Frequently I meet with home sellers who do not wish to be nickeled and dimed over repairs when they are under contract to sell. They will express their desire to sell “as-is” during our listing appointment. There are some points that sellers need to understand about “as-is.”
Selling as-is immediately devalues a home in the eyes of a buyer.
The connotation of as-is to a buyer is one that there are numerous and expensive problems with a home. If there weren’t, why would a seller let you know up front they are selling as-is? Surely, they must be covering up a condition issue. Buyers will picture the home above when a seller is really trying to tell them, “I don’t want to be bothered fixing toilet flappers. I’m too busy.” Talk about demolishing an ant hill with an atom bomb, this is a great example of blowing the intention out of proportion.
Selling as-is is not a substitute for disclosing known issues with a home.
Sellers in Viriginia are tasked with disclosing material defects when selling their home. Latent material defects are the ones that some sellers may think an as-is disclosure is sufficient to disclose. It is not. If there is known mold, it must be disclosed. If there are high radon levels, it must be disclosed. If the seller knows the air conditioning doesn’t work, and wants to list in the winter as-is, that is a problem. And if a buyer voided a contract, presented a seller with an inspection report revealing problems, the seller can’t turn around and ignore the report and slap an as-is label on the home for future buyers and call it a day. Material defects, if not fixed, must be disclosed.
All home sales that happen using the Residential Sales Contract created by the Northen Virginia Association of REALTORS® are actually sold as-is.
There is a Property Maintenance and Condition paragraph in this document that states that that home is being sold in substantially the same condition as of, and a time frame of date of home inspection, date of offer, or some other filled in date, is selected. Furthermore, there are no required repairs in this contract with the exception of smoke detectors being installed and working per the laws and regulations of Virginia and, if a termite inspection is required in the contract, sellers must remediate and fix any damage noted by the pest inspector. (I’ve been selling homes since 2005 and have had no needed repairs due to termite damage, but plenty needing treatment to kill the wood destroying insects. Treatment is not expensive and can often be negotiated down with the pest company.
My favorite as-is date is date of the home inspection. It gives a written record of the home on the date of the inspection that can be used for reference if there is a walk through issue. Sellers are not obligated to do any repairs just because a buyer is having an inspection. If the buyer agreed to move forward with no repairs and complain at walk through that the faucet in the kitchen is leaking, and the inspection report reveals it to be the same at the time of the inspection, it is in substantially the same condition as the date of the home inspection.
Selling as-is is really more of a point of warning, rather than a disclosure, for buyers purchasing from estates or banks that foreclosed on a home. These entities are exempt from the Virginia Residential Property Disclosure Act and, having never lived in the property, are not expected to know material defects with the home. The same point of warning, however, does not exempt a seller who has resided in the property from making disclosures.
When sellers who were vehement about selling as-is hear these points, they understand that a blanket refusal from the outset to do nothing to remedy problems in the home, no matter how small, is going to result in less money in their pockets. Buyer enthusiasm is what makes buyers excited to bid above list price and get involved in multiple offer situations. Starting from an as-is point, buyer enthusiasm is not going to exist. Buyer skepticism is going to reign the day.
Some aggravation is worth the money you get in the sales price to be open to repair requests and judge them on a case by case basis.
New Year’s Eve 2021 and what is this Bristow/Gainesville Real Estate Agent doing? Starting her yearend market reports and blogging. What better topic to post about on my real estate blog than my predictions for the 2022 real estate market. This prediction is not for the country, nor the entire Commonwealth of Virginia. Instead, it is for the areas with which I am most familiar that are outlined on the chalkboard to the right of this post. Those I am most familiar with are Western Prince William County, which includes Bristow, Gainesville and Haymarket.
The real estate market in the first half of 2021 was more hectic and buyer frantic than it had been throughout all of 2020. Buyers were facing multiple offer situations, having to waive all contingencies and offer well above list price to have a chance at being chosen. The second half of 2021 is where things started to calm down. That’s not to say that the market went from a seller’s market to a buyer’s market. Not at all. It was still a seller’s market, but not as intense. My favorite way to explain the change in the latter half of 2021 was a weather analogy. If it were 120° outside early in the day, but later was 108°, you could say it was cooler than it had been, but 108° would still be considered hot.
The second half of 2021, while still presenting a shortage of inventory, compared to buyers in the marketplace, saw less frenzy on behalf of the buyers. Home inspections became a common request again, which was a relief to me having a few buyers actively looking. Marketing times began to creep up and seller subsidy (closing cost help) started to be seen here and there. All of this started about the time the sellers decided in late June/early July to take advantage of the seller’s market. Meanwhile, buyers who had lost out on summer vacations in 2020, were busying themselves with travel and fun. That meant putting house hunting on hold for a bit. The fall didn’t see much of a correction when they returned, rested and relaxed. The buyer frenzy had calmed, but it was still a seller’s market.
The New Year is jumping off from where we left 2021. Home prices are still high and climbing, but the rate of increase is slowing down. It’s far less likely to see a home list a at a reasonable price and see it bid up 7-10% higher. List price or a little higher is what sellers seem to be getting now. Sellers are still unlikely to have to give any closing cost help, but are much more likely to see home inspection contingencies.
No matter the market, my job remains the same–getting my sellers the maximum bottom line they can out of their largest asset. That starts with buyer enthusiasm and maintaining it throughout the process. For buyers it means making sure they find a home that meets their needs and are as protected as they can be throughout the process. Referring to the best lenders, home inspectors and title companies are just the start.
If a home sale or purchase in on your radar for 2022, let’s chat. It is never too early to start talking over the process and getting ready in advance.
As I drove around the Manassas/Bristow/Gainesville area today, there was a spring in my step. It certainly is a festive time of year, but that was not it. And I was pleased as punch that I closed not one, but two deals this week. The Christmas Miracle in Warrenton were buyer-clients. The last sale of the year was a seller-client in my ultimate neighborhood of expertise–Braemar. (If you can’t be an expert in the neighborhood where you have lived for over sixteen years and have served on the HOA Board for almost just as long, where can you be?) Yes, selling houses this close to the holidays is an extra special kind of happy, but I have to say, it is not an unusual occurrence in my real estate career. I sell houses year round and the yearend market is always a strong one.
It hit me when I got home that the extra pep in my step was due to the fact that it is December 22nd. That means the winter solstice is behind us and we have already faced the day with the least amount of sunlight hours. Woo-hoo! If there is one thing that can consistently drag me down, it is the dark of winter. As I write this post it is only getting on six o’clock in the evening, yet it feels like it could be ten in the evening. Today is a day for all of those with Seasonal Affective Disorder to cheer. We are coming out of the dark with a little more daylight every day as head through winter.
Lack of daylight and early sunsets don’t just make for a down mood. These things affect how I stage a vacant home, or direct a seller to leave an occupied home for showings. Light is the ultimate staging commodity when the daylight hours are minimal. A torch lap on a switched outlet in every bedroom is a must. Buyer enthusiasm can not reach its peak during an evening showing when all natural light extinguished hours before and buyers feel they are touring your home by the light of their cell phones.
Being a professional marketing agent, I know that getting buyers enthusiastic is the name of the game. When it daylight is minimal, light staging will definitely be accompanied by lamps in every room without overhead lighting. That’s what we did in 12423 Selkirk Lane that closed yesterday. A few more months of lamps as the critical staging item and we will be talking about what flowers to plant for the max curb appeal.
Being a Listing Agent I have honed many skills that allow my sellers to make the best first impressions, create buyer enthusiasm and ultimately, wring more from their sales to max out their bottom lines. Staging properties is not something that needs to be done at great expense to a seller. Little touches here and there are usually all that is needed. Most times, using the items the seller has in their home works. Every so often, I substitute in something from my own inventory.
In the case of the kitchen above, the seller had left barstools, the dining table (no chairs) and the table runner and a very nice polish pottery bowl. This area was tight. Fluffing the table included turning over the runner to the reverse side which was a lot less busy with only one pattern vs. three patterns, setting the table, adding a taller centerpiece and some chairs. Then came figuring out what to do with the barstools. The ones present didn’t really do anything but call attention to the big dining table and interrupt the flow of the island.
Adding these saddle style, lower height black bar stools left a clean line of the granite counters and left more space visually in the dining area. And with the living room being completely empty, I did make use of the bar stools elsewhere to set up an area of focus. You can see the full video tour of the property by clicking this link. There are examples of light staging in the owner’s bedroom and bathroom. Items were edited from the home that were useful, but dated it. Lamps, rugs, etc.
This home had been on the market as a For Sale By Owner on Zillow at the same list price and had a few open houses with many buyers through. However, it lacked offers when I took over. After the staging, professional photos and a few days on the market, the seller had four offers.
The devil truly is in the details when a home hits the market. Professional marketing agents like me get that and do everything we can to help our listings make the absolute best first impression.
Not too long ago, I was in a car with a very good friend of mine. The music playing on her car stereo was hard core metal. It sounded so pissed off and angry to me that I wanted to beg her to turn it off. She remarked that if I listened to the lyrics, I would find them insightful and contemplative. Being a communications major I knew I had to get past the non-verbal first, which was that loud, over-powered, fast paced music to have a chance of hearing the lyrics. And the way the artist was spitting out his words, it was not likely I would even understand them. The artists comtemplative and insightful thoughts were going to be lost to anyone who didn’t like this kind of music. It did not have wide appeal.
If you did not already know, most communication we encounter is non-verbal, even in a verbal message through conversation, music and so forth. How a person holds themselves, the words they chose to use, the pace of their conversation, the confidence in their voice and so much more all make up over ninety percent of what the recipient of our messages takes in. When the non-verbal conflicts with the verbal, the recipient can find themselves suspicious of the verbal. So how does this translate to selling a home?
Even in the strongly favored seller’s market that Bristow and Gainesville have been experiencing, non-verbal messages can overpower the message a seller really aims to make to buyers. Perhaps a seller has a very large floor plan with plenty of space. That message is not going to get through to buyers if the space is so cluttered with furnishing that buyers can’t actually take in the feeling of spaciousness. Maybe the home is targeted to luxury home buyers because it fits the mold of a refined home. It is not going to resonate with those buyers if the paint colors inside change from room to room and are reminiscent of trends that went by the way side and the carpet is stained. The disconnect between the intended message and what is actually happening are not going to lift buyer enthusiasm, but leave buyers hesitant to act. Or if they do act, they won’t act with the same gusto in the offer price they would if the intended message mirrored the non-verbal message a seller’s home is sending..
Listing preparation is where a seller’s intended message is edited to come through loud and clear. And when it comes to selling a home, the only way to achieve that is by de-cluterring, removing personal items, having fresh neutral paint throughout (preferrably professional painted with clean lines,) new carpet and rearranging furnishings to showcase the floor plan. Vacant homes will also do best with some light staging to help buyers visualize the space.
Of course, how to market to buyers is where a professional listing agent comes in. My job is make sure the non-verbal message of your home matches what you want your message to be. If it doesn’t, it will show in your offers. You don’t need to be a mind reader. Hire an agent well versed in the local market. This isn’t going to be your one or two deal a year agent. This is going to be a top producing agent with their finger on the pulse of the market. In Bristow and Gainesville, that is me. Get in touch for a no obligation market analysis that gives you an idea of your bottom line and how to best to increase it. If you don’t, you might as well be the deep thinker that wrote a song akin to poetry that will never be widely heard due to the overpowering music.
The Second Key to Max Profit When Selling Your Home
There are two major things a seller can do, even in a seller’s market, to max out their bottom line. The first I wrote about in detail and is all about creating buyer enthusiasm. This is essentially putting the shiniest, most attractive bait on the hook to the get the best and/or most buyers acting on the listing. The second key is what takes place after a buyer is under contract and it is just as important. It just involves different tasks. Simply put it is:
Maintaining Buyer Enthusiasm and Seller Profit
Neogtiations after a contract sales price has been agreed upon by the seller and buyer can be just as tense as the intial negotiations, if not more so. Buyers can feel they have a seller by the shorts and want to create points of renegotiation along the way. The first point of renegoation is home inspection. Having an idea of how to prepare for a home inspection is so important. Sellers can easily overlook simple things that can cause big panic. Or buyers can feel so entitled they overask. How should a seller respond to an an over indulgent buyer? An experienced, skilled, full-time professional agent knows how to deliver “no” without losing a buyer.
Appraisal is the second hurdle many buyers need to cross as a contingency to a sale. Even if a buyer has waived an appraisal contingency and is willing to eat any difference between appraised value and contracted sales price, there can be a buyer’s remorse issue if the divide exists at all, or is what the buyer considers too big. Not every listing agent meets an appraiser with a package of information to support the sales price. Whether the buyer has an appraisal contingency or not, I know that part of maintaining buyer enthusiasm and my seller’s profit is meeting the appraiser every time.
One of my favorite success stories about meeting an appraiser comes from having a less updated home sell for more than a very updated home of the exact same floor plan. I met the apprasier and though we still appraised low, we sold for more than the updated home. Turns out that discount broker didn’t meet the appraiser and relied on the home to speak for itself, leaving $15,000 on the table. (That was way more than the updated home’s seller would have paid by hiring a non-discount broker.)
In a seller’s market, getting through HOA void periods quickly is important as well. Having an agent that prepares for that ahead of time and doesn’t wait until the seller is under contract is just leaving the right to void period open for a buyer. And that’s not the only pitfall regarding HOAs. Did you know if HOA or condo violations are not corrected before settlement a buyer maintains a right to void under the title paragraph of the contract? Professional, local agents know the most frequently seen HOA violations and can help a seller prepare for their HOA resale inspection before the home is ever listed.
Details abound in the contract to close period of a home sale. Getting the major points of negotiation handled before there is an issue is a major part of that. Hiring a professional agent to lead the way is always the path to the highest profit. Again, it may seem intuitive to cut commission to save money, but he best don’t work for less. If a seller wants the best result (highest bottom line,) the agent they hire matters.
Another day, another not so startling realization that too many listing agents have no idea how their choice of words, photos and inaction affect their sellers. A buyer-client texted me a listing of Interest. Her words were, “I know that something has to be wrong with the property since it’s been on the market so long.”
It would be a lie to say I had no pre-conceived notions as I typed the address in the MLS. Afterall, she had found the home on a media website beginning with the last letter of the alphabet that is infamous for its lack of current information. I was certain I would find that the property was in fact under contract. Alas, it was not. Hmm. What was going on?
Public facing remarks told the tale of a perfectly pleasing remodeled home with more acreage than its surrounding neighbors. Days on market showed nearly two months on the market. That does’t jive with being on the market two months when conditions favor sellers. The photos weren’t bad, but the opening one showed a three car garage with all of the doors open and junk spilling out of them. Not great, but not the worst I’ve ever seen. That’s when I noticed the agent remarks had some very important information.
The seller was insisting on a contingency on him finding another home to rent and wanted the right to void a contract at any time without penalty.
The property was being sold “STRICTLY AS-IS”
The first one alone was a big issue. Who the heck wants to get into business with a seller who sounds like they don’t want to sell? In two months, he should have been able to find some sort of temporary housing. Add in the all caps announcement that the home was being sold as is and I smelled trouble. Evidently, I was not alone as the home had been on the market all this time without action.
Calling the listing agent when you get into territory like this as a buyer’s agent is key. The barrier to entry into real estate is low enough, not to mention the very minimal expectations of many brokerages that don’t care who they bring on board as long as they have listings and buyers. A phone call always clears things up one way or another.
The listing agent was cheerful enough. He had been in business a very long time, but that doesn’t mean anything as I soon found out. Not only did he express that his seller had already found a home and moved out, he was shocked his own listing still had those remarks. Really?!! It was his responsibility to make sure the information was accurate, but I didn’t care. Leave it be. Less interest means more opportunity for my buyers.
As for the “STRICTLY AS-IS” language, I asked why he put that in there. After all, every listing agent worth anything knows that our contracts are as-is any way. Saying the home is “STRICTLY AS-IS” just rouses images of costly problems lurking in the shadows. Nope. There was one unfinished project, a koi pond. The seller just didn’t want to make any repairs. Most sellers don’t, but stating from the get go that a home is as-is just drives interest and price down. The connotation behind those words is not good for seller’s bottom line.
Counseling my sellers on the lay of the land with regard to strategy and marketing is key to getting them the most interest and highest possible price. Most sellers have no idea how their own ideas and stubbornness can work against them. It is my job as a full-time real estate professional to make sure they fully understand each aspect of the sales process and that we have a solid plan of action to increase buyer enthusiasm, not arouse buyer suspicion.
When you are ready to sell, insist on hiring a full-time professional agent that will level with you about how to get that sought after top of the market price. The simple fact that demand may favor sellers is not a recipe to demand one sided negotiations and lackluster marketing that will leave you buyer-less.
When Is Using an Escalation Clause in an Offer Appropriate?
One of the devils of a seller’s market is use of the escalation clause in offers from buyers. Having been at the helm of a twenty-six offer offer scrum with a Gainesville seller ealier this year, I legitimately had to make sticky notes on the offers as to which offer escalated them to various points. From the listing side they are sought after by sellers, but misused by buyers.
The best explanation I have come up with for escalation clauses for my own buyer clients is that they should speak in your absence. Say for instance a home has no offers, but is likely to get many. An interested buyer may write a full price offer with an escalation clause to speak for them when other offers roll in. However, writing an offer with an escalation clause and expecting an immediate answer from a seller is insanity.
Escalation clauses are an invitation to the seller to find offers that would escalate the offer. A buyer writing an offer with an escalation clause, if they are willing to pay above list price and do not want to compete, should simply write the offer they were willing to stand behind with their escalation clause. That would be worthy of a seller answering right away.
Nonetheless, this week I encountered two misuses of escalation clauses as a listing agent. My sellers received a full price offer with an extremely generous escalation addendum. When they had not answered the buyer within less than eight hours, they pulled their offer. It was madness. But it didn’t end there. Another offer with an escalation addendum rolled in. What did they want? An immediate answer, of course. When they didn’t get it, they withdrew their offer.
Escalation clauses are wonderful tools when used appropriately. And of course, if you use one, you must expect the seller to attempt to escalate it or, another danger of escalation clauses, simply counter you at the highest escalation point. When buying a home, if you want an immediate answer, an escalation addendum is likely not the tool you want.
Sellers: Is Your Home Ready For a Home Inspection?
In the seller market conditions that the Bristow/Gainesville market, and entire Northern Virginia area has been facing, home inspections have been more rare. However, after a dip in activity during the summer months, home inspection contingencies seem to be making a come back. Granted, buyers may be opting for Right to Void Home Inspections vs. the right to ask for repairs as part of the contingency. However, your property should leave very little cause for concern. You don’t want to cause undue alarm to buyers, their agents and inspectors for items that are well within your control to maintain for less than the cost of a dinner out at a very nice restaurant.
Here are some items that sellers can do to prepare their properties for home inspection:
Change your air filters before the inspection
Make sure all burned out light bulbs have been replaced
Gas fireplaces should have pilot lights lit and ready to ignite
Replace batteries in ceiling fan remotes and leave remotes where they are visible
Make sure your garage door opener safety sensors are aligned and free of cobwebs
Garage door remotes should be left out for testing
Downspouts should be connected and in good order with extenders if possible
Hose bibs should be winterized in mid to late fall and remain so until early spring
Make sure your smoke detectors are less than ten years old, have fresh batteries and all are the same model if hard wired into your home
These simple items can save so many headaches with buyers. Light bulbs that are burned out are called out as non-functioning lights by inspectors. Same with gas fireplaces that can’t be ignited. And dirty air filters can cause all kinds of alarm.
The photo at the top of this post was taken at a home inspection where I represented the buyer. There was zero air flow going through it, thus suffocating the air handler. The filter was being sucked into the air handler. This meams the HVAC was working harder than it needed to, which can lead to prematurely aging the system. In the case of the property where this drywall dust and paint particle encrusted filter was found, it was obvious that the renovations done to the property prior to hitting the market left a lot of debris in the air. Obviously, it all landed in the air filter, as it is supposed to. Unfortunately, the sellers, nor their contractors, thought to change the air filter during or after the improvements to lessen the stress on the HVAC.
Simple maintenance items can stop a lot of unnecessary panic.
When meeting with sellers about what they should do to to prepare their home for market, I am often met with groans and dread. Suggesting anything from a fresh coat of paint, new carpet, updated flooring in bathrooms and even de-cluttering can elicit responses I know like the back of my hand. Here are a few:
The next owners will want to personalize the space with their own colors so it is a waste to paint it neutral.
Installing carpet is such a hassle. I would rather just offer a credit.
That floor in the bathroom has served us well all the time we’ve lived here. Why update it now?
De-clutter? I thought it was a seller’s market. Can’t buyers look past that? There’s nothing on the market.
Nobody likes the hassle of a project, that includes buyers. The cost to actually do the preparation far outweights what a buyer would charge in what I can a P.I.T.A. (Pain In The ***) tax. I’ve expressed it many times to sellers. When a buyer walks in and slumps their shoulders with the dread of a task, the adding machine is running at estimates that always exceed the cost of doing business. Now, due to a recent sale in my own neighborhood, I have a real life example to share. In fact, I made it part of my recent Braemar Townhouse Report.
In the span of seventy-nine days, one townhouse was marketed and sold twice by two different owners. The first go round was by sellers who had owned the home for three years. The home was more cluttered than it should have been on professional photo day, had some varying paint colors on the wall and needed carpet in a couple of rooms. Apparently, they also needed a new roof. It listed for $385,000 and sold for $393,000.
Only thirteen days later, the investor that bought the home had it listed for $429,000. They had painted the entire home a neutral color, which freshened it up. They added a back splash in the kitchen. New lighting fixtures were added to the bathrooms and anywhere there was a ceiling mounted fixture. The bathrooms were tiled with a very modern, neutral tile. The owner’s bathroom vanity had been painted. Faucets in the bathrooms were updated. New mirrors added or old ones framed in the bathroom for a more modern feel. Carpet in the bedrooms was replaced. A new garage door opener installed and the big one, a new roof. It closed in late August for $433,000.
The difference in sold price was $40,000. The investment to make the improvements, at worst, was likely $15,000. More likely, it was $10,000. Would spending that kind of money to get $25,000 to $30,000 more in your sold price be worth the aggravation? Clearly, the price to do the jobs was not $40,000. And if the first sellers had an approved insurance claim for the roof, they would have been facing far less money spent than they left on the table.
Some sellers really are cash strapped and can’t afford the up front costs to do improvements. The great news for them is that there are actually contractors out there who will let payment ride until the home closes and allow themselves to be paid from funds at closing.
If this example doesn’t drive home the reason to do listing preparation, I don’t know what would. And the differences in sales prices only get larger when the price point and home are larger. Hire a professional listing agent that knows how best to prepare a listing with minimal cash outlay for maxmimum return. If you are selling in Bristow, Gainesville or the surrounding area, I can help.