neighbohoods

“How long will it take to sell my House?”

by John Rice

I get asked this on every listing appointment. It is hard to believe that a couple of years ago, it was rare for any house in any condition to make it past the first day on the market. I usually don’t reply with an amount of time, but with a sequence of events that need to happen to attract a buyer. The honest to goodness truth is that any house should sell pretty quickly if the seller will do some prep work. Granted, there are exceptions…..Two million dollar house? Will take time since there aren’t many buyers in that price range. A unique house? May need a unique buyer. An overpriced house? Will usually only sell to an idiot with a realtor who thinks we are still in the 2022 market.

I’ve been doing this a long time. This is how it usually goes in this changing market. I see the house. I ask the sellers if they are able to do any work that needs done to attract buyers. Buyers want as move in ready as possible and for the best price right now…..well, I guess they always have but now they have more listings to chose from and sellers can no longer just put their house on the market without a little prep work. Sometimes the seller can’t/won’t do anything. If they can’t/won’t, I tell them the price I think their house will sell for just like it is. Usually though, the seller picks a few items from the list. We put it on the market. They get positive feedback for the things they have done. They get negative feedback for the remaining items on the list.  After awhile, the seller starts to realize that they are going to have to do more items on that list or reduce the price. Often, buyers subtract about 5 times the cost for the remaining items on the list. I’ve been on the buyer side of this. They almost always say something like “If I have to paint this whole house I’m not paying a penny more than $XXX,XXX!!”  or “I would need to replace all the carpet and I like hardwood, so let’s just subtract the cost of hardwood from the asking price and go from there.” Can’t blame them. After all, it is turning into their market these days.

Eventually, the seller plugs away at the list until it sells. See, there is the sequence of events I mentioned at the beginning of this post. Now that the house is ready, it is going to sell because it is competitive and will almost always fall on the short list of a buyer.

But what happens to the people who do everything on the list from the beginning and price it correctly? Their house usually sells very quickly. Why? Because buyers want the best house for their money. Make your house THAT house, and start packing.

NEVER sell your house “As-Is”

by John Rice

Why? It can keep people from wanting to see your house. Plus, nobody knows what it really means!

Let’s clear the air first about what it means. Did you know that ALL houses are sold “As-Is”? The contracts all the realtors use in my area say on line 202 that the buyer is purchasing the property “As-Is.” That means just as they see it and where they see it. The house is going to stay there and no warranties, no promises of something happening differently in the future are expressed or implied……So reason #1 to NEVER sell “As-Is” is because you already ARE selling “As-Is.”

I have had several buyers in the past tell me that they were interested in a house but saw the seller was selling “As-Is” and didn’t know why. A lot of buyers think that means there is some big issue the seller knows about and wants to pass their problem on to the buyer…..So reason #2 to NEVER sell “As-Is” is because it scares off buyers from even coming to see your house. It is hard to sell a house to somebody that won’t come see it.

Somehow, “As-Is” has come to mean that the seller prefers to not negotiate any repairs after a home inspection. Wise realtors say something like “Seller welcomes inspections but prefers to not do any repairs.” Still, I say there is no need to even do this. Just as the price is negotiable, the inspection terms are negotiable as well. The contracts in my area say that if the buyer elects to do a home inspection, they have the option to ask for repairs. It also says the seller has no obligation to do any of them…..So reason #3 to NEVER sell “As-Is” is because you as the seller do not have to do any repairs. There is no need to state this to a buyer before they even see your house and know if they want it. This is something that can come up during the contract negotiations. If you were on a dating app, would you put on your profile that you’re lactose intolerant and have bad breath? Of course not. The goal of presenting the listing is to get a buyer to schedule a showing. Nothing else.

How much value do improvements add? Depends on the rest of the house

by John Rice

I often get asked what improvements can be made that give the biggest return. I think a lot of folks are hoping I will say new flooring, new counter tops, stuff like that. I say do those if they are common for your neighborhood and/or price range, and only if your house does not have big negatives that future buyers will have a hard time overlooking. Not all improvements add more value than they cost. Keep in mind that you are focusing on that one new improvement. Sure, it is exciting. You are removing one negative from your house. When you go to sell, the buyers are looking at your whole house. They are weighing the positives against the negatives.

Many years ago, I had two older home listings that both had fabulous features. One of them had a reaaaaally narrow staircase to what had been the attic. It had a new kitchen, great deck, and 2 fantastic bathrooms. Another listing had the smallest living room I have ever seen, but the whole upstairs was brand new. I mean the seller took the roof off and had it rebuilt all new by a very reputable remodeler. It had a walk-in closet and master bath like a new high end house. It was totally superior to any other house in the neighborhood and its price range. Both of them took a while to sell. I would call the agents that showed them for feedback and they would go on and on about how much the buyer loved certain features and what a nice job the sellers had done with their improvements. I was always tempted to interrupt them and remind them that the house was for sale. I let them finish and they always started their last sentence with the word “But”. It was like this: “Buuuuuuuut that living room was too small.” Or “Buuuuuuut they just couldn’t handle those stairs.”

(Since I brought up the whole adding value verses cost of the improvement thing, would you like to know what is the highest return when getting your house ready to sell? Paint. Nobody ever gets excited when I tell them this, but it is true. Fresh paint always make any house feel better.)

Getting ready to sell?

by John Rice

Getting ready to sell your house? Here are some things to know:

Often a seller will think they need to do something like spend a lot of money refreshing a kitchen or a primary bathroom. While I am positive any buyer would appreciate that, doing so usually costs more money than it adds in value. If it doesn’t add more value to your home than it costs, it is a waste of time. The goal is to do things that add value and/or make the house sell faster. A better choice is to bring up the least best parts of your house than to make one or two areas way better than average.

Most sellers usually have one or two repairs that they think are going to cause the buyer to walk away. Often they are sort of minor issues that have bothered them the entire time they have lived in the house.

I remember once I had a seller who was planning on spending a lot of money to replace a front door because it had some wood rot between the metal on the front and back. From the side of the door, it looked like about a 3/4 inch by 2 inch area of rot. I told them not to do that. Why? To begin with, I didn’t think that a buyer would find it to be that big of a deal. When a buyer gets their inspection report, they are most focused on bigger issues usually. Something like that little bit of rot at the bottom of the door probably looks especially minor compared to the top 2-3 issues their inspector finds…..meaning that the seller can decline their request to repair it and focus on the real items that could be deal breakers.

What to do then? Fresh paint. A deep cleaning. Decluttering. These are the things that make your house look the best and cost the least.

    The market is changing

    by John Rice

    No doubt, there has been a shift this year.

    Few sellers have to move. Most just want to. None of them are excited about being a buyer if they need to finance their next home. They don’t want to give up their very low interest rate they got during COVID. They are upset that they can no longer expect to sell their house the first day on the market, get above list price, and the buyer waive a home inspection.

    Buyers are only buying if they really need to move. They don’t like the combination of high prices and high interest rates. They have more choices and power in the transaction than ever, but they can’t see the forest for the trees.

    First time buyers account for the lowest percentage of buyers in forever. Most first time buyers seem to want to skip the small, boring most affordable houses and rent until they can afford what we used to call the “Move up” house. This is leaving most houses under $250k to investors. Almost every super affordable house I have sold this year has been purchased by an investor. Even in multiple offers, they are easier to work with and will often pay the most for a house.

    Basically nobody is happy.

    This is the first time in my 20 year career of seeing such pessimism from both sellers and buyers in a fairly good market. The only other time I have seen both parties this discouraged is during the Great Recession. It was an extreme Buyer’s Market so sellers were unhappy. Buyers were worried their house would be worth less than they paid for it after the closing. Nobody was happy.

    I think we are stuck here for a while. I don’t see prices going up much in the near future and I don’t see them going down either. I don’t see interest rates going down enough to make much of a difference. I think this is just the new normal.