Home Remodeling Return on Investment

So you know that you are going to sell your house. Of course you want to get as much as you can for your Arizona real estate. And now you are wondering which home improvement projects you can undertake will net you the most profit when you sell the house. Should you add a pool? How about remodel the kitchen? Or maybe we should just nip this in the bud right here.

Cold, hard facts: No matter what project you decide to undertake, your return on investment (ROI) will not be any greater than maybe 83%. In other words, you are losing in almost every case more than 17%! Seriously, let’s just take the swimming pool example. You go out and spend $15,000 for a new play pool (that’s a pretty bare bones pool in that price range). You might be able to expect to recoup $10,000 of that when the house sells. Simple math: That’s a $5,000 loss.

Does this mean that I am trying to talk people out of doing home improvement projects? Oh, heck no. In fact it is not uncommon to see me elbow deep in a home improvement project at any given time! If you think that you would get lots of enjoyment out of having one of those fancy custom backyard fire pits installed, then by all means do it! Just don’t expect that you will recoup the full amount that you spent when it does come time to sell your house.

Thinking About a Short Sale? There are a Couple of Things You Need to Know…

There are so many people who are finding themselves in the situation of trying to sell their house for less than they owe on it before it gets foreclosed upon. It is an awful situation to be in. And the inclination may be just to let the bank take the hit on the Arizona real estate you are upside down in. Well before you do that there are some things you need to know.

Tax Consequences: Most sellers in a short sale situation think that they are safe because the IRS can’t count mortgage debt which is forgiven as income and therefore you won’t have to pay taxes on it. But this does not count for cash out refinancing. Many people who are “upside down” in their homes right now are that way because they took cash out as a second mortgage. It also does not apply to second homes. This debt forgiveness is limited to the original purchase money on your primary home.

Secondary Debt: Just because the primary lender has given the OK for a short sale to occur, it doesn’t mean you are off the hook for any other debts that you have secured through your deed. The holders of second (or third, and so on...) deeds don’t have to forgive the debt, and will usually sell the balance to a collection agency. Other times they might settle for a lesser amount than was originally owed through loss mitigation. But you don’t just get off the hook.

So before you do enter into a short sale, know exactly what you are getting into. Many people who have found themselves in mortgage trouble have been able to find other alternatives. Check all of your options, and only then enter into a short sale. And if a short sale is the only option, know that your Realtor is probably not a loss mitigation expert and he or she can not give you tax advice.

Living in a Fish Bowl

Whether you like it or not, if you are trying to sell your house that means that strangers will be coming into your home. And they will be looking in your closets, opening kitchen cabinets, peeking into bathroom drawers, and invading what you might otherwise consider your privacy. It’s not that they are snooping; it’s just natural that these potential buyers want to really check the house out since this is a major purchase!

And if that’s not aggravating enough, sometimes people will want to see your house on short notice. Maybe a Realtor has a client who has been looking at Chandler real estate who changes their criteria while looking at houses. So they stop what they are doing, re-pull the inventory and find that your house might work. So they call you up and ask if they can come over right now.

It happens. And you don’t want to tell a potential buyer that they can’t come over right now because you are home doing something. You want any potential buyers to have as much access to your house as possible.

So yes, it is a big pain in the butt that strangers will be traipsing through your house. And it’s true that some may want to do it on a moments notice. So while your house is listed always have it “show ready.” And be a good sport about letting Realtors bring their clients to your house.

Holding Open Houses – A Good Idea?

When you are trying to sell your house you understand that strangers will be coming into your home. If these strangers are with a licensed Arizona real estate agent you probably don’t have anything to worry about. But if you decide to hold open houses you are inviting people into your home that just might be looking for something else. If you decide to hold open houses yourself you should always remain on high alert for your own personal safety.

Also, there are some simple steps you can take to protect your stuff. Secure personal belongings which would create any temptation for theft. Never leave stuff like money, prescription drugs, jewelry, guns, collectables or anything else of value lying around. It is also a great idea to touch bases with your insurance agent to discuss scheduled and unscheduled items. You may also want to discuss liability coverage for people viewing your home.

I am not a big advocate of holding open houses. It is a great way to meet your neighbors, but these won’t be your neighbors anymore when the house sells! It is also a great way for a Realtor holding an open house to meet potential buyer clients (who won’t be buying your house). And the odds of somebody randomly coming in and buying your house are almost non-existent. Open houses do not sell houses. If it were that easy, Realtors wouldn’t exist.

What Happens When an Offer Comes In?

Well for this, let’s assume that you are the seller, and I Jeff Hunt, am your agent. The buyer will also have an agent (not me).

The buyer’s agent has a relationship of trust with your potential buyer and it’s important that I (as your Realtor) recognize and respect that. They have hired the agent to handle all of their dealings in good faith. So regardless of the price that is offered or level of experience the buyer’s agent has, I will work professionally with that agent to create a win-win situation so that we can get your home sold.

When we get the offer, we will review it and accept it, reject it or counter back with a fair price based on current market conditions. I will also send a cover letter or email to the buyer’s agent acknowledging our appreciation for the offer, the hard work the agent has done to bring us the offer, and an explanation of our counter offer with supporting documentation.

And this whole time, you as the seller have to try to remember a few key things:
1. Negotiating is a give and take process.
2. The buyer knows that it is a buyer’s market.
3. Just like you, they want the best deal possible.
4. It’s just a house now so get out of the “my home” mindset.
5. Never take a “low ball” offer personally. It is just an offer, not an attack.

Hopefully the negotiations will end with both you the seller, and the buyer feeling like they got a fair deal. Then we can open escrow and get ready for the inspections – but that will be another topic…

Clutter and Other Personal Stuff

When a potential buy is looking at your home it is important that they are given every opportunity to picture themselves living in your house. And nothing can spoil that image faster than all of your personal items like family pictures, trophies, vacation souvenirs and your favorite knick knacks. So before you put the “for sale” sign in your yard, take some time to go around your house and de-personalize it. Take all of the magnets, photos and “art” off of the fridge. Pack up the wedding pictures in your bedroom. Box up and remove all of the clutter.

Now I know that this is tough because you probably don’t view most of this as clutter. It’s your stuff! A great place to start is in the kitchen. Remove everything from you countertops. Yes, everything! Then attack the cabinets and drawers. If you rarely use certain dishes, pots, pans or gadgets, box them up.

Look, your ultimate goal is to sell the house and move, right? So view this as a chance to get a head start on packing for the move. And so you are not moving clutter from one part of your house to another (like from your kitchen to your garage), why not rent a storage unit for the time being? It is just one more way that you can make your property stand out above all of your competition in this saturated east valley real estate market.

First Impressions Are Everything

No matter what part of the country you live in, right now is a terrible time to try to sell a house. Unfortunately, sometimes a situation arises where one needs to sell their house. Maybe it is because you were relocated for work. Maybe it’s because of impending foreclosure. No matter the reason, if you want to sell now, your house has to stand out from the competition.

The first impression that any prospective buyer is going to get will be made before they even enter the house. In fact, this impression might just get formed before they even get out of their realtor’s car! Here in the Chandler real estate market landscaping is typically low maintenance. Sometimes there will be a patch of grass, but the majority of homes have desert landscaping. Weeds can get out of control fairly quickly. Simply get out there and make sure your landscaping is up to par. Lawns should be mowed, bushes trimmed, and any weeds or garbage removed.

And let’s not forget about the front entryway. While the potential buyer’s agent is fiddling around trying to get the lockbox opened, the buyer is going to be looking around. So sweep away any cobwebs on your front porch and entry area. You might even want to invest in a new door mat. These will be their first impressions; you won’t get a second chance to make a first impression.