There are so many good reasons for home improvement — even in a tough economy. You may want to boost your home’s future sales value, add livable space, refresh an aging room or feature. Or you may just want to enjoy your home more, especially if you wanted to move but the market didn’t cooperate. Find out which projects could bring you joy — and some cash back!
Is the kitchen the biggest project that will pay you back or the bathroom?
It’s been a long couple of years for homebuyers and their agents.
The pandemic-fueled tornado of low inventory, tons of buyers flocking to the market amidst record-low interest rates and would-be sellers holding onto their homes for fear of being left out in the cold with no place to go, made for a brutal homebuying experience in many places.
“Last year, it was pretty much come in every house guns blazing, do whatever you could do to acquire that house,” Max Stokes of Compass in Northern New Jersey told Inman. “There was no negotiation over the last couple of years.”
But the tides are turning.
Volatile — and comparatively high — interest rates coupled with an uncertain economy are starting to shift the market’s balance. Sellers don’t have the hold on the market that they once did. And it’s time for buyers to start taking advantage of the shift.
As a balanced market comes into view on the horizon, here’s how buyers’ agents are changing their negotiation tactics to help their clients achieve some wins that were once impossible in the frenzied market of the last two or so years.
Ask the developer to cover closing costs on new properties
On new development properties in Manhattan, where Leslie Singer of Brown Harris Stevens works, the taxes folded into closing costs can be a lot to swallow. In the past few years, sponsors (another term for developers) have typically put the onus of mansion and transfer taxes on the buyer of the property.
On New York City properties priced below $500,000, transfer taxes are 1 percent and on pricier properties, that tax increases to 1.425 percent. Mansion taxes kick in on properties priced at $1 million or higher and range from 1 percent to 3.9 percent, depending on the exact price.
But in this market, Singer said developers are a lot more willing to negotiate.
“In these types of markets, sponsors may be more flexible on the backend, such as assisting with closing costs,” she told Inman.
Leverage different listings against each other
With inventory staying on the market a bit longer these days, buyers have the time to comfortably compare different active listings — and potentially leverage them against each other if a seller is really being a stickler when it comes to negotiating, Stokes said.
With properties that he has represented recently, Stokes said homebuyers have pointed out to him other similar properties in the same market, and why they might be a better offer than his own listing, lighting a bit of a fire under the seller.
“[They’re] pointing out the differences in the comparables that are on the market and trying to leverage three [listings] against each other,” Stokes said.
Marry the house, date the rate
With elevated mortgage rates, a lot of buyers are hesitant to get out into the market now. But Gretchen Rosenberg of Kentwood Real Estate in Denver said that she and her agents are encouraging homebuyers to get off the fence and commit to a home if they love it. Mortgage rates will be in flux for a while, so buyers should get the house they want now and keep refinancing for a better rate in mind for the future. In other words, “marry the house and date the rate,” Rosenberg said.
“We are out there talking rates and just reminding buyers again, hopefully this is a longtime purchase. It’s not a year, it’s not like you’re a renter, you’re going to be in it for a while, and so someday down the road — we don’t know when, we can’t promise when rates will come back down — you’re likely going to be able to refinance. You also might be able to buy down the rate now, depending on your position.”
Get more recent data to back up the best offer
In the past, Rosenberg said she might gather comps from the last six months of sales to inform her buyer’s offer on a property. But with the market changing rapidly over the last few months, in large part as a result of volatile mortgage rates, Rosenberg said data from six months ago is already out of date. To help buyers craft the best offer that’s most likely to succeed, her agents are digging into data from a neighborhood’s most recent sales.
“They’re diving more into the data,” she explained. “They’re saying, well, what have the last couple of sales been? Not the last six months of sales, which is what we would normally do to comp a house, but the last couple of sales in this neighborhood, and how many price reductions have there been in this neighborhood? What are the days on market now? What’s the percent original list versus final sale price in the last 30 days?”
Don’t waive your rights
Stokes is working with homebuyers now who also transacted a home earlier in the pandemic, and he said he had to make it clear to them that waiving things like a home inspection or appraisal were concessions they wouldn’t even consider this time around — even if he didn’t necessarily encourage it the first time.
“You don’t need to do that anymore,” Stokes said. “The market’s normalizing, if not turning, so keep your rights in the contract … there’s no reason to do it just to do it.”
“People were voluntarily waiving [inspections] and just doing escalation clauses,” Dawn Maddux of Engel & Völkers Western Frontier in Missoula said. “In the 11 years I’ve been in real estate, I’ve not ever seen that before … Now, we’re kind of getting back to writing normal offers, maybe at or a little below asking price based on what the market will bear and based on what comps show, where before, it was just a frenzy.”
Along the same lines, Maddux elaborated that homebuyers shouldn’t feel rushed to make decisions before they’ve done all their due diligence on a property, and buyers’ agents should actively encourage this to avoid regret later.
“They have time to do their research there — there’s not a frenzied competition,” Maddux said. “It’s honestly better for the seller because, what we’re seeing happen, is there’s a lot of lawsuits pending where buyers jumped into properties, they end up with buyer’s remorse, they [find] out something [about] the house that the seller didn’t disclose, probably because they didn’t know about it, and they didn’t get an inspection so they wouldn’t have had a way to know.”
In this market, when a deal isn’t as sweet as a homebuyer or the buyer’s agent feels it could be, under the right circumstances, there’s no shame in even stepping away from the negotiations for a week or two altogether.
That opportunity arose recently for Stokes and one of his buyers, who was interested in a fixer-upper that he thought was overpriced given how much money would need to go into renovating the property.
“I said, ‘Well, there’s not going to be many buyers out there that are going to be willing to take this on their shoulders right now,” and [the sellers] disagreed,” Stokes told Inman. “And I just told my buyer, ‘Just trust me — you’re one of the only buyers out here that would do this right now. Take a deep breath, sit back, and let’s just watch this for a minute.’”
The seller reached back out a week later, wondering if they were still interested, and Stokes said they were considering some other options. Another week after that, the seller reached back out again and said they would drop the price to match the buyer’s offer
One thing is common among all properties that receive multiple offers these days: the home is in a good location. Location is nearly always what drives homebuyers in their search. Before considering price, number of bedrooms or size of home, a buyer looks for location.
If your home is on a busy street, not in the best school district or near a freeway on/off ramp, chances are you won’t receive the kind of activity that a well-located home would. In that case, work closely with your agent to price the home correctly.
Must be priced right
Buyers in any market look for perceived value. Homes priced 10 percent (or more) over their market value won’t get noticed. Pricing isn’t an exact science, and it’s nearly impossible to pin a precise number to a home until buyer and seller sign a contract and close. Then, the price officially becomes the home’s market value. Until that time, agents can provide sellers with a value range. Have a good location? Does your home show well? Are you in a strong sellers’ market? Price your home on the bottom of that price range and you’ll be sure to attract buyers — and possibly multiple offers.
Must show well
A generation ago, sellers simply did some deep cleaning and maybe some de-cluttering before their first open house. Presentation wasn’t as important then as it is today, given online listings. More buyers today develop an emotional connection to a home. They want to imagine themselves in your home and not feel like they’re a guest. What does that mean? Appeal to the masses. If you have a good location and you plan to price your home realistically, then you need to make sure you give buyers what they want. If you can afford it, make cosmetic upgrades; invest in some staging and work to turn your home into a “product.” Emotionally disconnect from your home and try to see it more objectively.
Plan on having the home in perfect condition for the photo shoot. A buyer’s first impression of your home likely will be via the Internet or an email from their agent. Make them want to step inside. The more buyers you attract to your home, the more activity.
Know your market
Don’t assume that national trends apply to your region, city or neighborhood. If you’re not in a strong sellers’ market or you spend a fortune on last-minute upgrades, you could be in for a giant surprise. Just because you hear about bidding wars and multiple offers on the news doesn’t mean that applies to your area. Home selling is like the stock market it is goes up, down and can have a bit of a lull when interest rates go up and what is happening in the news for your area and even around the world.
Work with a good Realtor and, no, not all agents are Realtors learn the difference. A local Realtor knows the area and what has recently sold as well as ones that have sold over the past six months to a year. Knowing those homes, having walked inside and personally knowing the agents who have sold them matters. This is market data that an outsider just doesn’t have access to. This knowledge empowers good local agents to educate their sellers.
I know the last year has you asking yourself I don’t need to worry buyers are waiving inspections. I guarantee you that is changing and if you do not wish to have a Seller’s pre-inspection than you may wish to check out this list. You can make your home more attractive to buyers and increase your likelihood of obtaining a positive inspection report by performing routine maintenance now before going on the market.
A visual inspection does not pass or fail a house but simply describes those items in need of minor or major repair or replacement. The inspector will visually examine the structure, crawl space, attic, mechanical components and all interior rooms, as well as closets.
On the day of you can help by having keys available to any locked doors, removing obstacles around water heaters and other appliances, removing items from closets that provide access to attics, and so on. Please be ready to indicate the location of hidden components such as the water meter, electrical panel, sump pump and main sewer clean out.
You can eliminate seasonal limitations on the inspection by clearing pathways of snow or debris. Ensure that appliances not tested because of the temperature (such as air conditioners in winter) are operation. Move boxes and storage items away from interior walls and make certain the entire perimeter of the house can be observed. Finally, leave pets with a friend or, take them with you, for the few hours of the inspection.
Repair minor defects in the exterior wall coverings.
Repair damaged masonry on walkways and steps.
Repair missing or loose railings on decks and steps.
Recaulk around exterior windows and doors.
Replace missing or damaged shingles
Recaulk around flashing.
Clean debris from gutters.
Ensure downspouts are intact and water drains away from the house.
Trim trees and shrubs away from the roof.
Loosen any windows that are painted shut.
Replace missing or faulty hardware on doors and windows.
Repair any broken or cracked windows.
Replace damaged baseboard or molding.
Recaulk around bathtub and kitchen/bathroom sinks.
Re-grout tub and shower enclosures and the kitchen backsplash.
Repair leaky faucets and fixtures.
Unclog slow drains using commercial cleaner.
Replace oversized fuses with proper fuses.
Repair faulty receptacles and switches.
Ensure exhaust fans are in working order.
Have the fireplace chimney swept.
Have the furnace or other major appliances serviced.
Ensure central vacuum, garbage disposal, water softener and other ancillary components not part of the standard inspection are in working order.
Replace dead batteries in smoke and CO detectors.
Have service contracts, manuals and warranties available and in a drawer for the inspector/buyer to access.
Prior planning always pays off and makes for a smooth transaction after securing a buyer. Reach out to me for questions on this or if you are considering selling your home.
Considering a discount brokerage for listing service? Knowledge is power, and I would like to give you some power to make a wise decision for the largest financial transaction that most people will ever make.
With the hot market our area has been experiencing the last few years discount brokerages with listing services have “popped up” to get in the door. There are two sides to every transaction a listing side and a buyer side. If the listing side does 1.5% you have the buyers side at 3% so you are at 4.5%. If you devalue the buyer side the agent may not show your home or talk their clients into another one in the neighborhood that is offering a higher rate.
I know you work hard at your job and for your paycheck and believe me we do too. Generally, I have found agents who give their commissions away are part-time, new to the business or have very little real estate knowledge. I would like to give you an analogy “Nordstrom vs. Walmart” There are shoppers for both but why does one choose to pay Nordstrom prices over Walmart? Plain and simple: experience, knowledge, customer service and value. It is the same in every part of life if you think about it. The cheap roofer or the one you know will do the work right the first time? If you are a consumer, you may get lucky and come out alright but, then again, how much money will you leave on the table because you have an agent who cannot negotiate and doesn’t have the time to spend any effort on your transaction. They simply collect a fee and move on. Again, It’s the largest financial transaction most people will ever make. It just seems foolish to trust someone who does not value themselves and therefore, how can they value you or take care of your best interests?
I would like to share some real comments from local Realtors (not agents) around the area in response to the question How do you feel when your competing with discount brokerages in today’s market?
As the old saying goes you don’t get something for nothing. Any agent would have to be nuts to offer such low fees. I’m sure their trying to up-sell the customer once they get the listing ie staging, better photos ect.
Customer service and partnership. They have no interest in you past the extent of filling in the forms. No rapport is built or partnership. They will not verify your data input, nor will they scrutinize your form 17. They won’t negotiate on your behalf. We had a case a few months ago where a 1% entered exactly what the owner told them to and it was grossly wrong. Any Realtor would have caught this. We called the seller on this and explained to him how to fix it and even corresponded with Cheapo agent to get it corrected. That seller recognized the ‘partnership’ and ‘customer service’ value we presented and told us that he would be contacting us in the future. We saved him a potential lawsuit. If a seller isn’t investing in a Realtor who in turn is invested in them, then they are doing themselves a grave injustice!
Lower fees are not the way to go, offer better value for your client. The quality of service and representation of the client is reflected in the commission.
You get what you pay for. I think it’s typically just a listing service. They don’t provide any benefits to their clients. We are a full-service Broker with a network of vendors to help give our clients the best possible service.
Getting a buyer to write up an offer on your house is only the first step, and quite frankly, in this market that’s the easy step. What we’ll do is get you the best buyer who we’ll negotiate the best price and terms to net you the most money, and make sure the sale closes. Because if your sale doesn’t close it won’t really matter how much of a discount you get in commissions right?
I provide service & knowledge. Good service costs. We do have some discounters in our area as well as DIY providers. I try to educate potential sellers diplomatically that “you get what you pay for. My expertise, experience and marketing abilities have been honed over decades. I have no intention of giving that away. “If you work for “peanuts you get monkeys”
Cheap Realty type outfits come and go, but the only get a small smidgen of the market; if this was really an effect approach to market your home and get top dollar, don’t you think everybody would be using these gimmicks? You want top value and exposure, correct?
As Realtors we adhere to a strict code of ethics, agent’s do not.
Most all of us are in business for ourselves not our brokerages. If we do not do an amazing job, we will not be in business for long as referrals will build or destroy any business. Professional Brokers rely on referrals to grow their business therefore our best interest is the client. If we do not exceed expectations, then they will not refer us to anyone and we will have to be a 1%.
It will affect all of us in the industry in a negative way. When clients ask us to cut our commissions, we need to ask them if they would expect their surgeon to cut his commission! We work hard for our money, and it’s not always easy.
I think people doing this are incompetent and couldn’t fight their way out of a wet paper bag.
Very easy to answer. I won’t show the property.
You get what you pay for.
I think it’s terrible. It lowers our standards on what we can do for our clients as far as staging and marketing but also makes our profession look “cheap” now. Buyer agents will most likely not show listings that offer low commissions, so it does not do the listing any good. The other point is, when buyers know that full commission is not offered…they will negotiate down…as they do not want to feel like they are now over paying.
They are desperate and will offer less value to the client. They always come and go with every robust market.
Cheapo is not interested in providing value just a quick transaction and nothing more.
It’s just a disservice to the owners and sets the bar very low for the Realtors in the industry.
Compare and contrast these lower listing services with that of a professional Realtor and you will see how much more value you receive working with a professional. For example, you have a trained expert that understands value. I am a Certified Master Negotiator, Managing Broker, Senior Real Estate Specialist, Military Relocation Expert and more! Sounds like a lot right? It is but I value the utmost trust my clients put in me and furthering my education on their behalf has given me a wealth of knowledge that only benefits my clients. The proof is obvious to me as most all my clients come back to me years later to help them again and keep referring me. My team knows how to decipher the fine details of any, and all, offers and we know how to negotiate with them prior to presenting the offers to you. This not only saves you time it achieves the most amazing offers with details and timelines that you and I construct at the beginning. I negotiate to not leave your money on the table. To get you the most net knowing all the financing types available to buyers and what will work best for your unique situation.
With me and my team you have a partner that will guide you through your transaction from start to finish. As a professional we represent you and no other. You can expect excellent communication from me and you will always know the status of your transaction. Additionally, not only do we value our partnership with you during your transaction we will stay in contact with you long after. Buying or selling a home is stressful therefore we will manage the details that will lead to a less stressful transaction. Another point of value to consider is we work with a network of many companies that will add value such as lenders, home inspection firms, title and escrow firms, moving companies and other professional’s as well. I hope this assists in showing the added value from a professional Realtor is so much more beneficial to you. Wouldn’t you agree?
Put me to work and you will experience amazing results our sellers have been receiving.
By the way, Red** did 35,000 transactions last year, and REMAX as a whole, about 1.2 million. What does this say? WAY more people trust a REMAX agent than an hourly agent who gets paid regardless of whether the home sells or not.
Happy Tuesday and Welcome to August! Yep, I am a few days late on the monthly newsletter please forgive me I was having a very fun weekend at the Gorge and Watershed. A bit slow and tired today but it was worth it. So as we slide into August enjoy with some great events, ideas, tips, real estate news and its National watermelon day so go enjoy!
Trying something a bit unconventional! If you do not know how the Real estate market is right now I am going to take a quote from the MLS “The economics of scarcity are driving prices up at an unsustainable pace,” said Dick Beeson, managing broker at RE/MAX Northwest. “What will happen this spring and summer will likely be more of the same. The real estate vortex we’re in of depleted inventory and high prices is real and unrelenting.” “If interest rates weren’t historically low, buyers would be unable to afford the escalating cost of housing,” suggested Beeson. “We’re feeling nervous about where this market is headed,” he said, adding, “Help is not on the way. Sellers are almost as rare as the dodo bird.” Although he noted the number of new listings coming onto the market has kept pace or even exceeded last year’s totals in some areas, (Not Snoho county) “new listings are immediately devoured by a plethora of waiting buyers.” The situation has buyers asking, “Am I paying too much?” and sellers asking, “Can we ask more?” That answer for both is “Yes,” says Beeson
Do you know Snohomish county does not even have 2 weeks of inventory? I listed a home in Marysville a few weeks ago and within 2 days I had 18 offers! Many waived everything and, I mean everything. The offer my sellers decided to accept? 140k over asking and covering the difference of a low appraisal! So why am I bothering you with this?We have 5 home buyers that we have been working to find homes and one family that currently has 7 family members living in the same townhome as they have special needs and we want to find them homes! We were just beat out of an offer that we put in for them. Our offer was 50k over asking and waiving all we could plus they would cover a 25k low appraisal. The offer that got it was $80k over listIn almost 11 years in Real Estate I have never experienced anything like what is happening. I rarely do not get my clients the home they want on the first try but, right now there are to many buyers, low interest rates and not enough homes on the market to sell. So I am trying to think outside the box. If you happen to know of anyone thinking of selling within these parameters can you PLEASE consider having them contact me? Believe me I have scoped out everything online, even FSBO, and so I am reaching out.
Local firefighterVeteran wanting to use his VA loan for the first time. They are approved for up to 500k. They would love a small rambler w/garage and a bit of a yard. Flexible on area. Currently looking in Lake Stevens, Marysville and Arlington. 3-bed, 1.5 bath. Home does need to be in good condition for VA financing but if something is called out and if a little something is needed to push I will do it!
Family of seven. Multigenerational family with one of the parents being confined to bed permanently. We are trying to find a home that has 2, or potentially 2, living arrangements. A split maybe for parents to live downstairs and the younger families up? They have 2 small pet goats so no HOA neighborhood. Underwritten approved to 675k.
First time home buyer with 2 small kids and need a home they can keep their laying hens with them. No HOA against chickens. 3 bed/ 1.5 bath with a garage detached or attached. Like homes with a bit of lot. Looking in Marysville, Granite falls, Arlington area. Underwritten approved to 500k.
First time home buyer couple. No kids yet but want to have a couple fur babies soon as they lost there two older ones in the last year. Underwritten approved to 570k, 3 bed, 2 bath. Like newer modern homes but not the zero lot line ones.
First time home buyer expecting their first baby in May. Underwritten approved to 425k. Flexible on location but prefer Everett and going east or north is okay. At least a 2 bedroom, 1 bath.
This is not something I would normally do or ask but I want to do the best for my clients and never hurts to try right?
Please reach out if you know of anyone, wanting or thinking, about selling. That could help my buyers or another family that is looking for a home.
Are you considering selling your home and retiring? Maybe somewhere warmer? We all know the main areas for retiring are Florida with many cities being ranked in the top 10. I was surprised to see Myrtle beach- SC, Ann Harbor MI, and Lancaster, PA in the top 10 and I did not see Arizona in the top 25. In fact it looks like they were #38 in the 2020 ranking. Times are changing for sure! Where do you think Washington ranked? We ranked 46 out of 50!
Over the years seeing Seniors in my church, neighbors and with my own parents I have seen many challenges as we age that make you decide to move. After struggling to help one family move that had many medical challenges I decided I need to learn more to help this population and is why I am proud to be an Seniors Real Estate Specialist (SRES). Helping those make a move that is more senior friendly and working with their family in taking the time they may need for their next adventure in life.
So where do you start when you are starting to consider a move and have lived in your current home for 20+ years?
1. Start with the easy stuff.
Eliminate anything that’s broken, damaged, or no longer wanted. Then, go to the out-of-the-way spaces like attics, crawlspaces, and garages. Progress in these “easier” parts of your home will help you build momentum and tackle the harder-to-decide areas.
2. Ask yourself, “If this disappeared tomorrow, would I run out and replace it?”
If you wouldn’t miss it or need to replace it, it’s probably not worth keeping.
3. Don’t be a storage unit for others.
If friends or relatives have left things for you to store, it’s time to ask them to pick up their possessions—or arrange to have them shipped. You may need to be tough and set a firm deadline, after which you will donate the items.
4. Ask for help.
Although you can do much of this work on your own, a family member, a good friend, or even a professional organizer can help make the job more manageable.
5. Decide what’s important.
Pretend you are moving overseas, but you can only take a severely limited number of items because it costs a small fortune to ship them. What items belong on your list? These are the things that matter most to you!
6. Is this something from a lifestyle I no longer have or want?
For example, if you have three cabinets full of plastic containers, but only cook for one or two people, it’s reasonable to eliminate a few plastic sets—and dishes, pots, and pans.
7. Schedule a regular time each week—or several days a week—to work on rightsizing.
Realize that rightsizing is a life-changing marathon, not a sprint. You didn’t accumulate everything overnight, and you won’t sort it all out overnight, either.
8. Value what you keep.
The fewer things you keep, the more you will treasure and enjoy what you have, instead of tucking items away in a closet or stacked among dozens of other things. These are the select, meaningful items worth having in your personal space.
9. Prevent new collections from forming.
Instead of material gifts, ask people to spoil you by sharing time, enjoying new experiences, and helping you indulge in luxuries (spa certificates, imported chocolate, a musical or other theatre production, gift certificates for dinner out, etc.). In other words, ask for special treats that you love and want, but don’t always buy for yourself.
10. Use age to your advantage.
Now is a great time to give items to family members that you eventually want them to have. Take a photo (preferably a digital one) of your recipients holding their treasured gifts and create a scrapbook of “next generation” memories. These images can serve as powerful reminders of your most cherished items moving forward into posterity with the most special people in your life.
It takes time once you decide you want to start making the steps for a move. The average time frame I work with Senior sellers that have decided to move is a few months to a few years. I had one couple that I worked with for 3 years! They had been in their home for 32 years. Raised their kids and finally decided it was time to move into a ground floor condo with no steps and then go see the world. It takes time to navigate and sometimes many meetings to help them make decisions and keep them on their path. I helped with so many referrals and even some of the heavy lifting before we did the heavy selling. 🙂
Want more information on what a SRES can do for you? Visit the consumer site to learn about the value of working with a SRES and content with topics to assist you like Senior housing options, adapting your existing home and more.