How to sell your home faster

Given today’s economy, selling your home quickly is more important than ever. With so much uncertainty in the marketplace, time is not your friend. Here are three things you can do to get an offer sooner than the house down the street:

#1 Do not try and sell your house for sale by owner. This is a very appealing way to sell your house for a lot of people because not paying a real estate commission equals less cost, which is always better. This is not 2005 and inventory is abundant. Love ‘em or hate ‘em, the National Association of Realtors spend thousands and thousands of dollars each year conducting housing sale statistics. According to NAR, in 2006, only 7% of all home sales were open market for sale by owners. What the statistics don’t say, is that of the 7%, a broker almost always represented the buyer in the sale. Where I live, home prices dropped and average of 40% from 2007-2009 and the number of houses for sale skyrocketed. I don’t have to drive around and look at unlisted property anymore. Any real estate agent in town can find a list of 10 suitable houses for any buyer in any price range by simply searching their local mls. They know they will get paid and how much before they ever pick up the phone. If you sell your home yourself, you are not on this list.

#2 Stage your home. Staging your home does not entail an interior design degree or rummaging through a million color pallets trying to find a paint that will hypnotize a buyer into purchasing your home. Staging your home can be done at no cost and in a very short amount of time. The most important thing to remember as you are staging your home is this: How we live in a home and how we sell a home are two completely different things.

#3 Make your home easy to show on short notice. I talked to a real estate broker the other day who wanted to show one of my listings. Naturally, I asked how many homes she was showing this buyer. She said 19. Showing 5 homes and arranging the best route and best showing order is a chore. Showing 19 is unimaginable. Not to mention sorting through 50 properties to narrow it down to 19. If your home is similar to another home and all a real estate agent has to do is call you, the owner, and tell you a time or leave a message with the showing time on your voicemail, your home will be 1 of the 19 that gets shown that day. The other 31 homes don’t make the list because they require appointments, 24 hours notice, x hours notice, etc. The more showings, the better chance of an offer, the sooner the offer, the faster your home sells. You get the picture.

What happens to Second Mortgages in a short sale?

Second mortgage loans seem very different from 4-5 years ago.  A second mortgage is a loan on a piece of real estate when there is already a loan in place.  They were widely used to get 100% financing on homes.  Second mortgage rates were typically higher than first mortgages due to the higher risk.  Second mortgages are all but extinct in today’s home purchases.  In the world of short sales and foreclosures, they are the supporting actors.

Any chance anyone has at avoiding foreclosure is often doused when there is a second mortgage loan.  You can work all day long on getting the first mortgage to take less than owed and even if they approve, the second mortgage may not.  The second mortgage will usually settle for fractions less than you owe, but it is usually more than anyone wants to pay them.

So what happens to second mortgage loans in a short sale?  You guessed it.  They need to agree to a short sale also.  Although second mortgage rates are typically higher, the amount owed is usually less.  Here is how it works.  You send the offer and any other required paperwork to the bank who holds the second mortgage.  They review all documentation and come back with an amount they need.  Most of the time, they come back with a number which is too high.  The key to negotiating with second mortgages, is to push as hard as possible and get them to take the smallest amount possible.  A very typical number is between $3000 and $5000 dollars (although every situation is different).  Many second mortgage holders will accept something in this range.  So after 30-60 days of negotiation, you finally get them to agree to accept the short sale.  Phew, glad that is over.  So who in the world is going to pay them this money?

Most of the time, the first mortgage will pay them some money as part of their short sale approval.   Bank of America will typically pay $3000 to the second mortgage and IndyMac (now One West Bank) pays $2,000, to give you two examples.  Simple math tells you that $3000 is less than $5000 and there is still $2000 left.  So now you are down the road 90 days, you have short sale approval from the first mortgage, short sale approval from the second mortgage, and guess what?  You can’t close because no one is willing to pay the extra money to get the second to go away.

Lately, big banks are under scrutiny for trying to get money from Realtors, buyers, etc., to get the amount they want.  The good news is that people are finally paying attention to the poor practices of big banks.  The bad news is that your home still won’t sell and you end up as another tally on the long list of foreclosure victims.

How to stage for free when selling your home

“You need to stage your home!”  Often the first words out of many people’s mouths when they find out you are selling your home.  What is staging?  Staging is simply arranging your home so that people looking to buy it can see it for what it is.  When it comes to staging, you have 2 options:  Staging your home yourself or hiring a Staging Company.  Staging companies come in many shapes and sizes.  The thing they all have in common is that they cost money.  So, if you have extra money lying around the house, feel free to hire a staging company.  If not, below are some easy ways to stage your home by yourself.

The first thing to do :  Remove any and all family pictures from your walls, shelves, and everywhere else.  There are two reasons for this.  The first reason is it disrupts the flow of a showing.  When someone is looking to buy your house, you want them focusing on where they would place their furniture, how nice the granite is in the kitchen, whether or not their mother-in-law can sleep in the shop in the back, etc.  Pictures distract people.  The last thing you want is a buyer with cash in hand, stopping to see why you like poodles instead of labs.  The second reason to remove family pictures is because they make rooms and hallways feel smaller.  I am not sure when hallways became the “art walks” for the family tree, but they did.  Art galleries are open with high ceilings and very few walls.  There is a reason for this.  Make your hallways and rooms feel like empty “art walks” so the next owner knows where to hang their art.

The next thing to do is remove any animal trophies (even the pictures).  I cannot express how important this is. Unless you are selling a hunting ranch in Wyoming or New Mexico, it can cost you a sale.  Enough said.

As for the rest of the house, here is the secret to staging: Take 1/3 of the stuff out of every room, literally.  There are very few times you should break this rule.  If you have 3 pieces of furniture in your living room, take one of them out and put it in the garage.  If you have 3 lamps in an office, take one (you guessed it) and put it in the garage.  If you do not have a garage, use one of the rooms in your house for storage.  If you have 6 chairs at your kitchen table, take 2 out.  This will leave your house less cluttered, but not empty.

Bookshelves and closets.  Same rules.  If your closet is like mine, 1/3 is very difficult to estimate.  For clothes that are hanging on hangers, just make sure the clothes are hanging freely and not bunching together.  The easiest way to decide what to remove, is take all the clothes you aren’t going to wear in the next 6 months out of your closet and store them.

Staging your home yourself helps you sell your house, helps you pack, and is free.  When in doubt, take more out.

The King of Social Networking, Facebook, heads to Central Oregon

In 2008, a client brought us 124 acres of dry sagebrush and juniper outside of  Prineville, Oregon. Even at that time, the effects of what would be the current recession were  being felt.  Prices were plummeting, buyers were evaporating, and companies were beginning to announce lay-offs and closures. In particular, land prices were proving to be extremely susceptible to the snowballing decline. Kerry O’Neal, principal broker of Strategic Realty,  studied the situation, stomped around the sagebrush, and informed the seller that we would do whatever it took to find a buyer for his property.

Fast-forward to the present, and you can now see the results of those efforts. Facebook, the largest social networking site in the world,  is building its first data center ever outside of Prineville, Oregon, on that same 124 acres of sagebrush.  This data center will house the webpages where people reconnect friends, colleagues, and family.  Strategic Realty is proud to have played our role in moving this giant to the region.

Data centers are state-of-the-art, climate controlled facilities which house the thousands of computers needed to run international websites like Facebook.  They can require immense amounts of electricity, communications connectivity, and water. The availability of these resources determine the most economical location for investment.

The impact on the local economy will be significant.   Facebook is constructing a $188.2 million dollar, 117,000 square foot asset in the community, and, in the process, are employing over 200 construction workers for the next one to three years.  When finished the facility will provide over 35 high-salary jobs for people living in Central Oregon.

Click here to see what else we’re working on…

Freddie covering its Fanny: Real Estate Agents Beware

During an ongoing battle with B of A over a short sale, I got a call from a gentleman interested in homes  in NW Bend.  I pulled the search and noticed one of my listings…listed with another broker!  After staring at the pictures for a few minutes, I called the other real estate agent.  After a very short conversation, she told me that she had a listing agreement with Freddie Mac, the locks had been changed, and I needed to just move on.  I kindly explained the home had not been sold or given back to Freddie and I personally verified the information with both B of A (they were actually right for once) and the trustee who did NOT sell the asset.  I then called the agent again and asked if she could fax or email me a deed, document, anything showing title to the home had been transferred.  The email response I received was something to the effect of “Go fly a kite. I know all you want is a commission check, but accept defeat, sorry about your luck, and don’t call me again.” Freddie Mac was wrong and I knew it. No offers in, no foul.  2 offers on her listing and 1 on mine… hot subject with major ramifications.  I ran my phone dead calling Freddie Mac, B of A, ReconTrust, and my seller.  After 2 weeks, the local mls kindly suggested I remove the listing from the mls or…not fun.  1 week later, I received an email from Freddie Mac.  Guess what? They were wrong, the other agent didn’t have the right to sell the property.  If there was any point in my life when I wanted to be a fly on the wall, this was it.  Oh how I wanted to hear the conversations the other agent had with the buyers and their agents about not being able to sell the property.  I am sure it was as entertaining as it sounds.  Moral: Don’t list properties you don’t have the right to sell and if you do, at least have the professional courtesy to help get to the bottom of the issue.  Because even trusty old Freddie Mac has to cover its fanny like everyone else.