SPRING 2021 UNDERSTANDING THE MARKET PREPARING YOUR HOME FOR SALE MARKETING YOUR HOME GETTING TO THE CLOSING
CONTENTS UNDERSTANDING THE MARKET What is your home worth? 4 Understanding the CMA 5 Common pricing strategies 5 Timing the sale 5 PREPARING YOUR HOME FOR SALE Declutter 8 Clean 8 Repair 9 A bright idea 9 MARKETING YOUR HOME Reviewing your marketing plan 11 Understanding today’s tech-driven buyer 11 What is staging? 12 GETTING TO THE CLOSING Getting your team in place 13 Organize your home 13 Closing documents 14
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A note from our founders Let us take a moment to share the pride and gratitude we are feeling towards our peers in the real estate field. Over the past year, our brokerages, Realtor associations, lending institutions, title services, insurance companies, municipalities, inspectors, and appraisers have banded together and kept the wheels of commerce turning. and successfully so! We made certain that service and safety could happen simultaneously and changes occurred throughout the real estate industry to allow transactions to continue as effectively as possible. Here at The Gallery Residential Brokerage, we are ready to serve you and we couldn’t be prouder to be a part of this dynamic tribe. John Meechan and Jeff Kniffin
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Understanding The Market
What is my home worth? Every homeowner and potential seller wants the answer to the question “What is my home worth?" There are three ways to answer that question. 1) What you, the homeowner believes the dollar value to be. 2) What the bank will appraise your home for. 3) The researched price you and your Realtor® assign to your property when putting it on the market.
Other factors that can influence worth include interest rates, seasonality, and whether it is a buyer’s, seller’s or neutral market. Here in New Jersey’s Monmouth and Ocean counties, we are experiencing a perfect storm of variables that can empower the sale of your property in 2020:
Success requires preparation and a team. While there is indeed a demand for homes, the selling process can still be complex and often emotional. Don't be distracted by the success or failure of “the house down the street.” There are many variables in the process and some may not apply to you and your home. Get your house in order and assemble a great professional team: Realtor®, attorney, potentially a financial advisor — and you'll be set for success.
Yes, everyone wants a beach house within commuting distance of NYC and Philadelphia. But overall population growth in these counties is adding to the demand and this is adding to the extreme desirability for housing in our area.
Local communities, and the nation at large, are still experiencing some of the lowest mortgage rates in history. This means buyers can finally enter the market or buy a house that would otherwise be out of reach with higher rates.
These days, there are more buyers than available homes in many price ranges and neighborhoods. This gives sellers a bit of an upper hand in negotiating, and has the effect of motivating buyers to make purchasing decisions more quickly.
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Understanding the Comparative Market Analysis What does your real estate agent, the bank, and even Zillow all have in common? They all use comparative sales data as a starting point to help determine what your house might be worth. You may have heard of this practice as “pulling comps,” comps being shorthand for “comparables.” This data is critical to helping understand what buyers expect to pay for similar homes in your local market. Expanding on comps, your real estate agent uses an approach called a Comparative Market Analysis (or CMA) to help develop a pricing and marketing strategy for your home. The CMA is a fact-driven assessment of your home built upon the following data points: Location: neighborhood desirability, school quality, access to highways, hospitals, etc. Specifications: lot size, square footage, number of bedrooms, bathrooms. Amenities: features such as number of bedrooms, a pool or a garage, etc. Condition: age, general wear and tear, renovations, improvements, etc. Financials: such as property taxesand homeowner association fees.
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A bit of art and science
The CMA is a valuable tool, but only a tool. Real estate agents must bring their know-how and experience in evaluating CMA information for your home in light of other existing market conditions. With information readily available on the internet, many sellers believe they can assess their home’s worth. Sellers should ask potential listing agents what additional insight and tools they can bring to the table.
A CMA is not a bank appraisal
A CMA is not a bank appraisal. An appraisal is a bank’s view of the property value used to help determine mortgage loans. Banks traditionally are somewhat more conservative when evaluating property value. A bank-assessed value that is significantly less than the negotiated property price will make obtaining a mortgage challenging. Having a real estate professional by your side can help guide you through this issue.
How to price your home
You will likely use the CMA and other insights from your real estate agent to help price your home for the market. It is important to remember this key takeaway: Most of the traffic for your newly marketed home will happen within the first three to four weeks it is on the market. When a house goes on the market, it meets the current pool of potential buyers shopping around. The property may not be right for them for a variety of reasons, including price. If that pool of buyers passes on your home, you are essentially waiting for new buyers to enter the market. During this dip, sellers often consider a price adjustment to attract buyers back as well as new buyers. A home that is competitively priced at the start will generate the most interest and potentially the most offers. It is counter intuitive to think that pricing is less important if there are more buyers than inventory. Pricing a home competitively. and from the start — and understanding what that truly means for your home — is key regardless of whether it is a seller’s or buyer’s market. Common pricing strategies
Low ball pricing strategy is an approach that some sellers and agents use to generate higher foot traffic and interest in the property. The hope is that a bidding war ensues and organically drives the property price up quickly. It’s a risk, but in some vigorous, well populated markets, this could be a solid approach. It relies squarely on a large and motivated audience of buyers. Requiring buyers to be pre-approved may help manage buyer volume. Timing the sale
Some home sellers will want to test the waters with a higher than average market price. This strategy has the potential to keep a house on the market for a longer time.Time on the market is not just a slower sale. Longer market times can also give buyers pause to ask “why” and assume there is a condition or other issue present. A longer time on market may also signal to buyers that they can make low ball offers on properties that have languished on the market for an extended period of time.
Even if a buyer agrees to a higher than market price, there may still be a risk.
Banks need to approve loans based on comparable market values and listing a property for more than it appraises for may make it difficult for buyers to obtain mortgages. Accepting offers only from pre-qualified buyers with manageable contingencies is a solid approach.
PREPARING YOUR HOME FOR SALE
Properly preparing your home for sale will reap rewards Good preparation can help potential buyers imagine living in your home. Whether you have lived in your home for years or are considering reselling an investment property, properly preparing your property makes it easier for buyers to connect with it. Bear in mind these three key steps: decluttering, cleaning, and repairing. Declutter
the process. The upside is there is less to pack and move and the potential to buy new items for the destination home. Clean
Deep cleaning freshens and polishes a property.
Clutter eats equity! Stagers and home organizers suggest removing everything that is nonessential to the room’s function and then reintroducing a handful of curated items to bring the room to life and give it personality.
Removing tired window treatments and cleaning the windows will instantly brighten a home. Sparkling fixtures and polished counters can make even a dated bath or kitchen more appealing.
Possessions that did not make the cut are either kept and stored for the move, donated or sold. Many homes have a collection of things that needs to be reigned in — be it collectibles, toys, or knick-knacks. Sometimes, an abundance of these items can overwhelm a room. A simple solution is to put most of them in storage during the selling period. Remove as many photos or highly personal items as possible. These can be a huge distraction and emptier rooms help buyers envision the home as their own.
Floors should be washed and waxed or vacuumed. If the home has been occupied by pets, a cleaning of carpets and upholstery is highly recommended. Owners may not notice lingering odors but buyers will be sensitive to smells and many may be allergic to pet dander. If anything is truly soiled, you may want to consider replacing it.
Decluttering can be an emotional exercise for many homeowners and it may help to have a non-judgmental friend or professional assist in
Expect buyers to peak into closets and drawers, examine baseboards and ceiling corners. Don’t forget spaces such as garages and basements. If the area is accessible to them, buyers will be evaluating it.
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Repairs can help remove buyer objections and fall into two categories — simple, quick fixes or repairs, which can range from major to minor. Quick fixes are usually the result of everyday wear and tear. Take a quick glance around each room in your house to see if it could use a tweak.Minor repairs such as patching up a chip or crack here and there or fixing a running faucet or toilet are also worth the effort, even if you need a hand in making the repair. Major repairs for higher ticket items could be a cause for buyer concern. You may need to weigh the time and expense between making a repair or accounting for it in the price of a house. If your home is in excellent condition, obtaining a home inspection of your own and sharing the results may be assuring to buyers. A bright idea
Replace your bulbs in kitchens, bathrooms, and bedrooms to the highest allowable wattage. That includes any lighting in closets or built-ins. It’s an easy way to add brightness and energy into the room and it allows for easy viewing of the rooms' details. In addition, open all blinds and curtains and let the natural light in.
a $5 screwdriver can add thousands in sales
Take a walk around your home with a screwdriver. Tighten up door handles and cabinet knobs — anything a potential buyer might touch. You want to give them to be left with the idea that your house is sturdy and well-maintained.
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Don't forget about curb appeal!
Bring an orderly and welcoming feeling to the front door and beyond if possible. Hide the trash containers, sweep the sidewalk, replace your front door mat. A wreath or flower container is a nice touch. If old or damaged, it may make sense to replace your front door hardware or even paint the door itself. This is your chance to make an impactful first impression.
MARKETING YOUR HOME
Reviewing your marketing plan Your real estate agent is responsible for putting together a plan of how to market your home. Helping you decide on a market price is just one step of an overall strategy. Gone are the days when homes would only be listed in the local newspaper or real estate magazine. Savvy agents now use a multichannel mix from social media to video to open houses. An important part of selecting an agent depends on how confident you feel in their proposed marketing activities. Make certain that you see and agree to their proposed marketing plan. Ask them specific questions about how they will increase your home’s visibility and attract the right type of buyer. Make sure they offer a solid online approach as part of their package. Understanding today’s tech-driven buyer
As society has changed, it is very important to know how different groups of people are buying so marketing activities can target them and attract them to your property. Over 93% of home buyers say they use a website to check out a home and over 50% of buyers eventually buy a home they saw online. 73% use a mobile phone or tablet to search for homes. (NAR 2019 Home Buyers and Generational Trends Report). And don’t think it is just “the younger generation!” 72% of those between 7393 used websites to browse for homes.
This means it is critical that homes are portrayed as attractively as possible once they are listed online.
You — and your agent — should insist on professional photography no matter the price point of your home. Typically, the agent foots the bill for all marketing materials including professional photography.Homes situated on larger parcels of property may benefit from overhead drone video and photography. The same holds true for homes on the water or in unique natural settings where the environment should be highlighted as a feature of the home. In addition, luxury and unique homes can be presented through 3D virtual tours which assist in bringing them to life; this is especially useful to reach qualified but outof-the-area buyers. “All the single ladies” — a growing segment of home buyers are unmarried women. Single women made up 17% of home buyers in 2019, according to the National Association of Realtors (NAR). Their single male counterparts accounted for around 9%.) Single women are one of the fastest-growing groups of homeowners today.
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Staging Consider home staging before photography
Staging a home simply means preparing a home for sale with two goals: Minimizing the amount of days on market Getting multiple, desirable offers Generating the highest possible sale price Most often, staging includes rearrangement of existing furniture and adding an accessories “layer.” Sometimes, furniture is removed in order to free up valuable floor space. Other pieces may be introduced to suggest usefulness to a room. Painting is an excellent way to freshen and brighten a room and light, neutral colors like grey or beige are recommended. Whether you have lived in your home for years or are considering reselling an investment property, appropriately staging your property makes it easier to connect with buyers. This is especially true of millennial buyers who generally prefer a polished look. Millennials represent the largest home buying demographic. They are the original HGTV and “selfie” generation, making them highly visual and appreciative of fit and finish. Who pays for staging
Typically, the cost of staging a home is paid by the seller. In some geographic areas, real estate agents may pay part or all of the staging depending upon home value and marketplace. In highly competitive markets, full-blown staging, complete with up-to-date rental furniture is becoming commonplace and is often expected by demanding buyers who are ready to pay top dollar. Key tips for successful staging
Sell a lifestyle, not just a property. “Modern staging understands the local buyer demographics and helps them imagine what living in the house would be like.” Says Susan Corbo, owner of attention2detail, a NJ staging company. “I take a very different approach when staging a family home in the suburbs vs. a city condo for young professionals.” Accentuate the positive
Staging can also help buyers see past a home’s more “unique” features. Extra small bedrooms can become offices or nurseries, even an extra closet. With art or shelving, an unexpected bump-out, or curved wall can be shown to be an advantage rather than a challenge. Staying "show ready"
Note that approaches to staging vary by whether the home is vacant or if occupied by owners or tenants. If people are living in a home during the selling process, stagers can provide practical advice on how to minimize the impact on their daily life while keeping the home “show-ready.”
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GETTING TO THE CLOSING
From contract to close
Knowing the process keeps your nerves in check. After you and your buyer come to terms, you will need to agree to a closing date which is agreeable to all parties. If there are any issues, such as you will be out of town, or otherwise unavailable, you will want to bring that up early as possible. Potentially, you may not even need to attend the proceedings.
Organize your home
Prepare for the buyer’s inspection. Make certain all light switches, bulbs, and outlets etc. working. Keeping things tidy and cared for sends the right message to inspectors.
The property officially changes hands during a closing and it is the “end” event at your sale. However, preparing for it should begin way before the closing date. Last minute surprises during a closing are unpleasant and challenging Here are a few things you can do to make sure it goes as smoothly as possible. Get your team in place
Make sure your agent knows that your expectations are that they will organize and facilitate closing-related activities. This is why picking the right agent is so important. Their knowledge of the process, understanding the paperwork and their experience of “what can go wrong” cannot be underestimated. Other than your agent, line up other members of your team. Speak with your banker, your accountant, and attorney to give them a head’s up that you are selling your home. Have your Realtor® on call for any questions you might have when reviewing the HUD-1 Settlement paperwork you receive immediately before closing.
Have your home cleaned before the final walk-through. Gather any warranties, manuals, or instructions for systems, appliances etc. for the buyer’s reference. Collect and label all keys and remotes and leave them in a central place along with the home alarm password and instructions. Cancel utilities. Turn off any valves to help minimize the possibility of leaks and damage. Head to the Post Office to fill out change of address and mail forwarding information. Alert creditors, subscriptions, etc of your address change. When you lock the door for a final time, look back and think about your time there but more importantly, your new life ahead.
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Your real estate agent and attorney will certainly help you here but it is likely you will need these items for closing: Final closing instructions and statement of closing costs Title report Mortgage and loan information HUD-1 Settlement Statement Deed Lien information or affidavits regarding liens Bill of sale (for anything you leave behind Property tax information Homeowners’ insurance paperwork Trust documents Lead-based paint disclosure (if your house was built prior to 1978) Homeowners’ association (if applicable)
About The Gallery The Gallery is one of the fastestgrowing brokerages in New Jersey. Since opening in 2017, it has opened offices in Asbury Park, Red Bank and Spring Lake, and has most recently opened an office in Fort Lauderdale, Florida. Founders and co-owners John Meechan and Jeffrey Kniffin are long-time Monmouth County residents with over 25 years of real estate experience between them, serving in a variety of leadership roles. In opening The Gallery, they wanted to focus on professional agents who are dedicated to serving their clients in the roles of pricing analysis and listing preparation, marketing, contract negotiation, and transaction management. The benefit to sellers? You get high-performing, experienced agents and teams working together to deliver the best results. As an independent and local agency, The Gallery answers just to its clients and communities; no national or corporate office calling the shots. This hyper-local focus is the difference — you’ll experience exceptional professionalism and transparency in how we work together, from a practitioner who also lives in your community and knows it well.
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Serving your real estate needs from our convenient locations in ASBURY PARK 700 Mattison Avenue RED BANK 160 Monmouth Street SPRING LAKE 309 Morris Avenue FORT LAUDERDALE 501 E Las Olas Boulevard 888-997-1246 thegallerynj.com