Shop like a Pro at Real Estate Open Houses

May 18, 2013 by Susan

You can just have fun visiting open houses when you’re not ready to buy real estate. But get serious and shop like a pro when the time is right for you to buy.

Here are tips that’ll have you shopping like a real estate pro at the next open house you attend:

Preview the real estate online: Don’t waste your time attending open houses for properties that don’t meet your minimum requirements.
Remove the emotion: Professional real estate investors and agents don’t allow emotions or gut feelings to determine which property they should buy. Instead, focus on the facts and figures.
Dig deep: Don’t fall for the fresh coat of paint and new carpeting. Peel back those layers to see what condition the home is in. Open under-sink cabinets and flush toilets. You’ll discover any obvious plumbing problems or water damage, and get some insight into how well the sellers have cared for the home.
Rely on your senses. Do you smell cigarette smoke or pet odors? Can you hear traffic noise inside the home with all the windows and doors shut? Does the woodwork and wall around the window feel damp?
Talk with the neighbors. Take a walk around the neighborhood and ask the neighbors what they like and dislike about living in the area. Look to see how well the neighbors keep up their homes and yards.
Observe the amenities: If there’s a pool, park or other play areas, check them out. Maintenance of these spaces can give you clues to how well the homeowner’s association functions.
Keep an eye on what you see before entering. Are there any missing, curling or buckling roof shingles? Is the exterior paint peeling? Is there an extensive garden you’d have to maintain?

Links:

Water damage

http://www.smabsolute.com/recognizing-the-hidden-signs-of-water-damage/

Homeowner’s association

http://www.investopedia.com/articles/mortgages-real-estate/08/homeowners-associations-tips.asp#axzz1tSdszv1f

Buckling roof shingles

http://www.pattoncontracting.com/roofing-buckling.htm

Filed Under: Buyers

Ten Repairs You Must Do Before Putting Your Home Up for Sale

May 17, 2013 by Susan

If you’re getting ready to put your home up for sale, it’s time to make all those repairs that have been simmering on the back burner. When buyers come looking, they want things in tip-top shape, otherwise they think you have not been taking care of the property.

Here are your ten must-do repairs before putting your home up for sale:

Repair the roof. Maintaining a sound roof literally tops the list of crucial home repairs. Replace missing shingles and fix damaged shingles.
Clean, clear and caulk gutters. When the weather is dry, get on a ladder and clean out all the leaves and debris from the gutters. Check their condition, repair any loose sections and caulk around the end caps.
Fix sagging screen doors and other front-of-the-home problems. This is what a buyer sees first, therefore, these are must-do repairs. Approach your home as a potential buyer and see it through his or her eyes. Fix everything that looks shabby.
Patch nail holes. Walk through all the rooms, and fill in all nail holes with lightweight putty. Wait for it to dry, and then paint the walls.
Eliminate odors. The last things buyers want to smell are mold, a cat box and smoke in the house. Using scented candles and plug-in room fresheners just smells of cover-up. Deep clean bathrooms with bleach. Wash walls with ammonia-type cleaners. Paint with a Kilz primer to seal cigarette smoke in and on walls. Then cover with a fresh coat of paint.
Repair or replace damaged flooring. If you have vinyl flooring, check for holes, tears and discoloring. Get a professional to replace flooring if necessary.
Reseal the toilet. If the toilet rocks when you sit down on it, the seal needs to be replaced. You do not have to call in a professional to do this; just make sure you have a friend handy who can help you lift it.
Stop faucet drips. Dripping faucets are easy to repair. Turn off the water under the sink. (While under there, look for any moisture problems.) Dismantle the hot and cold handles, take them to the hardware store and buy new parts. Reassemble at home and turn the water back on.
Renew dinged baseboards. Clean them to remove scrapes and smudges from pets and children’s toys. Fill in dents, sand smooth and repaint.
Fill in cabinet scratches. Old English scratch cover or a scratch stick work wonders here.

Links:

Repair damaged shingles

http://www.thisoldhouse.com/toh/article/0,,219567,00.html

Reseal the toilet

http://www.diynetwork.com/how-to/how-to-remount-and-reseal-a-toilet/index.html

Dismantle the hot and cold handles

http://video.search.yahoo.com/search/video?p=how+to+repair+faucet+drips

Filed Under: Sellers

How to Catch a Home Buyer’s Eye

May 16, 2013 by Susan

In this economy, every leg up on other sellers will help your home sell faster and at the price you want. If you’re not getting the offers you want on your home, here are nine ideas to get things moving in the right direction:

Get an appraisal. Knowing what a professional appraiser thinks your home is worth gives owners a reality check. It also helps you determine the best price for your home.
Get a home inspection before listing your home. Find out the hidden problems with your home and correct them in advance. If you get your home inspected and find problems but elect not to repair them, be sure to include the problems on the property condition disclosure form.
Consider offering a home warranty. Everyone likes a security blanket and a home warranty gives buyers an assurance that if something goes wrong with major appliances, plumbing or electrical systems, they will not have to spend a lot of money to get it fixed.
Pay for lawn care through the summer. This lets the buyer know you’ve thought of everything, and it’s one less worry for them when moving. Taking care of the pool cleaning tab is another incentive you may want to consider including.
Pay the HOA dues. If you’re in a homeowner’s association (HOA), pay the new buyer’s fees for the first year.
Pay all or part of the buyer’s closing costs. This can be deducted at closing from the proceeds of the sale.
Pay the buyer’s property taxes for a year. You may already have paid a portion or all of it anyway.
Offer to leave furnishings. If you have a couch that perfectly fits an unusually shaped living space, offer to include it in the sale of the home.
Have some flexibility on the price. Being willing to negotiate on the price shows a buyer you are willing to work with them.

Links:

Get an appraisal

http://money.cnn.com/2009/07/29/real_estate/home_appraisals.moneymag/index.htm

Property condition disclosure

http://www.nolo.com/legal-encyclopedia/required-disclosures-selling-real-estate-30027.html

Home warranty

http://www.homewarrantyreviews.com/qa/44/what-is-a-home-warranty

Filed Under: Sellers

Seven Tips for a Painless Closing on Your Real Estate

May 15, 2013 by Susan

The closing is the final step in purchasing your real estate. The closing date is set during the negotiation phase and is usually several weeks after the offer is formally accepted. During the closing, the buyer and seller complete the purchase contract and ownership of the property is transferred to the buyer.

Before the closing can occur, all terms of the purchase contract must be met. As you can imagine, problems can come up which delay the closing. Here are seven tips to ensure a smooth and problem-free closing on your real estate:

Communicate. Talk with all parties involved in the deal, from your agent to your lender, and discuss what to expect. Get in touch with each of them to make sure they have everything they need from you for a hassle-free closing.
Do a final walk-through. Before you close, it’s critical to do a final walk-through to check that all repairs agreed upon were actually done. You also want to ensure that everything is in the state that you expect it to be in.
Anticipate errors in the paperwork. There could be missing documents, typos and mistakes in the paperwork. Before closing day, review all documents thoroughly to catch and fix mistakes.
Make sure the money is there. Talk with your real estate agent to be sure that you will have the money you need, in the right form, at closing.
Ask your agent to attend the closing. You want your trusted agent there to explain to you the purpose of each form you are signing, answer any questions you have and guide you through the process.
Expect the unexpected. Read all documents before signing them. Any corrections will have to be made before the closing can continue.
Plan to take the day off. You do not want to be late to the closing or be worried about having to go back to work. Spend the rest of the day celebrating!

Links:

Final walk-through

http://www.closing.com/learning-zone/article/final-walk-through-checklist/

Closing

http://www.lendingtree.com/mortgage-loans/advice/closing-a-mortgage-home-loan/

Home-buying process

http://www.fanniemae.com/portal/helping-homeowners-communities/home-buying-process.html

Filed Under: Buyers

How Do Lenders Determine How Much You Can Afford to Spend on Real Estate?

May 8, 2013 by Susan

Mortgage lenders are primarily concerned with your ability to repay your real estate mortgage. They will consider your credit score, debt-to-income ratio and how much you have for a down payment before telling you what you can afford to spend on real estate.

Credit Score

One of the first things your lender will review is your credit score. Credit scores range from a low of 350 to a high of 850. In this case, the higher, the better. The lower your credit score, the higher your interest rate and points will be, and the lower the amount of home you’ll be able to afford. If your score is too low, you may not qualify for a mortgage. If your score is low, you may need to take some time to improve your credit score before buying real estate.

Debt-to-Income Ratio

Lenders use a formula called the debt-to-income ratio to determine if your income is high enough and your debts are low enough to qualify for a certain loan amount.

Standard debt-to-income ratios are the housing expense ratio (also called front-end ratio) and the total debt-to-income ratio (also called back-end ratio). How are these calculated?

Front-end ratio: Shows how much of your gross monthly pretax income would go toward the mortgage payment. As a general rule, the monthly mortgage payment, including principal, interest, taxes, and homeowners insurance, should not exceed 28 percent of your gross monthly income. To calculate the front-end or housing expense ratio, multiply your annual salary by 0.28, and then divide by 12 months. This is your maximum housing expense ratio. (Annual salary x 0.28/12 = Maximum housing expense ratio)
Back-end ratio: This shows how much of your gross income would go toward all of your debt obligations – mortgage, car loans, child support, credit card bills, etc. Your monthly debt obligation should not exceed 36 percent of your gross income. To calculate this ratio, multiply your annual salary by 0.36, and then divide by 12 months. This is your maximum allowable debt-to-income ratio. (Annual salary x 0.36/12 = Maximum allowable debt-to-income ratio)

Down Payment

Last but definitely not least, lenders consider the amount you have for your down payment. The bigger your down payment, the less risk the lender is taking on, so you will probably receive a better interest rate. Ideally, you want to come up with at least 20% of the value of your new home as a down payment, to avoid things like mortgage insurance payments.

Links:

Credit Scores

http://www.ehow.com/about_5272055_credit-rating-scores-explained.html

Improve your credit score

http://www.fool.com/specials/2000/sp000807.htm

Debt-to-income ratio

http://www.bankrate.com/calculators/mortgages/ratio-debt-calculator.aspx

Filed Under: Buyers

Eight Tips for a Successful Open House to Sell Your Home

May 6, 2013 by Susan

You’ve cleaned the house, made all the necessary repairs and removed all the clutter. Now it’s time to have an open house to pull in potential buyers for your home.

Here are eight tips to help you have a successful open house:

Take advantage of new technology. Advertise the open house on all the popular real estate sites. With technology what it is these days, most home buyers start their searches online. If you’re working with a real estate agent, he or she will handle this for you.
Enlist your neighbors’ help. Neighbors have friends who are looking for homes too. Let them know about your open house and invite them over. They will be looking at your home for their friends, their kids’ friends, etc.
Go paperless. Have your real estate agent take lots of good quality pictures and upload them to all the real estate sites. No printing required. The more information you have online about your home in the better.
Create neutral environments. Remove the animal heads from the walls. Take down anything controversial or extremely personal from walls and shelves. Remove area rugs that don’t stay with the home, so buyers can see the beautiful floors.
Be security conscious. Make sure your agent has everyone sign in. Remove or lock up any prescriptions and valuables, such as jewelry, cash or credit cards.
Make buyers feel comfortable. Provide soft music and homemade cookies. This will make potential buyers feel welcome, and baking cookies will make your home smell great!
Use low-tech ideas. Ask your real estate agent to put “Open House” signs around the neighborhood and in your yard. This will catch all the drive-by and walking traffic.
Remove yourself. Do not attend the open house. Buyers will be intimidated to look in closets or ask the questions they want answered, if you are following them from room to room. Take your pets with you, along with the cat box and food bowls.

Links:

Successful open house

http://www.homefinder.com/news/opening-doors/2010/03/19/ten-diy-open-house-tips/

Advertise the open house

http://realestate.about.com/od/servingsellers/ss/holdopenhouse_3.htm

Take lots of good quality photos

http://voices.yahoo.com/house-photos-tips-taking-pictures-home-626593.html?cat=54

Filed Under: Sellers

What You Must Disclose When Selling Your Home

May 3, 2013 by Susan

As a seller, you must disclose anything that might impact the value of your home. That includes something as small as a toilet that doesn’t flush properly to something as big as an unstable foundation. Anyone selling a home, even in “as-is” condition, must obey disclosure laws.

Here are six things you, as the seller, must reveal:

Termites. If your home has or had a problem with termites, it must be disclosed to the buyer.
Lead. If your home was built before 1978, you must comply with the federal law requiring disclosure of all known lead-based paint and hazards in or around the house. Buyers must receive a copy of the Environmental Protection Agency’s pamphlet Protect Your Family from Lead in Your Home, and they must be allowed a ten-day window to test the house for lead. If this process is not followed, the buyer can sue for triple the amount of damages suffered.
Water damage or mold. If there was mold caused by a leaky roof, flooded basement or dampness, these water issues must be disclosed. Water damage is one of the biggest causes of disclosure-related lawsuits.
Repairs. Any repairs made to the property must be disclosed on the seller’s disclosure statement, even if the problem has been resolved. This includes repairs disclosed by previous owners. In many cases, potential home buyers are relieved to know that things have been repaired and are no longer a problem.
Infamous history. A home’s notorious or criminal past must be disclosed.
Natural hazards. Some states require sellers to disclose any risk of natural disasters such as being in a flood plain or earthquake zone, in addition to susceptibility to wildfires.

Historical or special zoning should also be disclosed as it limits what the buyer may be able to do with or to the property.

If you’re unsure as to whether you should disclose something, disclose it. If you have even the smallest question about whether to disclose something to potential buyers, avoid the potential for liability and tell all.

Links:

Full Disclosure

http://www.ehow.com/how_2209514_provide-full-disclosure-selling-house.html

Disclosure Laws

http://www.nolo.com/legal-encyclopedia/required-disclosures-selling-real-estate-30027.html

Protect Your Family from Lead in Your Home

http://www.epa.gov/lead/pubs/leadprot.htm

Filed Under: Sellers

How to Get the Best from Your Real Estate Agent

May 2, 2013 by Susan

You’ve decided it’s time to buy a new home, and you’re ready to hire a real estate agent to help you through the process. Wise decision!

The agent you hire wants to provide the very best service for you. Here are several things you can do to help your real estate agent do the best work for you:

Share your expectations. Exactly what do you want your real estate agent to do for you? Do you want him or her to provide an update to you weekly? What’s your preferred method of communicating – phone, email or text?
Get pre-approved for a loan. When you’re pre-approved, you have a better chance of getting that perfect home you find because sellers prefer to work with buyers who have been pre-approved for a mortgage. You’ll also know the price range of the home you can afford to buy.
Be clear about what you want. Prioritize a list of exactly what you’re looking for in a home and give that to your real estate agent. Be sure to include as many details as possible, including the price range (which you know since you’ve gotten pre-approved for a loan), the number of bedrooms and bathrooms you need, the type of neighborhood you prefer to live in and the style of home you want.
Be honest and frank. If you have concerns about a home you’ve looked at, speak up. Share exactly what it was you liked and disliked about the home. If the agent is not living up to your expectations, tell him or her. Treat your agent the way you’d like to be treated and your relationship will flourish.
Go at your own pace. If you get tired or overwhelmed when you look at more than three homes in one day, tell your agent that you want to limit the number of homes to three per outing.
Be prepared to negotiate. Your agent will handle the contract negotiations for you, but you must be open to compromise. When you find a home you love, don’t lose it because you’re unwilling to negotiate. Place an offer and then counter-offer as many times as needed in order to get the home you want.
Remember that you have the final word. The agent can and will make suggestions, but the final decision is yours. When you find the home that fits your needs, be ready to say, “Yes, this is the one.”

Just like any other relationship, the client-agent relationship takes work. If you both do your part, you’ll be more relaxed, make better decisions and achieve your real estate goals.

Links:

Preapproved for a loan

http://www.credit.com/mortgage-course/get-loan/get-preapproved/

Style of home

http://www.oldhouses.com/styleguide/

Be prepared to negotiate

http://www.latimes.com/classified/realestate/buying/offers/la-re-negotiate,0,5175590.story

Filed Under: Buyers

Be Informed If You Short Sale Your Real Estate

April 29, 2013 by Susan

If you are financially distressed, it might be time to cut your losses and minimize the damage to your financial future. If you’re feeling the economic pressure of an impending foreclosure, then consider putting your real estate up for a short sale.

While it might seem like short sales should be a speedy process, they’ve been known to play havoc with many unsuspecting sellers. We’ve created a list of the many short sale pitfalls sellers encounter.

Settle your accounts – Strive to pay off all your other debt. Your bank might not approve your short sale application if you have judgments from other creditors pending.
Pay your HOAs – Even if you’re defaulting on your mortgage, it’s important to meet your monthly Home Owner’s Association dues. Your HOA usually has to approve a short sale, so you definitely want to be in good standing when it’s time for them to sign on the dotted line.
Make sure your buyer is pre-approved – Talk with your real estate agent and have them ensure that your buyer is legitimate. If there is any wavering on the buyer’s side, the bank might not want to deal with the hassle and you’ll be declined.
Get your documents together – Your bank will want copies of all documents concerning your real estate before they even consider approving a short sale. Remember, they are forgiving you of debt, so do your best to make them want to help you.
Don’t give up – Even if you’re declined for a short sale several times, there’s a chance they’ll approve you the next go around. Find out why you were declined and try to remedy the situation as soon as possible.

Follow the tips above and you’ll be prepared to present a credible account to your bank.

Links:

Short sales

http://homeguides.sfgate.com/short-sale-process-sellers-1171.html

Home Owner’s Association

http://www.nolo.com/legal-encyclopedia/homeowners-associations-hoas-ccrs-29786.html

Declined for a short sale

http://homebuying.about.com/od/shortsale/a/100108_RejectSS.htm

Filed Under: Sellers

The Five-Year Rule for Home Ownership

April 27, 2013 by Susan

When considering whether you should purchase a new home, you want to take into consideration the five-year rule. That’s the minimum number of years many experts believe you need to own a home in order to break even on it when you sell it. Some experts are now suggesting seven years, but in this article I’ll be talking about the five-year rule.

What happens if you own your home for less than five years? Often, you’ll lose money because:

You pay thousands of dollars in closing costs each time you buy property. That money does not build equity or increase the value of your home in any way.
In the first five years of your home loan, a much higher percentage of your monthly mortgage payment goes toward interest than toward paying down the principal of the loan balance.

How do you beat the five-year rule?

Purchase a property you intend to fix up and rent it out at a rate equal to or higher than the mortgage payment.
Buy towards the lower end of what you can afford, and make extra payments to pay down the principal.

Why own for five years minimum?

After five years, due to the structure of amortized mortgages, the cost of owning a home equates to the cost of renting.
The five-year mark is where you typically start to build equity in your home.
Rental prices continue to rise; eventually your mortgage payment could be less than a rent payment.

Links:

Interest

http://www.investopedia.com/articles/pf/05/022405.asp

Amortized mortgages

http://www.mtgprofessor.com/A%20-%20Amortization/how_do_amortized_mortgages_work.htm

Rental prices

http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy_calc.asp

Filed Under: Buyers, Sellers