Question: “I’ve never sold my house before. Why is it frowned upon to be present when potential buyers are looking?”

Bottomline: You might say something that impacts the sale – almost always negatively.

The buyers can’t, don’t or won’t start to think of the house as something they could live in if the owner is there.  As the seller you want a prospective buyer to think of themselves living there.  They can’t do that when they see you, Mr or Ms. Seller, watching every move they make.

Seriously, now, just reverse the situation.  Would you want an owner there as you walk through a house?  Doesn’t that just feel a bit creepy?

You want them to be able to freely talk about your choices – paint colors, decorating choices, wallpaper, etc.  How poorly designed the kitchen it for them, that the bathroom may need to be remodeled. All of these things were great for you, but it may not be for them. You want them to be comfortable discussing these things with their realtor and between themselves. If they can work out what they would do with your house to make it better for them, they might buy your house They won’t discuss those things if you are there.

Besides, anything you hear could make you become defensive and say something you shouldn’t say or start to think twice about the entire process.  It places added and undo stress upon you, your real estate agent and can cause an unpleasant and uncomfortable experience for the buyer.

You, the seller, want the potential buyers to start thinking about how their furniture will fit in your house, how they might use the extra room up front, how their child would have fun in the new playset in the back yard.

The buyers don’t want to hear the stories about your kids, your family,  your experiences in the house or the latest upgrade you made and how much it cost you to do so.  They have a tough time imagining themselves there as it is anyway … make it easy for them.

Honestly, sellers, in their eagerness to try and get their home sold, just don’t know when to remain quiet.  In a desire to be helpful and because you’re proud of your home they want to highlight or amplify what they think is important or what matters but that may not at all be what the potential buyer cares about.

So all you, the seller, have now done is pushed the buyer away instead of drawing them in, which is the exact opposite of what you were trying to do.

Ok, here are a few more reasons why not to be present during the showing of your own home….

1) People are very judgmental.  You may be having a bad day, not looking your best, etc.  They will judge you just by the color of your socks or the way you wear your hair that day.

2 ) Buyer’s will pick you apart and play you like a fiddle, trying to find any reason why NOT to buy your home or any reason to negotiate you down off the price. And remember a buyer’s agent is not your friend!  They work for their client not for you.  If you as a seller want to tip your hand and give away information that can harm you in a negotiation then by all means …. So anything you say can and will be used against you!

3) Most people who have expensive homes don’t hesitate to let their homes be shown without being present, but people with the less pricey homes sometimes act like their house is the last houses on earth.  My job as an agent is to walk thru with my client but people are not there to rifle through your belongings.  They are just going to walk through the house and try to imagine themselves living there

• The buyers don’t want to see you because they want to discuss the home freely without the sellers being present. Your presence makes you look desperate and makes the buyers uncomfortable.

Trust your realtor and their realtor. Let them do their jobs.

If you must be there, just be there for a moment to meet, greet and go!  Let them in and go run errands or go grocery shopping. Let them know to take their time.  And oh yeah, pen up your animals and take them with you!

**Ryan Wheeler is an expert real estate agent and military veteran serving buyers and sellers of homes in the Shreveport-Bossier City area.  Connect With Me Here

A lot of this should be taken care of by your Realtor as part of the purchase process. But sometimes things get overlooked or there’s confusion if you haven’t done something before. So here are some important tips to be mindful of:

1. Make sure you get a good home inspector. Do whatever it takes. Double-check with your Realtor that they have an inspector that finds all kinds of things. It’s better to get a depressing report that lists every teeny item than to have them miss anything. Do not wait until you close for looking for damage! If you do, then you’re stuck paying for it and fixing it yourself. When you find issues (like, say, water damage or termites), then you include it in the negotiations to either lower the price or to have the seller fix the issue at their expense. If, instead, you wait until it’s too late and check on your own, or check after closing, then you have to handle all the repairs at your own expense and on your own. It’s the inspector’s job to find almost every single thing that could be a problem in a house you’re buying. This includes things like:

-Water damage. (Unless it’s hidden by something permanent, like drywall. Even if it’s been painted over or covered with carpet, a good inspector will know what to look for.)

-WDO (Wood Destroying Organism) damage or any signs of WDOs. There’s a number of ’em out there and a good inspector will see signs of any of them and any damage done by them.

-Pests in general, such as rodents and insects. Even snakes. (Yes, sometimes snakes find their way into homes and live in the crawlspace or attic.)

-Mechanical issues. They should start up the HVAC system and test it to be sure it’ll heat and cool and that it’s all working properly. If you’re on a well, or have septic, they’ll check what they can, but you can never really be sure if the septic is about to be an issue.

-Roofing issues and leaks.

Possible indications of upgrades or renovations that were not done to code. (Sometimes this stuff is hidden by drywall, but they’ll find what they can.)

2. Be sure you have a thorough title search. Every now and then I’ve heard of a property changing hands without a full title search. This process is done by the Title company, but make sure a thorough title search has been done. The biggest thing is to make sure there is no tax lien or dispute of ownership.

3. Be sure to plan out the items that are easier to be done before moving in. For instance, if you want to paint all the interior (not uncommon!) then it’s probably easier to do that before you move in and start thinking about decorating. If you want to start getting stuff in the house, paint the bathroom and the largest room (or rooms). Then you can move the bed and some clothes in and put everything else in the big rooms while the rest of the house is painted.

4. Call Zoning and Planning. If you want to put any additions on, at all, even 10 years down the line, call Z & P before making your offer on it. Give them the address and let them look it up. Find out if there are issues with setbacks, wetlands, flood plains, or zoning regulations that would keep you from doing any additions or renovations you would want to do in the future.

5. Check on any HoAs or if there are any covenants. If there are any, the owner should know and inform you about them, but a good title search will help if, for some reason, they don’t tell you about them.  This is also something your real estate ageent will know.  Some HoAs are okay, but some are basically like neighborhood nazis who can make living in an area miserable. (I’ve read about people getting fines and complaints for having multiple vehicles parked in the driveway and out front while they were moving into the house!) Also check for covenants. I’ve seen covenants in deeds even without an HoA. One specified that only one single family dwelling could ever be built on a lot. Others were restricting auxiliary buildings (like tool sheds or a detached garage).

6. Check the crime rate. Call the county or city Sheriff’s Department and talk with a deputy or someone else who can tell you about how safe the neighborhood is.  Sometimes a county or city will have that data available on their own website, so you can see what kind of police and fire calls have been called in from that area.

7. Bonus: Always check with zoning for future development. If the county has a GIS (Geographical Information Services) website, find it and go there. Check for future plans. When we were looking for land, we found several properties that looked wonderful – until we looked them up on the county GIS. It turned out they were in or near the path of a future planned highway.

While it doesn’t happen often, you don’t want to buy a house and find out later that your quiet neighborhood will be split by a highway or by something else that’s being planned and is public record but which you didn’t know about. In many cases planned projects are on the county/city GIS website, but Zoning and Planning should always know about these issues.  I know this sounds like #4, but it’s more. One is checking to be sure you can make any renovations or additions. This issue is the kind of thing that even the people in Z & P will often not think about unless you specifically ask them to check on. Also, when I mention floodplains and wetlands zones, that applies mostly to new construction, but if your house was built before some regulations and is grandfathered in, it’s possible the house could be in the floodplain. While that’s a problem in itself, it could impact what you can do in the yard and with the house in the future.

Amassing a 20 percent down payment — or any sizable downpayment, for that matter — is difficult for most people. Saving money in general is difficult for most.

While a large downpayment can convey benefits (smaller loan balance, lower interest cost over time, no mortgage insurance premiums) the reality is that most borrowers are chasing the ever-moving goalposts, and the larger the percentage, the harder it can be to reach them.

By way of example, lets say that homes in your market are selling for $200,000. We’ll compare two borrowers — one who waits to accumulate a 20 percent down payment and one who buys with just 5 percent down.

A wannabe homebuyer starts to save money to amass a down payment. A goal of 20 percent is set, so the borrower needs to save up $40,000 in cash.

Even with diligent savings, accumulating $40,000 in cash will take some time. For our purposes, let’s say this takes two years. Great! Now they’re ready to look for a home.  But wait!  Home prices have risen by 5 percent in the first year (to $210,000) and have risen another 5 percent the second year, so the $200,000 homes they hoped to buy are now selling for $220,500. To maintain that 20 percent down payment figure, the potential homebuyer will have to bank another $4,100. This could delay purchasing again for a while, another couple of months at least.

Now consider someone who is only looking to make a minimum down payment — just to get a foot in the door, so to speak. While 3 percent down options are available, they shoot for 5 percent. As above, homes are selling for $200,000 and making a 5 percent down payment means amassing $10,000 in cash. In the same example of saving as above, this potential borrower was saving $1,666.66 per month; this means only six months of cash accumulation before they can move into the market to buy a home. As above, prices have moved upward a bit… but over this 6 month period, perhaps just 2.5 percent. This means they need additional savings of only $250 to cover the difference — or less than one week’s additional cash accumulation.

Let’s look at some additional figures, too. The buyer who waited to buy purchases a home for $220,500, and with 20 percent down, the home has a mortgage of $176,400 and no Private Mortgage Insurance (PMI). At a 4 percent rate, and with a 30-year term, this translates into a principal and interest payment of $842.16 per month.

The buyer who did not wait to buy purchases a home for $205,000 (that’s $200,000 appreciated by 2.5 percent over a six-month period). With 5 percent down, this leaves a mortgage amount of $194,750; with a 4 percent interest rate and a 30-year term as above, this would see a principal and interest payment of $929.77 plus an additional PMI payment of $95.75 per month for a borrower with very good credit, for a total payment of $1,025.52 per month.

So the borrower who bought sooner with a smaller down payment has higher costs. However, there are some compensating factors to consider.

To start with, the borrower who bought sooner has experienced some beneficial price inflation. Over the 18 month differential (when compared against the borrower who waited) the original purchase price of $205,000 has now moved up to a value of $220,631.25; coupled this with 18 months of paying down the loan balance ($189,552.34 after 18 months), this borrower’s equity stake has risen from 5 percent to about 14 percent (expanding from an original $5,250 to a current $31,078.91). It may only be a few additional months before they are eligible to cancel the PMI (generally this is a minimum of 24 months must pass before the lender will consider cancellation). When this occurs, their monthly payment will drop back to just $929.77, so their initially substantially higher costs end up only about $87 per month more than the buyer who waited. (We might recommend using the former $95.75 PMI payment as a monthly prepayment, which would produce tremendous additional interest savings over time).

Buying a home with a smaller down payment does have its costs, as demonstrated above. All other things being equal, a higher loan amount will carry higher monthly payments and total interest costs than will a smaller loan. The higher loan amount means that the borrower with the smaller down payment needs to have higher income to qualify, especially when PMI costs are considered, as they will be. That said, buying sooner means that the process of equity building can start sooner, and this is especially the case if home prices are rising strongly, as they have been in many markets for the last few years.

Of course, waiting to buy can have its costs, too. The opportunism provided by a smaller down payment means that a potential homebuyer can move more quickly to take advantage when a desirable property comes on the market; the borrower waiting for an arbitrarily higher down payment may miss this chance. If we consider these homebuyers to be first-time buyers, looking for starter homes already in short supply, it may be that the buyer who waits may have little to buy — or could possibly even be paying a premium to the buyer who bought sooner and may already be selling and moving up.

One additional caveat — wildcard, actually — is interest rates. While low and fairly stable in recent years, there is no certainty or guaranty that they will be the same in two years as they are today; in fact, it’s a good bet that they will be different. How much different is unknown, but even if the borrower who waited sees rates of only a half percentage point higher, the cost difference between the choices narrows considerably (especially after the PMI cost for the 5 percent down borrower is eliminated).

Pricing Your Home Too High

• By far, the worst home selling mistake a seller can make is hanging the wrong price tag on a home. If the home is priced too high, buyers won’t look at it. If it’s priced too low, sellers worry that they’ll give away profits.
• If the home is overpriced, buyers might submit lowball offers, which tend to result in an immediate offer rejection. These extremely low offers tend to infuriate and insult sellers.

Home Is in Bad Condition

• Getting your house ready for market goes beyond making the beds and washing dirty dishes. Although I’ve seen plenty of homes with toys scattered throughout and dishes piled in the sink; buyers can’t get out of those homes fast enough.
• Dressing your home for showings is called staging a home. Think of the process like arranging flowers in an attractive vase. If you or your agent lack the vision or ability to stage, consider hiring a professional home stager.

Trying to sell it yourself

• Statistics don’t lie.  89% of all “For Sale Buy Owner” attempts end up calling a Realtor for help.  Why?  Because they don’t have requisite expertise, knowledge or systems in place to properly market, advertise, engage or engage with a buyer.  Not to mention no experience with setting the right price, negotiating, figuring out all the paperwork, staying in compliance with local laws, etc.  FSBO homes usually are people that don’t know what they are doing and can lose big in the end.  Walking over dollars just to save dimes is never the best choice.

Home Is Marketed Wrong

• Whenever I see a badly shot photograph in MLS, and perhaps it’s the only photo, I want to shake the agent and scream, “What are you thinking?” But agents and sellers make plenty of marketing mistakes.
• Before selling your home you still need to examine your local and neighboring communities housing market statistics. If you live in a high-demanded area for tourists, executives or that has prime real estate value in terms of worth then your outlook could be better than a neighboring community that has 1/3 of their properties on the market, and has for the last 6 months.

Not disclosing problems or past history of your home

When selling your home don’t try to keep the home’s past history a secret. A home inspector could locate the problem(s) later into negotiations or the past history could affect the safety of the future homeowners. Be honest and take care of all repairs before attempting to sell your home.  The buyer could always sue you as well if you kept pertinent information to yourself.  Honestly is always the best policy.

Ignoring your Realtor’s advice.

If you’ve chosen correctly, your Realtor should be the one person you really listen to when it comes to strategies for selling your home quickly and for the best price. If they tell you that the home needs to be de-cluttered or staged, listen. Buyers react negatively to homes that need repairs or are messy.

1.  The advice your uncle gave you is not always the best

Be careful about following the guidance of family and friends who have limited experience in the process.  Having bought a home once every 5+ years does not qualify them as an expert.  Your agent does this every day so perhaps their advice is more timely and knowledgeable?  What other professional service would you allow family and friends to give you?  Legal, medical, business advice?  Likely not … treat this the same way.

2. Take the time to “sniff” out any issues with the property

Look and smell for mold as well as animal-related odors. Knock on walls to see if they sound hollow. Open the dryer and the dishwasher – you never know if pests are living in there. Does the toilet flush properly? Does the heating/air-conditioning work? Is the flue functioning above the fireplace? Is the water pressure okay?

3. Work with experienced professionals

Hire the most thorough, licensed home inspector you can find to pinpoint any issues that could potentially end up becoming costly repairs.  Your agent can help you find a great professional.

4. Use your head, not your heart

Don’t be afraid to walk away from a bad deal. There will be other properties, maybe even better ones. Remember that this is a financial transaction and that your terms must be met.  In order to get your best deal you must be willing to walk away.

5. Negotiate as much as you can … but be careful

Your agent will be doing the negotiating for you, so make sure you tell them what it is you are willing to concede and what you aren’t.  Just remember, there is a fine line between being a hard negotiator and being unreasonable.  Pushing to hard can (and does) sink deals with sellers.  Just be aware … and listen to your agent’s advice

6. Gardens and yards are work

Almost everyone likes the idea of having a garden, but if you’re not used to maintaining one, you might want to think twice about whether you want to spend your weekends weeding and mowing the lawn.

7. Buy property you can afford now, not later

Even if you’re pretty certain that you’ll be earning more in a year or two, you might also find that circumstances increase the other expenses in your life. Children, schools, new cars and travel plans are substantial costs. Make sure there will be room in your budget for you to live the life you want.

8. The search can take longer than you think

Don’t operate on someone else’s timeline and don’t make commitments that will make things challenging if your property hunt takes a few months longer than you anticipated. If you’re renting, stay on a month-to-month agreement so that you are able to move without penalty.

**Ryan Wheeler is an expert real estate agent and military veteran serving buyers and sellers of homes in the Shreveport Bossier City area.  Connect With Me Here