Here is a great article from the Raleigh News & Observer. There are many good points in this article that I wanted to share it. I now make this article REQUIRED reading for all my new listing clients.
If you get NOTHING else from the article - just remember - "Potential homebuyers typically will take just 15 seconds to decide if they want to buy your home... so lose the distractions!"
++++++++++++
By Samantha Thompson Smith, Staff Writer
Potential homebuyers typically will take just 15 seconds to decide if they want to buy your home.
So if they're looking at your wedding pictures on the wall instead of the cherry built-in bookcases, you might have already lost them.
Worse still, perhaps they're distracted -- even turned off -- by the ultramodern décor, the lingering scent of smoke or the antlers hanging in the den. In 15 seconds, they're too busy judging you, the homeowner, to notice the stone fireplace, the screened porch or the gourmet kitchen.
In today's highly competitive real estate market, homeowners can't afford to make those kinds of mistakes. That's why more real estate agents and some homeowners lately are turning to professional home stagers to set a home apart.
"When it's a buyer's market, your house must be perfect," said Karen Reynolds, owner of the home staging company Champagne Staging in Wake Forest.
"Buyers have so many choices. You want your house to stand out. And a staged home will stand out."
According to a study by Stagedhomes.com, a group that promotes and teaches home staging techniques, 93 percent of homes staged last year by an accredited home stager sold in less than one month. And nonstaged homes stay on the market five times as long as staged homes, the group's Web site says.
Reynolds, who started staging several years ago for her own investment properties, said that for the 25 homes she staged and sold last year, the average time the homes were on the market was 18 days. And that includes a few that were listed for 120 days or more without a nibble before she staged them.
"What staging does is highlight the positives of the house and help detract from the negatives," Reynolds said. "It gives an implied lifestyle so the buyer can see how they can live in the house."
Julie Keelan, a real estate agent in the Wake Forest-Rolesville office of Allen Tate Realtors, recently sold three homes staged by Reynolds. Keelan is so sold on the concept that she offers a two-hour staging consultation to homeowners who list with her as part of the listing package.
"After I saw what she did, I became a believer," Keelan said. "A lot of sellers have a personal attachment to their property. When they're in selling mode, they have to detach."
C. Reneé Hill, owner of the Raleigh interior designer firm Interiors by Reneé, said her business is now about 30 percent home staging, with demand from real estate agents driving the surge.
"The sad part is that some people don't want to pay the money for the staging," Hill said. "They need to invest now and get the price they want as opposed to having your house sit on the market."
The biggest mistake people make is that they wait until the last minute or until their home has been on the market for more than six months before they look into home staging, she said. Hill said it is best to at least talk to a stager before putting a home on the market to get a list of what needs to be done on the inside and outside of the home.
In the long run, it is a low-cost investment, especially considering the alternative might be letting the home sit on the market for months or reducing the asking price to get the home sold.
Home staging prices vary, of course, depending on the size of the house.
Consultations start about $125. Reynolds said that in two hours, for about $250, she can get a lot done in a 4,000-square-foot house, especially if the homeowner is willing to help out and bring a few friends to get the job done more quickly.
But often, the price isn't what is painful for the homeowner. It is hearing what among their beloved possessions needs to stay and what needs to go.
Reynolds admitted that when she walks through a house, she is ruthless.
"I look at it like a buyer," she said. "I find everything that a buyer would pick apart. Every flaw the house has gives the buyer one more reason not to buy the house or [to] give a low-ball offer."
In the end, most homeowners end up seeing the value of the staging. Some even enjoy seeing the transformation.
Lose the distractions ...
Amy and Danny Houston, who own a 3,200-square-foot-home in Heritage in Wake Forest, were open to hearing Reynolds' advice after their home fronting the golf course was on the market a few months.
After taking about an hour to walk through each room, all the way up to the attic, Reynolds pointed out a long list of what needed to go. Most things were decorative pieces and family mementos, but in some cases, a bed or a table had to be pulled out.
The Houstons took about week to move out family photos, rugs, a treadmill, paintings, a computer and printer -- all per Reynolds' instructions. Then Reynolds added a few decorative touches, just enough to give the house some warmth.
The result was staggering.
Instead of seeing the furniture in the living room, you could see the baby blue walls, the expensive plantation shutters and the tall built-in bookshelves. The room looked bigger and brighter, and you were no longer so distracted by what was inside that you couldn't see the 16th hole of Heritage Golf Course outside.
... But keep the warmth
Reynolds said her job is to make the home as neutral but as warm as possible, highlighting its positive elements. The goal is to keep the buyer focused on the house instead the family living there.
Often that starts with taking the owners' personality out of the home. Family photos? Gone. Diplomas on the wall? Gone. Kindergarten artwork on the fridge? Gone.
Next comes decluttering, a step that trips up plenty of homeowners who don't see their decorations as distractions. The key is knowing what needs to go and what can stay, Reynolds said.
Her rule of thumb: If it's smaller than a bowling ball, it has to go.
Reynolds leaves just enough décor so that it won't distract.
Stagers said sellers should pack up the rest of the stuff and store it. Just leave plenty of space for people to walk around.
Show off walls and floors
Furniture is also critical in home staging -- not just the quantity, but the size and placement as well.
Reynolds suggested taking out enough furniture so you can see 70 percent to 80 percent of the floor space (the same rule applies to wall space).
Take out most of the area rugs as well, so potential buyers can see the beauty of your hardwood floors.
"Less is definitely more, but not to the point where it doesn't have any personality whatsoever," Reynolds said. "It's important to be able to create that feeling of warmth."
Most stagers say sellers should only keep enough furniture so homebuyers will be able to envision their own furniture in the space.
The furniture you do keep in the house can't be oversize or overstuffed, said Karen Jensen and Ann Jagger, owners of Homes in Motion, a Raleigh company that specializes in updating and enhancing homes and work spaces.
"Big furniture can make a room look small," Jensen said. "It can even make the house look smaller."
Another rule: Don't try to sell an empty house. If you've already moved out, rent furniture. Some staging companies have furniture, greenery and decorative items that homeowners can use until the house sells.
Monday, March 24, 2008
Monday, March 10, 2008
Buyer Incentives When Listing Your Home
** I highlighted a few of my favorite points in the following article from Realtor Magazine
This article was published on: 03/01/2008 by Realtor Magazine
Selling: Examining enticements The Risks of Oversweetening
Buy this house, and you also get the $40,000 luxury car in the garage. Sounds like an enticing offer that just might clinch the sale, right? “It didn’t have any impact,” says Phil Wood, CEO of John R. Wood, REALTORS®, in Naples, Fla., of the incentive one of his company’s sellers tried in 2006. “Buyers looked at the home and said, ‘I guess this house is $40,000 overpriced.’ ”
Because of that and similar lessons, Wood says his team now tells sellers to skip incentives to buyers. “On our advice, just about all of our sellers have stopped doing incentives,” he says. “We advise them to price perfectly, and then no incentives are necessary.”The logic behind offering an incentive to a buyer to purchase or a salesperson to sell a property is simple: By buying or selling this house, you get something extra for free.
A handful of states ban incentives to entice someone to buy a particular property, says Mike Thiel, associate counsel for the NATIONAL ASSOCIATION OF REALTORS®. Because state statutes can be confusing on this point, Thiel recommends that you check with your state association before you offer any incentive to buyers.
Even in the vast majority of states that allow buyer incentives, those inducements may not be effective. Many practitioners say that while they sometimes suggest that sellers consider offering an incentive, what really makes a property sell is its price.“You can offer incentives all day long, but usually buyers see through that,” says Ben Coleman, broker-owner of Century 21 Hartford Properties, a 40- person brokerage in San Francisco. “The single thing that’ll drive buyers and salespeople to a property is that it must be priced at today’s market value. If that happens, you’ll get buyers at the property, and you’ll get practitioners there, too, because they believe buyers will buy.”
Richard Quigley, a salesperson at @properties in Chicago, generally agrees. “Probably the greatest incentive in the world is a price reduction,” he says. Quigley and his fellow @properties practitioners don’t often advocate that sellers offer incentives. In rare cases, however, Quigley has recommended that sellers sweeten the deal for buyers. “If the property has needed help, I’ve suggested that a seller offer something,” he says. “Say the property doesn’t show well, and the seller isn’t particularly cooperative, so the purple bedroom remains the purple bedroom. I’ll say, ‘Why don’t we offer a decorating allowance? Maybe that’ll catch somebody’s eye.’ ”Quigley says he’s recently seen a range of incentives in the Chicago market. They’ve included covering a condo unit’s assessments for a specified time, offering a free deeded parking space, paying the buyer’s closing costs or local transfer stamp fees, covering the mortgage for a set time, offering to pay for new appliances, and throwing in gift cards.
Coleman isn’t entirely opposed to incentives either. His team sometimes offers vacations to buyers or to the cooperating salesperson. His brokerage has also begun to offer five-year home warranties rather than the more common one-year plans. In Naples, builders who offered cruise vacations 12 to 18 months ago have switched to offering “more value-added things,” says Wood. “Builders used to charge extra for a pool, but today they’ll say that, for one month, they’ll throw in the pool for free.”Although such perks may increase traffic to a property, if the property sells, practitioners say it’s not because of the incentives. “They’re just fringe benefits,” says Coleman. Quigley agrees. “The buyer has to already like the property, and the incentive facilitates moving forward,” he says. “No buyers will purchase something they don’t want just because they’re getting a new refrigerator.”
Catching the EyeWhen you’re trying to get salespeople to show and sell a property, money still talks. “The most motivating factor usually is the commission,” says Coleman. “People are driven by dollars, whether it’s making or saving dollars. That’ll drive practitioners to the property.”For instance, rather than halving a commission with a cooperating broker, Coleman’s seeing brokers offer a 55 percent to 60 percent split to the cooperating broker. “We’re also seeing builders offering referral fees to practitioners when they bring a buyer and then offering a commission on top of that.”In the Chicago market, Elizabeth Ballis, a broker-associate at Coldwell Banker Residential Brokerage, says incentives to buyers are more common than perks offered to sales associates. “I’ve seen them,” she says, “but they’re not rampant.”
Salesperson incentives are “a slippery slope,” says Ballis, “You have to make sure they’re legal, and they’re not perceived in a good light by buyers. That’s why my recommendation to sellers is to make sure incentives are targeted to the buyer’s benefit, not the salesperson’s.”Thiel says offering increased compensation to a buyer’s representative is fundamentally legal through out the country, but related legal and ethical issues could still arise. “Are there requirements that buyers receive a disclosure that the salesperson is getting an increased commission? No,” he says. “But if there’s something that materially influences the buyer’s agent to do something that affects the best interests of the client, that could raise ethical concerns, and it raises the possibility of the buyer’s agent getting sued.” The bottom line: Again, check with your broker or state association before adding commission incentives.
This article was published on: 03/01/2008 by Realtor Magazine
Selling: Examining enticements The Risks of Oversweetening
Buy this house, and you also get the $40,000 luxury car in the garage. Sounds like an enticing offer that just might clinch the sale, right? “It didn’t have any impact,” says Phil Wood, CEO of John R. Wood, REALTORS®, in Naples, Fla., of the incentive one of his company’s sellers tried in 2006. “Buyers looked at the home and said, ‘I guess this house is $40,000 overpriced.’ ”
Because of that and similar lessons, Wood says his team now tells sellers to skip incentives to buyers. “On our advice, just about all of our sellers have stopped doing incentives,” he says. “We advise them to price perfectly, and then no incentives are necessary.”The logic behind offering an incentive to a buyer to purchase or a salesperson to sell a property is simple: By buying or selling this house, you get something extra for free.
A handful of states ban incentives to entice someone to buy a particular property, says Mike Thiel, associate counsel for the NATIONAL ASSOCIATION OF REALTORS®. Because state statutes can be confusing on this point, Thiel recommends that you check with your state association before you offer any incentive to buyers.
Even in the vast majority of states that allow buyer incentives, those inducements may not be effective. Many practitioners say that while they sometimes suggest that sellers consider offering an incentive, what really makes a property sell is its price.“You can offer incentives all day long, but usually buyers see through that,” says Ben Coleman, broker-owner of Century 21 Hartford Properties, a 40- person brokerage in San Francisco. “The single thing that’ll drive buyers and salespeople to a property is that it must be priced at today’s market value. If that happens, you’ll get buyers at the property, and you’ll get practitioners there, too, because they believe buyers will buy.”
Richard Quigley, a salesperson at @properties in Chicago, generally agrees. “Probably the greatest incentive in the world is a price reduction,” he says. Quigley and his fellow @properties practitioners don’t often advocate that sellers offer incentives. In rare cases, however, Quigley has recommended that sellers sweeten the deal for buyers. “If the property has needed help, I’ve suggested that a seller offer something,” he says. “Say the property doesn’t show well, and the seller isn’t particularly cooperative, so the purple bedroom remains the purple bedroom. I’ll say, ‘Why don’t we offer a decorating allowance? Maybe that’ll catch somebody’s eye.’ ”Quigley says he’s recently seen a range of incentives in the Chicago market. They’ve included covering a condo unit’s assessments for a specified time, offering a free deeded parking space, paying the buyer’s closing costs or local transfer stamp fees, covering the mortgage for a set time, offering to pay for new appliances, and throwing in gift cards.
Coleman isn’t entirely opposed to incentives either. His team sometimes offers vacations to buyers or to the cooperating salesperson. His brokerage has also begun to offer five-year home warranties rather than the more common one-year plans. In Naples, builders who offered cruise vacations 12 to 18 months ago have switched to offering “more value-added things,” says Wood. “Builders used to charge extra for a pool, but today they’ll say that, for one month, they’ll throw in the pool for free.”Although such perks may increase traffic to a property, if the property sells, practitioners say it’s not because of the incentives. “They’re just fringe benefits,” says Coleman. Quigley agrees. “The buyer has to already like the property, and the incentive facilitates moving forward,” he says. “No buyers will purchase something they don’t want just because they’re getting a new refrigerator.”
Catching the EyeWhen you’re trying to get salespeople to show and sell a property, money still talks. “The most motivating factor usually is the commission,” says Coleman. “People are driven by dollars, whether it’s making or saving dollars. That’ll drive practitioners to the property.”For instance, rather than halving a commission with a cooperating broker, Coleman’s seeing brokers offer a 55 percent to 60 percent split to the cooperating broker. “We’re also seeing builders offering referral fees to practitioners when they bring a buyer and then offering a commission on top of that.”In the Chicago market, Elizabeth Ballis, a broker-associate at Coldwell Banker Residential Brokerage, says incentives to buyers are more common than perks offered to sales associates. “I’ve seen them,” she says, “but they’re not rampant.”
Salesperson incentives are “a slippery slope,” says Ballis, “You have to make sure they’re legal, and they’re not perceived in a good light by buyers. That’s why my recommendation to sellers is to make sure incentives are targeted to the buyer’s benefit, not the salesperson’s.”Thiel says offering increased compensation to a buyer’s representative is fundamentally legal through out the country, but related legal and ethical issues could still arise. “Are there requirements that buyers receive a disclosure that the salesperson is getting an increased commission? No,” he says. “But if there’s something that materially influences the buyer’s agent to do something that affects the best interests of the client, that could raise ethical concerns, and it raises the possibility of the buyer’s agent getting sued.” The bottom line: Again, check with your broker or state association before adding commission incentives.
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