Why Absorption Rates are Important When Selling Your Home

Why Absorption Rates are Important When Selling Your Home

First important thing to understand about absorption rate is that appraisers are required to use it to determine your homes current value.  Therefore it is something that you will need to understand so you can make sure your home is being valued properly.

Secondly, you will need to know the absorption rate so you can determine how aggressively you will need to price your home and to get an estimation of how long it may take your home to sell given current inventory.

What Is Absorption Rate: essentially absorption rate is a method to determine how fast homes are selling in a given area AND weighs supply and demand of current housing inventory on the market. A declining figure indicates the inventory is decreasing as more homes are being sold than are coming onto the market. A rising absorption rate implies that there are more homes coming onto the market than there are buyers willing to buy at the market prices.

For instance: If 12 homes sold in the last 12 months that means that the market will absorb 1 house per month on average.  If there are 10 homes currently on the market, there is a 10 month supply and so on.

¨       a 6 month supply is considered a balanced market:

¨       less than a 6 month supply is considered a sellers market, and

¨       more than a 6 month supply is considered a buyers market.

This figure is pretty easy to determine. You’ll need to know two things – the total number of active listings (homes currently for sale) and the total number of homes that sold over a specific period of time. To get the absorption rate for your area, divide the total number of active listings by the average number of sales per month and you get the absorption rate.

Using Absorption Rate To Sell Your Home: Once absorption rate is figured you will have a good statistical estimate of how many months it will take to sell all the homes in your area at the current rate they are selling. Keep in mind this number is a snap shot and looks only at current inventory.  The higher the number, the more aggressive you’ll have to be to get your home noticed and sold.

Armed with the absorption rate you can decide how aggressive you will need to be.  If you have a high absorption rates and need to sell your home in the first few months you will truly need to have one of the “best deals” of all the competition…meaning best combination of location, condition and price. Also remember that as homes sell, news ones come on the market that may be priced more competitively, so keep track of what your competition is doing so you can act accordingly.

It was your dream home…but it isn’t anymore….

This home was once your dream home but it isn’t anymore.  Isn’t that why you are moving?  So you can build a new dream?  It’s ok to move forward in life.

So you want to sell your beloved home. The one where your children were either born and grew up in. The one which you painted all the rooms by hand to save money and painstakingly stenciled all those pink and purple swirly things in your daughters room. The home that has no secrets for you and all its “quirks” seem charming now. That drip in the sink lulls you to sleep at night and that hole in the wall (behind the picture) reminds of a funniest story. It’s your home and you feel as attached to it as you do to your favorite pet. Problem is…your trying to sell your home AND a dream to someone else. Their dream looks different than yours and you NEED to cast a wide net when trying to fulfill the dreams of a majority. I mean, you want a bidding war…don’t you!??! Repeat after me, “It’s not your dream home anymore…it’s theirs.” I also know (first hand unfortunately) that spending money on a home that you are trying to make money on seems counter intuitive. The realities are…well…real!!! The facts are the facts. If you don’t de-clutter, if you don’t paint that bright yellow kitchen and pull down the roster border and fix the hole in the wall…your story of why someone else should live there won’t make sense. If the light fixtures don’t match and they’re in the same room, than your telling buyers that this house meant nothing to you and will probably shouldn’t mean much to them.

All of this is so important as the housing market begins to stabilize. The urgency to “buy now” is relaxing as interest rates rise and all those homes that had been sitting on the market during the crisis (inventory) are gone or getting more expensive.

If you are looking to sell your home now, please make sure you are telling the right story when buyers walk into your home. Allow those warm and comfortable memories to come through by showing how well you took care of your home. As well, the days of putting a premium on those “feelings” reflected in what you think your home is worth may be putting you at a disadvantage. The facts are the facts and unfortunately the comparable’s don’t lie.

WHAT IS THAT SMELL?!

When I was looking for homes in my neighborhood I saw many of them.  Just like the rest of you, what makes one house perfect for some makes it a definite “no” for others. Many of them were very nice homes and there was one that I looked at that seemed perfect except for one thing…the smell. I distinctly remember the smell of wet dog as soon as I walked in the home. Needless to say, as I walked around the house instead of looking at how nice and open the great room was I was thinking about how I may have to pull up carpet or pull down plasterboard to get the smell out.  As I walked out I couldn’t help but think how different the experience would have been if the home didn’t have such a strong smell.

Having your home staged, everyone knows, is vital to success in selling your home but how your home smells can be a deal breaker as well. I’ve often walked into a home and smelled the faint yet distinctive odor of cigarette smoke and wondered if I was the only one. The truth is that those who have lived with such scents for so long, no longer smell it.  That is why it becomes so important to have your realtor or other unbiased person give their opinion.

Pet Odor:  Thankfully there are remedies for these odors.  That being said, the more offensive the odor the more work it will take to remove it.  First and foremost you’ve got to remove the source of the problem so as not to introduce new odors. This may mean keeping your pet in non-carpeted areas of the home until the house is sold.  Doing a good deep cleaning of all furniture, including washing couch covers is your first step.  Having the carpet cleaned professionally is second.  Airing out is always a must as well.

Odors like cat urine are among the worst and can seep into carpet fibers, carpet padding, concrete and wood floors, upholstery fabrics, and furniture cushions and pillows.  In particularly bad instances, you may have to remove the carpet, remove the pad and seal the floor, and then replace the carpet and the pad. Cleaning the carpet might help but humidity will raise the odor from the padding or floor beneath.

SmokeCigarette smoke can cling to furnishings, drapes and other window coverings and work its way inside walls. Some topically applied solutions can help to reduce the stench, but an ozone generator, hydroxyl generator or air scrubber should be more effective. These approaches are very effective in absorbing odors though there is no guarantee that an odor can be eliminated.

Get an Unbiased Assessment: The best way to find out whether a house smells or not is to have someone who doesn’t live there to come inside and give an opinion. The obvious person should be your realtor. Unfortunately not all brokers will point out that a house smells bad for fear of offending.

If you have pets or are a smoker, you may need to ask your realtor to be honest with you knowing now that these smells may be in your home despite that fact that you do not smell them.  Having your realtor help in these seemingly small ways is really the best and most effective way of getting your home ready for selling.

Lake Norman Real Estate

 

After a beautiful day on Lake Norman

Lake Norman Real Estate…a great place to settle down!  4 counties, 34 miles from the southern tip to the most northern, 520 miles of gorgeous shoreline make up North Carolina’s largest manmade lake.  Duke Power created Lake Norman in 1963 by damming the Catawba River thus creating recreational activities and a source of hydroelectric power.   With the creation of the lake came the introduction of many shoreline miles of Lake Norman real estate.  Located just 20 miles north of Charlotte makes the commute easy and vacation life something you can have year round!  If this is the life you are looking for than Lake Norman real estate is the best investment you can make!  Many people think Lake Norman is a town in and of itself.  But Lake Norman doesn’t have it’s own zip code.  Locals refer to the entire area around it as “Lake Norman” .  Majority of people commute to Charlotte from the towns of Huntersville, Cornelius, Mooresville and Denver.  These towns offer some fabulous neighborhoods with great amenities to enjoy for the whole family.

Moving to the area?
 Be sure to read more about us on our About Us page.  We have been helping homeowners with their Lake Norman real estate needs for 9 years.  We help them SAVE money with our consumer driven business plan.  We list homes for less than a typical realtor and WE HELP PAY FOR CLOSING COSTS for the buyers we represent!   So if you are in the market for some Lake Norman real estate – be sure to give us a call!  704-641-9601

The towns of North Meck…..

Huntersville, NC
Located 15 miles north  of Charlotte the Town of Huntersville is the southern most town that hosts Lake Norman real estate.  With a population of nearly 48,000 it is one of the three towns known as North Meck.  It boasts some great shopping at Birkdale Village as well family activities at Discovery Place Kids  and Carolina Raptor Center.  The Town of Huntersville also hosts some historical sites as Latta Plantation and  Historical Rural Farm.  For the active person there is the Huntersville Aquatic Center and golf at Birkdale and Northstone and Skybrook.  As well as the many parks the Town of Huntersville runs.

The average home price in 2012 in Huntersville is $247,000.  For Lake Norman real estate with scenic views ranged from $475,000 to $1,300,000 with an average of $863,000.  It’s boasts waterfront communities such as Lookout Point, Lake Norman, Blythe Pointe, The Cape and Tranquil Cove.  Huntersville also hosts many non waterfront communities for those who wish to be close to Charlotte and still live close to Lake Norman.  Such neighborhoods as Cedarfield, Wynfield, Melbourne, Birkdale, The Hamptons, Northstone and so many more.  Many residents dock their boats at one of the many nearby marinas and enjoy their weekends with water sports on Lake Norman.

 

Cornelius, NC
Located just north of Huntersville with a population just over 25,000, it is also one of the three towns in “North Meck“.  Cornelius boasts a wide variety of housing opportunities just like Huntersville and much more Lake Norman real estate.  Compared to its southern neighbor Cornelius is home to many more lakefront property including single family and condominiums.  The average sale price in 2012 is $432,000 while Lake Norman real estate ranged from $300,000 to $4,550,000.  20% of the homes sold in 2012 sold under $600,000.  Some of the neighborhoods that sit on the scenic lake are The Peninsula, Patricks Purchase, Island Forest, Norman Shores, Sawyers Landing, Crown Harbor and Shearwater Point just to name a few.

 

Davidson, NC
While The Town of Davidson hosts the least amount of waterfront property it’s proximity to Lake Norman real estate and it’s quaint small town feel make Davidson another popular choice in the North Meck area.  With a population of just over 11,000 Davidson is also home to Davidson College, a private liberal arts college.  Davidson’s average home price in 2012 has been $348,000 with a high price of $807,500.

Davidson has a waterfront restaurant, North Harbor Club where you can sit and enjoy eating outside by the water.

 

 

Questions To Ask BEFORE You Hire a Real Estate Agent

Just like my teacher used to say “there are no stupid questions”…this holds true here. Your home is one of your most important assets so finding the right real estate agent is one of the most important decisions you will make before buying or selling a home.  You should feel comfortable asking agents anything and everything, especially prior to signing a contract with them.  Below are just a few of the important questions that should be asked before signing a contract BUT a simple internet search will give you more questions than can be asked in a life time! This list will give you a great starting point.

WHAT IS THE AGENTS MARKETING PLAN FOR SELLING YOUR HOME? One of the biggest advantages of hiring a real estate agent is increased access to resources for marketing your home. Immediately upon signing with you, your agent should post your house on the Multiple Listing Service (MLS) but what other venues will they use? The most effective and most increasingly popular venue for selling homes is the internet. More than half of buyers use the internet to search for homes. Does the agent plan on holding any open houses?  How soon and how many? Depending on your needs, the agent should have a variety of options to offer regarding marketing your property.

HOW WILL THE AGENT KEEP YOU UPDATED?  Find out what kinds of news you’ll be updated on, the frequency and how they will be communicated to you? If you’re a buyer, there are a number of details to handle, even after a seller has accepted your offer. This includes home inspection, potential re-inspection, mortgage paperwork, title search, title insurance, repairs and other items. Will you get a weekly update, or just on an as-needed basis? Will it be with a phone call, an email or both? You may have your own preferences, and the agent may or may not accommodate them.

HOW DOES THE AGENT GET PAID? During the interview, you’ll want to talk money. Some agent’s charge a flat fee and some agents do not. Typically if they do not charge a flat fee they will take a percentage of the home’s final sale price. What percentage are they suggesting? The typical fee is around 6% of the selling price.

DOES THE AGENT HAVE A CANCELLATION POLICY? What if after signing you hear that your neighbor’s friend is interested in buying your house? Or, if you’re buying a home, you stumble upon one on your own. Find out if the agent will still be entitled to the full commission/flat fee and what cancellation fees may or may not apply.

FINALLY, ASK THE AGENT WHAT PROBLEMS THEY SEE IN YOUR HOME THAT MAY AFFECT THE SELLING PROCESS? If the agent tells you what sounds like legitimate drawbacks, then they may be a keeper.  On the other hand, if they don’t point out what you already know are flaws, this could be an indication that they may have only a half-hearted dedication to selling your home.

Outdoor Sweat Equity….

(Money magazine…online article) — There’s no better place to build sweat equity than outdoors.

A high-end landscape contractor will charge at least $5,000 to remodel a typical compact suburban front yard. Yet if you can handle a shovel, hose, and wheelbarrow, you have the physical skills to replace overgrown or mundane greenery with fresh plants, boosting curb appeal and possibly property value.

The tricky part is getting the design right; it’s not as simple as putting a few plants in the ground. Here’s how to achieve that upscale look on your own.

1. Broaden the beds

A single-file row of plants along the foundation and the property lines looks generic at best.

Widen the beds to four to six feet so there’s room for more flora — and to make the plants really pop, use mulch that’s the color of soil, says Newport, R.I., landscape architect Kate Field.

That means the fine, dark, compost-like material that costs about 25% more than basic wood chips, or about $120 to $150 (delivered), and that lasts only one year.

2. Focus on foliage

Replace oversize or drab plants with new shrubs and perennials arranged two or three deep, with smaller plants placed in front of larger ones (check the mature size listed on the label).

“Don’t get hung up on picking the best flowers,” says Portland, Ore., garden designer Darcy Daniels. That’s because blooms are short-lived; it’s the foliage that you’ll see most of the time.

Look for plants with red, purple, or multicolored leaves, as well as a variety of textures, from fine light-green needles to broad dark-green fronds.

Alternate shapes too, with, say, a conical spruce near a chunky hydrangea. You’ll pay $20 to $100 per plant, depending on type and size.

3. Accent the architecture

Create a focal point using a dwarf tree or a large shrub. Don’t just plunk it in the middle of the yard. Instead, place it in line with a structural element of the property, such as a corner of the house, garage, or lot.

Japanese maples ($100 to $400) and crepe myrtles ($30 to $50) are two good choices that look attractive in all seasons, says Severna Park, Md., nursery owner Gary Blondell.

4. Trim with technique

When it comes to caring for your plants, ditch the electric clippers, which carve bushes into perfect geometric shapes.