Checklist | For a Better Home Showing

CHECKLIST For Better a Home Showing

 Remove clutter. Clear off counters and pack unnecessary decorative items. Put extra

furniture in storage, and remove out-of-season items. Be sure to clean out the garage,

 Let it shine. Cleaning windows and screens will help bring more light into your home.

Replace burnt bulbs, and consider higher wattage in low-light areas. Clean the walls or brush on a fresh coat of bright, neutral paint. Replace heavy curtains with sheer ones and show off your view.

 Keep it clean. A deep clean before listing your home will make upkeep easier. Consider hiring a cleaning service to help.

 Maximize comfort. In summer, shut A/C vents on the first floor so more air will get

upstairs. Reverse the process in winter.

 Perform a sniff test. Clean carpeting and drapes to eliminate odors. Open the

windows to air out the house. Consider potpourri or scented candles and diffusers. For quick fixes in the kitchen, cotton balls soaked in vanilla extract or orange juice can instantly make the fridge a nicer-smelling place. Boil lemon juice in your microwave, then add it to your dishwasher to eliminate odors. You can also run lemon rinds through the garbage disposal for a similar effect.

 Take care of minor repairs. Sticky doors, torn screens, cracked caulking, or a dripping faucet may seem trivial, but they’ll give buyers the impression that the house isn’t well-maintained.

 Tidy up outdoors. Cut the grass, rake the leaves, add new mulch, trim the bushes, edge the walkways, and clean the gutters. A pot of bright flowers near the entryway adds great curb appeal.

 Set the scene. A bright afghan or new accent pillows easily jazz up a dull room. Pretty

dishes or a simple centerpiece on the tables can help buyers picture themselves living there. Try staging a chess game in progress. If you have a fireplace, lay fresh logs or a basket of flowers there.

 Make the bath luxurious. Make sure your personal toiletry items are out of sight,

along with old towels and toothbrushes. Add a new shower curtain and fancy guest soaps.

 Send the pets to the neighbors. If that’s not possible, crate or confine them to one room, and let the real estate practitioner know where they’ll be to eliminate surprises.

 Lock up valuables and medication. Agents can’t watch everyone all the time.

 Head out. It can be awkward for everyone if you’re home at the time of a showing.

Use Feng Shui Concepts in Staging

Feng Shui is a Chinese system of beliefs that govern spatial arrangement in relation to the flow of energy or “life force” (known as chi or qi) in a building. Learn how to appeal to buyers who follow such principles.

Chi flows in.

Pay special attention to the front door, which is considered the “mouth of chi” and one of the most powerful aspects of the entire property. Make sure the area is swept clean and free of cobwebs and clutter. Ensure all lighting is straight and properly hung. Consider lighting the path leading up to the front door to create an inviting atmosphere.

Chi can flow out, too.

Energy can be flushed away wherever there are drains in the home. To keep the good forces of a home inside, always keep the toilet seats down and close the doors to bathrooms.

Consider the bedroom carefully.

The master bed should be in a place of honor, power, and protection. Place it farthest from and facing toward the entryway of the room. The optimal placement is diagonal in the farthest corner of the room. Paint the room in colors that promote serenity, relaxation, and romance, such as soft tones of green, blue, and lavender.

Offer a formal dining space.

The dining room symbolizes the energy and power of family togetherness. Make sure the table is clear and uncluttered during showings. Use an attractive tablecloth to enhance the look of the table while also softening sharp corners.

Get a clear perspective.

Windows are considered to be the eyes of the home. Getting your windows professionally cleaned is a good idea anyway, but for buyers, your home will sparkle all the more brightly and your view will be optimally displayed.

About the Appraisal Process

Once you are under contract, the buyer’s lender will send out an appraiser to make sure the purchase price is in line with the property’s value.

Appraisals help guide mortgage terms.

The appraised value of a home is an important factor in the loan underwriting process. Although lenders may use the sale price to determine the amount of the mortgage they will offer, they generally only do so when the property is sold for less than the appraisal amount. Also, the loan-to-value ratio is based on the appraised value and helps lenders figure out how much money may be borrowed to purchase the property and under what terms. If the LTV is high, the lender is more likely to require the borrower to purchase private mortgage insurance.

Appraised value is not a concrete number.

Appraisals provide a professional opinion of value, but they aren’t an exact science. Appraisals may differ quite a bit depending on when they’re done and who’s doing them. Changes in market conditions also can dramatically alter appraised value.

Appraised value doesn’t represent the whole picture of home prices.

There are special considerations that appraised value doesn’t take into account, such as the need to sell rapidly.

Appraisers use data from the recent past.

Appraisals are often considered somewhat backward looking, because they use sold data from comparable properties (often nicknamed “ comps”) to help come up with a reasonable price.

There are uses for appraised value outside of the purchase process.

For selling purposes, appraisals are used to determine market value and factor into the pricing equation. But, they may be used to determine insurance and replacement value, or assessed value for property tax purposes.

Prepare for a Short Sale

A short sale is a situation where the net proceeds from the sale won't cover your total mortgage obligation and closing costs, and you don't have other sources of money to cover the deficiency. It’s significantly different from a foreclosure, which is when your lender takes the title of your home through a lengthy legal process and then sells it directly. A short sale is sometimes the route sellers take to avoid foreclosure.

Consider loan modification first.

Contact your lender to see if they have programs to help you stay in your home. You may be able to refinance your loan at a lower interest rate, switch to a different payment plan to help you get caught up, or secure a temporary forbearance period.

Hire a qualified team.

Find a qualified real estate agent and a real estate attorney who both specialize in short sales. Interview at least three candidates for each and look for prior short-sale experience. Find people who will advise you in your best interests. A qualified real estate professional can give you accurate pricing advice through a comparative market analysis or broker price opinion. The team will also be able to expertly market the home, negotiate complex contracts with buyers, and ease the process of working with your lender(s).

Prepare a short-sale package to send to your lender(s) for approval.

You can’t sell short without your lender (and any other lien holders) agreeing to the sale and releasing the lien so that the buyers can get clear title. This is another task where your team will be indispensable.

Gather documentation before offers come in.

Your lender requires several documents in order to consider a short sale. This package accompanies the offer, typically including:

• A hardship letter detailing your financial situation and why you require a short sale

• A copy of the purchase contract and listing agreement

• Proof of your income and assets

• Copies of your federal income tax returns for the past two years

Navigate a Short Sale

Be prepared for a lengthy waiting period.

Even if you're well organized and have all the documents in place, short sales can still be a long process. Waiting for your lender’s review of the short-sale package can take several weeks or even months. The length varies by lender and location, but these benchmarks can put your situation in perspective:

• If you have only one mortgage, the review often takes about two months.

• If you have a first and second mortgage with the same lender, the review can take about three months.

• With two or more mortgages with different lenders, it can take four months or longer.

• Your real estate professional and attorney, with your authorization, can work with your lender’s loss mitigation department on your behalf to prepare the proper documentation and speed the process along.

When the bank does respond. . . it can approve the short sale, make a counteroffer, or deny the short sale. The last two actions can lengthen the process or put you back at square one.

Don't expect a short sale to solve your financial problems.

Here are some post-short sale conditions to keep in mind:

• Your lender may ask you to sign a promissory note agreeing to pay back the amount of your loan not paid off by the short sale. If your financial hardship is permanent and you can’t pay back the balance, talk with your real estate attorney about your options.

• Any amount of your mortgage that is forgiven by your lender may be considered income, and you may have to pay taxes on that amount.

• Having a portion of your debt forgiven may have an adverse effect on your credit score. However, a short sale will generally affect your credit score less severely than foreclosure or bankruptcy.

Improve the Odds of an Offer

Price it right.

Set a price at the lower end of your property’s realistic price range. Consider:

• Comparable properties: A “ comp” is what real estate professionals call home sales that can be reasonably used to help determine the price of your home. But just because you’re in the same neighborhood doesn’t mean that the houses will sell for the same amount. Your real estate professional will help you determine how to compare your home in terms of size, upkeep, and amenities. • Competition: How many other houses are for sale in your area right now? Are you competing against new homes or condos for sale in the area? • Contingencies: Do you have special needs that might turn away buyers? A common one is refusing to be flexible about a moving date. • Asking a lender: Since most buyers will need a mortgage, the home’s sale price should be in line with a lender’s estimate of its value. • Accuracy: Studies show homes priced more than 3 percent over the correct price take longer to sell. Prepare for visitors.

Get your house market-ready at least two weeks before you begin showing it. Make all your repairs, and do a deep clean (or hire a cleaning service to help).

Consider an appraisal.

For a few hundred dollars, a qualified appraiser can give you an estimate of your home’s value. This is useful for sellers going through a divorce or needing to divide the proceeds for other reasons. Be sure to ask for a market-value appraisal, and find someone who understands the area and type of home you have. Your agent should be able to offer recommendations.

Be flexible about showings.

Spur-of-the-moment showings are disruptive, and making sure your home is constantly ready to show can be exhausting. But the more amenable you can be, the sooner you’ll find a buyer.

Anticipate the offers.

Decide in advance the price range and terms that are acceptable. Be clear with yourself and your agent about what kind of offers you’re comfortable with. It’s critical to know what price you’ll accept before entering negotiations with a potential buyer.

Don’t refuse to drop the price.

If your home has been on the market for more than 30 days without an offer, be prepared to consider lowering your asking price.

Recognize a Qualified Buyer

Offers can be exciting, but unless your potential buyer has the resources to qualify for a mortgage, you may not really have a sale. Your real estate professional will try to determine a buyer’s financial status before you sign the contract. But it’s good for you to know what buyers with follow-through potential looks like.

They are prequalified—or even better, preapproved—for a mortgage.

Such buyers will be in a much better position to obtain a mortgage promptly.

They have enough money to make a down payment and cover closing costs.

Ideally, buyers should have 20 percent of the home’s price as a down payment and between 2 percent and 7 percent of the price to cover closing costs. If they plan to make a smaller down payment, they will need to purchase mortgage insurance, through either a government guarantee program or a private mortgage insurer. Their ability to provide earnest money in a timely fashion will be an indicator of liquid reserves.

Their income is sufficient to afford the home over the long term, too.

Ideally, buyers should spend no more than 28 percent of their total income to cover the principal, interest, taxes, and insurance associated with the sale (often abbreviated as “PITI.”)

They have good credit, which they are monitoring and maintaining.

They will have recently reviewed their credit report and have actively worked to correct any blemishes or errors found.

They’re not managing too many other debts to take on a mortgage.

If buyers owe a great deal on car payments, credit cards, and other debts, they may not qualify for a mortgage.