Article from Real Estate Buyer's Councel Newsletter:
Tighter Lending Standards Good For Housing, But Will Dampen Sales
WASHINGTON, April 11, 2007 -
Tighter lending criteria and fallout from the subprime loan debacle will lead to a healthier housing market with greater assurance that owners can handle mortgage adjustments, but higher loan standards will slow the housing recovery, according to the latest forecast by the National Association of Realtors®.
David Lereah, NAR’s chief economist, said the changes are necessary for the long-term health of the housing market. “We want to people to be able to stay in their homes with mortgage terms they understand and can handle,” he said. “Simply stated, a loan with the lowest monthly payment probably isn’t in your best interests – borrowers need to understand worst-case scenarios. If you’re in a mortgage you aren’t comfortable with, now is an excellent time to refinance, if you can, with historically low rates on safer conventional loans.”
Last week, Freddie Mac reported the 30-year fixed-rate mortgage was 6.17 percent. The 30-year fixed rate should rise slowly to 6.6 percent by the end of this year, so borrowers who need to refinance should act soon.
“Tighter lending standards will dampen home sales a bit, but by less than a couple of percentage points from initial projections. We still forecast 2007 to be the fourth highest year on record for existing-home sales, and housing remains a great long-term investment,” Lereah said.
Existing-home sales are likely to total 6.34 million in 2007 and 6.52 million next year, in contrast with 6.48 million in 2006. New-home sales are seen at 904,000 this year and 935,000 in 2008, below the 1.05 million last year. Housing starts are estimated at 1.47 million in 2007 and 1.55 million next year, down from 1.80 million units in 2006.
“As home sales moderate, overall home prices will be essentially flat this year,” Lereah said. “The good news is that inventories remain well below the levels experienced during the last housing downturn in the early 1990s, and supplies are close to balance in many areas.”
The national median existing-home price will probably slip 0.7 percent to $220,300 in 2007, following a 1.0 percent rise last year. The median new-home price is projected to increase 0.4 percent to $246,200 this year, after gaining 1.8 percent in 2006. Modest growth is expected next year, with existing-home prices increasing 1.6 percent and new-home prices rising 2.0 percent.
“When you look at housing activity in 2007, especially during the first half of this year, the percentage change in median home price is being distorted as the composition of sales shifts geographically from high-cost markets to moderately priced areas, in contrast with the sales distribution a year earlier,” Lereah said. “Within given markets, most areas can expect minor price gains.”
The unemployment rate should average 4.6 percent in 2007, the same as last year. Inflation, as measured by the Consumer Price Index, is likely to decline to 2.1 percent this year, compared with 3.2 percent in 2006, while growth in the U.S. gross domestic product is forecast at 2.3 percent in 2007, down from 3.3 percent last year. Inflation-adjusted disposable personal income will probably rise 3.1 percent this year, up from a gain of 2.6 percent in 2006.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries. # # #
Existing-home sales for March will be released April 24; the Pending Home Sales Index is scheduled for May 1 and the next forecast will be May 8.
NAR at a Glance
Saturday, April 14, 2007
Thursday, April 5, 2007
Positioning Yourself for a Successful Sales Call
by Tom Ninness
You finally got the opportunity to meet with a top Realtor. You share all of the different loan programs you have available, the great staff you have, and that you are committed to excellence. You mention that you are available to do pre-qualifications over the weekends and you'll do finance flyers for the agent's open house. You pull out some of the open house flyers that you've done for some of the other agents and the agent is impressed. The meeting goes well. You leave some of the flyers and your card and promise to follow up with the agent the next week.
The next week you leave a message, then another message a couple of days later, then one on Friday to remind the agent the agent that you are available that weekend if any needs come up. After attempting another couple of times to get a hold of the agent, the agent finally calls you and says that they are happy with the current lender that they are working with and if anything changes, they will call you. What just happened?
Three's a Crowd
There are three people involved when it comes to a sales call: the prospect, yourself and the current lending provider. The power is with the current provider as he is already on the pedestal and no two objects can occupy the same space.
When we make a sales call, we can compete against price, product and service. Service has the greatest potential to differentiate yourself from your competition. The fact is: Most prospects are being underserved and your goal is to see where those areas are. The one currently in the top position tends to just sit on his pedestal with little reason to be proactive in doing more for their clients.
Where is the pain?
People are motivated by either pain or pleasure? Believe it: Most people are motivated by pain . A successful sales call's mission is to get the prospect to feel dissatisfied with their current provider and want to work with you.
By asking the right questions, I have agents admitting to me: "I never see my loan officer", "It takes awhile to get my calls returned", "I've had issues with the good faith estimate being higher and that's embarrassing", "They get me the closing figures at the last minute", and "They never give me ideas that would help my business". These are areas of service where you can stand out.
Finding Your Winning Differences
For you to become successful, you need information, knowledge and intelligence. You need to know as much as you can about all three parties involved to have a successful sales call.
When I get the opportunity to meet with a top Realtor, I do plenty of reconnaissance. If I know some of the other agents in the office, I'll ask them if they know the current loan officer servicing this agent. I also learn as much as I can about the loan officer and the company that they work for. If I don't know any agents in the office, I'll call some of the title companies in the area and see what they know about the agent and who is the current provider. Going to the agent's website will give you some additional knowledge. It's important that you understand the following:
Your strengths versus your competition's strength - you will tie or lose.
Your weaknesses versus your competitions strength - you will lose.
Your strengths versus your competitions weaknesses - YOU WIN!!
The Perfect Sales Call
Building Rapport
You start by building rapport. There is a sequence in a relationship. You have to get to know the person, from this you can learn to like the person and eventually earn the trust of the person. I usually will ask if the agent is a native to Colorado since most of us came from somewhere else. How did they get into real estate? I never talk about rates and products, as there are some products that I don't have and maybe the current loan officer prices his loans skinnier than I do. Find the common ground to begin building the relationship.
Finding the Pain
You need to get the prospect to see where they are being underserved. By raising the prospect's expectations above their current level of service, you will create the pain. A question you could ask would be, "Let me ask you a question, what is the biggest challenge in your business today?" Later, in the conversation you could ask, "When it comes to the loan officers that you work with, what are some of the short comings you see in happening in the service that they provide?"
Educate versus Selling
From Tim Sander's great book, "Love is a Killer App", Tim emphasizes that we need to give knowledge with compassion or, as I like to say it, "with no strings attached". We also have to pass the test of comfort and credibility. I like to share stories of others who are experiencing the same kind of pain in their industry. By sharing stories, the prospect will learn that you have something that the current service provider does not have.
After listening to the prospect, and sharing what we do to combat the areas that the prospect shares what their challenges are, I'll bait the prospect with a take-away. A take-away is like waving a Frisbee in front of my Australian Cattle Dog and then putting it away. They want what you have. I can say after making a point, "Well, perhaps this is not really important to you." Guess what, it is important! This technique will create a "Self-Discovery" with the prospect and they know that their pain could be eased and that pain reliever is right in front of them.
Proposing a Remedy
All good sales people know when the momentum has switched over to them. It's time to go for the win. Asking questions, such as: "What would you like to happen next?" or "When do you want to get started?" are two great questions. One agent actually said to me when I asked this question, "I don't know what I'm going to say to my current loan officer. Would you mind calling and telling him that I'm switching over to you?" I was giving myself a "high five" when this occurred. You need to have a plan in place before you leave or at least an appointment with the agent no later than 48 hours from your initial meeting. You need to keep the fire burning with the prospect.
Final Thought
To stay on top of the pedestal, you must deliver what you promise. The agent needs to see and communicate with you frequently at the beginning. This is a brand new relationship and it will take time for both of you to learn how you do your business and what your systems are.
I have been knocked off the pedestal from time to time and it doesn't feel good. If this has happened to you, consider it a learning experience and don't let this happen again. Keep bringing superior service to your agents. Stay in front of them and communicate often. I make it a point to meet face-to-face with my top agents a minimum of once a month. I'm always looking for ways to increase their business with ideas. Get in the habit of asking what "pain" are they experiencing in their business currently and see how you can ease the challenges they are currently experience.
Remember, the more information, knowledge and intelligence you know about the prospect and the current service provider, the better chance for success. Never bad- mouth your competition, as the prospect will get defensive. It was them who decided to work with the current provider and it will make them feel that they didn't make a good choice. Let the prospect make the self-discovery on their own. Finally, if you start pushing the prospect to make a decision when they are not ready, they will push back and you will lose. Sometimes, the relationship is too entrenched to get the current service provider off of the pedestal the first time. Keep the momentum going by setting up that next appointment.
You finally got the opportunity to meet with a top Realtor. You share all of the different loan programs you have available, the great staff you have, and that you are committed to excellence. You mention that you are available to do pre-qualifications over the weekends and you'll do finance flyers for the agent's open house. You pull out some of the open house flyers that you've done for some of the other agents and the agent is impressed. The meeting goes well. You leave some of the flyers and your card and promise to follow up with the agent the next week.
The next week you leave a message, then another message a couple of days later, then one on Friday to remind the agent the agent that you are available that weekend if any needs come up. After attempting another couple of times to get a hold of the agent, the agent finally calls you and says that they are happy with the current lender that they are working with and if anything changes, they will call you. What just happened?
Three's a Crowd
There are three people involved when it comes to a sales call: the prospect, yourself and the current lending provider. The power is with the current provider as he is already on the pedestal and no two objects can occupy the same space.
When we make a sales call, we can compete against price, product and service. Service has the greatest potential to differentiate yourself from your competition. The fact is: Most prospects are being underserved and your goal is to see where those areas are. The one currently in the top position tends to just sit on his pedestal with little reason to be proactive in doing more for their clients.
Where is the pain?
People are motivated by either pain or pleasure? Believe it: Most people are motivated by pain . A successful sales call's mission is to get the prospect to feel dissatisfied with their current provider and want to work with you.
By asking the right questions, I have agents admitting to me: "I never see my loan officer", "It takes awhile to get my calls returned", "I've had issues with the good faith estimate being higher and that's embarrassing", "They get me the closing figures at the last minute", and "They never give me ideas that would help my business". These are areas of service where you can stand out.
Finding Your Winning Differences
For you to become successful, you need information, knowledge and intelligence. You need to know as much as you can about all three parties involved to have a successful sales call.
When I get the opportunity to meet with a top Realtor, I do plenty of reconnaissance. If I know some of the other agents in the office, I'll ask them if they know the current loan officer servicing this agent. I also learn as much as I can about the loan officer and the company that they work for. If I don't know any agents in the office, I'll call some of the title companies in the area and see what they know about the agent and who is the current provider. Going to the agent's website will give you some additional knowledge. It's important that you understand the following:
Your strengths versus your competition's strength - you will tie or lose.
Your weaknesses versus your competitions strength - you will lose.
Your strengths versus your competitions weaknesses - YOU WIN!!
The Perfect Sales Call
Building Rapport
You start by building rapport. There is a sequence in a relationship. You have to get to know the person, from this you can learn to like the person and eventually earn the trust of the person. I usually will ask if the agent is a native to Colorado since most of us came from somewhere else. How did they get into real estate? I never talk about rates and products, as there are some products that I don't have and maybe the current loan officer prices his loans skinnier than I do. Find the common ground to begin building the relationship.
Finding the Pain
You need to get the prospect to see where they are being underserved. By raising the prospect's expectations above their current level of service, you will create the pain. A question you could ask would be, "Let me ask you a question, what is the biggest challenge in your business today?" Later, in the conversation you could ask, "When it comes to the loan officers that you work with, what are some of the short comings you see in happening in the service that they provide?"
Educate versus Selling
From Tim Sander's great book, "Love is a Killer App", Tim emphasizes that we need to give knowledge with compassion or, as I like to say it, "with no strings attached". We also have to pass the test of comfort and credibility. I like to share stories of others who are experiencing the same kind of pain in their industry. By sharing stories, the prospect will learn that you have something that the current service provider does not have.
After listening to the prospect, and sharing what we do to combat the areas that the prospect shares what their challenges are, I'll bait the prospect with a take-away. A take-away is like waving a Frisbee in front of my Australian Cattle Dog and then putting it away. They want what you have. I can say after making a point, "Well, perhaps this is not really important to you." Guess what, it is important! This technique will create a "Self-Discovery" with the prospect and they know that their pain could be eased and that pain reliever is right in front of them.
Proposing a Remedy
All good sales people know when the momentum has switched over to them. It's time to go for the win. Asking questions, such as: "What would you like to happen next?" or "When do you want to get started?" are two great questions. One agent actually said to me when I asked this question, "I don't know what I'm going to say to my current loan officer. Would you mind calling and telling him that I'm switching over to you?" I was giving myself a "high five" when this occurred. You need to have a plan in place before you leave or at least an appointment with the agent no later than 48 hours from your initial meeting. You need to keep the fire burning with the prospect.
Final Thought
To stay on top of the pedestal, you must deliver what you promise. The agent needs to see and communicate with you frequently at the beginning. This is a brand new relationship and it will take time for both of you to learn how you do your business and what your systems are.
I have been knocked off the pedestal from time to time and it doesn't feel good. If this has happened to you, consider it a learning experience and don't let this happen again. Keep bringing superior service to your agents. Stay in front of them and communicate often. I make it a point to meet face-to-face with my top agents a minimum of once a month. I'm always looking for ways to increase their business with ideas. Get in the habit of asking what "pain" are they experiencing in their business currently and see how you can ease the challenges they are currently experience.
Remember, the more information, knowledge and intelligence you know about the prospect and the current service provider, the better chance for success. Never bad- mouth your competition, as the prospect will get defensive. It was them who decided to work with the current provider and it will make them feel that they didn't make a good choice. Let the prospect make the self-discovery on their own. Finally, if you start pushing the prospect to make a decision when they are not ready, they will push back and you will lose. Sometimes, the relationship is too entrenched to get the current service provider off of the pedestal the first time. Keep the momentum going by setting up that next appointment.
7 Tips to Radically Update Your Home (And Not Lose Money!!!)
by Eric Bramlett
Everyone loves to update their homes, and if you live in an older home in an appreciating neighborhood, it can be a fantastic investment. There are some pitfalls to avoid, which can cost a homeowner quite a bit of money because of no return on investment. However, it's better to focus on what TO do and stay the course.
1. Raise the Roof!!!
Not literally, but gut the attic, and raise the ceiling in, at least, the living room. Older homes typically have 8 foot ceilings, and it's one of the first characteristics that buyers notice. It's relatively inexpensive, when you compare your return on investment, to demolish the ceilings of your older home and sheetrock over your new, vaulted ceiling. It's amazing how much larger and lighter your home will feel.
2. Knock Down Walls
Literally, knock down as many walls as you can and still retain the integrity of the home, and the NECESSARY separation of rooms. If you compare older homes to newer homes, you'll notice that older homes are typically "choppy" while newer homes feel "open and flow well." This is due to "line of sight." Newer homes opt for less separation in rooms. You can create this same feeling by demolishing a half-wall that separates your kitchen from the living room or knocking down the wall between the living room and dining room to create one grand room. You'll be AMAZED at the difference it makes.
3. Overhaul Your Kitchen and/or Master Bathroom
These are the two rooms in the house that you can ALMOST go overboard and still get your money back when you sell the home. Refinish or replace the cabinetry, put in new tile and sinks - even install a new, stand-up shower! When (or if) you put your home on the market, you should see a GREAT return on investment.
4. Add a Master Bathroom
The 1-Bathroom houses from the 1970's and earlier are now obsolete. Americans have decided that we like a private bathroom for ourselves and another bathroom for our guests and children. While 90% of the house additions are bad ideas because they don't flow well or create poorly usable space, a master bathroom addition is a fantastic way to add more square footage, and more value to your home. Make SURE that your builder ties in the new slab to the old, and make sure that the addition is done properly. A poorly designed or executed addition never adds value - most buyers immediately imagine demolishing the work.
5. Xeriscape Your Lawn
It's trendy, it's cheap - it should be a go! Your homes curb appeal is the first thing that buyers notice, and it's how buyers decide whether or not they'll "click on your house" online to further investigate the interior. You can xeriscape a ¼ acre lot for around $3000, and you'll more than make up for that when your home goes on the market. Furthermore, it's environmentally & fiscally responsible. Stop wasting water!
6. Paint!!!
It's fairly obvious, but painting your home modern, neutral colors makes a HUGE difference in the appearance of the home. And when you factor in the cost - roughly $0.75/s.f. - it would be a HUGE mistake to forego painting your home when you decide it's time to modernize it. If you're planning on staying in the home for some time, paint it whatever colors you wish, but plan on repainting right before it's time to put it up for sale. If you plan on updating your home in order to sell it, go with neutral colors so that it will appeal to the widest audience.
7. Put in Wood Floors
You won't ALWAYS get your money out of installing wood floors. If you're in a great area, and it's time to replace the floors, look at the cost difference between tile, pergo, and wood. If your home will sell for $250k+ then forget about pergo and, if you choose tile, make sure it's not cheap tile. If the cost difference between wood and your other options is negligible, then go with wood - it appeals to the most buyers.
Updating your older home can be very fun, very rewarding, and potentially very lucrative. Older homes in established neighborhoods are ripe for updating and can draw a premium on the marketplace. Make sure and follow these guidelines, and you should see a great return on your investment.
Everyone loves to update their homes, and if you live in an older home in an appreciating neighborhood, it can be a fantastic investment. There are some pitfalls to avoid, which can cost a homeowner quite a bit of money because of no return on investment. However, it's better to focus on what TO do and stay the course.
1. Raise the Roof!!!
Not literally, but gut the attic, and raise the ceiling in, at least, the living room. Older homes typically have 8 foot ceilings, and it's one of the first characteristics that buyers notice. It's relatively inexpensive, when you compare your return on investment, to demolish the ceilings of your older home and sheetrock over your new, vaulted ceiling. It's amazing how much larger and lighter your home will feel.
2. Knock Down Walls
Literally, knock down as many walls as you can and still retain the integrity of the home, and the NECESSARY separation of rooms. If you compare older homes to newer homes, you'll notice that older homes are typically "choppy" while newer homes feel "open and flow well." This is due to "line of sight." Newer homes opt for less separation in rooms. You can create this same feeling by demolishing a half-wall that separates your kitchen from the living room or knocking down the wall between the living room and dining room to create one grand room. You'll be AMAZED at the difference it makes.
3. Overhaul Your Kitchen and/or Master Bathroom
These are the two rooms in the house that you can ALMOST go overboard and still get your money back when you sell the home. Refinish or replace the cabinetry, put in new tile and sinks - even install a new, stand-up shower! When (or if) you put your home on the market, you should see a GREAT return on investment.
4. Add a Master Bathroom
The 1-Bathroom houses from the 1970's and earlier are now obsolete. Americans have decided that we like a private bathroom for ourselves and another bathroom for our guests and children. While 90% of the house additions are bad ideas because they don't flow well or create poorly usable space, a master bathroom addition is a fantastic way to add more square footage, and more value to your home. Make SURE that your builder ties in the new slab to the old, and make sure that the addition is done properly. A poorly designed or executed addition never adds value - most buyers immediately imagine demolishing the work.
5. Xeriscape Your Lawn
It's trendy, it's cheap - it should be a go! Your homes curb appeal is the first thing that buyers notice, and it's how buyers decide whether or not they'll "click on your house" online to further investigate the interior. You can xeriscape a ¼ acre lot for around $3000, and you'll more than make up for that when your home goes on the market. Furthermore, it's environmentally & fiscally responsible. Stop wasting water!
6. Paint!!!
It's fairly obvious, but painting your home modern, neutral colors makes a HUGE difference in the appearance of the home. And when you factor in the cost - roughly $0.75/s.f. - it would be a HUGE mistake to forego painting your home when you decide it's time to modernize it. If you're planning on staying in the home for some time, paint it whatever colors you wish, but plan on repainting right before it's time to put it up for sale. If you plan on updating your home in order to sell it, go with neutral colors so that it will appeal to the widest audience.
7. Put in Wood Floors
You won't ALWAYS get your money out of installing wood floors. If you're in a great area, and it's time to replace the floors, look at the cost difference between tile, pergo, and wood. If your home will sell for $250k+ then forget about pergo and, if you choose tile, make sure it's not cheap tile. If the cost difference between wood and your other options is negligible, then go with wood - it appeals to the most buyers.
Updating your older home can be very fun, very rewarding, and potentially very lucrative. Older homes in established neighborhoods are ripe for updating and can draw a premium on the marketplace. Make sure and follow these guidelines, and you should see a great return on your investment.
Tuesday, March 27, 2007
Green building's surprising energy savings
By Katherine Salant
"Use common sense to make sense.
"It sounds like Ben Franklin, but the speaker in this case is David Johnston, a green-building consultant in Boulder, Colo. His Ben Franklin-sounding aphorism, he said in a recent interview, has proved to be a useful, shorthand way of explaining sustainable green-building principles and practices.
Although these have been embraced by more and more home builders, there is still much confusion among the general public as to what exactly makes a house green. One way to keep things straight, Johnston said, is simply to remember to "use common sense to make sense."
For example, Johnston is regularly asked if a green house is one that is petroleum-product-free. His common sense answer: "If you eliminate everything that contains petroleum, you can't enjoy the accoutrements of a 21st century lifestyle." All the heating and cooling equipment and standard appliances contain plastic, he pointed out, adding that "even something as basic as a toilet has plastic parts.
"The make-sense part of green building, Johnston went on to say, has to make sense both environmentally and economically. For example, building materials that have recycled content are generally considered to be a plus because recycling can significantly reduce both the volume of the waste stream and pressure on overflowing landfills.
But, speaking like the hard-headed home builder that he once was, Johnston said you shouldn't select a product solely on this basis. A product with recycled content may be much more costly than the conventional product it is intended to replace, and it may not perform any better.
Materials have to make sense from a health perspective as well, Johnston said. Many building materials are made with unstable, volatile organic compounds, called VOCs. They can off gas into the air for weeks and sometimes years after they are installed in your house. Of the hundreds of VOCs that have been identified, the one that concerns most people is formaldehyde, a potent eye and nose irritant that can cause respiratory problems. It has been classified by the World Health Organization as a confirmed human carcinogen. You can easily avoid it by using one of the many building products now available with low or no VOC content, Johnston said. Though the non-VOC products often cost more, this is one instance where a higher cost is worth it, he added.
Segueing from materials to other aspects of green-home builders Johnston talked about household energy use. His common sense rule: Use as little as possible. His common sense reason: to save money and the planet. If you use less energy, you'll save money on your utility bills. You'll save even more as the price of natural gas, fuel oil and electricity inevitably goes up.
If you use less energy you'll help save the planet because you will be reducing the greenhouse gas emssions associated with your house. Unbeknownst to most homeowners, buildings are the largest source of the greenhouse gas emissions that are causing global warming. In the United States, half of building-related emissions are from houses.
Johnston feels that energy issues are so important, he urges homeowners to put them front and center in the design of any new house -- "from the first sketch of a floor plan to the final dotting your I's and crossing your T's."But, Johnston hastened to say, energy savings should not come at the cost of having a great-looking house with lots of windows and great views. The trick is to get all this and save energy.Johnston's common sense strategy for supplying household energy needs: Use what's free before using what you have to pay for. That is, tap as much free solar energy as you can for your heating and lighting needs before turning to conventional solutions.
To do this, you really do have to think about energy from the start because the feasibility of passive solar solutions depends on how you place your house on your building site, the first step in any building project. To capture the sun's rays for heating your house during the winter, your living areas must be oriented to the south. You can keep the same spaces cool in the summer by adding overhangs. With some additional refinements to the overhangs, the sun can also supply your lighting needs during the day. To maximize the benefit of passive solar heating and cooling, you need to carefully tailor your building envelope to reduce heat loss or heat gain through the walls and roof. This generally requires adding insulation to the walls, attic and basement in amounts far above code requirements and upgrading windows to get ones with a low-emission coating that helps to keep the heat inside during winter and outside in summer.
Unless you live in Hawaii or Santa Barbara, Calif., where passive solar strategies can supply all your heating and cooling needs, you'll still need a furnace for those cold days when the sun's heat is not enough to keep you comfortable. But with your upgraded building envelope, you can use a smaller furnace and air conditioning condenser, and that is a cost savings, Johnston said.
You'll also need electric lights for nighttime use and cloudy days. Surprisingly, lighting accounts for about 12 percent of household energy use in the average household. Solar daylighting shaves part of this, but you can shave it further with compact fluorescent bulbs, commonly called CFLs, Johnston said. They use about 75 percent less energy to produce the same amount of light as an incandescent bulb, and they last six to eight times as long. CFLs can be screwed into almost any conventional light socket and their color correction has vastly improved in recent years.
The other part of the home energy puzzle that green building can affect is the sizeable energy draw for hot water. The luxury of having 40 to 50 gallons available 24/7 consumes another 12 percent of household energy use. But, Johnston said, it's another instance where you can tap free solar energy by installing a solar collector on your roof. For those cloudy days, though, you'll need a backup hot-water heater.
The other 35 percent of the energy that the average household consumes is out of a builder's hands, because it is the "plug loads" that homeowners bring into the house when they move in -- appliances, computers, home-entertainment equipment, and all the other doodads that most households accumulate. The most effective way to reduce this load is to purchase Energy Star products, now available in more than 40 categories.
How does Johnston's "common sense to make sense" work in real time on a real house?
To find out I contacted McStain Neighborhoods, a small production-home-building firm in Boulder that has built sustainable, green houses for more than 40 years. The firm builds about 350 houses a year in the Denver and Boulder markets.
Like all home builders, McStain evaluates everything from a cost-benefit perspective. But, unlike almost all the others in the United States, McStain has a research and development department that carries out in-depth reviews of about 50 new products and building techniques a year. Periodically, the firm builds a test house that incorporates the most promising of these innovations. The test houses are eventually sold, but the firm continues to monitor them for several years afterwards, said McStain marketing head Barr Hall.
Jeff Medanich, who heads up McStain's research efforts, said that much of his work is a balancing act, spending more here but saving more there so that in sum, the cost of an innovation is relatively small.
Medanich offered as an example McStain's current exterior wall construction. Instead of the dimensional wood studs that are used by most home builders (a single piece of wood sawn from a tree log), McStain uses finger jointed studs, which are made up of several smaller pieces of recycled scrap lumber that are glued together. These cost more but their superior quality means that fewer are tossed as unusable -- only about 4 percent compared with 20 percent of the dimensional studs. The cost difference is a wash, but the finger-jointed studs have the added benefit of lowering costs down the line. Because they are straighter, the walls are plumb, and this makes the work of subsequent trades go more smoothly and faster.
"Use common sense to make sense.
"It sounds like Ben Franklin, but the speaker in this case is David Johnston, a green-building consultant in Boulder, Colo. His Ben Franklin-sounding aphorism, he said in a recent interview, has proved to be a useful, shorthand way of explaining sustainable green-building principles and practices.
Although these have been embraced by more and more home builders, there is still much confusion among the general public as to what exactly makes a house green. One way to keep things straight, Johnston said, is simply to remember to "use common sense to make sense."
For example, Johnston is regularly asked if a green house is one that is petroleum-product-free. His common sense answer: "If you eliminate everything that contains petroleum, you can't enjoy the accoutrements of a 21st century lifestyle." All the heating and cooling equipment and standard appliances contain plastic, he pointed out, adding that "even something as basic as a toilet has plastic parts.
"The make-sense part of green building, Johnston went on to say, has to make sense both environmentally and economically. For example, building materials that have recycled content are generally considered to be a plus because recycling can significantly reduce both the volume of the waste stream and pressure on overflowing landfills.
But, speaking like the hard-headed home builder that he once was, Johnston said you shouldn't select a product solely on this basis. A product with recycled content may be much more costly than the conventional product it is intended to replace, and it may not perform any better.
Materials have to make sense from a health perspective as well, Johnston said. Many building materials are made with unstable, volatile organic compounds, called VOCs. They can off gas into the air for weeks and sometimes years after they are installed in your house. Of the hundreds of VOCs that have been identified, the one that concerns most people is formaldehyde, a potent eye and nose irritant that can cause respiratory problems. It has been classified by the World Health Organization as a confirmed human carcinogen. You can easily avoid it by using one of the many building products now available with low or no VOC content, Johnston said. Though the non-VOC products often cost more, this is one instance where a higher cost is worth it, he added.
Segueing from materials to other aspects of green-home builders Johnston talked about household energy use. His common sense rule: Use as little as possible. His common sense reason: to save money and the planet. If you use less energy, you'll save money on your utility bills. You'll save even more as the price of natural gas, fuel oil and electricity inevitably goes up.
If you use less energy you'll help save the planet because you will be reducing the greenhouse gas emssions associated with your house. Unbeknownst to most homeowners, buildings are the largest source of the greenhouse gas emissions that are causing global warming. In the United States, half of building-related emissions are from houses.
Johnston feels that energy issues are so important, he urges homeowners to put them front and center in the design of any new house -- "from the first sketch of a floor plan to the final dotting your I's and crossing your T's."But, Johnston hastened to say, energy savings should not come at the cost of having a great-looking house with lots of windows and great views. The trick is to get all this and save energy.Johnston's common sense strategy for supplying household energy needs: Use what's free before using what you have to pay for. That is, tap as much free solar energy as you can for your heating and lighting needs before turning to conventional solutions.
To do this, you really do have to think about energy from the start because the feasibility of passive solar solutions depends on how you place your house on your building site, the first step in any building project. To capture the sun's rays for heating your house during the winter, your living areas must be oriented to the south. You can keep the same spaces cool in the summer by adding overhangs. With some additional refinements to the overhangs, the sun can also supply your lighting needs during the day. To maximize the benefit of passive solar heating and cooling, you need to carefully tailor your building envelope to reduce heat loss or heat gain through the walls and roof. This generally requires adding insulation to the walls, attic and basement in amounts far above code requirements and upgrading windows to get ones with a low-emission coating that helps to keep the heat inside during winter and outside in summer.
Unless you live in Hawaii or Santa Barbara, Calif., where passive solar strategies can supply all your heating and cooling needs, you'll still need a furnace for those cold days when the sun's heat is not enough to keep you comfortable. But with your upgraded building envelope, you can use a smaller furnace and air conditioning condenser, and that is a cost savings, Johnston said.
You'll also need electric lights for nighttime use and cloudy days. Surprisingly, lighting accounts for about 12 percent of household energy use in the average household. Solar daylighting shaves part of this, but you can shave it further with compact fluorescent bulbs, commonly called CFLs, Johnston said. They use about 75 percent less energy to produce the same amount of light as an incandescent bulb, and they last six to eight times as long. CFLs can be screwed into almost any conventional light socket and their color correction has vastly improved in recent years.
The other part of the home energy puzzle that green building can affect is the sizeable energy draw for hot water. The luxury of having 40 to 50 gallons available 24/7 consumes another 12 percent of household energy use. But, Johnston said, it's another instance where you can tap free solar energy by installing a solar collector on your roof. For those cloudy days, though, you'll need a backup hot-water heater.
The other 35 percent of the energy that the average household consumes is out of a builder's hands, because it is the "plug loads" that homeowners bring into the house when they move in -- appliances, computers, home-entertainment equipment, and all the other doodads that most households accumulate. The most effective way to reduce this load is to purchase Energy Star products, now available in more than 40 categories.
How does Johnston's "common sense to make sense" work in real time on a real house?
To find out I contacted McStain Neighborhoods, a small production-home-building firm in Boulder that has built sustainable, green houses for more than 40 years. The firm builds about 350 houses a year in the Denver and Boulder markets.
Like all home builders, McStain evaluates everything from a cost-benefit perspective. But, unlike almost all the others in the United States, McStain has a research and development department that carries out in-depth reviews of about 50 new products and building techniques a year. Periodically, the firm builds a test house that incorporates the most promising of these innovations. The test houses are eventually sold, but the firm continues to monitor them for several years afterwards, said McStain marketing head Barr Hall.
Jeff Medanich, who heads up McStain's research efforts, said that much of his work is a balancing act, spending more here but saving more there so that in sum, the cost of an innovation is relatively small.
Medanich offered as an example McStain's current exterior wall construction. Instead of the dimensional wood studs that are used by most home builders (a single piece of wood sawn from a tree log), McStain uses finger jointed studs, which are made up of several smaller pieces of recycled scrap lumber that are glued together. These cost more but their superior quality means that fewer are tossed as unusable -- only about 4 percent compared with 20 percent of the dimensional studs. The cost difference is a wash, but the finger-jointed studs have the added benefit of lowering costs down the line. Because they are straighter, the walls are plumb, and this makes the work of subsequent trades go more smoothly and faster.
Friday, March 9, 2007
13 Tips for Selling Your Home in Winter
From MSN.com:
Sure, there are fewer buyers and the skies are gloomy. So warm and brighten up the place; make it look like a refuge from the weather.
By Bankrate.com
What makes selling a home more stressful? Selling it in the middle of winter.
The lawn is brown, the weather is usually bad and, unlike the longer days of summer, you have less time to show it off during daylight hours.
But not everyone has the luxury of waiting until the traditional spring or summer home-buying season to plant that "for sale" sign. And while it's true that in most areas you'll probably have fewer buyers during the winter, you will have less competition from other sellers.
The season makes staging -- the concept of showing your house at its best -- even more important.
Be prepared to put a little effort into it. "It's more difficult to make something look really appealing this time of year," says Ron Phipps, broker with Phipps Realty in Warwick, R.I.
If you do it right, you can really make your house stand out.
1. Keep snow and ice at bay.
The top tip from realtors: If the buyer can't get in easily, the house won't sell. That means keeping walkways and driveways free of the frozen stuff. Just like trimming the lawn in the summer, you want to make the home look like it's been maintained. If you're away frequently or live in an area that's subject to bad weather, it can pay to hire a service to regularly salt or shovel the driveway and sidewalks.
2. Warm it up.
If you're showing during the winter, think "warm, cozy and homey," says Ken Libby, owner of Stowe Realty in Stowe, Vt., and a regional vice president of the National Association of Realtors.
Before a buyer comes through, adjust the thermostat to a warmer temperature to make it welcoming. "Sellers like to turn the temperature down because of heat costs," says David Ledebuhr, president and owner of Musselman Realty in East Lansing, Mich., and a regional vice president of the National Association of Realtors. "But buyers who come in and aren't comfortable won't stay long."
If you have a gas fireplace, turning it on right before the tour can give the house a little ambience, Libby says.
With a wood-burning fireplace, you've got to be a little more careful. If the house is vacant, don't chance it. But if you're still living there and will be there during the tour, it can be a nice touch.
Many times, sellers leave right before the agent and prospective buyers arrive. In that case, adjust the heat to a comfortable temperature and have the hearth set for a fire. Buyers feel the warmth and see the potential, and you don't have to worry about safety concerns.
3. Take advantage of natural light.
"Encourage showing during the high-daylight hours," Ledebuhr says. At this time of year, "if you show after work, you're totally in the dark."
Make the most of the light you do have. Have the curtains and blinds cleaned and open them as wide as possible during daytime showings. Clean all the lamps and built-in fixtures, and replace the bulbs with the highest wattage that they will safely accommodate. Before you show the house, turn on all the lights.
4. Get the windows washed.
"Buyers act on the first impression," Ledebuhr says. Windows are one thing that many sellers don't even consider. In winter, that strong southern light can reveal grime and make it look like the home hasn't been well-maintained.
5. Play music softly in the background.
To create a little atmosphere, tune the radio to the local classical station. Turn it down so that you barely hear it in the background. "It's soothing," says Libby, who finds that soft classical music tends to have the most appeal to buyers. "I think people tend to stay around a little longer and look a little longer."
6. Make it comfortable and cozy.
Set the scene and help the buyers see themselves living happily in this house. Consider things such as putting a warm throw on the sofa or folding back the thick comforter on the bed. Tap into "the simple things this time of year that make you feel like you're home," Phipps says.
7. Emphasize winter positives.
Is your home on a bus route or some other vital service that means it's plowed or de-iced regularly in bad weather? Be sure to mention that to the buyers.
8. Set up timers.
You want your home to look warm and welcoming whenever prospective buyers drive past. But you're not home all the time, so put indoor and outdoor lights on timers, Phipps says.
Look at the outside lighting around the door. Is there enough illumination to make it inviting? If not, either get the fixtures changed or have new ones added.
9. Make it festive.
Even if you're not actually going to be present, greet your buyers as if they were going to be guests at a party, Phipps says. Set up the dinner table with the good china and silver. Have a plate of cookies for your guests, some warm cider or even chilled bottles of water.
"First impressions are so powerful," Phipps says. "If it looks like you're expecting me and greeting me as company, that's a powerful impact."
10. Give the home a nice aroma.
The No. 1 favorite? "Chocolate chip cookies," Libby says. "Just about everybody likes that smell."
Other popular scents: cinnamon rolls, freshly baked bread, apple pie, apple cider or anything with vanilla, cinnamon or yeast.
"But don't overdo it, either," Ledebuhr says. Scented candles in every room or those plug-in air fresheners can leave buyers wondering what you're trying to mask.
Watch the bad smells, too. Pet smells, smoke and musty odors can cling to curtains and carpets. Ask your real estate agent or a friend to give it a sniff test. Then clean the house, air it out and replace drapes, carpets or rugs before you show it.
11. Protect your investment.
Some sellers (or their agents) will ask buyers to either remove shoes or slip on paper "booties" over their footwear before touring the house. Many buyers like that, Phipps says. It indicates a "pride of ownership and meticulousness that resonates with buyers," he says.
12. Use the season to your advantage.
While the holidays are over (and the Christmas and Hanukkah stuff should come down), you can still use winter wreaths and dried arrangements around the door to spark interest. "Anything seasonally appropriate is fun," Phipps says.
In the winter, with the leaves off the trees, you might also have a nice view that isn't as apparent in the spring and summer months. It's a great time to sell waterfront properties, Phipps says. "You can see the views better this time of year."
13. Consider the area.
In some parts of the country, such as ski areas or warmer regions where the snow birds flock, winter weather can actually be a selling point. "We're right in the middle of our selling season," says Libby, who is located in Vermont. "It's not always spring and summer."
This article was reported and written by Dana Dratch for Bankrate.com.
Sure, there are fewer buyers and the skies are gloomy. So warm and brighten up the place; make it look like a refuge from the weather.
By Bankrate.com
What makes selling a home more stressful? Selling it in the middle of winter.
The lawn is brown, the weather is usually bad and, unlike the longer days of summer, you have less time to show it off during daylight hours.
But not everyone has the luxury of waiting until the traditional spring or summer home-buying season to plant that "for sale" sign. And while it's true that in most areas you'll probably have fewer buyers during the winter, you will have less competition from other sellers.
The season makes staging -- the concept of showing your house at its best -- even more important.
Be prepared to put a little effort into it. "It's more difficult to make something look really appealing this time of year," says Ron Phipps, broker with Phipps Realty in Warwick, R.I.
If you do it right, you can really make your house stand out.
1. Keep snow and ice at bay.
The top tip from realtors: If the buyer can't get in easily, the house won't sell. That means keeping walkways and driveways free of the frozen stuff. Just like trimming the lawn in the summer, you want to make the home look like it's been maintained. If you're away frequently or live in an area that's subject to bad weather, it can pay to hire a service to regularly salt or shovel the driveway and sidewalks.
2. Warm it up.
If you're showing during the winter, think "warm, cozy and homey," says Ken Libby, owner of Stowe Realty in Stowe, Vt., and a regional vice president of the National Association of Realtors.
Before a buyer comes through, adjust the thermostat to a warmer temperature to make it welcoming. "Sellers like to turn the temperature down because of heat costs," says David Ledebuhr, president and owner of Musselman Realty in East Lansing, Mich., and a regional vice president of the National Association of Realtors. "But buyers who come in and aren't comfortable won't stay long."
If you have a gas fireplace, turning it on right before the tour can give the house a little ambience, Libby says.
With a wood-burning fireplace, you've got to be a little more careful. If the house is vacant, don't chance it. But if you're still living there and will be there during the tour, it can be a nice touch.
Many times, sellers leave right before the agent and prospective buyers arrive. In that case, adjust the heat to a comfortable temperature and have the hearth set for a fire. Buyers feel the warmth and see the potential, and you don't have to worry about safety concerns.
3. Take advantage of natural light.
"Encourage showing during the high-daylight hours," Ledebuhr says. At this time of year, "if you show after work, you're totally in the dark."
Make the most of the light you do have. Have the curtains and blinds cleaned and open them as wide as possible during daytime showings. Clean all the lamps and built-in fixtures, and replace the bulbs with the highest wattage that they will safely accommodate. Before you show the house, turn on all the lights.
4. Get the windows washed.
"Buyers act on the first impression," Ledebuhr says. Windows are one thing that many sellers don't even consider. In winter, that strong southern light can reveal grime and make it look like the home hasn't been well-maintained.
5. Play music softly in the background.
To create a little atmosphere, tune the radio to the local classical station. Turn it down so that you barely hear it in the background. "It's soothing," says Libby, who finds that soft classical music tends to have the most appeal to buyers. "I think people tend to stay around a little longer and look a little longer."
6. Make it comfortable and cozy.
Set the scene and help the buyers see themselves living happily in this house. Consider things such as putting a warm throw on the sofa or folding back the thick comforter on the bed. Tap into "the simple things this time of year that make you feel like you're home," Phipps says.
7. Emphasize winter positives.
Is your home on a bus route or some other vital service that means it's plowed or de-iced regularly in bad weather? Be sure to mention that to the buyers.
8. Set up timers.
You want your home to look warm and welcoming whenever prospective buyers drive past. But you're not home all the time, so put indoor and outdoor lights on timers, Phipps says.
Look at the outside lighting around the door. Is there enough illumination to make it inviting? If not, either get the fixtures changed or have new ones added.
9. Make it festive.
Even if you're not actually going to be present, greet your buyers as if they were going to be guests at a party, Phipps says. Set up the dinner table with the good china and silver. Have a plate of cookies for your guests, some warm cider or even chilled bottles of water.
"First impressions are so powerful," Phipps says. "If it looks like you're expecting me and greeting me as company, that's a powerful impact."
10. Give the home a nice aroma.
The No. 1 favorite? "Chocolate chip cookies," Libby says. "Just about everybody likes that smell."
Other popular scents: cinnamon rolls, freshly baked bread, apple pie, apple cider or anything with vanilla, cinnamon or yeast.
"But don't overdo it, either," Ledebuhr says. Scented candles in every room or those plug-in air fresheners can leave buyers wondering what you're trying to mask.
Watch the bad smells, too. Pet smells, smoke and musty odors can cling to curtains and carpets. Ask your real estate agent or a friend to give it a sniff test. Then clean the house, air it out and replace drapes, carpets or rugs before you show it.
11. Protect your investment.
Some sellers (or their agents) will ask buyers to either remove shoes or slip on paper "booties" over their footwear before touring the house. Many buyers like that, Phipps says. It indicates a "pride of ownership and meticulousness that resonates with buyers," he says.
12. Use the season to your advantage.
While the holidays are over (and the Christmas and Hanukkah stuff should come down), you can still use winter wreaths and dried arrangements around the door to spark interest. "Anything seasonally appropriate is fun," Phipps says.
In the winter, with the leaves off the trees, you might also have a nice view that isn't as apparent in the spring and summer months. It's a great time to sell waterfront properties, Phipps says. "You can see the views better this time of year."
13. Consider the area.
In some parts of the country, such as ski areas or warmer regions where the snow birds flock, winter weather can actually be a selling point. "We're right in the middle of our selling season," says Libby, who is located in Vermont. "It's not always spring and summer."
This article was reported and written by Dana Dratch for Bankrate.com.
Friday, March 2, 2007
Key words do magic in selling real estate
I just read this article and thought it might be interesting to you...
It just talks about how the wording on real estate listings may affect
the end resulting sales price....
Have a great real estate day!!!!!
What's 'beautiful' worth? About $12,500
The right phrasing in real estate listings can speed a sale and even
boost the final price, a Canadian study says. And here's a tip: If you
must sell, don't put "must sell" in your ad.
By Marilyn Lewis
In real estate listings, what's the difference between describing your
home as "beautiful" versus "move-in condition"? About $12,500 on a
$250,000 home.
Professor Paul Anglin, a real estate economist in Guelph, Ontario, says
that homes described as "beautiful" in real estate listings sell for 5%
more while "move-in condition" has no effect on sale price.
Anglin and his colleagues from the University of Windsor and researchers
from Canada Mortgage and Housing examined about 20,000 real estate
listings and sales data in Windsor and Essex counties, Ontario, from
between 1997 and early 2000. Among other things, they studied how
listings' phrasing affected sale prices and the length of time it took
for the listings to close.
When speed is of the essence
Listings with the words "beautiful" or "gorgeous" sold 15% faster.
"Landscaping" in a listing hastened a sale by 20%. Describing a property
as in "move-in condition" quickened the sale by 12%. Calling a home a
"handyman special" cut sale time by half (researchers excluded listings
that used the term to describe a workshop or hobby area).
Other familiar jargon, such as "must see" or "vacant," or including the
information that a seller was moving, had virtually no effect on the
time before a sale.
The kiss of death appears to be language that reeks of desperation --
words such as "motivated" and "must sell." These slowed sales by 30%.
The term "ranch" house slowed sales by 10%. Properties described as
rentals (income producing) took 60% longer to sell.
Though Anglin assumes the basic effects he identified are universal, the
size of their impact will vary by locale, he says.
Do you believe in magic words?
Is there magic in these words? Does the concrete, visual nature of
"landscaping," for example, fire a buyer's imagination?
Stella Frize, a real estate agent in Cerritos, Calif., believes so. But
for her, the magic word is "turnkey."
"Anytime I see the word 'turnkey,' I expect that house is in immaculate
condition," she says.
Frize's business partner has his own favorite turn of phrase: "He always
writes, 'This could be the best buy in town.' He believes in this
wholeheartedly. We put it on every listing. It's like good karma for us.
We have sold 100% of our listings."
What surprises Anglin is that some hot words not only speed a sale but
also seem to raise the closing price. "If a house is described as
'beautiful,' everybody expects it to sell for a higher price," he says.
"The thing that surprised me is that it sells for a higher price -- and
faster. . . . I don't have a good explanation for it."
Maybe, he says, buyers' idea of beauty includes features such as
structural integrity, a good neighborhood and excellent upkeep,
qualities agents call "curb appeal," which allay the fears buyers
usually bring to big transactions.
The right words pay off in speed and money*
Term Effect on time until sale Effect on list price Effect
on selling price
Beautiful -15% +5% +5%
Move-in condition -12% Insignificant Insignificant
Good value -5% -6% -5%
Must see Insignificant +4% Insignificant
Starter home -9% -10% -10%
Vacant Insignificant -5% -8%
Rental property +60% -7% -9%
Handyman special -50% -30% -30%
Moving Insignificant -1% -1%
Motivated +30% -6% -8%
Landscaping -20% +5% +6%
Source: "House Prices and Time-till-sale in Windsor," professor Paul
Anglin, University of Guelph, Ontario *The study examined roughly
20,000 listings in Windsor and Essex counties, Ontario, from between
1997 and early 2000. The effects shown are averages; wide variations
appeared within categories.
Language + price = sale
None of this is to suggest that opting for "must see" over "must sell"
is all it takes to sell your house quickly and garner a higher list
price. The hot words have to be used accurately, and they must be
combined with the right price.
"The single most important message that a seller can send to a buyer is
their choice of list price," Anglin's study says.
Thus, the study does not illustrate a triumph of style over substance,
Anglin says, but how certain words, used accurately, can boost a
listing's power. Although "beautiful" seems to make a house sell faster,
using the term dishonestly can offend buyers and create distrust that
will backfire on a seller.
"The basic idea is that you are trying to find the one buyer who is
going to buy the house. As a seller, you hope they'll pay a high price
and quickly find your house. But usually it does not work that way,"
Anglin says. "It takes some time to find a buyer, and usually the buyer
does not want to pay a high price. The purpose of the listing
information is to attract not just any buyer but the buyers who would
like the house that you are trying to sell."
That's why, although "handyman special" may sound negative -- "most
people do not want to go anywhere near that place," Anglin notes -- it's
an efficient, positively framed means of isolating such properties for
the specific buyers interested in tackling fixer-uppers.
Size matters
Home size, too, is another important factor. The smaller the property,
the quicker the sale. One-bathroom homes sold 13% faster. Homes with
three bathrooms took 50% longer to sell. Homes with two stories or more
took more than 20% longer.
The size-speed relationship makes sense to real estate agent Joe Dobson
of Coldwell Banker Schneidmiller Realty in Coeur d'Alene, Idaho. Smaller
homes usually cost less, and there's more competition in lower-price
ranges, he says.
For the most part, Dobson says, his experience bears out Anglin's
research, with a couple exceptions. " 'Motivated,' that's been beat to
death. In a slowing market, every seller is 'motivated,' " Dobson says.
But sometimes, he says, desperate language can work when accompanied by
an emotion-laden explanation such as "must sell due to health reasons"
or -- a phrase Dobson likes but has found occasion to use only three
times in his 35-year career -- "divorce dictates dumping."
Call Roxanne for all your real estate needs:
619-778-0577
roxanneshomes.com
It just talks about how the wording on real estate listings may affect
the end resulting sales price....
Have a great real estate day!!!!!
What's 'beautiful' worth? About $12,500
The right phrasing in real estate listings can speed a sale and even
boost the final price, a Canadian study says. And here's a tip: If you
must sell, don't put "must sell" in your ad.
By Marilyn Lewis
In real estate listings, what's the difference between describing your
home as "beautiful" versus "move-in condition"? About $12,500 on a
$250,000 home.
Professor Paul Anglin, a real estate economist in Guelph, Ontario, says
that homes described as "beautiful" in real estate listings sell for 5%
more while "move-in condition" has no effect on sale price.
Anglin and his colleagues from the University of Windsor and researchers
from Canada Mortgage and Housing examined about 20,000 real estate
listings and sales data in Windsor and Essex counties, Ontario, from
between 1997 and early 2000. Among other things, they studied how
listings' phrasing affected sale prices and the length of time it took
for the listings to close.
When speed is of the essence
Listings with the words "beautiful" or "gorgeous" sold 15% faster.
"Landscaping" in a listing hastened a sale by 20%. Describing a property
as in "move-in condition" quickened the sale by 12%. Calling a home a
"handyman special" cut sale time by half (researchers excluded listings
that used the term to describe a workshop or hobby area).
Other familiar jargon, such as "must see" or "vacant," or including the
information that a seller was moving, had virtually no effect on the
time before a sale.
The kiss of death appears to be language that reeks of desperation --
words such as "motivated" and "must sell." These slowed sales by 30%.
The term "ranch" house slowed sales by 10%. Properties described as
rentals (income producing) took 60% longer to sell.
Though Anglin assumes the basic effects he identified are universal, the
size of their impact will vary by locale, he says.
Do you believe in magic words?
Is there magic in these words? Does the concrete, visual nature of
"landscaping," for example, fire a buyer's imagination?
Stella Frize, a real estate agent in Cerritos, Calif., believes so. But
for her, the magic word is "turnkey."
"Anytime I see the word 'turnkey,' I expect that house is in immaculate
condition," she says.
Frize's business partner has his own favorite turn of phrase: "He always
writes, 'This could be the best buy in town.' He believes in this
wholeheartedly. We put it on every listing. It's like good karma for us.
We have sold 100% of our listings."
What surprises Anglin is that some hot words not only speed a sale but
also seem to raise the closing price. "If a house is described as
'beautiful,' everybody expects it to sell for a higher price," he says.
"The thing that surprised me is that it sells for a higher price -- and
faster. . . . I don't have a good explanation for it."
Maybe, he says, buyers' idea of beauty includes features such as
structural integrity, a good neighborhood and excellent upkeep,
qualities agents call "curb appeal," which allay the fears buyers
usually bring to big transactions.
The right words pay off in speed and money*
Term Effect on time until sale Effect on list price Effect
on selling price
Beautiful -15% +5% +5%
Move-in condition -12% Insignificant Insignificant
Good value -5% -6% -5%
Must see Insignificant +4% Insignificant
Starter home -9% -10% -10%
Vacant Insignificant -5% -8%
Rental property +60% -7% -9%
Handyman special -50% -30% -30%
Moving Insignificant -1% -1%
Motivated +30% -6% -8%
Landscaping -20% +5% +6%
Source: "House Prices and Time-till-sale in Windsor," professor Paul
Anglin, University of Guelph, Ontario *The study examined roughly
20,000 listings in Windsor and Essex counties, Ontario, from between
1997 and early 2000. The effects shown are averages; wide variations
appeared within categories.
Language + price = sale
None of this is to suggest that opting for "must see" over "must sell"
is all it takes to sell your house quickly and garner a higher list
price. The hot words have to be used accurately, and they must be
combined with the right price.
"The single most important message that a seller can send to a buyer is
their choice of list price," Anglin's study says.
Thus, the study does not illustrate a triumph of style over substance,
Anglin says, but how certain words, used accurately, can boost a
listing's power. Although "beautiful" seems to make a house sell faster,
using the term dishonestly can offend buyers and create distrust that
will backfire on a seller.
"The basic idea is that you are trying to find the one buyer who is
going to buy the house. As a seller, you hope they'll pay a high price
and quickly find your house. But usually it does not work that way,"
Anglin says. "It takes some time to find a buyer, and usually the buyer
does not want to pay a high price. The purpose of the listing
information is to attract not just any buyer but the buyers who would
like the house that you are trying to sell."
That's why, although "handyman special" may sound negative -- "most
people do not want to go anywhere near that place," Anglin notes -- it's
an efficient, positively framed means of isolating such properties for
the specific buyers interested in tackling fixer-uppers.
Size matters
Home size, too, is another important factor. The smaller the property,
the quicker the sale. One-bathroom homes sold 13% faster. Homes with
three bathrooms took 50% longer to sell. Homes with two stories or more
took more than 20% longer.
The size-speed relationship makes sense to real estate agent Joe Dobson
of Coldwell Banker Schneidmiller Realty in Coeur d'Alene, Idaho. Smaller
homes usually cost less, and there's more competition in lower-price
ranges, he says.
For the most part, Dobson says, his experience bears out Anglin's
research, with a couple exceptions. " 'Motivated,' that's been beat to
death. In a slowing market, every seller is 'motivated,' " Dobson says.
But sometimes, he says, desperate language can work when accompanied by
an emotion-laden explanation such as "must sell due to health reasons"
or -- a phrase Dobson likes but has found occasion to use only three
times in his 35-year career -- "divorce dictates dumping."
Call Roxanne for all your real estate needs:
619-778-0577
roxanneshomes.com
Thursday, March 1, 2007
Private Transfer Tax Prohibition
LOS ANGELES (Feb. 28) – Because of a loophole in existing law, developers can impose private transfer taxes on unsuspecting home buyers. The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today announced it will sponsor SB 670 (Correa), “Private Transfer Tax Prohibition,” to eliminate this unfair tax on Californians.“Under current law, developers legally can impose private transfer taxes on home buyers at the time of purchase, with no oversight from government, no accountability on how the money is spent, and no limit on who can impose the tax or how many private transfer taxes can be added to a home when it’s sold,” said C.A.R. President Colleen Badagliacco. “Senator Correa’s legislation, which C.A.R. is sponsoring, will put a stop to this unfair, costly practice.“This is an alarming trend in California, one that gives non-government entities like developers the power to tax, while threatening the dream of homeownership by pushing prices higher,” she said. “While the highest private transfer tax rate we are aware of currently is 1.75 percent of the home’s value, under existing law there’s no upper limit.”A private transfer tax of 1.75 percent on a $500,000 home skims nearly $10,000, while inflating the cost of a home. Private transfer taxes also impact affordability in California. According to C.A.R. research, for every $10,000 increase in the cost of a home, another 200,000 potential home buyers are eliminated from the marketplace.“Developers levying private transfer taxes are free to use the money for any purpose including their own use,” said Badagliacco. “There are no controls in place over how revenue collected from private transfer taxes is spent. Under current law, the private transfer tax assessments may never expire, so that every time a home is sold, the tax is collected again. It’s time to eliminate this loophole.”SB 670 (Correa), “Private Transfer Tax Prohibition,” will next be heard in the Senate.(From www.car.org)
Monday, February 19, 2007
NEW HOUSING MARKET EXPECTED TO IMPROVE
Finally some good news in the media about the housing market according to REBAC:
It is only a matter of time before housing begins to recover from its first major downturn in about 15 years, said industry economists speaking last week at the International Builders' Show in Orlando, FL, and fundamental improvements in the marketplace could already be taking hold by this year's second quarter. "We knew we were in a correction process a year ago, and it was an inevitable occurrence following the unsustainable boom years of 2004 and 2005 when stimulative financing conditions and speculation from escalating home prices resulted in a 'grossly overheating market,'" said David Seiders, chief economist for the National Association of Home Builders.
I have seen the market improve and I think 2007 will be a better year. There is still a lot of uncertainty going on but I am starting to think that the worse is behind us. As for buying, I always believe, if you have money to invest, put it in real estate. There is no better investment.
It is only a matter of time before housing begins to recover from its first major downturn in about 15 years, said industry economists speaking last week at the International Builders' Show in Orlando, FL, and fundamental improvements in the marketplace could already be taking hold by this year's second quarter. "We knew we were in a correction process a year ago, and it was an inevitable occurrence following the unsustainable boom years of 2004 and 2005 when stimulative financing conditions and speculation from escalating home prices resulted in a 'grossly overheating market,'" said David Seiders, chief economist for the National Association of Home Builders.
I have seen the market improve and I think 2007 will be a better year. There is still a lot of uncertainty going on but I am starting to think that the worse is behind us. As for buying, I always believe, if you have money to invest, put it in real estate. There is no better investment.
Sunday, February 18, 2007
Are subprime loans going away?
The past couple of years have seen the popularity of subprime loans explode. This phemonena has made it easy for people to get into the housing market and buy homes that they would otherwise could not afford or loans they otherwise could not get. These loans are typically fixed for 2-3years and then they go up significantly in payment. So buyer beware, if you get such loans, know that your payments won't stay that low. But the bigger trouble might be the restriction on people getting and qualifiying for mortgages. We maybe seeing alot more forclosures or slowing on the mortgage front but this could also mean that people who could otherwise qualify for a mortgage would have to shop around a lot more and pay a lot more in fees to be able to get a mortgage. Sounds like a double edge sword to me. Well, I am not sure if this is good or bad but worth thinking about...
call me for your real estate needs or questions:
Roxanne
619-778-0577
call me for your real estate needs or questions:
Roxanne
619-778-0577
Friday, February 16, 2007
Life of an agent
Another day, another dollar in the life of an agent. I am pretty tired but ready and hoping to have a better day. Hope you are doing the same.
Best regards,
Roxanne
619-778-0577
Best regards,
Roxanne
619-778-0577
Thursday, February 15, 2007
What is NAR's Code of Ethics?
I thought this is interesting to every person looking to buy or sell a house:
The NATIONAL ASSOCIATION OF REALTORS® Code of Ethics:What Does it Mean for Consumers?How does the Code of Ethics affect everyday real estate practices? If a REALTOR® represents you, whether you are buying or selling a home, you can count on that REALTOR® to:1. Be honest with all parties in the transaction – not just with you, as his or her client, but also with the other real estate practitioner and his or her clients.For example, if REALTORS® represent a buyer with a spotty credit history, they can’t be dishonest with sellers about this fact. At the same time, REALTORS® can help their buyer clients collect and assemble information, such as credit reports and audited tax returns, to demonstrate that the buyer has addressed the problem and improved their situation.2. Put your interests ahead of his or her own, at all times. A REALTOR® makes every effort to understand the housing needs of his or her client, thoroughly researches available inventory, and shares all relevant information with the buyer so that he or she can make an informed decision. This service is provided regardless of the compensation available.3. Disclose all pertinent facts regarding the property and the transaction to both buyer and seller.If a REALTOR® believes information provided by a seller is questionable, the REALTOR® is obligated to investigate. REALTORS® should recommend that buyers consult their own experts, such as home inspectors, to address concerns. For example, if a home seller asks his or her REALTOR® to conceal the fact that the roof leaks, the REALTOR® cannot comply; if the seller insists, the REALTOR® should end the business relationship with that seller. 4. Be truthful in all communications with the public.When REALTORS® distribute newsletters, create Web sites, or place advertisements, they must be careful not to represent other real estate professionals’ work product as their own. If recently sold or listed properties in the community are publicized, it must be clear whether the REALTOR® was actually involved in the transaction, or whether that data came from the local multiple listing service or other source. This ensures that the public understands the REALTOR®’s experience and can make an informed decision when choosing real estate representation.Read a summary of the principles embodied in the NATIONAL ASSOCIATION OF REALTORS®' Code of Ethics.
The NATIONAL ASSOCIATION OF REALTORS® Code of Ethics:What Does it Mean for Consumers?How does the Code of Ethics affect everyday real estate practices? If a REALTOR® represents you, whether you are buying or selling a home, you can count on that REALTOR® to:1. Be honest with all parties in the transaction – not just with you, as his or her client, but also with the other real estate practitioner and his or her clients.For example, if REALTORS® represent a buyer with a spotty credit history, they can’t be dishonest with sellers about this fact. At the same time, REALTORS® can help their buyer clients collect and assemble information, such as credit reports and audited tax returns, to demonstrate that the buyer has addressed the problem and improved their situation.2. Put your interests ahead of his or her own, at all times. A REALTOR® makes every effort to understand the housing needs of his or her client, thoroughly researches available inventory, and shares all relevant information with the buyer so that he or she can make an informed decision. This service is provided regardless of the compensation available.3. Disclose all pertinent facts regarding the property and the transaction to both buyer and seller.If a REALTOR® believes information provided by a seller is questionable, the REALTOR® is obligated to investigate. REALTORS® should recommend that buyers consult their own experts, such as home inspectors, to address concerns. For example, if a home seller asks his or her REALTOR® to conceal the fact that the roof leaks, the REALTOR® cannot comply; if the seller insists, the REALTOR® should end the business relationship with that seller. 4. Be truthful in all communications with the public.When REALTORS® distribute newsletters, create Web sites, or place advertisements, they must be careful not to represent other real estate professionals’ work product as their own. If recently sold or listed properties in the community are publicized, it must be clear whether the REALTOR® was actually involved in the transaction, or whether that data came from the local multiple listing service or other source. This ensures that the public understands the REALTOR®’s experience and can make an informed decision when choosing real estate representation.Read a summary of the principles embodied in the NATIONAL ASSOCIATION OF REALTORS®' Code of Ethics.
Monday, February 12, 2007
Affordable Duplex in Normal Heights
2 on 1 property, perfect for extended family. Zoned for 3 units with room to add. Hardwood floors, tiled baths, very spacious! First floor is 3BR/2BA, second floor is 1BR/1BA with separate entrance and eat-in kitchen. Great backyard with covered patio, a spa, and mature fruit trees. Don't miss this opportunity!
For more detailed information, please visit Roxannes Homes.
One of a Kind in Mission Valley!
Exceptional, bright, spacious, conveniently located 2BR/2BA first floor unit with panoramic views. Custom kitchen cabinets and tiled floors throughout. Livingroom/master bedroom open into spacious wood deck patio with gorgeous views of evening lights, Admiral Baker Golf Course, and the San Diego River. In a quiet complex with pool, spa, and tennis courts. This is THE BEST spot in desirable Mission Valley area with all possible amenities.
For more detailed information, please visit Roxanne's Homes.
Panoramic View at its Best
Priced to sell! Sellers ready to move! 3 BR/2BA in the prestigious West Hills area in Santee. Variable price range $399,000-$469,000. Light, bright, super clean, move-in ready. Laminate floors, newer windows, custom paint throughout. Remodeled bathrooms. Check out the newer french sliding door. Panoramic views of the mountains. Located at the end of a quiet Cul-de-sac.
For more detailed information, please visit Roxanne's Homes.
Tuesday, February 6, 2007
Escondido May Not Discriminate against illegals
I came across this article in the Real Estate Professional Magazine that states a federal Judge has told Escondido city officials that their ordinance not to rent out units to illegal aliens is non-constitutional. Two Escondido landlords have filed suit against the ordinance stating that many of the illegal aliens have children who are citizens of the United States and this law prohibits them from finding suitable housing. The ruling temporarily requires Escondido to ignore the ordinance pending a trial to establish the law's constitutionality. It is interesting to see how this one will turn out to be. Will keep you posted if I come across any articles or news that would talk about the conclusions to this case.
Happy reading, visit sellinsandiego.com for your real estate needs,
Roxanne
Happy reading, visit sellinsandiego.com for your real estate needs,
Roxanne
Saturday, February 3, 2007
New-Home Sales End Year On High Note, Up 4.8 Percent In December
Hello Friends,
I do believe the reporters of the following article are right as far as the market picking up. I have seen a lot of activity in San Diego within the month of January as well. This article is from NAHB: National Association of Home Builders: Here is the article:
January 26, 2007 - Housing demand showed further signs of stabilization heading into 2007, as sales of new single-family homes rose 4.8 percent to a seasonally adjusted annual rate of 1.12 million units in December, according to figures released today by the U.S. Commerce Department.
“Today’s housing report squares with our most recent builder surveys, which show that traffic of prospective buyers is up and consumers are responding favorably to price adjustments and widespread sales incentives,” said David Pressly, president of the National Association of Home Builders (NAHB) and a home builder from Statesville, N.C.
On an annual basis, new home sales registered 1.061 million units in 2006. While this represents a 17.3 percent drop from the all-time high achieved in 2005, the sharpest percentage decline since 1990, the sales level was on par with the solid sales numbers registered in 2003, which preceded the unsustainable housing boom of 2004 and 2005.
On a quarterly basis, new home sales posted a rate of 1.061 million in the final quarter of 2006, up from 1.007 million in the third quarter, the quarterly low-point for the year.
“The stabilization of home sales and housing demand that we are now seeing is the first step required to put the housing market back on track,” said NAHB Chief Economist David Seiders. “The second step is to whittle down the inventory overhang, which builders have been doing since July, and the final step will be to bring housing starts back up to sustainable levels. We anticipate that starts will bottom out in the first quarter of this year and that residential construction activity will be moving up by the second half of 2007.”
The inventory of new homes for sale hit a 10-month low of 537,000 units in December, which is equivalent to a 5.9-month supply at the current sales price – down from a recent high of 7.2 in July.
On a regional basis, new home sales were up 27.3 percent in the Northeast, 26.6 percent in the Midwest and were flat in the South. Sales fell 4.4 percent in the West. Seiders noted that unusually warm weather conditions probably boosted sales in the Northeast and Midwest regions to some degree in December, but that the stabilization pattern evident in the fourth quarter is quite convincing and consistent with other available housing indicators, including NAHB’s survey measures.
© 2007
Contact me if you need more information about this article or about San Diego real estate.
Best regards,
Roxanne
I do believe the reporters of the following article are right as far as the market picking up. I have seen a lot of activity in San Diego within the month of January as well. This article is from NAHB: National Association of Home Builders: Here is the article:
January 26, 2007 - Housing demand showed further signs of stabilization heading into 2007, as sales of new single-family homes rose 4.8 percent to a seasonally adjusted annual rate of 1.12 million units in December, according to figures released today by the U.S. Commerce Department.
“Today’s housing report squares with our most recent builder surveys, which show that traffic of prospective buyers is up and consumers are responding favorably to price adjustments and widespread sales incentives,” said David Pressly, president of the National Association of Home Builders (NAHB) and a home builder from Statesville, N.C.
On an annual basis, new home sales registered 1.061 million units in 2006. While this represents a 17.3 percent drop from the all-time high achieved in 2005, the sharpest percentage decline since 1990, the sales level was on par with the solid sales numbers registered in 2003, which preceded the unsustainable housing boom of 2004 and 2005.
On a quarterly basis, new home sales posted a rate of 1.061 million in the final quarter of 2006, up from 1.007 million in the third quarter, the quarterly low-point for the year.
“The stabilization of home sales and housing demand that we are now seeing is the first step required to put the housing market back on track,” said NAHB Chief Economist David Seiders. “The second step is to whittle down the inventory overhang, which builders have been doing since July, and the final step will be to bring housing starts back up to sustainable levels. We anticipate that starts will bottom out in the first quarter of this year and that residential construction activity will be moving up by the second half of 2007.”
The inventory of new homes for sale hit a 10-month low of 537,000 units in December, which is equivalent to a 5.9-month supply at the current sales price – down from a recent high of 7.2 in July.
On a regional basis, new home sales were up 27.3 percent in the Northeast, 26.6 percent in the Midwest and were flat in the South. Sales fell 4.4 percent in the West. Seiders noted that unusually warm weather conditions probably boosted sales in the Northeast and Midwest regions to some degree in December, but that the stabilization pattern evident in the fourth quarter is quite convincing and consistent with other available housing indicators, including NAHB’s survey measures.
© 2007
Contact me if you need more information about this article or about San Diego real estate.
Best regards,
Roxanne
Monday, January 29, 2007
Starting the blog
Hello friends,
This is the first day I am writing to this blog. I am sure there are a lot of agents who are already familiar with this way of communication but I am pretty new to it so this is the first blog I am posting. I hope I get some feedback from fellow readers out there who can share their real estate knowledge and experience with me.
Best regards,
roxanne
This is the first day I am writing to this blog. I am sure there are a lot of agents who are already familiar with this way of communication but I am pretty new to it so this is the first blog I am posting. I hope I get some feedback from fellow readers out there who can share their real estate knowledge and experience with me.
Best regards,
roxanne
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