Ryan DeRoode | Twin Cities MN Realtor - Ryan DeRoode

The Top 3 Mistakes Sellers Make When Setting the List Price for their Home

Selling a home has some business considerations, some emotion involved, and possibly some fear of making a mistake. Home sellers are prone to make three common mistakes when deciding on a price at which to list their homes.

1. Setting the price based on the sellers’ needs.

How much the seller may need in cash to buy their next home or to realize the value appreciation they expected from their home has nothing to do with market value or what buyers are willing to pay for a home.

Sellers should do their best to separate their emotions about the home, as well as their expectations, from the decision on a list price for the home. A home, like any other commodity, is only worth as much as a buyer is willing to pay for it. Sellers should work with a real estate professional to complete a Comparative Market Analysis (CMA) to determine the approximate value of the home in the current market and for the neighborhood.

2. Expecting a list price similar to a neighbor’s home list price.

When a homeowner works with a real estate professional, the normal process for determining a list price for the home is to complete a CMA. They use the sold prices for homes that closed on the sale recently.

The list price of those sold homes is rarely the price at which they sold. The sold price is the most accurate way to see what a home can sell for in the current market. Because different real estate professionals select different comparable properties, and because they can use different adjustments to account for features that are different in the homes, list prices are not as useful as sold prices in the CMA process.

3. Using average prices per square foot to set list prices.

Though a part of the CMA process does involve the size of the home, it is used only after comparable sold prices are adjusted for feature differences.

Just comparing two homes based primarily or only on square footage implies that they are identical in other features. Though there are some areas where this could be true, in most areas there are several adjustments to comparable home sold prices to account for feature differences.

A carefully crafted CMA is the best way to determine the approximate market value of the home.

The main steps in the process are:

• Recently sold comparable homes in the same neighborhood or nearby are selected for the calculation. This is arguably the most important step, as using old comps or those out of the area can cause a less accurate valuation of the home.

• Though homes selected as comps should be as similar in features to the home to be valued, there will be differences in the number of bedrooms, baths, garage spaces, and more. The real estate professional must use a value for each of these features to adjust the actual sold price to be what it would have been if the homes were identical.

• Once the adjustments are completed, then the sold prices per square foot for the comps are averaged and that number is applied to the subject home to get the approximate suggested list price.

For the homeowner considering selling, knowing the basics of the CMA process can help in asking the right questions to determine how the real estate professional selected comps and handled the sold price adjustments. The goal is to arrive at a realistic list price to sell the home in the current market.

Questions on setting your selling price? Give me a call. I have extensive experience in helping sellers across the Minneapolis/Twin Cities area, and also including Lakeville, Apple Valley, Eagan, and Burnsville.

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Tips for a Simple and Stress-Free Move

Moving can be extremely stressful, especially when you haven’t planned properly for the big day. Recent surveys have found that moving is at the top of the list of stressful life events, including divorce, starting a new job, and having children. Most of us have experienced the typical moving day scenario: waking up on the morning of moving day, surrounded by boxes, bags, and furniture. Everyone’s desperate for a cup of coffee, but the mugs have already been packed and there’s not a spoon in sight. Then, much to everyone’s horror, the moving company arrives before the last boxes are packed. By the end of the day, the new house is overflowing with boxes, nobody can find what they need and tempers are flaring. It’s not the ideal way to spend the first night in a new house.

Moving day doesn’t have to be so stressful, though, as much of the pressure can be eliminated by employing some simple strategies. Planning your move effectively allows for a peaceful moving day and an easy transition into your organized new home. Moving can be an exciting, happy experience with the help of some easy tips.

Declutter Before Packing

Moving to a new house creates the perfect time and space to declutter. It’s a fantastic opportunity to rid yourself of old documents, clothes, electronics, books, and unwanted furniture. There are many different methods of decluttering, but the easiest involves working on one room at a time with separate piles for throwing away, keeping, and donating. When you’re finished working on a room, remove the donations and rubbish. Then, separate the items that you’re keeping and organize them into piles of similar items. If you struggle to get rid of clutter, it can be tempting to retrieve items from the donation pile, so organize to drop them off at a charity as soon as possible.

Personal documents that are no longer needed should be destroyed and sentimental items should be kept aside for separate packing. If you’re unsure as to whether to donate or keep something, hold on to it until the end of the process, then make a final decision. When moving to a smaller home, it’s important to declutter as much as possible. Objects like children’s artwork, cards, documents, and photos can be stored digitally to save physical space.

Staging to Sell

If your house is still listed for sale, packing may prove tricky as you’re still having regular showings to prospective buyers. The house needs to look its best in order to sell. Decluttering and packing is a messy process and it can detract from the overall appeal of a home.

Staging to sell is an effective method that enables buyers to picture the house as their own, as they’re able to visualize their own possessions in the home. This means removing anything that is personal, like photos, mementos, and ornaments. Clear the surfaces of shelves, especially in bathrooms and bedrooms, and try to keep colors as neutral as possible. Get rid of as much clutter as you can, including unnecessary furniture, as space creates the impression that the house is bigger and lighter. If you can, store packed boxes in a designated storage area, like a garage. However, if you don’t have storage space, pack boxes neatly against the walls. Deep clean neglected areas, especially blinds and windows, and add some fresh finishing touches, such as a vase of flowers or potted plants.

Intentional Packing

As each group of items is packed, label both the room and a list of the specific items on each side of the box for easy identification at the new house. Color-coding the boxes with a simple colored sticker per room enables both yourself and the moving team to recognize immediately where to group and place the boxes so that they don’t need to be moved from room to room. Ensure that you have strong storage boxes for fragile items and wrap them separately to keep them safe. Clearly mark them as fragile. Clothing on hangers can be packed on the hanger, if you have enough boxes and transport space, as it’ll save time during the unpacking period. When packing heavy items, such as books, double tape the bottom of the box to prevent breakage and try to limit the number of heavy objects per box.

Moving Day Prep

Preparation is essential for a smooth move. The day before moving, after most household goods have been packed, clean out appliances like the fridge, freezer, microwave, and oven. Throw away expired food and ensure that you have a cooler bag and ice packs ready to transfer food from the fridge and freezer during the move. Have a quick, easy breakfast prepped as well as snacks, drinks and something simple for lunch. When moving with pets, don’t forget pet food, bowls, and crates for the journey. Pack an overnight bag for each member of the family, containing an extra set of clothes, daily medication, toiletries, a towel, and personal items, as it may be difficult to unbox these items the same day of the move. If little children are part of the move, include a small bag of favorite toys and books to entertain them while you’re busy unpacking. Pack a set of bedding for each person, including sheets, pillows, and blankets, so that the first night in your new home is as comfortable as possible.

Freeze a cooked meal for that night’s dinner, to be reheated, or find a delivery service in your new area to order take-out easily. Make sure that your cell phone and an extra battery pack is charged, since you may have to coordinate with movers, family, and friends all day. Set an alarm to wake up earlier than usual, so that you have more time to deal with unforeseen problems.

Moving Day

Moving day can feel frantic as the moving team works their way through your old home, packing pieces of furniture, appliances, and boxes. If a family member or friend can babysit children and pets for the day, it could allow for a smoother move. However, if kids and pets are part of the move, make sure that they’re fed and entertained in a room away from the busiest part of the move, to keep them safe and prevent jarred nerves.

As you leave your old house, make sure that you check everything for the final time to make sure that you’ve left nothing behind.

Provide the moving team with instructions that link the color-coded boxes to their specific rooms in the new house, if possible. Once furniture, boxes, and appliances are being moved into the new house, don’t start unpacking boxes randomly. Instead, pack the fridge first from cooler boxes and set up safe spaces for little kids and pets. Put linen on the beds, ready for the night. Then, start the exciting process of unpacking and organizing your new house. Start with the kitchen, since those would most likely be the items that you’ll need first.

As you spend your first night in your new house, remind yourself that it may take some time to get all your boxes unpacked and feel settled. Instead of rushing through unpacking, take your time to absorb the flow of your new home. Enjoy creating new spaces and memories while celebrating a move without the usual stress and tension!

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How to Stay Under Budget When Buying a Home

For most people, purchasing a home will be the largest financial transaction they ever make. As such, it is extremely important that you manage to stay within your budget. After all, the amount of money you spend will directly impact your finances for the next 10-20 years.

Luckily, there are some easy tips you can follow, in order to keep things under budget, such as:

Establish a firm budget and communicate it to your real estate agent.

Before you can stick to a budget, you will first need to come up with a budget. Once you have decided what that number will be, it is important that you make it firm. This means, don’t tell your real estate agent that your budget is “around $300,000” or “$300,000-ish” if your actual budget is $275,000. By telling them exactly what you can afford, they can find you houses that make sense for you.

Avoid looking at out-of-budget homes.

When looking through your home purchase options, try to avoid looking at houses that are out of your budget. It can be very easy to convince yourself that it is worth it to pay an extra $20,000-$30,000 for a want vs. a need. However, if you can’t afford it, then you are just going to be torturing yourself unnecessarily. Stick to homes that you can afford.

Look at houses that have been on the market for a while.

Homes that have been on the market for a few months (or weeks in a seller’s market), can sometimes offer some excellent value. Because sellers will be anxious to complete a deal soon, they are often willing to negotiate on the terms of the deal. If you play your cards right, you can potentially negotiate thousands of dollars off of the home’s purchase price.

Ultimately, whether or not you can stick to your budget will come down to your level of self-control and willingness to negotiate. By following the advice contained in this article, you will be giving yourself the best possible chance of finding an excellent home that you can comfortably afford.

We’re here for you.

We understand that the home buying process is complex and filled with emotion. However, my goal is to provide you with comfort and reliability, as you’re navigating through the highs and lows of the real estate market, with the ultimate goal of finding your new home that fits your needs. Schedule a no-obligation first meeting with me here.

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3 Myths of Buying a Home

There are a lot of false presumptions regarding the requirements for purchasing a home. For some, the dream of homeownership remains just that, a dream, due to some common myths.

While some misconceptions were previously correct, many are no longer relevant today. With the facts, dreams can turn into reality.

You must have perfect credit

Having great credit does make financing a home easier, and allows for lower interest rates, but those with less than perfect credit can still get financed. Several sites provide credit scores free of charge for those unsure of their score.

If you have a credit score of at least 580, financing is possible. For those with a score lower, there are steps you can take right now to work on repairing or creating credit, such as paying your bills on time, keeping balances below 30% of available credit, not opening new credit cards or applying for new loans, and working on paying off debt.

A large down payment is required

The mere thought of coming up with a substantial down payment is intimidating for buyers of most income levels. For some, taking years of saving to meet the down payment requirement seems daunting. Since most conventional loans require a down payment, many homebuyers think there is a down payment requirement for all loans, which is not always the case.

There are ways to purchase a home with zero money down. Homebuyers may be eligible for government-backed loans that require little to no money down, zero or reduced closing costs, and a few additional incentives to homeownership.

These same government-backed loan programs are very lenient on credit scores and have assisted countless homeowners.

The process is difficult to understand

Purchasing a home is overwhelming for some, and it is the most significant financial transaction of most people’s lives. Luckily, there is an entire profession ready to assist. Real estate agents discuss the process from start to finish, often providing a detailed buyer’s guide whether you decide to work with them or not.

In working with a real estate agent, you will leverage the wealth of knowledge and network your agent/broker possesses. They know the ins and outs of the process, and will even refer reputable lenders to assist in getting you the financing you need.

Knowledge is the key to a successful transaction. Getting the facts right and working with real estate professionals is the first step to dispelling myths and becoming a homeowner.

If you have questions about the home buying process in the Lakeville or Apple Valley area, please reach out to me. Let’s discuss your goals and help make your dream of homeownership a reality.

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Top 5 Ways to Influence Buyers When You Want to Sell Your Home

You most likely fell in love with your home the second you saw it. Now it’s time to sell and move on to new adventures, and you want new buyers to experience the full force of the impact you felt when you laid eyes on it. These tips will help you achieve your aim.

Capture attention with curb appeal

Potential buyers form an idea about how much they like your house when they pull up in front of it. Before they step out of their car, they view the outside of the property and get a “hunch” about whether it could be right for them.

First impressions are important, so make sure the yard and front porch or steps aren’t full of clutter, and the area is inviting.

Before a showing: Trim hedges and potted plants, put gardening tools out of sight, and turn on lighting (depending on the time of day). Buyers might not always view the property in daylight, and you want it to look welcoming rather than dark and dismal.

Brighten up and clean the interior

Take a look around each level of your home to ensure it is fresh and gleaming. Buyers like spotless properties reflecting that it has been impeccably maintained, even if they wouldn’t keep it as flawless themselves. No doubt, your home is clean, but it’s best to convey pristine organization and cleanliness to make a good impression.

The best way to highlight freshness is by polishing, clearing clutter, and dispersing a pleasant crisp scent. Don’t go overboard, as potential buyers will be suspicious that the scent is an attempt to cover up bad odors. Vanilla, bergamot, cinnamon, or lavender essential oils are good choices, when used sparingly since many people enjoy them.

Before a showing: Do a quick polish to shine up surfaces, including sinks, the kitchen drainer, and the stovetop. If you have stainless steel appliances, be sure to remove streaks and fingerprints. And don’t forget to “sniff test” the air in the house.

Update fixtures and essential goods

As you’re preparing to list, you may wish to consider staging your home, and you will want to change old fixtures and essential elements that need upgrading. Items such as new doorknobs and handles, light switches, and lighting will make a fresh, yet subtle impression. This will make it much easier to swiftly prepare your home when you get “the call” or “the text” for a showing.

Before a showing: Look around your home with fresh eyes. Imagine you’re a potential buyer. Do you notice worn, tarnished accessories that spoil the ambiance? Put them out of sight, or, if they are inexpensive to replace, do so (maybe even while your potential buyers are touring your home!).

Create a sense of space

If you’ve cleared the clutter from rooms and cleaned the windows, your job is almost done. You can add the illusion of extra space, however, with long-legged furniture to accentuate height. Colorful prints and paintings on walls will draw the buyer’s gaze upward. You can also use mirrors to reflect large spaces and brighten dim hallways.

Before a showing: Make sure spaces are clear and views are unobstructed. Open blinds or draperies to bring in light and showcase the room’s full space.

Be organized

Consider how impressed you’d be if you test drove a car you considered purchasing, and the current owner was super-organized – items were neatly stored in the glove compartment, manuals in their proper place, receipts for additional repairs or new tires are neatly filed – you get the idea! You would consider this a sign they cared for the vehicle and properly maintained it.

The same is true when people come to see your home. If you’re able to provide receipts for routine maintenance or major new purchases (i.e. a new well or septic system), you’re providing evidence to show the property’s well-maintained, and everything is in working order.

Since showings can happen on short notice (especially in today’s market!) having an organized checklist or plan for what you need to do before a showing, will help you maximize your preparation time, and ultimately the impact your home leaves on potential buyers. Don’t forget to have a plan in place about how to manage children and pets when a showing occurs, so you know what to do.

Before a showing: Have a folder available to showcase any major purchases, for example, new windows or roof repairs that were completed on the home.

I wish you the best of luck as you’re in the home selling process, and hope you find the just-right buyer to see all of the potential in your home that you did initially!

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These 5 Things Can Kill Your Home Sale

You’ve read all the articles about getting your home ready to sell, and you have followed the advice and suggestions they offer. Your yard and entryway are attractive, the house has great curb appeal, you have painted where needed, and removed clutter and excess from every room. Your home looks great, and you have found a top-notch real estate broker. But is something lurking that can prevent your home from selling?

Mandatory Disclosure Laws

Although each state has disclosure laws that mandate homeowners to disclose any problems that exist with the property being sold, many sellers are not aware of some defects that exist in their homes. The issues could have existed long before the current owners purchased the property, or they may be the inadvertent result of home alterations. When problems are eventually recognized by the new buyers, lawsuits are the usual result. Regulations affecting disclosure can differ in each state. Did you know that, in spite of all your hard work, one or more of the following conditions can kill a home sale?

Sale Killers

Paying a few hundred dollars for a home inspection can catch some problems and save money down the road, but even the best inspectors are restricted in what they can see. Quite often a home inspector is not able to check under the home. If you suspect your home has one or more of the following problems, it would be worth it to pay for a thorough and more expensive inspection.

• Lead Paint – 1978 was the year that lead paint became banned for residential use. If your home was built prior to that year, it is very likely some older layers of paint contain lead. As the lead paint deteriorates it creates lead-contaminated dust in the home. Federal law requires the seller of any home built before 1978 to comply with notifications and disclosure obligations regarding lead paint.

• Asbestos – For many years asbestos was a major component in a variety of home construction products. Asbestos was used in siding, insulation in ducts and attics, vinyl floors, and a variety of glues. Asbestos is a scary substance and very costly to have removed. If the item that contains the asbestos is in excellent condition and will remain undisturbed, the seller is not obligated to remove it. If buyers suspect asbestos is present, they may walk away from the sale.

• Mold – One of the scariest environmental problems a home can have is black mold. Homebuyers are repulsed by any signs of mold. Dampness in walls, ceilings, and floors indicates mold of some kind is present and growing. Some mold causes allergic reactions, and some types are very toxic. You can have a mold inspection performed and receive a documented form showing the home is free of the toxin. This is a big plus if you live in an area where mold is prevalent.

• Radon Gas – Minnesota State Law requires sellers disclose radon information to buyers. Simply put, it makes financial sense for a seller to have radon testing performed before listing the home for sale, or at least prepare for the buyer to perform a test at the time of inspection.

• Cracks In Foundation – When a house settles, it can cause cracks in the foundation. Signs of settling include doors that won’t close properly, visible small cracks in walls or floor tiles, and windows that stick. You will need to consult with a structural engineer to determine if a foundation crack is responsible. The repair may be expensive if the problem has been neglected for a long time, and the home may be difficult to sell, until the repair is made.

When you get your home ready to put on the market, remember these five problems that could kill a sale in minutes. Have your home checked, and take care of any issues before you list your home. It’s better to invest some money on repairs than to lose a sale.

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