Real Estate Articles

If it seems like short sales have suddenly exploded in the real estate arena, it’s not your imagination.

Once considered relatively rare, short sales have become a common phenomenon in the past 18 months, thanks in large part to the banking and mortgage crisis.

To find out if you can benefit from a short sale, here’s some helpful information about the practice.

What Is a Short Sale?

Short sales occur when the bank and seller agree to a purchase price for real estate that is less than the original mortgage amount and does not cover the entire cost of the existing debt obligation.

Who Benefits?

Depending upon how the deal is structured, everyone can benefit from a short sale.

The seller benefits from the ability to save his or her credit rating and avoid bankruptcy or face a mountain of debt, the buyer benefits from acquiring a property at below market price, and the lender benefits from a sure sale that reduces the risk of a property going to auction or of having to foot the bill for foreclosure and additional expenses.

Considerations and Consequences

Short sales are not without consequences, so take time to carefully weigh all options before making a decision.

Sellers need to carefully review the terms prior to signing a final contract.

Some lenders expect the seller to make up the difference between the selling price and the full amount of the original mortgage.

Buyers should also proceed with caution, as many properties have additional liens, deferred maintenance, back taxes or other expensive fees that become the obligation of the buyer.

Additionally, short sales may require substantial time before obtaining final approval, which can make it difficult to lock in favorable rates or result in the loss of other prospective properties.

Home is where the heart is, but everyone knows that the heart of a home is the kitchen. It should come as no surprise, then, that the kitchen is one of the most important considerations prospective buyers have in mind when evaluating property.

Use these quick and easy kitchen fixes to add interest and obtain top dollar for your property without breaking the bank.

Lighten Up. Older homes frequently suffer from low-light conditions, ugly light fixtures and power-hungry appliances. Replace unappealing tungsten bulbs with energy-efficient LED lights for an instant update that looks great and saves money. Invest in up-to-date appliances that improve performance and save money with energy-efficient settings, antibacterial wash modes and enhanced water filtration.

Counter-offer. Replacing countertops and freshening cabinets can be a relatively low-cost way to update your kitchen. Many hardwood cabinets can be easily restored with a coat of paint or quick varnish. Combine this with a new countertop, you can achieve a totally refreshed appearance without the high price. Add some stylish knobs and pulls to complete the look.

Don’t Throw Money Down the Drain. Here’s a quick and easy do-it-yourself job that just about anyone can tackle. Replace that ugly, worn-out faucet with a shiny new fixture to instantly update a focal point of any kitchen. It takes very little time, ensures a sleek new look and eliminates drips and other common faucet problems.

When it comes to selling a home, almost everyone understands the value of working with a knowledgeable real estate agent.

But buyers can often benefit even more than they might expect.

Find out the top reasons more buyers than ever choose to work with an agent when searching for their next home or investment property.

Saves Time

Undoubtedly one of the most commonly cited benefits of working with an agent when buying a property is the ability to save time. Real estate agents do the hard work for you by obtaining all the details and then showing you only those properties that meet your preestablished criteria.

Saves Money

Not only does working with an agent allow you to focus efforts on properties that meet your needs, but research also shows that it actually saves money in the long run. Sellers view agents as more objective during the negotiation process, and buyers that work with agents have access to the best deals. Remember, even in a buyer’s market, the best deals go fast. Many properties are already under contract by the time they make it into the magazines or online MLS listings, whereas many agents send out weekly or even daily updates of newly listed properties.

Reduces Stress

Real estate agents are able to work with lending officers, appraisers and others to streamline the entire transaction and keep things moving along by providing a single, reliable point of contact. Should anything go wrong, agents are able to access their network of contacts and expertise to assist every step of the way.

Access

Some of the best buying opportunities never even make it to the MLS listings; instead, foreclosures, bank-owned properties and even government repossessions are often handled by specific agents. Likewise, agents are often aware of creative finance options or specialized programs that may benefit veterans, first-time buyers, investors or even small-business owners.

Few things are more dreaded than moving day but new storage solutions can ease some of the stress. Learn how to select the right storage space for your needs, based upon your specific situation, without breaking the bank.

Flexible Time. If your top priority is a flexible schedule, a POD might be the perfect choice for you. PODs are large containers that allow you to pack - and unpack - at your own pace. Because PODs are closer to the ground, they also tend to be easier to load and unload.

Long-Term or Transitional Storage. If you are relocating for a job, downsizing or planning to move within a short period of time, longer-term on-site storage might make the most sense. Rather than selling all your belongings or buying a bigger home, shop around for a local self-storage facility within a short distance of your new home. It’s a great way to clear the clutter without sacrificing cost.

Whichever method you select, keep these tips in mind:

Ask about insurance: Don’t assume your homeowners policy covers belongings in storage. Verify it in advance or ask about a rider to ensure that your belongings are fully protected.

Evaluate on-site security: Not all storage solutions are equal - always verify the security measures are in place before making a final decision.”

Climate control. If you intend to store valuable antiques, expensive electronics or other items that may be impacted by high humidity or temperature extremes, consider opting for climate-controlled units instead.

Thanks in part to changing demographics combined with the economic downturn, a major move to get back to the basics is a hot trend in today’s real estate market.

For those seeking maximum value at a minimum price, keep these essentials in mind.

Bigger Isn’t Better: Bigger spaces are associated with higher utility bills, increased property taxes, expensive insurance and even more maintenance concerns. Instead of picking the largest house you can afford, search for the one with the amenities that your family will truly use.

Good Neighbors in Great Hoods: Friends, family and wonderful neighborhoods are major attractions. In fact, research shows that homes located in top-rated school districts routinely fetch 10% or more than do similar-sized homes in less desirable districts. Family-oriented neighborhoods with parks and other amenities are highly desirable, while empty-nesters can save thousands by searching for similar homes outside of popular school districts.

Fruit Trees and Gardening Are a Big Trend: Throughout the nation, high-maintenance lawns are giving way to eco-friendly (and budget-happy) gardens, fruit trees and other down-to-earth activities. Ask about HOA restrictions and the cost of water bills prior to buying with the intent of starting a garden.

Going Green Is Bigger Than Ever: From energy-efficient appliances to environmentally friendly building materials, green is not only “in” but bigger and better than ever. Save thousands of dollars by searching for homes that have already implemented upgrades like LED lighting and Energy Star appliances.

Entertaining: As the economic excess of recent years continues to drive down the market, people are interested in entertaining, exercising and even eating at home more. Focus on properties that support your interests and lifestyle for today and tomorrow. Remember, the average person remains in a home for seven years, so buy right to make sure that your next house truly feels like home.

It’s only natural for your home to reflect your personal style, but when it comes time to sell, what makes a house a home becomes a major hindrance. Learn how to depersonalize your home in order to obtain the best price.

Go Neutral: Unless your favorite color scheme is completely neutral, it’s time to get out the paint and restore the color to something less noticeable. Eggshell, white tones and beige are good options. Don’t forget the other senses - in addition to color, make sure that the smell of your home is also neutral. Never assume that what you find pleasant smelling will appeal to others. Instead, have your home professionally cleaned using an enzymatic treatment that neutralizes all odors, including heavy perfumes and deodorizers.

Minimize: Eliminate all unnecessary furniture, belongings and clutter as much as possible prior to photographing and showing the home. Not only does it allow people to see the property more clearly, but it helps break down the mental and physical barrier separating buyers from seeing the house as their own.

Highlight the Home: Never showcase personal belongings - instead, highlight the home itself. Tour the house room by room to discover the essence of each area. Create a beautiful view, ambient lighting or other inviting scenario that attracts visitors without overwhelming them. Eliminate distractions that identify the home as belonging to you while allowing them to see themselves living in the house.

Thinking about selling your home but worried about the competition?

Whether you live in a cookie-cutter neighborhood where every home looks more or less the same or you simply need a few fresh ideas to help your home stand out from the rest for sale on the same street, use these simple tips to make it the best on the block.

Tackle Trouble Spots

Like every home, yours has a few trouble spots that you have probably learned to live with.
Unfortunately, time might make the heart grow fonder, but unfortunately it rarely helps sell a home.
Have an independent appraisal performed and pay special attention to needed repairs, deferred maintenance and any “ugly” areas.

Invest in fresh paint, plants and other quick fixes designed to enhance curb appeal.

Find a Focal Point

Make sure there is something memorable about your home from the moment prospective buyers see the front door until they leave.

Avoid candles, fresh flowers or other potential allergy or chemical sensitivity triggers and opt for neutral yet elegant décor or decorations instead.

Every room should capture attention while inviting visitors to explore.

Make It Theirs

Remember, attract - don’t detract. Clear clutter and make sure each room is open enough that buyers are able to envision their belongings in the room - not yours.

Neutral colors, natural lighting and a casual ambiance combined with simple yet inspiring plants, paintings or other props help create a “special spot” they will want to call home.

Price It Right

Buyers will often look at your house only if the price is right. It’s easy for them to compare the price of your house with the prices of others on the street, so it’s essential to make sure yours is priced competitively.

Rising unemployment, sluggish real estate values and uncertain economic times may not seem like criteria for buying a home, but upon closer inspection it could prove to be the winning combination.

Here’s why.

Tightening Credit Standards: Credit isn’t as easy to come by as it once was, and it’s expected to get even worse as banks attempt to cut losses. Even if home prices remain stable, rising interest rates could add hundreds of dollars to monthly mortgage payments. Consider locking in prices by obtaining a low fixed-rate mortgage before rates rise. It’s one of the best ways to protect your family from an uncertain economic future.

Taxes and Insurance: The lower price of a home benefits buyers in more than one way: taxes and insurance expenses are also lower. In fact, buying in an area that caps tax increases will likely lead to savings for years to come as you fix the cost associated with home ownership.

Better Negotiation: It’s a buyer’s market, so sellers are more likely to entertain flexible options or other creative ways to make a deal work. Distressed homeowners are searching for ways to seal the deal, and banks are even getting in on the act. While the media has made a big to-do about private partnerships to help eliminate toxic assets from the banks’ rosters, the sad fact is that the average offer from institutional investors is only 30 cents on the dollar. Short sales, option contracts and other lowball offers are increasingly entertained by both sellers and banks.

While the burst real estate bubble might be bad news for the economy, it could be good news for first-time homebuyers. In fact, now might just be the best buying opportunity of a lifetime. Follow these steps to determine where to begin:

Establish a Realistic Budget. Owning a home involves more costs than meet the eye. In addition to mortgage, taxes and insurance, wise homebuyers set aside a little savings toward maintenance and unexpected emergencies. Remember, you will eventually need to repair or replace many items in the home.

Buy What You Need. While real estate is often considered an excellent investment, it’s important to only purchase as much home as you actually need. Bigger isn’t always better; sometimes it’s simply more expensive. Higher taxes, bigger insurance bills and more maintenance can eat away at even the best budgets. So buy what you need, unless it’s wise for you to…

Plan for Growth. First-time buyers can also be too modest when it comes to purchasing their first homes. If you intend to begin a family, you may quickly outgrow the home. Plan for growth to ensure you will be as happy in the home tomorrow as you are today.

Understand Appreciation. Although you don’t want to base the purchase of your home solely upon appreciation, it’s important to understand how the future value of your home is likely to impact your ability to move up later in life. When the time comes to sell, rent or exchange the current property, a home with long-term appreciation provides greater buying options in the future. Search for neighborhoods expected to rise in value over time.

Work with a Reputable Agent. A great real estate agent or broker is often worth his or her weight in gold, which is why you will typically find that investors would never think of going it alone. Unfortunately, many first-time buyers are under the mistaken impression they can save money by helping the seller eliminate or reduce the commission. Research shows this is rarely the case. Most agents help negotiate a lower sales price and ensure that funding, necessary paperwork and other important legal considerations are all taken care of.

June 2009

Spruce up your yard in time for summer entertainment with these quick and affordable fixes for the most common curbside complaints.

Pressure Wash and Spray. Start at the roof, then work your way down, to remove stains and dirt from walkways, driveways and even fences. Whiten and brighten the concrete, crevices and other corners of your home and yard to lighten the entire area.

Clear the Clutter. Trim and remove low branches and excess clutter to create the look and feel of clear, open space. Consider purchasing plastic partitions or other low-maintenance storage units to hide away trash cans and other unsightly items that add to the perception of clutter and detract from the beauty of your home.

Touch Up the Paint. Shutters, doors and awnings are all prone to excessive wear and tear over the winter months; make a point of touching up the paint. It’s an easy and affordable way to revitalize the look of your home.

Add a Touch of Color. Bring in fresh mulch; then follow up with strategically placed flowers, potted plants and other enhancements throughout the yard. This will add interest while helping hide those tough trouble spots. |

Create a Focal Point. The most successful landscapes incorporate a central element that serves as the focal point for the entire area. Use the same strategy in your own yard. Begin with something affordable and small like a garden bench or pond to add elegance and appeal.

June 2009

Buying a home needn’t be a high-risk venture. With a little planning, preparation and the use of a knowledgeable real estate agent, you can avoid these common buying blunders.

Procrastination

How many times have you called on a property only to learn it was already under contract? It happens more often than you might realize, especially for the biggest bargains or areas in high demand.

Working with a real estate agent allows you to make your buying preferences clearly defined and then be automatically notified once a property that meets your expectations is listed.

Budgeting

Find out how much home you can afford by getting pre-qualified and pre-approved by the bank. Not only does it send the message that you are a serious buyer who is willing and able to close on the right property, it can also help the broker negotiate other terms, such closing costs, on your behalf to make the deal work.

Assumptions

Never assume that the taxes and insurance quotes for a property will remain the same after purchasing.

Property or homeowners insurance also involves your independent credit score as well as the history of the home and its condition.

Likewise, property taxes are often years behind or may have a cap placed upon them if the property was eligible for homestead exemption or other special limitations placed on tax increases.  Always obtain at least three independent insurance quotes on a property and obtain a newly revised estimate for property taxes before making a final offer.

Skipping Inspections

A complete, independent inspection is one of the best investments you might ever make, especially when it comes to purchasing a home.

Whether the home is brand new or 100 years old, always invest in an inspection to prevent costly repairs and other hazards.

Pricing right is one of the most important aspects to selling a home.

Price too low, and you are leaving hard-earned money on the table or worse…you can actually create a reverse incentive for buyers to view the home since they may assume the property is in need of extensive repairs. Price too high, and the listing will languish on the market until everyone grows bored of seeing it.

Use these simple steps to obtain a ballpark figure on finding the right price for your home.

Obtain current comparable estimates. If you live in a neighborhood with similar-sized homes, try to find a recent sales example and then extrapolate the price per square foot to derive a rough rule of thumb. Increase or decrease the estimate based upon condition, age, upgrades and other amenities.

Include income potential. If the property is capable of generating an income via rental or other ventures, then use the profit potential of the property to estimate the return on investment or ROI. Most investors expect an ROI at or above the safe, headache-free option of investing in Treasury bonds.

Get a second opinion. Work with a real estate agent who specializes in that location to provide valuable feedback and a second opinion. Remember, if you expect a fast sale then search for all available properties and then plan to price your home near the bottom range of the properties currently listed and sold in the area.

Buyers searching for a new home will do well to remember how seasons are likely to impact real estate. Learn how to obtain the best price while making seasonal variations and weather trends work for you with these quick tips:

Always view homes in person. Although a picture may be worth a thousand words, there are times when a photo can actually lead you astray; overgrown bushes could be hiding a diamond in the rough, while a snow-laden landscape may not show the true beauty and charm of a potential property. Assuming all things are equal, take time to visit a property in person before making a final decision.

Shop during the “off” times. Motivated sellers may need a fast sale due to job transfers or other family situations; unfortunately, they aren’t always able to take advantage of perfect timing. Harsh weather, holidays and other “off” times often result in fewer people looking for properties. Offer fast closing times and other negotiation strategies for a win-win situation.

Purchase extra protection. Seasonal variations can give misleading inspection results if you aren’t careful. Always take the time to obtain a professional inspection and pay close attention to “off season” items. For example, in the middle of winter it’s easy to discover heating-related problems but don’t forget to have the HVAC system checked too. Other common seasonal culprits include pools, irrigation systems, fireplaces and windows. An appraisal is an inexpensive way to guard against seasonal real estate related problems.

Learn how to obtain the best price and avoid the headaches and heartaches associated with selling a home by avoiding these top four mistakes most people make:

1. Pricing

Without a doubt the single biggest mistake most people make when selling a home is not pricing right. Price too low and people are likely to ignore the home because they think it has major flaws; price too high and it is likely to sit on the market so long people lose interest. Work with an agent to price right as soon as the house goes on the market.

2. Maintenance

Failure to make small repairs, paint and properly maintain the property can result in a lower selling price, longer duration on the market and just plain lack of interest.

Remember, first impressions matter. Most people will begin their search online then take a drive by the home before scheduling an appointment to see more.

Make sure your home looks its best at all times.

3. Cutting Commission

While it might seem smart to reduce commission or even try to sell a home yourself, it’s usually “penny wise and pound foolish.” Remember, a lot of the commission goes to the agent/broker who brings a buyer to the table…less commission equates to fewer people working on your behalf to get the home sold.

Don’t scrimp on the MLS or cut commissions; the additional time, advertising costs and other expenses are likely to erode any so-called savings you might hope to gain.

4. Future Planning

Make sure you have a plan in place before sitting down to the closing table; be sure to take taxes into consideration and have a new home lined up in advance.

Otherwise, you are likely to find at least a portion of your profits going toward unexpected expenses.

Buyers are often tempted to cut corners on things like home inspections to save money for fun items like furniture or a big-screen television. Don’t! A home inspection is one of the best investments you can make when purchasing a new home or other real estate.

Learn how to use a home inspection to your advantage with these pointers.

Plan and Prepare

Think of a home inspection as a fact-finding mission. Having a complete home inspection performed is one step toward finding out everything there is to know about the property.

Go beyond the basics by having water, soil, electrical, HVAC, pest and other systems thoroughly tested in addition to the regular home inspection. Hidden home defects often become apparent, including poorly performed repairs, forgotten faults, structural damage or other potential pitfalls, that could transform your dream home into a nightmare.

Avoid higher insurance premiums or more stringent mortgage terms by understanding the full history of the property.

Save Money

Almost every property has a few defects - even new homes - and buyers are often surprised how seemingly insignificant items can add hundreds or even thousands of dollars to the price of a home. Having an independent inspection performed often saves more money than it costs, since the sellers are forced to fix the problem or negotiate the price based upon the new information. Remember, once a defect is known the sellers are legally bound to disclose it to all prospective buyers.

Negotiate

Motivated sellers may not have the time or interest to fix all the problems on a property.

If you have more time than money, a home inspection provides a strong rationale to lower the purchase price or work out other alternatives while the home is being repaired or renovated.

One of the major selling points of vintage homes is the attention to detail and fine craftsmanship only found in older houses. Learn how to make the most of the period details in your house to reap higher sales prices with these effective strategies:

Shine the Spotlight: Prepare your home in anticipation of taking plenty of photos. Pay attention to details and any unique features. If you have lived in your home for a while, ask friends or family to stop by and take a fresh look; it’s easy to forget how desirable your home is when you see it every day.

Provide Details: Was your house built with old yellow pine? Chances are it is virtually indestructible to most pests. What about the hardwood floors or gingerbread trim on the outside of the house? Any chance they are handmade? Cabinets, painted tiles and a variety of other common building materials have made a comeback in popularity. Take time to explain the history and benefits associated with each unique item of your home to prospective buyers. Not only does it set your home apart from the rest, but knowing the history helps buyers make that all-important emotional connection.

Appraise Items: If possible, hire an appraiser or perform a search for similar items to help demonstrate the inherent value of the items. For example, an old cast-iron tub in good condition can go for thousands; handmade lighting fixtures may range from a few hundred to thousands and many types of wood are not available at any price because of restrictions on harvesting and imports.

If you have ever wondered why it’s better to work with an agent rather than listing “by owner,” you aren’t alone. Superficially, selling a home seems easy - until you actually try it.

According to statistics, nearly 80% of people give up and list with an agent after months of costly and time-consuming delay.

Here is why agents matter more than ever:

Time

Showing homes, answering calls, responding to email, scheduling inspections and appraisals plus much more are time consuming tasks; more importantly, everything involved in a real estate transaction is time sensitive. Delays can cause a deal to fall through even at the last moment.

Promotion

Agents specialize in a specific location and know exactly what buyers are searching for in your area.
Not only do they know how to price right and grab the attention of prospective buyers, but many agents have an established list of buyers waiting for specific types of properties.
Successful real estate marketing requires extensive experience, time and persistence to achieve top prices in a buyer’s market.

Cost

Selling a home requires more than simply placing a sign on the front lawn; it also entails a lot of out-of-pocket expenses with no guarantee of success. Advertising can cost hundreds or even thousands of dollars, listing with a “by owner” agency or MLS service typically adds hundreds more.

Finally, it is important to remember that real estate agents split commissions between the listing agent and the selling agent. To attract attention to your home it is still necessary to split the commission with any agents who bring buyers to the table.

Working with a real estate agent is likely to save you money over the long run.

Learn how to add value to any home with these quick tips:

Deferred Maintenance: Small repairs and the general neglect of a home can make it appear less appealing than it really is. Don’t be detracted by deferred maintenance; instead, perform an inspection to eliminate the risk of serious problems, then use the condition as a negotiation tool.

First Impressions: More than one home has suffered from a bad first impression; overgrown shrubs, faded paint, lack of shutters and stained concrete walkways make any home look tired and dull. Fortunately, first impressions are fast and affordable projects; landscaping, pressure washing and a new doorknob quickly turn a tired entrance into an inviting space.

Lights and Appliances: Upgrading lights and appliances might be one of the best ways to add value to any home. Energy-efficient appliances and beautiful LED lighting not only provide a modern, up-to-date appearance but are quieter, easier to operate and more dependable than older models.

Cosmetically Challenged: Some homes simply suffer from poor taste; horrid carpets and personalized paint choices may have been the pride and joy of the original owner but don’t translate well into the general market. Rather than succumbing to the “shock and awe” when encountering a cosmetically challenged home, focus on the structure and surroundings instead. Cosmetic fixes often result in the largest “bang for the buck” when it comes to adding value to the price of a home.

Selling a home in a down market takes more planning and preparation but with a little know-how it’s still possible to get a great response with these quick tips:

Price Matters

Without a doubt, the most important consideration is to price the house right - especially if you want a quick sale. When the market was red-hot homes sold fast so it is easy to forget that historically homes are on the market an average of six months before selling. Be realistic and work with your agent to price right.

Staging & Updating

Make sure your home looks its best by updating paint, making small repairs and taking the time to properly stage your home for online and in-person viewing.

Pre-Qualify

Window-shopping is a popular past-time even when it comes to real estate. One of the benefits of working with an agent is the ability to preserve your valuable time and only entertain serious offers from qualified potential buyers.

Reach Out

Reaching the best potential buyers isn’t always easy especially in a down market. It takes experience, objectivity and great marketing skills to know how to position your home to reach the right buyer. Does your home have a great view? It might be perfect as a vacation get-away. Is it located near a major International airport or business center? International buyers could be searching for a second home due to the favorable exchange rate.

Offer Incentives

Get noticed by offering buyer incentives. Buyer incentives are a welcome addition to any deal and include things like gift cards, LCD televisions or new appliances. Find out what tops the local “wish list” when it comes to amenities then calculate the cost of offering an incentive. They are an easy and effective way to capture the attention of potential buyers in a crowded market.

December 2008

When it comes to evaluating the value of a property there are more ways than meet the eye; like beauty, the value of a property is often in the eye of the beholder. Savvy buyers and investors use several of the following methods to determine if the price is right:

Comps: Comparing a property to others is the most commonly method of establishing price and value. Age, size, location and amenities are compared to other properties in the area. Unfortunately, this method doesn’t work well for unique homes or those lacking nearby comparisons.

Income Potential: Another popular method is to determine the amount of income the property would generate if rented or used in another endeavor like a small business or hobby.

Return on Investment: Calculating the ROI is a good measure especially for those buying income producing property or “fixers” in need of extensive renovation or repair. The ratio between money invested into the property versus the anticipated return (often using leveraged funds) is particularly useful for those who purchase real estate as an investment. For example, if your cash outlay was $10,000 and you made $2,000 your ROI would be a whopping 20%.

Replacement Cost:  Inflation, taxes, permits and other costs tend to rise over time making it more costly to build a home. For example, 25 years ago many homes could be built for less than $40 per square foot while today it is difficult to find a home for less than $100 per square foot.