Real Estate for the Over 50 Crowd

If you are a Seller and you receive an offer containing a “First Refusal Clause”, here is what you need to know: 

For the Seller, a first refusal offer  is a bit nerve racking when you’re selling a home. You may receive an offer that you really like from a buyer, but you don’t  fully understand what the First Refusal Clause means to you..

The first refusal buyer must remove all of their other basic conditions (i.e. Financing, Home Inspection, etc.) in order for the seller to grant the first refusal. The realtor® will likely insert a clause requiring the First Refusal Buyer to list their home on MLS® within 24 hours of acceptance of the offer.  And today, with so many options available,  the Seller may even go as far as to state that the listing must offer the Buyer Agent a selling commission of 2.5%.  The reasoning behind this request is that if the seller is willing to give the Buyer the time to sell their home, then the Seller wants assurance that the Buyer is being as aggressive as possible in getting the home sold.

The First Refusal Clause will have a timeframe for the Buyer to sell their home, typically 3-5 weeks and will also have the number of hours that the Buyer will  have to remove all of their conditions should you receive a satisfactory second offer. Again, typically 24-48 hours.  Usually, if the buyer does not have an offer on their home, they cannot firm up and the home is now sold to the second Buyer. 

If the Sellers receive a second offer, it does not have to match the first offer price; it is a new negotiation and those buyers will not know what was previously agreed.

In the same sense, if the second offer is better than the first, the First Buyer does not need to match the second offer.

PROS of the First Refusal Clause for the Seller:

1. It shows the market that someone else loves your home.
2. The building and septic inspections would be completed and paid for by the buyer, so you would be aware of any shortcomings with the property.
3. A first refusal usually commands a selling price that’s closer to list price.
4. Your realtor® works hard to have the other property sold. (Your realtor® would first evaluate the likelihood of the back-up selling based on current market conditions and pricing, and advice you of the risks involved.)
5. A second offer forces the First Refusal firm up their offer or walk away, but this is after the second buyers have waived all conditions. So as the Seller, the second offer Guarantees that your house is sold!
6. During the time that the Buyer has to sell their home, MLS still shows the Sellers property as Active so the public will still have interest.

CONS of First Refusal:

1. The Seller cannot secure bridge financing with a First Refusal as the bank considers it a conditional offer.
2. Some realtors® shy away from showing first refusals as they are afraid their buyers will fall in love with the property and then not be able to have it if the First Refusal  Buyer firms up their offer.
3. You have to continue to show the home and market it.
4. The back-up property may not sell.
5. Some buyers will not want to make an offer, pay for a septic and for a building inspection at a cost of approx. $1,000 and then lose the property. For this reason, sometimes the Seller offers to pay for the second buyer’s inspections should they not be the successful buyers.
6. The realtor® sees the first refusal comments on MLS and will advise their buyer accordingly.

If you are faced with a decision regarding a First Refusal Clause, take some time to fully understand the offer and ask questions of your realtor®.

Some of my clients don’t want to stage their home.  If I suggest we bring in the stager, it is because I truly think we can achieve better results, faster, if your home is staged.  But over the years, here are :

TOP 10 REASONS NOT TO STAGE YOUR HOME

1. We want to test the market for 90 days. And on the 91st day? Price reduction–and 90 days worth of potential buyers who have already eliminated your property and moved on to another one.

2. It costs too much money. I have never seen a home where the staging costs would have exceeded the first price reduction. And that doesn’t even factor in the monthly carrying cost of the home.

3. We can’t stage the house, we’re living in it. One common misconception is that staging is only for vacant homes. Every home/condo can be staged, and you can actually live in it after staging.

4. We didn’t have to stage any of the other properties we sold over the years. Yes, once upon a time you could generate three offers by 5 p.m. on the same day your Realtor® put the For Sale sign in your yard. Not now. Buyers are picky and they have a lot of homes to choose from.

5. Everyone loves our house so buyers will love it, too. What you, your friends and relatives love about your house may not be what today’s buyer wants. Sellers are often baffled by the feedback they get after showings–amazed that buyers have found things they don’t like about the property.

6. We can clean the carpets and declutter without someone telling us how. Yes, you can (and should) do this, but it is a tiny piece of staging. Do you know what separates “clutter” from “asset”? And what about all the other things that staging encompasses, like traffic flows, highlighting architectural features, updating, and appealing to your target market?

7. We have no desire to remove/change our _______________ (wallpaper/mirrored tile/gold faucets/paneling/dated light fixtures . . .). And neither do buyers. Work with your agent and the stage to get your home ready, rather than having to sell at a discounted price! 

8. The view alone will sell this place. Then why many months later are these great view homes/condos still on the market? Could it be that buyers want something to go with the view–like a comfortable, move-in ready home?

9. We would rather let the buyers makes their own paint/flooring choices. And that equals a price reduction. If buyers do make an offer on your home they will double or triple the cost of these items and reflect that in their discounted offer price–which includes a deduction for the inconvenience.

10. Our home is professionally decorated. A professionally decorated home is tailored to the owner’s particular needs. Does it work for the new buyer’s needs? You could see #1 above . . . .

These are all great reasons–

• for price reductions
• for extended time on the market
• for buyers not coming to look at your home
• for buyers not coming back for a second look

There are dozens of reasons not to stage, but only one good reason to stage–getting your home sold faster for the highest possible price. Staging is preparing your home for sale and creating a home that buyers want to buy. If you want to be in the best competitive position in this market today, consult with your Real Estate Agent.  They should have a professional home stager on their team before listing your property for sale.

Kris

When it comes to spring cleaning your home, it can appear to be an enormous job.  Create a schedule so you don’t end up overwhelmed with the size of the task.  Bite off little bits and allow yourself a feeling of accomplishment each time you can mark something as “done”.

1. Clean windows are a must – both inside and out.  If you aren’t able to do this yourself, hire a local window cleaning company.  When your windows are clean, the whole house looks better, from inside as well as from outside.
2. Do a thorough clean, one room at a time, including closets and storage areas.
3. Declutter as you go – if you haven’t used something in the past 12 months, you probably should consider it as a potential garage sale item.
4. Tidy the Pantry
5. Pull out appliances and clean behind them (don’t forget the top of the fridge and dust the coils at the back)
6. Defrost the freezer
7. Clean out the Linen Closet
8. Clean carpets and floors
9. Dust walls and ceilings
10. Clean light fixtures, wash covers
11. Go through closets, put away winter-wear and discard unwanted items
12. Clean your computer, dust the keyboard and screens and organize your files – review insurance policies, household inventories, etc.

Kris

When it comes to cleaning up your lawn and garden in springtime, it doesn’t all have to be done at once.  Some chores are more important than others at this time of year.

1. Start by getting rid of any leaves and debris that have accumulated on your lawn over the winter.  The grass needs light to grow and to stay disease-free.
2. Clear out dead perennial foliage .
3. Clean out and compost winter-killed foliage from perennials and ornamental grasses to make way for new growth.  Dig out any winter-sprouted or perennial weeds.
4. Late blooming shrubs (butterfly bushes, rose of Sharon, etc) bloom on new growth so prune and shape as soon as new growth appears. 
5. Prepare soil and plant as soil conditions allow.
6. Scrub  decks, patios, driveways and walkways
7. Wash outdoor furniture
8. Inspect light fixtures and clean covers.

LATER ON

1. Trim shrubs and hedges to make garden look neat and well cared for.
2. Add mulch as needed and add in a balanced fertilizer as soon as ground has dried out.
3. Prune roses after new shoots have sprouted and prune early-blooming shrubs as soon as they have stopped flowering.
4. Patch dead spots in the lawn as they become apparent.

EVEN LATER

1. Dig new garden beds or expand existing ones
2. Plant or transplant trees, shrubs, and evergreens
3. Thin and shape woody trees and shrubs
4. Clean tools, sharpen blades, restock garden supplies before warm weather arrives.

Kris

Most neighbourhoods see garage sales springing up everywhere as soon as the weather is decent enough to spend a half day huddled in your garage.

Make a fun day of it – enlist your neighbours – have a street sale!  If several of you do this together, it provides everyone the incentive to sort through the garage, the basement, the shed, the closets and unearth the items you no longer need that are sure to be somebody else’s treasure.

Create a plan for

(a)  Gathering the garage sale inventory

1. Systematically (perhaps concurrently with your spring cleaning), go through storage areas and closets and determine what you no longer need or want
2. Clean each item so it looks as good as it can possibly look

(b)  Marking each item with price tags

1. Clearly mark each item with a price tag.  The local Business Supply stores often sell packages of coloured price stickers

(c)   Displaying your items for sale

1. Sort out patio tables, card tables, clothes racks – some way to display the items for sale to their best advantage

(d)  Advertising

1. Advertise in various local newspapers
2. Put Garage Sale Signs at nearby local intersections

(e)  What to do if it rains

1. Advertise a “rain day” in your ads

(f)    What do to with the sale left-overs

1. Arrange with a local charity to pick up garage sale left-overs or take them yourself to a Salvation Army or Goodwill drop centre

(g)  Make sure you have lots of change, a comfortable lawn chair, a cup of tea or coffee and lots of patience!! 

You may not earn enough money for to buy something at the top of your wish list, but you will feel the satisfaction of having rid yourself of many unwanted items.  Two rules you must obey:  NOTHING COMES BACK INTO THE HOUSE and SET A LIMIT ON WHAT YOU ALLOW YOURSELF TO BUY FROM YOUR NEIGHBOURS!!

Kris

Everyone has heard that you need to de-clutter your home when it’s time to sell.  But, what does that really mean? Before going hog wild and moving out… here’s a few of the most important things to consider removing before you list your home for sale. 

10. Personal photos. I don’t always recommend removing photos of the ‘family’ but if you have hallways filled with photos or photos on every end table it is probably necessary. Buyers really DO get distracted by them. They will take them all in as they walk down the hall. Not only do they take away from the home, but it’s really disturbing when a buyer is excited to ‘know’ the sellers. And, the buyers do look at them. 

9. Bills and personal papers. I understand that you cannot remove these document from the home all together, but please take the time to organize them, box them up and put them out of sight. If you have bills laying out on the counter or kitchen table it’s like an invitation for the buyers to ‘peek’ at them. Believe me – I discourage it – but it still happens. And as a seller you just don’t want to leave the temptation behind. 

8. Money. If you have cash, cash boxes or coin jars sitting out in the open… put them away. It’s just better for everyone if it’s out of sight. As Realtors we do what we can to protect your home, but your help makes a difference! 

7. Valuables. Jewellery, watches, valuable antiques…. anything that might be worth a bit of money that you wouldn’t want to lose. Out of sight, out of mind. If buyers don’t know they are there they won’t think about it. I can’t tell you how many homes I’ve been in where the jewellery is left on the dresser…. somehow it’s uncomfortable. At least put it away. 

6. Religious Items. Just remove them while your home is on the market.  In my experience, for some reason they make buyers feel really uncomfortable.  

5. Shoes! If you have a pile of shoes at the door… ask yourself why. A pile of shoes gives a buyer two impressions. The first? That there isn’t enough storage in your home. 2. That there are too many people living in the home. So, in order to avoid wondering on the part of the buyer… just put them away. 

4. Medicine. Don’t store it on the counter. Don’t store it in the bathroom. Put it at the back of a cabinet or Remove it.  

3. All things on your kitchen counter. Everything? Really? Yup. The cleaner you can leave the counter, the more buyers dream of being in there. Have you ever been in a cluttered kitchen? Does it feel inviting? How about a cleaned up kitchen? Does it make you want to spend time there? Also, if you store things on the counter it gives the appearance that you do not have enough storage space.  

2. No more junk drawers. Seriously. Clean them out. There is nothing more tacky than a potential buyer opening the cupboards and drawers and having things sticking out everywhere. Box up all the notes, pens, tacks, and odds and ends and put them away. Chances are you don’t dig in the drawer often anyways. AND, de-clutter your closets.  Fold linens neatly, line up the towels.  Give the impression that the home has plenty of storage and it all works! 

1. Clean off the Refrigerator! Take a photo of your fridge, take everything off, wash the front (and side), and take another photo. It is really refreshing to walk into a home that has a clean fridge. The kids pictures are beautiful but buyer’s can’t imagine their own children’s drawings on there if it is covered with yours. And, the magnets… they are generally more of a distraction to the room than a help. Just pack them away until your home is SOLD! 

There are many more ways to de-clutter a home for sale… but these are some important things to consider. For more information on selling your home.. give me a call.

Kris

You have just signed all of the paperwork to refinance your home and handed the loan officer the check for the appraisal, and now you’re wondering what is going to happen next. Good news-the appraisal inspection is painless, and usually takes anywhere from 20-40 minutes to complete. However, there are a few things that you should do to help the process move along as smooth as possible.

Preparing for the Bank Appraisal:

• Create a detailed list of the recent improvements, which should include the following: when completed, cost of the improvement, before and after pictures if available.
• Make sure each room is accessible; the appraiser is required to inspect each room. Give the appraiser room to do their job. Errors are more likely to occur when the appraiser isn’t able to concentrate on their inspection.
• Keep all pets restrained.
• If you live within a development that has a homeowners association, have the name and phone number of the contact person available, along with a fee statement.
• The appraiser may need to inspect the attic, so make sure you know where the access hatch is and have a ladder handy.
• Walk through each room and straighten up as if you were getting ready for company to visit. Appraisers are objective and can look past many things, however, the underwriter reviewing the appraisal photos may feel differently.
• Complete any unfinished projects-most appraisals are done “as is”, and any projects that haven’t been completed, will have to be adjusted for within the appraisal report.
• A copy of any agreements regarding easements (shared driveways and/or garages, etc.) should be made available.

Once the appraisal is complete:

You have a right to a copy of your appraisal, so ask for it. If you  find any errors or have any concerns, talk with your loan originator. This is hard for borrowers to understand, being that they paid for the appraisal, but the mortgage company is the appraiser’s client, and they can’t discuss the appraisal with anyone else unless given permission.

Kris

Get your own real estate agent: Most of us think of a real estate agent as representing the seller. But having your own agent to help you buy a home can save you time and money.  A good agent can help you find the right home quickly because they know the area and have access to listings, agent open houses and other information. Your agent can advise you on market conditions and appropriate prices.  Your agent will have a  professional network of inspectors, lawyers, mortgage brokers, that can assist you with the sale.  The listing agent has a legal responsibility to represent the sellers’ best interest, not yours.  You need a trained professional in your corner – a buyers’ agent.  And the best part, it’s free!

Kris