One of the biggest mistakes home sellers make is listing a home with obvious, although small, problems.

Any house — even a brand-new house — needs fixing from time to time. It’s just that buyers don’t want to be reminded of this obvious truth when it comes time to plunk down their cash.

As a seller, your top priority is to overcome any real or imagined obstacles buyers have. Fixing stuff that’s broken and selling a home that looks like it’s been impeccably maintained over the years is a good start.

Grab a pen and pad of paper and start by touring your home looking for things that need to be done. Perhaps your walls or trim need touching up with a fresh coat of paint. Or maybe you have a crack in a floor tile. Or, your wall clock needs a fresh set of batteries in order to display the correct time.

Check the bathrooms: cleaning or regrouting bathroom tile and fixtures will help make that room seem fresh and clean. Cracked window panes and ripped shades should be replaced before any agent or buyer walks through the door.

Not fixing broken items — especially those that can be easily fixed — sends a not-so-subtle message to the buyer that you don’t care enough to get these things done. Also, when the home inspector comes through (which he or she inevitably will), you know these items will come up in the “need to do before I’ll buy your house” list.

What should you fix? Anything that a prospective home buyer will think should be in working order on the day of sale, including:

* All appliances, including air-conditioners, furnace, boiler and hot water heater. They don’t have to be new, but everything should be in working order. Clean out lint from the dryer. Make sure the ice maker is working properly. Install new air filters in your heating and air-conditioning systems. Clean out the air-conditioning compressors. Make sure your humidifier is working properly.

* All faucets. If it leaks or doesn’t turn on correctly, repair or replace it.

* All windows. If any window panes are cracked or don’t open properly, fix or replace. And make sure to repair all screen doors and windows.

* All doors. No creaking, no doors that open only partially, no cabinet doors that don’t open at all. If the windows are painted shut, fix them so that they open properly.

* Any exterior problems. Replace missing roof shingles, repair your gutter if it has come apart, and regrade landscaping away from the house if you’ve been finding puddles or wet walls in your basement. Clean out your gutters and downspouts.

* Cracked or chipped paint. A fresh coat of white or off-white paint can help make your home seem bigger.

* Peeling wallpaper. Get some wallpaper glue and make sure to get the air bubbles out when you press it to the wall.

* Change the light bulbs. Make sure all light bulbs are working and swap out the burned-out bulbs. Houses are often too dark when buyers come through in the late afternoon or evening for a showing. Make sure every light you have has the brightest wattage possible, and that you turn on every light before a showing — even during the day.

* Carpet. If your wall-to-wall carpet has been pulled up in places, make sure it is tacked down firmly. And while you’re at it, you might want to have your carpets cleaned and floors waxed before you sell.

* Kitchen cabinets. Doors should open smoothly; hinges and knobs or pulls should be tightened.

As you’re walking around the house, remember that a prospective buyer will be opening up every drawer and door. How well these items work communicates a lot about how you’ve taken care of the property. Making a good impression here will go a long way toward getting your home sold quickly — and for more money.

If you can’t manage to get your home in selling shape yourself, check the Web for local handyman- or handywoman-type businesses to help you out. Typically, you can hire these folks for an hourly or flat fee to take care of your “to do” list.

While you may spend a couple of hundred dollars having someone install a new light fixture, fixing creaky doors or changing light bulbs, the results should make the expenditure worthwhile.

Consumers are demanding a range of real estate products and cost options and driving the real estate industry to a new era of specialization and segmentation, according to a work group that included real estate brokers, sales associates and consultants.

The work group, formed by a National Association of Realtors committee that is composed of Realtor association executives, also reported “conflicting consumer desires” – consumers seem to want both autonomy and personalized service in real estate transactions.

“The Consumer: Catalyst of Change,” a Realtor association report released this month that is based on the work group discussions, also noted that consumers are hungry for: “convenient online services and search tools, including full information about listed properties,” “immediate responses to their online or telephone communications,” “personal, friendly service from both the agent and the real estate company,” “a smoothly integrated transaction process with effective solutions for any hurdles along the way and no surprises at closing,” “low fees and commissions or a choice of fee packages,” and “a convincing sense that the agent and broker add value to the buying (and) selling experience.”

The report also states that “retail giants like Wal-Mart or Home Depot … dominate their sectors by offering the consumer a wider selection of choices and lower prices than their competitors. And companies that fail to respond to changing consumer preferences – even once-dominant leaders like General Motors – pay the price.”

The downward pressure on industry commissions and fees is likely to accelerate, according to members of the work group who were interviewed for the report, in part because of “a huge overcapacity of real estate professionals relative to the business.”

A one-size-fits-all real estate business model appears to be going the way of the dinosaurs, the report also states, and “brokers, agents, multiple listing services … and suppliers are successfully developing and utilizing different business models.”

Changes in technology have occurred at an even faster rate than changes in consumer behavior, according to the report, and this technology has served to empower consumers and alter their demands. It remains to be seen whether the continuing impact of the Internet on the real estate industry will be evolutionary or revolutionary, the report states.

“Today, there appear to be some online companies with the potential market reach to create revolutionary change in the real estate industry.

“Consumers are comfortable using leading auction sites to buy and sell large items – including some types of real estate. Fast, user-friendly search sites have created a new perception that any information – including data on communities, neighborhoods and properties – is instantly available and free.”

While similar reports in 2001 and 2003 focused on technological innovations and alternative real estate business models as drivers for change, the latest report “focuses on the consumer as the primary driver of change,” the report states.

Other trends and likely trends that members of the work group identified: a more diverse society, a smarter consumer, a new generation of tech-savvy buyers who want instant information, more requests for one-shop real estate services, a demand for a more efficient and transparent transaction process and cost structure, increasing industry consolidation, and a more rapid response rate to consumer inquiries.

One consultant, who is quoted in the report, said, “We have always said that real estate is a local business and one that is too personal to be done over the Internet. But there will be a certain number of transactions done over the Internet – maybe even 10 percent – in the next five years.”

A veteran agent, meanwhile, said there will continue to be a demand for the traditional model of high-quality service for a commensurate commission rate.

The report on the work group discussions also noted that consumer access to property data is a key issue for MLSs. “It is a given that property data will be available to the public in some manner so the debate is on control and content. Should a local or regional MLS allow consumers to access listing information – and retain control of the process – or simply serve as a database for brokers and their agents?”

Some working group members questioned whether changing real estate market conditions could impact alternative business models, while others said that the industry would likely continue to be populated by many types of business models.

Managing Internet leads and customer relationships today are important topics for real estate professionals, as is the growth in referral fees, according to the report. “One broker noted that more than 25 percent of all transactions now have some type of referral fee attached – a trend that could have significant consequences for their long-term profitability.”

Mortgage rates dropped this week as markets bet the Fed would soon pause its interest-rate hikes amid modest economic growth and declining home sales, according to surveys conducted by Freddie Mac and Bankrate.com.

In Freddie Mac’s survey, the 30-year fixed-rate mortgage fell to an average 6.72 percent this week, down from last week’s average of 6.8 percent. The average for the 15-year fixed-rate mortgage also dipped from last week, falling from 6.41 percent to 6.34 percent.

Points, which are fees charged by lenders for loan processing expressed as a percent of the loan, averaged 0.3 on the 30-year and 0.4 on the 15-year loans.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 6.35 percent this week, with an average 0.4 point, down from last week when it averaged 6.36 percent. The one-year Treasury-indexed ARM averaged 5.78 percent this week, with an average 0.7 point, down from last week when it averaged 5.8 percent.

“Mortgage rates drifted lower this week on indications that economic growth is moderating, inflation remains under control and the Fed just may pause raising rates for awhile,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Meanwhile, recently released new-homes sales for June fell to a lower-than-expected rate. That drop can be traced directly to higher mortgage rates, which are also helping to slow the growth of house prices in 2006.”

In Bankrate.com’s survey, mortgage rates dropped thanks to slower economic growth and hints from Fed Chairman Ben Bernanke that interest-rate hikes are nearing an end. The average 30-year fixed rate mortgage fell to a six-week low of 6.77 percent, and these loans had an average of 0.28 discount and origination points.

The average 15-year fixed rate mortgage, popular for refinancing, dropped by a similar amount to 6.39 percent, according to Bankrate.com. On larger loans, the average jumbo 30-year fixed rate is back below the 7 percent mark at 6.95 percent. Adjustable-rate mortgages were no different, with the average 5/1 ARM slumping to 6.47 percent, and the average one-year ARM dipping to 6.1 percent.

The decline in mortgage rates began with Fed Chairman Ben Bernanke’s testimony before the Senate Banking Committee last week and was underscored when the June existing-home sales indicated a widespread slowdown in the housing market, Bankrate.com noted. The housing market propped up economic growth in recent years but the fear now is that it will take the wind out of the sails of consumer spending and lead to a broader economic downturn. Yields on government bonds that initially declined due to Bernanke’s comments last week remained low this week as the inventory of unsold homes reached a nine-year high. Mortgage rates are closely related to yields on long-term government bonds.

Bankrate.com reported that fixed mortgage rates are nearly one full percentage point higher than one year ago. On July 27, 2005, the average 30-year fixed mortgage rate was 5.84 percent, meaning that the monthly payment on a loan of $165,000 was $972. With the average 30-year fixed rate now 6.77 percent, the same loan originated today would carry a payment $100 per month higher, $1,072. Despite recent increases, fixed mortgage rates remain an attractive refinancing alternative for adjustable-rate borrowers facing sharp payment adjustments, according to Bankrate.com.

The following is a sampling of Bankrate.com’s average 30-year-mortgage interest rates this week in some U.S. metropolitan areas:

New York – 6.73 percent with 0.19 point

Los Angeles – 6.8 percent with 0.47 point

Chicago – 6.9 percent with 0.05 point

San Francisco – 6.83 percent with 0.23 point

Philadelphia – 6.67 percent with 0.33 point

Detroit – 6.83 percent with 0.01 point

Boston – 6.82 percent with 0.09 point

Houston – 6.84 percent with 0.35 point

Dallas – 6.74 percent with 0.45 point

Washington, D.C. – 6.58 percent with 0.63 point

And they said the good times would never end.

Unfortunately for home sellers nationwide, the red-hot seller’s market of the last few years has cooled – dramatically in some places. The National Association of Realtors (NAR) estimates that existing home sales will drop 6 percent in 2006, from last year’s record highs.

If you’ve been waiting to sell, this isn’t the news you want to hear. But it’s still possible to make lemonade even if the market feels a little sour in your neighborhood. The best thing you can do is be realistic about your local market.

Here are some things to keep in mind:

Your home may not sell at the price you want

Although homeowners have been conditioned to believe that their home will appreciate by double-digit leaps each year, it may be tough to get top dollar right now. While you can price your home wherever you want, buyers are sophisticated enough to know what’s a fair price and what’s not. You’re better off pricing your home right when you list it than pricing it at some sky-high price and turning off prospective buyers.

Consider under-pricing your competition

With more homes on the market, some savvy sellers are under-pricing the competition in order to draw more attention to their home. If you do it right, you may end up in a bidding war and may wind up with a bid that’s above your original list price. The idea is that buyers will recognize a deal and flock to it in droves.

It’s tough to sell by owner in a slower market

Many home sellers dream of selling on their own and pocketing the commission. But it’s hard to sell on your own in a slowing market because you’re up against homes listed by agents who are putting their advertising muscle into getting their properties sold. If you want to try listing by owner, give it a whirl: price it right, use one of the companies that allows you to list it in the local Multiple Listing Service (MLS), and make sure it looks as good as possible. But if it hasn’t sold in six weeks, hire a full-service agent.

No one wants to fix anything

Vintage is in–if you’re in the clothing business. Movie stars wear vintage (that is, old) clothing by famous designers to walk on the red carpet. But when it comes to buying a home, new or like new is hot. So, get your home into selling shape by clearing out clutter, repainting rooms, packing away or giving away excess furnishings and clothing, and cleaning or replacing your carpets. Today’s buyer wants to move in and not worry about anything other than replacing window treatments (if that).

Curb appeal has never been more important

The Internet brings the world of home sales to our desktops, in millions of living colors. If the photos of your home don’t reflect a gorgeous exterior with a fabulous garden, it’s possible that prospective buyers perusing the Web will simply move on to the next listing. Make sure your exterior is in such magnificent shape that buyers have to stop for a closer look. That may mean hiring a professional landscaper to give your garden a makeover, or painting your exterior to make it shine.

While plenty of homes are selling, listing times are lengthening. Naturally, it would be nice to sell within a couple of days of listing your home, but the reality is that your home may sit for months before fielding an offer. The best thing you can do is keep visiting other homes on the market to see what’s selling, and how long it takes.

The other day a car salesman boasted to me that he was a consummate “professional,” and that he always did his job in a “professional” manner. I asked him how he knew that this was so, and he engaged in a long-winded conversation about satisfied customers, pleasing the manager, and being able to sleep at night. I listened carefully and wondered how he was so certain that he was meeting “professional” standards.

He was in a hurry so I didn’t bother to explain to him that there really is a technical, traditional definition of “professional” status, which includes three criteria: 1) specialized knowledge; 2) group identification and membership; and 3) agreed-upon education and training, including ethics training, certification by examination and continuing education.

While he might have met the first two criteria, I wasn’t sure that he could meet the third. To attain professional status, someone selling goods or services must be obligated to follow certain, written ethical standards of practice. This allows individuals in a specific industry to maintain specific behavioral expectations amongst themselves as well as toward their target consumers. Without a written code of ethics, standards are nebulous and therefore cannot be formally learned or enforced. This breeds moral chaos.

In contrast, with written moral standards, certification and training, individuals have a real opportunity to develop clear expectations and trust amongst themselves and consumers. In this case, they could actually become professionals.

The Value of Having a Fiduciary Duty

One of the earmarks of being a professional is that an individual has a fiduciary duty to each of his clients that is clearly spelled out in a written code of ethics. Two good examples of professional status are lawyers and Realtors.

In contrast, non-professionals are workers who do not have a fiduciary obligation toward the people with whom they do business. The extent of this individual’s ethical obligation is usually delineated by contract (which also makes it a legal obligation), informal standards of the industry, or traditional expectations of the company for which he works.

Two good examples of non-professional status are courtesy clerks at grocery stores (formerly called “boxboys”) and haybailers (usually young men who stack bales of hay onto flatbed trucks). More specifically, having a fiduciary duty requires a professional to never put his own interest above the interest of his client. It requires the highest good faith and fair dealing, which often requires the sort of guidance a parent provides to his or her children.

Professionals who carefully abide by their fiduciary duties consistently and fully create trust in consumers and in potential customers. This is good for business. Without this fiduciary duty carefully delineated in a written code of ethics, it is much more difficult for a group of individuals who work in a service industry to create trust amongst members of the public.

Dr. Kevin Boileau is CEO of BPI Consulting Group and co-executive director of Ethical Lending Foundation

Common myth about architects dispelled
Top reasons for hiring a professional to design home

Thanks to the old stereotype of the architect hunched over a drafting board, T-square in hand, many people still think that an architect’s main purpose is to draw “blueprints” (nowadays more properly called working drawings).

The trouble with this romantic notion is that it suggests that architects are paid to draw, when in fact, they’re paid to think.

In truth, producing working drawings is a tedious but relatively incidental aspect of the architect’s charge. It’s roughly analogous to taking a novel that’s been written in shorthand and typing it into a computer. The essential creative work–if it’s been done properly–is all but finished, and only the mechanics of formatting remain.

Alas, this preliminary thinking, which is the real kernel of the design process, takes a lot of time and effort and yet may not yield much of a tangible product until much later. Considering this dearth of physical results, it’s gratifying that many people nevertheless perceive why spending 15 percent or so of their building budget on architecture might be a worthwhile investment.

Still, there are also lots of perfectly intelligent people who are mystified, annoyed or even angered that a few sheets of drawings should take months to complete, cost them many thousands of dollars, and further delay them from getting their project under construction. These people quite reasonably reckon that all that money spent on mere paper could buy them a bigger Jacuzzi or a fancier front door.

I can only counter such reasoning by pointing out that architects provide a service, not a commodity. To say that your architectural investment only buys you a few sheets of paper is like saying that the cost of a Harvard education only gets you a lousy little diploma.

There are plenty of familiar arguments for hiring a licensed architect, most of them having to do with the technical side of the process. For one thing, the high level of detail found in a good set of working drawings–far from scaring off contractors as some people fear–actually makes the bidding and construction process easier and more accurate. For another, an experienced architect can help circumvent building-code booby traps that can make for nasty (and costly) surprises during construction. These services alone can save thousands of dollars in lost time and change orders. Hence, that seemingly extravagant 15 percent fee can repay itself quite rapidly.

Beyond these cut-and-dry reasons for hiring a professional, however, there’s one more–perhaps the only one that architects care passionately about—and that is the pursuit of good design for its own sake. Obviously, there are cheaper ways to get plans drawn than by hiring an architect, and no doubt there are times when a design that’s merely “good enough” would probably suffice. But from this architect’s perspective, at least, there can’t be much magic in this kind of undertaking. After all, humanity’s rise over the millennia has come, not from doing things well enough, but from doing them as well as we possibly could.

Most buyers have inspections done before they conclude a home purchase. However, recommendations for further investigations often are overlooked, and this can have serious consequences.

One buyer bought a striking contemporary in a multiple-offer competition. The home inspector recommended that an engineer evaluate the foundation. The buyers failed to heed this advice. After closing, they began to worry about the unevenness in the floors. They consulted with an engineer who told them that the foundation was faulty and that the house was moving.

Had the engineering inspection been done during the inspection contingency time frame, the buyers could have renegotiated the contract with the sellers. Depending on how the contract was written, they might have been able to cancel the contract without penalty if they hadn’t wanted to go ahead with the purchase.

However, these buyers discovered the seriousness of the problem after closing. At that point, their recourse was mediation and if that failed, binding arbitration, due to the provisions of their purchase agreement. As with all such proceedings, there’s no guarantee that they will work out in your favor.

Other buyers bought a relatively new house that didn’t appear to have any glaring defects. They noticed a damp smell, but attributed this to the fact that the house was located near a creek. They did not do any further investigations to find the source of the musty order.

After the first heavy rains, the buyers noticed staining on the interior walls underneath the windows, as well as stains on the exterior stucco. The house was located in a relatively new subdivision in a small housing tract in Marin County, Calif. Other neighbors noticed similar problems.

The homeowners whose homes were adversely affected hired an attorney and sued the builder. However, the builder didn’t have insurance to cover construction defects. And, he didn’t have the money to fix the problems.

There are several reasons why buyers don’t execute further inspections. One is the cost. Spending several hundred dollars or more to make sure you’re making a wise investment is minimal when you consider the cost of correcting serious problems. In both of the examples above, the remedies cost thousands of dollars.

Another reason buyers forego recommended inspections is lack of time. The time frame for inspection contingencies is negotiable between the buyer and seller. Sellers like to see the shortest contingency period possible. This can boomerang on the seller if it means the buyers don’t have sufficient time to complete due diligence investigations.

HOUSE HUNTING TIP: If you need more time for inspections, ask the sellers for an extension. One way to sweeten the request is to remove your inspection contingency subject to an extension of time to complete specific further inspections. This way the sellers know that you’re generally satisfied with the condition of the property, but need more time before removing the contingency altogether.

In some cases, further inspections can be expensive. Some buyers don’t proceed because they are short of funds and don’t want to spend them on what might be a losing proposition. In this case, before giving up, you might ask the sellers to share the expense. If the issue in question is new information that the sellers were unaware of when they put the house on the market, they might be receptive to this approach to resolving the problem.

Home inspection reports are often loaded with disclaimers and recommendations to consult with other licensed professionals. The key is to determine which of these recommendations must be done.

THE CLOSING: Contact the home inspector directly and ask him to distinguish a cautionary note from a strong recommendation.