5 Ways to Save on Your House Sale

Save Money on Your House Sale

With the sales price being so large, few sellers stop to think about ways to minimize the costs of selling their home. Knowing, monitoring and controlling the costs during the escrow process is key to saving thousands of dollars and to receiving larger proceeds from the transaction. Here are costs to understand:

  1. One of the largest costs is commissions paid to the real estate agents. Commissions vary from 5%-7% of the sales price depending on the type of real estate transaction. While lower costs may seem like a winner, many times you get what you pay for with an agent. With so much riding on the selling price, a real estate agent should bring great service, a solid marketing plan and sharp negotiating skills to the table. If your agent is bringing less to the table, you will see a lower sales price.
  2. With every home sale, home owners are required to pay the Owner’s Title Policy and to share in the escrow fee paid to the local title/escrow company. While the fees are not negotiable, the title/escrow company used to process the transaction is negotiable. All title/escrow companies publish their fees in rate books which are readily available to review and compare.
  3. Do you live in a Home Owners Association (HOA)? If so, then your HOA may charge a transfer fee, disclosure fee, or capital improvement fee. Few homeowners understand what their HOA will charge them for the transaction – and charges may run from $500-$2000. A quick phone call to the HOA should clarify what fees are charged. While these fees are non-negotiable with the HOA, there is the possibility of negotiating and sharing the cost of these fees with the buyer for your home.
  4. In any real estate transaction, a Home Warranty is considered a must purchase for the new buyer. The cost ranges from $325-$600 and is a negotiated item payable by the buyer or the seller. Many times home sellers are requested to pick up the cost of a Home Warranty for the buyer. However, the cost is negotiable.
  5. Are you in an area where 1st time home buyers are known to be moving? If so, you may want to prepare yourself for requests to contribute to the buyer’s loan costs. These contributions are generally up to 3% of purchase price or more. The contribution covers appraisal fees, A.L.T.A. title policy, impound accounts, origination fees and other loan costs. While the contribution to buyer loan costs can be very important to getting a home sold, stronger buyers rarely need such assistance.

Do you want to learn more about ways to control your selling costs and get the most money from the sale of your home? Contact us at (602) 753-0177 or www.ThompsonGroupAZ.com.

Share

Freshen Up the Inside to Sell for a Higher Price

Beautiful staged kitchen room in a modern house with granite countertops and antique finished cabinets.

A prospective buyer’s willingness to buy more quickly – and at a higher price – is often driven by emotion. A home that shows exceptionally well helps arouse the prospective buyer’s emotional desires for that home. First impressions count! That’s why you’ll see neat, clean homes getting snatched up while others just sit there on the market. Builders of homes in the spend hundreds of thousands of dollars to stage a model home properly, and they do this for good reason. Buyers will buy the perceived value of the property.  Buyers buy the image and feeling that a received from experiencing the property.

The emotions that you, the Seller, are trying to stimulate are triggered by sensory experiences. Aim for the senses – especially touch, smell, and sight. Uncluttered, clean, fresh-smelling homes sell faster and for higher prices. Try to clear your mind of any preconceived notions, then walk into your house, close the door, look around… and truly feel your house. Then consider these steps:

  • Organize and de-clutter! Remove clutter from countertops, desks, and garage. Remove excess furniture. Organize closets, drawers, storage areas. Throw away, sell or store excess! Rent a storage unit if necessary. Clutter makes the home appear smaller and masks the home’s good points.
  • Freshen up interior paint as needed. Again, fresh paint is the best bang for the buck. Light, neutral colors such as beige, white, or off-white have a broader appeal and can make small rooms seem larger and airier. Remove ‘tired’ or busy wallpaper. Brighten drab garage interiors, storage areas with fresh paint. Paint/stain woodwork as necessary.
  • Make kitchen and bathrooms sparkle. Clean/oil cabinets, clean appliances/fixtures. Add fragrances. New color-coordinated towels are an excellent investment. Fresh looking kitchen and bathrooms will often make or break a sale.
  • Clean floors and carpeting. Add carpet freshener to carpeting which is ‘tired’ or to eliminate smoking or pet odors. If you have a smoker in the house, ask that person to smoke outside and to dispose of the ’spent’ smokes in the trash.
  • Make minor repairs. Tighten loose knobs, fix leaky faucets, lubricate squeaky hinges, replace filters, tighten loose banisters, repair doors and doorknobs, remove stains, and make sure your doorbell works.
  • Make sure all lighting fixtures work. Add new bulbs with the highest wattage allowed to make your rooms seem brighter. Light, airy homes seem bigger and more inviting. It’s well worth the extra cost.
  • Is the fireplace in good working order? Remove ashes from the fireplace and add fresh logs.
  • Buy fresh, colorful indoor flowers or plants. They get a lot of mileage, and they will enhance your new home as well.
  • Exterminate. One bug, dead or alive, will make a bad impression on prospective buyers. Hire a professional.

Selling your home is a process, not a single event. Getting your home ready to sell is part of that process. As you prepare to put your home on the market, make sure to pay close attention to how your home is prepared to show – it can make all the difference in the world.

Do you need help? Contact us at www.ThompsonGroupAZ.com or 602-753-0177 to get started.

Share

Selling for Top Dollar – Contract Terms to Avoid!

Top Dollar

My favorite part of listing and selling any home is negotiating the best possible contract for our client! Preparation is a big part of the negotiation. When showing a home and advertising to multiple buyers, the goal is have as many buyers as possible interested in our product. Often overlooked, the contract we negotiate with the buyer is a big part of the product. If the terms of the contract are prohibitive, then our sellers see a lower price. However, if the terms of the contract are attractive, our sellers see bigger prices! Here a few terms to avoid if possible:

  • As-Is Sale Transactions. Many sellers would prefer to not do work before listing and selling their homes. However, many buyers don’t understand the cost of repairs – or even how to get the repair complete. Questions that linger in a buyer’s head generally results in lower offers or no offers at all. In most cases, the seller can complete the repair for smaller expense than what a buyer thinks the repair will cost.
  • Tenants In Place. Only in very rare cases does a tenant want the owner to sell the house. Most tenants would like to remain in the home and don’t want to move. In addition, the tenant does not receive any proceeds from the sale, so the tenant has no motivation to clean up and present the home to get a great sales price. Most buyers want to move in at close of escrow, so having a tenant in place is probably a deal killer for any owner occupant buyers.
  • Longer Escrow Period. If you have lots of stuff and are not able to move out of your home within 30 days, bear in mind that most buyers want a quick move into a new home. Longer escrow periods will be a deal killer for a large number of buyers. There are a variety of different strategies you can consider that will allow you to move in under 30 days. Bringing those quick move-in buyers back to the table will bring more contracts and a higher price.
  • Changing the Buyer’s Financing Structure. Most buyers have consulted a lender prior to writing a purchase contract and have determined a financial structure that will work for their purchase. Part of the structure may include a request for the seller to pay some or all of the buyer’s loan costs. While most sellers don’t like to pay any extra costs, changing the structure of the contract can be a deal killer. Instead, focus on ways to get the overall net amount of the contract up to an acceptable amount. At the close of escrow most sellers are much more interested in how much money goes into the bank, not the structure of the contract.

Do you want to learn more about how to manage the home-selling process? Contact us at www.ThompsonGroupAZ.com or 602-753-0177.

Share

Experience Matters – Questions to Ask Before Selling

Question Mark

Our clients have presented us with many unique situations when selling their Arizona Homes. Whether moving out-of-state to take a new job, hoping to buy a bigger home with a pool, needing to be in a new school district, or looking to downsize to a home that is more manageable, our clients all had something very important in common. Each had future plans – plans that depended heavily on how the logistics of the sale were handled and the financial results of the sale.

Marketing and Selling Homes is Serious Business.

A well-planned and executed sale of a home allows the homeowner to move forward with their next phase of life. However, mistakes may cost thousands of dollars and hours of stress when escrows are canceled. Nothing may be more important in the transaction than the knowledge and experience of the agent giving you advice. So, here are a few good questions for you to ask your agent:

  • What do you know about the area? At times, knowledge of the area can be the key to selling a home. Buyers that are new to the area need to know information about schools, movie theaters, shopping and more. An agent who lives in the area can help buyers identify how they will enjoy the area – and many times, the home will sell quicker.
  • How do you market my home? Believe it or not, some agents think that ordering a “for sale” sign and putting your home in the multiple listing service (MLS) is how to sell a home. This is only the beginning! Great agents should be able to deliver to you a written marketing plan tailored for the Phoenix Real Estate market along with success stories from using that plan.
  • How much are the costs of selling my home? In order to plan for the future all homeowners with Phoenix Homes for Sale need to know the amount of money they will have after the sale of the home. Great agents should be able to estimate the cost of real estate commissions, title fees, loan costs, repair costs, and property taxes.
  • When will the buyer’s loan be approved? Without loan approval, the sale of the home cannot close escrow. In tracking a lender’s process, a great agent should know how to use the LSU (Loan Status Update) form, what “PTD” conditions are, and what is the time needed for a lender to get loan documents to title after full loan approval. Being able to track the lender’s progress is essential for a seller to know whether they will close on time or not.
  • What is breach of contract and how do you handle this? In the Arizona purchase contract, the seller is unable to exit the contract while the buyer retains over five exits from the contract. However, if the buyer is in breach of contract, then the seller may exit the contract. Breach of Contract occurs when the buyer takes actions that are contrary to the written contract. This is a serious situation that experienced agents should have a plan to handle.

Do you want to learn more about how to make your home-selling process go smoothly? We would love to help with your transaction. Contact us at www.ThompsonGroupAZ.com or 602-753-0177.

Share

Marketing Your Home’s Location!

Location, Location, LocationThe name of the game in real estate is location. There’s a reason some say, “location, location, location” – because it is so important. When preparing a home for sale, agents typically are dealing with a whole lot of logistics and people. Managing painters, landscapers, handymen, stagers and photographers take up time – and, too often, marketing your home’s location gets overlooked. However, many home buyers are new to the area in which they’re looking and have lots of questions about your home’s location. If they are able to get excited about the location, they will make better offers!

Great amenities around your home may include award-winning schools, shopping centers, specialty stores, movie theaters, restaurants, community parks, community pools, and great freeway access. The more of these that you and your agent are able to present to a buyer, the better.

Another appealing factor in a location is proximity to great employers. If your home is near big employment centers or if big employers are moving into the area, those can be great avenues for marketing your home. Buyers prefer shorter commutes, so there should definitely be a plan to market this aspect to any job seekers in your area.

There can also be negatives to your location such as issues with the local schools, extra commute times to work, or proximity to harmful and/or noisy roads. Rather than ignore these, it is important to address them and come up with solutions that will work for the buyer. While actually fixing some location issues may not be possible, it is usually possible to find alternate solutions to satisfy a buyer.

Summing up: one of the most important skills a real estate agent will bring to a seller is the ability to market location. Do you want to learn more? Contact us at www.ThompsonGroupAZ.com or 602-753-0177 today!

Share

Selling for Top Dollar – Contract Strategy

Real Estate ContractThe day is here! You need to sell your home. The next steps are to find a real estate agent familiar with your neighborhood, put your home on the market, and negotiate a BIG sales price. You might not have seen the latest Arizona purchase contract. Filled with 10 pages of legal jargon and multiple addendums, the lack of understanding of the Arizona purchase contract is an easy way to give away thousands of dollars even though you may sell your home for Big $$$.  Here a few items to watch for that can affect your bottom line:

  • Buyer Loan Costs. Many buyers need help with the purchase cost and like to write offers asking for the seller to pay their loan costs. And if the overall contract sales price is right, paying the buyer loan costs might be well worth while. Generally, the request is made as 3% of sales price.  Initially that amount may not seem high. However, when considering a sales price of $200,000, 3% of sales price works out to be $6000 – not a small sum of money. Instead, consider offering a compromise: have the buyer pay only half of the loan costs or a set amount instead of a percentage of sales price.
  • HOA Transfer Fees. Did you speak with your home owners association (HOA) before listing your home? The amount your HOA will charge to transfer your home to a new buyer is great information to know. We have seen HOAs have charging in the range $500 – $2500 to transfer the property. With HOA transfer fees being a negotiable item, a seller may be able to pass this cost on to a buyer.
  • Home Warranty Costs. As a general rule, buyers of for most Arizona homes expect sellers to pick up the cost of a Home Warranty. The Home Warranty will cover the buyer for one year in case some of the working components in the house break. The home warranty also protects the seller from being pursued by a buyer who feels that an A/C unit, hot water heater, or other expensive item died prematurely. A typical, basic Home Warranty plan will cover most items and can be obtained for under $450. But watch out – some buyers will ask for plans that can cost twice this amount.
  • Appraisal. Did you and your real estate agent have a conversation about what price the property is likely to be valued by an appraiser? Will your home appraise for the sales price on the contract?  Sellers may accept contracts for sales prices that have no chance of being supported by appraisal.  Mr. Seller, beware!  The appraiser may submit an appraisal for thousands less than the contracted sales price. If the seller forgot that the purchase contract is subject to the appraisal, the seller may have packed up the house and secured a new place to live.  When the appraisal comes in below sales price, the seller is generally between the proverbial rock and a hard place. They’re forced to decide: “Do I accept the new sales price and take a financial hit or do I cancel this contract and try to sell the home again?” Keeping in mind that most sellers are moving for significant life reasons such as job transfer, bigger home or changes in lifestyle, the seller generally must accept the financial hit or give up on the timelines and main reasons for moving.

In most cases a little upfront planning will help net more money for sellers when the contract arrives. Do you have more questions? Contact us at (602) 753-0177 or www.ThompsonGroupAZ.com

Share

Capital Gains Tax on Your Home Sale

Capital Gains Tax on Real EstateMost of our home sellers are making nice profits on the sale of their homes. Unfortunately, some sellers will need to pay the IRS on those profits. Although that is not normally the case, it does not hurt to review this potential problem before putting your home on the market.

The Great Exclusion

If a homeowner lived in his house for 24 months out of the last five years, he is entitled to exclude $250,000 of the profits from the sale – or $500,000 for married homeowners. The 24-month period does not need to be consecutive, as long as you have lived in and owned the home for at least two years.

The “2 of 5”exclusion may be used each time you sell or exchange your primary home. Generally, the exclusion may be claimed only once every two years, although exceptions do exist.

Gotchas Exist!

In a recent listing appointment our homeowner decided that the time was right to put a home on the market. Our seller moved out of state and rented the home for several years. Our seller realized that he was now making a profit, but was unaware of the requirement to live in the home for two of the last five years. The homeowner consulted his CPA/tax advisor before moving forward with the sale and decided the profit was big enough to pay the capital gains tax.

On another recent seller conversation, the seller had found a wonderful new home on an acre lot to purchase, but needed to sell his current home. The seller bought his current home only 18 months ago and would be making a nice profit on the sale. After consulting with a CPA, the seller decided to postpone the sale of his current home six months to avoid the capital gains tax.

As a standard part of business, Phoenix AZ Realtors are not experts on the ins and outs of capital gains taxes. For the best advice, consult a CPA or tax advisor.

Do you want to learn more about ways to control your selling costs and get the most money from the sale of your home? Contact us at (480) 776-5214 or www.ThompsonGroupAZ.com.

Share

Best Renovations for Improving Sales Price

Woman painting the walls.

Have you been out to see the builder model homes lately? If so, you may have noticed that builders have loaded tons of upgrades into the homes. The builders know that the look and feel of the home is super important to the buyer and if they get the buyers excited about the possibilities, then it will lead to more sales. As a homeowner and a potential seller someday down the road, getting buyers excited about your home will lead to a higher sales price! If you make a few upgrades to your home now, you will also get to enjoy the changes before you move. Now, don’t overspend on your improvements, but here are a few that can make a huge difference when you sell:

  • The Kitchen – The kitchen is where improvements go a very long way. New cabinets, counter tops, and appliances will add a lot of value. Don’t feel like you need to turn you kitchen into a gourmet kitchen! There are a lot of ways you can update your kitchen to the current trends on a budget. Keep in mind that giving your kitchen a cohesive contemporary look is the best way to add value to your home.
  • Landscaping – If your yard is feeling more like a jungle or desert than a place where kids would like to play, then it might be time to make a few changes! Whether you like desert landscaping or something a little greener, color and cleanliness is the key. Buyers are always looking for a yard that is well-kept, but that will also be fun to hang out in after work. Putting in a handful of plants will go a long way to dressing up your front or back yard. If a buyer can picture outdoor living and nightly barbeques, then you are on the right track.
  • Flooring – Updating your flooring is a great way to get a completely new feel throughout your home. New carpet, new tile floors, or hardwood floors can make a home feel newer and will appeal to younger buyers.
  • Paint – Without a doubt, a new coat of paint on the walls goes a long way to refreshing a home. Stay away from colors that are too bold and stick with colors that are more neutral. Earth tones and two-tone paint styles are the trend lately and appeal to younger buyers.
  • Bathrooms – In bigger homes, the master bathroom is a great area to look at spending more of your upgrade budget. However, in smaller homes, it can be hard to get your upgrade dollars back in bathroom remodels. As you look at remodeling your bathrooms, light and water fixtures are a great way to spruce up the area without overspending.

Do you have questions about remodeling? Contact us www.ThompsonGroupAZ.com or 480-776-5214 to get started.

Share

Is My Home Priced For This Market?

House For Sale PriceHas your home been on the market so long that the For Sale sign out front has begun to rust? At some point you probably began to ask yourself if your home may be overpriced for the market. Here are a few thoughts to consider in making that determination before your For Sale sign completely rusts away:

  • Comparables – Is your home priced right according to comparable properties? Comparable homes that have sold recently can give you a great idea of how well your home may appraise. Active, pending listings give a great indication of where the market is and what your competition is as you try to get that next buyer. Pricing considerably higher than the Active, Pending or Sold properties probably will impede a quick sale and extend your time on market.
  • Showings – How many showings are you getting each week? Has it been a few weeks since you last saw a buyer’s agent in your home? If so, you are probably overpriced. A good sign that you are priced right is getting 3-4 showings a week from qualified buyers working with real estate agents.
  • Market Changes and Activity – What is the market doing? Are interest rates higher or lower? What’s new on the local MLS? Are there a lot of bank owned properties or short sale properties in your area? Does your area attract lots of first-time buyers or move-up buyers? All great questions to ask when deciding on how high or low to price your home.
  • Do you really want the truth? Many times sellers and real estate agents just are not ready to be honest about the situation. It’s usually far more useful to understand the realistic factors necessary to accomplish a goal than conjecture about the price you hope or wish your home will sell. Assuming that’s your position, don’t be afraid to ask your real estate agent for the honest truth: What list price does my home need to be at in order to sell in the next 30 days? Just be prepared for the answer!

Rather not figure this out on your own? Our Phoenix AZ Realtors would love to help. Contact us at www.ThompsonGroupAZ.com or 480-776-5214.

Share

Ways to Net More from Your House Sale

Penny Saved, Penny EarnedMy grandfather once taught me “A Penny Saved Is a Penny Earned.”  Nowhere is that more true than in the sale of a home — probably due to the number of pennies involved in the transaction. With sales price being such an important factor for a seller, few stop to think about ways to minimize the costs of selling their Phoenix Arizona Homes.  Monitoring and controlling the costs during the escrow process is key to saving thousands of dollars and to receiving larger net proceeds from the transaction. Here are some costs to keep your eye on…

One of the largest costs is commissions paid to the real estate agents. Commissions vary from 5%-7% of sales price depending on the type of real estate transaction. While lower costs may seem like a winner, many times you get what you pay for in an agent. With so much riding on the selling price, a real estate agent should bring great service, a solid marketing plan and sharp negotiating skills to the table. If your agent is bringing less to the table, you will see a lower sales price.

With every home sale, home owners are required to pay the Owner’s Title Policy and to share in the escrow fee paid to the local title/escrow company. While the fees are not negotiable, the title/escrow company used to process the transaction is negotiable. All title/escrow companies publish their fees in rate books which are readily available to review and compare.

Do you live in a Home Owners Association (HOA)? If so, then your HOA may charge a transfer fee, disclosure fee, or capital improvement fee. Few homeowners understand what their HOA will charge them for the transaction but charges may run from $500-$2000. A quick phone call to the HOA should clarify what fees are charged. While these fees are non-negotiable with the HOA, there is the possibility of negotiating/sharing the cost of these fees with the buyer for your home.

In any real estate transaction, a Home Warranty is considered a must purchase for the new buyer. The cost ranges from $325-$600 and is a negotiated item payable by the buyer or the seller. Many times home sellers pick up the cost of a Home Warranty for the first year to protect the new buyer from unforeseen repairs.

Are you in an area where 1st time home buyers are known to be moving? If so, you may want to prepare yourself for requests to contribute to the buyer’s closing costs. These contributions are generally up to 3% of purchase price and could be more. The contribution covers appraisal fees, A.L.T.A. title policy, impound accounts, origination fees and other loan costs. While the contribution to buyer loan costs can be very important to getting a home sold, stronger buyers rarely need such assistance.

Do you want to learn more about ways to control your selling costs and get the most money from the sell of your home? Contact us at (602) 753-0177 or www.ThompsonGroupAZ.com.

Share