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Should A Seller Replace Old Carpet Or Offer An Allowance?

Should I Replace the Carpets when I’m ready to sell my home? This is a question that real estate agents hear time and time again. So lets look more closely at this topic. Most real estate agents will say “Yes, absolutely replace the carpet”. But why?

1. The Home Will Show Better

The most obvious answer is that it will make your home show better, and thus impress potential buyers more and hopefully result in a quicker sale of your home. For a buyer, walking into a home with a dirty and disgusting carpet is a real turn off. Even if the house is otherwise in great condition, the buyer’s first impression was the ugly carpet, and this will stick with them throughout the tour of the home.  (Note that if the carpet is in good condition, a professional cleaning should suffice).

2. Seller Saves Money Overall

A common seller concern is that buyers may not like the new carpet and would rather pick their own style and color. The answer to this is to pick a neutral beige color with a style common to the area and neighborhood. As a seller, you should understand that a buyer is going to ask for a credit, or allowance, for replacement of old worn out carpet. The buyer will also generally make a lower offer if there is old or damaged carpet. The buyer feels he or she should be compensated for the hassle of having to replace the carpet after closing, thus delaying moving in for a week or more. In most cases, the seller will save money by replacing the carpet.

As an example, a seller of a $200,000 home decides to replace the carpet and the replacement cost is $3000. The buyer makes an offer of $190,000 and the deal closes at $195,000.

In another scenario, the seller decides not to replace the carpet of a $200,000 home. They buyer wants a credit to replace the carpet. But also, the buyer feels the home is not worth as much due to the first impression of the ugly carpet. The buyer also feels the inconvenience of having to replace the carpet is worth a sizeable discount.  The buyer then offers $185,000 and asks for a $6000 carpet allowance. Assuming they meet half way on price, the deal closes at $192,500 and the buyer ends up negotiating a $5000 carpet allowance. In this scenario, failing to replace the carpet cost the seller $7500. In the previous example, replacing the carpet only cost the seller $3000.

In the sale of a home, every situation, and every buyer or seller is going to be different. The above recommendations and scenarios are based on what one would generally expect to experience in a real estate transaction where carpet is an issue.

Related Articles On Pensacola Real Estate News:

Home Improvements: Which Ones Really Pay Off

How You Can Save Big Money On Home Improvements

Posted by Karl Burger | Currently 1 Comment »

How Many Photos Generate The Most Interest In Your Home?


Point2 Technologies has released the findings of its 2008 Point2 Photo Effectiveness Study. The results of this study should be especially useful for both real estate agents and home sellers.

Over 100,000 real estate listings were sampled!

The graph clearly shows that more real estate photos generate more interest. But look what happens when the photo count goes from 15 to 16. Amazingly, there is a 20% jump in Views, Interest, and Leads.



The purpose of this study, according to Point2 Technologies, was to examine the impact of photos in driving real estate transactions

Below is a quote from the Point2 Technologies article about the study:

“Results strongly suggest that adding more photos generates better response to real estate listings, reconfirming trends observed in a 2007 study also by Point2.

The Study tracked three trends, namely consumer Views, Interest and Leads. All increased significantly as the number of still photos related to the listings increased.

Listings that did not include any photos performed very poorly, generating little consumer response and business. Specifically, the Study showed that listings with zero photos attract, on average, a mere 0.02 percent of the detailed listing views that listings with 21 to 36 photos enjoy. Listings that featured a single photo fared significantly better.” 

Here is a definition of the terms used in the study:

: how many times a real estate listing was viewed online

Interest: how many unique visitors interacted with a real estate listing, i.e. going beyond the initial set of photos to see a virtual tour, do a mortgage calculation or access more home details

Leads: the number of unique visitors who contacted the real estate broker or agent 

What does this mean for real estate agents and home sellers? 

Very simply, ensure that the real estate listing has 16 or more photos for maximum effectiveness.

I did my own little study using homes listed for sale on the Pensacola real estate market. I did not sample 100,000 homes. I sampled 100 homes. All were between $150,000 and $250,000 and were in various areas of Pensacola, Milton, and Gulf Breeze.

To sample, I did a search for homes in the aformentioned price range and areas. I then picked every 5th home in the list. That seems random enough to me. There were a lot more than 100 homes available to sample in the list, but by the time I got to 100, I was sick of sampling.


The first column shows the number of pictures that were included with the real estate listing in the Pensacola MLS.

The second column shows the percentage of my sample that met the picture criteria. In other words, 10% of the homes sampled had only 1 picture. 20% had over 20 pictures. 

Overall, this tells me that most Pensacola real estate agents are doing a very good job of including pictures. Around 68% included over 10 pictures.

However, with 16 being the magic number, 63% of the agents are missing a golden opportunity by including 15 or fewer pictures, according to the referenced study.

Is it always good to include pictures with your real estate listing?

Well agents, if your pictures are bad enough to end up on Athol’s Bad MLS Photo site, maybe you should just focus on working with buyers.    

Related Articles On Pensacola Real Estate News:

How Important Are Pictures For Your Listing?  


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How Home Sellers Can Protect Themselves From Liability For Unpermitted Improvements

There have been a lot of improvements made to real estate in Pensacola. With so many homes being damaged by hurricane Ivan in 2004, most homes had some type of repair done. Many home owners took this as an opportunity to upgrade their homes. But what about permitting these upgrades? When selling real estate, permits for repairs and improvements can become an issue.

Installing WindowMany improvements made to a home require permits. For example, installation of new windows, new Heating/AC systems, a new roof or  electrical work will require a permit.  However, often times home owners would like to save a little money and do the work themselves or with some friends. It is, after all, much cheaper to buy a few cases of beer and get your buddies over for a weekend re-roofing party, rather than hire a licensed roofing contractor. How many unlicensed “weekend home improvement experts” do you know?

The problem with unpermitted work comes when it is time to sell the home. According to the most current real estate contracts, the home sellers should be able to back up any work done that requires a permit with proof that the work was permitted and approved by a licensed county/city inspector.  It is very important to note that these improvements may have been done PRIOR to this seller’s ownership of the property, but the current owner is held responsible for insuring that all improvements to the property were properly permitted.

Now that doesn’t really seem fair, but that is the reality of it.

So how does a home owner handle selling a home on which unpermitted work has been done? Contact an attorney, and provide FULL DISCLOSURE!!!

This means full disclosure in writing in the real estate disclosure forms or the real estate contract. Do not use any language that suggests or implies that the work was done correctly, or “according to building codes”.  Such statements or implications can get sellers into future legal dilemmas. Real Estate Home Improvement

When disclosing that work was done without permits, sellers should state that “no guaranty is made regarding compliance with building codes.” Sellers should also recommend that buyers hire a qualified home inspector to evaluate the condition of the improvements, as well as the rest of the property. With that kind of disclosure, sellers should be reasonably safe from complaints after the home is sold. Of course, in this litigious society, there are no guarantees.

I am not an attorney, so the best advice I can give in this situation is to contact an attorney, and take the attorney’s advice, which will likely be to provide full disclosure as described in this article.  There have been cases of sellers being sued for damages from unpermitted work years after the sale of a home. Example: Faulty unpermitted electrical work causes fire resulting in the death of a resident. Huge lawsuit! Don’t let this happen to you.


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Earnest Money: Clarifying The Confusion For Pensacola Home Buyers – Part 2


Earnest money shows commitment to buy. My real estate experience has shown that many home buyers in the Pensacola real estate market do not understand the concept of earnest money. This is an important concept to understand when making an offer on Pensacola real estate. 

Click the link below to read Part 1 of this article:

Earnest Money: Clarifying The Confusion For Pensacola Home Buyers – Part 1

In Part 1 we discussed what earnest money is and how much should be offered when buying a home in Pensacola Florida. In Part 2, we will address the following questions:

1. Who holds the earnest money?

2. What ultimately happens to the earnest money?  

These are 2 questions I encounter regularly when working with Pensacola real estate buyers.

When a buyer makes an offer on a home, the buyer will give their real estate agent a check for the earnest money deposit. The real estate contract Earnest_money_check_writing_RS250will dictate to whom that check is made payable. The check may be written to the real estate broker, who is required to deposit it in a trust fund. However, this tends to be a burden on the brokers, so the check is commonly made payable to the title company that is expected to handle the closing of the real estate transaction. The title company holds the earnest money in escrow.

At the end of the real estate transaction, whether it be a successful closing or fail to close, there are 3 things that can happen to the earnest money.

1. It is applied to the purchase price of the home
2. It is returned to the buyer
3. It is disbursed to the seller

If all goes well and the real estate transaction results in a successful closing, the earnest money is applied to the purchase price of the home. Thus if the home is sold for $100k and the earnest money deposit was $1000, the buyer will need $99K to close.

If the real estate transaction cannot be completed, the earnest money will be returned to the buyer if the buyer complied with the terms of the contract. Most real estate contracts, including those used in the Pensacola real estate market, require that the buyer apply for financing within a certain number of days from the effective date of the contract. If the buyer makes a good faith effort to obtain financing and cannot, the earnest money will be returned to the buyer. If financing is obtained, the buyer still has the option of having a home inspection. If the buyer is not satisfied with the results of the inspection, the buyer can back out of the the contract and have the earnest money returned.

This has been a simple overview of how earnest money can be returned to the buyer. I go into much greater detail with my Pensacola real estate clients with regards to their obligations under the real estate contract.

If buyers fail to act in good faith in complying with the terms of the real estate contract, the earnest money can be disbursed to the seller. This generally happens if the buyer is determined to be in breach of the real estate contract.

A good real estate agent will do everything possible to prevent breach of contract, but ultimately it is the buyer’s responsibility to meet the terms of the contract.


 As a final note, there are 2 important points that I need to address in regards to earnest money. These points are:  

The fact is, earnest money is not a requirement of an offer to purchase real estate. If a seller is willing to accept an offer without an earnest money deposit, so much better for the buyer. However, the reality is that most sellers will require an earnest money deposit.

Buyers also need to know that they must have the funds in their account to cover the earnest money check. The check is not held by the designated escrow agent until closing, it is immediately deposited into an account. Thus the earnest money funds must be available immediately. A bounced earnest money check can cause serious problems with the real estate transaction.

Look for detailed discussions of real estate contract terms is upcoming articles. We’ll see just how interesting I can make a contract discussion. I can hear the yawns already. 

Click on Pensacola Real Estate News for a complete list of articles indexed by category.


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Earnest Money: Clarifying The Confusion For Pensacola Home Buyers – Part 1

Earnest money is all about commitment. My real estate experience has shown that earnest money is a topic unfamiliar to many home buyers in the Pensacola real estate market. I have worked with many clients who did not understand the earnest money concept when making an offer on a Pensacola home.

We’ll tackle the 4 biggest questions I have encountered when working with Pensacola real estate buyers:

1. What is earnest money?Earnest_money_check_writing_RS250

2. What is the proper amount of earnest money to put down?

3. Who holds the earnest money?

4. What ultimately happens to the earnest money?  

We’ll start with question 1, “What is earnest money?” Earnest money is money that the buyer provides along with an offer on a home. It is considered “good faith” money. The buyer is offering good faith to the seller that the buyer will do everything possible to obtain financing and purchase the home. Without an earnest money deposit, the buyer has nothing to lose by backing out of the real estate contract. Note that there are legal ramifications, but these are rarely pursued due to the legal costs involved. In other words, the real winners end up being the attorneys.

When the seller accepts an offer, the seller effectively takes the home off the real estate market. This is done by having the real estate agent mark the listing as “Pending” in the Pensacola MLS. Thus the seller is risking losing a potential buyer while the home is under contract. Buyers in the market will no longer be looking at this seller’s home. In addition, the seller is paying holding costs up until the home is sold. For this reason, larger earnest money deposits make the seller more comfortable with the potential buyer. Larger earnest money deposits show that the buyer is more committed to the purchase of the home. 

2. What is the proper amount of earnest money to put down?

The answer depends on the price of the home and local real estate market conditions. Typically in Pensacola homes under $100K, a $1000 earnest money deposit would be acceptable. For higher priced homes, generally 1% of the purchase price is generally considered acceptable.

Real estate market conditions are also a factor in the amount of an earnest money deposit. Pensacola, as with much of the country, is experiencing a strong buyer’s real estate market. In a buyer’s market, buyers generally offer a minimum earnest money deposit. However, in a seller’s real estate market, as Pensacola experienced after hurricane Ivan, the amount of the earnest money deposit can make the difference between acceptance and rejection of an offer. If a seller has multiple offers, or expects more offers soon due to market conditions, the seller is more likely to accept an offer with a larger earnest money deposit, all other factors being equal. Temp1

A common negotiation tactic used by seller’s real estate agents is to include an increased earnest money deposit in a counteroffer.

In some situations, when acting as a buyer’s agent, I counsel my buyers to break the earnest money deposit into 2 separate payments. A minimum deposit is included with the offer. Another earnest money deposit is promised after the completion of a home inspection. This method works in the interest of both the buyer and seller. The seller ultimately gets a larger earnest money deposit, and the buyer learns of the condition of the home before making a full earnest money deposit.

In part 2 of this article, I will discuss questions 3 and 4. Who holds the earnest money, and what happens to it in the end. 

Click below to read Part 2:
Earnest Money: Clarifying The Confusion For Pensacola Home Buyers – Part 2 

Click on Pensacola Real Estate News for a complete list of articles indexed by category.

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