Wishing You A Happy And Peaceful Holiday
And A Year Filled With Good Health And Good Fortune
x, Vicky
Victoria Germaise
Friday, December 9, 2011
5 Things to Do Now to Get Your Home Sold in 2012
5 Things to Do Now to Get Your Home Sold in 2012
It’s that time of year when most of us start to count our blessings, look back at what we’ve accomplished in 2011 and think about what we’ll get done in 2012. If selling your home is part of 
your resolution list for next year, there’s plenty of prep work you can do to set yourself up for home selling success.
Here are 5 things you can and should start working on without further ado, if you want to get your home sold - smoothly and for top dollar - in 2012.
1. Put your intentions in writing. The first step to any real estate transaction - actually, to anything important in life! - is to get clear on your goals. Unexpected challenges and situations might very well come up in the course of selling your home, so having a clear idea of your ultimate goals at the outset is a must to help you make the right decisions along the way and to remind you when you might need to course correct.
When you’re setting your objective and writing it down, it’s critical to be specific and holistic, drilling down to the details of what result it is you want your home sale to achieve in your life.
Also, establish where your priorities lie: with speed or with dollars? For example, your goal might be to sell your house as quickly as possible so you can relocate your family by spring. Or, your goal may be to sell your house at the best possible price no matter how long it takes.
Getting as clear as possible from the very beginning on your priorities and ultimate life objectives for the sale will allow you to communicate these crucial things clearly to your agent, and will power your decisions on issues like:
In order to position yourself and your property at the point of pricing nirvana, you’ll need to do some leg work. stat. You don’t need to pick an exact price this moment, unless you’re planning to list your home super soon, but you can get started on what I like to think of as the ‘thinking seller’s’ three-pronged approach to pricing now, by:
Another great prep tool in gearing up to sell your home in 2012 is to study similar homes for sale on Trulia! Pay particular attention to what features they have, how they are described and priced, any incentives the sellers are offering (e.g., closing cost credits, etc.) and how long they’ve been on the market. (Hint: you might not want to price your home right in line with one that’s been on the market over a year. Obviously, that home is overpriced, and that is NOT a result you want to replicate!)
Finally, one of the most efficient and nuanced ways to get to know your local market is to begin speaking with agents who sell homes in your area. Get a few referrals, call them up and tour them through your home. Then, ask these pros for their opinion on what you should list your home for, what recent sales they think are the most comparable (and why), and how long they would expect your sale to take given their experience and current conditions.
You can use these same home tours to get a head start on selecting your listing agent by asking the agents you interview to give you a preview of what they would recommend in the way of preparing your home, timing your listing and marketing your house to achieve the objectives you set in Step 1.
3. Gather your paperwork. In planning for your sale next year, you can get a great head start by pulling together the necessary paperwork now. Keep in mind that the specific requirements vary by state, so this is not an exhaustive list. In general, you’ll need to have these ready:
5. Get a head start on your ‘home’work. How much prep work your home needs really depends on its current condition. A good starting point for many sellers is to order an inspection. Most buyers will get their own inspection before closing a deal, but getting ahead of them with your own will help you avoid any unwanted surprises later on in the transaction. An inspection will give you a reality check on your home’s condition, enabling you to decide upfront whether it’s worth it to fix something now or simply reduce the price in consideration thereof.
Your holiday vacation from work is a great time to:
(a) obtain any advance inspections your real estate agent recommends,
(b) have any reasonable repairs completed,
(c) pre-pack and declutter your place, and
(d) prettify your home’s curb appeal - painting the shutters and sprucing the landscaping goes a long way toward attracting buyers.
Kudos, in advance, for taking the time now to prepare for your home sale in 2012! Selling in today’s market is no easy task, and doing the heavy lifting now - before your home goes on the market and, hopefully, while you're on vacation! - will help tremendously in making things go as smoothly, and profitably, as possible.
your resolution list for next year, there’s plenty of prep work you can do to set yourself up for home selling success.Here are 5 things you can and should start working on without further ado, if you want to get your home sold - smoothly and for top dollar - in 2012.
1. Put your intentions in writing. The first step to any real estate transaction - actually, to anything important in life! - is to get clear on your goals. Unexpected challenges and situations might very well come up in the course of selling your home, so having a clear idea of your ultimate goals at the outset is a must to help you make the right decisions along the way and to remind you when you might need to course correct.
When you’re setting your objective and writing it down, it’s critical to be specific and holistic, drilling down to the details of what result it is you want your home sale to achieve in your life.
Also, establish where your priorities lie: with speed or with dollars? For example, your goal might be to sell your house as quickly as possible so you can relocate your family by spring. Or, your goal may be to sell your house at the best possible price no matter how long it takes.
Getting as clear as possible from the very beginning on your priorities and ultimate life objectives for the sale will allow you to communicate these crucial things clearly to your agent, and will power your decisions on issues like:
- which home improvement projects, if any, to complete before you sell;
- whether to accept a particular offer; and
- how aggressively to negotiate counter-offers, and on which points to push back against a buyer’s offer.
In order to position yourself and your property at the point of pricing nirvana, you’ll need to do some leg work. stat. You don’t need to pick an exact price this moment, unless you’re planning to list your home super soon, but you can get started on what I like to think of as the ‘thinking seller’s’ three-pronged approach to pricing now, by:
- visiting open houses,
- studying nearby listings, and
- talking with local agents.
Another great prep tool in gearing up to sell your home in 2012 is to study similar homes for sale on Trulia! Pay particular attention to what features they have, how they are described and priced, any incentives the sellers are offering (e.g., closing cost credits, etc.) and how long they’ve been on the market. (Hint: you might not want to price your home right in line with one that’s been on the market over a year. Obviously, that home is overpriced, and that is NOT a result you want to replicate!)
Finally, one of the most efficient and nuanced ways to get to know your local market is to begin speaking with agents who sell homes in your area. Get a few referrals, call them up and tour them through your home. Then, ask these pros for their opinion on what you should list your home for, what recent sales they think are the most comparable (and why), and how long they would expect your sale to take given their experience and current conditions.
You can use these same home tours to get a head start on selecting your listing agent by asking the agents you interview to give you a preview of what they would recommend in the way of preparing your home, timing your listing and marketing your house to achieve the objectives you set in Step 1.
3. Gather your paperwork. In planning for your sale next year, you can get a great head start by pulling together the necessary paperwork now. Keep in mind that the specific requirements vary by state, so this is not an exhaustive list. In general, you’ll need to have these ready:
- Disclosure documents: This includes any documentation of anything that might impact a buyer’s decision about your home, whether it be inspection reports, repair receipts or estimates for repairs you haven’t actually had done yet. Your local real estate pro will help determine what exactly is needed here.
- Compliance certificates: In some cities, the local government will require certain conditions be met before a property is transferred to another owner. Examples of these requirements include sewer line condition guidelines, and energy conservation ordinances that require low-flow toilets and shower heads to be installed. Again, your real estate agent and your city’s website can help you figure out which, if any, of these types of ordinances might apply to your home.
- Mortgage statements: Before the property’s title can transfer to another owner, the escrow or title company will need your mortgage statements to order payoff demands from any mortgage holder who has to get paid before that can happen.
- Financials: If you’re planning on a short sale, you’ll have a lot more paperwork to gather in your process, including paycheck stubs, bank and investment account statements, and two years’ W-2 forms or tax returns - the bank will review these to determine whether they will authorize you to sell the home for less than what you owe.
- prep work you’ll be doing to your property before it’s listed for sale - including decluttering, staging and any repairs or cosmetic power-tweaks you plan to make;
- if you’re planning a short sale, a timeline for submitting an application to your lender for approval (this might be before or after the property is listed - consult with your lender and your agent on the matter)
- planned list price (based on current local market conditions - this could change if you don’t plan to list your home for several months);
- the target date on which your home will be listed for sale in the local MLS; and
- how showing arrangements will work so that local agents can get prospective buyers into your house to see the place, and what.
5. Get a head start on your ‘home’work. How much prep work your home needs really depends on its current condition. A good starting point for many sellers is to order an inspection. Most buyers will get their own inspection before closing a deal, but getting ahead of them with your own will help you avoid any unwanted surprises later on in the transaction. An inspection will give you a reality check on your home’s condition, enabling you to decide upfront whether it’s worth it to fix something now or simply reduce the price in consideration thereof.
Your holiday vacation from work is a great time to:
(a) obtain any advance inspections your real estate agent recommends,
(b) have any reasonable repairs completed,
(c) pre-pack and declutter your place, and
(d) prettify your home’s curb appeal - painting the shutters and sprucing the landscaping goes a long way toward attracting buyers.
Kudos, in advance, for taking the time now to prepare for your home sale in 2012! Selling in today’s market is no easy task, and doing the heavy lifting now - before your home goes on the market and, hopefully, while you're on vacation! - will help tremendously in making things go as smoothly, and profitably, as possible.
SOURCE: TRULIA.COM
Wednesday, November 16, 2011
On A Mission For Missoni
You’d have to have been hiding under a rock last month to have missed all the hoopla about legendary Italian designer, Missoni, launching a line of designer goods at Target. The ads were all over TV and magazines for weeks, tempting us with the beautiful, colorful, Missoni signature zig-zag lines on clothing, bedding, dishes – even a Missoni Bicycle!!!!!! My heart had been palpitating for weeks at the thought of a house full of zig-zags!!!!! My fashionable neighbor and I had planned to be at Target at 7:30am, well-positioned to grab a cart and charge through the aisles. We had been forewarned that hordes of women from all over were going to descend on our local Target, grab everything and then sell it all on eBay, for great profit.
One problem: launch date for this limited-time design spree was Super Tuesday – Election Day, and I was working at the polls from 5am until 10pm. Depressed, I faced the gruesome fact that I would miss out on all the zig-zag fun.
With a media blackout at the polls, I missed the news that Targets all over the country were besieged by crowds of nutty women, fighting in the aisles – all the shelves, nationwide were empty by 8:15am!!!!! Target’s website crashed and everything online was immediately sold out, as well! I learned all this from my neighbor, whom I called on my way home that evening. (She was there and managed to snag a bag full of goodies.) I walked into my house, exhausted and deflated at the missed opportunity.
I trudged up the stairs, listless with fashion-depression. I walked into the bedroom, turned on the light, and there on the bed, neatly laid out, was a treasure trove of Missoni zig-zags: dress, sweaters, handbag, blouses, serving platter, laptop case, shoes!!!!! My dear, prince of a man, Howard, secretly set out at 7am and was there among the throngs of women, on his own personal Missoni-mission!!!! I cried. The guy's a keeper.
To show my gratitude, I decided that I will assume lawn-mowing duties for the rest of our lives!!!! Wearing zigzags!!!!!
One problem: launch date for this limited-time design spree was Super Tuesday – Election Day, and I was working at the polls from 5am until 10pm. Depressed, I faced the gruesome fact that I would miss out on all the zig-zag fun.
With a media blackout at the polls, I missed the news that Targets all over the country were besieged by crowds of nutty women, fighting in the aisles – all the shelves, nationwide were empty by 8:15am!!!!! Target’s website crashed and everything online was immediately sold out, as well! I learned all this from my neighbor, whom I called on my way home that evening. (She was there and managed to snag a bag full of goodies.) I walked into my house, exhausted and deflated at the missed opportunity.
I trudged up the stairs, listless with fashion-depression. I walked into the bedroom, turned on the light, and there on the bed, neatly laid out, was a treasure trove of Missoni zig-zags: dress, sweaters, handbag, blouses, serving platter, laptop case, shoes!!!!! My dear, prince of a man, Howard, secretly set out at 7am and was there among the throngs of women, on his own personal Missoni-mission!!!! I cried. The guy's a keeper.
6 Must-Haves for Mortgage Approval
Even trade-up buyers, owners of multiple properties hit roadblocks
Monday, November 7, 2011.Interest rates fell to new lows in September. Low interest rates increase affordability and should make it easier for buyers to qualify. Yet stories of buyers waiting months to gain loan approval and home purchase transactions not closing on time due to lender's strict underwriting are all too common.
Some buyers are turned down for illogical reasons. For instance, if you have investments -- even if they're performing well -- an underwriter might deny the mortgage because your portfolio doesn't fall into the underwriter's risk assessment model.
One couple was turned down because the husband had worked at his current job for less than a year -- even though he was making more money at the new job than he was before.
These buyers were well-qualified. The wife had worked several years for one employer and was able to qualify for the loan on her own. So, the transaction closed, although two months late.
Generally, it's more difficult to qualify now than it was a year ago. Most conventional lenders require a 20-25 percent down payment. For the lowest interest rates, your credit scores need to be in the 700 range. You need to have verifiable income and cash reserves in addition to your down payment and closing costs.
You could run into underwriting problems if you're self-employed, as W-2 income is much easier to verify. Other hurdles are lapses in employment and owning a lot of property. Some lenders won't lend to buyers who have more than three or four residential properties.
If you're buying a new home before selling your current home, you'll need to have 30 percent equity in your current home. This needs to be verified by the lender's appraiser. Also, the lender will want to see a copy of the cashed check from the tenant for the first month's rent to verify rental income if needed to qualify.
HOUSE HUNTING TIP: As soon as you're serious about buying a home, find the best mortgage broker or loan agent you can to assist you. Don't make your selection based on interest rates alone. A good track record counts for a lot.
Closing the deal should be your primary goal. If you have to pay 0.25 percent more to assure your transaction closes on time and that you're not turned down at the last minute, it's worth it.
Be candid with your loan professional about anything in your financial picture that might impact loan qualification. A good loan agent or broker will be able to assess your financial situation and anticipate what you'll need to do to satisfy the underwriter.
Be aware that appraisal issues can impact your loan approval. For example, if a previous owner added square footage without a building permit, the additional square footage probably won't be included as livable square feet.
If the appraisal comes in for less than the purchase price, the lender might not lend you enough to close the deal. Include an appraisal contingency in your contract.
As of Oct. 1, the conforming jumbo mortgage limit for expensive housing markets like New York City and San Francisco dropped from $729,750 to $625,500. In some cases, conforming jumbo lenders have moved into the market to pick up some slack. You can expect to pay about 0.25 percent more for a 30-year fixed-rate conventional jumbo loan, in some cases. However, today's lower interest rates will help boost affordability.
There are more jumbo financing options available now. Adjustable-rate mortgages that are fixed for 10 years and then revert to an adjustable have a starting rate about 0.25 percent less than a 30-year fixed jumbo. A five-year fixed starts about 0.5 percent to 0.75 percent lower, but is riskier.
THE CLOSING: Because of the risk factor, the lender may want you to have a large cash reserve. Your retirement account counts toward this.
SOURCE: Dian Hymer, Inman News
Some buyers are turned down for illogical reasons. For instance, if you have investments -- even if they're performing well -- an underwriter might deny the mortgage because your portfolio doesn't fall into the underwriter's risk assessment model.
One couple was turned down because the husband had worked at his current job for less than a year -- even though he was making more money at the new job than he was before.
These buyers were well-qualified. The wife had worked several years for one employer and was able to qualify for the loan on her own. So, the transaction closed, although two months late.
You could run into underwriting problems if you're self-employed, as W-2 income is much easier to verify. Other hurdles are lapses in employment and owning a lot of property. Some lenders won't lend to buyers who have more than three or four residential properties.
If you're buying a new home before selling your current home, you'll need to have 30 percent equity in your current home. This needs to be verified by the lender's appraiser. Also, the lender will want to see a copy of the cashed check from the tenant for the first month's rent to verify rental income if needed to qualify.
HOUSE HUNTING TIP: As soon as you're serious about buying a home, find the best mortgage broker or loan agent you can to assist you. Don't make your selection based on interest rates alone. A good track record counts for a lot.
Closing the deal should be your primary goal. If you have to pay 0.25 percent more to assure your transaction closes on time and that you're not turned down at the last minute, it's worth it.
Be candid with your loan professional about anything in your financial picture that might impact loan qualification. A good loan agent or broker will be able to assess your financial situation and anticipate what you'll need to do to satisfy the underwriter.
Be aware that appraisal issues can impact your loan approval. For example, if a previous owner added square footage without a building permit, the additional square footage probably won't be included as livable square feet.
If the appraisal comes in for less than the purchase price, the lender might not lend you enough to close the deal. Include an appraisal contingency in your contract.
As of Oct. 1, the conforming jumbo mortgage limit for expensive housing markets like New York City and San Francisco dropped from $729,750 to $625,500. In some cases, conforming jumbo lenders have moved into the market to pick up some slack. You can expect to pay about 0.25 percent more for a 30-year fixed-rate conventional jumbo loan, in some cases. However, today's lower interest rates will help boost affordability.
There are more jumbo financing options available now. Adjustable-rate mortgages that are fixed for 10 years and then revert to an adjustable have a starting rate about 0.25 percent less than a 30-year fixed jumbo. A five-year fixed starts about 0.5 percent to 0.75 percent lower, but is riskier.
THE CLOSING: Because of the risk factor, the lender may want you to have a large cash reserve. Your retirement account counts toward this.
SOURCE: Dian Hymer, Inman News
Tuesday, November 1, 2011
Secret To A Better Credit Score
Better Mortgage Rates Start With Better FICO Scores
If you plan to use a mortgage for your next home purchase, you’ll want to keep your credit scores as high as possible. Credit scores play an out-sized role in determining for which mortgage product you’ll qualify, and to which rate you’ll be assigned by your lender.
The higher your credit score, the lower your mortgage rate will be.
What Is A Credit Score?
History has shown that the best way to predict a person’s behavior over the near-term future is to look at that person’s behavior in the recent past. It’s a concept similar to the First Rule of Physics — an object in motion tends to stay in motion.We can apply this theory to consumer credit, too. A person who has recently paid his bills on-time should continue to pay his bills on-time in the near-future.
This is the basis of credit scoring; using your past to predict your future.
To mortgage lenders, your credit score represents your likelihood of making on-time mortgage payments for the next 90 days. “90 days” matters because, after 90 days without payments, a homeowner falls into default.
Higher credit scores correlate with lower default risk which explains why people with high credit scores tend to receive lower mortgage rates than people with low credit scores. This is true across all loan types, including conventional, jumbo, and FHA mortgages.
Like most else in finance, those with the lowest risks get to pay the lowest rates.
Lenders Use The FICO Scoring Model, Exclusively
There are three main credit bureaus in the United States. They are Equifax, Experian and TransUnion. Each offers a bevy of credit-scoring products, available for purchase on their respective websites. Prices range from “free” to several hundred dollars.None, however, are particularly relevant in the home-buying process. This is because the nation’s mortgage lenders rely on a different credit model — the FICO model.
FICO is named for the Fair Isaac Corporation. It was “invented” in the 1950s and has become the mortgage industry standard for credit ratings. Today, FICO scores are omnipresent to the point that people generically refer to all credit scores as “FICO scores”.
This is akin to calling all adhesive bandages “Band-Aids”. FICO is the brand name — not the product.
FICO scores range from 300-850.
Credit Scores Change Mortgage Rates
Your FICO score has always influenced the mortgage rate for which you’re eligible. In 2008, though, it began to change your loan fees.In response to major mortgage market losses, in April 2008, both Fannie Mae and Freddie Mac introduced something called Loan-Level Pricing Adjustments (LLPA). Loan-level pricing adjustments are “discount points” added to a mortgage rate, based on a specific borrower’s risk to the lender.
A discount point is a loan fee, paid at the time of closing. 1 discount point is equal to 1 percent of your loan size.
Example : A $300,000 mortgage that’s assessed 1 discount point will have $3,000 in extra fees due at closing.
Fannie Mae and Freddie Mac know that low credit scores correlate to high default rates so, like an insurance policy, they assigned the highest costs to the highest-risk borrowers.
Assuming a 20% downpayment, look at how discount points change based on credit score. Fees get massive for FICOs under 700.
- 740+ FICO : There are no discount points required. This loan is “low risk”.
- 720-739 FICO : 0.250 discount points are charged to the borrower, or $250 per $100,000 borrowed
- 700-719 FICO : 0.750 discount points are charged to the borrower, or $750 per $100,000 borrowed
- 680-699 FICO : 1.500 discount points are charged to the borrower, or $1,500 per $100,000 borrowed
- 660-679 FICO : 2.500 discount points are charged to the borrower, or $2,500 per $100,000 borrowed
Example : A consumer with a 680 FICO score is required to pay 1.500 discount points at closing, or can alternatively accept a mortgage rate increase of 0.375%.
This is why it’s important to keep your credit score high. There are real dollar costs for having scores under 740.
Improving On Your Credit Score
If your credit score is not as high as you’d like, the good news is that you can take steps to raise it — sometimes without even changing your spending habits.
Wednesday, October 26, 2011
How To Avoid Costly Home Repairs
The costs of home ownership stretch far beyond mortgage payments, property taxes and insurance. From clogged gutters to broken shingles and mold, home repairs can easily add up — especially with all the precipitation and cold weather this time of year. We spoke with home improvement specialist Ron Hazelton for his preventative home maintenance checklist, which he says can save the average owner over at least $100,000 in repairs over the years.
Inspect Your Foundation
Foundation repair can cost as much as $25,000, so Hazelton's first bit of advice is to survey the exterior base of your home for any cracks, which may have been caused by rainwater mixing with soil. "When soil meets water, the soil tends to expand like a sponge and exert a great deal of pressure on a home's foundation and basement walls," says Hazelton. "After a heavy rainstorm go outside and walk around your home. Check within five feet of the house to make sure you don't see large puddles...Avoid having any water soaking the ground right next to your house."
For foundation repair, it can cost $400-$800 to repair simple, tiny cracks in the foundation. Moderate damage can run as high as $8000-$30,000 to repair, according to Costhelper.com.
Routinely Unclog Your Gutters
Check for built-up debris in your home's gutters, which may also lead to cracks in your home's foundation. Hazelton says that as rain falls, water may spill over the edge of the home and directly onto the ground. The water may saturate the soil surrounding the house and, again, force pressure onto the foundation. Hazelton's tip: Clean gutters at least a couple times a year, purchase a gutter guard or have a professional gutter cap installed. "What I also recommend is having a downspout extension that carries water away from the foundation as it exits," he says. A typical downspout costs no more than $10.
Look For Exterior Leaks
Exposure to sunlight and water can cause the caulk around your home's windows and doors to deteriorate. Keep an eye out for loose or missing caulk and replace it with a fresh seal. If left unattended, water can seep behind your home's exterior wood and gradually cause rotting, staining and even mold. "Repairs could easily run into the tens of thousands of dollars," says Hazelton.
Inspect Your Roof
"You want to have your roof in good shape going into the colder weather," says Hazelton. Using a pair of binoculars from the ground, look for shingles that might be damaged, broken or missing and any place where something is penetrating through the roof where water can leak in. A 2,000 sq. ft. roof with asphalt shingles can run from $3,000 to $8,000 for repairs. Severe repairs can cost up to $30,000 and beyond.
"Remember, the roof is kind of the tip of the iceberg. If water enters and runs into your house, inside ceiling and walls, that's when you've got the potential for rot or mold," he says.
Change Heating or Furnace Filters
During the heating season, you should consider changing your heating or furnace filters once every two months, says Hazelton. "A clogged filter decreases efficiency, raises your energy costs and it can cause damage to the heating system."
Replace Hoses in Laundry Room
Inspect the hoses that supply water to your washing machine once a season. Hazelton recommends replacing standard hoses with reinforced hoses made of steel mesh. "These hoses are under constant pressure and should they rupture while you're away from home, the water damage can be severe."
Remove Build-Up in Your Water Heater
A typical water heater should last 8 to 12 years, depending on the quality of the water inside. Hazelton's tip: remove any sediment build-up in the heater, at least once a year. "Those minerals can get quite thick, so it takes more energy to heat the water," he says. The task may take an hour or two to perform, but can help keep your water heater running efficiently. It can also help lower your heating costs.
SOURCE: Farnoosh Torabi - Financially Fit
Foundation repair can cost as much as $25,000, so Hazelton's first bit of advice is to survey the exterior base of your home for any cracks, which may have been caused by rainwater mixing with soil. "When soil meets water, the soil tends to expand like a sponge and exert a great deal of pressure on a home's foundation and basement walls," says Hazelton. "After a heavy rainstorm go outside and walk around your home. Check within five feet of the house to make sure you don't see large puddles...Avoid having any water soaking the ground right next to your house."
For foundation repair, it can cost $400-$800 to repair simple, tiny cracks in the foundation. Moderate damage can run as high as $8000-$30,000 to repair, according to Costhelper.com.
Routinely Unclog Your Gutters
Check for built-up debris in your home's gutters, which may also lead to cracks in your home's foundation. Hazelton says that as rain falls, water may spill over the edge of the home and directly onto the ground. The water may saturate the soil surrounding the house and, again, force pressure onto the foundation. Hazelton's tip: Clean gutters at least a couple times a year, purchase a gutter guard or have a professional gutter cap installed. "What I also recommend is having a downspout extension that carries water away from the foundation as it exits," he says. A typical downspout costs no more than $10.
Look For Exterior Leaks
Exposure to sunlight and water can cause the caulk around your home's windows and doors to deteriorate. Keep an eye out for loose or missing caulk and replace it with a fresh seal. If left unattended, water can seep behind your home's exterior wood and gradually cause rotting, staining and even mold. "Repairs could easily run into the tens of thousands of dollars," says Hazelton.
Inspect Your Roof
"You want to have your roof in good shape going into the colder weather," says Hazelton. Using a pair of binoculars from the ground, look for shingles that might be damaged, broken or missing and any place where something is penetrating through the roof where water can leak in. A 2,000 sq. ft. roof with asphalt shingles can run from $3,000 to $8,000 for repairs. Severe repairs can cost up to $30,000 and beyond.
"Remember, the roof is kind of the tip of the iceberg. If water enters and runs into your house, inside ceiling and walls, that's when you've got the potential for rot or mold," he says.
Change Heating or Furnace Filters
During the heating season, you should consider changing your heating or furnace filters once every two months, says Hazelton. "A clogged filter decreases efficiency, raises your energy costs and it can cause damage to the heating system."
Replace Hoses in Laundry Room
Inspect the hoses that supply water to your washing machine once a season. Hazelton recommends replacing standard hoses with reinforced hoses made of steel mesh. "These hoses are under constant pressure and should they rupture while you're away from home, the water damage can be severe."
Remove Build-Up in Your Water Heater
A typical water heater should last 8 to 12 years, depending on the quality of the water inside. Hazelton's tip: remove any sediment build-up in the heater, at least once a year. "Those minerals can get quite thick, so it takes more energy to heat the water," he says. The task may take an hour or two to perform, but can help keep your water heater running efficiently. It can also help lower your heating costs.
SOURCE: Farnoosh Torabi - Financially Fit
Thursday, September 8, 2011
6 Insider Secrets For A Successful Open House
You’ve heard the same old tips for getting your place ready for an open house a million times: repair, spruce, stage, clean, deodorize. (And with good reason, because they work!) But beyond these bare minimum absolute musts, here are some less obvious things you should consider doing if you are aiming to pull off an Open House that showcases your home at its absolute best.
1. Visit other open houses in your neighborhood, city and/or price range. Get a feel for how the competition is putting its best foot forward to prospective buyers - or not, as the case may be. This exercise of seeing how clean and pristine, well-decorated and neutralized (in odor and decor) some listings are, and seeing how basically clean, but well-lived in properties, appear to be down at the heels by comparison, will help you see your own place through new eyes: the eyes of prospective buyers who will be making those same comparisons with your house.
2. Move. Okay, you don’t have to move all the way out, but you should do a pre-move packing session. Literally, pretend you’re moving (if things go well, you will be) and pack up almost everything you like or need to use on a daily basis. Toiletries, pictures of your dear old granny and her kitties, your Tron posters -- none of this stuff should be visible to Open House hunters. And remember - they open closets, drawers, cupboards and garages. Consider renting a storage space if you need to.
3. Invite the neighbors. Yes, your neighbors are probably looky loos, just salivating to get a glimpse into how you live. But there’s a good chance they are also (a) aware of other people who want to live in their neighborhood, and (b) vested in your getting good neighbors. So, invite them - stranger things have happened than a neighbor attending an open house, then letting a house hunting friend know that they must go take a look.
4. Enlist the neighbors. Even if your neighbors don’t personally know someone who is in the market for a place in your neck of the woods, they want your home to sell at top dollar - remember, your home’s sale will form the basis for their home’s value! So, while you're inviting the neighbors to attend, be aware of whether there's anything they can do to make your Open House run smoothly - and ask! Things like moving their cars to free up street parking for attendees and not having their kid practice his trombone in the backyard during that particular 3 hours Sunday afternoon are favors almost any good neighbor will be happy to do.
5. Mow your neighbor’s lawn. This one’s not for everyone, and you’ll have to exercise good judgment to decide how far to go with it, but if you happen to live next door to the blighted house on the block - the one with waist high grass and cars parked on it - it might make sense to reach out and offer some help to your struggling neighbor. (Even if your home is amazing, some buyers will just not live next to a place like that.) Now - some residents of these types of places can be, shall we say, sensitive to the idea that you might be insulting the way they live. But other times, they are just elderly, down-on-their-luck, ill, or otherwise overwhelmed people who would welcome some help. If you have reason to think that your neighbors fall into this last group, take some cookies or their newspaper over and see if you can help them - and help yourself in the process.
6. Get over yourself. You know how you like to brag that your taste, your personal style, is eclectic? That you’re a trendsetter? The flip side of that is that you might have a bunch of stuff - like the sequined, tasseled, feathered, sculpted, man-sized butterfly wall hanging I once saw at an open house - that no one else would like. The goal in preparing your home for an Open House is to neutralize the decor, so that the broadest possible number of people will crave to live there. So, instead of insisting on using this moment in time to express your, mmm, unique design leanings, let your agent (or a pro stager) help you decide what should stay and what should go.
SOURCE: TRULIA.COM
1. Visit other open houses in your neighborhood, city and/or price range. Get a feel for how the competition is putting its best foot forward to prospective buyers - or not, as the case may be. This exercise of seeing how clean and pristine, well-decorated and neutralized (in odor and decor) some listings are, and seeing how basically clean, but well-lived in properties, appear to be down at the heels by comparison, will help you see your own place through new eyes: the eyes of prospective buyers who will be making those same comparisons with your house.
2. Move. Okay, you don’t have to move all the way out, but you should do a pre-move packing session. Literally, pretend you’re moving (if things go well, you will be) and pack up almost everything you like or need to use on a daily basis. Toiletries, pictures of your dear old granny and her kitties, your Tron posters -- none of this stuff should be visible to Open House hunters. And remember - they open closets, drawers, cupboards and garages. Consider renting a storage space if you need to.
3. Invite the neighbors. Yes, your neighbors are probably looky loos, just salivating to get a glimpse into how you live. But there’s a good chance they are also (a) aware of other people who want to live in their neighborhood, and (b) vested in your getting good neighbors. So, invite them - stranger things have happened than a neighbor attending an open house, then letting a house hunting friend know that they must go take a look.
4. Enlist the neighbors. Even if your neighbors don’t personally know someone who is in the market for a place in your neck of the woods, they want your home to sell at top dollar - remember, your home’s sale will form the basis for their home’s value! So, while you're inviting the neighbors to attend, be aware of whether there's anything they can do to make your Open House run smoothly - and ask! Things like moving their cars to free up street parking for attendees and not having their kid practice his trombone in the backyard during that particular 3 hours Sunday afternoon are favors almost any good neighbor will be happy to do.
5. Mow your neighbor’s lawn. This one’s not for everyone, and you’ll have to exercise good judgment to decide how far to go with it, but if you happen to live next door to the blighted house on the block - the one with waist high grass and cars parked on it - it might make sense to reach out and offer some help to your struggling neighbor. (Even if your home is amazing, some buyers will just not live next to a place like that.) Now - some residents of these types of places can be, shall we say, sensitive to the idea that you might be insulting the way they live. But other times, they are just elderly, down-on-their-luck, ill, or otherwise overwhelmed people who would welcome some help. If you have reason to think that your neighbors fall into this last group, take some cookies or their newspaper over and see if you can help them - and help yourself in the process.
6. Get over yourself. You know how you like to brag that your taste, your personal style, is eclectic? That you’re a trendsetter? The flip side of that is that you might have a bunch of stuff - like the sequined, tasseled, feathered, sculpted, man-sized butterfly wall hanging I once saw at an open house - that no one else would like. The goal in preparing your home for an Open House is to neutralize the decor, so that the broadest possible number of people will crave to live there. So, instead of insisting on using this moment in time to express your, mmm, unique design leanings, let your agent (or a pro stager) help you decide what should stay and what should go.
SOURCE: TRULIA.COM
Friday, August 26, 2011
4 TIPS For Buying & Selling Homes At Same Time
Once upon a home, buying a home was as simple as saving some dough, spending a couple of weekends visiting Open Houses and writing up a contract. The time frame from house hunt to move-in was a couple of months, max. These days, super-tight mortgage guidelines, market concerns, distressed sales and appraisal dramas complicate and prolong both buying and selling.
If you need to pull both buying and selling off at the same time, it can seem like you're signing up for these complications, squared. On top of that, the very real prospect of spending some time homeless takes the stress of home buying and selling to an entirely new dimension.
Fortunately, getting yourself educated about what to expect on today's market and knowing all your options empowers you to obliterate panic with a strategic approach, an amazing logistics plan (and backup plan) and comprehensive preparedness for all possible outcomes. In that vein, here are four need-to-knows for those who want or need to sell their current home and buy a new one, at the same time.
1. Meet with a local agent who actively sells homes in your neighborhood, far in advance of listing or house hunting. You need them to brief you on items like how long you should expect your home to take to sell on today's market, what (if anything) you can do to move it faster, and whether listing after doing some improvements to your home, at a different time of year or at a different price point than you had planned can realistically be expected to make an impact on your time frame.
You also need their professional opinion as to what price you can expect to get for your home. This will impact whether you need to consider a short sale (if your home's value is less than you owe on it, for example) which, in turn may affect your ability to qualify for a home loan in the short-term. (Short sales often make it difficult to qualify for a new home loan for a couple of years.) If you need to buy in the near-term, but your home is unlikely to sell except as a short sale, you'll need to discuss the legalities and logistics with your mortgage pro, attorney and/or a CPA, as well.
Actually, the information about how long your home will take to sell, how much you can expect to sell it for and whether you're expecting to have to unload it at a short sale is all information you'll need to provide to your mortgage pro, so definitely collect it as early as possible in the process. A year before you need to move is not too soon to have your first meet up with your agent.
2. Meet with your mortgage broker before your start looking for homes or put your own home on the market. Of course, this is something you would have done eventually in preparation for your purchase, but it's essential that you have them walk with you through both your sell and your plans to buy, before you do either.
Why?
Well, a good local mortgage broker can work with you and your agent to help you:
- do the math on what you'll net from your home sale;
- help you know how much you (a) can qualify to buy, and (b) will need to come up with for your purchase;
- understand whether the sale will impact your credit at all all and by how much, if so; and
- time your sale vis-a-vis your purchase.
There are dozens of ways the sequence might need to play out, to be successful at both buying and selling, and you'll need your mortgage pro to be a partner in the process of determining how to order things - before you actually do anything. For example, you might be under the impression that you can't buy before you sell, because you can't qualify for both, when in fact your mortgage pro could suggest a solution like a low- or no-cost refi first, to bring your payment down so you can qualify to buy before you sell. Or maybe you ARE in a situation where you can't qualify to carry two loans, so you need to sell first and use your own cash to make up the difference between what you owe on your home and what it sells for to avoid a short sale so you can still qualify to buy your next property.
In any event, you won't know what exactly your capabilities are, from a mortgage and timing perspective, until you hear it from the source. So, get that meeting on the calendar, too, as early as possible.
3. Know your options for staying in after closing - or moving in early. Many homeowners try to buy and sell at precisely the simultaneous moment, with very little overlap, because they don't want to throw money away on rentals. The reality of today's market is that very, very few sales close precisely when they are expected to, mostly for reasons entirely out of the control of either party. The seller's bank takes months longer than expected to allow a short sale to close, or the buyer's bank takes eons to sign off on the appraised value of the home. In any event, if you are selling your home, before your purchase will be complete, know that it's okay to ask for a "rent-back" where you can stay in the property for as long as a month or more after the sale closes by agreement with the buyer to pay them rent on the property in the amount of their mortgage payment, taxes and insurance for the time you remain in the home.
On the other hand, if you are buying after your sale closes, some sellers will allow you to move in before closing on a similar arrangement - essentially a lease or early move-in arrangement. They may ask you to sign a document waiving their liability for your belongings and anything else that goes wrong while you're there, before closing - you'll have to negotiate and decide what works for all involved. Before you start to freak out at the thought that your 'buy' won't close when you need it to, know that this option might be available, and talk with your home's seller to see if they'll consider it.
4. Plan for gaps - and for overlaps. There is very little in this world we can be sure of, except the high probability of your escrow closing late. Having a backup plan in place just in case you close one or both transactions off-schedule is essential to avoiding the surprise-induced panic attacks so frequently suffered by those intrepid housing consumers who try to buy and sell homes at the same time. And, frankly, sometimes the best defense against these surprises is simply to plan for gaps and/or overlaps.
So, if you want or need to buy before you sell, build a cash cushion that can cover double payments for a couple of a months - and just plan on that. If that's not in the budget, or if you'd like to try out your new neighborhood or town before you buy, close your home's sale, then plan on renting a place during your house hunt - if you just need a place for a month or two, you might want to consider a suite hotel or a short-term, vacation-style rental like those you can find on sites like Airbnb.
So, if you want or need to buy before you sell, build a cash cushion that can cover double payments for a couple of a months - and just plan on that. If that's not in the budget, or if you'd like to try out your new neighborhood or town before you buy, close your home's sale, then plan on renting a place during your house hunt - if you just need a place for a month or two, you might want to consider a suite hotel or a short-term, vacation-style rental like those you can find on sites like Airbnb.
SOURCE: TRULIA.COM
Thursday, August 11, 2011
5 Secrets For Coming Up With That Down Payment Cash
Most home buyers’ biggest hurdle is coming up with the cash for a sensible down payment. Gone are the days of zero-down loans, so if that was your plan, you’re going to need a new one! Coming up with a down payment for a home is a challenge because it’s not chump change we're talking about, here. The down payment on a $200,000 house, for example, will run you anywhere from $7,000 (on an FHA loan) to $40,000!
That might seem like an insurmountable amount of coin to come up with, but it’s actually more doable than you might think. Some buyers will simply save up their own cash, even if it takes many, many moons. The good news is that if you still need some help to boost your down-payment savings, there are resources you can harness to power your home-buying pursuit:
That might seem like an insurmountable amount of coin to come up with, but it’s actually more doable than you might think. Some buyers will simply save up their own cash, even if it takes many, many moons. The good news is that if you still need some help to boost your down-payment savings, there are resources you can harness to power your home-buying pursuit:
- The FHA Bridal Registry. Yes - you read that right! The FHA Bridal Registry Program enables wanna-be home buyers to apply their families’ wedding gifts toward their down payments. And although it’s named a “bridal registry” program, you don’t have to be a prenuptial couple to use it. You could also use this program to collect gifts for graduation, the arrival of a baby or some other major life event in which people want to give you gifts.
The FHA Bridal Registry works like a traditional registry, but is more flexible. The registrants visit their choice of FHA mortgage lenders and set up what essentially is a custodial savings account for the sole purpose of funding their down payment. The couple’s (or individual’s) family and friends can either deposit funds directly into the account or give the cash or check to the couple or individual, who then deposits it into the account. The account’s flexibility also goes beyond that of traditional down payment gift rules that are applicable to FHA loans, which are detailed below in insider secret #2. With the FHA Bridal Registry Program, the only gift documentation required is “lender and borrower certification of the funds.”
- Family gifts. Most lenders will allow home buyers to apply gift money from family members toward their down payment - within guidelines, that is. First, the lender will require a letter from the giver verifying that it in fact is a gift and not a loan. (They generally frown upon it being a loan because it would add to the buyer’s debt and change their debt-to-income ratio.) And second, the person giving you the money must be a relative. The reasoning here is that a friend will most likely expect you to repay the money, whereas a relative won’t.
FHA loans will allow the gift to make up any portion or all of the buyer’s down payment, many conventional (non-FHA) loan programs will restrict the proportion of a buyer’s down payment that can come from gift money. The lender may also have specific ways they want to see the money go into and out of your accounts. Before you accept a gift toward your down payment, be sure to check with your mortgage broker or loan rep to be sure that you’re dotting all the right i's and crossing all the right t's.
- Your Employer. Some companies offer assistance programs to employees. Most are government, university, large company and financial industry employers. One example is safety workers: n some areas, safety workers like firefighters and police can have access to down payment grants from their employers if they buy properties in the city where they are on-call as first responders. Also, many large colleges and universities, very large companies and banks and lending institutions offer down payment help and have below-market-rate mortgages set up for faculty members and staffers. Check with your Human Resources department to see if any such program is available to you.
- City/County/State Programs. Some states, counties and cities still offer programs that lend or give home buyers some assistance for down payments. These programs vary widely in scope - for instance, many target buyers with low and moderate incomes, while some seek to help the buyers of foreclosed or fixer-upper type homes. Some don’t have to repaid - meaning they are given as grants and are forgiven entirely if the buyer lives in the property for 30 years, but must be repaid if the buyer sells or rents the home out before the 30 years elapses. The programs pretty much all have some sort of homeowner education component that requires applicants to take personal finance and homeownership preparedness classes before they can receive funds. To learn more, visit your city, county and state websites to learn about programs that might be able to help you.
- Your Retirement Funds. Many financial advisors would advise against this, but if you have a 401K or Roth IRA account and some years to go before retirement, you might be able to tap into it or even borrow against your own funds for your down payment. Currently, you can take up to $10,000 out of your Traditional IRA with no penalty to put toward the purchase of your first home, but you will be taxed. You can take as much as you want out of your Roth IRA contributions with no penalty or taxes, though, and as much as $10,000 from your earnings penalty-free for your down payment. The rules get a little tricky, here, so definitely check in with your tax and financial advisors.
And while you can’t similarly draw from your 401K, many retirement and pension plans will allow you to borrow the money against your funds, then repay it to yourself – at interest. So the choice there comes down to paying your lender back with interest or paying yourself with interest. That choice should be you! But first, get some advice from your CPA or financial planner. This option might not make financial sense for your particular situation.
SOURCE: WWW.TRULIA.COM
Saturday, July 30, 2011
Winged Bride Weds On New Suffolk Beach
(OK, so let me start by saying how lame I am that my phone camera photo file was full and you will be deprived of enjoying all the photos I snapped of the happy event...all for naught, my climbing around behind sand dunes, feet entangled in doggie leash, trying to be invisible in my pjs (always walk doggie in pjs), as the happy couple and their guests gathered around the chuppah in the morning sun.)
So I'm walking Luna this morning, half asleep, and as we approach the beach I see alldressedup people on the beach, someone laying out a long carpet on the sand ---- is that a chuppah blowing in the breeze, is that a female rabbi????? ----- amidst a few early stragglers arriving with umbrellas, coolers and whining kids --- move over and let these optimists have their wedding!!!! I am convinced it's a gay wedding. Smiling, barefoot bald guy in fashionable black suit and sunglasses, female rabbi -- gotta be gay! Yippeeeee!!! New Suffolk leads the way again!!! Wrong, bride arrives, fashionably late, flowing white, strapless, backless gown --- wait a minute --- she has WINGS TATTOOED ON HER BACK!!!!! Yippeeeee again! You just never know what you're gonna see when you're walking your dog, in your pjs, on a Saturday morning in New Suffolk.
All this AND the NOFO Rock and Folk Fest this weekend in Cutchogue!!
So I'm walking Luna this morning, half asleep, and as we approach the beach I see alldressedup people on the beach, someone laying out a long carpet on the sand ---- is that a chuppah blowing in the breeze, is that a female rabbi????? ----- amidst a few early stragglers arriving with umbrellas, coolers and whining kids --- move over and let these optimists have their wedding!!!! I am convinced it's a gay wedding. Smiling, barefoot bald guy in fashionable black suit and sunglasses, female rabbi -- gotta be gay! Yippeeeee!!! New Suffolk leads the way again!!! Wrong, bride arrives, fashionably late, flowing white, strapless, backless gown --- wait a minute --- she has WINGS TATTOOED ON HER BACK!!!!! Yippeeeee again! You just never know what you're gonna see when you're walking your dog, in your pjs, on a Saturday morning in New Suffolk.
All this AND the NOFO Rock and Folk Fest this weekend in Cutchogue!!
Thursday, July 28, 2011
4 Steps To Smart Home Ownership
Not so long ago, in a not-so-distant land, owning a home was thought of as the safest "investment" around. Fast forward to the present day, and home ownership seems super scary to many people who can afford homes, and would like to own them, but are paralyzed by the fear of buying a lemon, or having a mortgage catastrophe.
Here are 4 simple steps to minimize the risk that you'll become the main character in a homeownership horror story.
1. Stick with a fixed-rate mortgage. Recent data shows that adjustable rate mortgages, or ARMs, are increasingly popular, rising from 9 percent of the mortgage market in the fourth quarter of 2010 to 12 percent in the first quarter of this year. This might seem crazy to some, but in financially aggressive crowds, the lure of low, 3 percent(ish) interest rates on ARMs is enough to overcome any qualms. As well, today's ARMs tend to have lower lifetime interest rate caps and require payment of principal, so they don't adjust as violently as the subprime interest-only and option ARMs that contributed to the foreclosure crisis.
If the thought of your mortgage payment changing over time gives you the shakes, you don't want to live in a state of interest rate obsession for the next few decades, or you simply crave the simplicity and predictability of knowing what your housing payment will be for the next 15, 20 or 30 years, then stick to
a fixed-rate mortgage. The rates are higher, but with a fixed-rate loan, the risk of scary payment changes are not only lower, they are non-existent.
2. Put - and keep - a home warranty in place. One of the most frightening things about going from renter to homeowner is the prospect of being solely responsible for the care and feeding of your home and all its systems and appliances. Responsibility for both the costs and the actual logistics of repairing things like a leaky roof, a broken hot water heater or a haywire electrical fixture looms large in the minds of first-time buyers, in particular.
A home warranty plan kicks in when escrow closes, and depending on the coverage you select, will cover your home against the breakdown of major systems and even some appliances, like furnaces and water heaters. In some cases, you can even upgrade the coverage to protect against roof leaks and some plumbing issues. When a covered item breaks down, just remember to call the home warranty company first - for the cost of a service call you can get the item repaired or even replaced, if necessary. I remember the home warranty company replacing a $900 water heater in my first home; what a godsend!
Talk with your agent - you might even be able to negotiate for the seller to pay for the first year's cost of the warranty. Just remember to renew it when it expires every year, to keep a cap on your risk of unexpected repair costs for the duration of your tenure as a homeowner.
3. Get repair bids and estimates, not just inspections. After you find the home of your dreams (or the home of your budget!) and get into contract, you'll have a contingency or objection period ranging from 7 to 17 days during which you can obtain all the inspections you want. Most buyers start out with a general property inspection, a pest inspection and a roof inspection, then get more specialized inspections if the property calls from it. Pest and roof inspectors will generally provide an inspection report AND a repair bid for any work they find needs to be done.
But the overall home inspection could very well list a dozen needed repairs, upgrades and maintenance items, without providing any information about how much those repairs will cost. If your inspection report surfaces work you'll need to have done to fix things (or avoid bigger fixes down the road), work with your agent to schedule actual repair contractors to come in and give you bids on the work before your contingency or inspection period expires. That will position you to negotiate around repair costs with the seller, or to know what you're getting yourself into, cost-wise, if you take the property as-is.
4. Buy on the 10-year plan. Warren Buffett once famously advised stock investors to "only buy something that you'd be perfectly happy to hold if the market shut down for 10 years." The same advice is good for buying a home in today's real estate market. Take on a mortgage you know you can sustain, buy at a price you can comfortably afford and avoid having to sell because you need to move for some urgent reason, or because the home no longer meets your needs.
You can take this last step to hedge against losing money on your home by planning your space, career and lifestyle needs out 5, 7, even 10 years in the future - everything from how many bedrooms and garage spaces you'll need to where you'll want to be located, geographically - and selecting a home that will meet those needs for that foreseeable future. As a general rule of thumb, the harder hit the area was in the recession, the longer you should plan to hold it.
SOURCE: TRULIA.COM
Thursday, July 7, 2011
Sellers: 4 Questions To Ask Your Buyer
On today’s market, some sellers struggle to get even a single offer - much less an offer from a qualified buyer, at a reasonable price, on terms they can live with. But just because the market is down doesn’t mean sellers are utterly powerless. Proactively asking prospective buyers the right questions can help put together the best possible deal, and stacks the decks in favor of it closing, as well - so here are those questions!
1. Where’s your proof? Real estate transactions fall out of escrow on today’s market more than ever (that just means that a contract is cancelled sometime between the time buyer and seller sign it and the time it was supposed to close). This is a seller’s worst nightmare - to get your hopes up and your moving plans in motion then have to cancel it all because the deal falls through. And that’s just where the awful-ness begins; every seller fears pulling their home off the market in reliance on a contract that later implodes because of the reality that they might forgo other good buyers while your home is marked “pending.”
Deals often fall apart because the mortgage lender fails to approve the short sale, or the home appraises way below the seller’s bottom line. But another common deal-killer is when the buyer’s financing falls apart. While nothing is bullet-proof, smart sellers have their agents ask the buyers agent for robust proof that the buyer can actually do the deal.
If your home’s buyer plans to use mortgage financing, you should get a pre-qualification letter from a mortgage pro who has actually run the buyer’s credit, seen their down payment money and checked their income and assets - it’s not overkill for your agent to call the buyer’s mortgage contact and check on how recent and how strong (or tenuous) this approval is. (The more recent the better - down payment savings can be spent and even jobs can be lost between the time of the approval and the time of the offer, if many moons have passed.)
If the buyer is using cash, the listing agent should insist on receiving a recent proof of funds, like a bank account statement, documenting that the buyer has the cash they’ll need to close on hand.
2. Is there anything you’d like? This question is all about personal property - the “stuff” that’s inside your home, from your furniture to your home electronics (not including the children - or the in-laws, if you have some in residence). If you have things that are in great condition, are difficult to move, are very well-suited or custom-made for the home or that you were planning to sell in the course of your move anyway, you might want to ask your home’s buyer if they are interested in them. Maybe you have a price in mind, or maybe you are willing to give it away for the convenience of not having to move it - I’ve even seen sellers who can’t meet a buyer’s counteroffer by reducing the price instead offer up a valuable item of property instead, sealing the deal that way.
If you do agree to leave some things behind - whether for a fee or for free, make sure you explain to the buyer in writing that you cannot offer a warranty on the item(s), and work with your broker or agent to ensure that the paperwork doesn’t run afoul of any lender guidelines.
3. For offers over the asking price: What’s your plan if it doesn’t appraise? Even on today’s market, a well-priced home in a great neighborhood can generate multiple offers, with the top offer usually exceeding the asking price. The problem is that if the recent sales in the area aren’t in that same price range as your amazing offer, your home could very well fail to appraise for the asking price (low appraisals are a very common problem these days - causing thousands of transactions to fall out of escrow). And the other problem is that some crafty buyers count on this, strategizing to make a sky-high offer to beat the others out, planning all the while to demand a price reduction when the property appraises low.
Before you accept an offer that is higher than you or your agent feels your home will realistically appraise for, ask the buyer what they plan to do if the property appraises below their offered price. Better yet, when it becomes clear that you’ll be receiving multiple offers, let all prospective buyers know that before you accept an over-asking offer, you will either (a) require that the winning buyer waive the appraisal contingency, and/or (b) require an agreement that the successful buyer will make up the difference between the appraised price and the purchase price, and proof that they have the cash on hand to do so. This is a surefire shenanigan minimizer, and will cause people to make only offers they will stand behind later. (Now, if the home appraises below the listing price, that’s a horse of a different color.)
4. Did you read the reports? Some savvy sellers who know their homes need a little work here and there (or a lot, as the case may be) take the smart step of having their home inspected or appraised in advance of even putting it on the market. If they can’t afford to do all the work indicated in the report, many will adjust the list price to account for needed repairs, some even going so far as to obtain repair estimates from local contractors and offer them up to prospective buyers in the home’s disclosure packets.
In their excitement to find a property that meets their needs, some buyers barely skim the reports and may not realize that the list price reflects a discount for the needed repairs. Best practices for sellers who have advance reports is to require buyers to acknowledge them (as by signing a receipt), and to even call out - in writing - the specific repairs for which the price is being discounted. Some listing agents in these situations even advise their sellers to insist on an as-is contract, so that the buyer has a crystal clear understanding that the seller cannot do any repairs.
That way, you don’t get two weeks into the transaction when the buyer understands the condition problems and (a) bails out of the deal, (b) asks for repairs or for more of a discount, or (c ) has their loan fall apart because a previous FHA appraisal came in low or their lender will not allow the home to be sold with your home’s particular “issues.”
SOURCE: TRULIA.COM
1. Where’s your proof? Real estate transactions fall out of escrow on today’s market more than ever (that just means that a contract is cancelled sometime between the time buyer and seller sign it and the time it was supposed to close). This is a seller’s worst nightmare - to get your hopes up and your moving plans in motion then have to cancel it all because the deal falls through. And that’s just where the awful-ness begins; every seller fears pulling their home off the market in reliance on a contract that later implodes because of the reality that they might forgo other good buyers while your home is marked “pending.”
Deals often fall apart because the mortgage lender fails to approve the short sale, or the home appraises way below the seller’s bottom line. But another common deal-killer is when the buyer’s financing falls apart. While nothing is bullet-proof, smart sellers have their agents ask the buyers agent for robust proof that the buyer can actually do the deal.
If your home’s buyer plans to use mortgage financing, you should get a pre-qualification letter from a mortgage pro who has actually run the buyer’s credit, seen their down payment money and checked their income and assets - it’s not overkill for your agent to call the buyer’s mortgage contact and check on how recent and how strong (or tenuous) this approval is. (The more recent the better - down payment savings can be spent and even jobs can be lost between the time of the approval and the time of the offer, if many moons have passed.)
If the buyer is using cash, the listing agent should insist on receiving a recent proof of funds, like a bank account statement, documenting that the buyer has the cash they’ll need to close on hand.
2. Is there anything you’d like? This question is all about personal property - the “stuff” that’s inside your home, from your furniture to your home electronics (not including the children - or the in-laws, if you have some in residence). If you have things that are in great condition, are difficult to move, are very well-suited or custom-made for the home or that you were planning to sell in the course of your move anyway, you might want to ask your home’s buyer if they are interested in them. Maybe you have a price in mind, or maybe you are willing to give it away for the convenience of not having to move it - I’ve even seen sellers who can’t meet a buyer’s counteroffer by reducing the price instead offer up a valuable item of property instead, sealing the deal that way.
If you do agree to leave some things behind - whether for a fee or for free, make sure you explain to the buyer in writing that you cannot offer a warranty on the item(s), and work with your broker or agent to ensure that the paperwork doesn’t run afoul of any lender guidelines.
3. For offers over the asking price: What’s your plan if it doesn’t appraise? Even on today’s market, a well-priced home in a great neighborhood can generate multiple offers, with the top offer usually exceeding the asking price. The problem is that if the recent sales in the area aren’t in that same price range as your amazing offer, your home could very well fail to appraise for the asking price (low appraisals are a very common problem these days - causing thousands of transactions to fall out of escrow). And the other problem is that some crafty buyers count on this, strategizing to make a sky-high offer to beat the others out, planning all the while to demand a price reduction when the property appraises low.
Before you accept an offer that is higher than you or your agent feels your home will realistically appraise for, ask the buyer what they plan to do if the property appraises below their offered price. Better yet, when it becomes clear that you’ll be receiving multiple offers, let all prospective buyers know that before you accept an over-asking offer, you will either (a) require that the winning buyer waive the appraisal contingency, and/or (b) require an agreement that the successful buyer will make up the difference between the appraised price and the purchase price, and proof that they have the cash on hand to do so. This is a surefire shenanigan minimizer, and will cause people to make only offers they will stand behind later. (Now, if the home appraises below the listing price, that’s a horse of a different color.)
4. Did you read the reports? Some savvy sellers who know their homes need a little work here and there (or a lot, as the case may be) take the smart step of having their home inspected or appraised in advance of even putting it on the market. If they can’t afford to do all the work indicated in the report, many will adjust the list price to account for needed repairs, some even going so far as to obtain repair estimates from local contractors and offer them up to prospective buyers in the home’s disclosure packets.
In their excitement to find a property that meets their needs, some buyers barely skim the reports and may not realize that the list price reflects a discount for the needed repairs. Best practices for sellers who have advance reports is to require buyers to acknowledge them (as by signing a receipt), and to even call out - in writing - the specific repairs for which the price is being discounted. Some listing agents in these situations even advise their sellers to insist on an as-is contract, so that the buyer has a crystal clear understanding that the seller cannot do any repairs.
That way, you don’t get two weeks into the transaction when the buyer understands the condition problems and (a) bails out of the deal, (b) asks for repairs or for more of a discount, or (c ) has their loan fall apart because a previous FHA appraisal came in low or their lender will not allow the home to be sold with your home’s particular “issues.”
SOURCE: TRULIA.COM
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