FSBO - The appraisal hurdle

After the buyer and seller come to a "meeting of the minds" on the price of a house, there is one more person who must be convinced that the house is worth the selling price--the mortgage company's appraiser.

The appraiser looks for three similar houses that have sold in the same area within the last several months, and compares the selling prices of these homes with the one that is now on the market. The appraiser makes adjustments to account for the differences in each property, and averages the adjusted prices of the other three homes to arrive at a final opinion of value. In subdivisions or condominium projects where there are many similar properties and numerous recent sales, the appraiser's job is relatively easy. In neighborhoods of older homes that have been renovated or remodeled over the years, it can be like comparing apples and oranges.

If the appraiser's evaluation is lower than the selling price, it can stall the transaction because the lender may decline the buyer's loan because of the discrepancy. A real estate agent can work to minimize potential delays associated with the appraisal process by helping the seller to price the home as close to fair market value as possible.

More For Sale By Owner Information

It is not unusual for homeowners to yield to the temptation to try to sell their own home. It seems easy enough--just place an ad in the weekend paper and wait for buyers to show up. Although it may seem simple, real estate sales transactions are extremely complex proceedings.

The first pitfall can come with pricing your property realistically. Homeowners often price their property too high initially, then drastically slash the price when weeks go buy without an offer. Even if a prospective buyer agrees to the initial asking price, there could be complications if the buyers begin to feel that they have agreed to pay too much, or if the lender's appraisal values the property at far less than the agreed-upon price. Some clients hire agents to market their home professionally after weeks or months of trying to sell their own home without success, or after their FSBO transaction fell through.

Feel free to call me if you have questions about the services a professional can offer to help you get your home sold with the least amount of hassle possible.  

For Sale By Owner Information

Selling FSBO

Even if a simple sign in your yard did produce a buyer knocking on your door, how will you handle the following questions:

"How does your home compare to others like it in the Clarksville, Fort Campbell, Montgomery County, Sango and Adams area?"

"How did you determine the fair market value of this property?"

"What about financing? Can you help?"

"If I make an offer, who will draw up the paperwork?"

"Why aren't you using a real estate agent? Is there something wrong with the property?"

"Since you aren't using a real estate agent, we can take their fee right off the top, right?"

Selling your home is one of the most important financial transactions you will make in your life. Don't take risks. Selling your home is nothing like selling a car. Every home is different, and every homebuyer wants to offer you as little as possible. How do you determine the real market value?

Almost all homes are sold using a real estate agent. As real estate professionals, it is our job to help you negotiate with all those buyers who want something for nothing. Not to mention preparing your home for sale, marketing it locally in the Clarksville, Fort Campbell, Montgomery County, Sango and Adams area and even nationally, and guiding you through the complex paperwork and pitfalls of escrow and closing. Make sure you are really ready to handle all of that before pounding that sign into your front yard. Errors can be extremely costly.

Remember: Buyers want to offer you as close to nothing as possible! While that "For Sale By Owner" sign might sound like a good idea, it usually means a different thing to buyers: "Try to steal this one."

If you must sell your own home, at least let us give you a sense of its true market value. Tell us a bit about your home, and We'll do a quick Comparative Market Analysis and let you know what we feel it is worth. We'll also describe, as experienced, Clarksville, Fort Campbell, Montgomery County, Sango and Adams area real estate agents, how we would market your property. This is free, with no strings attached.

6 Do-It-Yourself Updates That Can Increase Home’s Value By More Than $10,000

By Melissa Dittmann Tracey, REALTOR® Magazine

Simple, affordable do-it-yourself projects such as cleaning and decluttering and just adding lighting can help increase a home’s resale value, according to HomeGain’s annual home improvement and staging survey.

HomeGain, an online real estate marketing resource, surveyed nearly 600 real estate professionals in creating a list of the top do-it-yourself home improvement projects that offer the biggest return for your buck.

Overall, the home improvement projects that boasted the highest price returns were updates to the kitchen and bathroom–an estimated $3,435 price increase for resale. Painting the outside of the home ($2,222 price increase) also offered one of the highest returns, according to HomeGain’s Home Sale Maximizer study.

Here are six do-it-yourself projects–all under $1,000–that made HomeGain’s list, as well as the estimated increase to the home’s price at resale for each project.

1. Cleaning and decluttering: Remove any personal items, unclutter countertops, organize closets and shelves, and make the home sparkling clean. 
Cost: $290    Estimated return: $1,990

2. Light and bright: Clean all windows inside and out, replace old curtains, update lighting fixtures, and remove anything that blocks light from the windows.
Cost: $375 cost   Estimated return: $1,550

3. Staging: Rearrange furniture, bring in new accessories and furnishings to enhance rooms, including artwork and playing soft music in the background.
Cost: $550 cost     Estimated return: $2,194

4. Landscaping: Punch up the home’s curb appeal in the front and backyards by adding bark mulch, bushes and flowers, and ensuring current plants and grass are well-cared for and manicured.
Cost: $540    Estimated return: $1,932

5. Repair electrical or plumbing: Repair any leaks under the bathroom or kitchen sinks, remove any mildew stains, and ensure all plumbing is in good working condition. Update the home’s electrical with new wiring for modern appliances, fix any lights or outlets that don’t work, and replace old plug points with new safety fixtures.
Cost: $535     Estimated return: $1,505

6. Replace or shampoo dirty carpets: Steam-clean carpets, replace any worn carpets, and repair any floor creaks.
Cost: $647   Estimated return: $1,739

Finishing Touches - Low Cost or Free Ways to Get your Home in Tip Top Shape

The reality today is that sellers don't want to spend big to get their house in tip-top shape for buyers. The good news is that there's plenty they can do for free or at a very low cost.


By Melissa Dittmann Tracey
February 2011


  
You may not be able to shell out money to professionally stage your home, but getting it sparkling and clutter-free requires little more than elbow grease. After clearing away clutter, polish the hardwoods, clean the countertops, and dust the light fixtures. You can make a stainless steel sink shine with thrifty cleaning remedies such as baby oil or club soda, according to DoItYourself.com. Howard Products’ line, which includes Restor-A-Finish (about $5 per can). It comes in various wood finishes and can be used to polish cabinets and even blend out minor scratches and imperfections.

Tips:


Box it up. Most people pack up after they sell the house, but why wait? Sellers should start packing as early as possible—ideally, before they put the home on the market.


Show off the laundry space. Buyers will be impressed if the laundry room is fresh, inviting, and organized. Make sure light bulbs are working, and hide soaps in a cupboard or line them neatly on a shelf.


Focus their attention. Pick a focal point for each room. For example, the focal point of a bedroom is usually the bed, and for a music room, it’s the piano. If a room is mostly empty, you can help draw attention to a corner with a plant or mirror.


Floors

Hardwoods are on most buyers’ wish lists (red oak being the most popular, according to the National Floor Trends 2010 market study). Hardwood flooring averages about $5 to $15 per square foot, plus about $2 to $8 per square foot for installation, so it’ll be pricier than vinyl, carpet, or other options. But it can make a huge difference. You may find less expensive hardwoods by going directly to installers, who buy their inventory wholesale. If it’s a small area, the upgrade won’t be as expensive, says remodeling industry expert Bill Millholland, an executive vice president with Case Design/Remodeling Inc. To imitate the look for less, try vinyl or Bamboo flooring, a sustainable resource that resembles wood but averages $4 to $6 per square foot.

Tips:
Call the experts. Dirty, worn carpet may benefit from professional cleaning, ranging about $180 to $390 for a 1,300-square-foot home.

Refinish it for cheap. Practically any beaten-up hardwood can be salvaged with refinishing, about $340 to $900 for a 15-by-15-foot room, according to CostHelper.com. Call a professional tile company to freshen up ceramic tile grout—or, for do-it-yourselfers, hardware stores sell grout paint.
Add a layer on top or bottom. One other option for lackluster flooring: Use an area rug, even over carpets. It’ll add a splash of color, and bring definition to living areas. If you’re adding inexpensive carpeting, consider upgrading the carpet pad.. It’s only about 50 cents more per square foot and it will make a budget carpet feel luxurious.


Lighting


New lighting fixtures are a quick way to create ambiance. Just avoid brass lighting fixtures, which had their heyday in the 1980s. More contemporary choices are brushed nickel and chrome finishes. Also, rust and oil-rubbed bronze are becoming more popular as more home owners set out to have lighting that doubles as an accent feature, says kitchen and bath designer David Alderman, 2011 National Kitchen and Bath Association president. Use lighting to highlight special features—pendant lights to show off that kitchen island or sconces to illuminate a foyer. Under-cabinet lighting in the kitchen is affordable and makes countertops sparkle, Millholland says. Fluorescent light strips tend to be more affordable and easier to install than puck lights.


Tips:


Go natural. Open those blinds and wipe down the windows. You’d be surprised at how much a simple window cleaning can instantly improve natural light.



Save on energy costs. Compact fluorescent bulbs remain the go-to choice for energy efficiency. Early CFLs didn’t always deliver on light quality or convenience, but they now come in warm, neutral, and cool colors, and major manufacturers are now enclosing the spiral tube in a conventional bulb shape.


Don’t forget the basement. The biggest problem with basements is a lack of adequate lighting. While the natural-lighting flow often can’t be altered, adding lights will create a sense of open airy space on a par with the rest of the house. Paint walls an opaque color so natural light will appear brighter.

Paint


A few gallons of paint can go a long way in making a home more chic—and the cost can’t be beat. Covering a 12-by-12-foot room with two coats will cost you about $50 to $100, including supplies. “A home’s interior painted in a pale yellow or light green, or even beige, gives buyers an idea of what they can do with a space,” says Bill Fields, vice president of merchandising for the Lowe’s paint division. Reserve darker or trendier colors for accent walls or to highlight details such as a fireplace or an arched doorway, says Erika Woelfel, director of color marketing at BEHR Process Corp., a paint supply company based in Santa Ana, Calif. Common color picks for accent walls are dark red, green (not lime green, though), or a stone gray. Or instead of introducing a new color, use the paint in the rest of the room as a guide, choosing a color that’s three shades darker. To bring depth to a long hallway, Fields suggests painting the wall at the end of a long hallway a different shade than the others.


Tips:


Shine with sheen. Flat or matte finish is difficult to clean and shows scuffs. Increasing the sheen can brighten rooms. Eggshell or satin bounces light off the walls to make spaces seem larger. Semi-gloss, higher on the sheen level, is a good option for kitchens and bathrooms since it’s easy to clean, Fields says. And gloss, the shiniest of all, is best for big “statement” areas, such as the front door, Woelfel says. But gloss accentuates flaws, so use it sparingly.

Create monochromatic harmony. Use different variations of the same color throughout the home. The Paint Quality Institute, a paint education resource, refers to this as “layering.” Choose a color card, which usually has about three or four similar hues, and use two or more colors from the single card. Use the lighter colors in the main living areas and darker shades for the rooms that branch out, such as the bedrooms, Woelfel suggests.

Paint the baseboards white. But don’t use stark white, which can take on gray tones against some wall colors, says Woelfel, who suggests antique white or Navajo white as better options. If the home has dated stained-wood trim, simply painting it off-white can bring it up-to-date. But don’t forget to use a primer first.


7 Ways to Create a Cohesive Style

Small updates will have a more dramatic impact if home owners are careful to keep the styles consistent and find ways to draw out the home’s best features. Here are some tips from experts on how to make small improvements pay off.

1. Concentrate on big impact rooms. Be selective about what you do. Kitchens and bathrooms still usually offer the most bang for your buck, says remodeling industry expert Bill Millholland, executive vice president with Case Design/Remodeling Inc.

2. Go neutral. Don’t introduce too much color to the “bones” of the home. You don’t want buyers to see too much bold color on cabinets and walls and say, “‘I have nothing to go with red,’” says Terrylynn Fisher, crs, green, a staging consultant at Empire Realty in Walnut Creek, Calif. “Buyers will have a tough time seeing past it.” Stay neutral with walls, cabinets, and fixtures. Bring in pops of colors through accessories.


3. Consult an expert. A professional stager or remodeler can work within your budget and pinpoint where best to spend your dollars. For a list of contractors or interior decorators, ask colleagues or friends for recommendations or check the Web sites of organizations such as the Real Estate Staging Association or the National Kitchen and Bath Association.


4. Know when inexpensive won’t work. Certain projects simply can’t be done cheaply, especially in a high-end home. “If it’s a luxury home, replacing the vanity with an off-the-shelf product from a big-box store isn’t going to cut it,” Millholland says. “Most consumers will be able to tell that you did something cheap. They won’t even see the value of it, so you’re better off cleaning what’s there and having it appear its best.”


5. Find inspiration. For design guidance, grab a catalog from Pottery Barn, Restoration Hardware, or Williams-Sonoma. “Anything you see in there is fairly consistent with what the average consumer is looking for,” Millholland says.


6. Plan your budget. Even small projects can carry a premium if a contractor is needed for installation. For labor savings, bulk your work, grouping several projects in a full day’s work rather than hiring a handyman or contractor for separate hourly jobs, Millholland says.

7. Complement the architecture. If it’s a two-story colonial home, avoid overly contemporary updates, such as stainless steel countertops. Likewise, if the exterior is modern or contemporary, stay away from traditional styles, such as dark wood or classic lighting fixtures, Millholland says.


Melissa Dittmann Tracey is a contributing editor for REALTOR® magazine.