North Shore Views
Archive for the 'Selling a home' Category
Ever since the housing bubble burst, many of us have become reluctant landlords. Unable to sell our homes for enough to recoup our investment in them, many would-be sellers have decided to rent until the market improves. Before you go down that path, consider these tips from Keeping Current Matters:
Set Up an Appointment with an Eviction Attorney
People rent their homes assuming their tenants will pay the rent every month. But in this economy, there are millions of people who can’t pay their mortgage, and there are also many who can’t (or won’t) pay their rent. But once someone is living in your home, it’s not easy to get them out, even if they have not paid the rent in several months. You should understand the legal challenges of eviction before deciding to rent your home.
Consider Hiring a Property Manager
Unless you are a full time investor, you may want to hire a professional to find a qualified tenant, collect the rent and manage the problems. Otherwise you are opening yourself up to the possibility of receiving phone calls at all hours of the day and night to take care of maintenance issues or problems that a neighbor may be creating for your tenant.
Create a Realistic Budget
Sure, you will receive revenue in the form of rent. But don’t forget you’ll also have expenses:
- Mortgage payment (unless there is no mortgage on the house you will rent out)
- Property taxes
- Maintenance expenses such as repairing or replacing the roof, heating and AC, appliances, etc.
- Insurance – you may need to increase your liability coverage when you have tenants living in your house. Be sure and check with your insurance company.
Brett Lotsoff of 1st Advantage Mortgage talks to Paula Weiss of Come Home North Shore about how to avoid having a low appraisal derail your real estate transaction.
A good Realtor will always accompany an appraiser and provide him with her analysis of comparable properties. Most appraisers will welcome this input ans take it into consideration when they are writing up the appraisal. This is a much more effective strategy than trying to challenge the appraisal number after the fact.
If you would like more information on finding a lender or understanding the role of appraisals in the mortgage process, give Brett a call at 847-239-7810 or email him at [email protected].
A New Twist on the Agent Team Concept
It seems only fitting that my first post of the new year should be one that introduces my new real estate team, Come Home North Shore, which officially launches today, January 1, 2012 (though we have been hard at work for the last couple of months getting our ducks in a row).
Come Home North Shore was formed by three agents in the Winnetka office of Coldwell Banker (Paula Weiss, Daverille Sher and me). As the real estate market has changed and morphed over the last several years since the meltdown, we have realized that the traditional ways of doing business need some re-thinking.
Every transaction is more complex. The lending environment is more difficult to navigate. Short sales take longer to close. Buyers are cautious. Pricing a property for sale is more challenging than ever. And the Internet has changed the way buyers shop for homes.
In this environment we agents are finding that it is nearly impossible to go it alone and do it all well: listing homes, marketing homes, analyzing the ever-increasing amount of market data, managing transaction details and maintaining regular communication with clients, all the while actively trying to generate leads and market ourselves. So, in many markets, agents are forming teams to be able to service their clients while growing their business.
Most agent teams have a head honcho with one or more minions who fill roles as admins, buyer agents or closing coordinators. We decided to go a different route and combine the specific skills that are most important to our clients.
All of us have broad real estate experience and skills, but each also brings specific expertise to the team: Paula has deep experience in the new construction market. Her knowledge of architecture, design, building materials and remodeling have proven invaluable to her clients. Daverille capitalizes on her financial and accounting background to help investors analyze deals and to correctly price properties for maximum profitability. I apply my 20+ years of consumer marketing experience to getting maximum exposure for our clients’ properties. There’s one thing we can absolutely guarantee to our clients: no one will do more to market their home than we will.
We are very excited to start the new year with our new team. You can find out more about Come Home North Shore here. If you’d like to hear more about how we can help you buy or sell a home, give us a call at 847-881-6657 or email us at [email protected]. Or contact one of us directly:
Wishing you a happy, healthy and productive 2012!
Our team has three ready, willing and able buyers who cannot find a home to buy. And we know that some of the other agents in our office are having the same problem.
The data supports what we are seeing: Wilmette’s inventories are at their lowest point in over two years. At 6.3 months supply of homes, we are actually in what is considered a “balanced” market (neither a buyer’s market nor a seller’s market). And at some popular price points there is almost no inventory. For example, there are currently only three homes for sale between $700,000 and $799,999 and only five between $800,000 and $899.999 in Wilmette.
Which made us wonder how many potential North Shore sellers are out there who are waiting until the beginning of the year to put their homes on the market or who are not even considering listing their homes because they don’t think anyone is buying.
Here are the types of homes our buyers are looking for:
- In Wilmette: A three bedroom (plus office), 2+ bath home east of Ridge Rd. around $750,000.
- In Harper School neighborhood of Wilmette: a newer construction, 4+ bedroom home between $1-1.5 million.
- In Winnetka, Kenilworth or Wilmette: a large, newer construction home between $1.5 and $2.5 million.
- In Wilmette or nearby: a 3-4 bedroom condo or townhome to rent for six months.
So if you have a home that fits one of these descriptions, and you would like to sell, please let us know! We might just have a buyer for you. We can be reached at 847-881-6657 or by email. If you are looking to buy, you can search for homes here.
But there’s another reason, one that sellers don’t always realize can be an obstacle to getting an offer: buyers cannot get in to see the house.
Maybe the owner places restrictions on showing: 24 hour notice required, no showings between 12:00 and 3:00 pm, etc. Home owners may think that these are reasonable restrictions…can’t the potential buyer just rearrange his schedule or come another day? Well, maybe and maybe not. In a strong seller’s market, you can probably get away with it, as there are more buyers competing for fewer houses. But in today’s market, when buyers have plenty of other choices, they may not bother to come back at a more convenient (for you) time.
Here’s a situation I ran into last Saturday: my buyer client was in Wilmette for the afternoon and wanted to tour some of the homes she’d seen online that fit her criteria. When I called to make appointments, the listing agent for one of them told me that she couldn’t show it that afternoon because she was showing property in the city, where she was based, and the owner required her to accompany all showings. Could we come on Sunday instead? No, we couldn’t. My buyer was not going to schlepp all the way back to Wilmette the next day just to see one house.
The home in question has been on the market for over a year. It’s an unremarkable house and still somewhat overpriced, but it has two more things working against it: the requirement that all showings be accompanied, combined with the fact that the agent is not based in the area and is not available to show it on short notice. My guess is that that seller is getting about half the number of showings they otherwise would have and have therefore cut their odds of selling in half.
My plea to sellers: please make it as easy as possible for agents to show your house. The inconveniences you suffer while it is on the market will pay off in the speed of sale and the price you net.
If you’re planning to sell your Wilmette home, one of the first things your agent will do is run a comparative market analysis (CMA) to help determine the appropriate list price. She’ll look at properties similar to yours that have sold recently and that are currently on the market. Another tool I like to use to provide additional input on pricing strategy is what I call the “odds of selling” analysis.
It’s a quick and dirty analysis comparing inventory of homes in each price band to the number of sales in that price band. Just divide the last three months of sales by the current active listings and you get your odds of selling in the next three months. Unless the market changes dramatically going forward it’s a pretty good way to see how things are moving in the price band in which you are competing.
Odds of Selling Your Wilmette Home by Price Band
In this chart you can see that the best place to be if you’re a seller is in the $700-799K price band, where there is more demand than there is supply, making your odds of selling 137%. The next best place to be is $500-599K (106% odds) followed by $900-999K (100%).
How does it help you to know this? Let’s say your price is hovering just above $800K. You may want to consider coming down to $789-799K to get into a more active price band. If you’re just over $2,000,000, you could improve your odds of of selling by getting below $1,999,999. On the other hand, if you are significantly over $2,000,000, maybe you want to reconsider putting your house on the market, as there are several listings and few to no buyers in this band right now.
If you’re a buyer in the $700-799K or $500-599K range, recognize that a well-priced and well-presented house will sell quickly, so have your ducks in a row so you can move quickly to make an offer. And you may not be able to get a “steal” in this price range. Contrary to popular belief, some houses are selling quickly and with multiple offers. It all depends on which market and which price band you’re in.
Last weekend I had a chance to visit an estate sale conducted by a new firm called North Shore Estate Sales. North Shore Estate Sales is the brainchild of Mike Welsh, an attorney and fellow Coldwell Banker Realtor.
After I got done browsing and buying, Mike was kind enough to let me interview him to learn more about his new business.
Anne: How (and why) did you get started doing estate sales?
Mike: I have been involved with senior citizens and the disposition of estates in one form or another for many years. I am a trial lawyer, licensed in Georgia and Illinois, and one of my focuses has been the legal needs of senior citizens. I pursued an auctioneer in Federal Court a few years ago on behalf of a senior citizen who had hired him to dispose of her mansion full of antiques. He gave her a check for only $21,000 several weeks after the auction which emptied her house. After that experience I realized I really like being the solution to those kinds of problems.
I had a good friend start an estate sale company when he retired from real estate – this was in South Carolina – and I helped him set up the business and worked on sales with him. I really enjoyed the hands on aspect of the sale – bringing value just by being part of the process, organizing, smiling at people, making it work.
Then I started as an agent with Coldwell Banker for a lot of the same reasons – being a solution, making things work. And the estate sales just evolved out of that. I consider the two businesses to be very complementary. First, because I meet a lot of people at the sales that I wouldn’t have otherwise met – which expands the network of people I can potentially find solutions for, both in estate sales and real estate.
Often when my clients are reading a listing sheet for a North Shore property they are interested in purchasing, they will see a comment on the agent remarks section that reads something like: “buyer pays transfer tax” and they ask me what that is. A transfer tax is basically another source of revenue for the town and you can’t close on a property without proof that it has been paid. Usually the tax is calculated as a dollar amount per thousand dollars of the sale price of the house. For example, Wilmette has a transfer tax of $3.00 per $1000. So a home that sells for $600,000 will have a transfer tax of $1,800. Usually you have to show proof that the water bill has been paid in order to get the transfer stamps.
Not all towns have a transfer tax. For those that do, sometimes it’s the buyer who pays and sometimes it’s the seller. Here’s a guide to transfer taxes for the North Shore, as well as nearby towns that have them. For more information call the town hall. The phone numbers are noted in the notes section of the chart.
North Shore Municipal Transfer Taxes
Selling our home is not something most of us do very often, so the rules about the taxes we have to pay on the gain from the sale (if there is one) can be confusing. In a nutshell here’s what you need to know (but please confirm it with your tax accountant!):
1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your principal residence (i.e. your main home) for two years out of the five years prior to the date of its sale.
2. If you have a gain from the sale of your principal residence, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).
3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.
4. If you can exclude all of the gain, you do not need to report the sale on your tax return.
5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.
Any real estate agent will tell you that the three keys to successfully selling your home are: 1) pricing it right; 2) getting it in show-ready condition; and 3) attracting as many buyers as possible. Attracting buyers is what your marketing plan is supposed to do.
Most traditional marketing plans include a For Sale sign, listing on the MLS, a broker’s open, public open house(s), brochures and, that old staple, newspaper advertising. If you have a high-end home your agent might also buy an ad in a local magazine.
The problem is, only 2% of buyers look at print ads as part of their home search, according to the National Association of Realtors. So, while it’s fun to see your home in print, especially in a glossy magazine, you probably aren’t getting much effective exposure.
It only stands to reason that, if you want to be seen by buyers, you should go where buyers are looking. Since 90% of people use the Internet in their home search, that’s where your marketing plan should be focused.
When you review your agent’s marketing plan for your North Shore home, here are the things you should look for: