Dan Swings Blog

1. What level of attention and expertise do you need from a listing agent?

Some sellers want a consultant who provides real estate expertise and backs off while sellers make final decisions and hire vendors to get the property in what they consider to be listing condition.

Other sellers have mentally moved on and want the listing agent to do everything but write the checks.

Just as agents need to determine what level of service they’re happiest providing, sellers need to decide exactly what services they expect their listing agent to provide and make those expectations clear up front.

2. What market-specific information do you have or have a plan to acquire?

To keep a home from sitting on the market, timing the sale to coincide with months of greatest buyer activity is smart. Prime selling season can vary from city to city, region to region and state to state.

Only an experienced, local real estate agent can guide you on the best market timing for your property. Spring might be optimum to put properties on the market in general, but some markets — like ours in the Ponte Vedra area — are also lively from Labor Day through Halloween.

While that market cools with the weather, ski resort sales heat up when the snow falls.

3. Do you know who your likely buyer will be?

An agent who sells a lot of properties similar to yours is apt to have a better feel for which properties appeal to specific groups of buyers, which means they get snapped up fast while others linger on the market.

What property condition and features do your probable buyers demand before they make an offer?

If you don’t know what appeals to whom and aren’t ready to interview agents, plan to spend your weekends visiting open houses similar to yours in what you think will be your broad price range. Then, pay attention to who attends the open house, as well as what the house looks like.

4. Do you understand that today’s buyers expect homes to look like properties they’ve seen on HGTV?

What that means in real life is staging a home to sell is no longer optional in most markets. Do not think that watching HGTV qualifies you to stage your own home in a way that hits the right buttons with buyers.

Also, do not think that because you’re an “artist” or you studied interior design in college that you understand how good stagers merchandise a house.

You just don’t. You need professional help with this every bit as much as you need a plumber to replace the kitchen sink. This is not a DIY opportunity!

5. Are you aware that in the wake of the housing crisis of a decade ago, mortgage lending standards have changed dramatically?

Is financing readily available for your property? If not, sellers — or their agents — need to get financing options nailed down and addressed — to the extent possible — any issues that might affect whether buyers can find a lender to offer a mortgage on specific properties.

6. Do you know how to price your property?

For starters, get off the computer. Real estate website “estimates” are calculated mathematically. Algorithms simply cannot take into consideration which properties are in a sought-after neighborhood and which, although they might be mere blocks away, are not.

1. So, while you’re spending weekends visiting properties that resemble yours, pay attention to prices on homes in different neighborhoods.
2. Factor in property condition versus buyer expectations. Buyers bid on properties based on appearance and how the space will work for them. They will pitch fits if anything much is wrong with the structure or mechanical systems. But sound systems don’t sell houses. Cosmetics do.
3. Plan to list at a reduced price if your property or neighborhood is affected by significant negative factors that are outside your control. That would include things like your neighbor’s new hobby raising peacocks, the lawsuit filed against your homeowners association (which means banks have stopped lending there) or your home’s location in an area undergoing a five-year utility undergrounding program, which shuts down streets Monday-Friday. Uncontrollable variables are crazy-making. But, by definition, they are not controllable. So, deal.
4. Mortgage interest rates affect pricing, too. When interest rates go up, the number of buyers at entry levels dwindles. And that affects home prices from the bottom of the market up.

7. Do you know what a realistic sales timeline is in your market for properties similar to yours?

Depending on its current condition, count on spending two weeks to two months to get your property in shape before it goes on market.

If you haven’t done anything to keep the property updated, be aware that buyers expect to pay much less for properties they must immediately go to work on. And some buyers won’t touch them at all.

So, if you’re thinking of selling, getting a home and/or pest inspection upfront can save you a lot of anguish and prep time.

Staging and professional photography adds another week to the timeline, sometimes more if the weather isn’t cooperative, as many markets experienced this winter and well into spring.

The first week to 10 days after a property goes on the market is dominated by listing agency office tours, broker caravans and public open houses. So you’ll spend more time out of your house than in it.

Once that frenzy has passed, unless you’ve moved out, you’ll be living in a staged home and vacating it for showings — along with other family members and pets. This period is, hopefully, short. Even then, it will feel like an eternity.

Once the property is in contract, you will generally have another 30-45 days to get packed up and move out.

The good news is, during that time, you won’t have to endure many additional showings. Of course, inspectors will be examining every crevice of your home for the first couple of weeks. But, they’re not much swayed by staging, although a home that’s a total wreck doesn’t usually earn high marks.

8. What’s next?

Now is not the time to go all “leap and the net will appear.” You need to know where that net is going to be.

At least, out our way, the housing shortage is real, especially for those vacating homes who plan to rent. So, it’s prudent to know what your next move is.

9. Do you know what you don’t know?

No. You don’t. Good agents in your area, however, do know what you do not. So, if you’re even thinking about selling, start looking for the best agent for you immediately. Agents like long lead-times and are happy to talk to you early in the selling process.

10. Have you ever heard the expression ‘you get what you pay for’?

You should probably keep that in mind when the siren song of the cut-rate broker falls on your eager ear. If you don’t know what you don’t know, I’m here to tell you the biggest thing you don’t know is how much a cut-rate broker can actually cost you. But maybe you need to find out for yourself.

Call me when you’ve had enough. 904-671-9225

Appraisers are to remain neutral, so beyond providing information or answering any questions they might have about the property, neither parties involved in the transaction, the buyer, the seller nor the lender cannot influence them in any way.

No one, not even a agent can ask them what they plan to bring the value in at ahead of time. As a matter of practicality, some appraisers might give agents a heads-up that they are having difficulty bringing the value in at the contract sales price and ask for assistance with comparables.

This is often indicative of the reality to come. A seller lurking around the house while the appraiser is doing the appraisal is not helpful and may only exacerbate the situation. Appraisers can be finicky, and understandably so.

Pointing out the obvious or how much money was spent doing x, y or z is NOT productive. This is why providing details of upgrades and what has been done to the home in advance of the appraiser’s visit is strongly recommended.

A seller can have this information for reference in the home, but there is no need to go into a dissertation of each item and the history of what was done and why.

If there is an extenuating set of circumstances that need explanation, then it might be helpful to have the your listing agent convey all of that information to the appraiser at the time of their visit.

What keeps appraisers accountable?

Just like real estate agents, an appraiser’s license is on the line with their work, each and every time. Appraisers have been under scrutiny like never before, especially in the post-real estate market crash era.

They cannot pull numbers out of thin air, and everything they put on an appraisal report must be verifiable, justifiable and have an explanation.

Underwriters review appraisal reports when they are completed for accuracy and might scrutinize what was done on the report and ask the appraiser for more information.

In short, understanding what the appraisal process entails will help to manage expectations from beginning to end. Sellers with a realistic outlook of the process and an understanding of what is and what is not within their control, as well as their listing agent’s control, have the best chance of navigating through this milestone successfully, no matter the outcome.

I pulled up stats this morning and was surprised that the values per square foot have increased 17.4% since 2017. These are averages and can these stats be accurate? They are absolutley accurate based on the Northest Florida Association of Realtors supportive data.

Since the build out of Estate lots and mid size lots are gone, it’s important to know that I can more than likely procure a buyer within 70 days or less. Providing we agree on a value supporting the listing price.

Thinking about selling? Have friends moving and wish to visit or revist thsi amazing community? Call me and I assure you we’ll make it happen. 904-677-9225

This is the million-dollar question buyers and sellers wonder about. Who chooses them? The answer is no one. The assigned appraiser is typically in a pool of appraisers that come up in a rotation by a third-party appraisal management company that the lender uses to put everyone at arm’s length in the transaction.

The appraiser is randomly assigned, and no one can request a particular person.

While agents are often familiar with some appraisers more than others and might see them come up in a particular lender’s appraiser pool, there are plenty of appraisers an agent might not be familiar with who could be given the property to appraise.

Many appraisers have also a staff that they depend on. The staff pulls the data, sometimes staff will do a drive by and then the final documents is reviewed and approved to submit. So there can be many loose ends that may not be a full report in their due diligence.

8. Are there bad appraisers?

Just like Realtors, some are better than others. Some appraisers are more intuitive, detailed and have a better grasp of their market. Others are more reasonable and allow some leeway within reason with the comparables they choose as well as their adjustments, whereas others are more conservative.

No two appraisers necessarily see things through the same looking glass, just like agents.

As I’ve said before, the appraiser must provide documentation and without question, rarely if ever will revisit their work once submitted.

I personally like to make their job easier if I’m able to meet with them during their walk through of the property. Provide them some of my comparables in hopes it will make their job a bit easier. Not always, however occasionally they’ve used my suggestions.

The market might want to pay more for a home, but when there is financing involved, it’s rare that a buyer will want to pay over the appraised value. When the contract sales price and appraised value, no matter how exceptional or nice the home is, there is less confidence about the purchase, and when it’s a substantial, rarely will the contract close.

If the home is in an area that tends to have a lot of first-time, FHA or VA buyers for example, and there are concessions being given by sellers, such as closing costs, the appraised value might come in less.

It’s extremly important to have a seasoned Realtor represent you! Concessions are not viewed as the true sales price of a property, so the appraiser will discount them when determining the real price. In many neighborhoods where this happens, the values want to increase, but appraisals often hold prices back a bit, simply due to the dynamics of most buyers in the neighborhood needing financing that requires an appraisal.

6. What if the appraisal comes in less than the contract sales price?

Besides a difficult inspection, this is one of the most stomach-dropping moments in a real estate transaction. Everything seems to be sailing along just fine until boom, the lender shares the bad news that the appraisal came in less.

The buyers might not have the additional funds to come out of pocket or might not want to. When this happens, the buyer’s agent will typically share the appraisal report with the listing agent (unless prohibited by law, etc.), so they can see and understand the shortfall and how the appraiser arrived there. I have experienced different appraisers come in with substantially different values. This becomes a different challenge, and discussed in another blog.

The seller and listing agent can appeal the appraisal, but don’t expect much to happen there. The buyers lender is steadfast and in todays market it’s extremley for lender to sway from the original appraisal. The process can take several weeks with no guaranteed outcome, leaving the sale in limbo and everyone’s plans on hold.

Unfortunately, time and money does not wait. The listing agent can pour over the report like a forensic accountant backward and forward looking for discrepancies, errors and bad information as well as submit comparable sales they feel should be considered. I’ve never seen an Appraiser accept this data.

Typically, the appraiser will refute the data submitted. Although minor tweaks could be made, it’s usually not enough to pull the value up. As a result of today’s lending guidelines, the lender can rarely, if ever, throw out the appraisal and order a new one.

The buyer and seller can elect to renegotiate the price, which could also put all the other terms in the contract up for grabs. This means that any closing costs, items the sellers were willing to leave as well as the closing date could be up for discussion.

If the seller has to come off their price by a certain amount, they might not be willing to do as much or want to close sooner or later in exchange for the hassle.

Worst case, both parties can walk away. YES it can happens. Sometimes an appraiser brings the value in so low that the damage is irreparable. I’ve experienced deals where the appraiser might not be familiar with the area or have experience with the kind of home being appraised (unique, higher-end, waterfront, niche property, etc.), and may have driven 60 miles to do the evaluation. which hurts everyone involved in the transaction.

Determining value is a specialized skill that is built over years of working with properties in a variety of neighborhoods and truly knowing and understanding the fabric of those communities inside and out. Florida Appraisers must have a bachlors degree now and because there was so many ethical vialations from 2004 thru 2012 the state has revoked many licenses and appraisers determination if final.

Knowing every home, floor plan, how the homes were constructed, who the builders were, lot sizes, views, etc., is not something that can be gleaned from data on a MLS sheet.

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The market might want to pay more for a home, but when there is financing
involved, it’s rare that a buyer will want to pay over the appraised
value. When the contract sales price and appraised value, no matter
how exceptional or nice the home is, there is less confidence about the
purchase, and when it’s a substantial, rarely will the
contract close.

If the home is in an area that tends to have a lot of first-time, FHA
or VA buyers for example, and there are concessions being given by
sellers, such as closing costs, the appraised value might come in less.

It’s extremly important to have a seasoned Realtor represent you! Concessions
are not viewed as the true sales price of a property, so the appraiser
will discount them when determining the real price. In many neighborhoods where
this happens, the values want to increase, but appraisals
often hold prices back a bit, simply due to the dynamics of most buyers in the
neighborhood needing financing that requires an appraisal.

6. What if the appraisal comes in less than the contract sales
price?

Besides a difficult inspection, this is one of the most stomach-dropping
moments in a real estate transaction. Everything seems to be sailing along just
fine until boom, the lender shares the bad news that the appraisal came in
less.

The buyers might not have the additional funds to come out of pocket or
might not want to. When this happens, the buyer’s agent will typically share
the appraisal report with the listing agent (unless prohibited by law, etc.),
so they can see and understand the shortfall and how the appraiser arrived
there. I have experienced different appraisers come in with substantially
different values. This becomes a different challenge and discussed in another
blog.

The seller and listing agent can appeal the appraisal, but don’t expect much
to happen there. The buyers lender is steadfast and in today’s market it’s extremely
for lender to sway from the original appraisal. The process can take several
weeks with no guaranteed outcome, leaving the sale in limbo and everyone’s
plans on hold.

Unfortunately, time and money does not wait. The listing agent can pour over
the report like a forensic accountant backward and forward looking for
discrepancies, errors and bad information as well as submit comparable sales
they feel should be considered. I’ve never seen an Appraiser accept this data.

Typically, the appraiser will refute the data submitted. Although minor
tweaks could be made, it’s usually not enough to pull the value up. As a result
of today’s lending guidelines, the lender can rarely, if ever, throw out the
appraisal and order a new one.

The buyer and seller can elect to renegotiate the price, which could also
put all the other terms in the contract up for grabs. This means that any
closing costs, items the sellers were willing to leave as well as the closing
date could be up for discussion.

If the seller has to come off their price by a certain amount, they might
not be willing to do as much or want to close sooner or later in exchange for
the hassle.

Worst case, both parties can walk away. YES it can happens. Sometimes an
appraiser brings the value in so low that the damage is irreparable. I’ve
experienced deals where the appraiser might not be familiar with the area or
have experience with the kind of home being appraised (unique, higher-end,
waterfront, niche property, etc.), and may have driven 60 miles to do the
evaluation. which hurts everyone involved in the transaction.

Determining value is a specialized skill that is built over years of working
with properties in a variety of neighborhoods and truly knowing and
understanding the fabric of those communities inside and out. Florida
Appraisers must have a bachelor’s degree now and because there were so many
ethical violations from 2004 thru 2012 the state has revoked many licenses and appraiser’s
determination if final.

Knowing every home, floor plan, how the homes were constructed, who the
builders were, lot sizes, views, etc., is not something that can be gleaned
from data on a Multiple Listing Service sheet.

 

Knowing every home, floor plan, how the homes were constructed, who the builders were, lot sizes, views, etc., is not something that can be gleaned from data on a MLS sheet.

It’s important for you as a seller to understand that not everything that you’ve put into your home, no matter how extensive or exquisite will be given substantial value in the eyes of an appraiser. It’s critical to remember that an appraiser will never give value equivalent to the cost of each component in a home.

You may have spent $20 per square foot on wood floors, but an appraiser may not give any more in value to these than a home that has $8 per square foot wood floors or even wood tile.

The fancy marble counter tops might not add any extra value when comparing this to a home that has quartz or even granite counters. Pools are especially subjective, and just because a you spent $150,000 on a lagoon style pool with grotto, bar, water slide, etc., does not mean an appraiser will see it that way as far as how much the pool is worth appraisal-wise. Certain things will not add extra value at all, such as a newer roof or home air conditioner and ventilation system, but they will help the home sell faster and for a stronger price. Pool screens, epoxy flooring or cabinets in the garage, while pricey to install, will not inherently increase the value of a home on an appraisal.

How will other home sales factor in?

Real estate: It’s complicated, and when it comes down to which comparable properties to use on the appraisal report, it can be anyone’s best guess. Fingers crossed, but this is where it can get subjective.

It is important to remember that an appraisal is defined as an art and not a  science. Therefore, the comparable properties that one appraiser uses might not be the same as another. “Reality, I’ve seen so many variances, don’t expect any appraiser to necessarily include properties in an adjoining neighborhood or area that sold for higher prices to justify a seller’s contract sale price if there are lower-priced comparables that are suitable in the subject property’s immediate neighborhood.”

Cash sales might not be used when the subject property is being financed. An appraiser cannot give huge adjustments to make the subject like the comparables due to lending guidelines that dictate limits on the maximum percentage of adjustments that can be made.

In other words, don’t expect an appraiser to take a 3,000-square-foot home and adjust it to the subject property that is 2,400 square feet. Appraisers are going to try to use the most recent comparable sales available, and those most like the subject in size.

This might be disappointing for you as a seller that is banking on that record-breaking sale from six months ago to be incorporated when there have been several recent sales that closed for less. If the home is in a neighborhood where there are higher new construction sales, the appraiser will most likely stick to resales that could have lower prices!

TOMMOROW? How does an appraised value compare to market value, and what if the appraisal comes in much less than the contract sales price.