Advantages of Using a Realtor

With the real estate market stabilizing somewhat, Sellers who are on the borderline between making a net profit or loss on a home sale are sometimes tempted to try to sell on their own.  These “For Sale by Owner” (FSBO) scenarios are filled with the potential for liability and financial risk.  Suppose a Seller is comfortable with these possibilities.  Is there any other reason to list a home with a Realtor?  The reason Sellers list a home with a real estate agent lies in the services the Realtor provides.  In effect, the Seller is buying the benefits of the Realtor’s contacts, experience and knowledge, all of which can make a home sell more quickly, possibly for more money and definitely with less trouble than by going it alone. When potential clients want to know what a Realtor brings to the transaction, I mention a few key characteristics that I bring to the table:

Knowledge.  Real estate agents have knowledge of the market that will help in pricing a home accurately. An overpriced home will sit while those around it sell. On the other hand, an under priced home may move quickly, but the Seller won’t get the profit they could have.  Striking a balance and maximizing the financial goals of the client is a skill that comes with both experience and a keen interest in market dynamics.  Moreover, experienced Realtors excel in process management.  The majority of what needs to occur in a real estate transaction is familiar territory to a Realtor.

Objectivity.  A good Realtor has training about how to market a home and can suggest changes that will make a home more appealing to Buyers. Some of these may be as simple as moving a chair to make a room more accessible. Others may be more time consuming clean-ups or repairs. Following an agent’s suggestions will result in a home being in tip-top shape and less likely to raise concerns in Buyers. Face it, a Buyer who notices one repair unmade will start looking for others. The Realtor is objective about the home and will see it with a fresh eye. Sellers may have lived with cracked porcelain or a missing doorknob so long that they don’t even notice. Objectivity also permits the real estate agent to respond rationally to any criticisms of the property that Buyers may make.

Contacts.  The majority of houses are bought and sold through real estate agents.  As a result, FSBO Sellers cut off a large number of the Buyers that Realtors have in the queue.  Even more important is the contact solicitation through exposure of the property.  A Realtor places the home in the MLS or Multiple Listing Service. Information about the home goes into a computer network that is instantly updated and, depending on the agent’s on line marketing focus, gets syndicated to potentially hundreds of other websites where Buyers search for homes.  Making the home easily findable and searchable on line is critical, since over 80% of home searches start on line.  Other sources of contacts include Relocation referrals, usually available only to real estate agents.  In addition, the Realtor’s brokerage virtual and/or physical caravans are another source of contact.  There are a plethora of other sources of contacts and leads accessed by Realtors that are not accessible to FSBOs.

Security.  A question that sometimes keeps Sellers up at night is this:  Just whom are you letting inside your home? Most people would not normally open the door to a total stranger and let them walk through their house, but that's what FSBOs do.  Even if the person looking at the home intends you no harm, he/she may not be a serious home shopper. Realtors pre-qualify customers as to price range and seriousness before committing to s will commit a lot of time spend with them.  Therefore, working with a Realtor ensures that few, if any, non-buyers enter the home.

Availability. A home listed with an agent is on the market all the time. Agents have cell phones and offices backing them up (and seem to work 24/7).  The lock box that agents use allows your home to be shown whether you are available or not.

These are just a few of the many attributes a Realtor brings to the table.  They build a foundation upon which all other tasks are laid and serve as valuable advantages in the real estate transaction.

25 Easy Ways to Make Your Home Sell Faster

1.  Create a positive mood.  Turn on all lights, day and night, and install higher wattage light bulbs to show your home brightly.
2.  If you have a fireplace, highlight it in your decorating --- even if you never thought of it as a focal point in the past.
3.  Keep your home dusted and vacuumed at all times.
4.  Have a family “game plan” to get the home in order quickly if necessary.
5.  Air out your home for one-half hour before showings, if possible.
5.  Lightly spray the house with air freshener so that it has a chance to diffuse before the buyer arrives.
6.  Put family photos in storage.
7.  Improve traffic flow through every room be removing all non-essential furnishings.
8.  Putty over and paint any nail holes or other types of damage in the walls.
9.  Clean all light bulbs and light fixtures.
10. Wash all windows inside and out.
11. Make the most of your attic’s potential.
12. Remove and/or hide excess extension cords.
13. Open doors to areas you want potential buyers to see such as walk-in closets, attics, cedar closets, etc.
14. Microwave a small dish of vanilla twenty minutes before a showing and place it in an out of the way place.
15. Highlight an eat-in area in your kitchen with a table set for dinner.
16. The kitchen and bathrooms should always be spotlessly clean.
17. Expand your kitchen counter by removing small appliances.
18. Organize your closets and pack away the off-season clothes.
19. Replace shower curtains and keep them clean.
20. Put out fresh towels and decorative soaps.
21. Use flowering plants to dress up the yard, walkway, and patio.
22. Paint all entrance doors.
23. Clean and shine all hardware and accessories indoors and out (door knobs, knockers, lamps, mail box, address numbers, etc.)
24. Use a new doormat.
25. Be sure the doorbell is in good working order.

5 Things That Can Happen Now that Your Home is on the Market

Congratulations!  You’ve cleaned, packed, and staged your home and it’s now on the market.  Hopefully, you have worked carefully with a Realtor to properly position your home for maximum appeal and competitive power among the rest of the inventory of homes for sale.  So, what now?  Well, there are five basic scenarios that could happen. 

1 – Multiple Offers.  This scenario would be characterized by:

• Lots of showings
• Happens just days after the sign goes up
• Home sells at or above full asking price

2 – Strong Single Offer.  The experience for this scenario would be:

• Lots of showings
• Happens within the first 30 days
• Sells at or near full price

3 – The “Norm.”  The average time on market in the Savannah area remains around 3 months.  Certain neighborhoods with lower inventory are selling more quickly.  However, a reasonable scenario would be:

• 8 to 12 showings within the first 45 days
• Offer in line with expectations
• Sells at 95 to 97% of the list price

4 – Feels Like the “Norm.”  This is a scenario that begins to feel like trouble.

• Good showing activity
• No offers
• Identification of property problems via showing feedback
• Time to fix problems
• Time to re-consider pricing

5 – Nightmare!  Unfortunately, some home sellers will find themselves in a nightmarish scenario.

• No showings.  Nothing is happening at all.
• Price problem
• Fix the price and re-position the property

The best advice for sellers is to make sure that the home is property priced and positioned from day 1.  If you are considering the sale of your home and want to make sure that you find yourself in one of the first few scenarios, call me!

Why Get a Termite Inspection?

 
When a buyer makes a home selection, one of the most important tasks to complete during the Due Diligence process is getting a termite inspection.   In the Savannah area real estate market, termites are one of the biggest threats to homes.  In fact, the heaviest area of termite infestation in the U.S. is the southeastern part of the country.  Local Realtors will often say to buyers and sellers, “You’ve either got them, have had them, or you’re going to get them.”  Of course, termites are not the only wood destroying organism that can create havoc in the home.  That’s why the inspection done to complete a Georgia Wood Infestation Report (otherwise known as a termite letter) requires the termite professional to inspect for dry wood termites, subterranean termites, wood borers like powder post beetles, and wood destroying fungus.

Termites, the biggest culprit, live in colonies and eat 24/7.  They don’t like exposure to the light and rarely break through the surface of the wood that is providing the meals.  They hollow out the wood and are not always detectable until enough damage is done that the wood actually gives way.
There are some sure signs that a homeowner or buyer can look for:

• Damaged wood
• Dirt termite tunnels
• Small holes in the sheet rock
• Water leaks or water damage around doors and windows or in crawl spaces (the equivalent of ringing the dinner bell)
• Swarming termites (sometimes confused with flying ants)
• Wood in contact with soil, such as around siding, decks, and porches

There are two primary ways to prevent termites.  One is to create a chemical barrier between the home and the termite colony in the ground.  Crossing the barrier will kill the termites.  Another effective method is to install baiting stations in the ground surrounding the home.  Regular inspections of the bait stations will reveal any termite activity.  If any is detected, then a special bait is inserted which will kill the termites.

In this market, having a termite bond, or warranty, is a critical item to negotiate when buying a property.  The bond, which typically costs from $150 – $200 annually, can ensure that annual inspections (at minimum) are performed to check for any signs of infestation.  Two types of bonds are available: a treatment bond and a treat & repair bond.  They do exactly what it sounds like.  If a homeowner has a treatment bond, then the termite company will treat the property at no cost if active termites are discovered during an inspection.  The better option is the treat & repair bond, which goes beyond treatment.  The termite company will pay for any repairs to the property needed as a result of the termite infestation.

Whether a person is buying or selling, having the proper termite inspection, treatment, and/or bond is critical to protecting the home, and ultimately, the current or future owner’s investment.

Distressed vs De-Stressed: Short Sale Basics

If you stopped people on the street and asked about the economy, the majority would probably say that the US economy is improving.  However, there are still a good number of folks who remain unemployed or underemployed.  Moreover, with the prospect of “Obamacare” on the horizon, many more are fearful that their work hours will be reduced, causing financial strain or full-on crisis.  Homeowners facing financial uncertainty experience incredible stress.  Often, the stress puts owners in a state of denial, driving inactivity until a point of desperation is reached, typically caused by receipt of bank/mortgage letters that threaten action on delinquent or missing mortgage payments.  Still others find themselves in a financial fog due to a job-required relocation, illness or death in the family, or a change in marital status.  In this scenario, the homeowner has one stress upon another piled on until he/she reaches the proverbial last straw.

Fortunately, there are options with respect to home selling that can transport a homeowner from “distressed” to “de-stressed.”  If selling a home is a key tactic that will help an homeowner regain financial equilibrium, a Realtor can assist in facilitating a Short Sale.  A Short Sale allows the borrower to sell his/her home for less than the total amount due on the mortgage loan.  Choosing the Short Sale process allows the homeowner to avoid foreclosure and allows the lender to minimize its losses.  It is a cooperative process versus a legal resolution (foreclosure or eviction).  A Short Sale is usually not considered for homeowners who are not delinquent on payments, unless a major change in financial status is imminent.

There are a variety of documents that will be required, submitted by the Realtor often in a national online system such as Equator, including:

• Hardship Affidavit, noting the reason(s) for the financial issue
• Third Party Authorization, which allows the lender to discuss all aspects of the mortgage with the Realtor
• Verification of the borrower’s income (pay stubs)
• Copies of most recent bank statements
• Copies of most recent tax returns
• Buyer’s Offer to Purchase
• Preliminary settlement statement

The timetable for completing a Short Sale can be considerable.  In the Savannah area market, Realtors have experienced up to 3 to 4 months to get a bank decision AFTER an offer to purchase has been submitted.  This is down from an average of one year, as recently as three years ago.  During this time, the lender will obtain either an appraisal or a Broker’s Price Opinion (BPO) on the property; will evaluate the borrower’s financial documents; and seek authorization to accept the offer from the investor and/or the insurer of the homeowner’s mortgage loan.  The good news for the homeowner is that the Realtor coordinates the paperwork, keeps up the continuous dialogue with the lender, and assures that the process is managed properly.  In short, the homeowner moves from distressed to de-stressed.

Of course, there are a few caveats:
1)  Each potential Short Sales is reviewed on a case by case basis.  There is no guarantee that the bank will accept an offer.
2)  There may be potential tax implications to the homeowner.
3)  The sale of the home must be a “arm’s length” transaction, meaning that it can’t be sold to anyone with close personal ties to the homeowner.
4)  The odds of the Short Sale success are reduced if there is a second mortgage or equity line on the property.
5)  If the homeowner has sufficient assets, he/she may be required to make a monetary contribution of some of the difference between the net proceeds of the sale and the amount due on the loan.

If you are facing financial difficulties and want to know if you could qualify for a Short Sale, contact me.  I will be delighted to be part of the solution to your financial needs.

Can This Attic be Remodeled?

Home buyers in Savannah who are drawn to older homes, particularly in midtown neighborhoods such as Ardsley Park and Parkside, often think of attic space as having a great deal of finishing potential.  There are scores of great examples of attic re-do’s and likely equally as many that have missed the mark.  While I’m not an architect or a general contractor, I have found a few guidelines to share when buyers ask the question:  Can this attic be remodeled?

The first test relates to headroom.  A general guideline for considering an attic remodel is that the unfinished attic needs around 10 feet of headroom at its peak.  Code requirements may vary based on where you live, but typically around half of the finished attic living area must be at least 7.5 feet high.  Sometimes, adding a dormer is necessary to meet this criteria.  If there’s no problem with headroom, then the second hurdle would be how to improve or relocate the entrance to the attic space.  A lot of the Savannah bungalows have dedicated stairways to their attics.   However, if one doesn’t exist, a buyer would need to plan for at least a 3 x 10 foot rectangle for a standard stairway or a 5.5 square foot space for a spiral staircase.  Buyers will often sacrifice a closet to grab the necessary space.  Of course, placement will depend on available headroom.  Therefore, these two decision criteria are inseparable.

If the first two tests have positive results, then it would be prudent to ask an architect or building contractor to assess the attic floors for strength and movement.  An attic floor with a lot of “give” may need some additional joist supports, which is especially important if the attic re-do is designed to support heavy objects or furnishings when the remodel is complete.  Even if the space is destined to be a playroom, with limited furnishings or side wall built-in’s, additional joint support may be needed where the joists run for long distances.  Another architect/contractor discussion should focus on how the heating & air system will be designed for the new space.  Most remodels cannot be heated and cooled by existing systems, which usually have about 1 ton of capacity for every 600 square feet.  With all of the ductless mini-systems available on the market today, many remodelers are choosing that option.

Working with an architect will likely assure that your remodeling plans meet all building, electrical, and fire codes.  However, it is recommended that these plans be evaluated by the appropriate city or county official during a buyer’s due diligence period.  Changes, such as a certain amount of square footage of window space, might be needed.

Remodeling can be a daunting task.  However, for those of us who watch shows like “Love it or List It” or “The Property Brothers,” there’s no doubt that tackling an attic remodel can have fabulous results in both home value and functionality.

10 “Don’t’s” Every Home Seller Should Know–Part 2

If you are thinking about selling your home, I’m sure you’ve been anticipating the rest of these recommendations.  In addition to the first five suggestions, here are a few more that should make your selling experience a great one:

6.  Don’t look just at the price the buyer offers.  A good Realtor will help you understand that a great offer is the sum total of all of the terms proposed.  Of course, price is important since it will be the largest variable.  However, other key factors are the timetable, type of buyer financing, and special stipulations or requests that the buyer makes.  A “clean” offer, i.e., one with no requests for closing cost assistance, repairs, warranties, personal property, etc., may be much more important than getting the asking price.  This would certainly be true if you only had a few weeks to get to that new job, or want to make a move before the new baby arrives, or before school starts.  It is critical that all offers be put into the context of a Estimated Net Proceeds Worksheet that will allow you to get a clear picture of your bottom line, especially if you receive multiple offers.

7.  Don’t list your property with a real estate agent just because they charge the least (or the most).  As you would with any other major investment, look for the best value.  There are different levels of representation that you can accept.  Limited brokerage companies may charge a flat fee to put your home in the multi-list and then it’s up to you to negotiate in a “don’t know what you don’t know” environment, matching skills with a trained negotiator.  Unless you are a real estate veteran of multiple sales or have a portfolio of investment properties, you will likely need a full service brokerage.  Once you’ve made that decision, you will learn that there’s no such thing as a “standard” commission.  However, most brokers will set a policy for a minimum commission.  Depending on the scenario, Realtors may charge a flat fee or a percentage of the sales price.  Commission may also vary based on whether the listing agent also sells the property or whether that agent is participating in the new home purchase once the current home sale is consummated. Most Realtors are comfortable discussing what is and isn’t acceptable.  After all, it’s the way they make a living and put food on their tables.  In a typical home sale, a Realtor will perform at least 200 tasks to get the job done.  If you are making a decision to choose the least expensive cost option, take the time to ask what tasks will be left out of the mix.

8.  Don’t forget that buyers will shop around looking for the best buy.  You are in competition with other sellers to get the buyer’s attention.  It is often very helpful to have your Realtor show you what he/she considers to be the “best buys” in your price range before you make a final determination on price.  If the price is not the issue, compare the competing homes in categories such as staging, new or “fresh” features such as appliances and paint, yard size and fencing, and the type of restrictive covenants that may govern use of the property.  Pretend that you are shopping for a home and take an objective look at how your home measures up.  Before launching your marketing activity, be sure you and your Realtor have taken a good, hard look at any repairs or changes that should be made in your home.  You know the old saying:  You never get a second chance to make a good first impression.

9.  Don’t forget that you control the pricing of your home, how it looks, and the overall marketing plan, but the buyer controls value.  If buyer’s won’t pay your price, the house remains yours.  When you are negotiating an offer, remember that every time you counteroffer a buyer’s proposal, you are essentially buying your home back at the new price.  Take the “value” concept out of the real estate context and think about shopping.  You are walking through the mall and want to buy a new outfit.  Something catches your eye and you check the price tag.  If the outfit is phenomenal, just your size, your “best” color, and fits perfectly, you probably won’t have a problem paying full price because you don’t want to take a chance that it might not be in the store next week.  However, if the outfit is good, but you think it’s a little overpriced compared to what you saw in the last store or the price just isn’t in your current budget, you might wait until it goes on sale and becomes a better value for the money.  While that scenario is simplistic, it is applicable to real estate.  Once a buyer believes your home is a good value, he will act.

10. Don’t forget that a home is basically sold twice: first to the other real estate agents and then to the buyer.  Most multi-list systems are set up to notify Realtors of new listings.  There are internal tracking systems that can identify whether the Realtors took any action, based on the availability of your home.  In the Savannah MLS, this system quantifies how many times your property matched a buyer’s search criteria, how many times a local Realtor emailed your property to a prospective buyer, etc.  If an agent doesn’t see the value, then your property will not be recommended as a viable choice to a buyer as a showing option.  Be sure that your Realtor is sharing that information with you periodically.  My experience has been that the most valuable marketing is the agent-to-agent communication and getting agents across the threshold (with or without a buyer in tow).  If an agent personally experiences your home and finds it good value, then he/she will find a buyer for it, even if the buyer they initially brought isn’t interested.

The top ten “don’ts” in these two posts should help set a good mindset for selling.  Certainly, there are scores of other elements involved.  However, a seller’s attitude and approach to the sale makes all the difference.  If you are considering selling your home, call me.  I’d be delighted to talk with you about these and other strategies that will make the process as stress-free and successful as possible.

10 “Don’ts” Every Home Seller Should Know–Part 1

Selling a home is serious business.  Your home is one of the largest assets you have.  Consequently, making good choices and minimizing risk is key.  Following are some helpful suggestions for consideration:

1.  Don’t overprice your home.  It will cost YOU money!  The Savannah area market remains highly competitive.   Even though there are a lot of national news stories about market recovery, price appreciation, and inventory shortages, you can’t let that make you overestimate a market position and, thereby, take unnecessary risks. There’s a truism in the industry: All real estate is local.  The national news stories are based on the top twenty metropolitan areas tracked and included in the Case-Schiller Index.  That experience may have little to do with what’s going on in your home town.  So, when it comes to putting your home on the market, it will be critical to look at properties in your neighborhood (or close to it) that have sold in the last 90 days.  If home condition and features are similar, pricing at or near the average sold price per square foot is a reasonable approach.  Sellers who need to sell quickly typically market their homes at up to 10% below market average and will often create a flurry of showing activity and potential multiple bids.  However, Sellers who want to ride a potentially mythical wave of price appreciation, without serious discussion and evaluation of pro’s and con’s with their Realtor, could find themselves priced out of the market.  Overpriced homes will languish and sellers may be forced to chase price with subsequent price reductions.  Unfortunately, it could be similar to chasing a ball down a hill.  You never catch up.  In the long run, excessive days on market and multiple price reductions will encourage potential buyers to “lowball” offers.  As a result, you lose net proceeds.


2.  Don’t be surprised if the first offer on your property is the best offer you receive.  Face it, there’s never been a time like today when so much information is available to buyers.  Typically beginning on line, buyers will check for a “Zestimate” to set the ballpark of what your home’s value might be.  (These estimates may or may not have any basis in reality.)  They’ll pull county tax assessor records.  There’s even access to superior court records to see what you borrowed to buy the home originally in hopes that they’ll get a sense of how much negotiation room you might have.  And, that’s all before they even talk to a Realtor!  Multi-list features allow the buyer’s Realtor to profile your neighborhood and automatically generate reports that will show all the necessary parameters to develop a price offer that is in line with recent sales, tempered by the number of days your home has been marketed.  Reasonable buyers, assisted by knowledgeable Realtors, will craft good offers.  As a result, EVERY offer, but particularly the first received, needs to be evaluated carefully.  No knee-jerk reactions allowed!  Even an initial low offer is presented, countering with market-sensitive terms is highly recommended.


3.  Don’t let your property sit on the market too long before making a significant change in price.  For the last several years, the real estate market has been flooded with foreclosures.  When banks are involved in home sales, you can almost guarantee that every 30 to 45 days, a price change will be made until the property is sold.  The banks are not interested in holding properties; they want them off the balance sheet.  So, systematic price reductions will lead the property to the “sweet spot” when the price is so attractive, buyers will act with urgency.  Buyers have become accustomed to this type of market trend and expect that sellers will remain sensitive to market nuances, making price or other adjustments as necessary.  Your initial price reflects the conditions when you listed.  However, conditions may change.  Your Realtor should provide a monthly market positioning report to help you track market changes, enabling you to know when a price change may be needed.  Properties that remain on the market for extended periods without any price changes are overpriced --- plain and simple.  Not only do these homes become “stale,” they also come across to buyers as being owned by sellers who are likely to be unreasonable in the negotiation process.

4.  Don’t think that all real estate agents and companies are created equal---they’re not.  When you plan to sell your home, it will be critical to know the real estate brokerage’s track record as well as its business philosophy.  Every company (in every industry) has a “feel,” an intangible dynamic that affects activity.  Is the company busy? Productive? Well regarded?  Have they won service awards?  Do they reward their Realtors for working together instead of acting in isolation?  Do they have a strong web presence?  Do virtual and physical caravans? Ask for their numbers.  Likewise, agents may be incredibly different in their approaches to marketing a property and causing it to sell.  Ask for the details on the home marketing system.  Is it heavily focused on web-based strategies? Will it include high tech elements?  Video/virtual tours?  What is the plan for agent-to-agent marketing?  You are going to need more than a sign and a profile in the multi-list!

5. Don’t make it difficult for agents and buyers to see your home.  Yes, you have a life.  You have dinner guests planned, family from out of town,  and kids to feed.  Keeping your home clean and available for showings is a necessary evil of the process.  However, buyers want to look at homes at their convenience, and that may not always be on Saturday afternoon between 2 and 4, when you know you will be at the kids’ soccer practice.  It is critical to maintain a high level of flexibility in the times your home can be shown.  Requiring restrictions, such as “24 hour notice required,” will result in potential buyers bypassing your home for another. 

For Sale by Owner: Marketing for Top Dollar

Pick up any real estate news article and there will be references to the fact that many markets are now experiencing inventory shortages.  When that happens, sellers begin to consider tackling the real estate market on their own.  However, the prospect of managing a “for sale by owner” or FSBO may be more challenging that it appears.  For those sellers who decide to attempt to FSBO, there are some things they should do to market their homes and find the best buyer.
Finding a buyer for your FSBO home might not be impossible.  Nevertheless, the key is finding the RIGHT buyer that will help you net the most amount of money in the desired time frame.  To accomplish this, you will want to develop and implement a comprehensive marketing plan so that you reach the most ready, willing, and able buyers in your market.  You don’t want to lose thousands of dollars because the right buyer never noticed your house.

Prior to launching your marketing efforts, be sure to read the Federal Fair Housing Laws and Guidelines regarding advertising so that you do not violate any federal laws in your ads.  Being a FSBO does not provide protection against federal liability.  The laws apply to anyone advertising a home for sale.  After you become familiar with the guidelines, you might consider advertising in the local newspaper, homes magazines, real estate journals, cable TV, Craigslist, and a variety of on-line residential marketing websites.  Create a website for your home and consider crafting a series of blog posts about the unique features of your home.  If you have excellent computer skills, try developing a virtual tour as well for your website.  (Or you can consider hiring a high school student!)  Before taking your photos for the tour, do some research on local stagers who could help you identify the best approach to showing off your space.

Once you have done your initial marketing launch, consider mailing brochures and flyers about your home to your immediate subdivision and adjoining subdivisions near you that might be priced lower than yours.  You might be able to entice a move-up buyer.  Then, identify the top 25-30 Realtors in the market and plan mailers and possibly an agent open house to showcase your home to the Realtors.  National statistics show that more than 80% of FSBOs are sold by Realtors.  After all, they represent the professional group who work with the most buyers.  While a seller might consider tackling the sale without professional help, a buyer hardly ever tries to purchase a home without representation.

A social media campaign would also be helpful so that you can leverage family, friends, and close acquaintances to pass along the information about your home to people they know.  In addition, email marketing via programs such as Constant Contact or MailChimp could be used effectively to continue communications with local Realtors and other professionals to keep your property in top-of-mind status.

These are just a few marketing strategies that might be helpful.  There are hosts of other alternatives as well as precautions you can take for safety.  In addition, talk with a lender who can prequalify any potential buyers you might meet.  Understanding the “ideal” buyer and being prepared to discuss loan options will help you weed through buyers and lookers.
For more information on FSBO strategies, don’t hesitate to call.

Five Keys to Minimize Surprises When Selling Your Home

Local sellers who have tried to sell their home can testify that, with all the “routine” stress of taking on such a task under the best of circumstances, no one wants to experience any unpleasant surprises.  So, how can a seller minimize surprises?
1.  No matter how thorough a Realtor’s market analysis might be, some sellers are convinced they are more knowledgeable about what their home’s value might be.  Fair enough.  In most industries, the mantra is “the customer is always right.”  However, in real estate, a good Realtor needs to be direct and firm on home values.  Improper pricing is the fastest way to a loss of profit as well as extended time on the market.  If there is a significant difference of opinion about a home’s value, get an independent appraisal prior to launching the property for sale.  This will help to take the guesswork out of the equation and assure that the home is properly positioned to compete in the market.  Having the appraisal in hand will also put the seller on firm footing when negotiating an offer.
2.  We’ve been through some tough economic times in the last few years.  As a result, some sellers could still be spinning from having to ride on a financial roller coaster.  If and when sellers are selling due to financial hardships, it could be incredibly helpful to get a preliminary title report.  Attorneys who specialize in real estate closings can tackle this relatively inexpensive step to assure that the homeowner does not have any unknown liens that might be on the property as a result of financial issues and/or work done in preparation to get the home ready to sell.
3.  Homeowners with properties that have seen multiple rounds of renovation over the years (particularly true in many of Savannah’s historic districts) might consider the option to get an inspection by the local municipal building inspector.  Preparing a home for listing includes pulling a variety of public records about the target property.  One of these is the county tax assessor’s property record card.  This on-line record, which is reviewed by most buyers, should have details regarding permits given for major property renovations.  If a property has had a few facelifts, but there are no permits documented, there’s an obvious red flag.  No one wants to open a can of worms.  However, it’s preferable to know about any potential building code or zoning violations up front.  Sometimes, a more “comfortable” option for sellers is the next key.
4.  Get the home pre-inspected by a licensed, professional home inspector.  Repair-related issues are one of the most common deal-killers in real estate.  Having the home pre-inspected will accomplish two primary goals:  a) the seller will be able to confirm that all mechanical systems are in good working order (or identify items that can be addressed prior to launching the property listing); and b) the seller will be able to improve the market standing of hi/hers home by advertising that the home is pre-inspected and has no repair concerns.  This will save a potential buyer hundreds of dollars and is a “value add” that could tip the balance in terms of getting a buyer to make an offer.
5.  Get the proper documents in order for buyer review.  There are two key documents that can affect the marketability of the seller’s property:  a survey and a flood elevation certificate.  In Georgia, the provision of a survey is not a requirement for the transfer of real estate.  Nevertheless, if you were buying a home, wouldn’t you want to know the boundary lines?  Even if a privacy fence was installed years ago, there is no guarantee that there are no encroachments unless a survey is available.  I could tell horror stories about property line disputes over structures that had been in place for over a decade!  The second item, the flood elevation certificate, may be unique to coastal areas like the Savannah market.  If the seller has a certificate that pre-dates 2000, it’s a sure bet that an updated one will be needed for the transaction.
These are a few simple suggestions that can facilitate a smooth transaction.  So, why are there six keys in the artwork?
BONUS:
6. Hire me!  My job is to make either the purchase or sale of a property as painless as possible so that the client can achieve his financial goals and savor the excitement of opening or closing a chapter in his life.  There are a variety of other steps a seller can take to enhance the process.  I’ll be happy to discuss them with you when the time is right.

Feng Shui Tip: Create an Exceptional Entrance

No matter how much the Savannah real estate market heats up, Sellers need to continue to do everything they can to be competitive and get a Buyer’s attention.  From the first conversation at the listing appointment, I’m often asked for tips on how to make a home attractive.  The first approach is the “no cost/low cost” approach, starting with a little basic feng shui.  Feng shui is a design philosophy that focuses on how to bring harmony and balance into a space.  The term means "Wind and Water" in Chinese.  The industry fell in love with the philosophy a few years ago, and even though the faddish romance seems to have fizzled a bit, the concepts make too much sense to ignore.

Today’s tip is all about the entrance to your home.  Pay attention to the front door, which is considered the “mouth of chi” or the life force.  The front door is actually one of the most powerful elements of the property.  All good things enter there --- blessings, opportunities, and good fortune.  It is also one of the critical elements of the Buyer’s first impression.  I’ve never understood why Realtors often put lockboxes on side or back doors.  Buyers need to feel how the energy enters the home.  So, what do you do?


The Water element is associated with the entry into a space because of the flow of energy through the door. Black is a great color for an entryway because it evokes the Water element and creates energy flow, bringing positive energy into the home.  Black (and dark blue) anchor the energy of reflection, concentration, and truth.    Another good choice might be green, which anchors the energies of growth, healing, harmony and vitality. An interesting exercise is to sit with the Seller and define the “ideal Buyer” for the home and what that Buyer’s characteristics might be.  Then, a door color specifically designed to appeal to that type of person could be discovered.  A Seller can also replicate the color in the foyer.  For example, if the home has a black door, it would be possible to accentuate the energy by using a black & white entry rug with a lively pattern.

In terms of décor, the best feng shui art for your front entry will be connected with Water.  This gives a lot of flexibility since the Water element is represented by undulating, sinuous shapes, mirrors and glass, and (of course) some type of small water feature.  Photos or paintings of water scenes or of objects associated with water (e.g., a painting of river rocks) are highly desirable.  Abstract are that includes sinuous shapes are also good.  A welcome rug/carpet should be a dark color and would be enhanced if it has winding shapes within in.

Of course, the basics must be addressed as well.  The area around the door and entry has to be clean.  No cobwebs, no clutter. Moreover, all exterior entry lighting should be straight and properly hung.  If the Seller has a few bucks to spend, new outdoor porch & landscape lighting is always a good choice.  Rounded shapes have better feng shui.  Likewise, the foyer lighting is important.


People generally agree that first impressions typically do not change over time.  So, if you are selling a home, it is critical that a Buyer connects with your home from the moment he/she approaches the front door.  An exceptional entrance will set the tone for a great showing experience, and hopefully, a great offer!

The New Stigmatized Property: Homes in a Flood Zone

A couple of weeks ago, I had a real estate closing scheduled for a great property in a southside Savannah neighborhood.  Inspections were completed, the loan was approved, and a week before the closing, my Buyer asked me to get him out of the deal.  It was the first time that had happened in 13 years.  Why did we terminate?  Flood insurance. 

What happened?  The neighborhood is landlocked.  There are no rivers, streams, or even lagoons in sight.  However, the City has a drainage canal running through one section of the subdivision near the home.  During the “due diligence” period, the Buyer researched the canal.  We also searched available on-line resources about the flood zone.  The Seller did not have flood insurance, but we soon determined that the home did indeed have a small portion of the back yard (not the house) in a designated AE flood zone.

The flood insurance premium for homes in “high risk” zones, i.e., those designated with the letter A or V, are based on a building’s elevation above, at, or below the Base Flood Elevation (BFE) set for the zone.  Generally, the higher the building is above the BFE, the lower the premium.   To determine the exact premium (set by FEMA), a Flood Elevation Certificate, prepared by a licensed surveyor is required.  The process of finding or generating a Certificate is not difficult.  However, the rules of the flood insurance game changed with the Congressional passage of the Biggert-Waters Flood Insurance Reform Act of 2012.    

 

Although the B-W Act was passed last year, the implementation is just now rolling out.  In a nutshell, Buyers can no longer assume an existing homeowner policy or “grandfather” a policy.  In fact, the Act will eliminate the subsidy for flood insurance that has been provided by the federal government for years.  On October 1 of this year, over one million US policies will be subject to 25% PER YEAR premium increases until the premiums are increased to full risk rating.  These increases can range from a few hundred to tens of thousands of dollars per year.

In the case of the closing that was terminated, the Buyer was facing a 2013 policy premium of $800/year, with annual increases until the premium grew to $5,000/year.  In other words, his mortgage payment was destined to be $800/month but, ultimately, the flood insurance would add another $400/month, destroying the affordability of the home.  The loss of the home was tough on the Buyer, but the prospect of a potential future foreclosure due to the increasing expense of flood insurance would have been tougher.

In the Savannah area market, approximately 20% of the homes actively listed require flood insurance.  What should a Seller do?  Those who live in a flood zone may now be holding “stigmatized” property, with Buyers ruling those homes out of consideration.  Many of the desirable waterfront properties in Savannah may languish on the market indefinitely or reduce prices to achieve some measure of competitiveness.

Sellers should immediately contact their insurance providers and get more details about how premiums for their homes will change.  Many Sellers do not have updated Elevation Certificates that meet today’s requirements for writing a new policy.    In the Savannah market, this will become a hotly negotiated term of any future transaction.

Occasionally, changes in the law and federal programs have resulted in unintended consequences.  On the heels of some measure of local Savannah area real estate market improvement, the changes associated with the National Flood Insurance Program may cause setbacks.  If you need more information on the changes, or need a referral to knowledgeable insurance providers or surveyor, contact me for assistance.