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Showing the Open House
Showing the Open House
by Dr. Oneida Cramer
Freshly baked bread and cut flowers finish the last minute touches to the well appointed home showing. But to get the best deal for your property in Dallas' current home market, homeowners should do their homework before showing off their homes.
"Right now, there's just a tremendous amount of activity based on the fact that people can easily sell their houses," said real estate agent Dave Perry-Miller, senior vice president/sales associate with Adleta & Poston realtors. Historically, it's an inexpensive time to sell because homeowners can gain appreciation from having held their homes the last 4 to 6 years plus they can easily trade up to a different property without encumbering tremendous disparity between the current interest rate and their previous interest rate.
"Interest rates haven't changed significantly enough, where they tremendously impact someone's ability to purchase a property," said Perry-Miller. In fact, quite the fashion in Dallas home buying is trading up on a long term mortgage. So, many sellers in Dallas ultimately move to the other side of the home market equation.
"It's a double edged sword because the good news is that if you were to put your property on the market first, it's much more financially convenient and there's much more financial piece of mind because you sell your property," said Perry-Miller. At that point you're able to buy a property; but you are then at the mercy of what is on the market. The other way, which most people are opting right now, since it's relatively easy to sell their houses, is to find a house that they really like and make an offer on the property that works for their schedule and the schedule of the sellers. Then they have a comfort level that if they put their property on the market at a realistic and competitive price, that it will certainly find a buyer.
Most homes sell within thirty days; many homes sell within three days or even within hours of the posting. Some homes, 10% of the homes over one million dollars and less than 5% of the homes under a million dollars, never get posted, according to Perry-Miller.
"What typifies what's going on with a really good property for sale," begins real estate Lori Kircher with Virginia Cook Realtors. "If you have a real active aggressive, successful team, and word gets out about your new listing, they're on the phone. They're getting that client over there long before that listing gets put on the MLS (Multiple Listing Service). A house can be sold, and it just never even goes public." Or once a property is listed, whoever is watching the market closely and happens to pull it up on the computer first, often gets the sale, according to Kircher, who also sees lots of one phone call house sales.
"But because it's moving so fast, I'd caution anybody against thinking that--obviously if it's so easy, I don't need an agent," said Kircher. "There are so many lawsuits. You really need the protection of the standard contract and real estate companies."
Agents provide council, staging, marketing, and guidance throughout the procedure. And some of the most important steps take place during early phases.
"We suggest that the sellers have an appraisal done. . perhaps two appraisals" said Perry-Miller. "It verifies square footage because buyers want to know, and tax department information may or may not be accurate."
"Second, we look at properties that have recently sold, and we also look at properties that have just come on the market to see what is being offered right now," said Perry-Miller. "Between these two parts of the equation, we try to come up with a very competitive, yet, a price that leads a little bit rather than relies totally on past comparable."
"The third thing that we're doing is counseling people on the need to have extremely competitive houses, condition-wise," said Perry-Miller. There's a tremendous amount of construction in single homes, town homes, and zero lot line homes in the last ten to fifteen years in the Park Cities, Preston Hollow, Bluffview area, and even in the uptown area just south of Highland Park. Sellers are also on the notice that even if they live in an older part of town, they are competing with new construction homes because of the rebuilding on existing sites.
These new homes are building in a lot of the new technology, such as provisions for computer lines, DVD's, a built in screen, and many appliances that people don't think to install into a home, once they're living in it, according to Kircher.
So, many people might chose the building process, right now, said Perry-Miller. But buyers also know that if they choose to build a house, they're also looking at a longer waiting time. Although they like the idea of building, if they find a house that's in very good condition or if they find a house that fits their needs and they can move into it in 60 days, they think that's terrific. So, it's important to have your property in as close to competitive condition as possible.
"Older homes can still compete if people are willing to spend around $5,000 to fix them up," said Kircher. "You need to paint the whole outside. . . wash the windows, plant colorful flowers--things that don't cost much money, but show TLC (tender loving care). It's an overall impression that this person cares about this house."
Even in the areas where homes are being torn down, the survival of your home would depend on three conditions, according to Perry-Miller. (1) The condition of the home, (2) its charm, for instance, those architectural details that couldn't be found in a new home or would be extremely expensive in a newer home, and (3) the height of the ceilings. True, older homes with architectural integrity, nine foot or greater ceilings, and a certain charm, are being bought up as quickly as the larger properties.
"Honesty is the name of the game," said Kircher. Before putting the house on the market, sellers must prepare a seller's disclosure stating everything good and bad about the house. The inevitable inspection always seems to come up with some hidden leak or infestation, but it should not find major problems. For, unexpected repairs can turn away buyers, who have a negotiable number of days to reconsider the bid. During this option period, usually 7 to 14 days, the house is taken off the market and buyers are urged to inspect the house and find out every detail. If the buyers walk away from the house, they forfeit the option fee, which is generally less than $1000 to $500. And the home goes back on the market again, this time with added information to the seller's disclosure. So, it's to the seller's disadvantage not to have taken care of all problems before putting the house on the market.
"I feel that it's important for the sellers to get the appraisals, have the house inspected, and then we rebate or credit a portion of that (up front out of pocket expenses) at the closing," said Perry-Miller. But not all agents make this offer. In fact, the real estate business is becoming less standardized, according to Kircher and Perry-Miller.
"There has never been historically as much disparity between what you're getting, even within agencies," said Perry-Miller. "It's galling to me that some agents get the sellers to do all the work and then charge a transaction fee." Transaction fees are a new thing, not routinely used in the past, but sometimes requested to compensate the agent's commission, which has remained approximately the same for years.
"Prices of homes have gone up astronomically, said Perry-Miller. "So, that's why we're able to sell the larger volumes of real estate right now. Agents have to offer their expertise, and they have to offer their guidance and their counseling. But to charge a transaction fee on top of that, I don't think it's appropriate."
The only other obligation a seller might incur when showing the home is the short-term, one-time showing agreement, a practice that's been around for a long time and represents good business sense, said Kircher. Generally, if an agent has a client looking for a house and that agent finds a prospective home that fits the buyers needs just about to come on the market, the agent very often will offer the seller a contract that specifies a one-time showing, where the agent can bring one client to the house and if that client buys the house, the seller will agree to pay the agent a commission for that sale even though the two parties have not had a pre-standing listing agreement.
"I think its important for sellers to have accessibility to their houses," said Perry-Miller. To ease the need for absolute accessibility, Perry-Miller designed a web page equipped with virtual home tours that allow circumscribed viewing of prospective homes. Now that computers can educate buyers before they visit their first house, computers are actually helping to the speed up the home buying process.
"But the computer never takes the place of an agent showing the property," said Perry-Miller. For once inside the house, the fragrance of the cut flowers and the aroma of warm bread only clinches the sale.
Dr. Oneida Cramer
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