Finding the Sweet Spot

Dear Kathe:

You often write about making sure to price our home correctly for a better chance of a successful sale.  How do we do that?

We all know the story of Goldilocks – be it the porridge being too hot, too cold or just right, or the beds being too big, too small or just right, or the chair being too hard, too soft or just right, the winning combination was not an extreme but the “just right” spot in between.

The same is true when pricing homes, and in particular, Signature homes.  Price them too low, and they fly off the market, most likely far below a price you could have achieved. Price them too high and they sit for months or years. The trick is finding that sweet spot in the middle that will drive in an offer in a reasonable time, maximizing your return.

But how to find this sweet spot?  If I could invent an App for that, I would be rich!  Zillow has tried, but their Zestimates are often hopelessly flawed for unique communities like Sewickley, and particularly for our Signature homes.  A computer in a remote location simply cannot translate all of the high-end amenities you may have added to your home into a realistic number. Human judgment is required. And yet your agent may not have the most objective opinion – you may be friends, for example, and he may not want to hurt your feelings. And it is certainly not wise to rely on your own opinion – we are least objective about our own homes!

That is where the appraiser comes in. Having your home pre-appraised may be your very best course of action. For approximately $450, you can have an objective analysis that will not only allow you to most accurately price your home but will allow you to say to buyers “this home was priced based on an independent appraisal.” That will carry a lot of weight when buyers are assessing how realistic your price is and usually drives in a price close to the appraisal.  Please do note, this appraisal must be independent of a refinance – it must simply be done for pricing guidance for it to be truly objective. But if you take the time to get it “just right” out of the gate, after the buyers have tried on all the “too highs” yours will be the one they pick!

 

188 Sweetwater Drive –  New Listing

Kiss old house “problems” good bye and still live in Sewickley!  Sound too good to be true?  Check out 188 Sweetwater Drive.  Only 6 years old, this wonderful home is sited on an awesome half-acre lot at the end of a cul-de-sac in a fabulous Sewickley neighborhood!  Incredible outdoor spaces include Trex deck, patio and two firepits, all backing to natural woodlands. Three finished levels include huge finished lower level with full bath.  Gorgeous design aesthetic throughout unifies this incredible open floorplan.  4 bedrooms, 3.5 baths, 3 car attached garage. $599,000.  See more…

 

 

518 Irwin Drive – Home of Distinction

Exceptional opportunity to own one of Sewickley’s landmark homes! Recently remodeled with a current design aesthetic, this notable home is architecturally impressive and yet incredibly comfortable for today’s lifestyles.  Outstanding main level space includes a huge kitchen open to a large family room, spacious “homework room” adjacent to the kitchen, and living room, dining room and den.  Finished lower level. 6 bedrooms, 4.5 baths PLUS a nanny/in-law suite.  Incredible yard with room for a pool.  So close to all Village amenities and yet giving you the perfect amount of privacy.  $2,900,000. See more…

QUICK SEARCH

I’m ready to answer any questions you have regarding your real estate needs.
 
 
Kathe Barge, CRS, ABR, CNE, SRES
Associate Broker
HOWARD HANNA
REAL ESTATE SERVICES
401 Broad Street
Sewickley, PA 15143
Cell: 412-779-6060
Office: 412-741-2200 x238
kbarge@howardhanna.com

Asking the Right Price

How long should a seller wait to reduce the price of their home?  Is it ok to start at a higher price and reduce the price later?

There are many “rules of thumb” in real estate that provide suggestions as to when a price reduction is appropriate. One of the most common is after “13 weeks or 13 showings.” In other words, if your home has been on the market for at least 13 weeks, or if it has had at least 13 showings, and you haven’t received an offer, there is a good possibility that it is priced too high and should be adjusted. However, there are many scenarios in which a price reduction is not warranted.  First, you need to consider whether there are any buyers in your market segment.  If other homes are selling readily and your home is not, then you need to re-evaluate your price.  However, if nothing is selling and there are just no serious buyers in the market, then reducing your price is unlikely to spur on a sale.  You also have to consider whether there are factors that are holding back your sale that could be corrected for less money than you would lose by reducing your price.  For example, if your home has dated carpeting or wallpaper, it may be more cost effective to change the carpet or remove the wallpaper.  Reducing the price is unlikely to incent a buyer to take down your wallpaper or change out the carpeting  — no one wants to do the work these days, so it might just fall on you in order to draw the offer. Additionally, if your home is in need of a more significant renovation, such as a new kitchen, reducing the price is not necessarily solving the problem – you are just putting your home in a pool of less qualified buyers who also probably don’t want to take on the project. In this scenario your two best options are either to reduce to below market so a buyer senses a deal and is willing to take on the project, or be patient and wait (the months or years) for a buyer to come along who appreciates your house as it is. Generally speaking, it’s a far better plan to price correctly out of the gate than to push the market and have to reduce later.  If you take a more conservative approach to pricing, you also have a good chance of a bidding war.  Reducing later is highly unlikely to bring buyers who have previously considered your home back to the table – they have moved on.  Even the 13 weeks may be too long if there are strong market signals that you came on too high.  My best advice is to trust the judgment of a local real estate professional when it comes to pricing – you only have one chance to make a first impression!

172 Bradford Road – New Listing!  On a nearly 2 acre wooded lot in Bradford Woods, this home is exceptionally convenient to Route 19 and I79 and yet is nestled in a quiet neighborhood in world all its own.  With private patios and decks, lush lawns and mature landscaping, its an idyllic setting just minutes from Pittsburgh and Sewickley Village. Originally a charming cottage, this home has been expanded to over 3000SF plus a finished lower level and a 3 car detached garage! Offering 4 bedrooms including a huge main level master with sitting room and fireplace, its systems were all recently updated – new roof (2015), HVAC (2014) and water heaters (2019).  $475,000.  See more…    

17 Linden Place  – Exclusively By Kathe  – New Listing 17 Linden Place perfectly merges the ideals of Sewickley Village living! Sited in a quiet neighborhood on a tree lined street with sidewalks to everywhere and on a large flat yard, yet just steps from Sewickley Village shops! Offering a completely neutral palate ready for your custom touches. Upstairs are four generous bedrooms and two nicely remodeled baths. On the main level the eat-in kitchen offers white cabinetry with granite tops, and flows into the adjacent family room with wood-burning fireplace and through doors onto the patio. The lower level is finished with exceptional indoor play space and bath. An exceptional amenity is the 4 car garage with unique apartment above!  $750,000.See more…   

QUICK SEARCH

I’m ready to answer any questions you have regarding your real estate needs.
 
 
Kathe Barge, CRS, ABR, CNE, SRES
Associate Broker
HOWARD HANNA
REAL ESTATE SERVICES
401 Broad Street
Sewickley, PA 15143
Cell: 412-779-6060
Office: 412-741-2200 x238
kbarge@howardhanna.com

To Update or Not to Update

We last updated our home twenty years ago and are now ready to downsize.  Does it make sense to put it on the market at a lower price or do we have to make updates before we list?

You absolutely do not need to update your home before you list! I’m sure that comes as a relief to you.  However, if the last significant updates you made were twenty years ago, you must price accordingly.  Even if your bath tiles are white, for example, and not a turn off, the size and style of tiles has changed in two decades and the baths, although neutral, will feel dated to buyers.  One of the biggest mistakes sellers make is to note what their neighbor’s home sold for and price theirs accordingly.  If the neighbor had new baths (as opposed to neutral baths) or a new kitchen, or new paint colors… they will get significantly more money for their home.  The key to selling with no updates is to get a likely value in “as is” condition from a local expert – I can help you with that! It is important to be clear when pricing, however, what you intend to do before listing – some sellers have projects planned but not completed and that would be important to take into account. As long as you price your home right, your home will sell without updates.

Before deciding to list “as is,” however, it is a good idea to consider what the cost of recommended updates would be and what they might yield you if you make the investment.  Usually, when updates are made right before a sale and are in line with current design preferences, your home will sell faster and the higher price you receive will be far greater than the cost of the updates. If this is something you would like to consider, I would be happy to meet with you to discuss what you might update and how the updates might increase your value.  You could then make an informed decision about whether or not to list “as is” or update.

In the end, you may decide that you value the simplicity of an “as is” listing and the increased price realized is not worth your time and the stress of a project.  Even in that case, it’s a good idea to still stage the home for sale by decluttering and giving it a good scrub down (including windows and carpets).  Homes that are clutter free and have been recently deep cleaned will also sell faster and yield a higher sales price, even if they are not as updated as buyers might prefer.

 

100 Buhlmont Drive

Seeking newer construction but want a home in the Quaker Valley School District?  Check out 100 Buhlmont Drive!  Featuring 4 bedrooms 3 full and two half baths and the convenience of an attached garage, this beautiful brick home offers an open floor plan with large kitchen opening to great room with built-ins and fireplace.  Main level laundry room offers additional convenience. Finished walk-out lower level.  Large yard with plenty of play space.  $647,500  Read more….

 

319 Scaife

Exceptional Sewickley Heights home will take your breath away with its unparalleled beauty. Sited on 5 private acres, it combines the authentic charm of a Sewickley Heights carriage home with modern amenities and stunning design.  Magazine perfect kitchen with top-of-the-line appliances and granite tops opens to a captivating dining room with fireplace and relaxing family room.  French doors open from the gorgeous living room, also with fireplace, onto the sprawling stone terrace, which spills out effortlessly onto the manicured grounds.  Enjoy coffee or wine relaxing under the wisteria-draped trellis. Incredible master suite with three walk-in closets and remarkable custom bath with radiant floors, Victoria and Albert soaking tub and large shower with custom glass enclosure.  Charming enclosed courtyard. Three car attached garage.  $2,150,000    Read More…

I’m ready to answer any questions you have regarding your real estate needs.
 
 
Kathe Barge, CRS, ABR, CNE, SRES
Associate Broker
HOWARD HANNA
REAL ESTATE SERVICES
401 Broad Street
Sewickley, PA 15143
Cell: 412-779-6060
Office: 412-741-2200 x238
kbarge@howardhanna.com

The Effect of Rising Mortgages

We’ve noticed interest rates are rising on mortgages.  What effect do you think that will have on our market?

You are correct – the fed raised the interest rates AGAIN this year, and have indicated that we need to be prepared for two more rate increases in 2018. Those increases are expected in September and December and many forecasters are expecting that rates will be over 5% by 2019.  The economy has been incredibly strong and unemployment is lower than it’s been since the 1960s (excepting one month in 2000).  With a surging economy, the fed is forced to raise rates in an attempt to keep investors interested in mortgages, control inflation and avoid a possible future economic crash.  Rates are ¾ point higher than they were last year.  Nonetheless, historically 6% is considered an excellent interest rate and they are still well below that!

With all of that in mind, today is as good as its going to get for years to come for mortgage interest rates.  So don’t procrastinate any longer!  If you are thinking of a move, there is no better time than now to find a new home and lock in your interest rate.  In September you will likely pay more for the same house over the life of your loan than  you would if you bought it roday.  What impact will these rising rates have on the market?  Some buyers will not be able to afford a home that they could have afforded previously – as rates rise all borrowers will qualify to borrow less and that lower number may or may not be enough for you to be able to buy the home of your dreams.  All buyers will pay more for their homes over the life of the loan than the could have had they purchased earlier.  Ultimately, higher rates could depress home values as buyers can afford less, but I do not see that happening in this market.  We just do not have enough inventory for rising rates to depress home prices…yet.  But if we ever bring supply in line with demand again, we may see rising rates soften home values.

Of course, as rates rise it becomes very important to shop your loan product.  Those who get two lender estimates save on average $1500 upfront and those that get 5 save $3000 upfront on average.  Most buyers will take the time to shop around for a new car, so why not take the same approach toward your mortgage. With rising rates, you will appreciate the  upfront savings!

Featured Homes

625 East Drive

The opportunity of a lifetime! All of the elements of the ideal Village experience merge beautifully in one home! Tastefully remodeled, elegant yet comfortable! Located on one of Sewickley’s finest streets. Built and maintained with impeccable attention to every detail. Richly appointed throughout. Beautiful kitchen loaded with amenities. Private study with richly molded walls and handsome wood-burning fireplace. Family room/morning room with arched windows flood the room with light. Restful owners suite with luxurious his and hers baths. Amazing dressing room with mahogany center island. Four to five additional bedrooms, three laundry areas, finished lower level with game room and home gym. Two-car garage with bonus room above. Beautiful, private grounds with large stone patio. $2,800,000

 

219 Orchard Lane

A spectacular Sewickley Village transformation!  Large two-story addition of 1000SF+ incorporates a new large family room, mudroom and luxurious master suite. This complete renovation included all new wiring, zoned central A/C added to the home, 2.5 new baths including a gorgeous master bath, addition of main level laundry and new kitchen featuring abundant white cabinetry topped with Quartz, stainless appliances, and large center island overlooking the large great room. New master suite includes vaulted ceiling, spacious walk-in closet with laundry chute, Fenced rear yard with patio.  $650,000

I’m ready to answer any questions you have regarding your real estate needs.
Kathe Barge, CRS, ABR, CNE, SRES
Associate Broker
HOWARD HANNA
REAL ESTATE SERVICES
401 Broad Street
Sewickley, PA 15143
Cell: 412-779-6060
Office: 412-741-2200 x238
kbarge@howardhanna.com

Zillow Information Not Always Correct

The information on Zillow is incorrect about our home.  Should we address this?

Zillow is relied upon by millions of consumers for their real estate information and so it is important, if you plan to sell your home, that the information be correct.  Incorrect information can lead to poor buying decisions on a buyer’s part and might also adversely impact your Zestimate.  On their website, in the very fine print, Zillow itself admits that its Zestimate reliability in Pittsburgh is not particularly good, but most people don’t read the fine print.  So before you list your home for sale, take the time to check it out with Zillow and correct the errors you see by clicking on the “Correct Home Facts” tab, setting up an account and submitting the requested error corrections.  It is possible to dispute the Zestimate as well, so if you are listing your home for sale and the number is significantly lower than you anticipate it is worth, it may also be worth your time to do this before you list.

It is important, however, to be aware that whatever you post to Zillow stays there. As tempting as it might seem to try a “For Sale By Owner” to “save” the real estate commission (and I say this with emphasis because it is the buyer, and not the seller, who is paying the commission – if you are a FSBO they expect you to deduct the realtor fees you are not paying from your price, so the savings is theirs), I do NOT recommend listing FSBOs on Zillow.  Once they are there, they become part of a price history on the home, and if you ultimately employ an agent and try to raise the price, the buying public will be able to see online your earlier price and you will struggle to get traction at the higher price point.

Zillow is a popular online tool for many consumers (my preference is howardhanna.com as it is not owned by a publicly traded company reporting to shareholders  and is not selling space to make money for shareholders, which in some instances may not be in a consumer’s best interests). Given that many consumers use Zillow, I do recommend you take the time to get the information about your home correct before listing!

FEATURED LISTINGS

1432 BEAVER ROAD

Complete architect-designed interior renovation of this elegant Sewickley Village Queen Anne Victorian. Sited on a private 1.7 acre lot in the heart of Sewickley Village.  Meticulous renovation and transformation into a home that works perfectly for millennial families. 5000SFF+. Remodeled kitchen seamlessly incorporates new cabinetry and granite tops while integrating refinished antique glass cabinet doors into the design. Completely redesigned master suite, with sitting area, turret reading nook, luxurious bathroom and exercise room. Impressive development of the lower level incorporates a family room, office, kitchenette/bar area and powder room into the home. $1,200,000

444 WOODLAND ROAD

Privacy in the heart of Sewickley Village!  2.973 Acres with mature landscaping, sprawling lawns, in-ground pool, private patio and natural woodlands that provide a year-round buffer for this magical property, yet Village shops and restau

rants are just a few blocks away! Renovate to restore the home’s original relaxed elegance, reminiscent of New England seaside homes.  Or replace with your own 21st century home of your design and creation!  A rare opportunity in Sewickley!  $725,000

I’m ready to answer any questions you have regarding your real estate needs.
Kathe Barge, CRS, ABR, CNE
Associate Broker
HOWARD HANNA
REAL ESTATE SERVICES
401 Broad Street
Sewickley, PA 15143
Cell: 412-779-6060
Office: 412-741-2200 x238
kbarge@howardhanna.com

THE BENEFITS OF BUYER’S AGENT

Why should we use a buyers agent when buying a new home?  We thought it was better to just call the listing agent.

It’s always a better idea to use a buyer’s agent who is focused on your home search rather than calling each listing agent of every property that you might be interested in.  First and foremost, a buyers agent is essentially no additional fee to you.  Buyers do pay a very small “broker fee” (at Howard Hanna, that fee is comparatively quite low, at $325), but the commissions are paid by the seller.  So there is no financial reason for you not to have Buyer representation!

Having a buyer’s agent offers a long list of advantages to you.  The agent will get to know your personal needs and wishes and be able to screen houses more effectively as well as target houses that might be a great match.  The agent will be able to compare the various homes that you see, helping you to objectively address the positives and negatives of each home as they relate to each to other.  You should expect a buyer’s agent to be able to do a detailed analysis of the comparable sales for you so that you can feel good about any offers you are making.  Your buyers agent will also be able to guide you through the inspection process, which can be very tricky these days with home inspectors being unusually critical of the homes they are inspecting.

Does this mean that you should sign a buyer agency agreement with the first agent you meet?  Absolutely not!  The internet offers a wealth of information about Realtors these days.  Before choosing a buyer’s agent, check their online presence.  Look at their qualifications – do they have certifications or other professional credentials?  Check out their online reviews on websites such as Zillow, Trulia, realtor.com, yelp and Facebook.  Do they have a personal website where you can learn further information about their business and services to you?  Feel free to request personal interviews of past clients if that is helpful to you.  Once you feel you have chosen the best match for your needs, engage that Realtor as your buyer’s agent and move forward, knowing that you are in good hands!

FEATURED HOMES

180 Summerlawn Drive

Beautifully remodeled open concept 17 year old home on ½ acre wonderful lot in a delightful Sewickley neighborhood close to Village. Four finished levels of living space including finished walk out lower level. Kitchen with new stainless appliances open to family room.  Main level laundry.  Large master suite. Four bedrooms, 3 full and 2 half baths. Third floor great room.  New roof. $599,000.  See photos….

444 Woodland Road

Privacy in the heart of Sewickley Village!  2.973 Acre yard with mature landscaping, sprawling lawns, in-ground pool, private patio and natural woodlands that provide a year-round buffer for this magical property, yet Village shops and restaurants are just a few blocks away! Renovate to restore the home’s original relaxed elegance, reminiscent of New England seaside homes.  Or replace with your own 21st century home of your design and creation!  A rare opportunity in Sewickley!  $825,000  See photos and more details

 

 

I’m ready to answer any questions you have regarding your real estate needs.
Kathe Barge, CRS, ABR, CNE
Associate Broker
HOWARD HANNA
REAL ESTATE SERVICES
401 Broad Street
Sewickley, PA 15143
Cell: 412-779-6060
Office: 412-741-2200 x238
kbarge@howardhanna.com

For What It’s “Worth”…

In your May 11th article, your first item you noted about real estate is that a home is worth what a buyer is willing to pay.  I thought a home is worth what it appraises for?”

In my May 11th article (available to those of you who missed it on my website), I did list 12 important things everyone should know about real estate, the first being that yes, a home is only worth what a buyer is willing to pay.

Appraisals are typically done in conjunction with a mortgage application, although they are sometimes done as part of an estate administration or by a homeowner who wants to get a better sense of what a home is worth.  Many appraisers are not experts in the neighborhood they are trying to appraise a home in and miss the block by block nuances that greatly affect value.  However, even if they are well versed in a particular area, they may not have been in every home and may not understand the special circumstances surrounding why one buyer may have paid a premium and another buyer may have purchased at a discount.  Appraisers often don’t have their finger on the pulse of buyer expectations – unlike Realtors, they do not interact directly with buyers and don’t have the opportunity to hear them complain about wallpaper, colored carpets, dated lighting and outdated kitchens and baths.  They don’t see firsthand how eager buyers are to purchase newly remodeled homes and the premiums they will deliver for those homes and they aren’t privy to the conversations Realtors have trying to convince a buyer to take on a project. So sometimes they are just too high and that price will not be achievable absent a sizable remodel.

It is also irrelevant how much money a seller has invested in a home.  It is important to keep in mind unless renovations were made in conjunction with a home-staging professional in an effort to sell your home, improvements were made for the homeowner’s enjoyment and may not carry any value for a home buyer.

In the end, Buyers in 2017 America are quite savvy.  Most view all inventory for many months before choosing a home.  They probably know better than a home seller how a home stacks up against what has recently sold.  If they don’t, it is all readily available online.  So in the end, the price is determined by how convinced a buyer is that the value is in the home.

FEATURED HOMES:

7 Harvester Court

7 Harvester Court

 

Beautifully remodeled custom built home offers 3 new luxury baths, newer kitchen, new roof, new HVAC, new deck, new paint in modern aesthetic and more. Totally turn-key for you and your family! 4 bedrooms, 3.5 baths, 3 car garage, finished walk-out lower level. $775,000.

 

 

 

1008 Beaver Road

1008 Beaver Road

Less than .5 miles to central Sewickley Village yet sited on private 4 acre lot. Inside, discover a modern  home with beautiful finishes. Stylishly remodeled kitchen w/ Subzero fridge, Viking professional range, charming butler’s pantry. With six bedrooms, two home offices, a formal study, cozy family room with fireplace, living room with semi-circular bay window, sunroom, enormous recreation room/gym, and a 2 attached car garage (and much more!), this home is a show stopper!  $1,950,000

 

 

 

 

As an Associate Broker at
HOWARD HANNA REAL ESTATE SERVICES,
Kathe Barge, CRS, ABR, CNE, is ready to answer any
questions you may have regarding your real estate needs.  Feel free to contact her at the office (412) 741-2200 x238or on her mobile phone (412) 779-6060.

The Power of Pre-Approval

It’s true! Bidding wars are back in some neighborhoods!  The extremely tight inventory, coupled with the influx of spring buyers has made the competition sometimes fierce for well-conditioned homes in great neighborhoods.  The first thing you should do to set yourself up for success in a hot market is to get a pre-approval from a reputable local lender.

The pre-approval process is more than a pre-qualification.  It involves submitting all documentation to your lender long before you actually make an offer.  This includes tax returns, bank statements… The lender will underwrite your loan subject only to the appraisal of your new home once you find it.  This makes you an incredibly strong buyer – you could choose to remove the mortgage contingency altogether and insert only an appraisal contingency, but even short of that, knowing that you have taken the time to get fully approved will impress the seller and give you some advantage over other buyers.

Pre-approval (as opposed to pre-qualification) is also important so that  you don’t find out 75% of the way through the home buying process that you cant afford the home.  Sometimes lenders miss some of the critical pieces of your puzzle during the pre-qualification process that an underwriter will pick up.  For example, it is possible that your gross income is high, and that you reported that figure to the lender, but when the underwriter reviews your tax return they see that your AGI (adjusted gross income) is lower due to alimony.  Child support payments will also lower the amount of the loan you can qualify for.  You may have co-signed student loans or car loans for a child, or a mortgage for a family member.  Any debt you have co-signed for, whether it is an asset you use personally or not, will lower the loan size you can qualify for. And of course, pending actions for divorce, as well as dings on your credit you were unaware of (such as doctors bills you forgot to pay) will affect your ability to borrow.  Better to take the time to figure this out up front and target homes you know you can afford, rather than being tempted by those out of your price range!

FEATURED HOMES:

1OO8 Beaver Road

1008 Beaver Road – NEW PRICE!

Spectacular, lovingly restored, turn-key historic Sewickley home. 8000SF+2 home set in a private 4-acre lot with a stream, grounds to play in, and romantic terrace and 2-story patio to entertain on – all  just blocks to central Village. Inside, discover a modern  home with incredible , beautiful finishes. Stylishly remodeled kitchen w/ Subzero fridge, Viking professional range, charming butler’s pantry. With six bedrooms, two home offices, a formal study, cozy family room with fireplace, living room with semi-circular bay window, sunroom, enormous recreation room/gym, and a 2 attached car garage (and much more!), this home is a show stopper!  $1,950,000

 

 

 

129 Fox Hill

129 FOX HILL ROAD

Tired of looking at one fixer upper after another wondering how you can fit a project into your already too busy life?  Look no further! This home has been meticulously renovated — recent improvements include new kitchen, 2.5 new baths, new windows, new HVAC, new paint inside and out, newly refinished floors & more. 4BR, 2.5 baths, 2 car garage, finished walk-out lower level, 1 acre lot. $625,000

As an Associate Broker at
HOWARD HANNA REAL ESTATE SERVICES,
Kathe Barge, CRS, ABR, CNE, is ready to answer any
questions you may have regarding your real estate needs.
Feel free to contact her at the office (412) 741-2200 x238,
or on her mobile phone (412) 779-6060.

Getting a Lowball Offer, and Hitting A Home Run

Do you recommend that seller’s work with “lowball” offers that they receive? 

The quick answer is YES! Sellers should try to work with any offer that they receive.  However, it’s important to layer filters onto the offer to determine how you should respond.

If your home has been on the market for more than a few months and hasn’t sold, there is a possibility that it is overpriced.  Sometimes a home is just very unique – in its location or its floorplan, for example.  This may extend its marketing time as the pool of potential buyers will be smaller.  But if your home offers more of the features that buyers today are seeking and it hasn’t sold, chances are your pricing may be too aggressive.  This may be a tough pill to swallow – the market right price may be below what you had hoped to sell your home for, below what you “need” to buy your next home or below what you have invested in your home.  As unappealing as this may sound, the market doesn’t care what a seller wants, needs or has invested.  The only relevant inquiry is what has sold in the recent past and how your home compares to those homes.

So if your home is new to the market and you get a lowball offer, it’s not unreasonable to expect that buyer to increase their price.  But if it’s been on the market a while, the price adjustments may be weighted more heavily on the seller’s end.  In any event, it’s important to counter every offer that you receive.  Sometimes you may want to just reduce a small amount in your counter, providing comps and analysis that clearly substantiate your value.  If you provide this information to the buyer, there is a possibility that your data will persuade them to see the value in the home.  If you have no data to justify your price and its just what you “hope” to get or “need” to get, you may want to be more generous with your counter offer and hope to meet the buyer somewhere in the middle.  People list their homes when they want to sell them and the first step in that process is to start the conversation with every buyer, no matter how offensive their offer seems at first – frequently sellers are rewarded for their patience and responsiveness with a sold home!

Featured Homes:

5 Kevin Drive
$759,000

Does living alone in the woods sound appealing to you? 5 Kevin Drive delivers the opportunity to live on 3 acres of natural woodlands, surrounded only by mother nature, and yet still be part of an up-scale neighborhood.  And you cannot beat the location, which combines this privacy with close proximity to I-79.  5 bedrooms, 3.5 baths, 3 finished levels, 3 car garage, two home offices.

928 Blackburn Road
$1,225,000

This immaculate Sewickley Heights home was transformed from an historic barn just two decades ago!  On a private 5 acre lot backing to the Allegheny Land Trust, the main home features 4 bedrooms, 3.5 baths, an expansive great room with soaring ceilings and woodburning fireplace.  On the lowest level are the original stables with 4 stalls, but this space would also be perfect for other farm animals or vehicles.  The property also conveys with a renovated guest cottage with 3 BRs, 3baths.

 

 

As an Associate Broker at
HOWARD HANNA REAL ESTATE SERVICES,
Kathe Barge, CRS, ABR, CNE, is ready to answer any
questions you may have regarding your real estate needs.
Feel free to contact her at the office (412) 741-2200 x238,
or on her mobile phone (412) 779-6060.

The Score on Appraisals

Our neighbors home was under agreement and we just heard that it didn’t appraise.  Is this a common issue you face and how can it be prevented?

Appraisal failures have become more common since the 2008 recession and the tightening of lending standards.  All lenders are required to use pools of appraisers – they cannot control where the appraisal order goes or who does the appraisal.  In fact, lenders are to have no contact with the appraiser to avoid undue influence. Unfortunately, some lenders (typically the larger ones as compared to the small local lenders) use large appraisal placement services and an appraisal on a Sewickley home could end up being placed with an appraiser in Monroeville, or worse yet, in West Virginia or Ohio.  These non-local appraisers do not know our market and often miss the subtleties of our neighborhoods and inventory.   Additionally, many companies use very young people whom they pay a very low wage to complete the appraisal.  It becomes a volume business that many rush through, often missing important details (like that third bathroom).

If an appraisal fails (meaning it comes in under the agreed upon purchase price), there is almost nothing anyone can do to correct that appraisal.  Unless there is an egregious error, like missing a third bathroom, it is highly unlikely there will be an opportunity to increase the appraisal.  Therefore, it is important to set yourself up for success at the time of the initial appraisal.  To do this, I ask my sellers to provide a specific list of all updates they have made to their home in recent years.  I then personally meet the appraiser at the home and make sure that he is taking note of all of its special features.  I also provide him with a list of all of the home’s features and all relevant comparable sales and how they compared to the home he is appraising.  By having personal contact with every appraiser and helping him to understand the nuances of our town and the home he is appraising, my sellers are far more likely to receive the appraisal they need to keep their deal on track.

Should your home fail to appraise, rather than reducing your purchase price to meet the appraised price, a creative solution is to pay for the buyer to change lenders and start the appraisal process all over again.  This is usually less than $1000 and is usually cheaper than reducing the purchase price.  I have seen appraisals come in more than $100,000 apart in a two week time period, which only accentuates how many appraisers just don’t understand our area.  It’s usually not that the value isn’t there but that the appraiser just doesn’t get the market.  This solution could get your buyer the home they want and you the price you agreed to.

FEATURED HOMES:

309 Quaker Road
$799,000

Picture perfect, modern aesthetic is combined with historic charm in this beautifully remodeled Sewickley Village home.  With 5 bedrooms, 4.5 baths, newer white kitchen, mudroom, main level office, 2 car garage and fenced backyard, this fantastic home is in impeccable condition throughout!

 

 

 

204 New England
$699,500

Exceptional condition and a surprisingly spacious floorplan define this handsome, beautifully expanded Edgeworth home.  Three finished levels of living space.  Wish list features include main level mudroom and den, kitchen open to family room and attached garage, New master bath.  Pottery Barn aesthetic throughout. Large yard.

 

As an Associate Broker at
HOWARD HANNA REAL ESTATE SERVICES,
Kathe Barge, CRS, ABR, CNE, is ready to answer any
questions you may have regarding your real estate needs.
Feel free to contact her at the office (412) 741-2200 x238,
or on her mobile phone (412) 779-6060.

Selling with Old Mechanicals

Dear Kathe,

We have a very old (25 years) furnace.. It is still working well and we don’t have the cash to replace it. We are planning to sell our home next year. What advice do you have?

A 25 year old furnace is a very old furnace, well beyond the useful life expected of such equipment. If a buyer makes an offer on your home and then finds out how old your furnace is, there is a very high likelihood that they will be asking you to buy a new furnace as part of their inspection response. There are a few things you can do to set yourself up for a positive outcome.

First, when you complete your seller disclosure, be sure to write on the document that the furnace is past the end of its useful life and may need to be replaced soon. Price your home accordingly and be sure that your agent highlights to buyers agents that you have priced your home at a lower price point because of its older mechanicals. This will prevent the buyer from expecting you to buy them a new furnace – they should take the age of the furnace into account when making their offer.

Second, put a home warranty on your home when you list it. This will provide coverage to you should the furnace break while you own the home and will give the buyer 12 months of coverage should anything happen in their fist year of ownership (and it is renewable).

Finally, consider buying a new furnace. Many contractors are willing to accept payment at closing if you make arrangements for this upfront. With a new furnace you can ask more for your home and are more likely to draw more enthusiasm form the buyers who do see your home.

Pocket Listings — Are They For You?

Dear Kathe, 

We have noticed that several homes have sold lately before they have hit the MLS. Are these “pocket listings” a good way to sell your home?

If a home sells before it hits the MLS, as a “pocket listing” as they are often called, it is highly likely that the seller could have sold the home for significantly more money. The MLS exposes a home to a large number of prospective buyers in a very short amount of time. This widespread exposure is what has the potential to drive the price up for the seller.

A “pocket listing” is more like a secret sale. The agent you are dealing with may have a buyer that is willing to buy your home, but if it’s that easy, chances are you could have received more money if the general public had a chance at your home, and a bidding war could have possibly ensued. If an agent is being straightforward with the seller and discusses the strategies involved with using the market pressure of the MLS to drive in a higher price, it’s a rare seller who will willingly leave money on the table.

So why do we occasionally see these seemingly “secret sales” taking place? Some sellers perceive these pocket listings as a good thing – some don’t want to be hassled with multiple showings, some don’t want the general public to know their home is available for sale. Some agents choose this strategy because they want to keep all of the commission for themselves and that only happens if their own buyer is the successful bidder. If a seller’s goal is to maximize financial return, however, a pocket listing, or accepting an agreement of sale before the home is marketed in the MLS, is rarely the best strategy.

So no, my 17 years experience indicates that a pocket listing is usually not in a seller’s best interests. The highest returns I have seen sellers achieve occur in scenarios when they have used strategies to maximize the excitement within the buying community through proper pricing, excellent conditioning and staging and full MLS exposure.

The Pace of the Sale

Dear Kathe,

Why do some homes seem to fly off the market and others take years to sell?

Location. Price. Condition. These are the three most important factors that go into how long a home is on the market. Unique attributes and depth of market segment would be fourth and fifth!

Location is really where it all begins. If your home is in an easy to sell location, the market will be far more tolerant of imperfections in other areas, such as wallpaper or a slightly aggressive price. Location is sometimes relative to a particular buyer – their work address may make one part of town more desirable than another, but generally speaking, buyer excitement about properties rises and falls with address.

Condition is also a very important factor in pricing. Homes that look like they are straight from the pages of a Pottery Barn catalog tend to sell more quickly, and tend to bear higher prices than are sometimes warranted. Those that are dated, with older wallpaper and carpeting, for example, tend to sit – unless, of course, they are in a hot location and deeply discounted, in which case our stable of “flippers” will be ready to buy with cash and close quick for the opportunity at a profit when they renovate.

Price is the easiest of all factors to change. If priced well, even less popular locations and homes that have condition challenges can sell quickly. But if you are trying to match the price of competing sales that were in better locations, better condition or with more amenities, you may find your home takes far longer to sell.

Finally, you may have a home with unique features. A home with no off-street parking can be a challenge to sell at any price point, and it is a matter of being patient and waiting for the right buyer who appreciates the home’s other attributes. You may not have a master bathroom. You may not have any green space in your “yard.” You may have a kitchen barely big enough for one. You may have only two bedrooms. There are many factors that could lengthen time on the market even with perfect condition and price. And of course, depth of the market segment is relevant as well. The higher you go in price, the fewer qualified buyers there will be and the longer your home will take to sell.

It’s Not Worth What You Think

There are many factors that go into determining a home’s value.  The first, most important thing to keep in mind, however, is that it’s not what you think.  To rephrase, what you think the value should be, or what you think you need to get for the home to either recoup your investment, reimburse you for time spent renovating, or get you what you need to move to your next home is not a factor in determining value.  A home will sell for what a buyer thinks the home is worth – not what a seller thinks its worth.  So how do you determine that number?

Value is determined first and foremost by comparable sales.  What other homes have recently sold for is the most relevant gauge of what the market will bear for your home.  If you haven’t been in the homes, however, you will need to rely on a professional to make the comparison for you.  Factors to be considered include size of lot, usability of lot (flat is better) and location of the property both in town and as it relates to other homes (currently, closer to the center of the Village will bring more money, across the street from a home in disrepair, less).  Also considered are above-grade square footage on the main two floors (finished lower levels and third floors add some value but generally not at the same square footage price as the main two levels) and configuration of rooms (do you have an eat-in kitchen, a family room open to the kitchen, a dedicated master bath).  Finally amenities are considered.  How many garages do you have and are they detached, integral or attached (the most valuable)?  How long ago was your kitchen and bath updated?  Under 10 years?  Do you have stainless and granite?  Have you removed all of your wallpaper?  All of your brass?  All of your colored carpets?  Homes sell every day with dated amenities, but their existence definitely affects price.  When looking at other homes that have sold, it is important to have a realistic understanding of how your home really compares to those homes.

The investment you have made in the home also has some relevance.  If you have made significant improvements (beyond a fresh coat of paint and new carpeting), there is a high likelihood that you will be able to recoup your investment.  It is important to prepare a detailed list of those improvements to substantiate value to potential buyers.

Other homes currently available for sale, however, are not a particularly relevant factor to look at.  Many of our homes sell for substantially less than the sellers were originally asking, and while our average community realization is 89% of asking price, there are homes that have sold at nearly half of their original asking price.  Competing listings are only relevant to determine how much competition you will have – not how much your home will sell for.

In the end, its what a buyer thinks, based on where other homes are selling and how yours compares, that will determine where your home will sell, and all of the marketing in the world will not change that reality!

The Price is Right!

Deciding on an asking price is a challenging task, particularly in Sewickley.  Interestingly, in Pittsburgh’s North Hills, sellers realize much closer to their asking price, often 97% and higher.  However, if a property is overpriced in the North Hills, buyers will simply write the property off – low-ball offers are not made.  In Sewickley, however, we have developed the unique tradition of negotiating fairly heavily on the sale of a home.  In Edgeworth last year, the average realization was only 89% and offers often start as low as 80% below asking price.  So how is a seller to price a property?  If a seller prices 20% over the price a home is likely to sell for to allow for negotiating, it is likely to be seen as “overpriced.”  If the seller prices only 2% over likely sales prices, many buyers will factor in the large discounts we often see and bring in inappropriately low offers.  Developing a strategy for both pricing and marketing is therefore critical to make sure that a home is both well received and does not sit and get stale on the market.

If you’re facing a deadline due to job relocation or other reasons, then you need to price competitively, even more competitively than expected in today’s market.  You’ll need to list at significantly less than your competition.  And keep your commission higher as an incentive for a quicker offer.  That may seem tough to stomach, but it’s better than continuing your monthly loan payments or the hassle of trying to find tenants to rent your home and of being a landlord for a year or more.

If your home has been listed for some time, but not generating interest, you may need to lower your price.  Of the three elements that sell a home – price, location, and condition – price is the one you’ll have the most control over.  Review your listing company’s programs and marketing, making sure that you are taking advantage of all of them.

Make sure your home shows better than its competition.  Its condition should outshine all of the other listings in its price range.  Take time to de-clutter, store off site what you can live without, stage and make sure you attend to all of the little maintenance projects you may have been putting off.

In the end, Sewickley statistics show that if your home does not have an agreement on it within 75 days of the listing date, you will not achieve 90% or more of your original asking price.  This makes the original list price a critical decision and also makes it clear that after 75 days, it is absolutely essential to reevaluate your price in light of market feedback and price.