Heather's Helpful Hints for Sellers in Bucks County, PA - Links to Love

My husband and I just spent the day getting our fix and flip investment property in Warminster, PA ready to be put on the market. There is the inevitable list of piddly little "to-do" items that take forever to complete: cabinet hardware on the kitchen cabinets, grills on the A/C vents, toilet paper holders and towel racks in the bathroom. We spent about 5 hours today doing a multitude of tiny things that add up to mean big money in the end. Of course, I played washer woman - nothing like cleaning toilets in a house that was inhabited solely by workmen. G-ross!

I was going to write a blog about how to prepare your home for market, but quickly realized I've talked about this ad nauseum on this blog (you might have noticed my obsession with cleaning kitchens and baths). So, rather than reiterate, I've decided to just link those babies up!

Heather's Links to Love for Sellers in Bucks County, PA

The 10 Minute Staging will tell you how to quickly get your home show ready (and you'll see my messy kitchen).

5 Things That are Sure to Run Off Buyers will tell you the five quickest ways to get a Buyer out of your house (which should NOT be the goal here :)

Find out How a Plate of Cookies can beat out hardwood floors.

The Quickest Fixes for Your Kitchen and Baths illustrates my obsessive nature regarding these rooms.

When Does it Make Sense to Rehab an Estate? Find out my criteria...

Look for more hints here in the very near future. Every time I put a flip house on the market, I remember how difficult it is to get a property ready to market. These investment properties keep me in tune with my Sellers frustrations :)

Why Appraisers May Be Doing Buyers (and Agents) Dirty Work in the Future

For the first time, ever, in my real estate career, I'm seeing homes not appraise for the contract price.

Now, some may think this is long overdue, and that appraisers are finally doing their job the RIGHT way. I'm of the opinion that appraisers were doing their job the right way all along - houses were worth those inflated prices because people were willing to pay those inflated prices. If houses are worth what a Buyer is willing to pay....well, I'm getting off track here.

Anyhow, the fact of the matter is that appraisers are now under direct scrutiny, and they're being a lot more stringent about how they perform their appraisals. I'm hearing (and our office reporting) of a lot more deals falling through because the home did not appraise at the contract price.

What does this mean for Buyers and Agents?

Well, it lets us off the hook just a bit, doesn't it? No longer can Sellers overprice their home against their Realtor's advice and hope that someone, somewhere will pay their inflated pricing. I mean, sure they can still do it, but that appraisal is going to kill any deal they get at their inflated pricing, unless they are willing to lower their price to the appraisal price.

For Buyers, a appraisal can be your very best friend. It can shave a few thousand dollars off your contract price. Of course, it can kill the deal, as well, but in most cases, the Seller is more than willing to compromise with you to get the deal done.

What does this mean for Sellers?

Comps, comps, and more comps! Make sure that your asking price is backed up by good, solid, CURRENT comps. You can't overprice by $5,000 and hope you can squeeze a little bit out of your home. There's no squeezing anything at this point (except your proceeds). Don't look at it as a loss - you probably wouldn't get that extra $5,000 anyway. Look at as you are priced right.

Secondly, keep an eye on your Seller's Assist numbers. Previously, no one had a second thought about jacking the contract price up to accommodate a Seller's Assist. Those days are gone. Your house needs to appraise at the contract price, not at your net price. If you're offering a Seller's Assist, figure on taking it off of your current price.

There are new procedures going into place in May that will affect how lenders order appraisals, and I expect some fall out in pricing to result. It's more important than ever that you keep appraisals in mind when pricing, or purchasing a home.

3 Ways to Find Your Zen When Negotiating Real Estate Transactions

1. Keep it civil.

I wrote a post What NOT to do in a Real Estate Transaction waaaay back in January of 2008. I think my favorite line of that post was "never start negotiations with an opening salvo to the other party." Look, you don't have to be friends with the other party, but keeping the dialog civil, on-task, and moving forward is going to accomplish your goals. Once the other party hates you, it's difficult for them to remove the emotion to work through the deal. Antagonistic negotiations often de-volve into fighting over trashcans and a $30 bathroom mirror (I've seen it happen).



2. Learn the Serenity Prayer. Repeat as necessary.

You can't control the other party, you can only control your end of the deal. People have complex lives going on, with motivations, finances, and weird dynamics that you never will, nor would want to, understand. Trying to figure out the other person, while good for hours of discussion, usually isn't very productive. Take a look at the offer, figure out how to make it acceptable to you, turn it back over to them and let them do the same.




3. Take the time to remove the emotion.

It's VERY typical to get emotional during negotiations. Heck, even I get irritated when I sell my fix & flip properties. It's ok. It's human. You're on opposite teams in this game. So, while you can rant and rave about how CHEAP the Buyers are being, or how NITPICKY the home inspector was, take the time you need to remove that from your response. Usually, by the next morning, you can look at the situation with a clear mind. Take the time you need to think things over, because you might regret losing a workable deal by telling someone to go pound sand.

Help! My Listing Expired and I'm Never Gonna Sell This Place!

Cute clip-art aside, I know that having your home listing expire without a sale isn't funny or cute: it's scary and disheartening.

I ran a list of expired listings in Bucks County, and boy...there are quite a few. I'm certainly seeing an increase in expired listings, so you are not alone.

You may be panicked at the thought that you will never sell your home. You may feel as if it's a lost cause, or that it'll "never happen."

So, what do you do if your listing has expired?

• Decide whether you want to re-list with your current REALTOR (R). Were you happy with his/her service, marketing, communication, etc? Do you think he's done all he can to sell your home? Contrary to the knee-jerk reaction to find a fall-guy for the lack of a sale, your REALTOR might not be to blame. However, if you think that it's time for a change of REALTOR, you'll have plenty to choose from when they inundate you with mailings :) (Disclaimer: you might see some mail from me. Check it out and give me a call!)

• Start from scratch with a new CMA. Often, when a house is on the market, you live in a fishbowl of your direct price range. Pricing may have changed while you've been on the market, and you'll want to take another look at what's actually SOLD while you've been on the market, and the NET sold price.

• Take all the negative feedback that you've received and handle anything that reared it's ugly head. If someone mentioned the Spongebob mural in the kid's room, paint it. If someone mentioned the carpets were stained, clean them. This is your chance to address all the issues that cropped up and start fresh. View those past Buyer's as your own personal "Problem Finders." If one person mentioned it, you can be sure that others noticed, just didn't remark on it.

• Stage it. This is especially important if you've moved on and your home is now vacant. It's important. It works. You don't even have to go full-bore, but you need to put some furniture in the house.

Take a step back and a deep breath; then evaluate your situation with a clear mind. Then, take the next steps forward to move on...interview another REALTOR (Me! Pick Me!) do another CMA and make a pricing adjustment - fix the problem and get your home back on the market.

Above all, remember that homes are selling every day in Bucks County. Your home WILL sell.

Bucks County Real Estate Inventory - December 2008

We saw an increase in the Months Supply of Inventory from our November numbers of 14.7 months supply of inventory. As of December, we currently have 16.2 months supply of inventory of single family homes, an increase of 76% over two years.

What does this mean to Sellers in Bucks County?

Well, what it doesn't mean is that you'll never be able to sell your home in this market. Homes sell every day, and not all of them are distressed, well-under-market, deal-of-the-century sales. There are plenty of people selling their homes at market value, and moving forward with their lives in a reasonable amount of time.

It does mean that you need to know what you're doing in this market. I'll repeat some advice I gave in November when I presented the October 2008 Months Supply of Inventory:

In order: get it staged, price it right, market the hell out of it.

Want to talk some more, or see the statistics for your local municipality? Shoot me an email, and I'll send it right out to you.

Bucks County Real Estate Market Heats Up

Bucks County Buyers are coming out of hibernation, and they're motivated and looking for the deals.

Ok, this is purely a non-scientific observation. In the past week, my personal client base has blossomed. I'm now working with three serious Buyers who weren't looking last week. I feel energized, and excited, and I'm thrilled to be on the hunt again.


The New Year brings about more than resolutions, starvation diets, and gym memberships. The holidays are over, people are doing their taxes, examining what they want for the coming year, and are motivated to make changes in their lives. On top of this, the lure of low interest rates, tax refunds, lower prices, and more inventory only sweetens the deal for Buyers in this marketplace.

I've always used Superbowl Sunday (Go Iggles! :) as my personal benchmark for when our selling season starts to heat up. It's when I feel the energy of the market pick up, and usually see an increase in my business. I was concerned that this year might be different.

It doesn't look like it. Although 2008 was a difficult year for many, it was my second best year in the business. Early indicators look like 2009 may follow suit.

There is value in this marketplace, and Buyers are looking to take advantage of that.

When Does it Make Sense to Fix a Home in an Estate Sale?

Selling a beloved family home after the death of a parent may be one of the most emotional real estate transactions you will go through. On top of the obvious difficulty in dealing with the death of a parent, the family home is often in some disrepair and dated.

When working with estates, I counsel the family to take an honest look at the home. If the home has generally been maintained, and has been updated throughout the years with new mechanicals (heater, roof, etc) as needed, then it may make sense to do a light rehab. What's a light rehab? Paint and carpet. Perhaps a kitchen. Now you have an updated, well maintained home that should be a very sellable product (as long as you price it right).

If however, the home has been neglected, and many of the major components need repair or replacement, then it doesn't make sense to rehab the home. You would have to do a full-scale rehab at that point. It rarely makes sense for an estate to invest that significant amount of time, energy, and money. At that point, I suggest that it's better to sell the house "as-is" and let someone else invest the money, time, and energy to bring the home up to speed. It doesn't make sense to paint and carpet a home that is only going to undergo a major rehab, and you'll be throwing good money away.

How about if the home is marginal? Paint and carpet, neaten up the kitchen if possible, maybe with new flooring and countertop, and price it to sell.

Although difficult to do, you need to take an emotional step back from the home in order to see its true condition, then move forward from there in a way that makes sense: financially and emotionally.

Which Group Shall I Put You In? Are you an A or a B Client?

The ultimate goal of most REALTORS is to have a referral based business; one where clients come to you by word of mouth, and you are able to run a successful business just by answering the phone and getting fabulous clients. I'm on my way there, as 78% of my business this year came from past clients or referrals. It's a fabulous way to work, and I thank each and every one of my past clients who were so kind as to entrust me with their family and friends.

There are many training programs for REALTORS that focus on getting referrals from past clients.

Wanna know how?

By begging for them. By calling people up with thinly veiled "Oh by the way, do you know anyone who might be buying or selling real estate?"

There was a rather extensive article in a trade magazine, which actually encouraged agents to group their friends, family, and past clients into Groups A and B. They go on to tell you to treat everyone you know as a Group A for one year. No referrals from you in that time? Well, then, you get demoted to Group B. I guess then you only get four "Oh by the way" calls each year, rather than the thrill of getting one each month.

Let me tell you why I think MY business is mainly referral based:

I do a good job. I work hard (and smart). I care about my clients. I care about you when you hire me, I care about you as we go through the process, and I care about you after the deal closes. (And I care even if you don't send any referrals my way).

I would never disrespect a client so much as to group them by their worthiness of my attention, based on how much business they feed me.

Yet, amazingly, I'm still running a referral based business.

No grouping necessary.

5 Things Buyers DO Give a Crap About...

As promised, here are a few things that Buyers really do care about:

Curb Appeal

The first impression when a Buyer pulls up in front of your home gives them an initial "Ahhh" or "Ewww" to start off the showing. Even if the house is beautiful inside, it's hard to combat the initial "Ew" factor. The good news is that an initial "Ah" lends itself to Buyers looking a little more kindly on any interior fix ups. Set the tone. Your house should look happy and cared for. Grass should be cut, trash cans hidden, landscaping trimmed and mulched.

Maintenance

A house that has good maintenance records is golden. It screams to a Buyer "There are no hidden surprises here - I've taken care of everything." If you don't have good maintenance records, a flurry of upkeep can also communicate the same to the Buyer. Have the heater, chimney, and A/C units serviced prior to listing. Have your septic system pumped. Have a contractor come and make the multitude of minor repairs that you've learned to live with: leaky faucets, bad hinges on kitchen cabinets, ripped screens. Attach all your receipts to the Sellers Disclosure. Give the Buyer a sense of security that things in your home have been maintained.

Kitchens and Baths

Yeah, I know that you've heard this a million times, but I cannot stress it enough. Kitchens and Baths sell homes. The difficult part of this is that kitchens and baths get the most use (and dirt) and they need to show the cleanest. They have to be clean. Ruthlessly clean. They also need to appear spacious, even though they collect the most clutter. Here's the minimum of what you should do: clear off counters and sinks, invest in new towels for the bathroom, CLEAN.

Did I mention they should be clean?

(As an aside, I've got a great tip for an outdated bathroom: chocolate brown is the new hot neutral and chocolate / pink and chocolate / blue are hot combos. This covers a variety of outdated tile: brown, pink, and blue. Shoot me an email if you need help trying to figure out how to make your 50s tile look a little more contemporary)

The Schools

Maybe I just work with a lot of families with children, but almost all my Buyer clients search by school district rather than town. There's not much you can do about this. I'm just telling you it matters.

An Emotional Connection

Buyers are looking for "the one." They have to fall a little in love with your home. How can you help that emotional connection? The house should feel happy and well maintained - no kicked in doors from angry teenagers, no divorce papers lying around, no trashcans filled with beer bottles. Even if some not so happy things are happening in your home, the Buyers shouldn't be able to tell that.

Make your home inviting. Remember the things you fell in love with and highlight them. A great backyard? Stage a seating area under a tree with a fire/conversation pit. Was it the bright kitchen? Set the table with some cookies and a note for Buyers to sit down and help themselves.

I've got some recommendations for Buyers as well. As my friend Kim Brown put it "Crap Buyers will Just Have to Deal With." Look for that coming next...

5 Things Buyers Don't Give a Crap About

How much you paid for your house

It has absolutely no impact on the Buyers at all. How much you are making or losing on your house is your problem. Just as a Buyer can't limit your profit, neither is he/she responsible for covering your losses.

How much money you need to move into your next home

Again, see above. YOUR finances are never the problem of the Buyer. A lot of Sellers will say, "What's another $5,000 over 30 years?" It's $5,000 more than the Buyer wants to spend on your house. That $5,000 is just as important to the Buyer as it is to you.

The special tile imported from France in your powder room

Unless you are rehabbing for resale, there are things that you have done to your house that are specialized. Things that you are absolutely in love with and for which you waaaay overspent (C'mon, admit it. We've all done it.) The Buyers? The probably aren't going to love it as much as you do, so they aren't willing to buck up for how fabulous it is.

The sentimentality attached to certain things in the house

I'm a sentimental gal. I have trees planted in my yard in honor of my first Mother's Day with each of my babies. I found an engraved Christmas tree ornament from the previous owners that I hang on the tree each year in their honor for building this great house. If I ever sell? I know that new Buyers will take down my first born's tree (it's, quite frankly, ugly). I doubt they'll care about the ornament. Buyers don't care that you spent 3 weeks restoring a mantle - they'll paint over it if they want. Your sentimentality is your own, don't expect the Buyers to share in it.

The "Possibilities" in the Home

You have to price your home as it is, not how it could be. Yeah, maybe you can finish your basement, but you can't expect a Buyer to pay you for a finished basement just because it could be one day. Same goes for unfinished construction projects, scarred wooden floors, closets with rough-in for plumbing, etc.

What DO Buyers give a crap about? Stay tuned for my next post...

What to Expect When You're Expecting (A Showing)

Because you may only sell one house in your entire life, or at least do it so infrequently that everything changes in the years between sales, I thought it would be helpful to tell you what to expect when your house is being shown by a Buyer's Agent.

1. Your REALTOR will install a lockbox on your front door, either electronic or combination. A Buyer's Agent will bring the Buyers to your home and access the property via the lockbox. They will leave a business card to indicate that they have been in the property. In most cases your REALTOR will not be at the showing, only the Buyer and Buyer's Agent.



2. Buyer's Agents try to give a one hour window of when they will be at your property. However, sometimes they are running early or late. It's important to be as gracious as possible and allow the access to the home if at all feasible.



3. You should skeddadle on out of the house while Buyers are there. If you're home when they get there, let them in and then take a walk while they're in the house. I would suggest you leave the property, don't sit in the backyard while they're in the house. It makes them feel rushed.



4. You can expect the Buyer's Agent to leave the house as they find it. It the lights were on when they came (and they should be) they'll probably be on when you return. If the back door was unlocked, it will still be unlocked. Buyer's Agents don't know if you have additional showings necessitating the lights staying on, or if you leave your back door unlocked for family members.

I've written previously about staging and preparing your home for sale, but I wanted to give you a brief run down of the logistics of a showing while your house is on the market.

Where are all these smart people coming from?

I just had the absolute pleasure of meeting with my friend Lindsay about selling her home. Again, I'm so pleased with how darn SMART she is! How am I meeting all these smart Buyers and Sellers? I love it!



Here are some of the things she's doing that are going to pay off for her:

• She spent 13 hours painting her pretty crimson red room a soft neutral color. Backbreaking, thankless work that will pay off (Promise Lindsay!)


• She's replacing some windows that won't stay open (they'll only come up on the home inspection anyway, and it's a good pre-emptive strike against inspection issues).


• She's repainting her ceilings and has banished all smokers outside.


• She's cleaning out and cleaning up, and when her house goes on the market, it's going to be ready to go!

I can't wait to show her house - it's going to knock Buyer's socks off.

Want some more tips on how to prepare your house for sale? Shoot me an email, and I'll be happy to give you all my secrets!

But...But...But...or "How a Deal is Made"

I put an offer in on a property in a downward trending market today. I included my comps showing that the price that we offered is fair. It wasn't a crazy offer, it does have a basis in reality. The reality is that prices are eroding in that area, and there are a ton (a TON) of short sales and bank owned properties lingering on the market. Prices are going to continue to erode until we get rid of this inventory. The Seller was only willing to come down a bit off the asking price. My Buyer wasn't willing to go up more than a smidge because our guts are telling us we can pick something up in the next couple months at his target price.

The other agent was great. He told me what the Seller's current bottom line was without arguing the comps with a "We have vinyl siding - this comp has asbestos! yadda, yadda, yadda..." I told him my Buyer wasn't going to move up in price without the "That house is a piece of crap! Look at the foreclosures on the market...they're going to regret it...yadda, yadda, yadda..."

And so, the deal has died. Not in a clash of ego and tears. Not in a desperate back and forth of negotiating increments of $1,000. It simply died because the Seller was willing to take X, and my Buyer was willing to pay Y, and those two lines didn't intersect at any point.

So, how is a deal made? A deal is made when a Seller is willing to take what a Buyer is willing to pay. Sometimes, this puts everyone in a "Happy Place." Sometimes the deal dies only to be resurrected another day. But, at the end of the day, it comes down to this:

A deal is made when a Seller is willing to accept what a Buyer is willing to pay.

That's it. It's really pretty simple.

You Love Me! You Really Love Me!

I met Buyers and their Agent at one of my listings today. They were doing their home inspection. After the typical meet and greet, I asked them, "Are you excited?"

"YES!" the woman said enthusiastically, and she and her boyfriend looked at each other and giggled a little bit. Oh, they were excited, all right. They were ecstatic. They were giddy. They were in love. Unequivocally in love....with my listing.

I had 60 people go through this listing. You read it right - 60. Everyone had very positive things to say about it, but I only got one crazy offer in writing, and a couple no-show buyers. Lots of Buyers who "had interest" and who "put it on the short list." But nobody fell in love with it until these two walked in the door. And now my pretty rehab is getting the attention and love that it deserves.

My listing found its true love, its soulmates, its Mr. and Mr.s Right, and I'm happy for all parties involved.

I love this business.

What's a U&O and why do I need to pay for it?

When selling your home in Bucks County, it's a good idea for you or your REALTOR to call your local township and ask if there is a U&O (Use and Occupancy) permit required for residential resales. Many townships have these permits, and the requirements differ from township to township. The permit is required when you sell a home in the township, and in the Agreement of Sale, the Seller is required to provide one, unless specifically noted that the Buyer will be responsible for the inspections and any necessary repairs.

Sometimes, a township will require a U&O inspection where the inspector looks for obvious hazards - GFCI outlets in the kitchen and baths, broken windows, anti-tip device on stove, etc. They may also require: heater certifications, chimney certifications, electrical certifications, sprinkler system certifications, etc.

Because many times the U&O permit can be a very involved process, the best idea is to contact your township when you list the home. Although many townships won't inspect until 30 days prior to settlement, knowing the requirements, and what they are going to inspect prior to selling your home gives you the opportunity to plan and prepare.

Want to know your township U&O requirements? Shoot me an email, and I'll be happy to forward them to you!

7 Creative Ways to Appeal to Buyers

7 Creative ways to appeal to Buyers:

1. Pay points on the mortgage to reduce the interest rate on the loan.
2. Pay closing costs to reduce the money a Buyer needs to bring to settlement.
3. Pay the taxes for the year to give the Buyer a year of no tax escrows in their monthly payment.
4. Pay for Home Owner Association Dues for the year to reduce the monthly payment.
5. Pay for a home warranty, pre-pay for oil, or pay for a heater contract for the year.
6. Give them an American Express Gift Card to purchase a washer, dryer, and refrigerator.
7. Pay for lawn care for one season.

Are you Following Your Pricing Cues?

Below are two pricing cues that I use to gauge my pricing on listings. In general, I think these are good guidelines to follow for Bucks County. All real estate is local, however, and these standards may be atypical of other areas. But for Bucks County, I look for:

• 10 showings in 10 days. If you haven’t received 10 showings in the first 10 days on the market (and there was no holiday to impact showings or something of that nature) you need to take a look at your marketing and pricing. First take a look at your marketing – do you have the maximum photos in the MLS (and are they good photos)? Is your listing on realtor.com, zillow.com, craigslist.org, and has it been syndicated to Trulia, Google, etc. Is your realtor.com listing enhanced with custom verbiage? How many hits is your listing getting online? If everything looks good on that end, you probably need to adjust the pricing. The first two weeks on the market are the time when your property is “hot.” Don’t waste them by under marketing or overpricing. You can’t sell it if Buyer’s aren’t looking at it.

• Lots of showings but no offers or interest. Now, this is a bit open to interpretation because Buyers are taking quite a bit of time to go from interest in a property to writing an offer. However, if you have 20 groups through your house, and it’s not on anyone’s short list, you need to adjust the pricing. It means your marketing is working, but you’re still priced just a touch high. The good news is that a price adjustment sometimes spurs these “on the fence” Buyers into action, and you may end up with a hot property with lots of interest.

If you have a lot of continued activity, generally positive response, and some nebulous Buyers waiting in the wings thinking about your home, stay the course for as long as seems reasonable. However, if you see prices starting to fall in the area, I would consider a price reduction in order to revitalize the listing and spur some offers.

How to Keep Your Transaction On Track

In my last posting, I warned against some things that implode transactions. Let's take a look at some things that keep transactions on track and moving forward:

1. Follow up. My motto is "I trust everyone to do their job. I just call a lot to make sure." Follow up on your mortgage lender, the township, the contractor who is supposed to be doing your repairs, even - your REALTOR (R)! I don't like to consider it nagging, I like to consider it touching base. If you call often and early, you always have a better chance of rectifying any problems that would impede your settlement.

2. Do what you say you're going to do. If you've agreed to repair something, don't get caught up with moving and not do it. The Buyer is going to want some money for it at the table - and I guarantee it's going to be more than what you were going to spend on it. If you say you've made mortgage application, you better have done it. It's very, very easy to get caught up in packing your stuff, or picking out paint colors, but you need to get the "work" done. It doesn't matter if your heart isn't in it, and you're emotionally connected somewhere else.

3. Keep good records. Keep your Agreement of Sale handy. Keep your mortgage paperwork handy. Keep receipts for repairs handy. My advice is to start a file folder and staple some lined paper to the inside front cover. Keep a call log of the date and name of everyone you talk to and a short note on the conversation. Use email as much as possible to document. If there is a problem that crops up, you have the information on hand to take care of it.

And then it's smoooooth sailing right through the settlement.

Despair is most often the offspring of ill-preparedness
Don Williams, Jr.

Should I Stay or Should I Go?

If you have a property to sell before you buy, many Sellers in Bucks County struggle with whether to buy or sell first. Ideally, you can coordinate the settlements back to back and there is no difficulty in getting the proceeds of your home sale to move forward with your purchase. Ahhhh, it’s so lovely to have things work out.

But it doesn’t always work that way. Here’s a quick snapshot of the risks and rewards of selling first, or buying first:

Sell Your Home First
The drawback is you may not find a property that you like and have to move in with family or temporary housing for a while. This could wreak havoc on your life, especially if you have kids in school, and you’ll incur storage fees for your possessions. The reward is that you know exactly how much money you are getting from your home sale, can make offers without a home sale contingency, and don’t have the stress of carrying two mortgages.

Buy Your Home First
The drawback is that you may be inviting financial disaster. You may either have to carry two mortgages for an extended period of time OR you may have to fire sale your house and not realize the equity you thought you were going to get. The benefit is that you have the luxury of working on your new home prior to moving in (painting, etc), can move your possessions in at your leisure, and any children only have to move once.

What’s my recommendation? It depends on your financial situation. Some people can carry two mortgages without financial ruin, or have a lot of equity where a $10-20K hit isn’t going to make or break them. However, if you’re not in that group, I would sell first, and ask for an extended settlement of 4 months to give yourself time to find a home. There is a ton of inventory on the market and you have a good chance at finding your home quickly.

However, my last few home sales have been under 30 days on market, so it can be done.

How do I get it done? Look for my next post where I’ll run through it…

In the meantime, enjoy!

Why it's OK to Sell Your Home in a Down Market

As prices fall, many homeowners are deciding to stay in their homes until the market recovers. However, if you are planning to buy up (move up to a higher price range), it's really ok, and in fact may be a smart move, to move in this market.

Say what???

Although you may have taken a hit on your home price, higher priced homes have taken an even bigger hit on theirs, and you can buy your "move up home" for a lot less money. Say, for instance, prices have decreased 5% in your area. At the top of the boom, you're home was worth $200,000 and you were looking at homes in the $400,000 range. Your home is now worth $190,000, but that $400,000 is now priced at $380,000. You're already up $10,000!

Where you'll see the most financial gain, however, is long term and with market recovery. When the market DOES stabilize, and DOES start to recover, you'll see greater gains because you're at a higher price point. Taking a look at the examples above, and starting with a price of $190,000 and $380,000, even a modest appreciation of 1.5% a year over 5 years will yield $204,684 and $409,368, respectively.



Now, some fair warnings:

1. This is LONG TERM. I don't think anyone is expecting a quick recovery or hand over fist appreciation like we've seen in the past few years. Slow and steady wins the race on this deal.

2. This is assuming that the market doesn't continue to depreciate, and we don't have a complete bust in the market.

Ready to make the move? Should you buy or sell first?

I'll tackle that topic in my next blog posting. Stay tuned..