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What to Expect During a Home Inspection

May 7, 2020 By Rick

As a seller, you might be wondering what to expect during a home inspection. It can be a little stressful and nerve racking to think about someone poking around your house trying to find things wrong with it. Also knowing that these things can be used to negotiate against you is just a stressful situation all around.

However, if you take my advice about a pre-listing home inspection (read that article here) you will have very little to worry about. If you didn’t do a pre-listing home inspection, don’t worry. I’m going to walk you through exactly what to expect.

Some inspectors will get there early and begin on the outside, including the roof. Although some inspectors will actually get a ladder and inspect the roof, many have started using drones to film the roof and inspect it in more detail once they are back at their computer.
Once the buyer(s) and their agent show up, they will make their way inside. Sometimes the buyers are there with the inspectors, sometimes they are not. I always recommend attending the home inspection for the buyers, but I think it is better for the sellers to leave (go shopping, watch a movie, get something to eat, etc).
On the inside, the inspector will check the electrical, plumbing and mechanical (heating & cooling) system. They will also check all the windows for leaks and whether they open and close properly. Appliances will be tested, by running the dishwasher and turning on the stove. They will note every minor issue they discover.
In the attic, they will look for leaks in the roof. They will check for any discoloration and potential mold. They will also check the insulation and determine if it is up to code and note what type of insulation material is being used.
In the basement the inspector is looking for any evidence of water and potential foundation problems. An unfinished basement is ideal for inspection since everything is exposed and can be expected with the naked eye. This makes it easy to see what type of electrical work and plumbing has been done in the home.
Inspections can take 2-4 hours depending on the size of the home. The home inspector is documenting everything digitally and taking notes. Afterwards the inspector will spend time generating a detailed report and deliver it to the buyer(s). The buyers will review it and then make a decision on whether or not to move forward with their purchase as-is or not.

Based on the results of the home inspection, the buyer(s) then decides to one of the following: a) move forward as-is, b) ask for repairs/credit or c) kill the deal. If the buyer asks for any repairs or credits, they are literally opening up the transaction to re-negotiation. This is where the help of a professional is the most beneficial!

Hopefully knowing what to expect will ease your anxiety about the whole inspection process. Feel free to reach out if you have any questions or concerns.

How to Negotiate When Selling Your Home

May 6, 2020 By Rick

There is a lot of advice out there for buyers on how to negotiate purchasing a home. I don’t know why anybody would want to do that on their own (unless they are a professional negotiator) but I wondered why there isn’t much advice for selling your home!

So I am going to give you some pointers here on how to negotiate offers on your home. Even though the first offer may be the best offer, I like to know exactly what my seller’s needs/wants are and then I draw a line in the sand. If you have a great home and follow my suggestions when we listed it, I am confident that we can generate the offer that meets everything that you want and need.

Read the Entire Offer: Although it is tempting to react to the purchase price alone, read the entire offer. It can help to write down the key items. A lot of language in purchase agreements is standard or similar. However, you need to pay attention to the offer amount, the earnest money deposit, the closing date, occupancy, due diligence periods, any addendum and timelines.
Offer Price: How much are they offering and what type of financing are they using? Are they borrowing money from a bank to buy your home? If so, how much are they putting down? The more money they are putting down, the stronger the buyer. Are they paying cash? That’s great! That means no appraisal (only lenders require an appraisal to justify their loan to the buyer). This could accelerate the closing timeline or it makes closing much easier (one less player without the lender now).
Earnest Money Deposit (EMD): As a general rule of thumb, the more earnest money the buyer attaches to their offer, the better. I typically like to collect 3% of the offer price as the EMD. This helps to keep the buyer committed to the deal. Buyers can put up $0 if they want. As a seller you don’t want that. If the buyer ever decides to walk after contingencies are removed, there is no cost for them to do so.
Home Inspection Period: The more time you give to the buyer to make a decision based on the home inspection, the more damaging it is to your marketing if they back out. When a buyer backs out due to a home inspection, they get the EMD back. The most common is 7 day inspection period. Anything between 5-10 days is pretty common.
Occupancy: This is where the seller closes and the buyer is the new homeowner but the seller will continue to live in the home for an additional agreed upon time period. This is common if the seller is purchasing a home but needs to sell their current home to fund their new purchase. The amount of time and the daily rate are negotiable. Buyers will typically want the seller to pay based on the buyer’s new payment.
Home Inspection Repairs: Everything is negotiable. The buyer might want you to pay for the whole new roof that needs to be tore off and replaced. However, you can say no (leave it all on the buyer if they still want the place). You can also pay for partial (seller gives a credit for half the cost of a new roof). A third option is to just pay for it all. Do this if you don’t want to lose this buyer and there is plenty of equity to cover the cost.

These are just some of the things that can be negotiated between a buyer and a seller. Having a professional who has years of experience dealing with these type of negotiations can really help guide you to making the best decision possible for you and your needs, when selling your home.

Don’t forget to subscribe to my YouTube Channel for more tips and advice on selling your home.

What to Expect When Showing Your Home

May 6, 2020 By Rick

A lot of home sellers wonder how to handle showings when their home is on the market for sale. So I am going to tell you exactly what to expect when showing your home, based on how my buyers view homes when we go out.

First of all, you are going to have to get used to the idea that people are going to go through your closets, kitchen cabinets and bathrooms. Remember, they are trying to figure out how the space works as they imagine themselves living there. They are not there just rummaging through your stuff because they are nosy.

Secondly, all appointments made through my office are vetted through the buyer’s agent’s office. We make sure to validate license information so that we know who is coming in and out. Remember, buyers are not permitted to be in a home without their agent. So expect some type of either phone or text confirmation of all showings.

Be Prepared for Critical Feedback.

Another thing to be aware of is that I always do my best to collect feedback on my listings from the buyer’s agent. I always provide feedback myself. Be prepared for critical feedback that you may not like. Just keep in mind that it is not personal. These buyers and their agent do not know you. They are not making judgments about you (like if they say the place felt dirty). Develop a thick skin and try your best to look for objective feedback. Objective feedback could give us insight into how to sell the home.

Make the home available to view as much as possible during reasonable hours.

Typically people will view homes between 9am and 7pm. Sometimes you could get a request for earlier or later than that but that is your decision to accept or deny. The more convenient it is for the buyer to get in and look, the better the chance we can get your home under contract.

I hope you enjoyed this article. You can visit my YouTube Channel for more tips and information about buying or selling a home.

Preparing Your Home for Showings

May 6, 2020 By Rick

Selling your home can be a very exciting process. Seeing your home online and receiving all of the showing requests really makes you feel good, especially when the photos/videos/etc are professionally done. However, preparing your home for showings (and marketing) can be a daunting task.

Have no fear though! I am going to help you keep track of what needs to be done and what to expect. Here’s a checklist to stay on top of everything.

1. De-clutter

Pick-up all the clutter. This seems obvious, but you’d be surprised how people’s clutter can become invisible to them. So go room-by-room and check all floors, table/desk tops and furniture. People need to be able to comfortably walk around your space.

2. Clean

If you don’t want to hire a cleaning crew to come through and do a deep, thorough cleaning, you can always take the time and just do it yourself. Do not skip this step! Vacuumed floors, squeaky clean countertops and mirrors, shiny appliances and sanitized bathrooms make a huge impression. If you decide to do nothing else on this list, that will probably be fine if you complete these first two steps.

3. Stage

This is much more simple than it might seem. If you have that interior designer touch, then have at it! For those of us that don’t, follow this simple rule. Define each room’s purpose and remove everything that doesn’t belong. If you have a bedroom that is being used as crafts room, I suggest clearing it all out and stage it as a bedroom. People want to see each room and how they will use it.

4. Landscaping

This is what we call curb appeal. Mow the lawn, add mulch to the flower beds, trim the bushes, etc. While you’re out there take care of any exterior repairs that might be needed. You want people to fall in love with the house as soon as they pull up. That first impression based on curb appeal is half the battle. I suggest actually getting in your car and driving up to your home and assess your curb appeal.

5. Lighting

Make sure all of the blinds are open and all of the lights work. Also make sure you have consistent light temperatures. That means the bulbs in a particular room are all of the same color. Pay attention to the color temperature usually labeled as daylight, soft white, etc.

Once you have taken care of all of the above, it is time to get your photos, videos and 3D tours done. Maintaining this level of cleaning and maintenance for showings will literally put you above every other showing out there.

Don’t forget to visit my YouTube Channel for more tips and information about buying or selling your next home.

What is a Seller’s Disclosure Statement?

May 6, 2020 By Rick

The Michigan Seller Disclosure Act requires a home seller to disclose the condition and other information about the property known to the seller through a Seller’s Disclosure Statement. It is not a warranty by the seller or agent and it is not meant to replace a buyer inspection. Also, agents will not (and cannot) help you fill this out. This is required to be filled out by the homeowner and what they know to be true.

What does a Seller’s Disclosure Statement include?

A Seller’s Disclosure Statement will typically cover appliances, systems and services associated with the home. The homeowner must be truthful in all representations. If you know that the dishwasher doesn’t work, you need to indicate it. However, if you never used the dishwasher and have no idea if it works or not, you can mark “Unknown” truthfully.

How Important is a Seller’s Disclosure Statement?

A buyer and their agent may use the seller’s disclosure statement in order to structure their offer or inspect any concerns they may have over any of the statements. For example, above I mentioned the seller might not know if the dishwasher works. Well, a buyer might want to ask their home inspector to specifically test it. This could influence whether the buyer’s asking price will include a discount for the dishwasher or not.

Property conditions include statements on whether the basement or crawlspace has ever had water leaks. It also asks whether the roof has ever leaked and how old it is (again, if you don’t know you can write in “unknown”). The seller is also asked to disclose any issues regarding the heating system, the plumbing system, electrical system and if there have ever been any infestations.

If a seller were to intentionally make a false statement, they could end up in a lawsuit down the road from their buyer (the new home owner). Let’s say the seller had a foundation leak in the basement and hid it. It was missed by the buyer and their inspection. Years later it was discovered that the leak was still present and had created very expensive damage. If the new home owner could prove the previous homeowner had lied on the disclosure statement, they might decide to hire a lawyer and sue!

Always tell the truth and exactly the truth. There is no need to guess or try to dig in and find out. If you don’t know, just say so.

Here’s a link to the Seller’s Disclosure Statement. Feel free to reach out if you have any questions or concerns.

For even more tips and information about preparing your home for the market, visit my YouTube page here.

What is My Home Worth?

May 6, 2020 By Rick

When preparing to put their home on the market, every homeowner has one key question on their mind- “What is my home worth?”

It’s important to understanding the basics of what goes into pricing your home. This will help you get the most for your home in the least amount of time. Ultimately, your home is worth what a buyer is willing to pay for it and what you are willing to sell it for. This is the reason why the most common method for determining the value of your home is using comparable sales.

Comparable Sales

I use the most recent sales of comparable homes in your area to determine the appropriate pricing strategy to list your home. Let’s break that down to better understand:

Most Recent Sales: Depending on how many homes are selling in your area, I try to find homes that sold within the last 90 days. If there are not enough that are similar to your home, I will bump my search out to 120 days. Then I will go to 180 days, 360 days, etc. The most accurate will be the most recent. Finding 3 similar homes that sold in the neighborhood within the last 7 days is the best route to take in this case. This method will be a great indicator/predictor of what your home will sell for.
Currently For Sale: The homes that are similar to yours and currently for sale are your competition. If you are over-priced, you will sit on the market as the other homes are purchased up. A good strategy is knowing what homes are selling for (see point 1). Pricing competitively against the homes currently on the market is important.
Truly Comparable: Take a look at the recent sales and currently-on-the-market properties. Make sure you are realistically and objectively comparing your home to the others. Often we think our home is worth more because we VALUE the memories and design choices. Be honest in evaluating your home against others. Do you need a paint job? Is the bathroom outdated? How about the kitchen? What does your curb appeal look like compared to the others? Based on these answers you might need to be at the TOP of the price range. Alternatively, you may need to adjust your price down to compensate for any inadequacies.

What Your Home Value is NOT

It can be difficult to be objective (and that is where a professional can help), but you have to set aside your tastes and feelings. Here are a few things that the value of your home is NOT based on:

What You Paid for Your Home: It can be difficult and painful to accept this, but it does not matter what you paid for it. That goes both ways. If you bought your home for $349,900.00 and it all of the data suggests a list price of $299,900.00, then you are out of luck. The numbers don’t lie. The same is true in the opposite direction. For example, if you paid $299,900.00 and the data suggests $349,900 then you are going to make some money. So it doesn’t matter what your monthly payments are or anything else. Also, don’t let buyers negotiate you out of money by looking at what you paid for it!
What You Think of Your Home: Many of us love our homes and can’t understand why someone else wouldn’t feel the same. Often we build memories and we can’t help but be influenced by our emotions when thinking about our homes. You might love purple walls, but buyers will knock big bucks off their offer price to compensate for a professional painter.
What You Spent on Your Home: The THOUSANDS you’ve spent on repairs, window treatments or landscaping won’t influence the price in the minds of buyers. One debatable update is when people finish their basements. Sometimes we spend a lot of money down there and enjoy the finished space for years. One might think that should be worth SOMETHING. Right? Well, I have found that two identical homes, one with a finished basement and the other without, may sell for the same amount in the end. However, the home with the finished basement might sell a lot quicker!

For more tips on how to prepare your home to hit the market, contact me here or visit my YouTube page and subscribe to stay informed on the latest information about Michigan’s Real Estate Market.

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