Wednesday, July 5, 2017

Selling Your Utah County House by Defeating Two Scoundrels Image via http://mitasrestaurant.com/

Selling your Utah County house is a lot easier when you have an experienced professional relieving you of the lion’s share of the work. I spend full time dealing with the ins and outs of marketing, dealing with qualified prospective buyers, and making sure the Utah and Utah County technical requirements are met to the letter. That means that the lion’s share of what you need to deal with are the finishing touches of showings and open house presentations.

But long before any marketing can get under way; before an eye-pleasing Utah County listing can be created—and even before a final choice the right Realtor® is made—two formidable opponents have to be met and conquered. Taken individually, neither is nearly as imposing as when they team up. But when they work together, they can stall the initiation of any Utah County house selling initiative for months—even years. Unfortunately, they’re always hanging around the house, waiting to cause trouble.

The villains are inertia and its helpmate, clutter.

Inertia is the force that pushes you back in your seat when your jetliner takes off. It’s the force that keeps the car moving after you’ve taken your foot off the gas. It’s the physical property of a body at rest (or in motion) that opposes a change in what is happening at the moment.
In the realm of homeownership, real estate inertia is the natural tendency to stay put in your familiar home setting. Rather than upsetting the applecart by striking out in a new direction, it’s the understandable propensity to leave well enough alone—even when the familiar home base is no longer as suitable a venue as it used to be.

This despite the fact that as our family or work or financial situations evolve, sooner or later most everyone will overcome house-related inertia and start thinking about selling and finding a better fit. That might be larger or smaller, grander or simpler, or simply more conveniently located. That’s when inertia’s partner comes into play to stop everything.

Clutter is all the stuff we’ve built up to make our lives more comfortable—and there is a lot of it we could do without. But the idea of actually addressing which things are disposable, and then actually disposing of them? Well, nobody in his or her right mind wants to tackle that (at least not right now).
To make a mathematical formula for this common phenomenon:

inertia + clutter = later

The foolproof strategy for overcoming the two scoundrels is to cut the clutter part down to size. Tackle one room at a time. It works. True, this involves overcoming a certain amount of inertia—but nothing like the mountain of the stuff that thinking about the whole household full of the stuff involves.

My i + c = l formula probably might not be included in any physics textbooks, but it’s a good one to remember as soon as you begin to think about selling your own Utah County house. Also good to remember around the same time is to give me a call!

Alicia Terry & ATeam Realty

Utah County Independence Day: Best on Tuesday…or Sunday? Image via http://www.freepik.com/

This year we’re fortunate indeed: the calendar has cooperated with the spirit of the occasion to give Independence Day its proper import. With Utah County’s Fourth of July festivities falling on a Tuesday, we avoid the vexing problem that crops up every time July 4 falls on a weekend. Since nobody wants the extra day of picnicking and parading to be confused with the ho-hum regular weekend days off, the powers that be have to arbitrarily reassign July 4 observances to the following Monday (or previous Friday, if the Fourth hits on a Saturday).

This year, with the Fourth happening on the 4th, all is well. For convenience’s sake, most everybody opts for a four-day long Fourth—so Monday the 3rd gets a star turn due entirely to its lucky proximity to the big day.

But maybe Utah County patriots ought actually to have given more consideration to the serious meaning of the holiday back on Sunday, the 2nd. They would have had ample historical reason to do so. Just ask John Adams. Or Abigail, for that matter.

The reason why July 2nd is an entirely appropriate time to celebrate Independence Day is that it’s actually the day when the Founding Fathers decided to tell England’s King George, “You’re fired!” Anyone who has ever worked on a committee with more than a few members will appreciate why.
Historically, it was on July 2nd that the delegates in Philadelphia approved the motion to separate from their irritating European bosses. The great and courageous act having been accomplished, delegate (and later, the second President) John Adams wrote home to wife Abigail,“The Second Day of July 1776, will be the most memorable Epocha, in the History of America. I am apt to believe that it will be celebrated, by succeeding generations, as the great anniversary Festival.”

Committees being committees, the paperwork and so forth took a couple of days to make its way through the machinery—so Jefferson’s Declaration of Independence didn’t get adopted until the 4th. Adams didn’t foresee that the adoption of the physical paper (parchment, to be more accurate) would become the rallying point for those “succeeding generations.” It’s actually a branding thing: every time anyone looks at the Declaration of Independence, that “July 4, 1776” up there at the top is what jumps out at you.

But Utah County celebrants who didn’t give a thought to the Founders back on Sunday the 2nd needn’t feel less than properly patriotic, because Utah County’s Independence Day always measures up to Adams’ checklist:

It ought to be solemnized with Pomp and Parade [check!] with shews, Games [check!] Guns Bells Bonfires and Illuminations [check!] from one End of this Continent to the other…

Utah County’s Independence Day observances do live up to what Adams hoped for (except for the bonfires)—so he’d probably have been okay with waiting until Tuesday. As for what the ideas about liberty and self-governance contained in the (slightly tardy) Declaration has meant to humanity as a whole—I bet he’d consider it more than a Tryumph!

Whenever your Utah County real estate matters come up, I hope you’ll give me a call—it sure won’t take two days to get going!

Alicia Terry & ATeam Realty

Friday, June 30, 2017

A July Surprise for Utah County Home Loan Applicants Image via https://www.paisabazaar.com

For a few Utah County mortgage applicants, next week may see a one-time favorable change in how they are viewed by home loan lending institutions. It’s a technical change that could amount to a significant difference in the results they get when they apply for Utah County home loans.

The first evidence of what the Washington Post calls “a surprise boost” will be triggered on Saturday, which marks the July 1 beginning of a changeover in the information gathered by the three national credit bureaus. Equifax, Experian, and TransUnion have been working with a number of states to handle an awkward technical problem: many states have outmoded computer reporting systems that result in “troubling error rates” in official public records.

Translation: they’re frequently outdated, scrambled, missing identity information—just plain wrong.
The data in question—tax liens and monetary damages from civil court judgments—has too often been the basis for depressed credit scores for unfortunate home loan applicants. And because some governmental agencies can be excruciatingly slow to respond to requests for corrections, when time is a factor (as it often is) those mistakes can be decisive. For any Utah County home loan applicant whose own credit score has suffered, it’s not an abstract problem.

As part of an initiative by the credit bureaus to increase the accuracy of their scoring, beginning in July they will purge the dubious information from their files and stop collecting it altogether. FICO estimates that between 12 and 14 million U.S. consumers have tax liens or judgments in their current files: they can expect an abrupt jump in their scores. Consumers with no other negatives in their files could see their FICO scores instantly jump by 40 points or more. The result could be better home loan offer terms as well as lower interest rates.

Inevitably, there is a downside. Those with legitimate judgments and tax liens against them will also show elevated scores, which could be misleading to loan companies and landlords who rely on the numbers to make informed risk evaluations. The size of the problem is expected to be limited, though, since most people with judgments and liens have other negatives in their files.

In case you are uncertain whether your own credit score might be affected, that probably means it’s been a while since you checked…and that’s never a good thing! Keeping on top of your credit reputation is certain to pay off in the long run, especially when the time comes to begin looking for your next Utah County home—which is also when you’ll want to give me a call!

Alicia Terry & ATeam Realty

Wednesday, June 28, 2017

Top 8 Ideas to Boost Utah County House Values Image via https://www.confused.com/

From time to time it can be fun to scour the latest “Top Ten” lists of cost-conscious ways to increase the value of Utah County house value.

Some make more sense than others. Upgrading bathroom vanity cabinets appears on some of the house value lists, for instance—but those lists were probably thrown together in a hurry since the return on investment is admitted to be 66%. When an investment returns two-thirds of its cost, it’s hardly competitive. For Utah County homeowners preparing to sell, vanity cabinets don’t belong on the action list.

The best idea lists are the ones which show ROI: the return on investment. Here’s a new compilation, offered purely as food for thought (since the “return” number for any individual case can’t actually be verified)—
  1. Yard improvement, AKA Landscaping. Return on investment registers at a hefty 303% according to the NAR® (and even 400%, per This Old House). And it’s true that a weedy, dried-up lawn is not the way to woo any but the most bargain-thirsty buyers. We can assume that the investment figure the NAR points to does not include the homeowner’s time, but even so, a shipshape yard definitely provides a house value gain.
  2. Repair (electrical, plumbing, what-have-you). Return: 299%. This is for sure: Utah County houses with unaddressed mechanical defects are handicapped in the marketplace—in the end, it’s just too costly.
  3. Clean and Declutter. Return: 403%. With an average cost estimated at about $400, there’s no argument that it will be easily returned multiple times. When you can rely on truly professional help, the boost is invaluable.
  4. Carpet. The return on investment for an average outlay ($671) is calculated by the HomeGain website at 160%. I might add a caveat to this one: a truly threadbare or uncleanable carpet surely rates replacement—but if existing carpet is presentable, that cost might be better directed elsewhere.
  5. Staging. With a return of 196%, it’s hard to disagree—especially since Utah County’s professional stagers can often save by directing attention away from areas that might be overly expensive to renew.
  6. Lighten and brighten. This includes everything from “clean windows” or “repainting dark-colored rooms” to boosting the wattage of living room lamps. As a result, the “return” numbers are all over the map: but they’re all positive.
  7. Upgrade appliances. Full kitchen remodels are usually too expensive to fully reclaim their cost, although when necessary, minor kitchen remodels reclaim 79%. As an alternative, replacing seriously outmoded kitchen appliances is much more likely to add enough value to make it a canny move.
  8. Declutter and Clean. (I know—but if anything is worth repeating, this is it)!
Your Utah County house’s value is what the market proves it to be—but it’s also the shelter your family calls home. If it’s filled with happy memories, that value is probably the one that winds up counting the most. But as for the other kind, when it’s time to shift gears, I hope you’ll give me a call!
Alicia Terry & ATeam Realty

Monday, June 26, 2017

The Matrix Describing Utah County Real Estate Negotiations Image via https://www.biggerpockets.com

When the goals motivating the parties in a negotiation—including Utah County real estate negotiations—are understood by all concerned, the odds for success are greatly improved. In most cases where the negotiation is between a buyer and seller of Utah County real estate, the goals are straightforward enough that it doesn’t seem to require much attention. Yet with a negotiation as weighty as the buying and selling of a home, stripping down the motivations common to the various parties can be a clarifying exercise. Here is what you might call a negotiation matrix:
When a buyer puts together an offer, more often than not their mental decision-making process goes something like this:
  • — — — — — — — — BUYER — — — — — — — —
  I do not want to lose this house ->|<- I want to pay as little as possible
  • — — — — — — — — —— — — — — — — — — — —
The reason for the colliding arrows is that the two goals run the risk of conflicting with one another. If the buyer’s offer is too low, another buyer could come in to swoop up the property, and: game over. If the offer is higher than would turn out to be acceptable to the seller, the second goal will have been needlessly sacrificed.  
At the same time and on the other side, the seller is usually thinking:
  • — — — — — — — — —— — — — — — — — — — —
I want to complete the sale ->|<- I want to bank the full asking price (or            higher!)
  • — — — — — — — — — SELLER— — — — — — — — — — —
It’s quite similar to the buyer’s mental process. Both are calculations of the risk vs. reward that making an offer and responding to an offer entails.
When a buyer makes a lowball offer, it signals to the seller that the “don’t want to lose this house” side is probably losing out to the “pay the least” side of the buyer’s calculation. If the seller is leaning toward the “complete the sale” side of his or her own calculation, the offer will either be accepted or countered with a significant discount. If the current inclination is more toward the “full price” side, the counter may contain just a minor discount.
This negotiation matrix is the barest of bare-bones reductions. In practice, it’s often a little more complicated. Offers often contain details about desired maintenance corrections or may be dependent upon outside factors (like selling their current home); counter-offers, likewise.
Where a possible negotiation can needlessly go off the rails is if either party becomes emotionally threatened by an offer or counter. And believe me, it can happen! What’s vitally important is that each side understands that the other’s goals are legitimate, even though at odds with their own. A lowball offer may be misguided, but it’s not evil. A refusal to counter at all is, likewise, a statement of a legitimate bargaining position. Either may be disappointing, but neither is necessarily evidence of bad faith.
It’s my job to help my buying and selling clients chart a course through the negotiation rapids while avoiding such emotional cross-currents. At best, they are a needless distraction; at worst, obstacles that can prevent a meeting of minds. Appreciating the legitimacy of everybody’s motivations before the actual numbers start to fly is a good way to prepare. And, as usual, calling me is another prudent idea!
Alicia Terry & ATeam Realty

Friday, June 23, 2017

Automated Utah County Home Appraisals: for Amusement Only Image via http://www.homeappraisalsinc.com

In the Terminator movies, a robot from the future (Arnold Schwarzenegger) hunts down the human heroine in order to change the future by altering the past. Although that’s actually the present. It’s complicated.

Although generally considered science fiction, the same thing is happening right now in the realm of Utah County home appraisals! Now, before any Utah County readers panic, there’s no immediate danger to the community. The authorities have the situation well in hand; in fact, the robot in question has already been hauled into court. There’s certainly nothing that could affect any individual Utah County homeowner…that is, unless your own house is about to be entered into the Utah County listings.

First, about the robot: this is not the Terminator (Arnold) himself. In real life, if you saw him in the supermarket or walking down the street, there would be nothing to fear at all. In real life, he is an actor/Governor who is actually an American/Austrian who is a conservative/liberal and in no way the fictional robot character who was the antagonist/protagonist featured in the Terminator movies.

Neither is the robot that lurks in some online listings: the home appraisal robot. It, too, is nothing to fear, even though it has probably already visited your house without your knowledge. This robot comes from the Zillow website, and its name is “Zestimate.” It means no harm and is doing the best an automated home estimate robot could be expected to do. Any unintended consequences of what happens when it visits your house are, as the phrase indicates, unintentional.

About that court case: the online information company Zillow publishes a dollar figure that its robot calculates for most U.S. home addresses. It is featured as its “Zestimate” of a property’s market value. An Illinois realty lawyer has sued them because she claims that in her case that number is so low and off-kilter that it has materially hampered the sale of her condominium. State law has it that nobody can publish an appraisal without permission of the property’s owner. Zillow says that the $ number it calls its “Zestimate” is not an appraisal at all: instead, it’s an “estimated market value.” Who wins the court case is yet to be determined.

How this might affect your own Utah County home is because prospective buyers might visit Zillow to see what the robot thinks your own property is worth, and be slightly misled. Zillow admits that, compared with actual sale prices, their Zestimate number has a median error rate of 5% (not bad)—but that it’s only within twenty percent 89.7% of the time. A 20% error would be terribly misleading; especially when it happens more than one out of ten times.

The fact is, this robot doesn’t come from the future like the Terminator. Its numbers are based solely on publicly recorded information, which may be outdated, incorrect, or, most likely, unable to factor in anything other than basic square footage and general comps. What the Zestimate cannot account for are things like how upgraded, or outdated, or depressingly dark, or delightfully light, or traffic-noise heavy, or majestically awe-inspiring the subject property actually is in comparison to the comps used to calculate the Zestimate. When human beings aren’t involved at all, the subject property itself is not actually compared. I think there is room for this kind of automated approach. It can be fun and interesting to look around a neighborhood to see how various individual properties fare, even if the numbers aren’t to be taken too seriously.  As the name implies, it's really just an estimate. 

But when the time comes to actually sell your own Utah County home or to start looking in earnest for a house you will be calling home for many years, that’s no time to rely on anything less than comparables and guidance researched by a living, breathing real estate professional. In other words, when the information needs to be right—call me!

Alicia Terry & ATeam Realty

Wednesday, June 21, 2017

Utah County Rental Home for Sale and the Get Rich Slow Scheme! Image Source: http://www.mlive.com/

The term “get rich quick scheme” has been held in low regard since before Charlie Ponzi’s pyramid came crashing to earth in the 1920s. Probably that word “scheme” is a problem…sounds too shifty. And the whole idea of sudden riches sounds as reassuring as “something for nothing” or “free lunch.” 

Prudent Utah County residents tend to go a good deal more cautiously when they plan their investments. They usually aren’t even aiming to “get rich.” More like “get comfortable.” Instead of hoping to reap sudden wealth (living off all those tolls after buying the Brooklyn Bridge), they think in conservative terms like “passive income streams” and “lowered risk strategies.” Instead of responding to radio ads for the week’s fastest-growing franchise opportunity, they’re more likely to be scouring the listings for Utah County rental homes for sale.

A week or so ago, The Wall Street Journal published a real estate piece that focused on the building momentum behind this kind of investment strategy. The headline promised to point out ways “to get the best return on a rental property.” It included bullet-pointed tips like “Maintenance costs money” and “Invest for the long term.” The article described the growing number of investors concerned about stock market volatility: they are “choosing a different place to park their money.” The parking place in question? “Buying homes in moderately-priced markets…then renting them out.”

Instead of going high-ticket, one Ohio investor purchased a four-bedroom home for $175,000 in a town with “a strong job market.” After expenses, she nets $350 in positive monthly cash flow. Doing the math, that may be a modest amount, but it’s the cash net after paying for the home loan: she’s simultaneously acquiring the property. It’s a slow but steady strategy. Anyone who finds themselves regularly checking the listings for Utah County rental homes for sale are probably like-minded with investors the Journal describes: “investors who take comfort in the steady income stream.”

With “get rich quick” schemes held in such disrepute, you might conclude that a “get rich slow scheme” would be well-received. Perhaps—but it might be better if we switch out that “scheme” word for one that’s more substantial—like “plan” or “program.” In the meantime, if you are among those looking for this brand of steady-as-she-goes investment opportunity, you don’t need a formal designation to put it into action. For details on the current batch of Utah County rental homes for sale, just phone me at the office!
Alicia Terry & ATeam Realty