Tuesday, August 21, 2018

"Why won't my house sell?" Six reasons no one is buying your home.

You decided to sell your home, discussed it with lots of other people, hoped there would be a a flood of interested buyers, but the offers didn't come rolling in. Here are my observations from 20 years as a home inspector and 30 years as a home buyer as to why some homes just don't sell very well, in no particular order:
1) Bad timing. There are ebbs and flows in the demand for real estate, affected by seasons, economics, interest rates and leniency of lenders. You might be led to believe it's a good time to sell because you've read an article or seen a news story that says 'home sales are booming' but those alleged news stories are 12 weeks behind the trend because actual home sales are a lagging indicator of market demand for housing - it often takes months between when a home is put on the market and when the final closing on the sale takes place. It has been my experience the best time to put a house on the market is around mid-March through April when things are starting to get warm and green, and people want to get out of the house they were cooped up in all winter. Another reason to list a house is April is families looking to move or change neighborhoods or schools often want to be done with the transition by late summer before the next school year starts, thus they start seeking out homes in early spring.
2) Over-priced.  Many home sellers are either greedy or scared of selling their home too cheap, thus they put too high a price on their property initially, which limits buyer interest in the house.  Buyers often search for homes online in order of value, starting with the lower valued ones first, so by the time they've found your house they've already scrolled past numerous similar homes at lower prices, which doesn't illicit much enthusiasm or interest in your house. The consequence of asking too much for a home up front is you'll miss selling opportunities, which ultimately costs you more money (insurance, taxes, utilities, mortgage interest, maintenance) than had you just priced it at or below market value in the first place. Another problem with over-pricing a home is the longer a home sits on the market, the less buyer interest it generates.
3) Unclean. Having a clean house might not affect the value too much, but it definitely affects the mindset of a buyer. Do some basic landscaping (trim trees and shrubs, mow and rake, remove weeds - especially those ones growing through the cracks of the driveway), wash windows, scrub / vacuum floors, dust walls, ceilings, lights, cabinets, trim and furnishings, and remove any evidence of pets including their odors. Also, get rid of clutter.   
4) Stylistic turn-offs. Believe it or not, other people think your house is ugly or doesn't have the kind of curb appeal they're looking for. Perhaps they think it's too gaudy, or too meek. It might have an awkward layout, outdated finishes, under-lit rooms, bad art, worn furnishings, or God forbid - brass hardware on doors and plumbing fixtures.  It is highly unlikely your tastes (or indifference to style) will be considered cool by the majority of those who might potentially be interested in your home. That doesn't mean you need to remodel everything; just understand that your house isn't suited for everyone.
5) Defects. Every house has problems, but some people are more turned off by the various problems than others. The defects that are often most likely to turn off buyers might include: settlement or foundation problems; groundwater (moisture problems in basements); large cracks walls or ceilings; roof or plumbing leaks, and; bad windows. 
6) Insufficient marketing or exposure.  The best way to sell a house is to make sure as many people as possible know about it, and that it's properly represented by clear images and accurate descriptions where publicized.  Listing a house through a real estate agent or on Zillow is a great start, but sharing the listing on social media such as Facebook, or on other sales sites such as Craigslist will help get it out to a wider audience, and one of those people not even looking for a house might have an in-laws' friend's cousin's nephew who would be perfect for your house, but wouldn't have even considered it if it wasn't for someone else sharing the information with him.
If you're having a hard time selling a house there are a few options to consider: Sometimes it's best to hold onto a home and wait for the market to change or the right buyer to come along, other times it's best to cut your losses and reduce the price to get it sold in a hurry. Other considerations to having home that's not selling might include: 1) taking down the listing for a brief period, hiring a real estate agent, or changing the agent you have, and relisting the property; 2) hiring professional cleaners or a staging company to spruce the place up; 3) doing some easy, quick improvements such as planting flowers out front, making simple repairs to minor defects, installing better light fixtures and brighter bulbs, repainting some walls, or replacing the flooring in the most prominent rooms. I typically recommend doing simple, easy improvements rather than making major expensive modifications to help sell a house that's already listed because usually the hassles and cost / benefit ratios of those major modifications aren't enough to make them worthwhile. 
Sometimes the 'pride of ownership' clouds objectivity. In our own heads we often we inflate our home's value while minimizing its problems. Unfortunately you can't easily control regional economics, market demand, or the location of your existing home, so if you need to sell your home chances are you'll have to either correct the issues that are turning off buyers or reduce the price, or both.

Sunday, April 1, 2018

Where Does One Find a Commercial Property Inspector?

Commercial Property Inspections - An Emerging Opportunity
Finding a property inspector qualified to perform comprehensive evaluations of commercial properties isn't easy. Every inspector I know is a "home inspector" specializing in residential inspections, not commercial, though many will perform commercial inspections on occasion. I'm primarily a residential inspector who's done some commercial inspections on the side over the last 18+ years, but as of late my income from commercial property inspections has grown exponentially because of the increased demand for (and limited supply of) commercial property inspectors. I've inspected medical offices, restaurants, multi-family dwellings / apartments, grocery stores, office buildings, warehouses, retail stores, manufacturing facilities, schools, agricultural operations, bars / taverns, and assisted care facilities.

Commercial buildings are fewer in number than owner occupied residential buildings and don't have as high of sales turnover rates, thus there's been less of a demand for inspectors to investigate the condition of commercial properties at the time of sale relative to whole home inspectors.
It's been my experience that most commercial buildings are sold without comprehensive general inspections. Instead of hiring a general property inspector, commercial property buyers or owners are often more likely to have maintenance personnel, civil engineers, or systems specialists (plumbers, electricians, HVAC technicians) check out various components of a property.
There are few contractors or inspectors that understand the comprehensive elements of a commercial property relative to construction, mechanical systems, and the extensive rules, standards and guidelines that apply to commercial properties. There's a breadth of uses for commercial buildings that have to be considered in context with regulations imposed by various different governmental agencies relative to those uses, and few inspectors have a good understanding of those regulations or how they apply to different buildings, of different styles, constructed in different time periods, and used for different purposes. I have a unique background because while in college I did commercial property maintenance for three summers and later worked as a plant engineer at a food processing facility. After graduation I was a project manager for two different contractors that did commercial construction and commercial restoration. That background has served me well.
Unlike owner-occupied residential structures, commercial buildings serve a single purpose for their owners - production of income - thus the costs associated with maintenance and repairs relative to rental income are usually the most important consideration for commercial property buyers and owners, and the inspector must be cognizant of that fact when evaluating the conditions and life expectancies of a property's various components.
Another challenge of inspecting commercial properties is working around tenants, thus an inspector must often work outside of normal working hours or hours of operation of a non-vacant property to perform the inspection.
Commercial property inspectors must be able to evaluate the comprehensive components of a property and convey those evaluations accurately to a buyer in order for the buyer to weigh the financial risks of a purchase. Failure of an inspector to find and report serious problems can be costly to a purchaser, and depending on whether the inspector might have been negligent at any point during the inspection or creation of the report, he or she might be liable for those oversights.
Commercial inspections are time consuming, require extensive knowledge on the part of the inspector, and can expose an inspector to huge liabilities, thus the inspections can be expensive. The cost of a commercial property inspection starts at around $750 and that cost might increase based on the property's size, value, accessibility, and/or the amount of time it takes to do the inspection and report.
I will continue to do home inspections as I've done for the last 19 years, but I'm expanding into the commercial market more aggressively to fulfill the growing need for such inspectors.