Katherine Tarbox is a senior editor with REALTOR® Magazine. Formerly, she was editorial director for Washington Life. She is the author of the international bestselling book A Girl’s Life (Dutton, 2000) and has made hundreds of media appearances including The Today Show, The Oprah Winfrey Show, and CNN.
Showcasing Real Affordability
Affordability is about more than price alone.
March 1, 2010
Two homes may be listed at around the same price, be located in the same neighborhood, and even look very similar. Yet one could end up costing the buyer thousands of dollars more over time.
From soaring utility bills to an impending roof replacement, many factors can add up to higher-than-expected monthly bills. On the flip side, properties with energy-efficient windows, newer appliances, and a clean bill of health from a qualified inspector could spell significantly lower ongoing costs.
While there’s no way to predict all of the surprise costs that inevitably arise with a home, it’s a smart practice for buyers to evaluate affordability beyond the asking price.
Is there more you could be doing to let potential buyers know the true cost of living in a home? Here are some strategies worth exploring.
Explain it better in the MLS.
When Stephanie Edwards-Musa, an associate with Prudential Gary Greene, REALTORS®, in The Woodlands, Texas, recently searched through expired listings in the MLS, she was expecting to discover that prices were way out of line. But to her dismay, she found that most homes were priced properly (in her opinion), just marketed poorly.
Key features that she knew the homes had and that buyers would likely be willing to pay for, such as double-pane windows and Energy Star–compliant appliances, were not included in the MLS writeups.
"Energy-efficient homes are very appealing to buyers, especially today when it seems everyone’s looking to save money on bills," Edwards-Musa says. She advises taking a close look at what’s been entered into the MLS for each of your listings to make sure all of the wallet-friendly features are included. "Now when I filter through listings for potential clients, I try to look at everything that’s not mentioned, from appliances to building materials," she says.
Use bills as part of your marketing.
Some buyers do ask to see the utility bills for a property before making a purchasing decision, but the state of Hawaii has taken that a step further. As of July 1, 2009, owners are required to declare the electricity costs for the most recent three-month period in which the property was occupied.
While this type of mandated disclosure is unusual, it does bring to question whether real estate practitioners should be doing a better job of sharing information about housing costs from the get-go. Tim Guilliams, an associate with Keller Williams Realty in Fort Mill, S.C., says that in cases where the electricity, gas, or water bill is less expensive than comparable houses in the neighborhood, he leaves a copy of the bill at open houses and explains why they’re lower—for example, if the home has special insulation.
Confront buyers’ worries.
Buyers are often apprehensive about what they can’t see. Does the property have foundation problems? Water damage? Working appliances? Since most people don’t hire a property inspector until they’ve made a decision to purchase, you can help put prospective buyers at ease by explaining what maintenance has been done and highlighting special features, says Ardell DellaLoggia, an associate with Sound Realty in Seattle.
"Even some of the best home inspectors can’t tell a 30-year from a 35-year shingle," she says. "So if you’re a seller and you know you have a 35-year shingle, highlight that feature. It should also go on your seller disclosure form," she says.