Don’t Buy That House – It’s a Money Pit!

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HOW EMOTIONAL DECISION MAKING CAN REALLY HURT BUYERS’ and SELLERS’ BOTTOM LINE

Right now we are sitting in the cusp of a very difficult market. You may be wondering how that could be since both buyers and sellers are enjoying certain benefits of the real estate marketplace these days. But the truth is that the balancing act can be a difficult one to manage when it is neither a full-fledged buyers’ market nor sellers’.

One thing to note, however, is that just a year ago our inventory levels were about 50% higher than they are now – leading to a very different outlook these days for everyone involved. With very little inventory, comes increased demand and with increased demand comes the room for appreciation. In fact, for the first time in years we are finally seeing an appreciation on home prices of up to about 11%!

Decisions Made Purely By Emotions Are Counterproductive

But while sitting in the midst of this precarious market where neither side is fully in “control”, it is critical to make smart, savvy decisions that are not persuaded merely by emotions. Sure, you may see your dream home and fall absolutely in love with – but is that all that should go into it before you make the very important decision to buy it? And for sellers, the emotional quotient comes in when you consider how to price your home. There is equal opportunity to botch that up when emotionally charged decisions get the better of market savvy.

Base Real Estate Decisions On Facts and Practical Information
How best to handle it then? Simple. Bring in the facts and use the facts only to determine where to go next. Buyers will need to evaluate everything about the house, the locale, price for value and more. Sellers need to set realistic price goals and work with their Realtor to come to a reasonable number rather than just what “feels right”.

There are several important questions to ask when seeking the perfect home; should I offer more than last year’s asking price? Is a low-ball offer the way to go? How badly do I want this property? Similarly, sellers should be asking things like “Is my price driven by what sold down the street or rather what the market indicates?” or “How motivated am I to sell; enough to offer a low price to generate increased interest?”

The most important thing to remember is not to rush into any decisions – and certainly don’t let your emotions get the better of you. Base everything you do on the facts, consider market statistics, trends and the advice you receive from your real estate agent. Keep an open mind and be receptive.

I invite you meet with me so together we can consider everything there is – and you can make informed decisions about your real estate goals and how to achieve them. Because neither you nor I want you to end up in this situation (get ready for a HUGE laugh...Tom Hanks and Shelley Long in “The Money Pit”).

Market Update and Late Summer/Early Fall Maintenance Checklist

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Denver Real Estate Market Does a 180 From Last Year

It was just a year ago when our market was looking at a lot of available homes, more distressed properties than we would like and a slow moving marketplace overall. But today, the tables have completely turned. In fact, since that time last year the number of homes available on the market has dropped about 50%, setting off a series of events that has changed the face of how we are doing business this year.

Sellers are enjoying more offers, buyers are facing bidding wars for some properties and everyone’s happy with the low cost of borrowing that keeps on keeping on. In fact, even though we are moving toward a seller-controlled market overall, the cost of borrowing is still at an all time low, driving buyers to buy now and therefore contribute to the sharp reduction of inventory. Of course, sellers are happy these days.

Speaking of sellers, in some cases we are seeing homes sold within days, offers made within hours and interest generated before a newly listed property has even had time to cool off. And all this positive activity points to one very positive outcome: prices are starting to escalate. What’s this mean to you? It means this is a great time to buy. It’s also a good time to sell.

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Late Summer/Early Fall Maintenance Checklist

As we transition into the next season and then into winter, it is a good idea to prepare your home for the cooler months. In my flyer that I sent out, several tips are mentioned that will help you with your home maintenance.

Removing Pest Magnets

By removing garden debris like firewood, extra vegetation and standing water you will eliminate or at least significantly reduce the risks of pest infestation. Since pests tend to gravitate to warm, moist and dark areas, the types of debris mentioned here are ideal breeding grounds for pests.

Pampering Lawn And What Not To Do

To foster gorgeous, green lawns that look like manicured gardens without spending the astronomical amounts of money needed to achieve it, cut your grass high and leave clippings in the yard to add further nourishment to the lawn. Avoid using products with nitrogen in less-than-perfectly green lawns as they can encourage weeds. Fertilize your lawn only when the temperatures are moderate and there are not heavy periods of rain or serious drought.

Cleaning Sink Drains

Rather than risk damaging pipes with expensive and harsh chemical drain cleaners, put together a homemade solution of equal parts of salt, baking soda and vinegar. Flush the solution down the drain for effective drain cleaning. If that is not enough, attempt to clean the drain yourself by cleaning out the u-shaped pipe that sits under the sink as well as flushing out the sink’s drain plug.

Clean And Replace Grout And Caulks

Since tile grout can get damaged or weakened with moisture, it’s a good idea to keep these areas clean. If there are loose spots of grout or if kitchens and bathrooms need caulking, repair them as soon as possible.

Furnace Inspections

At least once a year, furnaces plus heating and cooling units should be inspected, serviced and maintained. Call a quality contractor and have them check all lines; make sure the system is running efficiently and effectively. Replace filters and have both inside and outside units cleaned and thoroughly flushed if applicable for your unit type.

Inspection And Maintenance Of Water Heater

Water heaters generally run without much hassle however homeowners should have them checked once each year. In case of a leak, it could lead to a bigger problem. Check all surrounding areas for evidence of moisture, cracks or problems with water lines leading to the water heater.

5 Reasons Homes Don't Sell

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Who does not want to get top dollar for their home?  The truth is that with the countless homes that have been on the market during the past several months – in many areas, just getting an offer is great news.  But regardless of your location, it is important to avoid making mistakes that could cost you the sale of your home.  Here are five things that sellers do wrong (and what you can do right) that end up in an unsold house.

Pricing

You want as much money as you can but that ends up backfiring when homeowners overprice.  The priceshould be set at middle or low end of the range for your home to be able to sell.  It’s important to review area comparable sales to gauge what other homes in the same neighborhood have recently sold for.  Overpricing helps other homes in the neighborhood sell and it also slows down your offers.

Staging and Photographs

Staging has become more popular – arranging furniture and removing personal items from the house.  It allows buyers to look at the home with a blank slate and be able to envision their own lifestyle in the home. Another benefit of this is that the home’s features will be in plain view for buyers rather than being buried beneath mountains of the seller’s stuff.  High quality photographs are another part of effectively selling a home.  Almost all buyers begin their property search on the Internet and photos are pivotal to the process. 

Access to Property

Restricted access to the property will hinder successful sales because buyers will not be able to get in and see the home on their own schedule.  If you have a busy schedule that may seem difficult to work around, meet and discuss alternatives with your Realtor such as installing a lock box on the front door or setting up specific blocks of time each week that allow for some level of predictability without sacrificing accessibility to your home.

Attendance of Seller at Showing

One of the cardinal rules of real estate transactions during showings is that the seller must not be present while the buyer is reviewing the property.  If you happen to be present when a buyer shows up, leave quickly and do not interact with the buyer or their agent.  If that is not possible for some reason, make yourself as scarce as possible by either going to an area of the home that they have already looked at or go outside for a little while. 

Rejecting First Offer

The first offer you get on your property is usually the best offer you will get on your property.  It is important to look at that first offer as your best one and keep in mind that the longer the home remains on the market, the lower the offers are going to get.  Offers come in between 15 to 20 percent lower than the asking price but the home usually sells within about 5 to 10 percent of the asking price.

If you would like us to review your home and provide suggestions on how you can improve your chances for a successful sale, contact us today!

What is the COST vs. VALUE for Remodeling Your Home?

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Click here to see the Remodeling Value Report mentioned in the video >>

Real estate in Denver has been going through a series of changes lately – and I am pleased to report they are welcome changes.  After what seems like an eternity, we are finally seeing sales go up, inventory going down and affordable mortgages still very much available.  What this means is that buyers can still find great deals while sellers are enjoying more attention and consequently multiple bids on their properties.

Denver Marketplace Seeing Positive Shift

The number of sold homes reported is up 13% from the same time last year with 3,800 homes sold as of April 2012.  With 10,000 active listings on the market, inventory is down by 42% versus last year’s figures, indicating a stabilizing market.  Buyers remain active given the record-setting low interest rates that are still available despite what seems to be a recovering economy.  As a result, many homes continue to go under contact in the greater Denver area.

Up 19% from last year, there were 5,600 homes that have gone under contract so far this year.  The good news continues with the average Days On Market figure dropping 19% from the previous year, with the current average days it takes to sell a home being less than 90 days.  The average sold price is inching upward too, with the current median price at $275,000 – up 10% from last year’s numbers and up 6% from just last month.

These changing trends are welcome news to everyone and they have opened up the path to success for many sellers that were otherwise wary of selling in an uncertain market.  Most sellers are receiving multiple offers on their homes within the first two weeks of listing – adding to their confidence in an upward trend that soon might very well mean an increase in home values.

One of the main things that result in selling success is the ability for sellers to set their property apart from others in the area.  What this means is that their home is priced right, presented well and has desirable amenities or features.  A common practice among many sellers before they list their home is to rehabilitate areas of the home that need repair, enhance existing structure or add new features entirely.

Significant Returns on Investment When Remodeling Prior to Sale

Before you delve into renovating your home it is a good idea to consult with a professional to learn of areas that will yield better returns on your investment.  On this blog, below is a link to a report that shares the aspects of a home that will yield the most return – and it is broken down by price category.  For mid-level priced homes the most sought-after updates are usually in the bathrooms and additional bedrooms.  The percentage return, according to the report, can be as high as 53% or more depending on your renovation.  Upscale homes are also seeing significant returns on renovation investments.  Bathrooms and kitchens are the main areas of focus in these homes with an expected return of 52% for a bathroom addition, 62% for a major kitchen remodel and 71% for a minor kitchen remodel. For more details, access the report directly here.
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Before you embark on any major changes to your home it may be a good idea to consult with us for a walk-through on your property.  With years of experience being able to recognize exactly what buyers will be more inclined to respond favorably to, we can help you determine what changes you would most benefit from in the home.

As always, our success is in your success and we look forward to the opportunity to serve you!