The 3% Rule: How to potentially make 3% more profit on the sale of your home (Part 2)

After decades in real estate and selling hundreds of homes, I truly believe that the average homeowner can do certain things to positively influence their sale. I call it the “3% Rule,” and it means that the average homeowner can potentially make up to about 3% more on their home sale. 

Of course, this isn’t an exact science. But even a 1% increase in a $300,000 home sale would equal an additional $3,000 in a home seller’s pocket. And 3% would equal a whopping $9,000! 

In part one of this blog, I covered my first seven points of my 3% Rule and today I'll delve into the remaining eight.

So how can you potentially make up to 3% more on the sale of your home?

8. Have professional photos taken

If an image is worth a thousand words, the images home shoppers first see of your home could possibly make you tens of thousands of dollars. For that reason, we suggest using a professional photographer for your listing photos, who will employ perfect lighting, and lenses with pinpoint clarity. With most buyers thumbing through hundreds of listings on the internet, the first impression those photos will make can result in more looks, interest, and ultimately, a better opportunity to sell your home for top dollar. 

9. Price your home right the first time

You may think that the easiest way to net more money on your home sale – or even 3% more – is to price your home higher. But overpricing your home compared to the competition will only ensure that you get fewer online views, fewer walk-throughs, fewer offers, and, probably, not sell it for that higher price at all.

Instead, think of selling your home as a balancing act between getting the highest possible price and also selling it as quickly and efficiently as possible. In fact, research shows that the longer a home is listed without selling, the less it will ultimately get. And you’ll probably have to pay your mortgage payment if it doesn’t sell quickly, or even two or three payments (or more!)

So we’ll sit down together and look at a comprehensive market analysis, revealing the hard data about what similar homes in the same area are selling for, as well as what other competition is on the market. 

10. Give the dog (or pet) a vacation away from home

Surveys show that if you really want to sell your home for top dollar, it's best to relocate pets off of the property during the listing and showing process. Not everyone is a dog/cat/or pet person, and some people have allergies or serious reservations about animals. Even if you put them in a side room, the fact that they are there and the buyer can't openly explore the home will leave them with a less than a positive feeling.  

11. Maximize light 

One of the easiest ways to make a house look larger, nicer, and more inviting is to brighten it up, especially with natural light. So remove those heavy, dreary shades and curtains for lighter translucent materials, change outdated or inadequate fixtures, and consider new bulbs with soft white light. Research shows that just by doing these things you'll get a 300% Return On Investment when selling – which is a super simple way to try and reach that goal of a +3% sale price.

12. Take an honest look at your competition

Before we ever put a sign in your front yard and list your home for sale, together, we’ll look closely at the other homes that are active, pending and sold in your neighborhood. Not only will this give us an idea of where to price your home accurately, but we'll also understand what other options buyers are seeing when they go house hunting.  

Ultimately, we’ll present you with a detailed market analysis with every home that is currently for sale within your greater geographic area and with similar dimensions and features (for instance, homes with 3 or more bedrooms in Folsom). Armed with this knowledge, we’ll be able to strategically price and position your listing against the competition.

13. Start a bidding war with an attractive price

One of the best ways to get the MOST net proceeds for your home is to price it extremely aggressively from the start. This may feel counterintuitive, but by pricing it favorably, you'll create a huge buzz of agents and buyers who rush to see your home as soon as it hits the market. They'll feel the sense of urgency and quickly submit full price and higher offers, and most often even engage in a bidding war that drives your price up.

14. Make it easy to show – and show well!

How easy will it be for other real estate agents to show their eager buyers your home? You’ll be doing yourself a great service if you make it easy and accessible to show for other agents (and their buyers!)

It’s also wise to prepare ahead of your listing by starting to pack, organize all of your possessions, and move furniture and boxes to a storage unit ahead of time. That way, the home will be less cluttered, look bigger, and buyers will be able to envision living there as they walk through.

15. Don’t ever hold back when it comes to disclosures

If you really want to see your home sale go smoothly – including netting the highest possible profit - make sure to honestly and accurately fill out your disclosures. Not being forthright about any material defects, problems, and issues with the property – or even the neighborhood – will throw a monkey wrench in the transaction, jeopardizing the sale, costing you more money, and possibly even landing you in court. 

The good news is that we can usually solve many of these concerns before the home is even listed by ordering the appropriate reports and making necessary repairs, which will give the buyer a green light to offer a great price.

How else can you sell your home for more? Use the Alfano Group Real Estate Agency!

Too often, homeowners choose a Realtor just because they know the person socially or they bump into them at an open house, but smart sellers enlist the help of the best real estate professional possible.

The Alfano Real Estate Group would love the chance to compete for your business and earn your trust. When you’re ready to sell your home, so feel free to contact us any time with questions. 

The Anatomy of Today’s Homebuyer, Part 2

Who exactly is today’s homebuyer? In part one of this blog we outlined facts, statistics and data on today’s homebuyer demographics, as well as what they’re looking for and what’s motivating them.

From square footage (less) to relationship status (more single homebuyers, especially single women), what’s most important (quality of neighborhood above school system and affordability) and which amenities are hottest (walk-in closets, tech and green homes), by knowing what buyers are looking for and how they operate, we can market your home sale with maximum efficiency.

So what do today’s homebuyers really want – part two?

So what are some things that will send potential buyers running for the next listing?

56% of buyers say they’re turned off by bad or strange odors

70% of home shoppers are scared off by damp patches, stained walls and ceilings (as they should be!)

54% of potential homebuyers report that dull lighting or a lack of natural light is unattractive

25% found outdated bathrooms unappealing

15% don’t even want to walk in a cluttered room, and

14% dislike décor that is in bad taste or over the top

Agent-assisted home purchases are at an all-time high of 87 percent, while only 7 percent purchasing directly from the previous owner and 6 percent buying from the builder.

What are the pain points for homebuyers? Asked to rank the most difficult step in home buying, this is how today’s homebuyers responded:

51% Finding the right property

23% Paperwork

17% No difficult steps

14% Understanding the process

13% Getting a mortgage

13% Saving for the down payment

As we documented in part one of this blog, the vast majority of homebuyers start their search for a property online on websites or the MLS. Here are the features of real estate websites they found most valuable:

84% Found detailed information about properties

87% Found photos very useful

45% Found interactive maps very useful

42% Real estate contact information

42% virtual tours very useful

Homebuyers are increasingly concerned with the location of their neighborhood in proximity to where they work when faced with increasing commute times. According to surveys, how important is a reasonable time and cost of commute to work for today’s homebuyer?

32% Not important

30% Very important

38% Somewhat important

It seems like all single buyers want two things in a home these days: central air conditioning and a house that’s wired. But according to the sex of the homebuyer, their priorities may differ from there.

Single Men:

Stainless steel and granite countertops

Cathedral ceilings

New homes

Walk-in closets

Single Women:

New kitchen appliances

En-suite master bath

Single level homes

Do buyers want condos, single-family homes, or townhouses? Well that may depend on their age group, as their area significant differences by generation.

Gen Y

84% Detached single-family homes

7% Townhouses/PUD

3% Condos

Gen X

89% Detached single-family homes

5% Townhouses/PUD

2% Condos

Younger Baby Boomers

82% Detached single-family homes

9% Townhouses/PUD

3% Condos

Older Baby Boomers

81% Detached single-family homes

5% Townhouses/PUD

5% Condos

Silent Generation

71% Detached single-family homes

8% Townhouses/PUD

10% Condos

Multi-generational housing is growing rapidly:

13% of all homes are purchased by multigenerational households.

57 million people are living in multi-generational households, double the number in 1980.

1 in 5 Younger Boomers purchases a multi-generational home.

Why are multiple generations in the same family buying a home together? Here are the top reported reasons:

24% Cost savings

23% Adult children moving back in

18% Caretaking for aging parents

10% Spending more time with aging parents

First-time buyers are lagging:

The historical norm for first-time buyers is 40%.

However, the percentage for first-time buyers is now 32%, the lowest number since 30% in 1987.

Incomes among homebuyers are rising.

The median income for homebuyers is now:

Repeat buyers $98,700

All buyers $86,100

First-time buyers $69,400

How about luxury homebuyers?

70 percent of luxury and high-end buyers say the location of their home is the most important factor.

Homes near the beach or mountains are still popular, with great views and access to leisure activities paramount, but many younger buyers are purchasing property with acreage in the country or rural settings, too.

And 54% of luxury buyers still put top priority on a chef’s kitchen when they go looking for their next home.

60 percent of affluent customers want hi-tech and wired homes, fully automated so they can control features like lights, security systems, video cameras and intercoms, climate control, TVs and music, window shades, and door locks from an iPad, remotely via a mobile app, or even with voice activation.

In fact, almost 90 percent of this demographic of luxury homebuyer said they wouldn't even consider living in a home that isn't tech-friendly.

Buyers want green and environmentally friendly homes that are also energy efficient. Two thirds of high end buyers looked for Energy Star-rated windows and doors and insulated glass, and 18 percent of those surveyed reporting that they a home's Green-LED certification was very important.

Open floor plans are more important than ever according to 39 percent of high-end buyers.

Media rooms still are in vogue, with 60 percent of respondents looking for homes that contain one, and 19 percent looking for home theaters.

Home gyms and specialty exercise rooms were an important feature for 50 percent of buyers.

28 percent of luxury homebuyers want swimming pools.

Outdoor kitchens are still a red-hot trend, with nearly half of new luxury buyers on the hunt for homes with that feature. But aside from the typical wet bar (desired by 42 percent of respondents), they’re also looking for warming drawers, sinks, and climate controlled wine, beer, and beverage fridges. 

Buyers also are looking for outdoor fireplaces and fire pits in close proximity to the swimming pool and outdoor entertainment area.

Open rooftops are being utilized as spaces for entertainment, exercise, reflection, yoga, and sunset watching, and also to create stunning rooftop gardens and green areas.

Luxury homes appeal to car aficionados with subterranean parking, high-tech automated parking, and even glass ceilings or walls so the autos are on display as you walk through other areas of the house.

They want dedicated wine cellars with precise climate controls and also dining and tasting areas to host their friends for vineyard-quality events and parties.

Super purification systems are one of the biggest new attractions in the luxury market, with filtration systems that include UV lights, humidification systems, and energy-efficient fans run to keep the air purified.

5 More home selling science and psychology secrets that will make you big money! (Part 3)

When it comes to selling your home, everyone wants to walk away with the highest profit possible. Fortunately, there is a whole hidden science to selling a home, based on mountains of data, copious independent research, and the psychology of perceptions and human behavior. When you list your home for sale with The Alfano Group, you not only have hard work and great service at your disposal, but strategies and tactics developed over decades of successfully representing home sellers. 

We'll share more and more of these home selling tips so stay tuned, and of course contact us if you want to find out how to make the most money when you sell your home!

1. Your greatest marketers could be your neighbors!

Your neighbors are one of your best assets to help market and sell your home, yet rarely utilized. But it makes perfect sense to spread the word about your home hitting the market to those live around you, as they have a vested interest in choosing a great new neighbor. In fact, if you go knock on their door (or have us do it) and let them know the details of the sale and even provide them flyers or brochures, they’ll do a great job telling their friends and coworkers, providing a boost of serious and motivated buyers.

They’ll actually thank you for briefing them before the listing even officially hits the market, and will hustle to generate interest. In the same vein, you can also spread the word about your for sale home to neighborhood associations, local schools, and other community organizations.

2. Personalize your listing with a quick introduction video.

When buyers are in a competitive offer situation, Realtors often advise them to write a personal letter about how much they love the house and a little bit about themselves. In some cases, it can absolutely sway the sellers into accepting their offer, as the personal touch balances out all of the contracts and numbers inherent in a real estate transaction.

The same tactic can work for sellers if they put together a very short (maybe one minute or less) video about their family and their home. Talking candidly about how much they loved the house, the great memories they had there, how they loved the neighborhood and schools, their favorite local parks and restaurants, and giving a valid reason why they’re selling and moving can all be part of a seller’s video.

It’s not the information in the video per se that will make a difference to buyers, but psychology shows that it will humanize the listing, allowing it to stand out from the pack and establishing positive feelings of trust and familiarity. Ask us more about what would be appropriate for a great seller video and how we can use it on YouTube, Instagram, Facebook, etc. to help market your home.

3. Focus on low-cost home improvements in kitchens and bathrooms.

To fix up or not fix up, that is the question for many homeowners before they list their home. Research shows that it doesn’t pay to undertake huge and expensive home improvements before listing your home, unless they are essential or safety concerns, like leaking roofs or faulty electrical systems. But additions, adding a pool, remodeling every room, and other significant upgrades will probably only yield you 20-40 cents on the dollar once the home sells.

Instead, data shows that the wisest investment is to put resources into smaller, cosmetic improvements into your kitchen and bathrooms. Repainting the walls, replacing dated appliances with stainless steel, modernizing light fixtures and possible retiling floors in the kitchen all keep the budget under control but will be a huge selling point when buyers walk through. In fact, that will yield an ROI of 85% or higher, and buyers pay most attention to the kitchen and master bathroom when making a first impression of a home.

4. Impress buyers (and their agents) by having your inspections all done.

There is a lot of uncertainty in any real estate transaction, with inspections, appraisals, disclosures, and contingency periods all reason for a buyer to get cold feet – or choose to renegotiate. But one great way to relieve that uncertainty from the get-go is for sellers to get all of their inspections done before they even list the home. Potential buyers (and their agents, especially!) will love reading in your listing description that the house has a clear pest report, a roof certification, a completed home inspection with the appropriate fixes already done, and maybe even a current appraisal.

Not only will it eliminate any surprises during the transaction so it’s psychologically comfortable and safe, it signals that you are serious and ready to close. By having all of your inspections completed ahead of time, you’ll attract a better, more motivated breed of buyer that won’t waste your time or nickel and dime you on every fee and issue that comes up. This strategy works especially well for higher end and luxury listings, but for all sellers it ultimately saves a lot of time since the deal can now close as soon as their loan clears, saving days or weeks, and we all know that time is money when you’re selling your home!

5. Have your home professionally staged.

For any high end or luxury home, enlisting the services of a professional stager is a must. But is it really worth it? If you’re worried about the cost or inconvenience, consider these statistics from Realtor Magazine and The International Association of Home Staging Professionals:

95% of professionally staged homes sell faster than non-staged homes.

Homes that are staged stay on market only half as long as homes that aren’t.

Staged homes sell for an average 11% higher purchase price than non-staged homes.

Only 4% of homes in high price brackets are staged (which means two things: some real estate agents aren’t doing their jobs correctly, and your luxury home will stand out like a diamond in a pile of coal when you do stage it.)

The median dollar value for home staging services is only $675 (but higher based on more work and the nicer the home/higher the listing price),

But the great news is that surveys show that staging generates a Return On Investment of 8-10% when the home sells

With those benefits and financial returns, can you afford NOT to stage your home?

***

If you'd like to check out more home selling secrets from The Alfano Group, try these past blogs: 

http://thealfanogroup.blogspot.com/2016/04/home-selling-science-psychology-and.html

http://thealfanogroup.blogspot.com/2016/05/home-selling-science-psychology-and.html

15 Home-selling mistakes that could cost you a lot of money. (Part 2)

Your house is probably the largest financial investment you’ll make in your lifetime, and therefore selling it should be handled with diligence, care, and planning. But too often, homeowners make the same common mistakes when putting their home up for sale, ultimately costing them tens - if not hundreds -of thousands of dollars.

But if knowledge is power, then by identifying these most common home selling mistakes we can empower you to make better decisions and avoid them, ensuring you maximize your profit when selling, starting with selecting the right real estate agent to represent you.

In part one of this blog we covered the first 7 mistakes homeowners make when putting up their house for sale, and here are the next 8:

Mistake #8: Becoming too emotional

We understand that your house is your home, where you probably raised your family and have many years and memories invested. But selling your home should be viewed as a business transaction, not personal. By taking emotion out of the process as much as possible, you’ll make clear and logical decisions in your best interest. Ask any successful businessperson and he or she will tell you that emotion, fear, anger, ego, and personal feelings end up costing you money!

Mistake #9: Not listening to the market

When we list a home, we first run a comprehensive market analysis for the seller, showing the hard data about what similar homes in the same area are selling for, as well as what other competition is on the market. We’ll make our best professional recommendation on the listing price, but the final decision is up to the homeowner. No matter where you set your initial listing price, pay attention to what the market is telling you – what the data says. Ignoring market data and instead making decisions on emotion or hope for gain can be counterproductive and cost you in the long run.

Mistake #10: Failing to think like a buyer

Instead of thinking, “This is what I want for my home,” and “I want to sell at this price,” try to put yourself in a potential buyer’s situation. Imagine yourself hitting the home buying circuit on a busy Saturday and how you would view each listing. For instance, buyers usually start from the bottom of their price range and then work their way up, and as a home seller, realize they will be viewing a lot of other listings in the same price range as your home – your competition. Understanding the process from a consumer’s perspective will help you maximize your home’s presentation and strategically set your price to get the highest and best offers!

Mistake #11: Not having your home staged

If you are trying to sell your luxury or high-end home, enlisting the help of a professional stager is a must. Yes, you’ll have to spend a small amount of money up front, but it will offer huge returns when your home sells. In fact, national statistics show that staged homes sell in an average of 13.8 days while non-staged homes sell in 30.9 days, and staged homes sell for an average 17% higher sales price, offering a 586% return on investment.

Still not convinced? In a recent survey, 9 out of 10 potential buyers said they had trouble visualizing how a completely unfurnished home could appear when furnished, and 81% of buyers report a stage home is easier to visualize the property as their future home.

Mistake #12: Not researching your competition

Buyers have a lot of homes to choose from, so before you even price your home or put a For Sale sign in the front year, your real estate agent should sit down with you and go over a market analysis thoroughly. Every home that is currently for sale within your greater geographic area and with similar dimensions and features (for instance, homes with 3 or more bedrooms in Folsom,) should be considered your competition. This is the same approximate list your pool of potential buyers will be looking at, so make sure you’re listing is strategically priced and positioned correctly against that competition.

Mistake #13: Not marketing your listing correctly

What sells homes these days? A great home at the right price is WHY a home sells and that never changes, but the HOW is something far different. Research shows that certain marketing strategies significantly impact home sales – and pay the most dividends for the seller. These include taking a good number of professional-quality photos, staging the home, making sure it’s easily accessible for any potential buyer’s agents, exposure through community and professional networking, and especially a great online presentation that includes a stellar MLS listing, web, email, and social media promotion. Marketing correctly through digital platforms is essential these days, especially with higher end listings, considering that 95% of luxury homebuyers are active and engaged on social media and 90% of luxury buyers start their search for a home online.

Mistake #14: Not consulting your tax advisor and other financial advisors

Some of the best tax breaks you’ll ever realize are tied to real estate, especially with capital gains exclusions and the ability to do a 1030 exchange rollover to avoid profit from some home sales becoming taxable events (especially with investment properties.) However, you never want to sell your home (or make any big financial decisions, for that matter) without consulting your CPA or tax planner. Since an additional hundreds of thousands of dollars (or millions) of income you potentially might have to declare would surely throw your tax returns out of whack, failing to get expert counsel could potentially be the biggest home selling mistake you could ever make.

Mistake #15: Using the wrong Realtor

The home seller ultimately makes the important decisions about pricing, listing, staging, showing, and marketing their home. But smart sellers enlist the help of the best real estate professional possible to give them great advice, and it all starts with finding the right real estate agent. Too often, homeowners choose a Realtor just because they know the person socially or they bump into them at an open house, but you should really use a local expert who specializes in listing homes similar to yours. Interview the best candidates and ask tough questions, while also gauging whom you feel good about since you’ll be communicating and working closely with that person. If you follow this process, you’ll end up with the best possible real estate agent to help you sell your home and maximize your profits through a smooth transaction.

***

The Alfano Real Estate Group would love the chance to compete for your business and earn your trust. When you’re ready to sell your home, so feel free to contact us any time with questions.