Real Estate Snippets

How Not to Sell A Home

Staging is all about dressing your home in its Sunday best (or maybe dressing your home for selling success?), but the current market downturn and the influx of short sale homes and foreclosures on the market are telling a sad story.  Sellers who have lost their jobs, been unemployed for medical reasons, or got caught with rapidly rising mortgage payments are having a tough time emotionally.  Staging a home takes a lot of energy and sometimes a few hundred dollars.   Families in crisis may have to choose between a new can of paint for staging and a bag of groceries.  If my kids were hungry I know which choice I would make.

Many of the short sale or foreclosed homes marketed in St. Paul are vacant.  Many have been "swamped out" by a professional cleaning crew with big roll off dumpster boxes for the debris.  Some homes clean up pretty well, but others need the attention of a new owner to regularly clean and love them back to their original beauty.

If, however, you are one of the home sellers still living in your St. Paul home and still hoping to find a buyer, clean your house until it shines.  Whatever you do, take those cans to the recycling!

Good Advice for Sellers

Several months ago, Maureen Francis, a blogger from Oakland County, Michigan, listed ten things sellers should not do if they wanted to sell their homes.  In March it was an established fact that the real estate market was plummeting and it was getting harder and harder to market homes.  The number of houses listed for sale far exceeded the number of buyers.  The former real estate mantra, "The money is in the listings", was losing credibility. 

Today, some St. Paul real estate agents groan when a listing call comes.   Questions spring up.  Will this seller be reasonable, or unwilling to adjust to today's market?    Is it worth my time, money and emotional energy to list this property?  Should I take this listing or pass on it?

Maureen's list for home sellers includes the following:

• Don't try to sell it yourself.
• Fix deferred maintenance items because there's lots of competition and the best one wins the sale.
• Update decorating.
• Do de-personalize everything.
• Don't overprice to see what happens.
• And more can be found here.

If you're thinking of selling your St. Paul house, check out Maureen's list for a reality check.  And then, call your St. Paul real estate agent to get their professional opinion on specific price, upgrades, and marketing suggestions.

Showing Requests

It's got to be a comedy of errors, otherwise how could so many things go wrong with one showing request? 

The buyer's agent called to request a showing.  The clients declined the first request.  Four days later, the agent called again requesting another showing.  My clients happily agreed.  Two hours before the showing, Mr. Seller (AKA I Can't Believe This Is Happening!) called me in desperation.  A pipe had broken in the basement and they had water everywhere.  Could I please contact the buyer's agent and cancel the showing? 

Ten days later, the buyer's agent called a third time.  Was the plumbing fixed so they might come through tomorrow?  Mr. Seller readily agreed to this third attempt to see their St. Paul house.  Just before the scheduled showing time, the buyer's agent called to cancel the showing.  The buyers had had an emergency come up and couldn't come through the house after all.

What a set of weird circumstances!

The fourth request came when my cell phone was stolen so the message was stuck in limbo land.  The buyer's agent tried once again amazing me with his tenaity.  "Could his clients come through on Monday evening?  They still want to see the house."  Of course, the sellers agreed, only to once again have the showing canceled. 

The final cancellation was permanent.  The buyers had made an offer on another house that hadn't experienced such a comedy of errors.  The moral of the story:  If the house is not seen, no one will buy it!

Bathrooms

He may be my youngest client to demonstrate knowledge of one of the most important selling points in a house. It may be he's learned from dogs to search out every fire hydrant in town. Who knows what goes through the mind of a 3 year old boy when he's out shopping for a house! But, I know he's got the right idea.

The minute the door is opened this young man heads straight for the bathroom. It doesn't matter whether the house is occupied or not. He has to check out the bathrooms! If they're "icky", he gives a commentary to that effect. If he likes them, he lets us know.

He's on the right track, because studies have shown kitchens and baths are the two most important improvements a home seller can make when marketing their home. The baths and kitchens can make or break the sale. Yep, it comes straight from the "mouths of babes" and my little client has got it all figured out!

Newspaper Ads for Real Estate

REALTORS® have known for a long time that newspaper ads have been producing less response.  Because real estate agents choose to spend their money where they get the best results, they have been placing less paper ads creating less revenue for the papers.  Landlords have experienced the same thing as newspaper ads have generated less calls.  Craig's List has become the new marketing venue for many buyers searching for homes or tenants looking for rental properties.  Savvy real estate agents are aware of not only Craig's List but other venues as well including Zillow, Trulia, Realtor.com, Yahoo, and many others.

Convincing home sellers that newspaper ads have become passe΄ is not so easy.  Just because one real estate agent has not experienced results from paper ads does not mean paper ads are useless.  Afterall, the agent may submit a poorly written ad (We've never seen any of those!) or poor pictures or some other reason that is specific to that agent.  Last week, however, the LA Times announced a cut back in their real estate ads as part of larger cuts in the paper.  It seems that lack of results in paper ads is being recognized by the newspapers as well. 

Staging to Sell a House

Every generation has its industries and its fads.  In the flower child generation (yes, that was my generation) the activists wore beads, smoked pot, had long stringy greasy hair and beards, no underwear to speak of, long flowing dresses and were forever flashing a "V" for peace.  Thankfully, that fad disappeared as have so many others.  Today we have piercings and tattoos, black spiky hair, studs, and black nail polish.  In the flower child years, coffee shops were discussed as something futuristic, but no one believed they would actually succeed.  Today, everyone drinks designer coffee, some beans that have even been eaten by rodents and recycled into very expensive coffee!

In like manner, every family has their things that are okay for family living.  Many families realize that their teens need to express themselves through posters and wild colors.  They are passing fancies.  I was one of those parents. 

The problem comes when the house goes on the market.  Whether the children like it or not; whether the parents like it or not; the house has to be de-cluttered and de-personalized.  If there are posters like these hanging in your home, they've got to go, along with many other similar statements of independence.

Stagers even recommend taking down family photos.  The goal is to make the home attractive and to remove enough personal stuff so the buyers can mentally move in their furnishings without competition with yours. 

De-personalizing is hard to do because your home no longer feels like it is yours.  The home seller has to live in the property while it's being marketed.  The question is,  "What if it doesn't sell?  All those changes will be for naught!"

The goal has to constantly be kept in mind.  The staging, de-personalizing, and de-cluttering are the first ties with the old home that have to be cut.  More ties will be cut as the house sells and the seller moves.  They're all small steps toward the final new destination . . . a new house where you can move all that clutter: the toys, the refrigerator magnets, the posters, the family pictures, the religious icons, the plants, the collections, the snake, etc.  The old house needs to be "stripped" of its personality so you can move the personality to a new location.

What Adds Value to a House

It's summertime and as temperatures rise in St. Paul and Minneapolis, some dream of time to leisurely enjoy a backyard pool.  If, however, you want return on your investment when selling your house in the cold Northland, don't expect a swimming pool to increase the value of your home.  If your home was in Florida, California, Nevada or some of the other states that have longer warm seasons, a pool might be considered a necessity, but not in Minnesota!  Remember how cold Memorial Day was this year!  A pleasant summer season might allow four, or possibly five, months of use, but that might be pushing the season's limits.

Additionally many buyers are leery of swimming pools for reasons other than seasonal.  The cost for higher homeowners' insurance premiums, energy used to run the pump and heater, water to fill the pool, chemicals to keep the pool clean, and a pool service to winterize for St. Paul's frigid months is daunting to some buyers.  The wear and tear of our winters on pools is another factor.  Others are concerned about safety issues for their own children and neighborhood children.  A pool needs to be constantly supervised or barricaded against uninvited guests as well.

Those cool afternoons with a soda by the pool are so tempting.  Consider pros and cons before going to the expense of an in-ground pool.  Does the operating expense work in your budget and is the expense compatible with the cost of your home making the cost acceptable to a new buyer in your price bracket?  The number of buyers willing to buy a house with a pool is narrowed when you resell which could extend the amount of time it takes to sell your home.  Will the enjoyment obtained from the pool compensate for the lack of return on your investment or is a new kitchen (which has a high rate of return on resale) a better choice for your remodeling budget?

For pool lovers (I'm one of them.) these factors are all surprises.  From a St. Paul agent's perspective, it's based on experience.

Two Sides to Every Story

Randy Goetz, Esq., a seller wrote a letter that the St. Paul Areas Association of REALTORS reprinted with permission from "The Listing Agent and Her Seller".   Randy politely suggests a few things that he thinks buyers' real estate agents should do.  His list includes:

1. Show up for the scheduled showing or make sure to cancel the showing.  This one is obvious.  Each showing request is an emotional roller coaster for sellers, so showing up is a good idea!  Not to mention, it's also polite.  Many sellers go to great lengths to have their house ready to show and to be gone during the showing.  Calling to cancel is definitely a sign of respect.
2. Leave a business card or note.  This one is difficult.  Some real estate agents consider leaving a card as soliciting the seller to become the other agent's client.  The entire real estate industry can't decide on which is best practice for everyone as the opinions are so divergent.  Leaving a note is even more like soliciting the seller's business.  Most St. Paul listing companies give instructions to leave a card. When there are no instructions against leaving a card, I usually do leave one.  Occasionally I have run out before my showing day is done.  On those occasions a note might be appropriate.
3. Provide prompt, helpful feedback.  If I've seen twenty 3 bedroom two story houses that day, and the feedback request comes by phone . . . ?  The caller had better be able to tell me something distinctive about the house so I can remember it.  I don't take the notes; my clients do.  If I can remember the house, I will definitely give feedback.  If I can't . . . well, send me an e-mail with the link to the listing and I'll definitely get it right!
4. Turn off the lights.  IF I am instructed with the showing instructions to turn off the lights, I will.  If I am not, I won't.  Why is that?  Because there might be another showing right behind mine and the lights should be on for that one, too.  How do I know if someone else is coming in or not?  IF turning off the lights is important to the seller, then give the buyer's agent the instructions to do so.

These things are mostly common courtesy.  My rule of thumb is to leave the house in the condition I found it.  If the lights are on, I leave them that way unless instructed to turn them off.  If the stereo is on, I certainly don't pretend to be a technician and start turning buttons to turn it off.  If the door is unlocked when I get there and there is no lockbox, I will leave the door in the same condition I found it upon my arrival.  If I find the agent before me neglected to close the lockbox so the key is accessible to the public, or if the door is not properly locked, I correct that error.  If it is obvious the homeowner has left the door open, I will hope they are walking in the back yard and will return soon to secure their unlocked home.

The statement that Randy Goetz said which felt insulting was "As a seller in today's market, I am so over buyer's agents."  Those words felt "so" like fighting words.  I do my best to bring a buyer into their home so they can reach their goal of selling the house and Mr. Goetz is "over buyer's agents"!  Much like Mr. Goetz, I spend a lot of time preparing the showing tour for my buyers.  Guessing the amount of time a client will spend in each home is impossible.  Allowing some lead time and overlap time (which I do) helps, but is not a perfect system.  Invariably sellers will expect me to rearrange my 20 St. Paul area houses so I can get to theirs an hour later than requested.  The homes are mapped in the most efficient way possible.  Back tracking is time consuming and sometimes impossible.  Some sellers won't allow showings except between 2 and 4 PM on weekdays (when my clients are at work)!   When I'm on the 18th house of the day and I'm only a few minutes late, consider it a miracle.  That day is a good day.

My suggestion to sellers is to be thankful there is an agent with the buyer.  Who is going to watch to make sure your valuables are not stolen? or your prescriptions?  Who is going to make sure little Johnny doesn't wreck the 1000 piece lego set it took 3 weeks to assemble?  Who makes sure the buyers remove their muddy shoes when they enter your home?  Who spent 2 hours the previous day arranging for the showings?  Who makes sure the buyer is pre-qualified for a loan before inconveniencing the seller and creating the emotional roller coaster a showing causes?  Whose life is in jeopardy if the buyer is dangerous?   Whose gas is bringing the buyer to your house?  Who pays for those cards you want left behind?  Do you expect your agent to come to your house for each showing?  The buyer's agent comes to every one of the showings their client has.

My point may, or may not, be obvious:  There are two sides to every story.  The seller is inconvenienced but has a goal in mind.  The buyer sometimes creates the seller's inconvenience, but brings the solution to the goal.  Let's work together to accomplish that goal, to find a buyer for the seller's house!

Sellers Disclosure

The Minnesota Association of REALTORS® has an "approved" Seller's Property Disclosure Statement" which we use for our St. Paul listings.  I had somewhere figured that the form is required by Minnesota statute when what is really required is disclosure.  There's even a little clause under the MAR dislosure form title which "disclaims any liability arising out of use or misuse of this form." 

Without the form, however, how would the seller know what to disclose and what not to disclose?  For instance, it is not required for the seller to disclose if a predatory offender lives nearby, but it is required to give the information to the buyers which allows them to research the presence of predatory offenders.  As a result the MAR form has a paragraph with the Minnesota Department of Corrections website and phone number.  How would an unrepresented seller (one not using a real estate agent) know they were required by law to give that information?

The list of things the seller does NOT have to disclose includes:

• occupancy of the property by anyone with AIDS or HIV
• suicide, accidental death, or natural death in the home
• "perceived paranormal activity" which means ghosts or other presences
• the presence in the neighborhood of an adult family home, community based residential facility or nursing home
• the presence of a predatory offender in the neighborhood

Since this list is specifically addressed by the Minnesota legislature, it's clear there is no duty to disclose.  However, the statute says that sellers "are obligated to disclose all material facts of which the seller is aware that could adversely and significantly affect an ordinary Buyer's use or enjoyment of the property".  The list of things above is specifically excluded.  However, there are many buyers that do not want to buy a house where someone died an unnatural death.  Even though there is no DUTY to disclose, be assured your neighbors will inform the new owners of all the gory details.  Whether the courts would support withholding of such information is still to be determined. 

In the meantime, my motto is the more you disclose, the better.  If someone met an untimely death, the disclosure could be as simple as this:  "A personal tragedy occurred in this home.  Serious buyers should have their agent inquire about the details."  With a statement like that, privacy can be maintained without failing to alert the buyers to the gorilla in the room!

Different Showing Procedures

Most St Paul area houses listed for sale by a real estate agent have lock boxes on the door with a key for the home safely tucked inside.  The lock boxes may vary in style including numeric or alpha coded ones or the new fandangled electronic boxes that require an electronic key to access them.  The one common denominator is that there is a key to the home inside the box.

Not all markets use lock boxes, however.  There are some locations that require the listing agent to be present to open the home for showings.  Other areas require the agent who is showing the house to pick up a key at the listing agent's office and return the key after the showing.  Some locales allow appointments to be arranged between the seller and the buyer's agent. 

My personal preference is the system we use in the St. Paul area.  Here are my reasons:

• Imagine a listing agent that has 50 houses on the market having to go to each home to open it for every showing!  That might work in a very compact community, but when listings are 30 miles apart it could be cumbersome. 
• If the listing agent were required to open each house for showing, imagine the nightmare that would be to schedule.  The showing time would need to be scheduled around the seller, the listing agent, the buyer and the buyer's agent's calendars!   And I think I've got problems scheduling our family gatherings.
• Often my buyer clients ask for a block of time in which many houses can be seen.  Obtaining a key for each of the listings to be shown, would be cumbersome.  Imagine if the listed house were in Eden Prairie and the listing company that had the key was in White Bear Lake.  My showing would require driving to White Bear to pick up the key, showing the house in Eden Prairie some 30 miles away, driving to White Bear to return the key and then repeating the procedure for each house being shown.  Hundreds of miles would be required for each tour of houses.  It's not a very "green" idea.
• Requiring the buyers' agent to get a key from the office would also limit the amount of showings that could be scheduled for each listing.  If my showing were at noon, the key obtained at 11:00 AM and returned at 2:00 PM, any other agent wanting to show the house during that time could not gain access to the house.  Whereas when a key box is on the property,  multiple agents could show the house during the same block of time.
• Asking the buyers' agent to arrange showings with the seller is also difficult.  Sellers are usually not present for showings in the St. Paul market.  Buyers are more comfortable seeing the house and discussing the pros and cons of the property when the seller is absent. 
• Some sellers try to "sell" their home to potential buyers which usually makes the buyers uncomfortable.  In some cases the very thing that a seller considers an asset is actually a deficit for the buyer.  Occasionally a seller tells too much information about their personal circumstances and compromises their negotiating position without even realizing it.

Lock box codes must be obtained through the listing company.  As a result, permission to enter the home has to be granted before the real estate agent can get the code.  Sellers can be notified so they can prepare the house and leave.  When properly used, the lock boxes are efficient and safe allowing the maximum number of showings in a block of time and allowing agents to be more efficient with their time as well.  Thank goodness I work in a real estate market that uses lock boxes!