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call or text me: 847-691-1111 or email: ann@rannjones.realtor

Sunday, April 18, 2010

What does it take to get my house sold? Part 3: Property Condition


The first time I took some young buyers out to look at homes in Lake Forest, it turned out to be a rather negative experience. When we walked into the first house, the owners were sitting there watching TV with bags of potato chips and pretzels strewn on the coffee table. There were dirty dishes in the sink; wet towels on the floor in the bathroom; blinds half up and torn with windows that were in need of washing; and carpets that had obvious dirt and dog hairs on them. Needless to say, we left the house quickly and my clients to this day recall that house and what their first impression of Lake Forest was; certainly not the grand descriptions of F. Scott Fitzgerald!


Looking at a property is an emotional experience for a buyer. I can't overstate how important the condition of the property is to how a buyer will relate to it. Today's buyers are looking for "perfect houses" and they are often buying new construction in a marginal location over homes in need of updating in a great location. People are so busy these days that they are avoiding major renovations and even easy decorating. They want homes that look beautiful, have great features and require minimal updating. While location will probably trump most things, property condition is a very close third.


While one can’t change the ills of the housing market or the location of the home, this is the one element where the sellers have total control. Sellers need to dazzle the buyers. It’s the WOW homes that are currently selling. WOW: the feature that makes this home stand out over the competition. Investing a little up front may mean the difference between selling and not selling your home. So how do you create a WOW experience for the buyers?

CLEAN

This is the most important action you can take. A clean home is perceived to be a loved home and buyers want to believe the home has been loved. Consider your home as a sensual experience for potential buyers.

Smell – make sure that the home is well ventilated and doesn’t smell stuffy, damp or odorous. If you’re a smoker --- cease smoking in or near the home!! I’ve actually had clients turn right around and walk out the door if they thought there was a smoker in the home. Fumigate if necessary. Pets can also leave odors. However, be prudent about air fresheners. They can leave the impression that you are trying to hide odors.

Sound – repair the jammed or squeaking doors and noisy appliances.


Sight – the cleaner the better. Wash the windows, clean the gutters, keep the yard trimmed, eliminate dirty dishes and clothes, vacuum, dust, etc. etc. Make sure your furnace has a clean air filter. Sinks and tubs need to be clean and sparkling – where necessary re-grout. Shampoo the rugs and clean the furniture. Get rid of pet hair.


Touch – Check that anything a buyer might touch feels clean and smooth. Make sure that PB& J sandwich doesn’t leave sticky jelly on banisters!

REPAIR

Consider having an inspector come in and conduct a “pre-listing” inspection. We have annual physicals for ourselves – why not have a check up for our home? The buyers will undoubtedly hire a professional inspector – why not hire an inspector ahead of time. Know the condition of your home. Preemptively make repairs and pass the test early.


MERCHANDISE YOUR PROPERTY

Like it or not, your home is like any other product that needs to get sold. We all personalize our homes and decorate them to meet our needs and wants. “Decorating” may include things like those pencil marks on the door jamb showing your children’s heights through the years or that wall of family photos or that mailbox with your name on it or maybe that brilliant purple wall.

While we may live with papers on our desks and stacks of books by our nightstands or toothbrush and toothpaste out on the sink; while our teenagers may love their posters of Tony Hawk or Brian Urlacher; while we may enjoy cooking with every appliance on the counter top.... need I say more? Buyers get stuck looking at "stuff" in and out of closets and may not see the rooms or the storage capabilities of the house if our stuff gets in the way.

When selling your home don’t decorate it – you need to merchandise it!


What are steps to merchandising your home?

Detach emotionally – you want your home to become someone else’s home. Buyers will often devalue rather than value a seller’s decorating. It’s not personal. In a buyer’s market, the clever seller understands that they need to create a home that many buyers might want. Let go of your home and begin moving both physically and psychologically.


Declutter and depersonalize - Buyers are essentially “buying space.” Clutter and your personal items make the rooms feel smaller. Go room to room and trash, pack, or put away “stuff.” Minimize personal photographs – a few are OK, but lots of photos can be distracting. Clean out closets – make it look like there is still a lot of room for more. Clear off kitchen counter tops and straighten out cabinets. Get rid of dust collectors like silk flowers and useless knickknacks. Limit the number of “things” on tables and in shelves. Some things are OK, but with too many it looks cluttered and with too few it looks sterile. Organize your book shelves and desks. Lock up valuables and important papers.


Cramming boxes, toys and other things into the basement or garage is not a great idea. Rent a storage locker until the home gets sold. Ask yourself the question, how much do I really need this thing? Can I sell it on eBay or donate it the church rummage sale, etc.? Maybe having a garage sale is in order.

The only thing that you should ADD is light. Don’t scrimp on wattage – you want the home to be light and bright. Buy a few lamps if necessary.

PAINT

You can do yourself a big favor and probably come out financially better on the sale on your home with just a little paint. Neutralize the very distinctive rooms. There are some great colors (soft yellow, taupe, soft white, sage, etc.) that can make a room feel warm and inviting.

Be judicious about wallpaper and consider removing bold or distinctive papers in favor of neutral paint colors. (See my previous blog entry on wallpaper.) Consider this scenario: if a potential buyer’s family has only sons, the bedroom with that hot pink bunny wallpaper is going to be viewed as the bedroom that “needs work.”

Check the trim, windows, doors, etc. If paint is chipping and marked up, then touch it up and make it look fresh and clean. If windows are painted shut, consider “un-sticking” them and repainting.

Make sure the front door is clean and freshly painted. Paint the mailbox, too. Look closely at the high traffic areas and touch up scratches and scuff marks.

CURB APPEAL

Don’t kid yourself, first impressions are important. Home buyers do judge a home by looking at its cover and sometimes won’t even look inside if they don’t like the outside. I’ve written about this before (see curb appeal). To restate:

Make sure the front door is inviting and visible. Pretty pots of flowers or a small bench can add wonders to a front door. Make sure the home numbers are visible and clean. If the hardware is old or painted, consider replacing it with new hardware.

Check to make sure that the key and lock work effortlessly – replace the lock if necessary. As an agent, nothing is more annoying than being unable to open the door during a showing with a potential buyer.

Clean the light fixtures – install a new one if lighting is an issue. Get rid of any spider webs or hornet nests.


Touch up any chipped paint. Consider repainting the house a neutral color if it is currently in need of repainting.

Consider new landscaping around the front door.

Check the gutters to make sure they are secure and not leaving unsightly pools of water.

Make sure that the sidewalk to the home is in good condition and repaired. Fix the steps into the home and see that they are easy to maneuver. Tuck point loose bricks.

Trim loose branches and prune shrubbery that is unflattering to the home or getting in the way of easy entrance into the home.

Consider re-sealing or repairing the driveway if it cracked and worn.

Put away toys, bicycles, hoses, lawn equipment, etc.

The lawn should be green, weeded and mowed. The flowerbeds should be looking beautiful. Remove any pet waste – people do walk through the yards.

Put out a new welcome mat if the old one is worn and dirty.

STAGING

How you live in a space is quite different from how you sell a space. Remove excess furniture – make sure people can move down hallways and from room to room easily without bumping into furniture.


Make sure the doors open and shut easily without any barriers in the way.

Create cozy seating areas – don’t push all the furniture against the walls of the rooms. Color always adds punch to a room. If the room is neutral, put out fresh flowers or a pretty cushion to add a focal point.


Old, cheap or worn furniture is worse than no furniture. If you’re trying to sell a high-end home, those milk crate bookshelves from college days have got to go.

Replace stained rugs.

Designers will tell you that items look best grouped in odd numbers and little off center.

Make sure the lighting is superb throughout your home. Pull open the curtains and blinds and let the light in for showings. If you have heavy drapes or blinds that block lighting, consider removing some of the window treatments.

Limit the number of area rugs. If you’ve got hardwood floors, show them off.

Placing around live plants and playing soft music helps just about every home!

Investing upfront to merchandise and stage your home could make an even greater difference on the ultimate sales price. If merchandising your home seems like an overwhelming task, keep in mind there are various professionals you can hire that will de-clutter, clean, repair, host estate sales, paint or even stage your home to help you. Your real estate agent should be able to give you the names of resources.

Finally, analyze the competition – the buyers do. They know every home that is out there – they study them endlessly on the Internet. Go to Sunday Open homes and pretend you’re a buyer – visualize yourself in that home. If you were the buyer would you pick that home or yours? You are competing with every other seller out there and you want the buyer to pick your house.


I am always amazed when I take buyers out to see homes and the house is a mess. Like I said, it’s a beauty contest today and you want to be best in show.



Saturday, April 3, 2010

My life in real estate: location, location, location

When I think about how impulsive the purchase of my second home was, I cringe. I wanted a bigger apartment. I had looked in my Near North neighborhood and couldn’t afford anything that I liked, so my realtor took me further north to Lakeview near Belmont Harbor. While I didn’t really know the area very well, I was drawn to this apartment in a beautiful vintage building near the lake because of (and this is what I mean by impulsive) its beautiful herringbone-patterned, dark wood floors in a gorgeous, spacious hallway. It also had two en suite bedroom/baths with a living room and a formal dining room. The apartment had so much space after my tiny one-bedroom on Scott Street. Yes, the kitchen was ugly and the decorating was horrible, but I could fix those things. Right? It was such a great price, that I made an offer the same day I saw it – no reflective thinking – just an impulsive decision.

But there was one thing I couldn’t fix… its location. Now there is nothing wrong with Lakeview – in fact, it’s a great area in Chicago. But it turned out that for me, it wasn’t a fit. First, there was no place to park my car; I finally found a garage that was about ½ mile away on Broadway Street. Late evenings required a spooky walk from the garage to home along dark streets. Getting groceries was a 3 hour+ activity which required riding the bus to the market on Diversey, and then going home to wait around to have groceries delivered to my apartment.

At the time I was working at a client in Northbrook. It took at least 20 minutes to drive west on Belmont just to get to the Kennedy – I hated driving on Belmont so much, that sometimes when I came home in the evening, I would go all the way to the Ohio Ramp and come back up along the Drive. I didn't like the stores on Broadway; I missed the easy proximity to window shopping on the Mag Mile or being able walk to my office in the Loop. During one snow blizzard, it took me FOUR hours to get home from my office to my apartment. In the past, I would have walked home.

But the worst thing about the location – which I really hadn’t considered when buying the place -- was its placement within the building. It was a front facing unit on the 2nd floor. With little effort and some ingenuity, someone could break in pretty easily. When the windows were open, I could hear everything being said on the street – and there were definitely things I didn’t want to hear. I felt unsafe and unhappy in this location. After five years living there, I put the apartment on the market. Unfortunately, it was a buyers' market at the time.

As I mentioned before, there are six elements that go into selling a home -- the second most important element that goes into determining whether a property sells is location. For all the reasons that I had difficulty with this location (particularly the parking and the 2nd floor), I had trouble finding a buyer for my unit. I finally reduced the price to less than what I had paid for it in order to get out of the building – I wanted to move! Great space didn’t matter anymore – I just wanted to be in a neighborhood that I loved.

Now that I work as Realtor, I always recommend to buyers: pick your neighborhood first – then pick your home. Too often people start with the house and then find themselves living in an area that they may grow to dislike for one reason or another: they don’t like the schools, the ambiance of the town or sometimes even the people who live in the town. I encourage buyers to go to local events: parades, art fairs, etc. Get a feel for the town. Is this a place where you feel comfortable and want to settle?

I think three main things determine the property values are in the Chicago area: the quality of the school district, the proximity to Chicago and to a lesser extent, the local property taxes. The buyers I work with along the North Shore either want to be close to Chicago (i.e., New Trier district) or prefer larger lots and bigger yards (Lake Forest area). Sometimes the choice is very hard for them, because they want the convenience of Wilmette with the space that moving further north can provide. It becomes very much a personal choice.

Once the area is picked, where do you want to live within that area? In general – and this is not a hard and fast rule – the closer to the lake, the higher the value of the property. People tend to gravitate to the North Shore to enjoy the fun of Lake Michigan and all it has to offer, so lakefront properties are generally the most expensive homes.


But even a great location can have its drawbacks. I had some friends that had a gorgeous lake front property near Muskegon, MI. The value of the property continued to rise until one year; there were significant erosion problems along the bluffs overlooking Lake Michigan. What had been substantial property and a great location suddenly became a nightmare requiring costly resources to secure the property.

Also, locations are subjective. If you’re the kind of buyer who wants lots of space between you and your neighbors, purchasing a home in Kenilworth Gardens or East Lake Bluff may not work for you – even though they are both considered wonderful locations. In Lake Forest, there is a mindset that living west of 41 is not as desirable. Well, I live west of 41 and I love it. The light is great; the sunsets are amazing; our yard sizes are fabulous with wonderful privacy; I’m close to the walking paths in Open Lands; and have easy driving distances to points North South East and West – I think I live in the best neighborhood in Lake Forest. It is subjective.


OK buyers, you’ve picked the town, now how to evaluate the location…. What are the key factors that determine the intrinsic value of a location? Safety, noise level, and privacy are probably the big three. These are the three that will drive the resale-ability of the home.

SAFETY – is it a busy street? Can you back in and out of your driveway? (The interesting thing about the North Shore is different streets connote different perceptions. For example, Deerpath in Lake Forest has stretches that are difficult, but West of Waukegan and East of Sheridan, Deerpath is a fabulous street for a home. Green Bay Road through the New Trier and Highland Park areas are pretty commercial and not particularly desirable as a residential address. Once you get to Lake Forest, some of the most spectacular homes are on Green Bay Road… a knowledgeable realtor can help a buyer understand the intrinsic value of various streets and locations.)

A second safety consideration is the proximity of the property to trains, power lines, landfills and flood zones. Anyone of these “incurable” features will tend to devalue the property.


NOISE – are you close to a highway or train? People generally devalue the locations that have excessive noise and are less inclined to purchase a home with this “incurable” defect.

PRIVACY–most people like to have some level of privacy with their homes – particularly in their backyards. With that in mind corner lots can sometimes devalue a property as well. Although, great landscaping can cure that problem.


Locations therefore can have both “curable” and/or “incurable” defects. For example, some of the things that are incurable include: proximity to trains, power lines, highways, schools, etc. These are usually perceived as negatives to a location. Things that are curable might be – being too visible to the neighbors: that can be somewhat cured by adding a few arbor vitae to block the view. Being too close to a pond – perhaps a fence can be put around the pond to create a safer setting.

The incurable aspects to a location are much less of an issue in a sellers’ market. Why? Because buyers have so little inventory, from which to choose. When there is a shortage of inventory, buyers will sometimes forgo their location issues in order to be in the neighborhood of choice.

However, in a buyers’ market like we are experiencing today, there is surplus of inventory – buyers don’t need to purchase a home in a challenging location – they have other options. As such, locations with incurable issues need to be priced extremely competitively in this type of market... more so than in a balanced market.

One last thing to consider about the value of a location: think about the homeowner in Lower Manhattan. The value of their location changed radically on September 11, 2001. While we don’t expect to experience anything of that magnitude, things do change: roads and schools are built; open areas can become shopping centers, etc. The potential value of particular location can change in time.

If you are a seller today, you need to recognize and understand the value of your location. Be realistic: if your home is near a highway or train, on a busy street, or, in some cases, on a corner lot, you may need to aggressively adjust the price lower than you would in a better market.

Now, to end my story... Because of the impulsiveness when I purchased my Lakeview home, I went overboard the next time and looked all over the city for the subsequent six months to find the perfect next home (my poor realtor!). As you might suspect, I ended up two blocks from the lake and a block from the Mag Mile living on the 6th floor of yet another vintage building. While I still didn’t have parking and grocery shopping continued to be a challenge, I didn’t care: I was living in a location that I loved.