When Should You Accept A Low Bid?

If you are selling your home and are motivated to get the deal done quickly, you may be tempted to accept a low bid. Whether you need to sell because you are being relocated or need to downsize to save your financial investment, there are several things you should consider before accepting a bid that is below your asking price. Here are a few tips on making that decision a bit easier.

How Motivated Are You?

The decision to accept a low bid should always be influenced by your actual financial position rather than simply wanting a quick sale. If you are in a situation in which you may lose your home due to foreclosure, accepting a low bid may be your only option. If, on the other hand, you are simply tempted to take a low bid because it is more than you originally paid for the home, you may want to reconsider. For most people, the motivation will lie somewhere in the middle, and balancing your motivation to sell and the potential financial loss of accepting a low bid should be carefully evaluated.

Avoid Becoming A Motivated Seller

The best way to sidestep having to take a low bid is by avoiding the position of being a truly motivated seller in the first place. If you are having trouble paying your mortgage, be sure you have exhausted any refinancing options that may exist. Another common reason people feel obligated to accept a low bid is that they have already purchased a new home and do not want to be in the position of paying two mortgages at once. So before purchasing a new home, first sell your existing home.

No matter your reason for considering accepting a low bid for your home, be sure you get the advice of both a REALTOR® and a financial advisor to ensure you are making the right decision. 

Have more tips? As always, I look forward to hearing your thoughts!

Be well,

Rhonda

PS. Thinking of buying a home or selling yours? I'd love to sit down and talk with you about the process and the market. You can reach me anytime at 401-326-2928. 

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What Season Is Best To Sell?

So you are ready to sell your house, but you look out the window and see several feet of snow on the ground. Should you bother putting your house on the market in the winter, or should you wait until spring? Is there a better season in which to sell your home? The answers to these questions depend on a few basic factors.

Where You Live

In a place where the climate is very cold in the winter, it can be wise to wait until spring to sell, because fewer buyers will be venturing out to look at homes. In an area where the sun shines year round, weather is not a concern, and people will have no trouble coming out to see your house. This doesn’t mean, however, that season doesn’t matter in a warm climate! It can still affect how many potential buyers will come out and the odds of selling.

Watch Out For The Holiday Slump

People are usually too busy from Thanksgiving through Christmas to spend much time house hunting, and in January they are often recovering financially from holiday over-spending. Most experts will recommend that you avoid listing your home until after the worst of the holiday slump in the market is over and people are looking to buy again. This is true no matter what the climate!

Particulars Of Your Home

If your home is near a high school, you might want to consider selling in the summer when things nearby are a bit quieter. The noise and traffic of the school year might put some buyers off. If your home is near a lot of fun winter activities, this might actually be a selling point that will be highlighted better in the winter months. Looking for these details of your area and capitalizing on them will help you to get your home sold.

The season does matter when it comes to home buying, and spring is usually a good time to list. Your REALTOR® can help you to determine what season makes the most sense for listing in your particular case, providing you with market information in your area and helping you pinpoint the particulars of your home that make it appealing in a specific season. 

Have more tips? As always, I look forward to hearing your thoughts!

Be well,

Rhonda

PS. Thinking of buying a home or selling yours? I'd love to sit down and talk with you about the process and the market. You can reach me anytime at 401-326-2928. 

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Home Assessments...Do They Reflect Market Value?

As a real estate professional, we often hear sellers and buyers alike refer to a home's asking price in correlation to the the assessment. To begin, it's important to understand the difference. According to the International Association of Assessing Officers, the Assessment is the value used to calculate your property taxes. An assessor will first make a determination of market value, then multiply it times a factor (how the factors differ depend on local laws). The result is the Assessment, or Property Tax Assessment. As a homeowner, it's always extremely important to understand your property tax bill and how it is derived. 

So then how is market value determined? The Fair Market Value of any piece of property is the price at which it will sell in an open market within a reasonable period of time. 

It's the question agents strive to answer when assisting sellers list their home for sale, and when assisting buyers purchase a home. To determine market value, the agent will look at comparable properties in the area that have sold in the past 6-12 months. It is not always an exact science, especially in communities where home styles and amenities can vary greatly even within a neighborhood as opposed to a subdivision where the homes are very similar. It can also be difficult if there is a shortage of homes that have sold during the past year. 

So back to the question at hand...Do home assessments reflect market value? In a nutshell, no. Now, that being said, there is often an interesting trend between assessment and sale price within given areas. I will research and calculate this trend and use it as a guide in determining a property's market value either when helping a seller determine a listing price or a buyer determine how much to offer. It is certainly not exact, but it can be used as another tool in the arsenal of determining value. 

It is important to remember that, at the end of the day, Fair Market Value for any property is what a fair and informed buyer is willing to pay for it. 

As always, I would love to hear your additional thoughts and comments. 

Be well,

Rhonda

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Functional Obsolesence - what is it and can I do anything about it?

Functional Obsolescence is defined as "loss of value from all causes within the property except those due to physical deterioration".  Huh?!

In understandable terms, Functional Obsolescence is a defect in a property that affects the property's utility. For example, there is only bathroom is located on the second floor of the house. Or perhaps the house has no formal dining room or if it does have one, it's far removed from the kitchen.

Functional Obsolescence can be either curable or incurable.  It is considered curable if the amount of money invested to remedy the issue increases the market value of the property by at least that much. On the other side, it is considered incurable if the cost to remedy the issue is greater than the added value the remedy will bring. 

So, what does this mean for buyers and sellers?

If you are a buyer, be aware of shortfalls in the dwelling's utility and factor in the associated costs to fix those shortfalls when making your offer. Your real estate agent or broker can connect you with the right contractors in the area in order to get an idea as to what it might cost you to address the issues, and can then help determine if your return on investment will be worth it. 

If you are a seller, you need to be aware first, of the objections that may arise from potential buyers.  Also, keep in mind, that you may need to lower your expectations on market price to take into account the costs that potential buyers will face in order to address the issues and alter the property to better suit their needs.

Look forward to hearing your additional thoughts.

Be well,
Rhonda

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