Real Estate Appraisal Blog

In the current economy, it's often difficult to sell a home for a good price, especially if you want to sell it quickly. While the average homeowner is unaware, there are techniques that real estate investors sometimes use to sell properties quickly at very good prices. This article details one of those techniques.

In a nutshell, the plan is to create a big stir, and then do a round-robin auction on your house. It's not uncommon to get a higher price than the house is actually worth!

Make plans with your realtor to follow these steps for a 7-day sales strategy:

1. List your house. While it isn’t required that you have your house listed on the MLS, it will make things a lot easier. There really isn't a more effective way to let the world know about your property. Let the listing go live on a Monday. Include these details in the listing:

    

   • List your house at a 10% discount off of what it's actually worth. Most people make the mistake of listing their $200,000 house for $220,000, with the hopes of eventually getting $200,000. List that $200,000 house for $180,000 and people will pay attention. You'll get the other $20,000 in the end.
   • State that there are no showings until Friday. In fact, state that the showings are only allowed between 9:00 am and 11:00 am on Friday.
   • State that there will be a second showing on Saturday. Again, limit this showing to between 9:00 am and 11:00 am. Be sure all the time constraints are in the listing itself.

1. Open the doors Friday and Saturday morning. With some good promotion, at 9:00 on Friday and Saturday morning, there will be anywhere from 10-20 parties ready to get into the house and take a look.

2. What happens when a family pulls up to view the house and there are already 10 other cars there? They’re thinking, “Wow, this is a really great deal. We need to act fast.”
   
   
3. As the agents and prospective buyers enter the house, they should be told, "This house will sell this weekend; we're going to take the highest offer we get by Sunday night."
   
   

    

4. Start the "auction." By Saturday night you’re likely to have 5+ offers on the property. Here is where you put the auction into play. For the time being, ignore the highest bidder. Sunday morning, you (or your agent) are going to call the others and say: "I really appreciate the offer you put in, but you're not the highest offer. But you have until 9:00 tonight to submit another offer. The house will sell at 9:00 tonight."

5. Remember, these people have already been in the house and feel competitive. It's like when you bid on something on eBay. If the bid is just a little bit higher than you want to spend, you're probably willing to raise your limit just a little bit.
   
   

    

6. Continue calling everyone that is not the latest highest bidder until 9:00 pm. You simply repeat step 3 until the time runs out.
7. That's it - you're done! You can now proceed with setting up the closing.

This process is highly effective and reliable. There is no reason for you to be stuck trying to sell your house for months and eventually sell it for a lower price than you deserve.

It might take a little bit of work to find an agent to use this non-traditional technique, but you won't have to call many to find one that's game.

Venturing into the wonderful world of homeownership is exciting and fills you with an inspired new vision for your future. However, it may also bring you some unwelcome surprises if you're not well-prepared. 

Simply knowing what to expect in the way of costs will enable you to leap through this hurdle with ease.

To this end, here are some expenses you can expect to encounter when you buy a home:

 1. Closing costs. These can add up to $5,000 or $10,000. Negotiate 

may even be willing to pay most or all of these fees. The Title Company will give you a detailed estimate of these fees prior to closing.

Examples include:

• Loan application fees

• Legal fees

• Fees to the Title Company for their services

• Title Insurance

• Filing fees

• Paperwork copying fees

• Courier fees

• Property taxes

• Homeowner association dues

• Daily pro-ration for rent depending on the actual closing date

• Home inspection fees

• Termite inspection fee

• Home warranty

• Appraisal fee

• Home insurance

• Possible loan insurance

• "Points" - optional. You may want to pay some of the interest on your loan to reduce your monthly rate.

• Other fees as required by your situation

2. Initial expenses for your home. When you move from renting to owning a home, you may need to purchase them yourself unless the seller puts in the contract that they're leaving these items.

• Appliances – such as a washer, dryer, and refrigerator – may or may not be included in the purchase price. Appliances like the water heater and dishwasher are considered built-in and stay with the home.

• Curtains, window treatments, and blinds will usually stay if they're already there.

• Furniture and rugs

• Lawn maintenance tools - lawn mower, edger or weed-wacker, tree and bush trimmers

• Deposits for electricity and water service

3. Property taxes. These taxes are paid yearly to your local government. Your lender may set up an escrow account for you and include 1/12 of the estimated property taxes with each monthly payment; then, they pay them when they come due. These taxes include:

• School district taxes

• County taxes

• City taxes, if you live within the city limits

4. Homeowners' association dues. These, too, are paid once each year if you live in an area that has a homeowners' association. Depending on your association, these can be as little as $25 per year or as much as several thousand, depending on your community's amenities.

5. Home Insurance. Your mortgage company will require that you maintain insurance on your home. The first year's fee is collected at closing, and then they usually collect the fee for this insurance monthly and include it in your escrow account, so it will be there when the next year's fee comes due.

6. Home maintenance and repairs. Home emergencies, like appliances breaking down, plumbing leaks, electrical panels going out, or roof damage from a hailstorm can occur suddenly. It's easier to maintain a fund for these expenses that you add to each month, so the money will be available when needed. Keep these regular expenses in mind:

•   Roof. You'll need a new roof every 15-20 years or so, depending on the local weather and your roof's warranty.

•   Lawn. Do it yourself or hire a lawn maintenance service.

•   Pool. If you have a pool, weekly maintenance is a must. You can also hire a pool service.

•   Paint. Painting can be expensive. A fresh coat of paint every 5 years will help maintain your home's value.

• Also, you may need to replace and repaint damaged walls or ceilings if you have a plumbing leak, roof damage, termite damage, rot, or holes in your wall.

Although owning your own home can be expensive, there's nothing like the pride of ownership and knowing that you're increasing the value of your investment with each monthly payment. In addition, maintaining your home's beauty brings you a joy that you just can't get with renting.

There are two options available to you if you no longer need a real estate property. You can either sell it or turn it into a rental. Both options have their pros and cons. Consider your choices and select the option that makes the most sense for your situation and financial goals.

 Selling Your Home

 Selling your home means you will receive a lump sum of money. You can, for instance, use this money to make a down payment on a new home. The main advantage of selling your home is that you can use the money from the sale to easily finance another real estate purchase.

Selling your home also means you no longer have to worry about maintaining the property. This can be your best option if extensive repairs are needed and if you would rather avoid expenses linked to maintenance. Typically, maintenance costs between 6 and 10% of a property’s value each year.

 Renting Your Home

 The main advantage of turning your property into a rental is that you will generate a steady income over the long-term. This could be a good way to supplement your income. You can use a portion of this income to make repairs to the property or to make upgrades and increase its value.

 Turning your home into a rental means you always have the option of selling it later if you decide you need a lump sum to buy another property or if you no longer want to spend money on repairs and maintenance. You can also turn your property into a rental until the market changes, allowing you to get more for the sale of your home.

 The downside of turning your home into a rental is that you will become a landlord. You’ll have to find tenants, address their requests and complaints, and you might even have to evict tenants who don’t pay rent. There is also the risk of your property losing value over time.

 To help alleviate this downside, if the finances allow it, you could hire a property manager to handle these issues for you.

Remember, you won’t be able to start renting your property until it’s considered to be livable within your local building codes and landlord/tenant laws. You might have to spend a significant amount on repairs, especially if this is an old home.

 You might also have to spend money to make your home a more appealing option for tenants, especially if there are better rentals available in the area.

 Making a Decision

 The best option depends on what your plans are. If you would like to move away for a few years and then come back to the area, renting your home on a temporary basis makes sense. If you’re moving to a nearby community, becoming a landlord is usually manageable.

However, if you’re moving to a different state for good, selling your home would most likely make more sense. Being a landlord would not be convenient and you may need money from the sale to help with moving and acquiring property in your new location.

Do some research on your local real estate market. If the value of your property is likely to remain steady or to increase, you could turn it into a rental and plan on selling it later. However, if you think your property will lose its value, selling it now would probably make more sense.

The main question to ask yourself is: Would you rather get a lump sum now or generate a monthly income for the long term? Weigh the pros and cons for each option. Keep in mind that you can always use a management service if you prefer not to act as a landlord or plan on moving to another area. Both options allow you to earn money with your property.

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