Tag Archives: getting a home ready to sell

Homesellers, It’s not personal…It’s Real Estate

In every aspect of life, some people are apt to get their feelings hurt easily. If someone doesn’t like your outfit or says your kid doesn’t play soccer well, etc. But in business, people try to get a thicker skin by saying, it’s not personal…it’s business. When selling your home, you need to remember the same thing when under critique. It’s not personal…. it’s real estate. Homesellers need to keep in mind that homebuyers have to find what is best for their needs and wants and if it is not this house, it will be the next. What the seller likes or wants in the home or its decor or use is not relevant to what the buyer will want. Different strokes for different folks. The goal is selling the home at the best price in the fastest time.

Here’s what I have heard sellers say….If it’s good enough for me, it’s good enough for them. They can take me as I am and the house as it is. They are nit picky. They don’t understand that this cost me $$. They are too young and don’t know any better. They should appreciate… They don’t know…. or IF THEY DON’T LIKE IT, THAT’S THEIR PROBLEM.

If you want your home to stay on the market forever or sell for less money, keep thinking that way. But if you change your thinking, this is what you need to do to prepare for the mindset of selling a home successfully.

1. THINK “It’s no longer your home…it’s a means to an end – a product.” You want to get where you are going and selling your home is the means. You need to think of it as a retail product and “stage” it to appeal to your target market home buyer. Homes sell faster and for a better price if they appeal right away to the target homebuyer…with as little work possible. Sometimes your target homebuyer will be about as far away from your taste as possible. To sell, you need to appeal to them and make changes, even if it doesn’t appeal to you.

2. BE REALISTIC…REALLY understand the good and bad points of your house. Sometimes you can fix the bad points, sometimes you can’t. Upgrading or not, staging or not and pricing must be based on the market and your home. What you think your home is worth isn’t always what the market thinks. Homebuyers look at the market. The market wins. Listen to your expert Realtor advice, which they should be able to substantiate with comps. They are the market, don’t ignore them.

3. FEEDBACK….Feedback from home buyers and other Realtors is important and hard to get…so when you get it, don’t dismiss or ignore it. This is what people are thinking who could have bought your home….but instead there was a reason they bought another home. They may not like the decor or the layout, etc. You have to figure out if it is cost effective to fix or change it or you may need to adjust your price….or you can ignore it, make excuses and sit on the market forever.

And if they don’t like your wall-to-wall mirrors or southwestern decor…don’t take it personal. That is why you should not be in the house when they are there. They don’t want to hurt their feelings, so they will not say what they need to say and their Realtor can’t do his or her job explaining the home and countering objections. Once they have it in their heads they don’t like something, it is tough to reverse or change.

4. FINANCING…Whether you agree or not, times are different now than when you were starting out and buying a home. Many first-time homebuyers these days have very little down payment and no extra for closing costs. Often they will ask you for closing costs, but what you are really doing is allowing them to finance the costs into the mortgage. Negotiate your bottom line like a business….don’t get caught up in how much they are putting down or whether or not they want to finance closing costs. It should only matter if they are capable and likely to get the loan and you are getting a net price that works for you.

5. INSPECTION…It is wise to have an inspection done on a home or a used car, or anything before you make a major purchase. The inspector’s job is just like a doctor doing a physical. They will tell these homebuyers everything that is wrong with the home. That is their job, some are better and putting things in the right perspective and some are not. The key is again, don’t take it personally. You may not agree with what is said is wrong with the house, you may think it is nit picky, but the point is the home buyers do care and if you want to complete the sale, you need to decide if the price is worth making some repairs or negotiate what is or is not important to them. Also remember, once you know there is a problem, if there is, you have to disclose it for the next buyer.

REMEMBER – home buyers are your customer. They have the money.

Can you Handle the Truth in Selling Your Home

There are many euphemisms about the benefits of the truth. The truth shall set you free as a homeseller, as you need to be ready, willing and able to handle the truth from your expert team. But many homesellers prefer to listen to what they want to hear instead of the hard truth, which can end up costing them time and money to sell their home.

When considering selling their home and interviewing Realtors for advice on selling, most homesellers ask these two questions “Tell me what I can sell my home for? and Tell me what should we do to get our home ready to sell?” Unfortunately, it is really like asking someone “does this outfit look good on me.” You think you want the answer, but you don’t really want the answer.

Some Realtors will tell sellers what they want to hear just to get the listing. They ask you – what do you want to sell the home for? Then they tell you – Sure – that is what the home will sell for. But do they have any statistics to back that up? No, because sometimes what the seller would like to sell the home for is not consistent with the market value of the home.

That same Realtor will tell you, nothing needs to be done to the home to market it, for fear that if they tell the seller the home is dated, untidy, unclean or the home needs to be staged, the homeseller will give the listing and another Realtor who lies to them. But then what is the point of getting expert advice, if you have no intention to listen to it?

Some Realtors actually rely on the feedback from other Realtors who show the home to push the blame away from them and tell the seller what really needs to be said to sell the home.

Lying to a seller about price especially is illegal and unethical for a licensed Realtor and will definitely end up costing the seller precious listing time. And in the end, that same Realtor will ask them for price reductions, staging and changes or upgrades to the home to get the home sold.

So, sellers, would you rather waste time with a Realtor who tells you what you want to hear and doesn’t give the expert advice they should or let your market time increase and then eventually change things, which will cost you time and money?

Remember the story, “The Emperors New Clothes.” Everyone was afraid to tell the emperor the truth and he would up walking around his kingdom with no clothing. Home sellers, are you ready to handle the truth and benefit from a better sales price and shorter listing time?

What you need to know about using an Attorney in a Real Estate Closing

Many of my clients ask if they have to use an attorney when buying or selling a home. While the answer is no you don’t have to but you need to use an attorney when buying or selling a home and here is why.
1. Who is going to explain all the paperwork to you at the closing? By law in Illinois, only an attorney can explain the mountain of paperwork from the mortgage note to the deed to the closing charges to ensure that you are getting what you paid for and that you understand everything you are signing. So unless you want to just sign a bunch of papers you don’t understand, you need a real estate attorney there with you when signing.
2. If you are selling property…there are a myriad of paperwork that needs to be completed for transfer taxes and there are documents to be reviewed like the title, survey, deed. If you don’t understand every word and paragraph, how do you know it is completed properly? How do you know that your error will not put you in future litigation?
3. Dealing with the other attorney…In Illinois, most sellers use an attorney, so if you are a buyer, you would have to deal directly with the attorney on everything, inspection repairs, extensions, title problems and review? While these things are not rocket science they do require a level of knowledge and experience to be successfully achieved. If the other side has it and you don’t…you are putting yourself at a disadvantage.
4. Are you sure you are protected and getting what you are entitled to? Buying and selling a home is complicated. The deed and title need to be reviewed to ensure there are no liens. The survey needs to be reviewed. Real estate taxes and exemptions can expose you to paying more taxes out of pocket than necessary. A real estate attorney will review all these items and protect your interests now and in the future.
5. Make sure it is a real estate attorney who has experience in real estate. You would not have a cardiologist perform brain surgery. Both doctors, but specific knowledge and experience are required. Same with attorneys, there are nuances that only attorneys who practice in real estate will know and recognize. This could be the difference between preventing or solving a problem or something you will have in the future.
6. Where do you look for a real estate attorney? Your Realtor and/or lender are great resources. They work with attorneys every day and can give you a personal recommendation. Then you should talk to them and ensure you feel comfortable with them. It is important that you feel comfortable asking questions and ensure they have time to help you and will communicate with you.
7. What should I expect from my attorney? Some attorneys are the “just see you at closing types.” You are better off with someone who is with you every step of the way, not just on the day of closing. They should review all the paperwork, communicate with the Realtors, lender, title company and other attorney. They should answer all your questions and keep you up to date. They need to protect your interests and do what is best for you. And they should work well with all the parties involved to make a smooth transaction. If they seem difficult to work with, they are likely not the right choice. Real estate transactions have a lot of moving parts, all parties need to work together to ensure a smooth and successful experience. And keep in mind, while an assistant or paralegal can do a lot of the paperwork, they should not be the one answering your questions and explaining paperwork. That is what your attorney is for.

8. What should you pay for a real estate attorney? You usually pay a flat fee, not by the hour, phone call or retainer for a real estate transaction. It is paid at closing. You can negotiate the fee, especially as the seller of the property, but again it is more important to get a good attorney than save a few bucks.

Simply said. You don’t know what you don’t know. In every industry there are experts that people rely on to protect, educate and inform them. Doing it yourself you could miss something that will cost you money, hassle and more in later years. Unless you understand all the paperwork and laws…get an expert. After all, this is not only your home, but your largest investment.

Creepy Distractions that Turn Off Home Buyers when Selling a Home


As a Realtor, I see a lot of unusual, even crazy things in people’s homes. If these silent idiosyncrasies could be explained by the home seller, I am sure they would make more sense. But in their absence and left to the imaginations of home buyers, these eclectic eccentricities can often creep home buyers out …distracting them from the advantages of the home and maybe completely turning them off.

I once entered a room with a full-sized child doll sitting in a rocking chair in the corner of the room. You could not see it until you entered the room. It surprised each and every person who came into the room and needless to say, no one really saw that room. Or the full-size “butler” statues – yes they scare you because they seem like a real person when you walk in the room. Startling to say in the least, creepy to say in the most. This goes for any personal possessions that may not be appreciated by the general public. Doll collections with eyes seemingly following you all over the room are not much lower on the creep-o-meter. Realistic stuffed toy animals of cats sitting on beds or a large tiger in the corner, are another eerie distraction.

And Taxidermy…I have seen heads of nearly every animal on the wall, as well as various skin rugs on walls and floors, horns on walls and full-on stuffed formerly live animals. While these trophies are treasured by the home sellers, to a homebuyer who may not share this hobby, they are unsettling and unpleasant. When you are blindly entering a home, it can cause children to be afraid and many times scare even adults who are not expecting a “jungle room.” Home sellers, let’s put it this way, do you want the home buyers referring to your home as the “dead animal” or even the “jungle” house after their visit. No, that will not sell your home. Put them away in storage, boxes, etc.

Marked graves in the yards for pets or urns of grandma on the mantel are another turn off. While the urn will move with you, home buyers only can wonder how many fluffy and spot bones they will inherit if they buy the home. What is unseen….is the best answer for this.

Weapons in the homes, from samurai swords and cross bows to maces and guns are more common than you would believe. Best to keep the armory put away in a closet in a box, etc. Not only are they dangerous, especially for children viewing the home, but also could be a theft temptation you don’t want to deal with and a potential insurance nightmare you definitely don’t want to deal with.

And while the Nazi flag may be reminiscent of an inside joke or historical memorabilia or something to the home seller, home buyers could easily be offended enough to ignore the home’s attributes and head for the door. Or better yet, they may never come to see the house as they see the photography on the internet and in listings.

Snakes, tarantulas, hamsters, gerbils and lizards may be in cages, but do you want to take the risk that recoiled home buyers will not enter those rooms with their slimy occupants present. If they have to stay in the room, best to cover them …. out of sight, never in mind.

And “Friendly” cats and dogs may be fine for your guests while you are around, but home sellers need to cage or remove these residents and not leave for unsuspecting home buyers…and agents for that matter. You don’t want agents and homebuyers skipping your house when they go to the door and “spot” is barking his head off at the front door awaiting them.

Real life encounters are not limited to pets. Believe it or not, more than once, I have opened a bedroom door to see a lump in the bed that was not laundry, but a real person sleeping in the bed. Both the buyers and I couldn’t get out that room or that home faster.

Again, while it is your home, it also is a product. If you wouldn’t like it in a department store, don’t put it in a home you want to sell. Remember, first impressions last forever and are not easily erased.


Appraisals are a necessary component of getting any home approved for a loan when buying or selling a home. Cash deals do not require appraisals but loans, which comprise most home deals, DO require an appraisal which needs to be valued at least at list price.
Appraisals for buying a home and selling a home have both objective and subjective components.
Market value – Appraisers consider 3 of the comparable properties in the last 6 months against the selling home. Which comparables they use are subjective, but the comparables are objective. This is 80% of the appraisal value.
Adjustments – Similar home type, square footage, immediate area (subdivision or town), school district…these are the criteria generally used by appraisers to establish comparable properties, but minor adjustments can be made to ensure a fair appraisal when selling a home. Adjustments for finished vs. unfinished basement, number of bedrooms, number of baths, number of garage spaces ad whether attached or detached, type of siding on the home, age of the home, lot size, condition/upgrades, and whether or not a home is distressed (foreclosure or short sale) all can factor into an appraisal when selling a home. All these adjustments have guidelines, but the adjustments and the amounts are subjective. Upgrades and lot size usually take the hardest beating on these adjustments and never really get a real and true value. If you have an acre and other homes are subdivision lots, don’t expect the price of the lot itself to be accurate in the adjustment. It will be a fraction, mostly due to the flat vacant land market and difficulty in value. The same is true of exceptional upgrades. You may get a superior value, which will help, but it will not be the cost of what you paid. So, if your home is over-upgraded for your market, compared with similar homes, it will be a fraction of what you paid for the upgrades. This is usually around 10% of the appraisal value.
Condition – Totally subjective. Appraisers would not have seen other comparable homes, but can see pictures on the MLS. They assign a poor , fair, average or superior rating. This can affect 10-15% of the homes value. Also, if you have an FHA loan, there are some repairs that would be required to be done before the home can be loanable. This is subjective but also is

required by FHA requirements. These are all generally safety requirements. Roof condition, GFI outlets, etc.
Frequently asked questions about appraisals when selling a home.
If a neighbor with a similar home sells their house undervalue just to get out, will that hurt my homes’value? Yes, if it is not a short sale or foreclosure, there will be no adjustment.
If the house does not appraise, can the buyer pay extra to meet the agreed price? Sometimes, it depends on the lender and the type of loan. However, it is often difficult to convince a buyer that they should pay over value for a home. Also, they would need to have extra cash, since any payment over the appraised price would need to be in cash. Not the difference between the loan amount and the appraised value, but the appraised value and the purchase price of the home.
Who pays for the appraisal? The buyer
Does the seller get a copy of the appraisal? No, unless they are asking for a price adjustment as a result of the appraisal.
Does the appraisal amount stay with the home if a deal were to fall through? Possibly. If it is an FHA loan and the lender files the case number and the appraisal, then the appraisal – bad or good – will stay with the home for up to 6 months.
How to basements count toward assessed value. Whether finished or unfinished will count, however, walkout, lookout basements are still considered below grade, even if one foot is below grade. The square footage, qualified bedrooms and bathrooms will still only be counted at a percentage of their total worth as compared with above-grade.
So, it really doesn’t matter what you, your buyer, or the agents think of the worth of the house. It only depends how it stands up to similar homes in the area.

Housing Trends…in-law arrangements in homes have made multigenerational buyers more common

Home buyers looking for in-law arrangements in homes have experienced sharp increases in demand putting sellers with the potential for in-law arrangements and suites in a great marketing position.

Parents are aging and sometimes costs of care and other complications require adult children to take them in. But on the other side of the generations, high cost of renting, divorce and difficulties finding jobs have resulted in necessity for in-law arrangements adult children and sometimes their families to live with the folks too.

In many cultures, multi-generational living is commonplace, but it is new to the masses in the US.
What multi-generational buyers are looking for are ways to have a complete or partial living arrangement for either side of the familial spectrum, while maintaining a comfortable separation, when needed.

Older parents coming out of their own living arrangements are often the most difficult to accommodate. They are used to living on their own, so “downgrading” to something less than what they had on their own can be a sore subject.

They will at minimum want as much of their own separate space as can be provided. Private bedroom with on-suite bath (usually no tub), decent-sized bedroom and closets, sometimes a sitting area and sometimes a kitchen. And usually no stairs.

While basements can often accommodate all this and more, older parents usually can’t or don’t wanted to be relegated to the “dungeon” – even with a chair-lift to handle the stairs. And they want to feel comfortable in the space to live as their own home, not like they are intruding.

Buyers looking for this kind of accommodation will likely have to do some renovation to make this happen. Renovation loans can be obtained in order to make changes, even moving walls, etc. They require a higher level of and come with a bigger interest rate, but the money in the mortgage is cheaper than credit cards. Sometimes the sale of their home can be used for this extra money. But don’t look for sellers to be ok with 2 home contingencies to buy a home. Not going to happen.

However, additions are more expensive and a lot more hassle. Looking for homes with extra 1st floor rooms, like a den, sunroom or 1st floor master bedrooms often can be a perfect in-law suite. Adjacent living rooms can be tapped to make a suite where parents can have privacy to have friends over, etc. If utilizing the 1st floor master, enough space has to be made to accommodate a 2nd master on the 2nd floor.

Many “in-law arrangements” are basement suites. While this will not often suit older parents, it is often perfect for young couple, single or young family needs. They can benefit from the proximity of parents for potential babysitting and save a lot of money with no rent payments, and sometimes better schools and area than they could afford. And they also have a completely separate retreat and living area, which both parents and adult children alike appreciate.

Depending on the family dynamic, the in law may not the final decision maker, but they may have a say in the final plan. Need to plan ahead to ensure you don’t ruin the space so it can not be reasonably reverted if necessary by a future buyer.

Sellers who have this type of feature in their homes or can even offer an idea of how it can easily be done, can certainly market that feature to capture some of these new buyer needs and put their homes ahead of others in the marketplace.

Selling and Buying a Home with Home For Sale or Close Contingencies – Facts and Fiction

If you are selling you home, do you buy a new home first or do you wait until you sell and risk two moves and being homeless. It can be a dilemma and can be exacerbated by complications of a large family or work schedule, schools, transportation, etc.

Once upon a time, buying a home contingent on the sale of your home was normal. When the housing slump occurred, sellers did not have enough confidence in the market that the buyer could sell their home to risk taking their home off the market. Since 2015, that is beginning to change. Sellers are having more confidence in the market, but not total confidence. Here are some facts for buyers and sellers about contingencies.

. You can not purchase a foreclosure or short sale home contingent upon the sale or close of your home. And banks will not give you months to sell and close on your home.
. A purchase contingent on sale or close is a big seller concession, they need to be compensated with a better offer price to risk losing market time.
. Best time to ask for contingent on sale or close is during the winter months. Sellers are not risking as much. . You have better chance and price negotiation on that – still no foreclosures or short sales.
. Do the inspection up front, but not the appraisal. Yes, the inspection costs money but you need to show the seller good faith that you are serious about the deal. Inspection items are negotiable and need to be done within the 1st week of any contract so no one wastes their time.

. Never take a contingent on sale/close contract over a non contingent contract. Yes, you may get a little money more, but it is not a done deal and wasting precious market time can cost you more than you gain if it doesn’t go through.
. Your house is NOT SOLD. There are no sure things here, there is always a risk. Keep showing it.
. Your agent should do a market analysis of the buyer’s home to ensure their home is saleable or closeable to mitigate the risk.
. Don’t compound contingent on sales. So don’t you get a house contingent on sale/close when your buyer has the same situation. And don’t take a contingent on sale/close deal if the buyer’s buyer has the same. Just like dominos, too much risk, it could all come tumbling down.
. Not all sellers should consider a contingent on sale/close. Contingent on close is better, but if you are in a good market and getting tons of activity…..better not to risk it.

The property ladder can not move without someone taking a risk. Contingencies on sale/close can work, but due diligence is required to calculate the benefits and risks. Many sellers and buyers benefit from this, but both must be realistic.

Tips for Selling a Home in an Estate and planning to Sell a Home in an Estate

Selling a home in an estate is always a difficult thing and just one of the many experiences most people go through. However, there are some ways to make it easier to sell a home in an estate that you can do now and later to ensure that your heirs have an easier time selling a home in an estate and planning to sell a home in an Estate.

As a Realtor, I have dealt with many people selling a home in an estate from both the listing agent end and the selling agent end. It can be difficult and complicated and can be a real turn off to buyers, or at the least delay the closing or get you in trouble. Here are a few dos and don’t for selling a home in an estate.

1. Speak with one voice. There is a lot of communication and decisions in selling a home. The listing agent needs to have one person to speak for the estate and/or heirs. Delays in negotiations and arguments and misunderstandings among varied heirs who have hidden or past agendas and varied knowledge of the market in the area or the circumstances, etc. can prolong and complicate negotiations and information to the point where buyers bail on the deal. Making decisions by committee all over the world does not work.

2. Make sure your title is correct. Very often during the arrangements after a death in the family, attorneys change over the deed, etc. It is important that this is done properly. A closing can be held up or even cancelled if the proper person in the estate has the right to sell and is on deed properly, etc. Get an attorney involved immediately when you decide to sell a home in an estate and have them look into the title and deed to get ahead of any problems before closing, even before contract.

3. Disclosure is required in Illinois. However, there are circumstances where you need to understand when it will or will not apply to you. If you have knowledge of any deficiencies in the house, to protect yourself, it is a good idea to disclose. If it is fixed, you do not have to disclose past problems, only current.

4. Be realistic. Very often heirs either have the get rid of it or $$$$ attitude towards sales. Selling a home in an estate just like any other sale need to be marketable, priced right and appealing. It is a commodity, just like anything else. Personal feelings about the home, how it was built or cared for, should not enter into it. Market value is what someone is willing to pay for it. And remember – markets are different everywhere – so if you are in California or Texas, etc. doesn’t mean it is the same in the local market. A Realtor can tell you the realistic prices and what the costs are to sell a home.

5. Advertise as Estate – pro or con? I usually say no. Sometimes buyer perceptions of selling a home in an estate are not going to get you the fastest sale at the best price. The word “estate” sometimes evokes buyer fears that someone has died in the home. While you do not have to disclose that and while it is not relevant, some people have an issue with that. Don’t ask, don’t tell. Other buyers see “estate” and see “fire” sale. Let the home stand on its own merits.

6. Fix up or leave it. This is a question of all people selling a home. But for estates, I would say, look at your budget. Clean the place up, get rid of dated furniture, personal possessions, lace curtains and just like any other home, ask yourself if this will appeal to your target market. If not, either get a budget to change some or all things or price accordingly to sell. But keep in mind, any repairs should be done to improve sale ability and avoid lending condition issues.

You can avoid these problems ahead of time when you are planning your estate. Here are some simple and inexpensive planning tips from Attorney Joseph A. Macaluso on how to make preparations for your heirs to sell a home in an estate.

By taking advantage of a Transfer on Death Instrument (in Illinois and some other states), you can arrange to have your home transferred to your children on your death without the expense or time delays of Probate Court.

If you or you and your spouse own your home, you can record a Transfer on Death Instrument with your local Recorder of Deeds, which will automatically transfer the home to your children on the death of the last to die of you and your spouse. During the lifetime of either, you or your spouse are free to sell or mortgage your home.

The legal fees to prepare and record the Transfer on Death Instrument are far less expensive and less time consuming than Probating your Estate or some of the other procedures your children would have to follow in order to sell your home after your demise.

You should contact an Estate Planning Attorney to take advantage of this opportunity to both save legal fees and make the process of transferring your home to your children at your death less stressful for your children.

If you have inherited real estate, hopefully your benefactors have followed the advice in the above five paragraphs. If they have recorded a Transfer on Death Instrument, you are now the owner and can easily sell the property if that is your desire.

On the other hand, if there is no such instrument recorded, your course of action depends on how title had been held, and by what method you inherited the property. Some of the possibilities are:

1) Your parent made you a joint tenant on the property by recording a joint tenancy deed. If that is the case, you and any other surviving joint tenants can sell or otherwise deal with the real estate upon presentation of a death certificate and a joint tenancy affidavit.

2) Your parents owned the real estate as beneficiaries of an Illinois (or a few other states) Land Trust. Once again, transfer of the property would not be difficult and would be handled similarly to 1) above. The disadvantage of a Land Trust is that there are yearly fees to the Trustee, and additional fees to transfer the property.

3) Your parent or parents had entered into a Living Trust and have transferred title to the real estate to the Trust. In that event, the successor Trustee under the Living Trust would be able to transfer the property with a copy of the death certificate.

4) Your parents left you the real estate pursuant to the terms of a Last Will and Testament, or they had no will and you are the statutory heir. This is where it becomes more difficult to sell the real estate. In that event, your obvious choices are to a) hire an attorney to open a probate estate with its attendant legal fees and delays, or b) ask the Title Company to accept a bond in lieu of probate. There are additional costs involved in acquiring the bond, depending on how long ago the death occurred.

At any rate, whether your parents did advance planning or not, upon the death of your last parent, you should definitely consult with an attorney so that when and if you decide to sell the property, you will be able to transfer the property to the Buyer with as few problems as possible.

The RIGHT way to look at closing costs when selling a home or buying a home

Closing costs when selling a home or buying a home seem to always be a tug of war between buyers and sellers. Buyers think that sellers should include closing costs for them. A lot of times when I show younger people their parents or grandparents always tell them “they (the seller) should include closing costs.” Sellers often oppose the idea of including closing costs for buyers, often sellers say. “Why should I pay their closing costs. If they can’t afford closing costs, maybe they shouldn’t be buying a home.” The truth is both parties are wrong. When selling a home or buying a home, closing costs become just part of the equation to make the deal happen. However, the way to look at it is not seller concessions or seller paying the closing costs…it should be seller allowing the buyer to finance their closing costs by making it part of the deal.

Many buyers need the closing costs to make the deal happen. There are a lot of people who just are not savers any more. They may good money but the down payment is about as much as they can do. But buyers need to realize that the seller doesn’t owe them anything. And while every thousand dollars costs a buyer $5 dollars a month in monthly payment, $1,000 dollars is a $1,000 to the seller.

Sellers need to realize that they don’t get to decide who gets to buy a home or who does not get to buy a home. Sellers should not care who is buying and what their financial situation is, as long as they are approved to buy the home and will get the loan and offer an agreeable price.

When buying a home, you should consider financing your closing costs. It can help you get into a home and use your savings for down payment or improvements to the home, moving, etc. it all takes money and if you can finance the closing costs, it can cost you only a few dollars more each month.

When selling a home, you should consider the request to “pay” buyer closing costs as allowing the buyer to finance their closing costs. It does not affect your net. As long as you are getting the amount you want, what do you care if they include the closing costs in their mortgage?

I often negotiate my deals based on the net to the seller. Don’t include closing costs in the initial negotiation, but let the other party know you intend to add the closing costs to the deal once a net to the seller price can be agreed upon. That way it is not an emotional or adversarial issue for the buyer or the seller. It is a non issue and you can focus on the price – bottom line to the seller.

The only time this becomes an issue is when the appraisal does not meet value. Then it becomes a little sticky. Appraisers are supposed to consider the closing costs paid on the contract, but sometimes they don’t and the closing costs become a pawn in the renegotiation.

When buying a home, buyers need to understand that sellers are entitled to get at least the value of the home, as appraised. Remember, appraisals are not always true to the real value of the home. It is based on the recent comparables, so sometimes the home’s value is more, but it is suffering from lack of comparables or neighbors who are giving away homes to get out.

Home Sellers need to understand that appraisals may or may not be indicative of the true value of the home, but the current market value depends on the comparables, nothing else. And while sometimes, the buyer can come to the table with money above the appraisal, sometimes they don’t have that extra money. And often it is difficult to get a buyer to pay above the appraisal price.

Closing costs need to be considered by both parties as a part of the deal and means to the end to make negotiations go smoother.

What affects Home and Property Values?

“This is going to lower our property values.” Most things people think affect their property values do not. Appraisals on home sales and refinances are done based on the home and the comparable home sales in the area.

Appraisals leave something to the subjective opinion of the appraiser, but mostly are done by guidelines. Appraisers also have to back up their appraisal to the government, bank and/or management company.

Appraisals are guided by size of the home, number of bedrooms, baths, size of the lot, type of home, and condition of the home (upgraded, not upgraded) based on a good, better, best type system. But the property value or home values are generally determined by a comparison of your home with 3-5 other similar homes sold in your neighborhood or immediate vicinity in the past 4 to 6 months. So if your neighbor underpriced and gave his home away because he wanted to move, does this affect your home value. Yes for at least 6 months.

If there are foreclosures and short sales in your neighborhood and the values are lower, will that affect your property and home value? Yes – again for that period. Appraisers do take foreclosures and short sales into consideration and do make adjustments for distressed properties and for condition of the home, but yes, it will affect your home value.

If you upgraded your home and no one else in the neighborhood did, will it affect your home value? Yes. Appraisers do make adjustments based on condition, upgrades or improvements, but are certainly not worth the equivalent of the value of the improvement.

The other factor is home buyers and what appeals to them. Because appraisals are largely based on the comparable home sales, home buyers’ selections of areas, homes, types of homes, etc. affects your home values. Home buyers are people and they react emotionally about a home, positives and negatives. Location, neighborhood, schools, nearby amenities, taxes, public transportation (too close or too far), as well as numbers of bedrooms, baths, upgrades and condition of homes affect their choices and will ultimately affect your home’s property value.

So school rankings, tax rates and crime statistics do NOT factor into an appraisal. Neither do proximity to trains, commercial property, schools, busy streets or parks. None of this is reviewed or factored by an appraiser. BUT, these are definitely factors that home buyers consider. If home buyers don’t like these things, sellers will have to lower prices to sell. Then it will affect your property values.

So what does and does not affect your home’s property value? In short, it doesn’t matter what YOU think your home is worth, it doesn’t matter what YOUR BUYER thinks your home is worth. It only matters what similar homes in your area have sold in the past 4-6 months and how your home compares with them.

Before selling or even preparing to sell, it is always best to call a Realtor to find out what the recent market is and how it does affect your home values.