Flat Fee MLS Blog

During slow housing markets in the past, many seller’s have made money and gained equity by remodeling or renovating their homes, while they waited out the downturn.

Things have changed in 2008.  Homeowner’s in this market should carefully run the numbers and focus only on a rate of return, before deciding to put more money into their homes. 

Today’s steep price declines and the record number of vacant foreclosed property mean that it may take years to recoop further investment in your home.  

If you are considering a renovation, check out the Cost versus Value Report, just published by Remodeling magazine.   You can read about the average costs to complete a variety of jobs and the expected payoff, after the work is completed.

Thank you for visiting Why6Percent.com.  Have a great weekend and happy home selling!!

Listing a home with obvious, even if small, problems are one of the biggest mistakes sellers make. Buyers prefer problem-free houses and as a seller, your top priority must be to overcome any obstacles between you and the sale. Fixing stuff that’s broken and selling a home that appears to have been well maintained will often overcome any real or imagined problems a buyer will have. Conversely, not fixing problems sends a loud message that you don’t care enough about your home. And, don’t forget, the home inspector will not miss problems, even if the buyer didn’t see them.In today’s slow housing market, seller’s should fix anything that a home buyer would expect to be working on the day of the sale, including:

1. Odors and Smells: Obviously, a big turn off for buyer’s in any market, and often poses health concerns. Stinky houses don’t sell. Find the source of of your problem and remove it.

 2. Appliances: All appliances advertised as a part of the sale should be clean and in working order, before your first showing.

3. Plumbing: If it leaks, drips or runs, fix it or replace it.

4. Windows/Doors: Repair or replace cracked panes or fogging windows.  If windows are painted shut, fix them. Put WD 40 on any squeaks and creaks. Replace torn or missing screens.

5. Cabinets:  Doors should open and close smoothly and quietly. Buy some sitck on pads at the hardward store to make your cabinets sound more solid, when the door is closed.  Knobs or pulls should be tightened or replaced with updated hardware.  Remember that Buyers will be opening every drawer, make sure they glide smoothly. Wipe all surfaces clean.  Remove and replace old, dirty shelf paper and liners.

6. Paint:  Is the biggest improvement you can make for the money.  If paint is dingy, chipped or cracked, repaint.  If your rooms or hallways look dark or uninviting, repaint in white or off white.

7. Wallpaper: If it’s peeling up in places along the seams or corners, use wallpaper glue and press it to the wall. Be sure to remove all bubbles. If your wallpaper is old, dated or unappealing, remove it and paint the walls white or off white.

8. Carpet:  If the carpet is in good condition, clean it.  If it is pulled up in places, tack it back down.  If it is old, dated, or worse, it stinks, replace it with a nice neutral color.   If replacing the carpet, also replace the padding. Use a thick padding to make the carpet feel more luxurious.  If pet smells or odors are on the tack strips, replace those at the same time.  If you have hardword floors covered by old carpeting, remove the carpet and show off those floors.

9. Lighting: Replace all burned-out light bulbs with the brightest wattage the fixture allows.   If your fixtures are dated or don’t work properly, replace them.

10. Exterior:  Clean and touch up the front entry and sidewalk.   Add a splash of color with some inexpensive plants or a pumpkin at this time of year.  Remove or trim over grown tree’s and shrubs, especially those that block the front of the house or sidewalk.   Weed landscape beds, mow and edge the lawn.   Repair missing or damaged fencing. Replace missing shingles. Clean out gutters and downspouts. If puddles or a wet basement is a problem, correct the drainage.

As you walk around your home, remember that savvy buyers will check every nook and cranny.  How well things work and look says a lot about how you’ve taken care of the property.   Make a good impression and it will go a long way toward getting your home sold quickly —and for more money.

Thank you for visiting Why 6 Percent.  Please feel free to submit any questions or comments in the space below.

Every offer to purchase a home will contain a repair contingency.   The contingency will outline the options for seller and buyer, in the likely event that repair issues are discovered during the buyer’s property inspection. 

Before we begin to address the repair issues, I would like for all sellers and buyers to remember that there is no perfect home.  Every house, new or old, will most certainly turn up a list of repairs.   If you are a buyer searching for a perfect house, you can stop searching.   There are no perfect houses.

The purpose of home inspections is to identify safety issues or serious (ie: expensive) problems that are in need of repair, before the buyer complete’s the home purchase.  The buyer will use an inspection report to compile a list of repairs that they want the seller to fix, before closing.   Since both parties desire to maximize their cash, sellers are often left to make a decision about which repairs are necessary or reasonable, and which are not. 

So, what helpful facts should sellers and buyers know about handling repair requests?

1. First, all Buyers should have an independant, professional home inspection and seller’s should only accept inspection reports done by a qualified, home inspector.  Sellers are not obligated to accept the opinions of the buyer, the buyer’s friend or cousin, or any non-professional, for that matter.
2. The Buyer should provide a copy of the inspection report, along with the list of items they want the seller to fix.   If the seller hasn’t received a copy of the report, they should ask the buyer to provide it, before responding to the buyers repair request.
3. The Buyer should not “nit pick”.  A request for repairs should focus on major problems and safety issues.   The buyer should not ask the seller to fix cosmetic problems, such as a bad paint job or peeling wallpaper.  The buyer should have addressed those issues in the purchase offer, during their initial walk through.
4. If a seller receives a long list of repairs, they can consider offering a home warranty that covers major defects.  This insurance can save a deal by easing the buyer’s fear that the home is a money pit.  For a few hundred dollars, companies such as American Home Shield, provide an insurance policy at closing, which  covers major items and gives the buyer peace of mind.
5. In a buyer’s market, they often want everything fixed.  Sometimes the seller can ascertain inside information about which “big ticket” items are the most important to the buyer, but the seller should always keep in mind that they risk the buyer walking, if they don’t agree to complete the entire list of repairs.
6. When a seller is presented with a lengthy repair list, they should remember that known problems become material facts.  If a seller declines to fix buyer requested repairs, the problems are now “known” and must be disclosed to any future purchaser, in the event the buyer walks and the deal falls through.
7. If a seller wants to cooperate with a buyer, but is unable or unavailable to oversee repairs, the buyer might be willing to accept a cash credit at closing to cover the expense estimates.   Many buyer’s are comforted by the fact they can use the seller’s money and hire their own contractors to make the repairs in a way the seller may not have done.

What Repairs Requests are Deal Breakers?  Which are Reasonable for the Seller to Refuse?

1. Lender Required Repairs-Any problem noted on an appraisal, such as a bad roof or structural problem, is grounds for the bank to refuse to lend money on the property until the problem is fixed and the structure is properly protected.   Sellers are advised to make all repairs noted on an appraisal.  They affect the buyer’s ability to borrow funds and complete the purchase.
2. Leaking Pipes-It is not unreasonable to ask a seller to repair water leaks and the damage which the leaks may have caused.  Unrepaired leaks raise mold issues and other problems seller’s don’t want to have if the deal falls through.
3. Water Penetration-Sellers should address water penetration issues.  Most are caused by improper drainage of water away from the home.  Adjusting the grade or installing a french drain is usually the fix. 
4. Roofing System-As stated in item #1, the seller should expect to repair or replace their roof, if deferred maintanence has caused water penetration issues.   If your roof is in good shape, sellers can aleviate problems ahead of time, by providing the buyer with a roof certificate, since most inspectors do not cover roof inspections.
5. HVAC and Hot Water Heaters-Usually, age is a good indicator of whether the seller should replace these systems.  The average life expectancy of a HVAC system is about 20 years, and about 10 years for a water heater.  It is not unusual for the buyer to ask for new systems, if the existing ones are on their last legs, but these are big ticket items for the seller to repair, so no easy answer here. 
6. “Tar Paper” Sewer Lines, aka “Orangeburg” Sewer Pipes-These pipes, which are made from tar paper, are famous for collapsing.  Generally, they last about 30 years before they disintegrate.  While replacing sewer lines is expensive, they are an item most sellers will replace.
7. Unsafe Decking or Handrails-Sellers should generally fix any items that effect the safety of the occupants, or are matters of local code enforcement.
8. Galvanized Water Pipes-Many homes built 30 years ago have galvanized, steel water pipes.   These pipes become clogged with minerals overtime, which is often the cause of low water pressure.  These type of pipes are also prone to rust and leaks.  While it isn’t unreasonable to expect the seller to fix leaks, few sellers are willing to replace all the plumbing lines.
9. Electrical System-The electrical panel should be safe and not overloaded.  The breakers should be marked with the name of the area of the home that they service.  Sellers, again should expect to repair any safety or fire issues that are found during the inspection.   If your home was built before 1960, it is likely the electrical service is Ungrounded, meaning the plugs have only two outlets.   Most sellers will refuse to rewire a house, simply because the service is Ungrounded, since it does not cause any problems.  A tip might be for the seller to offer to run “Romex” from the electrical panel to any new receptacles that the buyer intends to use for sensitive electronics and large appliances.  As a general rule, buyers who require grounded wiring should be looking for newer homes.
10. Foundation or Wet Basement-These are difficult issues that effect the very structure the home is built on.  These homes are best purchased “as is” at a steep discount.   Buyers should always think twice about purchasing a home with this type of problem.  Problems with or repairs to these systems never go away.  These are material defects and must be disclosed to any future purchaser.

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The buyer’s home inspection is one of the many steps involved in selling a home, that by its nature, pits buyer against seller.   No seller wants to be faced with a lengthy, and often, expensive list of repairs.  No buyer wants to purchase a potential money pit.  Sellers should be prepared for the news that in a buyer’s market, buyers clearly ask for more repairs than they would have ask for a couple of years ago.   Sellers need to understand that it is critical to separate the emotional or insulting nature of an inspection report from the transaction itself.  And, although objectivity is a difficult task to master, seller’s should always be calm, never angry, when responding to the buyer.

Seller’s need remind themselves that the inspector works for the buyer.  It is the inspector’s job to document a large list of items that may cost the buyer money down the road.   This doesn’t mean the inspector thinks your home is a piece of trash or that you don’t maintain it.  They are simply noting items about your home that may need attention. 

So, what should the seller do after they receive a list of repair requests?   Although state laws regarding inspections and repairs differ slightly, most sellers have three options.

1. You can accept the entire repair request list.
2. You can decline the entire repair request list.
3. You can agree to part of the repair request list.

Each of the three options have a potential effect on the transaction.

If you accept the entire repair list, the deal moves forward and proceeds ultimately to the closing table.  Keep in mind you have to make the requested repairs and the buyer will do a walk thru before closing to make sure the repairs are acceptable.  Don’t try to save a little money by doing the work yourself, if you aren’t confident in the outcome of the job.

If you decline to make any repairs on the list, the buyer can accept the house in “as is” condition.  Or, they can cancel the contract and get their earnest money refunded.

If you agree to fix some, but not all, items on the list, the buyer can cancel the contract and get their earnest money back.  Or, accept the repairs you have agreed to do and proceed to closing.

Note:  As a general rule, repair request negotiations are one-time affairs.  They do not go back and forth with an offer and counter offer.   Repair requests do not involve other terms of the contract such as price, closing date, etc. 

Tomorrow, we will address what items on a repair list are reasonable requests and which should be declined.   If you have an specific issues, please leave a comment in section below or post your question in the Y6 forum to assist others.

Thank you for visiting Why6Percent.com, the company who can list your home on the MLS and InfoTube.net for one, low flat fee.

The first thing buyer’s ask is “How much is your asking price?”   If the price is too high, the buyer will quickly lose interest.  If the price is too low, you will quickly lose money.

In order to price a home correctly, you must understand your local real estate market and your competition.   The goal is to set an asking price that successfully competes with homes that are comparable to yours.   Setting the correct price is easy to do, if you follow these 6 simple steps.

Step 1.   Get to Know Your Competition:  Drive through your neighborhood, and other area’s that compete with yours.  Identify the homes on the market that are similar to the one you are selling, with approximately the same size and age as yours, with the same number of bedrooms, baths and lot size.   Visit local real estate websites, infotube.net, realtor.com, zillow and trulia to verify property details, square footages, asking prices, etc.  These website can also help you find a complete listing of all homes that you may not have found on your drive by search.

Step 2:   Tour Open Houses:  Visit as many open houses as you can to see for yourself how your home compares.  Learn as much as you can about the condition of these homes, such as upgrades done to the kitchens, baths and bedrooms.

Step 3:   Find Recently Sold Properties:   To correctly price your home, you need to know what others like it have actually sold for.   To find out this information, you can visit your local tax assessors office, as housing data is public information.  The internet can also cut down on your homework.  Many tax assessor offices provide housing data online.  You can also educate yourself by reviewing the “Recently Sold” feature at Zillow and Trulia.  While these technology websites don’t have data for every location, they do cover most of the country.

Step 4:  Add and Subtract:  You now have information about property currently on the market and data for recently sold homes.   Evaluate the asking and sales prices, property details, neighborhood ammenities and ask yourself how your home measures up?

Step 5:  Be Honest and Impartial:   This is the hardest step for anyone attempting to value their own property.   Even Realtors, who price homes for a living, are notorious for overpricing their own homes.  Forget about what houses sold for in the past.  In most area’s, prices have decreased 15-20 percent in the past year alone.   Price your property inline with your competition or it will simply sit on the market.   Only competitively priced homes are selling in this market and buyers will only purchase what they perceive to be a good deal.

Step 6:  Set Your Price:   You have a complete picture of all the homes that compete with yours in the marketplace.   Price your property aggressively from Day One on the Market.   Pay attention to the effect subliminal pricing has on buyers and play to it.  If your competition is priced at $250,000, price your home at $249,000, for example.   Use your knowledge to to set a price that buyer’s can’t afford to pass up.

Congratulate yourself on a job well done!!!  Not only have you determined an asking price for your property, you’ve become an experienced expert in your local scene.  With your knowledge and sense of the competition, you will be able to honestly communicate about your homes’ advantages and disadvantages, when comparing it to other houses in the area.

Thank you for visiting Why 6 Percent.   Please feel free to comment or post a question about the sale of your home.

InfoTube.net  is now providing a Free Featured Home listing with video tours and 20 photo slideshow to all Why 6 Percent MLS customers.

The InfoTube.net homes for sale website, combined with a flat fee MLS listing places your property in front of millions of home shoppers each month.    But, in a difficult housing market with far to few buyers and far too many sellers, there is another way to reach millions of new buyers per month…Video.

Making a Video about the benefits of living in your home is easy and fun to do.   Dust off that digital camera you don’t often use, and put it to work selling your home to a whole new audience.

Tips for Shooting a Good Video Home Tour without Editing:

1. Plan Your Tour and Your Shots:   Decide what property features are important and how you will highlight them visually.   Make sure you clean and stage the area’s that will be on video so your house looks its best.   Plan the order of the shot in the same sequence as someone would tour the home.  Start with the front walk up, entry, etc. to make your video easy for the viewer to follow.
2. Get familiar with your camera. The on-off switch, zoom and record buttons.   You can pause between scenes by touching the “shoot” button and resume filming by touching it again.  (Practice a little to see how the camera works inside your home.)
3. Use the video camera like a still camera.  You can walk with a camera, but the video will be shaky. Keep the camera as still as possible.  A tripod is an excellant tool used to steady the shot.
4. Shoot 3 Basic Shots of each Feature:  Start with a Wide Shot to establish the location.  Zoom slightly to use a Medium Shot to follow action or frame a view or scene.  Use a Close Up shot to show off a detail or something special.
5. Watch how much you zoom.  The camera registers better if you move closer to the subject, versus just zooming in.  Also, avoid using the zoom if you are hand holding the camera.   You won’t be able to keep a steady shot.
6. Try to shoot at least 10 seconds for each shot.   If you are panning the scene, 10 seconds will produce a nice flow and the viewer won’t get sick trying to watch while the room spins.
7. Lighting is a must.   Do not shoot toward a bright window.  Lower the blinds and turn on all the lights, if you can’t get another angle.  Lamps or drop lights aimed at the subject and positioned behind the camera are an ideal way to light your space.  If shooting outdoors, try a cloudy day, early morning or late afternoon when harsh sun won’t wash out color and details.  Also when shooting outdoors, make sure the subject is facing the sun.
8. Plan to bring emotion and life into your presentation.   Include historical facts, neighborhood shots, nearby attractions, special views, street scene’s, neighborhood schools and parks, splashing hot tubs and roaring fires.   Add fresh flowers in the kitchen and dining room.  Set the dining room table.  Place candles around tubs and fireplaces.  Add color outdoors with inexpensive hanging baskets or pots of flowers.   You don’t need to plant them unless you want to.  You can hide the pots in the dirt or behind shorter plants.
9. Time the Video.   The majority of viewers will not sit through a video longer than 3 minutes, unless it is really compelling.
10. If can have a lot of fun Editing, if you have a newer computer.  Movie Maker is Free on Microsoft software.  IMovie is free on Apple.  While you don’t have to edit to make a great video, editing is great for adding captions, music or voice overs, or selecting the best scene.  We will discuss editing and special effects later next week.

Video’s don’t sell a home all by themselves, but they certainly attract serious buyers.  Do yourself a huge favor and upload your home video tour to InfoTube.net today…we will put it on Youtube for you.

Thank you for visiting why6percent.com.  Please feel free to post questions or comments anonymously by clicking the “comment” link below this article.

                                                                                     The Environmental Protection Agency offers the following tips for those who want to conserve energy and water inside the home:

•  Visit energystar.gov to find energy efficient appliances that can save money and reduce greenhouse gas emissions.
• Turn off appliances and lights when you leave the room.
• Use the microwave to cook small meals. (It uses less power than an oven)
• Have leaky air-conditioning and refrigeration systems repaired.
• Cut back on air conditioning and heating use if you can.
• Insulate your home, water heater and pipes.
• Don’t let the water run while shaving or brushing teeth.
• Take short showers instead of tub baths.
• Keep drinking water in the refrigerator instead of letting the faucet run until the water is cool.
• Scrape, rather than rinse, dishes before loading into the dishwasher, wash only full loads.
• Wash only full loads of laundry, or use the appropriate water level or load size selection on the washing machine.
• Buy high-efficient plumbing fixtures and appliances.
• Repair all leaks (a leaky toilet can waste 200 gallons of water a day)
• Water the lawn or garden during the coolest part of the day (early morning is best)

It’s easy to be green while you are marketing your home and communicating with first time homebuyers who need to know these talking points.

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                                                                     Let the light of day brighten up your night! Powered by a built-in photocell, solar night-lights require no wiring and no electricity, and they turn on automatically at night. Now you can harness the sun to illuminate your driveway, paths, steps and decks with easy to install solar lights that recharge (for free) during the day. Your curb appeal is also enhanced for night time viewing by potential home buyers while you are marketing your home.

Designed to look great whether you like traditional or modern, these energy-savers are available both in-store and online. There is a vast array of holiday night lights available online, including Christmas and Halloween. They are becoming increasingly popular, particularly since they are so much easier to install than traditional wired systems. If you decide you don’t like where you put them, or simply want to expand or mix things up, they are also much easier to move than wired units.

By harnessing the sun for your night time lighting projects, you are saving money, saving energy, and enhancing your home’s curb appeal-this is an easy way to go green.

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                                                                         What do “points” mean? Quite simply, they are fees and they came by this name because they equal one percentage point of the loan amount. For example, for each point that you agree to pay at closing, the lender agrees to reduce the interest rate on your loan by a set amount, (generally an eighth to a quarter of a percent), this is why paying points is often referred to as a “buydown.” You are simply purchasing a lower interest rate.

Points are similiar to another fee you’ll see on your closing statement, the loan origination fee. Sometimes it is called an origination point because it is also expressed as a percentage of the total loan amount. An origination point on a $200,000 loan is also $2000, but it has a different purpose; it covers some of the lending institution’s cost in preparing the loan application process, including paying office personnel.

Another important difference between origination points and discount points: discount points on new mortgage loans are usually tax-deductible, depending on your particular tax situation, while origination points are not tax-deductible. So, if your closing statement shows an origination point, you may want to ask that a discount point be substituted instead. Ask your accountant for advice on this.

Should you pay discount points? Points are for long -term gain. Here are some tips on whether you should pay them:

1. If you are cash-strapped at closing, paying points may not be worth saving a small bundle in interest over many years.

2. If you’re not planning to live in your home very long, skip the points. You will never realize the savings.

3. Use a mortgage calculator to gauge for yourself whether points are a good idea and to see how long it takes to break even.

Whether you are a buying a home or selling a home, this is a good reference to point out.

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 This could be the opportunity of a lifetime for first-time buyers. For aspiring home owners who find their goal stubbornly elusive, newly enacted legislation providing a tax credit of as much as $7,500 for first-time buyers might just be the break they need. 

Here’s the scoop on the first-time home buyer tax credit:

• The tax credit is available for first-time home buyers only
• The maximum credit amount is $7,500
• The credit is available for homes purchased on or after April 9, 2008 and before July 1, 2009. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit
• Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible. Visit the Federal Housing Tax Credit website to learn more about the tax credit.

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