What’s In, What’s Out

Each year, Mark Nash of Coldwell Banker Residential Real Estate in Chicago asks subscribers to his e-zine what buyers want most. His most recent poll shows:

IN

• A reduced carbon footprint: How your home and you impact the earth matters to more buyers who want a home that lets them save energy and lessen their contribution to global warming.

• Outdoor living: Massive fireplaces, outdoor kitchens, and under-patio heating to extend the season are not just for the Sun Belt anymore.

• Fully concealed appliances: That wood-printed cover for the fridge is not enough any longer; now appliances are hidden behind hinged doors.

• Floating homes: Not your father’s houseboat, these nonmobile homes are basically ranch houses sitting on stationary barges in a lake or river.

• Home elevators: Even builders of mid-priced homes are adding this essential for boomers wanting to age in place.

• Pet showers: Clean pets mean clean homes, and who wants to mess up the bathtub when this feature can be a part of the garage or mudroom?

• Freestanding bathtubs: These oversized soaker tubs, or “bath thrones,” have supplanted whirlpool baths as the must-have bathroom centerpiece.

• Bathroom suites: Whether it’s multiple flat-screen TVs or a mini fridge and cappuccino maker, you’ll soon have a whole home inside this one room.

(This information was re-printed from realtor.org)

Here is a brief article that appeared in the Friday, 3/21 issue of the Birmingham Business Journal:

Friday, March 21, 2008

Birmingham area near top of pack in affordable homes

Birmingham Business Journal - by Lauren B. Cooper and G. Scott Thomas ACBJ

Birmingham now ranks third in the nation for affordable housing, outpacing at least seven other Southeastern cities.

According to a study of the nation’s largest 50 metro areas conducted by American City Business Journals, parent company of the Birmingham Business Journal, the metro area’s median monthly housing payment was $753, taking a little over 20 percent of local homeowners’ median monthly household income of $3,711.

That’s $86 more than No. 1 ranked Oklahoma City, $391 less than the national average and $2,738 less than Los Angeles, ranked the least affordable city in the nation.

The Magic City ranked highest in the Southeast as well, listed above other top affordable cities such as Memphis (No. 9), Louisville (No. 11), Charlotte (No. 12), Nashville (No. 16), Atlanta (No. 17), New Orleans (No. 1 and Jacksonville, Fla. (No. 25).

There is good news and bad news in the current real estate market.  February numbers are in for the Birmingham market, and the average sales price, compared to a year ago, has dropped from $186,311 to $178,600, although “DOM” (days on market) has also dropped from 113 to 90, indicating brisker sales, according to Dave Mace, at the Birmingham Association of Realtors.  He also said that total sales in the Birmingham MLS in February were 979, compared to 1,250 in February, 2007.  The median home price has stayed the same.  Homes in lower price brackets tend to turn over faster than the $300+ price points, in my experience.

NOW IS A GREAT TIME TO BUY.  The selection is amazing, in both new homes and re-sales.  Interest rates remain low.  The limit on FHA loans has increased to just over  $178,000, and, while subprime loans and other risky mortgage products have all but disappeared, more buyers will have access to these safer FHA loans and other lower-interest rate loans in high-cost areas, according to Mace.  On the other hand, by the end of March, 100% financing will virtually disappear.  We have heard the new max will be 97%.

Yet many buyers seem to be holding out.  For what?  Are they expecting further dramatic decreases in home prices?…more desperate sellers trying to dump their homes at any cost  hoping to avoid foreclosure?  (well, yes, there’s always some of that going on…)  Wayne’s personal experience has been that buyers have so much to choose from right now that they are looking…looking…looking…for exactly what they want (or for a fire sale on something close) but remain very slow to make offers.  Frequently the offers they do make are so low that sellers, realistically, can’t even consider them, so they are, essentially, a waste of everybody’s time, and never result in a binding contract.  Other Realtors® have said to me that they think buyers’ expectations may be somewhat unrealistic, in terms of what they can get for the money.  Sellers who are anywhere short of facing impending foreclosure may be willing to reduce their profit, but are not going to suffer a loss on their property.  While it may be that sellers don’t really expect full price offers in this market, it is so competitive that many have cut their asking price to very near their bare bones minimum.  To take much less could mean a loss, and if they DO have to take a loss, it won’t be a very big one. 

Bottom line?  There will probably not be, in the foreseeable future, a better time to buy than now.  Inflation, rising costs of construction, and the state of the economy (are we in a recession?) are all still pushing up the cost of housing over time.  Who knows where interest rates will go, but they probably won’t go a whole lot lower.  Good, safe loans are out there for those who qualify.  The selection is way more than adequate.  So IF you are serious buyer, now is the time.  But be realistic when you make an offer, whether to a re-seller or a builder.  The myth that you’re going to get something for half of what it’s worth is…at least 98% of the time…just a myth.  The standard for sellers a few years ago was to seriously consider an offer down to 97% of asking price.  It may be lower than that now, maybe 94-95%.  But sellers have already come way off the price they want, and have less room to dicker.  Birmingham is NOT Detroit, South Florida, Las Vegas or Silicone Valley.  We never really had a real estate bubble, and the bubble has not burst.  Our home  price appreciation over the years has remained realistic, at an average 3-5% per year, not 3-040%; so housing here is not dramatically overpriced, even for today’s market.  So buyers AND sellers have to use reason in cutting deals that can actually work. 

Come “off the sidelines” and Buy something.  You’ll be glad you did.  So will I.!  And, by the way, one way to get an even BETTER deal on the home your buying is to take advantage of the unique Buyer’s incentive program that we offer our buyers.  Check it out on our website.  We can, literally, put THOUSANDS of dollars back in your pocket when you close on your next home.

An open house might give your home the exposure it needs to find your buyer.  It’s easy to hold open houses, and I highly encourage you to do them often.  Now, I don’t want to alarm you, but there are some common-sense precautions you can and should take to protect yourself and your property and to be prepared for your open house.  Below are things that agents know and do to minimize the threat of a “crime of opportunity” against themselves when holding an open house.  These are important things to think about, because, after all, when you hold an open house, you are inviting absolute strangers into your home to wander around and see everything you have.  If you plan to hold your own open house, please be sure to follow these guidelines:

1. Never do it alone.  Have a friend or family member with you at your home at all times during the open house. 
2. Set up a call schedule with a friend or neighbor (one calls the other every 30 minutes) and a coded distress signal, so that you can call with a message that would appear harmless to a prospect but would alert others to potential danger.
3. Prepare ahead.  Remove from view any object that could be used as a weapon (i.e.; stow knife blocks inside cabinets, make sure guns are secured in a gun safe, scissors are not left out on the desk, etc.)
4. Do not wear expensive jewelry or carry large amounts of money.  Do not have valuables (coin jars, jewelry boxes, silver settings, pocket-sized pieces of crystal or valuable knick-knacks, car keys) in view.  Safely stow credit cards & cash.
5. When prospects arrive at your home, ask them to register on a sign-in sheet (or in a guest book.)  Get their name, address, telephone, car make & model, tag number, and driver’s license number.  It sounds like a lot to ask, but legitimate prospects will not mind, and remember…you are giving an unknown person complete access to your home.  You need to know some information about them first.
6. Keep groups of lookers together.  Do not let anyone wander around the house unattended.  Stay with them and carry your cell phone or a cordless phone with you in case you need to make an emergency call.  Don’t hesitate to call your friend, neighbor, or 911 if you become suspicious of a prospect’s behavior.
7. Always let a prospect enter a room first and follow them in.  Stay between them and the door.  Never let them get between you and the doorway.  If you need to get out of the room, don’t let them block your exit. 
8. Finish the open house while it’s still light out.  Do not hold an open house after dark. 

3/4/08

You want to sell.  You must try EVERYTHING.  Here are some more tactics that are worth considering.  Be prepared…you might need to spend some money to sell, and you might need to invest some time and effort.  You can’t just turn it over to a Realtor® who is going to get it sold for you, it honestly just doesn’t happen that way.  YOU and YOUR HOUSE are going to sell your house.  A Realtor® is an expert with ideas and marketing access; an invaluable asset in the process.  But unless you get intimately involved in the details, it is going to be difficult to find your buyer.  You don’t want to waste your marketing opportunities by being less than completely prepared when timing and exposure bring your buyer your way.

Re-think open houses: 

The most serious buyers are looking in the evenings and off-times like Saturday mornings.  Hold an open house THEN instead of the usual Sunday afternoons, when you will be attracted more “lookie-lu’s” than serious buyer prospects.  Make sure you get everyone’s name and number who looks at your house, and call them back within 24 hours for feedback.  Ask them what it would take to get an offer from them.  What can you lose?  Whenever you have an open house, stick out a fish bowl with a note that says “Drop your business card here for a chance to win a free lunch.”  You’ll get an email, a work number, a name…every opportunity to connect with a possible buyer.  All for the cost of one lunch…payable when you get a binding contract or actually close!  (And you really should follow through, draw a card and buy lunch…it’s great PR.)

Organize a neighborhood open house day: 

Ever notice how car dealerships are bunched together in the same area…or the bars & restaurants…or those big neighborhood yard sales?  Why?  Because that attracts bigger crowds, and everyone benefits.  You can do the same thing with an open house.  Why not go around the neighborhood and talk to the other sellers…they have the same problem you do…they haven’t sold yet, and they need a buyer.  Get all your neighbors with homes for sale together and organize a neighborhood open house day that will attract volumes of potential buyers, and split the cost of the ad.  Offer some food or drink or door prizes or drawings at each house.  (That’s how they get agents to attend those agent open houses.)  The great thing is that, as we learned in Real Estate School, ALL real estate is “non-homogeneous,” which means that no two properties are exactly alike. Real Estate is always local, and unique.  And that means that the buyer who would buy your neighbor’s house probably wouldn’t buy yours anyway, whether it’s the number of bedrooms, shape of the back yard, or any of a hundred other things.  By making it a neighborhood event you can buy a bigger ad, share the cost, and attract buyers and agents who know they can see a variety of options in one trip. 

Google “St. Joseph statue:”

You’ll find lots of places you can buy one for just a few bucks, with instructions on what to do with it.  Many sellers swear that they’ve sold their property in the past by burying the statue for good luck.  Maybe it works, probably does if you believe it, and it certainly can’t do any harm!

Participate in an agent open house:

They are usually held on Tuesdays, from 10AM – 2PM.  We don’t do them, but you can let your selling neighbors know that if their agent will set one up, you would like to participate.  Agents will “caravan” through 4 or 5 homes.  Each home provides something; first, soup and/or salad, second, lunch entrée, third, dessert & coffee, last, a drawing for a gift or gift certificate or cash.  I’m not sure this sells houses, but it does expose them to agents who might influence a buyer and, after all, you only need ONE buyer.  At any rate, if you’re going to try EVERYTHING, this is included!

Post notes:

I love this idea!  Make signs on neon-colored 3×5 cards, and post them (with removable tape) throughout your house to point out details that prospects might otherwise miss.  Is the refrigerator or washer/dryer included?  Put a note on them saying so.  New carpet?  Custom draperies?  Italian light fixtures?  Home Warranty included?  Electric pet fence?  Gas fireplace starter?  Make sure visitors are aware of everything that adds value to your home.  Are notes tacky?  Absolutely.  Do buyers mind?  They LOVE them, and will walk around looking for every one to find and read.  And here’s the BEST one:  Right inside the front door, put one that says “KINDLY REMOVE YOUR SHOES.”  Some people will, some won’t, but they will all get the impression that it’s a well maintained home that the owners have really cared about.  I’ve known sellers who have put out a basket of those blue shoe booties at the front door.  I know having those signs around will annoy you, but they work.  Remember, you don’t sell a house the way you live in it.  Buyers have no emotional attachment to your home, and you are selling a product.  They need information, so give it to them.

Get Feng Shui Savvy:

Get a book or research it online, and then arrange your furniture and accessories by the principles you’ve learned.  Your house will look better, you might sell faster, and you’ll feel more peaceful about the whole process.

Hire a home stager:

For $150-200, they will honestly and objectively tell you what you need to do.  It will probably include de-personalizing (removing an abundance of family photos, etc., religious wall hangings that could possibly eliminate someone who might otherwise have made you an offer but was offended.)  It will include “editing” or removal of a lot of stuff.  I know you don’t want to spend money on the house now that you plan to leave, but you might have to.  You might need to rent a storage unit to put stuff in for awhile.  (The garage might hold some stuff, but if you fill it up more than it already is buyers will get uncomfortable.  You probably should “edit” the garage, too.)  It could include re-arrangement of furniture, artwork and accessories.  This can make rooms feel larger, traffic flow work better, and it can help people to imagine their own stuff in your space, if it’s done right.  Another recommendation might be re-painting.  Sure, you love your chartreuse hall bath, and the jelly-bean purple master bedroom is your childhood dream.  But as easy as it is for them to re-paint, most buyers can’t see beyond what they are actually looking at to the potential of a room.  Not only that, they want the house to be move-in ready so they don’t have to launch right into renovations.  They can usually live with neutrals or earth tones, where pastels or extreme hues might rule you out.  Couldn’t you live with new bland paint for just a little while if it will help market your product…you house…to a wider audience?  So, invest in a home stager, and follow the recommendations you get.  Remember, you need to turn your house into a product. (Think of model homes you might have been in…lovely, well decorated, yet impersonal and with as broad an appeal as possible.)   You could hardly spend more than the cost of another month or two’s mortgage payments, and, in the long run, a quicker sale could save you more than you spend.

Stand out front and check the curb appeal, and hang out awhile at the front door:

Take action.  Buyers have so many choices these days that if the picture they see on the internet…or the house they see driving by…doesn’t really grab their attention, you will never get to show them the spectacular floor plan and interior drama.  WhatEVER it takes, it must look good outside.  This means new mulch or pine straw, new flowering annuals, trimmed and pruned shrubs (if they’ve overgrown the house, you MUST cut them back, unless you are trying to appeal to the curator of the botanical gardens,) lawns, sidewalks and curbs mowed and edged, mailbox painted, gutters and trim paint clean and fresh.  The single place that buyers spend most of their time is on your front porch waiting for their agent to finish fumbling around to get the key out of the lockbox.  And they are looking around.  They see everything from old rusty front door hardware (lets face it, you never even look at this…you come in through the garage), cobwebs in the corners to sickly plants in the urn to cracked mortar on the brick steps, peeling paint on the wrought iron, and faded shutters and window trim.  You know what they say about first impressions, so what will they be saying about yours?  Make sure you make this a fun, beautiful, spotlessly clean, well-maintained place.  Investing a few…or a few hundred…dollars on a new front doorknob, updated light fixture, and necessary upkeep can not only pay off…it will bite you badly, if you don’t do it.

Bake a pie.  Or a chicken.  And turn on the lights.  Oh, you’ve heard this before:

When you list, get your carpets cleaned. 

Sniff your closets…pare down the Imelda Marcus shoe wardrobe, and keep a mild deodorizer in each closet.  Put a bounce sheet in every shoe. 

When you have a showing, go all out with the good smells.  Bake something that smells great (leave out the curry, don’t bake a fish, and don’t cook cauliflower or broccoli for a day or two before the showing.)

Remove litter boxes to a faraway place outside during the showing, and clean their usual area well.  Pet odors = bad.

A mild potpourri or Aroma candles - good ones – are okay in small doses, but be sure not to leave candles burning after the showing.  You want to have something left to sell at the end of the day, and it’s easy to forget they’re lit in the daytime.

Bright idea:  Turn on Every light in the house.  Saying this goes against my inclination to be “green.”  But bright rooms appear larger and happier, so turn them ALL on, then just turn them off after the showing.  Of course, they shed light on dirt too, so be sure you have cleaned, cleaned and cleaned again.