Should A Seller Offer An Allowance For Flaws When Listing their Home?

As we approach the fall season and homes that have not sold have sellers asking the question what to do. One thing I have noticed lately is more Realtors are making a statement about offering an incentive to buy the house. If the home is in need of new paint because the colors are turning off buyers they are offering an allowance for new paint. If the carpet is old and worn then they are offering an allowance for new carpet.....But is this a good way to advertise your home for sale? There are a couple train of thoughts on this. One is this way the buyer can choose to do what they want with the allowance. In North Carolina it is a little trickier than just giving them an allowance or a rebate. You cannot show it on the contract and most lenders I have dealt with will not allow it because of the appraisal issue that can come up from it. But I understand the premise. Why have a seller paint the house with a neutral color and then the buyer come in and repaint it. Just give them an allowance to allow them to have it painted anyway they want. The same goes for the carpeting as well. But what are you telling people about your house and the upkeep of it? If you are giving them an allowance for something for the home; then you know there is an issue with it. If you have not corrected that issue what other potential issues are there floating around the house that you are not telling? There may not be any; but what is a buyer to think when they read this? My first inclination is that you did not maintain the home and are throwing money to entice me to buy anyway. The other inclination I have is that you may have the house overpriced or be more willing to come down substantially on the house because you are offering an allowance for something. Meaning you are coming across as desperate to sell your home. Either way I have never heard of a situation where there is an allowance offered for carpet, paint, appliances, etc..... where the outcome was not the buyer feeling that the seller was not maintaining the house or that they were desperate to sell the house. With that why then do you insist on offering an allowance for something on the listing sites? 95% of all buyers being their search online (and I think that is a conservative estimate). Why would you want them to read that first before even looking at the house? What not in negotiations after they have looked at the house and made an offer negotiate with the price the fact that you are aware that the house needs X? I have noticed this coming up more and more often lately with homes buyers are looking at and without saying anything I get those same answers. It has kept some buyers form even looking at your home...And who knows; they may have been the right buyer for your house... Dave diCecco Realtor/Broker Coldwell Banker United Cell:704-519-7895 ddicecco@cbunited.com www.davedicecco.com

Is It Time To Lower Your Price On Your Charlotte, NC. Home?

As we approach the beginning of the school year and Labor Day summer unofficially ends for most of us. In the Real estate business it begins to slow down a little with school and holidays around the corner. So, as I look back on the year and the way the market is trending; a conversation that is had by just about all Realtors at this time with sellers are should you lower the price of your house? I am a believer in pricing a home correctly form the onset so as to avoid the discount price. In the past few years with the market being a highly favorable buyer's market I was checking adjustments every 30 days or so to see if I was priced correctly with the current market conditions or not. And I would advise my sellers to either modify their price or keep it the same depending on what the homes in the area were doing. Now we are in a more balanced market and average homes are selling in a little over five months keeping us in a balanced market. But it still goes that this time of the year the buyer pool is smaller than it was in the spring. Most people with families or children going to school moved before school started to take advantage of not having to transfer their kids out of the school once they closed. So historically you are dealing with a smaller pool of people looking to buy a house in Charlotte, NC. That said I decided today to see how many homes were on the market in just Charlotte and then break it down by days in stock to see how many may be on the market too long and look to see why. Currently there are 2684 homes actively listed for sale in Charlotte. Over half of those homes have been on the market for less than 60 days. The other half mostly fell in the 60 days to 120 days on the market. Not all that bad because they are between 2 to 4 months. But 282 of the homes have been on the market in Charlotte for greater than six months. 282 is not a large number unless you are one of those people in Charlotte whose house has not sold yet. Looking at the homes I noticed over half had issues with poor or no descriptions or no photos of the inside or just a photo. Some were just plain overpriced. Which leads me to why would you take an overpriced listing? That is a topic for another blog post. My point here is that your Realtor may come to you and say let's lower the price of your house it is after labor day and the market is slowing down and there are not as many buyers out there. But the question you need to ask yourself is: "is it the price or the house or the agent not doing his job?" I am a believer that there are reasons houses do not sell and why some sell quicker than others. Some of it is listing of the home at the right time and having a willing and able buyer there and ready for you. Others is that you have the home priced right and with a good description and photos. But before you decide to lower the price ask yourself: 1. what are the comparable homes in my neighborhood or area of Charlotte listed for and sold for recently? 2. How are the photos of my house? 3. How many showings did you get and what was the feedback? 4. Did I address the concerns from the feedback? 5. Did I get any offers? 6. Was the house easily accessible for showings? 7. Did the Realtor market the home liked I wanted him/her to? 8. Did the house show well? Answering these questions can help you decide if you should lower your price or not. Sometimes you have a house priced right and it is just bad luck and location that hinder it...But before you decide to lower the price on your house look at these questions and answer them honestly. This will tell you if you are overpriced or not. Dave diCecco Realtor/Broker Coldwell Banker United Cell:704-519-7895 ddicecco@cbunited.com www.davedicecco.com

How Your OfferTt The Seller Can Impact Negotations

The housing market in Charlotte, NC. area is no different than it is in other parts of the United States. WE all went through a downturn where buyers were buying homes for significantly less than the sellers bought it for and now we have reached a point in the upswing where it seems like it is balancing off for the long term. But that leads me to the question. Do you still make a low offer on a house in the current market? And if you do how will that affect your negotiation power? A lot depends on the seller and the type of seller you are dealing with. For example, if you are dealing with a bank owned home or one owned by an investor then they have no emotional attachment to the house. They are looking at the numbers as strictly a business decision with no ties to the house just a bottom line they are trying to recover from the house. They might be more apt to look at a low offer and negotiate in good faith and not feel insulted by the offer (as long as it is not to low). But, what if you are dealing with a home owner that still lives in the house? They may have raised their children in the house or this was their first home, or one they did a lot of work to. Then they have more of an emotional bond to the house and their judgment could be clouded by a perception of what they feel is a fair number versus what the numbers should really be. In those cases your low offer may come with a stigma attached to it and hurt you in negotiating the house. They may feel insulted or like they are giving the house away to you. There are a lot of homes I have negotiated on where the seller believed there house was worth more than the average market value of homes today because of the work they have done and the time they have spent in the house. It does not necessarily mean it is worth more. But some Realtors are taking listings without regard to the value of the house. I talked to one who knew it was overpriced but told me “that is what the seller wanted me to list it for; and I did not want to lose the listing”. So just because it is listed for a certain amount of money does not mean it is worth it. However; if a Realtor agreed to take the listing overpriced the process of negotiations are going to be tough and tedious task. The seller in their mind have validation that the house is worth more than it actually is because we (Realtors) gave them a listing at their number for the house. Then you go through the negotiation process with the listing agent on your side. I went through process with a buyer recently. The market said the house was worth X amount of dollars and the seller wanted a substantially larger amount of money for the house than what the value was worth. Thus to get to what we felt would be a fair market value of the house based on current sales we offered a substantially low price that was immediately rejected and after a long conversation and some back and forth we finally reached a fair number. But we could tell the sellers were not happy with the negotiations and tried to get more money out of us because they felt we undervalued their house initially. This situation worked out. But I have countless other ones where the buyer has walked away from a house because of the price. During that process I have seen some sell and others not sell; and stay on the market substantially longer than need be.... But you need to know before you negotiate on a house what type of seller you are dealing with. It could have an impact on your negotiations and whether you get the house of your dreams or not. Dave diCecco Realtor/Broker Coldwell Banker united Cell:704-519-7895 ddicecco@cbunited.com www.davedicecco.com