Say NO to these 4 renovations before listing

Naturally, when your clients put their home on the market, they want the very best chances of selling it quickly and getting a good price. This means making their home as appealing as possible and seeing it through the eyes of a potential buyer. You probably urge your selling clients to de-clutter their homes, clean every room thoroughly and rearrange the furniture to create a more natural flow. However, some sellers might decide to go a step further.

If you have clients in an older home who are considering making major renovations before putting it on the market, you will want to slow them down before they make a costly mistake. While some repairs and renovations can certainly add value and appeal to a home, others can be a waste of money and may even cost your client a sale.

A smarter way to go

Rebuilding, replacing and renovating could seem like good ideas to your clients, particularly if their home is a number of years old. It is common for home sellers to read online or see on TV that certain upgrades will add more value to their home and thereby fetch a higher price. This isn’t always the case, and there are often less expensive ways to draw the attention of buyers.

For example, clients with a garage may be tempted to convert it into an additional bedroom, home office or expanded living space. This often involves finding contractors, obtaining permits, and adding costly electrical, HVAC, and plumbing elements. Your client will most certainly delay a timely sale and may spend more than they will recoup at closing. More practical changes can include installing an organization system in the garage and replacing the garage door. The following are other examples of smarter options to suggest:

  • Deep cleaning the existing flooring instead of replacing it with new flooring that adds little resale value and that buyers may not like.
  • Upgrading light fixtures and professionally cleaning windows instead of adding a sunroom to allow more light into the rooms.
  • Purchasing a home warranty to cover appliances that are still in good working condition instead of replacing them entirely.

Buyers looking at existing homes likely already have in mind the changes they want to make, whether it be repainting the walls, replacing the flooring or upgrading kitchen appliances. Your clients’ major projects could end up doing little to make the sale and might even be the first things a new owner removes and replaces after closing day.

Helping your client buy a safely constructed condo

After last summer’s tragic condo collapse in a neighboring state, your clients may be reluctant to consider buying a condo, especially one in a building that is not a new construction. This is understandable since most individuals may have little knowledge or experience that would help them identify whether a building is safe or has dangerous defects.

Finding your clients a condo that meets their needs and is safe to inhabit may now require some extra effort, and you will want to have the tools to guide them in doing their own investigations before deciding on purchasing a unit. Often this means knowing the right questions to ask and who is responsible for the building records and maintenance.

Watch out for these signs

Every state has minimum standards for safety in high-rise residential buildings such as condominiums. This includes codes for fire safety, decks and balconies, elevators and stairs, and the overall structural soundness of a building. Sustaining those standards requires periodic inspections by trained professionals and a schedule of repairs and maintenance to ensure the building remains sound. Depending on the location of the building and the materials with which it is constructed, deterioration is a possibility, so it is wise to be alert for any of the following red flags:

  • Cracks in the outer walls or foundation, especially cracks that are particularly wide or that travel at an angle
  • Crumbling concrete, such as pillar or supporting posts or balconies
  • Exposed metal or rebar that concrete once covered
  • Corrosion on exposed metal
  • Windows or doors that no longer close correctly
  • Significant cracks in floors, walls or ceilings of a unit
  • Wallpaper with unexplained wrinkling
  • Musty odors in units

Perhaps the most important red flag is when a condo association does not have any cash in reserve and has not kept up with routine repairs. Your client may quickly find his or her fees rising after purchasing a unit but perhaps too late to repair life-threatening damage.

Your clients’ homework

Clients who are interested in purchasing a condo should do their due diligence. This means obtaining copies of association meeting minutes to learn of the most common complaints and unresolved safety issues. Have residents complained about concrete falling on their vehicles in the underground garage? Are there persistent leaks throughout the building? These are issues that should raise concerns.

The association should also provide a copy of the financial report, which can reveal a lot about the upkeep of the building. Finally, your clients will want to hire a skilled inspector who has experience in condo safety.

How sellers can make the most of a home inspection

One of the most stressful parts of selling a home may be when the buyers order a home inspection. Buyers will hire a trained professional to walk through your client’s home, check every appliance, and examine the attic, basement, and crawl space. For hours, the inspector will scrutinize the home and then prepare a thorough report of his or her findings. It is this inspection that could bring the transaction to a screeching halt.

No matter how new your seller’s home is, it is likely the inspection will uncover some defects, probably some the owners did not expect. These might be quick and easy repairs, or they could be deal breakers. However, rather than stressing about what a home inspection might reveal, you can encourage the owners to prepare their home to increase the chances of getting a more positive evaluation from an inspector.

Expecting an inspection

You can urge the owners to gather receipts and reports for any service, repair or replacement they have done on the house. Organizing copies of these for the inspector can be helpful, but an inspector is not going to be interested in any cosmetic changes, such as painting the living room. The main concerns involve the structure of the home, its systems, water damage and pest infestations. To prepare for inspection day, you can suggest that the owners take the following steps:

  • Clear any clutter that will prevent an inspector from accessing the attic, crawl space, basement or other areas.
  • Unlock rooms that contain a water heater, furnace, electrical panel or other appliances, and make sure those rooms have adequate lighting.
  • Check for clogs in the plumbing.
  • Do seasonal maintenance, such as clearing gutters, trimming trees away from the house and replacing HVAC filters, smoke detector batteries, and light bulbs.
  • Make sure the chimneys, flues and gas lines are clear of debris and have adequate caps.
  • Arrange for someone to care for their pets so they are out of the way during the inspection.

Some homeowners even hire an inspector of their own before they list the home. This way, they do not end up blindsided by defects that could affect the outcome of the deal. You may wish to suggest this to a client who has an older home. However, whatever you or your client learn from a pre-listing inspection, you must disclose to potential buyers. If your clients opts out of a pre-listing inspection, you should be prepared to negotiate in case any defects surface during the buyer’s inspection.

Do your potential clients believe these myths about real estate agents?

 

 

Television and movies have a way of presenting certain jobs in an unfavorable light. If you are a real estate agent or are working to obtain your agent license, you may cringe when you see an inaccurate portrayal of a real estate agent on your favorite show. Often these characters come off as bumbling, dishonest or egotistical, more concerned about their own images than their clients’ needs.

Hopefully, not everyone believes these stereotypes despite the way Hollywood portrays real estate agents. Unfortunately, many potential clients still have some misperceptions of the real estate industry and what it is like working with a real estate agent. You may have some control over the perpetuation of these myths if you can understand how your clients might look at you.

Setting the record straight

Misunderstandings about working with a real estate agent can cause some buyers or sellers to try to handle a complex real estate transaction on their own. This could result in frustration and perhaps even legal complications when buyers and sellers do not understand the process or their responsibilities to each other. If you come across potential clients who are reluctant to work with a real estate agent, it might be because they believe any of the following myths:

  • You are trying to get rich from the sale of their home.
  • Once they sign a contract with you, they have no option but to work with you to the end of the transaction.
  • They don’t need an agent to buy a home because they can just use the seller’s agent.
  • A random choice of real estate agents will have the same results as shopping around for a good fit.
  • A homeowner who is selling without an agent will not work with them if they have a real estate agent.

Of course, your education and experience tell you how you will likely split your commission several ways and that you are usually willing to release a dissatisfied client from an agent contract. You might have to explain to buyers that a seller’s agent has a legal duty to represent the seller’s interests and that it is a wise idea to speak with several agents before deciding which one is a good fit. Buyers may even be pleasantly surprised when you offer to show them an FSBO home.

Your positive attitude and focus on the needs of the client can expel some of the stereotypes the public has about real estate agents. Additionally, your skills as an agent can go a long way in putting to rest these and other myths about the real estate world.

Getting into the mind of a real estate investor

There are two kinds of real estate agents: those who work with investors and those who do not. Whether you have encountered flippers, buy-and-hold investors or the occasional wholesaler, if you had a bad experience, you might not want to work with investors ever again. However, with the right strategy, many real estate agents have discovered that the benefits of being investor-friendly can outweigh the frustrations.

Dealing with real estate investors can be quite profitable, but you do have to be ready to do some work and to be patient. It’s true that many would-be investors lose interest before they make their first purchase, but surveys show that there are between seven and 28 active investors for every one real estate agent in the country. If you can learn to understand what an investor is looking for, you may be able to tap into this lucrative market.

Expanding your business with investors

Unlike your average home transaction, your investor clients are not necessarily looking for family-friendly neighborhoods and granite countertops. They are looking for passive cash flow and motivated sellers. They want a once-in-a-lifetime deal, and they want it fast. Therefore, you will have to have a system that is driven less by the emotion of the sale than by the income potential. Other important things to know about investors in general include:

  • Investors often have niches, such as multifamily properties, shopping centers, office complexes or multi-use buildings, so you will want to learn about these areas.
  • Many investors make multiple transactions each year, and some flippers may turn dozens of properties each month.
  • They typically have a wide network in the community, which might mean valuable referrals coming your way.
  • They understand the real estate process and usually need less hand-holding.
  • Buy-and-hold investors need properties that will provide positive cash flow.
  • Buying investment properties often requires creative financing, and it will be important to know up front your clients’ plans for financing the deal.
  • Some investors use the technique of lowballing dozens of sellers on the off-chance that one will accept the deal, so you should know your boundaries in this area.

Since investment is such a complex area of real estate, you might want to take advantage of any resources available to prepare yourself for working in this niche. Additionally, as distasteful as it may be to work with new investors, your guidance may provide the information they need to make a successful deal, which can be the start of a mutually beneficial relationship.