's Guide advertises your home every day until it sells. No other real estate
company can make that offer. In addition, the magazine has significantly increased the buyer activity in our offices. Many of the prospective buyers who call in about another home in the Real Estate Buyer's
Guide will be shown your home, too. Does this magazine take the place of newspaper advertising?
The introduction of the Real Estate Buyer's Guide has not taken away from our traditional newspaper advertising. We are still advertising homes in the newspaper. However, the magazine has the
advantages of a much longer shelf life than a newspaper and a readership who is particularly interested in real estate. What does it cost me to be in the magazine?
There is no extra charge to have your home in the Real Estate Buyer's Guide. It is one of the services provided when you list your home with Coldwell Banker Schlott, Realtors.
Seller financing offers benefits to both buyers and sellers including tax breaks for the seller, as well as offering an alternative when conventional loans can't be found Sellers should run a full credit check on the borrower, require hazard insurance on the property and
include a due-on-sale clause. There are also financing disclosure and repayment term requirements that should be met. Homeowners who are anxious to sell often consider seller financing, which may include taking back a
second note or even financing the entire purchase if the seller owns the home free and clear. Seller financing differs from a traditional loan because the seller does not give the buyer cash to
complete the purchase. Instead, it involves extending a credit against the purchase price of the home while the buyer executes a promissory note and trust deed in the seller's favor.
These special circumstances must be acceptable to the lender who makes the first mortgage on the property.
The necessary paperwork is prepared by the title or escrow company after the terms are worked out between the buyer and seller.
It is critical to thoroughly evaluate the creditworthiness of the buyer first. Fear of default makes many sellers reluctant to take back a second mortgage.
"You may want to get all your cash out of the house, particularly if you are buying another home, "
"This 'I won't take a second' position can change, however, if you find it difficult to sell your house at a decent price otherwise. "
In addition to bringing a better price, seller financing offers these advantages, according to William H. Pivar, author of Real Estate Investing from A to Z.
Negotiations Are low ball offers advisable?
Low-ball offer is a term used to describe an offer on a house that is substantially less than the asking price. The term often scares real estate agents, as well as sellers, because such offers question whether
the home is priced properly. Some experts contend that while any offer can be presented to the seller, a low-ball offer can sour a prospective sale and discourage the seller from negotiating at all. Moreover, unless the house is very overpriced, the offer will probably be rejected. Some persistent buyers overcome these odds by making a raft of low-ball offers until they succeed.
Sellers sometimes pay for all or a portion of the closing costs involved in the sale of a property, depending on the local real estate market conditions, the other terms of the purchase contract, and the
seller's cash and timing considerations. Seller concessions, as they are referred to in real estate jargon, for at least part of the closing costs are
more common in a buyer's market than in a seller's market. These concessions will typically be agreed upon during the offer- counteroffer-acceptance cycle, though
sometimes a seller will make further concessions during the escrow process. Such concessions would generally be acknowledged in the form of an addendum to the purchase contract.
In addition, most lenders will allow a credit from the seller to the buyer for the buyer's nonrecurring closing costs. But they usually won't allow a credit that reduces the amount of the buyer's down
payment, or that includes any of the buyer's recurring closing costs, which include such expenses as fire insurance premiums, interest on the buyer's new loan, property mortgage insurance and property taxes. Lender's policies vary on how large a credit for nonrecurring costs they'll allow. Deciding what stays and what goes is usually up for negotiation.
"Appliances that are not built in (washer, dryer, refrigerator, portable dishwasher, portable microwave) are all negotiable," states Dian Hymer, author of Buying and Selling a Home in California. "Sellers who are undecided at the time of listing about which appliances will stay with the house can
either leave this section blank or state that the appliances are negotiable. Built-in appliances, window coverings, tacked down carpets, and fixtures permanently attached to the property are assumed to be
included."
Desperate sellers will sometimes consider such offers. "While a very low offer in a normal market might be rejected immediately, in a buyer's market the
below-market offer will usually either be accepted or generate a counteroffer. When few offers are being made, an outright rejection of offers becomes unlikely," writes Pivar, author of Real Estate
Investing From A to Z. Plus, Pivar wrote, "There are always some sellers who for some reason must sell quickly" and will consider a reduced price.
There are other considerations:
How far must the owner go to fix problems?
Some of them are code violations that should be fixed. Most sellers like to make all minor repairs before going on the market in order to seek a higher sales price.
In addition, buyers include a contingency "inspection clause" in the purchase contract which allows them to back out of numerous defects are found.
Once the problems are noted, buyers can attempt to negotiate repairs or lowering the price with the seller. Tax Considerations What expenses beyond the mortgage interest are tax deductible?
"Points paid by the buyer are deductible for that year," say Edith Lank and Miriam S. Geisman, authors of Your Home as a Tax Shelter, Dearborn Financial Publishing, Chicago, 1993.
In a new ruling by the IRS, even points paid by the seller are deductible. According to Lank and Geisman, not a lot of other fees are immediately tax deductible, but some may be
figured into the adjusted cost basis of your home, an important figure when people ultimately calculate capital gains.
"When you buy your home, you have closing expenses, many listed on your settlement statement, that are not deductible on your income tax return, but, instead, simply are added to your cost basis for the
property," Lank and Geisman say. "If you haven't yet purchased your home, a look at the following list could frighten you away from the
project forever! Any of these expenses you may encounter cannot be used as income tax deductions; add them to your basis: title insurance, loan-application fee, credit report, appraisal fee, service fee,
settlement or closing fees, bank attorney's fee, attorney's fee, document preparation fee and recording fees," the authors say. The seller paid the points on this home. Are these deductible from income taxes?
Home owners affected by the IRS'1995 announcement allowing buyers to deduct points paid by the seller are instructed to file an amended tax return for the year in which the home was purchased,
"If they're entitled to a refund, they will get a refund based on the filing of an amended return," said Pam MacLean, assistant public affairs officer with the IRS office in Oakland, CA.
The amendment form, called 1040X, can be ordered by calling the IRS directly at 1-800-TAX-FORM. At the top of the form,write "seller paid points," MacLean says.
Form instructions tell people to attach a copy of their settlement statement, commonly called the HUD-1 form.
The IRS announced in mid-March that people who purchase homes after Dec. 31, 1990 could deduct points paid by the seller. This deduction previously was reserved only for points actually paid by the buyer.
However, MacLean said many deals between buyers and sellers were taking place outside of escrow. Some buyers were paying the points but could not take credit for it because the seller wanted to use the
deduction to reduce capital gains. "The IRS made the change so it would be the same no matter how people were doing it- it would be the same for everybody," MacLean said. What kinds of IRS publications will help in calculating taxes?
Refer to the following IRS Publications: Order by calling 1-800-TAX_FORM. Call 1-800-TAX-1040. Order by calling 1-800-TAX_FORM |
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