The Benefits of Home Staging

Staging a home is an important step in the selling process for many homes. With a fresh look plus strategic placement of furniture and decor, a staged home can attract more buyers and often times generate a quicker sale and higher sales price. Your broker can guide you through the process to see what type of staging fits your home best, from minor touch-ups or new coats of paint to more in-depth construction projects. Your broker’s expertise and experience in this area allow them to offer tips, strategies, and staging company recommendations to help you to get the best price for your home.

“After being on the market for 3 months with another agent, our client’s house wasn’t selling so they decided to make a change. We came in, re-staged the property, implemented our marketing strategy, and listed the property at the same price at which it had expired. The home had 25 showings the first weekend back on the market, was under contract in 2 days and closed well over the asking price in just 3 weeks time.”

Over 95% of Buyers Agents say that staging has some effect on their view of the home

staging, Winston Downs

Bedroom before and after staging

Almost 1/3 of buyers are more willing to “overlook property faults” when the home is staged

kitchen, staging, winston downs

Kitchen before and after staging

Over 81% of buyers find it “easier to visualize the property as their future home”

living room, staging, winston downs

Living room before and after staging

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Selling your Home: step-by-step

Selling your Home: step-by-step

Some things change fast in real estate: markets go up and down, contract language is updated, mistakes and lawsuits give rise to new regulations and rulings.   But other things remain the same, year after year.  Here are the things our Colorado Department of Real Estate (DORA) wants you to know about the process of selling your home:

Determine goals or outcome: Once the decision to sell has been made, a number of other questions come to mind. What is a fair price under the current market conditions? What are the current market conditions? How can the property be marketed most effectively? How long will the process take and how should I proceed with future plans? Who will be able to help with contract and closing requirements? Some sellers have the experience and expertise to answer these questions, many others would prefer professional assistance from a real estate broker and/or an attorney.

Interview and select a broker: The process for selecting a broker is described in the section titled “How to Select a Real Estate Broker“. As a seller, pricing and marketing issues are very important. Everyone wants to make sure they get the best possible price and terms. Proper preparation will assist you in reaching that goal.

Competitive Market Analysis: The brokers that you interview will want to take a careful look at your property in order to gather information to help them estimate its value. This estimate is not an appraisal, but a competitive market analysis. This is a tool that will allow you to compare your property with similar properties recently sold and currently on the market.

Marketing Strategy: Newspapers, yard signs, open houses, internet, multiple listings service? How should your property be marketed? What kinds of advertising really pay off? What works for sellers in my price range? A broker who knows your area will be able to help you devise a marketing plan based on previous successes.

The Listing Agreement: The listing agreement is the written contract whereby a property owner hires a real estate broker to market real property and provide services. A listing contract describes the property ( address and legal description), the listing price and the terms that are acceptable to the seller. The listing also outlines the compensation that the broker is to receive. A listing may specify a percentage of the selling price, a flat fee or any other negotiated agreement mutually acceptable to the parties (the seller and the broker are the parties to the listing contract) as compensation to the real estate broker. Colorado brokers are required to use listing contracts approved by the Colorado Real Estate Commission.

Preparing for a Showing: Your broker can give you good advice about how to prepare your property for showing. Common sense applies, but a trained third party observer can help you to make the best possible first impression on prospective purchasers. A thorough clean-up, a little fresh paint or minor repairs can help show your property in a favorable light.

Counteroffers: An offer to purchase made by a prospective buyer has no limits on what price or terms it may contain. An offer that mirrors the listing’s asking price and terms may be common under certain market conditions, however, from a purchaser’s point of view, it may represent a minor issue in a search for an exceptional value. A licensed real estate broker is required to submit all offers regardless of it’s terms. The seller always has the option of accepting or rejecting an offer that does not meet his or her requirements. If the terms do not meet with the sellers approval, a counter offer may be utilized as an attempt at compromise rather than dismissing what might be a qualified prospective purchaser.

A Commission approved “Counter Proposal” form is used to modify the terms of an offer to purchase. Once a counter offer is made, the terms of the original offer have been rejected and the seller proposes new terms. The original purchaser then has the option of rejecting or accepting the new terms.

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The Appraisal: 10 things your broker should do

The Appraisal:  10 things your broker should do

Appraisals are sometimes a source of confusion for both Buyers and Sellers, but usually for different reasons.

Review:  an appraisal is an opinion of value prepared by an authorized person.  In Colorado, Appraisers are licensed and regulated by the State. There are different levels of licensure, depending on the qualifications of the Appraiser.

Buyers sometimes think that the appraisal will “protect” them from overpaying.  There is a clause in the contract, after all, that says in effect: “if the appraisal doesn’t come in at contract price, you don’t have to buy the house.”  While there may be an element of truth in that kind of protection (today, anyway), you should stop thinking that.  If you need a reason, please Google “the role of appraisals and appraisers in the Global Financial Collapse of 2006-2008” or something similar.  There was nothing protective of Buyers for a long time leading up to the disaster, and you’ll be better off being a little more skeptical.

Sellers sometimes think that the Broker’s price opinion was an appraisal, or that having multiple offers (or even one offer) is some kind of assurance that the appraisal will come back at contract price.  Actually, there is some truth in the latter – competing offers should have a positive effect on value – but it’s not a given.

Why Appraisals are done.  In residential real estate, they are done to protect the lender’s interest in the property (the mortgage).  To learn more about what can go wrong I this scenario, Google  “the role of appraisals and appraisers in the Global Financial Collapse of 2006-2008”. The appraisal is ordered by the lender and paid for by the Buyer.

What can you do to make sure the appraisal goes the best way possible?  Answer: treat the appraisal just like you would a “showing:”  home is spotless, lights on, curtains open, staging in place (if applicable), etc.

Beyond that, there are several things you should expect your agent to do. The following list is advice from an appraiser to your broker; it’s adapted from “10 Things to Guarantee a Perfect Appraisal”, by Kerry Dunn, founder/chief appraiser at Dunn Appraisals, www.dunnappraisals.com

1)   Show up

Having you, the realtor, at the appraisal really helps everything run better for the appraiser.

2)   Call/Email

If you can’t show up, please make a phone call or send an email of introduction to the appraiser.

3)   Pricing

Show the appraiser the documentation that you were relying on in pricing the property.

4)   Contract

Email or hardcopy contracts are always appreciated as appraisers don’t always get them from the lender. This will ensure that the appraiser has the most recent copy/latest amend-extend of the contract.

5)   Hope for the best, plan for the worst

As with realtors, appraisers come with varied levels of experience. Keep in mind that even the most experienced of appraisers may not be intimate with the market nuances of your property or neighborhood. Educate them with what you know, in 60 seconds or less. If it takes longer than that, put it in writing and give it to the appraiser.

6)   Comps

Don’t assume that the appraiser will identify and consider the same sales/listings as you did. The appraiser may, or may not, consider the same properties in the appraisal, but at least you have disclosed them.

7)   Detail sheet

Give the appraiser a list of all updates and upgrades to the property.

8)   Sketch

If you have a sketch, please share it! Appraisers appreciate confirmation of field measurements.

9)   Just the facts

Share what you need to and let the appraiser do his/her thing. Most appraisers have a rigid property inspection process that needs to be done in silence. There is a LOT of information that needs to be absorbed in a relatively short time span. It’s best to have a conversation at the end of the inspection, not in the middle of it.

 10)  Professionalism

Expect it. Lenders expect their appraisers to look and act like professionals. If they are not, let the lender know about it.

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Choosing Paint Colors in Winston Downs

Choosing Paint Colors in Winston Downs

Why paint your house?

Seller’s will often ask a broker what should be done to prepare their home to sell.  A good place to start is with “street appeal”: the first impression of your home as the buyer drives up.  Yes, I’ve had buyers who wouldn’t get out of the car . . . don’t be that house, even if you’re leaving some things “as is” in other parts of the house.

Exterior painting isn’t cheap to do right – the best painters spend a lot of time preparing (scraping, caulking, etc.) before applying paint. But of all the things you can do to “stage” your home, it may have the best dollar-for-dollar payback on the sale.  Plus, there’s that incalculable element of making a good impression and getting the buyer inside — at which point they may be more forgiving of other shortcomings (condition-wise) on the inside.

What should you think about when choosing exterior paint colors?

Look at the rest of the neighborhood.  Yes, you can and should make an individual statement with your colors, but also try and conform to the look of the subdivision.

Exterior paint, Winston DownsYou want to look like your home “fits in” with the others; drive around and look for some that have done a good job with exterior paint.  Choose a scheme that blends with the neighborhood or stands out in a subtle, unobtrusive manner.

Look at your neighbor’s house on both sides of you.  Choose colors that don’t clash with your neighbor.

exterior paint, winston downsThink about your existing landscaping: do you have trees that change color?  You can also consider flowering shrubs and flower gardens when selecting colors for compatibility. Big trees?  We have them in our neighborhood, so remember that shade from the trees will tend to make colors appear darker.

A 2-Color scheme is usually best

Winston Downs, house paintIn Winston Downs, most of the homes are ranches built in the 1950’s to 1960’s.  This particular mid-century architecture features simple and clean lines without much ornamentation.  When painting, the main architectural “details” to consider are gutters & downspouts, window and shutters (if any), doors and siding.

For the majority of homes, a 2-color scheme works just fine:  one color for the siding and another for the trim.  Notice on the house to the left, the soffits (the part underneath the roof overhang) are painted the same as the gutters.  A safe and effective approach to color placement is to select two tints or shades from the same color strip a few shades apart. Either the lighter or the darker shade could be used for the body and the opposite for the trim. A contrasting accent color could punctuate the door. Lighter colors on a porch will make a home feel more “approachable” and welcoming.

winston downs, ranchesIf there are details that you want to emphasize, lighter colors will make them stand out.  You can define the entryway by using color as a “Welcome” sign, but do this carefully (notice the house at “508”  has a green door).

Windows are an opportunity: they give character to a house. Outlining them can give crispness to the color scheme – if that’s what you think it needs.  Try not to “accent” unattractive elements such as gutters, downspouts, a protruding garage door, air conditioning units, unevenly placed windows, etc.

winston downs, house paintConsider the colors that can’t change (exterior brick for example, roofing shingles, and stone accents) and use these elements as color resources because there are numerous shades and hues in building materials. A charcoal gray shingle for example could have flecks of gray-green or gray blue that could be found on a paint color strip or incorporated into the color scheme.

Look at your color samples outdoors, at various angles and different times of the day. Better yet, buy small quantities of your colors and put some paint on the back of the house where body, trim and accent colors can be viewed together.  You want to see what they look like at different times of day.

Light or Dark colors?

winston downs, ranchLight colors appear larger;  Dark colors look smaller.  A large home on a small lot painted white or a light color – for instance, a tinted neutral – can make the house seem larger and the lot seem smaller. Dark colors might make a home look smaller but more substantial.

Light or white is a good choice for windowsills for reflection of the sun’s heat and light. Light colors advance in space; dark colors recede. If a house is placed far away from the curb, painting it a light color will visually bring it forward.

winston downs, exterior paintIn the past, light colors were perceived to be safe choices. However, as consumers have gained more confidence with color, and as a broader spectrum of colors have been made available for exterior use, those “traditional” approaches are changing.  Today you see lots of tinted neutrals that work well with landscaping and building materials, as well as midtone values of neutrals.  The homes pictured on this page are all in Winston Downs, and good examples of these principles of color selection and application.

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Schools: What Buyers Want

Schools: What Buyers Want

A house is a collection of desirable characteristics: shelter, comfort, and location.

School quality is a locational characteristic that influences home values. Research shows us that homebuyers are not only aware of differences in school quality but also have revealed their preferences for higher quality schools by paying a premium for their home. This premium for school quality is among the most imp0rtant factors in determining home prices. (Neighborhood School Characteristics: What Signals Quality to Homebuyers? Kathy J. Hayes, Research Associate Federal Reserve Bank of Dallas and Professor of Economics Southern Methodist University, and Lori L. Taylor, Senior Economist and Policy Advisor Federal Reserve Bank of Dallas, 1996)

Buyers agree with Economists. So we know that buyers will pay more for a house in a neighborhood with a “good” school, but not all school characteristics appear to be indicators of school quality. Buyers aren’t willing to pay more for things like school expenditures or student body characteristics.  Instead , researchers find evidence that the school characteristic for which homebuyers pay a premium is the same characteristic that economists associate with school quality, namely, the “marginal effect” of the school on student performance.  (The Economics of Schooling: Production and Efficiency in Public Schools, Eric A. Hanushek, Journal of Economic Literature, Volume 24, Issue 3, Sep. 1986)

What are the “Marginal Effects” of Schools?Winston Downs School

Economists who study schools talk about Educational “Production.”  The concept of production is an important teaching and research tool, and applies to all kinds of industries – including education.  For all industries, output depends on input:  more materials, labor, automation, etc. equals more widgets produced.  For schools, the inputs are things like teacher quality, school characteristics, curricula, etc.  These are mostly controlled by school administrators and policy-makers (the School Board).  The output of the educational process is the achievement of individual students.

The theory is that more and better schooling makes people more productive in the labor market, better able to participate in society, better consumers, etc.   Economists, sociologists, and political scientists have conducted hundreds of investigations into post-schooling outcomes. In general, empirical studies confirm the correlation between higher levels of schooling and positive attributes after graduation.

Good Schools and The Good Life

Although the relationship of a good education and a good job is apparent to homebuyers, there are plenty of other “marginal effects” that have been studied.  Individual academic achievement has also been linked to:

  • increasing job satisfaction (Robert Michael 1982, and Robert Haveman and Barbara Wolfe 1984)
  • maintaining personal health (Michael Grossman 1975)
  • increasing the productivity of mothers working at home, and the effects of the mother’s education on the learning of young children(Arleen Leibowitz 1974)
  • the effect of education on political socialization and voting behavior (Richard Niemi and Barbara Sobieszek 1977)
  • the relationship between education and criminality (Isaac Ehrlich 1975)
  • the contribution of education to economic growth (Edward Denison 1974)
  • the effect of education on marriage and divorce (Gary Becker, Elizabeth Landes, and Robert Michael 1977)

A number of studies have shown how differences in the attractiveness of a particular school or school district come to be capitalized into the price of houses. Most of these studies look at the differences in the “provision of public services,” of which schooling is the most important one.

 

 

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What is the Hottest Price Range?

What is the Hottest Price Range?

The hottest price range in Denver is where the most sales are happening, where homes sell overnight and Sellers get multiple full-price offers. This is good information for both buyers and sellers: buyers need to know how competitive the market will be for them; and sellers can use this information to best position their home price for a quick sale.

Price Buckets

A price bucket is just a way to group products by price.  For example homes between $150-250,000 might be one bucket, $250-300,000 the next, etc.Denver MLS areas

You can make the buckets any increment you want, and it might be true that different areas have different hot buckets.  For example, in Denver, Metrolist divides Denver County into 5 geographic areas, and the surrounding counties are split up also.   Here are the geographic areas for Denver in MLS:

Notice there is a Northwest area (DNW), Northeast (DNE), etc. plus Downtown (DTD).  Although buyers and sellers often use zipcode searches (because some of the internet sites are set up that way), most brokers primarily use MLS Areas to begin a search, and it’s also the way historical data (number of sales, prices, time on market, etc.) is collated in MLS.

What I’m suggesting is that you might want to make a list of  “buckets” for the MLS area in which your home is located.  Why?  Because they’re going to be different for each area. Then when you list your $600,000 home in Northeast Denver, you won’t be as surprises to find it’s not getting the same activity as your neighbor who is priced at $350,000.

Denver Southeast (DSE)

Bucket_dse_2013Notice that the “hottest” price bucket in Southeast Denver is $250-350,000.  With about 450 sales so far this year, it’s 50% stronger than the next best bucket ($350-450k).

 Northeast Denver

Now let’s look north of Colfax Ave. and see that the hot price bucket is in a slightly different market segment.

Bucket_dne_2013In this area, the hot segment is $150-250,000.

Using Price Buckets in Home Pricing

Home Sellers might want to consider the distribution of sales when pricing or re-pricing their listing.  If you have a $675,000 home, for example, your odds of selling go way up if you move it into the next lower price bucket.

The owner of a $575,000 listing in Northeast Denver more than doubles their odds of selling by dropping the price under $550,000.

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