Contract to Closing

Many people believe that the hard work is done once a property goes under contract.  This is wrong!  The hard work is actually just beginning.  Many things can go wrong at this phase of the contract.  Some of the pitfalls can just be minor disturbances and others can cause the deal to completely fall apart and have the property go back on the market.  To prepare yourself fully it is important to understand the processes involved before continuing and make sure you are fully aware of any potential problems.  If you’re working with a REALTOR® he or she can guide you through this process.
 
Loan approval. Buyer-financing problems are the No. 1 reason houses don't close.  After what the market has gone through, lenders are leery. Most offer will come with letters from the buyer's direct lender, saying that the buyer had been preapproved for the loan. That's pretty standard.
Tip: As added insurance, however, ask for a pre-approval letter instead.  The difference between approval and qualification is simple.  A pre-approval with include the lending broker verifying what the buyers have told them (credit reports, income verification, etc). A pre-qualification will be based on what the buyers have said with no verification.

Appraisal. In today's market, getting a home to appraise for the purchase price is a big problem. Housing values are rising faster than appraisals, which rely on past sales.  Banks base loans off either the purchase price or the appraised value — whichever is less. So if a buyer is taking out an 80 percent loan, the bank will loan 80 percent of the lower number. If the house appraisal is lower, the buyer either has to pay more, the seller has to lower his price or the deal is dead. Low appraisals kill about 40 percent of deals.  
Tip: Have a good idea of what the house should appraise for.  A seller should have a CMA which includes past sales.  Appraisers will normally go no further back than 6 month and no further away than 1 mile in a suburban area.  Keep this in mind when looking for what other homes have sold for.  

Home inspection. Buyers should have an inspection done within a week of signing the contract so parties can address issues early. Deals rarely fall apart over a home's physical condition, but buyers can use these reports to get sellers to lower the price, make repairs or both.
Tip: Have the house in good repair before you list. Or, be proactive and have an inspection done before the house is listed. Present that report to buyers saying the home is for sale "as is." The buyer can get a second inspection, which won't likely be too different but having the inspection up front protects sellers from buyers who want to nitpick.  Also remember there are certain repairs that will be lender required.  This will have to be done in order for a bank to loan money.  There are also some repairs that won’t be lender required.  There is no mandate to fix these types.

Title clearance. A property's title lists who owns it and any liens against it, which owners are often unaware of. A house has to be clear of liens to transfer to a new owner, and all owners must agree to sell. Title issues rarely end deals, but can hold them up.
Tip: To head off such issues, title problems should be addressed before being listed or at least be in the process of being cleared before a home is listed.

Contingencies: Many buyers make offers contingent upon another transaction, such as their house, they currently own, successfully closing.
Tip: If presented with a contingency contract take a good look at how solid the other deal is.  For example if a buyer brings you a contract stating it’s contingent upon their house selling but their home is not even listed yet, this is not a good idea.  Not too many contingent offers are being accepted in this market.

Once clearing all these hurdles, the good news is it is time to close on your house.  Team Johnson of Watson Realty Corp prides itself on its strong listing presence.  We list and sell more units than another agent or team of agents in our region.  We have successfully negotiated and closed many homes and would love the opportunity to add your home to our list of success stories.  For more information give us a call at 904-495-0146 or email us at teamjohnson@watsonrealtycorp.com

Team Johnson
Watson Realty Corp
St. Augustine, FL 32086
904-495-0146
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Receiving and Negotiating Offers

You have placed your home on the market and it has been shown many times.  Now is the moment you’ve been waiting for.  You have received an offer to purchase the house.  Now what do you do?  Is it a good offer?  What if you’re lucky enough to receive multiple offers?  If you are working with a REALTOR® he/she will sit down with you and explain the pros & cons to the offer(s) but ultimately it is your decision to make.  This article contains tips to be sure to review when negotiating an offer.
An Offer to Purchase is a legally binding document that outlines the terms and conditions under which a purchaser is prepared to buy. The offer will include general information such as both parties' names, the address of your property and all necessary dates. It will also include a negotiable purchase price; this being the first price offered and a list of the contents that may be sold with the home (the chattel). It will also include all financial details such as, the proposed down payment, amortization rates and terms, as well as the closing and expiration dates.
PRICE
The price is instantly where everyone looks first.  This price is not what you will collect at closing.  You will need to figure the sales price minus fees, taxes and insurance.  If the price is lower than what you were expecting don’t automatically reject it.  Take a look at some of the other terms of the contract.  Those terms are discussed in greater detail further on.
ASKING FOR CLOSING COST CONCESSIONS
It is very common, even for REALTORS®, to look directly at the sales price and no further.  Before deciding on an offer, the reviewer needs to look at the closing costs section of the contract.  If the buyer is asking for closing cost assistance it is in fact lowering the offer price.  I hear it all the time from agents as well.  “I’ve made a full price offer.”  What they don’t see is that the buyer is asking for 3% closing cost assistance from the seller.  If the offer price is $100,000 with 3% closing cost assistance, the seller would have to contribute $3,000 to the sale.  This makes the offer in reality is $97,000 not $100,000
HOW IS THE PROPERTY BEING PURCHAED
Is the buyer planning to finance or pay cash?  When an offer is made with cash there are several advantages.  One advantage is there is no financing contingency period.  Financing contingencies can last from 30 to 60 days.  This is time the property is off the market and not being actively marketed for sale.  If the financing falls apart after this deadline, the contract is dead, the buyer gets their deposit back, and the seller gets to start all over again.  With a cash offer, you don’t have to worry about this time period and can close a lot sooner.
Another advantage of a cash offer is you don’t have to worry about the property appraising.  When dealing with financed offers it is important to remember banks loan money based on two things:  the agreed sales price, or the appraised value, whichever is lower.  If a bidding war drives the asking price up, the house will still have to appraise at the higher price if the offer is made with financing.  If the appraisal comes in at a lower than agreed upon price, the seller has two options:  void the contract and start over or lower the contract price to the appraised value.  With a cash offer there is no appraisal and you can close much sooner.
HOW MUCH IS IN ESCROW?
An earnest money deposit will be held by a third party until an agreement is reached or there is a closing between you and the buyer. At that time, the money is usually credited to the buyer and applied to the down payment. Until you accept his or her offer, the buyer may withdraw the offer and get the earnest money back. On the other hand, if the buyer fails to follow through with the contract once it's accepted, you may be entitled to the earnest money.  The more money they put on the line, chances are the more serious they are about purchasing the property.
REPAIRS
When reviewing an offer check for repair requirements and/or allowances in the contract.  Even a cash offer could have a stipulation in the offer stating the seller must perform repairs.  “As-is” contracts are the only exception.  As “as-is” contract is just that, the buyer will buy the property exactly how it sits with no repairs done by the seller.  Financed offers will sometimes be submitted without an call for repairs or allowances; BUT it is not only up to the buyer and seller.  The buyer’s lender will have requirements that the seller MUST perform before closing.
OTHER CONCESSIONS
Buyers will sometimes ask for a seller to leave personal property as a part of the deal.  Items that are most commonly requested are refrigerators, washers, dryers, and window coverings.  This gives you more bargaining power.
MULTIPLE OFFERS
What if you have multiple offers?  First of all, congratulations!  The first step is to notify all parties that you are now in a multiple offer situation and all parties need to submit their highest, best, and final offers.  Once you have received them all, now it’s time to choose one, but remember-highest does not always mean best.  For more information on this subject please refer to our previous blog “MULTIPLE OFFER SITUATIONS: WHICH IS THE BEST OFFER.”

Sellers are always looking to sell: A) at the highest possible price, b) with the least amount of inconvenience and c) in the quickest amount of time possible. Like with most transactions in life it will only come together if you have both parties willing to give and take.  Team Johnson of Watson Realty Corp are all exert negotiators.  We are always here to help buyers and sellers through this type of process.  Put the power of team to work for you.  Call Team Johnson at 904-495-0146 or email us at teamjohnson@watsonrealtycorp.com.

Team Johnson
Watson Realty Corp
St. Augustine, FL 32086
904-495-0146
Click Here to Search the MLS Like an Agent
View My Website
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Showing Your Home

Now that your home is listed you hope for an ample amount of showings.  You will want to make sure that your home shows to its best advantage to any potential buyers that come through.  When you show your home, you want to engage the buyer emotionally because the decision to buy is based more on emotions, and less on logic. Give the buyer permission to say, "Yes, I want to buy this home," by staging, accentuating your home's positive attributes, and do not draw any attention to the negative aspects.  Below are a few guidelines to keep in mind.

The Gracious Welcome

* Although the buyer is a guest in your home, you want the buyer to imagine owning the home. You don't want to make the buyer feel like an intruder.
* Don't expect the buyer to remove his or her shoes, unless you are selling to a buyer for whom religious or cultural reasons mandate it. Otherwise, the presumption is insulting.
* Leave the house. The buyer won't talk about the house in front of you or open doors with you standing there.
* Don't pressure or hurry the buyer. Tell the buyer to take all the time that is needed.
* Leave a bowl of wrapped candy or other treats near the front door with a small note thanking the buyer for coming to see your home.
Check the Temperature
* Now is not the time to worry about your utility bill. If it's cold enough to wear a sweater to stay warm, turn on the heat.
* If it's warm outside, turn on the air conditioning. It's better to heat or cool the house a degree or two warmer / colder than usual and then set the temperature at normal. This prevents the heat or A/C from kicking on when the buyer is present, because some HVAC systems are loud.
* You want the temperature inside to be comfortable and to give the buyer more of a reason to linger, especially on hot or cold days!
Play Down the Scent
* Don’t spray any exotic scents and deodorizers.  Many people have allergies.  Use a crisp, clean scent.  Some possible examples are usually anything with an “ocean” scent or “linen.”
* If weather permits, open the windows -- if there is too much noise outside, close them.
* If you're going to bake cookies or simmer spices such as cinnamon in water on the stove, put out munchies so buyers aren't disappointed. More than one buyer has said, "Oh, darn, I thought there were cookies in here!"

Play Up the Visual

* If you have seasonal photographs showcasing flower gardens, leaves bursting in color or a snow-covered lawn twinkling from street lights, then display them in a prominent position.
* Open all the window coverings to let in light.
* Keep blinds partially closed that otherwise show undesirable outdoor scenery such as a dilapidated fence or a nearby structure that obstructs views.

Light up the House

* Turn on every light in the house, including appliance lights and closet lights.
* Brighten dark rooms with few windows by placing spot lights on the floor behind furniture.
* Turn off TV.

Provide Thoughtful Cards

* Attach printed cards to items and in rooms that provide further information the buyer might miss or might not know. You have so little time to make an impression.
* If you have an antique chandelier in your dining room, put a card on it that discloses its age and other important details.
* If you have removed the washer and dryer from the laundry room, attach a card to the wall describing the room.
* Take care when placing a card that says: "Not included in the sale." That will make a buyer want it, but you can play that later to your advantage.

Top It Off With Food

* The best way to entice buyers to linger and notice even more details about your home is to offer them food. You don't need to cater a lunch, but finger sandwiches, cookies, soft drinks, water, desserts, all are welcome.
* Set out serving utensils, if needed.
* Provide plates, cups and napkins. They can be paper products.
* In plain sight, provide a waste receptacle.

Encourage Buyer Feedback

* Near the snacks, leave pens and a stack of preprinted questionnaire cards or a guest book to sign.
* Buyers will feel obligated to respond to your request after being fed.
* The showing feedback you receive will be invaluable.
* Allow buyer anonymity.

These are just some of the tips that are usually helpful when showing a home.  Depending on whether you are working with a REALTOR® some of these will not be necessary for you to perform.  For example, many real estate agents will host “open houses” or “broker’s luncheons” that will take care of feeding potential buyers.  The main area you always want to make sure is that your home is clean, de-cluttered, and welcoming.  When you list your property with Team Johnson of Watson Realty Corp, we will help you every step of the way including providing you with a checklist entitled “Getting Your Home Ready for Showings.”  To get started call Team Johnson of Watson Realty Corp at 904-495-0146 or email us at teamjohnson@watsonrealtycorp.com.


Team Johnson
Watson Realty Corp
St. Augustine, FL 32086
904-495-0146
Click Here to Search the MLS Like an Agent
View My Website
Click Here to Email Me

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Marketing Your Home For Sale

Marketing a house for sale is one of the most important jobs your real estate professional will do.  Gone are the days where marketing consists of listing the property in the MLS system and putting a sign in the yard.  However, we are not in a time where internet marketing alone will suffice.  In order for an agent to be successful they must have a multi-level approach to marketing.  This article contains marketing ideas that should be performed on your house in order to get your home sold for top dollar in as short a time as possible.

Photography.  Most people in society are visual people.  They have to see it.  That is why all decent marketing should have photos.  The photos must be good quality with great lighting.  Some agents have the equipment and the skills to take their own photography.  Most, however, do not.  In those cases your home should be photographed by a professional photographer.  Photography the home is the first step but photography should not stop there.  If you live in a community that has amenities those should be included in the marketing.

Signage.  Although this is not the only step, a sign should be put in the yard the day the property is placed in the MLS system.  This gets the word out to neighbors that your home is on the market.  This also makes it easier for buyers and buyer’s agents to find your home when they are looking for it.  The only exception is if you live in a neighborhood that does not allow signs.

Websites.  A property listed for sale should have many opportunities to be found online.  One way is for the property have its own website.  The website features should include information about the home for sale, along with high quality digital photos, map to the property, and a pdf download listing flyer, and information on the schools and city. The property website should also be optimized to show up in search engine keyword searches.

QR Codes.  If you or your agent are going to be successful in marketing your home you must understand how to marketing to different generations.  The younger generations, as a whole, are not likely to pick up a flyer.  However, if you use features like QR Codes.  Using a smart phone, you scan the code and it directs you to an area that provides more information on the property.

Print Advertising.  Just as there are certain people in society that will not pick up a flyer, there are some that won’t know what to do with QR Codes and look for flyers.  You must market to these people as well.  Informational brochure boxes with flyers still have a purpose.  At a minimum the flyers should include pictures and verbiage about the house.  If the property has a website that could also be listed on the property.  The agent should also make sure the box constantly stays full.  Many agents put the box out and forget about it.  An empty box markets to no one.

Another print advertising example are just listed cards.  Many agents mail cards out to the surrounding neighbors to get the word out about your home being for sale.  Many times neighbors will tell friends or family about homes for sale in their area so that they can “choose their neighbors”

Finally, there are plenty of publications that advertise homes for sale.  In the Saint Augustine area these include but are not limited to Homes & Land Magazine, The Real Estate Book, and The St. Augustine Record.  There are still a large number of people that grab these magazines or newspapers to look for homes.  Good marketing should utilize these resources.

Virtual Tours.  Virtual tours are not new.  They used to be reserved for the million-dollar homes.  This is not the case any more.  Some virtual tour platforms are better than others.  We recommend that your virtual tours contain high-resolution photography, a 360◦ degree view, music, and written information about the property.

Video Tours.  Video tours are one of the new marketing techniques.  YouTube is the 2nd largest search engine out there and for a long time it was not being utilized to sell real estate.  

Syndication to Real Estate Websites.  It's all about EXPOSURE!!! Since 82% of home buyers begin their search online make sure your property is syndicated to many of the major real estate searchable websites. Examples of this include but are not limited to REALTOR.com, Trulia, Zillow, etc.  The property profile should include all the information included in the property website-many large photos, details and features, video tours, etc.

Broker Caravan.  It is important to get your home in the minds of the real estate professionals in your area.  A great way of doing this is for your agent to host a Broker’s caravan, breakfast, luncheon, etc.  If an agent has seen the property, they are more likely to show it to their buyers.  The best way to get agents to linger in the house is to offer food.

Open Houses.  Not every home is suitable for an open house due to its location or other factors.  If it is located near a high traffic area; however, the agent should host an open house.  This will usually get the property advertised again.  Also the agent should invite the neighbors.

Like with any business transaction, you want to know what to expect before you get started.  If you are interviewing agents ask them how they plan to market your home.  To go one step further, ask them for a written marketing plan.  Team Johnson of Watson Realty Corp does more to marketing its properties than anyone else in our area.  We provide written marketing plans that contain all of the activities mentioned above and include a timeline.  More marketing means more exposure. More exposure can mean better deals, higher prices, and quicker closings. It also means back-ups when deals go south at the 11th hour.  We hope you see this value and allow us to sell your property.  For more information please contact us at 904-495-0146 or email us at teamjohnson@watsonrealtycorp.com

Team Johnson

Watson Realty Corp

St. Augustine, FL 32086

904-495-0146
Click Here to Search the MLS Like an Agent
View My Website
Click Here to Email Me

FIND US ON THE WEB