Colleen's Blog

You Can’t Please Everyone

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Tue, 27 Oct 2009 06:18:46 -0500

In spite of your best efforts, you may rub some people the wrong way. Even if you do your best to treat others with consideration, they may have a different interpretation of what being considerate entails and end up angry. Or they may be upset for a multitude of reasons and you just showed up at the wrong time and became the scapegoat.

Stay cool and try not to let it get under your skin. Analyze the situation and try to see the other person's viewpoint; decide if there is any merit to their anger and whether you would do anything differently if you could do it over. Make it a learning experience.

Making a Change

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Mon, 26 Oct 2009 10:07:45 -0500

Change is inevitable, but most of us resist it.

Change can be inconvenient. It may take time to reposition your life to accommodate the change and you may have to notify lots of people about it, such as change of address, name, or office.

Change can bring hardships, especially when it's out of your control, and you may think nothing positive can come from it. However, there are stories of people who have recovered from devastating events and built a life beyond their wildest dreams.

Change can be beneficial, and this is usually the intent of changes we initiate ourselves. If you're dissatisfied with an aspect of your life and/or have a general sense of boredom, that may be an indication that a change is needed.

My view is that when you get to a point (in just about any situation) where the perceived disadvantages/negatives outweigh the advantages/positives, it's time to make a change.

Sometimes a small change in attitude will make a big difference; other times, more drastic action is needed. Investigate your options and try them out mentally for a few weeks. If the proposed change feels good, go for it.

I have taken my own advice and recently moved my license to Advanced Realty at 2344 Centerville Road, suite 105, Tallahassee, FL 32308.

What’s More Important, Your Money or Your Life?

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Thu, 10 Sep 2009 06:05:24 -0500

I've run into several sellers this year who really want to move, but their house isn't worth what it used to be and they'll lose money if they sell. They're not upside down and can afford to take the loss, but they can't bring themselves to accept the fact that they've lost the equity that they had with real dollars, not from appreciation.

In all cases, these sellers were very unhappy with their current situation and hated where they lived. Three of them wanted to move out of state to be with aging relatives. But all of them decided that they would wait until their house appreciated sufficiently to make up for the equity they had lost. Unfortunately, it looks like they will be waiting quite a few years.

There are also a surprising number of homes for sale (in Tallahassee) that have been sitting vacant for many months, are owned free and clear, and are way overpriced. The sellers "aren't in a hurry" and are stubborn about the price, so the homes sit without activity and lose value as time goes by. And yet, the owners stress over the fact that the house hasn't sold and they have to keep paying property taxes, keep the yard maintained, etc.

Many of these are estate homes, left by parents to their children, so they're like "found money" that the new owners got without any effort. After two years of an estate home being on the market, a neighbor remarked to one such new owner, "Honey, sometimes you just need to let go. It's not always about the money".

We sometimes forget that money helps us live a certain lifestyle and we make decisions that cause us unhappiness or stress for fear of losing some of it. Is money more important than a happy life?

Why hasn’t your house sold yet?

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Wed, 09 Sep 2009 05:51:27 -0500

Could it be that the price is too high? Regardless of its condition and location, if it were priced at $1, would there be plenty of buyers for it? As they say, "price fixes everything".

But every seller wants to get top dollar. And, not surprisingly, every buyer wants to get a great value, so sellers and buyers need to meet in the middle.

Sellers prepare their house to the best of their ability to make it appealing, and then price it so that buyers believe they are getting a great value. The more appealing the house, the more money the buyer is willing to spend.

The Basics of Good Pricing

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Tue, 08 Sep 2009 06:52:35 -0500

I was searching MLS (in Tallahassee, FL) today and found two active listings in a nice neighborhood that were both priced at $259,000, yet one of them was 1550 SQF and the other was 2300 SQF. It didn't make sense. The last sale in this subdivision was one year ago for a 2200 SQF house that sold for $264,000. With falling home values, even the larger one may have been a bit too high. Hmm, I thought, maybe the smaller one is REALLY fantastic.

I checked the pictures and descriptions and all three (two active and one sold) appeared to have similar amenities and lot sizes and be in the same general condition. Hard as I tried, I couldn't find any significant differences to account for the outrageous $168/SQF for the smaller house. Average $/SQF for comps in this area is $127/SQF for Active listings and $117/SQF for Sold (no wonder inventory is so high).

Here's a simplified overview of pricing for anyone who doesn't know the basics:

1. Search MLS properties for the following:

similar size (e.g. 200 SQF above and below the subject)
within 1 mile of the subject
currently active, pending, and sold in the last six months
similar age (e.g. 10 yrs below and above the subject)

2. Review the sold listings and try to find at least three that are most like the subject.

3. Compute the average sale price and average $/SQF.

4. Compare this with the prices of the active competition.

This gives you enough information to begin to formulate a reasonable range and is probably enough to prevent blatant errors in pricing like that mentioned above. If the sellers in this example looked at comps and still came up with this price, they may be using the infamous Seller-Expense method of pricing.

Sellers want to get a good price for their homes, but setting a list price that is too high in a market with declining values ruins their chances of getting top dollar. Hopefully, someone will tell them that if no one comes to look at their house, it means it's way overpriced. Maybe then the sellers will reduce the price to something realistic. Otherwise, the longer it sits on the market, the lower the final sale price will be.

The Seller-Expense Method of Pricing a Property

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Mon, 07 Sep 2009 16:08:27 -0500

This strategy involves calculating all the seller's expenses and then basing the price on that, to ensure that the seller makes a profit, or at the very least, breaks even. This method of pricing is often used by un-informed sellers when there is little or no equity in the home and the seller doesn't want a short sale on their credit and/or can't afford to bring money to closing.

Typical expenses for sellers include:

Brokerage fee for both listing agent and buyer's agent
Documentary stamps on the deed
Pro-rated property taxes
WDO (wood destroying organism) inspection and repairs
Mortgage satisfaction and recording fee
Payoff of mortgage(s) and equity line(s) of credit
Home repairs

Unfortunately for the seller, this strategy probably won't work unless the price developed in this manner is roughly equivalent to or less than market value.

Freedom of Expression

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Fri, 28 Aug 2009 06:28:08 -0500

I heard someone say recently that they were entitled to speak their mind because "that's what America is all about". This person was describing an ugly closing where both agents were shouting at each other and disparaging one another's competence. You would think that someone who had earned a PhD in Business would have shown more maturity and self-control, but obviously, even well-educated people may lash out at others and place blame, instead of focusing their efforts on finding solutions.

In America, we appreciate our freedoms and guard them carefully. We sometimes forget that along with freedom comes the need to act maturely and responsibly and not impinge on others' freedoms. No one wants to hear an angry dispute that degrades into name-calling, especially in a professional setting. And who wants work with someone who loses self-control under stress?

Three Things a Seller Should Know Before They Get an Offer

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Mon, 27 Jul 2009 07:28:11 -0500

The more knowledgeable and better prepared the seller, the easier it will be to negotiate and resolve issues when an offer is presented. Selling a home can be stressful, especially in a declining market when home values are falling and sales are slow. Understanding the process and discussing typical scenarios with their Realtor will give sellers an advantage when they are presented with an offer.

First, it's a good idea to determine a realistic price range based on active and sold comps and then review probable expenses and estimated net proceeds at both the upper and lower ends of the range.

The seller usually focuses at the top of the range and should understand that it's possible that the house will sell at the lower end, and be OK with that. (Note that comps should be reviewed at least every two weeks and the range adjusted as needed, in accordance with activity.)

Second, it will help the seller to become familiar with the contract and understand the norms for their area. In Tallahassee, FL, for example, the buyer typically pays for the home inspection and the seller typically pays for the WDO inspection and repairs. Most items are negotiable and the more familiar the seller is with the contract and possible terms, the better equipped they are to recognize a strong offer and get a good deal.

Third, the seller should know that there are other negotiations along the way after the contract is signed and be prepared for them as well. Most notably, buyers may ask for repairs based on the home inspection and further negotiations may be required if the appraisal comes in lower than the purchase price.

Watch out for Buyers’ Remorse

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Thu, 25 Jun 2009 13:10:41 -0500

When you buy something expensive, like a house, you're usually both excited and nervous. For many people, once they've signed their name on the dotted line, some level of anxiety sets in, otherwise known as buyer's remorse.

You might have a case of buyer's remorse if ...

You wonder if you selected the right house
You think that maybe you could have gotten a better deal
You're worried that you can't afford it (even though you have discussed it thoroughly with your lender and the monthly payment is well within your comfort range)
You take comments to heart by friends and family questioning your judgment

Buyer's remorse is stressful, but shouldn't stop you from your home purchase. If you have done due diligence in understanding the home buying process, have saved some money for expenses associated with buying a home, are working with a trusted Realtor and lender, and the home you've purchased meets your most important criteria and fits your budget, your concerns may be unfounded and a simple case of buyer's remorse.

If you start having any of the symptoms above, discuss it with your Realtor and lender. They can help you determine whether you have a valid concern or just cold feet.

A Tale of Two Inspections

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Wed, 24 Jun 2009 06:23:41 -0500

Inspectors serve a useful purpose - to identify issues with major systems in a house and inform buyers of items requiring repair immediately or in the near future. It's a good way for buyers to determine whether a house is structurally sound and how much maintenance goes with it. If there's a lot of deferred maintenance, the buyer can either ask the sellers to take care of it, re-negotiate the price, walk away from the sale, or accept the house in its current condition.

Good inspectors are thorough and are able to assess the severity of an issue and describe it without scaring the buyer away from what may be a good house.

A seller I know was happy to get a contract soon after listing his house. The house was in good condition and there weren't any major problems that the homeowner was aware of. It had a new roof and the kitchen had recently been updated. The inspection came back with a large list of items that needed repair including a suggestion to put a roof over an atrium to prevent possible flooding - even though this had never been an issue during the 10 years (and one hurricane) the homeowner had lived there. After reading the long list of issues, the first-time homebuyer decided to cancel the contract even though she loved the house and none of the issues were major. The inexperienced agent didn't help by commenting that the house was obviously poorly constructed.

The seller soon had another contract and was surprised when the second home inspection turned up an entirely new list of issues, some with items that the previous inspector had declared were working as designed and vice versa. This time, the buyer was familiar with home maintenance and was able to put the issues in perspective.

Some lessons:

If you're not familiar with home maintenance, you may need assistance from a trusted contractor to help decipher the home inspection. A home inspector is giving their opinion about what the important issues are and two different inspectors may see things very differently.
Before hiring a home inspector, ask around and find one who has a good reputation for thoroughness and common sense.
Agents who aren't expert in home construction should be careful about drawing conclusions based on a list of issues in a home inspection that they don't really understand.

Formula for Success – Multiple Offers & Sold in 5 days!

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Wed, 13 May 2009 06:13:00 -0500

Who would have thought that a modest home in an average neighborhood without A-rated schools would create a feeding frenzy? But it did. As soon as it went on the market, the showings started and every showing brought an offer! The owners settled on one that brought smiles to their faces with terms that fitted their needs exactly. It's great to know that this can happen even in a slow economy and depressed housing market.

The secret? A combination of hard work, knowledge of the local market, and giving buyers what they want - Value. The sellers put in a lot of effort to get the house in great condition, including a new roof. The kitchen and baths, although small, had been updated and were sparkling clean.

Early on, the sellers consulted with a professional stager whose ideas helped them focus on how to give the house universal appeal. They rented a storage unit and removed many pieces of furniture and items that they could live without for a few months. The house looked like a model home.

Outside, the owner painted the shutters and door in a color suggested by the stager and took pains to clean up the landscaping and add a new mailbox. It took the sellers roughly 3 weeks to get everything in shape.

The house was priced where the local market data showed comps were selling and voila - the offers started pouring in. A home in great condition, with universal appeal, that's priced right will always produce the same results.

When Pricing your Property, Think like a Buyer

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Tue, 07 Apr 2009 07:04:34 -0500

Conventional wisdom says to get the best price for your property, clean it up - Preparing a Home for Sale - Consider Professional Cleaning, make needed repairs, make it attractive - Use Professional staging to Entice Buyers, and then price it right. Pricing it right seems to be the biggest challenge for most sellers.

Buyers who are working with a Realtor are already aware of the homes competing with yours. They have likely seen (or are planning to see) all the homes that are similar to yours in size and amenities. They are aware of the sale price for homes sold in the last six months - this is a starting place, and because prices are dropping, buyers expect to pay less than what sold previously.

Ask your Realtor to give you a list of homes that are of similar size to yours - everything within 5 miles that's between 200 SQF smaller and 200 SQF larger than yours and examine the list to compare amenities and price. Where do you want your house to appear in this list? Buyers will consider the lowest priced homes first and probably won't even look at the higher priced ones.

Then look at all the homes for sale (wiithin 5 miles of yours) that are in the price range you are considering. How does yours compare to the others in the list?

If your house stands out as a great value from both perspectives, you are likely to get a quick sale. Remember, in a declining market, the longer your house is on the market, the lower the price you are likely to get, so a quick sale should be your goal. If your property is a really good value, you'll get multiple offers and might even get more than the listing price.

Persistence Pays off!

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Fri, 13 Mar 2009 06:46:08 -0500

You'd think that buying a foreclosure would be much easier than buying a short sale (which requires bank approval that can take 1-3 months), but in some cases it can be just as frustrating and time-consuming.

After looking for months, my clients finally found the perfect home, which happened to be a foreclosure. It was in perfect condition, in a great location, and bigger than anything they had seen so far. It was also at the top end of their budget and being careful money managers, they hesitated for a few days before making an offer. Luckily for them, the interest rates dropped to 5%, making their monthly very affordable.

The bidding process went smoothly and after a week of negotiations, their offer was approved by the seller/bank. Everything seemed to be falling into place and they expected to close in two weeks since their financing was all arranged. But the seller/bank said they required 45 days to close - just a formality, they said, in case any problems arose that required time to correct. Oh Yes.

We were given contacts at the title company in another city (which the seller/bank insisted we use) and contacts at the closing dept of a company that represented the seller/bank and were told, when we asked for status, that there were some title issues that needed to be resolved. After several weeks, we were told that the bank was working on a Deed in Lieu (DIL). This was a big surprise since we all thought that the bank had foreclosed and just hadn't recorded the deed yet.

As the weeks rolled by, the only update we got was that "the bank is working on resolving issues and it takes time".

Toward the end of the 45 days the seller/bank required for closing, we got a notice saying that the contract was about to expire and the buyer was required to request an extension. This seemed like a slap in the face since it was the "seller" who was causing the delay. The buyer was getting nervous because his rate lock was about to expire and getting it extended would be expensive and require funds they hadn't budgeted. We felt like the seller/bank wasn't telling us the real story and I was advised by several colleagues to give it up since they had horror stories of similar transactions that never closed.

About that time, I "happened" to find out that the seller/bank had already taken a DIL three months previously and had "lost" the file. Further research turned up the fact that the seller/bank's attorney had the DIL and was waiting for the seller/bank to give the OK to have it recorded. They said they could go forward if we sent them a copy of the contract, which we promptly did. We then notified the seller/bank reps what we had found out and things started moving.

It looked like it was finally going to work, but other snags dragged it out for an additional three weeks. It seemed like there was some new glitch every other day that WE had to iron out and coordinate between the seller/bank's various departments and representatives, who didn't seem to be communicating with each other.

The bottom line is that it finally CLOSED! My clients got their dream house at a price they can afford and are ecstatic. Ideally, this is the way every transaction should be completed - with a happy ending and very satisfied clients. Was it worth the effort? You bet! The weeks of struggle and frustration were well worth the years of happiness the new homeowners will have raising their family in their beautiful home.

Some people say, "if it was meant to be, then it'll happen". Others have the attitude, that "if they want it to be, then they'll make it happen". I tend to subscribe to the latter philosophy. My clients had a reasonable goal and I felt compelled to help them realize it if it was humanly possible.

Don't be So Quick to Reject That Offer

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Tue, 24 Feb 2009 06:36:50 -0600

Most Realtors know stories about sellers who rejected a low offer soon after their property was listed, and then got offers that were lower than the first or no other offers at all. Time goes by and eventually the seller lowers the price to the amount of the first offer and wishes he had taken it.

Getting any offer in this market is good news, even if it's much lower than desired. This is a tough market and every offer should be considered seriously - as if it's the only one that the seller will get. Make an effort to understand the other side's reasoning and inform them of your own. Keep negotiations going and be willing to give something to the other side with every counter offer to keep them interested.

Buyers today seem to fall into two categories:

1. They are afraid they will overpay and lose money or be upside down

2. They are "buzzards sitting in a tree, looking for something to die" (quote by an investor I met recently and sums up the attitude pretty well)

If the offer comes from the first category of buyer, it's in the seller's best interest to do what's necessary to make it work.

Getting the Highest Price is Simple, but not Easy

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Mon, 16 Feb 2009 06:17:20 -0600

Sellers are afraid of "giving their house away" and buyers are afraid of paying too much. Especially in a declining market, sellers need to be smart and help buyers perceive value. The strategy involves two simple ideas, but takes know-how and hard work to implement:

Attract lots of buyers. The more people who see your home, the higher your chances of getting a good price. A savvy Realtor who has kept up with the times and has the means to market effectively can make this happen. The right price is essential, especially in a declining market.
Give the buyers what they want. Once you get them to the house, give the buyers what they are looking for:

- Curb appeal. How Important is Curb Appeal? An attractive exterior that is nicely landscaped will set expectations and either draw them inside or turn them away. This is your buyers' first impression and can make or break the deal. It doesn't have to be professionally done, but does need to look neat and appealing. Exterior of house should look clean and in good repair. Front door and hardware should be in excellent condition.
- Little or no work. Maintenance should be up to date, especially roof and HVAC. Make the repairs you know are needed.
- Squeaky Clean and no clutter. House looks deep-down clean, especially kitchen and bathrooms. Consider Professional Cleaning (get references). An excellent professional can work wonders and make a grungy bathroom look like new. Rent a storage space and remove everything but the essentials.
- Fresh walls and flooring. Paint or touch up walls - get a professional opinion from a stager on colors. Have carpets professionally cleaned. If they don't look good after cleaning, consider replacing them. Giving an allowance for carpets is not a bad idea, but requires that the buyer go to the trouble and effort of having the carpet replaced. Better to pick a neutral color and have the house move-in ready.
- Pleasant Aroma. No one wants to smell last night's dinner, especially if it was fish or cauliflower. And worse, a musty smell from a vacant house is a real turnoff. Use the kitchen fan to dispel odors when cooking and use a room freshener - but don't overdo it. You want a faintly pleasant smell, not anything overpowering.
- Nicely staged for universal appeal. Each room should have a focal point and obvious purpose. Arrange furniture to make the room look spacious and inviting. Colors and accessories should be relatively neutral, but not boring. Remove photos and other personal knick knacks that you wouldn't see in a showroom or model home. Hire a professional stager, even if it's for a one hour consultation to get ideas.
- Help Buyers See the Benefits of Your Home that may not be obvious. Share pleasant experiences and reasons why you have loved living there.

If you don't or can't do most of these things, you can expect to lower the price accordingly. It's not possible to set an exact amount on what each contributes and each item varies in importance from buyer to buyer.

My experience has been that a (relatively) small amount of money and effort on the part of the seller makes a huge difference to a buyer and can mean getting a much higher price.

This is a simple and effective strategy to get the best price in the shortest amount of time. Since home values are dropping, the longer the house is on the market, the lower its value to a buyer. To get the highest possible price, plan on doing what it takes to sell it quickly.

Do New Paint and Fixtures Justify an $11,000 price increase?

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Tue, 10 Feb 2009 07:03:10 -0600

In an unusually slow buyers' market in a declining economy, a house that has been on the market for four months with two price reductions suddenly has an $11,000 price increase taking it back to the original list price!

There are a total of four pictures, two (almost identical) of the front of the house, one of the carport, and one of the back yard - usually a sign that the inside is in poor shape. The house was built in 1970, so it's likely that the inside is in need of serious updating.

The garage has been enclosed and there's no carport or external storage, another negative for most buyers in this price range.

There is no indication as to the age of the roof, A/C, and appliances, but one can guess ...

The only clue to the price increase is in the confidential remarks that state: "New Paint, New fixtures and carpet to come... looks like a different house".

The house is now priced $10,000 higher than a recent sale in the neighborhood that was in perfect condition and had a garage.

Apparently the broker and seller aren't aware of local market conditions, haven't studied the comps, and don't know that consumers want detailed information and lots of pictures. Granted, this broker is not affiliated with a major real estate company and may not be keeping up with the times.

This is a good example of poor pricing and inadequate advertising, at least for the MLS and Realtor.com, which is the most widely-used non-branded search site for buyers and is fed by the MLS system.

By missing the great opportunity to advertise in MLS, they've probably eliminated roughly 68% of buyers who might have been interested in the house (40% of buyers come from Realtors, 28% from internet).

By pricing it too high, they've probably eliminated ALL of the potential buyers.

A Strong Offer Increases Your Chances of Success

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Mon, 02 Feb 2009 07:26:16 -0600

A strong offer is one that sellers will consider seriously; it shows that you mean business and provides benefits for both parties. You want to get the best possible deal on a property you've selected, so make a strong offer which is either likely to be accepted or will motivate the seller to open negotiations.

An offer can be simply divided into price and terms (closing date, condition of property, etc. ) - pick one or the other to maximize. Trying to make both price and terms advantageous to yourself will likely offend the seller and make them less likely to negotiate*.

A strong offer has the following characteristics:

- Shows the buyer is serious about buying the property. The size of the binder is a good indication of seriousness and shows you have some skin in the game. A typical binder is 1% of purchase price: less is a weaker offer, more is a stronger offer. A seller takes a risk when they take their home off the market and a higher binder mitigates that risk.

- Shows the buyer is capable of buying the property. A pre-approval letter or proof of funds for a cash offer is essential. Without it, offers may be rejected outright.

- Has a balance between asking for and giving concessions. A strong offer may propose a lower purchase price and balance it with concessions on terms such as a quick closing date (10 days) and accepting the property "as is" without any warranty or repairs.

Conversely, if the buyer needs help with closing costs and wants the property to be in perfect condition when they move in, they can still make a strong offer by giving the seller full asking price with closing costs added on top - assuming that the house is priced at or below market value.

Common sense and an attitude of compromise should rule the day regardless of whether it's a buyer's or seller's market and ideally, there will be an incentive for both sides in every offer and counter offer.

* Expert negotiators such as Herb Cohen http://www.herbcohenonline.com/index.htm advise against negotiating for yourself because it's extremely difficult to remain objective, even if you have excellent negotiating skills and experience.

Buyer Objects to a Buyer Brokerage Agreement

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Wed, 28 Jan 2009 06:45:30 -0600

I believe that Buyer Brokerage Agreements are beneficial to buyers and in many cases, they sign up without thinking twice. For those who have never heard of them before, there can be some hesitation. I ran into an objection recently that is fairly common for those who don't fully understand them.

In Florida, a Buyer Brokerage Agreement is a contract between a buyer and a Realtor that spells out the responsibilities of each and formalizes a commitment to work together. There are variations of the details and requirements in different states, but the main idea is to set expectations and agree on compensation for services rendered.

My new clients were first time homebuyers and counting every penny. They had saved just enough to cover their out of pocket expenses and were uncomfortable with the clause in the Buyer Brokerage Agreement that makes the buyer responsible for paying the full Realtor fee, if the commission offered by the seller doesn't cover all of it.

The benefit to the buyer in guaranteeing the fee is that the Realtor will make ALL inventory available to the buyer, including FSBO's, which usually require significantly more time and effort on the Realtor's part.

When I explained that the commission offered by the seller usually covers the fee and in the few cases where it doesn't, we would write up the contract with the fee as a buyer closing cost to be paid by the seller. That seemed to satisfy them.

What objections do you run into with Buyer Brokerage Agreements and how do you handle them?

Basing Your Price on an Appraisal is a Bad Idea Unless the Appraiser is the Buyer

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Wed, 21 Jan 2009 19:49:47 -0600

When homeowners start thinking about selling their house, many decide to get an appraisal to see what it's worth. But unless the appraiser is willing to buy your home, don't assume that the appraised value is the same as market value - what buyers are willing to pay.

According to a recent article in CNN Money, "Taming inflated home appraisals", 90% of appraisers feel pressured to reach a figure that pleases the person ordering the appraisal.

Even if the appraiser doesn't feel pressured to inflate the value, appraisals typically don't consider active competition or look at houses that failed to sell (expireds). And in a rapidly changing market, an appraisal more than 60 days old may already be outdated.

There are many pieces of information to consider in pricing your house. An appraisal is just one of them.

Swallowing a Bitter Pill

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Tue, 20 Jan 2009 19:16:47 -0600

I recently met with some young homeowners who are ready to move up but first must sell their house. It's been on the market only a few weeks and already has an offer! Unfortunately, the offer is much less than they had hoped for.

There has been some back and forth and the offer currently on the table is reasonable given the state of the market and glut of inventory. But the offer is $20,000 less than a neighbor's house sold for just two years ago, at the height of the boom. And even though they know all about the declining market, their hopes were still too high. It's a bitter pill.

But the story will probably have a happy ending for them. Even if they accept this offer, they will net enough for a good down payment on a bigger home that they'll probably get for a steal. They brightened a little when they remembered that.

I'm just sorry for the neighbor who bought at the height of the boom and is now upside down. Hope they don't need to sell any time soon.

In a Declining Market, Price Your House to Sell Quickly … or Lose Money

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Mon, 19 Jan 2009 19:20:05 -0600

In a declining market, it's been shown that sellers get the highest price in the first 2-4 weeks their house is for sale. Values are going down, so the longer the home is on the market, the lower the final selling price will be.

Many sellers have found this out the hard way, when they insisted on starting out with a price that was either right in the middle of the competition or at the high end. Even with incremental reductions, in a declining market they remained above the ever-decreasing "sweet spot".

Hint: buyers are looking at the bottom end of the price range, trying to find a bargain.

After many frustrating months, sellers may finally drop their price enough to reach true market value, which is now much lower than it was at the beginning of the process. If they had priced aggressively in the beginning, they would likely have gotten an offer at a higher price. There is a good discussion of this concept in Shift by Gary Keller.

Pricing your home correctly isn't an exact science, but you can easily tell if your house is overpriced by the following symptoms:

No offers
Low offers

If the house is way overpriced, you won't get any calls or showings either. If this is the case, drop the price immediately, before you lose any more money!

A Reverse Mortgage isn’t a guarantee against foreclosure

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Mon, 12 Jan 2009 14:38:42 -0600

A Reverse mortgage (RM) may be a welcome help to homeowners over age 62 who have sufficient equity in their home and want to stay there but can no longer afford their monthly payment. Or they may want to use their home equity to improve the quality of their life with additional monthly income or pay for a big ticket item ... and the borrower usually doesn't have to pay the money back (although their estate or heirs probably will).

It sounds like a sweet deal - the mortgage(s) are paid off and you can either get a lump sum, a credit line, or monthly payments, (or some combination of the three), and you get to stay in your home for the rest of your life (even if the equity runs out) ... providing you don't default on the loan.

How can you default on a loan that doesn't have to be paid back, you ask?

Any of the following can cause a default and raises the possibility of foreclosure if the borrower doesn't have the funds to pay back the loan in full:

Failure to pay property taxes, hazard insurance, or violation of any other borrower term
Allowing the property to deteriorate beyond normal wear and tear and not correcting the problem
Living elsewhere for more than 12 consecutive months
Permanently moving to a new primary residence

While these items don't seem unreasonable, if the equity runs out, homeowners with low income may find it difficult to pay property taxes and make necessary repairs. To mitigate this problem, many local and state governments have programs to help seniors pay taxes or get money for repairs. For more information on resources by state, check out HECM Resources.

This is a greatly simplified discussion of one aspect of reverse mortgages and is meant to highlight an issue, not to explain how reverse mortgages work. While there are benefits to reverse mortgages, there are also high costs and it is in the borrower's best interest to have a complete understanding of what is involved before entering into one.

For an in-depth discussion of RM's and how they work, alternatives to RM's, and resources to help make a decision, check out Reverse Mortgage Loans: Borrowing Against Your Home produced by the AARP Foundation.

How can you compensate if your house has only one bathroom?

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Sat, 03 Jan 2009 20:51:11 -0600

We've become accustomed to convenience and most buyers want a house with multiple bathrooms and don't want to consider a house with only one.

If your house has only one bathroom, you can mitigate the situation if you:

Make sure the bathroom rocks! (check out HGTV for ideas)
- It must be squeaky clean
- have updated fixtures
- fresh paint that complements shower curtain, towels, and bath rug
- enough storage for bathroom necessities
- tile on floor or shower stall must be in great condition
- good lighting, etc.
Focus attention on other appealing areas of the house to distract buyers from the fact that there's only one bathroom.

If there aren't any areas that are appealing enough, you need to fix this. Work with professionals - your Realtor and a professional stager to determine how to showcase the most positive aspects of your house and create a WOW reaction when buyers walk in the door. (You'll also need to be sure it has plenty of curb appeal to make them want to come inside.)

I have repeatedly seen people fall in love with a house and happily overlook a feature (even a big one like only one bathroom or not enough bedrooms) that they previously said would be a deal-breaker.

P.S. You can also lower the price to compensate, but this way might net you more money

2009: Unthinkably good things can happen

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Thu, 01 Jan 2009 10:05:51 -0600

In her blog recently, Instead of a New Year's Resolution... How about a New Year's Theme?, Jennifer Allan suggested we eschew the traditional new year resolutions and come up with a theme for the year instead.

I think this is a great idea, and for 2009, I'm borrowing one of the themes from the article:

Unthinkably good things can happen.

I'm going to post it in visible places and read it at least 3 x a day.

Thanks Jennifer!

P.S. I'm also a believer in working hard to make things happen and I think it starts with a positive attitude. I don't have any New Year Resolutions, but do have a business plan for 2009.

Highest and Best Use

Colleen McConnell, Tallahassee Realtor (Advanced Realty Group) — Wed, 31 Dec 2008 22:47:21 -0600

According to Wikipedia, "Highest and best use is a concept in real estate appraisal. It states that the value of a property is directly related to the use of that property; the highest and best use is the reasonably probable use that produces the highest property value. This use, the Highest and Best Use, may or may not be the current use of the property.

A local appraiser presented this concept (and other appraisal considerations) in a seminar at our local board a few months ago. It was a very interesting talk and I was particularly taken by the concept of "highest and best use". Apparently, it's not always easy to determine the highest and best use of a piece of land and sometimes its best use is never implemented.

I couldn't stop thinking that this also applies to people. There are many who have fallen into a job/career/life situation by chance and circumstance and spend many unhappy years doing work and living a life that they don't enjoy.

And after you reach a certain age and acquire obligations, it's almost impossible to find the courage (and the energy) to change. It's easier to go along being miserable than rock the boat and risk financial hardship. But some have done it and the results were far beyond their highest expectations.

If you don't like your life and you dread going to work every day, ask yourself ...

What am I passionate about?
What are my talents?
What makes me happy?

Find a way to use your talents doing work that you love. The alternative is to live a life of quiet desperation and reach old age with many regrets. You only get one life, so do whatever it takes to make the best of it.

Happy 2009.