Provided By Trulia
Go for the long haul
When looking for a home, search for one that you could see yourself living in for several years -- at least five to seven years is ideal. Buying -- and moving -- to a new home takes a lot of time and effort, and can add up significantly in closing and moving costs, etc. Staying in place longer will help you avoid those added expenses. Plus, the extra time spent in your home could be just enough to help you ride out a downturn in the real estate market.
Leave room to grow
Aim for a home that can adapt to your needs as your life changes, say, if you have a new baby, or Junior moves back in after college. If you can't afford a place that's large enough to meet your anticipated future needs now, look for one that will allow you to build on later on.
Be flexible
Consider a place with rooms that can serve multiple functions, so the home remains highly functional for you through the years. For example, an open-floor-plan-style home is very adaptable. A kitchen that overlooks a family room is helpful when one's children are young (you can cook while watching the kids), while such a kitchen is also great for entertaining your friends once the kids leave the roost.
Go for your type
Think about what style of home fits you best -- house, condo, townhome, etc. -- they're not one size fits all. For example, a single-family home -- which sits on its own lot and must be maintained by the homeowner -- may be great for a person seeking privacy, but not so wonderful for somebody who doesn't want to worry about mowing the lawn, fixing the plumbing, etc. Meanwhile, a condo might be perfect for somebody who wants a "lock 'n' leave" lifestyle, but not for somebody who doesn't like sharing a wall with his neighbors.
Check the surroundings
When you purchase a home, you not only get a house, you also buy into a neighborhood. Think about whether that neighborhood will suit you. Sure, you might love the house itself, but will the loud neighbors next door or the school across the street become too bothersome for you? Also, do you like the feel of the neighborhood and does it offer everything you need? It's best to find a place in a community that you'll enjoy.
Buy what you can afford
It's easy to shoot for the sky and overspend when buying a home -- you understandably want the best your money can buy. Examine your finances, keeping in mind current and future expenses, and don't exceed your means. It's smarter to buy a home you can easily afford than one you have to stretch to get into. Stay down to earth, and you'll be better prepared should unexpected financial commitments and problems arise later down the road.
Think "home" first
When purchasing a home, don't imagine the dollar signs you'll see the day you sell it. A home is just that -- primarily a "home," and not an investment. So, buy a place that'd be great to live in first and think about its resale value second. Predicting real estate cycles and home appreciation is tough enough for the experts -- and much more for the average home buyer. Plus, while home renovations tend to add value to a residence, they rarely recoup more than what was spent on them.
Look at both old and new
It's nice to move into a place that's brand-new. But, new isn't always better. Consider both old and new. While you might not like a previous homeowner's decorating decisions, you might like the owner-installed upgrades -- like a finished basement and a backyard deck -- that a new home might not have.
Location, location
You've heard this tip before, but a home's location does matter. A house that's located on a busy, noisy street may be less enjoyable to you as a homeowner than one situated on a quiet, secluded cul-de-sac. Plus, a home on a cul-de-sac is likely to be worth more than a poorly located one when it comes time to resell. So consider a home's location before you're smitten by a spectacular interior.
When it comes time to sell
While you want to think of your place as a home first and not an investment, it doesn't make sense to purchase a white elephant, either. You should put at least some thought into how easy -- or difficult -- it'll be to resell the home one day. If a home is so unlike other nearby homes in terms of size, style, price, etc., you might want to skip it and look elsewhere -- it could become a burden should you want to someday move on.
Looking for your perfect home? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com.
Showing posts with label trulia. Show all posts
Showing posts with label trulia. Show all posts
Wednesday, August 3, 2011
Wednesday, July 6, 2011
Everything you need to know about deeds
Provided By Trulia
For the home buyer, the deed is the heart of the real estate transaction. Your real estate contract will specify the terms of the sale, but it's actually the signed deed that will transfer ownership -- called "title" -- of the home from the home seller to you, the buyer.
This legal document must be in writing and must be signed by the seller, and in many cases, by the buyer too. Your real estate broker and your attorney should be able to help you in drawing up this document.
Often it is necessary to have the document registered with the county recorder's office in the county where the property is located and to be signed in a notary's presence to authenticate the signatures.
There are several types of deeds, but the one that will protect you the most as a buyer is the warranty deed in which the seller promises that he does indeed have title to the property, has a right to sell the property and is transferring it to the buyer.
The seller also promises or warranties that there are no "encumbrances" (something that gives somebody other than the buyer a right to the property, such as liens) or "defects" -- errors or flaws in a deed that may affect transfer of the property. Very similar to the warranty deed is the grant deed.
The riskiest type of deed for a buyer is the "quitclaim" deed, which offers no warranties for the buyer. Make sure you speak with your attorney about the type of deed you'll be receiving and about any cautions, if any, associated with it.
Since the deed is a legal document that's crucial in the legal transfer of a home, it's crucial that you properly review the deed in its entirety before the transfer is completed and the deed is recorded. Among the items you should carefully check in the deed are:
The seller
The deed must correctly identify the seller by name (and sometimes by address). The seller is known as the "grantor" in the deed.
The buyer
As the buyer, you should be the "grantee" specified in the deed. Look to see that your legal name is spelled correctly, and if a street address or post office box for you is given, that it's correct.
The legal description of the property
In the deed, your property will be described according to an accepted survey, which will refer to your property by lot number, section and possibly metes and bounds. The street address for the property may also be noted.
Finally, for a deed to become valid, it must be delivered to and accepted by both the buyer and the seller. Once every detail is properly executed with the deed, you are the rightful owner of your new home!
Have questions about the closing process? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com.
For the home buyer, the deed is the heart of the real estate transaction. Your real estate contract will specify the terms of the sale, but it's actually the signed deed that will transfer ownership -- called "title" -- of the home from the home seller to you, the buyer.
This legal document must be in writing and must be signed by the seller, and in many cases, by the buyer too. Your real estate broker and your attorney should be able to help you in drawing up this document.
Often it is necessary to have the document registered with the county recorder's office in the county where the property is located and to be signed in a notary's presence to authenticate the signatures.
There are several types of deeds, but the one that will protect you the most as a buyer is the warranty deed in which the seller promises that he does indeed have title to the property, has a right to sell the property and is transferring it to the buyer.
The seller also promises or warranties that there are no "encumbrances" (something that gives somebody other than the buyer a right to the property, such as liens) or "defects" -- errors or flaws in a deed that may affect transfer of the property. Very similar to the warranty deed is the grant deed.
The riskiest type of deed for a buyer is the "quitclaim" deed, which offers no warranties for the buyer. Make sure you speak with your attorney about the type of deed you'll be receiving and about any cautions, if any, associated with it.
Since the deed is a legal document that's crucial in the legal transfer of a home, it's crucial that you properly review the deed in its entirety before the transfer is completed and the deed is recorded. Among the items you should carefully check in the deed are:
The seller
The deed must correctly identify the seller by name (and sometimes by address). The seller is known as the "grantor" in the deed.
The buyer
As the buyer, you should be the "grantee" specified in the deed. Look to see that your legal name is spelled correctly, and if a street address or post office box for you is given, that it's correct.
The legal description of the property
In the deed, your property will be described according to an accepted survey, which will refer to your property by lot number, section and possibly metes and bounds. The street address for the property may also be noted.
Finally, for a deed to become valid, it must be delivered to and accepted by both the buyer and the seller. Once every detail is properly executed with the deed, you are the rightful owner of your new home!
Have questions about the closing process? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com.
Friday, June 24, 2011
Choosing the Right Exterior Paint
Provided By Trulia.com
The type of paint you'll use depends on the kind of surface to be painted - wood, aluminum, vinyl, stucco or masonry - and the type of finish you want. Exterior paint is specifically formulated to provide:
•Color and gloss retention
•Flexibility to withstand expansion and contraction due to weather
•Mildew resistance
Latex or Oil
Exterior house paints fall into one of two categories: latex or oil (alkyd). Each has different characteristics.
Latex
Get the longest-lasting finish with the best gloss retention. Latex paints are easy to work with, dry quickly and are extremely durable. Latex paints also clean up easily with soap and water.
Oil / Alkyd
Good adhesion, excellent durability and stain resistance make oil / alkyd-based paints excellent choices for exterior trim. Clean paint tools with mineral spirits.
Matching Paint to Surfaces
To ensure a quality paint job that will last, the paint you'll use depends on the type of surface you want to paint.
Walls
Because it's easy to work with, latex paint is an excellent choice for do-it-yourself projects. Latex paints can be applied over properly prepared wood, vinyl, aluminum and stucco.
Metal
Use either latex or oil/alkyd paint on properly primed iron or steel. You can apply latex directly on aluminum and galvanized metal. However, these metals need to be properly primed if you're using oil/alkyd-based paint.
Trim
Either latex or oil/alkyd paint is appropriate for trim. Gloss and high gloss finishes are generally your first choice, but flat or satin finishes are fine selections.
Selecting a Sheen
Exterior paint comes in a full range of sheens. The finish you choose will be based on the type of surface you're painting and the durability and final appearance you want to achieve.
Flat/ Matte
This finish softens the look of an exterior and helps hide surface blemishes. Flat finishes are ideal for body siding.
Satin
With its slight gloss, this finish offers the benefits of a flat finish with added cleanability. It works best for:
•Trim
•Window frames
•Shutters
•Surfaces that need routine cleaning
Gloss
This lustrous, durable finish is perfect for areas that require frequent cleaning. Gloss finishes, however, may accentuate surface imperfections. This finish is ideal for:
•Doors
•Garage doors
•Decorative metal (lamp posts, metal trim)
•Functional metal (gutters, downspouts, railings)
•Accent trim
High Gloss
This extremely hard and shiny finish provides a rich, smooth luster. Gloss finishes, however, may accentuate surface imperfections. This finish is excellent for:
•Front (main entry) doors
•Decorative fixtures
•Accent trim
Are you looking for a new home to jazz up? Give us a call at 972-772-7000 or email us at frontdesk552@kw.com.
The type of paint you'll use depends on the kind of surface to be painted - wood, aluminum, vinyl, stucco or masonry - and the type of finish you want. Exterior paint is specifically formulated to provide:
•Color and gloss retention
•Flexibility to withstand expansion and contraction due to weather
•Mildew resistance
Latex or Oil
Exterior house paints fall into one of two categories: latex or oil (alkyd). Each has different characteristics.
Latex
Get the longest-lasting finish with the best gloss retention. Latex paints are easy to work with, dry quickly and are extremely durable. Latex paints also clean up easily with soap and water.
Oil / Alkyd
Good adhesion, excellent durability and stain resistance make oil / alkyd-based paints excellent choices for exterior trim. Clean paint tools with mineral spirits.
Matching Paint to Surfaces
To ensure a quality paint job that will last, the paint you'll use depends on the type of surface you want to paint.
Walls
Because it's easy to work with, latex paint is an excellent choice for do-it-yourself projects. Latex paints can be applied over properly prepared wood, vinyl, aluminum and stucco.
Metal
Use either latex or oil/alkyd paint on properly primed iron or steel. You can apply latex directly on aluminum and galvanized metal. However, these metals need to be properly primed if you're using oil/alkyd-based paint.
Trim
Either latex or oil/alkyd paint is appropriate for trim. Gloss and high gloss finishes are generally your first choice, but flat or satin finishes are fine selections.
Selecting a Sheen
Exterior paint comes in a full range of sheens. The finish you choose will be based on the type of surface you're painting and the durability and final appearance you want to achieve.
Flat/ Matte
This finish softens the look of an exterior and helps hide surface blemishes. Flat finishes are ideal for body siding.
Satin
With its slight gloss, this finish offers the benefits of a flat finish with added cleanability. It works best for:
•Trim
•Window frames
•Shutters
•Surfaces that need routine cleaning
Gloss
This lustrous, durable finish is perfect for areas that require frequent cleaning. Gloss finishes, however, may accentuate surface imperfections. This finish is ideal for:
•Doors
•Garage doors
•Decorative metal (lamp posts, metal trim)
•Functional metal (gutters, downspouts, railings)
•Accent trim
High Gloss
This extremely hard and shiny finish provides a rich, smooth luster. Gloss finishes, however, may accentuate surface imperfections. This finish is excellent for:
•Front (main entry) doors
•Decorative fixtures
•Accent trim
Are you looking for a new home to jazz up? Give us a call at 972-772-7000 or email us at frontdesk552@kw.com.
Monday, June 20, 2011
Neither a borrower - explaining annual percentage rates
Provided By Trulia.com
Humans have a natural tendency to portray themselves in the best possible light. When the neighborhood kid who mows the lawn wants more money, he says his rate is lower than what the other kids are charging. When he gets together with the other kids, he brags about getting paid 20 percent more for the same amount of work.
Consumer credit companies, including mortgage lenders, are no different. When they're lending you money, they like to talk about their low APR, which stands for Annual Percentage Rate. When they're "borrowing" your money (by selling you a CD at the bank, for instance) they advertise their generous APY, which stands for Average Percentage Yield.
APR is the term relevant to mortgage borrowers. But it's useful to understand both, as well as a third concept—compounding.
When you're paying a simple interest loan at a rate of, say, 12 percent per year, it's easy to calculate its effect per month. It's 1 percent. At that rate, a $10,000 debt balance increases by $100 each month or $1,200 each year.
Enter the "magic" of compounding. Einstein called it "the most powerful force in the universe."
For the lender, the magic works this way. After one month, your new balance is $10,100. At that point, the lender starts charging interest not on $10,000 but on the new balance of $10,100. After a year (if you've made no payments) your balance is $12,268. Your simple interest rate was 12 percent but your APR worked out to 12.68 percent.
In fact, for the borrower, it's worse than that. Lenders don't compound monthly—most do it daily. That's the significance of the "daily periodic rate" you see listed at the bottom of your statement. The above 12.68 percent APR becomes something like 12.74 percent. (In a periodic rate, more "periods" means more interest.)
There is more you should know about APR. InvestorWords.com defines it as "the yearly cost of a mortgage, including interest, mortgage insurance, and the origination fee (points), expressed as a percentage."
The add-ons are man-made, not mathematical constructs. But clearly, they're of interest to borrowers when cross-shopping loan rates between banks. Just be sure the same number of points is factored into both figures, or you're comparing an apple to an orange.
Hey, what about APY? Again, that's more relevant when you're the lender. Buy a 12-month CD and the bank will advertise its great Annual Percentage Yield of 1.4 percent - which sounds a little better to you than the APR, which is 1.3-something. Hence, the magic works in your favor for once.
A related note comes from the Lessons for Life Department. Given a choice, be a lender, not a borrower. Better yet, be a bank.
If you would like to learn more about borrowing, give us a call at 972-772-7000 or email us at frontdesk552@kw.com.
Humans have a natural tendency to portray themselves in the best possible light. When the neighborhood kid who mows the lawn wants more money, he says his rate is lower than what the other kids are charging. When he gets together with the other kids, he brags about getting paid 20 percent more for the same amount of work.
Consumer credit companies, including mortgage lenders, are no different. When they're lending you money, they like to talk about their low APR, which stands for Annual Percentage Rate. When they're "borrowing" your money (by selling you a CD at the bank, for instance) they advertise their generous APY, which stands for Average Percentage Yield.
APR is the term relevant to mortgage borrowers. But it's useful to understand both, as well as a third concept—compounding.
When you're paying a simple interest loan at a rate of, say, 12 percent per year, it's easy to calculate its effect per month. It's 1 percent. At that rate, a $10,000 debt balance increases by $100 each month or $1,200 each year.
Enter the "magic" of compounding. Einstein called it "the most powerful force in the universe."
For the lender, the magic works this way. After one month, your new balance is $10,100. At that point, the lender starts charging interest not on $10,000 but on the new balance of $10,100. After a year (if you've made no payments) your balance is $12,268. Your simple interest rate was 12 percent but your APR worked out to 12.68 percent.
In fact, for the borrower, it's worse than that. Lenders don't compound monthly—most do it daily. That's the significance of the "daily periodic rate" you see listed at the bottom of your statement. The above 12.68 percent APR becomes something like 12.74 percent. (In a periodic rate, more "periods" means more interest.)
There is more you should know about APR. InvestorWords.com defines it as "the yearly cost of a mortgage, including interest, mortgage insurance, and the origination fee (points), expressed as a percentage."
The add-ons are man-made, not mathematical constructs. But clearly, they're of interest to borrowers when cross-shopping loan rates between banks. Just be sure the same number of points is factored into both figures, or you're comparing an apple to an orange.
Hey, what about APY? Again, that's more relevant when you're the lender. Buy a 12-month CD and the bank will advertise its great Annual Percentage Yield of 1.4 percent - which sounds a little better to you than the APR, which is 1.3-something. Hence, the magic works in your favor for once.
A related note comes from the Lessons for Life Department. Given a choice, be a lender, not a borrower. Better yet, be a bank.
If you would like to learn more about borrowing, give us a call at 972-772-7000 or email us at frontdesk552@kw.com.
Friday, May 13, 2011
Four questions to ask before choosing a mortgage broker
Provided By Trulia
Mortgage brokers are engaged in the business of finding you the best home loan. Their true clients are the lenders, and their real "job" is to deliver good, creditworthy borrowers like you.
Mortgage brokers have encountered a formidable competitor in the past decade or so, called the Internet. Borrowers can compare loans through sites like Trulia Mortgage, eloan.com and LendingTree.com. Fill out a credit application and receive several offers. When banks compete, as the slogan says, you win.
That's a good way not only to pit lender against lender (a subject for another chapter), it's also useful keep your broker honest as well. Your job is to monitor the market. Why? Because loan rates change daily. A broker acting in sheer self-interest could bait you with one rate (possibly lower than reality), knowing you can't "lock" that rate until you complete the full application process. It's always a good practice to be skeptical and do you homework.
Why haven't I seen a rate like this elsewhere?
Ask this question only after having done some homework. A similar scenario would be a broker who advertises rates below market to get you in the door, and then lists all the fees necessary to make that rate possible — even including lofty origination fees.
What are the fees and costs associated with the interest rate you've quoted?
(Above-the-board brokers welcome questions like this.)
Fees take many forms. There are charges for your credit report, appraisal, title insurance, deed-recording, overnight deliveries, etc. For a rate quote to meaningful, it should be accompanied by a list of all related fees and costs.
Your broker must supply a Good Faith Estimate of all charges before the closing. The estimated figures aren't set in stone because "third party" costs such as title insurance premiums can change. But it's possible to know the total tab, or a figure pretty close to it, several days in advance.
Ads and other promises aside, you don't really know what you'll be paying until your rate is "locked". Brokers have been known to game this process. For example, a broker might say your rate is locked when it's not, and if rates go down before closing, he could sell you the higher rate you agreed to and pocket the difference. A broker who plays this game and loses (because rates go up) could tell you that your rate wasn't really locked — it was a misunderstanding.
If your rate truly is locked, your broker will have proof of it. Hence this line of inquiry:
May I see the lenders commitment letter that shows my rate is locked in?
Many states have started licensing brokers. This is a positive development, with potential to weed out the few bad apples remaining in the business. In the past, going into business took nothing more than a web site and a shingle. Licensing requirements will prevent scams. Still, one very basic question is always in order:
How long have you been in business?
Longevity is important--time and nature have a way of separating the wheat from the chaff. With the array of available mortgage products more complex than ever, experience is important too. Look for at least five years in the business. With that as a minimum, your broker will have seen good times as well as bad.
Are you ready to buy but need a great mortgage lender? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com.
Mortgage brokers are engaged in the business of finding you the best home loan. Their true clients are the lenders, and their real "job" is to deliver good, creditworthy borrowers like you.
Mortgage brokers have encountered a formidable competitor in the past decade or so, called the Internet. Borrowers can compare loans through sites like Trulia Mortgage, eloan.com and LendingTree.com. Fill out a credit application and receive several offers. When banks compete, as the slogan says, you win.
That's a good way not only to pit lender against lender (a subject for another chapter), it's also useful keep your broker honest as well. Your job is to monitor the market. Why? Because loan rates change daily. A broker acting in sheer self-interest could bait you with one rate (possibly lower than reality), knowing you can't "lock" that rate until you complete the full application process. It's always a good practice to be skeptical and do you homework.
Why haven't I seen a rate like this elsewhere?
Ask this question only after having done some homework. A similar scenario would be a broker who advertises rates below market to get you in the door, and then lists all the fees necessary to make that rate possible — even including lofty origination fees.
What are the fees and costs associated with the interest rate you've quoted?
(Above-the-board brokers welcome questions like this.)
Fees take many forms. There are charges for your credit report, appraisal, title insurance, deed-recording, overnight deliveries, etc. For a rate quote to meaningful, it should be accompanied by a list of all related fees and costs.
Your broker must supply a Good Faith Estimate of all charges before the closing. The estimated figures aren't set in stone because "third party" costs such as title insurance premiums can change. But it's possible to know the total tab, or a figure pretty close to it, several days in advance.
Ads and other promises aside, you don't really know what you'll be paying until your rate is "locked". Brokers have been known to game this process. For example, a broker might say your rate is locked when it's not, and if rates go down before closing, he could sell you the higher rate you agreed to and pocket the difference. A broker who plays this game and loses (because rates go up) could tell you that your rate wasn't really locked — it was a misunderstanding.
If your rate truly is locked, your broker will have proof of it. Hence this line of inquiry:
May I see the lenders commitment letter that shows my rate is locked in?
Many states have started licensing brokers. This is a positive development, with potential to weed out the few bad apples remaining in the business. In the past, going into business took nothing more than a web site and a shingle. Licensing requirements will prevent scams. Still, one very basic question is always in order:
How long have you been in business?
Longevity is important--time and nature have a way of separating the wheat from the chaff. With the array of available mortgage products more complex than ever, experience is important too. Look for at least five years in the business. With that as a minimum, your broker will have seen good times as well as bad.
Are you ready to buy but need a great mortgage lender? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com.
Friday, March 18, 2011
5 Mortgage and Foreclosure Myths
Provided By Trulia
In a mortgage market that changes as quickly as this one, today’s fact is tomorrow’s fiction. For buyers, misinformation can be the difference between qualifying for a home loan or not. Sellers and owners, knowledge is foreclosure-preventing, smart decision-making power! Without further ado, let’s correct some common mortgage misconceptions.
1. Myth: Buyers with bad credit can’t qualify for home loans. Obviously, mortgage guidelines have tightened up, big time, since the housing bubble burst, and they seem likely to tighten even further over the long-term. But just this moment, they have relaxed a bit. In the last couple of weeks, two of the nation’s largest lenders of FHA loans announced that they’ve dropped the minimum FICO score guideline from 620 (which allows for some credit imperfections) to 580, which is actually a fairly low score.
At a FICO score of 620, buyers can qualify for FHA loans at many lenders with only 3.5 percent down. With a score of 580, the lenders are looking for more like 5 to 10 percent down – they want to see you put more of your own skin in the game, and the higher down payment lowers the risk that you’ll default. However, if your credit has taken a recessionary hit, like that of so many Americans, this might create a glimmer of hope that you’ll be able to take advantage of low prices and interest rates without needing years of credit repair.
2. Myth: The Mortgage Interest Deduction isn’t long for this world. Homeowners saved over $85 billion in 2008 by deducting their mortgage interest on their income tax returns. A few months ago, the National Commission on Fiscal Responsibility and Reform caused a massive wave of fear to ripple throughout the world of real estate consumers and professionals when they recommended Mortgage Interest Deduction (MID) reform, which would dramatically reduce the size of the deduction.
Fact is, the Commission made a sweeping set of deficit-busting recommendations to Congress, a few of which are likely to be adopted. Fortunately for buyers and sellers, MID reform is not one of them. Very powerful industry groups and economists have been working with Congress to plead the case that MID reform any time in the near future would only handicap the housing recovery. Congress-folk aren’t interested in stopping the stabilization of the real estate market. As such, the MID is nearly universally thought of as safe – even by those who disagree that it should be.
3. Myth: It’s just a matter of time before loan guidelines loosen up. The US Treasury Department recently recommended the elimination of mortgage industry giants Fannie Mae and Freddie Mac. I won’t get into the eye-glazing details of it here, but the long and the short is that (a) this is highly likely to happen, and (b) it will make mortgage loans much harder and costlier to get, for both buyers and homeowners. It’s possible that loans are as easy to get as they’re going to get. So don’t expect that if you hold out, zero-down mortgages will come back into vogue anytime soon. Fortunately, Fannie and Freddie aren't likely to disappear for another 5-7 years, so you have a little time to pull your down payment and credit together. If you want to get into the market, the time to get yourself ready is now!
4. Myth: If you don’t have equity, you can’t refi. Much ado is being made about how stuck so many people are in their bad loans, because they don’t have the equity to refinance their way out of them. If you’re severely upside down (meaning you own much, much more than your home is worth), stuck may be the situation. But there are actually a couple of ways homeowners can refi their underwater home loans. If your loan is held by Fannie or Freddie (which you can find out, here), they will actually refinance it up to 125% of its current value, assuming you otherwise qualify for the loan. That means, if your home is worth $100,000, you could refinance a loan up to $125,000, despite the fact that your home can’t secure the full amount of the loan.
If your loan is not owned by Fannie or Freddie, you might be a candidate for the FHA “Short Refi” program. While most mortgage workout plans are only available to people who are behind on their loans, the Short Refi program is only available to homeowners who are current on their mortgages and need to refinance up to 115 percent of their homes’ value. So, if you owe $250,000 on your home, you can refinance via an FHA Short Refi even if your home’s value is as low as $217,000. If you think you’re a good candidate for a short refi, contact your mortgage broker, stat – there are some in Congress who think that this program is so underutilized (only 245 applications have been submitted since it rolled out in September – no typo!) that its funding should be diverted to other needy programs.
5. Myth: If you’ve lost your job and can’t make your mortgage payment, you might as well mail your keys in. Until recently, this was essentially true – virtually every loan modification and refinancing opportunity required that your economic hardship be over before you could qualify. And documenting income has always been high on the requirements checklist. But there are some new funds available in the states with the hardest hit housing and job markets, which have been designated specifically for out-of-work homeowners.
The US Treasury Department’s Hardest Hit Fund allocated $7.6 billion to the states listed below – all of which are now using some portion of these funds to offer up to $3,000 per month for up to 36 months in mortgage payment assistance to help unemployed homeowners avoid foreclosure. Contact the state agency listed below if you need this sort of help:
•Alabama: http://www.hardesthitalabama.com/
•Arizona: https://www.savemyhomeaz.gov/
•California: https://www.keepyourhomecalifornia.org/
•Florida: https://www.flhardesthithelp.org/
•Georgia: http://www.dca.state.ga.us/housing/homeownership/programs/hardesthitfund.asp
•Illinois: http://www.ihda.org/
•Indiana: http://www.877gethope.org/
•Kentucky: http://www.kyhousing.org/
•Michigan:http://www.michigan.gov/mshda/buyers/save_the_dream/helping+hardest+hit+homeowners++contact+your+mortgage+servicer+for+assistance
•Mississippi: http://www.mshomecorp.com/firstpage.htm
•Nevada: http://www.nahac.org/
•New Jersey: http://www.state.nj.us/dca/hmfa/home/foreclosure/homekeepers.html
•North Carolina: http://www.ncforeclosureprevention.gov/
•Ohio: http://www.savethedream.ohio.gov/
•Oregon: http://www.oregonhomeownerhelp.org/
•Rhode Island: http://www.hhfri.org/
•South Carolina: http://www.scmortgagehelp.com/
•Tennessee: http://www.thda.org/
•Washington D.C.: http://www.dchfa.org/
Do you have more mortgage and foreclosure questions? Give the experts a call at 972-772-7000 or email us at rockwall@kw.com.
In a mortgage market that changes as quickly as this one, today’s fact is tomorrow’s fiction. For buyers, misinformation can be the difference between qualifying for a home loan or not. Sellers and owners, knowledge is foreclosure-preventing, smart decision-making power! Without further ado, let’s correct some common mortgage misconceptions.
1. Myth: Buyers with bad credit can’t qualify for home loans. Obviously, mortgage guidelines have tightened up, big time, since the housing bubble burst, and they seem likely to tighten even further over the long-term. But just this moment, they have relaxed a bit. In the last couple of weeks, two of the nation’s largest lenders of FHA loans announced that they’ve dropped the minimum FICO score guideline from 620 (which allows for some credit imperfections) to 580, which is actually a fairly low score.
At a FICO score of 620, buyers can qualify for FHA loans at many lenders with only 3.5 percent down. With a score of 580, the lenders are looking for more like 5 to 10 percent down – they want to see you put more of your own skin in the game, and the higher down payment lowers the risk that you’ll default. However, if your credit has taken a recessionary hit, like that of so many Americans, this might create a glimmer of hope that you’ll be able to take advantage of low prices and interest rates without needing years of credit repair.
2. Myth: The Mortgage Interest Deduction isn’t long for this world. Homeowners saved over $85 billion in 2008 by deducting their mortgage interest on their income tax returns. A few months ago, the National Commission on Fiscal Responsibility and Reform caused a massive wave of fear to ripple throughout the world of real estate consumers and professionals when they recommended Mortgage Interest Deduction (MID) reform, which would dramatically reduce the size of the deduction.
Fact is, the Commission made a sweeping set of deficit-busting recommendations to Congress, a few of which are likely to be adopted. Fortunately for buyers and sellers, MID reform is not one of them. Very powerful industry groups and economists have been working with Congress to plead the case that MID reform any time in the near future would only handicap the housing recovery. Congress-folk aren’t interested in stopping the stabilization of the real estate market. As such, the MID is nearly universally thought of as safe – even by those who disagree that it should be.
3. Myth: It’s just a matter of time before loan guidelines loosen up. The US Treasury Department recently recommended the elimination of mortgage industry giants Fannie Mae and Freddie Mac. I won’t get into the eye-glazing details of it here, but the long and the short is that (a) this is highly likely to happen, and (b) it will make mortgage loans much harder and costlier to get, for both buyers and homeowners. It’s possible that loans are as easy to get as they’re going to get. So don’t expect that if you hold out, zero-down mortgages will come back into vogue anytime soon. Fortunately, Fannie and Freddie aren't likely to disappear for another 5-7 years, so you have a little time to pull your down payment and credit together. If you want to get into the market, the time to get yourself ready is now!
4. Myth: If you don’t have equity, you can’t refi. Much ado is being made about how stuck so many people are in their bad loans, because they don’t have the equity to refinance their way out of them. If you’re severely upside down (meaning you own much, much more than your home is worth), stuck may be the situation. But there are actually a couple of ways homeowners can refi their underwater home loans. If your loan is held by Fannie or Freddie (which you can find out, here), they will actually refinance it up to 125% of its current value, assuming you otherwise qualify for the loan. That means, if your home is worth $100,000, you could refinance a loan up to $125,000, despite the fact that your home can’t secure the full amount of the loan.
If your loan is not owned by Fannie or Freddie, you might be a candidate for the FHA “Short Refi” program. While most mortgage workout plans are only available to people who are behind on their loans, the Short Refi program is only available to homeowners who are current on their mortgages and need to refinance up to 115 percent of their homes’ value. So, if you owe $250,000 on your home, you can refinance via an FHA Short Refi even if your home’s value is as low as $217,000. If you think you’re a good candidate for a short refi, contact your mortgage broker, stat – there are some in Congress who think that this program is so underutilized (only 245 applications have been submitted since it rolled out in September – no typo!) that its funding should be diverted to other needy programs.
5. Myth: If you’ve lost your job and can’t make your mortgage payment, you might as well mail your keys in. Until recently, this was essentially true – virtually every loan modification and refinancing opportunity required that your economic hardship be over before you could qualify. And documenting income has always been high on the requirements checklist. But there are some new funds available in the states with the hardest hit housing and job markets, which have been designated specifically for out-of-work homeowners.
The US Treasury Department’s Hardest Hit Fund allocated $7.6 billion to the states listed below – all of which are now using some portion of these funds to offer up to $3,000 per month for up to 36 months in mortgage payment assistance to help unemployed homeowners avoid foreclosure. Contact the state agency listed below if you need this sort of help:
•Alabama: http://www.hardesthitalabama.com/
•Arizona: https://www.savemyhomeaz.gov/
•California: https://www.keepyourhomecalifornia.org/
•Florida: https://www.flhardesthithelp.org/
•Georgia: http://www.dca.state.ga.us/housing/homeownership/programs/hardesthitfund.asp
•Illinois: http://www.ihda.org/
•Indiana: http://www.877gethope.org/
•Kentucky: http://www.kyhousing.org/
•Michigan:http://www.michigan.gov/mshda/buyers/save_the_dream/helping+hardest+hit+homeowners++contact+your+mortgage+servicer+for+assistance
•Mississippi: http://www.mshomecorp.com/firstpage.htm
•Nevada: http://www.nahac.org/
•New Jersey: http://www.state.nj.us/dca/hmfa/home/foreclosure/homekeepers.html
•North Carolina: http://www.ncforeclosureprevention.gov/
•Ohio: http://www.savethedream.ohio.gov/
•Oregon: http://www.oregonhomeownerhelp.org/
•Rhode Island: http://www.hhfri.org/
•South Carolina: http://www.scmortgagehelp.com/
•Tennessee: http://www.thda.org/
•Washington D.C.: http://www.dchfa.org/
Do you have more mortgage and foreclosure questions? Give the experts a call at 972-772-7000 or email us at rockwall@kw.com.
Monday, March 7, 2011
Surprising Insider Secrets for the 5 Stages of Buying Your First Home
Provided By Trulia
Buying a home is not a discrete event; it's a process - a sequence of events that happens over time, sometimes over as long as several months or even years! While general guides to buying a home are a dime a dozen, I'm excited to share with you some insider secrets you may not have heard elsewhere - one for each stage involved in buying a home. Here's to helping you make the best decisions at every phase of your homebuying process!
Stage One: Deciding Whether It's The Right Time to Buy.
Insider Secret: The market is the least important factor you should consider when deciding whether and when to buy a home.
Why: Everyone knows affordability is at an all-time high. Home prices are low, and so are interest rates. But trying to time the market is a fool's errand; many who get caught up in that game of trying to make sure they buy at the absolute bottom will end up losing out on very, very favorable conditions.
Beyond that, the most important considerations when deciding whether and when you should buy a home are personal, not market driven. On today's market, it only makes sense to buy a place if it's going to be sustainable and work for you for at least the next 4-5 years [if your town's real estate market has been fairly recession-proof] or 7-10 years [if the housing/foreclosure crisis has hit your area pretty hard].
Against this "smart holding period" backdrop, smart buyers decide to buy when it makes sense for:
•their life plans (i.e., they are comfortable making the commitment to live in the same town, and the commitment to )
•their family plans (i.e., whether they plan to get married, have children or empty their nest in the time they plan to own the home - and the implications of these plans on their space needs and location priorities
•their career plans (including, but not limited to: whether they have job or income security, whether they feel they will be working in the same area for the foreseeable future, and whether they want to work less or start their own business in the months or years to come)
•their financial plans (including foreseeable changes in income and expenses, e.g., kids going to college or making partner at the firm).
Stage Two: Getting Pre-Approved.
Insider Secret: Working with a mortgage broker referred by your real estate broker or agent may save you money.
Why: Bolstered by the real-life stories of a couple of bad apples, TV pundits and some consumer advocates have spun the tale of a real estate industry cartel, whereby sinister agents hook unsuspecting buyers up with shady mortgage brokers, who place them in crappy loans and kick back some bucks to the agent. I'm here to tell you, in my experience, the opposite is true the vast majority of the time.
When you work with a mortgage broker who has a strong track record of helping your real estate agent's clients out, you end up in a best of all worlds situation, nine times out of ten. First off, your agent will take you much more seriously once a mortgage broker they know and trust has run your credit, checked your income and approved you for a loan, as well as communicated with your real estate pro about your qualifications and what you can afford. Secondly, your agent can help you communicate with your mortgage broker, sometimes helping get past appraisal glitches or facilitating other workarounds, as they come up. Third, you get the assurance of working with a mortgage pro who has been vetted and vouched for by someone you not only trust, but someone who can verify that the mortgage broker has the ability to get transactions closed in the timely manner required of today's real estate sales contract. Otherwise, you may end up working with a competent mortgage broker who has a great track record when it comes to refinancing, but can't keep up with the pace and common obstacles to getting a home financed in the context of a sale.
On top of that, sometimes the relationship can help you negotiate out of a couple of line item loan fees (if your particular mortgage rep has the power to get them down at all), if push comes to shove and cash is tight to close the deal. Assuming you are working with a real estate pro you really trust, working with a mortgage broker they trust can save you, rather than cost you, money.
Stage Three: House Hunting
Insider Secret: "Distressed" doesn't always equal "discounted" - in some cases, a "regular" sale can be a deeper deal.
Why: Short sales and foreclosures have grown to comprise roughly 30 percent of the homes sold on today's market, even higher in some areas. The average sale price of foreclosed homes was 32% lower than the average sale price of non-foreclosed homes, at last count. However, it's not always the case that foreclosed homes or short sales - homes which are being sold for less than what the seller owes on their mortgage(s) - offer the buyer a fabulous discount.
Mortgage servicers and asset managers who make decisions about distressed properties are on the hook to their investors to recoup as close as possible to the current fair market value of every home they sell. Some banks even have a general rule of rejecting offers more than 10 percent or so below the home's list price, preferring instead to reduce the price by that amount and put the home back on the open market to see if any new buyers are activated by the price reduction to make an offer better than the lowball offer that was initially put on the table. On short sales, the bank is trying to get as close as possible to recovering what the seller owes - and may or may not be concerned with what the fair market value of the home is. (Nine times out of ten, there will be a big gap between fair market value and the seller's outstanding mortgage balance. If there wasn't, the seller wouldn't need to do a short sale!)
With so many distressed properties and homes with depressed values on the market, in many areas, the individual, non-distressed home sellers who are putting their homes up for sale right now are those who are very motivated to sell. Further, they are more likely to be flexible with you on everything that is negotiable, from contingency and escrow periods, to price, to repairs and included items.
Also, individual sellers can be emotionally motivated to sell to move on with their lives, get into their bigger (or smaller) house, or move on to their next job; banks, on the other hand, aren't people (!), so lack that emotional sense of urgency to get the properties sold, no matter how urgently you may think they should be trying to get rid of the foreclosed properties they own. (If you've heard the old advice that banks don't want to be in the home-owning business, I can tell you this. That is true, in a very general sense, but now they are and will be - for a long time to come. They have no emotions, have no urgent need to sell or move, and are not willing to give houses away at pennies on the dollar to get out of it, no matter what those infomercial folks say.)
Long story short: you can sometimes negotiate a better deal with an individual seller on a "regular" sale than with a bank on a distressed home sale. So, don't limit your house hunt to foreclosures and short sales, if you're looking for a good deal on your home.
Stage Four: Negotiations
Insider Secret: Your family and friends can cause you to lose your dream home.
Why: With so much information on the web and the news every day about the recession and the buyer's market, everyone seems to be an armchair economist/real estate savant. But much of that news is national and based on medians, averages and trends. That is, it might not necessarily apply to every home on the market in every city, and more importantly, it might have nothing to do with "your" particular home.
When I was a little girl, my best friend's grandfather would very carefully hand each of us a quarter, always doling it out with the sage admonition: "Don't spend it all in one place." We'd always smile, look at each other, then go ask our Moms for ten bucks apiece. In the same vein, people who are not currently in the market for a home have no idea what an individual home should "go for." If you tell your parents, church pals, or colleagues at work the blow-by-blow details of your offer, counteroffers, etc., you should expect to hear things like, "Oh, you're paying way too much!", "I think you should push them down another $10K," or "You know, you're in a better bargaining position than that." And sometimes, taking that sort of advice will end up blowing your deal. Work with your trusty real estate broker or agent to develop a smart strategy - with their experience in your local market - about what price and terms to offer. Then keep working with them to manage and maintain realistic expectations as you proceed through negotiating the contract to buy your home.
Stage Five: Escrow, Inspections and Underwriting
Insider Secret: It's critical that you attend your home inspections.
Why: When it comes to inspections, many first-time buyers expect that a home will either pass or fail. Except in a few jurisdictions where the government imposes certain condition requirements for a home to be sold, the home inspection is more about educating you, the buyer, as to the details and nuances of the home's condition than about seeing if the place hits a particular target for "good" or "bad" condition.
Home inspectors don't just look for things that need fixing, they also look to understand the home's systems and features, as well as to point out areas that will require your ongoing maintenance, highlight emergency shutoffs and other need-to-knows, and indicating where you should have specialists further inspect items of concern. Many home inspectors create vivid, detailed electronic reports - some, complete with color photos. But that's not enough!
If you're physically onsite at the home during the inspections, the inspector can physically show you the shutoffs for water, gas and electric - and how to use them. They can also point out, in person, any things that need repair, and give you some tips for maintaining the place in tip-top shape. Also, in many states, the general home inspector is legally prohibited (vs. the pest, roof or other "specialty" inspectors) from issuing a written quote or bid for repairs, to avoid a conflict of interest where they'd try to fabricate flaws in the home to get the repair job. However, the repair costs are one of the most important things a smart buyer wants to know!
If you show up, many inspectors will give you a rough range it would cost you to do various repairs, or otherwise indicate to you whether the needed repairs are "big deal" or "$10 home improvement store" fixes; some will even give you a few references to contractors they trust.
All around, you'll get much more of the detailed information you need to know whether and how to move forward with the transaction if you should up in person to the home inspections, rather than just waiting for a copy of the report to come to your email.
Are you ready to find your perfect home? Give us a call at 972-772-7000 or email us at rockwall@kw.com.
Buying a home is not a discrete event; it's a process - a sequence of events that happens over time, sometimes over as long as several months or even years! While general guides to buying a home are a dime a dozen, I'm excited to share with you some insider secrets you may not have heard elsewhere - one for each stage involved in buying a home. Here's to helping you make the best decisions at every phase of your homebuying process!
Stage One: Deciding Whether It's The Right Time to Buy.
Insider Secret: The market is the least important factor you should consider when deciding whether and when to buy a home.
Why: Everyone knows affordability is at an all-time high. Home prices are low, and so are interest rates. But trying to time the market is a fool's errand; many who get caught up in that game of trying to make sure they buy at the absolute bottom will end up losing out on very, very favorable conditions.
Beyond that, the most important considerations when deciding whether and when you should buy a home are personal, not market driven. On today's market, it only makes sense to buy a place if it's going to be sustainable and work for you for at least the next 4-5 years [if your town's real estate market has been fairly recession-proof] or 7-10 years [if the housing/foreclosure crisis has hit your area pretty hard].
Against this "smart holding period" backdrop, smart buyers decide to buy when it makes sense for:
•their life plans (i.e., they are comfortable making the commitment to live in the same town, and the commitment to )
•their family plans (i.e., whether they plan to get married, have children or empty their nest in the time they plan to own the home - and the implications of these plans on their space needs and location priorities
•their career plans (including, but not limited to: whether they have job or income security, whether they feel they will be working in the same area for the foreseeable future, and whether they want to work less or start their own business in the months or years to come)
•their financial plans (including foreseeable changes in income and expenses, e.g., kids going to college or making partner at the firm).
Stage Two: Getting Pre-Approved.
Insider Secret: Working with a mortgage broker referred by your real estate broker or agent may save you money.
Why: Bolstered by the real-life stories of a couple of bad apples, TV pundits and some consumer advocates have spun the tale of a real estate industry cartel, whereby sinister agents hook unsuspecting buyers up with shady mortgage brokers, who place them in crappy loans and kick back some bucks to the agent. I'm here to tell you, in my experience, the opposite is true the vast majority of the time.
When you work with a mortgage broker who has a strong track record of helping your real estate agent's clients out, you end up in a best of all worlds situation, nine times out of ten. First off, your agent will take you much more seriously once a mortgage broker they know and trust has run your credit, checked your income and approved you for a loan, as well as communicated with your real estate pro about your qualifications and what you can afford. Secondly, your agent can help you communicate with your mortgage broker, sometimes helping get past appraisal glitches or facilitating other workarounds, as they come up. Third, you get the assurance of working with a mortgage pro who has been vetted and vouched for by someone you not only trust, but someone who can verify that the mortgage broker has the ability to get transactions closed in the timely manner required of today's real estate sales contract. Otherwise, you may end up working with a competent mortgage broker who has a great track record when it comes to refinancing, but can't keep up with the pace and common obstacles to getting a home financed in the context of a sale.
On top of that, sometimes the relationship can help you negotiate out of a couple of line item loan fees (if your particular mortgage rep has the power to get them down at all), if push comes to shove and cash is tight to close the deal. Assuming you are working with a real estate pro you really trust, working with a mortgage broker they trust can save you, rather than cost you, money.
Stage Three: House Hunting
Insider Secret: "Distressed" doesn't always equal "discounted" - in some cases, a "regular" sale can be a deeper deal.
Why: Short sales and foreclosures have grown to comprise roughly 30 percent of the homes sold on today's market, even higher in some areas. The average sale price of foreclosed homes was 32% lower than the average sale price of non-foreclosed homes, at last count. However, it's not always the case that foreclosed homes or short sales - homes which are being sold for less than what the seller owes on their mortgage(s) - offer the buyer a fabulous discount.
Mortgage servicers and asset managers who make decisions about distressed properties are on the hook to their investors to recoup as close as possible to the current fair market value of every home they sell. Some banks even have a general rule of rejecting offers more than 10 percent or so below the home's list price, preferring instead to reduce the price by that amount and put the home back on the open market to see if any new buyers are activated by the price reduction to make an offer better than the lowball offer that was initially put on the table. On short sales, the bank is trying to get as close as possible to recovering what the seller owes - and may or may not be concerned with what the fair market value of the home is. (Nine times out of ten, there will be a big gap between fair market value and the seller's outstanding mortgage balance. If there wasn't, the seller wouldn't need to do a short sale!)
With so many distressed properties and homes with depressed values on the market, in many areas, the individual, non-distressed home sellers who are putting their homes up for sale right now are those who are very motivated to sell. Further, they are more likely to be flexible with you on everything that is negotiable, from contingency and escrow periods, to price, to repairs and included items.
Also, individual sellers can be emotionally motivated to sell to move on with their lives, get into their bigger (or smaller) house, or move on to their next job; banks, on the other hand, aren't people (!), so lack that emotional sense of urgency to get the properties sold, no matter how urgently you may think they should be trying to get rid of the foreclosed properties they own. (If you've heard the old advice that banks don't want to be in the home-owning business, I can tell you this. That is true, in a very general sense, but now they are and will be - for a long time to come. They have no emotions, have no urgent need to sell or move, and are not willing to give houses away at pennies on the dollar to get out of it, no matter what those infomercial folks say.)
Long story short: you can sometimes negotiate a better deal with an individual seller on a "regular" sale than with a bank on a distressed home sale. So, don't limit your house hunt to foreclosures and short sales, if you're looking for a good deal on your home.
Stage Four: Negotiations
Insider Secret: Your family and friends can cause you to lose your dream home.
Why: With so much information on the web and the news every day about the recession and the buyer's market, everyone seems to be an armchair economist/real estate savant. But much of that news is national and based on medians, averages and trends. That is, it might not necessarily apply to every home on the market in every city, and more importantly, it might have nothing to do with "your" particular home.
When I was a little girl, my best friend's grandfather would very carefully hand each of us a quarter, always doling it out with the sage admonition: "Don't spend it all in one place." We'd always smile, look at each other, then go ask our Moms for ten bucks apiece. In the same vein, people who are not currently in the market for a home have no idea what an individual home should "go for." If you tell your parents, church pals, or colleagues at work the blow-by-blow details of your offer, counteroffers, etc., you should expect to hear things like, "Oh, you're paying way too much!", "I think you should push them down another $10K," or "You know, you're in a better bargaining position than that." And sometimes, taking that sort of advice will end up blowing your deal. Work with your trusty real estate broker or agent to develop a smart strategy - with their experience in your local market - about what price and terms to offer. Then keep working with them to manage and maintain realistic expectations as you proceed through negotiating the contract to buy your home.
Stage Five: Escrow, Inspections and Underwriting
Insider Secret: It's critical that you attend your home inspections.
Why: When it comes to inspections, many first-time buyers expect that a home will either pass or fail. Except in a few jurisdictions where the government imposes certain condition requirements for a home to be sold, the home inspection is more about educating you, the buyer, as to the details and nuances of the home's condition than about seeing if the place hits a particular target for "good" or "bad" condition.
Home inspectors don't just look for things that need fixing, they also look to understand the home's systems and features, as well as to point out areas that will require your ongoing maintenance, highlight emergency shutoffs and other need-to-knows, and indicating where you should have specialists further inspect items of concern. Many home inspectors create vivid, detailed electronic reports - some, complete with color photos. But that's not enough!
If you're physically onsite at the home during the inspections, the inspector can physically show you the shutoffs for water, gas and electric - and how to use them. They can also point out, in person, any things that need repair, and give you some tips for maintaining the place in tip-top shape. Also, in many states, the general home inspector is legally prohibited (vs. the pest, roof or other "specialty" inspectors) from issuing a written quote or bid for repairs, to avoid a conflict of interest where they'd try to fabricate flaws in the home to get the repair job. However, the repair costs are one of the most important things a smart buyer wants to know!
If you show up, many inspectors will give you a rough range it would cost you to do various repairs, or otherwise indicate to you whether the needed repairs are "big deal" or "$10 home improvement store" fixes; some will even give you a few references to contractors they trust.
All around, you'll get much more of the detailed information you need to know whether and how to move forward with the transaction if you should up in person to the home inspections, rather than just waiting for a copy of the report to come to your email.
Are you ready to find your perfect home? Give us a call at 972-772-7000 or email us at rockwall@kw.com.
Friday, March 4, 2011
6 Things That Turn Home Buyers Off (and What Sellers Can Do To Prevent It)!
Provided By Trulia
We've talked about surprising home features buyers LOVE, and about why buyers aren't biting on today's market, despite it being highly affordable. But we haven't talked much about the characteristics of sellers, listings and homes that turn buyers all the way off. Well, not until now!
Here are 6 big-time homebuyer turn-offs that make buyers cringe at the thought of your home, and action steps you can take to prevent your home from being an offender:
1. Stalker-ish sellers. I know you think you’re being helpful, walking the buyer through your home and pointing out the wagon-wheel light fixture you made with your own two hands, the custom mural of a stingray you paid top dollar to have painted across your living room wall and the way the sounds of happy schoolchildren running across the front yard of your corner lot to get to the school in the next block lifts your spirits. However, the buyers might be trying really hard to ignore, minimize or figure out how to undo the very features of your home you hold dear. They also may want or need to have personal space and conversations with their mate or their agent while they’re viewing your home - you being there, especially walking right alongside them while they’re in your home, prevents them from being comfortable about doing this, or discussing all the things they would change if the home were theirs. In my experience, the more nitpicky a buyer gets about a house and the more detailed their list of things they would change, the more serious they are about considering making an offer on this place.
What’s a Seller to do? Back off. Let your home be shown vacant, or leave the house when people come to see it. If you need to be there, at least walk outside or go sit at the coffee shop down the way while prospective buyers view your home. If the buyers have questions, their people will contact your people.
2. Shabby, dirty, crowded and/or smelly houses. You already know this one. Yet, buyers constantly marvel. The buyers who come to see your home are making the decision whether to choose your home for the biggest purchase they’ve ever made during the worst economic conditions most of them have ever experienced. Your job is to get your home noticed – favorably – above the sea of other homes on the market, many of which are priced very, very low.
What’s a Seller to do? Other than listing your home at a competitive price, the only tool within your control for differentiating your home from all the foreclosures and short sales is to show it in tip-top shape. Pre-pack your place up, getting rid of as many of your personal effects as possible. Do not show it without it being completely cleaned up: no laundry or dishes piled up, countertops freshly washed, smelly dogs (I have a couple who smell on occasion – no judgment – but don’t show your house with pet odors) or litter boxes cleaned and/or out of the house.
3. Irrational seller expectations (i.e., overpricing). Buying a house on today’s market is hard work! On top of all the research and analysis about the market and situating their own lives to be sure they’ll be able to afford the place for 5, 7, 10 years - or longer, buyers have to work overtime to separate the real estate wheat from the chaff, get educated about short sales and foreclosures and often put in many, many offers before they get even a single one accepted. The last thing they want to add to their task lists is trying to argue a seller out of unreasonable expectations or pricing. And, in fact, there are so many other homes on the market, buyers don’t have to do this. When they see a home whose seller is clearly clueless about their home’s value and has priced it sky-high, most often they won’t bother even looking at it. If they love it, they’ll wait for it to sit on the market for awhile, hoping the market will “educate you” into desperation, priming the pump for a later, lowball offer.
What’s a Seller to do? Get real. Get out there and look at the other properties that are for sale in your area and price range. Get multiple agents’ take on what your home should be listed at, and don’t take it personally if their recommendation is low. If your home has much less curb appeal or space or is much less upgraded than the house across the way, don’t list it at the same price and expect it to sell. If you owe more than your home is realistically worth, you may need to reexamine whether you really want or need to sell, or consider a short sale, if you simply have to sell. Don’t be tempted into testing your market with an obviously too-high price, unless you’re prepared to have your home lag on the market and get lowball offers.
4. Feeling misled. Here’s the deal. You will never trick someone into buying your home. If the listing pics are photo-edited within an inch of their lives, or your home is described as an “approved” short sale when, in fact, the bank approved another offer, now withdrawn, but will require a new offer to go through any sort of approval process (even a truncated one), buyers will learn this information at some point. If your neighborhood is described as funky and vibrant, as code for the fact that your house is under the train tracks and you live in between a wrecking yard and a biker bar, prospects will figure this out. If the detailed information about your home, neighborhood or even transactional position (e.g., short sale status, seller financing, etc.) is misrepresented, the sheer misrepresentation will turn otherwise interested buyers off. If you authorize your agent to “verbally approve” the buyer’s offer, don’t go back the next day demanding an extra $5,000. In cases where the buyer feels misled, whether or not that was your intention, running through the buyer’s mind is this question: If they can’t trust you to be honest about this, how can they trust you to be honest about everything else?
What’s a Seller to do? Buyers rely on sellers to be upfront and honest – so be both. If your home has features or aspects that are often perceived negatively, your home’s listing probably shouldn’t lead with them (like the ad I recently saw with the intro line: “this place is a mess!”), but neither should you go out of your way to slant or skew or spin the facts which will be obvious to anyone who visits your home. Make sure you know what the listing of your home reads like, before it’s published to the web, and that a prospective buyer will not feel misled by it.
5. New, ugly home improvements. Many a buyer has walked into a house that has clearly been remodeled and upgraded in anticipation of the sale, only to have their heart sink with the further realization that the brand-spanking-new kitchen features a countertop made, not of Carerra marble, but brand-new, pink tiles with a kitty cat in the middle of each one (I saw this once, people – no joke). Or the pristine, just-installed floors feature carpet in a creamy shade of blue – the buyer’s least favorite color. New home improvements that run totally counter to a buyer’s aesthetics are a big turn-off, because in today’s era of Conspicuous Frugality, buyers just can’t cotton to ripping out expensive, brand new, perfectly functioning things just on the basis of style – especially since they’ll feel like they paid for these things in the price of the home.
What’s a Seller to do? Check in with a local broker or agent before you make a big investment in a pre-sale remodel. They can give you a reality check about the likely return on your investment, and help you prioritize about which projects to do (or not). Instead of spending $40,000 on a new, less-than-attractive kitchen, they might encourage you to update appliances, have the cabinets painted and spend a few grand on your curb appeal. Many times, they will also help you do the work of selecting neutral finishes that will work for the largest possible range of buyer tastes.
6. CRAZY listing photos (or no photos at all). Here at Trulia, we’ve seen listing photos that have dumpsters parked in front of the house, piles of laundry all over the “hardwood” floors touted in the listing description, and once, even the family dog doing his or her business in the lovely green front yard. Listing pictures that have put your home in anything but its best, accurate light are a very quick way to ensure that you turn off a huge number of buyers from even coming to see your house! The only bigger buyer turn-off than these bizarre listing pics are listings that have no photos at all; most buyers on today’s market see a listing with no pictures and click right on past it, without giving the place a second glance.
If you are ready to sell your home give us a call at 972-772-7000 or email us at rockwall@kw.com.
We've talked about surprising home features buyers LOVE, and about why buyers aren't biting on today's market, despite it being highly affordable. But we haven't talked much about the characteristics of sellers, listings and homes that turn buyers all the way off. Well, not until now!
Here are 6 big-time homebuyer turn-offs that make buyers cringe at the thought of your home, and action steps you can take to prevent your home from being an offender:
1. Stalker-ish sellers. I know you think you’re being helpful, walking the buyer through your home and pointing out the wagon-wheel light fixture you made with your own two hands, the custom mural of a stingray you paid top dollar to have painted across your living room wall and the way the sounds of happy schoolchildren running across the front yard of your corner lot to get to the school in the next block lifts your spirits. However, the buyers might be trying really hard to ignore, minimize or figure out how to undo the very features of your home you hold dear. They also may want or need to have personal space and conversations with their mate or their agent while they’re viewing your home - you being there, especially walking right alongside them while they’re in your home, prevents them from being comfortable about doing this, or discussing all the things they would change if the home were theirs. In my experience, the more nitpicky a buyer gets about a house and the more detailed their list of things they would change, the more serious they are about considering making an offer on this place.
What’s a Seller to do? Back off. Let your home be shown vacant, or leave the house when people come to see it. If you need to be there, at least walk outside or go sit at the coffee shop down the way while prospective buyers view your home. If the buyers have questions, their people will contact your people.
2. Shabby, dirty, crowded and/or smelly houses. You already know this one. Yet, buyers constantly marvel. The buyers who come to see your home are making the decision whether to choose your home for the biggest purchase they’ve ever made during the worst economic conditions most of them have ever experienced. Your job is to get your home noticed – favorably – above the sea of other homes on the market, many of which are priced very, very low.
What’s a Seller to do? Other than listing your home at a competitive price, the only tool within your control for differentiating your home from all the foreclosures and short sales is to show it in tip-top shape. Pre-pack your place up, getting rid of as many of your personal effects as possible. Do not show it without it being completely cleaned up: no laundry or dishes piled up, countertops freshly washed, smelly dogs (I have a couple who smell on occasion – no judgment – but don’t show your house with pet odors) or litter boxes cleaned and/or out of the house.
3. Irrational seller expectations (i.e., overpricing). Buying a house on today’s market is hard work! On top of all the research and analysis about the market and situating their own lives to be sure they’ll be able to afford the place for 5, 7, 10 years - or longer, buyers have to work overtime to separate the real estate wheat from the chaff, get educated about short sales and foreclosures and often put in many, many offers before they get even a single one accepted. The last thing they want to add to their task lists is trying to argue a seller out of unreasonable expectations or pricing. And, in fact, there are so many other homes on the market, buyers don’t have to do this. When they see a home whose seller is clearly clueless about their home’s value and has priced it sky-high, most often they won’t bother even looking at it. If they love it, they’ll wait for it to sit on the market for awhile, hoping the market will “educate you” into desperation, priming the pump for a later, lowball offer.
What’s a Seller to do? Get real. Get out there and look at the other properties that are for sale in your area and price range. Get multiple agents’ take on what your home should be listed at, and don’t take it personally if their recommendation is low. If your home has much less curb appeal or space or is much less upgraded than the house across the way, don’t list it at the same price and expect it to sell. If you owe more than your home is realistically worth, you may need to reexamine whether you really want or need to sell, or consider a short sale, if you simply have to sell. Don’t be tempted into testing your market with an obviously too-high price, unless you’re prepared to have your home lag on the market and get lowball offers.
4. Feeling misled. Here’s the deal. You will never trick someone into buying your home. If the listing pics are photo-edited within an inch of their lives, or your home is described as an “approved” short sale when, in fact, the bank approved another offer, now withdrawn, but will require a new offer to go through any sort of approval process (even a truncated one), buyers will learn this information at some point. If your neighborhood is described as funky and vibrant, as code for the fact that your house is under the train tracks and you live in between a wrecking yard and a biker bar, prospects will figure this out. If the detailed information about your home, neighborhood or even transactional position (e.g., short sale status, seller financing, etc.) is misrepresented, the sheer misrepresentation will turn otherwise interested buyers off. If you authorize your agent to “verbally approve” the buyer’s offer, don’t go back the next day demanding an extra $5,000. In cases where the buyer feels misled, whether or not that was your intention, running through the buyer’s mind is this question: If they can’t trust you to be honest about this, how can they trust you to be honest about everything else?
What’s a Seller to do? Buyers rely on sellers to be upfront and honest – so be both. If your home has features or aspects that are often perceived negatively, your home’s listing probably shouldn’t lead with them (like the ad I recently saw with the intro line: “this place is a mess!”), but neither should you go out of your way to slant or skew or spin the facts which will be obvious to anyone who visits your home. Make sure you know what the listing of your home reads like, before it’s published to the web, and that a prospective buyer will not feel misled by it.
5. New, ugly home improvements. Many a buyer has walked into a house that has clearly been remodeled and upgraded in anticipation of the sale, only to have their heart sink with the further realization that the brand-spanking-new kitchen features a countertop made, not of Carerra marble, but brand-new, pink tiles with a kitty cat in the middle of each one (I saw this once, people – no joke). Or the pristine, just-installed floors feature carpet in a creamy shade of blue – the buyer’s least favorite color. New home improvements that run totally counter to a buyer’s aesthetics are a big turn-off, because in today’s era of Conspicuous Frugality, buyers just can’t cotton to ripping out expensive, brand new, perfectly functioning things just on the basis of style – especially since they’ll feel like they paid for these things in the price of the home.
What’s a Seller to do? Check in with a local broker or agent before you make a big investment in a pre-sale remodel. They can give you a reality check about the likely return on your investment, and help you prioritize about which projects to do (or not). Instead of spending $40,000 on a new, less-than-attractive kitchen, they might encourage you to update appliances, have the cabinets painted and spend a few grand on your curb appeal. Many times, they will also help you do the work of selecting neutral finishes that will work for the largest possible range of buyer tastes.
6. CRAZY listing photos (or no photos at all). Here at Trulia, we’ve seen listing photos that have dumpsters parked in front of the house, piles of laundry all over the “hardwood” floors touted in the listing description, and once, even the family dog doing his or her business in the lovely green front yard. Listing pictures that have put your home in anything but its best, accurate light are a very quick way to ensure that you turn off a huge number of buyers from even coming to see your house! The only bigger buyer turn-off than these bizarre listing pics are listings that have no photos at all; most buyers on today’s market see a listing with no pictures and click right on past it, without giving the place a second glance.
If you are ready to sell your home give us a call at 972-772-7000 or email us at rockwall@kw.com.
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