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Hi Friends and Neighbors,
My wife and I want to say hello to everyone. We moved into Village Green two years ago. We love it here and are looking forward to meeting our neighbors.
I've titled this part of the website Real Estate 101. Its purpose is to answer many common questions about real estate. Your first question probably is; why am I doing this? I believe that your home is probably the most expensive thing you will ever own. To be well informed about the ownership, purchase and/or sale of your home just makes good sense.
It's all about education. A client, several years ago, said it should be called a home owner/home buyer "tune up". Exactly. That's the idea and goal. My hope is that you will find this area interesting and informative.
The topics covered will be informative, current and of general interest. You may have some understanding of most of the topics from past home ownership. However, real estate law and therefore, the real estate business is an evolving process. Each year brings new rules and regulations and new ideas.
The topics to be discussed will be drawn from some 25 years in this business. They will be selected questions most frequently asked by my clients, that is, FAQ. If that sounds like some computer jargon, it is, because the computer has created huge changes in our business. More on that later.
The greatest effects on the business that occur over time are the changes in the real estate laws by the state. This is true of essentially every state, not just Florida. The changes are designed to protect your investment in your property. It's a rare year when a new law or two about some aspect of the ownership, sale or purchase of a home isn't added to the books. Note, that as real estate agents, few of us are also lawyers. We don't practice law, but we must be able to explain how the laws affect home ownership.
And this prompts the first FAQ.
Question: Should I use an agent to sell my home and/or can I sell it myself?
You can certainly sell it yourself. I doubt there is any state in the country that would prohibit you from doing that. Agents would label that situation where the owner opts to sell his home himself as a For Sale By Owner or FSBO sale. I'm not sure selling your home yourself was ever a good idea, though many years ago the process was certainly simpler.
Here's the most important reason for having an agent's help. I don't mean to insult your intelligence with this next comment, but here goes. There is only one set of rules to follow to sell or buy a home, those set up by the state and you can count on them changing annually. Do you know the current law?
Just because you decide to sell your home as a FSBO does not relieve you of following all the state's laws to the letter. You won't believe how often this is overlooked. So why do people go the FSBO route? To me there are three reasons.
One is the person who just wants to do it. The attitude is that I own it so I can sell it myself. Hey, it's the great American way to be able to do things like that.
Second, is the person who doesn't want to pay a commission. They decide to sell it themselves and save the commission. Statistically about 80% of home-sellers in these two groups who start out on their own end up using an agent anyway. They find out during the sale process that too many questions come up they can't answer and decide to get help.
The third situation has always bothered me. It is the owner who decides to sell the home himself because he knows there are some problems with the home or neighborhood, situations that the state laws require all sellers to disclose. This seller knows that an agent knows or will find out about these problems and require their disclosure. The seller knows that the disclosure of these issues could make the home difficult to sell or at least make it less valuable so that it would have to sell at a lower price.
Further, the typical buyer of a FSBO home acts like the seller and also doesn't have an agent. He buys the home and only discovers what the seller had not disclosed after moving in. He takes the seller to court. If it can be shown that the seller intentionally held back information from the buyer that the law required to be disclosed, the seller will usually lose and it will cost him more than any commission he would have paid an agent to do it right in the first place. Incredible as it sounds, the courts are full of cases like this. The real estate attorneys love FSBO situations. As agents our policy is disclose, disclose, disclose. As your agent, my attitude is that I can keep you out of trouble by assuring you fully understand the law. However, I can't get you out of trouble. If you go on your own and there is a problem, only a lawyer can help you. Lawyers are more expensive than agents.
Question: How do you determine what price to ask for my home when you list it?
This is always a great question. When the market is in a circumstance like it is now, it's hard to believe, but the basics of pricing haven't changed. The basic rule in setting a price is to first determine what other homes like yours have sold for recently. A licensed appraiser can do a formal analysis. As agents we routinely perform a marketing analysis for you prior to listing your home. It's less comprehensive than a formal appraisal but adequate for the listing. Let's expand on that.
(By the way, the terms used here are the terms commonly used by licensed appraisers. Very few real estate agents are also licensed appraisers. However, as agents, we follow the same general principles of appraising when we price your home.)
Your home is called the "subject" home. We compare your home to other homes that are called "comparables," or "comps." To locate the comps I will search the local Multiple Listing Service (MLS) for this information. A comp usually should satisfy these criteria:
1) The comps should be as similar as possible to the subject - similar number of bedrooms, baths, square footage, style, etc.;
2) They should have sold and closed recently, ideally within the last 6 months;
3) They should be as close to the subject as possible, ideally in the same subdivision, if possible;
4) There should be at least 3 comps.
When we have 3 comps satisfying the above criteria, we average their selling prices. This average figure gives a good starting point in determining the selling price of the subject home, your home. There are enough comps in the area that it is not difficult to come up with a basic figure.
But there is a problem here. That is, that over the years since our homes were built, there are few, if any of the homes that have not been improved, updated or remodeled in some way. Porches and patios have been added or enclosed, kitchens updated with new cabinets and appliances, pools installed, etc. Any cost associated with any work like this may have been factored into the selling price of any of the comps listed in the MLS sold listings. There is no way to know that with any certainty. It is not possible to go inside each comp to see what, if any, work had been done. And this is where determining a price for your home may get difficult. Let's approach it this way.
Let's start by averaging the prices of the 3 comps. Then determine at least one possible higher price than the average and one lower price. The higher price would reflect any substantial updating you may have done that could be recovered in the selling price. The higher price could also be a situation where the seller is in no particular hurry to sell and will ask a higher price and just wait for a buyer who will pay that price. The lower-than-average price could reflect a home that needs updating or possibly a situation where the seller must sell quickly. (A lower than average price will almost always get a buyer's attention.) The point is to determine a price range that will be acceptable to you, the seller, that will attract potential buyers, and a price range that will stand up in a formal appraisal. Do not ever buy or sell a home without a formal appraisal or an agent's market analysis. You must know how the sale price relates to the community's comps.
Regarding a price that is above the average has one big potential problem. If the buyer is getting a mortgage to buy your home, his mortgage company will always have the home professionally appraised. The price determined in that appraisal must equal or be less than the sale price buyer and seller have agreed on. If the appraised value is less than the agreed on price, as the seller, you have two choices. You must either lower the price to the appraised value from the appraiser or cancel the contract.
Appraising is an art not a science. There is reasonable leeway in appraisals. There should also be reasonable leeway in your price.
The point is that a price based on average appraisal criteria will appraise well and will close. A price based on those same criteria also will bring buyers for your home who are ready, willing and able to buy and complete a transaction quickly. This is further true because agents representing buyers usually will not show homes that are over priced. Price it right and it will be shown and it will sell.
Question. My neighbor's home recently sold. There were two agents involved in the sale, the listing agent and another agent who had a buyer for the home. Both agents claim to have sold the home. I'm confused. Please explain.
There are two sides to every real estate transaction and, therefore, potentially two agents. One agent represents the seller and the other represents the buyer. Since both were involved, both may claim to have sold the property. (It's also possible for the listing agent to represent both the seller and the buyer in the same sale.)
As our MLS programs continue to become more and more sophisticated, the trend is to more sales with two agents. This is happening because doing computer property searches is getting easier and faster. The main thing that has happened is that the listing information, when entered into the MLS system, is instantly available to all agents in the area. At any given moment, there may be many agents with qualified buyers looking for property to show, especially new listings in good areas. It's one listing agent working against the interests of many other agents in the area. In Manatee County there are over 1,400 licensed agents and over 3000 agents in Sarasota County. That's a lot of competition.
While the listing agent will always have a marketing program for your home, every other agent in the area is potentially a buyer's agent who may already have a client, and will see your new listing and show the home, sometimes the same day it is listed, and will sell it before the listing agent's marketing program can be successful. Computers have seriously changed our business.
Question from home buyers is, should I have the home inspected?
The answer is absolutely "yes." The purchase contract provides the opportunity to have inspections. There are several inspection options for the buyer, among them are a structural inspection and a termite inspection. As a home-buyer you are about to spend a lot of money. You must know what you are getting.
When a home is listed with an agent, the agent will have the seller complete a disclosure detailing what the seller knows about the home and the neighborhood. The seller will sign the disclosure stating that the information he provided is true and complete. Every potential buyer will receive the disclosure. If you purchase the home at this point, without any formal inspections, you are agreeing to purchase the home "as is." That is, you are buying the home on the strength of the seller's disclosure and your own inspection of the property. If something turns up after you move in that an inspection would have uncovered, you may have no opportunity to go back to the seller for a settlement. If something turns up the seller failed to mention or lied about, you may have some recourse. The bottom line is, why take a chance? It's foolish economy.
Question: Should I have the home inspected before listing the home.
This is a little harder to answer. If you have carefully maintained your home over your ownership, it probably is not something to consider.
If you have had problems like roof leaks, major plumbing problems, things which you should be disclosing in the listing agreement, a current professional inspection that shows these situations were repaired or replaced, would also appeal to a buyer. Further, if you have an inspection before listing, this information can be made available in the computer listing and to prospective buyers. That is, a current inspection can become an effective marketing tool, putting the buyer's mind at ease about potential major problems, thus creating a great incentive to any buyer.
Question: What should I repair or replace before listing the home?
The danger here is spending money for things that will add no value to the ultimate sale price. Take a very objective look at your home. If you were a buyer, would you buy it in its present condition? If not, what would have made it more attractive to you? Make a list and read on.
Things you should consider doing as a seller would include: repair of non-working appliances that will stay with the home; replace appliances that will stay with the home that can't be repaired; repair any damaged areas on walls, soffits and fascia; paint the interior if it shows wear or if you have decorated in bold, dark colors; have the carpets cleaned, especially if you have pets; replace the carpet if it is showing worn places. Paint or re-carpet in neutral colors. Tell the paint or carpet store you want to look at "builder-grade" materials and colors.
Things not to do: this is not the time for a kitchen or bathroom makeover or adding a room addition, that is, major alterations or additions such as enclosing a carport or a patio. If you are not sure about something, ask an agent for advice. Personally, I had a seller who put in a pool just before he called me to list his home because he thought it would enhance the value of his home. (He didn't ask for advice first) I also represented the buyer who loved the home but did not want the pool. The buyer talked the seller into a low price, what the home would have sold for without the pool, and after moving in, filled the pool with dirt and planted grass on it. The idea is not to spend money for items a buyer may just throw away anyway because of their personal tastes.
I have spoken to the most common questions buyers and sellers have asked. There are many more topics. Call me or email me if you have any other questions. I am happy to help you.
To review, the biggest problem for all buyers, sellers, real estate agents, actually anyone, anytime who is involved in the purchase or sale of a home, is that the rules change, sometimes several times a year. These are changes to the state real estate regulations and affect all transactions. All transactions must comply. Historically, most problems occur when a home is sold or purchased without an agent. Just a word of friendly advice - play it safe. Use an agent.
I hope you have found them interesting and valuable.
As an active agent, I am always looking for opportunities to serve the community. I have many years in the real estate business. That experience will help you make sound decisions about a sale or purchase. Further, living in the community, I can serve your needs better than most other agents.
I live only minutes from you. I am readily available to show your listed home when potential buyers call me after seeing my sign. Many times buyers are in their car in front of your home when they call on their cell phone. In most cases I can meet them quickly. I will hold an "open house" frequently if you wish. If you are a seasonal owner, as your agent, I can easily keep an eye on your listing when you are not here. I would be checking for lights that are left on and doors not locked after other agents have shown your home. (That does happen.) All of that is in addition to my normal selling services to you. These include your listing in the MLS (usually in the MLS within an hour after completing the listing), my realtor sign, an informational flyer about your home and your listing placed on the internet. These basic marketing ideas will get your home sold quickly and for the best price.
I look forward to serving you.
Mark Rusch
Markey Realty
941-704-9481 (direct)
mark@markrusch.net (email)
www.markruschhomes.net (website)
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