Fix Your Home's Quirky Layout Before Selling?

Hello Dave,

We removed 2 walls in our bungalow as it was quite dark. Now we are selling and the layout seems to be putting buyers off, my agent tells me to leave things as they are as someone will love it, but I need to sell fast and not sure if I should replace the stud walls. The bedroom doors also open into the living area which is a privacy issue. 

Thanks so much,

Susie

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Susie,

Shoot…it’s hard when you make changes to your home that you are confident will make it better only to find out that you actually might have made things worse. If your feedback has been consistent that the change you made is now a hindrance to the house selling, then you might consider putting the walls back up. Before you make any hasty decisions, make sure that the layout feature that is putting buyers off is indeed the wall removal and not the fact that the bedroom doors open to the living area! I have seen it time and time again, if the master bedroom is visible from the living area when the bedroom door is open it is a major buyer turn off. A “funky” floor plan is worse than a floor plan that shows dark, but identifying exactly what is causing the hesitation is crucial. The last thing you want to do is fix the wrong problem! Regardless of the floor plan quirk that is holding the house back, often times it is hard for a buyer to see how to fix the problem. Actually, even if the buyer can identify it, they do not have the expertise or know anyone who can make the changes for them to make the home more livable. Obviously, as your agent suggested, you always have the option to just wait it out, rather than fixing the problem.

“I understand your agent’s perspective and advice as I always say, “there’s a butt for every saddle” and if you wait long enough, you will eventually find the right butt and that butt will love it! ”

I understand your agent’s perspective and advice as I always say, “there’s a butt for every saddle” and if you wait long enough, you will eventually find the right butt and that butt will love it! Sometimes waiting is not the best option, especially if you can easily correct the issue and make the property more sellable and “now ready.” This time of year waiting takes on a whole new meaning, especially for those who wish to sell quickly, since we are headed into the winter months. As we creep closer to the holidays, patience can start to take on a whole new meaning and playing the “waiting game” can be a bit of Russian roulette. A house that shows dark is not a good thing, especially in a bungalow where space is at a premium. In smaller spaces it is always a best practice to try and have it show as bright as possible! One, cost effective, way to add more natural light to dark spaces is by adding solar tubes. A solar tube can bring lots of natural light to any dark area at a very affordable price. If you decide to put the walls back, then adding solar tubes may be an effective answer to your “dark” problem. 

Regardless of what the problem is, you are doing the right thing by listening to your feedback and proactively trying to correct the problem. Identify the real problem. Get it fixed. Add a solar tube. Watch it sell! Best of luck! 

Dave Kimbrough
The Kimbrough Team

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Common Closing Costs for Home Sellers

Dave,

We are currently in the process of selling our home and it just went under contract—yay! We want to know what to expect financially from this point forward. What are common closing expenses for sellers?

Thanks!

Cheryl, Palisade

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Cheryl,

Oh my gosh, this is such a great question and one that I get ALL the time! As a seller you have the privilege of paying the sales commission you agreed to with your listing agent, assuming your home is listed with a Realtor. The other costs associated with selling your home (outside of the real estate commission) that are the seller’s responsibility are varied, but you can almost always calculate an additional 1% if your sales price is UNDER $300,000 and about .7% if your home is over $300,000. If you calculate it that way you will, almost always, come up with a slight over estimate of your closing costs. 

The most common cost that is overlooked is your property tax. What most people don’t fully realize, as I did not prior to becoming a real estate agent, is that our property taxes are paid in arrears. It’s probably something most folks just don’t think much about and it often times is a bit of a surprise. How it works is, the title company will pro-rate the current taxes from January 1 to the day of closing and you will have that amount debited on your settlement sheet. The two largest debits you will see (outside of real estate commissions and your mortgage payoff) will be the taxes and the title insurance policy. Title insurance simply indemnifies that the title to the property will be passed from you to the new owner in good standing and free of any liens. For a $250,000 home you can expect this expense to be in the $900-$1000 range, these costs are on a sliding scale based on purchase price.

“The most discussed fee on the seller’s settlement statement is often the charge for water & sewer. The bills for water and sewer, if left unpaid, can be held as a lien against the property and thus MUST be settled at the time of close to ensure the passing of a clean title.”

The most discussed fee on the seller’s settlement statement is often the charge for water & sewer. The bills for water and sewer, if left unpaid, can be held as a lien against the property and thus MUST be settled at the time of close to ensure the passing of a clean title (as discussed above). In order to ensure that the amount that is owed is covered, the title companies always hold out an amount significantly over (generally around $200) your typical water and sewer bill. This ensures there is enough to pay it off and they will refund the difference back to you shortly after close. This one always creates a fair amount of discussion about how you never have had a bill that high, but believe me they will refund you the difference in short order. Always remember that your other services like gas, electric, telephone, television, etc. are your responsibility and you should call 24–48 hours prior to close and let them know you will be moving and the service will be transferring to a new owner on the date of close.

One last tip. Your mortgage statement always provides a payoff for you to reference, however the day it is printed you start accruing interest so your payoff is always higher than what is printed on your statement. I always tell our sellers to just add one extra payment to the amount on the settlement statement and that will provide a safe payoff amount. In my experience when closing day comes people are happy they overestimated and get a little money back, rather than under estimate and have to go digging for that little extra! I hope this help and by following these guidelines you should have a safe estimate of your closing costs.  Congratulations on getting your home under contract and best of luck on your new journey!

Dave Kimbrough
The Kimbrough Team

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Contingent Offers—To Accept or Decline?

Dave,

We recently, about a month ago, turned down an offer on our home that was contingent upon them selling their current home. They asked us to take our home off the market for two months while we waited for their home to sell. They had already had their home on the market and we decided we did not want to risk having our home off the market while we just waited for their home to sell. We asked our Realtor last week if they had sold their home yet and found out they did have it under contract, but have decided to purchase a different home. 

We are very frustrated and feel like they should have come back and put a contract on our home, as they said they would surely bring us another offer when their home was sold. We just feel like we have been left at the alter and now are starting over. What should we have done differently? 

Jake and Laura, Grand Junction

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Jake and Laura,

This is one of those classic darned if you do and darned if you don’t, that is the lesson learned from contingent offers.  When we receive a contingent offer, it boils down to a calculated risk. You have to work with your agent and determine, to the best of your ability, how probable it is that their home will sell? If the buyer is coming from the Denver area, it is HIGHLY likely their home will sell quickly, so the risk is VERY limited, as that market is very hot! When deciding to take a contingent offer, it also is dependent on how good the offer is. If it is a good offer, then sellers are generally willing to take on a little more risk. As it is with every contingent offer, you must decide if the probability of their home selling outweighs the risk of taking their offer and waiting to see if their home sells. Remember, you always have options.

Your first option, the option you chose, is to not accept their offer with a contingency and count on them coming back when/if their home goes under contract. My experience is that few people come back after they have been spurned. Remember, buying a home is an emotional process and you want to capture that buyer while they are emotionally invested in your property. When you turned down their offer, they may have felt like they had been spurned and started to look around again at competing homes, in essence, looking for a new partner. Bad analogy, I know, but you get my point. I have found it a better option to find some common ground to work with them on, which indicates that you want to sell the home to them, but you also need them to recognize your need to continue trying to sell your home if someone else comes along and wants to buy it.

“ I have found it a better option to find some common ground to work with them on, which indicates that you want to sell the home to them, but you also need them to recognize your need to continue trying to sell your home if someone else comes along and wants to buy it.”

This leads us to other options, the 48 hour and 72 hour first right of refusal. This means that you continue your efforts to sell and if you get another offer, they have 48 or 72 hours, you determine the length of time here, to remove the contingency on the sale of their home. If they cannot remove the contingency, then you can sell it to your new prospective buyer. Most buyers appreciate the fact that you, like them, are looking to sell your home and understand your need to take the first ready, willing and able buyer who will meet your terms for sale. You have now shown them that you want to sell your home to them and they are likely to receive this response in a positive fashion. They are now still emotionally connected to your home and feel like the next showing on their home may deliver a contract and get them into your home. They are still invested and still working toward the goal of getting their home sold, so they can purchase yours. Again, it has to make sense and it is a calculated risk.  

The key to everything is the ability to continue marketing the property and solicit other offers. There are several creative ways to create a win-win for the buyer and seller and have everyone involved, agents included, working toward a common goal. 

Remember, you turned down their offer, there is nothing that says they can’t change their mind and that is exactly what they did. You ran that risk when you turned them down and played hard ball. I do, at times, recommend taking a contingent offer, but often leave the seller with the contractual ability to continue to sell their home should they receive another offer and in my mind this is key. Sometimes you have to be willing to take on a little risk, as long as it does not leave you out of the game. I hope this helps and I am hopeful another offer is right around the corner.

Dave Kimbrough
The Kimbrough Team

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