Sellers, Take Note: A/C, Kitchens, And Energy Efficiency Top Criteria For Buyers

When you’re getting ready to list your home, you want to make sure any changes or renovations are going to give you a return on your investment by making your home more appealing to potential buyers. But what, exactly, are the things buyers are looking for?

According to Zillow’s 2017 Consumer Housing Trends Report, there are a few clear winners when it comes to upgrading your home to make it more appealing to sellers. According to the report, 62% of buyers require a home has air conditioning before they make a purchase. And while the perfect kitchen and an energy efficient home aren’t exactly “needs” for most buyers, they do rank high on their list of “wants” (at 48% for both).

The Takeaway

If you’re thinking about making changes to your home in order to generate more interest from buyers, your money would be best spent installing central air. Improving your kitchen and making your home more energy efficient come in a close second.

First time Home Buyers checklist

Buying a first home is one of the most exciting times in a person’s life. But it’s also a huge decision and it can be overwhelming for potential homeowners who don’t know the steps to take to get them from “thinking about buying a first home” to “time to move in”.

Here’s a first timer’s checklist for purchasing property to help homeowners manage the buying process for the first time:

Finances

Before homeowners start thinking about purchasing a home, it’s important to take a look at finances.

Pay Down Debt

The first thing that potential homeowners will want to do before looking for homes is to pay down any outstanding debt, especially credit card debt. Credit card debt typically has a high interest rate and paying down large balances can be a drain on finances. Credit card debt also has a big impact on credit scores, which will directly affect the interest rates homeowners will secure on their home loans.

It can be a challenge, but paying down high-interest debt before purchasing a home is the best long-term strategy for potential homeowners.

Know The Numbers and Gather Documentation

It’s also important for homeowners to have a solid understanding of their financial history before they apply for loans and looking for homes.

It’s important that homeowners know their credit score, and the credit score of their spouse, partner or co-purchaser. They should also plan to review their credit reports to look for any errors or discrepancies; even minor dings on a credit report can cause higher interest rates on a mortgage.

Potential buyers will also want to gather the documentation they’ll need when applying for a mortgage. This includes copies of credit reports, paycheck stubs, copies of federal tax returns and documentation outlining any student loan or credit card debt.

Rework Budgets

There’s no way around it – owning a home is an expensive endeavor. In order to purchase a home that won’t put them under financial strain, homeowners need to take a close look at their budgets and figure out how much house they can afford.

Homeowners should track their expenses, see where they can cut expenses and then figure out a realistic and comfortable home budget. It’s also important to factor in all home-related expenses when creating a budget. Obviously, there will be a mortgage payment, but homeowners should also factor in things like property tax, any HOA fees and utilities.

Determine Mortgage

Once a budget has been decided, it’s time to determine what type of mortgage will be the best fit. Most homeowners elect for a 30-year mortgage, but there are shorter term mortgages available (like 15-year mortgages), which typically carry lower interest rates.

Homeowners should also determine whether they’ll be applying for a fixed rate or an adjustable rate mortgage. While adjustable rate mortgages can save money on the front end, they can cause higher payments down the line should interest rates increased. Fixed rate mortgages guarantee a fixed interest rate throughout the life of the loan, which offers homeowners security in knowing their mortgage payment won’t change.

Homeowners should speak with a mortgage specialist to determine the best fit for them and get pre-approved for a mortgage before beginning the home buying process.

Choose An Agent

Choosing the right agent is essential for first time home buyers. The process of purchasing a home can be overwhelming, and having the right agent can help homeowners navigate through this new territory relatively stress-free and find the home of their dreams.

When choosing an agent, homeowners should consider:

Does this agent have experience working with first time buyers?

Ideally, potential homeowners will want to work with an agent who has experience working with first time buyers. First timers typically have a lot of questions and, having never been through it before, need additional support, guidance and reassurance throughout the buying process.

A real estate agent who has worked with several first time buyers will expect these additional questions and concerns and will make room in their schedule to accommodate it.

Does this agent specialize in the desired market?

First time and seasoned buyers alike should always work with an agent who specializes in their desired market. Every area is different and working with an agent who understands the ins and outs of an area gives buyers an advantage over the competition.

Start Looking At Properties

Once an agent is in place, the fun can begin: it’s time to look at properties. Before homeowners look at properties, they should set clear expectations with their agent about what they’re looking for, share their “must haves” and their “nice to haves” and let the agent know any potential deal breakers.

Many first timers wonder how many properties they should view before making a decision. And again, there’s no magic number. Some homeowners may jump on the first property they see, and some may view 100 before finding a home that feels true to what they’re looking for.

When viewing homes, homeowners should consider whether the property is a place they could see themselves comfortably and happily living for the foreseeable future. Other considerations include:

  • How much work will need to be done on the home before it’s move in ready?
  • What will be the cost of necessary repairs and renovations?
  • How is the neighborhood? Does it feel safe?
  • If children will be living in the home, how is the school system?
  • Is the area noisy?
  • Does the property feel private? If not, is that something that’s manageable?

There’s no formula to follow for finding the right house as a first time home buyer. But following this checklist will get homeowners a few steps closer to finding their dream home.

Don’t forget to request your free copy of my Ultimate Home Buyers Guide as well

How Selling Your House Is Like Making Lasagna

How many layers are there in a lasagna?

There’s no right or wrong answer to that. Other than, “more than one” probably. Even two is pretty skimpy.

So, let’s say three is minimal for argument sake. (But, four or more is better.)

The number of layers probably just boils down to using up all the lasagna noodles and sauce you have, or getting to the top of the pan you have to use. No exact amount. Use what you’ve got.

But, if all you’ve got won’t stretch to make three layers in the size pan you have, perhaps you should use a smaller pan. At least have the three layers.

This isn’t a lasagna lesson.

You could say that it doesn’t really matter how many layers there are, as long as it tastes good.

And, there really isn’t any rule that you can’t have a one or two layer lasagna. So, you’d be “right”.

It just wouldn’t look exactly right. Not a big deal. It’s lasagna.

But, this article isn’t really about lasagna, it’s about real estate. Specifically, the critical “layers” you need to have when you list your house for sale.

Like we were talking about above with lasagna, for the sake of argument, you definitely need three layers. More would be better.

So, let’s look at the three most important layers when listing your home for sale.

The 3 layers

The three “layers” you need to have when you list your home for sale are:

1- Price
2- Exposure
3- Ease of access

Price

The price of your home is the first, and most critical layer when you are listing your home. If you don’t nail the pricing, the next two layers won’t matter a whole lot.

It won’t matter how much exposure your home has if the price isn’t in line with the market. Buyers have a good handle on values, and they won’t waste their time looking at a house if the price is way out of whack.

There’s certainly a little room to be on the “high” side. You don’t need to “give your house away”. But, you really need to be priced well against the current competition, and justifiable against similar homes to yours which have recently sold.

Exposure

Exposure has gotten easier over the years because of the Internet. But the easiest way to ensure you reach every single buyer in the market is to make sure you’re on the local multiple listing service (MLS).

Beyond that, you want to make sure your listing “populates” or “syndicates” to all of the real estate sites out there. Again, the easiest way to do this is typically to list your home on the local MLS. Most agents have a system that then allows your listing to be picked up by more real estate websites than you can imagine.

Beyond that, it doesn’t hurt to have some other exposure in terms of marketing. This will vary from agent to agent, and company to company.

But the bottom line is this — your home needs to be easily found. And since most buyers are actively looking online, make sure it’s on there as “everywhere” as possible.

Ease of access

Your home needs to be easy for buyers to come and see.

Sounds simple enough…

You want your home sold, so of course you figure you’ll make it easy to come and see.

But not everyone does. More people than you can imagine make real estate agents and buyers jump through hoops to schedule a showing.

Saying no to a showing, or trying to corral every showing into a tight window of time during the week is going to hurt you.

So, just make sure you keep your house ready to show at any given moment, and say yes to any request to come see the house. (Within reason, of course…)

If you just do all three of those things, you’re in pretty good shape to get your home sold for as much as the market will bear, in as short a time as possible.

But, it won’t necessarily be as good as it could be if you were to add just a few more layers to your “listing lasagna”.

The “extra” layers.

While the first three layers are more or less non-negotiable, and will most likely get you as close to the highest offer as possible, as quickly as possible, you may want to consider these extra layers.

Adding these into your mix will increase your chances of getting the highest and best offer possible, as quickly as possible.

1- Hiring an agent who knows and understands the market.
2- Hiring an agent who is a strong advisor.
3- Hiring an agent who can negotiate.
4- Hiring an agent who keeps things together.

Knows and understands the market

It’s easy enough to hire a real estate agent. There’s plenty of them. But, you should really make sure to hire one who truly knows and understands your local real estate market.

You want one who can analyze the activity on your house, and the overall market, so that the agent can…

Advise you

There’s a lot of talk about selling homes “as quickly as possible”. The key words there are “as possible”.

Sure, you and your agent want your home to sell, and sell quickly. But “quickly” depends on the market. And you want an agent on your side who, after analyzing the market and activity, can advise you on what to do…

Should you stay firm on your price and just be patient?

Should you lower your price? If so, how much?

Is there something you can change about your house that buyers are getting hung up on? If so, is it worth doing, or will the cost be too much for it to make sense?

There’s way more than that to list, but those are just a few examples of advice your agent should be relied upon for, and be able to provide to you.

Negotiate

This is another thing that gets a lot of lip service. But an agent who negotiates well is a huge asset.

Sure, you want one that will negotiate a “win-win” enough to make a deal come together. But, you really want one that gets you the fatter end of the win. And that isn’t always just about price.

A good negotiator will get you the best price and terms.

And, more importantly, it’s important to have an agent who will…

Keep the deal together

There’s a lot of time, and a lot of things that can lead to a deal falling apart between signing the deal and a closing.

Things go wrong. People get cold feet. Buyers get greedy and ask for credits and repairs, or threaten to bale on the whole deal. Appraisers throw their opinion into the mix.

Again, just to name a few examples… but there are so many things that can make a deal fall apart.

Having a strong agent on your side, who can almost predict and nip problems in the bud before things get out of control, is a huge layer to add to your listing lasagna. And, if things do get dicey, you want an agent who can wrangle it all in and get things back on track.

Looks can be deceiving.

People often look at selling a house as pretty simple. And the truth is, it is pretty simple…in terms of the first three layers.

But that doesn’t necessarily make the best “lasagna” possible. It might look OK enough to be called lasagna, but it’s not gonna be quite as tasty as it could be, if you take enough care to add the next four layers.

What do real estate and Independence Day have in common?

Fourth of July and real estate
Fourth of July and real estate

What’s the first thing you think of when you think 4th of July?

Probably fireworks, right?

Okay, maybe you think about barbeques, pool parties, or parades first.

The point is, the first thought for most people isn’t about the nitty-gritty that we’re actually celebrating — our independence as a nation.

Deep down, we all know that’s what it’s all about. And we respect it. But, we’re also human. Who can blame us for enjoying our freedom watching fireworks, without giving all that much thought about everything our founding fathers did to get us here?

So it is in real estate…

There’s a lot of focus on the “fireworks” in real estate. The big, glorious, flashy, exciting moments. Like…

The moment your house first hits the market.
Seeing the pictures of your house all over the Internet.
Throngs of people walking through your first open house.
Receiving offers from buyers…maybe even multiple offers.
Going under contract.
Walking into “the” house, and falling in love with it.
Making an offer on the house you love, and having it accepted.
Closing on the sale or purchase of your home.

All really exciting “firework” moments.

But they’re not the full story. There’s a lot of stuff behind the scenes in order to get to those fun, celebratory moments. A lot of thought, knowledge, skill, and work… Not necessarily fun, or sexy stuff. But it’s all important. It’s all necessary to get to those exciting “fireworks” moments.

Not that the behind the scenes stuff should be something you think about. As a consumer, you should enjoy the glorious moments. Leave the nitty-gritty to your agent.

Just know that there’s more to it than the “fireworks” you want to see when you buy or sell a house.