As in all walks of life, there are times when being a Realtor calls for having the “hard talk.” To be honest, that “hard talk” has sometimes cost me a sale. Whether I’m being honest with a potential client about the value of their home or advising a buyer not to buy a particular home, honesty does not always translate into me getting the listing or getting the commission. But it’s how I operate, and it’s what I think you should expect from any Realtor you work with.
Here are a few areas where you should expect your Realtor to “tell you like it is” and not necessarily “tell you what you want to hear.”
- True Market Value. It’s only natural that when it comes to selling our homes, we may see more value than is really there. Why? Because of the memories, the love, the time and money we’ve invested in our home. I’m guilty of it too. Which is why it’s so important to get a Realtor’s honest opinion as to the value of your home based on facts, not feelings. A good Realtor will look at comparative sales in order to arrive at a recommended listing price. That doesn’t mean comparing your next door neighbor’s 4 bedroom, 4,100 square foot house with your 2 bedroom, 1,800 square foot house. He or she will take everything into consideration: size, condition, age, location, when choosing what sales to compare yours to. The figure he or she arrives at may not be the one you had in mind, but it is the one that is driven by the data. And when it comes to time spent on the market, homes that are competitively priced, fly off the market sooner.
- Condition of Your Home. When we live with certain things day in and day out, we get used to them. Things like pet odor, dog hairs, accumulated clutter may escape our purview but will definitely influence how your home comes across to a potential buyer. I’ve had to have the hard talk many times with clients, explaining the need for a deep cleaning, painting, or landscaping. It’s never easy to bring up but it’s definitely a conversation a good Realtor should be having with his or her client.
- Tax Complications. When factoring in the profit you’ll be walking away with from the sale of your home, it’s important to take into consideration the tax consequences and how they may affect you. A good Realtor can walk you through some of those so you are not blindsided. For example, if you have a capital gain from the sale of your primary residence, you may qualify to exclude up to $250,000 of that gain from your income, or up to $ 500,000 if you file a joint return with your spouse. You can’t take advantage of those exclusions, however, if the home wasn’t your primary residence, you didn’t own or live in it for two out of the five years prior to selling, you already claimed the exclusion on another home you sold within the past two years, or if you acquired the home through a like-kind exchange within the past five years
A different set of complications occur with the sale of rental property. All that depreciation you were able to claim and write off your income taxes has to be recaptured upon the sale and taxed at that time which needs to be taken into consideration when determining whether to accept an offer.
While it’s best to consult with your accountant in these matters, your Realtor should at least be making you aware that these factors can play into just how much money you are putting into your pocket upon the sale of your home.
- When to Walk Away from a Home. As much as I love to make a sale, I value doing right by my client more. And sometimes that means advising a buyer not to buy a particular home. For example, recently I talked some clients out of buying a home for their daughter. It seemed like a good buy at first, but once the inspection report came in identifying all the work to be done, I advised them to walk away from this place and look for something a little more expensive that doesn’t require all that investment. In another situation, I reminded some clients who were considering a $1.325 million home that their original ceiling was $1.2 million. They were moving from California and wanted to use some of the proceeds from that sale, but preserve the rest for travel and other things they wanted to do. In the end, they agreed that it made more sense to stay within their budget and thanked me for holding them to their limit.
- When to Accept an Offer. On average, the Lake Oswego real estate market appreciates 5% per year compounded. But conditions can change depending on a variety of things, especially demand. Right now we are seeing a lot of internal movement–Portlanders moving to the suburbs, and Lake Oswegans moving up or down. And there are out-of-state buyers too, driving demand. However, sometimes, especially when a buyer has insisted on listing their house for more than what their Realtor recommends, offers may come in that are below the asking price and the seller’s initial expectations. In some circumstances, it’s best to wait it out. In others, it’s not. A good Realtor can help you sort out which is the best scenario for you. Considerations include: your post-sale plans, how much activity your house has received, how much activity there has been in your price range, your current financial situation. Again, it’s not always an easy conversation to have but one I am always willing to undertake should the occasion call for it. And that’s what you should expect from any good Realtor.
If you are looking to buy or sell a home in and around Lake Oswego, please give me a call at 503.939.9801, check out my website, and/or fill out the form below. I’d love to put my 30+ years as a local Realtor to work helping you make your next move!