Dear Pat,
Our house needs painting, and we want to make sure that the colors we pick for the siding and trim will be “buyer friendly” when we go to sell in a few years. It’s not very exciting now, with beige stucco and white trim. We’d like to stand out from the crowd, but we don’t want any trouble selling. Any ideas you’re willing to share from a real estate point of view?
---Choosy but not Artistic
Dear Choosy,
You must know by now that Pat is opinionated and always happy to share—on color matters and nearly everything else. I understand your reluctance to “express yourself” when it comes to exterior colors. Many who have undertaken to do so have wrought jarring exteriors that litter the urban landscape with bubble-gum pink or baby blue. Some well-meaning attempts at historical accuracy with golds, oranges and greens have unfortunately resulted in overly bright color schemes that would surely seem clownish to residents in a bygone era. Yet some efforts at creative color or historical interpretation have yielded stunning results, dramatically improving both the salability of the home and the image of the whole block. Is this simply a matter of innate taste? While I believe some among us do have the knack for color, most of us have to do it the hard way: by looking at pleasing examples, following some important rules, and taking the time to proceed by trial and error.
First, Choosy, pile the family into the car and drive around some toney neighborhoods, where some owners have paid designers for their color ideas. It’s always worth a look in your own neighborhood too, to get your own sense of what feels right. The palette of colors and combinations you now have in your head (or in your camera, if you’re really serious about your research) may be perfect for your own house. Or not, depending on several factors including style: bungalows always look best in earth tones, as an example; neighbors’ colors will certainly be important (obviously), and exposure, too: west facing fronts glow up nicely in the latter-day sun, so golds and reds would be enhanced more than white, for instance.
Now comes the hard part: transferring those perfect colors in your imagination to actual paint on your house. This is done through trial and error. I’ve been told many times by clients that they just “went ahead” and painted their house even though the actual paint seemed lighter, or somehow different, than the color chip they had selected. Or worse, that the color was named “Charlestown Gold” but it came out kind of a greenish yellow. Jeez, you guys—the paint companies hire underemployed English graduates to make up romantic sounding names; they don’t think “Greenish Yellow” would be much of a seller. But I digress. Buy a quart, or no more than one gallon. Paint out enough on the house to get beyond the color chip variable (that is, the chip always looks darker than the same color spread out over a wider area) and to keep the obvious contrast of the old to the new color from affecting your sense of what the new color really is. Now carefully evaluate it: is it really the rich, evocative gold you saw on that house in Kenwood? Or is it more of a screaming yellow, without character and subtlety? If you’re not happy now, do not continue to paint. Bring it back to the store and ask for help in either “doctoring” the paint with further tinting, or selecting another color from the choices available. Buy a quart; repeat process—as many times as it takes to be entirely satisfied that you’re doing the right thing. Remember, this is hugely important to you as a homeowner and a seller—yet most people spend more time selecting a couch than selecting the right exterior colors. So live up to your handle, Choosy, and call me when it’s time sell. Good luck!
Thursday, July 1, 2010
Tuesday, June 15, 2010
Magic Kitchen Logic
Dear Pat,
After months on the market last year we finally gave up. We lowered the price three times, we painted just about every room, we did everything we could but got no offers. Feedback from the agents who showed the house was pretty positive and sensible except for two things that kept coming up: our busy street and our poor kitchen. Of course we can’t change the street, and of course we can’t wave a magic wand and give them a dream kitchen. Duh. That’s why we want to sell! Any practical ideas that we CAN do?
---Stuck Here
Dear Stuck,
Your handle fits nicely, because while you see yourself stuck on your busy street with your poor kitchen, I see you stuck in the passive mind-set that keeps you from your goals. First, let me say that good houses sell on busy streets all the time, and at fair prices, as long as they appeal to the right buyers. Let’s not dwell on why people are content to buy on busy streets (although price plays a big part in this), just be assured they do. Let’s move on to the thing you actually CAN change: the kitchen.
Since we moved to a buyer’s market a few years ago, sellers have had to adjust to buyers’ wishes in ways we never imagined. Now sellers (especially ones on busy streets, or with other conditions that can’t be changed) often need to add value before they sell, in addition to making needed repairs. These days that added value often comes in the form of a new kitchen—for me as a listing agent, it’s the single biggest factor in predicting success on the market. Example: last year I had clients take their house off the market after four months of price reductions and frustration. Determined to sell, they completely remodeled their kitchen with new IKEA cabinets, new counters and lovely ceramic tile backsplash. Plumbing changes and electrical changes were minimal, but new fixtures were added. The new cabinet configuration added utility and spaciousness. Total cost of the remodel? $4000 and one week’s time off work. We put the house back on at a higher price and received an offer within 3 days, netting more than the cost of remodeling.
Less-handy sellers may still have to find a contractor to do the work; but a careful use of referral resources amongst friends and family can often find (especially these days) someone with the skills to provide and competently install new kitchen cabinets, fixtures and appliances for $7,000 to $10,000. Remember, a $200,000 Longfellow bungalow doesn’t need a Plekkenpol kitchen. Keep the changes simple but effective, so you may be sure of recovering most, if not all, of your cost. To wave this magic wand you may need to borrow from an equity line or other sources for the short term, but that money returns to you on closing day—which comes a whole lot sooner if you face the market with a spiffy new kitchen.
Although I’ve addressed this article mainly to sellers, I think it’s worth mentioning to any potential buyer that the real bargains in the traditional market can be found among the many otherwise-worthy houses with poor kitchens. Buyers with moxie (does anyone ever say that anymore?) can build equity right away. Meanwhile, Stuck Here, I hope all this magic kitchen logic hasn’t been lost on you. Good luck!
After months on the market last year we finally gave up. We lowered the price three times, we painted just about every room, we did everything we could but got no offers. Feedback from the agents who showed the house was pretty positive and sensible except for two things that kept coming up: our busy street and our poor kitchen. Of course we can’t change the street, and of course we can’t wave a magic wand and give them a dream kitchen. Duh. That’s why we want to sell! Any practical ideas that we CAN do?
---Stuck Here
Dear Stuck,
Your handle fits nicely, because while you see yourself stuck on your busy street with your poor kitchen, I see you stuck in the passive mind-set that keeps you from your goals. First, let me say that good houses sell on busy streets all the time, and at fair prices, as long as they appeal to the right buyers. Let’s not dwell on why people are content to buy on busy streets (although price plays a big part in this), just be assured they do. Let’s move on to the thing you actually CAN change: the kitchen.
Since we moved to a buyer’s market a few years ago, sellers have had to adjust to buyers’ wishes in ways we never imagined. Now sellers (especially ones on busy streets, or with other conditions that can’t be changed) often need to add value before they sell, in addition to making needed repairs. These days that added value often comes in the form of a new kitchen—for me as a listing agent, it’s the single biggest factor in predicting success on the market. Example: last year I had clients take their house off the market after four months of price reductions and frustration. Determined to sell, they completely remodeled their kitchen with new IKEA cabinets, new counters and lovely ceramic tile backsplash. Plumbing changes and electrical changes were minimal, but new fixtures were added. The new cabinet configuration added utility and spaciousness. Total cost of the remodel? $4000 and one week’s time off work. We put the house back on at a higher price and received an offer within 3 days, netting more than the cost of remodeling.
Less-handy sellers may still have to find a contractor to do the work; but a careful use of referral resources amongst friends and family can often find (especially these days) someone with the skills to provide and competently install new kitchen cabinets, fixtures and appliances for $7,000 to $10,000. Remember, a $200,000 Longfellow bungalow doesn’t need a Plekkenpol kitchen. Keep the changes simple but effective, so you may be sure of recovering most, if not all, of your cost. To wave this magic wand you may need to borrow from an equity line or other sources for the short term, but that money returns to you on closing day—which comes a whole lot sooner if you face the market with a spiffy new kitchen.
Although I’ve addressed this article mainly to sellers, I think it’s worth mentioning to any potential buyer that the real bargains in the traditional market can be found among the many otherwise-worthy houses with poor kitchens. Buyers with moxie (does anyone ever say that anymore?) can build equity right away. Meanwhile, Stuck Here, I hope all this magic kitchen logic hasn’t been lost on you. Good luck!
Saturday, May 15, 2010
Working It Out OK with the FHA
Dear Pat,
We’re about to put our house on the market but we’re leery about accepting an FHA offer because of all the repair work the FHA requires. Can’t we just sell say that we don’t want to take an FHA offer? We don’t have a lot of cash, and we’re already…
Overworked
Dear Overs,
Sure, you can refuse to accept an offer that includes FHA financing. But you think you’re overworked now? Picture the time when you’re actually on the market: before leaving for work, you have to make sure the kids toys are picked up and put away, beds made, dishes washed, the dog brought to the neighbor’s house, lights all turned on, the whole place vacuumed and dusted and polished and shined—everyday. On weekends and evenings you have to be ready to do all the above at an hour’s notice for showings, plus grab the kids and go someplace and wait until the showing is over. This goes on until the house sells or the showings finally drop to nothing as interest drops away. Do you want to prolong this process, possibly for months, because you refuse to look at an FHA offer? Most houses in our area sell using FHA financing—it’s the only way for the majority of buyers to afford a house.
Fact is, the FHA isn’t really all that hard on sellers these days. The actual “work orders” that are sometimes required are usually pretty simple: mainly health and safety items such as peeling paint or broken windows. Occasionally a handrail must be added to basement stairs, or a dangerously small electrical box replaced, or roof shingles replaced if leaking around a chimney flashing—but these are very rare calls. Most sellers should be completely aware of these concerns after the city Truth-in-Sale-of-Housing inspection, and should plan accordingly. In today’s buyer’s market, all sellers should have their houses in good order, free of peeling paint and broken windows.
So if you’re with me on this, Overs, here’s how to proceed when you get an FHA offer: the financing page will state how much money you are willing to spend to repair the house if required by the lender. The amount is negotiable, and often can range from zero to $1500. Let’s say you’ve agreed to $500 and the contract is sent to the lender, who requires the garage and some of the house trim to be scraped and painted. If you can’t find a painter to do all the work for $500, you can do all or the extra part of the work yourself, or you can ask the buyer to do the extra (many buyers are happy to do this, to both preserve the deal and to make sure the job is done to their satisfaction). The above is one simple example; in real life Real Estate the problems and their solutions will be as varied as the houses on the market. But two things are certain: (1) if you want to sell your house as quickly as possible, you need to open yourself to the entire market by agreeing to sell FHA, and (2) it’s not FHA requirements that make or break a transaction—rather, it’s the willingness of the parties involved to cooperate.
So roll up your shirtsleeves one more time, Overworkers, and look over your castle for the conditions I’ve mentioned before you go on the market. When the inevitable FHA offer comes in, negotiate a reasonable amount for work orders, pledge your cooperation and expect the same from the buyer. This is how it all works out OK with the FHA. Good luck!
We’re about to put our house on the market but we’re leery about accepting an FHA offer because of all the repair work the FHA requires. Can’t we just sell say that we don’t want to take an FHA offer? We don’t have a lot of cash, and we’re already…
Overworked
Dear Overs,
Sure, you can refuse to accept an offer that includes FHA financing. But you think you’re overworked now? Picture the time when you’re actually on the market: before leaving for work, you have to make sure the kids toys are picked up and put away, beds made, dishes washed, the dog brought to the neighbor’s house, lights all turned on, the whole place vacuumed and dusted and polished and shined—everyday. On weekends and evenings you have to be ready to do all the above at an hour’s notice for showings, plus grab the kids and go someplace and wait until the showing is over. This goes on until the house sells or the showings finally drop to nothing as interest drops away. Do you want to prolong this process, possibly for months, because you refuse to look at an FHA offer? Most houses in our area sell using FHA financing—it’s the only way for the majority of buyers to afford a house.
Fact is, the FHA isn’t really all that hard on sellers these days. The actual “work orders” that are sometimes required are usually pretty simple: mainly health and safety items such as peeling paint or broken windows. Occasionally a handrail must be added to basement stairs, or a dangerously small electrical box replaced, or roof shingles replaced if leaking around a chimney flashing—but these are very rare calls. Most sellers should be completely aware of these concerns after the city Truth-in-Sale-of-Housing inspection, and should plan accordingly. In today’s buyer’s market, all sellers should have their houses in good order, free of peeling paint and broken windows.
So if you’re with me on this, Overs, here’s how to proceed when you get an FHA offer: the financing page will state how much money you are willing to spend to repair the house if required by the lender. The amount is negotiable, and often can range from zero to $1500. Let’s say you’ve agreed to $500 and the contract is sent to the lender, who requires the garage and some of the house trim to be scraped and painted. If you can’t find a painter to do all the work for $500, you can do all or the extra part of the work yourself, or you can ask the buyer to do the extra (many buyers are happy to do this, to both preserve the deal and to make sure the job is done to their satisfaction). The above is one simple example; in real life Real Estate the problems and their solutions will be as varied as the houses on the market. But two things are certain: (1) if you want to sell your house as quickly as possible, you need to open yourself to the entire market by agreeing to sell FHA, and (2) it’s not FHA requirements that make or break a transaction—rather, it’s the willingness of the parties involved to cooperate.
So roll up your shirtsleeves one more time, Overworkers, and look over your castle for the conditions I’ve mentioned before you go on the market. When the inevitable FHA offer comes in, negotiate a reasonable amount for work orders, pledge your cooperation and expect the same from the buyer. This is how it all works out OK with the FHA. Good luck!
Monday, April 5, 2010
Appraisals These Days
Dear Pat,
We’re getting our house ready to sell, but our neighbor had an experience recently that gives us pause. After they sold their house the appraisal came in low and they were forced to close for less money.
What’s happening to appraisals nowadays?
---Smells Fishy
Dear Fish Smellers,
You might be getting a fish story from carping neighbors. Most appraisals come off without a hitch these days; although the situation you describe sometimes occurs when the appraiser (or the bank underwriter) values the property below the sale price and both parties are forced to renegotiate. Remember, the seller is free to drop the deal at this point, and find another buyer who may have a more reasonable (to his thinking) lender/appraiser. Or the buyer may try to find another lender who likes the sale price (assuming the seller won’t budge on his price). And sometimes the renegotiation includes a lower sale price but with some compensating concessions from the buyer. So that rotting bullhead may turn out to be a walleye by dinnertime. Keep in mind that we’ve always seen the occasional low appraisal.
But there have been major changes in appraisal procedure since Fannie Mae handed down new guidelines in May last year. In-house appraisers are a thing of the past. Lenders are expected to choose by case from a large pool of appraisers; most large mortgage companies take it a step further by hiring a third party company to pick the appraiser. Thus the mortgage company has no affiliation with the case appraiser, and no undue influence (keeping that fishy smell far, far away). Unfortunately, since the appraiser comes off a very large list, he/she may know nothing about the area of town where the subject property sits. In the past a bank would choose their “south Minneapolis expert” to appraise a house in Longfellow—nowadays it could easily be an appraiser who lives in Blaine who has a keen understanding of the northeast suburbs!
So, as it turns out, these days one of the few people who may have contact with the appraiser is the listing agent, who sets up the appraisal appointment, and sometimes meets the appraiser at the house.
At this time a savvy agent is able to impart useful information about recently sold houses in the area that the appraiser might not find in MLS records. This can be of great value if the listing agent has been in the comparable homes and can shed light on the differences. Surprisingly, since the guidelines have changed we haven’t seen a big increase in low appraisals. It could be that appraisers, whether local or not, are working extra hard these days to find the best comparables in a very close area, or it could be that listing agents have stepped up to provide more information to appraisers about recent sales in their neighborhood.
One thing that hasn’t changed is the problem of getting the “odd-fit” house through the appraisal process: a split entry in a 1920’s bungalow neighborhood, or an exceptionally upgraded home that may be smaller than its less-stylish neighbors. The problem is finding nearby comparable properties that have sold in the last six months. But that’s not your problem, Fishy ones—pick a good agent, trust the process, and soon you’ll be smelling only the roses. Good luck!
We’re getting our house ready to sell, but our neighbor had an experience recently that gives us pause. After they sold their house the appraisal came in low and they were forced to close for less money.
What’s happening to appraisals nowadays?
---Smells Fishy
Dear Fish Smellers,
You might be getting a fish story from carping neighbors. Most appraisals come off without a hitch these days; although the situation you describe sometimes occurs when the appraiser (or the bank underwriter) values the property below the sale price and both parties are forced to renegotiate. Remember, the seller is free to drop the deal at this point, and find another buyer who may have a more reasonable (to his thinking) lender/appraiser. Or the buyer may try to find another lender who likes the sale price (assuming the seller won’t budge on his price). And sometimes the renegotiation includes a lower sale price but with some compensating concessions from the buyer. So that rotting bullhead may turn out to be a walleye by dinnertime. Keep in mind that we’ve always seen the occasional low appraisal.
But there have been major changes in appraisal procedure since Fannie Mae handed down new guidelines in May last year. In-house appraisers are a thing of the past. Lenders are expected to choose by case from a large pool of appraisers; most large mortgage companies take it a step further by hiring a third party company to pick the appraiser. Thus the mortgage company has no affiliation with the case appraiser, and no undue influence (keeping that fishy smell far, far away). Unfortunately, since the appraiser comes off a very large list, he/she may know nothing about the area of town where the subject property sits. In the past a bank would choose their “south Minneapolis expert” to appraise a house in Longfellow—nowadays it could easily be an appraiser who lives in Blaine who has a keen understanding of the northeast suburbs!
So, as it turns out, these days one of the few people who may have contact with the appraiser is the listing agent, who sets up the appraisal appointment, and sometimes meets the appraiser at the house.
At this time a savvy agent is able to impart useful information about recently sold houses in the area that the appraiser might not find in MLS records. This can be of great value if the listing agent has been in the comparable homes and can shed light on the differences. Surprisingly, since the guidelines have changed we haven’t seen a big increase in low appraisals. It could be that appraisers, whether local or not, are working extra hard these days to find the best comparables in a very close area, or it could be that listing agents have stepped up to provide more information to appraisers about recent sales in their neighborhood.
One thing that hasn’t changed is the problem of getting the “odd-fit” house through the appraisal process: a split entry in a 1920’s bungalow neighborhood, or an exceptionally upgraded home that may be smaller than its less-stylish neighbors. The problem is finding nearby comparable properties that have sold in the last six months. But that’s not your problem, Fishy ones—pick a good agent, trust the process, and soon you’ll be smelling only the roses. Good luck!
Monday, March 1, 2010
Clean the Workbench
Dear Pat
We are closing the sale of our house soon, so we’re busy clearing and cleaning. But the garage and the basement are a problem for us: we were told that everything not attached must be removed, but what about the heavy old workbench in the basement? Also, there are dusty old boards and other materials in the garage rafters that were left for us when we moved in. Can’t we just pass this stuff along?
-- Trying to be Reasonable
Dear Trying,
The official answer is: sorry, no—at least not without the buyer’s permission. The purchase agreement requires all personal (loosely defined as “unattached”) property and debris to be removed before closing, and the buyers have the power to make you do just that—right down to the last rusting smiley-face button. If the buyer’s walk-through inspection prior to closing reveals any unwanted stuff that has been left for them, they can refuse to close; or they can require you to leave enough money in escrow to pay for removal. Many sellers have, in fact, left the closing table with proceeds checks smaller by $100-$500 because they ignore—or were ignorant of—this stipulation in the purchase agreement.
But your question about the workbench actually touches upon an area of customary divergence from the purchase agreement. A workbench (or substantial basement shelving) is something of a special situation: often it can be left for the buyers without complaint, unless it’s too wobbly, or greasy, or otherwise crummy and undesirable, in which case you’ll soon hear from them! And check to see if that stuff in the garage rafters happens to be original millwork or fixtures removed from the house as a result of remodeling. Such original materials customarily pass from owner to owner, waiting for a restoration, I suppose. So you may have a little wiggle-room, but by all means check with the buyers in advance to be sure. It’s not worth the bad will—and the expense—if you’re wrong.
We are closing the sale of our house soon, so we’re busy clearing and cleaning. But the garage and the basement are a problem for us: we were told that everything not attached must be removed, but what about the heavy old workbench in the basement? Also, there are dusty old boards and other materials in the garage rafters that were left for us when we moved in. Can’t we just pass this stuff along?
-- Trying to be Reasonable
Dear Trying,
The official answer is: sorry, no—at least not without the buyer’s permission. The purchase agreement requires all personal (loosely defined as “unattached”) property and debris to be removed before closing, and the buyers have the power to make you do just that—right down to the last rusting smiley-face button. If the buyer’s walk-through inspection prior to closing reveals any unwanted stuff that has been left for them, they can refuse to close; or they can require you to leave enough money in escrow to pay for removal. Many sellers have, in fact, left the closing table with proceeds checks smaller by $100-$500 because they ignore—or were ignorant of—this stipulation in the purchase agreement.
But your question about the workbench actually touches upon an area of customary divergence from the purchase agreement. A workbench (or substantial basement shelving) is something of a special situation: often it can be left for the buyers without complaint, unless it’s too wobbly, or greasy, or otherwise crummy and undesirable, in which case you’ll soon hear from them! And check to see if that stuff in the garage rafters happens to be original millwork or fixtures removed from the house as a result of remodeling. Such original materials customarily pass from owner to owner, waiting for a restoration, I suppose. So you may have a little wiggle-room, but by all means check with the buyers in advance to be sure. It’s not worth the bad will—and the expense—if you’re wrong.
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