Signs That You are Ready to Be a Home Seller
Most people easily recognize when the time is right to buy their very first home. They are tired of their current situation and the appeal of getting their own place is too enticing to resist. However, the signs are not quite so easy to notice when it is time to sell the home. Some home owners have a long, drawn out inner debate before coming to the conclusion that they need to sell and move to another place. Here are some ways that you can know the time has come for you to sell your current home.
The Attachment to the Home is Gone
Many people hang on to a home for far too long because they are emotionally connected to the home. The nursery where they brought home their first born, the hallway where a baby took its first steps and other sentimental memories make it tough to part ways with a home. However, if the idea of selling the home brings about a feeling more of relief and not sadness then you are emotionally ready to move on.
A New Plan Has Developed
If you have already picked out another home, or decided what the next home should look like and what features are necessary, then you are ready to move on. Knowing where you wish to live and what the house should look like is a huge step in getting ready to sell your current home and move to a new place. This type of preparation is typically very motivating for most people and helps them to get everything in order for the move.
Your Finances are In Order
Getting ready to purchase that first home is quite an experience for most people. Monitoring credit scores, reducing debt and keeping all payments up to date while saving up a nest egg takes time and discipline. However, once those habits are in place it is easier to maintain a solid credit score. Also, if you have been in the home for any length of time it is likely that there is built up equity which can be used as a down payment on the next home. All of these factors make it simpler to sell a home and be in the right financial position to purchase another home.
It is Time to Move On
Lots of people have come to the realization that they need to change jobs, end a personal relationship or sell some of their long held items. When the thought occurs to you that you would be OK with the idea of getting rid of your house, then the time has come to move on to a new place.
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Simple Ways to Get Your Home Ready to Sell
For those homeowners that have waited to sell their home, heed the advice of Nike: “Just Do It.” Interest rates are still really low and the upcoming changes in mortgage lending may disqualify some buyers. Now is the time to sell your home. In order to help your home sell quickly follow the timely advice offered below.
Spend a Little Now to Get More Later
With so many homes available many buyers are seeking out a property that is move-in ready. This means that small repairs and maintenance items will possibly turn off some buyers. Take a walk through the home and pick out the small things that need to be fixed. Leaking faucets, a chipped tile, a flaky bit of paint and other similar items can negatively impact the appearance of your home.
You should also consider spending a little money to get the carpets thoroughly cleaned and ask a local heating/air conditioning company to service your unit.
Put Yourself in the Shoes of the Buyer
If you are looking for a new home, what items are important to you? The majority of people want to live in a clean home that smells nice with lots of room in the closets, cabinets and other storage areas. Therefore, you should put a lot of time in to making your home look clean, neat and organized. Start with the cabinets and closets. Remove as much clutter as possible and even add some shelves if it helps improve the look. Go through all the rooms and put everything away in a nice, orderly fashion. Finally, get a few aroma dispensers and put them throughout the house.
Make People Interested in Coming Inside
So many homeowners spend time, money and a lot of effort improving the inside of the home that they ignore the outside appearance. It is important to have an inviting appearance. Homeowners should trim all the bushes, clean out the gutters, make sure the driveway and walkway are clear and clean the windows. For people that have siding, consider power washing the siding as well. It is really important that the front door and the surrounding entrance area look clean and homey.
Two Important Rooms: Bathrooms and Kitchens
The bathroom and kitchen will usually have more influence over selling a home than any other part of the house. It is a good idea to go through these rooms and spend extra time, and even money, to make sure they look attractive and modern.
Many types of cabinets can be painted with a little bit of planning and work. All bathroom plumbing should be in good working order. Make sure there is plenty of light with good looking fixtures and that the ventilation to both the kitchen and bathroom is more than adequate. Also, make sure the counters are clean and devoid of clutter.
It may seem like a crazy idea to spend money on a home that you are planning to sell. However, spending money in the right areas can greatly improve your chances of selling the home faster and may yield a good return on the investment.
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What Kind of Mortgage Fits Your Needs?
No matter the state of the economy, each year the number of new mortgages underwritten reaches millions of homeowners. Some are buying for the first time while others are downsizing or upsizing. When rates drop, like they did over the past 2 years, many people seize the opportunity to refinance their home loan. However, how do people decide on which mortgage to use for their specific need? An online survey conducted by HSH.com points to some of the factors that influence consumer decisions.
Most Important Factor
It should come as no shock that the most important factor is the interest rate. Regardless of the type of loan, the size of the loan or the customers home state, everybody is trying to get the best rate for their home loan. In the survey mentioned above over 45% stated that the rate was the top factor for choosing a loan.
Other items, such as the length of the term and the fees also ranked high in the survey, but none was as vital as the rate.
Deciding How Much to Use for Down Payment
The ability to make a down payment equal to 10%-20% of the home’s price will give the borrower a range of products to choose from. A large down payment and a solid credit score will usually allow a borrower to qualify for a conventional loan which has the best interest rates.
For borrowers that have a smaller down payment, their options will be limited to FHA, USDA or VA for qualifying veterans.
Choosing the Right Term
With rates at an all-time low many borrowers are actually paying more attention to the term of the mortgage loan as part of the decision process. While the traditional fixed rate of a 30 year loan remains quite dominant more and more people are looking at different adjustable rate products. Those borrowers that have refinanced in the past 2 years have often chosen to go down to a 15 or 10 year term in order to drastically cut down on their total interest pay back while also paying off the home sooner.
Brokers Still the Top Choice
When looking for the right mortgage loan a number of people still prefer to use the services of a mortgage broker over a local bank or credit union. In the survey mentioned earlier over 30% of respondents claimed that they sought the services of a broker rather than another type of lender. Since brokers typically have access to multiple lenders they can offer any type of mortgage loan and get the best rate too.
Obviously, none of these factors discussed the two biggest items facing a borrower; are they happy with the home and can they afford the mortgage payment? Beyond those two items, the guidelines mentioned above should help any new borrower pick a loan that is right for their situation.
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When you have a home or a piece of realty and you have plans for resale, it is important to take these critical factors into consideration. Do remember that in real estate, selling a property requires not just efforts but, most importantly, the right knowledge and timing. The perfect convergence of these factors will largely contribute to lucrative sale deals in the market.
Indeed, home staging is of great help in increasing a home’s face value and in quickening its resale. Though preparations are essential, it is important not to invest a lot in the processes involved. By planning carefully the home staging processes, you are guaranteed to get the most bang for your buck.
Negotiating is as common as breathing in real estate. From the start of the transaction to closing, negotiations come in handy on both buyers and sellers. To sellers, the aim is to obtain the most money for their property. To buyers, it is to snag the best property by obtaining the best value out of their hard-earned money. Indeed, negotiations when buying real estate take time, efforts, patience, perseverance, the right timing, and the right attitude—and a reliable real estate agent whose advice is worth in gold.
Estimating house repairs accurately for an investment/flip.
Very few people ever buy a car and then find out the amount of the monthly payments and insurance. Most people sit down with pen and paper, or a computer, and crunch some numbers to make sure they can handle the purchase. The same thing should be done before buying an investment property. However, buying a home with the purpose of flipping takes a bit more knowledge and calculation in order to earn a profit when it comes time to sell.
Understand the Difference between Structural Problems and Cosmetic Needs
Even a brand new novice can recognize the need for some paint or fresh carpet. People that have purchased a home before could possibly spot an older front door or some outdated windows. However, being able to see and recognize a problem with the structure of a home takes a bit more knowledge and practice. Pay close attention to these areas and possible problems:
- Areas damaged by water; evidence could be water stains, rippled paint, musty odors or flaking of paint
- Problems with water lines; water supplies that drip or don't run, leaks around toilets, pipes, and water valves
- Presence of pests, especially termites
- Dry and rotten wood
Beyond these trouble spots, it is also important to understand that a home 20+ years old will most likely need some kind of other normal repair such as an updated HVAC system, new roof, or new water heater.
The Right Compromise Makes Everyone Happy
Keep in mind that your goal is to FLIP the home. That means that you can purchase the home well enough below the market value that you can quickly sell it to someone else for a profit. If you try to repair too many things, then the price will need to be increased and you could scare off a few investors.
Here is a simple formula that will help you when looking at potential properties.
- Determine the value of the home after repairs have been made
- Deduct the money needed to make said repairs.
- Take this new amount and multiply it by 70%. This figure is top dollar offer.
Here is a simple example. You are looking at a home that should be worth $180,000 once it has been repaired. The money needed to fix it up is $15,000.
|Estimated new value of home after repairs||$180,000.00|
|Multiplied by 70%||$115,500.00|
In this particular example, if you could purchase the home for $109,000 and sell it for $114,000 you would make a quick $5,000 without lifting a finger. To make this better, the investor that buys the home from you has enough room to buy the home, make the repairs and sell for a profit.
How to Get Better at Estimating Repair Costs
- Habit of looking at homes – You will need to inspect quite a few homes in order to learn how to recognize particular problems. Seeing the same kind of problem multiple times will teach you what to search for in a home.
- Get acquainted with a contractor – If you are not a contractor yourself then it is a good idea to strike up a friendship with a contractor. They will be able to give you estimates on your potential properties. You can also refer work to him to keep him busy.
- Take good notes – When you are looking at a home with a contractor take notes about the problems that he points out and the price for the repair.
- Study material prices – Get accustomed to visiting the local hardware stores to get prices on materials. Knowing when prices are going up, or going down, or certain items will help you make more accurate estimates.
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Rookie mistakes when flipping a home.
With mortgage rates still at all-time lows and lots of homes available at prices below market, many people are turning to real estate investment for the first time. In order to be safe, new investors often start out with flipping homes instead of holding a property for its rental value. Here are some of the top mistakes rookies make in home flipping and how to avoid them.
Not Allowing Enough for Repair Work
This is usually the biggest mistake made by new investors. People who have never renovated a home often underprice the repairs needed to make the home attractive enough to sell. This is why seasoned investors recommend that new investors talk to a contractor BEFORE placing a bid on a home. Getting a good price upfront will help determine if the house is worth the purchase. It is also wise to add a bit of cushion for Murphy's Law for things that just go wrong for no reason.
Allowing Emotion to Let You Pay Too Much
Some investors find the “perfect” home and go full steam ahead with the purchase. They find a home with a discount in a hot area and they just KNOW that they can sell it for a quick profit. This is where cold, hard facts should take the lead, not emotion.
An investor should never, ever buy a home for anything more than 70% of the home's repaired value. This is a rule of thumb that has been used by many investors for years and it has served them well. Paying more than the 70% will lead to smaller profits or even a loss.
Trying to Do Too Much
Many new investors envision themselves remodeling the bathroom, adding new paint and then finishing up the front lawn in a few weeks and then, voila, the home will sell. However, it is best to let the pro's handle the tough work. Repairing or remodeling a home can require some or all of the basic contracting skills such as carpentry, plumbing, masonry, painting and electrical. It is simply too much of a daunting task to try and do all of this on your own unless you have considerable experience in these areas. Even if you can do it all, wouldn't it be better to hire someone to do this type of hourly work while you search for the next deal?
Taking Too Long for the Repairs
Each month that you own a property is another month of expenses for items like utility bills, insurance and property taxes. This can eat in to your future profits and may even cause yourself a loss. Before buying the property sit down with your contractor and discuss the estimated time needed to repair the home. If necessary, ask the contractor to break the job down into rooms and develop a timeline. This will help you and the contractor stay on pace to finish the work and get it back on the market.
Your goal as a home flipper is to find a home at the right price that you can turn around and sell for a profit. Don't fall in to the trap of these mistakes and don't get too attached to any home. Always be ready to simply walk away from a potential deal and look for a new one.
Rock Realty Client Testimonials
"Mike & Matt,
Thank you so much for helping us find our dream home! We love it! Thank you for the many hours spent in research, travel, phone calls, and emails. Thank you for being open & honest with us every step of the way! We felt we could trust you 100%. We really enjoyed working with you and highly recommend you to others.
Kevin & Abby G. (Madison, WI)
Rock Realty Home Buyer Client
Thanks for the compliments, and Congratulations on your new home Kevin & Abby!
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How to Purchase a Home in 2013
As this new year begins many people are setting goals, making resolutions and generally planning for a better year. If you are one of the people considering a home purchase in the upcoming year there is some sound advice to follow in order to make the process smoother and ensure that you get in to a home that truly makes you happy.
Be Realistic About Your Finances
If you are currently renting a nice place for $650 a month then it would seem unreasonable to think that you could afford a home with a loan payment of $1,000. WHY, you may ask? Because the expense of owning a home goes well beyond the monthly payment. There are other things like mowing the lawn, keeping the furnace and air conditioner maintained, repainting every few years, updating the bathroom, replacing an appliance or two, and the list goes on. Understanding the expense for these items will help you set your budget accordingly and hopefully prevent you from getting in to a home that you cannot afford.
Talk to an Experienced Mortgage Broker
After determining how much you can comfortably afford for a home, it is time to chat with a mortgage broker. The broker can look over your finances, your credit history, employment history and the length of time you have lived at your current address and determine the best loan for your needs. A broker can also get offer from multiple lenders in order to get the best rate for your mortgage.
It is wise to let the broker know how much you are comfortable paying each month so that they can use this information to establish a price range for your home. Most people can financially afford more than they are willing to pay. Having the right budget amount will help when you begin looking at homes.
Talk to an Experienced Real Estate Agent
Now that you are firm in the amount you can afford monthly for a payment and you have an approval from a mortgage lender it is time to talk to an experienced real estate agent. A good agent will sit down with you and listen to your wishes in order to decide which homes could meet your needs. Using the price range provided by the mortgage lender, the agent can focus on homes that fall in your budget and prevent wasting time on homes that are too expensive. An agent can also focus on other parameters such as a specific school zone, homes with particular features, size of the home and other things that are important to you.
Don’t put it off any longer. Sit down with a calculator and decide how much you can afford. Then make the decision to make 2013 the year that you become a homeowner!
All too often, people fall in love with a home for the wrong reason. And when it comes time to sell, they find that there are not as many people in love with the home like they were. Here are some common mistakes first time homebuyers make and how you can avoid the same errors.
Buy With Reselling in Mind
The previous generation considered a home purchase akin to a marriage; till death do us part. The new generation does not see it in such lasting terms. Modern families may move up in the value of a home, relocate to a better school district or simply sell what they have and move to a new state to pursue a different career. For people that buy a home with a small, or zero down payment, it will be tough to sell within a matter of just a few years. Staying in a home for a number of years gives the property time to appreciate while also giving you a chance to pay down the loan.
Older homes have lots of appeal to many buyers, but they also come with some major considerations. Modern appliances, up to date electrical systems and comfort due to a good air conditioning & heating system are usually not that common in older homes. You may purchase an old house with plans to improve these things as time goes along. However, if you find yourself in a position that you must sell before the renovations are complete, it may be tough to find a buyer.
Don’t Buy a Home Just on the Payment
Many would-be homebuyers look at the principal and interest payment for a proposed mortgage and say “I can handle that.” For the majority of these people, they are correct in their statement. However, they may be overlooking some major expenses.
First and foremost, a house is like a vehicle in the respect that it must be maintained in order to provide a long, useful life. Replacing the roof, getting new appliances, repairing the occasional plumbing problem, and a host of other items are just a part of owning a home. Homes that end up in foreclosure often show signs of neglect, mainly because the owner could not afford even the basic maintenance items.
Besides maintenance, there are property taxes as well as homeowner’s insurance. Depending on the location and value of the property, these two items can typically cost between $300 to $500 a month. Potential buyers need to do their homework and get a full estimate of their payments, along with escrow, from their lender.
People that are novice to the real estate industry still understand one basic rule; location is king in realty. Homes located near shopping areas, close to good schools and exhibit low crime rates are the best selling properties. If you fall in love with a home and you are the only person considering the property, there could be a reason for the lack of competition. It is important to pick a home in a place conducive to an easy sell. Otherwise, you may be in for a long wait when it is time to get rid of the home in the future.
Did You Work This Weekend?
I had an open house today in La Habra, California. The odd thing is , I think I was they only agent in the area having one. My wife even was in disbelief that I would elect to have one.
Well I have found out a few things:
The market makes no adjustment for holidays...I had 12 groups of people show up which is good for me.5 of those people gave me their email and 4 of the 5 gave me a valid phone number. One Family wanted to know what was needed to buy a home (I will be setting an appointment this week with my spanish speaking collegue)Rain does not deter a home buyer. okay it didnt rain but it was cloudy. Last week it did rain and I still had people come.Oh yes I followed up tonight (Sunday) , thanking them for stopping byIt doesn't matter that the property has just gone into escrow. Only one person asked why I still show it if it cannot be offered upon and I said there is always a chance it will fall out of escrow; her husband supported my position.
So. did you work this weekend? Maybe I got the lead that was destined originally for you...well you get the idea.
There is no doubt that an insurance policy on a home can be tough to understand. However, going over the policy and making sure you are comfortable with the important parts can payoff down the road. Here is an overview to make sure you have the basics covered.
It is important to know that in the event you lose your home to some sort of accident or force of nature that the insurance plan will provide enough funds to rebuild the home. This goes beyond the selling price of the home when you bought it. You need to know that the home can be replaced at today's costs. Construction costs and materials tend to rise over time. It is important to have replacement cost as part of your insurance policy.
Replacement of Belongings
Besides the actual structure of the home you should also consider your belongings. This can really mean anything such as furniture, dishes, picture frames, electronics, clothes, jewelry and a host of other items.
Try to stay away from the “current market” clause. This means that your 5 year old couch would be replaced at a price that assumed 5 years of use. The same concept would apply to any item that you have owned for a considerable amount of time. Also, ask the insurance company about their process for allowing you to replace items. For instance, if your home burned down and you are staying in a small apartment, do you really want to replace your giant screen TV right now? If the insurance company only gives you 60 days to replace an item, where will you store the products? Does the company demand that you buy an item, provide a receipt and then get reimbursed? All of these items should be covered prior to getting a policy.
The deductible for a home insurance policy works in the same manner as an automobile insurance plan. Higher deductibles will result in a lower monthly premium. However, a high deductible assumes that you have the funds to pay the amount in the event of an emergency. A smart financial move would be to save up a good amount, such as $2000, and then change your plan to a deductible of $2,000.
It is always a good idea to have a strong liability plan in place. For instance, if you have guests for a backyard barbecue and someone falls at the party, your liability policy should cover the expenses for the fall. This could be the cost for the ambulance, any stay at the hospital and possible rehabilitative therapy that is necessary after the injury.
Day to Day Expenses
Some insurance companies will reimburse you for your expenses while you are awaiting for your home to be rebuilt. Make sure you understand the circumstances surrounding this type of expense and how the insurance company will reimburse you.
A lot of the terminology used in the insurance plan is unique to the insurance world and may take a conversation with an agent to understand it properly. Understanding the policy before purchase will help you to feel confident that you are covered in the event of a major crisis.
Understanding Home Owners Insurance
I have a field team of 3 that are awesome. One of the field people, Ida, is a lady in her late sixties that doesn't have to work, but just loves the hustle of driving around and being out in the field. For 60+, she's in great shape and is the kind of woman you wouldn't want to cross (I almost lost an arm-wrestling match to her a few years back!...Like I said ALMOST...LOL).
Anyways, a while back she went to check one my vacant REO properties in a sketchy part of town. She made her way through the house checking the living room and bedrooms to make sure all was okay when she heard the shower running at the rear bathroom. She opened the door and found a squatter in the shower, butt-naked, ding a ling out and all!! Now if this was me, I would have backed out fast, went out to my car, and called the police. Ida took a different approach and scolded the man for trespassing. He pulled on his boxers quickly and as he was angrily stomping towards her yelling at her "Get out!", she whipped out her camera and started taking pictures of the squatter!!! (I posted photos to my website: http://wp.me/p1yiuo-2o) He ended up grabbing his stuff and running off, but I couldn't believe this story!
Of course my staff's safety is my top concern and we discussed better ways for her to handle this the next time....but HOLY CRAP!! I don't know if Ida was crazy, stupid, or just a bad-ass 60+ female version of Braveheart.
If this was you, what would you have done? Anyone have any scary run-ins with squatters on your listings/showings?
Therefore I propose the following changes to every agent's open house program:
You must have with you your preapproval letter. Or give me your loan officer's name and number. That is your admission ticket. This house may be overpriced for your buying power. I want to show you homes that you can afford. Forget lowballing as it does not work. I will then leave you alone after signing in. Give me feedback about the home please.
If you are shopping for someone else, please at least give me their contact information. I will then let you look . Since when did you become a real estate agent?
Oh you are an agent...where is your card or "my brother is an agent". Ask them to show you this property instead.
If you do not have your preapproval letter , my loan officer partner will talk to you because he is here right beside me. No, I am not trying to sell you something...you will sell your house to yourself. I want you to be a success this buying thing and write an offer that is the one accepted out of 10 offers.
You will commit to set up a consultation with me before we look at anything else. I want to show you only the right homes for you and not just what you got through random listings. I need to learn about what you seek and not show just any 3 bed home.
Yes indeed, I am considering changing up things and ratcheting up my program. I need some real buyers. MOST OF ALL I WANT YOU TO BE SUCCESSFUL!
Integrated Asset Services®, LLC (IAS®) (www.iasreo.com), a leader in default management and residential collateral valuations, today released the latest IAS360™ House Price Index (HPI). Based on the timeliest and most granular data available in the industry, the index for national house prices was down 0.5% in July.The slight decline marked the first down month for the IAS360 since February. The leading U.S. housing benchmark remains ahead fractionally for the year but still well off (-16.2%) its high in June 2007.“We are seeing normal seasonality with a slight July pullback, but we are not out of the weeds yet as we will see waves of volatility while the markets correct themselves and settle down,” said Dave McCarthy, President and CEO of Integrated Asset Services. “Meanwhile, there’s an awful lot going on down at the neighborhood level that will take time to normalize at the top.”Conspicuous among the nation’s 10 major metropolitan statistical areas (MSAs) were the 3.8% declines in both Denver, which had been reliably stable since the first of the year, and San Francisco, which had jumped almost 8.0% from February. Notable, too, was a sizable 4.8% drop for the month in Las Vegas. While the region has fallen month over month since August of 2006, July’s plunge represents the largest percentage drop to date.“A lot of this volatility has to reflect Washington's near-term influence on price behavior through actions like the foreclosure moratorium,” says McCarthy. “We’re already seeing buying activity moving around in different price segments. The beauty of the IAS360 is that the index captures and reports on these changes in a way that reveals the reality of the market.”The IAS360 House Price Index is a comprehensive housing index tracking monthly change in the median sales price of detached single-family residences across the U.S. The index, based on all arms-length transactions, tracks data for 15,000 neighborhoods, that roll up to report on the changes in 360 counties, nine census divisions, four regions, and the nation overall. The IAS360 House Price Index is delivered on a monthly basis.
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