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Beware the "Buy Your House Quick and Easy" Trap - Part 1

by Cynthia LaChapelle

Mr. Tan had received about 20 mail pieces before he finally called the phone number.  Someone seemed to want his rental property very much. 

  •          

  •           I Want to Buy Your House.  

  •           Sell with No Commission or Hassles. 

  •            I'll Buy Your House AS IS.  

 

These are some of the letters and post cards. It sounded like just what he needed  to cash out of the house he had bought in the 1980s for his parents. He originally went under contract in December to sell for $209,000, which seemed like a great price considering it needed work.  That was also a good bit above the tax value. The investor making the offer was with Citylink, a national company, which gave him assurance that they had the money and would close quickly as promised. But they did not. Actually, he soon saw his house posted for sale in the Multiple Listing Service (MLS) by an unfamiliar realtor for $224,000. Mr. Tan was surprised, because he was told that Citylink was buying the home. 

He contacted the original investor for answers, and the listing disappeared from the MLS. It "expired" after only 11 days on the market. (If listings are withdrawn, paperwork signed by the property owner must be filed with the MLS, but a listing can expire without ever submitting anything -even the original document - to MLS.) 

Then he told Mr. Tan that Citylink had decided not to buy the house. He said that he was very sorry and annoyed at the company that he purported to work for, so he was going to leave Citylink and try to help Mr. Tan under the name of his own company.  But he wouldn't be able to buy the house himself, because he didn't have the financial resources that the big company had.  

The investor put Mr. Tan's house under a new contract for sale at $175,000. Mr. Tan agreed to a $34,000 price drop. The financial noose was tightening. Since he had agreed to sell his house for a very attractive $209,000 with no fees or commissions, he had moved out his tenants and his mother. His house was no longer producing income, and he had to pay rent for his mother's apartment. 

The justification for the much lower price was that the company had hired an inspection which showing that the house needed a lot of work. This condition was obvious from the beginning, but now it was the pretext for lowering the price drastically. Mr. Tan was willing to do it, because he was now financially committed to selling the house. He had a new monthly burden, but he really had no idea what had already been done to the public records to force his sale without his knowledge and how far this would go.  

Read part 2 for more of the story 

If You Want to Do Anything in Real Estate, You Better Know the Rules

by Scheryl McDavid
Scheryl McDavid
Broker with LaChapelle Properties 

 

It’s an understatement to say that internet shopping has taken over the real estate industry. Who hasn’t used Zillow, Trulia or Redfin to find their next home or investment? So, my interest was definitely piqued when my mentor offered me her copy of Zillow Talk: The New Rules of Real Estate by Spencer Rascoff and Stan Humphries, who chronicle the rise of their powerful real estate search app and all the data that went into creating it. And that, my friends, is exactly what makes Zillow so useful, it’s the data. More than 3 terabytes of it (that’s one million million).

If you’re thinking about selling a house, here’re some pricing pointers from the book that you’ll want to keep in mind:

  • On average, sellers overprice their homes by 6.9%
  • When a home is overpriced, it tends to sell for less than market value
  • Overpriced homes can almost double the time it takes to sell them (often as long as 4 months!)
  • 47% of sellers end up cutting their list price to make a sale

Here’s the good news:

  • Houses priced at fair market value tend to sell for 2% above the asking price
  • Homes with “psychological” or strategic pricing — where you place a “9” in place of the last non-zero digit — may sell up to 4 days faster and for slightly more money than those with all zeros in the price ($299,900 vs. $300,000, for example)

Published in 2015, I think a number of Zillow’s findings are still relevant for our area today:

  • Negative equity reduces the housing supply; “under water” homeowners don’t sell when there’s no down payment for their next home
  • Low mortgage rates create higher demand because of easier financing
  • Both of these conditions create a market with fast-rising prices (North Hills, Raleigh, I’m looking at you)

 All this sounds a lot like another real estate bubble might be coming, so I appreciated, especially, the authors’ refusal to offer predictions of how the real estate market will perform following the 2008-2009 crash. Instead, they use an interesting quote from Donald Rumsfeld, “There are known knowns … there are known unknowns … But there are also unknown unknowns.” Rascoff and Humphries suggest that America has the data and the understanding to avoid another devastating bubble.

The main takeaway is this, read the data, understand the data, and get to know your area really, really well. And yes, even with Zillow, Trulia and Redfin in your pocket, this can be overwhelming. So, if you’re going to buy, sell or invest in real estate, get some help from a professional who can guide you and there will be a lot fewer unknown unknowns to hurt you.

Home Staging

by Cynthia LaChapelle

You may have heard that it doesn't take much effort to sell a house in this market these days. I've even heard other realtors say they don't bother to stage or prep a house for market. While you can get away without working at it, I don't think it serves the client. It’s commons sense that the house that has buyers fighting over it and generating a bidding war is going to go for a higher price than the one that people will settle for.

You don't have to go all out, and there is a perfect comfort level for every seller.  Some clients want to do whatever is necessary to get top dollar, some are willing to do only simple changes that will double their money or better, and some just want it sold without as little hassle as possible. I let them know what I recommend based on those desires. 

The idea isn't to present the house the way it's most comfortable to live. This is a show. We start with cleaning and decluttering. If you are moving out of town, you may want to get rid of a lot of possessions before you take the time and expense to pack and ship a lot of things. You can donate household items to charity and get a tax deduction. You can also box up things you won't need to use for a while along with some larger furniture that may make the rooms seem smaller, and put these in storage until your move. You will be happy you've done this in the period of time between contract acceptance and your closing date, because that is a little stress of your back during a fairly hectic time.

After I give my opinion, I bring in my Stager, Honey. (Yes, that her name and yes, she is very southern.) I pay her for one consultation, and we make the most of it. Since I've already gone through and given my advice and opinions she covers a lot in that session. If we haven't made a decision about repainting in some areas, she can help make that decision and which colors may work best with the carpet, tile, counters and things that can't be changed.

She picks items that need to stay and need to go. She goes through the closets and storage to find decor items that are just the thing to make a room pop. Best of, she is the queen of artful rearranging. She makes lovely scenes on walls and surfaces that were jumbles. 

I keep up with the trends in home styles and decor so that I can advise clients and market their homes. Colors to put a house on the market trending now are grays and beige. Both color families can work, and there is a hybrid,“GREYGE." Somehow these are both at the same time and tend to change as the light changes.

Some of Honey's current favorite colors are Accessible Beige, Silver Strand, Rainwashed, Quietude #6212, Agreeable Gray, Urbane Bronze, Sea Salt (Sherwin Williams Colors). 


I learned a trick of the easy way to pick the ceiling color. You don't want stark white ceilings, but you usually want a nearly white color.

(Remember this is to sell your house, not a design statement.)  Paint ceilings a 25% saturation of the wall color. You don't have to worry about finding the lightest possible color in the color chart that correlates to your wall color any more.

My next blog will have more on choosing colors and fixtures that drive the buyers to a bidding frenzy, especially what is cost efficient.

TREIA Presentation Invite & Info

by Cynthia LaChapelle

 

You're invited to a presentation!

Cynthia LaChapelle, has been a real estate broker since 1986, a TREIA (Triangle Real Estate Investors Association) board member for 12 years and past President. She is a also an investor, rehabber and landlord. After working with Century 21, Remax and Fonville Morisey, she opened her own brokerage in 2005. 

This landlord presentation will be an owner’s perspective of the following issues:

  • Criteria for acquiring buy and hold property in the Triangle area
  • Tips and tricks for choosing and managing tenants
  • Protecting yourself
  • Avoiding legal trouble

Cynthia also will share some of her forms that she uses as a landlord.

 

When: Thursday Oct. 27  11:30-1:30

Where: Prestownwood Country Club - 300 Prestonwood Parkway, Cary NC

Please register by noon Tues Oct. 25 for rate of : Cost $15 TREIA members, $30 guests

https://www.treia.com/Events.aspx?ID=Women-in-Real-Estate-WIRE-15-10-26-2017

Displaying blog entries 1-4 of 4