Category Archives: Selling a Home

That Drone May Shoot Your House — In a Good Way

earthI was feeling like all real estate news had turned into an endless loop of the same material (c’mon, how many times have we seen that St. Joseph statue story already?) when I came across this item from Paul Hagey and Inman News: “Drones are ready for real estate.”

That’s right, tiny unmanned, remote-controlled helicopters are becoming affordable, and photographers are figuring out how to stabilize them for high-quality pictures and even video,  allowing prospective buyers to see views of your property that you’ve never experienced yourself.

You’ve got to admit, this is cool stuff. Even cooler when you read the part about how not even a normal plane or helicopter can get low enough — in the 300-feet-over-your-house range  –  to take photos with of similarly impressive detail and depth of field.

Of course, not every property will look good from the air. Last time I looked at my house on Google maps, it looked like a square of gray (that being the roof) set against a lot of other gray (those being the neighbors’ roofs and the cement of nearby roads) plus the occasional dot of green (uh oh, I really should prune back that jasmine vine). But the nearby high school swimming pool looks really great.

So if you’ve got a house with a pool, you may want to be an early adopter of this drone method of real estate advertising. The same goes if you’ve got a luxury property that looks more shapely from the air than my little square of gray. Or if you’ve just got a really stunning roof.

Really? Sellers Can Paint the Walls in Actual Colors?

For a while there, “neutrals, neutrals, neutrals,” seemed to be running a close second behind “location, location, location,” for favorite real estate tag line. Home sellers were advised to paint as much of their house as possible before putting it on the market — and to paint only in inoffensive yet alluring shades of what you and I might call tan, grey, and white. (The paint vendors, of course, call them “bisque,” “barley,” and other similarly tasty terms.)

SONY DSCBut hold everything: The word on the street now is that “bold colors” work very well if you’re trying to sell your home to “millennials,” or buyers currently in their 20s and 30s. This according to experts quoted by Richard Eisenberg in his article “How Boomer Home Sellers Can Hook Millennials.”

If you believe the paint companies, “Emerald,” “Aloe,” and “Lemon Sorbet” are what’s trending now. In fact, florals, patterns, and wallpaper are said to be making a comeback, too.

Pity all the home stagers whose websites include “Before” and “After” pictures in which they painted over perfectly respectable colors with shades of blah!

Home Sellers: Don’t Spill Precious Beans to Prospective Listing Agents

flageolet_bigIf you’re doing your due diligence when preparing to sell your home, you’ll talk to two or three real estate agents or brokers about the possibility of representing you in that sale.

Brokers are typically generous with their time at this stage — they’re experts in the field, they love touring houses and talking about real estate, and they (of course) are hoping you’ll sign up with them and ultimately pay a chunky commission on the sale.

But I’m getting ahead of myself here. Things can get very chummy during these initial conversations, and you may even feel with each broker that, “This is the one.”

Better keep at least some cards close to your chest, however, as described by columnist Ken Harney in his intriguing and disturbing article, “Agents not obligated to keep secrets when they don’t get the listing.” If it weren’t for an April Fool’s joke played by a real estate broker — who pretended to have set up a website, “LostListings,” in which the unchosen masses of prospective brokers could sell information gleaned from those initial conversations — this topic might not have made it to anyone’s radar screen. The joke website suggested, for example, that brokers might reveal things like the seller’s desperation to unload the house quickly to avoid foreclosure, or defects the seller was hoping not to have to disclose.

Not everyone caught on to the joke, however. (That always happens!) And a conversation ensued along the lines of, “Okay, so how much can a broker who no longer has a direct relationship to the seller ethically reveal?”

For the brokers who ARE in contract to sell someone’s house, the answer is clear. They must maintain confidentiality, subject to any exceptions set out by state law. (In some states, for example, listing brokers must tell buyers about material defects within their knowledge that would not have been readily apparent to the buyer or an inspector.)

If I’d had to guess, I would have said that prospective brokers would also have a professional obligation to keep confidential any information they learn from home sellers. That’s what lawyers have to do — in fact, Section 1.8 of the American Bar Association’s Model Rules for Professional Conduct specifically addresses the nature of lawyers’ relationships with prospective clients, saying, “Even when no client-lawyer relationship ensues, a lawyer who has learned information from a prospective client shall not use or reveal that information, except [some narrow exceptions].”

Well, guess what? Apparently no such rule has been written for real estate agents and brokers. Harney interviewed the National Association of Realtors’ (NAR’s) top legal official, Laurie Janik, who said, “The Realtor Code of Ethics does not impose any duty of confidentiality with respect to information provided by a prospective seller client who does not engage the Realtor.”

Harney also spoke with the ethics columnist for Realtor Magazine (also senior vice president and general counsel of Prudential Alliance Realtors in St. Louis), Bruce Aydt, who agreed that the Code of Ethics says nothing about information divulged during listing presentations. Aydt noted, however, that sellers in these conversations likely “have an expectation of privacy ….” Yup, that’s just what the lawyer for the disgruntled home seller would write in the 100-page legal brief to support a lawsuit against a loose-lipped broker.

To be fair, no one is claiming that there’s been a rash of — if any — instances where selling brokers revealed confidential information about a prospective client. I’ll bet most of them have enough business savvy to keep mum. But if you’re thinking of selling, you might not want to put this theory to the test. Unless you want the word on the street to be, “We just won the zillion-dollar lottery and are moving to the Bahamas, you can sell this dump for $1 and we’ll still be rich!!,” keep it to yourself.

The Seller Has No Place to Move to Yet: Will Your Purchase Close?

IMG_4405Found a house to buy? You’re probably feeling lucky, while many other home buyers remain frustrated at the present dearth of “For Sale” signs (not to mention properties). Low housing inventory breeds low housing inventory, with sellers thinking, “How can I put my house on the market when I don’t know if I’ll be able to find another house to buy?” along with “How can I afford to buy another house until I’ve sold this one?!”

Would-be home sellers are all but stuck — unless a buyer is willing to sign onto a so-called “seller purchase contingency.”  This portion of (or addendum to) the home purchase contract says that the deal will not close unless the seller finds another home.

If you’re the buyer, and you love the house in question enough to risk either waiting extra time for it or losing it altogether, you might want to sign onto such a contingency. But read its terms carefully first, and sound out your seller. In particular, you want to find out how far down the road toward a new house the seller will contractually need to be before your sale will close, and what steps the seller has already taken toward finding a new home.

As pointed out by Bob Hunt in the RealtyTimes article “Seller Purchase Contingencies Require Care,” the California Association of Realtors (CAR) has issued a new (as of November, 2012) addendum for just this purpose, called the “Contingency for Sale or Purchase of Other Property.” (Note: It’s not that this contingency is a new concept — real estate agents could, in the past, add language to this effect in California as well as in other states — but the contingency has become more commonly used, which apparently led CAR to issue the new form.)

The language in the new addendum is favorable to California buyers, requiring only that sellers have “enter[ed] into a contract to acquire replacement property” within a certain number of days (17 is suggested in the contract) in order to remove the contingency and allow the original deal to close. In other words, buyers who sign this addendum don’t have to wait around to make sure that the sellers’ deal actually closes on time or at all — they just need to hope that the sellers get as far as a signed agreement with another home buyer (and actually removes the contingency).

Seventeen days isn’t a very long time in which to not only find a house but enter into a purchase contract. You may want to give the sellers more time to begin with. But to make sure you’re not going to be strung along for nothing, it’s also worth making sure the sellers have been taking the appropriate steps toward finding a house.

California Realtor George Devine (co-author of Nolo’s How to Buy a House in California) says, “The seller is motivated to act in good faith here — otherwise he or she risks losing you, the willing buyer. Nevertheless, in a situation like this, you (most likely through your agent) should be asking pointed questions of the seller, like, ‘Why are you selling? How many houses have you already looked at? Have you made an offer on any? If so, at what stage are the negotiations?’ If, for example, the seller hasn’t really looked around at all, but wanted to test the market and see what price his or her house would command before taking the next steps — or is already in escrow, but with a 180-day closing period — you might want to think twice. “

If a Home’s Walk Score Is Low, How’s Its Parking Situation?

parking_ResidentialParkingWe’ve long known that a home’s walk score is a big factor in its value: A 2009 study found that homes with above-average levels of walkability (to amenities such as stores, parks, schools, and public transportation) sell for anywhere from $4,000 to $34,000 over homes whose walk scores are merely average.

Millennials in particular are taking an interest in walking or biking, whether for lifestyle or pocketbook reasons, thus sending the car industry into a state of worry about declining purchase rates.

Still, with one car out there for every two Americans, there’s a good chance that folks buying a house are going to want at least one spot for their vehicle, as well. The 2011-12 “Cost vs. Value” report from Remodeling Magazine found that a standard (not upscale) garage adds about $33,000 to the value of a U.S. single-family home — not enough to make it worth the $57,000 price tag in building a new one, but certainly enough to warrant calling attention to a garage that’s already there.

First-time homebuyers don’t always appreciate the benefits of a garage, but those who go without soon learn. Circling the block night after night in order to park at your own house is no fun. Neither is waking up to find that your car has been relieved of its catalytic converter.

With condos, or homes in jam-packed urban areas, buyers may have to pay separately for a parking spot. If you thought condo fees were high, get ready for some new sticker shock. As Bob Hunt reports in RealtyTimes, parking-spot prices in San Francisco have gone as high as $1 million, and in San Francisco, up to $90,000 back in 2011. Do we hear $100,000?

Whether you’re buying or selling, considering these proximity and transportation issues will help to both place a value on the property and  estimate the costs and ease of life for the owner.

“For Sale” Signs Still Important Home-Search Tool

A recent Washington Post article, “Conn. real estate agent accused of stealing competitor’s for sale signs from in front of homes,” got me wondering: Are yard signs still that important? Or was this overly competitive agent skulking around in vain, in a world that’s become Internet-driven? (Allegedly skulking, that is.)

Here’s what the National Association of Realtors (NAR) tells us about how home buyers locate the place they want to buy:

Information sources used in home search:

  •     Internet: 88%
  •     Real estate agent: 87%
  •     Yard sign: 55%
  •     Open house: 45%
  •     Newspaper ad: 30%
  •     Home book or magazine: 19%

Yes, the Internet tops the list, but over half of home buyers still rely on a yard sign — and why not? Seeing a “For Sale” sign on a neighboring house is sure to get some buzz going. Not to mention the fact that if you see a house ad, and then drive by to take a quick look, the yard sign helps spot the place.

So, if you’re selling a house, make sure to use a yard sign. (Most everyone does, but some sellers have been known to refuse, for privacy reasons or because they’re embarrassed at having to sell when the reasons are financial.) And then make sure that sign doesn’t walk off during the night!

For more marketing tips, see Nolo’s articles on “Preparing and Showing Your Home.”

Before Selling Your Home, Check Your Zestimate

Estimates of your home’s value that you might find online are, as widely acknowledged, nigh on bogus. They’re created by computers, which, smart as they’ve gotten, lack for feet or eyeballs with which to visit a house. The result that’s available on websites such as Zillow has been described as everything from “hallucinatory information” (by Realtor Jonathan Dalton, in Phoenix, Arizona) to “gives the wrong impression,” (by Realtor Gary Russell, in Waco, Texas).

The problem for home sellers is that, if your house appears in the Zillow system, any potential buyer might look at its so-called “Zestimate” and possibly believe it. Dalton’s impression is that, “buyers look at Zestimates . . . in a borderline irrational manner if only to support their own desire to get a ‘deal’ on a house.”

As a seller, you want to know what dollar figure the buyers are looking at: Will they coming to your house thinking it’s a bargain (or that maybe you’ve priced it low because of hidden problems), or over-priced? In either case, it’s worth taking steps to change the Zestimate — which you can, within limits.

On the Zillow listing page for your home, click the link for “Claim this home.” Then, you will be able amend any of the basic information offered, such as number of bedrooms and baths, type of flooring, included appliances, and so on. This still can’t possibly account for factors like a great location, a tree-lined street, a great layout, or a stunning remodel, but it’s a start.

I just “claimed” my current house, as an experiment. I had expected to be able to report that I raised my Zestimate by alerting the computer to home features that it couldn’t have known I had. But no, I lowered it. A lot. Actually, that’s not too surprising, given that Zillow thought my house had one more bedroom than it really does. (Need I say more about accuracy?)

Zillow also gives you a place to add your own estimate of the home’s value. Interesting idea, getting into an online argument with a computer. I’d be inclined to take a hands-off approach, and leave that portion blank — but that’s a conversation to have with your real estate agent.

Got Room in Your Home for Grandma?

When new-home builders start offering models with an independent living space for elder (or younger) family members, you know there’s a trend afoot. (See “Latest home designs: Our house is Grandma’s house, too,” by Jim Buchta of the Star Tribune of Minneapolis.) Minnesota’s Lennar Corp. says it’s the first production builder to offer a design featuring a “house-within-a-house,” each with a its own entrance and garage.

Buchta also provides figures from the Pew Research Center, indicating that while only 12% of the U.S. lived in multigenerational households in 1980, that has since gone up to 17% of U.S. households. Yup, a trend!

What does that mean for home buyers and sellers who won’t be signing up to live in a Lennar Corp. development? For buyers, expect competition for houses with layouts that can accommodate a relatively independent family member, and that don’t present major barriers to accessibility — or can be so adapted. (For more information, see Nolo’s article on “Home Modifications for the Elderly.”)

For sellers, it means a marketing opportunity. If your home already features grandma-friendly features, or could easily be adapted to do so, be sure to mention this in your marketing materials. Just be careful about over-promising, in case local zoning or building laws limit the possibilities for remodeling or expanding your house.

Also realize that your most likely buyers may be originally from another country, where many generations share one house is more common. That may give you ideas or cautions for marketing, such as advertising your house in the local ethnic media.

 

News of Climate Change Hasn’t Reached the Real Estate Media

Anyone else notice something off-kilter about Curbed’s recent analysis, in its article about an architecturally “ho-hum” house on the Pacific Coast Highway in Malibu, that the $15,800,000 price tag is justified by its “location, location, location?”

Yes, the view toward the ocean is beautiful. Yes, it’s got a private set of stairs to the beach.

But the article made no mention of the fact that, as The New York Times stated in March of this year, “severe coastal flooding could occur regularly in the United States by the middle of the century and [] California would be among the states most affected.” (See “Both Coasts Watch Closely as San Francisco Faces Erosion.”) Nor does it mention the California report (cited in the same article) that predicts sea level rises of seven inches by 2030 (that’s 18 years away, folks) and 14 inches by 2050. How convenient, those private stairs may someday lead straight into the water!

Wouldn’t you think the prospect of watching extreme weather through a lovely set of plate glass windows would reduce the value of the location just a tad? Even the climate change deniers will have trouble denying the public’s reduced interest in property that looks to be at risk. Someday, I would expect, climate change will be part of the discussion of any piece of waterfront property. In the meantime, let’s all just focus on the ho-hum architecture.

FSBO Seller Gets Creative With News of Cheating Husband

It’s not as though she needed to create her own yard sign. Any of several online companies offer premade, lawn-ready “For Sale By Owner” signs along with other services. (See, for example, www.owners.com, http://fsbo.com/Sellers.aspx, and www.forsalebyowner.com)

But recently divorced Portland homeowner (and business owner of Totallyradcards.com) Elle Zober apparently wanted to add a personal touch. She and her son created a sign that reads, “Husband Left Us for a 22 Year Old . . . House for Sale by a scorned, slightly bitter, newly single owner.”

And it hit the media big time, with reports in Q13 Fox News Daily, Opposing Views, and Business Insider. Zober’s blog states, “Cannot say enough how shocked I am by allllll the media attention.”

According to Opposing Views, the sign is achieving its goal and then some: “Zober is getting offers for the house and invitations for dates.”

As to why it’s working, I’d speculate that the humor and the unusual approach help. But whether it would work for every other “scorned, slightly bitter” seller is another matter. Zober seems to have her head on straight despite all she’s been through. If the many reporters knocking on her door were to find someone gunning for revenge against said ex-husband, they might have raced back to the curb. But instead, Zober is able to deliver media-worthy quotes like, “It is not about revenge. What’s done is done. He did what he did. We just want to sell our home.”