Home Staging is Worth the Expense

Home Staging Living Room

As the teach in sales training, don’t say price or cost or expense but investment. And that is what home staging is – an investment. The reason is that it pays for itself by either getting a better price when you sell your home or finding a tenant faster when renting an apartment. We asked Tenay Benes of Calm Castle Home Staging (https://www.calmcastle.com/) to give us some insights on why home staging makes sense.

Vacant vs. Occupied Staging

You have opposite goals with these two situations. With Occupied staging people tend to accumulate a lot of items over time and the house can start looking cluttered and smaller than it actually is. The goal here is to start culling out and opening up rooms to make them look larger and often more inviting. Many people almost don’t want to move after completing the process because they find their house more enjoyable. There will also some touch up, painting in places and repairs done to make everything look in good shape.

With Vacant staging you are adding furnishings to the property. If you have already moved everything out, the house can look very barren and uninviting. Most people can’t picture how it will look after they move their furniture in. By putting some furnishings in the rooms, it makes the house much more inviting. It doesn’t take a lot but it makes a big difference in how it looks and shows.

Increase Price and Likelihood of Selling

By doing either the vacant or occupied staging, homes typically sell faster and for a higher price. Think about how you feel if you walk into a place that you want to straighten or fix things versus a place where you could imagine living there right now. Even though the house is identical, it is just the way it is decorated which can have a large impact on people’s impressions.

Well-Maintained Home

When buyers walk through, they not only are looking to see if the number and size of rooms and layout meet their needs. They are also looking to get an idea of what type of condition the house is in. If they notice a number of things that need fixing, they will figure there are other things they haven’t noticed yet. That will make them less interested and decrease what they are willing to pay because they are assuming that they will have to spend money fixing the different things and automatically reduce the offer price by that amount or more. You want the house to look in great shape. The following two photos show two bedrooms. The differences are exaggerated but our guess is you would be willing to pay a lot more for one versus the other.

Fair Market Value

There is no exact fair market value for a house. It is whatever a buyer is willing to pay ultimately. However, it is in a range and by having the house fixed up and looking nice with no clutter, you are much more likely to get in the upper range of the fair market value.

Grow Your Home

By reducing the clutter, you can make the house feel larger. It can also mean rearranging furniture so that you get a better use of the space. You want everything to flow. When you walk into a room you don’t want to be bumping into a chair or bureau or other item. The doors should be able to swing freely and not be blocked by furniture. After people finish the staging process, they are usually amazed at how much larger their home feels.

Needs a Purpose

When you are living in a home, sometimes you might use a room for several purposes. That is fine for living there, but if you are selling, it is better if each room has an obvious single purpose so it is clear to potential buyers walking through. It may seem obvious to you, but many people just can’t visualize spaces. If the room’s purpose isn’t clear, someone who can’t visualize can essentially ignore the room and right it off. That has just reduced the value of the house to them.

Competition

Remember that your home is not the only one on the market. You are in a competition with the other sellers. By doing the staging and having your home looking really nice and like the buyer can move in tomorrow without having to do any work, it gives you a leg up on the competition.

If you were wondering whether doing staging is worth the money, hopefully this will convince you it is worth the time, money and effort. Remember, staging is an investment, not an expense.

Tips on Buying a Home

Buying a home is one of the most cherished dreams for any person. It’s a decision that requires a lot of planning and a big financial commitment on the part of the individual. It’s important that the decision is based on sound understanding of your finances, so that you can acquire your dream home without hurting your future financial goals.

As they say, location, location, location. A small home such as the one below could sell for more than the large one above if it is an extremely desirable area.

Here are a few tips for home buyers to help them prepare for this important but often overwhelming process.

Ensure that you meet the prerequisites

Take stock of your financial situation to ensure:

  • You have little or no outstanding debt. If not, try and pay them first before embarking on buying a house.
  • Your savings are in good health to take care of your expenses for at least 6 months after making the down payment of for a new house. If not, start saving extra to build up sufficient funds.
  • Income wise, you are secure in the foreseeable future. If one of the following is true, then try and secure this front first:
  • You don’t have a regular job
  • Your business is not doing well
  • You are not happy with your current job, and the market does not have many opportunities
  • Explore the real-estate market. Make sure approximate price of the kind of house you want falls within your affordability range.

Plan a budget

Figure out the budget for the house you want to buy. Assess how much you can afford to pay upfront and what would be the ideal monthly instalment for you to pay. The upfront amount to be paid is usually 20% of the total cost of a property. After having made the down payment out of your savings, no more than 25% of your monthly take-home salary should be planned towards paying the loan instalment.

Similarly, plan ahead for the closing costs too, which can be of the tune of 5% of the loan amount. They might need to be paid in future, but it’s better to keep that money reserved or start saving for it.

Find the right home to buy

Do proper research and identify a house that fits your budget and is located in the right neighborhood. Take help of a professional agent if you’re not well-versed with the real-estate scene in the area. Don’t fall for a lucrative offer that makes an unaffordable property look otherwise. Most importantly, stick to your budget.

Get pre-approved for a loan and select the right lender

If you’ve taken care of the prerequisite and planning stages, it should not be difficult to get a pre-approval letter for a loan. Any lender will be willing to lend only after assessing your income and debts. Getting pre-approved gives you an edge in the whole process.

Select the lender carefully based on reputation, competitiveness of the rate, transparency of lending offer and your own experience of dealing with them.

Negotiate hard and get the best deal

You are investing a great amount of money into buying your dream home. So, don’t shy away from negotiating hard and obtaining the best deal possible for you. Do your homework and revise it frequently during the deal finalization process without getting intimidated at any stage. And, don’t let them know if you have fallen in love with a property. That will make it much harder to negotiate and get a good deal.

Rehabbing Tips for Profit

Size Matters

If you want to rehab a house, what size and price house would you choose? Have you watched the TV show about real estate agents who sell to the rich and famous? Well, do you have contacts to the rich and famous? Do you have the money to fix up a house that size? The larger and the higher end the house, the more money you need to put in to make money on the back side when you sell.

Traditionally, you don’t want to even buy the largest house in the neighborhood even if it isn’t a mansion. Why? Because the average price of the other houses will hold down the price of the larger house. If that same house were in a neighborhood with larger houses the same size as it, it would sell for more.

In addition, there is a limited market for the large homes. Just not that many people can afford them. By going for the average price home you have a much larger market of people who will be interested in buying. That also means you can probably sell faster which is important because there are holding costs involved. The faster you sell, the lower the holding costs and the more profit you make.

What you want to do is find out what the average home price is an area and look for a house that would be worth that fixed up but you can get for a discount because of some problem, whether that is repairs needed or foreclosure or something else. You want an average house with other average houses nearby. Below is just one example.

Repair Estimates

If you are in a trade and doing a rehab then you probably know the prices pretty well already. However, if you are fairly new to rehabs, you need to get an idea of what repairs will cost. That is important for you to know before you bid on a property.

Find 2 or 3 contractors. When you are trying to figure out your bid, have them come in and give you an estimate. This will help prevent you from losing money by bidding too high on a property and then finding out that by the time you have finished rehabbing you have spent more than what you can sell it for. Not good. A saying in the rehab business is that you make your money when you buy not when you sell. In other words, you have to buy right.

On your first rehab, ask the contractors what they would do to fix it up. Make sure you walk through the house with the contractors and talk to them and ask questions. Each will have different ideas which you can pick and choose from. The only problem is that you will get estimates that are hard to compare because they contain different tasks.

After you have done one or two and know what repairs you want done, you can give them a list of repairs to be made and each will have the same list so you can compare one to the other more easily. Still be open to suggestions they may have for you. They could save you money with an idea or suggest something that will increase the attractiveness of the house and therefore the sale price.

Six Mistakes to Avoid When Choosing a Real Estate Agent

Whether you’re selling a home or buying one, it is in your best interest to get the help of a real estate agent. Choosing the right real estate agent is a vital part for the success of your marketing or buying process. You need to choose a good real estate agent that will represent your and interests well during the transaction process. With many companies out there filled with agents who claim to be the best, it can be challenging to find a reliable real estate agent. There are mistakes which are common among agent seekers, and it is best to avoid them at all costs. If you want a reliable agent that will ensure a smooth transaction, avoid the mistakes below.

Hiring the Cheapest Option

There are real estate agents who will undercut the competition by lowering their competition so as to win the bid. Basing your decision on the commission rate solely is a mistake. Agents use their money to market and advertise a property which can be expensive in the long run. Similarly, a buyer’s agent has to collect important information and attend negotiation meetings, which require money. If your agent quotes a low commission, it means there will be less money to market your property. It is therefore important to go for the best option instead of the cheapest option. 

Hiring a Part-Time Agent

There are agents who have devoted their entire lives to helping people buy and sell the property. Such agents are the ideal ones to work with. Choosing a part-time agent to help in buying or selling your property is a mistake to avoid. While part-time agents can be a cheaper option, you are likely to suffer long-term damages due to their misgivings. Home investment is a huge investment and you need an agent that is committed and readily available to help. 

Basing On Emotion Rather Than Skill

Buying or selling a property is a serious business. Hiring an agent based on friendship or family relation does not give you an advantage. Your friend may not see the need to work hard because you can easily forgive his smaller mistakes as opposed to a stranger. Take a look at their track record along with the credentials before selecting the agent to work with.

Assuming All Realtors Know the Same Things

It is a mistake to think all realtors are the same. Every real estate agent has their own experiences and knowledge. This is why some realtors are at the top of the chain while others are at the bottom. Hire a reputable and experienced agent who is a member of the National Association and suits your needs. 

Choosing the Agent That Has Sold More Homes

Some may be tempted to believe that the best agent is the one who has sold more property than anyone else. To determine the best agent, you need to choose for the one who completes the sale, negotiates the most favorable terms, does proper marketing and communicates with you whenever necessary. It may not be the highest selling agent. 

Choosing the Agent That Agrees With Your Pricing

An agent who agrees with your price without any considerations is not an expert. The right agent will be honest with you and tell you the true value of your property. This is will help you use the right price to sell your property. No one wants their property to spend months on the market before it’s sold.