Buying · Real Estate · Selling

Trade Up or Trade In?

If you’re ready to upgrade to a larger home, or need to relocate, you’re presented with a dilemma.  You can’t simply “trade in” like an automobile, so your choice is:

1) sell your existing home first, or
2) own two homes until the first one sells.

But what if you can’t find another home?  Will you be left on the street?  Or how can you afford to own two homes at one time?  What is the answer?

If owning two homes is out of the question, explain this to the agent who lists your home.  It’s a good idea to begin looking for your next home before you have a buyer for your old one, but not necessarily wise to attempt a purchase.

If you find another home, and make an offer contingent upon the sale of your present one, sellers are less likely to accept your offer. But while your home is for sale, continue looking at others.  Try to select two or three that meet your needs.  Then, as soon as you have a contract on your present home, begin negotiations to purchase your favorite.  If, by chance, it is already sold, you will still have the opportunity to purchase one of the others or possibly another new one that is new on the market.

Ask your agent to explain this situation in more detail.  The more you know, the more comfortable you will be with your decision.

Buying · Real Estate · Selling

It Takes Two To Harmonize

Whether you are buying a home or selling one, it is likely that once an Offer To Purchase is on the table, you’ll enter a phase of the transaction called Negotiation.  Fear not – this is how both sides “win.”  By following a few reasonable recommendations, both parties can turn Negotiation into Agreement.

It’s best to begin with a fair asking price and a fair offer.  Sellers, don’t shoot for the moon.  Buyers, don’t lowball on a home you really want.  Overpricing is a turnoff to potential buyers, while low offers may meet with outright rejection.

Next, understand and respect each other’s priorities. Seller won’t budge on price?  Perhaps they would pay more of the transaction fees. Buyer urgently needs quick possession?  Perhaps they would forgo some repairs.

This illustrates the value of compromise.  A win-win situation doesn’t necessarily mean that both parties get everything they demand.  Avoid emotional decisions and be open to concessions.  If you can’t agree on a particular term, try meeting in the middle.  Who will pay closing costs?  Who will pay for repairs?  You needn’t hold up the entire agreement when you can simply split the difference on certain terms and move forward.

Experienced real estate professionals are successful negotiators.  Bringing buyers and sellers together is Job Number One.  Protect your best interests by seeking the advice of a professional.

This article was originally published on this site on December 14, 2015. It has been updated reflect the current home market.

Buying · Real Estate · Taxes

One Last Thing to Pack

Whether you buy or sell a home, you will face moving day.  It should be a happy occasion, and you can invite Uncle Sam to the party!  That’s because if you’re relocating and working in a new place, you could qualify for a generous deduction on your income tax return.

Regardless of whether you own or rent, or whether you itemize your deductions or take the standard tax deduction, you can deduct qualified moving expenses.  There are two “litmus tests,” the first of which is that your new job location must be at least 50 miles further away than your old job.  Second, you must remain and work full-time for 39 out of the first 52 weeks after your move.

Even if you haven’t yet worked all 39 of those weeks when you file your next return, you can still claim the deduction.  If for any reason you do not fulfill that requirement after filing, then you’ll have to amend your next year’s return to delete those moving costs.

What sorts of expenses qualify? Hiring movers (or just the moving truck), storage costs (up to thirty days), even the gasoline if you drive from your old home to your new one.  So, before your move, designate a folder for all of your receipts, because the more you can substantiate, the more you can claim! Always check with your CPA or tax professional. Happy Motoring!

This article was originally published on this site on June 12th, 2012. It has been updated reflect the current home market.

Buying · Financing · Real Estate

Make Me a Match

Real estate agents are not necessarily mortgage specialists.   However, we all know that financing is an integral part of any real estate transaction, and buyers often look to agents for some guidance relating to their loan options.

It is for this very reason that agents maintain strong relationships with local lenders and mortgage specialists.  With all the issues involved in coordinating the sale and purchase of property, many agents simply don’t have the resources to become experts in such an ever-changing field as mortgage products.

There are now more choices than ever in terms of documentation, payment options, and loan terms.  Just as examples, some of the most popular loans are Fixed-Rate Mortgages, Adjustable-Rate Mortgages (ARMs), and Interest-Only loans.

“Fixed” are just that – regular principal and interest payments for an established period of time.  ARMs fluctuate, but new “hybrids” offer a fixed rate after a certain number of years.  Interest-only loans are uncertain if you choose not to pay any principal in the early part of the loan, but can work out if you need short-term cash flow or intend to move or refinance shortly.

Every buyer has a best mortgage match, and there are literally hundreds of options.  It can make your head spin!  Have an agent recommend another professional who can help get you into the home of your dreams.


This article was originally published on this site on January 30, 2015. It has been updated reflect the current home market.

Buying · Real Estate · Selling

How Much is Enough

My word is my bond!  That expression held great meaning to land buyers and sellers in the “olden” days.  Most real estate sales were made with a handshake, and a verbal promise to complete the transaction at some future date.

Later, as a show of their good intentions, buyers would give sellers a sum known as “earnest money” to be held until the sale was consummated.  This deposit had more ceremonial significance than monetary assurance of a completed sale.

Today, earnest money deposits are a part of most every real estate transaction.  The amount used as a deposit is negotiable between buyers and sellers, with no minimum or maximum required by law.

There is, however, a strong message attached to the amount of money tendered by buyers.  As the saying goes, “Money talks!”  If sellers are presented with two identical offers on their home, one with a $10,000 deposit, and the other with $500, which do you think they are most likely to accept?  Sellers believe the higher deposit indicates buyers who are more qualified to complete the purchase.

Having said that, understand that earnest money is just one factor to be considered when buying or selling a home.  The amount of the deposit is relative, and depends on the unique nature of each property.  Detailed information about earnest money deposits is available from the real estate agent you choose.

Buying · Financing · Real Estate

Keep the Horse Before the Cart

While many buyers are aware that a mortgage pre-approval letter increases their buying confidence and power, most may not understand exactly why pre-approval is so important.  Why should you jump through the application hoops before even beginning your home search?

First, you’ll know exactly how much loan you can afford, making your initial home search much easier.  Why waste your time looking at homes either out of your reach or well below your financial grasp?

Second, pre-approved buyers stand on solid negotiating ground with sellers.  Sellers working with well-qualified buyers are more likely to accept the offer and less likely to stall on terms and conditions.

Notice that the topic of this column is “pre-approval,” and not “pre-qualification.”  What’s the difference?  Pre-qualification is easy – you provide basic information to a lender, and in a few short minutes, you have an answer.  Pre-approval requires strict verification of documentation relating to your employment, credit history, sources of income, etc.  It takes more time, but is more accurate and carries more weight.

Understand that pre-approval is not binding, and is still subject to a satisfactory appraisal on the prospective purchase.  If your financial situation changes, interest rates rise or fall, or the deadline passes, a recalculation will be necessary; but a little legwork now will pay off handsomely as you approach the finish line on your contract.

Note: This article was originally published on this site on May 5, 2016. It has been updated reflect the current home market.

Buying · Inspections · Real Estate · Selling

Avoid the Red Tag

Have you ever noticed clothing sales that advertise “seconds” at greatly reduced prices? The “second” quality merchandise may exhibit flaws like uneven seams and pulled stitches, and capitalizes on the slightly lower quality in exchange for a lower price.

Much like those “markdowns,” a home being offered for sale with obvious flaws also invites a lower price. Homebuyers, like other savvy shoppers, quickly become aware of needed repairs, and then begin scrutinizing the home for other defects.

If you plan to sell your home and expect to receive a reasonable offer, be certain that all needed repairs are completed before the “For Sale” sign appears out front. If you don’t, expect to receive about $2 less for each $1 in needed repairs.

Protect your investment by asking an agent for advice. They will walk through your home as a buyer would, making notes of all attention. This could range from a cracked windowpane to carpet in need of replacement. No matter what the flaw may be, if it attracts attention, it also becomes a point on which the buyer may negotiate a lower sale price.

Your real estate agent can guide you further by providing marketing tips to make your home more attractive to buyers. Remember that by offering a “first quality” home, you may expect to receive the best price.

Note: This article was originally published on this site on April 21, 2016. It has been updated reflect the current home market.