Lancaster PA Luxury Real Estate

 I was recently asked about the connection between a property's assessment value and its potential selling price.  There is often confusion about the various methods that are used to evaluate property and it's important to be able to distinguish between them and to know how they may be helpful to you in your home buying decision.

Property Assessment - The assessment is a tool the town uses to determine your property tax amount.  In Massachusetts each town has an assessor who is responsible for determining the value of each property and its improvements.  The assessor reviews sales data from the previous year and, based on sales prices of similar homes, will arrive at a value for each parcel.  With today's declining real estate market, assessments do not necessarily reflect a property's fair market value since the data used may not be up-to-date or accurate. Because of this, it is not unusual to see a home listing with an assessment that is higher than the asking price.

Comparative Market Analysis - Real estate agents establish fair market value by compiling a report called a CMA or Comparative Market Analysis.  This analysis is based primarily on comparable properties that have sold in the same neighborhood, of a similar size and style and of a similar age.  The sales should have taken place no longer than six months ago to be valid comparable sales.  The analysis will also take into account properties that are currently on the market, under agreement and also those that have expired.  The goal of the CMA to a buyer agent, is to establish an offer price that is the lowest possible that a seller might accept. 

Appraisal - When you have an accepted offer on a property your bank will hire an appraiser to arrive at an estimate of value for the property you will be using as collateral for your mortgage loan.  An appraiser is licensed and trained in the practice of developing an opinion of value for real property known as Market Value.  Similar to the CMA, the appraiser will base the property value on three recent sales of similar properties in the same area that have sold over the past six months.  A professional appraisal is detailed and includes land to value ratio, general real estate conditions in the area, zoning information and a sketch of the property showing the layout of the rooms. 

All three methods of property valuation will factor into your home purchase. 

• The Assessment will assist you in calculating the property taxes,
• Your realtor's Comparative Market Analysis will help you to arrive at an appropriate offer price, and
• The Appraisal amount should support the price you are paying for the home.

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Real Property vs. Personal Property - What is Included in a Home Purchase?

Property Disclosure - Who Has the Burden of Proof?

Courtesy of Claudette Millette, The Buyers' Counsel, 800-392-1446, Contact me 

A quick glance in the window displays downtown and at the yards in town are enough to let us know that the winter holidays are coming even without a calendar.

This time of year is both harder and easier to sell a house. Traditionally, fewer people are looking to move in the next five to six weeks, so there are likely to be fewer showings. However, the buyers coming through your home between now and January are not tire kickers. These people are usually serious about buying a home. When sellers get a showing request during this time, they need to be sure that their home is in tip-top shape.

This is the time where a little extra effort can pay off big. Do something to set yourself ahead of the competition.

Many people like to do a little holiday decorating, and this is an area where some sellers slip up. Remember that you are hoping to move. Start transitioning to your new home already. Maybe you always have a yard full of decorations and your house draped in garland. Start breaking that tradition this year in preparation for your move. Begin the mental process of moving.

As a general rule, less is more with holiday decorating and home selling.  This is not the year to rival a landing strip with your outdoor lights. Take a minimalist approach. One arrangement on the dining room table. One holiday tree. A tasteful wreath on the door.

Buyers do expect to see some holiday decorating.  Do not forgo decorating completely, but do not over do it either. A simple set of holiday towels can add a nice accent to a bathroom. The towels, a mini tree, scented pinecones and a holiday bathmat is overdone. Ask your Realtor for frank and honest feedback on your holiday decorating plans, and follow his or her suggestions. You are paying for the Realtor's expertise, so use it.

Keep things neutral. Avoid highly personalized decorations like the handmade stockings with all the children's names embroidered on them. The point it to help the buyers see themselves living in your home. Also, ours is a multi-cultural society. While many do celebrate winter holidays, it may not be the same holiday as you. Bring out the creche or menorah for your celebrations, but not during showings.

Be safe.  Avoid the pile of presents under the tree.  Keep pricey ones inside storage containers instead of on the basement or closet shelf.  Most buyers are completely trustworthy, but you never know who could be walking through on a showing or during an open house.

Buyers can be sensitive to scents and noises, so choose yours with care. During the holidays, sellers may have strongly scented potpourris or spice scented air freshners out that are competing with the tree, the cookies they baked the day before and more. Keep scents soft and neutral. The same goes for music. Holiday music can be easily overdone and many get their fill from stores, elevators and more. Go neutral and non-holiday with your musical selection.

Once the holidays are finished, remove the decorations promptly. Those decorations can seem stale to buyers looking in January, so be sure to pack them away instead of putting it off.

I hope that all of our sellers will have the best gift of all this holiday season - an accepted offer and a successful closing.

For home borrowers ("mortgagors") facing foreclosure, a deed in lieu of foreclosure provides an alternative solution to the standard default process. In particular, the deed grants the lender (the "mortgagee") full rights to the property title to satisfy the conditions of the loan. Such agreements are a common form of mortgage contract settlement. In general, a deed is a right granted by a legal contract based upon mutual agreement; therefore, a deed-in-lieu must be based upon voluntary agreement knon as a "quitclaim deed" in good faith.

In cases where a borrower lacks sufficient assets for a deficiency judgment, the lender will often pursue a deed settlement independent of court proceedings. Under certain conditions, a deed in lieu of foreclosure can offer several advantages to the borrower and lender alike. If agreed to by both parties, the lender is then able to assume ownership of the property, creating a more efficient process by limiting court costs and waiting periods involved in standard foreclosure processes. Standard foreclosure procedures can take years to court and are further complicated by personal bankruptcy declarations, which can be relatively common in such cases. For a borrower facing foreclosure, the deed agreement can relinquish him or her from underlying debt, thus removing the foreclosure record from a credit record and reducing the need for a declaration of personal bankruptcy. Lenders also benefit in terms of improved settlement efficiency, which greatly reduces the time, cost and potential complications that would otherwise be involved in a repossession procedure.

In order for the agreement to be reached, the appraised market value of the property must be less than the outstanding debt from the original agreement, and the property must not be subject to any 3rd party creditor claims or liens. Deeds-in-lieu are often initiated either by personal financial difficulties on the part of the borrower or changes in the macroeconomic environment that shift interest rates and/or underlying home values. Mortgage contracts that rely upon a relatively high monthly payment based upon a variable interest rate (with a limited, initial down payment) are particularly vulnerable to shifts in the economic environment; an interest rate change of just a few percentage points could double a borrower's monthly payment, under certain circumstances. The recent housing market challenges have reflected a coalescence of these factors, which have made deeds-in-lieu a common instrument for borrowers facing foreclosure.

Technically, to proceed with a deed-in-lieu both parties must agree to and sign both an Agreement in Lieu of Foreclosure, which outlines the terms of the deed, as well as the deed itself, which transfers legal ownership of the property. In certain situations, a borrower may pay to reduce the debt to ensure they maintain their credit rating. Once the agreements are reached, the lender then classifies the original loan as paid and issues a waiver to deficiency judgment, which would normally go into effect in case sale of the property results in an amount less than the debt. A third party escrow service then executes the agreement, thus releasing both parties from their original contract.

10 Smart Tips For Savvy Homeowners

 

Here are some tips that I give my sellers when listing their house.  It's a mix of domestic wisdom and selling secrets!

 

1. Keep candles in the refrigerator for several hours before use to slow down dripping and make them last longer.
2. Have you tried baby wipes on carpet stains? They work so well you will be wondering why no one told you sooner!
3. To eliminate strong cooking odors (fish, fried food, bacon, garlic, ect.) heat white vinegar in an uncovered pot on the stove. (Don't boil) Remove after 30 minutes. The light vinegar smell dissipates quickly, taking odors with it.
4. After your next party, share flat, leftover beer with your garden. Plants love the yeast.
5. Ants hate anything spicy. Sprinkle ground pepper, cayenne, even cinnamon, in their path, and you'll stop them in their tracks.
6. Fill nail holes with a paste made from cornstarch and water. Works just as well as putty!
7. Your chimney will stay clean if you throw a handful of salt on the fire.
8. When a wooden door or gate sticks, bring out the hair dryer. By blowing hot air directly on the wood where its sticking, you will remove the moisture and the swelling will go down.
9. Squeaky doors? For a drip less solution, use petroleum jelly on the hinges instead of oil.
10. Simmer a sliced apple and a couple cinnamon sticks in water on your stove. Your whole house will smell like apple pie. This one is great for open houses!

 

How a home is presented can have a significant impact on how quickly a home sells and for what price.  Especially now, when most markets have an abundance of homes for buyers to choose from, it's important for sellers to carefully consider how their home is staged.

Buyers generally want to get as much space as their money can buy.  A moderate sized home that is presented well can often feel more spacious that a larger home that is not presented well.  In turn, that smaller home is likely to sell quicker and for a better relative price that the other home.  Here are 6 tips for making your home feel as spacious and attractive to buyers as possible:

1. Keep the number of wall and flooring colors to a minimum.  A home that has just 1-2 carefully selected wall colors and just 2-3 floor coverings will feel larger than a home that has a different color scheme and/or flooring materials in each room.  If selecting new colors, consider that most of today's buyers want warm neutral tones.
2. Minimize the amount of furniture you have in each room.  There should only be as much furniture as is necessary to make the room feel comfortable and properly demonstrate how the space is to be use.  If you have too much, either sell it or store it.
3. Clear the clutter!  Sellers should use putting their home on the market as an opportunity to prepack excess ... stuff.  Keep decorative objects to a minimum. Porcelain figurines are distracting and can be easily broken.  Put away personal/family photos as they are also distracting and make people feel they can't make an offer because "where will that nice family go?"!  Pick up newspapers and magazines.  Put away--or pack away--unnecessary items from countertops in the kitchen and bathrooms.  Clutter can make rooms seem smaller than they are.
4. Make sure your rooms or spaces properly demonstrate their intended function.  The formal living room is not where buyers would expect to find kids' toys!
5. Position mirrors in the right places to make a room appear larger. Make sure the mirrors reflect what you want to see more of, such as a favorite painting or a lovely window. 
6. Let the light in!  When preparing for a showing, turn on every light and make sure window coverings are open.

              

Remember ... a clean, well-maintained and spacious home is not only more marketable, but can often command a higher price.

 

Patty & Scott Carroll - RE/MAX Equity Group, Vancouver WA

Charm pricing is very prevalent in our society. A product is advertised at $9.99 rather than $10 or $97.50 rather Charm Pricing and Real Estatethan $100. When sellers back off the rounded number by a few cents or few dollars to make something look less expensive, it's referred to as "charm" pricing.

Such pricing make sense for items sold at retail for a set price. But what about real estate pricing? Does a seller gain anything by setting the listing price to seem lower than it actually is, such as $149,900 instead of $150,000?

Marcus Allen of Florida Atlantic University and William Dare of Oklahoma State University did the research. They studied a large sample of home sales and discovered that when charm pricing was used, homes tended to sell closer to the listing price than those offered at a rounded price.

They concluded that when sellers use charm pricing, buyers tend to perceive that the listing price is close to the seller's reserve price (the lowest amount they will accept). Sellers appear to indicate the price is fixed, and they will accept a minimum amount of bargaining.

On the other hand, sellers who list homes with a rounded price seem to be indicating there is more room for bargaining. They expect this price to be a mere starting point for negotiation. They need a round figure only to position the property in the range of comparable properties.

William "Art" Sexton
Sexton@RERNC.com 
www.Raleigh-Real-Estate.biz