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. 

Frustrated by the lack of housing inventory? Here are 25 reasons why people will always sell

Right now, it definitely looks like sellers are in the driver's seat in our Sacramento real estate market. But don't worry; there are always homeowners who not only want to list their home for sale, but need to. In fact, there are a variety of motivations why people stick a For Sale sign in their front yard, which means that opportunities always abound for homebuyers.

Here are 25 reasons why people will always sell their homes:

They’ve outgrown their current home

Many young homebuyers begin with a "starter home" which may be small (in square footage and in price tag). But after they become more financially stable in a few years, they may opt to sell and move into a more spacious home.

They just want a nicer, bigger home

Sometimes there’s nothing at all wrong with their current home, but sellers just fall in love with a bigger, nicer, or different home – perhaps in a neighborhood they’ve always wanted to live in.

They “messed up” on the purchase

Maybe these sellers made a grave mistake when they originally bought their home, like purchasing the smallest home on the block, one that was the scene of a grizzly crime (no wonder why it was so cheap!) or 2/3 of the house was unpermitted editions. In any case, the only way to reconcile that mistake is to move and pass it on to the next buyer.

A job transfer

Relocation out of the area because of a job transfer is one of the most common reasons people need to sell quickly, which means they are often highly motivated.

Moving in with a partner/marriage

Ahhhh that’s so nice! When a girlfriend and boyfriend decide to finally tie the knot (or just move in together), it often calls for buying a home together – and selling their current homes.

Divorce or breakup

It's an unfortunate reality of life that relationships sometimes don't work out. In most cases, it's often best (and necessary) to sell the house they cohabitate in and move on.

There goes the neighborhood

Crime is increasing, graffiti and vandalism are becoming more common, the local schools are declining, and you’re starting to see shopping carts abandoned on the sidewalks. Time to put up a For Sale sign and get out and move to a better neighborhood!

The Empty Nest Syndrome

Once the kids are all grown up and gone to college, couples often choose to sell their family home – which is now way too big for them and a little sentimental.

They want to be closer to family

It's very common for tight-knit families to try to stay together. Once the kids are grown and have their own families, that usually mean the elders selling their home and moving closer to them – not the other way around.

Their current commute is too long

Some people just want to be more centrally located and not have such a long commute to work, play, or city centers.

Retirement

You put in 35 years waking up early and going to work every day, so now that you’ve retired, it’s time to sell your house and move to Florida so you can finally sit by the pool and relax!

Health problems

When people have medical concerns or needs, special living arrangements sometimes offer peace of mind and a far healthier lifestyle. So instead of retrofitting their current home to accommodate their medical needs, it’s often easier just to sell and move into a dwelling that’s already equipped to accommodate them.

The loan becomes more expensive

Remember all of those loans that were adjustable, interest only in the beginning, or had balloon payments? Sometimes, the monthly payment rises higher than is feasible and that means selling is the only good solution.

The maintenance is piling up

If you were facing $25,000 in roof, foundation, heat and air, and/or necessary upgrades at your current home, would you invest the money and stay…or would you be inclined to put it up for sale and move into a home that didn’t need major repairs?

Job loss/loss of income

If you got fired on Friday and lost a major chunk of household income, the For Sale might be up on your home’s front lawn by Monday. Or, a maternity leave, career change or starting your own business, or any other financial setback could dictate putting your house on the market.

A promotion or influx of cash!

Congrats on winning millions of dollars in the lottery! Or maybe you were left a huge inheritance or were finally recognized and rewarded at your work. Either way, when people have more cash on hand they often choose to sell their home and buy one that is more befitting of their new means.

A lifestyle change

Instead of spending your whole Saturday mowing the lawn, raking leaves, and cleaning at your current home, maybe you’ve decided you want to windsurf and go wine tasting every weekend, and selling your home is the only way to achieve that dream lifestyle.

All of the neighbors are selling

Inevitably, others around us move away or go through life changes, too, and if your best friends/neighbors start moving out, sometimes it feels like the right time for you to list your home and move on, too.

The fixing is finished

If you're a DIY, fix it-and-flip enthusiast, then life becomes way too simple and boring when all of the hard work is done and the home repairs are finally finished. Time to sell and start over with the next "fixer" project!

Cash in on a seller's market

When the market appreciated so rapidly that homeowners were sitting on hundreds of thousands of dollars in equity after only a few years, it was hard NOT to sell and realize that profit (except that meant finding a new home to live in, of course.)

Got a new job in another state/area

Most people are either trying to find a better job or at least earn a promotion, but sometimes, the cost for that upward mobility is a transfer to a new state, a new city, or just a new area in the same region, which forces their hand on a home sale.

They really want a pool/one-story house/open floorplan etc.

Some people have discerning tastes and know exactly what they want in their ideal home. In that case, they may look for the opportunity to cash in on their current equity by selling, and then move on to their dream homes.

Apartment living is so much easier

These days, an increasing number of Americans are deciding that it’s time to sell the house and move to a smaller and easier apartment or rental, just for the sake of convenience and freedom.

Landlord sick and tired of the “4 T's"

Every year, hundreds of rental property owners sell their homes in Sacramento for no other reason than the “4 T’s”: toilets, taxes, tenants, and termites!

Probate/estate sale

When a loved one passes away, their real estate holdings often either are willed to heirs and descendants, who usually decide to sell the property, or it passes through a detailed legal process resulting in a probate sale.

15 Things homeowners can do to make up to 3% more on the sale of their home

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.

After decades in real estate and selling hundreds of homes, I truly believe that the average homeowner can do certain things to influence the sale of their home. In my estimation, homeowners can increase their net profit by up to about 3% compared to if they DIDN’T do these things (or compared to the competition).

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 – enough extra profit to hire a moving truck and take the family on a nice vacation before you move into your next house!

Remember that while some of the items on this checklist may seem fairly insignificant – or even obvious – it’s my experience that if you do them all and do them well, you’ll get more for your home and see a higher profit. The best part is that these are all things that YOU can do – influencing your own destiny without being subject to the whims of the market, real estate agents, and buyers.

But no matter if you end up making an extra $100, $1,000, or $10,000 on the sale of your home, it’s all a net positive. So what are the things you can do to help profit a little extra – maybe be even 3% in some cases – when that “For Sale by the Alfano Group” sign goes up in your front yard?

1. Clean
Before we even list your home for sale, it’s time to roll up your sleeves because it's time to clean your house from top to bottom. A thorough pre-listing cleaning will including getting in the corners, dusty shelves, tops of cabinets, packed garage, etc. that’s often missed with regular weekly cleaning. You’ll also want to make sure to steam clean your carpets, get water spots off of mirrors and shower doors, and recaulk and re-grout in kitchens and bathrooms where it's dingy or discolored. Definitely get rid of any trace of bad odors, like must, smoke, pets, etc. Just having your home sparkling clean and looking and smelling fresh will go a long way when the first prospective buyer walks through!

2. Declutter
Once you’re done cleaning, it’s time to go through your home and remove clutter, excess items, and two-thirds of your personal effects. A decluttered, de-personalized room will look bigger and more airy for the ever-important listing photos. It will also be easy for potential buyers to envision their own personal things in the space, and that’s a great first step towards selling for a higher price to help reach the +3% goal we set.

3. Evaluate the home’s condition
Buyers will order pest inspections, home inspections, appraisals, sometimes even roof certifications, and carefully go over the disclosures you send them. What will they see? You know your house better than anyone, so if you anticipate any issues or negative items popping up during these inspections, it’s better to address them – not mid-transaction when they could potentially slow down the sale, lead the buyer to ask for a price reduction, or, even worse, have second thoughts.

Short of hiring your own home inspector, you can pay your handyman or a licensed general contractor to walk through and give you a quick but thorough assessment of your home’s condition. He or she can tell you what will most likely need to be repaired immediately before the home sale closes, what will need some TLC a year or two down the road, and even give you prices to do the necessary work. Of course, essential repairs like a leaky roof, cracks in the foundation, and inadequate heat and air systems definitely need to be addressed before we put a For Sale sign up. Taking care of these things before the buyer ever walks through will help foster their perception that the house is squeaky clean and well-maintained, and therefore more likely to offer full price or negotiate less.

4. Spend on light repairs only
Yes, we want to take care of important home repairs, and fix anything that could compromise health, safety, or cause further damage to the home. But after that, we’ll want to focus our time and resources on the repairs that will drive up your price and cost you the least, ensuring that your ROI on these repairs is through the roof.

5. Spruce up your kitchens and bathroom
There are also plenty of small repairs and fixes that focus the ever-important kitchens and bathrooms that could boost your offer price. Low-cost (sometimes even DIY) projects like painting, replacing dated lighting or fixtures, etc. in kitchens and bathrooms always strengthen your sales price because those are the rooms that buyers tend of focus on the most.

Research into listing and sale prices reveals that putting money into improving kitchens and bathrooms yields the highest ROI of any home repair, and houses that have new, modern, and updated kitchens and baths consistently sell for more than similar houses without those improvements – maybe even for up to 3% more!

6. Curb appeal
Another way you can boost your home sale profit is by dolling up your curb appeal. Even if you don’t have the time or money for expensive upgrades, you can create a great first impression for buyers just by painting your front door a bold, bright color! Step out to the street and look at what a buyer will first see as they walk up to your home for the first time. A fresh coat of paint on the front exterior of your house, planting some flowers, installing a new mailbox, putting up solar walkway lights, power washing the driveway, and doing a little landscaping don’t cost a lot but will enhance your cub appeal.

7. Consider having your home staged
When it comes to netting more from a home sale, the adage, "You have to spend money to make money," may apply to home staging. In fact, for higher-end and luxury home sales, enlisting the help of a professional stager is a must. It won't cost much at all but 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. Furthermore, 9 out of 10 potential buyers said they had trouble visualizing how an unfurnished home could appear if they lived in it, and 81% of buyers report that a staged home is easier to visualize the property as their future home.

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Look for part two of this blog with 8 more things homeowners can do to possibly make up to 3% more when they sell their home!

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?

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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

20 Things That Will Drop Your Home's Value

1. Undesirable location

You’ve heard that the three most important factors in any home’s value are location, location, and location, right? Unfortunately, the flip side of that is true; if you live in a declining neighborhood, or even in a house too close to a busy street, a noisy business, railroad tracks, an airport, etc. your value will surely suffer.

2. Fire or flood inside the home.

Natural disasters are one thing, but if your property has suffered flooding or a fire that originated inside the house because of human error or faulty systems, future buyers will surely take not – and the price will drop. It’s hard to overcome the stigma of past flooding, especially because of the potential for rot, mold, and damage behind the walls or under the floors. 

3. Natural disasters

Damage from hurricanes, earthquakes, and flooding all need to be disclosed when you sell your home – and could raise doubts about the present condition, therefore affecting the value. If your home was in or damaged by a natural disaster, be sure to keep detailed records from insurance adjusters, contractors, appraisers, etc. to satiate future buyers.

4. No garage or inadequate parking

If every house in your neighborhood has a two-car garage and you only have a one-car garage, or just an outdoor carport, your home’s value could drop significantly. Of course there are some neighborhoods where everyone parks on the street, but generally your home needs to be consistent with what is standard in that community for the price to remain intact.

5. Noisy neighbors (and their pets)

Does your neighbor blast country western music at ear-splitting volumes until 2 am every night? Do you live next to a breeder who is raising 20 very vocal Chihuahua puppies? Or did a U-Haul truck just pull up and a college fraternity start unpacking? Even though it’s own out of your control, reports show that having noisy neighbors can drag your home value down by 5 or even 10%.

6. Bad roof

There are many components of a house that may “turn off” buyers if damaged or outdated – electrical, plumbing, and heat and air among the big ones. But a roof that’s past its prime or already leaking can really scare off buyers – even more than the cost to fix the roof would dictate if they looked at it rationally.

7. Unnatural deaths or homicide

Did your home belong to Dexter before you bought it? A homicide, suicide, or any unnatural deaths or violent events on the property absolutely have to be disclosed by the seller, and can really drop the value. In fact, studies show that a non-natural death in a home can drop the value 10-25%, and even being too close to that house or on the same street can sink neighboring home values by up to 3%.

8. A subpar school system

Who buys homes in most middle class suburban neighborhoods? The majority of homes are bought by young couples that hope to start families, or young families who already have children, and that means the quality of the local schools is paramount. A great local school system can boost demand and increase your home’s value accordingly, while a middle-of-the-road school system will neither hurt nor help your value. But a notoriously bad school system in your area can definitely collectively sink your neighborhood’s values.

9. Huge (or cheesy) billboards

Of course businesses need to advertise to stay competitive, but if a local car dealership or casino just constructed a billboard in or near your neighborhood that dominates the skyline, you may experience a sinking feeling. And if that billboard happens to be advertising a strip club, political candidate, laxative brand, or a PSA for drug addiction, that sinking feeling will apply to your wallet as your home price sinks like a stone.

Don’t believe me? A study in Philadelphia found that homes within 500 feet of a billboard were worth $30,826 less on average at the time of sale than others farther away.

10. Low ceilings

You don’t need to necessarily need to have soaring vaulted ceilings in your home, but even if your ceilings are just a couple of inches below average, potential buyers could perceive your home as cramped, claustrophobic, or smaller than its actual square footage.

By the way, most standard ceilings in the U.S. are right about 8’ high, but some communities adhere to the national IRC building codes that allow for minimum 7 foot ceilings in living spaces. But the newer the construction and the bigger the living area, the higher the ceiling should be to maintain proportions.

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Subscribe to this blog or follow us on social media and look for part two of this blog, where we cover the next ten things that will drop your home's value!