GREENS FARMS

Market Trends Report

March 2012

NEGOTIATING OFFERS ON YOUR GREENS FARMS CONNECTICUT HOME

Getting an offer is not the end of the sales process, it's really the beginning.  Up until this point everything has simply been paving the way for the right buyer to make an offer on your home.  An offer includes more than the price, it includes the terms of the sale, which can sometimes be more important than the price.  For example, if someone offers full list price, but makes the sale contingent upon the sale of their own home, this offer is less desirable than a slightly lower offer with no contingencies.  You need to look at the offer as a whole, not just at one or two aspects.  Sometimes getting the right price causes sellers to overlook problems that could arise from the close dates or mortgage contingency dates.  They are so overjoyed with the price that these issue recede into the background only to cause havoc later as sellers find themselves unsure whether to pack and move because the mortgage commitment date is so close to the close date. 

COMPONENTS OF AN OFFER

There are at least five components to most offers: (1) sale price, (2) inspection contingency, (3) amount in escrow at contract signing, (4) financing, and (5) date of closing.

1.  SALE PRICE

The first component is the sale price.  Most negotiations start with an offer price that is not their final one.  If the offer price is too low, you may want your listing agent to go back to the buyer agent and explain that the offer is too low to begin negotiations, but they are invited to come back with a higher offer.  When is an offer too low?  Normally, when you take the midpoint between their offer and your list price and it is below a sale price that is acceptable to you, you should not make a counter offer.

2.  INSPECTION CONTINGENCY

The second component is the inspection contingency.  Most buyers will want an inspection before they buy the home.  Check on the deadline for this contingency.  You can still market your home during the period of the inspection, but your home will be listed on MLS as CTS (Continue to Show) and the number of showings will slow down because buyers usually don't want to see a home that already has an offer on it.  You want the inspection to take place as soon as possible, because if you need to put your home back on the market, less time will be lost. 

If the buyer does not want a home inspection, this has value to you as a buyer, especially if they are willing to go to contract in less than a week. 

Sometimes inspections end up as secondary negotiations as buyers look to shave a little more money off the sale price.  I encourage my sellers to make it clear to the buyer's agent that the final agreed upon sale price is an "as is" sale with no room for negotiating inspection items, unless there is something major that comes up that would be a deal breaker, such termites.  If termites are found to be active, this has to be remediated by the seller or the buyer cannot get a mortgage. 

3.  IN ESCROW

The third component is how much the buyer will put down at contract signing, so that if the buyers change their mind and walk away before closing, you have some compensation for your trouble.  Be careful if the buyer is putting very little down as even a slight downturn in the market before closing makes it easy for the buyer to justify walking away.  Ten percent down at contract signing is preferable.

4.  FINANCING

The fourth component is the financing.  Cash is the most desirable form of financing, especially if the buyer doesn't require an appraisal.  You'll want to make sure there are proof of funds and that there is at least 10% down at contract.  Most buyers will need mortgages 

5.  DATE OF CLOSING

The fifth component of an offer is the closing date.  Most closings are scheduled for 60 days from accepted offer, but sometimes a buyer wants a shorter or longer closing time.  Be careful in a declining market of a long closing time as the value of the home can decline to the point where the buyer wants to renegotiate the sale price or they will walk away.  Yes, you may get to keep the amount in escrow, but if the market drops steeply it may not cover the drop in value or compensate for the lost time on market.  If a buyer wants to close too soon, you may have difficulty moving out in time and arranging housing for yourself.  You also want to look at the length of time between the mortgage contingency date and the closing.  If it is less than 30 days and the financing falls through, you may have packed up your home and have to unpack it.  You don't want to sign a lease or commit to buying another home until you are contingency free. 

OFFERS AND COUNTEROFFERS

Having examined the offer as a whole, you will want to negotiate the terms of the offer as a whole, and not just focus on price.  The offer consists of all the components discussed above.  Styles of negotiating vary in different regions and markets, but in Connecticut generally, there are about three rounds of offers and counteroffers and no more than 24 hours between replying to an offer or counteroffer.  If the initial offer is too low, it's best not to make a counteroffer, but to instead encourage the buyer to come in with a higher offer before starting the rounds of counteroffers. 

Ideally, both sides will counter the same amount and meet in the middle between the initial offer and the list price.  Most often the buyer and seller will counter offer the same amount so that within two or three rounds, the midpoint has been reached.  If one side is coming up or down a lot more than the other side, negotiations can stall.  If agreement is not reached, it does not always mean that this is the end of the negotiating process.  Sometimes the buyer will come back a few days or weeks later and make a higher offer after their "final and best" and sometimes the seller will try to reopen negotiations with a lower offer.  However, once the buyer has "walked away" it is sometimes hard to get them interested in the property again.

Remember, the offer doesn't mean anything until both parties sign the agreement and have a fully executed offer.  A buyer can find another home they like better or a higher offer can come in from another buyer, so get the offer signed by both parties as soon as possible once all the terms are agreed upon.  Also keep in mind that until the contract is contingency-free, the buyer doesn't have to buy your home.   I've seen buyers run up charges last minute on their credit cards or buy a new car right before the mortgage commitment and lose their financing.  Make sure there is enough time between the mortgage commitment and the closing for you to prepare for moving.

Thinking of selling your Greens Farms Connecticut home, call Gail Robinson, REALTOR, at 203-521-0768 for a free consultation.

SHOWING YOUR GREENS FARMS CONNECTICUT HOME

After you have set the price, staged your Greens Farms Connecticut home, and agreed upon a marketing plan with your listing agent, the next step is to make your home easy to see and to show off your home in its best possible light. 

EASY TO SHOW

These are important words to busy buyer agents.  When your home is "easy to show" buyer agents may include your home in their schedule even if it isn't quite what their buyers say they want.  This is good because buyers sometimes fall in love with a home outside their stated criteria.  "Easy to show" means that the sellers are very accomodating in terms of showing times and are forgiving if the agent runs a bit ahead or behind in their schedule.  The more restrictions you put on showings in terms of times, days, or making the home unavailable for last minute showings, the fewer potential buyers will see your home and the longer your home will likely take to sell.  If you have a home that requires preparation for a showing, perhaps you have a toddler and a dog, for example, then "24 hour notice required" might be appropriate, so you have time to get the home prepared for a showing. 

Another aspect of being "easy to show" is allowing your listing agent to put an electronic keybox on your front door.  If the buyers agent has to make arrangements to pick up the key or obtain a combination for a lock, it's another step that a busy buyer's agent has to take.  Make it easy for the buyer's agent.

PREPARED TO SHOW

Make sure your home is prepared to show each day.  If you and your spouse both work during the day, the morning rush can create a messy home.  During the time your home is on the market, be sure to put the dirty dishes in the dishwasher, used towels in the hamper, and leave the home decent, if not perfect, just in case there is a last minute showing.

When a home is in "show condition" it is sparkling clean, there is no clutter, surfaces are clear of papers or items (other than decorative ones), and it looks and smells inviting.  Cooking odors can be a real detriment, but baking odors entice buyers, especially freshly baked cookies.  Be careful about using air fresheners, especially the kind that plug into the wall.  If your home has an odor problem, go to the source of the problem and resolve it.  For example, keep kitty litter boxes clean. 

Don't overlook your basement.  A musty basement can ruin an otherwise perfect showing, especially if the potential buyer has allergies.  Buy a dehumidifier and have the hose drain into your sump pump, so that you don't have to keep emptying it.  Keep the dehumidifier running 24/7 until your home is sold.  If there is anything that is causing a musty odor in the basement, get rid of it.  Mildew and mold are huge issues for buyers today and you can't over come the first impression of a musty home.  The buyers won't return.

LIGHTING

Lights deserve their own special section because they are so important.  If you know there is a showing planned for that day, put on every light in the house, including in the basement.  Yes, the buyers agent can put on lights as she/he goes around with the buyer, but it's not the same effect as walking into a well-lit home.  Ideally, the buyer and agent are walking from room-to-room discussing the features of your home, not searching for light switches.  Also, the buyer's agent is not going to turn on every light in each room.  She/he just won't have time.  You want your home to show it's best, so turn on every single desk, table, accent, and overhead light in your home before the showing.  Don't leave this to chance.  And, yes, your electric bill will go up, but not as much as you think, because heat producing appliances are what generate the most amperage on your electric bill.

GOING THE EXTRA MILE

If you want to make your home especially inviting, you can have soft classical music playing in the background.  You can have a fresh flower arrangement in the entry way or living room and a bowl of fruit on the dining room table.  Some listing agents recommend having the dining room place settings out as if guests were coming to dinner.  That's your call.  You could have potpourri in the bathrooms for decoration and scent.  Guest towels and soap in the bathrooms is another nice touch.  Put the trash can out of sight in the kitchen and make sure the wastebaskets are empty in each room.  You may also want to print up (on your computer) small signs that point out features that a busy buyer's agent might miss, for example, "Plans for expansion of this room are available" and have a copy of the plans nearby.

PROPERTY BOOK AND BROCHURES

You don't want to leave anything to chance.  Make sure there are brochures for the potential buyer to take that highlight the features of your home with full color photographs and include a copy of the MLS printout.  You should also have a "Property Book" next to the brochures, a three-ring binder that includes the field record card, warranties, oil tank remediation, recent improvements with dates, plot plan, property disclosures, and floor plans (if possible).  I don't include the Property Disclosures as take-aways because I like to know when an offer is coming in.  The buyer's agent will call me to request a copy of the Property Disclosures and I can also give the agent my fax number and be ready to receive the fax.  The Property Disclosures are available for both the agent and potential buyer to review in the Property Book during the showing, but there is no need to everyone to take a copy with them unless they are making an offer.

HOW DO YOU LIVE YOUR LIFE WHILE YOUR HOME IS FOR SALE?

You have choices.  You can live your life as you always do and expect your home to be on the market a very long time with fewer and fewer showings as buyer agents avoid your home, because it doesn't "show well" or you can accept as many inconveniences as you can tolerate and sell your home faster and for more money.  It's your decision. 

If you want to extract the most value out of your home, you have to live differently for the time your home is on the market.  This means you take the toaster oven out of the cabinet, put it on the counter before you make your toast, and after it has cooled down, you put it away under the cabinet.  You make your bed each day, you throw your clothes in the hamper, you put papers and books away. 

You will also want to keep prescription medicines tucked away, money out of sight, bank statements, credit cards, and other personal information filed away.  And, of course, keep valuable jewelry locked away.  This is less of an issue with showings and more of a concern with Open Houses, but it is still prudent to take these precautions.

You can still have dinner parties and weekend barbecues, but you have to be prepared to miss potential buyers, because evening and weekends are the times that buyers have available to view homes.  You can turn down last minute showings because you are in the middle of preparing dinner or are too tired.  You are in control, however, if you make it too inconvenient for agents and buyers to see your home, then you are making your home harder to sell.  

TO PREVIEW OR NOT TO PREVIEW

Your listing agent has held Broker Inspections, but there is an agent who didn't attend them and wants to preview your home.  Should you let this agent preview your home for her client?  Yes, if at all possible, let the agent preview your home.  If you are in the midst of preparing dinner, let your agent know so that she can ask the agent if she minds the fact that the owners are at home and the house is not in show condition.  Most buyer agents will appreciate the accomodation you are making to them and be able to see past the momentary disarray.

SHOWINGS ARE A GOOD THING

Reframe the inconvenience of showings into getting one step closer to selling your home.  Don't build your hopes up for each showing or you will be on an emotional roller coaster.  Assume that you will need ten showings to get one offer.  Your house will not be right for every buyer and that does not mean you don't have a wonderful, amazing home.  It may just mean that the buyer needs a second floor laundry room and there is no room to put one in your home or the master bedroom won't accomodate their furniture.  Buyers have specific requirements and sometimes they don't know until they see a home whether the home will meet the needs of their lifestyle or not.

As inconvenient as showings are, the only thing worse is no showings.  If there are no showings, there will be no sale.  Showings are a necessary part of the Greens Farms Connecticut real estate sales process.

MARKETING YOUR GREENS FARMS CONNECTICUT HOME

Print advertising is dead.  Well, almost!  Newspaper circulation is down and newspapers are shutting their doors across the U.S.  In tracking my Return on Investment (ROI) in advertising, I have seen print advertising decrease in effectiveness and Internet marketing increase. 

MARKETING VS. ADVERTISING

Let's talk a bit about the difference between marketing and advertising.  Advertising is when you pay the media to announce details of your product or service, such as when your agent takes an ad out in The Real Estate Book, a publication that is distributed at grocery stores, gas stations, and other public places.  Marketing involves all other methods to bring attention to your home and encourage its sale.  Open Houses are one form of marketing, postcard mailings are another, and the MLS is also a way of marketing your home.

THE IMPORTANCE OF YOUR GREENS FARMS CONNECTICUT MLS LISTING

The closer the marketing gets to an actual buyer, the more effective it is.  MLS is one of the most effective forms of marketing because buyer agents search for properties for their clients and the public side of MLS using Listingbook or IDX allows the public to view the MLS data from various sites.  Because the MLS is one of the most important marketing vehicles for your home, the description, data, and photos must not only accurately describe your home, but highlight its features. 

There is a saying in real estate that "Photos sell a home".  They may not sell a home, but they certainly increase showings.  You want the best possible photos of your home that still show your home in a realistic light.  I've seen some professional photographers use ultra-wide angle lenses that make the foyer look like a ballroom.  You don't want potential buyers to be disappointed when they enter your home.  The depiction should be realistic, but your home at its best. 

NICHE MARKETING CHANNELS

If your home is in a niche market, you'll want to know that your listing agent has figured out the channels to reach that niche market and draw the buyers in.  If the niche is a geographic one, for example, yard signs with the agents name on them may cause potential buyers to call the agent and even if the home isn't right for that buyer, if the agent has a number of listings in that location, he/she may be able to redirect the call to your property. 

If your agent has a blog that attracts buyers for your niche market, that is also an important source of buyers.  How much traffic does your agent get on their blog each day.  Are the visitors to the blog from areas that most of the prime buyers of properties in your niche market come from?   Does your agent have e-mail subscribers to updates to their blog?  If so, how many subscribers does your agent have to the e-mail updates?

SOCIAL AND NETWORKING CAPABILITIES

Ask about the social and professional networking capabilities of your listing agent.  Many homes are sold by agents who get the word out to people they know, other agents or their own buyers.  If your agent is networked into people in the media, your home could be featured in local or national newspapers.  If your home is featured in the New York Times, they will even have a slide show accompanying the article.  Of course, there is no guarantee of publicity, but ask about your agent's track record in obtaining publicity for their listings.  Publicity is free and it is credible.

STAGING YOUR GREENS FARMS HOME

You've seen HGTV. You know that staged homes sell faster and for more money, staging works, but it requires an outlay of money that you may not have. If you can't afford a stager, you can still apply some of the basic principles of staging to help your home sell faster. First thing you'll want to do is to walk through your house room by room with your listing agent. Your agent may not be able to give you the design advice of a stager, but he/she can give you advice about which room colors might cause a problem (e.g., a bright purple dining room) or furniture pieces that should be moved or rearranged. Don't make the mistake of painting the entire interior off-white on the premise that buyers can choose their own colors. Well-chosen wall and trim colors can make the difference in a buyer's decision.

Buyers have very little imagination, that's why staging is big business. Staging is all about creating an illusion of the perfect home for buyers to move into. Think Pottery Barn, Crate and Barrel, Ralph Lauren, or Martha Stewart Living - soft inviting colors, nothing bright or stark. If you have a friend whose tastes runs along these lines or a decorator friend, ask them for help in choosing colors, arranging your furniture, and picking out accessories (e.g. throw pillows, area rugs, vases or bowls). After you've depersonalized the home, it may look a little stark and the right accessories will add the glamour and sparkle your home needs to stand out.

In a cool market, you need a hot property! Some properties are "hot" by virtue of their location, views, or style. Your property needs to stand out from your competition in order to sell fast in a slow market. We are assuming that you've priced your home properly and the buyer has to decide between your home and a comparable one. Let's look at what makes a difference, so that the buyer puts an offer in on your home instead of the competition...

DO ALL REPAIRS AND MAINTENANCE

No one wants to take on anyone else's problems. Buyers will heavily discount a home that needs repairs or maintenance, if they make an offer at all. Most often, they will just take a pass. Whether the market is hot or cold, the home that is in mint condition will get the most showings and offers.

If you are not sure where to start, get an inspection. You don't have to share the inspection with the buyer, it just gives you the information you need to prioritize your repairs and maintenance. Is there an appliance that isn't working, call the repair man. Everything should be in working order. After you've attended to the repairs and maintenance, the next focus should be decluttering and packing.

DECLUTTER AND DEPERSONALIZE YOUR HOME

You are going to be moving anyways, so pack away the items you don't use on a regular basis as well as all personal items (photographs, diplomas, trophies - buyers want to envision themselves in the home) and any knickknacks or papers (aim for completely clean surfaces on counters, tables and desks). Buy a Brother labeling machine from Staples for $29 and large clear plastic bins from Target and start putting away off season clothing, photograph albums, glassware, and so on. Stack the bins up neatly in a corner of your basement or garage.

No room in your basement or garage? Then it's time to declutter. Start with your garage, basement, attic as you will need to make room for storing the items from the main rooms of your home. You'll need to make three piles in every area/room you clean - one for items to throw out, another for items to sell at a tag sale (or to give to friends/family), and another to be given to charity (leftover items from the tag sale can go to charity as well).

CLEANING FROM TOP TO BOTTOM

Once the home is decluttered and depersonalized you can focus on cleaning it until it sparkles. You may need to hire a service to shampoo the rugs and clean the windows, but make sure the entire house is clean including the garage, attic, and basement. This is a big job, so call on family to help or hire a cleaning service.

PAINTING YOUR ROOMS

Painting the interior is the least expensive home improvement you can make and gives the biggest return on your investment. Make sure it is a quality paint job. Don't paint over wallpaper. Remember to scrape and sand or prime where needed. Wallpaper makes most homes look dated and should be removed, whenever possible.

LIGHTING

Lighting provides the next biggest return on your investment. Updated fixtures improve the look of a home, but don't have to cost a lot. Go to Lowes or Home Depot and replace the dated brass coach lights on either side of your front door with dark bronze lights that match the style of your home. Replace the ceiling and bathroom light fixtures, if need be. Replace your florescent light bulbs with incandescent bulbs (not green of me, I know, but you want the warmth and glow of incandescent lights for showings). Place small halogen floor lights in corners behind plants and furniture pointing up to create a sense of drama and adding accent light to the room. Make sure that there are enough lamps in every room so that there are no dark corners. Consider adding inexpensive halogen lights under your kitchen cabinets or even in your cabinets, if you have glass fronts.

HARDWARE

Check the hardware on your kitchen cabinets and bathroom cabinets. If it is old and dated looking, consider replacing with brushed nickel or bronze. Target has some inexpensive hardware that looks great. If your kitchen cabinets are old and dark, you might consider painting them off white before you add the new hardware, but be careful about how the hinges will look. You don't want white cabinets, brushed nickel hardware, and dark hinges. You may need a handyman to help you with the replacement of the hinges, if you go this route.

CURB APPEAL

If there is one thing I can't stress enough, it's that your home has got to impress the buyer BEFORE he/she steps out of the car. Your house can look fabulous inside, but if the agent can't get the buyer out of their car and into your home, then you've lost a potential sale. Even if the buyer does enter the home, the first impression of the exterior will linger. Also, don't forget the potential buyers who drive by your home and call from your lawn sign. Curb appeal is important for many reasons.

You can improve the curb appeal of your home with foundation plantings, a well manicured front lawn, painting and repairing fences, walkways, and steps. You can reseal your driveway, paint your trim, shutters, and front door, put flower boxes on windows (be sure to keep the flowers fresh and watered) or hanging flower pots from a front porch. Make sure the lock works easily on the front door and that buyers can enter through the front door. Replace old storm/screen doors with new high quality ones. If you have side lights or porch lights, replace them if they are out of date or rusty.

BEAT THE GREENS FARMS MARKET COMPETITON

If you've seen staged homes, you'll notice that it doesn't look like anyone lives there. The counters are clear of toaster ovens, blenders and dishes. There are no magnets or notes on the refrigerator. The coffee table has no magazines, books or newspapers lying on it, just a decorative bowl or candles. The dining room table does not have a table cloth, you can see the wood and a bowl of fruit and perhaps a table runner is resting on the well polished surface. Furniture is minimal, just enough to indicate the function of areas.

You won't fully achieve this look without a professional stager, but your goal isn't to have the most perfectly staged home, it's to have a home that looks better than your competitors. Attend the Open Houses of your competitors. It's the only way to know how your home compares. If your home isn't the best staged home in your price range, make the changes required. You only get one chance at a first impression with buyers, so make sure that you've done all you can before your home goes on the market. Your staged home will also look fabulous in the photos and photos bring buyers to your home.

THINKING OF SELLING YOUR GREENS FARMS CONNECTICUT HOME?

Please call Gail Robinson, REALTOR, at 203-521-0768.

1. INTRODUCTION

This is the first installment of a six-part series on Selling Your Greens Farms Connecticut Home in a Buyer's Market.

What is a Buyer's Market?

A buyer's market is one in which there are more sellers than buyers. Nationwide we are in a real estate buyer's market, which means according to the National Association of REALTORS (NAR) that there is more than six month's worth of inventory (homes for sale). However, if you look at different locations, neighborhoods, price ranges, and even home styles, some niche markets are doing better than others. Low interest rates and FHA low down payment mortgages have encouraged sales at the low end, downsizers are spurring sales in the mid-range, and at the high end, there are buying niches, such as luxury, waterfront and water view homes.

The real estate industry uses a statistic to determine whether your area is a buyer's market. This statistic is called the Absorption Rate. The Absorption Rate is the number of homes sold in your market area for the past 12 months divided by 12. This tells us how many homes sell per month. From February 1, 2011 to February 1, 2012,  37 single family homes sold in Greens Farms, that's an absorption rate of 3.08 or another way to think of it is that an average of 3 homes a month sold in Greens Farms CT during that time period.

With 33 single family homes on the market at the current absorption rate, it would take almost 11 months to sell all the homes on the market in Greens Farms CT.

This means that most homes will not sell during the six month listing period. How can you make sure your home is one that does sell? Positioning your home to sell in today's competitive market will be the focus of this six part series:

1. Introduction

2. Pricing Your Home to Sell

3. Staging Your Home

4. Marketing Your Home

5. Showing Your Home

6. Negotiating Offers

Coming up next, "Pricing Your Home to Sell in Greens Farms Connecticut".

Please call me for your Greens Farms CT real estate needs at 203-521-0768.

GREENS FARMS

Market Trends Report

January 2012

The Greens Farms, Connecticut real estate market is showing signs of picking up. The slowdown earlier in the year can be attributed in part to the season and the freak October snow storm and accompanying power outages. However, the 3 month comparison shows that while sales haven't increased, prices are on the rise.

The amount of inventory that the market can absorb was down a bit August through October, likely due to Tropical Storm Irene and the October snow storm, which kept buyers away.  Sales normally slow down over the winter, so we use the 12 month absorption rate instead of the 3 or 6 month rate, which means that it would take about 11 months to sell every home currently on the market.

Although it is still a Buyers Market in Greens Farms, it is a stronger market than many other Fairfield County markets.  With low interest rates and an improving economy, we are expecting a good Spring market.  Let's hope the weather stays mild and the Spring market begins early this year!

Thinking of buying or selling in Greens Farms, Connecticut, call Gail Robinson, REALTOR, at 203-521-0768 for a consultation.