In a busy seller’s market, it is not uncommon for a home to be listed and multiple offers received on the very first day! The listing agent in this scenario is in a great spot to drive the price up and will ask every buyer for their “highest and best” offer.
Dealing with a “Highest and Best” Scenario
As a buyer in this scenario, most agents will simply ask you to give your best price and hope that you are picked as the winning bid. You can guess what the other buyers are going to do (we won’t know the details of the other offers) and submit an offer you think will be the highest but this is not a good strategy and can cause you to pay more for a home than necessary.
So what’s a buyer to do? It’s time to pull out the escalation clause.
What is an Escalation Clause?
An escalation clause is a way for buyers to hopefully become the highest and best offer but without overpaying.
The escalation clause says, “I will pay $x for this home but if the seller receives an offer higher than mine, I’m willing to go up to $y price.”
How Does the Escalation Clause Actually Work?
We submit an offer on a standard contract and our escalation clause kicks in only if we are not the highest offer.
For example, let’s assume we offer $300,000 for the home. We’re actually willing to pay $315,000 if needed to get the home. We will define in our escalation clause that we will go up in $1,000 increments over the highest price.
In our example, if the highest and best offer for a home is $310,000, our escalation clause automatically kicks in and our offer becomes $1,000 higher at $311,000.
What if someone bids $320,000? In that scenario, our offer becomes $315,000 as that was our maximum and we hope that our offer is picked due to other factors such as our initial deposits, closing date, etc..
Does This Guarantee we get the Home?
No, it sure doesn’t. Someone could bid higher than our best offer. There may be someone paying cash for a home and that is more desirable for the sellers than our highest price. There are just too many reasons why our offer simply isn’t picked.
What are the Problems With Escalation Clauses?
One of the most common problems we see with escalation clauses is that the seller’s agent has no idea what they are or how they work. That is where I, as a buyer’s agent, can explain the clause to the other agent. It will not guarantee that they accept it though.
Another problem with an escalation clause is that we’re showing our cards. Remember that when asked for a highest and best offer, the seller does not have to choose one. Or, the seller can still counter.
In our scenario from before, our max was $315,000. The seller will know that so if the highest and best offer from someone is $305,000, the seller can always counter us with $315,000 since they know that is what we’re willing to pay for the home. Rest assured though that this is uncommon. Simply put, I don’t see this happen.
Should I Use an Escalation Clause?
My opinion on escalation clauses is that they’re a fantastic tool to use when there are multiple offers. However, I think they’re best suited for scenarios where there are 3 or more offers. If there is only one other offer on the table, offering your highest and best may be your best bet.
People make decisions in minutes, if not seconds, when meeting someone for the first time. After all, good first impressions are so important. The same is true when selling your home. Chances are, buyers have seen the photographs of your home online already and are hoping that the house at least meets the quality and condition they’ve already seen. It is your job as the seller to ensure that your buyers are not disappointed.
We know your home shows well in pictures because the buyers have agreed to have a look. So, how can we make sure they like what they see when seeing the home in person? Follow these tips and make your home live up to their expectations.
Spend Time Creating Curb Appeal
The exterior of your home is the first thing a buyer will see when pulling into the driveway and is an easy, inexpensive way to make a first impression.
Ensure your lawn is well-manicured at all times. Adding color through flowers can really make your home pop.
Clean your driveway! Pressure washing is an affordable way to make your home look well-maintained.
Get rid of anything that is in your yard that doesn’t need to be there. Do your children have a soccer goal? Any old patio furniture? Get rid of it!
De-cob your home. Cobwebs are certainly on the exterior of your home and they’re so easy to sweep away.
Wash those windows! Shiny windows may not get noticed but dirty windows sure will.
Declutter, Declutter and Declutter Again
Take items you aren’t actively using and box them up. After all, you’re moving!
Greatly reduce the amount of clothing in your walk-in closet. A packed closet will signal to the buyers that they might not have enough room for their clothes either.
Make your family room free of those items we all have for day-to-day living. Blankets on sofas, mail or magazines on end-tables and those sorts of items will make the room feel smaller.
Remove some pictures off of the wall. I’ve been in homes where entire hallways were covered in photos. It makes for great decorations but the odds of your buyer wanting your photos of the family reunion are pretty slim. Trim down the amount of clutter on the walls and patch/paint the holes.
If Something is Broken, now is the Time to Fix it.
Look up. Any stains on the ceilings from old roof leaks or plumbing malfunctions? Ensure that the source of the problem is fixed and then properly get rid of the evidence.
Fix sliding door rollers that aren’t functioning smoothly. Your buyers in Naples will certainly want to see the lanai and will walk out through a sliding glass door most likely. If those doors feel heavy or stuck in any way, they need to be addressed.
Fix that front door lock. If your front door is hard to open, your buyer will be standing there to see that it isn’t functioning. Call a locksmith and have the door repaired.
Chirp! Is the smoke detector beeping? Get up there and change out the battery! Your buyer isn’t used to it like you’ve become and it will subconsciously lead to them thinking the home is somewhat neglected.
This may not be “broken” but make your bed every day. A bedroom with a beautifully made bed shows so much better than a bed that is disheveled.
Carpet stains? Give the carpet cleaners a call. If the carpet is worn down, offering a credit at closing for flooring or simply replacing it is worth your money.
Appeal to the Buyer’s Senses
What’s that smell? Have a kitty? Just cooked some fish? Whatever is causing the odor needs to be remedied. Don’t spray air freshener to cover up the smell—actually get rid of it!
Road noise? Your buyer really doesn’t want to hear the noise so make sure all windows and doors are closed so the road isn’t highlighted. You can turn on some soft music but this often leads buyers to get suspicious and notice the noise even more than without the music.
Update and Upgrade Where it Makes Sense
Change cabinet hardware if the existing hardware is dated. New knobs can make a world of difference in your kitchen and bathrooms and it is very cheap to do.
Need some fresh paint? Look above your stove. Is the wall stained from cooking? A gallon of paint is very cheap and will make a big difference in your buyer’s eyes.
One of my pet peeves is plastic that is discolored. Look at light cans, electrical outlet covers and light switch plates. If they’ve turned off-white in any way, change them!
What Else Should you do?
Leave a comment below if you have other ideas for ways to make a great first impression that do not break the bank. A little effort before your home goes live will help you get top-dollar for your home!
Buyers want to feel comfortable that the home or condo is in good repair and the worst thing we can do is have a lengthy inspection report full of issues. This can cause a lot of fear in the buyer’s mind that home maintenance has been neglected. Worse, if the contract is an “As Is” contract, your buyer can simply walk away and get their deposit back within the inspection period. Therefore, it is imperative you set your home up for a successful inspection that is free of the most common defects outlined below.
A home inspection is one of the most important tools in a buyer’s toolbox as it unveils any issues, potential or existing, of the home being bought. It can also mean new costs for the seller to repair the defective items (or give a cash credit to the buyer). Luckily, there are some things we can do in advance to make the inspection goes well.
Inside The Home
Lighting that functions is important and the easiest fix
Walk around your home and turn on every single light. If a bulb is out, replace it! This doesn’t sound like something that would show up on an inspection report yet if a light doesn’t come on the inspector will generally write it up as a possibly bad light fixture which just scares your buyer.
Has your A/C been professionally serviced and cleaned?
Do you have a service contract on your air conditioner? Even if you do not, have the A/C company of your choosing come out and tune it up. Make sure they clean the A/C as well as any substance in the A/C will be noted as possibly being mold. Talk about scaring a buyer!
Look for signs of water intrusion at your windows
Look at every single window sill and ensure there isn’t any staining or signs of water intrusion. If there is, have a handyman over to fix it and repaint or replace the sill. A leaky window can lead a buyer to think there is mold damage under the window.
Stains on the ceiling could be a major roof leak
When a roof leaks or condensation builds up on the A/C ducts, ceiling staining can occur. As this is a sign of moisture in the home, your buyer is going to panic and instantly assume there is mold. Walk around your home looking at every bit of your ceiling and ensure there aren’t any stains.
Is there water or moisture under your sinks?
Drip, drip, drip. In extreme cases, you’ll see damage to the cabinetry if a sink is leaking. In more mild cases, the inspector will simply find some moisture on the pipes. An easy way to test this yourself is to take a thin tissue and wipe the pipes down under your cabinets. A thin tissue will show any moisture there might be. Again, a handyman can fix this up for you in no time!
Every GFI must trip and reset
One of the easiest tests and fixes in your home is to ensure that GFI outlets trip and reset properly. You’ll usually see two buttons on them—one for trip and one for reset. Press the trip button and ensure the power goes out. Then hit the reset button to turn the outlet back on. These outlets cost under $20 so fix any that do not work.
All windows open easily and stay open
Open every window fully and ensure it stays up. If your window drops at all, the spring is generally the cause. A handyman can fix this common problem for you.
Smoke detectors all working
Easy peasy! Press the test button on every smoke detector in the house to make sure they all function. Are the smoke detectors original? If so, consider replacing them as they are relatively inexpensive.
Outside the home
How is your roof?
I don’t want you to climb on your roof to inspect the tiles however a lot of the roof is visible if you stand back a bit. If there are obvious issues such as missing shingles or cracked tiles, be sure to fix them. Want to cause a buyer to freak out? Leave them alone and the buyer will assume there’s water intrusion!
Are there any busted sprinkler heads?
Turn on that irrigation system and make sure all sprinkler heads are functioning. If not, they are also very inexpensive to replace.
Ready, aim, fire! Are your sprinkler heads aimed properly?
Your sprinkler heads may be working but are they aimed properly. I often see them aimed where they’re hitting the home! This can cause staining on the exterior of the home or worse, water can get inside. It’s easy enough to adjust where the heads are aiming so be sure to pay attention to each.
Are GFI outlets covered?
Now that we have your GFI’s all working inside, it’s time to test those outside. More importantly, outdoor outlets should be covered. If the cover is broken (or missing), replace it! It will just shrink the inspection report.
Is your pool and spa equipment functioning properly?
Is your pool pump and heater working properly? The inspector will certainly check these items so it may be worthwhile to have your pool company of choice come and service the system.
What did I miss?
What are your inspection stories? Are there other items that you had pop up on your inspection that you wish you would have fixed beforehand? Leave a comment and let us know!
Buying a new home or condo with the Listing Naples Group is a really fun and rewarding experience. But, there are traps along the way that we’ll keep you from hitting. Do not make one of these serious mistakes or it could potentially cost you your next home!
Overextending Your Finances and Becoming “House Poor”
Remember that when you are buying your home, your mortgage isn’t going to be the only expense you face. Your insurance, taxes, and maintenance fees will all factor into your monthly expenses. Here in Naples, you’ll likely be paying Homeowner’s Association (HOA) fees or condo fees as well.
I always caution my buyers to take a long look at what they’re approved for from the lender and factor in the additional costs to avoid being “house poor.” When too much of your monthly income is going toward housing, it will will really cripple your lifestyle.
You Might not be a Handyman
“We could take this wall down.”
“We could rip the carpet up and lay laminate flooring.”
“All this kitchen needs is for the cabinets to be painted.”
“There should be a door here instead of the wall.”
“We should add recessed lighting.”
“This vanity would have to go and we could put in updated ones.”
Sound familiar? HGTV has made every person feel like a handyman. How hard can these things be? The answer? Hard if you don’t know what you’re doing!
Sure, you can watch YouTube videos on how to lay laminate flooring but do you really have what it takes to do it yourself? Should you really mess with the electrical system in your house to add recessed lighting? Chances are, you should hire a handyman or contractor for the job. When buying your next home or condo, really evaluate whether or not these easy projects are going to really be easy for you to do on your own or if you need some money saved to hire someone to do it for you.
Not Shopping for a Mortgage
Not all lenders are equal so getting quotes from more than one lender is very important. Lenders are more than happy to run your numbers and tell you what they have to offer. The two lenders I recommend for this are Tori Juran and Lauren Maxwell.
I hear buyers routinely say, “I don’t want them all to pull my credit and lower my score.” Good news! It will not lower your score. When applying for a mortgage, you have 30 days in which you can have as many lenders as you’d like run your credit and it will not count as multiple pulls!
Applying for Credit Before you Close on Your Home
You’ve found your house, your offer has been accepted and you’re on your way to closing in 30 to 45 days! Do not buy anything! We’ve seen the horrors of buyers applying for credit to buy furniture or trading in a car for a new one all while waiting to close and guess what? That can make you not qualify for the loan you’re approved for. As a rule of thumb, do not make any large purchases before you close on your new home or condo.
Making a Large Down Payment That Isn’t Enough
The more you put down on your next home, the lower your monthly payment is going to be. That’s easy enough to understand. The issue I see is that sometimes people will put down a little more than the minimum required down payment. Or, they’ll put down something like 10% when the minimum is 3.5%. In those situations, I’d rather see you keep the money you have in the bank for emergencies or needed repairs down the road. You can always pay down your loan early if you decide that’s what you want to do. However, if you’re not putting down 20% on your home to avoid private mortgage insurance (PMI), I’d rather see you hang onto your money. Speak to your lender though and get a second opinion.
Spending all of your Savings on Your New Home
I never want to see my buyers empty their bank accounts to purchase their next home. Buyers save for their down payments and sometimes purchase a home right when they have just enough. It’s great to hit the down payment mark in your savings yet you need to have more money left in the bank in case something happens. What if you purchase and an appliance or air conditioner goes out? It can happen and you need to be prepared!
Not Getting a Full Property Inspection
When you’re about to spend hundreds of thousands of dollars on your next condo or home, do not skimp on your home inspection. An inspection isn’t that expensive yet adding on septic, mold, radon and wood destroying organism inspections can up the price quite a bit. That said, it’s worth it.
Ignoring Your Needs and Wants List
When you’re buying your next home or condo, I highly advise making a needs and wants list. Once you have it, stick to it! Do not make an emotional decision because you find a home online that is really great in one aspect yet doesn’t meet your needs and wants. For example, if you really want to have a single family home in Golden Gate Estates yet you find a home in an HOA with a really awesome layout and kitchen, stop and really think about how that will change your lifestyle. You’ll love the home but miss out on the land, privacy, etc.. I think it is very important to explore what’s out there but if you ignore your needs and wants list, you’ll have buyer’s remorse later.
My Final Thoughts
It’s really easy to make mistakes when buying a home if you do not have proper guidance. I take a lot of pride in being an honest Realtor® that would rather show more houses that are fits instead of nodding my head and allowing someone to make a mistake that will affect them for years to come.
All of these mistakes above can be avoided very simply with the right guidance. When I follow up with my customers after they’ve purchased, I always hear them say that they love their new home or condo. Many of these customers nearly went astray and made one of the buyer mistakes above yet with some frank discussions they avoided a trap.
We’re always looking to work with new buyers so please feel free to contact us with any questions you might have. Remember that most of the buyers we work with are 9 to 18 months away from making a buying decision! Even if you think it is too early, send us an email, call or text and we’re happy to answer any questions you may have.
HGTV makes it seem like you should call a Realtor®, see three houses and pay just under asking for the home of your dreams. The truth is, there are some steps you absolutely must take before you step foot inside of a home. These steps will make certain you are able to buy a great home that fits your budget.
Strengthen up Your Credit Score
Your credit score will play a huge part in the interest rate you will pay on your mortgage so it is worth the time to improve it. I highly recommend you run your free annual credit report and look for any negative marks. Work to fix these so your score improves.
Currently, Tori Juran at Movement Mortgage is able to lend conventionally at a 620 credit score and in some instances a 580 score for FHA loans. However, as you can imagine, the rates are going to be much higher when you meet the bare minimum.
For example, a $300,000 loan at a fixed rate of 3.5% will be a mortgage payment of $1,347 per month. Raising the interest rate only 0.25% to 3.75% will cost you an extra $42 per month. Small changes to your credit report could mean lots of savings in your future.
Lower Your Debt-to-Income Ratio by Paying Down Your Debts
Your debt-to-income ratio simply takes your debt and divides it by your income. Sounds easy enough and it is! What this means is that to improve the ratio, you can either make more money (very challenging) or pay down your debt. If you have the ability to pay down debt without sacrificing your down payment savings, it is worth it! This will also have an influence on your interest rate so do not let this slide.
Save for Your Down Payment and Closing Costs
One of the most common misconceptions I hear from people is that they cannot buy because they do not have 20% to put down on their home. This misconception has cost people so much time and rent money and it simply isn’t true. It’s great if you can put down 20% on a home which saves you a monthly private mortgage insurance (PMI) fee, yet most cannot. There are programs such as a USDA loan that will allow you to put 0% down! That said, the most common amounts are 5% down for a condo and 3.5% down for a single family home. Yes, there are various programs with different down payment requirements so speak with your lender about the options you have.
Pick Your Mortgage Broker and Apply
Finding a mortgage broker that you want to work with and is reliable enough to get you to the closing table can be a tough task. Simply ask your Realtor® for recommendations. I always recommend Tori Juran or Lauren Maxwell to my customers. Both are local to Naples, Florida, amazingly talented and dedicated to you having a smooth closing. Also, you can apply online right through their websites.
Once you have applied for a mortgage and received approval, you will have a strong estimate of what interest rate you will pay and more importantly, you will know how much home you can afford!
Please remember that just because you can afford up to a certain amount, you don’t need to spend that much. You never want to be “house poor” where too much of your money is going to your mortgage leaving you with little left over to enjoy life. Once you have that number though, it is time to shop!
Narrow Down Your Search by Limiting Geographic Areas
One of the quickest ways we can refine your search results for your home is to have a good idea of where you want to live geographically. Here in Naples, we commonly hear people say they want to be west of I-75, in North Naples, or East Naples, and often close to the beach. Perhaps you have a maximum time you want to commute to work, a church you want to be close to, or restaurants and activities you like. Whatever your situation is, narrowing down the geographic area will really help you hone in on the individual homes to pursue.
Make a “Needs and Wants” List
I absolutely love when customers come to me with a well thought-out list of needs and wants. This list will help give me as your Realtor® the important guidelines for our search and will keep us from spending time at homes that do not fit your needs.
As an example, do you need a 3-car garage or do you want one? Many people truly need a big garage, yet for others it would be nice to have. Think through the cost of these features and decide what you truly need your next home to have.
Finally, Hire a Realtor® to Work for you
No surprise here—this is my favorite step! Hiring a Realtor® is a huge step for you to take because this is the person that not only must know the area, but is someone that is going to negotiate on your behalf to get you the home you need at a price you can afford! When you think about it in those terms, it simply doesn’t make sense to hire someone because they’re your friend, a relative or worse, someone a friend of yours happens to know.
Ask your agent to provide you with a list of their recent sales including the asking price of each home and the actual sale price. What you might find is that many agents are part-time and don’t have many sales to even speak of. Others may have a long list yet you’ll see that their buyers paid closer to asking price.
Finally, most Realtors® are going to require you to sign a “Buyer-Broker” agreement. This agreement locks you in to using that agent for a certain amount of time (often 6 months) or you will have to pay that agent a commission if you buy a home from someone else.
Do not sign a buyer-broker agreement!
I will never ask my customers to commit to me in this way. If my customers aren’t happy, leave! Use someone else! Is the agent so unsure of herself that she needs you to be contractually obligated to using her?
This is too big of a decision to get stuck with an agent that you have lost confidence in.
I look at it in a different way. Imagine you went to the dentist because of a toothache. You need help and the dentist walks into the room with a clipboard in hand and says, “This document will lock you into using just me for your dental work. If you end up not liking me, that’s really too bad. You’ll be stuck using me or paying me a commission if you go to a different dentist.” Chances are, you’d leave the office with your same toothache and the same is true for picking your Realtor®.
Start to Look at Homes and let the Buying Process Begin!
You’ve made it to the really fun part of your real estate search. It’s time to start looking for your next home and neighborhood.
Set Your Realtor® up for Success
At this point, you’ve chosen a Realtor® and have your mortgage ready to go. You just need to find the right house and neighborhood.
Give your Realtor® your needs and wants list and explain that you want brutal honesty both from your Realtor® and in the feedback that you provide. I tell my clients that I want them to tell me when they truly hate something about a home I show them. That feedback is invaluable because it allows me to refine my client’s search in a way that only shows houses that are a great fit.
Watch Emails From Your Realtor®, Mark Favorites and Leave Notes
The MLS system that we use will allow your Realtor® to send you listings automatically that match your needs. You then have the ability to mark the houses or condos as favorites and even leave notes on each one. When you mark a property as a favorite or leave a note, your Realtor® will get an email and be able to respond to your questions.
Personally, I love getting notes on homes that say, “We don’t like this layout” or “The kitchen is too dated.” Just think of how valuable that feedback is so I can adjust the search accordingly!
See the Properties you are Interested in
Let the fun begin! Now that you have a list of homes you like on paper, it’s time to travel to the neighborhood and see them in person. I prepare a book with printouts for my customers and provide them with a pen so they can make notes as they see homes. When looking at multiple homes in one tour, they start to blur together. In other words, you will remember not liking a particular aspect of a home yet not able to remember exactly which home that was! Take notes, speak with your significant other, and be very open and honest with your Realtor®.
Compare Homeowner’s Association Fees and What They Include
The fact is, most homes in Southwest Florida are going to be in a Homeowner’s Association (HOA) or Condo Association. Most HOA’s are going to offer something of value to their residents other than a set of rules and regulations. Many HOAs include things like landscaping, cable TV or internet, water and more. You’ll pay an HOA fee (usually quarterly) and these fees can range from the low $100’s a month to thousands of dollars each month in higher-end communities.
The trap I see new buyers fall into is that they’ll ask what the HOA fee is but not which services are included. You may see one property with a $200/month HOA fee that includes landscaping and another that is $225 a month but includes landscaping, cable television and Internet. In this case, the extra $25 a month is well worth it as cable and internet from Comcast could run you $150 a month alone! Your agent will be able to tell you what exactly is included and help you work through which neighborhood is a fit based on your lifestyle and budget.
Review Neighborhood Rules & Regulations
There are many rules that are important for you to review before you can safely pick a neighborhood to live. Some questions to ask yourself are:
Do you have a commercial vehicle?
Do you drive a pickup truck, large van or motorcycle?
How many vehicles do you have?
Do you have pets?
What are the rental restrictions?
These are all concerns for HOA’s. In Naples, most neighborhoods will not allow commercial vehicles. Many do not allow pickup trucks regardless of whether they’re personal or commercial vehicles. Almost every neighborhood has pet restrictions.
Before you write an offer, you need to make sure the neighborhood is a good fit based on many factors your Realtor® can review with you. We’ve heard the stories of people entering into a contract and finding out later that their beloved dog cannot live in the neighborhood and the agent didn’t catch that issue beforehand. Pay close attention to the rules and regulations for each neighborhood you’re in and rely on your Realtor® to give you truthful and accurate information.
Find Your Next Home and Make an Offer
You made it to the HGTV portion of the process and it’s time to make an offer! On TV, we would meet at a trendy coffee shop or restaurant and you’d surprise your agent with your pick. In reality, your agent will probably already know your choice as you’ve shared it with him already. It’s time to get your house!
The Offer Process
Writing an offer can be a stressful part of the home-buying experience. How much should you offer? Are they going to counter? Are there other offers on the home? These are all areas where your Realtor® can offer expert guidance.
Create an Offer Based on Comparable Properties
This is where having an expert, full-time Realtor® on your side can save you thousands of dollars.
Making an offer isn’t about guessing what the seller will accept. It is about looking at similar properties in the area that have sold recently and using those figures to guide you to a reasonable offer that has a strong basis and is justifiable. When we base an offer off of comparable properties, it allows a skilled agent to speak to the seller’s agent and explain why the offer is what it is. Since so many homes are in HOA’s and have similar floor plans, we can often find a home that is nearly identical to base an offer on. In other situations, the homes vary—one may have a pool and yours does not or perhaps one has a den instead of a 3rd bedroom. Regardless, we can use those comparable properties to craft an offer and not a guess.
Pay Attention to the Details of the Offer
An offer is not just a price you’re willing to pay. Although that’s the big part most sellers will focus on, other factors come into play. You will be choosing a closing date, whether or not you’ll have a professional inspection, what good-faith deposits you’ll put down and more. All of these small details will have a big effect on whether the offer is accepted or not.
As an example, I asked a seller’s agent when the sellers would want to move. They did not expect an offer on their home so quickly and so they would have to put their belongings in storage and move to a short-term rental. That was not ideal by any means and so we made our offer have a longer closing time allowing the sellers to stay in their own home and avoid paying for storage.
Often, crafting an offer where you take into account the seller’s needs and wants in regards to the small stuff can make the difference between a deal or a failed attempt to purchase.
Respond to Counter-Offers
It is rare to make an offer and have it accepted without a counter. That’s just the way it goes in our country. There’s bound to be a counteroffer and it will be up to you to decide if you’ll take it.
Now that you’re prepared and full expecting a counter, you need to look at whether or not you will accept it. Too many times, I see customers fall in love with a house before they own it and will make irrational decisions as a result. You’ll certainly have a maximum number in your head that you’ll pay for a home so do not go over that amount!
This is another opportunity for your Realtor® to give you expert advice on whether or not the counteroffer is reasonable. This isn’t a gut feeling but again guidance based on comparable sales.
Allow your agent to do her due diligence to help you make the right decision.
Your Offer is Accepted and Your Agent Gets to Work
Congratulations! Your offer has been accepted! If you watch shows like House Hunters on HGTV, you’ll expect to sit back and wait for closing. You still have some decisions to make at this point and your Realtor® is going to really get to work to get you to the closing table on time and without issues.
Your Offer is Accepted
This is where your Realtor® earns his keep and shows his value. You have some decisions to make and tasks to do, all with the guidance of your expert.
Who Will Handle Your Closing?
One big decision you make (technically you make this when you make the offer) is whether you will use a lawyer or a title company to handle your closing. Generally speaking, a title company will charge about $500 to handle a transaction and a lawyer will charge around $1,000 for similar services. The difference is that if a dispute arises, your lawyer will go to work for you generally without asking for additional compensation. When you’re spending hundreds of thousands of dollars on a home, it doesn’t make sense to save $500 on a title company. We advise our customers to use a lawyer for their closings.
Make Your First Escrow Deposit
The contract that we use dictates the schedule of deposits. In Southwest Florida, it is customary to make your first deposit within 3 days of the accepted offer and a second deposit in 15 days. These are negotiable but that is the norm. Your deposits will go into escrow and be held with your title company or lawyer to secure your property and help the seller feel like you’re committed to the contract.
Officially Apply for Your Mortgage
You applied for preapproval earlier so you could make the offer, yet now is the time to finish up and secure your mortgage. Your lender will want to check all of the boxes and do things such as verify employment or get updated bank statements. You’ve done most of the work already so this step is very easy. Here in Naples, it is customary that you fully apply within 5 days of an executed contract.
Apply to the Homeowner’s Association or Condo Association
This is a step that I’ve seen other agents miss. As an owner in a neighborhood, you’re a member of the association and therefore you need to apply. I have never seen someone get denied but it could certainly happen for a number of reasons, primarily criminal background. Your HOA application will ask for ownership or rental history, pet information, employer information and those sorts of things. It’s a very easy process and usually has a fee of about $100 per adult.
Get Homeowners Insurance Quotes
Your lender is going to require you to have homeowner’s insurance before you can close on your house but you’d want to have that anyway. You will want an experienced agent, such as Jennifer Johnson here in Naples, that can not only give you her quote but compare competing quotes so you know what you’re policy will cover and at what cost. Here in Southwest Florida, flood insurance is an additional cost that many will need to add. You can also save money sometimes with a wind mitigation report from your inspector.
Order Your Home Inspection and Ask For Repairs or Credits
All four of the commonly used contracts in Southwest Florida (Naples Area Board of Realtors Sales Contract, As-Is Contract or the FAR/BR contract or FAR/BR As-Is) allow for the buyer to get an inspection on the home. Two of the contracts require that inspector to be licensed while the as-is contracts allow anybody to inspect. This important step is going to tell you what issues the home has and the contract gives 6 areas of inspection to focus on:
Property and equipment
Termites or wood-destroying organisms
Air, surface, dust or other air quality (mold inspection)
Once the inspector has finished and prepared a report of the home’s condition, we can ask for the defective items to be repaired prior to closing or for the seller to provide a credit. Note that we ask for these things. The seller can reject our requests. In that case, we would have the right to walk away from the deal.
A home inspection by itself will identify defective items in the home yet common add-ons include mold inspections, termite/wood destroying organism inspections or radon.
Again, you’re paying hundreds of thousands of dollars for a home—don’t get cheap when it comes to inspections.
Your home appraisal is going to be ordered by the lender so you do not have to do this part on your own. However, there may need to be negotiations if the appraisal comes in lower than the price paid for the home.
When an appraisal comes in low, the bank will not let you proceed because they feel you are overpaying for a home. Your Realtor® will have to go to bat for you to get the price down to appraised value.
What if the appraisal comes in higher than we thought? Great news! You have built-in equity in your home the day you close on it!
Get a Copy of the Survey
The sellers will often have a copy of the survey. In the Naples contract, it states that if the owners have a survey, they must provide it to you. If not, you can get your own. Your survey will show you on paper where your property lines fall. It isn’t a very exciting document!
You Made it! What Should You Expect When You Close?
This is the day you’ve been waiting so eagerly for! On closing day, you’ll go to your lawyer’s office if you’re in town (yes, you can close from anywhere on Earth) and sign a large stack of documents. The mortgage is the main reason you’re signing so many pages but don’t worry—your Realtor® will be there as will the closing agent to answer all of your questions as you sign. Expect to be there for roughly an hour.
At the end of signing, you’ll receive the keys to your new home or condo! It is so important to make sure you have all of the keys you need, garage door openers and even the keys to the neighborhood amenities in many cases. You’ve made it! Welcome to your new home!
What Still Needs to be Done After Closing
You may have signed a pile of papers and handed a set of keys, but you’re not done yet!
Ensure Your Security
It’s time to change the locks on the doors and garage door openers. A handyman or locksmith can do this for you for little money although it isn’t too hard to do on your own. Consult YouTube for instructions on reprogramming your garage door opener.
Establish Electric and Water Service
If your association doesn’t pay for your electric or water, you’ll need to get both of these put into your name. Visit Florida Power and Light (FPL) online to establish electric service in your name. Set up water with Collier County Water Division. You will need your executed closing statement to prove ownership before they will transfer the water into your name.
Change Your Address with Your Credit Card Companies and Other Vendors
Often forgotten, you will want to change your address with your credit card companies to ensure charges aren’t denied. Call each directly or visit their websites for more information. Also, if you have any other bills coming to your home, make a list and call each one. Tip—look at your bank statements to refresh your memory of companies you pay that will need your new address.
Congratulations and Thank You For Reading
Your Realtor® is your guide through this lengthy process and I love every step of it. If you are looking to purchase a new home or condo in Southwest Florida, please consider the Listing Naples Group. We take so much pride in what we do and our reviews show how hard we work for each one of our customers, regardless of price point.
Please feel free to contact us with any questions you may have or to set up a time to interview us.
We can also be reached by call or text at (239) 248-8171.
Hiring the agent that wants to list at the highest price
You know what happens when you list too high—your home doesn’t sell. So why would you hire an agent that tells you your home is worth far more than what the other agents are telling you? We call this buying the listing and it is the most unethical practice I can think of. The agent tells you that your home is worth far more than what other agents say and as soon as you’ve signed the listing agreement, that agent is now telling you that you need to lower the price. Dirty, dirty, dirty. Don’t fall for this unethical practice.
Staying home for showings
I can tell you through many experiences of showing homes to buyers, the sellers being home can only hurt your chances of selling. When I take buyers into homes and we walk around, the buyers talk to each other and point out features and benefits of the home. When I take them to a home and the sellers are home, you could hear a pin drop! They hurry through the home and only discuss it when we’re back in the car. Even worse, one buyer will point out a feature and the other will say, “I didn’t see that.” They would have had the sellers been gone!
Only showing the home when it is convenient for you
Buyers need to see homes on their schedule. What happens behind the scenes is that a buyer will contact me to see homes. We make our showing appointments with rhyme and reason—we see homes in a particular order as they’re convenient to drive to. If you turn down a showing and offer a time that is better for you as the seller, the buyers will simply not see your home in most instances. You must accept showings as they come in if you want to sell your home.
Not doing a deep cleaning of your home
Buyers see homes that are dirty and instantly assume the house is in disrepair or not properly maintained. Before your home is photographed and put on the market, it is imperative that you deep clean the home. Even better, hire a professional to get the job done right.
Using your friend as your Realtor®
Unless you’re friends with a true top producer, you’ve made a huge mistake hiring an agent that doesn’t have a proven track record of sales. Realtors® get better with time and experience. Your friend likely doesn’t have the knowledge that can only come from being in this business for years. Don’t mix business and pleasure and hire someone simply because you feel it is the right thing to do. You’re making a very expensive business decision when you hire a Realtor® so make sure you’re hiring the agent that is most likely to sell your home quickly and for top dollar.
Not using professional photography
This mistake will cost you big. I hire a professional photographer for every listing I take, regardless of the price of the home. Everyone deserves the best and a professional photographer’s pictures are what catches people’s attention as they shop online for their next home. Remember, I pay the cost of the photographer so if you have an agent that doesn’t want to spend the money, what else will they skimp on? The fact is, photography is the #1 marketing tool we have as agents so it is certainly not a place your agent should try and save money on.
Letting your agent off of the hook and not forcing them to do what they said they would do
This is a big one. When you interview agents, you’ll hear a whole dissertation on what will be done to market your home. Open houses, photography, virtual tours and more will be thrown out there. You sign and… crickets. Is your agent doing what she said she’d do? Your agent made a promise so hold her feet to the fire.
Pricing your home high so you have “room for offers.”
This is a common mistake sellers try to make when they don’t have expert guidance. The fact is that if your home is overpriced, many buyers won’t make offers because they think there’s no way you’ll come down to their (reasonable) offer or that you’re just “too far apart.” Price your home right from the very beginning and get it sold for a great price.
Thinking your house is the best in the neighborhood
Everyone owns the best house in the neighborhood. I think that about my own home! However, it is rarely true. It is so important to take a step back and take an honest look at the competition. Your home is probably great yet the others have features and benefits that may make them more appealing. Don’t let your bias color your asking price. Be reasonable and listen to your agent’s advice.
Not following activity in the market
Your Realtor® needs to be following the market on a daily basis for you. If a competing home has a price decrease, you need to be made aware of that so you can reposition your home accordingly. If your agent puts your home on the MLS and simply waits for a buyer, there’s a high likelihood your home will simply expire off of the market without finding a buyer.
Not insisting that your home is marketed properly online
This is huge. You’ve hired a Realtor® and you will pay your Realtor® handsomely for selling your home. Insist your agent does his job! The second we have a listing go live, we advertise heavily online. After all, that’s where buyers are. You deserve to have your home show up on searches, with stunning photography and the right description. It costs a lot of money to properly market a home so be sure to hire an agent that commits to this cost. hint: we do.
Not fixing things that will show up on the inspection anyway
We all have small maintenance items in our homes that need to be repaired. Fix them ahead of time! When numerous items show up on the inspection report, it simply gives the buyers cold feet and makes them nervous that the home hasn’t been cared for. If you don’t know what to look for, contact us and we’ll be happy to send you a sample home inspection report.
Ignoring the feedback we get along the way
Here’s a little behind the scenes for you—when an agent shows your home to buyers, that agent will get an automatic email afterward asking for feedback. The email generally asks what the buyers thought of the price, how they rate the home versus others they see, etc.. This feedback is incredibly valuable! If you keep hearing that the home is priced too high and you ignore this feedback, you can’t expect your home to sell quickly.
Having an agent that doesn’t give you the full picture on the cost of selling
Commissions will be paid but what about the other costs of selling your home. There’s a title company or attorney to pay, title, doc stamps, intangible taxes and many other small fees that add up to much more than just commission. When you hire our team and we begin discussing an offer, we will often get the attorney or title company to give you a net sheet that shows you a very solid estimate of what you will walk away with from your sale. Your Realtor® must do this or you’ll end up being surprised at the closing table.
Failing to do the basics before each showing
Before every showing, beds need to be made, trash taken out, counters cleaned off, blinds lifted and all lights in the house on. These simple steps make your home look so much better so do not hurry out of the home for a showing. Make sure you do the bare minimum (or ask us to do it for you) before each showing.
Not hiring us as your Realtors®
Our team has a much higher than average success rate of selling homes. We also routinely get above market value for our sellers and almost always sell faster than the market average. How do we do this? Simple. We work. We do the work other agents don’t want to do and it shows in how our listings are presented online and how well we generate buyer interest. All agents are not the same so be sure to interview us for the job of selling your home!
Condominiums in Naples are a fantastic option for many different groups of people. First-time buyers can generally get a lot for their money. Retirees can enjoy a virtually maintenance free life. And, everyone will enjoy the amenities condo communities provide.
There are certainly questions you should ask your Realtor® before you sign the offer. The answers to these questions can vary wildly between different neighborhoods so always seek out the official documents for the condo before you buy.
What is the rental policy? Can the condo unit be rented?
You’re planning to be a full-time resident so what do you care? Well, you may care when you move if you want to keep the condo and rent it yourself. Or, if the rental policy is too restrictive, investors will not want the unit so your pool of potential buyers shrinks. Finally, you may have trouble getting a mortgage to buy the condo if the ratio of renters to owners is too high. Your experienced Realtor® (like ourselves) can certainly help with this question and provide sound advice.
What is the pet policy?
The most common policy for condominiums in Naples is to allow small pets. There is generally a limit on how many you can own (usually two) and a limit on their weight (often around the 35lb mark).
What about renters? It is becoming more and more common for condos in Naples to allow owners to have pets but disallow pets for renters. There’s a belief that renters will not pick up after their pups so a limit on who can own pets is put into place.
What are the rules regarding renovations?
It’s all too common for myself or my wife to show a potential buyer a condo and the renovation wheels get turning. One of the most common renovations is to replace the flooring with wood or tile. Sounds like a simple change yet if you’re in a condo you’ll have rules to follow. Most of the time, condos on the second floor or greater will require cork to be put down first which can add to the cost. Do you want to remove a wall and open up the floor plan? That sounds great but make sure you’re allowed to do so before purchasing the unit.
What is included in my condo fees?
Condo fees (similar to an HOA fee) are the assessments you pay, usually quarterly, to own in the development. The fees vary wildly from one condo community to the next. Some will offer cable television and internet access while others may not include either. Some condos even include your water! Be sure you know what is covered because this will certainly affect your monthly budget.
Is there anything included with the condo unit?
Parking spaces, car port spaces, garages and storage units are commonly sold along with the condo. Your Realtor® will be able to show you what is included when you tour the unit.
What amenities does the development have?
One of the best features of living in a condo is that there are often amenities in the neighborhood for you to enjoy. Swimming pool, tennis courts, bocce ball, putting greens and more are common amenities for Naples condominiums. Definitely check out the amenities while you tour the units.
Are there any special assessments coming up?
When you own a condo unit in Naples, you also own a fractional share of everything else. So, who pays for the road to be paved? Who is paying for painting the exteriors of the buildings? You are! Part of your condo fees each month will go toward these items. But, what if there isn’t enough money for something to be fixed or upgraded? This is where the Board of Directors will vote on a special assessment. A special assessment is just a bill for something that needs to be done. You will want to be sure the condo complex does not have any special assessments coming up. If they do, a skilled Realtor® will modify the contract so that the seller has to pay off the special assessments in full.
Did I miss anything?
Whew, so that’s that with buying a condo! Did I miss a question you may have? Leave a comment below or feel free to contact us to have your question answered.
We know this is really hard to do. You’re leaving your trust in a buyer’s agent you’ve never met and hoping she stays with her customers as all goes well. I can tell you from many experiences that when an owner stays home for a showing and I walk buyers through, it is awkward. Buyers will stay silent if you’re at home and they won’t explore and take note of the features and benefits your home has to offer. Head to a coffee shop, walk the dog, go to the movie or do just about anything other than staying home!
Set Your Home Up For Success
Turn every light in the house on. It may seem like overkill but people love bright spaces. If you aren’t at home just before the showing, let us know and we’ll happily drive over and turn the lights on ourselves.
Make it Easy for People to see Your Home
It would be ideal if buyers made their appointments 24 hours (or even days) in advance but that rarely happens these days. Buyers want to see homes on their own schedule and will often make showing requests only hours in advance. If you take my advice on selling, you’ll have your house ready for showings every night before bed. That way, you can accommodate last minute showings like these. Also, keep in mind how buyers make their showing requests. Buyer’s agents will organize a list of homes and make all of the requests. If you deny a buyer’s request to see your home, odds are they will simply skip it. It is highly unlikely they’ll come back at a different hour or day.
Don’t get Upset When the Unexpected Happens
I’ve shown buyers homes and halfway through they fall in love and decide they want to put in an offer. This means they’re skipping the remainder of homes they’re scheduled to see and I have to let the sellers down. This happens so don’t get upset. We’ll get the next one!
Make Sure you do These Things Before Every Showing
I always encourage my sellers to take 15-20 minutes each night before bed to make their home perfect just in case someone wants to see it the following day. Some of the things you should do are:
* Make all of the beds when you wake up
* Take out the trash
* Do your dishes and remove clutter from the kitchen counters
* Freshen up the bathrooms
* Clean the kitty litter box and replace litter as needed
Following these 5 tips will set you up for home selling success! It’s tough being a seller—we know that. However, if you routinely set yourself up for success by following these steps, your home shouldn’t be on the market very long!
What Specifically Have you Done to Market my Property?
Realtors® work in very different ways from one-another to sell a property. Some agents use traditional advertising methods such as newspaper ads while others take to the Internet to capture buyers’ eyes with online ads. Your Realtor® made big promises during the listing presentation so ask what specific efforts have been made to sell the home. Ask to see the advertisements or emails that have gone out.
What Were the Results of Your Efforts?
Now that you know what your Realtor® has done (hopefully something!), it’s time to find out what the results were. Did the efforts make the phone ring? Were there showings as a result?
What has the Feedback Been From Agents That Have Showed my Home?
Surely you’ve had some showings. Once a home is viewed, an email goes out to the agent that showed it asking for feedback. Most agents will complete the short form. It asks how the home ranked versus others that were shown, what the opinion of price was and other feedback that could help you tailor your listing to buyers’ needs. That feedback is crucial as it lets you know what buyers are thinking about your home. Ask for a printout of all feedback left so you can improve your price or condition of your home.
What’s Happening With Competing Homes?
During the listing presentation, your Realtor® probably showed you what comparable properties sold for and showed you what homes are active on the MLS. Revisit those active listings that you’re competing against. Have those homes had price reductions? Have they sold before yours? Seeing what the competition, and the market as a whole, are doing can help you position your home to sell.
Can I do Anything to Make my Home Sell Faster?
Ask your agent for advice on how to sell your home faster. A lot of this will coincide with the feedback that has been left. Do you have a mural that people do not like? Is the paint color too bold and is in need of an adjustment? Are visitors saying the price is too high? These are all things that you as a seller can change to help your home sell faster.
Why do you Think my Home Isn’t Selling?
Ask your agent for his or her advice. An agent will always have an opinion on why the home isn’t selling. Maybe it is simply too soon and it hasn’t been on the market long enough. Perhaps your price is too high. Maybe other homes have come on the market that are more appealing to buyers. Your agent will have knowledge of the market and hopefully some valuable suggestions to help you get your home sold quickly!
Many buyers will pick the homes they want to see and schedule a day or two to see them with their Realtor. If your home is one they’ve picked, make sure they can see it! It would be fantastic if all buyers gave you 24 hours notice to show your home but that’s just not the case. In fact, you’ll often get showing requests that are only a few hours before the buyers want to see it!
Keep your home ready for showings. Each night, take 15-20 minutes to straighten up your home. If you’re diligent about this habit, it won’t take long at all each night to have your home in tip-top shape and ready for showings on short notice.
Not Paying Attention to Small Details
Do you have scuff marks on your walls that haven’t been touched up? Are there any stains on your carpet? Do you have a bathroom that could use a thorough cleaning (hint: kid’s bathrooms)? It is so important that you notice the same things your buyers will notice as they walk through and you fix those issues before the buyer has a chance to see them.
Not Paying Attention to Market Conditions
Other homes in your neighborhood are going to be bought and sold while your home is on the market. Did they sell at a big discount? Those sales are important because they could affect your home’s value. A home in your neighborhood that sold low could certainly affect your appraisal so be sure your price is in line with what the market is doing.
Getting Antsy About Selling
We know that our sellers can get antsy as their home is on the market. We will sometimes have customers ask us why their home isn’t selling when it’s only been on the market weeks or a month. Currently, homes in Naples are taking 98 days on average to sell. When your home has only been on the market a month, it likely has another two months before your offer comes in! Don’t panic!
Not Treating all Offers With Respect
Buyers want a bargain—that’s just the way it goes. We’ll see low offers come in from time to time and we’ve seen sellers not want to respond. The fact is, the buyers are certainly offering much lower than they’re willing to spend and hoping you will accept it. We will routinely get “lowball” offers up to fair market value just by countering. We negotiate for a living and this is simply par for the course. Don’t be afraid to counter high on a low offer—you may be surprised at what happens!
Spilling the Beans on Social Media
We all have Google and this is especially true for buyers. Our buyers will often tell us facts about the seller that they learned by doing a search for the seller’s names. If you’re on social media talking about how soon you need to be in your next home, that’s going to affect your offers! Don’t put information out there that we don’t want your buyers to see!
Being Home for Showings or Asking the Realtor to be There
There are few things worse for a showing than the sellers being there. It makes for a very quiet and rushed showing. Buyers need to be able to walk through and discuss the pros and cons amongst themselves as they see them. If you’re in your home, don’t expect to hear a word from the buyers. If you’re worried about your belongings, pack them away. After all, you’re moving! Get a head start on packing.
Allowing Your Realtor® to be Cheap and Lazy
There’s nothing worse than a Realtor® that puts a home on the MLS, sits back, and waits for an offer. You’re paying your Realtor® to sell your home—make her do her job! When my wife and I list a home, we are working every single day to sell it. We have constant, targeted online advertisements running. We are calling or emailing agents that may have a buyer. We’re doing open houses. In other words—we work! Don’t settle for an agent that is lazy. You deserve the best.
What did we Miss?
What have you seen sellers do to impede the sale of their home? Leave a comment below!