Whoa! Things are crazy-busy in this real estate market! The past two weeks have given me many opportunities to work with both buyers and sellers and our listings have gotten lots of showings, lately. (I currently do not have any listings that are short sales nor foreclosures, so all of my listings are traditional sellers.)

With so much inventory on the market, traditional home sales are enjoying a boost of activity. Short sales and foreclosures are still very much a part of the picture, but buyers still want the convenience and “less strings” of a traditional sale.

As a buyer, you should keep in mind the level of activity and increased competition. If you find a property you really like, that information should be in the back of your mind as you draft your offer. Here are some other things to contemplate:

  • Representation — In Wisconsin, buyers have an opportunity to be represented by an agent, known as a Buyer’s Agent. There is a contract for this type of representation. Discuss this with the agent you are working with so that you know what is available. It’s best to have this conversation BEFORE you begin searching for homes. Ask which party the agent is representing in the transaction.
  • Strategy — Is there a lot of competition for this home? It’s ok to ask if there have been offers and showings, but it shouldn’t be the sole deciding factor that determines the strength of your offer.
  • Earnest money — Will you provide earnest money with your offer or after acceptance of your offer, and how much? Different markets have different expectations depending on price range. Ask your agent for guidance on this. There are some – albeit few – offers that don’t have earnest money at all.
  • Personal property — What items of personal property will be included in the sale? Do you want all of it? Do you want things that the seller didn’t mention would be included? It is common to see appliances left at the home but not all sellers want to leave them.
  • Pre-approval letter — This is almost a “must have” before you start looking at homes anymore but sometimes the process takes a different direction. If you are making an offer on a short sale or foreclosure home, you WILL need a letter of pre-approval before you make your offer. Other sellers are learning about this, and they want to see them, too – preferably at the submission of your offer. Ask your agent for direction on this topic.
  • Contingencies — Every offer has contingencies, and the most popular ones are for financing and inspection. However, what about other issues: zoning, rules and regulations, covenants and deed restrictions, surveys or maps, marking of lot boundaries, etc. Discuss your concerns with your agent before drafting your offer.
  • Closing costs — Many of the offers in my area will be financed through FHA or Rural Development. These programs are intended to help buyers who have less than 20% down to make their purchase. Consequently, these offers will often include a contingency for the seller to provide a credit at closing to cover some of the buyers’ closing costs and pre-paid expenses like appraisal, etc. Check with your lender before the offer is drafted so that you know if you will need a contingency for this in your offer.
  • Buyer’s use of the property — I always ask my buyers: “Will you use this property in the same way as the current owner is using it?” In other words, do you plan to purchase a single family home and then after closing run a business from your home? Do you plan to convert a duplex to a single family residence or vice versa? Do you plan to install a fence or shed or put up a new garage in place of an existing one? Your agent needs to know that so that contingencies can be put in place to check out those options. Sometimes people investigate these details prior to making an offer. Check the zoning of the property to be sure that it is in sync with how you will use the property.
  • Inspections and tests — Have any been done by the seller? In our market it is traditional for buyers to have a home inspection, but on a rural property they will also be doing a well and septic inspection, as well as water tests, at a minimum. Other types of tests can include lead based paint, radon, mold, or pest inspections. Ask your agent what is typical in your market. If one of the new occupants of the home has allergies, consider what contingencies you might need in your offer.

These are just some of the more common issues that I review with my buyers. Every offer is different: That’s one of the exciting things about working in real estate!  When possible, I recommend doing as much research as you can prior to making an offer, but don’t let indecision weigh you down and stop you from getting your dream home! Get as much information as you can in writing, from the source of the “decision:” In other words, if you want to put up a fence, get a copy of the covenants and deed restrictions (if any) and municipal ordinance, if applicable, to see if you can do what you want to do. Also note that detail is important: A subdivision may not allow a privacy fence, but they will allow a chain link fence.

A final word about contingencies: Contingencies, when agreed upon between the buyer and seller, give the buyer (or seller) the opportunity to do something or check on something and if it isn’t acceptable to them, this can be a reason why the offer may not go to closing (every situation is different and you may need legal advice). If you ask for a radon test and the seller approves that contingency in your offer, you don’t have to do the test: You can waive contingencies at your discretion but if I were your agent, I’d want to see that in writing to document that you changed your mind.

I always make it a point to explain to my clients the importance of staging, not only for the photos of the property that will show up on the internet and on the MLS, but for showing appointments and open houses. It’s all part of that very critical “time on market.” In this area, if you are on the market much beyond 60-90 days, you need to make some changes because buyers will be more likely to pass you over for fresher inventory; at that point, your changes will need to include a serious price review. The home must be ready and staged by the time it is listed: no grace periods!
I’ll share an experience with you from a recent open house on one of my listings:  I was holding an open house at a vacant listing (if you think staging is important in your lived-in home, imagine a vacant home where EVERY flaw is glaring at you?!) I sat at the open house on Saturday and Sunday. Saturday I had a couple of guests and they didn’t look too impressed. The floors were dirty with the standard “walked on” appearance that you get in fall and winter. The windows had splatter on them. The bathrooms were dull. The owners had painted — not professionally — and there was paint splatter and streaks. There was a stale odor in the home. Some of the smoke alarms were chirping because of almost-dead batteries. I called the sellers who live far away and asked them if they could quickly get somebody to come in and spruce up the home for the next open house. I worked with them to make some minor changes: We staged the bathrooms, swept and vacuumed the floors, cleaned a few windows, changed some curtains that were very worn (front window) and purchased some room spray for a more pleasant odor. Sunday’s open house brought several groups of multiple people. Feedback on the condition of the home was more favorable and the visitors were more willing to discuss price and other issues with the home.
This is a real-life lesson on the first and lasting impressions that one 10-minute visit to a home can make. You only get one chance to make a good impression! For more staging tips, view my post on Staging for Optimum Value http://wp.me/soTlC-19

We are on the threshold of spring, that magical time when homeowners start thinking of gardening, lawn care, home improvements, painting, etc. If this is the year that you move on, up, or out, here are some suggestions for staging your home for the real estate market.

The first thing you need to do is look at your home with “buyer’s eyes,” for two important reasons: 1) What are the best features of your home, and 2) What are the worst features of your home?

There are several things that you can do to make your home appeal to a broad range of potential buyers, such as:

De-cluttering – Every home can use this when it’s time to market the property. Think about the 50% rule and remove approximately half of what you see in each room, on surfaces, in drawers, cabinets, and closets. It is best to take the items removed off-site from the home to avoid cluttering another room or the basement or garage, but if it all stays on-site, it is best to neatly organize the items somewhere and leave lots of space to walk. Don’t stack things against the basement walls as buyers generally like to see all of the walls in the basement.

Furniture placement – Consider the best features of your home and then make sure nothing blocks the buyer’s eye or path to these features. Let the fireplace draw them right in from across the room. When possible, remove screens from windows to show-case the yard or view, and make it easy for a group of 4-5 people to move about your home together. Simplify the interior to avoid distracting buyers from the positive features.

Paint – Color sets the mood and tone of the home, and can highlight your home’s assets or downplay less desireable features when used properly. Seek professional advice, if needed, to select a proper color palette.

Floors – Vacuum, clean, get in the corners and close to the baseboard, repair and eliminate tripping hazards. If you have tiled floors be sure that the grout is clean and in good condition. Don’t hide a beautiful hardwood floor with a barrage of area rugs.

Window treatments – Like color, custom window treatments may make a strong statement and may distract a buyer. With wood blinds, many windows may need only a sheer, a topper, or perhaps no extra window treatments at all. In a small room, large window treatments are overwhelming. Replace bent curtain rods. Dust/clean the blinds for a fresh look: Many buyers “try out” the blinds to be sure they work.

Style – If your home has a “casual” or “neutral” floor plan like a great room, use that style of furnishings to avoid distractions for a buyer; oftentimes after leaving a showing, a buyer will tell me, “There was something about that home that didn’t feel quite right…” and then they concentrate on finding something “wrong” with it. The more the style and décor of your furnishings matches the style and décor of the home, the easier it is for people to imagine living there. When in doubt, KISS: Keep it simple, Silly!

Bedrooms – Bedrooms are generally staged as a bedroom: You may need to use that 3rd bedroom as an office, but most of your buyers plan to use it as a bedroom. Keep furnishings in a bedroom — especially small ones — to a minimum. In general you should remove at least half of the clothes from the average closet: Buyers want to see to the back of the closet, and to the top and bottom of the closet, as well.

General cleaning – Cobwebs, spider webs, dusty light fixtures and ceiling fans, corners, baseboards, windows, mirrors and other reflective surfaces, doors, handles, door knobs, light switches, tubs, sinks, cabinets… EVERYTHING benefits from elbow grease and spit-and-polish! Buyers notice these details when they are looking at the expansive ceiling height, the light fixtures, etc. Don’t forget to replace burned-out lightbulbs.

Appliances – The exterior and interior surfaces should be clean and fresh, free of grease, mold or other spills. Clean burner pans on the stove, drawers in the refrigerator, and wipe the dust off of the furnace, water heater, etc. Yes, it’s the basement, but buyers are judging the home and the value with every scene they take in.

Curb appeal – Be sure that your front entry is clean, tidy & appealing. Paint, repair or replace signs of wear and weathering to avoid losing a buyer before they discover your beautiful home! Purchase a new “welcome” or door mat for the front door. Continue lawn/snow maintenance.

  • Odors – This is important: Buyers are sensitive to “new” odors. You have lived with your pet for some time, and you don’t notice the smells, but buyers do, and sometimes they are allergic. Did you ever open a refrigerator and notice a strong smell? Buyers register those experiences as negatives and it carries with them through the rest of the home, in most cases. Smoking, pets, food odors and scented candles and other air fresheners are sometimes too strong of odors for people to take in in the few minutes they have in your home.

Potential problems – Do you have a “fatal flaw,” or something about the home that is costly or time-consuming to replace or repair? Perhaps you have a non-traditional feature in your home such as a tub in the middle of the master bedroom. Contact a professional contractor or two to discuss estimates to supply to potential buyers regarding options for changing this feature.

Pre-sale inspection – Consider hiring a certified home inspector to do a home inspection and radon test prior to marketing the home. If you have a septic system and/or well, pool or other outbuildings or special features, have them inspected, too, including water tests. This gives you and the buyer a sense of confidence regarding the condition of the home. The inspector can give you a printed report on the home, as well as e-mail it to you for use in your marketing.

There are very few people who follow every bit of advice here, but the more attention you pay to detail, the more likely buyers will be to notice! Make your home stand out and be the one that other sellers have to measure up to!

I’ll let you in on a little secret: Some real estate agents think that real estate is weather-driven. As a manager, I frequently hear from agents that “this is a bad time of year” for real estate because of the cold, ice and snow. Then, in spring, they tell me “this is a bad time of year” for real estate because of the spring thaw, mud, no flowers or trees in full bloom yet, allergies, etc. Along comes summer and guess what: “This is a bad time of year” for real estate because of family vacations, allergies (again!), summer rec programs for the kids, and so on. By August, I’m told, buyers and sellers are focused on getting their kids back to school. Here comes fall and guess what: “This is a bad time of year” for real estate because of high school sports kicking off. And then, well, it’s the holidays.

So, here’s the even bigger secret: HOMES SELL ALL YEAR ‘ROUND!

Not every potential buyer or seller follows the same calendar. In fact, given the above excuses, I’m not sure I could even be convinced to make this my career! According to my calculations I might have a month or two out of 12 to make my living!

So, Buyers, when IS the best time to buy?

Answer: The best time to buy is when you’re ready. We live in Wisconsin. There will always be snow and ice in winter, rain and mud in the spring, heat in the summer, holidays, school activities, etc.

Be realistic: In the summer we want to know how well the home holds heat and how sound the foundation is come the spring thaw. Serious buyers ask serious questions: They want to see the heating and electric bills for the prior 12 months of the home’s occupancy (many utility companies now make some general information available on-line). Buyers want to see the property condition report provided by the sellers. Serious buyers hire a certified home inspector to review the property and assess it’s condition.

Here’s another tip: Ask your insurance agent for a CLUE report* on the property to see if there have been claims filed for water intrusion. This is a particularly good strategy when purchasing a foreclosure property. (There may be a fee for such a report.)

By the way, no matter how bad the economy was, there were always lenders approving buyers for home mortgages.

No more excuses! Get out there and get looking!

* C.L.U.E. (Comprehensive Loss Underwriting Exchange) is a claims history database created by ChoicePoint that enables insurance companies to access consumer claims information when they are underwriting or rating an insurance policy. (information courtesy of http://oci.wi.gov/pub_list/pi-207.htm , from the Wisconsin Office of the Commissioner of Insurance).