If you've ever gotten ready to sell a home, you know that in order to fetch top dollar, you need to get your place in good shape. But that costs money—hiring contractors, painters, and other pros—so you might be wondering: Why not save some cash by tackling a few of these fix-its myself?
That's fine and good if you know what you're doing. But unless your DIY skills are fairly advanced, experts agree that this is one of the biggest mistakes a home seller can make. If you bungle the job, you might end up making things worse, and shelling out even more money down the road.
"You have to ask yourself: Is it likely to do more harm than good?" says Dan Bawden, chairman of the National Association of Home Builders Remodelers
To help you separate the tasks you can tackle from those best left to the pros, here are some DIYs to avoid when preparing to sell your home.
If you have rooms that need a fresh coat of paint, go for it, says Bawden. But if you have cracks in the drywall from a shifting foundation or a little depression from years of doorknob slams, it's worth it to hire a pro.
"In my house, I wouldn't do the Sheetrock," says Bawden. "I'd hire someone to fix plaster or drywall. If you don't get the texture just right, when you paint the wall, the repair is going to stick out like a sore thumb."
You don't want your "fix" to look worse than the original problem. Contract out the drywall repair, then DIY the paint job afterward.
"I’ve been in the construction business for years, and I don’t mess with anything inside an HVAC," says Bawden.
The heating and cooling systems in your house are complex, and often connected to both electrical and gas. Making a mistake could mean blowing out the entire system, setting you up for a much more expensive repair in the end.
Furthermore, you'd better believe that potential buyers are going to have their inspector go over the HVAC as thoroughly as possible. Even something relatively simple such as installing a smart thermostat can fry your wiring if done incorrectly. When it comes to your heating and AC, approach with caution.
Unlike installing a refrigerator, stove, or washer and dryer (which can often be a simple DIY task), installing a new dishwasher is complicated.
"The complexities involved with setup, such as installing water and drainage lines under the kitchen sink cabinet, are best handled by a professional," says Doyle James, president of Mr. Rooter plumbing.
Doing this job wrong could mean flooding your kitchen, which will ruin your floors and more. And besides, most big-box stores offer installation for a fairly reasonable price if you're buying new units, or a plumber can handle it for $150 to $500.
"Even if it's not a really massive tree, you'd be surprised how hard it is to dig around the roots," says Bawden.
It's also dangerous, especially if you don't have the tools professionals would use to remove the upper part of the tree before taking out the stump. Do you really want to be that person who puts a tree through your own roof because you were too cheap to hire a tree removal professional? (No, you don't.)
Siding and window fixes
Bawden cautions against DIY siding or window replacement, because water can seep into the walls if you don't reseal the layers properly. It might not be noticeable at first. In fact, you may sell the house not even realizing there is a problem, but down the line, mold and water damage will start to appear.
Not only is that bad karma, it could also be what Bawden calls "lawsuit city."
While replacing a light fixture or ceiling fan could be fine to DIY, experts draws the line at any electrical work involving the breaker box. Not only could you hurt yourself, you could also create a fire hazard, especially if your home isn't brand-new.
"Older homes do not usually have safety devices like ground fault circuit interrupters, making it especially dangerous," explains Shawn McCarthy, owner of Handyman Connection of Colorado Springs.
"You reach the limit pretty quickly," agrees Bawden. "Anything that involves running new wires or repairing faulty wiring should be left to a professional."
Aside from the risk of fire or injury, serious electrical work done by an unlicensed electrician could have code problems, meaning you're likely to get a thumbs-down from the inspector later anyway.
Even if it's just a little fix that the average DIYer could easily do (e.g., hammering down a shingle or two or replacing chimney pipe roof flashing), be cautious.
"It's very easy to get disoriented," says Bawden, especially on a peaked roof. This is why even pro roofers always use a harness in case of falls, so unless you take similar safety measures, steer clear.
Some plumbing tasks are doable: Fixing a running toilet or snaking a slow drain should be in pretty much anybody's comfort zone. The problem with attempting bigger DIY plumbing tasks, though, is that you often don't quite know what you're getting into. Disassembling leaky or blocked under sink pipes, for example, seems simple enough. But according to James, "Pipes are complex and very tricky to reassemble, particularly when they're in close proximity to other plumbing components and machinery, such as dishwashers or garbage disposals."
He notes that what might appear to be a straightforward problem, like low water pressure or a fractured pipe, could actually be a symptom of a larger issue with your system. Plumbing has a way of getting out of hand—i.e., broken pipes, flooding, and worse.
TC On Point
Despite a dearth of properties on the market, sales of existing homes rebounded in February, according to a recent report.
After a dip in the number of closings in December and January, about 5.54 million existing homes (which have previously been lived in) were sold in February, according to the most recent National Association of Realtors® report. That represents a 3% rise from January and a 1.1% increase from the same month a year earlier.
"Sales are being driven in the West and the South," says Chief Economist Danielle Hale. That's an indirect result of builders putting up more new residences in those regions. "Inventory is still low in those areas, but the new construction created opportunities for existing-home owners to trade up. It’s leading to faster turnover.”
Indeed, existing-home sales were up 11.4% month over month in the West. They also rose 2.4% year over year. In the South, they jumped 6.6% from January and 3.4% from the same month a year earlier.
However, sales were down in the Midwest, sliding 2.4% from the previous month to the same level as one year ago. In the Northeast, they fell 12.3% from January and 7.2% from February 2016.
Single-family homes, those stand-alone abodes that typically come with a yard out back, saw the biggest jumps. Sales were up 4.2% monthly and 1.8% annually.
But it's still too early to tell what this means for the rest of the year.
"March is where we really start to see a pickup in closings," says Hale. "And March is really the bellwether for the year as far as how the home-selling season is going to go.”
Sale prices also edged up just a little to reach $241,700 in February, according to the report. That's a 0.37% rise from January and a 5.9% jump from February 2017.
However, they were still quite a bit cheaper, by 33.6.%, than the median cost of a newly constructed home, at $323,000 in January, according to the most recent data available from the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
About 53.6% of all existing homes sold in February were closed on for $250,000 or less, according to NAR. About 33.6% were between $250,000 to $500,000 and an additional 10.3% cost between $500,000 and $1 million. Only 2.5% of all sales were for $1 million or up.
“The very healthy U.S. economy and labor market are creating a sizable interest in buying a home in early 2018," Lawrence Yun, NAR's chief economist, said in a statement. "However, even as seasonal inventory gains helped boost sales last month, home prices—especially in the West—shot up considerably. Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar."
Your rehab is not finished the moment your contractor cleans up.
After the last trim is painted and the appliances are installed, you have one more crucial step that will ensure you a quick sale, STAGING.
For those who are not familiar with STAGING, Staging is the process of creating an emotional experience that leads sellers to make buying decisions much quicker and easier. Staging is a pivotal element in your real estate investing business that does not take much effort, but yields in immense benefits. Bottom line – Staging sells your property faster, which allows you to see your profits sooner.
Staging is simple; you want the buyer walking thru the house to envision themselves living there. You want them to visualize where they would put their furniture, where they will have dinner, and enjoy a movie. Staging does not have to be complicated. You can have a lot of fun and showcase your style. Here are few tips to help stage your rehab.
Home Staging Tip #1: Clean, clean, clean!
Make sure your rehabbed house is clean from all debris, inside and out. You want the house cleaner than if your mother-in-law was coming over for Thanksgiving dinner. Make sure you don’t forget the window sills and little nooks and crannies, dry wall dust gets everywhere. Be meticulous in the kitchen and baths. You should feel comfortable eating your next meal off the floor.
Home Staging Tip #2: Bring a friend or family member
This person needs to not have an emotional connection to the house. You want an unbiased eye to help highlight the positives and distract from any negatives.
Home Staging Tip #3: Pick a Staging Point.
Go to each major room in the house (i.e. Kitchen, Bathrooms, Living room) and select an attractive part of the room to highlight. An example in the living room would be a fireplace. Simply put a mirror or painting on the mantel with some candles and a few logs in the fireplace and you just staged! It’s simple as that. Now your buyer is able to visualize enjoying a roaring fire on a chilly winter night in their new house!
Take advantage of these staging tips before putting your flip house on the market. Your goal is to enhance the “WOW” factor a buyer gets as they preview the property. This will maximize your time. Back to TIP #1 CLEAN, Make sure your contractor cleans up after themselves every night to ensure time isn’t wasted when you are ready to clean. TIP #2 Also talk to your friend or family member that you are going to involve. Tell them what your objective is, as they will be more helpful if they know your goal. TIP #3, you can save a lot of time by picking the features in advance that you want to highlight. If you are unsure of your own style, don’t be afraid to ask a store clerk or friend for help. You can accomplish half the work of staging before your project is finished. Stick to a tight time line and don’t waste a minute. Every wasted minute is narrowing your profits.
How can you better guarantee profits and profit margins when flipping houses today?
According to a recent media article, some real estate investors in areas of the country are finding it increasingly difficult to produce anticipated profits after flipping houses. How can you prevent this from happening to you?
Similar situations may not be uncommon today, but that does not indicate a major change in the velocity of the new housing boom or that it’s too late to get into flipping houses.
So how can you avoid falling into that boat, lower risk and enjoy better profit margins when flipping houses in today’s market?
1. Real Estate Education
Investing in your real estate education will have the biggest returns of anything you do and will keep on paying you back into eternity.
2. Lock in Your Profit When You Buy
Don’t speculate. Always buy low and lock in profit upfront. If possible, have it sold already so that you are guaranteed profits before you even write the contract.
3. Be Careful What You Put in
One of the biggest traps in flipping houses today is over improving, under improving or simply investing in the wrong improvements. Know your stuff and what the real returns on them will be.
4. Do Your Due Diligence
Don’t invest without thorough due diligence. Know your values front and back end and recognize you need more tools than just Zillow to accurately assess them.
5. Don’t Allow Appraisal Contingencies
You might want to include them when making offers to buy homes, but don’t allow them when you sell – that’s so 2001.
Most real estate investors are missing out on the bulk of potential returns due to one major mistake…
Is real estate leverage your most dangerous enemy or best ally?
Fear resulting from the last bubble is neglecting many investors from realizing their full potential and greater returns by snubbing real estate leverage.
Many are afraid to use real estate leverage, as taking on increasing debt is associated with bad business practices. However, not all borrowing is bad. In reality, it’s an investors’ best friend and tool. Used well, real estate leverage can make all the difference in returns, success, lifestyle and ultimately financial freedom. In addition, attracting a private money lender has never been easier.
Paying cash, keeping down debt and refusing to take on overhead can be smart. Subsequently, it can seriously diminish returns, cap growth and permanently cripple top end potential!
Compare paying $800k cash for a property, putting in $150k in repairs and walking away with $50k in profit after flipping the house versus diversification and using leverage.
Consider the interest and returns on that can be compounded again and again over time, adding years of additional returns in a matter of weeks. Plus, this doesn’t even discuss the advantages diversification and leverage has for liability protection and preserving wealth.
Embrace leverage; reach your full potential!
Have you been looking for more private mortgage money?
Great news is emerging for those real estate investors who having been searching for more capital…
Hard money and transactional lenders have been promoting their services more than ever recently and even conventional mortgage lenders and banks have begun to offer more incentives to borrowers to take out new loans.
Of course some real estate investing pros just prefer private mortgage lenders for the lower interest and fees, speed, control and ease of doing business. If that’s you then thanks to Ben Bernanke and the Fed it could be getting a lot easier for you this week.
Bloomberg reported this week that mortgage REITs are losing money, losing investors and losing returns in response to the Federal Reserve plan to buy up mortgage debt and the number of homeowners refinancing thanks to low mortgage rates and the $25 billion mortgage settlement.
Investing in mortgages may still be a great investment but giant REITs are bleeding investors due to a drop in returns and are showing investors how investing in publicly traded stocks is incredibly risky and volatile compared to direct investment in real estate, mortgage notes or private partnerships.
It doesn’t matter if you are up 99% in a day if you can lose it all tomorrow. Fortunately this isn’t an issue private lenders need to worry about with investing directly in mortgage notes or flipping houses for that matter.
According to the Bloomberg report annual dividend yields on these big home loan REITs have been around 13%. That’s not bad, and at least far out beats the S&P 500 performance.
Maybe you don’t want to giveaway those types of returns but at least you as a real estate investor can offer a much better investment vehicle which will be safer and more consistent.
Strike on this opportunity and close more private lenders. Don’t just build great presentation materials showing the strength and track record of what you are offering but contrast it with the downside of investing elsewhere too.
Feeling insulted is normal. But don’t let it get in the way of what might be a good deal.
You’ve invested a great deal in this house. So when the time comes to put it on the market, you expect potential buyers to recognize its true value. But sometimes, you get an offer that’s so far below your asking price it feels like someone pitched a baseball straight at your stomach.
Should you simply walk away from such a number? Or does it make sense to pause and weigh your options? Here are some points to consider before you decide:
#1 Is It Really Low-Ball, or Just Lower Than You Wanted?
Some agents define a low-ball offer as 25% or more below list. In areas where there’s a shortage of available homes, that figure may drop to 20%.
“What defines low-ball varies from market to market and even submarket to submarket, but certainly from price range to price range,” says Steve McLinden of Bankrate.com.
In other words, it’s likely that an offer of $80,000 on a $100,000 home will be more quickly dismissed than a $1.6 million offer on a $2 million home, he says.
#2 Should You Immediately Reject a Low-Ball Bid?
Although your feelings may be hurt, giving in to the drama monster won’t get your house sold. “When the low-ball offer comes in it can be upsetting, but it doesn’t have to be,” says Bill Gassett of RE/MAX Executive Realty in Hopkinton, Mass. “The fact that someone wants to buy your home is a good thing and you should deal with every offer — unless it’s just completely ridiculous.”
What constitutes a “ridiculous” offer? Anything significantly less than 25% below your list price should probably trigger warning bells. However, it pays to rely on your agent’s expertise to help you decide on the right response.
Countering, rather than ignoring, a low offer is often the smartest strategy. A counter to a low-ball offer “shows buyers you’re willing to work with them,” says Eric Snyder of Douglas Elliman in Boca Raton, Fla. After all, he reasons, “it’s not about where buyers start, it’s where they end up.”
And you’ll never have a chance of getting to that final number if you allow your emotions to cloud your judgment.
#3 Is Your Price Too High?
Sometimes when a seller receives one — or more — low-ball bids, it may be because the asking price for the home is out of step with the market.
Before you set a price, your agent will provide you with comps – for-sale listings of similar properties in the area — along with a pricing recommendation. Your best bet is pricing that reflects the comps. If you decide to “test” a higher price, you might have to tweak your price to invite more reasonable offers, which is just going to delay the sale.
#4 What Do You Really Need?
There may be factors involved in selling your home that are more important to you than price. Perhaps you need to sell quickly because you’re buying another home. Maybe an all-cash deal would make your life a lot easier. There are a number of potential deal sweeteners that a potential buyer could provide that may make a low offer more appealing. These include:
#5 Will You Look Too Desperate?
Don’t worry about how your willingness to entertain a low-ball offer is perceived. What matters most is the result, says McLinden.
“Some sellers get so wrapped up in righteous indignation following an ‘insulting’ offer that they tell their agent to refuse all further communication from the offender,” he says. And while that may soothe your wounded ego, it won’t help sell your house.
4 things home sellers do when pricing their homes.
Home pricing is more of a science than an art, but many homeowners price with their heartstrings instead of cold, hard data.
Smart sellers know that crunching the numbers is always the better route to an accurate home price. Here’s how they do it.
#1 They Avoid Overpricing
Homeowners often think that it’s OK to overprice at first, because — who knows? — maybe you’ll just get what you’re asking for. Although you can certainly lower an inflated price later, you’ll sacrifice a lot in the process.
Just ask Candace Talmadge. She originally listed her Lancaster, Texas, home for $129,000, but “eventually had to accept the market reality” and chop $4,000 off the price.
The home’s location proved challenging: Buyers were either turned off by the area — a lower-income neighborhood south of Dallas — or unable to afford the home.
“Sellers have to keep in mind the location,” says Talmadge. “Who are going to be the likely buyers?”
The most obvious pitfall: A house that remains on the market for months can prevent you from moving into your dream home. Already purchased that next home? You might saddle yourself with two mortgages.
“You lose a lot of time and money if you don’t price it right,” says Norma Newgent, an agent with Area Pro Realty in Tampa, Fla.
And worse: Continually lowering the price could turn off potential buyers who might start wondering just what is wrong with your home.
“Buyers are smart and educated,” says Lisa Hjorten of Marketplace Sotheby’s International Realty in Redmond, Wash. “You’re probably going to lose them.”
#2 They Don't Expect Dollar-for-Dollar Returns
It’s easy for homeowners to stumble into two common traps:
“Many homeowners think, ‘Of course my home is worth a bazillion dollars,’” says Newgent. If they put in a few thousand dollars worth of new flooring, for example, they might overestimate the upgrade’s impact on the home’s value into the tens of thousands.
Talmadge’s Texas home came with a built-in renovation trap: It was already the nicest home in the area, making it harder to sell. Major additions had inflated the square footage — and the price, according to one appraiser — without accounting for the surrounding neighborhood. That created a disconnect for buyers: Wealthier ones who might be interested in the upgraded home disliked the neighborhood, and less affluent buyers couldn’t afford the asking price.
“Don’t buy the nicest home on the block” is common real estate advice for this reason.
That’s not to say that renovations aren’t worth it. You want to enjoy your home while you’re in it, right? Smart renovations make your home more comfortable and functional but should typically reflect the neighborhood. A REALTOR® can help you understand what certain upgrades can recoup when you sell and which appeal to buyers.
Another culprit for many a mispriced home is online tools, like Zillow’s “Zestimate,” that prescribe an estimated market value based on local data.
The estimate is often wildly inaccurate. A Virginia-area real estate company, McEnearney & Associates, has compared actual sold prices with predicted online estimates for several hundred homes in the area for the past few years and concluded the predictions failed half of the time.
#3 They Use Comparable Sales (also Known as "Comps")
The best pricing strategy? Consult a real estate agent, who will use something called comps (also known as “comparable sales”) to determine the appropriate listing price. They’re not just looking at your neighbors; they’re seeking out near-identical homes with similar floor plans, square footage, and amenities that sold in the last few months.
Once they’ve assembled a list of similar homes (and the real prices buyers paid), they can make an accurate estimate of what you can expect to receive for your home. If a three-bedroom bungalow with granite countertops and a walk-out basement down the block sold for $359,000, expecting more from your own three-bedroom bungalow with granite countertops and a walk-out basement is a pipe dream.
After crunching the data, they’ll work with you to determine a fair price that’ll entice buyers. The number might be less than you hope and expect, but listing your home correctly — not idealistically — is a sure way to avoid the aches and pains of a long, drawn-out listing that just won’t sell.
#4 They Adjust the Price When Needed
Once your home is on the market, you’ll start accumulating another set of data that will serve as the ultimate price test: how buyers react.
Agent Hjorten says there’s an easy way to tell if you’ve priced too high: “If we have no showings, it’s way too high. Lots of showings and no offer means you’ve marketed well — but it’s overpriced once people get inside.”
Talmadge didn’t struggle with showings. She says a number of people were interested in the home, but not enough at the price. In the end, Talmadge sold her home for $125,000, with a $5,000 seller’s assist, a discount on the cost of the home applied directly to closing costs.
“It all boils down to location, location, location. In [another] neighborhood, our house might well have sold for well over $130,000,” Talmadge says.
When it comes to finding a buyer, pricing your home according to data — and the right data, at that — is crucial to making the sale.
You probably only think you’ve eliminated pet odors. Here’s how to make sure.
Having pet odors inside your home can turn off potential home buyers and keep your home from selling. Ask your real estate agent for an honest opinion about whether your home has a pet smell.
If your agent holds her nose, here’s how to get rid of the smell:
#1 Air Out Your House
While you’re cleaning, throw open all the windows in your home to allow fresh air to circulate and sweep out unpleasant scents.
Once your house is free of pet odors, do what you can to keep the smells from returning. Crate your dog when you’re out or keep it outdoors. Limit the cat to one floor or room, if possible. Remove or replace pet bedding.
#2 Scrub Thoroughly
Scrub bare floors and walls soiled by pets with vinegar, wood floor cleaner, or an odor-neutralizing product, which you can purchase at a pet supply store for $10 to $25.
Try a 1:9 bleach-to-water solution on surfaces it won’t damage, like cement floors or walls.
Got a stubborn pet odors covering a large area? You may have to spend several hundred dollars to hire a service that specializes in hard-to-clean stains.
#3 Wash Your Drapes and Upholstery
Pet odors seep into fabrics. Launder, steam clean, or dry clean all your fabric window coverings. Steam clean upholstered furniture.
Either buy a steam cleaner designed to remove pet hair for around $200 and do the job yourself, or pay a pro. You’ll spend about $40 for an upholstered chair, $100 for a sofa, and $7 for each dining room chair if a pro does your cleaning.
#4 Clean Your Carpets
Shampoo your carpets and rugs, or have professionals do the job for $25 to $50 per room, depending on their size and the level of filth embedded in them. The cleaner will try to sell you deodorizing treatments. You’ll know if you need to spend the extra money on those after the carpet dries and you have a friend perform a sniff test.
If deodorizing doesn’t remove the pet odor from your home, the carpets and padding will have to go. Once you tear them out, scrub the subfloor with vinegar or an odor-removing product, and install new padding and carpeting. Unless the smell is in the subfloor, in which case that goes next.
#5 Paint, Replace, or Seal Walls
When heavy-duty cleaners haven’t eradicated smells in drywall, plaster, or woodwork, add a fresh coat of paint or stain, or replace the drywall or wood altogether.
On brick and cement, apply a sealant appropriate for the surface for $25 to $100. That may smother and seal in the odor, keeping it from reemerging.
#6 Place Potpourri or Scented Candles in Strategic Locations
Put a bow on your deep clean with potpourri and scented candles. Don’t go overboard and turn off buyers sensitive to perfumes. Simply place a bowl of mild potpourri in your foyer to create a warm first impression, and add other mild scents to the kitchen and bathrooms.
#7 Control Urine Smells
If your dog uses indoor pee pads, put down a new pad each time the dog goes. Throw them away outside in a trash can with a tight lid. Remove even clean pads from view before each showing.
Replace kitty litter daily, rather than scooping used litter clumps, and sweep up around the litter box. Hide the litter box before each showing.
#8 Relocate Pets
If your dog or cat has a best friend it can stay with while you’re selling your home (and you can stand to be separated from your pet), consider sending your pet on a temporary vacation. If pets have to stay, remove them from the house for showings and put away their dishes, towels, and toys.
At first it seems like the easy, smart, money-saving path to take. Simply add your children to the deed of your home, bypass the probate process, and minimize costs to the children. This strategy is very common. The idea is to hold real property jointly with family members who are given what is called “rights of survivorship.”
There are major disadvantages to adding your children directly to your deed, and is not recommended. One such disadvantage is due to tax implications. As an illustration: if you purchased the home for $100,000 then at some point added a name to the deed, then passed away, your child would own the home. If that child later sells the house for $500,000, a capital gain of $400,000 would be taxed. This is not the case if the home is given to the child through proper estate planning.
If you have questions or concerns about how to best hold title to a home, consult with a legally qualified estate planning attorney before making any decisions. Your attorney can guide you through the best options given your unique financial situation.
Virtual Real Estate Assistant
It’s not enough to just get email leads: there must be follow-up.
When prospects submit an online form for listing information, 40% expect an instant response, and 70% expect a response within 30 minutes. But only 20% of agents respond within an hour, and some do not respond at all, according to the National Association of Realtors® Profile of Homebuyers and Sellers.
That’s throwing money in the trash.
The latest upgrade to ConnectionSM for Co-Brokerage provides the most efficient online lead solution on the market. Now, ConnectionSM for Co-Brokerage offers these enhancements:
More importantly, ConnectionSM for Co-Brokerage helps agents connect to consumers. Increased engagement means higher conversion rates.
More than 43% of consumers found their homes online—up from 11 percent—according to N.A.R.
Internet leads are an irreversible trend the brokerage community must capture—or watch their business falter.
Today’s real estate agent has to work smarter, not harder. The best way to gain the highest return on time and money is to prospect more effectively— to prospect with verified email leads for faster results.
With ConnectionSM for Co-Brokerage, there are no cold calls. Each conversation is impactful and meaningful, because agents are armed with intelligence.
Successful agents know if their pipeline isn’t filled with potential buyers and sellers, they are quickly out of business. Quality leads mean everything.
It’s easy to get inundated with the day-to-day transactional business of selling real estate. There are inspections to schedule, showings to get feedback on, and appraisal issues to contend with. All of that must be juggled with cultivating new business.
Quality online lead referrals must be a spoke in your prospecting wheel.
Every agent needs multiple streams of business—referrals from past clients, family members and friends, as well as strangers actively searching for a new home or considering selling the house they own.
Buyers and sellers start their search online. If you’re not capturing those potential clients when they are without representation and searching for advice, you are not optimizing all of your resources.
At least 20% of home buyers said they found their agent on realtor.com®—compared to 13% and 12% on the two top competitor sites, respectively, according to the February Consumer Brand Tracking Study by Westerberg Consulting.
ConnectionSM for Cobrokerage Works for You
Unclaimed buyers searching active listings on realtor.com® are funneled to agents signed-up for ConnectionSM for Cobrokerage.
Because realtor.com® listings are updated every 15 minutes from more than 800 MLS systems across the country, buyers are searching current inventory. There are sites that sell leads from closed or expired listings; that does you a disservice.
“We know you have choices," says Steve Pacinelli, Vice President of Industry Events for Move, Inc., operator of realtor.com®. "Various companies offer leads. I say evaluate them on quality, time invested and ROI. Once you put that time in, you can’t get it back.”
Kimberly Grogan, a REALTOR® from Arlington, TX, won Rookie of the Year in 2012 for the national Keller Williams franchise. She credits ConnectionSM for Cobrokerage for her success as a new agent.
“There’s always that moment when you’re hesitant to call your sphere,” says Grogan.
She circumvented the fear by signing up for leads.
“When I first started, I was spending about $1,000 per month on leads,” she adds. “I was making about $8,000 a month off of those leads.”
She said she closed two deals a month as a direct result of ConnectionSM for Cobrokerage.
Realtor.com® delivers better leads, according to a June study by PAA research, an independent research firm. The study shows agents are 30% more likely to convert a realtor.com® lead versus the competition.
But it’s not just about getting the lead. Agents must also follow up on those leads quickly, as Grogan did.
“The moment a lead came in, I responded,” she says.
ConnectionSM for Cobrokerage Works Fast
For consumers thirsting for timely information, fast responses are the key to converting them into clients. A Harvard Business Review study noted 70% of buyers expect a response to an online inquiry within 30 minutes. Yet, it takes REALTORS® two hours to respond, according to the National Association of REALTORS®.
That disconnect has been addressed in the latest update to ConnectionSM for Cobrokerage.
Now, the system will automatically send a text or email response you can customize, to the client, within 15 minutes.
“It’s your words,” says Pacinelli. “Remember, the best agent is the available agent.”
ConnectionSM for Cobrokerage Just ... Works
Grogan sold $6.3 million in residential real estate in her first year using ConnectionSM for Cobrokerage. Now three years into the business, she has a team, The Grogan Group, with a buyer’s agent to handle online leads.
With ConnectionSM for Cobrokerage, leads come with an actual phone number and email address. It will even import useful demographic information about the lead such as household income, marital status, place of employment and job title, when available. It also shows the last three houses the prospect looked at online as well as the ones saved as their favorites.
The point is to move the conversation along. The first conversation is no longer an expedition into their wants and price range; it’s a revelation of how knowledgeable you are.
“We make you smarter," Pacinelli adds. "You can introduce them to new homes because you already know what they are looking for."
Fewer new homes were sold in December than the month before—but it's not something that those looking for the home of their dreams should be too worried about.
There was a 9.3% monthly drop in newly constructed home sales, totaling 625,000 in December, according to a joint report by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. December sales were up 14.1% year over year.
The monthly decline is thanks to a blockbuster November. Because of the shortage of homes on the market, buyers who couldn't find their perfect abode in summer, when buying typically peaks, extended their searches and finally closed in the fall. So fewer home shoppers were out during the holidays.
"Sales were unusually high in the previous two months, which means that sales dropped in December because people had [already] bought their homes," says Joseph Kirchner, senior economist.
The most sales were in the South, at 331,000, and they were down 9.8% from November. They were up, however, 15.7% from the previous December.
That region was followed by the West, at 190,000. They were down 9.5% month over month, but up 18.8% year over year. In the Midwest, there were 63,000 sales, down 10% monthly and showing a 3.1% annual drop. There were only 41,000 sales in the Northeast. They were down 2.4% from November, but up 10.8% from the previous year.
Nationally, the median price of a new home was $335,400 in December, according to the report. That's up nearly 0.15% from November and almost 2.6% over the previous year. And it was nearly 35.9% higher than the $246,800 median price tag of an existing home, according to data from the National Association of Realtors®.
“Affordability continues to be a problem," Kirchner says. "In general, new home construction is focused on more expensive homes.”
That's because builders are contending with construction labor shortages, rising land and materials costs, regulatory delays, and difficulties obtaining financing.
Just 4% of the new homes sold in December were $150,000 or under. An additional 13% were between $150,000 and $199,999. The bulk of the sales, about 47%, were of residences costing $200,000 to $399,999. About 11% of homes sold went for $400,000 to $499,999. New homes costing $500,000 and up made up the second-largest chunk of sales, at 25%.
Do you first consider your audience when preparing your marketing materials? Or are you writing for your CEO or marketing colleagues?
Integrated marketing campaigns require a strong strategy with consistent messaging, tone, and voice used throughout each leg of the campaign. Effective marketing needs content focused on driving sales. To do so, you need to write with your customer in mind, and write well. Here are eight writing tips that will help improve the quality of your sales materials and help increase your revenues:
TC On Point - Transaction Coordinator Company
Here are six hurdles for first-time home buyers that can be overcome.
The obstacles to buying a first house may appear insurmountable: Home prices have risen, mortgage interest rates are poised to rise, and by most people’s definition we’re in a market that favors sellers.
But for many who think they can’t afford the American dream of owning your own home, there’s some good news: You probably can ― and in a place you’d actually want to live.
Here are six problems that, despite what you’ve heard, don’t have to stand in the way of home ownership.
Problem 1: You don’t have the 20 percent down payment.
Maybe you’re still paying off student loans or living paycheck to paycheck. Your savings account is simply not that full.
The gold standard in buying a house is 20 percent down ― that is, you pay 20 percent of the purchase price upfront. But that doesn’t mean you can’t get a mortgage with a smaller down payment. You can very often pony up much less ― even as little as 3 percent.
And you won’t be alone. According to the National Association of Realtors, 81 percent of Americans purchase their first home with less than 20 percent down.
Paying less upfront has its disadvantages: You’ll need to take out a larger mortgage, obviously. When you put up less than 20 percent, the mortgage lender can also require you to take out private mortgage insurance. But the difference between 20 percent and 3 percent on a house selling for $300,000 is the difference between $60,000 and $9,000. Sounds more doable already, doesn’t it?
What if you’re still coming up short? The solution for many young adults is to tap the Bank of Mom and Dad for a gift.
Your generous donors have to pay gift tax on any sum above the federal exemption limit for that year. The limit for 2017 is $14,000 from one person to another. That means Mom can gift you and your partner $14,000 each and Dad can do the same, which amounts to $56,000. Grandma and Grandpa could also chip in.
If you’re putting down 20 percent or more on a mortgage that’s backed by Fannie Mae or Freddie Mac, the whole down payment can come from a gift. But if your down payment is less than 20 percent, some of that money has to be your own.
Another option that is gaining in popularity, according to a recent study by ATTOM Data Solutions, is to ask Mom and Dad or another relative to co-sign the mortgage with you. Assuming their credit score is good and they have income and assets that boost your mortgageability, you could obtain a loan with less money upfront. The risk here is that if you miss a mortgage payment, their credit will be affected as well as yours ― and if you stop paying entirely, the bank will come after them.
The report found that 22.8 percent of all purchase loan originations on single family homes in the second quarter of 2017 involved co-borrowers listed on the mortgage or deed of trust, an increase from 20.5 percent during the same period in 2016. Among 42 cities with at least 1,500 such loan originations, those with the highest share of co-borrowers were San Jose, California (50.9 percent), Miami (45.2 percent), Seattle (39.1 percent), Los Angeles (31.1 percent), San Diego (29.4 percent) and Portland, Oregon (28.8 percent).
But since not everyone has parents who can or want to fork over financial help, here are some other places to look for down payment money:
Pull from your 401(k) or IRA assets.
You may be able to borrow up to the lesser of $50,000 or 50 percent of your 401(k) plan balance, and first-time home buyers may qualify to take up to $10,000 from an IRA without paying early withdrawal penalties. Be advised, though, that not all plans permit borrowing, and tapping into these resources so soon is likely to slow down your accumulation of retirement savings. Also, you will have to repay your 401(k) ― and some IRAs. Beware that some 401(k) plans require immediate repayment if you leave your current employer.
Skip the big wedding.
Although most Americans spend less than $10,000 on their wedding, some people are dropping $20,000, $30,000 and much, much more. The money you don’t spend on one day of celebration could make a substantial dent in your home down payment. A spinoff idea is to create a “wedding registry” that suggests money to buy a house instead of dishware that you already have. For instance, HoneyFund, which calls for honeymoon donations, can also be used to collect money for a down payment.
Play the first-time home-buyer card.
There are federal, state and local programs that help would-be homebuyers qualify for loans or offer them grants toward their down payments. Fannie Mae and Freddie Mac have options that can ease the way for borrowers with a wide range of incomes. Even the U.S. Department of Agriculture offers a helping hand to some first-time homebuyers, just in case the rural life appeals.
Problem 2: You have bad credit.
Bad credit may be the biggest obstacle of all to buying a house. A tarnished credit report will limit your choices to loans with higher interest rates or no loan at all.
The best thing to do is come clean about your bad choices and be prepared to demonstrate the new frugal and fiscally responsible you. Pay your bills and pay them on time. Talk to a mortgage broker and ask for suggestions on how to improve your credit score.
In the meantime, here’s some advice for every house-hunter:
Don’t incur any new debt while you are house-hunting.
Defer buying a car until after you buy your house. The mortgage lender will be assessing your income-to-debt ratio.
Don’t even apply for any new credit cards.
Each time you apply for a financial instrument ― a credit card, a car loan, a new refrigerator on layaway ― it is considered a “hard pull” on your credit. As a result, your credit score will drop a few points, and that will stay on your record for two years. Yes ― just for applying!
Know what your credit score is.
Shockingly, many people start house-hunting without first finding out this all-important number. According to the National Foundation for Credit Counseling, 42 percent of Americans haven’t checked their credit score in at least the past 12 months. What you specifically want to know is your FICO credit score since it’s what lenders look at most often to assess creditworthiness.
As of April 2016, the average FICO score nationwide was 699 on a scale of 300 to 850. Generally, a score below 550 is considered poor. The two magical numbers are 620 for Federal Housing Administration-insured loans and 720 for conventional loans with primary mortgage insurance. If your FICO score falls below the relevant number, you may not qualify for those mortgages. For conventional loans without mortgage insurance, your FICO can dip as low as 620, but the interest rates and affiliated costs on those loans will be prohibitive.
Problem 3: You fell in love with a house far outside your price range.
Well, first of all, congratulations on actually knowing your price range. Now break up with that dreamy mansion and move on. Shopping for champagne on a beer budget never ends happily.
A house will likely be the largest single purchase of your life. Think of it as an investment that you sleep in or a retirement savings account with a kitchen. You aren’t just house-shopping for current you, but for future you. And someday you’ll want to sell this investment.
So stop thinking in terms of whether your couch will work in the space and think more about the big picture. Make a list of the features you simply must have, the features that would be great to have and the features that you really don’t care about.
Suggestion: Add “good schools” to the must-have list because even if you don’t have children and don’t plan on ever having them, houses in good school districts appreciate faster. A National Bureau of Economic Research study found that for every $1 increase in per pupil spending, local home values increased by $20.
To determine that home price range (if you haven’t), figure out how much you can really afford to spend on housing each month. A standard rule for lenders is that your monthly housing expenses (PITI for principal, interest, taxes and insurance) should not be more than 28 percent of your income before taxes. Some banks will stretch this “housing ratio,” or “front-end ratio,” to 33 percent. So if you earn $5,000 a month, the maximum PITI payment the lender thinks you can handle is about $1,650.
Banks are also looking at a “back-end ratio.” Add up your PITI payment with all other monthly revolving debt payments ― on credit cards, car loans, any other loans you carry. That sum should be no higher than 41 percent to 50 percent of your gross monthly income, depending on the type of loan and lender.
While your dream house may cost too much for now, you don’t necessarily want to be below these ratios. The assumption is that your mortgage payment will stay the same through the years while your income will likely increase with promotions and raises. It may be a squeeze to make your mortgage payments for the first year or so, but the effort should get easier.
Problem 4: You fear you’ll mess up your life with a bad loan.
For decades, the 30-year mortgage with a fixed interest rate was a kind of one-size-fits-all. At the end of 30 years, you would own the house outright, hold a mortgage-burning party and then live “mortgage-free” in retirement.
But many people no longer reside at the same address for three decades. In 2016, the average length of time to own one particular house was 10 years, according to the National Association of Realtors’ “Profile of Home buyers and Sellers.” Ten years before that, homeowners tended to move every six to seven years. So there are many types of mortgages on the market designed for how we live now.
Some loans begin with low interest rates that are then adjusted upward by a certain percentage every year or so. The popularity of these adjustable rate mortgages are blamed for helping trigger the foreclosure crisis in the mid-2000s. Banks were accused of not adequately vetting potential mortgagees who found themselves with escalating payments that they couldn’t afford.
That said, adjustable rate loans make sense for some people. The low initial rate is more affordable at the beginning of the loan, when your income may also be lower. If all goes according to plan, you’ll refinance or sell the property before the loan resets beyond your ability to afford it.
Talk through the various options with a mortgage broker, preferably one who works with more than one lender. Make sure any loan you accept doesn’t impose a penalty if you pay it off early. If interest rates drop, you want the ability to refinance ― essentially, to get a new mortgage at a lower rate.
But don’t despair at the complexity. People like you are owning homes and paying down their mortgages every day. The overall mortgage delinquency rate dropped in the second quarter of 2017 to its lowest level since the second quarter of 2000, according to a national survey released by the Mortgage Bankers Association.
Problem 5: You don’t really know where to begin.
Some first-time buyers think going to every open house that offers free cookies is a smart way to start. Even if the cookies are great, you’re wasting time.
Begin by educating yourself. Since the home-buying process varies from state to state, learn how it works in the state where you want to buy. Fannie Mae and Freddie Mac both offer classes that can help guide you through the process.
Here are some basic things that every buyer should understand:
Real estate agents work on commission.
As a buyer, you don’t need to pay an upfront fee for an agent to drive you around and look at houses. The commission rates for both the listing and selling agents are written into the listing contract that the seller signed and are factored into the asking price. The typical commission is 6 percent, split equally. For especially expensive properties, sometimes agents agree to take less.
All this means that real estate agents don’t get paid unless the deal closes. They work to close deals. No deal, no pay day. Period. Agents may be very charming people, but they don’t work for you. They work for themselves.
It’s not usually a good idea to try to get around this unpleasant reality by hiring an inexperienced friend or relative who just obtained a real estate license. Work with an agent who specializes in the neighborhood you want to buy in. Drive around and see whose signs are on the most lawns.
Homes can be bought without bank or third-party mortgages.
Some sellers are willing to hold the mortgage. Instead of getting a loan from a bank, the buyer signs a contract to make payments directly to the seller. This is perfect for buyers who cannot obtain a conventional loan because of credit or income issues. It also saves the buyer a big chunk on closing costs. There are no points on the mortgage (essentially, fees paid to the lender). There’s less paperwork. Should the buyer default on the loan, the seller keeps the down payment and can foreclose the same as a bank would.
A house that’s been on the market a long time doesn’t necessarily have serious flaws.
Generally speaking, homes that don’t sell within the first few weeks are priced too high. The seller may have unrealistic expectations about the value of his home. There is no harm in making a low offer, and the real estate agent must, by law, present it to the seller. The seller might not like your offer, but if he has a smart agent, he will use your bid as an opening volley in negotiations.
Every house has some flaws. You have to decide whether they’re fatal.
Certain problems can’t be fixed but may be managed. If the house sits on a busy corner, there will be traffic noise. If the house faces north, it’s likely darker inside. Are these flaws you can live with? Would a row of dense shrubbery cut down the street sounds? Could skylights and some tree-trimming help with the sunlight situation?
Other problems may be worth embracing. It’s good financial advice to buy the dumpiest house on the best street. A house that is move-in ready will inevitably cost more. Turnkey homes, as they are called, lure you in by making it easy for you to envision living there. But if you want a bargain, bring a contractor with you to the dumpier house and let her help you “see” the potential behind the peeling paint and weed-filled yard.
A final word on open houses: They’re basically training and recruiting platforms for new agents. Free cookies aside, listings rarely sell because of an open house. Most of the people who walk through are curiosity seekers often looking at properties above their price range.
Only 9 percent of buyers found the home they purchased at an open house in 2014, according to the National Association of Realtors. Yet 44 percent of buyers that year included open houses in their search.
Problem 6: You made an offer and now are seriously terrified.
Home-buying is a negotiation, with price being the big item on the table. But it’s not the only item. Every offer you make should have at least these two contingencies:
1. You will have the chance to get the property professionally inspected. If the inspector turns up problems that would cost too much for you to fix, you can renegotiate the purchase price ― or walk away.
2. Your offer is based on your ability to find favorable lending terms. If you can’t get the money, you’re not legally obligated to buy the house.
Depending on where the property is and what you’re planning for it, other contingencies might include termite inspection and a contractor’s assessment of certain remodeling costs.
When you and the seller have a contract that you both accept, you go into a process known as escrow. A third-party escrow officer will make sure that all the t’s are crossed and the i’s dotted on the paperwork and will handle the money payouts when it comes time to close the deal.
Things can still go wrong in escrow. An inspection can turn up a roof that needs to be replaced or a garage with a mold problem. The buyer may not be able to secure financing by the deadline. Or the bank’s appraiser may deem the house not worth what the buyer is willing to pay for it.
Not every escrow ends with the sale of a property. Nationally, 3.9 percent of home sales failed in 2016, up from 2.1 percent in 2015. First-time home buyers are more likely to have a deal fall apart, according to the National Association of Realtors, because they’re unfamiliar with the process ― and yes, they may get cold feet and look for a way out.
Breathe deeply. We’re still waiting to meet the person who slept well the night before escrow closed.
Have you ever wondered why there seems to be such a large gap between the top sales performers and the bottom ones? Why do some sales reps hit their quotas effortlessly while others struggle and lag behind?
Being good at sales is a skill. It takes discipline, hard work and often natural talent. Some people are just born good salespeople, while others need to work at it. As a sales manager, you need to help your sales reps improve by following the lead of your top sales performers.
By applying their approach and attitude, your sales team can grow as salespeople, improve the customer experience and boost revenue for your business.
In his book, “You Can Win: A Step by Step Tool for Top Achievers,” self-help author Shiv Khera says, “Winners don’t do different things. They do things differently.”
Here are five ways your sales reps can start doing things differently and become winners.
1. Believe in the product
According to HubSpot, only 3% of customers trust sales reps. If you don’t have your customers’ trust, how can you expect them to buy from you?
Cultivating that trust starts with how sales reps position their company’s products and services. If a salesperson sounds like they’re trying to schmooze the customer or is really pushing to close, the customer will be put off.
Sales reps need to spend less time pitching and more time having a conversation. And to have that conversation, sales reps need to understand their products inside and out and believe in them as a real solution.
“I’ve found that having new reps read case studies about our successful clients can improve performance almost overnight” says Josh West, director of sales at LawnStarter.
Top salespeople frame their pitches with a true belief in the product they’re selling. And this belief must be authentic; otherwise, customers will see them as fake. With this approach, sales reps come across as helpful and informative, rather than pushy and disingenuous, and are more likely to persuade the customer of the product’s benefits.
2. Focus on the customer
The best sales performers put their customers’ needs first. They don’t just pitch to pitch. They work to understand each customer’s needs and tailor their approach based on addressing those needs. They take their customer’s perspective into account and try to see things from their point of view.
In an article for Funnelholic, Mark Roberge, former chief revenue officer at HubSpot, says, “If the salesperson truly has the prospect’s trust, they will help the prospect avoid a potential pothole.”
Good salespeople know their product isn’t right for everyone, and they don’t waste time trying to sell it to the wrong people. Because of this, they become trusted advisors to their customers. These top sales performers are focused on building strong relationships rather than just closing a deal. This attitude allows them to build trust and ensure that the deals they’re making are right for everyone involved.
3. Ask the right questions
According to research from HubSpot, the number one way to create a positive sales experience is to listen to the buyer’s needs. When top salespeople go into a meeting with a customer or prospect, they don’t do all the talking. Instead they focus on having a conversation.
Conversations are more natural and will put the customer more at ease. They will be comfortable talking with the sales rep and be more likely to buy. Asking the right questions is key to a good conversation.
On his blog, Seth Godin writes, “You don’t find customers for your products. You find products for your customers.”
The best salespeople ask questions to try to pinpoint what it is the customer wants and how they can help. They start with their customer’s needs and work backwards. How can their product address their concerns and be a solution to their problems? Once they’ve identified this, they can make a recommendation for the customer.
4. Manage time well
The top sales performers know how to make the most of every moment of their day. They are skilled at time management and always have a plan. They know time is valuable, so they make sure not to waste any of it.
The best way for sales reps to manage their time is by planning out each day and using time blocking. That means grouping similar tasks together, such as making cold calls, and doing them in a set chunk of time. During that chunk of time, they will only do the one task and eliminate all other distractions.
Successful sales reps also have a plan for their customers. They know and understand the sales cycle and what to do when they close a deal. They plan and schedule their time to accommodate and follow this cycle.
5. Enjoy the sales process
No matter how hard you try, a love of sales just cannot be taught. Some sales reps will have that passion while others will not. The sales reps who enjoy the sales process are competitive and have a need to achieve. They are good at what they do and enjoy doing it.
In his book, “The 4-Hour Work Week,” entrepreneur Tim Ferriss says, “Excitement is the more practical synonym for happiness, and it is precisely what you should strive to chase. It is the cure-all.”
Salespeople with the drive and the right personality will be happier in their positions and excited to come to work each day. They will take pride in closing deals, fulfilling their customers’ needs and succeeding. And happier salespeople means more sales and more revenue for your business.
Virtual Real Estate Transaction Coordinator Company