Posts Tagged ‘sell-house’

Home repair contractors – be sure to inspect their work

Sunday, October 11th, 2009

I have written about working with contractors on home remodels in the past (e.g., http://transformyourhouse.com/blog/?p=10). Although most are honest and hard-working and indispensable when specialized knowledge or skilled craftsmanship is needed, I could create a blog dedicated entirely to contractor problems, tips, and advice on how to work with them. Here’s another brief war story.

I was in escrow to sell a house that we had remodeled extensively, and the buyer’s inspector came up with a list of minor issues to fix or bring up to code. So, we fixed some ourselves, and some we fixed by hiring a home repair contractor (basically he was a licensed handyman with one laborer).

After escrow closed and the buyer had moved in, the buyer brought out the inspector to re-check everything again, and he said that certain items still weren’t up to code, such as an exposed bundle of spliced electrical wires for some of the low-voltage landscape lighting. When the buyer called the home repair contractor we had used to come back and fix it, the contractor told her that he had done a substandard job because we had told him to do it “on the cheap.”

What we had actually told him was to do the minimum required to bring the minor items up to code, i.e., no “gold-plating.” For example, just put the spliced wires within an electrical box. But the repair contractor instead sought to explain away his substandard work by blaming us for supposedly telling him to do a substandard job, which of course made him look ridiculous. I hadn’t personally inspected all of his tasks because most items were minor, we were quite busy moving out, and I simply trusted that it was done appropriately.

But this serves to show that unless you have good reason to trust a contractor implicitly (such as a long prior history of superior work from him), you can’t be complacent in assuming that any work will be completed properly, no matter how minor it seems. There’s always the possibility that a contractor might cut corners, forget to do something, take advantage of a situation, or try to set himself up for another payday in the future, so you have to stay vigilant. In this case, the contractor ended up having to go back to perform the substandard repairs properly, but only after making himself look inept in the eyes of the buyer (who would have been a prospective new client) and burning bridges with us.

It’s not my intention to disparage all contractors, because they have done a lot of good work for me. But even the good ones can get distracted by other jobs and bigger clients. My blog is for giving ideas, advice, and cautions to homeowners, and so I’m focusing more on the occasional problems that might arise than on the good jobs contractors typically do.

Need advice on home remodeling, affordable home makeovers, home repair for resale, or home staging for putting your home up for sale? Feel free to contact me for a consultation.

Seek simplicity, comfort, and value!

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Should you hire a real estate agent to sell your home?

Wednesday, August 12th, 2009

When it comes time to sell, many homeowners wonder, “Should I hire a full-service real estate agent to help me sell my home?” (Keep in mind, I am NOT a licensed real estate agent.)

I get asked this question a lot, but there is no simple answer. It depends on the housing market. It depends on what you feel are your capabilities. It depends on whether you have the time to manage the process. It depends on how quickly you need to sell…or whether you have to get it sold at all.

And in this tough housing market, many homeowners are trying to reduce expenses by using cut-rate agents or listing the home themselves, For Sale By Owner (FSBO). But is this effective?

Can you write marketing copy, create and place ads, get in the MLS (which is essential), take flattering digital pictures, arrange for a video “Virtual Tour,” hold open houses, produce professional flyers, negotiate a deal, and handle a comprehensive sales contract?

Although FSBO services can help quite a bit with these things, there is sometimes a perceived stigma in a buyer’s eyes, particularly with higher priced homes. And then there is the very real liability issue of legal disclosures. In my experience, even the most skilled & reputable agents sometimes can be somewhat lackadaisical about disclosures, since very rarely does a buyer try to come back after the seller for a claim. But it does happen…so be sure to over-disclose.

I have done house transactions lots of different ways. I’ve hired real estate agents. I’ve bought and sold privately with another private party. I’ve sold on my own to a buyer who was represented by an agent. And I can say that it’s always tempting to try to sell on your own to save the hefty commission, which is generally 5-6% (usually split 50/50 between buyer’s and seller’s agents).

By selling it on your own (FSBO), you can dictate how much commission you are willing to pay a buyer’s agent. However, the reality is that many buyers are uneasy about a home that is not represented by an agent, and in fact I have found that some agents won’t even show your home to their clients if there are plenty of choices of homes listed with other agents. Also, there are legal potholes, particularly regarding mandated disclosures, for which you would assume responsibility and liability. I have found, however, that most escrow agents will gladly help you (and the other party, if appropriate) navigate these potholes without the involvement of a real estate agent. I’ve done it this way a couple of times.

Alternatively, if your buyer is represented by an agent (whom you are paying a 2 or 3% commission), you might ask the buyer’s agent to handle your contractual obligations for a small additional compensation, such as 0.5%. I’ve done this before, too.

Most Realtors will tell you that it’s best to introduce your home to the market at a fair price with a big splash, generate lots of traffic and hoopla early, and try to get multiple interested buyers bidding up the price. They’ll say that if you put it on the market yourself at the wrong price and it languishes, then it becomes “stale” and will be harder to sell later. I think this is mostly true, but of course new buyers emerge all the time, so don’t let anyone scare you into doing something you really don’t want to do. I would say that if you are selling a house during a seller’s market (like we had from around 1996 through 2006), and if you feel confident in having the time, capabilities, and wherewithal to do all those necessary things, then you might want to consider FSBO or flat-fee discount listing brokers. If you have any doubts, however, then hire an agent and let them deal with the hassles. (Even in a seller’s market, your house will likely sell faster if represented.)

On the other hand, if you are trying to sell during a buyer’s market (like we are in now), you really should hire a good full-service listing agent. Although you might be tempted in a weak market to lower your price and make it up by not hiring an agent, the stark reality is that this is precisely the type of difficult market for sellers in which you really need a strong, well-connected, and well-respected Realtor to give you the best chance to get it sold.

Be sure to consider all of the pros & cons before making a final decision on whether to list with a full-service agent. To get my full take on this controversial subject, pick up a copy of my e-book:

“Transform Your House! How to Dramatically Update & Upgrade (Without Major Remodeling).”

Another piece of advice I’ll share is this: Don’t assume all agents are the same. And don’t hire an agent as a favor to them just because it’s your best friend’s cousin or your grand-nephew.

Seek simplicity, comfort and value!

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