Best Place Real Estate

Earlier today I was searching the MLS looking for condos to show a client. I came across one that looked particularly nice and, from the photos, appeared to have a very spacious living room. But as I looked closer, I realized that I have seen this floor plan many times and the living room isn’t that large. In fact, it is rather small. But the picture had been taken in such a way that it made the room look much bigger than it really is. Had I not been familiar with that particular floor plan, I would have wasted my buyers’ time showing them this unit. I know they want a bigger living room.

Another time I was looking for a house for a family who wanted a large kitchen and family room. I pulled up one listing that in the photos looked like it had a huge kitchen. It was quite believable as this was a fairly large home, almost 4000 square feet. Fortunately, I previewed the home before taking my buyers out and found that the kitchen really wasn’t all that big. Other photos of the same home made the entry hall look spacious and very elegant when it actually wasn’t anything to write home about. So, needless to say, I did not show this home to my buyers.

Having pictures of your home is a must when you list it for sale. Most potential buyers searching the Internet will just skip over listings that do not have photos. But be careful not to make your house look better than it really is. If so, when buyers actually come to see the home, they will be upset and disappointed that the house isn’t what they thought. It is hard to get an offer from an upset and disappointed buyer.

Make sure your pictures look like what the buyers will see when they view your home. For example, my backyard is really pretty (at least in my opinion) and this could be a plus if I ever decide to sell my house. I have a beautiful picture of the yard that was taken from just outside the dog-run at the side of the house. But how many buyers are going to look at the yard from the dog-run? My back porch looks really nice when you stand at the back fence, but again, are buyers really going to stand at the back fence when they are considering my house? No. Buyers are going to first look at the yard while standing in the house looking out a window.

The point is, don’t let your photos mislead buyers because you will lose buyers. Try to reach a happy medium. Have photos that will entice buyers to want to see your home but not disappoint them when they get there.

Common divorce scenarios:

• A couple is going through a divorce. One spouse wants to keep the house and agrees to make the payments. The other spouse wants to rid himself or herself of the house all together.

or

• Due to the recent decline in the market, the house has lost value and there is little or no equity. Even worse, the house may be worth less than the loan balance. One spouse wants to sell the house even if they have to do a short sale. The other wants to keep it until the market turns around.

So the “out spouse” says, “OK, if you want to keep the house, I will quitclaim title and then it will be all your responsibility. I will not have to deal with it any longer.

Seems like a simple solution, but there is a major problem with it if both husband and wife are on title and both are on the loan. While you may be able to quitclaim title (take your name off the Grant Deed), you can not arbitrarily take your name off the loan (Deed of Trust). Anyone on the loan is individually 100% responsible for the loan. If you quitclaim title but remain on the loan, you are then responsible for a loan on a property in which you no longer have any interest. Not a good thing.

Even if it is agreed that your spouse will make the payments, you are at risk. If for some reason your ex is late or behind on the payments, your credit score will suffer. In addition, the loan will be included in your debt to income ratio which could impact your ability to purchase another home in the future.

Laurel Starks does an excellent job of explaining this issue in her article Divorce & Your House: Leaving your ex-spouse in control of the house….and what else?

I think the main point here is the importance of making informed decisions during the divorce process so you can move on with peace of mind after it is settled.

Many savvy investors buy and sell real estate by doing 1031 exchanges. With the decline in real estate prices over the last few years, some investors may think they are selling a property at a loss and therefore do not need to do another 1031 exchange. But before you do anything, be sure and consult a tax professional because you may have a taxable event. If you acquired the property through a 1031 exchange and are now selling the property for a lower price than you paid for it, you may actually have a gain instead of a loss. The key to remember is that with a 1031 exchange you carry the adjusted cost basis from one property to the next.

Consider this scenario. Let’s say that several years ago you sold a rental property for $350,000. The adjusted cost basis of that property was $100,000 so you had a gain of $250,000. Rather than pay the taxes on the $250,000 gain, you deferred the taxes and bought another property through a 1031 exchange. You paid $350,000 for the new property.

Now in 2009, the property you purchased for $350,000 is only worth $250,000. Even though this is $100,000 less than you paid for it, you still have a gain of $150,000. Remember that you transferred the $250,000 gain from the first property to this property. After you deduct the $100,000 loss, you are left with a taxable gain of $150,000.

This is a very over simplified example, but the point is that if you have bought or sold, or plan to buy or sell through a 1031 exchange, consult a good tax professional first.

In his book, Duct Tape Marketing(Chapter 1, page 10), John Jantsch writes “A tough thing for some small business owners to swallow is that it doesn’t really matter what you like or dislike, what matters is what your target market likes or dislikes”.

When I read this, the first thing I thought was that this also applies to real estate. I thought to myself “A tough thing for many sellers to swallow is that it doesn’t really matter what they like or dislike about their house; it matters what their target buyers like or dislike”. It is especially hard when you are selling your primary residence. This house has been your home, your personal place for as long as you have lived there. It is hard to imagine it as anything but your home.

However, when you list your home for sale, you have to think of your “target” buyers. Those would be the buyers who are looking in the price range of your house. You have to stop thinking about what you like in your home and more about what your buyers like and what will attract buyers to your house.

And, this is where staging comes in. Staging is marketing your house. Staging is bringing attention to those feature that buyers in this price range like. There are a lot of misconceptions about staging. Some people think it is cleaning the house and making minor repairs. While it is absolutely necessary to have the house really clean and make needed repairs, that is not staging. Some people confuse decorating with staging. Decorating is personalizing a home. Staging is “depersonalizing” a house.

When you are trying to sell your house, it is best to think of it more as product or business than as a home. Think of the pool of buyers looking in your price range. What appeals to those buyers? What are buyers in that price range typically looking for? How can we make our house appeal to the greatest number of buyers in that pool? What can we do to our house to make it really stand out over and above the other homes currently on the market? Think marketing, think staging.

When you make an offer on a house, make it contingent on the seller providing a C.L.U.E. report. Comprehensive Loss Underwriting Exchange, hence the name C.L.U.E. report, is an information exchange insurance companies use to obtain prior claim history of personal property as well as automobiles.

Why is the claim history on the house important to a buyer? For one, it will give you an idea of past damage to the home and the probability of it occurring again. If the insurance company paid on a claim, you should check with the seller to be sure the repairs were actually made and the homeowner didn’t just pocket the money.

Another very important reason for getting a C.L.U.E. report is that it will help you determine if you, as the new homeowner, will be able to get insurance on the house. Even though past claims were submitted by the previous owner or owners, the damage was to the house. So when you are applying for insurance on that house, the property’s claim history is what the insurance company will look at. The claim history could affect the cost of the insurance or even if you will be able to get coverage at all.

It is really important that you get the C.L.U.E. report during your contingency period because if for some reason you are not able to get insurance on the house, you will also not be able to get financing. The lender will not fund without confirmation of insurance. You do not want to find out a day or two before escrow is suppose close that you have lost your financing because you can’t get insurance. The C.L.U.E. report is easy for the seller to get through Choicetrust.com and it can save you as the buyer a lot of headaches.

It may not sound like a big deal, but putting a little green in most rooms can make a house look more inviting to buyers.That is green as in greenery. A potted plant here and a vase of flowers there adds a certain ambiance to a home.

One of the reasons to stage a home is to depersonalize it so that it is easier for buyers to imagine themselves living there. Plants and flowers are neutral. It’s kind of a psychological thing. Plants bring in a little of the outdoors and even if they are artificial they remind us of nature. They sort of set the mood by giving a room a more relaxed and happy feeling. Try taking the car and fashion magazines off the coffee table and placing a potted plant there instead. Replace the family photo on the corner of the desk with some greenery. Doing this will depersonalize and neutralize the room and make it more inviting to a potential buyer.

It doesn’t matter if the plants are real or artificial. In fact, when you are selling your house, artificial might be a better way to go. While your house is on the market, you basically need to keep it “open house perfect” all the time. Caring for real plants during this time will just add to your daily “to do” list. And a wilted straggly plant on the coffee table is just not the look you are going for!

The greenery is not meant to stand out, but just be part of the room. If done properly, many buyers won’t even notice them. And that’s a good thing. You want potential buyers looking at your house, not at your belongings. Think of a window display at the mall. A clothing store advertising sun-dresses and swim wear may have a couple of surf boards and fake palm trees included in the display to give you the “summer feeling”. However, chances are that when you walk by, the only thing you notice is the clothing, but your subconscious mind is thinking summer fun.

Another advantage to using greenery is that it often helps you “declutter” the home. Removing clutter is the one of the best things, if not the best thing, you can do to prepare your home for sale. Again, remove all the magazines from a table and replace with one plant. Take everything off the bathroom counter except maybe a soap dispenser and add a little vase of flowers. Same with the kitchen. Clear the counters and then add a little greenery to break it up. After all, counter space sells and you want to show it off.

Often it is the little things that make a big difference. So go for the green with greenery.

Many people have a collection of some sort. I have a blue bottle collection. Why, I don’t know. I think I had something that came in anice looking blue bottle, so I kept the bottle. I now have about 5 or 6 blue bottles of different shapes and sizes. I keep them in a cabinet in the kitchen and I rarely pull them out.

Some collections are just a few items, like my blue bottles. Others can be quite extensive and often people display them throughout their home. Collections can be a lot of fun and very interesting, something to share with family and friends when they visit. However, when you have your house for sale, it is usually best to put the collection away and out of sight.

For one, they can be a distraction. When prospective buyers are viewing your home, you really want them looking at your house, not at your collection. You want them to remember your house as the one with the nice kitchen or big backyard, not the one with the model airplane collection or all the plates displayed everywhere.

Also, collections often have a tendency to make the house look cluttered. Clutter is probably the worst thing to have in a house for sale. Likewise, removing clutter is the least expensive and best thing you can do to prepare your home for sale.

When preparing your home for sale, the goal is to make the home appeal to the biggest pool of buyers as possible.  Buyers need to be able to picture themselves living in a home. Sometimes sellers make this very hard for buyers to do. For instance, I recently showed a home where the seller had a doll collection. There were dolls displayed everywhere, on shelves, on chairs, and on all the beds.  These were probably antique and very expensive dolls. However, my buyer was a young bachelor and it made it really hard for him to imagine his belongings in among this menagerie of dolls.  If all the dolls had been removed, it would have been easier for him visualize himself living there.  Remember, it is best to depersonalize your home so it appeals to all types of buyers.

By packing up your collection before you list your home for sale, you make your house more marketable and you have one less thing to do when it is time to move.

It is already bad enough to have suffer through the heartache and stress of the foreclosure process and the possibility of losing your home. But to be the victim of a scam that takes advantage of you makes it even worse.

The increase in the number of foreclosures has also increased the number of predators preying on vulnerable homeowners.  These unscrupulous people try to convince desperate homeowners that they can rescue them from foreclosure.

The California Association of REALTORS has provided member REALTORS with a document for us to share with consumers regarding foreclosure rescue scams.  It provides some of the warning signs and red flags of a foreclosure scam as well as some resources for homeowners who are already victims of such scams.  Click on Foreclosure Rescue Scams below.

Foreclosure Rescue Scams

I must add that there are a number of very ethical professionals who are seriously trying to help homeowners facing foreclosures.  But, just like everything else, beware of the scam artist.

The Internet has made curb appeal even more important than in the past. Today when you list your home, literally the whole world can see the front of your house.

Curb appeal has always been important. If buyers drive by and don’t like the front of the house, it is unlikely that they will want to see the interior. A messy front yard is a good indication of what the rest of the house is like. You know what they say, “first impressions are lasting impressions” and “you don’t get a second chance to make a good first impression”.

The Internet has added a new dimension to this because now most buyer’s “first impression” comes from an online listing of the house. Today buyers do a lot of homework online before they actually go out to look at homes. And when they are ready to go out looking, they often ask their agent to show them homes they have found on their Internet search.

When searching online, buyers particularly look at the photos of the listings. It’s “a  picutre is worth a 1000 words” type thing. But consider this. The first photo of each listing is usually of the front exterior of the house. There are often several more photos of the interior and backyard, but if the front is not appealing, a buyer may not click to view the rest of the pictures.

If you are preparing your home for sale, seriously study the front of your home and determine what needs to be done to improve its curb appeal. When you are ready to put it on the market, ask your agent to take several photos of the front and together pick the one that is the most appealing and likely to encourage a potential buyer to click for more. Make sure you have curb appeal and Internet appeal!

Please note: If the Internet listing of your home does not have photos you may as well not have your house on the market because buyers usually just skip over those listings!!!

The condition of your windows is really important because they affect both the interior and exterior appearance of your home.  So definitely put them on your “To Do List” when you are preparing your home for sale.

Preparing your windows is usually very inexpensive:

• Wash all your windows inside and out and make sure they open and close properly.
• Also wash all the screens and check to be sure the screens are in good repair.
• Window coverings and blinds should be clean and in good condition.  If you decide to change any window treatments, think light weight and neutral.
• If shrubs and bushes have grown very tall in front of a window, consider trimming the bush so it looks well manicured from both the outside and the inside.
• When showing your home, it is best to have all the curtains and blinds open so your house is as light and bright as possible.

Staging tip:  Sometimes the house is so close to the property line that a room may have a window that looks out at a fence or block wall and this is often not a pretty site.  Change a negative into a positive.  Get some large outdoor pots and place them outside the window.  Buy some ornamental trees or bushes for the pots.  Or, a nice looking potted vine with a pretty trellis may do the trick.  You may need to purchase 5 gallon plants so they are big enough.  Add a cute bird-house or wind-chime.  Another idea is large bakers rack with lots of colorful potted plants.  With just a little creativity you can keep the blinds open and have a nice view too.  Just remember to water the plants!