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Play hardball with lowball offers – don't ignore them.

March 7, 2016 by gailmarcarelli Leave a Comment

Experienced agents will tell you that any offer can jump-start an ultimately successful negotiation.
Even lowball offers.
So what constitutes a lowball offer? Depending on the market and other considerations, such as market-value of the home, most agents consider anything 20-25% below list price to be a lowball offer.

What to do about lowball offers

First and foremost, stay focused on the goal which is the sale your home. Do not fall into the “insulting offer and refuse to negotiate with the offender” trap.  Doing so in counter-productive. Instruct your agent to present all offers to you in writing including lowball offers. Counter all offers in writing, giving the lowball ones a little ground but not much. This strategy should eliminate the bottom fishers and flippers.
Lowballers who are truly interested in your home are often willing to raise their offers, in some cases incrementally. They may eventually arrive at an offer which is acceptable to you. Always have the last word in when negotiating. Be firm but reasonable at all times and gracious to all who show interest in purchasing your home.
Another strategy to consider is to direct your agent to explain to the buyer that  you are confused by their far-under-list or market-value offer and invite them to resubmit after viewing a comparative market analysis on similar homes in your neighborhood. Or direct your agent to ask for a logical reason behind that initial low offer. You may learn something about your property that you or your agent missed when setting the price. You may even learn something about the person making the offer such as they:

  • could come from an area where comparable homes cost significantly less
  • prefer to negotiate aggressively
  • may be inexperienced home buyers and getting advice from friends and family to start low
  • want to see if you’re at a point where you want to just get it over with
  • are afraid of overpaying and leaving money on the table
  • can not afford the home unless you drop your price

You can see where many reasons for making a lowball offer may be overcome with a little buyer education. If the buyer’s agent isn’t providing the education, then your agent may be able to help by providing comparative market analysis to the buyer’s agent. Sometimes it just takes a little shopping around the neighborhood to come to the realization that they should submit a better offer.
In addition to the price being offered, consider all of the buying party’s terms – such as when they’re willing to close, what contingencies they are requesting, their financial ability to perform and any closing costs they are asking you to cover. You may find a that a low cash offer with a quick closing and no special contingencies is acceptable to you under certain circumstances. After all, time is money.
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Filed Under: Real Estate, Real Estate Agents, Selling your home

Still no offers on your Jupiter home?

December 8, 2015 by gailmarcarelli Leave a Comment

Jupiter’s housing market is tight with demand outstripping supply. But a strong seller’s market isn’t a guarantee that you can quickly and easily sell your Jupiter home. There are some homes even in the most desirable neighborhoods like, The Shores of Jupiter and Egret Landing, that have remained on the market long after others have come and gone.
It is very well-known that the number one reason a home doesn’t sell is because it is priced too high. However, if your home is priced right and has had a lot of showings but still has not had an offer, not even an offer that is well below the asking price, consider these other possibilities:
Your house appears run-down. A house that appears run down screams that it has not been maintained. People do not want to buy someone else’s headaches. If your house actually is run down and has not been maintained, it will be a hard sell even in the most robust seller’s market. You may have to do some extensive repairs or significantly lower the price in order to sell it.
“But what about fixer uppers?” you may ask. In order attract people who want to make renovations of their own, the home needs to be priced well-below market. Buyers who have the desire, money and time to do the work are very scarce especially in the over-$400k range. And, those who are out there shopping for a fixer-upper are bargain shopping. If the house is not priced well below market value these buyers will not bite.
If a home just appears to be rundown then it is worth spending a little bit of money and or time to get in tiptop shape. There are a host of minor annoyances that you may have gotten used to over the years which may be turning off potential buyers.  Some things you could do include straightening and repairing crooked, broken or missing switch plates and outlets; adjusting cabinet doors so they close correctly; tightening and repairing door knobs and latches, and making sure all window blinds and shutters are working. Any signs of water damage can be a huge turn-off to potential buyers. A roof leak may have been repaired a while ago but the ceiling with the water stain has yet to be painted. Now is a good time to get that done. I am not suggesting that you hide a potential problems with paint. And when the time comes to disclose remember tell them about the roof leak and repair.
Your house is very outdated. Take a good look at your home through the eyes of a younger generation. Look for major items that date your home. Things like odd-colored bathroom fixtures – I have seen homes with purple, pink, and even black toilets, sinks and tubs. The $5,000 spent to replace the fixtures with a timeless color like white may be well worth it.  You may want to consider replacing old, miss-matched appliances – be aware that stainless is still king. Remove out-of-date wallpaper and paint the wall a neutral color. While you are at it, use that neutral paint on your daughter’s purple room and your son’s spiderman mural. And don’t forget to replace that old carpet especially if it is royal blue shag. Sprayed acoustic or “popcorn” ceiling is another turn-off for many buyers. Consider having it removed.
Your house has that “lived-in” look. Clean like you never cleaned before. And then clean again. And again. Keep your home spotless at all times. People will be looking in your oven, under your sink, in your shower, etc. If you can’t get the tile grout clean, call in a professional. Clean grout will help make you tiled floors and bathrooms look new. Also have your carpets professionally cleaned or even replaced. Locate and eliminate offensive odors. For the last one, it may be worth bringing in a friend or acquaintance to help detect offensive odors as we all get used to the odors in our homes. Clean windows with opened blinds will help brighten up your home.
Your home has an undesirable layout. This is also a tough one and there is not much you can do about it. This is where a professional stager can make a huge difference. They will be able to stage your home to accentuate its best features creating a wow factor which just might make that undesirable layout desirable.
Your house is poorly located.  This is a tough one as you can not move your house. But there is a lot you can do with landscaping. The main challenge with landscaping is getting it established before you put the house on the market. Fortunately for Jupiter homeowners, things grow fast in Florida. Does your home back up to another, or a concrete barrier wall, or a commercial parking lot? Dense hedges and fences with vines can change the view and help muffle sounds. And, the right plants can help create a lovely tropical oasis.
It may take some time and money to inspire buyers to make offers. However, you have one very important thing going for you – your home is in the town of Jupiter and Jupiter is a very hot market right now. So do what is necessary to get you home sold. If you need a professional objective opinion on your home before you list it contact me at gmarcarelli@ipre.com or call me at 561-809-6746.
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Filed Under: Egret Landing, Jupiter, Selling your home, The Shores of Jupiter, Uncategorized

Selling your home for the right price

December 15, 2014 by gailmarcarelli Leave a Comment


The reality is your home is only worth what the market will bear. The challenge is to determine what that is. A Comparative Market Analysis (CMA) prepared by a trusted Realtor® can provide you with the information you need to price your home. CMAs are often offered as a free service by Realtors. If prepared by a one who knows your market you will receive a fairly accurate range within which you can price your home. Pay attention to the average amount of time homes are on the market in your immediate area. This will also help you determine where to set your asking price.
If home prices are trending upwards you may be tempted to set your price high. However, overprice your home and risk having it sit on the market too long – which could be a very costly mistake both in time and money. Even if you do get an offer, the home may not appraise at the higher price which may make it impossible for the buyer to secure financing. Overpricing your home can make you appear unreasonable or unknowledgeable. Many buyers will not make an offer because they are concerned you will be insulted.
If your home sits on the market for a long period of time some buyers may assume you are getting desperate. That’s when the below-market offers start to appear, which can be very discouraging. After a while you will have to lower your price. By then you may have missed a few opportunities to have sold your home.  I have seen some overpriced homes taken off the market for a period of time and then relisted at a more competitive price – a lot of time and money wasted. Don’t base your price high because the market trending upwards.  If prices are trending upwards, buyers will make offers accordingly and bid price up to what the market will bear.
I recommend my clients to price in the upper-range only if there is something about their home that makes it stand out from the competition, such as a more desirable model or floor plan, or their home is in a much-sought-after neighborhood with very low inventory.
Some real estate agents will suggest a high price for  your home in an attempt to get you to sign a listing contract with them. The plan is to get the listing and when no offers are made within a certain timeframe, say 3 months, they will recommend a price change and use the price reduction to market your home: “PRICE REDUCTION – SELLERS ARE MOTIVATED!” Some unethical agents like to overprice homes hoping to generate buyer leads for other properties. The longer the home stays on the market the more buyer leads it may generate.
If there are a fair number of similar properties selling within a reasonable amount of time in your neighborhood then pricing slightly below the middle of the range is recommended. However, if you need to sell quickly, set the price lower or even below the bottom of the price range to generate a lot of interest. In a seller’s market or in a market where prices are trending upwards, this strategy may produce multiple offers and even a bidding war. The market will bring the price up. If you price your home in the lower range when the market is trending lower you will be ahead of the trend making it more likely that you will sell your home before the market falls further. And you don’t want to be caught in a situation where you must continually reduce the price, chasing the trend.
Things to remember:

  • The real estate market is local. What is happening in New York has very little bearing on what is happening in Miami. In fact, even markets in adjacent neighborhoods can perform differently.
  • You cannot sell your home for any more than a buyer is willing and able to pay.
  • Even the most seasoned professional can not accurately predict the market.
  • Price your home right and the buyers will pay what the market will bear.

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Filed Under: Homes, Real Estate, Selling your home

Home Inspectors Citing Building Codes

September 26, 2014 by gailmarcarelli 5 Comments

Should Home Inspectors be Citing Building Codes in the reports they write?

There is an age old argument for all Home Inspectors. The Home Inspectors argue about this topic on a regular basis. The question is whether to cite the Code or not to cite the Code. This argument has spilled over into the Real Estate world and the Real Estate Professionals have their own arguments about the topic. It is hard enough to find consensus amongst the Inspectors without the Real Estate Professionals weighing in on the topic. For years, more than 20 that I have been involved, some Home Inspectors and Trainers argue that they are against citing Code. They have argued a Home Inspection is more performance based, and the Building Code is not performance based. In layman’s terms the Home Inspector is answering the question of, “is the home functioning or performing as intended,” or as agents say, “is it working?”

Before I go further into this topic, let us dispel a common myth right away in the Real Estate Industry. This is for all Sellers, Buyers, as well as for Real Estate Professionals. What defines a Home Inspection, and what is required by a Home Inspector, is NOT defined by a Real Estate Contract or by the Real Estate Industry. A Home Inspector is bound by his Standards of Practice, the Standards of the Industry, his Standard of Care, and by his State Licensing Requirements. I cannot tell you how many times I have heard an agent tell me in the field, “you cannot report that,” or better yet, “it is illegal for you to report that.” That gets a standard shrug, sometimes with rolling eyes, followed by ignoring the person who is obviously not educated in the profession of Home Inspections who made the statement. I do not tell them how to write a contract, why do they feel compelled to tell me how to write a report? The average Inspector will perform between 300 and 500 home inspections in a year, with some doing more than that. That is 3,000 to 5,000 inspections and reports in 10 years. Find me an agent who has sold or been personally involved in that many transactions in 10 years.

Before we try to find consensus, not that we will, let’s first look at the Building Codes and their purpose, and then what a Home Inspection is. For this document I am writing Florida Specific. Other States definitions may vary; however, slightly and for the most part this information should apply to a great degree. The purpose of a Building Code is stated within the Code itself. The International Building Code states the following:

“Internationally, code officials recognize the need for a modern, up-to-date building code addressing the design and installation of building systems through requirements emphasizing performance. The International Building Code is designed to meet these needs through model code regulations that safeguard the public health and safety in all communities, large and small.”

Imagine that, the very argument Home Inspectors have against citing Codes is in fact one of the purposes of the Code. Note the words “emphasizing performance.” Well that clears up that argument as all Home Inspections are performance based, and so it seems the Code is also performance based. So that old argument is not valid and hereby laid to rest.

The Florida Building Code states the following:

“The base codes for the Florida Building Code include: the International Building Code, 2007.”

And further states;

“The purpose of this code is to establish the minimum requirements to safeguard the public health, safety and general welfare through structural strength, means of egress facilities, stability, sanitation, adequate light and ventilation, energy conservation, and safety to life and property from fire and other hazards attributed to the built environment and to provide safety to fire fighters and emergency responders during emergency operations.”

Now let’s look at what a Home Inspection is and the difference between a Home Inspection and a Building Inspector. In particular, what they are looking at, or their scope:

Per: FS 468.8311

“Home inspection services” means a limited visual examination of the following readily accessible installed systems and components of a home: the structure, electrical system, HVAC system, roof covering, plumbing system, interior components, exterior components, and site conditions that affect the structure, for the purposes of providing a written professional opinion of the condition of the home.”

Per: FS 468.603

“Building code inspector” means any of those employees of local governments or state agencies with building construction regulation responsibilities who themselves conduct inspections of building construction, erection, repair, addition, or alteration projects that require permitting indicating compliance with building, plumbing, mechanical, electrical, gas, fire prevention, energy, accessibility, and other construction codes as required by state law or municipal or county ordinance”.

So can you see the differences? Can you see how similar the definitions are? There really is only one major difference and that is one is for enforcement, the other is for reporting. As a Home Inspector you are not the AHJ, (Authority Having Jurisdiction), meaning you are not going to issue a citation. Simply put, you are not enforcing the Code; you are pointing out Code as a Home Inspector and backing up your opinions with a document, an Authoritative Document that is known to be the absolute minimum authority in the housing industry. It is no longer just your opinion, it is a Professional Opinion based on Documentary Requirements. So the big differences are, Home Inspectors don’t have enforcement powers and are are not limited by the Minimum Codes. Code Inspectors do have enforcement power and are limited to the Minimum Codes. There is no crossing an imaginary line if you keep in mind the different purposes of the two inspections.

Almost everything Home Inspectors do has its basis in the Building Codes, somewhere, some place, it is in there. The AHJ is inspecting for the protection of the community and bears virtually no liability to the individual, whereas the Home Inspector is there to protect his client and owes virtually nothing to the community at large. The scary part for a Home Inspector is that he has virtually unlimited liability to his client (unless limited by his inspection agreement.) In my opinion, quoting or reporting on any defect, in any manner, Code or not, has much less liability attached to it than not reporting on that defect at all, or ignoring the Code.

Home Inspectors use Code as just one of the tools of the trade. How else would Home Inspectors be able to comment on incorrect wire size, the presence or absence of GFCI protection, unsafe stairs due to missing railings and improper rise and run, missing caulking or waterproofing and on and on. I believe that a general knowledge of the Codes is important; however, the inspector has to know more than just one Code. As the Codes change, every 3 years, the inspector has to keep up. A house is only required to follow the Code that was in place at the time of the Permit Application. Meaning it does not have to meet the new Code, only the one in place when it was constructed. Note that all new renovations have to follow the Code that is in place at the time of renovation, unless a Building Official allows otherwise, in writing, it is known as a “Variance.” Without a doubt; working knowledge of the various codes puts the inspector into a better position to inspect any building.

It is a Code requirement to construct a stairway in a uniform manner, with railings, specified heights and gaps, and if you are inspecting the stairs to see if they are safe and in proper working order. If the stairs are all of the above, then you have, by default, inspected the stairs for the Minimum Building Code. Whether you state it in writing in your report, or not, you thought it. You referenced Code in your mind to make the determination.

As stated earlier, the Building Code is a Minimum Standard. A building that is built to the Building Code is the lowest level and quality of a building you can build legally. Fall below the Code and you have a real problem. The Home Inspection ventures into other areas that the Code does not allow for. For instance, a Home Inspector will comment on whether or not a roof, or appliance, is at, or beyond, it’s expected life. This would be something not specifically addressed by a Code Inspector, with one caveat. That being, the roof and exterior walls are required by Code to provide water resistance and protection from the elements, (why caulking is NOT cosmetic).

A seasoned well respected Home Inspector from the other side of the country once stated on a HI Forum; “The Code does not exist for Saturday afternoon, in your lounge chair, reading Shakespeare, sipping tea, nibbling crumpets, and life is beautiful. The Code exists so that when all hell breaks loose at 2 AM, your home is constructed sufficiently so that you have a chance of getting out alive.” 

Building Codes regulate construction and construction practices of all buildings and structures. What they do not regulate is Real Estate Transactions or Contracts. Home Inspectors and Code Inspectors are inspecting for construction requirements and construction practices. Attorneys are inspecting Real Estate Transactions and Contracts. That begs the question, are you a Home Inspector or a Real Estate Attorney?

Codes must be based on what is generally accepted as good standards of construction. Only those provisions which are reasonable, practical, vetted, voted on, or necessary can be enforced. Codes containing requirements or specifications which, through analysis, can be proved to be excessive of the minimum requirements are questionable at best.

I think the reasons for Inspectors warning against citing Code is pure folklore. There is very little support in history for Home inspectors not being able to cite Code. When I ask, and I have asked Nationwide, the question, “can you cite a written source where a Home Inspector got in trouble or got sued because he cited a code in his report?” I get no response. I think the warning, or thinking, goes back to the old inspection schools that were taught by people who really couldn’t conduct Code Inspections as the industry had not yet advanced that far. Keep in mind that Home Inspections have really only been around for 40 years, and have made great strides in the past 25 years. In fact, many Home Inspectors have taken the time to learn and become Code Inspectors through the State Agencies or ICC. There might have been a suit 20 to 30 years ago but that was when our profession was very young, and very inexperienced. Anecdotal experiences are not precedent nor do they make rules. Unpublished cases, especially those untested or not appealed are irrelevant and have no basis.

I have NEVER heard an Inspector state; “I got sued and lost because I did too much”, “I took photos”, “I reported all the details”, “ I cited Code”, I used the word Safety”, “I exceeded the minimum.” Every single case I have been involved in was due to what the Inspector DID NOT DO. I have yet to see a tested, reviewed, published case that actually provides a basis for a “less is more” precedent.

What every Buyer wants to know about their home purchase is actually quite simple. What is wrong with the house? What is it going to cost me money wise, now and in the near future, if I buy this house? Is my family safe in this house? That is what the buyer expects. Sure the Buyer wants the house, that is why an offer was made.

Unless the government has limited the ability of the inspector to quote the Code, there is no problem with quoting Code per se, just make sure the quote is correct, applies to that building time frame, and pertinent. Currently Kentucky is the only State I can find that strictly prohibits Home Inspectors from citing Code. There may be others. North Carolina kind of went the other way depending on how you view their law, If a Home Inspector cites a Code in North Carolina, he is required to verify when the home was built and perform a Code Inspection to that Code.

Florida has no law to my knowledge that prohibits Home Inspectors from citing Code. Not saying it has not been tried. You are not enforcing Code, you are pointing out Code as a basis for your professional opinion. Maybe the real objection stems from the inability of the parties and agents to argue your report if it is backed up by a Code, specification or Standard. Kind of closes the door on all arguments now doesn’t it? That is one way to stop the calls arguing about your report.

For Buyers, find an Inspector that has only your interest in mind, one that does not concern himself with getting more business from that agent. One that will inform you of a Code issue that could harm you or your property. New Inspectors rely on Agents for their business. After several years and 1,000’s of reports for clients, the Home Inspector who goes the extra mile has built a solid referral base that will last the life of his company without Agent referrals.

For Sellers, when you get a report that has the Buyers interest in mind appreciate that when you buy your next home you would not want an inspector to cut that seller any slack and overlook important issues that could harm you. Almost one half of my business came from the Sellers or their closing Attorneys.

For Real Estate Agents, Home Inspectors are independent, they are not “Transactional Home Inspectors” whose job is to make a deal happen. They have a fiduciary duty to their clients, and that is not you, or the Deal. They are governed by Standards that most Agents do not even know exist, or have read.

Certain Professions like to pit other Professionals against each other for their personal advance. Sometimes with adverse effects. Good Home Inspectors know this and many have already forged relationships with Building Departments, which I encourage. We are not stepping on Building Officials toes; in fact we are helping them with their job of making the community safe for all. Sometimes Sellers do things to homes without Permits and following Codes. Safety is everyone’s job. I remember a Real Estate Agent who notified the Building Department of my report and complained about Code cites. The Building Official offered to meet both the Agent and myself at the home. After reviewing my report, the house, and the Building Code Cites in my report, he complemented me on my reporting, and then turned to the Agent and asked; what are you going to do to correct all of the Building Code Violations. Priceless!

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Filed Under: Home Inspections, Home Purchase, Homes, Real Estate, Selling your home, Single detached home, Technical

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