Staging Secrets

There is no question that staging sells homes.  Your best option would be to hire a stager, which can be not only inexpensive, but also pay off huge in the long run.  If you can't, here are a few tips to stay ahead of the home down the street you're competing with.

1.  Remove the Photos

As buyers are walking through your home, the ONLY thing you want them to feel is themselves in your space.  It's difficult for potential buyers to do this when they're looking at an entire wall of your annual ski trip to Vail.  Use nature prints as a sure-shot.  If you're on a budget, buy a few photographic calendars.  Replace the personal photos you have in your frames with the nature photos from the calendars, and you'll have a neutral look without having a blank wall.

2.  Accentuate the Positives

What do you like best about your home?  In most cases, it's the thing that pushed you to purchase it in the first place.  Accentuate those areas to make potential buyers linger in those spaces to make sure they're truly soaking it all in.

3.  Ditch the Extras

I'm sure the kitten laying at the foot of your porch door to keep the drafts out is cute - but not everybody will think so.  Get an early start on packing, take your extra items (which include any items you don't use on a regular basis) and box them up!  Also avoid politically- or socially-charged material.  You don't want a buyer to walk away simply because they disagree with your views.

4.  Paint.  Paint.  Paint.

Your daughter has absolutely loved her neon pink walls for the last few years - I have no doubt.  It's time for a change.  You want potential home buyers to see your house with as little extra work as possible, so help them out.  All colors should remain neutral.  Paint will always be a good investment when trying to sell a home, so utilize yours with a color scheme that is not only comfortable for YOU for a few months, but also appealing to would-be buyers.

5.  Go Away.

As an agent, there is probably nothing more uncomfortable than walking through a home with buyers while the sellers are sitting in the family room.  In fact, I showed a home to some buyers where there were two small (and energetic) children running around.  When I say "running around," I mean the type of young boys that come behind you from out of nowhere and punch you in the leg.  My buyers, who were newlyweds that had obviously not thought about starting a family yet, asked me if we could go...immediately.  Typically, clients take about 20-30 minutes to tour a single home, so do yourself a favor and make yourself scarce.  Nobody can imagine relaxing in their new family room with the noise of you and yours.

Real Estate Recovery?

Over the past few years, there have been thousands of news stories covering the housing market.  Through all of the statistics and advice given out, the general public must be lost.  It seems as if the outlook for the housing market changes, depending on who's eyes you might be looking through.

Harry Truman once said "It's a recession when your neighbor loses his job, it's a depression when you lose yours."  After watching this roller-coaster of an economic adjustment, this phrase rings true more and more often.

S&P's Case-Schiller Home Price Indices based on peaks and troughs in the market trends.  The have labeled the spring of 2009 the bottom of the housing market, but many experts say that another nationwide bottom - a second dip - will be announced soon.

What is interesting, in my opinion, is that the National Bureau of Economic Research recently stated that the "recession" has been over for more than a year.  According to them, the "recession" was over when the economy stopped contracting and began to expand.

So why are people not dancing in the streets?  It's simple...

Perception.

The current housing crisis continues to be "real" to the general American public when things "hit home" - literally.  It wasn't until the general American lost their job and realized they couldn't sell the home for what they owed on it.  It wasn't until their mortgage payment began increasing and they realized they couldn't refinance the loan because of a low appraisal at their current balance.  It wasn't until a listing agent sat down with them and told them what the comparable sales looked like for their neighborhood.

The Case-Shiller sees recovery as a return of home values to their mid-decade peaks.  Alan Greenspan, on the other hand, thinks recovery won't be here until housing prices rise another 10% from the status quo.

Is it easy to see how important perception is?  Every analyst and expert will shout something different about the exact definition of "recovery," which means it will only get more confusing.


If you, as a consumer, are looking for the experts to give you a date signaling the end of this market adjustment, you're searching for the impossible.  The fact is, most homeowners in America won't think the market has "recovered" until their mental target value for their home is reached.  Most buyers, alternately, won't think recovery will be here until they've been priced out at the value they recently purchased.

In every household, there is only one person who can dictate where the recovery is at to-date - you.

In the Eye of the Foreclosure Storm

The recent foreclosure statistics are making their rounds in the media, and giving a lot of people what could be seen as a false hope for the short-term future of the housing market.  Many of the headlines report that foreclosures have decreased over the last few months.  Though, technically, this is true - it is not in any way a sign that the housing market is about to slingshot back.

The issues regarding robo-signing, faulty paperwork, and other challenges have the banks trying to correct many of the problems that were brought to the surface in recent months.

For the past three (3) months, fewer than 300,000 properties are receiving foreclosure filings after 20 straight months where the total each month exceeded that same number.  And, though less foreclosures are actually hitting the active market, the percentage of loans in foreclosure rose to equal the all-time high.

Picture it like this:  Due to the overheated market between 2001-2005, foreclosures in the past few years have flooded the market.  At this point, most states (especially Judicial Foreclosure states like Illinois) have built a temporary dam to keep the market from remaining under a flood plane.  The keyword in the previous sentence is "temporary."  Those loans that are on the sidelines in foreclosure right now or facing it in the near future are about to hit the market again - and with vengeance.  The "dam" was never meant to be permanent.

Though it sounds alarming, it really isn't so bad.  The shadow of the overheated market will continue to linger in Real Estate for a while, but shouldn't stop you, as a consumer, from continuing on the path of the American Dream.  MSNMoney.com reported that, from January 2000 to June 2010, Real Estate still gave a 43% return on investment, which is more than DOW, S&P, and Nasdaq combined.

At the end of the day, check your options.  Homeownership may not be as scary as you might think.

Make An Offer

 

After hours on the internet, miles in your Realtor's car, and more homes running through your head than you know what to do with, you've found your dream.  Time to make it your own.  But where to start?

Know What's Included

Go through the contract with your Real Estate Agent and make sure that you know exactly what you're getting.  Does the dishwasher stay or go?  Are built-in shelves left with the home?  What about air conditioners?  As silly as a few of these questions might sound, the majority of issues that put a closing to a halt revolve around seemingly miniscule issues regarding what's personal property the sellers will take and what stays with the home.

Determine Your Financing and Your Own Personal Limit

In this market, buyers need to get a pre-approval letter from their lender that states you will have the funds to meet the seller's price.  There is one thing a buyer should remember - the number given to you by the lender does not have to be the number you are comfortable at.  Know your budget, and remind yourself of the expenses you'll have in addition to the monthly payment, including utility bills, property taxes, etc.  Just because a bank will give you $300,000, it doesn't mean you won't find a perfect home that costs $250,000.

Examine the Home Carefully

Before making an offer, estimate major improvements or renovations the home will need to undergo.  Check for more serious issues, such as moisture in basements or turned-up edges in wood flooring.  Discuss with your Agent possible issues the seller might fix before closing, or decide to do the repairs yourself.

Make A First Offer

Contrary to what most homebuyers believe, the first offer is not only determined by the dollar amount you would like to pay, but also by comparing listing prices and final sales prices of other comperable homes in the area.  Buyers should typically offer 5%-10% below the list price to show their serious inclination to purchase. Do not make an extremely low offer unless you are prepared for outright rejection.

Decide on Earnest Money

Some sellers determine a buyer's ability to back up their offer by their Earnest Money Deposit.  The cash you have included with your offer shows good faith.  The earnest money should gover about 1%-2% of the purchase price, and will be used later toward your downpayment.

Consider Contingencies

A contingency is a condition that the purchase offer will only go through if certain issues or demands are met.  Common contingencies are that the home must pass a professional home inspection, or the buyer's current home must first be sold before they can purchase the one in question.

Be Patient

After the first offer, most buyers can expect a counteroffer.  Counteroffers will go back and forth between buyer and seller until both parties agree upon a deal that satisfies their needs.  Be patient!  If you are over-anxious, you run the risk of showing the sellers that you'll be willing to go higher than your offer.

All of the items above should be discussed with your agent.  He or she should know how to handle all of these situations to make sure you're getting the best deal out there.

So buckle up and enjoy the ride!  In the end, it could land you your dream home.

Boost Your Curb Appeal

Though it might be hard to imagine it now, Spring is definitely on its way.  With a new spring comes a new burst of buyers that will be eager to settle in before summer hits.  In order to shake of the winter blues in your front yard and add some life, here are six simple ways to boost your curb appeal to attract buyers.

1. Punch Up the Windows

You can easily highlight the architectural elements by painting the outside trim with colors that set them off from the rest of the home.  For an extra punch, go ahead and add shutters or flower boxes.

2. Dress Up the Yard

A good visual mix can make small lots look larger.  Try sprucing up the front with ornamental grasses, flowers, stones, and other landscaping materials.  If you're looking for easy maintenance (which could also be a selling point to a potential buyer), use native plants - they need less water and fertilizer.

3. Tend to the Roof

Make sure the roof is in the best shape by replacing weathered or missing shingles.  If you have a porch, this is a must.

4. Accentuate with Paint

When choosing a color scheme, decide on one that calls attention to key architectural details.  No matter what type of home you have, there are colors that can make it pop.  Depending on the color of your home, a red front door has been known to draw lookers.

5. Entrance Exam

Consider adding a portico or porch.  Either will frame the front door, and a porch can add extra living space for a fraction of the cost of an insulated addition.

6. Shape Up Siding

Check to see that shingles, clapboards, and masonry are in good conditio.  Spotless siding helps a home's details stand out.

Fixing up the exterior of your home is a sure way to boost the appeal - and ultimately the value.  Experts have shown that the right colors can increase home value by as much as $10,000.  So whether you decide to hire a painter/contractor or flex your Do-It-Yourself muscles, tackling these projects will give your home a better chance of selling quickly in the not-so-far-away Spring.

Waiting for Home Prices to Fall?

Yes, the whirlwind of the real estate market has kept many people on their toes wondering what will happen next.  There are a lot of buyers that are waiting - and watching - in hopes that they will catch a good home at the lowest price it will ever be at.

Unfortunately, waiting for the rock bottom price of a home is like trying to plan a space shuttle launch - a lot of factors go into it.  If you are a buyer, you naturally want a guarantee that you are getting the best price possible.  Waiting, however, is not the best decision.  KCM Blog, a popular real estate blog, recently pointed out that there is a major difference between the "price" of a home and the "cost" of a home when it finally comes down to mortgages.

Allow me to show you their example.

The National Association of Realtors reported that home sales rose 15.4% in the 4th quarter of 2010, and also showed that home prices remained stable during the year.  Most buyers would be happy that home prices have not increased.

HOWEVER...

Interest rates during the last 90 days have risen from 4.17% to 5.05%.  This might not sound like a lot, but KCM illustrates it very simply.  "The price is the same, it just costs more."

Take a home that costs $170,000 over a 30-year fixed rate mortgage:
...@ 4.17% interest, monthly payments equal $828.36

...@ 5.05% interest, monthly payements equal $917.80

By sitting on the sidelines for the last 90 days, the purchaser loses:
- $89.44 per month
- $1,073.28 per year
- $32,198.40 over the 30-year life of a mortgage.

At the end of the day, even if prices fall another 10% this year, the cost of the home will increase if interest rates rise more than 1%.  Buyers should stop worrying so much about the price of a home and should be more concerned with the cost of the home that is dictated strictly by the interest rate.

Caution vs Fear

Depending on the person being asked the question, the answers regarding the housing market will drastically vary.  In the recent months, the housing industry has been on shaky ground.  This new "Market Adjustment" is just that - getting us back on track to fair market value.  With that said, I think it is important for both buyers and sellers to distinguish the difference between caution and fear.

"Fear," by definition, is an unpleasant emotion caused by the believe that something or someone is dangerous, likely to cause pain, or a threat.  On the other side of the coin, "caution" means care should be taken to avoid danger or mistakes.

Do we all see the difference?

The media has historically done a bang-up job instilling fear into the hearts of the general public.  Sometimes, rightfully so.  Headlines surrounding the housing market in recent months have tended to show the economy in a negative light, making people hesitant to make a move.  However, whether you're buying or selling a home, don't let fear paralyze you and prevent you from making a sound decision.  As Real Estate professionals, it is our fiduciary duty to ensure that every decision you make is one in a positive step toward a financial and personal future with your home.  Any agent that makes you feel any different is not even worth your time.  Always remember that we are with you every step of the way.

Here is the bottom line: the market will be just fine.  Regardless of what you're hearing in the media or from your friends/family, a Gallup poll just released said that 67% of Americans think this is a good time to purchase a home.  The idea of American Home Ownership is still alive and well - and it's up to you as a consumer to make an educated decision about where you truly want to be.


And if you're still a little freaked out, drop me a note.  We can solve the housing market together.  One way or another, somebody has to.

Welcome!

I figured I would start out the first issue of my blog by introducing myself.

My name is Jonny Schmidt.  I was raised in Topeka, Kansas with my mom, dad, & brother.  I was a swimmer for my entire life, getting a scholarship to swim at the University of Georgia for four years.  While at college, I majored in International Affairs with an Emphasis in Humanities and German.  Before graduating, I had an amazing opportunity to study abroad with a Semester at Sea - I visited 11 countries in five months, ranging from the edge of Japan through Egypt to the tip of Gibraltar.  It was definitely a life-changing experience.  Once graduation came, I moved myself up to Chicago, the city I've been in love with since 8th Grade.

I have many goals for myself in the Real Estate industry.  My first goal is to become a Broker within the next few months.  (And, yes, I'm publishing this to make you all hold me accountable!  haha)  My second, and probably loftier goal, will combine two of my biggest loves - people and international culture.  By the end of the Summer 2011, I want to be on my way to receiving my Certified International Property Specialist (CIPS) designation for Real Estate.  As I learn more about this new idea, I will definitely keep you informed.

As for the name of my group, my ancestors have been members of the Holdeman Mennonite Church in Kansas.  They came to this country from northern Europe in 1876.  I truly believe that, though I do not practice in the Mennonite Church, the values and beliefs my parents instilled in me came from the root of all that these honest, hard-working people represent.  I am proud to call myself an ancestor of the Holdeman Mennonite Community - a people of peace, humility, and selflessness.  The "Holdeman Group" was so named to remind me of the kind of man I want to be - both in business and personal life.

Well, if you've made it this far, I applaud you.  I hope that you will continue to enjoy this blog as much as I hope to enjoy writing it.  I look forward to hearing from you at any time - and never hesitate with any questions you might have!

And...in case anybody was wondering...no, that is not me in the little Mennonite photo.  =)