Monday, September 22, 2014

Buying a House is Like Magic: The Gathering

Alright, it's about time I put together a post that addresses the huge audience of Magic: The Gathering players who are also real estate enthusiasts.

I came up with this idea a couple months ago when I was explaining the buying process to a client.

Buying a house is like attacking someone in Magic: The Gathering. Let me explain:

Draw: Prequalification

There's little use in going house shopping if you don't know what resources you have available. I've already written about this before, so I won't rehash it here. Prequalify for a loan. Draw that card. Make sure you know what you have available. I have a mortgage guy that I like working with, and I'll happily refer you to him if you want help with this step.

Also, I skipped Untap and Upkeep. Because those have nothing to do with real estate.

Pre-Combat Main: Shopping Around

This is the luxurious phase, where you look at your available resources, you get a feel for the board state, and you prepare for the Combat phase. In order to prevent you from spending an eternity (really, an eternity) in this phase, you should get together with your realtor and use their search engine tools to narrow down the possibilities.

Unless, of course, you genuinely enjoy looking at houses on the Internet. If that's the case, allow me to recommend this website, as it consistently has the most up-to-date information on what's available.

Combat:
Declare Attackers: Go Under Contract

Alright, now you've found your winning move, and you're ready to end the game. Pick the house that you like, make a competitive offer (What constitutes a "competitive offer" depends on what the market is doing, along with other factors.), and get that offer accepted!

Declare Blockers: Due Diligence, Financing and Appraisal

Unless you had an extremely compelling reason not to do so, you made your offer to purchase contingent upon Due Diligence and Financing and Appraisal. During Due Diligence, you will send in an inspector, find out every last problem with the house, and decide whether you want to proceed with the purchase or not.

Before Financing and Appraisal, you will have an appraiser come in and say whether the price being offered is justifiable, and also you'll make sure that your loan is good to go.

In either of these cases, if there is something wrong with the house or if there's something wrong with the appraised value (if there are blockers, you see), you can use Instant Spells, in the form of addenda, to try and rectify the problem.

Swing for Fatal: Buy the House!

All potential blockers have been vanquished. You go to settlement! If you settle with my favorite Title Company, then we will be sipping on sodas and apple juice while munching warm cookies as you sign a stack of papers that would make War and Peace jealous. It takes a bit, but then you've won the game! As soon as the loan funds (generally the next business day) you're a home owner!

Post Combat Main: The Housewarming party, I guess?

Realtors don't have a post-combat main. We always swing for fatal. Every time.

Want help winning a big, expensive game of Magic: The Gathering? Let me know!

Thursday, July 31, 2014

Utah is a red state with a purplish hue

Well, here I was getting ready to write a bombshell article about how Utahn politics were more moderate than you think (I was playing a hunch, honestly), but it turns out that the guys over at Five Thirty Eight already did a much better report on the topic in 2012.

Here's the report. It's a pretty quick read, and will give you a much more accurate picture of Utahn politics than Facebook memes. The report points out that while Utahns tend to draw a hard line on being opposed to same-sex marriage (but this has changed; see below) and abortion (this has not changed), they tend to have much more moderate stances on immigration. Utah was the first state to initiate a guest worker program, and is one of three states where illegal immigrants can legally drive cars. It also points out that Jon Huntsman, a Republican, was re-elected to the Utahn governorship on a campaign to invest in renewable energy sources and protect the environment, which is typically thought of as a flagship of liberal ideology.

By Ikiwaner (Own work) [GFDL 1.2 (http://www.gnu.org/licenses/old-licenses/fdl-1.2.html)], via Wikimedia Commons


So is Utah a conservative Republican state? Sure, but it's more nuanced than that. Check out the report.

Noteably, the report was written in 2012, and due to an interesting twist of fate, Utah became the 18th state where same-sex marriage was legalized on December 20, 2013. Upon reading the significantly complicated story of the legalization, one might conclude that this was the case of the judiciary overruling public opinion, and that conclusion would be incorrect. That link is to a statewide poll taken by the Salt Lake Tribune that shows that Utahns are just about evenly split on the question of legalizing same-sex marriage.

Speaking as someone who has lived here for most of my life, let me tell you that none of this information surprises me. In my neighborhood, I grew up around a wide variety of political opinions, and the milieu of differing worldviews only increased when I went to BYU. I guess it's a little comforting to see the statistics validate my experience.

Thursday, July 3, 2014

Easy ways to make your home sell for more money

I found this picture while looking for images to this article. It makes me inexpressably happy.

President Obama is unimpressed with this post. I live and work in Utah, though, so I'm not too worried. 


In my last post, I talked about Comparative Market Analyses (CMAs) and how realtors find the market value of your home.

What I hope was clear from that post is that setting the price of an asset like your home is fairly subjective.

Buying a home, much like selling a home, is an emotional process. This is one of the reasons it's important to have a good realtor, as we can act as a guide through what can become an emotional minefield.

When people are buying a home for themselves, they are going to instinctively picture themselves living in it. As the seller, your job is to make sure that the picture they see in their heads is unforgettably attractive.

Virtually every buyer has a couple qualities they're looking for in a home. For me, I wanted a yard that I could see a dog running around in. I've worked with folks who were really interested in having plenty of storage space, and also one buyer in particular who was enchanted with the idea of a closet under the stairs, because why not?

You can't appeal to all buyers at once, obviously, but you can work on the things that almost every buyer considers, whether they know they're considering it or not:

Curb Appeal:

I guess technically there's no curb here.
Photo by Andrew Shiva
The other fun reality of home selling is that buyers make decisions on homes way before you may expect them to. In many cases, the decision is made while looking at pictures, and merely confirmed when arriving at the home.

I'll cover pictures in a later post about staging, but let's talk about curb appeal.

Basically, curb appeal is what the buyer sees the moment they drive up to the house. The front yard, the front door, the windows, what have you.

Take care of your yard, especially the front yard. Plant brightly-colored flowers. (Friendly yellows, exciting reds, elegant blues, all good things. White flowers are overrated, but if you love them, go nuts.) Make the yard beautiful, and make the buyers' hearts flutter just a little when they look at your house.

The Front Door:
By Iampurav (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

This is part of curb appeal, but is worthy of its own section. Your front door is really the face of your house, even if you never use the thing. It is, at least initially, where buyers will picture the ingress and egress of friends into and out of the home. The front door should be freshly painted in a tasteful color, in good repair, and generally inviting.

Smell:
Someone, at some point, thought this fountain was a good idea.
By Joseolgon (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

You don't want the house to stink, obviously. I think sellers intuitively understand that, but what I want to stress here is you really don't want any weird smells. This should be a priority in staging. The moment buyers pick up a musty smell, they're going to start worrying about mold. Now, buyers should always get an inspection that checks for mold, regardless of how suspicious they are, but you don't want to be the house they remember as "the one that might have mold in it."

There are different schools of thought on what your house should smell like. Some realtors push the idea of baking smells, which I think is sensible, although I know people who get suspicious when it seems like you might be trying to cover something up, smell-wise. I'm in the cleaning materials camp. Wipe everything down with pine-sol, and your house will smell clean. Which brings us to...

Cleanliness:
By Uploaded by Duk 08:45, 16 Feb 2005 (UTC) [Public domain], via Wikimedia Commons

It is basically impossible to overemphasize the need for cleanliness in your home when selling. I don't think a lot needs to be said about this, although it may come up again later in my staging article.

Kitchen and Bathrooms:

Depending on how you're staging a home, bedrooms are surprisingly nondescript. For the most part, they are relatively plain rooms that the buyer can imagine being whatever they want them to be. With kitchens and bathrooms, it's a different story.

You can't control the layout of your kitchen and bathrooms for the most part, but you can make sure that they are immaculately clean, completely devoid of anything on the countertops (put those appliances in cupboards while people are viewing your home!), and well lit. Potential buyers will picture themselves using the kitchen and the bathrooms, and they have their own loads of appliances that they'll want to put around the kitchen, and what have you.

Questions I hear:

I hope this helped. Now I want to address some things I hear fairly commonly.

Should I repaint the house?

If you think you need to, then probably yes. The nice thing about painting is that it's cheap, and the difference between an old, cracking paint job and a new one is a dramatic difference, indeed.

Should I install granite countertops/hardwood floors/a fountain/a spaceship/etc.?

Probably not. People have all sorts of ideas about what hypothetical buyers are looking for in a home. Generally, you'll end up projecting what you as a buyer are looking for in a home, but as I stated above, buyers are fickle and unpredictable creatures.

If you installed something in the home because you wanted it there, then chances are it fits well with the home and will impress at least some of your buyers. If you install something specifically to increase the home value, you are playing a risky game, and most of the time you'll only end up recapturing the expense of the installation. It's generally not worth your effort.

The potential exception to this rule is if you already have all the supplies you need to install the new thing because you meant to install it awhile ago and just never got around to it. Since you've already put the money into the supplies, you may as well do the installation and try to recapture the expense.

What about adding bedrooms and bathrooms?

The MLS system values an extra bedroom at $1,000, and an extra full bathroom at $5,000. Of course, there's no guarantee you'll actually fetch that price, but that's the system's estimation. Honestly, I would apply the advice in the previous question. If you already have the stuff, and you just haven't gotten around to installation, then it may well be a worthwhile endeavor for you.

Is there anything COMPLETELY FREE I can do that will dramatically increase the value of my home?

Why, yes there is! It's called staging, and most of what I've written here falls under that category. There are a couple other things that go more into the specifics, and I'll cover those in a later post.

How much is my home worth now?

Good question. Click here and tell me a little bit about your house, and I'll send you a CMA as soon as I can. (Generally within two business days.) It's free, and involves no commitment of any kind.

(Do you want to get home-buying and home-selling tips emailed to you? Do you want to stay up to date on the national and local real estate market? Do you like ninjas? Subscribe to my newsletter at the bottom of this page!)

Tuesday, June 17, 2014

Pricing: The Comparative Market Analysis

By Evan-Amos (Own work) [Public domain], via Wikimedia Commons

If you talk shop with realtors all the time, you have probably heard the term "CMA." If you're a normal, healthy person, you probably haven't.

CMA means "Comparative Market Analysis," and it gets into the somewhat-murky waters of How Housing Prices Work. Let me explain:

Ultimately, your house is worth what someone is willing to pay you for it. A standard purchase contract allows you protections, including making sure that a professional appraiser agrees that it's a fair price, but in the end, there might be someone out there who is willing to pay you one million dollars for your 1200 square foot three bedroom house. (Full disclosure: There probably isn't, though.)

When you and your listing agent (me) sit down together to price your house, you're going to want to do a CMA for it, though, which is essentially a very educated guess at what someone would be willing to pay for your house, based on what people have been willing to pay for houses like yours recently.

If your realtor is good, they are going to have working knowledge of price levels in your area, and be able to determine where, geographically speaking, price jumps or dives happen around your house. They will access the Multiple Listing Service which, for realtors, has a massive collection of most house sale data from the past several years. They will take sales data from the past three months on homes that are similar to yours, and then run that data through an algorithm that adjusts for difference in square footage, number of beds/baths, garage, and so on. (Note: Three months is pretty standard, but in particularly slow areas, I've had to look at four months of data for reasonable comparisons, and I've done a CMA for an area where one week of data was plenty to get good comparisons. It depends on how fast homes are moving in your neighborhood, really.) When I prepare market analyses for clients, I also take into account similar houses that are currently for sale (the competition), houses that are under contract (prices that probably worked), and houses that have expired from their listing without being sold (prices that probably didn't work).

The point is, house pricing is not an exact science. There are powerful tools available that help us make very good estimates, but in the end, that's what they are-- estimates.

So, I'm guessing that two questions have occurred to you while reading this:

1. What's my house worth?
 -Glad you asked. I've built a form that will let you submit a CMA request to me. For reasons that should be apparent from the explanation above, CMAs are not (and shouldn't be) automated. I will happily give you a price estimate for your home with no obligation to you.

2. How do I increase my home's worth?
 -This is an excellent question, and its answer is deserving of its own post, so it will get one soon.

Tuesday, June 10, 2014

How to Train Your Dragon DVD

I have acquired a How To Train Your Dragon DVD. What better way to prepare for the sequel coming out this weekend? I will randomly draw a name from my subscriber list and give it to them. If you want a chance to win this DVD, or if you'd just like to receive occasional updates on what the real estate market is doing, subscribe to my newsletter at the bottom of this screen!

(Note: mobile users will need to use the Web version of this page. Subscriptions are not currently working for mobile devices.)

Wednesday, June 4, 2014

Learn about real estate, and get free iTunes stuff!

Hey, do you want to know more about the real estate market? Do you like buying things off iTunes? Then have I got a deal for you!

This picture is unreasonably cute.
By Huhu Uet alias Frank Schwichtenberg (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0) or CC-BY-3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons
I recently found out that Keller Williams puts together a newsletter that comes out about 2.5 times a month. 1.5 times a month, it's random little tidbits about home ownership and home sales that I'll spruce up to make a little more readable. Once a month, it's a pretty interesting compilation of data that tells you what the real estate market has been doing. They provide nationwide analysis, and I'll be adding information specific to Utah County.

So do you not only want to sound smart, but actually be smarter about real estate than your friends at parties? Sign on up! Just scroll to the bottom of this blog and give me your name and email address. (I'll only use this information to send you information about real estate, or possibly to invite you to awesome parties; I won't give it to anyone else without your express permission because I'm not a jerk.)

Oh, and once I have twenty subscribers, I will do a drawing for a $25 iTunes gift card. At the time of this writing, I have eight subscribers, and I will only be drawing from the first twenty.

I have another gift card, that I will keep a mystery for now, that I'll use in a future drawing, so don't worry if you don't win this one. All subscribers will get multiple chances to win gift cards. So sign up now!

Wednesday, May 28, 2014

Texting while driving now a primary offense in Utah


Texting while driving is now a primary traffic offense in Utah. A primary offense means you can be pulled over for doing this, rather than just having it add to your penalty if you're pulled over for something else.

This is something I feel strongly about. It's boggling to me that we had to make this law at all, and yet here we are.

Here's a sad video:




A group called Heads Up, Thumbs Up, is working hard to reduce distracted driving and to save lives. If you're willing to live a long, healthy life instead of destroying yourself and others, take the pledge to never drive distracted!