Rhonda Duffy’s Learning Cafe for Home Buyers and Sellers

Making money on your home is key to many of you. My clients report that they simply would not consider owning a home that they did not make some profit on. The thought of taking a check to closing is repulsive. Here is what I want you to know about making money on your home.

The obvious things about home ownership that make you money…

 The whole time that you live in a home, if it is your primary residence, you are saving on your taxes. In other words, you can either use your money to pay for a place to call your own that you are buying, or you can pay more taxes.

 The home ownership experience lends itself to your higher self-esteem. Self-esteem will lead you to making more money in all aspects of your life.

 The home gives you a place to do all of your handyman experiences on your own dime with your own result of profit, or not.

 As your mortgage payments are made over the years, your equity stake in the investment in your home, in most cases, will rise and your debt will fall.

But, on to how to make money on your home…

 Keep your home maintained the whole time that you live there.

 Keep your home clean and especially clean it well when you are selling it. Clean homes make 3 to 4% more money than dirty homes.

 Market your home at a high price instead of what your naive neighbors or low-balling agent of the neighborhood recommends. Go with your gut and go high. You will never get a high price if you don’t ask for it.

 Sell your home with a listing company that has low listing commission fees. Most homeowner’s profit is used up in selling commissions. You now have alternatives.

 Sell your home Staged and maybe throw in some furniture.

 Get every tool available to make your home look its best on the internet. Virtual tours, Staging, Videos and anything else that you can find. The first showing to potential buyers is on the internet. By the time that the buyer comes to your home in person, it is really the second showing.

 Offer a home warranty in lieu of some of the inspection items. If this is not enough for the buyer, tell them that you will give them 5 service call deductibles to cover future costs.

 To make a good deal on the sale of your home, it is imperative to make a good deal when buying it. Use an experienced agent to help you buy. They are a valued resource and cost you nothing. In fact, in my company we split out our commission with our buyer clients for helping us find them the home.

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When buyers come to your home it is critical to know how to talk to them. Here are some guidelines that will help you connect to them and pass along the fond memories that you have collected over the years in your home.

Start the process by telling the buyers that you are going to let them walk through first and then you will take them on a quick tour and let them know the important things about the home that brings value to the home.

Rule 1 – Don’t ask personal questions like:
Where do you live now?
Have you sold your home yet?
Can you afford my home?
What do you do for a living?

Rule 2 - Don’t follow them around on their heels. It is perfectly okay to know where your buyers are in your house, but they need space to see the home.

Rule 3 - Don’t talk during the walk-through. Let them ask you questions. They don’t need a tour guide on the first round.

Rule 4 – Make your tour for them reflective of important things that they can’t see or that are not obvious that brings value to your price. You can also add cards to the areas of the home that you have added upgrades. Hang them on the wall.

Rule 5 – Get their phone number and ask them when you can follow-up to see if they have interest.

Rule 6 – Call all buyers back if you add an incentive or lower your price.

Rule 7 – Hand all buyers a letter that you have written to them as potential buyers wherein you have answered any questions or objections that they may have about the home.

Rule 8 – You might consider putting your photos and flyer on a CD and giving this to your buyer.

Rule 9 – Feed the buyer cookies or something if you can during the visit and have them sit down. Talk about your family cookie recipe, your family etc… not about their house hunt.

Rule 10 – Sitting down brings me to my last suggestion, tell the buyer to please sit in each of your rooms so that they can see the rooms from all angles.

Rule 11 – If you are having a second showing, ask your best neighbor to stop in and say hi to you so that you can introduce them to the neighbor.

The point to all of this is that you should allow buyers to connect to your home and somewhat to you. Buyers want an emotional connection that allows them to feel confident in their house purchase. Avoid your own curiosity to ask questions and put on a show instead!

If you are showing your home and an agent is there with the buyers, still follow these rules if you are home.

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Hal Coleman from North Fulton Externimation has a great blog that you must join, show your kids or grandkids and enjoy!

www.yuckynastybugfacts.com

Here is his latest blog:

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This is from Realtor Magazine Online

Daily Real Estate News | August 27, 2008
10 Cities Where Jobs, Home Prices Are Growing

To determine where home prices are expected to rise most in the next couple of years, Forbes.com looked at projections for housing starts from the National Association of Home Builders and job-growth projections from Moody’s Economy.com.

Forbes identified cities that are likely to be vibrant markets because jobs are increasing and the housing market wasn’t overbuilt during the boom.

“The logic is pretty straightforward,” says Mark Zandi, chief economist at Moody’s Economy.com. “People will spend as much on housing as their income will allow them. House prices are very closely tied to household income over the long run when you look at business cycles.”

According to Forbes, these are the 10 cities where home prices are most likely to rise:
Albuquerque, N.M.
Charlotte, N.C.
San Antonio, Texas
Portland, Ore.
Austin, Texas
Salt Lake City, Utah
Colorado Springs, Colo.
Minneapolis
Atlanta
Oklahoma City

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Real estate can be a very lucrative business. Or, it can be the death trap that many an agent experiences as is evident as this present cycle of real estate corrects itself. Learning to be profitable is not that hard, but it does take a different mindset than what other agents before us could comprehend.

For some reason, real estate is perceived to be a service business. Yet, much of the “service” is really emotional counseling. If you look at the counseling business itself, they are not paid when the patient has a “result”. They are paid as the service of counseling is performed, and they are paid right then.

But if you really think about how real estate is set up, or at least how it has been set up in decades before us, real estate the way we know it is really just gambling. Now, how many people do you know make a great living from gambling? A consistent, real living? One that their family is not ready to commit them for, either to a mental institution at worst for being crazy enough to try it or at best to Gambler’s Anonymous for rehab for keeping with it. So, here it is in real estate for years where we have listed sellers, who may or may not sell, and/or work with buyers who may or may not buy. Service or gambling, I think the answer is the latter!

Now, here is where profit comes in. Profit to me means that I am making revenue beyond my expenses. Revenue to me is not based on gambling. Revenue is based on me performing good work for my clients and my clients paying me for that good work at the time that good work is performed. Very few transactions in business are based on gambling. You can think of a few, but even if you got a bad haircut, you are still supposed to pay the barber after the service is performed. Attorneys take retainers but don’t guarantee the result. Your accountant does your tax return, but does not guarantee that you will pay no taxes, and yet, they expect payment after they have performed the work and some expect it before they do the work.

Again, profit is when you make money beyond your expenses on a consistent basis. This means that when you do the work that you promised to perform, you are paid, no matter what. There are no ifs, ands or buts. If someone wants to pull his house off the market, after having it listed for only 3 months you are paid. If a buyer decides not to buy after you have shown them 16 houses, you are paid.

If this makes sense to you, say AMEN! We are in agreement!

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Sellers all over the United States look for buyers everyday. Here are some ideas for finding them. And, know that there are plenty more ideas other than these to find buyers, you just have to think out of the box to find them. So, as you read this, if you are in need of some buyers, open your mind and let’s go get them.

You Tube video posted on You Tube and everywhere else you can find to post video. Make the video with your camcorder and load to You Tube or get a Flip camera (they are very affordable and extremely easy to use) and load directly with its software.

Make Google Ad Words for your home and post your video.

Make a flyer and carry it with you everywhere you go to give out.

Hold an open house and dinner for your neighbors only so that they can tell their friends and neighbors about your home.

Make a website for your home with a photo album and advertise the site in newspapers, both big and small, that are cost efficient.

Of course make sure that you are listed in the FMLS and MLS.

A virtual tour on Realtor.com will make sure that you appear in a search query before your competition, those without a tour in your price range, does. Virtual tour companies will put you on their website too. Homescenes is an excellent choice for a virtual tour company.

Post your flyer on any bulletin board that you can find, including your work bulletin board.

If you have a neighbor that works somewhere with a bulletin board, ask them to put your flyer on their board.

Post your home on every for sale by owner site that you can find.

Put signs everywhere around your home.

Hold open houses any time of the week that you are home.

Ask other neighbors that are selling to hold open houses too at the same time and advertise that you are having a neighborhood-wide open house.

Stage your home and get your stager to put it on their website.

Advertise your home on TV.

Advertise your home in any home magazine that allows searching by location.

Consider holding an auction like the one in the book How to Sell Your Home in 5 Days.

Advertise your home to extended stay hotels, if they will allow you.

Hopefully, you are getting the idea that anywhere you want to put your home, helps you in the long run since we don’t know when, where or who your buyer will be.

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Anyone who has been in real estate for long knows that the reason for which someone gets into real estate, might not necessarily be the reason they stay in it. The perception of quick and good money in this industry is a widely held belief. One that has turned out to be a myth, for the truth is something quite different. Quick and good money will only materialize for those rare, exceptional agents that display both consistency and tenacity right out of the gate. The fact is most every agent struggles, at least at first, due to experiencing the roller coaster effect of closing deals and then having an empty pipeline void of new prospects.

Most agents that I talk to complain that when they enter the business their family is constantly nagging them about the hours that they keep and the phone calls that they choose to take at all hours of the day and night. Then, when they are not working, the agent is either at home, pouting over a lack of business or worrying about when the next client will surface and take up their time again - 24/7.

Loving real estate as a job is a change for many agents. Most are mired in the rut of attempting to make a consistent living while keeping the balance act of sharing time and attention between work and family.

Here are some ideas that I have used to keep on keeping on loving real estate.

Real estate is the backdrop of what you do. You are really in business. Real estate is just the canvas upon which you have chosen to paint and ply your craft. And anyone in business knows that you have to constantly be curious about what you do, challenge yourself to learn as much as you can and keep asking ‘what if…’ Because, ‘what if…’ means you are willing to change things in hopes of finding a better way. This does not mean expensive technology that has huge learning curves, nor does it mean changing the systems that work all the time. It means, saying things differently to get a new result. It means looking at things that are repetitive to see if there is a simpler way of doing them. And it especially means at all times, asking if the routine that you have been doing is necessary.

Ask yourself often, “What is real estate?” Defining it for yourself will open your eyes to what you love and hate about your profession which in turn allows you to connect deeper with and appreciate more what you love.

Set boundaries for yourself and your clients. This allows you to know when something is not working for you because you have already thought it out.
You can set quick boundaries by writing at the top of a paper such leading statements like; I will treat my clients with… And, my clients will not…

Try new things like video while you are showing houses. Make a series that is educational for your buyers to come.

Collect educational materials and make a file that you can give to your future buyers. Knowledge is empowering to both you and your clients. It cuts down on everyone’s confusion, which reduces stress leading to a more rewarding outcome for all involved.

Stay away from negative people in your business and your family for that matter. People who tell you that you can’t should now be considered motivational forces, if you have to hang out with them.

Do your best to find something that is funny everyday in real estate. Something amusing that happened at a house that you are showing, or something funny that your client said or something funny that you laugh at with another agent can make your day more memorable and enjoyable. Remember if something isn’t fun to you, you won’t want to do it.

The bottom line to all of this is that whether you love real estate or not, it is your choice. Your perception is reality. You can make anything that you want exactly what you want it to be.

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When you purchase a new home, you do a punch list with the builder noting paint, sheetrock, trim and other items that need to be repaired before closing. You as the buyer and the builder (via his superintendent) will sign a list of things to be done between this time and closing, and unfortunately sometimes after closing.

There are a couple of tips that you, as a buyer, need to know:

1. Make sure that as you are pointing these things out that you and/or your agent are also writing a list. You will be surprised to find that the superintendent looks like they are writing, but for some reason not all of the items are on the final list? At the end of your comparison, you sign the list, the superintendent signs the list and you take a copy of the punch list.

2. You will be marking paint problems, sheetrock issues and trim that needs to be repaired with blue painter’s tape. The superintendent will tell you several times that they have a rule for you to stand back 6 feet and see what you can find. Don’t do that. Get up close and demand that your home, no matter what price range, is done to your satisfaction. Ignore them when they tell you that the home is not going to be perfect. This is just their b.s.

Now, here is where the rub comes in, the blue tape items are not added to the punch list. So, after you make your marks with the blue tape for the painters to come back, make sure that you video where the blue tape is. I use a Flip camera. Flip cameras load directly to You Tube or AOL and/or my laptop directly and then I am able to take my laptop with the video to the house on the final walk-through. Make sure that the superintendent sees you video the house and that you are giving a narrative about where you are. Also, on your video, make sure that you state that you are at the punch list and give the date. This will be helpful if you find yourself in a legal dispute over anything with the builder in the future.

3. During the final walk-through 1-day before closing, use your list to see the results of the work that needed to be done. You should also view your video. Don’t be surprised if the painters took the tape off and did not do the work. That is where your video comes in.

4. If things are not done on the punch list and you are prepared to close, hold money in escrow from the builder along with a per diem rate that you will be paid if the work is not done in a timely manner. Have this written on an amendment and do not close until the builder signs this document.

Don’t be afraid to push on these folks. Builders have gotten away with shoddy work in the past because real estate agents want the deal to close smoothly and they don’t say anything combined with a very emotional buyer who is absorbed in the negative state of moving. It is very obvious to me when I listing a home that the seller bought new, and there was shoddy punch list.

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Foreclosures have become a dirty word to some and a profit word to others. Here is what you need to know about foreclosures whether you are a buyer or a seller.

For Sellers:

Rule 1 – Stand Tall - Just because you are selling your home and your neighborhood has foreclosures in it, does not mean that you can not sell your home. A foreclosure has a different appeal than a home that is lived in or still has a sane owner. Foreclosures look different and feel different and thus are not for everyone.

Rule 2 – Look Your Best – Foreclosures are often in shambles and the maintenance crews that are paid to work on the properties really have no overseer working to make sure that the work is done to perfection like you would as the owner of the property. Manicure and perfect your property and you will make a quicker connection to a buyer than the foreclosure will.

Rule 3 – Price High – Don’t price your property based on a foreclosure price. Remain as a “not distressed sale” and you will win by getting your price.

For Buyers:

Rule 1 – Be Patient – Banks who own these properties don’t really care what your timeframe is. It could be weeks before you hear that they have sold to someone else so, if time is of the essence for you, you don’t need to buy a foreclosure in most instances.

Rule 2 – Inspect and Inspect Again – It is critical that you understand what condition the property is in. Most people in foreclosure didn’t just get to foreclosure the month that they were kicked out. It is a result of not having money. So, most likely they did not maintain the property whether the problem was big or small. Although most banks will not do the work to get the house repaired, at least you will know whether or not you are getting such a great deal.

Rule 3 – Get A Warranty – Pay for your own home warranty at the time of the purchase. This will allow you to at least budget for the unknown.

Rule 4 – Don’t Pay Attention – Many times buyers who plan to live in the home are shocked by the stories about the previous owners when they meet the neighbors. If you are not going to go to the neighbors first, ignore the stories.

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