5 Mistakes Home Sellers Should Never Make

By Ann Brenoff | Posted May 31st 2011 9:00AM ∨

Trying to sell a home in today's market requires courage, smarts and a fair amount of humble pie-eating. It's a buyers' market, which means sellers are expected to roll over and grovel appreciatively over each showing their agent landed.

Sometimes, whether through ignorance or a last gasp of pride, sellers make one of these critical mistakes that actually worsens their situation. So if you are trying to sell a home, make sure you:

1. Don't move out with your furniture.

Let's say you're no longer dancing to the unemployment blues and finally landed a job that happens to be in another city. You need to sell your house fast and relocate because there's a paycheck with your name on it, but it's 3,000 miles away. By all means, you can move post haste. Just don't take your furniture with you. Nothing sells worse (and by worse, we mean for less money and takes much longer) than an empty house.

Think about all those new developments you have toured. Which of the identical units looked the best? The ones with the furniture in them. Empty houses are cold and depressing. The rooms may look bigger without furniture but they also look soulless. Plus a house recently stripped of wall hangings often screams "paint me" at the top of its lungs.

2. Don't assume home-staging is just for the wealthy.

Getting back to point No. 1, you want the house to look good and maybe your old La-Z-Boy lounger has passed its prime. Professional home-stagers are the magicians of the modern-day decorating world. They move things around, bring in a few pieces, stash away some of your junk and -- voila! -- your house looks like it's worth $100,000 more than you're asking and suddenly you have a buyer drooling. In fact, you might like the new look so much you don't want to sell anymore.

A study by Stagedhomes.com found that 94.6 percent of homes that were professionally staged sold within 33 days, compared to an average of 196 days for homes that are not staged. Staged homes stay on the market 83 percent less time than a home that has not been staged.

Staging is something you should consider if you do need to move out your furniture.

3. Don't think your dog doesn't smell.

We here at AOL are pet-lovers. We even are allowed to bring our dogs to work with us. But we also know that not everyone shares our affection for our four-legged friends. In fact, it's been estimated that 15 percent of the population is allergic to dogs and even more are allergic to cats.

Pets need to be removed for showings. Crate them and leave the crate in the garage.

But to focus on the odor issue. We often grow immune to smells that we live with. Many an ex-cigarette smoker has commented how he never smelled the cigarettes while he smoked them but now that he's stopped, he can smell someone smoking in the next car on the highway. Same principle applies to dogs. Admit it: Can your pooch really roll around in the dog park and come home not a little odoriferous?

Steam clean the carpets and upholstered furniture; launder the bedspreads if Fido has been known to sneak up on the bed; and ask a pet-less friend to give your house the sniff test.

4. Don't think that buyers will understand that you have kids and tolerate a little mess and clutter.

It's just not so, my friends. The perfect house showing, says just about every agent bearing a Realtor's membership card, is one where the personal affects are missing. You want prospective buyers to be able to envision themselves living in this house. Your son's Little League trophy belongs in the garage, packed in a box ready to be moved. Having clean bathrooms and kitchens are most critical. Nothing turns a buyer's nose up more than dishes in the sink or a bathroom in need of a good cleaning.

The declutter and cleanup advice applies to the outside of the house as well as the inside, said Jim Hamilton, regional vice president of National Association of Realtors. He says that 70 percent of the decision about whether to buy a home is made as the buyers drive up to it.

5. Don't price the house based on what you need to get out of it or what you think it is worth.

Price it based on what it will sell for. Otherwise, what's the point of chasing the dog around with a can of Lysol and making your kids pick up their clothes: You won't be moving anyway

One of the Smartest Hedge Funds Around is Calling a Bottom in Housing

Original Post: http://www.streetinsider.com/Hedge+Funds/One+of+the+Smartest+Hedge+Funds+Around+Is+Calling+a+Bottom+in+Housing/6518619.html

Despite unprecedented efforts by the U.S. government to support the housing market, recent data has led some to call an official "double dip" in housing. Amid the dismal headlines, one smart hedge fund manager is loading up on home-building stocks on the view that the bottom is in.

David Tepper of Appaloosa Management, the man who's "buy everything" trade in 2010 made him a Wall Street legend, is now buying homebuilder stocks hand-over-fist. In the first quarter, Tepper opened new positions in five homebuilders and one building product company.

According to his latest filing with the SEC, Tepper disclosed that he now owns 1,367,679 shares of Beazer Homes (NYSE: BZH), 1,119,740 shares of D.R. Horton (NYSE: DHI), 1,388,900 shares of KB Home (NYSE: KBH), 1,637,112 shares of PulteGroup (NYSE: PHM), and 198,100 shares Ryland Group, Inc. (NYSE: RYL). He also now owns 394,614 shares of cabinet maker Masco Corp. (NYSE: MAS).

The positions are small on an individual basis, with KB Home ranking the highest in portfolio among the group with a value of just $15.8 million. However, taken together the stakes add up to approximately $55 million - not a huge bet for a man of Tepper's stature, but respectable.

If you would have followed Tepper with his "buy everything" trade in September 2010 you would be sitting pretty right now. Another great example of his trading acumen is his contrarian purchase of Dean Foods (NYSE: DF), which he saw a 50% gain on since disclosing the purchase to the public in January of this year.

Tepper’s track record speaks for itself and therefore it may be time to start looking at these homebuilders for your own portfolio. Investors could also diversify amongst the group by buying ETF SPDR S&P Homebuilders (NYSE: XHB).

News Hub: Foreign Homebuyers Back in Droves

WSJ's Candace Jackson visits the News Hub to detail some very glamorous homes being scooped up by foreign buyers. Homebuyers from Russia and Brazil are leading the way back into the luxury home market. Photo: REUTERS/Rebecca Cook.

How the $8,000 Tax Credit Cost Home Buyers $15,000

Original Post: http://blogs.wsj.com/developments/2011/05/11/the-8000-credit-cost-some-home-buyers-much-more/
By Jack Hough

Getty Images

The government's recent $8,000 cash incentive for first-time home buyers has proved even more costly for recipients than for taxpayers, according to data released Monday. Typical buyers have lost twice as much to price declines as they received from the program.

The median home value fell to about $170,000 in March from $185,000 a year earlier, according to Zillow.com. That means a buyer who closed on a house just before the tax-credit program expired in April 2010 collected $8,000 but has since lost $15,000 in value. Those who bought earlier in the program have done worse; the median price is down $20,000 from March 2009.

"The $8,000 first-time home buyers tax credit . . . has brought many new families into the housing market," the White House boasted in November 2009 upon announcing an extension and expansion of the program. Judging by sales declines since, that seems beyond doubt. Over the past year, the pace of existing home sales has fallen more than 6% and that of new home sales has fallen 22%.

The credit wasn't great for taxpayers, either. IRS says it paid $26 billion in home buyer credits in 2009 and 2010, enough to cover the maximum $8,000 credit for more than 3 million buyers. (It says at least $513 million went for fraudulent claims. Some claimants hadn't bought houses. Some filed twice. Some were under age 18 or incarcerated.)

In October 2009, when the extension of the $8,000 credit for homebuyers was under consideration, I outlined five reasons the U.S. didn't need more housing perks. These included already-high prices and an abundance of benefits, the questionable stimulus value of home subsidies and a gaping budget deficit. In January 2010, with the extension passed, I recommended that eager buyers wait at least nine months and purposely miss the $8,000 tax credit deadline to take advantage of price declines after. The median price fell about $8,000 over the next nine months and another $8,000 since.

I realize that writing an apology for this program's failure probably isn't high on Congress's or the President's list of priorities right now. But just in case someone's conscience is bothering them, let me offer a simple draft:

"We thought the $8,000 tax credits would raise house prices and spur the economy. We were wrong. For starters, it makes no sense for a housing affordability program to have the stated goal of raising prices, because higher prices mean less affordability, not more. Another thing: The program didn't work. We squandered taxpayer cash, increased the debt and lured many Americans into losses. We're deeply sorry. We'll try not to repeat the mistake. If anything, in light of America's daunting fiscal challenges, we're going to consider sun-setting costly, existing programs that lure house buyers, like the mortgage interest deduction and capital gains exemption, which together are more than 10 times as expensive as the expired tax credit program, costing about $1,200 per household last year alone."

For homeowners who are wondering if prices are done falling, and for renters who want to know if now is the time to buy, here's my best guess. In April 2007, when I first wrote that renting had come to make more financial sense than home-ownership, I calculated that prices would have to decline by half to restore the historic relationship between prices and rents. Since then, they've fallen 30% nationwide. Inflation has eaten another 8% of their value. So the worst of the plunge seems done, but prices might drift lower or lose ground to inflation in coming years. In some hard-hit markets, of course, houses are a good deal. For a very rough gauge of value in a specific area, divide recent sale prices by the yearly amount charged to renters for comparable properties. If the result is over 20, prices are probably too high. If it's less than 10, houses might be a steal. If it's in between, well, it's in between.

For another take on prices, consider something I and others have argued about the natural rate of price increase for houses. It's exactly the rate of inflation. Houses, after all, are sticks and stones and other ordinary things, and inflation by definition is the gradual rise in the price of ordinary things. If house prices forever rose faster than the rate of inflation, they'd become infinitely expensive relative to rents, incomes and the cost of building materials.

House prices indeed tracked the rate of inflation during the 1970s, 1980s and 1990s, straying only slightly and briefly and returning each time. In 2000, house prices began to detach from the inflation rate and race ahead of it. Therefore, normalcy might be restored once the house price rise since 2000 matches the rate of inflation since then.

Houses are up 41% since 2000. Inflation has increased other costs by 32%. By this measure, too, prices on a national level seem nearly back to normal but not quite there yet.

Is That a Listing in Your Pocket or Are You Just Happy to See Me?

Original Post: http://realestate.aol.com/blog/2011/05/09/is-that-a-listing-in-your-pocket-or-are-you-just-happy-to-see-me/

By Ann Brenoff  for real estate at aol.com Posted May 9th 2011 1:55PM

A real estate practice that continues to cling to life support despite the recession -- and some say common sense -- is the pocket listing, which presumes that it's somehow a good idea to list your house for sale but keep it a secret.

In a pocket listing, a homeowner tips off an agent -- or six -- that they would consider selling their home if the price was right. They don't want the home publicly marketed or put in the MLS, they don't want open houses held and they certainly don't want a "for sale" sign decorating the front lawn.

While it's a marketing stance that may make sense for Brad and Angelina, it really doesn't for anyone else seriously hoping to sell their house.

Pocket listings serve the interests of a select few homeowners who, for various reasons, would prefer to not let their neighbors, business colleagues or the world-at-large know they intend to sell their houses and move. Why would they feel that way? Bravo "Million Dollar Listing" star Josh Altman offers this theory on the pocket listing: He says that in the places where he sells -- Beverly Hills and the other high-end markets in greater Los Angeles -- image is everything. "People like to paint a picture of themselves as successful and wealthy," Altman says. Listing your house for sale might suggest that you need to sell, that your job is on the line, or that you have an adjustable rate mortgage that is about to reset into the stratosphere and you can't pay the piper.

Altman says that he's actually seen an uptick in the number of pocket listings. During down economic times, he says, people want to test the market before listing, so they offer their home as a pocket listing for two or three months before deciding to let it go into the MLS. It also helps get them used to the idea that their home is for sale, emotionally speaking.

If a seller has a well-connected agent who knows the high-end community, a pocket listing can work. For for those in the mid-market range, this is neither the time nor the market, says Paul Ferra, a Coldwell Banker agent who sells in Topanga Canyon, Calif., where the homes are more modestly priced and the inventory flush.

Agents privately admit they dislike pocket listings but accept that they are a part of the business landscape. Jeffrey Hyland, a principal of the boutique Beverly Hills firm of Hilton & Hyland, calls the practice a bad deal all around.

"If the house sells quickly or to the first person who looked at it," Hyland says, "the seller always winds up feeling that he gave the house away." Full exposure to the market gives the buyer the most comfort that he got market value.

Hyland also says that buyers who jump into something because they are afraid it will soon be listed often suffer buyer's remorse and back out of the deal.

Plus, unless there is a contract signed, the agent who brings in a buyer may be relying on a handshake to get his commission. "There are no protections with pockets and this creates problems for the agent," Hyland says. "There may be several agents working with the buyer at the same time." It's a recipe for messiness, if not outright disaster.

Manhattan brokers also report that these deals have become more prevalent these days. In New York, where desirable inventory is said to be low -- having shrunk in last spring's buying flurry -- sellers perceive the market to have recovered and thus think they can command higher prices than may be the actual case.

Pamela Liebman, president of The Corcoran Group, frowns on the pocket listing practice as well. Quoted in The New York Times, Liebman said that people who declare their interest in selling an apartment without listing it may not be serious about selling it. Plus, she added, "ultimately the sellers hurt themselves."

The California Association of Realtors has a form for single-party compensation, and smart agents ask the seller to sign it before they bring a potential buyer over to see the house. But pocket listings have this implicit trust about them, making it hard sometimes for an agent to even broach the notion that the seller's word may not be good enough.

Agent Altman notes that because real estate is so competitive, agents with pocket listings may call around to other agents to see if they have potential buyers for the property, but are careful not to give away the address until they set up a specific showing for a prequalified buyer. His agency has an intranet system where pocket listings are posted just for Hilton & Hyland agents.

But how secret can a listing really be kept if there is to be a prayer of selling the property?

Not very. There's even a website where, for a $4.95 registration fee, real estate agents from around the country can post their pockets.

Anna Kournikova Lists Miami Beach Home at $9.4 Million

Original Post: http://realestate.aol.com/blog/2011/05/09/anna-kournikova-lists-miami-beach-home-at-9-4-million/
By Ann Brenoff  Posted May 9th 2011 11:05AM

Tennis star Anna Kournikova's 6,600-square-foot house in Miami Beach has volleyed onto the market with a price tag of $9.4 million.

The waterfront home on high-end Sunset Island has seven bedrooms. Typical of Sunset Island homes, great emphasis is placed on what's outside, which in this case is a heated pool and spa surrounded by a coral rock pool deck, a covered entertainment area, and an outdoor kitchen including barbecue. There is also a large dock on 156 feet of waterfront on Sunset Lake and a lush landscaping plan built around the large Royal Palms that surround the property.

(See photos after the jump.) The ivy-covered Mediterranean was built in 2000 and has French doors that lead out, hardwood floors throughout, high ceilings, arched windows, formal dining room and living room with a fireplace and a kitchen island with granite countertops. The property has a two-story guest house with a separate living space and kitchen on the first floor, and spacious suite on the second floor.

Kournikova, with Martina Hingis as her partner -- the Spice Girls of tennis -- won Grand Slam titles in 1999 and 2002.

The Russian-born tennis star has garnered attention for not just her play, but her stunning good looks and personal life as well. For years after her curtailment from the professional circuit, her name remained one of Google's most popular search terms.

The property is listed by Jill Eber and Jill Hertzberg, who partner under the name "The Jills" for Coldwell Banker Miami Beach.

Filed under: News, Celebrity Homes

Tags: Anna Kournikova, anna kournikova house for sale, anna kournikova miami home, athlete real estate, celebrity real estate, Martina Hingis, miami real estate, Sunset Island, tennis star, the jills

News Hub: Don King's Mansion, 'Home Alone' House

Don King cuts the price of his Palm Beach mansion to under $20 million and the house made famous by the movies "Home Alone" and "Home Alone 2" is up for sale for the first time in more than 20 years. Candace Jackson has details on both.

10 Tips for Surviving the Housing Market

Original Post: http://www.cnbc.com/id/42806429
By: Cindy Perman CNBC.com Staff Writer

The economy is starting to improve but the housing market has yet to show any significant signs of recovery, which has homeowners nervous.

Yellow Dog Productions Getty Images

The skies are starting to brighten up in the housing market.

 

Home prices are hovering near their recession lows, hit in April 2009, according to the latest Case-Shiller home-price report. It’s a buyer's market and by many projections, it won’t shift to a seller’s market for a good year or more.

So, how do homeowners, who have most of their equity in depressed real estate, slog through until it becomes a seller’s market?

Here are 10 tips from real-estate moguls who have survived several housing-market downturns.

1. Homeowners should be very encouraged by the fact that home buyer sentiment has improved.

“The mood has definitely changed … Buyers are feeling more positive,” said Barbara Corcoran, the founder and former president of the Corcoran Group and a real-estate pro who has survived four housing-market slumps. “The activity level has jumped considerably in the last 60 days … over and above the typical spring market,” she said.

Rents have been soaring and it’s now cheaper to buy than rent pretty much anywhere you go, Corcoran pointed out, which will only add fuel to home-buyer desire.

2. Builders aren’t building many new homes, which means less competition.

Housing starts have been flat for the past year, according to data from the Commerce Department, which means that homeowners won’t really have to worry about competing with new construction when they go to sell their homes.

“You’re seeing a lot less inventory on the market while at the same time, there are more buyers in the market,” said R. Donahue Peebles, chairman and CEO of the Peebles Corporation, which has a $4 billion portfolio that includes properties in Miami, Las Vegas and Washington, D.C.

3. In about 40 percent of major metropolitan cities, home prices are going up, according to the National Association of Realtors.

Low interest rates have been tough on savers, since saved money isn’t making as much interest, but they help drive up housing prices, Corcoran noted.

4. Remember: Your house may be worth less on paper, but you won’t lose any money unless you sell.

This is one thing homeowners often forget when they get caught up in the latest headlines about home prices or checking on the value of their own home: If you don’t need to sell right now — don’t.

Corcoran said she owns a country house that she’s not living in, but she plans to hang onto it until the market recovers. “I can’t bear to let it go for 50 percent of what I could have five years ago.”

5. Slumps feel like they go on forever, but the recoveries can happen quickly.

“Prices are always slow to unwind. And the time feels much longer than it actually is,” Corcoran said. “But when they recover, they recover like gangbusters — and you can make up a lot of appreciation in a short amount of time,” she said.

No one is suggesting this will be a "gangbusters" recovery, Corcoran clarified, but it will probably happen more quickly than most people think.

“I think people are grossly overestimating how long it’s going to take,” Corcoran said. Previous price recoveries have happened in quadruple- or triple-time, she said. “Maybe now it’s double,” she added.

6. While you’re waiting, do some renovations.

There are two big financial benefits to home improvements such as upgrading a kitchen or adding "curb appeal" (visual appeal for potential buyers before they even enter the house) during a housing-market slump: First, you’ll get a better bang for your buck when the market recovers and you sell your house. Second, you’ll save money on the labor. It’s basic supply-and-demand: When times are good and the work is flowing, contractors can charge more, and when the work is slow, they’re more willing to bargain on the price.

“Contractors are much more hungry for work right now,” Peebles said. “Architects and consultants are also hungry for work,” he added.

Not only will renovations help you command a better price when you go to sell the house but upgrades will help you sell the house more quickly in a competitive market.

Given how many homes are on the market, “buyers don’t have to tolerate things they don’t want,” Corcoran said. For example: hardwood floors. “I don’t care how pretty you think your carpet is, you rip it up and refinish the floors,” Corcoran said. “Nobody wants to move into your carpet.”

And, she said, it’s more important now than ever to have curb appeal. “Home buyers shop online nowadays and if the façade of the house doesn’t grab them in the first few seconds, they’ll click onto the next one,” Corcoran said.

However, she cautions, you have to be smart with your renovations and make sure you spend the least for the biggest payoff. So, maybe you don’t replace all of the kitchen cabinets, but you put on new doors or new hardware. Or, you replace the countertop. Change out the kitchen floor. Fix the doorbell. Repoint the driveway. Formica and and broken doorbells may have been acceptable during the boom, but in this market, they can kill the deal.

Plus, as an added bonus, you’ll get to enjoy the upgrades until the market recovers!

7. Don’t date yourself.

There are certain things that will date a home as soon as you walk into it. Would you believe that one of the things that can date a home in today’s market is a granite countertop?

“Granite is out, I hate to tell you!” Corcoran said.

That’s right — it used to be that formica and linoleum dated a house, but in this market, high-end materials like granite can date a house. The new thing is man-made materials such as Caesarstone (which is 93 percent quartz) or DuPont’s [DD 56.772 -0.018 (-0.03%) ] Corian, which are cheaper, more durable and come in hundreds of colors.

Stainless steel sinks are also on the way out — ceramic is back, Corcoran said. Farmhouse sinks are still safe, though: they've withstood the test of time, she said.

Her advice is to go shopping in a new, high-end development to see what all the latest materials and gadgets are, and then choose your renovations wisely to stay competitive.

8. Don’t let yourself get stuck. If you want to trade up — trade up.

“If you wish you had a better street, a nicer town, a better school district or a better backyard view — whatever you’re dreaming about, there’s no better time to trade up,” Corcoran said. “Even if you have to take 30-percent less on your house, you’ll get a better home and save 30 percent [on the trade-up], so you’re ahead of the game,” she said.

So even though it may seem counterintuitive to buy more real estate when you're feeling trapped in the home you already own, real estate pros say a downturn like this is the best time to buy.

“The biggest mistake I ever made in any downturn was not buying my first apartment during a downturn … I was too scared,” she said. “I still regret it.” After missing that opportunity in her first downturn, she said, it took her five years to get up enough money to get into the market.

9. Consider buying a vacation home.

Not only is now a great time to trade up, it's an even better time to buy a vacation home, given that some of the most depressed real estate in America is in sunny destinations such as Florida, California and Las Vegas.

It's not just because of the depressed home values, but also for the super-low interest rates. When Peebles started in real estate in 1979, he said, interest rates were at nearly 20 percent. Today, they remain under 5 percent.

It's not easy to go against the tide but that's how you make money in real estate.

“I saw great fortunes that were made in the early '90s. I saw great fortunes made back in the early '80s,” Peebles said. “I’m a big believer in the fact that you buy when fewer people are buying … It’s stressful, but you get rewarded for it. It’s called risk-taking.”

10. Be a smart seller.

When you are ready to sell, resist the urge to go with the real-estate agent who gives you the highest value on your house.

“Always go with the lowest — that guy is truthful!” Corcoran said. “The best broker is the one who will tell you what your house is really worth.”

It can be nauseating to watch the value of your home drop but the bottom line, the pros say, is not to get bogged down in the slump — but focus on the recovery.

Corcoran recommends ignoring all the negative housing news, and kicking back and toasting some marshmallows or firing up the grill.

“All that time you’d spend being worried, you could be enjoying your house!” Corcoran said.

“I believe that people who hold on will be rewarded,” Peebles said. “I think we will look back at this time period as one of the best buying opportunities in the nation’s history.”

“The biggest lesson I’ve learned is that it always comes back,” he said. “And if you believe in the USA, then you have to believe in the housing market of the USA.”