Getting the home ready for market comes last

Getting a buyer emotionally involved with your property starts with it making a great impression online, through photos, interactive tours and words. The process continues in real life, throughout the buyer’s experience walking through the home. This is no small challenge. Getting a home in top showing shape requires work and time.  And properly marketing a home takes a lot more savvy and effort than may be apparent to most people. But getting your home ready for showings and producing beautiful marketing really should be the last steps in the process of getting ready for your sale. There’s some important homework prospective home sellers should focus on before they spruce-up the property and put up a “for sale” sign.

First, determine what your post-sale lifestyle will be

The first step for you as a prospective home seller is to think carefully about what lifestyle you want to enjoy after the sale.  If you don’t already know what home – and where – you’ll be moving into, you’ll be smart to do some careful planning about the lifestyle benefits you want to secure in your next residence. Getting your future lifestyle priorities identified will go a long way towards helping you achieve a more successful and satisfying life in your next home.

To get started on this all-important lifestyle planning process, download the guide here or via the link in the image below:

(The above download will help you accomplish the initial step in a full analysis of your future lifestyle needs. A complete lifestyle needs analysis will help you zero-in on what your ideal next-home looks like.  This more advanced planning will be tailored to your demographic cohort since everyone’s needs and goals change over time as they progress through life. Follow the hotlink at right to learn more about the benefits of a complete lifestyle needs analysis.)

Next, know your numbers

Don’t make yourself homeless by mistake!  If you, as a prospective home seller, are intending to buy another home after you sell your current residence, confirm BEFORE you put your current residence on the market that you will be financially able to buy your next home as planned.  

Some home sellers neglect to do this important homework before they put their current home on the market. They put themselves at risk of being surprised to discover, after their current home is under contract, that they cannot afford to buy a suitable home in the location they want. This is not a good position to find yourself in just before the closing for the home you are selling! 

Before you put your current home on the market, check with a mortgage rep to confirm that, along with the expected proceeds from the sale, you will qualify for the purchase money mortgage financing you need for to buy the next home you want. 

Contact Warren Reynolds if you ‘d like to be connected to an excellent mortgage loan expert who can help you determine whether you’ll be able to obtain the financing you’ll need to buy the next home you have in mind.

Know what your home will likely sell for

The housing market is constantly changing.  The national and local economies have a big impact on home values.  Mortgage rates go up and down.   Housing inventories are always in flux.  These are just a few of the factors that impact the price you can get for your home.

So you need to know what to expect that buyers will pay for your home. And set your asking price accordingly. (Learn more about how to price your home properly here.)

Determine what you need to do to get your home in shape to sell

There’s a seemingly infinite number of websites with content on home staging and the home fix-ups that pay best at closing. Just a quick search yields a bewildering array of advice, some of it perplexingly contradictory when you drill down to the details provided!

It’s only common sense that your home will make a better impression online and in-person if it looks good, inside and out.  Input from a knowledgeable real estate agent can materially improve the impact your home makes at entry to market. And most buyers will hire a home inspector.  So, if your property has some needed repairs or deferred maintenance, you’ll be wise to address those issues before they are pointed out to your buyer during the inspection.

Warren Reynolds has 20+ years of experience selling homes in Massachusetts.  He’ll help you identify what you’ll need to do to get your home ready for sale.  And connect you with handymen and tradespeople who can undertake the repair work best left to experts. Get the benefit of Warren’s eye for the home repairs that pay best – contact Warren today!

Copyright ©02038.com

Pay attention to this reform from Fannie Mae

Fannie Mae recently implemented a reform that may cause trouble for home closings across the US.

With so much information and commentary on this topic, I’ll be brief here and provide you with links at the bottom of this post to take you to sites with authoritative content on this if you want to learn more.

And you should want to learn more about Fannie Mae’s Loan Quality Initiative if you’re thinking of buying or selling a home in 2010.  (It may be safe to assume – or hope – that the problems being caused by this new Fannie Mae initiative will be resolved in coming months, so by 2011 this controversy will be over.)

New uncertainties after the loan commitment letter

Fannie Mae is now requiring lenders to re-check the financial qualifications of mortgage loan applicants after the mortgage loan commitment is issued and just before the loan closing.

In essence, Fannie Mae is seeking to improve mortgage loan quality and reduce the chances for mortgage defaults.

This new requirement to re-check borrowers’ qualifications just prior to the closing took effect June 1, 2010 and the complaints were almost instantaneous.

Big change from past practice

Mortgage loans are now suddenly falling through due to this Fannie Mae reform even after the mortgage loan commitment is issued.

This is a sea change from past practice – the mortgage loan commitment in the past was a near-ironclad guarantee that the purchase money mortgage loan would close on time.

Trouble for home sellers

Home sellers now apparently can’t assume that the issuance by the lender of the buyer’s loan commitment means their home sales will actually go to closing as scheduled.

There may now be delays in closings, throwing off moving plans.

Even worse, home sales may be entirely lost at the last minute, imperiling a seller’s ability to buy his next home or start his new job as scheduled.

Buyers need to protect earnest money deposits

Home buyers face extra risks in addition to closing delays and deal fall-throughs.

After all, buyers typically place substantial funds into an earnest money escrow account to back up their home purchase obligations.

These funds may be at risk if the loan can’t close as promised in the lender’s loan commitment paperwork.

Buyers may not want to let their mortgage contingency clauses expire without having some additional language written into the real estate contract (Purchase and Sale Agreement in MA).

Such language would protect earnest money deposits in the event the pre-closing loan qualification re-check finds problems that delay or derail the mortgage loan.

Sites with more information

Please click the links below to learn more about the Loan Quality Initiative:

Massachusetts Real Estate Law Blog

SmartMoney.com

BankRate.com

Copyright ©2010 02038.com

Importance of first time buyers

Nearly half (47 percent) of all recent home buyers were first-time purchasers.  The share of first-time home buyers increased from 41 percent in 2008 to a stunning 47 percent in 2009. 

Internet marketing dominates; multiple home photos a must

For more than one-third of home buyers, the first step in the home-buying process was looking online for properties.  Nine in ten home buyers in 2009 used the Internet at some point in their home search.

Internet-enabled homebuyers rated multiple home photos as being the most helpful feature of the online marketing they viewed.

Most buyers used an agent

Significantly, 89 percent of buyers searching online used real estate agents as an information source, compared to 70 percent of the buyers who did not use the Internet.

77 percent of buyers ultimately purchased their home through a real estate agent in 2009.  Forecasts made at the start of the decade that real estate agents would be “disintermediated” by the Internet out of the average real estate transaction have proven false!

Suggestions for home marketing

So you in your marketing need to display lots of home photos.  Seek to show all the property upgrades you have made over the years.  

Many sellers would be wise to focus on first time home buyers and especially target purchasers working with agents.

Personalized marketing advice

If you are thinking of selling your home, please get back to me with any questions you have about how best to market your residential property.

I’d like the opportunity to show you what I can do for you!

Copyright ©2009 02038.com

What Home Sellers Should Do

Care should be taken in drafting contingency dates in sales contracts. Pad your contract and closing dates and allowing extra time for your buyer to get a mortgage commitment.

In effect, you need to allow for a slowdown in the entire home sale process and be prepared to pay extra attention to the home sale “comps” selected during the home appraisal.

What is HVCC?

HVCC is the acronym for the Home Valuation Code of Conduct, a sweeping change in how home appraisals are ordered, conducted and completed for purchase money loan financings.

The new appraisal guidelines took effect May 1, 2009 and apply to all single family mortgage loans sold to Freddie Mac and Fannie Mae.  According to the New York Times, these two government-supported organizations purchased or guaranteed approximately 50% of all mortgage loans in the US in 2007, as part of their operations facilitating the secondary mortgage market.

Why the Need for HVCC?

HVCC was created to shield appraisers from undue influence from mortgage lenders. The idea behind the code was that since lenders make money only when a home loan is successfully consummated, mortgage lenders have an incentive to pressure appraisers to have homes “appraise out.”

During the recent real estate boom, some mortgage lenders were reportedly coercing appraisers to inflate home value estimates to help ensure approval of home loans.

A Firewall between Lender and Appraiser

HVCC now bars mortgage lenders from ordering appraisals directly from a preferred appraisal company, in effect placing a “firewall” between lender and appraiser.  Loan reps now must delegate the process of ordering appraisals to in-house staff or to an outside appraisal management company.

This often causes delays and uncertainties in the appraisal process.

On a practical level, mortgage lenders can’t have any interaction with appraisers, even if it’s merely to make inquiries about the status of the appraisal report or to help speed up the finalization of the appraisal.  This lack of interaction creates a knowledge vacuum which fosters uncertainty during the mortgage loan contingency period.  It certainly raises anxiety levels for home sellers, home buyers and Realtors® alike.

The Middle Man Takes His Cut

The extra costs of having appraisal management companies act as middle men is reportedly having the unintended consequence of reducing the compensation that gets paid to the individual appraiser.

Those management companies apparently take a major cut of the appraisal fee, meaning the appraisers actually doing the job end up working for less money. 

This has allegedly led to less experienced, less skilled appraisers doing more of the appraisal workload, apparently driving up numbers of defective, poorly prepared appraisals that are torpedoing many home sales.

The Word from the Trenches

Realtor® organizations say they have been flooded with complaints from their members since HVCC took effect May 1.  Aggrieved Realtors® cite long delays in getting appraisal results, low appraised values causing sales to fall through, and a decline in the quality of appraisals being produced under the new guidelines.

The National Association of Realtors® (NAR) has asked for an 18 month suspension of the highly-criticized HVCC rules.  A moratorium, NAR indicated, would stop the derailment of current home sales and allow for a study of how appraisals have been handled under HVCC.   The goal would be to give regulators a chance to revise the HVCC rules to help end the problems that have cropped up with its implementation.

The National Association of Home Builders (NAHB) is citing defective appraisals generated under the HVCC rules as the cause of many lost home sales, especially in areas of the country hard-hit by the real estate recession.  The NAHB claims that the HVCC rules are promoting the use of inexperienced, poorly trained appraisers unfamiliar with local markets.  These appraisers often use poorly chosen home sales (including “low-ball” REO home sales and short sales) as “comps,” resulting in flawed appraisals which disrupt many homes sales.

Suggestions for Home Sellers and Listing Agents

Until there is some amelioration of the worst effects of HVCC, it seems the days of 30 day closings are over, or at least problematic. 

So beware of offers that anticipate a fast loan commitment and a quick closing.  Providing 30 days for the expiration of your buyer’s financing contingency might be realistic.

You might want to ask your listing agent to attend the appraiser’s visit to your home and provide that appraiser with an accurate list of relevant recent local home sales.  The intent with this would be to help forestall problems arising from mistakes made by an inexperienced appraiser unfamiliar with your neighborhood or community.

Plan for delays in your home sale.  If you are selling one home and buying another, pad all your contract dates to allow for extensions. 

The extra cautious might want to insist on a properly crafted home sale contingency in your home purchase contract that protects you if the buyer of your current home can’t get loan approval.

If you are considering selling your home and have questions about how HVCC might affect the marketing and sale of your property, please contact me for a free, no-obligation consultation.  Or click here to request a Home Value Report.

Being armed with knowledge and the benefits of thoughtful pre-sale planning is the best way to assure the success of any home sale!

Copyright ©2009 02038.com

However, there are still lots of photos on MLS showing green grass, leafy trees and bright sunshine!

Consider what prospective buyers may think when they see inappropriate seasons as they view photos of a home on-line.  They may think of a negligent listing agent who’s stopped caring about a listing that is not selling.  Or imagine that they’re viewing a listing long in tooth that no one wants to buy.

Agents should always  update exterior shots of their listings.  The ideas is to show snow shots in winter, leafy new growth in spring, and the splendor of red and yellow leaves as fall reaches its peak.

Summer home photos in the winter (and vice versa) are all too common on the MLS and may unintentionally speak volumes about the desirability (and asking price) of any home for sale.

Copyright ©2009 02038.com