There are few aspects of life more anxiety-inducing than buying or selling a house. Nearly 15 years after the collapse of the housing market, many Americans feel an understandable trepidation over the prospect of home ownership. But as the economy continues to rev up in New Orleans post-lockdown, the prospect of lower mortgage payments compared to soaring standards of rent is becoming more appealing. The autonomy of home ownership and the room to grow a family is a security blanket that everyone should have the opportunity to enjoy. Right now, the housing market is primed to stabilize for the first time since the doldrums of 2020. If ever there was a time to make the leap, it is now.
While many renters are excited to buy for the first time, there is a growing population of starter-home owners who are faced with a newfound problem; how to sell their current house. While buying a house is fraught with its own hurdles, selling in a competitive market can feel overwhelming, even impossible. While some brave souls choose to chart the treacherous waters of real estate on their own, they just are as liable to be successful as to flounder in the undertow. When diving into the world of home resale, it is best to have a licensed, experienced real estate agent by your side. For a small percentage commission on the selling price, you buy yourself decades of accumulated knowledge and industry expertise. To that end, we asked a few New Orleans realtors to weigh in on the best practices to maximize the value of your current home and find your dream house.
The journey of selling your home will begin with a consultation with your chosen realtor. This period is punctuated by lots of paperwork and one-on-one conversations so they can get an idea of your hopes for the sale. The most important aspect of the initial document signing will be the property disclosure. This is a legally mandated disclosure to make sure that your chosen real estate agent understands all the potential flaws or defects of your property. The more your agent knows about the home the better.
Once the paperwork is signed and the introductions have been made, your realtor’s sole goal should be to make your home as presentable as possible. That means taking professional photographs of the rooms, sprucing the lighting, prepping the house for its listing, and most importantly, finding strategic ways to upgrade the home for potential buyers. Every home suffers its own level of wear and tear throughout its life; paint fades, door hinges loosen, termites move in for the winter, and damage will happen. It’s your realtor’s job to turn that pumpkin into a coach, a process that includes making small repairs to the house, specifically in high traffic, high visibility areas of the home.
Jennifer Saltaformaggio, a 16-year veteran of the New Orleans housing market, cites these small repairs as key to maximizing your selling price.
“Let’s say you have old beat-up, granite countertops, maybe look at putting in some, some kind of quartz counters”, Saltaformaggio recommended. “If you spend the time to fix up your cabinets or you spend the time to create a good paint job, it really boosts the house in a specific way.”
Setting the Stage
As with all advice when it comes to financial matters, your mileage may vary based on how much money you do or do not wish to spend. But at the very least, do a thorough cleaning of the entire house and make sure that as many personal items as possible are out of sight. Caitlin Craig Brewster, who has spent the last seven years of her career working real estate in New Orleans, highlights the importance of putting your best foot forward.
“When I do a walk-through, I tell all my sellers that you need to basically move out,” Brewster explained. “Anything you are not using on a daily basis; you need to put in a box and put somewhere else.”
Nobody wants to walk into a stranger’s home. People want to walk into a blank canvas, a place they can project an entire future on, their future. The better you project that future, the stronger the interest in your home.
Another option for luring buyers is to offer a repairs allowance. This entails a set price point discounted off the selling price that can be allocated for repairs, painting, the general upkeep normally designated to take place before the listing. This can be enticing for sellers, as it takes away the burden of planning restorations. While his is advised by some, realtors caution that timing is everything in these types of deals. Kevin Rouchell, a realtor of 16 years, advises that while it might be advantageous to negotiate an allowance for home improvements, it might be best to wait a beat before playing that card.
“It depends on the desirability of the house,” Rouchell said. “If you’re in a bidding war, it might not be as attractive. But if not, it is best to wait until you’ve negotiated the sales price, gone under contract, and transitioned into the time of that’s called ‘due diligence’ for further negotiations”.
‘Due Diligence’ is the standard two-week period after a home contract is signed where the potential buyers get to run a fine-toothed comb over the home and property. During this time, the home buyer has the ability to walk away from the deal for any reason at all. Maybe the neighborhood isn’t what they thought, or the home requires more repairs than anticipated. No matter what the reason, this grace period means potential buyers have the chance to opt-out. Knowledge of these procedural rules and standards is one of the best reasons for trusting a realtor to handle these matters. For Rouchell, this is the benefit of hiring someone with experience whose goal is to keep their client at ease.
“It’s important to have a good agent that makes their clients realize, you know, I’m going to handle the stress. Don’t you worry about it. I’ll deal with the agents, and I’ll deal with the sellers, and we’ll work out the details.”
Saltaformaggio knows the value of good staging when describing a listing she has in the Irish Channel.
“We’re having movers move our own furniture into the home for the staging,” Saltaformaggio explained. “It’s what we call fluffing the house to make it ready to sell.”
This service could cost the real estate company as much as $1,000, pulling select pieces from their own collection to help lay out the home.
Saltaformaggio describes another property that sold earlier this year. For this client, she brought in her own contractor to do a walk-through with the client to give their own professional once over. The well-trained eye of a good contractor can catch all the potential improvements that otherwise might go unseen; such as painting the kitchen, the porches, and fixing the roof in places where the shingles have gone sour. After the house has gotten a facelift, there are more aesthetics to consider. Saltaformaggio recommends bringing in a professional maid to spruce up the interior and a landscaper to tame the exterior into something lush and inviting. After the specialists finished with the client’s home, Saltaformaggio was able to get $10,000 more for the home than the asking price, a coup for the client.
Initially your realtor will want to be realistic about what kind of price the homeowner could expect to sell their home for. According to Brewster, often times a conservative asking price is the key to a deeply coveted bidding war.
“I feel very firmly about not over pricing, even in a hot market. The markets are going to always dictate the price in my experience. So if you price it correctly, even if there’s 800 buyers, that price is going to escalate and you’re going to get $30,000 to $40,000 over asking just by driving the price up from a bidding war.”
The day of an open house can be nerve-wracking for any homeowner. Not only do you want to make the best first impression, but a positive experience of a potential home buyer could be the tipping point toward a sale. Once again, this is where the steady hand of your realtor comes into play. While some owners might be tempted to host the open house, realtors advise against this.
“Usually when people come to view a home, they feel actually a little more uncomfortable if they are talking in front of the homeowners,” Rouchell said.
At this stage in the process, your home should be a blank canvas to a potential buyer. They should be able to project their own kids running through the halls, their own art on the walls, their own lives led beneath that roof. The realtor’s job is to paint that picture for them and that painting is harder to pull off if the homeowners are wrestling for control of the brush.
The homeowners come into play when the property has a serious offer. It is at this point that both parties sit down with each other and begin the contract negotiations. Despite how TV and movies might portray this aspect of the process, Rouchell describes these conversations as being amicable.
“It’s usually at the closing table where you’re the friendliest, when you shake hands,” Rouchell said.
Selling a house is a give and take, and if the price is right, everyone can go home happy. Unless they don’t. And more often than not the pothole that trips up an otherwise smooth closing is the lender. Lenders are a key aspect of any home closing and realtors have their own interpersonal relationships with the lenders they trust; locals that know the market and who will answer a cell phone call from a person they have worked with before. But some people decide not to go with the tried and trusted lenders, they stray from their realtor’s advice and decide to go with someone else.
“Right now, I have a contract that I’m working but I did not recommend this lender,” Saltaformaggio said. “It’s a national company and literally, it’s just been hurdle after hurdle. So, using a really savvy agent is always a good idea and you’ll avoid a lot of pitfalls with experience.”
Can the financing of a home go through smoothly through a national realtor? Of course. But is there a higher odd of things going astray? Certainly so.
“I had a deal with a couple of buyer clients from California,” Rouchell described. “They were in the film industry. They had done a lot of work in several different states. They had a college buddy at Chase Manhattan Bank who boasted that he could close the deal in two weeks. Well, I had to get three extensions because they had to document a lot of income from various states. I thought the deal was going to fall through.”
Location is Key
While realtors are not in the business of telling anyone where to live, they do have the ability to point buyers toward the types of properties they are looking for. Their guidance of not only the local neighborhoods, but the topographical layout of the city itself can be invaluable, especially in New Orleans.
“If I had a buyer that said I really want to buy my first home in Lakeview. I grew up going to Saint Dominic, I love it there. But the houses around Saint Dominic are way out of my price range. Help me.” describes Brewster. “I’d say there’s a lot of new development in Gentilly. Are you comfortable with that neighborhood or changing your drive? And if they say yes, then I would look for flood zones, right? So, I would always help them by the most valuable property.”
Price is Right
So, now that your house is looking its Sunday best, the paperwork is signed, and a good realtor is captaining the ship, what’s next? It’s time to throw up a FOR SALE sign and blast pictures of your home across the internet. But before you start talking dollars and cents, your realtor will want to do a bit of research; comparing your home with other houses in the same area to see what kind of price you could be looking for; “comparables” as Rouchell calls them.
“I’ll compare your property to other properties from the past six to 12 months on the market and see what they’ve listed for versus what they sold for,” Rouchell said.
This is important because there are times when homes trend above their asking price. That could lead to a bidding war and means more money in the seller’s pocket. This phenomenon seems to be happening more as people move into New Orleans from other regions of the country. Rouchell has seen this ebb and flow with the markets, and can pinpoint a specific demographic as the main culprit.
“A lot of people are coming from out of state and the markets are different in their states”, Rouchell said. “Our rates may seem very affordable where they are used to paying $500,000 for certain three-bedroom properties. That may surprise some people who are not used to that price.”
This is proof positive that the real estate market has no allegiances to buyers or sellers, it flows with the economy and powers beyond a normal person’s control. But with a good realtor at your side, you can be sure that the tea leaves are being read as accurately as possible.
Selling to Buy
If all goes as planned, the last two weeks of any sale should be smooth sailing. Then, finally, the home can finally be sold. But there is one key aspect of this process that has yet to be discussed, the transition of home sellers into home buyers. In this scenario, realtors highly recommend taking care of your future home purchase before selling the home you have.
“One tricky scenario is home buyers who are looking to buy another home but they have to sell the present home first,” Rouchell says. “So, they don’t have a place to live in the meantime and it takes money to rent a place or move all the stuff into a pod.”
If this situation is presented, Rouchell recommends having your realtor write up an offer to buy a new home that is contingent on your current home selling. That way the trade-off is as clean as possible, and nobody is left hanging with two homes instead of the one they wanted. This means, of course, that the house being sold must be listed and viewed before closing on the offer to buy; otherwise, the offer would get lost in a swell of contractual maneuvering and the sale could be lost.
For buyers and sellers both, the real estate market can feel chaotic and overwhelming. Even realtors can’t fully predict what home prices of six months from now might look like, although they seem to be optimistic.
“I think it’s a more stabilized market,” Saltaformaggio said. “There’s more inventory in the New Orleans area, but homes are still selling.”
Rouchell is similarly optimistic, although he cautions home sellers that their timelines from consultation to sale might be increasing.
“I think you have to work a little bit harder than you did and maybe wait a month or two to sell the property, rather than in a day or two with three offers,” Rouchell said. “But buyers are not having to work as much…it’s evening itself out there.”
Brewster goes even deeper, explaining the benefits of buying the current market might not be as obvious as you might think.
“I think for sure that it is becoming more of a buyer’s market in the sense that I don’t personally think that prices are going to drop,” Brewster said. “But I do think what is going to happen is buyers are going to be able to negotiate more things. If yesterday they spent a million bucks, maybe tomorrow, they spend a million dollars, but they get credit for new siding or credit to closing costs paid.”
Nobody can tell the future, as everything in the U.S. economy is tied to everything else. A global pandemic wasn’t widely foreseen, neither was a crumbling housing crisis over a decade ago. The only constant through the years is that people want homes and a house is more than four walls and a roof; it’s a dream. It’s a vessel for your life. And while there are homes to be sold, there will be realtors around to help make that dream a reality.