How You Can Succeed in the Housing Market

How You Can Succeed in the Housing Market

For the past couple of months, Gini Carl’s mornings have consisted of seemingly endless rounds of bed-making, dishwashing, vacuuming and trailing after her 11-year-old daughter “to pick up everything she drops.”

No, Carl’s not some Type A, neat freak Martha Stewart wannabe. She has, however, been playing one since early April. That’s when she and her husband put their Albemarle County home on the market.

But staying on top of dirty dishes and a messy fifth-grader isn’t the worst of it. That honor goes to cleaning up after two dogs, a pair of cats, guinea pigs and hamsters. Oh, and then there was that unfortunate encounter with a skunk.

Carl awoke early one morning a few weeks ago, knowing that her Realtor planned to show the house later that day. I’m ready, she thought, until she stepped outside and got a strong whiff of something nasty.

What Carl didn’t realize—until she went back indoors and the smell didn’t dissipate—was that one of her pets had a run-in with Mr. Smelly and then decided to spread his bad fortune around. Specifically, a cat, who proceeded to make himself comfortable on beds, a couch and carpeting. Everything he touched reeked, Carl recalls with a laugh. “I was doing laundry at 6am. I called work and let them know I’d be late,” and then she got out the vinegar and Dawn dishwashing liquid.

“I didn’t have any tomato juice, so I used tomato sauce. I opened all the windows, threw down some carpet freshener and sprayed Febreze everywhere.”

Susan Veach, a Realtor with RE/MAX Assured Properties, applauds Carl’s deodorizing efforts. “It’s more important now than ever to have your house show in A+ condition,” she says. “In 2004, the average days on the market—from the time you put your house on the market until closing—was 50 days. Now it’s 171 days.”

Inventory is way up, she adds, “so the way for your home to rise to the top of someone’s list is to have the house in model home condition when you show it. Make the beds, send Lassie to the neighbor’s house, light some candles, bake some cookies and leave.”

When her Earlysville home was on the market, Debbie Philkill says that in addition to “frantic morning clean-ups,” she vacuumed twice a day, every day. She also burned through a lot of vanilla candles, “always wondering if the buyers noticed the just-extinguished smoking wick smell when they walked through the door.”

When you’re trying to sell your house, there’s always something to worry about, Philkill adds. Did the kids remember to flush the toilet? Was it a bad idea to cook fish for dinner last night? Did my husband put that stack of just-washed underwear in his drawer?

Letting your guard down even briefly can be costly, but Veach says if a client is at work and she schedules a last-minute showing, Veach will give the place “a quick once-over and pick up a bit. Everything helps, and our clients expect us to take care of all the little things” they may have forgotten.

But you can’t always count on a volunteer to clean up your messes. So why not have your home professionally cleaned before you put it on the market? A deep, top-to-bottom tidy will last a long time and all you’ll have to do is maintain it. And if even maintenance makes you nervous, pop for someone to come in every week or a couple times a month to help you keep up until your home sells.

As for pets, Carl jokingly suggests that if “you’re going to sell your house, it might be a good idea to sell your animals first.”

How you can succeed in the housing market

How you can succeed in the housing market

It seemed like a good idea at the time. Sign on for an adjustable rate mortgage and get more house for less of a monthly payment. Heck, you weren’t planning on staying in the place for long anyway. By the time the initial 4.25 percent loan hit 6.25 percent, you’d be history. 

Seems you forgot something: What happens when a hot real estate market cools? The obvious answer is a bunch of houses with For Sale signs out front that aren’t drawing all that many interested buyers. But if you’ve taken out an adjustable rate mortgage (ARM) and your home isn’t moving, you’re also looking at a mortgage payment that’s a lot more than it used to be.

ARMS used to be mostly taken out by folks who knew they weren’t in a house for the long haul. Then home prices exploded and ARMs became a vehicle for homebuyers to get more for less. Nobody expected that when the enticingly low initial interest rate changed, which it does periodically based on a predetermined economic index, they’d be in the precarious position of struggling to pay mortgages that often exceed the value of their homes.

ARMs “are inherently more risky than fixed-rate mortgages,” says Daniel Rothamel, a Realtor with Strong Team Realtors. “The key for borrowers is to manage the added risk. They need to stay on top of their ARM and know exactly when the rate is going to be adjusted, and how much the rate could go up. Usually, there is some sort of cap on the adjustment, but you need to know what it is and when it occurs in order to plan for the adjustment.”

If you can’t afford the new mortgage payment, Rothamel says you may wind up refinancing the loan. “Because so many loans are sold to investors in the secondary market, lenders have an interest in keeping you in the mortgage. As a result, your lender will probably give you plenty of options to refinance.”

Some markets around the U.S. have seen big jumps in their foreclosure rates over the last year; Nevada, for instance, saw three times as many foreclosures in March 2007 as it did one year earlier. Still, Rothamel doesn’t expect to see a significant jump in local foreclosures due to ARMS. “Right now, interest rates are still historically low, so rate adjustments won’t be as drastic as people may have feared.” And even if the foreclosure rate were to increase “as a result of unsuccessful ARMs, it probably wouldn’t be enough to have a significant impact on the overall market.”

The bottom line is that before making a mortgage decision, it’s up to you to know what’s going on in the real estate market. Ask questions and become familiar with the risks involved. And don’t talk to only one lender or consider only one mortgage option, says Rothamel.

“Arming yourself with knowledge will enable you to make an informed decision, which is usually the best decision,” he says. “Your mortgage is probably your biggest source of debt, so you owe it to yourself to be as informed as possible before making a decision.”