Home Staging – Can It Make Your Property Sell Faster?

When someone comes to your home for a viewing, they make snap decisions in seconds, and even the smallest thing can put them off. Unfortunately, most homes for sale are quite lived in, whereas buyers want sleek show homes that don’t require any improvement. Luckily, there are things you can do to improve your home, and one way to do this is cheaply is through home staging.

What is home staging?

Home staging basically refers to setting up your home so it’s more appealing to buyers. It means removing things that are too personal, and creating a calm, serene environment that will appeal to visitors.

Remove clutter

Removing clutter is the number one rule for house staging, but it’s important not to go too far. Homes that have been completely decluttered look bare, and make it difficult to imagine what the place will look like when they move in. Don’t make the home too depersonalised. A few family photos are nice – dusty knick knacks are not.

Use appropriate furniture

Oversized or unsuitable furniture can make a room look smaller. Also, if you’ve got a spare room and there’s no bed in there, then it’s hard for people to imagine what the room will be like once furniture is added. If you don’t have the right furniture, then consider borrowing some, or even looking for some second hand bargains. You can always sell them on once the house is sold.

Use space effectively

Although you may have plenty of space, and have moved your furniture to suit your space, you may not be using the room effectively. Don’t be afraid to use the middle of the room when it comes to coffee tables and rugs. This draws focus to the centre of the room, and can actually make it feel more spacious.

A contemporary way to style your home is to pull some of the furniture away from the walls. Again, this creates a modern, spacious look, especially in large living areas.


Add natural light

If you have large furniture blocking the windows, or are using unsuitable window coverings then you may find there’s a lack of natural light. Unfortunately, there’s not always a lot you can do about these sorts of rooms, but luckily there are cash buyers who’ll buy any house quickly, no matter what its condition. If you don’t want to go this route, then consider adding a skylight or roof lantern to improve a room.

Make it cosy

Rooms that are staged should look pleasant and inviting. Add some colourful cushions, make sure beds are made up with blankets draped over the top, and add some finishing touches such as a vase of fresh flowers. This will make the house look inviting, as well as well looked after.

Staging your home doesn’t have to cost a fortune. It’s all about using what you already have and making the most of it. You can then show your home in its best possible light, and impress any potential buyers.

source: 20smoney.com

How Accurate Are Local Home Sale Prices?

As you search for a home online, one of the more important statistics you’ll encounter are prices for homes that have sold recently in the area you want to live in. This is the best way to get a feel for the local market. In fact, identifying recent sales prices of “comparable” homes is basically how appraisers determine values.

How Sales Prices Work

Sales prices, sometime called closed sale prices, differ significantly from list prices, which basically represent only what the seller is asking for the house. Nor are they pending sales process or contract prices, which are the amounts sellers and buyers initially agree to but often change before closing.

Sales prices for individual homes that you see on real estate web sites come from brokers who report prices to their local multiple listing services rather than waiting for prices to be posted publicly at courthouses, a process than can take months.

But How Accurate Are They?

A new study has found that the prices consumers see on web sites were wrong an average of 8.75 percent of the time—in most cases higher than they should have been. The economists who conducted the study looked at 400 transactions in a Southeastern state from 2004 to 2008.

They compared prices from MLSs with the official prices and found that errors weren’t spread evenly over the time period but doubled in one year to more than 15 percent of transactions in 2006, when prices peaked and began to fall in the housing crash, followed by nearly as many errors in 2007 and 2008, when the crash accelerated. One example was 22 percent higher than the actual sales price.

How Do Errors Happen?

The timing of the errors suggested they were not random mistakes but were driven by marketplace conditions.

From the evidence, the authors of the study suggested two viable explanations for the market-driven error rates. The first was that some brokers intentionally inflated sold price information in the MLS, perhaps to make it appear that they negotiated a higher price for their clients.

“I don’t think agents were deliberately misstating prices, though that’s a story that fits the facts,” said Dr. Kenneth M. Lusht, one of the study’s three authors, in an interview. Lusht is Distinguished Professor of Real Estate at Florida Gulf Coast University.

“The second thing that could have happened, and it’s pretty likely, is that when you’ve got a down market, buyers get cold feet. They start thinking about not going through with the sale and giving up their deposit. So another story that’s consistent with what we found is that the price the broker submitted was the agreed upon price but between that the time he submitted it to the MLS and the settlement day the price was changed and the broker never changed the data because there is no incentive to do so.”

Whatever the cause of the errors, the study concluded, “Regardless of the motivation or source of the error, the result is the same—a misstated price.”

 The Bottom Line

More research is needed to confirm whether a real problem might exist and to measure its scope. Moreover, few markets today are falling at rates close to those of the period covered by the study, so at most errors are less frequent and less severe than those in the study.

However, in the meantime consumers relying upon sales data originating from multiple listings services should see if they can find other sources for sales that they are relying upon to set a sales price, price an offer or negotiate and final price.

source: totalmortgage.com

4 Reasons Buyers Need Their Own Agent

The old saying “no one has your best interest at heart except you” is often true, but in a real estate transaction it does not have to be that way.

In fact, buyers have an opportunity to sign a buyers agency agreement (it outlines the services provided by the agent, their compensation, exclusivity details, and how they will work on your behalf). It is logical to want to work directly with a real estate agent who can provide a wealth of information they otherwise would not be able to divulge to consumers.

Things like school district questions, neighborhood details, and even specific details about a property are all available to you under this arrangement. Your buyers agent clearly has your best interest in mind and will do everything possible to provide quality service while answering your questions as intimately as they possibly can. It is a win-win, because the more quality information you have available to you, the better home buying decisions you can make. The better decisions you make, the better chance you have of getting a great deal.

Whether you are a first-time, next time, or last time buyer, you want to know you are getting a good deal and will be safe, secure, and happy with the property you choose. All the more reason to do some upfront homework and choose an agent to represent you that has the qualities you are looking for.

Here are 4 reasons why buyers need their own agent when looking to purchase a home.

Market Knowledge

No one knows the local real estate market better than an agent! They are hitting the streets to check out the existing and new inventory, they have seen the neighborhoods, know which homes are likely to sell fast and those that may require some tender care to get under contract, they have a good understanding of the school districts, may know details about upcoming commercial construction in the area, and have a wealth of other information readily available to them.

While you may glean a few tidbits from the large national real estate websites, there is absolutely no substitute to discussing home details with an agent who has physically been inside the house and can tell you specific details about the property. Trust their market knowledge, and ability to discern what you need, to parlay that into a viable home viewing list.

Help with Hazards

While some buyers are very astute and have a keen attention to detail, many walk into a home with rose colored glasses on and fail to see some of the hazards that could end up being red flags or deal breakers. It is understandable you are excited and want to see if this house is “the one” and in doing so you may miss some of the finer points of the property.

Did you notice the roof, structure, and yard while walking up to the home? Your agent should be on alert to spot any imperfections or potential issues before you cross the threshold. Did you spot any leaks? Notice cracks in the floor, walls, or ceiling? You may have noticed all those things but chances are you were too busy checking out room sizes, trying to figure which room would be the office, determining if there was a place for your prized bar stools, helping the kids decide which rooms they may get, or you were mesmerized or appalled at the current owners “stuff”. No worries, an agent worth their salt should be pointing out all the intangibles so you can concentrate on the details important to you.

Your Own Representation

It is sometimes overlooked just how important this can be for buyers. Without your own buyer representation you are either being shown homes by an agent who legally cannot divulge information to you, or worse yet, you call the agent on the sign to see their listing. The listing agent works for the seller and will ALWAYS have the sellers best interest in mind, not yours. Remember, when you think you can get a better deal without having your own representation, it rarely works out in your favor.

The local agent is the local real estate expert so it makes good sense to utilize their expertise by getting their opinion about the area, crime, schools, each home you visit, specific pricing options, whether the property appears to be a good or bad deal, neighborhood nuances, and anything else that comes to mind. The point is, when you have your own buyer representation, you have an advocate in your corner who will share everything they can to help you make the best home buying decision.

Negotiation Power

This is one of the likeliest real estate areas where not having your own agent can cost you a lot of money. Unless you are skilled at determining which property imperfections or home inspection issues typically equate to a lower price, or know when the time is right to ask for additional assistance (i.e. closing costs, maintenance, updates, warranties, etc.), it is best to let a skilled agent handle this for you. Sometimes making a small concession in one area can reap big benefits overall, such as foregoing getting appliances updated and instead netting a lower sales price.

Agents will typically keep their emotions in check during the negotiations and may have additional insight about the home, listing agent, seller, or builder they can leverage to get you the best terms possible. Staying calm and collected reduces the likelihood of making a rash decision or snap judgement which could cost you in the long run. Getting the best deal on the home of your dreams is what you should be after!

Final Thoughts

In short, a buyer’s agent is much more than someone who just opens doors to let you view houses. They want to help you get a great deal, close quickly, and be happy with both their service and your new home. The better job they do on your behalf the more likely you are to refer them to your local sphere of influence and utilize their services again when you decide it is time to sell your home.

Whatever your reasons are for buying a home, there is no better option than working with your own buyers agent. Do your homework, choose a great agent to represent you, and begin the journey towards owning your own home. It really is that simple…happy house hunting buyers!

source:  totalmortgage.com

How to Tell if Your Local Real Estate Market Is Healthy

At its simplest level, real estate economics is a matter of supply and demand. Too few houses for sale to meet demand and prices rise. Conversely, if the local for sale inventory exceeds demand, prices will fall.

If supply and demand are in balance, though, prices will stabilize and homes will sell at prices closer to their true values without the unhealthy side effects of an unbalanced market—bidding wars and prices so high that they shut out first-time buyers or so low that they suck away equity from homeowners.

During the current recovery, rapidly rising prices have created bubble-like conditions, threatening some Western markets and raising the specter of the crash that contributed to the default of more than 5 million families.

Markets can change quickly, but it is not hard to tell when supply and demand are so out of balance that they create abnormal changes in the market that make it difficult for buyer or sellers.

Here some ways to assess a market’s health.

Rapidly rising or falling prices.

These are the symptoms that the market is out of balance and is causing damage to either sellers, buyers, or move-up buyers. Generally, an annual increase of 5 percent is a very healthy rate of appreciation.

Prices above that level and prices that are depreciating on annual basis suggest that they market is out of balance. Over the past three years, national average price has risen about 20 percent, according to CoreLogic.

Months’ supply.

Housing economists track the balance between supply and demand with metric known as “months’ supply.” It presents how many months it would take to use up the current supply of homes at the current rate of demand.  It takes into account current inventory, rate of replacement and the rate of disappearance. A six-month supply is considered healthy.

Time on market or days on market. 

This metric is simply the median time that homes are selling in a market. For a specific listing, it’s the number of days a listing is active in a multiple listing service before a buyer makes an offer that the seller accepts.

It is less accurate than months’ supply because MLSs reset the clock tracking time on market if the property is delisted and then listed again, often by another broker. “Time on site” a similar measure, also can be confusing since it measures only the days a listing has been on an aggregator site like Zillow or Realtor.com. It might have been listed on its MLS for s longer period of time than on an aggregator site.

When days on market exceed 90 days, it’s a good sign that either there is something wrong with the property or it is priced too high for the market.

List-to-sale, sale-to-list, or list-to-close ratio.

This is a sales metric used by real estate professionals to measure whether homes are selling more or less than the asking price in the local market. To calculate the metric, divide the actual sale price by the property’s final list price and express the result as a percentage. It can also be calculated using recent sales prices in a market.

Buyers, sellers and real estate agents can use the ratio to determine a strategy for price negotiation. A ratio above 100 percent means that it is a strong sellers’ market and homes are selling for more than their list price, suggesting mufti bid situations. If a home’s ratio is below 100 percent, the property may have had serious repair issues or was overpriced initially. When the ratio is below 100 percent on a market-wide basis, it suggests demand is soft and still softening, forcing owners to lower their prices after they listed their homes.

The bottom line? There are plenty of ways to get a feel for the housing market in your area as long as you’re willing to do a little research.

source: totalmortgage.com

Are New “For Sale by Owner” Sites Changing the Rules?

When home prices rise steadily over several straight years, seller’s markets crop up where demand is strongest. One of the side effects is a renewal of interest among home sellers in trying to find a way to forgo the traditional six percent commission that real estate brokerages charge. Typically, that means marketing their homes on their own.

During the current three-year old housing recovery, however, there’s no sign that more sellers are going “FSBO”, or “for sale by owner.” Since 2012, sale prices have risen about 20 percent, according to CoreLogic.[1] In several of the hottest markets like Riverside CA or Los Angeles price increase are near or exceeding 10 percent in 2015 alone.[2]


Despite the strength of the recovery, interest among home sellers in going it alone has yet to materialize. According to the National Association of Realtors’ annual Profile of Home Buyers and Sellers, only 8 percent of sellers went FSBO in 2014, fewer than in 2013 and the smallest share since the association started collecting data in 1981.[3] But a lot has changed in 35 years and NAR’s survey may not be providing a complete picture of how the Internet may be empowering consumers to reduce the fees they pay real estate brokerages.

The traditional definitions of FSBO may mask a growing trend among many sellers to do more of the marketing themselves with the help of the Internet and brokerages using newer models.

Here are a few of the new ways people are saving when selling their home:

Auctions. Foreclosure auctions were a significant part of the real estate business four or five years ago and now online auctions have become an increasingly popular way for owners to sell their homes at a good price without having to wait for months. Sites like Auction.com and Hubzu.com offer incentives to buyers to buy their next home at an auction.

Discount brokers. There is nothing new about brokerages that offer their services at rates significantly less than their competitors. Most, however, provide less service for their lower prices. Redfin is probably the best known of a new breed of brokerages that gives buyers rebates and sellers commissions as low as 1.5 percent without reducing service.[4]

Owners.com gives buyers a rebate equivalent to about 1.5 percent of brokerage fees after the closing. The rebate comes from the 3 percent commission that traditionally goes to the buyer’s agent.

Fee for service/listing on MLS. During the housing boom that ended ten years ago, demand was so strong that many owners saw no need for a real estate agent with one exception—they wanted to list their homes on their local MLS. Dozens of brokerages went into business by simply listing homes for a flat fee of $500 to $1000 and not providing other marketing services, or providing other services for fixed fees.

 New online tools. Ten years ago the first web sites and online brokerages for FSBO owners created the first listing inventories of FSBO homes and distributed turnkey tools like yard signs and brochures. Today a new breed of sites has taken FSBO tools to a new level.

Sites like forsalebyowner.com and owners.com provide sophisticated advice and unique tools to help owners value their properties and price them properly. Owners.com provides a trend tracking tool that helps owners see priding trends down to the neighborhood level.

source: totalmortgage.com

Things to think about before Buying and Selling Property

From a property market perspective, we live in strangely contradictory times. While the level of growth in the market has risen at an exponential rate over the course of the last 18 months, for example, it remains extremely difficult for buyers (particularly first-timers) to invest in real estate while achieving value for money. The market also seems to be undermined by fragility, despite its continued growth and pivotal role as an economic engine in Great Britain.

3 Financial things to consider when buying or selling Property

This myriad of factors provides challenges to both buyers and sellers, especially in terms of optimising value and making the most of their money. With this in mind, here are three factors that potential buyer and sellers must consider when looking benefiting their finances: –

The Misleading Nature of Value

The surge is UK housing prices has been well-documented, but a rise in the nationwide average is encouraging some home-owners to inflate prices beyond what the market can bear. While the average cost of a UK home now stands at £224,242, for example, it is important to note that inflated prices in London continue to distort the national figures. Additionally, a lack of housing supply is enabling vendors to drive bidding wars, artificially increasing house prices and forcing buyers to pay over the odds. Both buyers and sellers need to be wary of this, especially if they hope to complete a quick and mutually beneficial deal.

The Importance of Location

Location is also an important consideration, especially for home-owners or buyers who wish to resell their property for a profit in the near-term. The region in which your home resides will have a huge impact on its initial value, while it will also influence its resale value both in the short and long-term future. It is therefore crucial that vendors establish a fair and well-researched price point that strikes the balance between profitability and incentive, for example, while buyers with an investment mind-set must look to purchase homes in areas that are likely to increase in value over a specified period of time. To understand this further, take a look at this article on detailing the worst places to live in the UK.


The Cost of Buying and Selling Property

Whether buying or selling a home, you will have to consider a number of financial costs and charges before completing a transaction. From surveying fees to conveyancing charges, these costs can quickly accumulate alongside the fee that is being paid to an individual estate agent. This is why those keen on improving their financial circumstances continue to partner with online estate agents and quick house sale firms, as these entities usually charge a one-off fee and maintain a simplified and transparent operation.

source: 20smoney.com

Mortgage Pre-approval: Why You Want It & What to Do if You Can’t Get It

When you’re searching for a new home, few steps are as important as getting pre-approved for a mortgage loan.

Not only does it help you as a buyer, but sellers will view you as a better candidate. And if you get involved in a bidding war for your dream home, it helps to be the kind of buyer that sellers consider reliable.

How a mortgage pre-approval works:

First, you send documents proving your income to a mortgage lender. These documents can include your last two paycheck stubs, last two months of bank statements and last two years or income-tax returns. Your lender then studies these documents to verify your monthly income. Your lender will also run your credit to determine your credit score.

Once your lender has this information, it will tell you how much mortgage money it is willing to lend you. It will also give you a pre-approval letter stating this amount.

Why is a mortgage pre-approval important?

1. Streamlines Your Search

By pre-arranging financing, you can save a considerable amount of time. Because a lender will examine your credit report, pay stubs, bank statements, etc., they can tell you exactly what you’re qualified to borrow. That way you know what your price range is so you only look at homes you can afford. Rather than looking at a myriad of properties, you can narrow your search down to a handful and examine those in great detail.

You’re also less likely to be let down or become disillusioned when you fall in love with a property, only to find that it’s out of your price range. This can save you from a lot of frustration and expedite your search.

2. Sellers Take You More Seriously

When a seller has multiple buyers interested in their property, it’s important to stand out from everyone else. In the event that there were three other buyers, and you were the only one with a pre-approval letter, you would have a much better chance of getting the seller’s attention.

That’s because you have direct evidence of your ability to obtain financing. It also shows that you’ve put in the effort to get pre-approved, which proves you have a genuine interest in buying. This should reduce any skepticism or anxiety that a seller may have, and they’re likely to give you more consideration than other candidates.

3. Increased Leverage When Negotiating

Because of the effort you’ve put forth and tangible proof of your financial backing, this can really work to your advantage when making negotiations. According to Ray Mignone, a certified financial planner in Queens, New York, “pre-approval carries more weight when you go to negotiate a deal. It gives you bargaining power.”

Being pre-approved means that it’s basically a done deal, and you don’t have to go through the process of applying for a mortgage in the future. If a seller is faced with your offer and a slightly higher one from another buyer who hasn’t been pre-approved, this can often persuade them to go ahead and accept your offer. If the seller has no other offers, then you may be able to buy their property at a reduced price, and they may be more flexible with their terms.

Taking the time to go through the pre-approval process for a mortgage has some distinct advantages. Once a lender gives you the green light, it can help you find a great property at a fair price while eliminating a lot of hassle.

What if I can’t get pre-approved for a mortgage?
 

Getting denied for pre-approval should not discourage your efforts, although you may need more time to prepare for this large purchase. Therefore, here are five things you can do if you can’t get pre-approved for a mortgage loan.

1. Ask for an explanation

Mortgage lenders are helpful and they’ll provide a reason for the rejection, plus advice on how to proceed. Several factors can disqualify you for a mortgage loan, such as inadequate income, a low credit score and questionable employment. However, if you take a lender’s advice and make the necessary improvements, you might qualify for financing in the future.

2. Build your bank account

When applying for a home loan, the lender will ask for copies of your bank statements. This is to ensure that you have enough cash for your down payment and closing costs. In addition, some lenders want to see a 2 to 3-month cash reserve after paying mortgage-related expenses. If you will not have a cash reserve after paying closing costs and the down payment, the lender may recommend that you postpone buying a house until you’ve saved additional money.

3. Add points to your credit score

A conventional mortgage loan requires a minimum credit score of 650 or higher. Therefore, if you’re turned down for a mortgage due to a low credit score, take steps to build your credit. This can be as simple as paying all your bills on time over the next 6 to 12 months, or paying off a credit card to decrease your credit utilization ratio, which will subsequently raise your FICO score.

4. Increase your income

On the other hand, you might have excellent credit, but not enough income to qualify for a mortgage loan. There are several ways to approach this dilemma. Speak with your lender to see if you can qualify for a lesser amount; or if your spouse works, perhaps you can apply for a joint mortgage, at which time the lender uses your combined income to determine affordability. And if too much debt prevents a pre-approval, paying off credit cards and other loans — student loans, auto loans and personal loans — can increase purchasing power and help you qualify for the desired amount.

5. Wait until the two-year mark

Employment gaps can be the kiss of death when applying for a mortgage loan. For the most part, mortgage lenders require 24 months of consecutive income. Therefore, if you’re just entering the job market, or if you were unemployed in recent months, the lender may reject your application and require that you wait at least two years before re-applying for a mortgage loan.

Bottom line

Applying for a mortgage loan will have its share of obstacles, especially since lenders have tightened their requirements. However, if you carefully prepare for a purchase, you can successfully meet a lender’s qualifications and get the keys to your new home.

source: totalmortgage.com

Real Estate in the Internet Age

It will come as no surprise when I say that the Internet has transformed our lives. For instance, today’s travel industry bears little resemblance to the industry of 20 years ago. Travel agents are largely gone and consumers book flights and hotels or through sites like Priceline and Expedia that are programmed to find the cheapest deal.

From retailing (Amazon) to auctions (eBay) to job searching (Monster), to sending a letter or photo (Email) to advertising, the Internet has dramatically changed the way we do things, making it faster and cheaper to get what we want.

In real estate, big sites like Realtor.com and Zillow make it easy to shop for a house anywhere in the US while wearing your pajamas in the comfort of your home. You can find a mortgage online from Internet lenders like us, Total Mortgage, that offer more attractive rates than you might find locally. There are even “for sale by owner” sites that help spread the word for those sellers who prefer to go it alone.

The Old Way or the Highway

Yet the essential mechanism and cost structure for residential real estate transactions has changed little in more than 100 years. Hiring a professional to sell your house requires you to agree to pay a commission—a percentage of as much as 6 percent of the sales price.

This is more or less the same way your grandparents’ generation sold their homes. In fact, the multiple listing service, which at the center of the housing marketplace, was created in the 19th century not to make life easier for consumers, but to make it easier for their brokers to match buyers and sellers.

Brokerages own and operate the nation’s 900 or so MLSs and a dozen or so national franchises and big regional companies dominate real estate brokerage business. Try as they might, Internet companies and the federal government have failed to bring about wholesale, consumer-friendly changes like those in travel, employment, financial services, and retailing.

Selling your house on your own today is actually harder and more expensive than it used to be. No wonder the percentage of “FSBO” sales declined from 13 percent in 2001 to 9 percent in 2014.

Incremental Change

One of the big reasons sellers still need human agents has nothing to do with the real estate transaction, per se. Federal and state laws governing mortgages and home sales, most of them ostensibly to protect consumers, instead make transactions more complex, and virtually impossible for consumers to take on by themselves. In fact, the paperwork mistakes is the leading reason that 20 percent of real state deal fail to close.

So the real estate has made the relatively painless migration from bricks and mortar to the Internet, but now changes in the choices available are creating cracks in the wall.


 Discount Brokers vs Hybrid Brokers

Sellers care most about saving money. For many years fee-for-service brokerages have uncoupled their services and sell them for a fixed price like menu at a restaurant: listing a property on the Internet, providing a competitive marketing analysis, staging the house, etc. Others simply charge less than their competitors or rebate a percentage of their commission when the deal closes. For some sellers, these have been a good alternatives, yet they constitute a small segment of the real estate industry.

What’s happening today is different. New entrants into real estate business are seeking ways to utilize the things the Internet does well to the real estate business to save money for sellers and save costs for brokers by turning task over to computer platforms that have been handled by real people.

These include proactively matching properties with buyers through social media, technology platforms that take the transaction from lead to closing online, “virtual” agents who handle properties from a much larger geographic area than traditional agents by concentrating on marketing exclusively online, and providing services, like state-of-the-art home valuation, that empower sellers to make more informed decisions.

These brokers are “hybrid” because many offer traditional services or traditional ways to be compensated alongside their new options, affording a choice to consumers. As the real estate industry continues to evolve, expect to see more and more of them.

source: totalmortgage.com

Your Mortgage vs. A Cash Offer: What You Can Do

Cash is king in most business transactions, and it’s no different with mortgages. A cash offer can be very tempting for a seller because there is no risk of the buyer defaulting on their payment.

However, all is not lost if you’re going the way of the mortgage. You’ll just want to follow the steps below to make sure your offer is as appealing as possible.


1. Get your lender to back you up

A pre-approval letter from your lender is a must. It will also help if you can get your lender or real estate agent to show the seller financial statements that clearly display you’re a qualified homebuyer.

2. Have an appraisal ready

You don’t want to make the seller wait for your loan to be approved. Talk to your lender and find out exactly how fast they can get an appraisal done on the property, and when the loan will be approved. With some banks and mortgage brokers, it’s even possible to have an appraisal pre-ordered and ready to go.

3. Get inspections done right away

You don’t want to make the seller wait for anything. So as with everything else, get your inspection done as soon as possible.

4. Make a higher offer

When people pay with cash, they usually expect a discount. This provides an opportunity for non-cash buyers to make a higher offer. Paying more isn’t ideal, but if it’s what you have to do to get your dream home, it could be worth it.

5. Put more cash down

If you have some extra cash, consider making a higher down-payment. Instead of getting a mortgage for 70-80% of the purchase price, you could drop the financing down to 60-70% and potentially make your offer more appealing.

6. Make it personal

It’s not uncommon to write a letter to the seller, explaining a little about yourself and why you would love to purchase their home. A seller almost always appreciates knowing more about their potential buyers, and if you can strike an emotional chord, your chances of closing the deal could increase.

Bottom line:
At the end of the day, being flush with cash isn’t what makes the difference; it’s convincing the seller that you are a sound candidate to purchase their home.

If you have your finances straightened out, get things done in a timely manner, and can make a personal connection with the seller, you could very well beat out a cash offer.

source: totalmortgage.com

Negotiating Tips for Homebuyers

So you’ve found the perfect house. It’s got all the room you want for your family and it only needs a little bit of work here and there. There’s just one problem—it’s 15 grand over your budget.

Luckily, the bigger the purchase, the more negotiating room you usually have. Here are a few things to keep in mind when it comes to negotiating a lower price with the seller.


Get pre-approved. Getting pre-approved by a mortgage lender shows buyers that you’re good for your offer, and since deals often fall apart because the buyer can’t get financing, that counts for a lot. Make sure you look like as desirable a buyer as possible.

Use the inspection to your advantage. A home inspection has the potential to be your biggest bargaining chip. If it turns out there is something wrong with the house, sellers are often much more willing to open a dialogue and make concessions.

That being said, don’t count too much on the inspection. It could easily come back clean, or the problems could be bad enough that you think twice about buying in the first place.

Know if you’re in a buyers’ or a sellers’ market. In a buyers’ market, where there are more homes available than there are buyers, you have the advantage. Since homes are more likely to sit on the market for a long time, you likely won’t have a lot of competition. That means the sellers are more likely to accept a significantly lower offer, so if you want to low-ball, this is the time to do it.

In a sellers’ market, where the supply of for-sale homes is low, you will probably face a lot of competition for the property. In this case, your best strategy will be to work fast and prove to the sellers that you are the best buyer.

Don’t worry about going a little over your budget. Provided you’re not paying cash and you can get approved for the amount, don’t spend too much time angsting about a few thousand dollars. With the fairly low interest rates available at the moment, paying a little bit more might actually end up costing you around $10 or $20 extra each month.

Pay attention to your realtor. Your real estate agent is going to be invaluable when you get down to the nitty gritty of negotiation. Not only will he or she have experience with sellers to draw upon, but he or she will also know how the local market is doing and how that comes into play with the listed price.

source: totalmortgage.com

A Homebuyer’s Guide to Escrow

Once a seller accepts your offer, you enter the home stretch of your journey toward home ownership. At this point, though, there’s still some work to be done before you can collect the keys. During a period known as escrow, an independent agent handles most of the details. This process ensures both you and the seller perform the way you agreed you would.


Of course, that’s not the end of escrow for many buyers. When you take out a mortgage loan, your bank may insist that you deposit your property tax and insurance payments into a special escrow account established for that purpose.

Escrow for Home Buyers

 

Escrow is a legal term that describes a trust arrangement between two parties. It is the act of depositing something of value, usually cash or documents, with a neutral third party who only delivers the deposited items when certain conditions are met.

If you’re in escrow for a home purchase, an escrow agent (usually the title company conducting the closing) will gather and hold the seller’s deed, your down payment and the mortgage money your receive from the bank. They will then perform various tasks required by the sale and purchase agreement, such as obtaining approval to the home inspection report and taking out a title insurance policy.

When the contract contingencies are met, the escrow agent will pay the closing money to the seller and record the deed and loan documents in the appropriate county office, thus transferring the property to the buyer. At this point, escrow is said to be closed.

Escrow for Mortgages

 

Mortgage lenders require that you not only make your mortgage repayment but also that you insure your home and pay your property taxes on time. These payments commonly go by the acronym “PITI”:

• Mortgage Principal
• Mortgage Interest
• Property Taxes
• Homeowners Insurance

To safeguard their investment, many lenders collect your PITI payments prorated by month, together with a two-month cushion to guard against tax increases. The money is deposited in escrow and used to pay your bills when they arise.

Under the Real Estate Settlement Procedures Act, lenders must send you an annual statement showing the amount held in your escrow account and projected payments for the coming year. If your account shows deficiencies, your lender may raise your monthly payment. Excesses of $50 or more must be returned to you within 30 days of the annual statement.

Why Use Escrow?

 

Escrow takes the stress out of home ownership. During the home purchase process, escrow ensures that the property and its title are “clean” before the seller cashes any checks. After closing, mortgage escrow ensures that your bills are paid on time and your property is properly insured against hazards — providing invaluable peace of mind for home buyers.

source: totalmortgage.com

What Does It Mean to Be Pre­-Approved for a Mortgage?

Wouldn’t it be nice to know what you can afford before shopping for a house? With a mortgage pre-­approval, this is exactly what happens. Getting pre­-approved for a mortgage isn’t required to look at properties or bid on a home but there are advantages to meeting with a lender beforehand.

Pre-approvals help eliminate the guesswork when shopping for a property. Mortgage lenders can determine early on whether you qualify for a home loan and how much you can afford. Therefore, you don’t waste time looking at houses outside your budget.

A pre­-approval also tells realtors and sellers that you’re a serious buyer. It might come as a shock, but some sellers will not accept offers from bidders who are not pre-approved. Since sellers are eager to sell their homes and move on, they don’t want to take a chance with someone who might not be able to get financing.

Pre­-Qualification vs. Pre-Approval

It’s important not to confuse a pre-­approval with a pre-­qualification. Both are preliminary steps in the mortgage process, but there are differences.

A pre­-qualification is an initial assessment of whether you meet the qualifications for a mortgage, but it doesn’t guarantee financing. Pre-­qualifications are based on the information you provide on a pre-­qualifying form, which only asks for basic information like monthly income and an estimation of your credit score.

Understand, however, you can’t get a mortgage off a pre-­qualification. A pre-qualification says you might be a good candidate for a mortgage. A pre-approval, on the other hand, goes a step further. Getting pre­-approved for a mortgage involves completing an official loan application with the bank and going through the underwriting process.


Get started with your pre-approval today

What a Mortgage Pre­-Approval Entails?

With a pre-­approval, the mortgage lender will pull your credit and carefully scrutinize your credit activity and debts. You’ll have to submit your recent paycheck stub and tax returns from the past two years, plus provide copies of bank statements and disclose any assets you have.

Based on all of this information, the lender decides whether you’re eligible for a mortgage, and determines how much house you can afford. A pre­approval letter is the official green light to start looking for a house. If you must choose between a pre-­qualification and a pre-­approval, go with the latter. Unlike pre­-qualifications, pre-­approvals are practically written in stone, providing your credit, job status and income doesn’t change prior to closing.

Avoid Jeopardizing a Mortgage Pre­-Approval

It’s important not to make any significant changes to your personal finances after getting pre-­approved for a mortgage. Something as simple as getting store financing or financing a new automobile can jeopardize a mortgage approval.

This mortgage approval is based on your debt and income at the time of applying for the pre-­approval. Getting a new auto loan or acquiring some other type of debt before closing increases your debt­-to-­income ratio. And with a higher debt-to-­income ratio, there’s the risk of being disqualified for the mortgage. So wait until after closing to apply for financing.

The lender will check your credit about one or two days before closing to ensure no changes to your credit history and score. If everything checks out fine, you can proceed with closing and get the keys to your new house.


source: totalmortgage.com

What to Do If Your House Isn’t Selling

So you haven’t had a showing in weeks and you’ve forgotten what your realtor looks like and you may or may not have started to wonder if you’ll be moving after all.

You’re not alone. With the housing market recovering so unevenly, many sellers are finding that they’re not able to move on as quickly as they’d like. That being said, if your home has been sitting on the market for months, it’s probably time to reevaluate your strategy.

Before you do something drastic, try giving these 5 tips a chance.

1. De-clutter and read up on home staging. Many sellers assume buyers won’t mind the clutter—it doesn’t come with the house, after all. But though buyers know this, it doesn’t keep them from focusing on the knick-knacks when they should be admiring the hardwood. A messy house can also make buyers wonder what else you haven’t kept on top of, or even signal a lack of storage space

If you’re wondering where to start, home staging could be your answer. Staged houses typically sell faster and for more money than vacant or as-is homes. The basic idea? Aim for the hotel look. That means clear surfaces, neutral colors, no personal photos, and minimal furniture.

2. Be willing to compromise. When you’re selling something as big as a house, flexibility is your best friend. For instance, if you’re only showing your home on certain days or during certain hours, you may not be reaching the right buyers, lowering your chances for a sale. Refusing to entertain a lower offer, or to compromise in other ways can also be an issue. Don’t let a deal fall through because of something as small as closing fees or a broken toilet.

3. Fix the little things. Speaking of broken toilets, fixing yours (or your dingy paint job, or that loose tile in the kitchen, etc.) may make a big difference in the eyes of a buyer. No matter how small the fix, it’s still one more thing for a buyer to worry about in the middle of an already stressful move. Try taking a few weeks to get your house as close to move-in ready as possible, and it could just pay off.

4. Make a bigger (or a better) marketing push. Sometimes, selling a house is just a numbers game. If no one sees your listing, or if it’s not appealing when they do see it, you’re not going to be getting the traffic you need to make a sale.

Often, this just means uploading better pictures to your internet listing. These days, most buyers want to get a good feel for a property before they visit in person, and if you only have a handful of fuzzy cell phone photos taken pre-decluttering, you’re not showing your home at its best. Make sure your photos are well-lit, clutter-free, and plentiful.

5. Take a second look at your asking price. Nothing can kill a sale faster than an unrealistic asking price. Many sellers make the mistake of letting their attachment to the house get in the way of their subjectivity. This is why it’s important to listen to your realtor or appraiser, or else know the prices comparable houses in your neighborhood are selling at. It may just be time to lower your expectations.

source: totalmortgage.com

When Rent-To-Own is the Way to Go

If you’re not familiar with the rent-to-own structure, it’s for good reason.

When the housing market was booming, these options were few and far between. But with the market now moving more cautiously you may see more and more opportunities as a buyer and a seller.

First, let’s take a quick rundown of the basics
If you’re a seller thinking about turning your home into a rent-to-sell property, you first need to set a fixed rent and sale price. These should be negotiable, just like normal home prices, but keep in mind that once that agreement is signed, the sale price is locked into place for the length of the rental term, regardless of how the market changes.

There are a few other special differences. In addition to the rent, the renter is going to have to pay an upfront option fee, which will be put toward the down payment if the renter decides to buy the house and kept by the seller if the renter moves on.  On top of that, the renter will also have to pay a rent premium, or an amount in addition to the rent that will go toward the down payment.

The term of the rental agreement tends to be 1 to 5 years, at the end of which the renter has the option of buying the home at the agreed upon price with the down payment partially funded.

The Positives

If done right, this sort of deal can prove beneficial to both sellers and renters.

Rent-to-own can be a great plan B for sellers having a hard time getting a bite on their property. Houses still aren’t selling as fast as they did pre-2007, and if you’ve already moved into a new home, there’s a good chance you’ll be stuck paying two mortgages. A rent-to-own agreement could easily keep you above water for now and net you a sale later down the road.

Renters (slash potential buyers) benefit too. If you don’t have a great credit score, the rental period gives you time to build it up. Similarly, if you don’t have the funds saved up for a down payment, rent-to-own can be a smart way to put money toward one.

…and the Negatives

No surprises here—there are potential downsides for both the seller and the renter.

If you’re the seller, you have to abide by the contract even if the value of your home rises, or if someone makes an offer to buy it out right. If the renter backs out, you’re also back to square one, and potentially stuck with mortgage payments on a second house.

On the renter end, making a late rent payment often voids the option fee for that month, which will take a chunk out of your eventual down payment if you’re late a few times a year. If you decide not to buy the house, you won’t be able to get your option fee back, which means you may be out thousands of dollars.

There have also been cases of less-than-legit sellers offering rent-to-own options on houses under foreclosure. In this scenario, the bank gets the home and the renter is out their option fee and premium. Know what you’re getting into, and there should be no reason why both buyer and seller don’t benefit.

source: totalmortgage.com

How to Spot a Bad Realtor—And then Part Ways Properly

Just because real estate agents have guidelines to follow and tests to pass doesn’t mean they’re all the same, quality-wise. Whether you’re putting your home on the market or about to start the search, here are the hallmarks of a realtor you should stay away from.

The agent is difficult to get a hold of

Communication is a super important part of home selling and buying process. If your realtor takes longer than 24 hours to get back to you, or won’t give you weekly status updates, then it just isn’t going to work out and you might want to consider switching.

The agent is part-time.

Nothing against people who have other commitments, but if this isn’t your realtor’s full time job, you might want to look elsewhere. Having an agent on the outskirts of the industry usually means you’re the one missing out.

On the same note, don’t feel like you need to work with a friend or relative just because they happen to have a real estate license. If they’re not working actively and familiar with your area, they’re really not qualified to be helping you sell or buy.

The agent makes too-good-to-be true promises

In a down market, or even one that’s just starting to pick back up again, you’re going to have to face certain realities, and a good realtor won’t sugarcoat them for you.

So what sort of things should you hear from a good agent? That the longer your home is on the market, the more you will have to drop the price. That you may need to make some improvements before your home is attractive to buyers. That you may not be able to get exactly what you want for what you’re willing to pay.

The agent pushes you toward homes that don’t fit

Occasionally, you’ll run into realtors who are more concerned about their bottom line than yours.  If your agent is herding you in the direction of properties that are out of your price range or not in your neighborhood, be wary. They may be pushing you toward a friend or associate’s listing, or putting their commission ahead of your needs.

These warning signs are all well and good, but what should you do when you miss them?

The first thing to remember is that your real estate agent is working for you. This isn’t a partnership, and they aren’t lending you their services out of the goodness of their heart. Other than that:

Be upfront. Every real estate agent has broken up with a client at one point or another—you shouldn’t need to tiptoe around their feelings. Lay it out for them.

Don’t hesitate. You’re making this decision for a reason. Don’t let yourself get talked into giving the agent a second chance.

Be respectful. When you point fingers and get angry, no one comes out of the situation looking good. Not to mention that you may need to, or even want to, work with this agent again in the future.

source: totalmortgage.com

How to Sell Your Home Without an Open House

It doesn’t matter whether you’re selling a home yourself or working with a realtor, selling your property quickly is a priority. This way, you can move into your new home sooner rather than later.

Several marketing techniques can help sell a home faster, and many real estate agents host open houses which give potential buyers an opportunity to visit the home, receive information, and ask questions.

Although open houses are typical when selling a property, these aren’t always effective. As a matter of fact, you may consider open houses to be a complete waste of time. Luckily, there’s no rule that says you have to host an open house Instead, you may choose to focus on other selling methods. For example:

1. The power of an online listing

If you’re working with a realtor, ask about his marketing plan. You need your agent to do more than simply post a sign in the yard. You need your home to appear on websites, such as Zillow.com and Trulia.com.


Since many homebuyers use the Internet for preliminary searches, getting your house online is one of the most effective ways to attract attention. If you’re selling the home yourself, you can list the property on the multiple listing service (MLS) for a fee. This way, real estate agents can learn about the home and schedule times for their clients to tour the property.

Additionally, list your property on other websites, such as Owners.com and ForSaleByOwner.com (if you’re selling without an agent). You can also take advantage of a free Craigslist posting. However, there are rules when posting on this site. Read the terms and guidelines carefully to avoid having the listing removed from the site.


2. Don’t forget to add photos
With an online listing, it isn’t enough to provide text details about the property. That may be important stuff, but a picture speaks a 1000 words. Take images of each room of the house, and stage the property before taking these photos. Remove clutter, repaint and rearrange furniture to maximize space. It’s important to highlight as much available space as possible. Also, take photos of impressive features, such as a new fireplace mantel, granite countertops or any other sought-after real estate feature.

3. Create a video tour and post online

Since many homebuyers start their home search online, the more information you have online, the better. Some home sellers and agents have gotten creative and started making video tours of a property. These don’t have to be elaborate videos, and you can use any handheld video camera or the video camera on your smartphone.

Start recording at the entrance of the property and slowly walk through the home highlighting features and rooms, such as the kitchen and bathrooms, bedrooms, closets, and any other amazing features. You can add narration to your video, or use editing software to add music in the background. Once you finish recording and editing the video, post it to YouTube, attach it to your online listing, or post a link on Facebook or Twitter and share with your friends.

Bottom Line

The odds of finding a buyer with an open house are slim, so you’ll need to consider other ways to market your property and attract attention. Since the Internet is one of the first places homebuyers look, you’ll need to increase your online visibility to move your house quickly.

source: totalmortgage.com

Man Offers to Sell Home In Exchange for an iPhone 6 or the 32 GB iPad

So a guy, an Austrian fellow named Andreas Gindelhuber, with apparent dreams of making money in real estate here in the United States, resorted to selling his home in exchange for an iPhone 6 last week.

He originally purchased the foreclosed 3-bedroom, 1.5-bath Detroit home (you probably already knew it was in Detroit) for $41,000 in April 2010, per Zillow.

Two weeks later, it was listed for rent at a seemingly reasonable $750 per month. After languishing on the market for two months, Gindelhuber lowered the rental price to $695 per month and finally found some tenants.

But the neighborhood where the home is located was hard hit by the housing crisis, prompting nearby residents to move out and leave their properties behind.


Eventually his tenants also headed for the exits, leaving the place vacant and in disrepair. He also had a $6,000 delinquent property tax bill to worry about, so he hired local real estate agent Larry Else to market the property.

It’s unclear how the property got so badly damaged, but it’s supposedly missing all its doors and windows, and also has extensive smoke damage. I’ve heard about houses getting set on fire in Detroit…

Anyway, it seemed no one wanted the thing, even for the price of FREE.

Still, Gindelhuber listed the badly damaged property for $5,000, hoping to get some interest from somewhere, hopefully.

Then reality set in, forcing him to lower the asking price twice in two months, first to $4,000 and then to $3,000.


Then His Real Estate Agent Got Creative

That still didn’t cut it, so Gindelhuber and Else brainstormed. At some point Else remembers Gindelhuber telling him he would trade the house for an iPhone 6 or a new iPad 32 GB.

Realizing it could be a great publicity stunt that would no doubt put Else’s name on the map, they decided to add the potential barter to the official listing.

It didn’t take long for news outlets to pick up on the story, including a local Fox affiliate and Yahoo!, then it went viral.

A short week or so later the property has been sold to a local man (who lives down the street) for an unknown price, but apparently less than $1,000.  He plans to fix it up.

The funny part about the story is that Gindelhuber didn’t actually get his iPhone 6 or iPad in exchange for the sale.

But thanks to the Internet and its greatness, a man from Germany has offered to donate his brand new iPhone 6 to Gindelhuber.

The story also wound up in a German magazine, prompting the man to e-mail Else, claiming the story “touched me somehow.”

So it all worked out.

source:  thetruthaboutmortgage.com

Know the Difference: Realtors, Real Estate Agents and Brokers

Real estate agents, real estate brokers, and realtors. What’s the difference? They all sell property, right? They’re all collecting commissions, and they all know how to negotiate deals. Why bother learning what the difference is? It’s sort of like a red house vs a blue house. They’re both houses, right? Not so fast. There are actually some key differences between all three of these designations. Knowing them might mean the difference between selling your home and keeping it for another year.

What An Agent Does

An agent is a real estate professional that works on your behalf to find you the right home. He negotiates for a price that you should be happy with, and he does not chase sales for commissions. Even though he does earn a commission on every sale, he has a fiduciary duty to make sure that you’re getting the home you need and deserve. He has a responsibility to you, the consumer.

That doesn’t mean that you shouldn’t hire another independent inspector to check out the home – even when you’re working with an agent from trusted sources, like Agent Harvest. Having a second opinion can confirm what the agent is telling you.

What A Broker Does

A broker is a real estate professional that usually has more experience. He is a senior agent with additional education and training under his belt. He’s also probably in a more managerial role at a real estate brokerage.

He may also be a specialist when it comes to certain types of property. However, real estate agents and real estate brokers are sometimes interchangeable, depending on where you live in the country. If you’re unsure whether there’s a difference where you live, ask. It’s the easiest way to clarify any misunderstanding, and it might just make the difference in how much you get for your home.

For example, if you have the opportunity to work with a broker, a senior agent, you might ge better service than from an agent (someone younger in the business). If your broker doesn’t really specialize in the types of home that you have, or the area where you live, then a broker might mean the difference between selling the house quickly and staying where you are for another year.

That’s a serious consideration, especially if you have to move because of a job relocation or you just need to sell the home to downsize or pay off debts.

What Realtors Do

Realtors differ from real estate agents and brokers in that they are members of the National Association of Realtors. This is an independent organization of real estate agents, brokers, and other real estate professionals.

It’s not so much that these people are radically different in what they do. It’s more that they may have more extensive training and they are bound by a specific code of ethics and a fiduciary duty that brokers might not have. Even agents aren’t held to the same standards as Realtors. So, choose wisely, and regardless of who you choose, always do your research. Just because someone has the education and training, or even experience, doesn’t mean they will be a good fit, personality-wise.

Phillip Waterman’s career in real estate spans decades. With a keen eye and clear manner, he enjoys writing about navigating the real estate market for today’s buyers and sellers.

source: 20smoney.com