2012 Real Estate Five Step Action Plan
2012 Real Estate Five Step Action Plan
By Pat and Norm Brown
If your plans for the coming year include the purchase or sale of a home, here are some suggestions on how to organize and simplify the process.
1. Educate your self about the market.
There is almost too much information available to consumers today regarding real estate matters. Most seem to be looking to the Internet for information, and while this is a valuable source of information, what you will find may not be suited to your particular needs. We suggest that the best way to learn about the market is to attend as many weekend Open Houses as possible in the area under consideration. If selling, you will learn about your competition. If buying, you will learn the inventory from which you can choose. In either case, you will develop over time a system of relative value so that you will be able to know intuitively if what's offered is worth the asking price. You will also meet a lot of Realtors during your investigations and you will have the opportunity to "see them in action". How well do they know the product they are representing, how well do they communicate, and more importantly, how well do they listen. This exercise may help you in making a decision on whom to use.
2. Find a Realtor you feel comfortable with and develop a professional, business relationship.
As this may be the most important commercial transaction to which you will commit your time, energy, and capital, the foundation for the relationship with your Realtor must be built on trust and mutual respect. Your Realtor should commit to provide you with the services, information, and recourses you will need to successfully conclude your purchase or sale. In return, the Realtor expects you to deal with them honestly and exclusively. You will be amazed with how much you will learn during a normal real estate transaction. Each party must be able to communicate their ideas, opinions, and emotions within a framework of objectivity and with utter honesty. The goal is that everyone gets what they bargained for at the end, and that a positive lasting relationship continues beyond the close of escrow.
3. Put first things first--Buyers.
If you are looking to purchase a home, you need to determine your target price range. This involves both the funds you have on hand, and will acquire to close the purchase. If you intend to borrow money from a lender, find a lender knowledgeable about properties in your area and get pre-qualified for a loan. If you don't know a lender, your Realtor will normally provide you with at least 3 from which to choose. See them immediately! You need to have your credit evaluated, learn how much money your income allows you to borrow, and perhaps most importantly, find out about problems, in your credit file so that you can begin work to correct them. The emphasis should not be as much on rates and terms as these don't vary much between companies. What matters more is how well the mortgage professional communicates information, offers solutions to problems, and works with your Realtor to obtain the loan you will need. Oh, and it would be nice if you are a couple or a family to take some time and come to an agreement concerning what features you would prefer in your new home. You might need to compromise here and there, but you should agree fully on your basic needs.
4. Put first things first -- Sellers.
Sure you have lived in your home for years and think you know more about your home and its value than anyone. However, you probably have a strong emotional bias built on every upgrade, repair, and renovation you have made during your ownership. Once you learn about your competition, you need to look at your home through the eyes of the buyer, not your neighbor, who will want to cheer you on to an unrealistic asking price so as to increase the value of his or her home. Perhaps the best second step toward understanding your home is to have it professionally inspected by third party pest and home inspection services. These companies are thoroughly trained on what to look for in those areas you seldom visit -- your roof, your attic, your crawlspace, and under your decks. Since the buyer will most likely want these reports performed within the first 17 days of an escrow, doesn't it make more sense to find the problems they'll find and either correct or disclose the issues in advance so that the Buyer and you both know the condition of the property being sold. Enough said. The best first step is the analysis of your home's value as determined by a Realtor's Comparative Market Analysis (CMA). This is simply a report of how your home compares to others being offered and those, which have been recently sold in your area. If you did your homework by attending Open Homes in your area, you should not be surprised by the findings of this report.
5. Oddly enough, if you have done steps one through four, the rest should fall into place easily. Buyers will know what properties are worth, and what they can afford. Sellers will know what their home is worth given its condition and in comparison with other offerings. So really the last step is quite simple: Let the Realtor do their job and be active and engaged in the process. Your Realtor will assist you in the many small steps, which lead to a successful sale or purchase of your home. Continue to monitor market conditions by keeping up with new properties offered for sale, and what properties have sold for in your target areas. Before you know it, you will be either handing over or receiving the keys.
Happy New Year!
Pat and Norm Brown have been serving the real estate needs of Sonoma Valley residents since 1989. They offer a comprehensive understanding of the dynamics of transaction and transition management. They may be contacted at the Sonoma offices of Frank Howard Allen Realtors 707-939-2227 or email firstname.lastname@example.org