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Tuesday Tip: Title, surveys and the market in Covid month 4 …
Posted by Lori Craft on Tuesday, May 5, 2020
Perspectives on the Real Estate Market:
How are you dealing with the Covid-19 Lifestyle?
Rolling with the Covid hiccups or as I like to call it, “what new fresh hell is this …”
Community – Home, Hearth, and the New Reality
Buying your first home when you are already “adulting” can be daunting especially when children are involved. Unlike the 20 something buyer who has few obligations, you must consider not only the immediate needs of your partner and/or children and pets but also your future needs as well. For you, this means when purchasing, you will want to minimize your investment risk and still keep future value at the top of the need list.
While purchasing a foreclosure, short-sale or distressed property is not out of the question, you need to seriously evaluate your discretionary income that could be used toward repairs and your available time to devote to sweat equity. With child, marriage, and work demands both are often in limited supply. More often than not, at this stage of life, you will want to look for a property that is fairly turn key or at a minimum make allowances in your offer price to address any pending issues such as an older roof or aging mechanicals. This can be done through a reduction in price or requesting seller assistance toward closing costs. The latter will free up available cash to deal with repairs if need be. And if you are handy, you can put your own stamp on your new home at the fraction of the cost. Rule of thumb: budget to hire professionals for any plumbing, HVAC, or electrical work. Cosmetic issues such as paint are doable DIY projects.
Another huge factor for your group is location. Before kids, most people prefer to be close to where the action is and a quick commute to work. That changes somewhat when kids and larger pets come into the mix. Depending on your social life and the commute in to work, you may want to be closer to town which generally means a smaller home or townhome with less yard. In Houston, that can also mean the added expense of private school as well if the inner-city schools leave something to be desired. For this reason, I highly recommend you look to search engines such as greatschools.com or schooldigger.com to get an idea of school ratings. I also recommend calling the sherriff’s department regarding crime statistics. A community that suffers the occasional teenage car break is very-different from the one with three homicides this week.
With the exception of the buyers that really want that in-town experience, most homebuyers in your group are looking for a yard as for their kids and pets to play and to entertain friends. Depending on your price point, that could be closer in but more likely will require a move out toward the suburbs. Suburban life is different than living in-town and in Houston, master planned communities have evolved to address the needs of young growing families by developing green spaces for parks, nature preserves, lakes and pools, hike and bike trails, community schools, sports complexes and sports associations as well as easy access to freeways, entertainment, restaurants, and healthcare. These amenities do not come cheap and buyers often must sacrifice lot size and pay a premium in HOA dues.
One final consideration: since this is not likely your last home, you will want to buy with resale in mind. Make sure that the community has values that are holding or increasing or at least have the potential to increase. You will also want to be cautious about purchasing new construction in a neighborhood that still has much to be built out as you will pay a premium for that new home. You can expect to need to remain in that home at least three to five years to break even on your initial investment and closing costs… sometimes even longer.
The best bet for ensuring a great investment at this stage of life — one that will resell for higher value down the road but meet the needs of a growing family for 5-7 years — is to hire a licensed agent familiar with the local housing market. For you more so than many other groups, it’s helpful to have an agent that knows multiple areas of our ever growing county and adjacent counties.
Open houses spark immediate reactions from my sellers. I often hear, “Why bother with an open house?” or “We absolutely MUST do an open house!” It becomes quickly apparent that their preference for or resistance to doing one is based on myth rather than fact. So. what is true and what is not??
1. Every listing can benefit from an open house.
MYTH. For some homes, open houses are perfect and will generate high traffic and encourage multiple offers, but that is not always the case. In fact, some homes lend themselves to looky-loos and potential theft. And if your home is in poor condition, an open house may generate bad publicity and incur the wrath of your neighbors and HOA.
2. Open Houses only benefit the realtor.
MYTH. Most Realtors invest the time and money open houses demand to not only promote the listing, but also themselves. HOWEVER, 1 in 10 homes are still sold through an open house, so as a homeowner, why would you want to eliminate that 10%?
3. Listing your open house in the MLS is sufficient to generate traffic.
MYTH. While 90% of homes in Houston are sold through MLS, It is not uncommon for a buyer to “find” an open house that was not on his initial radar due to location or price-point and then fall in love with it. Many factors can encourage this outcome. Your realtor needs great signage and will be advertising up to a week in advance on social media sites like Facebook, Twitter, Instagram, and Reddit. As a homeowner, you can help as well by promoting it through your neighborhood boards and through your own social media outlets.
4. Never do an open house on a holiday weekend
IT DEPENDS. Which holiday are we talking about? Mother’s Day has been known to generate a great deal of traffic as well as the Saturday following Thanksgiving and the weekends before and after Christmas. Father’s Day, Memorial Day, and Labor Day tend to have low turnouts. Think about where people are going to be for that holiday – if everybody is packing up to go to the lake, no one will be coming to your open house.
5. If one open house has poor turnout, you should not do any others.
MYTH. Lots of factors play into turnout. Now, if you do three and no one shows, this may be a listing that is not a good candidate. I can count on one hand the number of open houses I have done that consistently resulted in crickets. You may have to tweak a few things, but if at first you don’t succeed …
6. Open Houses are for the neighbors to get decorating ideas.
SOMEWHAT TRUE. But not a bad thing … neighbors like their friends to move near them. And even though they come to the open looking décor inspiration, they may leave thinking of that one person for whom your house would be perfect.
7. We should do an open house every weekend until it sells.
MAYBE. It truly depends on the speed of the market. In a fast-moving seller’s market, too many opens can make a seller look desperate – not a good look for a listing. One or two opens will give the realtor an idea of what needs to be changed to sell it and what is actually working. In a slow market, a seller may need to do multiple opens to generate traffic and spur interest.
8. If my realtor doesn’t personally host the open house, he or she isn’t doing my home justice.
MYTH. With exception – there is always that lazy realtor that would rather be at the beach than working, but that is the rare exception. More often than not, your realtor is busy working on other ways to market your property at the same time and by having another agent host the open, he or she is expanding the listing’s exposure to that agent’s network as well.
In summary, to hold or not to hold open houses are based on the unique factors of your particular listing. Personally, I like them and find that in general, they are very effective. But each home is different, and you must weigh those pros and cons for yourself after a frank discussion with a licensed Realtor. He or she is most familiar with the speed of the market, the conditions of your home, and the circumstances of your sale.