How To Sell ANY Home
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1 Paul & Jana Klaasse How To Sell ANY Home Strategies That Maximize The Odds of Getting Top Dollar For Your Home WHO WE ARE > HOW WE GET THE JOB DONE >
2 THIS BOOK WILL HELP YOU SELL YOUR HOME Why do some houses sell quickly and for more money? Two houses -- seem similar -- both have 2 car garage, 3 bedrooms etc. Yet one sells for more money and quickly and the other lingers on the market. House number 1 have some magic trick? House number 2 just having bad luck? There are reasons but luck is not one of them. Houses do not sell for more money by accident. There s no magic trick or luck involved. On the contrary, higher prices and quicker sales are the result of careful planning and some simple strategies outlined in the following pages. Follow the same winning formula to get your home sold Thanks for taking the time to consider these ideas. Our background is in the Marketing & Ad Agency field which is a huge advantage in Real Estate Sales. Plus we train regularly and meet with a group of Realtors In Pittsburgh lead by Bob Cenk every few months to learn and share ideas. Some of the great ideas in this book originate from those sessions. Our sincere hope is that it will help result in you making more money on the sale of your home. We believe you ll see some ideas you ve not seen before. If you have questions or need help please contact us. We d be happy to help.
3 Price -- Presentation -- Marketing. The three things that go into a home sale. This book covers the systems, strategies and psychology that support each of those ideas Inside I.. The strategy & psychology of price setting II, How buyers pick what homes to preview III, Why the pictures of your homes can stop it from selling IV. Make Your Home Stand Out V. Don t Just Wait For An Offer VI. Why Buyers Will Eliminate A Home VII. How & Where to Reach Targeted Buyers VII. Scenario Demonstrating These Ideas VIII. Know what you ll net from a sale VIX. Figure your capital gains X. Will it be benefical to hire a real estate agent? (1)
4 I. The Strategy & Psychology of Setting a Price For Your Home Know How Buyers Will Find Your Home Buyers Set Price Criteria in Predictable Brackets Here s An Example. Lets say Matt is searching for a home online. His absolute top limit is $275,000 but he d rather spend less - so he sets his search criteria from $200,000 to $275,000. He won t even see Sue s house because she set the price at $199,900. She thought that would look better. Sue s house is just what Matt is looking for and he would be thrilled to find something at his lower end. If she had priced it at $200,000 - a hundred dollars more - Matt would have seen her house and a sale could very well have resulted. The only buyers that will see her house online are people looking up to $200,000 not buyers that start their search at $200,000 because she set the price at $199,900. Understanding Price Bracketing Who searches for homes with their starting price at $199,900 or $149,900? No one. They start at an even number. $200,000 or $150,000. If you price your home at $149,900 then buyers starting at $150,000 won t see your house. Many buyers would love to find a home at their lower end. Just about every other house on the Multiple Listing System is priced at a $100 less than an even number knocking out a whole bracket of buyers. Price your home so that it falls in 2 brackets that match how buyers search. PRICE BRACKETING FOR LARGEST NUMBER OF VIEWS (2)
5 II. HOW BUYERS RESEARCH PRICE The Problem With Sites Like Zillow is That They Are WRONG Much Of The Time The most popular sites are Zillow and eppraisal. Chances are an interested buyer will check out those sites to get an idea of the value of your home. They may even refer to those sites in their offer. Knowing this, you d be wise to get ahead of this issue before the negotiating begins. How We Do An Online Analysis When Determining Value The first step in determining value is to do a Competitive Market Analysis -- which we will cover in the next few pages. From that Analysis we ll have several recently sold homes similar to your home. Next step is to look up how Zillow and eppraisal valued those homes. Step 2 is to then compare those values to the actual sold price. Step 3 is to take those percentage differences, average it out and apply the average to the value these sites gave your home. Here s an example: These are the online estimates for a home that recently sold The actual price it sold for? $367, % of eppraisal estimate ( $4,231 more) & 94% of Zillow estimate ($21,242 less) Estimates - as you can see - are inconsistent and often wrong. Take the average of these percentage differences and apply that result to the estimate these sites give on your home. Good way to get ahead of any issue regarding online values in contract negotiating. (3)
6 How Buyers Research Price Part 2 Tax Assessments Its Also WRONG Much Of The Time Everybody says that the tax department assesses value at 60% of what they believe is market value. And some buyers will go by this. We decided to see if that holds water. Just like the online price analysis, we see how off this is using the assessments vs actual sold price method. And the majority of the time the 60% of market value rule doesn t hold water. Tax Assessments Can Be Useful Here s Why Same idea as online analysis described earlier. But even though the 60% rule is likely to be off, we are assuming the tax department is more consistent in what they value a certain area. So we take those same comparable sold homes that we used in the online analysis -- taken from the Competitive Market Analysis (which we ll go over very soon) and look at the tax department assessment compared to the actual sold price. Here s a Tax Analysis We Recently Completed Tax Assessment Actual Sold Price Percentage Difference 116, , , , , , , , , , Average difference - 44% Applied to Tax Assessment of Subject Property: 126,610 /.44= $287,750 60% of Market Value? No. This Analysis says the actual percent is more like 40-49% of market value. (4)
7 COMPETITIVE MARKET ANALYSIS (CMA) What Homes Like Yours Are Selling For In Your Area This is the most reliable method to determine market value. Pull recently sold properties similar to your home. TIPS IN A COMPETITIVE MARKET ANALYSIS: 1. Start with finding homes with similar sq feet. 2. Also acreage close to what your home has. 3. Consider the differences between these homes (number of bedrooms, bathrooms, amenities) and your home and make adjustments. 4. Don t include foreclosures or short sales unless there are a lot of them in your neighborhood. 5. Start with homes that sold within last 6 months. If not much comes up, go back further and then look at the appreciation/depreciation data so you can apply that to properties that sold more than 6 months ago. 6. Take a look at what s for sale (Active Listings) so you know the competition. ACTIVE LISTINGS CARRY MORE WEIGHT IN A SELLERS MARKET OR IN A MARKET THAT IS APPRECIATING. ARE YOU IN AN APPRECIATING OR A DEPRECIATING MARKET? The best way to determine this is to find a few homes in your area that have sold at least twice since the market starting picking up - about 8 years ago. And then calculate what percent they have gone up (or down). If you bought your home during that time frame, apply that percentage to what you paid for your home. You can also apply that percent to the sold comparables pulled for the CMA if the sold date goes back 6 months or more. Also check online marketing statistics for the zip code and homes in your area. (5)
8 III. Why The Pictures Of Your Home Can Stop It From Selling This is a bad picture of a really nice house. MUCH BETTER A Common Mistake Many Agents Make Is Not Having Professional Photos PICTURES SELL YOUR HOME. Its the first thing a buyer notices and it s what keeps them interested. Get Professional pictures taken. (6)
9 IV. Make Your Home Stand Out From The Competition After a long day of home shopping, buyers won t remember the details of the homes they saw So give them something that makes your home stand out. Our Brochures are 8-12 page bound booklets with floorplans, a school page, pictures plus maps & community information. [ [ [ [ [ PROPERTY/COMMUNITY Map location of Hospitals, Grocery Stores, school Information - bus stop location. Do some research on your area. Is it appreciating? Any plans for new companies moving in? UTILITIES (gas, electric, etc. with monthly cost estimates) Floorplan with pictures showing rooms & purpose SURVEY or PLAT (7)
10 V. Don t Just Wait For An Offer Buyer Previews Your Home & Seems To Like What They See MAKE THEM AN OFFER AND SWEETEN UP THE DEAL. Ann s house has been on the market for 2 months. Lots of showings but no offer and luke warm feedback. Matt comes along and is very complimentary and gives some great feedback but doesn t submit an offer. He is the perfect candidate for a Reverse Offer. So Ann Does This... Writes a contract with the following sweeteners: 1. Offered to reduce price by $3000 or pay $3000 toward buyer s closing cost. 2. She remembered he stated that he loved nice gardens but couldn t do as much because of an injury. She included a 6 month contract with a local landscaping company. 3. Offered a Home Warranty to insure the systems and appliances in the house 4. She also offered his agent a $500 bonus if the contract is signed within 48 hours. Plus she included a letter saying why she loved the house and the area, why she is moving and when she would like to move. GO GETTER ACTIVITY... MAKE A REVERSE OFFER The Reverse Offer consists of a formal sales agreement and a personalized letter from Sellers designed to answer the most common questions from Buyers What is their reason for moving? What do they like about the area? When are they planning to move? What is their bottom line price? (8)
11 VI. Why Buyers Eliminate A Home Buyers decide in the first 15 or so seconds of seeing a home whether they are interested or not. The home on the left would be a no go. House on the right would excite buyers and bring a higher price. When Buyers Pull Up Make Sure They See: Clean windows, a washed and if needed newly painted house, brightly painted front door & shiny new looking hardware - plus a new doormat, painted window frames, well manicured lawn and clean gutters. Decks & Porches should look freshly stained or painted, everything removed except flower pots and a few pieces of furniture. Stage the deck or porch like an outdoor room. All clutter removed. Inexpensive Ideas to Add Outdoor Pizazz Upgrade your mailbox. Add flower boxes and a pergola. Spray paint old hardware Add outdoor lights (9)
12 Inside Your Home Spotless & Staged Make it sparkling clean with freshly painted neutral walls Check List: * Make sure fireplace is clean and screen is in good condition * Drapes, shutters and shades should be clean and working. * Make sure windows open & close easily and windowsills are clean * Check doors - do they sag, seal tightly & are in good condition? * Floors - Are carpets clean, stain free and free of furniture dents. Wood floors - refinish if needed or wax to a shine. * Basement/Attic. Are they organized,well lit & clean? Stairs in good repair and doors open and close easily. Make sure there are not signs of insects and the exterior of the furnace & hot water tank are clean. * Garage. It needs to be clean, organized, well lit and free of oil stains. (10)
13 MAKE OR BREAK ROOMS First is the kitchen. Second is the bathroom. Make sure they sparkle and are clutter free. KITCHENS: Are appliances clean & in working order? Cabinets & countertype in good condition? Sink stained, chipped or in need of caulking? Clear off countertops & remove any frig magnets. BATHROOMS: Ensure faucets turn off, sinks drain freely, toilets in good condition, shower doors clean, recaulk tubs if needed, vanities and mirrors in good condition. It needs to be sparkly clean and smell fresh - not overly perfumed with strong candles. Inexpensive Ideas to Add Indoor Pizazz Add bright flowers & fruit on counters Add upscale hardware & plush towels Add a kitchen island & accessorize Placeset with some nice dishes (11)
14 VII. How & Where to Reach Targeted Buyers STRONG PRESENCE ON SOCIAL MEDIA Create an ad on Facebook and target it to income levels likely to buy your home and specify people who are active on Zillow and classified as likely to move. Create a webpage for your home provide a direct link so that buyers can click on the link and see your home. Include a virtual tour. A YARDSIGN THAT GRABS ATTENTION & Provides Drive-Bys Instant Access To Your Home s Website (12)
15 Marketing Your Home Everywhere Campaigns Send a flyer that appears in the message area to local realtors, realtors in the DC Metro area and a list of buyers currently looking for a home. Send it again if there are any changes like a price reduction. Multiple Listing System Once entered in the local MLS (MRIS), your home s listing is distributed to hundreds of websites. We also syndicate to additional websites through Circlepix - a real estate marketing company. (13)
16 1. 2. VII. A Scenario Using These Winning Strategies Prepare the home to get top dollar. Carol decides to sell her home. She schedules an inspection by a licensed home inspector and decides which items she will repair. This will be offered to interested buyers as part of a Buyer Protection Package -- along with a Home Warranty. She follows the 75 Point Checklist and paints a couple of rooms, hires her neighbor college student to help with landscaping, paints the front door and applies a nice wreath. Then she cleans everything to a shine. A Professional Photo shoot is scheduled to ensure all her work is captured in the photos and the home is presented in its best light. Determine the asking price. After going over the Equity Evaluation (the CMA, tax and online analysis) Carol sees that her home will likely sell in the $285-$290K range. She prices it in a bracket typically used by buyers when they search for a home online -- $300K -- to ensure that people searching up to 300 will see it and also people searching from 300 up. 3. The marketing begins and buyers start showing up A few weeks go by. She is getting a fair amount of showings but no offer. She has a good feedback system in place so she can stay on top of any issues. Leslie comes along and loves the house but expresses a concern about the price. and doesn t like the color in the master bedroom. Carol determines that Leslie is a good candidate for a reverse offer. So she puts a contract together and sends to Leslie Price lowered to $293. $2000 contribution offered toward buyers closing cost and she will pay for a painter to repaint the master bedroom. She sends Leslie a copy of the Home Inspection & Repairs and a nice letter saying why she is moving and what she loves about the house and area. Leslie counters with $4000 toward closing - everything else ok. Carol knew she would likely get between $285-$290 and this will net her at $289,000 - so she accepts and specifies that it is an As Is sale as the home has been inspected and comes with a Home Warranty. (14)
17 MORE ABOUT THESE STRATEGIES ITS A WIN -- WIN Carol is happy - she got the top range of market value (netting $289,000) and doesn t have to worry about buyer asking for more repairs. Buyer is happy -- she got a lower price with most of her closing cost covered and a home that s been inspected so she decides to forego an inspection eliminating the major reason contracts fall apart. Have A Good Feedback System so problems can be addressed FEEDBACK Staying on top of feedback is very important If buyer states he was turned off by an odor, for example, then you can resolve that before the next buyer arrives. Plus you can monitor likely candidates for a Reverse Offer. Buyer Protection Package HOME INSPECTION. The number one reason contracts fall apart is disputes over the Home Inspection -- buyers and sellers won t come to agreement over what needs to be repaired and who will do the repairs. Get ahead of this problem -- get the home inspected before putting it on the market and then the items to be repaired will be your decision as well as who will do them -- potentially saving because you ll have time to explore options and the charges for various contractors -- or do some of them yourself. Offer the report and list of repairs to buyers and use it as a sales point in the marketing in the form of a Buyer Protection Package. Include a Home Warranty that insures the systems and appliances in the house for a year. Place a flyer in your home and in the brochure with this information. Of course, buyer may get their own inspection but very often they won t and will appreciate the conscientiousness of the seller. HOME WARRANTY. This is a policy that covers the appliances and systems in the house. Its fairly standard these days in a contract. If a hot water heater or a heating system is nearing the end of its life and that is cited in the Home Inspection, providing a Home Warranty will mitigate the issue. It gives buyers comfort that they won t have a big expense in the first year. (15)
18 VIII.KNOW WHAT YOU LL NET AFTER EXPENSES SELLING PRICE: ENCUMBRANCES: First Mortgage Second Mortgage Prepayment penalty for existing loan Other ESTIMATED SELLING COSTS Commission based on sales price ( %X sales price) Attorneys Fees on sellers side (approx $ ) Recording Fees ($6.00-$10.00) Transfer Stamps (about $6.60 per thousand) Delivery Fees (Fed Ex) Other Processing Fees (Notary, etc) Septic & Well Inspection (approx $130.00) for FHA additional $ Pest Inspection (usually is package with well and septic inspection) Home Warrenty $ Other Other Other APPROXIMATE COSTS APPROXIMATE SELLER S PROCEEDS VIX. CALCULATE YOUR CAPITAL GAINS Your home s original sales price when you bought it Additional costs you paid toward the original purchase (include transfer fees, attorney fees, and inspections but not points you paid on your mortgage). Cost of improvements you ve made (include room additions, deck, etc. Improvements do not include repairing or replacing existing items). Current selling costs (include inspections, attorney fees, real estate commission, and money you spent to fix up your home to prepare it for sale). + Add the above items to get your adjusted cost basis The final sale amount for your home. The adjusted cost basis figure from above. Calculate Capital Gains (16)
19 REASONS TO HIRE A REALTOR... & WHY WE ARE A GOOD CHOICE A steamship captain hired a boiler expert to fix the boiler system in his ship. The expert asked a few questions, examined the system and reached for a small hammer. He gently tapped one value and BAM the problem was solved. He sent a bill for $1000. The captain was furious saying he was only on the ship for 15 minutes. The expert said he d send another bill which he did the following day. It read as follows: Tapping the valve: $.50 Knowing where to tap: $ We ll Save You Hours of your time. That s because we know what needs to be done to get a home sold and to settlement. There are hundreds of things to do -like marketing, loan conditions, satisfying contingencies,inspections, staying on top of deadlines, writing addendums when necessary - to name a few. If you aren t familiar with these activities you ll spend a lot of time on a learning curve and potentially expose yourself to risks. Its Knowing Where To Tap. 2. Odds Are You ll Sell For More Money Pricing strategy is something we spend a lot of time on. Setting a price goes beyond just knowing market value. We have made it our business to learn about buyer behaviour which can translate into getting top dollar for your home. Its Knowing Where To Tap. 3. You ll Be More Protected A title company closer told me that For Sale By Owners sometimes don t have a ratified contract for at least 30 days after an agreement and sometimes not until they get to settlement table. Why is this a problem? Without a ratified contract specifying contingencies, a buyer can walk at any time. Meanwhile your home has been off the market so that other buyers aren t seeing it. Our contracts are typically ratified within 48 hours. 4. We Can Solve Problems Others Cannot An example: We wrote a contract on a round house. Lender wouldn t approve the loan because of the unconventional nature of the house. We knew a lender that would lend on this property so the contract went to settlement. Problem solved. Another benefit of hiring a realtor. Its knowing where to tap. (17)
20 Jana Klaasse has been practicing real estate for about 20 years. She is licensed in Virginia and West Virginia and has a Military Relocation Professional designation. She is a retired American Airlines International Flight Attendant. She has a Masters Degree in Social Work from the University of Chicago and has also worked as a graphic artist and desktop publisher for Klaasse Marketing. Paul Klaasse s background is in advertising and sales. He worked for 20 years for Washington DC area newspapers winning numerous awards from national newspaper contests. He formed Klaasse Marketing, an advertising and marketing firm that served high tech clients throughout the DC Metro area. He retired in 2001 to sell real estate in the Eastern Panhandle. In 1989 I had the vision to marry Jana Beth Giddens Boomer Klaasse - my greatest personal and professional achievement. They have been negotiating real estate deals in this area for 15 years. Here s Our Contact Info We Can t Wait To Help! Jana Klaasse & Paul Klaasse Snyder Bailey and Associates Licensed in WV & VA 404 W.Burke, Martinsburg, WV Direct: (304) Cell: (304) Fax: (866) janaklaasse21@gmail.com Website: Military Relocation Professional)
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