As a Broker, I do care because it tells me a lot about the REALTOR® that I may be thinking of hiring or to whom I may be sending a Referral. Each designation requires additional education, passing at least one test per class (sometimes more!). There is also a cost of several hundred dollars to a few thousand, depending on the designation. Let’s break it down and find out what these letters mean for you:

Broker

Every Real Estate office in Delaware must have a Broker of Record. The Broker does not have to be the owner, but only a licensed broker can buy or sell, or negotiate the purchase, sale or exchange of real estate on behalf of a client or customer. A Real Estate Agent or Salesperson must work under the management and direction of a Broker. Before an agent can become a licensed broker, they must have completed 5 years in the business and document a minimum number of real estate transactions. Then you get to take 90 hours of classes, several tests, the State Exam and voila – you can become a Broker.

ABR

This is short for an Accredited Buyer Representative. What this means to you is that an Agent made a conscious decision to take the classes and become certified to work with Buyers and help them find the right home in the right location, regardless with whom the property is listed. It used to be that all agents represented the Seller, but now you may be represented by a Buyer Agent whose primary job is to represent you. Only a REALTOR® in good standing can become an ABR.

CRS

This stands for Certified Residential Specialist and is one of the most respected designations a REALTOR® can earn. To apply for CRS an agent must have completed 75 transactions or $25 Milliion in transactions within a 5 year period. Then there is a requirement of an additional 64 credits (hours) of education chosen from specific classes designed to really learn how to be a better REALTOR.

SRES

A Seniors Real Estate Specialist is a REALTOR® that has pursued a course of education and certification to specialize in working with clients age 50 or above (what I call Boomers and Beyond!). We help our clients research future retirement housing options, buy a second home that may become a full time residence in the future or sell the large family home and look for more appropriate housing that will provide years of comfortable living.

1. Your first offer is usually your best buyer
2. On a resale, no one wants the middle unit
3. No one searches the Internet for a 2 bedroom home
4. Pricing your home at $299,999 misses all the people searching for homes $300,000 – $350,000
5. Empty homes look smaller
6. It takes both sides – buyer and seller – to make a good deal
7. If it seems to be good to be true, it probably is
8. All Real Estate is Local – What happens in Lewes is different than what happens in Las Vegas
9. Staging works – Typically a staged home sells in 50% less time for 5% more
10. Homes listed with a REALTOR sell for more money than a For Sale By Owner!

Can I prove all of these? Maybe not, but I can share 10 years worth of stories that illustrate these Realities.

“How do you price a home a few years old in a community that is still selling brand new homes?”

First, think about SELLING when you BUY!

None of us knows what tomorrow will bring so when you are buying in a new home community, here are a few tips:

Do not scrimp on upgrades.

Buyers will not consider your home if you do not have

• The gourmet kitchen
• The luxury owner’s bath
• Hardwood floors throughout the main living areas
• Gas Fireplace
• Sunroom or Morning Room
• Other upgrades that the majority of buyers are choosing in that community

Think about how people search on the Internet.

Buyers are downsizing but they still want –

• 3 bedrooms and at least 2 baths
• 2 car garage
• Storage space

Two bedrooms might be enough for you, but when you go to sell Buyers will want three.

Think about Energy Efficiency.

Years ago, I suggested that my clients seriously consider upgrading the HVAC systems if upgrades were offered by the builder. Ditto the extra insulation. If you bought a home several years ago and accepted the standard offerings and have to sell today you are suffering from functional obsolescence.

Then, when you’re ready to Sell, be prepared to compete!

Staging WORKS

If you do have to compete with the builder, your home will have to show like a MODEL.

• Choose a Listing Agent who includes Staging with their Listing Services
• Do what they tell you and do it before you list
• You only have one chance to make a first impression!

Know the competition. Is the Builder

• Offering incentives
• Paying some closing costs?
• Contributing to HOA fees?
• Covering Impact fees?

Work with your listing agent and pay a commission rate that is higher than the Builder is paying.  Any other incentives should be focused on the Buyer however, not the Buyer’s Agent in this economy.

Price it Right

Bob asked “How much under new home prices do you need to go to compete?” That depends on how well you did the above and how homes in your community are now selling. You will need to price your home at or below the most recent comparable to attract a buyer and to make sure your home will appraise at the sales price. The appraiser will make an adjustment based on the age of your home as well as its size and amenities, so price it to sell AND get to the settlement table. Check out this article “Will Your Home Appraise?”

If despite your best analysis, your home is not getting any offers, the price is too high. Get ahead of the competition and take a meaningful price reduction. Living in a model home is not fun, the idea is to get your home sold! Do not tell your selected Listing Agent to just list it as is at the price you think it should sell for and then blame it on the Agent when it doesn’t sell.

How do you price your home to sell in this market?

First, you sit down with your Listing Agent and review recent sales of comparable homes. Then, you have to be willing to listen and price your home properly. What is your choice? Either price your home to sell or decide to stay where you are for now.
In a slow market, what do you do when there have been no comparable sales in your neighborhood or surrounding area? That’s the challenge facing many sellers and their listing agents today. Learning more about how Appraisers do their job can be useful.

If your home is a 4 bedroom, 2 bath, 2800 square foot rancher with a 2 car garage on a ½ acre lot, an Appraiser will search to find other similar homes that have sold recently within the immediate area. Then the Appraiser will make adjustments up or down in value to compensate for differences. If your home is smaller than others that have sold, he will adjust the value of that home up; if another recent sale was a larger home, he will adjust that value down. It can be a complex task and the result is not necessarily what you will want to hear.

But I paid 30% more than that!

You know what you paid for your home and how much you’ve put into improvements over the years. It has to be worth more than the sum of all your efforts plus a profit right? Not necessarily. But, if you bought your home 30 years ago, have maintained and updated it as needed, you will sell if you price it right. A good property priced appropriately for the market will always sell.

But I have an in-ground pool!

Some improvements will add more to the value of your home than others and it has to do with the value to today’s buyers not the cost of the improvement itself. An updated Master Bath or a new kitchen will appeal to more buyers than a pool in the back yard.
Ask anyone who has sold a home recently and they will tell you that the biggest hurdles today are:
•    Your Buyers getting financing approval and
•    Your home appraising for the contract price
It’s really the same hurdle because the bank will only lend 80% of the appraised value to the Buyer and even a Cash Buyer does not want to pay more than the current value of a home.

The Appraiser is hired by the bank or mortgage company to protect their investment. In case the Buyer defaults, they want to know that they can recover the remaining loan balance. Does it matter that you and the buyer came to terms and agreed on a certain selling price? Not really, unless your buyer is paying cash and is willing to pay the negotiated price despite a lower appraisal.

Always think about selling when you buy

One of the basic principles of value is CHANGE. Nothing stays the same, but if you think about selling when you buy a home you may avoid the extremes. A home needs to be updated over time. Compare it to staying fit. It’s easier if you do it regularly over time than to decide at age 60 to begin working out, drop 50 pounds, etc.

Here are a few of the Basic Principles of Value that affect people the most:

• Conformity – You may be a rebel, an individual with your own style who hates to look like everyone else. When it comes to real estate however, it doesn’t pay to be the most unique home in your neighborhood. In a community of nice ranch homes, the soaring contemporary twice the size will not sell for its maximum value.

• Contribution – Remodeling an outdated kitchen or bathroom will contribute value and probably help maximize the selling price of your home. Adding an in-ground pool or a greenhouse or a bowling alley in the basement may not add any value.

• Regression and Progression – Don’t ever buy the biggest or nicest home in the neighborhood. Its value will tend to fall or regress into the same range as the less lavish homes. Do buy the more modest home in a really nice neighborhood and watch your value rise or progress.

• Increasing and Diminishing Returns – Don’t over-improve your home. While a remodeled kitchen or bath might increase the value of your home, adding restaurant-quality appliances or gold faucets will not result in a higher selling price.

• Substitution – We all think our home is better than the one down the street. In reality, this principle of substitution teaches us that the value of your property is set by the cost of an equally desirable and valuable substitute property. If the other home is reduced by $20,000, your probable sales price will be affected.

• Supply and Demand – When the inventory of homes for sale kept growing and sales slowed, the balance of supply and demand got out a whack. As supply increased, value decreased. Sellers who adjusted their asking price quickly got ahead of the decline and managed to sell. Others decided to wait it out anticipating a recovery in the housing market that has yet to be realized in many markets.

The best advice I can give you is to be prepared. The Girl Scout adage is true today – Be prepared and you won’t be caught off-guard by an offer that is lower than you expected. Do your homework, work with a professional REALTOR® and understand that the principle of CHANGE doesn’t just go down. Eventually, what goes down must go up. But how and where do you want to live in the meantime?

“What does this mean for you? The new reports will look foreign to you and your clients with all the codes we have to use in the reports, so you will have to be versed on what the codes mean. Instead of the old days where we described a property as being Good in condition or Good in Quality of Construction, we will now be using codes such as Q=3 and C-2, etc. It will be far less user friendly to read and more automated system friendly. Fannie and Freddie want consistency across the board for all appraisals nationwide and the codes are the way they are trying to get this accomplished. They have clearly defined what Fair, Poor, Average, Good, Very Good and Excellent Quality and Condition should entail. No more leeway in how appraisers determine this on their own. Lenders are also gearing up for uniform delivery of their loan packages and the UAD is part of this whole process.” READ MORE

Gail Alm

Houses are selling.

National Association of Realtors’ (NAR) annualized numbers from the Existing Sales Report says 14,000 homes sell every day in this country.  That means 14,000 yesterday, 14,000 today and 14,000 tomorrow!
Most of the country is still showing sales below last year.  This year’s sales are compared against the expiring home buyer tax credit last year which pulled sales from later in the year into the first quarter. But guess what?  Here in Sussex County Delaware for the 1st Quarter of 2011 we are up 8% in units against last year in the sales of single family homes. And that too is up against numbers where people were buying early in the year to take advantage of the tax credit.
Total sales in the 1st Quarter for single family homes were up 11%.  This year we sold 474 units versus last year’s 434.  Properties sold for 93% of the list price and averaged 232 days on the market.
Condos and townhomes were down 6% in Sales, sold for 94% of the list price and averaged 316 days on the market.
Mobile home sales were down and sold for 85% of list price and averaged 229 days on the market.
Lot sales were up in units by 9% but down in sales $$.  They sold for 82% of list price and averaged 442 days on the market.
Most of the data releases going forward will be compared against last year and will look REALLY GOOD since the folks bought early last year to take advantage of the tax credit pulling those sales from the later months.
Most analysts believe we will actually start turning the corner in the second half of 2011.  Maybe here in Sussex County we are already on our way.  Watch for future editions of Just the Facts.

Your buyers are on the Internet

Do you know who they are and where they live now? Ask yourself, who is relocating to Lewes, Delaware, and the surrounding areas like Rehoboth Beach, Milton, Milford, Georgetown and the rest of Sussex County? The majority of our buyers do not currently live in Delaware; they live in New Jersey or New York, Connecticut or Pennsylvania, Maryland or Virginia. Most are over the age of 50 and they intend this to be their last move. They may not be moving here full time quite yet, but the idea is to relocate to Coastal Delaware to retire.

I'm for SALE!

Are you reaching them?

Our buyers are not reading the Cape Gazette or the Coast Press unless they happen to be here on vacation. If your home is only being advertised the old way in local papers or those glossy “free” magazines, will the right people ever see it?

Is your buyer going to walk in the door of your listing agent’s office ready to buy or are they actively searching on the Internet before they ever visit Lewes for the first time? Do you know how they search?

What do the buyers want?

They want a 1st floor master bedroom and master bath. They want an upgraded kitchen and beautiful floors. Basically they want a home that is “move-in” ready and needs no work at all. They’ve worked hard and now they are preparing for retirement and they want to be rewarded with their dream home.

Buyers want to see lots of pictures and video when your home is marketed on the Internet. If they don’t see what they’re looking for on their favorite web sites, they’ll never come to see your home in person.

If you’re planning to sell your home and it has the features that appeal to the new retirees – the leading edge Baby Boomers, your home should be featured here on this site – www.ActiveAdultsDelaware.com.  Contact us if you’d like to hear more about our marketing plan to sell your home.

HARD TRUTH: Mike Aubrey discusses pricing and market conditions with sellers during an episode of HGTV’s “Real Estate Intervention.” The show airs Tuesdays beginning June 29 at 9:30 p.m. ET.

By Deborah Ball Kearns, RE/MAX Times Online Associate Editor

Interventionist

Many of today’s sellers need a reality check on pricing. Mike Aubrey provides one each week on HGTV’s “Real Estate Intervention.”

The popular TV show follows sellers who are either thinking of listing their property or have had their homes on the market without a successful sale. Aubrey, a Hall of Fame and Chairman’s Club member with RE/MAX Metropolitan Realty in North Potomac, Md., takes sellers through two comparables – a home that recently sold and one that’s still on the market – to show them how their property stacks up to the competition. Then he sits them down for “the talk,” which entails a rundown of the numbers and his suggestion for pricing.

Most of the time, the truth hurts.

“Sellers can get extremely upset or offended when I tell them my opinion on what their house is worth given the market conditions,” says Aubrey, who remains remarkably patient with difficult sellers in several of the episodes. “Part of this business is telling people things they don’t want to hear, but you can’t get emotional about it. You have to control the situation and trust your work and the numbers. Having their best interest at heart means being honest.”

Aubrey’s straight-talking and frank manner has made the show a fan favorite; he gets thousands of letters and e-mails from agents and Broker/Owners who say they watch the show religiously. Some even make it required viewing during sales meetings.

While it’s not much different from what he does with his clients everyday, Aubrey says that the opportunity to show sellers a recently sold comp offers a unique angle to the discussion – something he wouldn’t normally get to show his actual clients.

Aubrey got the gig after appearing in a few episodes of  HGTV’s “Get It Sold” and “House Hunters.” But he doesn’t consider himself a TV star by any stretch.

“I’m a guy who sells real estate that happens to be on TV – and not the other way around,” says Aubrey, who works full-time with his team serving buyers and sellers in the Washington D.C. metro area. “I originally declined the offer to do this show because the filming would’ve interfered with my business, but they came back to me and offered me a shooting schedule I could live with.

“It’s a lot of fun, but it’s hard work; I put in 95-hour workweeks between selling homes and taping.”

Having his own real estate show has opened up countless avenues for Aubrey to promote his business. He has appeared on the Today show, which invited him back on July 11 (7 a.m.-9 a.m. ET) to discuss online real estate resources for buyers.

Aubrey’s real estate anecdotes have been included in The Washington Post and The New York Times, and he has appeared on news commentary programming and talk shows such as “Fox & Friends,” and “Rachel Ray.”

“One of the great things about doing ‘Real Estate Intervention’ is that I get to showcase the great work real estate agents are doing across country – especially right now,” Aubrey says. “It’s a big responsibility to be in a venue where I’m essentially representing all Realtors. So I make sure to do my homework and do the profession proud.”

The third season of “Real Estate Intervention” returns to HGTV on Tuesday, June 29 at 9:30 p.m. ET. You can watch past seasons on Hulu.com.

• How long have you been in real estate?
• Is real estate your full time job?
• Will you work weekends?
• Do you answer your cell phone in the evening and on weekends?
• What is your Internet Marketing strategy? Do you have your own web site and blog site?
• How are you using Social Media to market your listings?
• Do you have a Facebook Business Page, a Twitter account?
• How do you use digital photography and video to promote your listings online?

In a challenging real estate market, will you choose a listing agent who tells you the truth or tells you what you want to hear? As I was writing this, I turned on HGTV and one of my favorite shows was on – Real Estate Intervention. Mike Aubrey consults with sellers whose homes have been on the market for a while without success. He takes them to see similar homes in an effort to find the right price. On this show, the seller is a woman who has lived in her DC home for many years but she has lost her job and has to sell. She feels her home is priced right even when Mike shows her others in the neighborhood that prove it is overpriced. His concern is that if she hangs on too long, she may not sell at all and could end up in default. Later in the show we learn that she did get a contract for the exact price that Mike told her it would sell for. Was she happy? She was certainly relieved and commented that she had “learned a lot from Mike”.  Even though she had a hard time accepting his expert opinion, she agreed that he was being straight with her. She decided to accept the lower price and move on with her life.
Mike Aubrey is the kind of agent sellers need to choose. He doesn’t tell them what they want to hear, but he does tell them the truth. He also does it in a way that is thoroughly researched.
The agent you choose needs to be current with today’s Internet technology.  According to research conducted by the National Association of Realtors:

• 87% of buyers used the Internet in 2008 to search for a home; a dramatic increase from only 2 percent in 1995. That means the largest number of buyers for your home in Coastal Delaware probably do not live here!
• 32% of recent buyers reported that they first found the home they purchased on the Internet.
• 89% of all Realtors® belong to firms that have a Web site, and 60 percent of Realtor® sales agents have a Web site for business use.
• 82% of all Realtors® now use a cell phone daily or nearly every day; 92 % use e-mail and 89 % use laptop or desktop computers to communicate with clients.
• 39% of Realtors® use Smartphones with wireless e-mail and Internet capabilities. A small but growing segment of Realtors® use newer forms of communication, such as blogs and podcasts (3 % or less).

How will you choose an agent to get your house sold? If you live in Sussex County, Delaware, and your home appeals to active adults, contact us today.

Want an even better idea? Remodel your house for independent living, not just curb appeal. That will open up a whole new market of opportunity.

Pretend that you are handicapped or a retiree buying your last home and you are looking for a home that is accessible. You would prefer to buy one that you don’t have to immediately modify. Whether due to age, illness, or an accident, a family member, a spouse, or a close friend has limited mobility or may already be in a wheelchair. You need to buy a house that will be comfortable, accessible and visitable and you cannot find one.

A major problem at the moment is the widespread – and false – perception that making a house handicapped-accessible will diminish its value, especially in upscale homes. That makes the assumption that wealthy people never have accidents or get older. That also assumes that to make a house accessible will make it look like a hospital.

There are so many design options available that improve accessibility without sacrificing aesthetics. Several companies now offer bathtub and shower stall conversion products at an affordable price. But in a luxury home, an elegant ceramic tile, custom-built accessible shower could be the focal point of the Owner’s Suite.

One client of mine remarked “I don’t recall having seen any house in which 36″ bathroom doors would cause a noticeable decrease in usable space, yet houses continue to be built with 30 – 32″ bathroom doors, presumably because smaller doors are cheaper.” Simply widening at least one bathroom doorway will not diminish your home’s value; it may actually increase it. One option to create a wider doorway is to replace a standard door with a pocket door.

Continuing improvements in products for handicapped people will make more houses accessible. Eventually, even multi-story homes will be accessible with the installation of stair climbing robots, for instance.

While we wait for technology to improve the accessibility of our existing inventory of homes for sale, making your home accessible for disabled or older buyers – and making sure your Realtor lets the whole world know – will give you a leg up on the competition and expand your potential pool of buyers.