Real Estate Negotiation Tips

There are many ways to come out on top in real estate negotiations both as a buyer and a seller. Today we want to highlight some of the methods you and your agent can have at their disposal.

Real Estate Negotiation Tips For Sellers: Your keys to success

As a seller you hold a lot of the cards in negotiation. You have something that the buyer wants and have piqued their interest in your property enough that they have presented you with an offer. However, negotiation is still key to ending up with the most favorable offer. It is important to share with your agent what terms you are looking for. Is price your number one concern? Or are you more concerned about not paying for potential repairs? Timing is also a crucial factor. Do you need a specific closing date in order to purchase your next property? As your agent I will field phone calls prior to offers being written. Armed with this information the negotiation begins. These days there are a lot of competing offer situations. Informing these agents what terms would be most favorable to you allows them to create a great offer. My goal is always to present you with the greatest number of amazing offers. I then help you weed through all the idiosyncrasies to sign the best one.

Real Estate Negotiation Tips For Buyers

With the seller’s market of the last few years it can seem like sellers certainly have a bit of an upper hand. While this is true in some aspects at the end of the day a seller wants to dispose of their property and receive fair compensation. They may also have time constraints. Then we negotiate condition at time of inspection. The terms we first negotiate will always include timing. Sometimes, sellers are flexible but this is not always the case. The seller may need the cash from this sale to close on their next house in two weeks. Or they might need a rent back for several weeks after closing in order to secure their next move. The saying time is money is especially true in real estate. An offer that meets the timing the seller needs can easily beat out an offer thousands of dollars over yours. You can also waive your right to inspection. This ensures the seller that there will not be extra expenses that they need to worry about. Agreeing to cover any gap between the appraised value and your offer price is another strategy. This means you will bring the difference in cash to closing. When combined, all of these negotiation strategies provide a seller peace of mind in accepting your offer.

We Are Your Negotiation Experts

Need some help negotiating your next real estate transaction? Contact us and we would be happy to help you reach your real estate goals with the least amount of stress possible.

Benefits Of Working With A Real Estate Professional

Whether you are a buyer or a seller there are definite advantages to working with a real estate agent.  So what are the benefits of working with a real estate professional?  An agent can save you time, money and stress because they can help with navigating the unknowns in the market. Here are some specific ways that an agent can be invaluable.

Paperwork

Here are some specifics of how working with an agent can make a difference.  First is the issue of paperwork.  Real estate professionals provide the assistance with all of the necessary paperwork and disclosure required in today’s heavily regulated environment. As a result, an agent’s expertise can help same time by avoiding common errors made by those who are unfamiliar with laws and regulations.

Experience

An experienced agent is highly educated and brings that experience to your transaction.  They know the ends and outs and the potential pitfalls.  This means an experienced agent can save you from potential distress and keep the transaction moving forward smoothly.

Negotiations

Real estate agents involved in a transaction act as a buffer in negotiations between the parties. This can help the emotions remain out of the process and keep the deal together and moving forward.  As a result, an agent’s involvement can be particularly important because negotiations can become quite complex, as you move through a transaction.

Pricing

This is important for both buyers and sellers. Real estate agents can help you understand the current market that you will be a part of.  They have the tools and access to resources that are only available to real estate professionals.  This tools and resources can provide you with information to make educated decisions about pricing your home as a seller and what to offer if you are a buyer. 

One Of The Largest Benefits Of Working With A Real Estate Professional is Market Knowledge

In conclusion, agents are in the market every day.  They know what works and what doesn’t in the market that you are working in.  Moreover, they can be creative and help you best navigate so that you get what you want! This is certainly not all that an agent does or can do for you.  But this gives you an idea of why it is important to work with an agent and how you can benefit from that relationship. Looking for a great agent, Contact Us, we would be happy to help. 

How to Sell Your Home in the Winter

When you sell your home in the winter you are going to have to deal with shorter days, colder temperatures, possible snow and some dreary skies even in sunny Colorado.  So how do you turn this around to make these things positive for you?  Try to play up the season and the cold.  Build a snowman to greet your buyers.  Serve hot cider or hot chocolate for showings. Make sure to add some warm throws, extra pillows and place some rugs on the hardwood floors to add a touch coziness.  A candle burning with a winter scent can also add some warmth.

Sell Your Home in the Winter by Being Welcoming Despite the Weather

Make sure that your sidewalks are shoveled. Anywhere that might be icy be sure to deice so you’re your home is welcoming as well as safe.  Once the buyers are inside it is a good idea to have some space by the front door for people to take off coats, hats and boots.  Place a chair by front door so that people can sit down to remove their shoes.  Have a place to wipe snowy boots to avoid the wet footprints, if the buyers choose to leave their boots on as they walk through your home. 

Remember Extra Light

Make sure that your home is light and bright.  That is in the daytime and for those after dark showings that happen because days are shorter.  Add a bit of extra wattage in your lighting so that your buyers can see for safety and to fall in love with your home.  Light and bright is very desirable for buyers. Make sure that landscape lighting is working too so that the outdoor space can be appreciated. 

Consider the Cold

Winter cold can highlight negatives such as a furnace problems, draftiness and poor insulation.  Before a buyer ever sees your home make sure that your HVAC system is working at its best. Check for drafts and correct if you can. If your home will be vacant for showings, it is a good idea to go ahead and winterize to avoid plumbing issues.  

Marketing Should Match the Season

It is important to use current photos that match the season.  Out of season pictures may have the buyers thinking that the home has been on the market a long time.  Other photos of the home in different seasons can be displayed in the home. However, for marketing the photos should match the time of year that the home is being sold. 

There are motivated buyers that have to buy no matter what the weather and no matter what the date on the calendar. Make your home safe and inviting and your home can sell even when it is cold outside and the weather is dreary. Contact Us for more information on how sell your home in the winter and make it a successful process.

What is an Appraisal Gap?

Bridging the Appraisal Gap

So what is an appraisal gap? In today’s hot real estate market buyers often write a contract for more than asking price. They do so in hopes of having their offer be the highest and best offer that a seller receives on their home.  The buyers love the home and want to ensure that they get to move into this home that is the home of their dreams.  So instead of offering the asking price of the home which is $425,000 they instead offer $450,000.  The seller accepts the offer and the buyer and seller are under contract. 

How Value is Determined

During the under-contract period the lender, for the buyer, will order an appraisal.  The appraiser will come view the property and complete a report that compares the subject. They will also look for under contract properties. Finally, they will compare these with other homes that have recently sold in the area. All of this takes place to arrive at an appraised value for the property.

Making Sure the Seller Gets Their Money

The appraisal gap occurs if the appraiser appraises the value of the home as less than the contract price that the buyer and seller have agreed up on.  So, let’s say that the property is under contract at $450,000 and the appraisal comes in at a value of $430,000.  There is a gap of $20,000 in this example.  This means that the buyer and seller have to renegotiate the price of the home or the buyer needs to bring an additional $20,000 to closing that was not a part of their down payment or reserves.  Sometimes, in today’s hot real estate market, buyers say that they will cover the appraisal gap. That means that they will pay the contract price for the property no matter what the appraisal comes in at and there will be no need for the buyer and seller to renegotiate the price of the property. 

Sometimes an Appraisal Gap Falls Short

Other times a buyer’s contract will state that the buyer will cover a certain amount of gap.  For example, the buyer says that if the property does not appraise, they will bring an additional $10,000 to closing.  Let’s use the property that was under contract at $450,000 and appraised at $430,000. The buyer would bring $10,000 to closing and that would make up only $10,000 of the $20,000 gap between the appraisal and the contract price.  The buyer and seller would have to agree what would happen with the $10,000 difference. 

Make it Appealing

A contract that is written covering any appraisal gap can be a huge benefit to a seller.  They do not have to worry about what the appraiser says the value of the home will be.  The seller has peace of mind that the contract price is what the buyer will pay no matter what. For a buyer that really wants a particular home it might be wise to include appraisal gap verbiage in the contract. This gives the seller that peace of mind. It also makes the buyer’s offer as attractive as possible to the seller. 

If you have any questions about how to make your offer the most competitive in today’s market contact us. We would love to help you navigate the intricacies of the real estate process.

Ways to Save Water at Home

There aren’t many things worse than bills. A reality for homeowners is recurring utility bills for electricity, water and even gas. However, when it comes to water bills you may be paying more than you have to. We have compiled a list of several ways to save water at home, and with it your money on your utility bills as well.

City of Fort Collins Utility Audit Can Help Identify Ways to Save Water at Home

The city offers a sprinkler audit to determine how efficient your outdoor watering practices are and can identify leaks in your irrigation system. Best of all the city provides this to residential customers free of charge. If your interested in this service more information can be found at the City of Fort Collins Residential Water Website.

Fix Leaky Sinks and Toilets

A dripping sink can use as much as five gallons of water a day. This is quite literally money down the drain. Repair kits for most major brands can be readily purchased at your local home improvement store. Same goes for toilet tank repair parts. If you feel this is out of your wheelhouse you can always hire a plumber to complete the work for you. You can find an outstanding recommendation via our I Have A Guy list.

Install Low Flow or Increased Efficiency Fixtures and Appliances

Sinks, showers, toilets, even washing machines and dishwashers are all far more efficient now than they were just five years ago. However, this greater efficiency does not have to mean that they are any less effective at completing their task. If you have an older home or, substantially older fixtures and appliances, it would be beneficial to look into replacing these items.

Speaking of Dishwashers, Stop Prewashing Dishes Before Putting Them In

Modern dishwashers are a modern marvel. They feature a digester which chops up leftover pieces of food and flushes them away with the waste water. Rather than doing a full prewash simply scrape any leftovers into the trash, and then place them into your dishwasher. In the end you will have clean dishes and have saved a few gallons of water each day, which can really add up over the course of a month or a year.

Take your Car to the Carwash Rather Than Doing it at Home

Having a clean car is something we all enjoy. Washing it at home might make it seem like you are saving money but a combination of the time spent and water used in order to do it often negate any cost savings. As driveway car washing can use as much as 100 gallons of water. Another way to save water at home is rather than washing your car by hand, take it to a carwash for a few bucks and recognize water savings at your home right away.

What Are The Next Steps That Occur When You List Your Home For Sale?

We have discussed the report I provided you with information regarding the value of your home in today’s market and how long it might take to sell. You are comfortable with what I have told you and feel ready to get your home on the market. You would like to have it on the market as soon as possible. The next step is to sign all of the listing paperwork. This includes signing all disclosures that will be provided to the buyer, the closing instructions, loan payoff and closing information and the Exclusive Right to Sell Listing Contract. We also discuss showing instructions for your home.

Next we will go through your home room by room and I will provide you with staging advice. The way that we live in our home is not the way that our home should look when our home is on the market. I will provide you with suggestions to make your home appeal to the highest number of buyers and provide you with the best chance of multiple offers. When walking through your home I will also be making a list of décor items that I can bring to dress up your home. This may mean new towels for the bathroom to be used for showings, it may mean pictures for the wall, a lamp for the bedside table or any number of other things. I will schedule a time to come back for the final staging. I will bring all of the décor and place it where it should go. At this point you will be ready for pictures.

Pictures of your home are taken by a professional photographer. He will come at the scheduled time. I usually am present for this appointment. We will turn all lights on and he will go room by room photographing your home. Outside front pictures and back are also taken. This process usually takes an hour or more. He may also take the time for a video. You do not have to be present for the pictures, in fact it is much easier if you are not home. This allows the photographer to focus on showing your home in the best light, rather than answering questions and trying to work around you. Once pictures are taken the photographer will do his thing and make the pictures look their best. I will receive the photos within a few hours to a day. Once staging and photos are done you are ready to go in MLS. This process of staging and photography can be a quick as you need it, all occurring in 24 to 48 hours or can take longer if
needed. We are working together to make this happen. If you need the home on the market ASAP, we can make it happen. If we have some time, we can stretch the process.

Necessary paperwork has been signed. We have photos, your home is staged and ready. The next step is entering your home into the realtor’s MLS system. This can take a couple of hours. Brochures are made, sign is ordered and put up with brochures in the box. From the realtor’s MLS system the listing information is populated to over 600 websites across the country for buyers to find and look at. Showings calls can begin right away. Make sure that when you have a showing set up that you are not home, but you leave the lights on and ready to welcome that buyer for your home.

How Do We Arrive At A Value For Your Home?

You have decided to sell your home and have asked me to come over and meet with you and get you ready to go on the market.  What do we do next?  I have you give me a tour of your home.  During that tour you tell me about all of the recent improvements you have done and I also note upgrades that your home has.  For example granite countertops rather than laminate, large yard backing to open space rather than a yard in the middle of the neighborhood surrounded by other homes.  After this meeting I take all of this information back to the office.

Next, I sit at the computer and start doing my research.  I am looking first a homes in the neighborhood that have sold in the last 3 months that are similar.  Then I look at homes that have sold nearby that are similar.  By similar I mean first that the are approximately the same square footage. The homes that I am comparing to your home should have finished basements if you do and if you don’t the best homes to compare you to should not have a finished basement either. Then I look to see that they are the same style.  It is important to compare ranch style homes to ranch homes, two stories to two stories and bi-levels to bi-level homes.  Then I look to see that the homes that I am comparing to your home have the same number of baths and same number of garage spaces.  Then I check to see the number of bedrooms.  This will often give me a price range.  I will see a home that is clearly better than you and one that is not as quite as nice.  Those two homes have set the range.  Next,  I look within that range for the homes that are as close to like your home as possible. Similar upgrades etc.  After this research I should be able to give you a $10,000 to $15,000 range of what I think your home will sell for in today’s market.

In addition to doing the research myself,  I also have my licensed assistant do the same research.  He is able to have an objective look.  He does not know you and did not see your home.  I share with him important details and he arrives at homes that he thinks are comparable to your home and a value for your home.  We then meet and review the information.  Sometimes we arrive at different values and have come up with different comparable properties.  If that is the case we review and decide what should be included in my report and what should be left out.  Perhaps I forgot to tell my assistant that you have remodeled your kitchen.  Not knowing that will affect the value of your home. By having both of us do this research, you are getting two opinions wrapped into one report on your home.

Next, I get back together to review the completed report.  We look at the value and also how long it appears that it will take you sell your home.  If you want your home to sell faster than the average length of time that similar homes have taken to sell you may need to adjust your price to have your home sell faster.  If you are comfortable with the value of your home and the time line, then we are ready to go on to the next steps to put your home on the market.

Next week we will cover what those next steps are. 

Selling Your Home Yourself in this Hot Sellers Market?

It is easy to think that when it is a Seller’s Market, inventory is low that you could and should just go ahead and sell your home yourself. After all, buyers are snatching up any home that comes on the market and buying those homes at top dollar.  So, thinking of selling your home yourself in this hot sellers market. We know itt is tempting to be a for sale by owner.  But, in a word, DON’T.  

I know that it is easy for me to say that.  I am a Realtor and I benefit when someone uses me to sell their home.  So, why is it a mistake to sell your home yourself.  Most sellers decide to sell their homes themselves so that they will save the commission and net more money.  Research has shown that this is not the case.  Most sellers who sell their homes themselves end up netting a lower median price on their homes.  It is hard to negotiate for yourself. The buyer is wanting the best deal.  The agent for the buyer is looking our for their clients.  You have no one looking out for you and helping you insure that your needs are met.  

Another concern in selling your home yourself in this hot sellers market is Safety!  When you are a for sale by owner it is difficult to control who enters your home.  You do not know if the people that are entering your home are “real” buyers or someone casing your home to later steal from you. 

When you are a for sale by owner it is difficult to have a strong online strategy.  Over 97% of all buyers shop online for their home.  How are buyers going to find your home?  What type of photos are you going to have of your home?  Are you going to provide a virtual tour?  All of this is important. 

When you are a for sale by owner how will you make sure that the buyer that wants to buy your home really can afford it and the lender that they might be working with can really close the deal?  You do not want to waste time with a buyer that cannot buy.  How do you insure all of this?

In our litigious society how do you make sure that you are providing the buyer with the necessary forms and information as a part of the process so that they will not sue you for failure to disclose or any number of other things.  A Realtor can help you avoid legal jeopardy. This alone can save you thousands of dollars.  

It is tempting to think that selling a home is easy and anyone can do it.  You just stick a sign in the yard and the buyers come and they will want to buy.  Then you just go to closing and collect your money.  Things are not always as they seem.  This is one of those situations.  Hire a trained, experienced, top agent to help you sell your home and look out for you.  You will be money ahead in the end. Contact us today and find out how we can help. 

What is an ideal investment?

Ask a Realtor and they will more than likely tell you that real estate is an ideal investment. But why do they think that? Realtors like to invest in real estate because it is something that they know and they have some control over a real estate investment. But what are some other advantages to this type of investment and why does it make sense for just anyone to invest in real estate? Here is a list of reasons why real estate is such a good investment.

Income. An investment in real estate generates income when rent on at property is more than the expenses there will be a positive cash flow. Of course you get income from a savings account and income on a stock if it pays a dividend. But stocks don’t produce the income until they are sold.

Depreciation. This is a tax benefit that is unique to rental real estate and is one of the few tax shelters that are still available as a part of the tax code. This is a non-cash deduction from taxable income for wear and tear on the asset.

Appreciation. Most real estate properties will go up in value over time. According to the National Association of Realtors the annual price growth over the last 10 years has been 6.4%. In just the last five years it has grown at 7.3% annually. If you are considering investing in a particular community it is wise to check what kind of appreciation they have had in the last 5 to 10 years.

Equity buildup. This is the result of the amortization of the mortgage. Each payment applies less to the interest and more to the principal. This increases the equity that you have in the property each month that you make a payment.

Leverage. This occurs when borrowed funds are used to control an investment. An example of this is when you purchase a property for $100,000 cash. You rent the property and paid the expenses and have $10,000 left, your investment will have generated a 10% return.

You can always just leave your money in the bank. It is insured and safe. Interest rates today on savings are between 0.35% and 0.5%. Not a very good investment if you ask me. Another option is the stock market. The stock market is a record high levels and that may look like a very appealing option for investing in. But it is volatile and you may not have the know how to make money investing there.

Most homeowners are familiar with the general operation of a home and the maintenance, taxes and insurance on a home. Making the move to real estate does not feel like a completely unknown thing to jump to.

Connecting with a good real estate agent that has investment properties themselves is a great way to learn about what to look for when asking what is an ideal investment. Also consider joining an real estate investment group in your community to start learning about investing in rentals. Then make the jump and buy an investment property. The benefits are real…and you can do it!

What is Wire Fraud?

You have just gone under contract to buy a property.  Congratulations.  Now the fun starts.  You will be getting many emails requesting information and sharing information with you.  Additionally, you will regularly be hearing from the title company, lender and of course your agent.  You will receive title work, requests for additional documents from your lender and documents to sign from your agent.  This is an exciting, happy time, but a time to be careful.  Know who you are sharing your personal information with and know who you are receiving information from. You might be wondering what is wire fraud.

What is Wire Fraud? How It Begins.

In the beginning of the under-contract period, your contact information will be provided to the title company so that they can provide you with title work on the property that you are purchasing.   You will be receiving multiple emails from the title company.  As you progress through the under-contract period you will need to prepare for closing.  In order for you to close you will need to provide money for closing. This money will be the total of your down payment and closing costs.  Your lender will provide you with documents that will tell you the amount of money that you will need. Additionally, this money cannot be provided to the title company in the form of cash, personal check or cashier’s check. 

Most title companies today require that the money be wired to them in advance of closing, usually 24 hours prior to closing. In order to wire the funds, you will need wiring instructions. Warning…be very careful who you receive your wiring instructions from.  Your real estate agent will not provide you with wiring instruction, nor will the title company call you to tell you what they are.  Instead, you could expect to receive the wiring instructions by a secure email from the title company.  It is wise to also call the title company yourself and verify that the instructions that you have received are correct.  

Why does all of this matter to you?  Wire fraud is occurring in Northern Colorado.  Here is what is happening.  Buyers are receiving wiring instructions that seem very real.  The instructions may look like they come from the title company or even from the real estate agent.  The buyer follows the instructions and wires the funds for closing. 

The Day of Closing

The buyers arrive at the title company the day of closing.  They are told when they arrive that the title company has not received the wire for the down payment and closing costs.  The buyer tells the title company that the money was sent.  The buyers provide the title company with the wiring instructions that they used to wire the funds. Moreover, the title company reviews the instructions and realizes that the wiring instructions are not correct and that the money has not been sent to the correct place.   If the buyer is able to tract where money went, they could find that the money is in some off shore account and are not able to get it back.  This has happened more than once in Northern Colorado.  One buyer lost $160,000.  

Now What?

The money is impossible to retrieve. Additionally, you will not be able to close on the home that you have under contract that you planned to be moving into.  This is devastating. This is nothing that you want to happen to you. Verify any information that you receive.  Double and triple check.  Always pick up the phone and verify with a human being on the other end of a known phone number (never click links in emails, or correspond/call with emails/numbers provided in emails). Additionally, look up phone numbers on Google to make sure you are calling the right person. Do not become a victim of wire fraud.