Sell First or Buy First? Which Is Right for You?

When it comes to buying and selling real estate, timing is of the utmost importance. Unfortunately, it’s also a topic few people truly understand. The following are some tips to keep in mind when speaking with your real estate agent.

Sell before buying or buy before selling?

It’s an age-old question, but asking a few strategic questions might enable you to narrow your decision down to the right choice for your individual situation.

Is selling or buying a necessity or do you have some flexibility?

Job relocation, change of marital status or other life situations often require a relocation within a specified period of time. Equally important are the needs of the other party. Work with your agent to understand the opportunities and limitations of both sides in order to create a win-win situation.

Buying before selling typically benefits those who simply must move or relocate within a specified period of time and who are unable or unwilling to lease or rent. It is also a popular option for those seeking an exchange of property under Section 1031 of the U.S. Internal Revenue Code or for those who are attempting to minimize taxation via other deals.

Can you obtain financing or afford to carry both mortgages for any period of time?

If so, you may have a little more flexibility at your disposal. Speak to your agent about a leaseback or other temporary term. It’s often possible to use these when negotiating terms.
Selling before buying can benefit those who are unable to obtain financing with an existing mortgage in place or who wish to use cash proceeds from the prior sale to fund repairs, renovations or an entire purchase.

In many instances, it is possible to arrange a simultaneous closing for both the home purchased and the home sold with contingencies that reflect this situation on both transactions.

How to Make Good Decisions in the Real Estate Market

Matters of the heart tend to hurt rather than help the negotiation process when it comes to buying and selling real estate. The following tips will help you manage the emotional ties that bind buyers and sellers to bad decisions.

Use an Agent: Agents do more than just show a home. They provide an impartial and objective opinion about the condition of a property, pricing and comparable real estate on the market.

Establish a Priority List Then Stick to It: Every stakeholder in the buying and selling process should have a priority list that includes needs and wants. Creating such a list helps you stay organized and reduces the risk of becoming emotionally entangled in a bidding war or falling in love with unnecessary yet expensive features that won’t add to the functionality of the home. Ask your agent to focus on finding buyers or homes that meet the main needs on your priority list, and move to the wants later.

Get a Second Opinion: Ask a friend or family member for his or her opinion, especially if you aren’t certain. But be prepared to listen to constructive criticism. Appraisers, inspectors and agents are also vital sources of expert information.

Document: Take plenty of photographs when buying or selling so you can share them with others. Sellers can assist buyers by providing a fact sheet that includes room dimensions, existing warranties, upgrades and other important features of the property. Or buyers can bring along a tape measure and a notebook to jot down important details.

Ways to Figure Out If a Fixer-Upper Is Worth It

Deciding whether to purchase a fixer-upper or go with a home in need of fewer repairs isn’t always simple.
The following information can help you calculate the true cost of purchasing a fixer:

Supplies, Labor and Time:
Whether you do the job yourself or hire outside labor, repairs and renovations are notorious for costing more than you planned. If the home can’t be lived in while repairs are made, the additional cost of covering the mortgage, taxes and insurance while the home is vacant can also substantially add to the total cost.

Taxes and Insurance: Improvements often add to the cost of property taxes and insurance, so be sure to consider the long-term consequences. Properly performed repairs and renovations may help or hurt property tax values and homeowner insurance costs. It’s a good idea to get an estimate in advance. On the other hand, hiring outside crews to perform needed repairs can result in a tax write-off for investment properties.

Long-Term Profit Potential: Repairs and renovations can make your home more valuable, but only if the surrounding area is desirable. Whether investing for long-term appreciation or cash flow, carefully evaluate the desirability of the neighborhood.

Financing: Lenders often have different rates and requirements for properties in need of repair. Find out in advance if you are eligible for special funding, grants or tax incentives, especially when working with affordable housing options or first-time homebuyer programs.

Building Codes and Zoning: It is imperative to understand local building codes and zoning regulations before purchasing a fixer-upper. Never assume you can modify a structure without considering the building code. Likewise, zoning may dramatically alter the ability to use a property in a specific manner or make certain changes or additions. It’s just one more reason it’s more important than ever to work closely with your agent when purchasing a fixer-upper.

How to Help Your Agent Build a Winning Sales Strategy

Communicating with your real estate agent is the key to developing a winning strategy to show your property in the best possible light.

The following tips might help you avoid frustration and increase the odds of a successful showing:

Be Honest: The first step is to be completely honest with your agent. Make sure the agent knows about the benefits and pitfalls of the property in advance, including needed repairs and deferred maintenance.

Get Organized: The more information about the property you can provide, the better. Make a list of all past repairs, warranties that may still be in effect, improvements made to the property, and what is included or excluded in the sale. Copies of receipts, warranty documents and other paperwork give your agent a great headstart.

Set a Schedule: Let the agent know the appropriate times for showing the home, as well as any other instructions. Notify agents of special situations well in advance, especially concerning pets or other important matters.

Knowledge and Network: Your agent is an expert in the local real estate community, so use him or her to your advantage. Allow the agent to develop a marketing plan and use local resources that maximize the appeal of your property. Likewise, ask the agent’s opinion about service providers and other vendors who may assist in the process of selling or purchasing property.

Remodel or Buy? Which Is Right for You?

The decision of whether to remodel an existing home or buy another one has become more difficult because of the price of real estate declining across much of the nation.

A few years ago, the benefits of remodeling were quite simple due to the cost savings. Today it isn’t as straightforward.

The following are some things to think about when deciding whether to remodel or purchase a new property:

Lifestyle: Does your home continue to reflect your lifestyle? Experts agree the home should reflect anticipated lifestyle changes for the next five to seven years. If not, it might be a good idea to consider purchasing a new property.

Maintenance: Does your home require more maintenance and upkeep than desired, especially compared to newer homes? New homes offer the ability to “right size” the levels of yard work, repairs and other needs associated with home ownership.

Cost and Value: There are many factors that can weigh into the cost and value of a given property, including tax credits/write-offs, long-term appreciation, current level of depreciation, access to amenities, property taxes and insurance, utilities, maintenance, and much more. If you are not sure how to properly evaluate the true cost and value of your current property compared to a prospective property, ask your agent to provide estimates of principal, interest, taxes and insurance for comparable properties in the same neighborhood.

Community:
Access and affiliation with friends, family and the local community are important when deciding whether or not to remodel or buy new, yet they are easily overlooked by many homeowners.

Depending upon the age of the neighborhood, it may be difficult or even impossible to find other properties in the immediate area.

On the other hand, over time many communities experience a decline in desirability as crime rates, traffic and other problems start to creep in.

A Guide to Deciphering the Lingo of Real Estate

Whether you are buying or selling, the language of real estate is often complex and confusing. Following is a plain-language explanation of commonly encountered real-estate-related lingo.

Title: Title to a property essentially denotes ownership interest and is designated by the name(s) on specific legal documents such as mortgages and deeds. The title can be held by an individual, couple or even a corporation.

Deed: A deed is used to transfer ownership of property from one person or entity to another person or entity.

Deed of Trust: A deed of trust is a document that transfers title in a property, with the stipulation that the transfer is contingent upon repayment of an existing loan.

Mortgage: A mortgage is a loan you take out to buy property.

Clear Title: Clear title indicates that the property is free of liens or legal questions surrounding ownership.

Chain of Title: The record of historical ownership of a property. The title company or real estate attorney typically reviews the record in order to determine clear title.

Clouded Title: Any property that has an existing question regarding ownership, chain of title or even liens may have a “clouded” rather than “clear” title, which may adversely impact the ability to obtain financing or properly record the title. Most clouded title issues require a release, court action or other legal intervention to remediate.

What You Need to Know About Short Sales

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.

Quick and Easy Fixes to Spruce Up Your Kitchen

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.

Why Smart Homebuyers Work with an Agent

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.

Take the Stress Out of Moving with These Storage Ideas

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.