Last Minute Reminders

As we move into the heart of the spring real estate market there are some important issues that both buyer and seller should keep in mind if they want their transaction to move along seamlessly.

Let’s start with the seller.
Try to have the equivalent of an out of body experience when it comes to evaluating your property for sale. Look at it with a very critical eye; try to be a buyer seeing your home for the first time. What do you see that you don’t like? Fix it if you can. If it can’t be fixed then remember to consider it when pricing the property. It is always better to put your home in the best possible condition before showing it to prospective buyers, a home that shows well sells faster, without question. I have heard Realtors give very poor advise in this regard, advising, “no need to paint, the buyer is likely to do that anyway.” That is probably true but what your mother always told you about making a good first impression applies here as well.

Don’t just consider the negative, also recall those things you liked best about the home, the sort of things that caused you to purchase it in the first place. These things are likely to appeal to your prospective buyer as well. Make a list and share it with your Realtor, they can use the ammunition and try to paint a word picture for buyers. There is an old sales saying that probably applies more to real estate that any other product. “Facts tell, benefits sell!” So don’t just tell the buyers there is a park nearby, they probably figured that out for themselves. Instead describe to them the benefits of having the park nearby. “ I always felt so comfortable having the kids at the park just down the block, it seemed safer somehow.”

I know most Realtors prefer that you not say anything to the buyers as they make their inspection, after all, you don’t know them and you are likely to say exactly the wrong thing.

After all, going on and on about what a fabulous family home this is and what a great neighbor hood for kids, would not necessarily be the right thing to say to buyers who may be unable to have a family. So try to tune in and if the moment is right, there is never any harm in telling someone how much enjoyment you’ve received from your home.

Next, it is probably a good idea to try to create a profile of your prospective buyer. Small home? May be a starter for first time buyers, or a retirement purchase for empty nesters. Large home – big family. Golf course community, upscale buyer. You get the idea. By creating this profile you will be better able to plan your marketing approach. For instance, if you determine that the likely purchaser of your home will be a first time buyer with limited funds, then you will want to study financing programs that are available that may allow your participation and then design it into the plan. For instance, depending on the mortgage program they selected, a lender may permit the seller to make a contributions to the buyer’s settlement costs – these are typically referred to as “seller’s concessions.” Depending upon the amount of the buyer’s down payment the seller can contribute anywhere from 3% to 6% of the purchase price toward the buyer’s costs. So on a $100,000 purchase the seller can pay between $3,000 and $6,000 on the buyer’s behalf. The determining factor is the size of the borrower’s down payment, with 5% or less down the seller can only contribute 3%, with 10% or more down the seller may contribute up to 6%.

If you determine the ultimate buyer is likely to be a FHA purchaser, then inspect your home for safety issues. These things are likely to become conditions on your buyer’s mortgage which will need to be repaired prior to them proceeding with the transaction.

All right, now let’s look at the buyer.
The buyer’s first stop should be at their mortgage lender. There is absolutely no sense in beginning the house hunt until you know what you will be allowed to borrow. There are virtually hundreds of loan programs available, from zero down to programs for folks with “bad” credit. Quite likely there will be a program that suits you, but you need to be fully informed about what those programs might be. How much down will be required, what type of payment are you qualified for?

Once you have this all ironed out, your next stop should be your realtor. Should you use a realtor? Could you do it on your own? Sure you could. You could also walk to Los Angeles, but why take the painful route when driving or flying is so much less effort. A good realtor is worth their weight in gold, they can narrow the hunt to a manageable process, but don’t start by viewing homes right off the bat. Schedule an appointment with your agent, sit down with them and share the information you’ve obtained from your lender. Based on that information the two of you can plan a strategy that results in your successful purchase. Be honest about what your expectations are both of the agent and the home you are looking for. Be realistic, stay within the reasonable range of value that your realtor suggests based upon the information your lender provided. Stay flexible, if you are looking at resale property it is likely that you will have to make a few concessions to obtain the best property to fit the majority of your requirements.

Gary Straub is the AVP for mortgage production with Fifth Third Bank of Western PA and has been a real estate professional in the Pittsburgh area for 35 years.