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Real estate deal-wreckers

Looking to buy or sell in 2006? A property expert offers 10 pitfalls for the unwary.

  Steve McLinden

Those who don't learn from history are doomed to repeat it, the old proverb goes, so as the real estate market marks time before firing up again in the spring, it's a good time to mull over some of the more common things "not-to-do" to clear a trail for a happy home sale or purchase.

 Here are my picks for 10 mistakes to avoid in 2006:

 Not understanding the length of the buying/selling process. You know what happens when you make decisions based on optimism, time-on-the-market averages and generous promises from agents -- ye old Murphy's law kicks in. The home-selling process is often more extensive than you think, from the early planning stages to protracted negotiations to oft-delayed closings. Sellers can take months before they formally accept a buyer's offer. Financing can get held up, buyers have tough time selling their old house, rough edges discovered in the final walk-through must be smoothed, etc. Give yourself a couple extra months to complete the deal.

 Exposing your hand. Never let love for a house cloud your vision. Try to contain your enthusiasm. Otherwise, the sellers and (or) their agent will know they've hooked a live one and assume you may forgive certain flaws because you know the place is right for you. You can scream "yes!" when you get back out in your car.

 Skipping the loan preapproval step. For buyers, getting preapproved for a mortgage gives you a clear idea of how much you can safely borrow, plus it addresses credit-rating issues and kick-starts other financial paperwork. What's more, it identifies you as a serious buyer. Sellers with a hot property should demand nothing less than proof of preapproval from the potential buyer's financial institution. No sense in wasting time on time-wasters.

 Assuming the appraisal equals actual value. In theory, appraisals are objective estimates of value. But several different appraisals can yield several different numbers. For example, an appraisal that's been done for a possible refinance may have been slightly inflated to encourage that refinance. So sellers, before you put your home on the market, have an agent do a comparative market analysis to better indicate the home's worth. And buyers, get similar "comps" from your agent. But realize the true value of a house is what someone is willing to pay for it.

 Timing the bubble ‘burst.’ Thousands of apprehensive sellers and buyers have been playing this game since the late 1990s, trying to time their sale to either beat the "pop" and gain optimal profits, or to swoop in and pluck up cheap property after a burst. In almost all sections of the country, the bubble remains "intact." For the most part, real estate bubbles don't pop, they just slowly deflate and the market levels off then surges again in the near future. Always take the approach that real estate is a long-term investment.

 Hiring the wrong agent. Buyers and sellers should interview several agents, small and large. Get references and success stories. You may not benefit by opting for an agency's top-volume seller. That top-producing agent may have listed 40 homes last year and sold 30, but another agent may have listed 15 and sold 14. Opting for a friend or family member who is an agent doesn't assure you of results either. It could cause a rift. And choosing the agent who suggests the highest listing price is not a recipe for success either -- nor is opting for the agent who charges the lowest commission. Remember the SEED qualities in an agent: smart, empathic, experienced and dedicated will usually get the job done right.

 Missing the big picture. Opting for a dream house that will otherwise create negative quality-of-life challenges such as longer commutes, distant schools, limited access to services, higher taxes, more stringent deed restrictions, stricter homeowner associations and other chronic headache-makers can cause buyers to question their decisions after a few months. Make sure your that dream house is grounded in reality.

 Not knowing what you're signing. The sales contract is a legally binding document. Review it as if your legal well-being is at stake. It should address all your concerns and the concerns of the other party, such as who will pay what for closing costs and repairs expenses. A poorly written or incomplete contract can cost you lots of time, money and emotional energy and tie up your deal for weeks or months. If there have been any verbal commitments, they should be put in writing. If you're not using an attorney, make sure your agent is proactive in the construction and interpretation of the contract before you sign it or make concessions.

 Poor timing. How many stories have you heard about people drowning under the weight of two mortgages because they committed to a new house before selling their old one? The most important transaction in the "buying-one-and-selling-one scenario" is the sale. Sometimes, you have little choice in the matter, but when you do, secure the sale of the old house before signing on the dotted line for the new one. Sure, you hate to miss out on that rare find and you might have to find an interim rental, but that's better than spending time in financial limbo and biting your fingernails to the quick.

 Not completing your due diligence with a criminal search. In many states, agents are not obliged to tell you if there is a sex offender or other unsavory resident in a neighborhood you're eyeing unless you ask. Do so. They tell you to do your own research. Do so. Check with your area law-enforcement agency about how to access sex-offender lists and other criminal data bases for this crucial information.

 Visit Fredericksburg Texas Property For Sale

The single most important thing a buyer or seller of real estate will make is that of the agent they choose to represent them in the transaction. 

I won’t bother re-hashing the things stated in previous posts (i.e. Who Really Works for the Buyer, 200 Reasons, etc.) but instead spend my time in this post taking about the difference between choosing an agent vs. choosing an agency. 

Few buyers and sellers are aware of the fact that most agents are “independent contractors” working under the umbrella of a “broker of record” (the boss) who is often- times affiliated with a locally/regionally/nationally recognized brand.  I will not attempt to explain the pros and cons of local vs. national or (for example) RE/MAX vs. Coldwell Banker but rest assured there are certainly pros and cons to each.  Rather, it is important to a reader to understand that, to a very large degree, you are hiring an individual, not a company.  I know, I know, there is the argument that brands bring name recognition, advertising muscle, etc. but in the final analysis it’s all about the agent you choose to represent you and your property. 

Knowledge, experience and personalities vary widely within any real estate office.  Focus first on an agent’s knowledge of the market and their tract record in the real estate business.  Ask questions!  This is, after all, an interview.  Finding an agent with a personality compatible with yours, while important, should not be a deciding factor…the bottom line is “will they get you the best deal possible?” 

I continually meet frustrated buyers or sellers who cannot seem to get an agent to understand their needs.  They may get along great with an agent and love to have a cocktail with them, but if the job is not getting done, what is being accomplished?  Others find that their chosen agent lacks a true understanding the market that was not apparent in the beginning.  All of this can be overcome simple by asking a lot of questions before agreeing to sign a listing or buyer’s rep agreement. 

To sum it all up, shop for an agent first and an agency second.

 Visit Fredericksburg Texas Property For Sale

As the readership of this blog on Fredericksburg, Texas and Fredericksburg Texas Real Estate has grown, I’ve been asked on occasion whether or not I’d consider embedding podcasts links and RSS feeds into my blogs.  The answer is, yes, I’ve considered it and yes, I’m looking into what it would take to record and produce a high quality, informative, entertaining blog on my subjects of choice.

For readers not familiar with podcasts, they are simply an audio version of a blog.  A podcast can be downloaded from a site such as this or from sites like iTunes, Podcasting News, Podcasting Central or Podcasting-Station.  You can also choose to subscribe to a podcast and new content will automatically be sent to you via the RSS feed.

Let me hear from you.  If you’re interested, please let me know.

Visit Fredericksburg Texas Property For Sale  

The majority of full-time real estate agents hear a lot of feedback every day all year from homebuyers as they visit potential resale and new construction homes.  

They wonder why builders, developers and home-sellers add finishes or upgrades that say "cheap" or "soon-to-be-out-of-date", in addition to owners who think the laminate wood-grained kitchen cabinets look fine.  

Old standbys like solid oak hardwood floors might not be on the design edge, but quality and durability out sell trendy any day in residential real estate. After a year of property showings in 2005 and previous years with homebuyers as well as requests from customers who have come across "1001 Tips for Buying and Selling a Home" in The New York Times, the following is a list of what’s hot and what’s not for those looking to buy or sell in 2006.

What's Hot  

• Smaller square footage homes. After years of sprawl, new construction buyers want less space with better finishes.  
• Quality kitchen cabinets. With the kitchen/greatroom the center of family living, buyers today are looking at furniture style cabinets.  
• Bamboo wood floors. It could overtake maple as the favorite light-colored wood flooring in 2006.  
• Wall space for flat screen TV's. Specify power and cable boxes close to locations where homebuyers want to place the latest in visual technology. The popular location for installation in new construction is over the fireplace.  
• Multiple and high-powered phone lines. With modems, dsl, wi-fi moving into mainstream use, tech-savvy homebuyers want "wired" homes.  
• Separate shower stalls and bathtubs in master bathrooms. The growing divide among "soakers" and "showers" is increasing. Not having one of each in a master bath could squelch a purchase.  
• Built-in home stereo systems are a must-have for many audiophiles. Wireless hasn't quite made the pre-wired audio system home obsolete, at least not in 2006.  
• Balconies and decks wider than 3 feet. Homebuyers want usable outdoor space. Big enough for a bistro table and chairs and a couple of pots for container gardening.
• Guest parking. With the rise in condominiums, lofts and zero-lot line subdivisions, homebuyers want their guests to have a hassle-free experience when they arrive at their new home. Buy or lease an extra space for family or friends.  
• Dog Parks. Dogs and home ownership go hand-in-hand. The new way to meet neighbors in the hood is to interact with them at the dog park. Before buying a home, check out the nearest one.  
• Ranch or one level homes. The baby-boomers are discovering their utility in droves.  
• Second Homes. The baby-boomers are also keeping this market segment strong. Demand for second homes was still on the upside in 2005, but if primary home demand weakens, the second home market will historically follow.  
• Seller give-backs. With a more balanced market in most metro markets, requests by buyers to pay closing costs have increased, and some sellers are paying them.  
• Carbon Monoxide detectors. Home inspectors red flag homes that have only smoke detectors. Inexpensive and lifesaving, install one on every floor of a home before opening to homebuyers.  

What's Not  

• The real estate bubble. A possible “correction” with a soft decline in prices is a possibility but likely will have a minimal effect in Fredericksburg (see previous posts).  
• Ebony-stained hardwood floors. You're better off tearing it out than trying to sand the ebony out to refinish.  
• Single-rod closets. Buyers want the most storage in the least amount of space. Organizers accomplish this. 
• Dark rooms with small windows. Natural light can overrule a lot of other problems in a home.  
• Wallpaper. Buyers never have the same taste as decorators. Take it down (carefully) and paint. 
• Builder grade light fixtures and interior fixtures used outside. The right fixtures say quality to buyers. 
• Mid-century awnings on exterior windows and doors. Buyers want to let the sun shine in.  
• Mirrored backsplash's in kitchens and everywhere else. Mirrored walls and ceilings say 1980's hedonism. 
• Commitment (strong, bold trendy) colors. They look great in magazines, but as one buyer said to me "I don't live in a magazine".  
• Gas grills that need their own tank. Buyers prefer the gas piped from the house so they don't have to replace tanks.  
• Dropped ceilings. It might have updated a bungalow in the 1950's, but buyers want as much vertical space as possible. 
• Flipping. Increasing inventories of unsold homes is increasing, signaling weakening demand by all buyers. If you are holding properties to flip, prepare to place them on market after the holidays.  

On the Way Out  

• Stainless steel appliances. Word-of-mouth says the cleaning requirements aren't for everyone.  
• Laminate flooring that looks like hardwood. Not only can buyers tell it's not wood, the noise it makes with high-heel shoes is the deal killer during property showings.

   Visit www.Fredericksburg-Texas-Property-For-Sale.com

It’s been a bit since my last post on my foray into remodeling a home.  The weather has not been too cooperative but mostly, I’ve been busy with my “day job”, that of selling real estate.  I guess that’s a good thing! 

Anyway, last time I was able to work on the house I was busy pulling more asbestos shingles, removing tar paper and pulling nails.  Not too exciting but very necessary in the grand scheme of things.  I’ve posted some photos so you can see the progress.  I have the back and one side of the smaller home yet to do.  After that, it’s over to the contractors to let them really get things going.

Speaking of the contractor, he’s been tied up on a “job from hell” and will finally finish up this week.  His goal is to be on my jobs (yes, that jobs with an “s”).  In case I haven’t mentioned, my wife and I are also having to have new floor coverings installed throughout our home.  Additionally, we are doing some painting and other minor things.  We’ve got our hands full and can’t wait for it all to be over.  Doing two projects at once is not something I would recommend. 

When removing the shingles from the board & batten portion of the rear I had one of those remodeling WTF moments when I uncovered the two diamond-shaped holes (see photo).  Apparently, this was the home of a squirrel or rat…nice huh?

Visit www.Fredericksburg-Texas-Property-For-Sale.com