Helpful Tips for Showing Your Home

If you want to sell your home in the soonest time at a good price, you need to make your house look attractive and interesting to buyers. Here are twenty sure-fire tips to do this:

Preparation

  • The first thing you need to take care of is the outside since this is the first thing that potential buyers see. The lawn must be trimmed and free from clutter. Walks and s]teps should be clean from ice, snow and debris. The fron door needs to be clean and make the entry look inviting.
  • Faded paint and worn out wood makes your house look old and cheap. Spending on a new wallpaper will be worth your money. Take time and effort to redecorate your house and you’ll sell your house at a good price.
  • Bright and sunny rooms add to the charm. So open the curtains and let the sun shine in. It’s cost free but can do a lot of wonders.
  • Do all the necessary repairs – Loose knobs, sticking doors and windows, warped cabinet drawers and other minor.
  • Make your attic basement, and other utility space look bigger by removing storage bins. Painting the walls with a light color can brighten the mood and make them look more spacious.
  • Ensure safety. Take away any clutter that can cause injury, especially in the stairs.
  • Make closets, cabinets, shelves and cupboards look spacious by arranging things neatly.
  • Bathrooms should look clean and bright. And the faucets should be working.
  • Make the bedrooms look neat, beautiful and relaxing. Use attractive bedspreads and newly washed curtains.
  • Make sure all the lights in the house are working. Turn on all the lights for an evening tour. It will give potential buyers a feel of glowing warmth.

Showing

  • Avoid having too many people in the house during house tours or inspection. This will make the buyer feel like an intruder.
  • Music helps. But make sure it’s soft and mellow. The agent should be able to converse easily with the buyers.
  • If you have pets, make sure they are not in the way.
  • Be polite and accomodating but don’t force conversation. Maybe the buyer needs space to think or just take everything in.
  • Never apologize for the appearance of your home. Leave it to your agent to answer inquiries or objections.
  • Just stay in the sidelines. Your agent is trained and experienced in doing this. They will know how to emphasize the positive features of your house. And allow your agent to discuss price, terms, possession and other petinent factors. They are qualified to bring negotiations to a favorable conclusion.
  • Don’t dispose of furniture and furnishings before a buyer has bought the house.
  • Show your home to prospective buyers only by appointment through your agent. They could handle the tour better as professionals and can sell your house more quickly.

Tax Benefits For When You Sell

When you sell your home, especially at a time when your taxes are due, you could get financial shelter. Thanks to The Taxpayer Relief Act of 1997, the real estate sector can receive what is considered the best tax shelter through their homes.

According to the federal tax law, when you sell your home, you can keep, tax free, capital gains of up to $500,000 if you are married filing jointly or $250,000 for single taxpayers, or married taxpayers who file separately.

To qualify for the $250,000/$500,000 exclusion, you must have lived in the house (as your primary residence) for at least two of the prior five years. The best part is, it’s not a one-time benefit. You can use this benefit as often as you qualify – every two years, to fulfill the owner-occupied-two-out-of-five-years requirement.

For example, if you have two homes and you live in one of them for two years, sell it and live in the other one for another two years and sell them both, both qualify for the exclusion. If due to some unforeseen reasons like a job change, illness, death of a spouse, divorce, disaster, war or some other hardship, you are forced to sell before you meet the two-year residency requirement, there are special provisions. In these cases, the $500,000/$250,000 exclusion (not your specific gain) will be prorated. For example, if after only a year of living in your house you are forced to sell it because of a qualified unforeseen reason, you can exclude from taxes up to $250,000 (half the exclusion) in capital gains if you are married and file jointly or $125,000 for separate and single filers.

One unforeseen event where homeowners were able to use the provision was during the September 11, 2001 acts of terrorism in New York, Pennsylvania and Washington, D.C.. Sellers were able to prorate the exclusions given these conditions:

  • A spouse, home co-owner, or person living with the taxpayer was killed by the attacks.
  • The taxpayer’s principal residence was damaged.
  • The taxpayer or a person listed in (1) became eligible for unemployment compensation, or
  • The taxpayer or a person listed in (1) had a change in employment or self-employment that resulted in the taxpayer’s inability to pay reasonable basic living expenses for the household.

Selling costs
If later, after you sell, you realize there’s still a taxable profit after the exclusion, you can bring down your gain with selling costs. Your gain refers to your home’s selling price, minus deductible closing costs, minus your basis. Your basis is the original purchase price, plus capital improvements, minus any depreciation.

Selling costs also include real estate broker’s commissions, title insurance, legal fees, administrative costs and inspection fees. It can also include repairs or additions completed within 90 days of your sale to make the house more marketable.

Moving costs
If you need to move and sell your home because of a new job, you can deduct part of the moving costs. These are the requirements that need to be met:

  • Your new job must be at least 50 miles from the old;
  • you must work full time at the new work place for 39 of the 52 weeks after the move;

The exclusion could also include costs for travel, transportation, lodging and storage.

If you are self-employed, you can be eligible for tax deductions if you work full-time for at least 39 weeks during the first 12 months and a total of 78 weeks during the first 24 months after arriving at the new job location.

To get more information about home selling-related tax benefits, get in touch with tax professional and state and local tax authorities in your area.

Think Like a Buyer

As a seller, your goal is to sell your home in the soonest possible time at the most favorable price. To achieve this, there are many factors involved. Some of these factors like the home’s condition, asking price and marketing strategy are factors that you can control. However there are some other things that influence a buyer’s decision in buying a house.

When you enter the market, you need to understand most buyers’ wants and needs if you want to be succesful. Competition is tough so you need to know what your buyers want. Your real estate agent can guide you on how you could effectively sell your house despite some flaws.

  • LocationThis is one of the primary considerations that buyers have and unfortunately, is one thing you can’t control. According to the National Association of REALTORS(r), neighborhood quality is the number 1 reason buyers have for choosing a home. It is followed by commute times to work and school.
  • SizeHome sizes have continuously increased since the 1950’s. The market for smaller homes are often limited to new home owners, couples without children, or families with grown children who no longer live with them. 
  • AmenitiesThere are certain floor plans and amenities that become outdated as time goes by. Your real estate agent can inform you of current design preferences in the market. You can opt to renovate to increase profit and marketability. But don’t do this without consulting your agent. They can advise if it’s a wise investment based on the market condition and several other factors.

Short Sale for Luxury Homes

Some people are wondering if luxury homes can also be subject to short sales. The answer is yes. But it has to be done properly because it is sensitive. There are more factors involved. With the use of our technamicra and marketing strategies, we will find qualified buyers.

A short sale can work to the advantage of any property. But they vary in terms of the property situation and the goals of the owners. How?

  • It will not cost the seller. The bank will pay the realtors when the house is sold.
  • It’s probably the fastest way to sell your home if you’re trying to avoid foreclosure.
  • This proviees a way out from financial burdens and start anew.
  • You can still stay in the house for free while the short sale is still being processed.

Losing your home to a short sale may not be easy but it could solve your financial problem as long as it’s done right. Talk to us. We’re here to help you make informed choices.  

A House That Looks Good Will Sell

They say that if you want to sell a house, it should have curb appeal. What it means is that you chould make your house look captivating enough that homebuyers who drive by your house should be compelled to stop and take down the contact information for your agent.

According to the National Association of Realtors, curb appeal is the reason for the sale of 49% of houses. 

However, there are some things that you can’t control such as your neighbor’s houses and yards. You can do everything to make hour home and lawn tidy and beautiful but what if the other houses in the neighborhood are not as attractive as yours? Don’t worry. In fact you can use it to your advantage. This means your house will standout. If the other houses look as good as yours, they might be more interested in those houses or think that yours look inferior. If the houses are sprawling with toys, it gives the homebuyers an idea that there are many kids in the neighborhood. If they have children, they’ll be happy about it. Their children will have playmates. If however the neighborhood has a lot of junk, then it’s a problem.

Based on my experience on curb appeal, this is how you can beautify city and suburban (or semi-suburban) houses:

  • In the case of a yardless townhouse

    1987. A time when the real estate business is taking a downturn. There are many other townhouses for sale downtown. The house is located near a public-housing project which gives an impression of the area being high-risk for crime. On the other hand, it is home to beautiful townhouses, a school around the corner, streets with many trees and a close-knit neighborhood. Since their are many children playing in the street, crimes are prevented. There are no abandoned cars in the street.

  • What I did to prep it up

    I repainted the blue paint on the trim and on the front door. To give a feel of warmth and privacy, I added shutters to the windows in the living room. Then I set up a flower box on the window ledge. I also added a filled half-barrel on the side of the two marble steps up to the front door as well as the small area around the tree in front of the house. The front steps were bleached and scrubbed.

    To deal with the children, I treated them with ice cream so they’d be less rowdy on open house days.

    All my efforts yielded a favorable outcome. The succesful buyer was at the first open house. Prior to this, the house was on the market for five months with two real estate brokerages.

  • Golden rule:
    Give all the neighborhood kids ice cream. Unfortunately, I missed one kid who announced to everyone on open house that someone stole her bike. (It wasn’t true though)
  • In the case of a city house with front yard

    June 2001. The real estate market is booming. Houses in the $150,000-to-$300,000 range are a hot item. The house is located at a semi-suburban neighborhood. The flowers are in bloom; there are plenty of trees; and the street has reopened after a year of railroad-bridge replacement.

    On the downside, there’s a beer ditributor at the corner and they cause a lot of trash. And the street is busy since it’s a main route between two major city avenues.

  • What to do to prep it up

    Clean the facade of the house. Clean the porch columns and rails carefully to get rid of the mildew. Repaint the porch floor. Trim the hedges regularly and plant lots of pretty flowers. Touch up on the paint of the concrete bench under the dogwood. Repaint the stairs on the porch. Fix the sidewalk. Wash the windows.

    Water the lawn regularly and mow it once a week. When you pick up trash in front of your house, do the same with nearby houses.

Outcome: It only took one weekend to get the house off the market. As early as day 2, eighteen couples were scheduled for appointments.

Golden rule: Don’t risk selling your house at an ugly state. Do what you can to make it attractive. But don’t overdo it. Don’t spend so much to beautify the house. Your main goal is to get their attention, make them stop and give your house a good look. But keep their interest by making the inside of the house desirable as well.

Breaking Down the Offer

For a seller who has a house in the market for quite a while, it’s exhilerating to get a call telling you that someone is making an offer. You go through a series of emotions – intitially you feel ecstatic, the next moment when everything sets in, you start to worry thinking that the offer may may not be as good as you were hoping for.

Agents usually don’t tell you the price offer over the phone because there are other things to consider aside from the price – contingencies, seller concessions and real property requests.

Don’t stop at the price. Look at the rest of the offer. Focus on how much net you’re going to get.

Your agent should be able to explain to you the parts of the contract. But it’s better if you already have prior knowledge about real estate contracts. They could vary depending on your state but generally they should be similar.

Here are the basic parts you can expect in a contract: 

  • Earnest money deposit – As the name suggests, it is intended to show that the buyer is sincere. If the offer doesn’t seem favorable, the buyer sets a large earnest money. In most cases, the buyer is the one who decides where the money will be deposited – usually not to the seller but a third party like an escrow, attorney or sometimes a broker’s trust account. The earnest money is usually counted towards the downpayment. If for some reason the sale will not push through, the money deposited will be returned to the buyer. Typically, real estate contracts have a section on any disputes going to arbitration, and most of the time, sellers do not get even a portion of the earnest  money.
  • Purchase price – This is what you’re most interested in. This is most probably the first thing you want to look at. But don’t rejoice until you’ve given a thought on what the buyer wants to include in the offer.
  • Mortgage contingency – This is usually the first contingency you will see. This states that the buyer is acquiring a loan with a specific term and rate. You need to analyze this carefully. Some buyers use this to hold you down while they scout for better bargains. Make sure that the terms specified are realistic such as a 30-year, 5 percent fixed-rate loan with no points when that type of loan carries a 7 percent rate with 1.5 points in your area. Another thing you should be mindful of is the time limit. If not, the buyer might take as long as they want, leaving you tied commited to them and your house unsold. In this contingency, the buyer can also specify if they want you to carry back a first or second mortgage.
  • Seller concessions – The buyers could ask for anything – especially if they know that there isn’t much competition out there. But if the property is a hot item, you can expect the buyers not to ask much seller concessions because they know there isn’t much chance they’re going to get it.
  • Inspection contingencies – This states that the buyers can back out of the deal if the outcome of the inspections show that the house is too much of a problem. There is even a contingency that is dependent on the approval of their mother-in-law. So again, the contingencies should be realistic.
  • Personal property – The buyer can ask for anything that is physically attached to the house being sold. They are considered part of the transaction. It can be the book shelves, light fixtures, kitchen counter. So, those that are not attached to the house like appliances or furnitures still belong to the seller. So if there are things attached to the house that you want to keep, make sure you have them listed. On the other hand,buyers can state the items that they want removed from the house before closing; such as storage bins or boxes of useless items. 
  • Appraisal contingency – The buyer adds this contingency to ensure that they acquire enough amount for the sale price. There are some unlikely cases when the bank doesn’t give an appraisal high enough for the price of the house, usually it happens when there are more seller concessions. Example, the agreed upon price is $300,000 but includes up to $10,000 in buyer closing costs, the house may not appraise if it’s really worth $295,000.
  • Buyer selling property contingency – This applies when the buyer is also trying to sell their property. This means that they can only push through with the sale if they have already sold their house. There is a risk that the seller will let you wait for months. To protect sellers from this, there is usually a 72-hour clause, also known as a kick-out clause. This clause allows the seller to keep the house on the market. If there is another offer, the buyer has 72 hours to fulfill the agreement or the deal is off.

Clear the Clutter and Sell Your House

f you want to sell your house, aside from the washing and the scrubbing, you need to remove the clutter. This doesn’t only mean taking taking out the obvious trash like, empty cans of paint or boxes of unused items that have been sitting in the garage for as long as you could remember. It also means removing personal items from the house. To you, these things are special and looks part of the house. But to potential buyers, they are clutter.

When you show your house to buyers, they need to be able to visualize themselves living in it. But they can’t do this if there are too many personal things like souvenir items from your vacations or events, personalized wall decors and pictures. Instead of making them feel like this house could be theirs, it will make them feel like they’re intruders.

No matter how clean your house is, if there are many things, it will look crowded and it will be unappealing to buyers. I know, these things are important and special to you, so removing them from where they’ve always been will be heartbreaking. But you don’t have to get rid of them, you just need to move them away from the house you’ll eventually part with too. Consider renting a warehouse where you could still keep them.

You need to clear the house from clutter but it doesn’t have to be empty. Just aim to make the house look neutral.

Classify your things according to things you’re going to keep, donate and throw away. It might actually be high time for you to go over your stuff – especially those you haven’t even seen for years and say goodbye to them for good. You can think about selling some of your things in a yard sale or online but it will take time and effort – two things you usually don’t have enough of when you’re in the process of selling your home. If however you are intent on selling some of them at a later time, eBay and Craigslist are the most popular sites to turn to. But you’d be doing yourself and a lot of people a big favor if you just give away as much as you can.

Here are some tips for clearing the clutter:

  • Take out unnecessary furniture to make the room look more spacious.
  • Clear the foyer or mudroom of shoes, coats, umbrellas and other outdoor items.
  • Remove big equipment like a drum set or treadmill.
  • Take out your photos so the buyers can imagine their own photos in the house.
  • Throw away old magazines, newspapers and books. If you have time and creativity, recycle.
  • Arrange your wires neatly. Make sure it doesn’t look messy and won’t cause accidents.
  • Remove everything you have in your nightstand – tissue, medicines, magazines. But you can keep the lamp, clock and a book to add to the look.
  • Organize your bookshelves so they look orderly. Add a decor like a vase or an artwork to make it look pretty.
  • Clear your kitchen countertops. But you can leave important items like a microwave and toaster. Don’t forget to clear the fridge from personalized magnets, pictures, your children’s drawings, coupons or whatever you always stick there.
  • Put away plants that look unhealthy.
  • In the bedroom, take out shoes, clothes and toys off the floor and make sure the bed is done.
  • Tidy up your bathroom by hiding razors, toothbrushes and shampoos in a cabinet. Prep up your room by putting fresh soaps, towels or maybe plants.
  • Take out some clothes in the closet so they don’t look too full.

Determining Your Net Profits

When you sell your home, you can’t expect to take home all of the sale price. There are many fees to pay – commissions, taxes and miscellaneous and they can take out up to 7% of the sale price.

How do you determine your net profit? When you receive an offer, your real estate agent will give you a Seller’s Estimated Net Proceeds worksheet, which will give you an idea of all the costs that will be deducted when you close.

Here are some of the costs that could are usually deducted from the sale price. They may vary depending on yoru state.

  • Mortgage payoff balance.
    They can include your own home loan, second mortgages and home equity lines of credit.  
  • Loan payoff fee.
    Some lenders charge an administrative fee to pay off your loan.
  • Lien release document.
    If you need to pay for a contractor, court judgments or for property taxes, you’ll need to settle them first before you could close the sale.
  • Prepayment penalty.
    Ask your lender if you’ll need to pay for a prepayment penalty if you pay for your loan early.
  • Recording fees.
    If you previously loaned on the house, you’ll need to pay this fee to show that you’ve paid for it already.
  • Commissions for agents.
    This is the fee you pay to both your agent’s brokerage and your agent’s brokerage. Usually this takes off 6% from the sale price. This amount is split by the two brokerage and they are in charge of paying each agent.
  • Notary fees.
    You pay a notary to confirm your identity and verify the documents.
  • Escrow fees.
    The escrow serves as a third party. An escrow ensures that the money is protected while negotiations and processing of necessary documents are still ongoing. You could split the escrow fee with the buyer.
  • Title search fees.
    Before the sale of a home could be finalized, a title company does a search on public records to verify if the property is free from any issue and can be sold.
  • Seller concession. 
    You and the buyer might agree to the price of a house but the buyer asks for a 3 percent closing cost concession.  3% is given back to the seller to pay for the closing costs.
  • Repairs.
    If repairs are necessary, you’ll need to set aside a portion of the sale to spend for it. Sometimes it’s the buyer who requires it and sometimes, the lender.
  • Home warranty.
    There are times when the buyer asks the seller to pay for a home warranty which offers protection for the buyer’s first year in the house.
  • Termite letter. 
    Some states require this. It indicates that the house is free from termites.

There may be more costs not mentioned here. It’s best to ask your real estate agent so you can anticipate and prepare for it.

Exterior Improvements Give You More Bang for Your Buck

The outside of your home is the first thing that buyers will notice. It’s what gets them interested in your home. If you’re thinking about improving your home, you’ll be getting your money’s worth if you do a good job on the exterior.

According to Remodeling Magazine’s 2009-10 Remodeling Cost vs. Value Report, six out of the top ten remodelling projects were all related to outside improvements. The report surveys realtors across America. Based on the report, even a simple move like replacing a steel door for about $1200 can recoup more than 120% of your investment when you sell the house. An attic bedroom which costs $49,350 yielded $40,990. It brought back about 83% of what was invested. Adding a deck returned about 80% of the cost.

One of the primary reasons why people invest in outdoor improvements is that it doesn’t cost much and the investment will surely pay off. Usually, exterior improvements costs less than $15,000 but it can do a lot for your home’s curb appeal. Curb appeal is important because it holds the key to selling your home. Midrange outdoor projects in the report’s top 10 are a deck addition, vinyl siding replacement, wood and vinyl window replacements and steel and fiberglass door replacements.

Another reason for exterior improvements is energy efficiency. Plus, homeowners can get tax credits for weatherizing their houses under the American Recovery and Reinvestment Act. Improvements like upgrading windows, roofs and siding can be counted towards it. In the process of doing this, homeowners are also making their houses marketable.

It’s also a good investment to improve your kitchen and bathroom, but don’t spend too much. A small kitchen remodelling in a midrange house that costs $21,410 can yield about $16,775 or about 78 percent of its cost when you sell. If you decide to do a major renovation that costs $57,215 you can expect to recover $41,260 or 72 percent.

In an upscale home, a major kitchen remodelling at $111,800 can give you about 63 percent of your investment while a bathroom costing $52,300 would give you a little more than 61 percent.

Improvements in a home office or sun room can only yield about 50 percent of construction costs.

Fireplaces Will Help Sell a House

Buyers in general are more attracted to houses with fireplaces. They give a warm and cozy feel. They usually become the centerpiece of a room. Fireplaces add to the aesthetic appeal of a house.

They also keep houses warm during cold times. Even though there are already other possible sources for heat, it can still come in handy when there is no power during storms.

There are other states like California where a house a house needs to have a fireplace in order to be sold. But Gopal Ahluwalia, director of research for the National Association of Home Builders, says, “you probably don’t need one more than three days a year.” He says, “lifestyle is guided by the conditions of the economy. When you have money left over, you want to spend it on things you don’t need.”

Now that houses have become expensive and people are looking for ways to be cost-effective, are houses with fireplaces still popular? Is it worth the investment? According to experts, a fireplace can be paid for over time in a 30-year mortgage. And there are lower interest rates available.

Kira McCarron, marketing director of Toll Bros, which builds luxury houses in almost 20 states says, “The concept of fireplaces has changed. The shift from masonry to prefab designer boxes has put fireplaces in bathrooms, dining rooms and bedrooms, as well as living rooms and family rooms.” You can even find fireplaces on walls of entertainment rooms, below big-screen televisions, “so that you have your choice of what you want to see,” she says.

This is all made possible by technology. Now we have gas fireplaces because it is already possible to vent gas outside through a wall without a traditional chimney. Flexible pipes allow gas to go to the units. Usually houses have both – a wood fireplace in the living room and gas on the other rooms.

Burning wood can cause health and environmental problems. According to the U.S. Department of Energy, wood-burning appliances and fireplaces can release large quantities of air pollutants like nitrogen oxides, carbon monoxide, organic gases, and particulate matter. They can cause serious health problems particularly to children, pregnant women and those with respiratory problems. These chemicals have properties similar to cigarette smoking that are associated with cancer. Many areas consider smoke from wood burning as one of the major cause of air pollution.

Because of the availability of vent-free fireplaces, homes can now enjoy having several units instead of just one. However, vent-free appliances also come with safety concerns. In fact some states ban the use of vent-free fireplaces. And even in states where it can be used, some county government prohibit its use.

According to the U.S. Department of Health and Human Services the key to reducing health risks linked to vented and unvented heating appliances is proper maintenance.

Contractor John Burke puts a priority on safety when he installed a vent-free fireplace in his house. “There had to be a constant supply of fresh air in that house to guarantee safe operation,” Burke says. “Fortunately, the house was old and drafty, and there was never an issue.” The unit he bought came with a carbon monoxide monitor and an oxygen-depletion sensor. Once the level of oxygen in the room reaches a dangerous level, the fire turns off immediately.”Never leave a gas fireplace running when you aren’t in the room,” Burke says. “And make certain that you shut it off when you go to sleep for the night.”

Usually a gas fireplace costs between $600 to $3,000, excluding installation. Electric fireplaces usually cost between $1,200 to $1,500, but you can expect it to generate enough heat to take the edge off one or two rooms.

When you have an older house, you’ll have a problem with chimney lining, says developer Mark Wade. He rehabs older city homes. Home inspectors suggest that stainless-steel liners be installed in old chimneys. However, it will cost a lot. A stainless steel installed from fourth floor to the basement typically cost $3,000 for about 1 1/2 hours’ work.