It’s All About You

In past blogs I’ve talked about everyone involved in every transaction you do.  From the REALTOR, to the Lender, to the Inspector, the Appraisers, the Stagers, and on and on. There’s a lot, but I wanted to talk about the one person I haven’t talked about yet.  That is – Y-O-U! That’s right, you.  There wouldn’t even be a deal if you weren’t there.  The fact is, in every real estate transaction, it’s all about you. Whether you’re the buyer or the seller, it’s your deal.  It’s not just because you’re buying or selling a house, and it’s not just because you’re the client.  It’s also because every decision in the transaction is yours to make.   Now everyone involved plays a huge role, but for the most part, everybody else’s role is about giving you information, so you can make those decisions based on fact.

Let’s look at that, starting with the REALTOR.  If you’re buying, your REALTOR will show you homes you can afford in the areas you want to live.  They’ll tell you which prices are high, which are low, and which are right on the money.  They’ll discuss the condition, the features, and the pros and cons of each house.  They’ll examine the comparable properties nearby, what’s sold, for how much, and what did not sell.  That’s solid data, which helps you decide which house to buy.

If you’re selling, it’s the same drill.  Your REALTOR will give you data about the market.  About comparable home sales, about today’s buyers, and about your house, what’s good and what’s not so good.  What you can do to make it appeal to more buyers and how much to list your house for.  Again, solid data, which will help you decide exactly how to sell your house.  That’s just the beginning, your REALTOR will continue to provide solid information and market data throughout the entire transaction.  But again, every decision is yours.

The same dynamic happens with every other member of your team as well.  The Stager says they can either rearrange your existing furniture or bring in brand new rented furniture to make your house shine.  The decision is yours.

The home Inspector says the place needs a new roof, as the buyer you’ll decide whether to fight for it.  If you’re the seller, you’ll decide whether to pay for it.

The Lender tells you that if you pay a few points you can buy down the interest rate.  The decision is yours.

It even happens at the closing table, the title company will ask you if you want your profits wired into your bank account or whether you want a check.  The decision is yours, but do you really want to walk around with $100,000 check in your pocket?  It’s not a great idea, but still, the decision is yours.

You’re the boss and that’s exactly why it’s so great to have your very own real estate dream team.  They will provide information, data, and the facts and figures involved so that every decision you make in the biggest transaction of your life will be based on cold, hard facts.  And that is a dream come true.

How to Amp Up The Resale Value of Your Home

Whether you’re putting your home on the market this year or in the next five years, it is a smart decision to start building your home’s resale value now. Here are some ways to create a comfortable home while making it easier to put more money into your bank account on closing day.

Small Maintenance and Repairs

If you think that home maintenance on the weekends is a low priority, think again. The small chores you do around your home prevents it from losing value. Neglecting small maintenance and repairs causes 10% of your home’s value to walk out your door and slip through your windows. Most appraisers claim that homes showing little to no preventative maintenance can depreciate from $15,000 to $20,000!

Preventative maintenance can also actively increase your home’s resale value — according to a recent study, by about 1% per year! Also, because homebuyers generally notice any repairs needed upon buying a new home, proactive maintenance lets the homebuyer know that he or she will not have to spend extra money to maintain the basics. This makes your home more attractive, and thus more likely to get higher priced offers.

Remodeling Ideas and Tips That Work

Studies show that a home valued at $150,000 could increase its value between $8,300 and $19,000 with the addition of landscaping. These studies also note that positive landscaping can reduce the amount of time your home spends on the market!

Changing out the doors of your home is also generally a smart design choice. Lately, fiberglass and steel doors are a coveted aesthetic by homebuyers. A steel door costs $1,335 but has a whopping 91% return on investment. A fiberglass door, on the other hand, costs about $3,126 with an 82.3% return on investment. Likewise, a new fiberglass or steel garage door distinguishes your home from the rest on your block and provides a 91.5% return on a $1,652 investment.

Finally, matte paint finishes are trending this year because of their transitional qualities. With a matte finish, your potential homebuyer can easily match his or her stainless steel or black and white appliances. It’s touches like these that make your home appealing to a wide variety of homebuyers, and that drives up its resale value.

Your Needs and Buyers’ Wants

On that note, if you need to renovate your home, be sure to consider how those changes will affect its appeal to future buyers. Knowing design trends will give you the opportunity to make changes to your home based on where your needs and your potential buyer’s desires intersect, thus increasing your property’s resale value drastically.

Designers and design websites provide great ideas when you’re brainstorming home renovations. Keep in mind as you research, however, that you don’t want to sacrifice your needs for a comfortable home just for the sake of what you think a future buyer will want!

Therefore, before you begin making any changes to your home, consult your real estate agent. Real estate agents, because we are constantly working with new buyer clients, have insider insight into what home buyers are looking for now and in the future. We’ll be able to help you make smart choices when remodeling or renovating your home.

If you think you might want to remodel or renovate your home in the near future, or if you are just curious about other ways you can increase its resale value, please reach out to me!

 

How to Buy a Home: 7 Tips and Tricks from Real Estate Insiders

No matter if you’re in a buyer’s or seller’s market, there are a few critical steps you can take to make a smarter purchase. Since buying a home is likely the biggest single investment you will ever make, being prepared will help you make a better purchase. Here are our best tips to buying a home.

 

Know your buying power

What is your buying power? It is the combination of your credit-worthiness and how much you can realistically pay for a home.

First, you need to understand the hidden costs of buying a home. You will need to save not only for the down payment of your home — which is typically between 10% – 20% of the offer price — but also for any additional transaction fees, such as transfer tax, PMI, title insurance, and legal fees.

Then you need to know what you can realistically afford each month to understand how much house you can buy. Your mortgage rate will depend on your creditworthiness — if you have a high credit score, your lender will likely approve you for a lower mortgage rate, which can save you thousands of dollars per year in interest.

How much of your budget should go to your monthly home costs? According to SmartAssets, you can use the 36% rule as a rough guideline. This means that your monthly obligation shouldn’t be more than 36% of your monthly gross income.

A loan professional can help you figure out how much house you can afford.

 

Fix your credit with the help of a loan professional

According to CreditKarma, a good credit score is usually 720 or above. You want to clean up your credit as soon as you can, and definitely before you go to a lender for a loan preapproval.

When you apply for your loan pre-approval, you don’t want to have anything to hide on your application. So don’t lower your credit score by doing anything that will originate more inquiries into your credit. For example, don’t open any new credit cards. Also, don’t omit any debts or loans when you apply. If the loan officer discovers them in the application process, they may deny you a pre-approval.

Get a loan professional to check your credit score for you. A professional can give you a clearer idea if your score is in the ‘good’ range, or if you need to do some credit cleanup before getting a mortgage preapproval.

 

Work with a knowledgeable buyer’s agent

Do you understand what kind of market you are buying into? Even within a city’s limits, there can be micro markets that are increasing or decreasing in value.

That’s why it’s important to hire a highly competent real estate agent who knows the specific market. You want to make sure that the professional who you’re working with really understands what the market is like and will help you find the home that you desire.

How can you tell if your agent knows the market? See if they can provide you with a buyer’s market analysis.

A buyer’s market analysis report outlines which neighborhoods are still up and coming — with potential for increased property value — versus those that have peaked with inflated home prices. Having this analysis at your fingertips will help you know if a home’s list price is above comparable properties so you don’t overpay for a home.

 

Don’t try to time the market…

Even in a hot market, there’s never a perfect time to buy a home. It can take a while to know exactly what you like, and you may have to look at 10 or more homes before you can recognize what suits your lifestyle best. While you’re shopping, take photos of your favorite properties and the details that you liked the best so that you can remember what you liked.

Another good reason to slow down the buying process: you might find a better deal if you do. Investigate expired listings. Expired listings may have gone off the market because they didn’t get any offers at the listed price, so you may be able to underbid the original listing price. It’s not likely worth your time to look at FSBO (for sale by owner) listings, though. Since they are not represented by a professional, they are often overpriced.

When you start shopping, have a one-hour initial consultation with your realtor. Give them every single detail that you know about your lifestyle, buying power, needs, wants and desires for your home. The more detail you can provide, the easier it will be for them to help you find your future home. Your agent may also know of exclusive listings not available to the general public.

 

… But make the offer as soon as you find the right home

If you love it, make the offer. Otherwise, that dream home may disappear faster than you think, especially if you’re buying in a hot market.

Your buying agent should contact the listing agent before you submit an offer so that they can decide what’s important to include in the offer. If you’re serious about it, you want to increase the chances that your offer is accepted.

Show that you’re serious about the purchase by creating a buyer’s offer packet. It should include your lender’s preapproval letter, a screenshot of your down payment money in your bank account, and comps that support the rationalization of the offer you are presenting.

 

Get a home inspection

Once you’re in the negotiation process, it’s essential that you get a third-party inspector to run a thorough home inspection. The inspector will be looking for major structural issues, including problems with the foundation, plumbing, and electrical systems. Your inspector should be extra picky, pointing out the most minor faults.

Make sure to have the inspection conducted before it is too late to back out of a deal. If there are any major structural issues, you may be able to make the seller repair them as a contingency to solidifying your offer. Minor issues that you can repair on your own may be points for negotiating a lower offer.

 

Protect your credit before you close

Don’t raise any red flags with your creditworthiness in the weeks before closing. Any one of these moves could mean that you’re denied the loan and the deal falls through — even if you’ve already been preapproved!

  • Keep your spending to a minimum and don’t make any major purchases before closing — that includes buying furniture, or a car, truck, or van, or any excessive charges on your credit card.
  • Keep your bank accounts stable. Don’t change banks, spend any of the money you have set aside for closing, or make any large deposits to your accounts without checking with your loan officer first.
  • Keep your employment situation stable — do not change jobs, quit your job, or become self-employed. Any sudden change in your income can have that preapproval offer rescinded.
  • Do not cosign a loan for anyone. It will open an inquiry into your credit and add to your debt, which could raise your mortgage rate and cost you thousands of dollars over the life of the loan.

Looking for a home in our area? Let us help you find the home of your dreams. We’re well versed in the our local real estate market, and we can provide you with a buyer’s market analysis to help you find the right neighborhood for you. Contact one of our trusted agents today.

 

 

How to Stay Out Of a Hotel

That’s right, how to stay in your own place and not be a short term renter.  I’m talking about home sellers.  Because in today’s market many homes sell fast. You might put your house on the market and get an offer that same day.  If you like the offer and you take it, you’re headed to the closing table.  But, do you already have your next house lined up? Because that could take a lot more time than you think.  So there you are, you’ve sold one place and you don’t have another one under contract.  It’s time to look into what, month-to-month renting, long term hotel stays, time to ask your friends if you can move in for a month, time to panic? I hope not, but there are ways to avoid that situation and it’s all about carefully planning every step so you don’t end up in that hotel.

First, talk with your REALTOR.  They’ll know how long it takes to sell a house in your neighborhood.  That’s good intel.  They’ll also know how long it takes to buy a home.  Talk to a REALTOR about where you plan to buy about whether there are enough homes for sell.  If so, you can probably relax.  If however, inventory is tight you need to get ready to buy right away.  The first step is to get pre-approved for a mortgage on that next house, get that all lined up.  Now in some markets your REALTOR can help you prepare an estimated net sheet on the house you’re selling.  So you’ll have a pretty good idea on how much you can put down on the next place.

So get the mortgage on your next home lined up first.  At the same time get your current house ready to sell.  Have your REALTOR tell you what needs to be done to bring in the maximum profit in the minimum time.  Get that place in tip top shape, already for the “For Sale” sign.

Then ask your REALTOR if you should go house hunting first or should you put up the For Sale first?  Again, there’s no one answer for every market out there, but your REALTOR knows your market.  They’ll give you advice based on the current market conditions and they can tell you whether it’s best to start looking first or to list your house first.  Or maybe do both at the same time.  But remember you’ll probably have more power as a seller than as a buyer.  Now you can use that power to your advantage.  For instance, if you list your home and you get a fast offer, you can specify that closing will be 45 to 60 days out.  Hopefully, that will be enough time to get you into your next place.  You can also ask for a home of choice contingency, in which you accept the buyers offer subject to finding your next house.  If your market is red hot, that might work.

Now on the buyer’s side you will probably have less control.  You might have to move faster and have fewer contingencies than you’re accustomed to.  But, even though the seller holds most of the cards, they’ll probably be willing to work with you.  As long as what you’re asking for doesn’t cost them money or time.

Again, the goal here is to sell one place and move into the next without moving into a hotel.  But remember one thing, if you sell your current house for so much money that you’re willing to move out before you find another place – well, there are worse things than a month of room service.

 

Show Me the Money

How much cash will you need to bring to the closing table?

Let’s start low and then build up. First of all, if you qualify for a VA loan, they allow a zero down payment. If you’re a veteran or an active duty service member, you need to know that. Also, if you’re buying a home in a rural area, ask your REALTOR about the Department of Agriculture program. Yep, the USDA has a zero down home loan program for people buying out in the country.

Now if neither of those programs work for you then you’ll have to come up with some cash when you buy a house. But, you do not need a 20% down payment. If you’re a qualified buyer you can find a good safe mortgage which requires as little as 3% down. And again, this is not some sub-prime back alley mortgage, this is a high quality home loan. So that’s a good starting point.

Now, how do you get the money? Well course people who sell one house and buy another, they just take the profit from the first place and buy the second one. But if you’re a first time home buyer you don’t have that ability. So for you there are basically four ways to get your down payment ready to go.

First, save it. Just sock away all the money you can and try to temporarily stop spending on things you don’t really need. Plenty of people have given up vacations or expensive dinners in order to conserve their down payment money. You can too. It helps by the way to have your money put in your savings account automatically – direct deposit. You never see it so you won’t be apt to dip into it.

Second, plenty of first time home buyers get the down payment from their parents. But it has to be a gift, not a loan. Lenders won’t allow you to barrow the down payment. Your parents will have to give you the money. It happens all the time all across America.

Third, if you have an IRA or a 401K you might be able to withdraw money for a down payment. Talk to your accountant about this one. You need to try at least to avoid penalties for early withdraw. So talk to a financial pro about whether that’s a smart move for you or not.

The forth way to come up with a down payment, your city or state might have a program that provides down payment assistance. Again, talk to your REALTOR about what programs are in your area. You might qualify, you might not. Many people are surprised that they can be making a pretty good amount of money and still get down payment assistance.

On last thought. I talked a lot about how to get into a house with a low down payment. But if you can, you should know, it’s almost always better to put down more. Put down as much as you can. Your monthly payments will be less, you’ll walk into the place with more equity. And if prices were to drop, you’ll have more protection against going under water. So more is better. And if you just don’t have more, that’s okay. Remember, you do not need 20%. If all you have is 3%, 3.5%, or 5%, don’t give up. Because the home you want could be within your reach.

Sell That House: Seller Strategies That Might Help You

If you’ve decided to sell this spring, congratulations!  Good move. More homes sell between the months of April through June than any other part of the year. It’s prime time. When sellers have the best possible chance of selling for the maximum profit in the minimum time.

Realtor.com released a report about selling this spring and they agree it’s the peak selling season. Think about it. Prices are still rising, that’s good for sellers. Plus there are more home buyers than there are homes for sale. That’s good for sellers too. Because you might find that so many buyers want your place that they start a bidding war. The price could go way over list. But, talk that through with your REALTOR. Because if those bidding buyers are getting mortgages, there will be an appraisal. And that could be a problem.

The most important thing a seller can do is price the property correctly. No guess work, no pulling a price out of thin air. No thinking, “Hey, it’s a seller’s market, I can ask anything.” Because entering the market at a price that’s much higher than it should be, that’s not good news. Because the property might just sit there while you reduce the price again and again. That’s what some agents call the “death spiral”. Because buyers see the price dropping and they figure the sellers are desperate.  And then they’ll hit you with a low ball offer. Instead, use real market data that your REALTOR provides. They’ll go through all the recent sales and give you hard numbers about the best possible selling price for your home.

Next up, make that house shine. Make it look so good you might change your mind about selling it. So good the buyers will want to write an offer the first time they see it. To hit that goal your house needs to be squeaky clean with all the repairs done. Touch up paint, done. Lawn and garden clean ups, done. Here’s a great tip, set the dinning room table just like Thanksgiving. Use the good china, the good glasses, the good silverware, candles, and a center piece. Buyers will love that.

Finally, one of the best seller strategies out there – try saying yes more than no. If a potential buyer makes a request about the closing date or the curtains in the living room or even the gas grill they’d like you to leave behind, just try saying yes. If they’re offering really good money for the house, don’t let the little stuff get in the way. Stay on track towards a successful sale and it might the best spring of your life.

Connected After the Closing

The closing – in which the seller sells, the buyer buys, everybody shakes hands and the real estate transaction is a success. However, even after its done there’s one last thing that connects the buyer to the seller. It’s something that’s not always pleasant. The mail! Say that you just bought a house but the former owner still gets tons of mail every single day. Or if you sell a house but you never get any of the mail addressed to your old place forwarded to you, nothing.  

Ok, I know, in today’s digital world some people never get any mail but most of us do. Whether it’s a bank statement, or a refund check, or a magazine subscription. So when the house changes hands, what happens? Well, for starters as the seller you should go to your local post office or go online and fill out a change of address form. That’s the best way to make you won’t miss any mail. It’s quick, it’s easy, and it works perfectly.
Now, what if you don’t do that, do the people who bought your house have a legal responsibility to forward each and every piece of mail that arrives? Or if the new owner never forwards any mail at all and just throws it out, are they breaking the law? It’s a great question, because the fact is it happens a lot. People just forget to do that change of address form and there you are in the new house when you realize you’re not receiving anything from your old address. No letters, no magazines, no flyers, nothing. So who’s fault is it? According to the postal service, it’s your mail, and your new address, so it’s your responsibility to make sure it gets to you.

So really, you should fill out that change of address form. But if you don’t, when it comes to the new owners of your old place, they have options. Assuming that they know your new address, they could write it on every piece of mail and put it back in the box and it would eventually get to you at your new address. But again, that’s asking them to do all the readdressing. And if you get a lot of mail that’s a lot of work. Other options, they could write NSP on it. That means no such person. Or RTS, return to sender, and they can put it back in the mail box. But of course, if they do that you’ll never get it. It would either go to the dead letter bin or back to the original sender.

But what if they do just throw it all away? If it’s bulk mail, that’s probably okay. According to the postal service, catalogues, restaurant menus, that sort of thing is okay to throw away. But if it’s first class mail, that my friend is a crime. You cannot destroy first class mail. But here’s the problem, how to you prove the new owners are really throwing out your mail?

So let’s get back to the real solution here. Change your address yourself. Do in person at the post office or do it online. Don’t rely on the people who just bought your house. Again, the postal service says it your job to make sure your mail gets to you at your new house. Because if you do it the right way, just think, the next time somebody says “The check is in the mail”, you’ll actually get it.