You Never Get a Second Chance to Make a First Impression
Today’s real estate inventory in the greater Albuquerque area is the highest it’s been in the past ten years. Sellers are experiencing the inconvenience of having their perfectly-good homes on the market for longer than anticipated. Builders are offering various deep-pocket incentives to buyers. Speculative investments have curbed below previous years’ levels.
If you are selling or are planning to sell your residence, there is no time like the present to sharpen your competitive edge. Today’s type of marketplace is an excellent time for buyers to buy! Just as you would, these buyers are navigating right past the overpriced homes and then choosing to make an offer on the one that is presented best.
Have you ever visited a model home and thought about just how tempting it is to live in that floor plan? If so, this is certainly no coincidence. The home has been professionally staged and presented to encourage this outcome. Nest to correct pricing, the best thing you can do to sell your home is presentation.
People buy homes every month in all price ranges. Even when it is a buyer’s market, your home could be classified as a seller’s market home and even receive multiple offers if it is priced and presented properly. Consider the following factors when preparing your home for sale:
• Sharp Curb Appeal: Whether a prospective buyer finds your home online or bumps into the “For Sale” sign when driving down your street, the exterior front of the home will leave a lasting impression. A well-manicured exterior is usually a sign of a well-manicured interior. A home with overgrown weeds, non-edged flower beds or lawns, chipping paint, a dented garage door, or tired-looking stucco is likely an indicator that the inside is maintained in a similar fashion. Additionally, the main photo you or your real estate professional uses to market your home online and on flyers is usually the exterior front photo. Make somebody want to come inside!
• Delight the senses: The five senses include seeing, hearing, smelling, feeling, and tasting. Buyers will see your home upon touring it. Visually enhance it with tasteful décor, updated features, clean (i.e. little to no clutter) and sanitary surfaces, and no signs of deferred maintenance. Leaving easy-listening music on a very low volume inside will likely soften the atmosphere thus encouraging your prospective buyers to relax and really absorb the atmosphere your home offers. Pleasant aromas are welcoming, unpleasant aromas are offensive. Both will leave an impression and increase memory – make sure you leave a pleasant one! The sense of feeling mainly targets the home’s temperature. Keep it not too cold, not too hot so that a buyer will want to stay to look around. Taste should only be used in the form of cold waters or light hors d’oeuvres and is most important for events such as open houses. Once all of these are tweaked to perfection, the goal result is for the buyer to feel an emotional connection or sixth sense that your home is the best one for them.
If you make a conscious and successful effort to present your home well, you will rise above the competing properties and reach your objective! Contact a local real estate professional for a customized consultation regarding what you can do to make your home most marketable.
Do you want your home on the market, or do you want it sold?
The real estate market in Rio Rancho has changed in the past year. Overall real estate values have not dropped; yet are not rising fast. Understandably so, sellers remain persistent on receiving top dollar for their properties. Equilaterally, buyers want to get the best value possible.
Public news surrounding Rio Rancho continues to make it a speculative area. Positive news includes: Rio Rancho being ranked as one of the fastest-growing cities in the US, the Albuquerque area forecasted as the strongest real estate market in the nation for 2007, Lion’s Gate studios opening a new filming studio, and the University of New Mexico building a new campus here. Less than desirable spreading news I’ve heard is an overstock of investment homes on the market increasing supply/decreasing demand and our city’s largest employer, Intel, laying off around 1,000 positions by the end of the year.
The real truth of our real estate market is unknown; predicting it can be compared to predicting the stock market. Nobody knows for sure. It is purely my opinion as a Rio Rancho real estate expert that our market will get healthier with time, that the positives will outweigh the negatives.
These factors definitely all affect you if you are selling your Rio Rancho home today. We were blessed to achieve phenomenal growth in property values in recent years, but remember that these results are not typical.
With so many homes on the market, pricing and building value through pricing will be the difference between having your house on the market and getting it sold. I highly recommend you contact at least two real estate sales licensees to help with your homework since they will provide an objective opinion whereas yours alone may be tainted. They will research in depth what similar homes in similar areas have recently sold for which will establish a range where yours should be priced. For obvious reasons, this research should be based on what has recently sold, not what is now actively for sale. Homes on the market will be taken into account only if the market were increasing or decreasing dramatically – overall not today’s marketplace. Negative elements that may or may not be in your control such as being adjacent to a poorly-maintained home, pet or smoking odors, or having outdated features will bring your value to the lower end of this range while positive factors such as lush outdoor living in groomed landscaping, upscale features (compared to the average in the neighborhood), and an overall tasteful presentation will bring your home to the higher end of this range. Throughout the process, keep in mind to be honest with yourself regarding your home’s marketability. Drive around to view other homes for sale to make sure that yours would create value in your eyes in comparison to the competition if you were the buyer.
With today’s buyer looking for the best value available, creating value is the greatest competitive edge you can have. This alone will create the outcome to the question “Do you want your home on the market or do you want it sold?”
Exceptions to the Capital Gains Rule
If you are planning to sell your principal residence, you probably know that the IRS will allow you to keep significant tax-free profit from the sale – $500,000 for a married couple and $250,000 for individuals – as long as you have lived in the house for at least 24 months during the 5 years prior to the sale. However, you may be obliged to sell before you meet the 2-year residency requirement. How will this affect your tax liability? Will you be able to claim any capital gains tax exclusions?
The law allows you to prorate a portion of the tax exclusion if you can convince the IRS that the sale of your home is due to “unforeseen circumstances.” The IRS has prepared guidelines for what they call “safe harbors”, meaning factual circumstances proving that your primary reason for selling the home is a job change, a health crisis or other unforeseen events.
The IRS outlines a number of factors that can qualify you as a taxpayer for the partial exemption. These may include you or your spouse having an injury, disease or illness that required you to sell the property in order to pay for diagnosis or treatment. If your doctor recommends a change of climate for health reasons, that is considered a qualification. If the taxpayer merely decides they would prefer to move to a warmer climate, that is NOT considered a qualification.
Divorce or legal separation, loss of employment leading to eligibility for unemployment income, change in employment status leading to the inability to maintain housing payments and expenses, multiple births from the same pregnancy and death of the homeowner, spouse or co-owner qualify as unforeseen circumstances. Military duty, including overseas posting of the military homeowner for extended periods of time, entitles the taxpaying homeowner to an exemption. Likewise, so do acts of war, natural disasters (such as a devastating hurricane, tornado, earthquake or flood) or the involuntary sale of your home to make room for government-sanctioned use of your property.
If your situation falls under one of these descriptions, and you have owned and lived in your home since you purchased it and during the time when the “qualifying events” occurred, you will be eligible for the partial exemption of capital gains tax. The law applies to all types of residences, including single-family detached homes, condominiums, and apartments.
The partial exclusion is based on the number of days you have lived in the home, times the standard exclusion ($500,000 or $250,000) divided by 730 days (2 years.) For example, if you are a married couple filing jointly who have lived in the home for 6 months or 182 days, you may keep approximately ¼ of the standard exclusion, or about $124,650. The amount of the partial exclusion for single taxpayers is calculated using the standard quotient of $250,000. Consult a tax professional for detailed advice about your particular circumstance.
A Dozen Ways to Make Your Home Show Better
We all have had the experience of someone important coming to the house, and whether the visitor is an in-law, old friend, or business associate you know the drill: Have the house in "show" condition.
For home sellers the situation is much the same: First impressions count and while you may not be able to tell a book by its cover, you'll likely pay more for a book if the cover is inviting, alluring and attractive.
If your home is for sale or soon to be for sale, in addition to a general cleaning there are 12 steps you can take to benefit from that all-important first look:
1. Start with the outside. Mow the law, prune bushes, remove dead branches and get rid of outdoor furniture you don't intend to move. You may consider placing a few potted plants with bright color, seasonal flowers at the entrance. First impressions matter! If a buyer does not like what they see from the driveway, they may not even want to get out of the car. Create a welcoming environment.
2. Paint the front door and lintels, or at least clean them up. Sweep the front entrance. Throw away a worn welcome mat and replace with a new one if possible. Make sure exterior lights are in working order.
3. Check for leaks. A drip may not seem important, but does it suggest poor maintenance in places which can't be seen? Eliminate buyer worries and fix the little items which may be seen as clues relating to the general condition of the home. Eliminate “inspection worries” now by having an inspection early on.
4. Clean out & organize closets and storage areas. De-clutter! Donate old clothes, books, magazines and furniture to local charities. This will create a sense of greater space, mean less to move, and may provide you with a tax write off. .
5. Have a professional service clean your carpets. This is especially important if the carpets are to stay.
6. Caulk around tubs and sinks. New caulk invariably looks better than old caulk, and you'll also prevent leaks. Ensure that all sinks, toilets, and bathtubs are clean and tidy.
7. Replace bulbs that don't work and use as much wattage as is appropriate for each fixture. Bright lights make homes seem, well, light and airy. Open the blinds or curtains to create an open and clean feeling, especially during the day in areas which get a lot of sunshine. Clean windows if necessary.
8. “Appeal to the masses.” It’s not often that you find another person who enjoys green walls and a blue carpet. If this describes your home and you want it sold quicker, then go neutral. If you have any brightly colored walls or carpeting, consider painting or replacing now. Typically a buyer does not want to move into a home which needs renovation. Leave no excuse for lower offers. White or light tan colors work wonders!
9. Is there anything in the house that will surprise visitors? As an example, mirrors in poorly-lit basements can be dangerous. Ensure that carpets are free of kinks and trip hazards. Look at the property from the perspective of a first-time visitor. Things which are known to you may be uncomfortable to visitors.
10. Clean out medicine cabinets. Remove out-of-date items. Also, if you have prescription medicines, consider removing them when buyers visit.
11. People have both allergies and concerns when it comes to animals. If you have a pet, make arrangements to have it elsewhere when a home is being shown. Be wary of strongly scented air fresheners which may be a nuisance to some. Strive for an odor free, clean smelling home. Think “new car” scent. Open windows when home to keep the air smelling fresh. Use light scents such as vanilla if needed. Fresh baked cookies before an open house is a please all. Smokers: Outside is the place to be.
12. Homes in a given location and price range battle for a common pool of buyers. Ask your broker to examine the property for specific showing tips to make your home more competitive so that it will stand out from the others. Happy showing!
What Homebuyers Want
Sellers, it is time to polish your presentation if you intend to sell your residential property in today’s changing market. With increasing inventories of unsold homes and the softening of real estate activity in many areas, you will probably be facing greater competition in the marketplace. Knowing what buyers want will greatly improve your chances of making a profitable sale.
Buyers want reasonable asking prices. Gone are the days of multiple offers on overpriced homes, with desperate buyers waiving appraisals, contingencies and inspections in an attempt to win a bidding war. Get professional opinions of the current market value of your home before establishing your asking price. Ask your real estate agent to conduct a comparative market analysis (CMA), evaluating the selling price of nearby properties with similar features and square footage. Also keep in mind that just because the house next door to yours got one price, this does not necessarily mean that there is another buyer out there willing to pay the same for your home. If your agent agrees it is necessary, hire an independent appraiser to establish an objective opinion of value.
Buyers want quality and dependability. With economic conditions in transition, homebuyers are looking for home construction, features and finishing that can withstand the test of time. Classic designs that have proven their popularity tend to be more in demand when market conditions are unpredictable. For example, bamboo and oak flooring and custom-designed kitchen cabinets made of durable fine woods add significantly to a home’s buyer appeal. Neutral wall colors sell better than trendy designer tints or wild wallpaper, because buyers find it easier to visualize their furniture against a neutral backdrop.
Buyers want amenities that offer comfort and convenience. Homes that provide ways to pamper the homeowner are exceptionally attractive. Examples include master suites with his and her bathrooms (or at least his and her sinks), soaking tubs and rainforest showers, private exercise rooms and well-organized walk-in closets. Buyers appreciate homes that have high-speed Internet wiring and multiple phone lines for personal computers and home offices. Amenities that set your home apart from the ordinary will catch the attention of buyers.
Buyers want to work with savvy sellers. During the past several years, homebuyers were at a disadvantage in the hot seller’s markets that dominated Rio Rancho’s real estate climate. They had to study local market conditions, pay attention to economic trends, watch the mortgage interest rates and work intensively with their real estate agents to beat the competition for homes. Such well-informed buyers will not be eager to purchase property from a seller who is out of touch. They will prefer to work with sellers who know what their home is worth, list a property in top showing condition and are willing to give concessions to the buyer when negotiating the terms of the purchase agreement.
Ask your agent for feedback from buyers who visit your home. Selling your home could require you to invest in upgrades or cosmetic improvements such as new carpet, paint, lighting fixtures or hardware. Your real estate agent may suggest deep cleaning, home staging or replacing window coverings. It might take more effort than you anticipated, but placing your home above the competition will help secure the sale.
Standing Out Among the Crowd
How do you get real estate agents and buyers to notice your home in the midst of an accumulating number of “For Sale” signs in this hot market Rio Rancho is enjoying? How can you make your house desirable enough to draw attention away from the competition?
Consult a local realtor® before offering your home for sale. There are many factors to be aware of particularly with market conditions changing. You must decide on a price, which involves an analysis of properties that have recently sold and homes that are currently on the market. It is useful to get an objective evaluation from a licensed home inspector about the condition of your home and to make the needed repairs or cosmetic improvements.
Prepare your home before you list it. Get your home into prime showing condition by investing in fresh paint and yard work. If you decide to repaint the interior, choose a neutral palette that will provide a generic background against which homebuyers can visualize their own furniture. Remove all clutter, excess furniture, dust and grime. Repair or replace whatever makes the home look shabby—cracked windows or walkways, sagging porch steps, chipped plaster or stucco, missing roof shingles or drawer pulls. The desert climate can wreak havoc on wooden exterior accents. Refinish your deck or trellis if the wood looks worn or faded. Ask for staging advice from your real estate agent. What most home shoppers want to see are well-groomed landscaping and an immaculate, clutter-free interior. These simple and relatively inexpensive improvements will go a long way in a potential buyer’s eyes.
Homes that are energy-efficient also have a market advantage – they promise attractive savings on monthly utility costs. With hot summer days ahead we face the high costs of air conditioning. But you can reduce energy expenses by painting exterior walls a light color, putting a reflective coating on your roof or planting shade trees in your yard. A single tree, strategically placed, can reduce your air-conditioning costs by up to $300 a year or more. And according to the U.S. Forestry Service, a single mature tree will add about $5,000 per lot or 5 to 7 percent to the sale of the property.
Placing your property on the market at the right price is perhaps the single most important requirement for making your home stand out among local listings. Potential buyers will ask the price of your home first and then decide whether it measures up to their requirements. Homes that are priced competitively appeal to qualified buyers and draw a larger response from ads and word of mouth. Avoid overpricing your property! A fair list price will encourage offers that are closer to the asking price, and can even initiate a bidding war in a highly desirable area. An attractive listing price will keep your home fresh on the market and safeguard against “seller’s stagnation”.
Be willing to discuss any and all offers with your agent, and be as flexible as possible relative to the terms of the sale. Call me for up-to-date information about our local real estate market!
The Correct Price for Your Home
Your Realtor wants to sell your home as soon as possible, for the best price. He or she will use a Comparative Market Analysis to help you determine a fair price for your home. A comparative market analysis is based on information from similar properties in the area. The analysis uses information on properties that are currently for sale, properties that have already sold, and expired properties (ones which did not sell). The current sale price of similar homes will indicate what the competition is asking. Properties that have recently sold will indicate what buyers are willing to pay, just as properties which have expired may indicate what buyers are not willing to pay.
By carefully considering these three aspects your Realtor is able to determine a "fair market value"--the price which a buyer is willing to pay and the seller is willing to receive for the property.
In the real estate world, a large group of people are looking to buy homes at any given time. These are the seller's best prospects. This ready group of buyers is wasted, however, if your house is overpriced.
While shopping for a home, buyers will visit many similar homes in their price range and measure the features of each one against the price. They decide which house offers them the maximum value for the price. Buyers do not expect a home to be a "steal" or dramatically under-priced, but they do expect it to be a fair value. If your home is overpriced and they have been shopping around and comparing properties, they will probably refuse to look at your home. You and your Realtor may know that you would sell for $10,000 less, but the buyers do not know this. As a result, your overpriced property may receive little attention.
Don't be fooled into thinking your house is worth more than someone is willing to pay for it, or that it's just a matter of waiting for the "right" buyer to show up. Surveys show that the longer a house is on the market before being sold, the greater the drop in price from the listing price when it does sell. The buying public eventually sets an accurate price. An overpriced house just sits on the market, waiting for a price adjustment before it will attract a buyer.
Consequently, your Realtor may advise you to reduce the asking price if buyers fail to surface after a certain period of time on the market. If you are serious about selling your home, you should take your Realtor's advice. If the first price reduction doesn't generate a buyer, another reduction may be necessary. The monetary value of a house is only what someone is willing to pay for it, but if the market analysis is done correctly, you will get the maximum amount--and a timely sale.
Storage Strategy
Most buyers put storage space high on their list of priorities for a new home. No matter how much storage space a home offers, most people want more.
Sellers often face the minor indignity of having prospective buyers open all of their closets to determine the capacity of each one. Even an enormous closet looks small if it is cluttered. Straightening and organizing your closets will help sell your home. Also, if you get rid of your excess belongings ahead of time, your move will be less stressful when the time comes!
Have a yard sale or rent a storage unit temporarily or donate extra stuff” to a charitable thrift organization. Uncle Sam currently gives you up to $5,000 in itemized deductions if you donate household items to such non-profit organizations.
When all of your closets are in order, move on to the attic, basement, pantry, and wine cellar. Your storage areas will look much more spacious and attractive if they are neat and well organized.
Your Pet Vs. Your Sale
Your dog or cat can pose a problem when your property is listed for sale. Even if prospective buyers have pets of their own that smell just like yours, they may be repelled by animal odors. If you have a pet odor problem, you should remove the offending furniture or carpets or hire a professional to clean them. Check the cat box frequently and keep the litter fresh, or simply cover it when prospective buyers visit.
Some people have allergies or fear of certain animals, so it is a good idea to put dogs or cats outside or confine them to one area when your house is being shown. It is hard for buyers to appreciate your home through puffy, watery eyes or in between sneezes! Even if the house is exactly what they want, your chances of selling it are less if the buyers are distracted by animal odors or concerns.
The Walk Thru Inspection
Before the title transfer of your new home, you will to do a "walk-through" inspection to ensure that the property is in the same condition as it was when the purchase and sale agreement were drawn up.
Some sellers convey the appliances and major systems "as is," offering no promise that they will be in working order. Other agreements require all of the major mechanical systems, such as heating, plumbing, and air conditioning, to be operational. It depends on the contractual terms that are agreed to in writing between the buyer and seller.
During the walk-through inspection you should check the appliances by turning each one on and letting it run a full cycle. This gives you a chance to make sure that any repairs that were to be made by the seller prior to title transfer have been made. These details are much easier to work out before the transfer of ownership than after you have taken possession of your new home.
Closing Costs
When you sit down to figure out how much money you need for your down payment, be sure to remember your closing costs.
Closing costs vary, depending on financing fees and the time of the month you close. You will need to discuss the issue of closing costs with your loan officer. Some of these closing costs apply only once. These include the points on your loan, title insurance, escrow fees, appraisal, and transfer taxes or recording fees charged by local government agencies.
Other costs are recurring, meaning that they repeat monthly, quarterly, or annually. Some costs require pre-payment, and must be factored into your overall closing costs. These charges may include private mortgage insurance premiums, property taxes, homeowners’ association fees, and homeowner’s insurance premiums. Your loan may include an escrow account feature that includes taxes and insurance.
Check with your loan officer to see if and how this may apply to your loan.
Don't Market Your House Before It's Ready!
Listing your home for sale before doing the necessary preparation can be a costly mistake. Sellers who put their homes on the market before making essential repairs usually wait longer for the home to sell, and it usually sells for less.
Some sellers reduce the sales price to compensate for less-than-attractive conditions or credit the buyers at the closing for needed repairs. This approach is only attractive to buyers who are looking for a bargain and have the time and skills to fix up a property. Most buyers can't visualize a home's potential, have little remodeling experience, and are turned off by the thought of such a project.
The first time your home is seen by the public is the best chance you have to sell your home. You should wait until your home looks its best before showing it to anyone except your Realtor. Your agent can tell you how to prepare your property for the market and will happily promote your attractive and well-maintained home to buyers and other Realtors. You may want to sign a listing agreement a week or two before you are ready to show so your Realtor can place ads and begin marketing, but don’t open it to the public until it shows well.
Realtors are often asked, "What is the best way to show and sell a home?" Almost every Realtor can tell you a story about meeting with a prospective seller who has just completed a lot of work to prepare their home for the market. It can be difficult for a Realtor to tell the seller that their renovations were not the most effective changes to market their home.
If you are considering making any improvements prior to selling your home, the best advice is to consult with your Realtor before you make any changes. An experienced Realtor can provide you with information that can help you decide what kind of improvements will set the stage for a sale. Whether it is paint and wallpaper, remodeling the bathrooms, or updating the kitchen, your Realtor can guide you toward "neutral" choices that can assist the buyer's imagination.
When you are getting ready to sell your home, look for renovations that will cost a small amount in relationship to the increase they will have on the value and salability of your home. Your Realtor can help you decide if you should go ahead with the changes you are considering.
When a Low Offer Comes In...
Your home has been listed for just a few days, and your Realtor calls with great news. The people who looked at the house last night have come in with an offer to buy it! When the agents arrive to present the offer, you are excited and nervous. As they explain the price and terms, however, you feel that the price is a little too low and that the offer contains some terms that will be either expensive or inconvenient for you to meet. Should you try to work it out or wait for something better?
If your home is priced well, you can reject the offer and be reasonably confident that a better one will follow. In a buyers' market, however, you may not have that luxury. Try to get an idea of the buyer's overall strategy, and ask your Realtor for advice. Do they really want your house or will they move on to another property if you make a counter offer? Can they afford to pay a higher price? Are there ways to close the gap with a small owner take-back, or with terms that will increase your bottom line? It may be necessary to take a hard look at your asking price. If your price is on the high side, the offer may not be that unreasonable. We recommend that you don't "just say no" to a low offer until you have explored all the options.
If you get an offer that is a lot less than you expected, remember that the first offer is often the beginning of the negotiating process. Your agent can help you understand the pluses and minuses of the offer. Sometimes, an offer with a lower price than you expected, can look quite attractive once you understand all of the terms. If you are willing to make some compromises, the buyers may accept a counter offer that will give you more money. A lower price from highly qualified buyers may be better than one from people who may have difficulties with financing and have not been pre-approved.
Sellers can lose either advantage if they do not counter an offer that a buyer has made. Even if the opening offer is beneath what the seller feels is reasonable, it is advisable for the seller to respond with a slight reduction from the asking price. The most important component in negotiating is good communication and to keep the negotiations moving ahead.
The best way to handle a low offer is to counter it with definite terms that are favorable to the seller. A counter offer has two advantages in that it keeps the buyer interested and it moves the negotiation forward and gives the buyer an opportunity to submit another offer that the seller is more likely to prefer.
The Benefits of Using a Full Service Broker
Homebuyers who use the Internet to start their home search may be lured by the promises of realty companies advertising “one-stop shopping” guaranteed to meet all your housing needs. But before you sign up with an online company, consider the benefits of meeting personally with a real estate broker who can represent your best interests in the transaction.
A full service real estate broker will be informed about the current trends in your local market. He or she will personally meet with you and show you properties that satisfy your unique requirements. When you want to discuss your options for a home mortgage loan, your real estate broker will refer you to a reputable mortgage professional who can help you choose a loan that meets your specific needs. Your broker will have a working relationship with home inspectors and homeowner’s insurance companies whose professional integrity they can vouch for.
Online “one-stop” companies profit from handling all aspects of a transaction, but the homebuyer may not receive adequate personal attention or get the best deal. It is to your advantage to engage the services of a full service broker, because their sole motive is to protect you, guide you and help you realize your goal of buying property.
Likewise, if you decide to sell your home, you might be approached by an agent who offers to list and sell your home and promises to take a much lower commission for his or her services. This proposal might sound very attractive; why pay your broker 6 percent when this one will only charge you 4 percent? After all, 2 percent of $600,000 is $12,000 – a nice little savings to put in your pocket! Before you sign a 6-month contract with an agent offering a discount commission, consider what you may be sacrificing by not using a full service broker who will list and sell your home without cutting corners.
A full service real estate broker will give you comprehensive, thorough professional service, attentive to every detail at every point in the complex transaction process. He or she will share valuable information about the selling price of comparable properties, to help you determine a realistic price for your home. If your home needs repair or cosmetic improvements prior to listing, reputable local contractors will be recommended. Buyers will be pre-qualified and personally escorted when showing your home. After showing your home, your broker will give you feedback from buyers and agents, and negotiate the price and terms of the purchase contract when an offer comes in. Finally, your broker will schedule the home inspection and coordinate every aspect of the closing. You will be informed of what is happening at every step of the process.
You may not receive adequate professional or personal attention if the agent feels they owe you less because you are paying them less. It is to your advantage to engage the full services of a real estate broker who will give 100 percent to guide you through the complex process of buying or selling a home.
Second Home Investments Are Hot
Second homes are being purchased in unprecedented numbers for vacation and investment purposes. During recent years, second-home sales have surged to a market share of more than one-third of all residential transactions. In 2004, vacation home sales increased 19.8 percent and investment home sales increased 14.4 percent, totaling 2.82 million transactions, a new industry record. The National Association of Realtors’ chief economist David Lereah estimates that given the increase in the market, many individual owners have acquired multiple investment or vacation properties.
Although new figures for 2005 have not yet been released, this trend toward ascendancy of the second home market is likely to continue over the next decade. New research shows that 52 percent of the nation’s 70 million baby boomers plan to buy a second home within the next 5 years. The word is out that second and vacation home properties are the one of the best places to park investment capital. And the mature adults within this unusually affluent segment of the American population have plenty of capital to use, since most are still in their peak income earning years. Ninety-two percent say they consider property to be an excellent investment. They are eager to enjoy the benefits of the good life, and want to be able to stay in their own comfortable home away from home when they travel to preferred resort locations.
The typical buyer of either a vacation get-away or an investment property looks for a single-family detached home of between 1,200 and 1,700 square feet, on the average. For most, this second home is smaller than their primary residence, but about one-third say that their second home is larger. The average vacation homebuyer is aged 55, while the average investment buyer is aged 47. Vacation homes are typically located at a median distance of about 50 miles from the buyer’s primary residence. Investment buyers tend to choose properties that are closer to their current homes, to make ongoing property management easier.
When searching for a second home for recreational or investment purposes, one of the most important factors is to find a real estate agent who is very familiar with the area you are interested in. The choicest properties often sell by word of mouth, even before they are placed on the Multiple Listing Service. An agent or broker who has widespread connections in the region will know about uniquely desirable properties that become available, and can arrange a showing before the home is listed.
It is also helpful to engage the service of an agent with knowledge of the local rental market, particularly if you are buying the property as an investment. The agent should be able to tell you which areas command the highest weekly rental rates and offer the greatest promise of price appreciation. He or she should be able to recommend top quality property management companies and to answer your questions about zoning, codes and restrictions.
Experts advise that a quality home in a great location will always be a good long-term investment.
Choosing the Right Real Estate Agent
Are you considering selling your home, buying a home, or both and are puzzled regarding the process of how to properly select an agent to represent you? The good news is that Rio Rancho has many highly-experienced, top drawer, ethical real estate professionals serving our fine city. Like any industry, there is a medley of different personality types available. Who’s the right fit for you?
Start of by identifying at least three agents to interview. Some ideas to consider looking into may include the agent who:
• You have worked with in the past
• Comes highly recommended by a neighbor, friend, co-worker, or relative
• Has an impressive online presence
• You may have seen in various advertising venues
• You met at an open house
• You’ve noticed their sold listings in your area
• Demonstrates a give-back attitude through community philanthropy
Once you have arranged at least three good prospects, make appointments to meet with each one separately. These agents are applying for a job – the job to become your listing broker, buyer’s broker, or both. The same basic requirements for any other job interview do apply here too. Take note of what time the agent arrives for your appointment, how professional the image they portray is, how prepared for the appointment they are, and how well they communicate with you. A few questions you may consider asking include:
• What is your background/experience in real estate? There is nothing right or wrong with a response that the agent is a newer agent or that they bring many years of experience to the table. What you are looking for, above their honesty, is a sense that despite whatever this agent’s experience is, they value your business and prove to you that they will continuously work hard on your behalf to ensure the results you seek. Stagnant or proactive agents can be found in either category; therefore, find a proactive one!
• Tell me about your company. Excellent agents are found at both large corporations and with small boutique companies. Does the agent seem to rely on their company’s accomplishments over their own? Does their company offer adequate services to help ensure your goals are reached? Ensure your comfort level with their response.
• Describe a situation where you made a mistake in a transaction? How did you manage it? What was the outcome? All humans are subject to mistakes, and a humbling question such as this should allude to the general character of the agent. It is okay to make mistakes. How an error is rebounded is the major indicator of how customer service oriented this agent may be regardless of the outcome.
• What do you do differently from the majority of your peers to set you apart? Listen closely to the answer. Do you have the impression that this agent relies on their company’s general strategies or takes destiny into their own hands with their own efforts as well? Whether you are looking to buy or sell, ensure that the agent has a plan in place to stay in communication with you during every step of the process.
• What professional designations do you carry? The real estate industry offers various designations which require continuing education courses in order to earn. Generally speaking, the greater their professional training, the better equipped they are to guide you through your real estate transaction(s) and deliver desirable results.
There are many other excellent questions available which should come to you naturally during the interview. These are merely a few that could get you started.
All agents applying for the job should be happy to provide you with a list of recent references. It would be a very good idea to cross-check these references with a telephone call!
Agents are as individual as you and I. One that may have jived well with my personality may not with yours. There is an old saying that “the unconscious knows”. Once completing your interviews, give credence to your gut feeling and choose the one whom you feel most confident about working with. Buying or selling a home likely represents one of the largest investments of your lifetime. Having the right choice agent representing you is crucial.
- NUMBER1EXPERT™ 
