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Why is My House Not Selling?
And what can I do to help it sell?
Recently I have received several calls from clients asking why their house is not selling. We recently ran a seminar and one of the sections was on how to improve your chances of selling your home. So here is a look at the market and maybe it will provide some explanation as well as some tips on how to improve your chances of selling your home.
Is the market dead? Certainly not!
Based on recent activity, the market is very lively and vibrant. In August we have sold properties and have around 150 inquiries to handle, most of them genuine buyers and most of them looking to buy in the next 3 months. So the market is not dead by any means.
The UK market is very slow and UK buyers are weak on the ground, but as they only represent 5% of the current market, it shouldn’t affect the market too much. Those who are searching are looking for a bargain. They are looking for something generally under 150,000. Why this figure – I can only guess, but I believe that many of the buyers from the UK are people who decided to move to Spain a while ago.
However, with the dip in the UK market, they couldn’t sell their homes so they waited. Then they decided they didn’t want to wait too long, so they re-mortgaged their house (I believe June of this year saw the highest number of mortgages for several years). This means that instead of the £300 – £400,000 they would have had, they had between £60 – £100,000 and are now looking at a second home rather than a main residence.
For the rest of the Northern Europeans it’s the Dutch and Belgians mostly with some from the Nordic countries trickling down. Those from the Benelux countries are looking for a lifestyle change and tend to be younger families or those not quite ready for retirement who want to earn a small living. They tend to look for large villas with a good plot, but prefer to stay near the beach. Others are looking for larger premises to operate as a hotel.
The rest of the market is Spanish. The Spanish are still buying and at least 60% of our inquiries and 80% of our sales are to the Spanish. But generally they are looking at a first time home or a beachfront vacation home. They also don’t have more than 250,000 whatever they buy.
So if we look at a summary of what people are looking for, it goes something like this
Townhouses and apartments within 15 minutes of the beach – up to 150,000
Townhouses and condos inland around 100-120,000
Beach apartments lines 1-3 up to 200,000
Villas by the beach 200 – 400 000
Inland villas on large lots up to around 300,000
There is a good market for blighted properties to reform at around 100,000 but most looking for these types of properties want a real bargain – eg. do some work on it and double their money.
Hotels and rural housing – from 200,000 – 800,000 – both on the beach and inland – minimum 6 beds
And that’s pretty much what we’re seeing.
So why isn’t your property selling?
The most obvious reason is price. No matter what the market is, there are always buyers and any good value property will sell. It is estimated that the market in this area (La Safor and Marina Alta Region) is 30% over price and based on what we see I would agree in most cases. How do you know if your property is priced right? Well, a simple rule of thumb is as follows.
If you have a cottage/cottage etc with a plot of land, use the following to calculate the value of your land.
1. if the land is urban, in the interior it is worth from 25 to 80 euros per m2. From the beach it is worth up to 250/M depending on the location (this high price is the price in the main areas like Moraira facing the sea) in Oliva it would be around 100 – 130 per m, so multiply the number of meters by this figure and you have land value.
2. If it is suelo rustico, then it is worth 7-10 euros per M regardless of the house.
3. To calculate the value of the house, if it is new, then it is worth about 1100 euros per M, if it is old, 900, if it needs reforms, then 500-750, depending on what needs to be done.
4. If you have an apartment or house in the city, then multiply the m2 by 1300 if it is new or 1100 if it is old, 500 if it needs a lot of reform or somewhere in between, Of course there is a premium for being closer to the beach (like it or not people still want to be near the beach and will prefer to buy there) so add about 20% – 30% for similar properties on the beach (within 10km). Also, if the property is an apartment and does not have an elevator, then deduct 20% of this value
This of course does not take into account things like pools, location, views if an apartment has a lift (which devalues a house by 10-25% depending on the floor if there is no lift) etc, but it will give a rough guide and ready for the value of your homes. If it is off by more than 10%, then you will have a hard time selling in today’s market because this is similar to the formula used by banks to calculate mortgage values.
What you can do to make sure your home sells.
You should work closely with your agent on this. Most agents work hard to get a sale in today’s climate, but they are badly let down by sellers who claim they want to sell but put so many obstacles in the way that make it difficult. So what follows is a checklist of what YOU can do to help sell your home.
Before your first visit
1. Clean it up! When the agent comes to take pictures – do you really want people to see the Junk in the spare bedroom, the tools all over the living room floor and the dog basket in the kitchen in the picture – no of course not – so clean your house first that the agent comes to take photos and before each visit. It sounds like common sense, but you’d be surprised how many people don’t and have a take-it-or-leave-it attitude. Don’t be surprised then if the buyer has the same attitude and leaves it.
2. Be available. There is nothing more frustrating than hearing “I can’t make it tomorrow I have to go shopping” or some other excuse. We get people from the UK to look at houses and they generally have a few days here. When your agent calls to request a viewing – make the time (or don’t complain that your house isn’t selling). If you can’t, get someone else to do it. Better yet, give the agent a key. He is working for you to help you sell your house – so help him. Postponing for two days gives the buyer the opportunity to view 10 or more homes – so yours may not even get a viewing.
3. Take a look at the price. It is a pity that in Spain it is generally the buyers who set the prices – and the agents do not bother to tell them whether this is right or wrong. Ask your agent to do a proper appraisal. Or better yet pay for a bank appraisal. Then put your price below that. Remember that agents commission must be added to the price – 3-6% is normal although you may be able to negotiate with your agent. But do you really think your home is worth what you’re asking? If it is off by 5% it could be the difference between getting clients and not. Almost every time a house doesn’t sell it’s because of the price – usually they are much more expensive but the owner believes their house is the best – don’t we all just need a reality check
4. Time for a change. Paint the house. If it is cottage paint inside and out. It’s a small cost that makes a big difference. It gives the house a clean feel and painted in non offensive bright colors like cream or dare I say Magnolia/Eggshell. It doesn’t matter if you like it or not, you won’t be living there much longer.
5. Get rid of the clutter. Even large rooms can feel small with a lot of clutter around. It’s enough to have the essentials you need to live – store the rest in a garage or rent a storage room. Clutter is the second biggest killer of home sales after cleaning.
6. Consider making a change – it can be done quite cheaply. A few soft furnishings, well-placed pictures and a mirror in the right place, the table set as for dinner, plants placed in strategic places – they don’t cost much, but the effect is incredible.
1. Make sure everything is cleaned and sanitized.
2. Remove pets If you have cats, dogs or any other animals, remove them when people come over. Your dog may be a little gem, but many people are afraid of dogs and don’t want to be around when dogs are around.
3. Also be sure to remove pet odor before visitors arrive. If you have cats, NEVER let them into the kitchen (or even the house) when a visitor is there – you may believe they are the cleanest pets on earth – but the visitor is not in the habit. Also keep in mind many people suffer from allergic reactions to cats – don’t lose a sale because of it. Take the dogs for a walk (don’t leash them outside because they still bark and can scare people.)
4. In summer, turn on the AC for half an hour before, In winter, turn on the heating. A comfortable temperature is 21 degrees. It gives an environment and people generally feel comfortable at this temperature.
5. Open all doors and windows – unless of course it’s raining cats and dogs outside. Make the place look bright and airy – this is a great sales tool – even for Spanish buyers. And make sure all the blinds are open – don’t sit in a dark house when visitors come.
6. Make an impressive introduction. The entrance is the first thing people see and the first impression is the most important. Clean the garden, tidy it up, put plants outside the door, make it welcoming. If you live in an apartment, make sure that the communal entrance is clean and tidy, get rid of bicycles and strollers from the entrance – a friendly word with your neighbor will be enough.
7. Wind. Get away from any wind. Do not cook smelly foods such as garlic or fish beforehand. It can be uncomfortable. Once I went to show a house and the owner was cooking something awful – it smelled like old wells and made my eyes water – we got out so fast. Shame because it was a beautiful house.
8. Be cheerful. If you look miserable, the buyer will pick up on that and probably won’t want to be there. Ideally, leave the house when the visitor arrives and let the agent do his job. This may be out of place for a buyer who has the owner there. It means they cannot open with the agent.
9. Be calm. Never try to sell your home. That’s what the agent is there for. What you might consider a unique feature and selling point could be someone’s worst nightmare. You don’t know what the customer has told the agent beforehand, and your pearls of wisdom may be exactly what they didn’t want to hear—so keep quiet unless you’re asked a question. Then of course answer honestly.
One of the most annoying things about real estate agents in Spain is that they rarely call you back to let you know what’s going on. If they don’t call you, then call them. Find out what the reaction was. Ask the agent before the visit to brief you on customer feedback and LISTEN to what they say.
If it’s something you can easily change, change it. But always call the agent afterwards – give it a day or so.
We hope this has given you some ideas to help you sell your home. If you are desperate to sell and have a
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