Most sellers have a specific goal when it comes to their transaction: a quick sale and top dollar. But sometimes fast action doesn’t align with achieving the highest and best value.
There are multiple schools of thought on this subject and the perspective varies not only with where you are in the country, but also by price point, neighborhood and even down to the block. When it comes to pricing and the search for a quick sale, it’s always best to get help from a local agent.
Here are some strategies you can use to get offers fast.
1. The Theory of Under-Pricing
Under-pricing means that you go to market with a list price that is just below what the comparable sales in your area support.
You can’t pinpoint the exact market value of a home until it sells. But before you list, there’s always a range. If you price your house at or below the bottom of the value range, you are under-pricing the home.
In many West Coast markets this strategy will work effectively. Take this San Francisco home, for example: priced at $1.1 million, it received 10 offers and sold for $1.425 million in less than a week.
Risk alert: If you price your home low, this plan could backfire — big time. If you don’t know your market and this strategy doesn’t work, you’d better be ready to accept that list price.
2. Staging and Market Presentation
Well-priced homes that also show well sell quickly. If you want a quick sale, you need to invest some serious time in getting the house ready.
Prepping the home means taking out large pieces of furniture and personal items, painting, replacing carpets, finishing floors and even doing some minor renovations.
Enlist the help of a home stager and take their advice, and you can be assured a quicker sale. The investment of time and money will pay itself back.
Risk alert: If you go overboard on staging or you don’t spend the time and money in the right places, it could be a waste. Don’t make staging decisions in a vacuum. Focus on kitchens and bathrooms, de-cluttering and cleaning. When in doubt, ask for help.
3. Disclose and Inspect Upfront
In most of the country, sellers complete real estate transfer disclosures and present them to the buyer, and the buyer simultaneously inspects the home — all once they are in escrow.
What often happens is that buyers discover things they don’t like, or uncover issues. When this happens, they may lose confidence in the home or the deal.
By presenting disclosures upfront, and even providing buyers with a copy of a recent inspection report, you can help them get more comfortable with the home. If you price the home to account for whatever work needs to be completed or for disclosure red flags, buyers will feel more confident, and may make an offer much more quickly.
Risk alert: There is little risk in disclosing and inspecting. If you try to hide something and the buyer discovers it later, you can expect the deal to fall apart — or maybe even face a lawsuit down the road.
Selling your home is a major undertaking. Spend time strategizing and preparing the home for the market. Pricing, staging, presentation and disclosure go hand in hand. If you want a quick sale, price it right, present it in its best possible light, and go out of your way to make buyers feel comfortable with all aspects of the home.
While it can be tough enough to find just the right spot to rest your head at night on your own, it can be even more difficult when searching with a partner. Choosing where you’ll live, whether you’re renting or buying a home, is one of the most important and personal decisions you’ll ever make.
It’s the definition of complicated: the extra weight of the long-term commitment that sharing a living space brings. That means good communication is key.
“Moving in together is a huge commitment, perhaps more than a marriage itself, because it’s a substantial financial commitment to each other,” author and counselor Kerry Cohen says. “Any issues each person has around commitment, both in general and with each other, are surely going to come up.”
She advises couples to be prepared when looking for a place together.
“There will likely be arguing or maybe even hurt feelings,” Cohen says. “A lot of who a person is comes to the surface when buying a house — how detail oriented, how controlling, aesthetics, etc.”
Just because the potential is there for emotions to run high doesn’t mean they have to. Not if you take the time to do a little home-shopping prep. Here are a few do’s and don’ts, straight from the experts.
DO: Expect Feelings to Be on the Surface
Every expert we talked to brought up how emotional the home-selection process can be. And that makes sense, especially for buyers. C’mon: we’re talking about one of the biggest investments you’ll ever make, in both time and money. Things are guaranteed to get heated.
Setting clear expectations and communicating clearly and kindly throughout the process will go a long way toward defusing volatile emotions.
DO: Communicate Openly and Often
Joan Rogers, a principal broker at the Portland agency Windermere Stellar in Oregon, recommends that clients identify their old emotional pulls before starting the home search. “As with most other emotional processes, people carry all kinds of baggage into buying a home.” Use collaborative tools such as Trulia’s new boards to share properties that you find in real time.
DO: Understand What You Both Want in a Home and Why
Amber Salvador, a clinical psychologist at Sharp Mesa Vista Hospital in San Diego, suggests both parties make a list of their top three to five must-haves, then compare their lists and prioritize for budget and neighborhood before heading out on the search.
When searching for homes, make sure your list reflects who you are now as well as who you think you’ll be in five years, rather than clinging to old ideas of who you once were. The key component to success in agreeing on living arrangements is to make sure you truly understand why you want what you think you want.
DO: Be Willing to Compromise
“Be flexible. It’s important to be collaborative and work together versus against one another,” offers Salvador.
As Mick Jagger sings, “You can’t always get what you want, but if you try sometimes,” with a little compromise and understanding, “you might find, you get what you need.”
DON’T: Be Impulsive
“Impulsive decisions are typically made based on emotions,” says Salvador. “A major financial decision such as buying a home requires thought, preparation, and planning to carefully decide the most appropriate home given the couple’s budget, lifestyle, and needs.”
DON’T: Spend More Than Your Budget
The heightened emotions during the home search can also persuade you to spend more money than your budget may be able to bear. This can lead to long-term consequences in the partnership. Salvador says it’s essential that you choose a new home together based on rational decision making instead of emotional desires.
DON’T: Manipulate Your Partner to Get What You Want
Your home should be a place where you both feel comfortable. Manipulating, lying, or bullying your partner to get more of what you want in a home can lead to resentments down the road when money is needed for repairs or upgrades to features that weren’t jointly agreed upon.
Celebrity chef Paula Deen is asking $12.5 million for her Savannah estate in the city where she cooked up her Food Network shows. “When Paula is in Savannah, she wants an easier and simpler life,” a source told People magazine of the listing.
The large riverfront estate called “Riverbend” is set up like a private resort with an outdoor kitchen, a pond and a swimming pool with a dive-in theater.
It boasts a main house built in the French Caribbean style, two guest cottages, a dock house and a barn with an eight-car garage. Altogether, the 2009 estate includes eight bedrooms and 8.5 baths across 28,000 square feet of living space.
The doyenne of Southern cooking has been off the Food Network for almost two years and is now hawking her subscription-based Paula Deen Network, a mobile game and a line of food including chocolate butter sticks.
Immigrants are having a significant impact on the U.S. housing market. According to the Research Institute for Housing America, immigrants accounted for nearly 40% of the net increase in U.S. homeowners from 2000 to 2010. Meanwhile, the same group estimates that U.S. homeownership rates among Latino immigrants will hit 50% by the year 2020.
Overall, the number of immigrant homeowners is still relatively small, representing only 11.2% of owner-occupied homes in 2014, according to the Joint Center for Housing Studies. Even so, that’s up from 6.8% 20 years earlier.
So immigrants are clearly buying homes. But what sort of obstacles and challenges do they face that native-born homebuyers do not?
There are no legal barriers to foreign nationals buying property, owning homes or obtaining loans in the U.S.
Foreign investors buy U.S. property and do business with U.S. banks all the time — getting a mortgage and buying a home is simply more of the same, on a smaller scale.
“Residency of any kind is not a requirement for home ownership in the U.S.,” said Jason Madiedo, president of Alterra Home Loans, in Las Vegas. “The challenge for the consumer is to gain financing.”
Documenting Foreign Financial Info Can Be a Challenge
For a legal immigrant with an established employment and credit history in this country, the process of buying a home is much the same as it is for a citizen. However, there are still certain challenges that non-citizens may face when seeking to buy a home in the U.S. that native-born borrowers are unlikely to encounter.
“It becomes a little more difficult for a foreign national to buy an owner-occupied property unless they’re here with a job in the U.S.,” said Bill Ashmore, president of IMPAC Mortgage in Irvine, California. “The longer somebody’s here and the more they can document their income through tax returns, the better off they are.”
Even if they’ve established themselves professionally and financially in their home countries, recent arrivals may find it challenging to get a mortgage in the U.S., Ashmore said.
One of the major reasons is because the information needed to document income and credit is coming from abroad. That means the information may need to be translated into English, or may be in a different format or based on different conventions than American bankers are used to — for example, there will be no W-2s for earnings abroad.
There’s also the matter of verifying the validity of information provided by unfamiliar individuals or institutions.
“Are you going to accept the profit and loss statement of the accountant?” he asked.
As a result, many foreign nationals tend to simply pay cash for home purchases, which Ashmore termed the “path of least resistance.”
That’s not to say that foreign financial information can’t ever be used in obtaining a mortgage from a lender in this country. Ashmore said his company is developing a program in cooperation with about 25 foreign banks to enable borrowers to document assets abroad. However, potential borrowers would need to have accounts with a participating bank to benefit.
Alternative Measures of Credit, Income Sometimes Needed
Non-citizen homebuyers tend to fall into two groups, according to Madiedo, who is past president of the National Association of Hispanic Real Estate Professionals. The first group, he said, are affluent foreign nationals with the financial resources to buy property in the U.S. and the ability to come and go as they wish.
The second, he said, are the ones who come here seeking work and opportunity, people he calls “the type that this country was built on.”
“These folks have a much harder time obtaining financing,” he said.
For borrowers who haven’t established traditional credit, some lenders will use alternative methods of qualifying them for a loan, such as looking at rent payments, or phone and utility bills. But doing so is more labor-intensive for the lender and the loans carry higher interest rates than those done with conventional underwriting.
Another issue that sometimes arises with immigrant families is that many people may contribute to the household income, rather than the one- or two-earner households that lenders are more accustomed to evaluating.
“One of the challenges we’re seeing from an underwriting perspective is the multigenerational family,” Madiedo said.
In such a household, you may have grandparents, parents and children all working and contributing to the loan payment. Documenting all that income, and proving that everyone will be an occupant in the home, is a challenge in today’s lending environment, Madiedo said.
Not all lenders will be willing to go through the extra steps needed to underwrite such loans, although Fannie Mae, Freddie Mac and the FHA do have certain loan products that accept both nontraditional credit and varied income sources.
“The key for consumers is to be working with the right lender who understands their cultural nuances and packages the loan into whatever (product) works for them,” Madiedo said.
Nonpermanent Residents Can Still Get Loans
Another type of immigrant borrower is one who does not have permanent residency (green card) status, but who has come to the U.S. on a temporary visa because he or she has special professional skills that are in demand.
From a lender’s perspective, one concern with such borrowers is how long they will be able to remain in the country. As such, they may need to provide a statement from their employer/sponsor attesting to the expected duration of their employment, Ashmore said.
Both Fannie Mae and Freddie Mac offer mortgage programs that are available to nonpermanent residents from other countries who are here on a temporary work visa (H1B or H2B). Down payment requirements are higher than the minimums allowed on other Fannie and Freddie loans, however, and other restrictions may apply.
Nonpermanent residents from other countries may also be able to go outside of the Fannie/Freddie structures for what are called non-agency loans, which have fewer restrictions but also have higher interest rates and higher down payment requirements.
What About Undocumented Immigrants?
What about undocumented immigrants? Many are surprised to learn that even in that situation, it’s still possible to get a mortgage and buy a home.
A standard loan application will require the borrower to provide a Social Security number and indicate their citizenship or residency status. But those requirements aren’t established by law — those are requirements imposed by the agencies backing those loans, such as Fannie Mae, Freddie Mac or the FHA. And there are certain types of non-agency loans that don’t have those requirements.
For some loans, a borrower may use what is called an Individual Taxpayer Identification Number (ITIN) instead of a Social Security number. This is an alternative form of taxpayer identification that is issued to foreign nationals working in the U.S. who are ineligible for Social Security.
Lenders themselves aren’t equipped to check a person’s immigration status — Ashmore said that if a person has their financial and credit information in order, the lender really doesn’t have a way of knowing what their immigration status might be.
“If somebody’s going to come to me, I’m not going to check that their driver’s license is right, I’m going to do a fraud check,” he said. “It’s more documenting your ability to repay, rather than whether you’re illegal or not,” he said.
ITIN mortgages aren’t widely available, and are generally offered by small community lenders who are willing to put in the extra effort needed to underwrite them, according to Madiedo. Interest rates typically run about two to three percentage points above what someone would pay on a conventional 30-year loan, he said.
Madiedo said that undocumented immigrants who obtain mortgages tend to be dependable borrowers with low default rates. They also tend to keep their loans for a long time, being less likely than other mortgage borrowers to refinance to a lower rate or sell the property before the note is paid off.
“The loans perform extremely well, so it’s a good investment opportunity,” he said.
It may have sold for eight percent under the original asking price, but when you’re talking about an 1,800-square-foot San Francisco condo playing in the $2.5-million club, who’s really counting by the tens of thousands?
When it debuted on the market last month, the Nob Hill apartment at 1333 Jones instantly became San Francisco’s most expensive one-bedroom listing — as in, of all time — at $2.495 million.
Granted, the apartment is in The Comstock, one of the city’s most prestigious residential buildings. But when it comes to San Francisco co-ops, a fancy address only gets you so far.
So what does this elaborate eighth-floor beauty have that (no offense) you probably don’t? For starters, the completely remodeled unit features hardwood floors throughout, as well as a modern, open-concept kitchen.
From there, turn your attention to two slab-marble bathrooms and a walk-in closet off the master bathroom. Finally, take in the northwest-facing floor-to-ceiling windows that give way to panoramic views of the Bay — the Golden Gate Bridge, Alcatraz, Coit Tower, yada yada yada.
Some might say the ultramodern work-of-art/apartment does slightly resemble a life-sized fishbowl, but its sleek architecture and design are awe-inspiring. And there’s a bonus: The open floor plan includes frosted sliding glass doors that can be used to convert the office/den into a makeshift guest room.