Real Estate Vocabulary

Radon – A radioactive gas formed by the natural breakdown of uranium.

Make sure to test for radon when buying a home, especially if the home has a basement. Radon comes form the ground, into the pores of the basement floor, French Drains, etc.  Radon is a colorless, odorless gas which has been proven to cause lung cancer, resulting in an estimated 20,000 deaths per year in the U.S. That’s the bad news.  Some people dispute these numbers. Some scientists claim the numbers are higher.

The good news is radon is cheap to test accurately ($100-$125) and is rather simple to eliminate ($1,500) with ventilation. Most newer homes have radon systems already in place.  Radon is know to be more prevalent in certain areas, but has at times little consistency from house-to-house, neighbor-to-neighbor.

Homes without basements will be too difficult  to test accurately, especially if occupied, with occupants opening windows and doors.  Most radon gets “trapped” in the basement area, making it easier to test for. Make sure to use more accurate testing measures, using machines, not canisters. Home Depot and Lowes also sell canisters, making it simple for consumers to do self-tests.

For more information, click here.  (Wikipedia)

http://www.epa.gov/radon/

Just Give Me the Address!

I received a web inquiry yesterday from a past client, and a great guy. He was very frustrated because the MLS section of my website (technically known as IDX, for Internet Data Exchange) was not giving him the address of the properties he was viewing.

I explained to him why this was happening, and that he was being blocked by the other broker, because they want to keep the address a secret, so you are forced to call in to their office. There is even one company whose policy it is not to give you the address unless you give them your name and phone number for “security reasons”. Unbelievable. They have a big sign outside the property,but won’t give me the address from their direct mailer.

The address of the property is the number 1 thing a buyer wants to know. Why? They want to know the neighborhood, and they want to drive by.  Price and taxes are believe it or not, distant second and third concerns.

As a home seller, I would insist that my broker published the address everywhere, so the buyer could drive by, not be hassled, and shop for their home on their own terms.

At Help-U-Sell, we publish the address of every listing on our website, our direct mail pieces and we freely give the address without hassle.

So, as a future home seller, you have 2 options: insist on your broker providing the address upfront, or list with a Help-U-Sell broker.

Detach Your Emotions When Selling Your Home

When a buyer buys a home, on average, they view 11 properties before choosing one to buy.  They compare size, condition, amenities, and most importantly, location. Many factors go into the home they ultimately chose, including price, value, and other intangibles.

When a seller sells a home, they first thing they do is compare their home to other recent sales in the neighborhood. Usually, not very objectively. Then, they stack up all of their expenses and upgrades and improvements and – here’s the worst part- maintenance.  They add those things up, add it to the sales price of the neighbor’s home, add another chunk for negotiability, there you have it, an asking price.

Now of course, this may be the stereotypical seller, and not indicative of all home owners, but this is not uncommon.

The worst thing a seller can do (yes, some day I will probably construct a post called “5 Biggest Seller Mistakes”) is overprice their home, from an emotional standpoint.

My suggestion?  It’s no longer your home. The day you put in on the market, it is a commodity. The babies you raised, the birthday parties, the wedding pictures, the holidays you celebrated there do not have any value to the buyer.  The extra insulation, the 2×6 (instead of 2×4) studs, the special paneling in the basement,  even- become somewhat irrelevant to the buyer. Detach your emotions, be objective, and price your commodity to sell.   Or let it expire with your broker and call me.

The Sub Prime Debacle

The latest big real estate news is the rising rate of foreclosures in our country. The latest-latest big news is how lenders are pulling commitments out from underneath buyers- sometimes hours before closing is to occur.   It is very unfortunate to see this happen, for obvious reasons.  Some pundits believe we have seen only the tip of the iceberg.  Here are my feelings about why this is happening:

1. Lenders are under tremendous scrutiny for approving marginal buyers- many of whom should not have been approved.
2. Many lenders have convinced buyers to get a 2nd mortgage, an “80-20” for 100% financing.
3. Many buyers have purchase homes way above their price range, then gone out and maxed out credit lines for new furniture, accessories, home improvements, etc.
4. Along the same lines, many buyers have bought what they “wanted”, not what they “needed”.  This case can be argued for days.
5. The adjustable rates on these ARMS have increased.
6. Over-zealous buyers are not finding their earnings increase as they had hoped.
7. Prices have dropped, leaving less equity for homeowners. This is where Help-U-Sell does their best work, since our fee is much less than a 6% fee.

Sub prime is a term for buyers with less than great credit.  If you are not sub prime buyers, make sure to keep it that way.  Make sure to work with a credible lender, and perhaps get counseling before you buy from an accountant, a financial planner, and a good real estate agent.  Plan before you go shopping!

Why Newspapers are Doomed

Since I was a little boy, I loved getting up every morning and reading the newspaper. For the past 30+ years, I have been in the habit of buying a local paper, or when on vacation, USA Today or The Boston Globe or whatever.

During the last year or so, however, like many of you, I find myself buying the paper less and less.  And then I got to thinking. And then I did some research. Here are some random facts and thoughts:

1. Every year for the last 17 years, newspaper sales have gone down nationally, even though our population has pierced the 300 million mark.  17 years ago, the internet was not a common household term, and gave it no competition.
2. Newspaper ad space keeps going up, every single year, making the cost versus benefit counter productive.  A full page in the Sunday Times of Trenton for a Realtor is approximately $7,000.  Ouch.
3. Newspaper ads typically account for about 3% of all inquiries into a real estate office. Even less turn into sales.  Why? 1) Too much clutter.  2) Its not how people shop anymore. 3) Extremely limited information. 4) 80+% of all buyers now start their home search on the web.
4. I have less time now than ever to sit down and read all of the paper, making it a waste of time to buy it in the first place.  Then when I do read it, the murders, rapes, child abandonment stories and the like are not how I prefer to begin my day. On the web, I can pick and choose which stories I am interested in. FREE.
5. Everything in the newspaper can be had, for free, on the internet and TV.  With color photos, video, charts, graphs, etc.  In real estate, a buyer can visit my website and get the address of the property, a virtual tour, photos, learn of the next open house, see the floor plan…you get the idea.
6. I don’t trust (all) people who write articles in the newspaper.  Have you ever read an article about something you witnessed, like a sporting event, or in your area of expertise?  Enough said.
7. Many of us, but especially Generation X&Y, want to be stimulated with video, color, interactivity.  Not newsprint.
8. Newspapers, while recycled very efficiently, still are the #1 contributor to landfills.
9. Most newspapers are known for making numerous mistakes to Realtor ad copy. Once printed, too late.
10. Most people at newspapers seem to have arrogance, knowing they are one of the only games in town. Trudy Holzbaur at The Times of Trenton is the rare exception.

I fully expect 90% of newspapers to be extinct within 7 years.  The NY Times, LA Times, USA Today and some tiny independents will somehow figure out how to stay relevant and profitable.

Real Estate Vocabulary

Flashing – Metal strips placed around roof openings to provide water tightness.

Typically you can find flashing around chimneys, vent pipes, and where corners meet. When I purchased my new home 14 years ago, we had some leaks around the flashing area, which the builder needed to come and fix. This should be one of the first places you look if you have a leak. 

Agents Showing a Lack of Courtesy

At my office when an agent from another company wishes to show my listing, the agent calls a toll-free number, and the  professional appointment center takes their call. Typically, the agent name is already in their database from having shown properties in the past. Many brokers  (not all) use this same service.

After the showing, the agent is immediately sent an email regarding feedback for the seller. This email is sent for me, automatically, from the appointment center.

My gripe?  All the agent has to do is respond to the email. It takes about 20 seconds, and then I can forward the email, or call my client with the proper feedback. This, of course, allows me and my seller to make adjustments to get the listing sold.

About 1/3 of all agents respond.

Why I Love Audio Books

I am a poor reader.  My friend, K.C., calls me “ADD Boy”.  I get distracted by noise easily when I try to read.  And dogs. And kids. And the urge to sleep.  I am forcing myself to get through a book right now which is actually quite entertaining- slow in parts- but a great book nonetheless, The Tipping Point, by Malcolm Gladwell. He is a genius.  It has been on my night stand for exactly 12 months now, and I am forcing the last 20+ pages down like my Mother’s hamburger-cabbage soup.  (She doesn’t read this)

Anyway, my business coach suggested I read more in order to keep my brain sharp, my attitude crisp and to feed my internal thirst for knowledge and growth. When I told her I was a poor reader, she told me to go Amazon.com or wherever and get some books on CD.   I quickly remembered my old audio cassette collection of Brian Tracy, Earl Nightingale and others, many who have given me a better education than any college ever could.  With that, I went on a CD spending spree.

A couple hundred dollars later, I was on my way to building a CD Library.  Since all new music sucks, (a true sign of getting old) and I can only listen to so much ESPN Radio, this new ambition makes a lot of sense. Having a 20 minute drive to and from work, and quite often fining myself in my car going to appointments, I have been able to listen to 8 books now in the last 7 weeks.  The likes of Seth Godin, Jeffrey Fox, Michael Gerber, and yes, Brian Tracy, are now in my new library.

What does this have to do with real estate?  Godin (Marketing), Fox (Sales), Gerber (Business Management) and Tracy (Goals) are all considered experts in their field. The cool thing is that the more is listen, the more I want. Just the opposite of Mom’s soup.

Vacant Homes Info…Did You Know?

 

It just occurred to me today that when planning this post that 29% of my active listings (not yet sold) are vacant.  Wow!  I am rather embarrassed to admit that I had no idea the percentage was that high.  This brings me to the point of this short but very important post:

Vacant homes need special insurance coverage due to the fact that they are not insured against:

1. Vandalism.
2. Broken (frozen) pipes.

Though the chances of pipes freezing are slim now that we are approaching the warmer weather season, you surely need to be protected against vandalism.  Linda at Nottingham Insurance handles vacant homes insurance, and she is very nice and can be reached at (609) 587-1600.

Certificate of Occupancy: What’s the Point?

 

Most towns, like Hamilton Township, require a municipal inspection before a homeowner sells or rents a property.  In Hamilton, this is known as a Certificate of Approval for Occupancy.  Most folks just call it a C.O. 

This process is an often confused and talked about subject amongst neighbors and family.  More often than not, the inspectors get a bad name for being “too hard” on the homeowner.  In Hamilton, I think I am one of the few who believe they are just doing their job. The C.O. inspection typically takes 15-20 minutes. It is not to be confused with a private home inspection, which can last beyond 3 hours, and pours over every detail of the house.  The main point to the Certificate of Occupancy inspection is to make sure:

1. The property meets State and Municipal guidelines for safety, including:  smoke detectors, carbon monoxide detectors, fire extinguisher, handrails, operable heat, leaky roofs and basements, electrical hazards and more.
2. To ensure that sellers have satisfied requirements for permits so improvements may be inspected for safety.  Be honest with your inspector and get these permits taken care of ASAP, as they could significantly delay closing.
3. Neighborhood aesthetics.

What I like about Hamilton and Trenton inspectors is they allow the seller to have the property inspected before a buyer has been found for the property.  In Hamilton, the inspection office has sent letters to Realtors encouraging them to do just that, in order to avoid potential closing delays. This is always a good idea, and a practice of ours at Help-U-Sell.  The time frame for your town to schedule your initial inspection can be as long as 5 weeks in some towns.

A common misconception is that the report is confidential, and the buyer has no right to it.  This is not true. It is public record. Many agents have been chastised by homeowners for sharing this report with the buyer. Many buyers will compare the C.O. report to their private home inspection.

Some homeowners prefer to sell their home “as is”, having the buyer assume all violations. This is usually not a good idea, as most buyers expect thousands in credit for hundreds of cost and labor.

So, if selling your home in Hamilton or Trenton, I highly recommend you have your inspection done as soon as possible. In Hamilton, the report is good for 9 months.  After the property has been re-inspected and a C.O. has been issued, it is good for 6 more months.