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.

Inspections · Real Estate · Selling

Inspection Misconception

Inspections are a part of most residential real estate transactions, but because they are so common, their role is often taken for granted or misunderstood.  There are some important points you should think about before ordering an inspection on a home you’ve offered to purchase.

Remember that a home inspection is not a witch-hunt!  It’s not a tool for finding flaws to allow you to renegotiate your offer.  An inspection is an educational exercise that allows buyers and sellers to better understand the home’s condition.  An inspection can alleviate the buyer’s anxiety while also providing a basis for repair suggestions.

Don’t think that you won’t need an inspection for new construction!  Nobody wants any surprises when purchasing an older home, but imagine what could happen in a brand new one that hasn’t even been lived in yet!  If you’re considering the purchase of a home under construction, ask about “phase inspections,” which are completed at various stages in construction for your peace of mind.

Finally, don’t assume that inspections are exclusively the responsibility of the buyer.  Many sellers have benefited from pre-listing inspections that identify potential problems before the home is listed and the defects are discovered.  Both sides can use the inspection to make smart decisions and feel more confident about the transaction.  If you’re still uncertain, contact a local real estate professional with your questions.

Note: This article was originally published on this site on September 29, 2016. It has been updated reflect the current home market.

Credit · Financing · Real Estate · Selling

Saved By The Net

You’re ready to list, but are you ready to sell? Let’s say that on the first day your home is for sale, your agent shows it to prospective buyers. They love it, and sign a purchase offer on the spot. You were asking $750,000, and they offered $720,000. Because they are relocating, they need an answer right away, by 6:00 pm. What do you say?

You don’t say, “We just can’t give you an answer that soon.” These buyers are motivated and prepared to buy your home, with a written offer and earnest money deposit.

So how do you make up your mind so quickly? You must simply decide what your rock bottom price is before your home is even shown. Be prepared to negotiate on-the-spot by first asking your agent for a “Net” sheet based on your asking price.

The sheet will show what expenses must be paid out of the gross sales price, i.e. closing costs, brokerage fee, the payoff on your existing mortgage, etc.—resulting in the “net” proceeds that you will receive at closing.

Next, ask the agent to figure other net sheets based on receiving 95% or even 90% of the asking price. This helps you determine the absolute lowest offer you can accept. Once you know that figure, keep it to yourself and be prepared for all possibilities!

This article was originally published on this site on April 23, 2012. It has been updated reflect the current home market.

Real Estate · Selling

Start Moving Yesterday

Let’s say you’ve just decided to list your home for sale. You know there’s a lot to plan, but when do you start preparing to move? In a word, NOW! Stay focused and don’t panic!

The main aspect guiding your planning will be whether you’re moving a long distance or just locally. Either way, begin hoarding boxes, packing tape, moving blankets, packing peanuts – and big black markers to indicate contents and locations on every single box.

In many cases, you’ll want to consider a professional mover, and your listing agent can make some excellent recommendations. However, be sure your choice is licensed and bonded, and that their employees have workman’s comp insurance. Always get an estimate in writing, from more than one company, and inquire about their equipment, training and experience. References should always be available upon request.

Well in advance of The Big Day, hold a moving sale to reduce the amount you have to pay for your move. Items that don’t sell can often be donated to charitable organizations, or taken to the landfill as a last resort.

When you’re finally “outta there,” make sure you’ve brought enough cash for your travel, your medications and supplements, and your children’s favorite toys, games and entertainment. It could be a few days before you have access to your belongings, so plan ahead and be prepared!

This article was originally published on this site on June 8, 2012. 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.

Real Estate · Selling

Excuse Our Dust

Most homes need some fix-up and repairs to prepare them for buyers, but when should they be done?  Should an open house for agents be delayed until the house is in “model-home” condition?

For the answers, consider a scenario of a department store during renovations that puts up “Excuse Our Dust” signs.  Which would impress you most:

1) shopping at a store that promises to look better in the future,
2) shopping at one in the midst of actually improving their looks, or
3) waiting to shop until the store reopens, brightly illuminated with spacious aisles, and decorated to get your attention?

Can you see the difference?  Most buyers want to purchase a home matching their mental picture of their dream home – now.  Real estate agents want to show homes that will please their buyers – now.

Once you decide to sell your home, get sound advice from your real estate agent about needed repairs.  Prepare a written list, and complete every item before the “For Sale” sign goes up.

Now you can showcase your home to buyers, and ask your agent to invite other real estate professionals to preview your home.  They will only see  the positives and get the best possible price.

Avoid shortcuts and low offers when preparing your home for sale.  Ask your agent for details.

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

Real Estate · Selling

The Difference Between Selling and Dwelling

There is a special mindset associated with “staging” your home to sell in a soft market.  Staging refers simply to the act of improving your home’s appearance in order to appeal to the widest segment of potential buyers.  The approach you must adopt is to see your home with an objective eye.

Stop looking at your home as your “home,” and start visualizing it as the “product” it becomes when it enters the market.  Both a real estate agent and a professional home stager can help to market your product successfully by highlighting positive features and downplaying less attractive aspects.

Since you may have a strong emotional attachment to your home, you may not fully appreciate hearing about a better way to show your offering, but try to recognize that the way you decorate to SELL may be quite different from the way you decorate to dwell.  The appearance of a space often trumps its functionality when impressing buyers.

Your goal is to sell quickly at a fair price.  A survey by a large national real estate brokerage showed that staged homes sell in less time, and another survey of REALTORS® showed that a $500 “staging” investment recouped 343% of that cost.  So be prepared to swallow a little pride, move some furniture, and field better offers on the road to your successful sale.