Tag Archives: working with buyers

How Online Home Valuation Tools Work and Don’t Work

Whether buying or selling a home, online home valuation tools (also called Automated Valuation Models, or AVM’s) such as Zillow’s Zestimate can be useful. But they can also be problematic. Since most buyers and sellers are looking at these values, it is a good idea to understand them and how online home valuation tools work and don’t work.

RBHcomuterIt’s a computer, not a person. Online estimates follow an algorithm to give a projected estimate of value. This means that the algorithm is based on the accuracy of the data that is has to compute. The problem occurs when data is input by sellers that may falsely inflate values or where lack of data may not produce an accurate value.

What it (generally) measures. The value of your home will usually be a product of comparable homes. How does your home compare to similar homes that recently sold (within the last 6 months) and are actively listed within a 1-2 mile radius? In addition to proximity, other features compared are: square footage of the home, number of bedrooms and bathrooms, year the home was built, and size of lot. Values tend to be most accurate when this data comes from homes that are fairly new tract homes. Homes that are custom or have been updated with custom features, however, will likely be off on their value here.

It can also be problematic when the algorithm doesn’t recognize a neighborhood boundary. For example, is the computer is using comparable homes from a nearby condo complex when your home is a single family residence? Or, do some of the comps used fall in differently rated school districts? Also, computers are not likely to take into consideration the terms of those sales, such as distressed or discounted sales.

RBHaley Mortgage CalculatorOther features that are probably not figured into the algorithm are: views, location relative to busy roads, outdoor features such as a kitchen and/or a pool, whether the lot is flat or on a steep slope, and quality of the neighborhood, and higher end upgrades and appliances.

Know your competition. The reason comparable homes are considered when deciding value is based on the idea that a typical buyer will not pay more for a similar home if all things are equal. This is why it is especially important to look at recently sold homes (last 6 months) to help determine what people have paid. One mistake many sellers and buyers make is basing value on homes that are currently listed. The problem with this logic is that often the list price is the “best case scenario” for the seller but not necessarily what a buyer is willing to pay.

The bottom line. Being able to differentiate the value the of your home based on specific features is an important part of putting these online home value tools into context. So, unless you want to hire an appraiser, use online home value estimates only as a supplementary tool. Work with a trusted real estate agent to get a more accurate home value (they have additional tools and knowledge to help obtain this value). And remember, what a seller paid for specific upgrades will not always equate to what a buyer will pay.

R.B. Haley Fine Homes & Estates

12396 World Trade Dr., Ste. 306, San Diego, CA 92128

(858) 592-4895       http://rbhaley.com/     CalBRE#01843189

Five Steps to a Faster Home Sale

It is true that a seller’s market (like the one currently in southern California) favors the seller, but buyers are still an important part of the sale equation. There are critical steps sellers can take to reach the ideal buyers who are willing and able to pay top dollar, and to ensure a smooth and expedited escrow process. And it all starts BEFORE listing your property. Here are five steps to a faster home sale.

RBH_termiteOne: Work out the bugs     Having a pre-listing pest inspection done before listing your property can help eliminate surprises (like extensive termite damage) that can throw a wrench in the escrow process and keep the cost of repairs lower, giving the seller more control. Completing recommended repairs ahead of time can be a big selling point, and obtaining a termite clearance report by a licensed pest control company (required by many lenders to fund a loan) can help facilitate a faster escrow.

Two: Call in the inspector     Similar to a pest inspection, doing a home inspection before listing your home will give you an idea of any major (and minor) repairs that will be recommended and likely negotiated as a result. Sellers can give themselves an advantage by either making major repairs ahead of time or taking the cost of those repairs into consideration in the asking price. Keep in mind that buyers may (and should) still opt to have a home inspection done, but a home in great condition reassures the buyer as to the value, will help expedite contingency removals, and will keep more money in the seller’s pocket during escrow.

Three: Move Out     While there can be drawbacks to selling an unoccupied home, the benefits can outweighRBHmovingbox them. Vacating your home prior to listing protects your personal belongings, allows your home to be thoroughly cleaned and staged to be showcased at its best, and most importantly, it makes it much more accessible for potential buyers to see. It is also much more convenient for the seller.   Otherwise, you will have the constant headache of having to keep your home in “showing” condition at all times and be willing to drop what you are doing to vacate the property on a moment’s notice to accommodate potential buyers and stay competitive with other homes for sale in the area.

Four: Showcase it with staging     Whether your home is vacant or occupied there is a range of home staging options, but it is always recommended. Ideally, your home will be de-cluttered and de-personalized, and decorated in a tasteful and generally appealing way. If you do not have this talent, you can ask for guidance from your real estate agent and possibly consider hiring a professional. In a vacant home, staging is recommended in the living areas and master bedroom, and any other areas whose function is not well defined in the home to help buyers visualize how to use the space.

Five: Pre-listing marketing     This is where having a great real estate agent can make all the difference. When selecting a REALTOR ask about his or her pre-listing marketing strategies. These can include posting a “Coming Soon” sign in the yard and marketing to neighbors, advertising in local newspapers or websites, and posting “Coming Soon” on social media outlets and websites such as Zillow.com. Your real estate agent should also be promoting your property before coming to the market with other real estate agents who may have potential buyers through networking and broker caravans. Some REALTORS also do “Exclusive Preview” open houses or parties where previewing the home is by invitation only prior to a general Open House to further build excitement. All of these strategies help to build anticipation and demand and often translate into multiple offers.

And multiple offers puts sellers in the drivers seat so you can sell your home faster and with a smoother escrow.

R.B. Haley Fine Homes & Estates

12396 World Trade Dr., Ste. 306, San Diego, CA 92128

(858) 592-4895       http://rbhaley.com/           CalBRE#01843189

Energy Efficient Home Improvements That Also Add Value

A home for sale that is energy efficient is almost always more appealing to buyers. Why? Because buyers know that they will save money monthly because of the efficiency of the home and will not have to make those upgrades themselves. But not all upgrades are valued the same, and not all buyers are willing to pay a higher price for upgrades they do not value. Here are some common energy efficient home improvements that also add value to your home (so everyone wins!).

Windows     If you have not already upgraded to energy efficient windows, start here. Not only can older windows be an eyesore, window replacements are one of the few upgrades that instantly give an updated look while also providing great function by helping to regulate the home’s temperature and reducing its exposure to extreme heat and cold.RBH window

Appliances     Many home buyers today expect kitchens to be updated with modern amenities like granite or quartz countertops and stainless steel. This also includes energy efficient appliances. Again, this upgrade is functional and goes a long way with making a positive visual impact.

Furnace and A/C     If your home’s furnace or air conditioner is nearing the end of its functional life, it may be worth replacing it before you have to. Home buyers become weary when they know that an expensive item has a higher potential for needing to be replaced in the near future. Even simply adding a programmable thermostat can go a long way.RBH air conditioning

Insulation     While insulation is not something potential buyers will necessarily be able to see, it is likely something they will be able to feel. A well insulated home will offer more in the way of comfort from extreme temperatures and noise. And, as far as energy efficient home improvements, insulation is relatively inexpensive to install.

If you want to prioritize your projects further but are not sure where your house ranks in terms of energy efficiency, you can start by requesting an energy audit from your local utility company. Another benefit that homeowners may overlook is the added bonus of homeowner tax credits available by the IRS as an incentive to upgrade your home’s energy efficiency.

While not all buyers are willing to pay more for energy efficient upgrades (even in a seller’s market), many times the homes that are in need of updating and upgrading are magnets for real estate investors who see it as an opportunity to invest their own money into these upgrades, which results in a lower offer price to the seller. Consult with your real estate agent for further guidance.

R.B. Haley Fine Homes & Estates

12396 World Trade Dr., Ste. 306, San Diego, CA 92128

(858) 592-4895       http://rbhaley.com/           CalBRE#01843189

How to Sell Your Home Fast and For Top Dollar

Selling a home is both science and art. There are the numbers (economics)…and there are the people (buyers). Something magical happens when you get the best of both. Here are the tried and true recommendations for how to sell your home fast and for top dollar.

RBHaleyDollarSignFind the Pricing Sweet Spot     First, start by finding out what has recently sold and what is currently for sale in your neighborhood. Realtor.com can be a great tool for this. The value of your home is based, in part, on the theory that buyers will not pay more for a similar home in the same neighborhood. Ideally, your home will be priced slightly less that what is currently listed (to attract buyers), but slightly more than what has sold recently. A home that is priced too high is likely to sit on the market longer. Potential buyers automatically assume that something is wrong with the property, which may keep them away or only attract the bargain hunters (which may result in a lower selling price).

Downsize belongings     You have no doubt heard about the importance of decluttering your home, but the purpose behind it sends a powerful message. By creating space in your home, you are showing potential buyers that your home is comfortable, livable, and well cared for. What impression do you think it makes when things are jammed into closets and cabinets are overflowing? Think hotel; only the necessities.

Upgrade to move-in ready     Most buyers today have an expectation that the home they buy is going to be move-in ready; most are not looking for a large home improvement project. To appeal to these buyers you want to get familiar with the current trends and follow them. A great tip is to visit model homes, as they often do extensive research on their presentation to appeal to most potential buyers. Take note of popular materials, styles, and uses of space.

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Put your best foot forward     In most cases, potential buyers will view photos of your home before ever setting foot in it. Guess which photo they are likely to see first? It pays to enhance your curb appeal. In many cases this may mean simply laying fresh wood chips and planting some flowers. And, don’t forget about the backyard as well.   When it comes to photos of the inside of your home, lots of light and beautifully staging a home can make all the difference to online buyers.

Hire the right agent     A great real estate agent is knowledgeable, professional, and reliable.   Not only should she or he be able to get your home in front of as many potential buyers as possible, but is also someone who brings you value by negotiating a sale that protects and promotes your best interests as the seller…and can help sell your home fast and for top dollar.

R.B. Haley Fine Homes & Estates

12396 World Trade Dr., Ste. 306, San Diego, CA 92128

(858) 592-4895       www.RBHaley.com         CalBRE#01843189

What to Expect When Buying a Home: Making a Purchase Offer

So, you found the perfect home…now what? Assuming you have already take steps to get pre-qualified (if not pre-approved) for a home loan at this point (if applicable), and you already found a real estate agent you trust and want to work with, the next action step is to submit an offer to purchase the home. If you’re not sure what that looks like, keep reading on “What to Expect When Buying a Home: Making a Purchase Offer.”

Contact the Listing Agent. The first thing your buyer’s agent will want to do is confirm with the listing agent that the sellers are still accepting offers. Even if a home sale is Pending, the listing agent may accept back up offers in the event that the current accepted offer falls out of escrow. A good agent will also be able to glean some additional information and get a general feel for what the sellers might be looking for. Keep in mind that the sellers may also have criteria for selling, such as a time frame for closing escrow or moving.RBHaleyDollarSign

Consider an Offer Price. Start by taking a look at your own price range (the amount for which you have been pre-qualified) and what you feel comfortable paying. It can be easy to get excited and emotional about a home you want, but try to keep a long-term perspective throughout the process. Your agent should share with you comparable nearby homes that are for sale or have recently sold to help guide you to a purchase amount that seems appropriate. Be sure you are comparing like features (for instance, if one home has a remodeled kitchen and one doesn’t, then that should be taken into consideration).  Also, leave yourself some room for negotiation and closing costs (not to mention moving expenses).

Other Negotiable Terms. There are other terms and expenses included in the sales transaction that can be factored into the purchase offer. These can include paying/not paying for reports and/or suggested repairs, removing or including contingencies for the sale, and accommodating the seller’s timing needs for escrow or moving, among others. Generally speaking, the easier the buyer makes the purchase on the seller, the more likely their offer will be accepted. This can also mean that the buyer may be shouldering more risk, so it is important to walk through all of these things with your agent.RBHaleySignContract

Submitting and Offer and Counteroffer. Once you settle on a purchase offer price and ideal terms of sale, your real estate agent will help you complete the purchase offer contract (or Residential Purchase Agreement). This will be sent to the listing agent to present to the sellers. Often times (and especially in a “seller’s market”), the sellers will counteroffer with a higher price and/or additional terms. Your real estate agent will help guide you through this negotiation process (which might include several counteroffers) while promoting and protecting your best interests.

If all goes well, your offer will be accepted and the process of escrow will begin. For more information on the next stage of the home buying transaction, stay tuned for “What to Expect When Buying a Home: In Escrow.”

Investing in YOUR Future,

R.B. Haley Fine Homes and Estates

Did we miss anything? Feel free add comments below with some of your great ideas and/or feedback. Thanks for your input and please remember to share!

R.B. Haley, Inc. 12396 World Trade Drive, Suite 306, San Diego, CA 92128

http://www.RBHaley.com   858.592.4895   CA Lic#01843189/01219416

What to Expect When Buying a Home: Finding an Agent and a Home

Thanks to technology, searching for a home and finding a real estate agent to represent you through the home buying process is easier than ever. According to Realtor.com, 42% of buyers start their home search by looking online first. Interestingly enough, however, 53% of buyers rate their agent as being most important for finding the right home. So, while the internet can be a helpful tool when buying a home, working closely with a real estate agent you trust can make it a much easier and more positive experience. Here is What to Expect When Buying a Home: Finding an Agent and a Home.

RBHcomuterFinding an Agent. Although many people start their home search online (and before they have taken any other steps), your chances of a successful buying transaction increase if you start first by getting pre-qualified. Knowing your price point will help keep your home search focused on what you know you can afford. Once you have that information and a general idea of what you want and need, then you will want to start searching for a real estate agent to help you find it.

Referrals are a great way to start this process. Who do you know that has recently bought or sold a home, and would they recommend their agent? Chances are, you know someone who knows someone, so ask around. Before contacting an agent, be sure to do an online search for reviews of the agent (just remember that reviews can sometimes be paid advertisements). Also check the agent’s license status with California Bureau of Real Estate (it is recommended to use the license number from their card or website rather than their name). Interview multiple agents and choose the one you trust and want to work with the most.

Find a Home. With your agent on board, now you will want to actively start the home search. Communication with your agent and feedback are critical. Many buyers like to participate in the home search online, and your agent should encourage that. Since non-MLS sites may contain inaccurate information, it is best to allow your real estate agent to set up a custom MLS search based on your criteria. He or she can have homes that match your criteria automatically emailed to you, or may even be able to provide you with a custom URL that will give you direct access to the MLS for searching purposes. You can usually search the MLS from your agent’s website as well.

RBHhomecouryardWhen searching, try to keep in mind your “needs” and “wants” in a home and keep a big picture perspective. Some considerations to think about are: Is it situated near a busy street (are there noise or safety concerns)? Is there plenty of parking? What do the surrounding homes in the neighborhood look like? Try driving through at various times of the day and talk to other neighbors. What schools are nearby? Is there shopping, transportation, and restaurants/entertainment nearby? Are there other amenities, such as parks, nearby? If you see any vacant land, check on whether there are plans to develop it. When touring the inside of a home in person, try to look past the current homeowner’s possessions and envision how you might live in that space. There is a lot to consider and making a checklist can help. Your agent should also be able to help answer many of these questions for you.

In 2015, the average buyer typically searched for ten weeks and looked at a median of ten homes before they bought one (Realtor.com). Don’t get discouraged if you aren’t finding what you want (and don’t be too quick to compromise on your “needs”). Try not to become too emotionally invested in any one house and keep an open mind for a second and third choice when offers become competitive. Your agent is working to serve your best interests, so collaborating and communicating makes for a more positive home searching experience.

Once you find your ideal home, the next step is to make an offer. We will be covering that stage of the home buying process in our next article “What to Expect When Buying a Home: Making a Purchase Offer.” Until then, happy hunting!

Investing in YOUR Future,

R.B. Haley Fine Homes and Estates

Did we miss anything? Feel free add comments below with some of your great ideas and/or feedback. Thanks for your input and please remember to share!

R.B. Haley, Inc. 12396 World Trade Drive, Suite 306, San Diego, CA 92128

http://www.RBHaley.com   858.592.4895   CalBRE#01843189/01219416

What to Expect When Selling a Home: In Escrow

The process of selling a home can be exiting, but it can also be overwhelming. Knowing what to expect when selling a home can help make the process less stressful and minimize surprises. If you are following along in our series, you have likely found the best real estate agent, taken steps to prepare listing your home for sale, possibly staged your home to sell, and hopefully have had an opportunity to negotiate an offer. If all has gone well, you are now in escrow.  Let’s talk about “What to Expect When Selling a Home: In Escrow”.

What does it mean to be “in escrow”? The escrow instructions are often contained within the purchase agreement. Be sure these are complete and agreed upon. The signed agreement puts the sale “under contract” and an escrow account is opened. The escrow company acts as a neutral third party that will manage the paperwork and funds required to complete the transaction.

tape-measure-5-1554663While the specific escrow process will vary by transaction and geographical area, here is what a seller can generally expect during escrow. First, if the buyer is getting a loan to purchase the home, their lender will likely require an appraisal. As the seller, it is imperative that you disclose in writing any known problems, defects, or needed repairs (even if the home is sold “as is”). While not necessarily required (but recommended), the buyer may wish to obtain a home inspection. Lenders usually also require a pest inspection. Sometimes an environmental inspection may be necessary (if suspected toxins are present like mold or asbestos). Depending on the property, other inspections may also be required. As the seller, it is important to make your home available for these inspections.

In addition, the seller is expected to provide the full name and social security number of each seller, a copy of the original title insurance policy or grant deed, information on any debt against the property (such as a mortgage, deeds of trust, or home equity line of credit, including names and account numbers), and a copy of a current property tax statement. Your escrow officer or agent will let you know what else may be required. It is also important to be prepared for the final walk through in the final weeks. Once the buyer’s loan is funded and all terms of the sales contract have been satisfied, escrow will close and distribute funds and paperwork. Bring a driver’s license or photo ID, keys to the property, and any applicable warranties to the close of escrow.

set-of-keys-1315125-1279x2110What else should I do? As your real estate agent and escrow company walk you through this process, there are other important things to do for a successful transaction. This includes carefully reviewing all contracts and reports (including the purchase agreement, the title report, and all inspection reports), gathering and providing all HOA documents and contact information, tracking costs and estimates, and making all mutually agreed-upon repairs. Also, it is important that you stay available and reachable during escrow to address any last minute issues that may arise and potentially cause delays in the escrow process. If you are in the midst of a move, be sure your forwarding information available and keep your same cell phone number if possible.

If things have gone smoothly (and we hope they have), you will have successfully closed the sale of your house- congratulations! Be sure to check back for our next series of articles on “What to Expect When Buying a Home.” We hope you have found this information helpful and would love the opportunity to help you in person. Call us anytime and let us know how we can help you!

Investing in YOUR Future,

R.B. Haley Fine Homes and Estates

Did we miss anything? Feel free add comments below with some of your great ideas and/or feedback. Thanks for your input and please remember to share!

R.B. Haley, Inc. 12396 World Trade Drive, Suite 306, San Diego, CA 92128

http://www.RBHaley.com   858.592.4895   CA Lic#01843189/01219416

What to Expect When Selling a Home: Negotiating an Offer

Selling a home is a process, and knowing what to expect at each stage will help that process go more smoothly. By now you have likely found the best real estate agent to represent you, taken steps to get your house ready to be listed to sell, and may have staged your home. So far, so good. Now that your house is looking its best and your agent has likely listed it on the MLS, you can expect to have multiple appointments from real estate agents to show your home to prospective buyers (and possibly one or more Open Houses). Ideally, this will result in receiving an offer from a prospective buyer (or buyers). This brings us to the next stage: Negotiating an Offer.

RBHaleyChessAs you and your real estate agent consider how to negotiate an offer, it is a good idea to revisit some of the questions we posed in an earlier article: Why do you want (or need) to sell your house? What is your time frame for selling? What price range do you need (and want)? Are you prepared to move?

The answers to these questions will help you define what you need and what you want (and where you have room to compromise). Here are some additional negotiating points to consider:

  • Take the emotion out of the negotiation: Realtor.com suggests trying to view your home as a business prospect. Putting aside the emotional attachment it represents to you will help you to negotiate more clearly and effectively.
  • Be informed: When negotiating, have recent comparable sales on hand to support your asking price. Also, be aware of the current lending and market conditions- Is it a seller’s market or a buyer’s market? Are interest rates going up or down? Is housing inventory in your neighborhood low or high?
  • Expect to negotiate: Be prepared to counteroffer. Buyers anticipate that sellers will counteroffer, so again, knowing where you are willing to compromise (and not compromise) will help you focus your negotiating strategy.  RBHaleySignContract
  • What’s negotiable?: In addition to the sales price, many terms of the sale are negotiable. For instance, deciding on who (the buyer or seller) pays certain closing costs may be negotiable. Timing the close of escrow may be another negotiable item. Including/excluding expensive, non-permanent fixtures can be part of the negotiation as well. The strategies are many; consult with your real estate agent to decide what’s best for you and your situation. (And, yes, the real estate broker’s commission fees are also negotiable.)
  • Get it in writing: Any promised or proposed changes to an offer create a counteroffer (which requires a new or amended contract). Be sure to always put everything in writing.

Of course, sellers are not obligated to negotiate offers; offers may be rejected outright or accepted on the terms offered. Whatever the decision, your real estate agent can help guide you through it.  For legal advice, however, it is always advisable to consult an attorney.

Once the final sales terms are agreed upon and the contract is signed, the transaction enters escrow. We will talk more about the “What to Expect When Selling Your Home: In Escrow” in our next article.

Investing in YOUR Future,

R.B. Haley Fine Homes and Estates

Did we miss anything? Feel free add comments below with some of your great ideas and/or feedback. Thanks for your input and please remember to share!

R.B. Haley, Inc. 12396 World Trade Drive, Suite 306, San Diego, CA 92128

http://www.RBHaley.com   858.592.4895   CA Lic#01843189/01219416