Should You Accept That Offer?

by admin on March 19, 2012

Should You Accept That OfferIt has finally happened! The day has arrived! Your realtor has called to say that an offer has been made on your house. This can be such an exciting acquisition.

Before breaking out the champagne, take a breath and consider the following factors in breaking down the real value of the offer on the table. Here are some things to consider:

  • Earnest money deposit

This is designed to show how serious the buyer is about purchasing your property.  The buyer generally writes a check to a third party, usually an escrow account or a lawyer’s office, where it is held until the deal is closed. This deposit will be counted towards the buyer’s down payment. If the deal does not close for any reason, this money is returned to the buyer.

  • Purchase price

This is the number you’ve been waiting for.  However, there is more to this purchase price than meets the eye. Trust me as your realtor to keep you abreast of all this is happening.

  • Mortgage contingency

This means that the offer is contingent on the buyer acquiring a mortgage at a certain interest rate and price. Read the offer and make sure the buyer is being realistic (30 year fixed at 2% with no points is probably not going to happen, even in this market).  If the buyer doesn’t get approved, then you are back to square one. This could also be a way for a buyer to tie up your property while looking to see if there is anything better out there.  It is unethical, but I’ve seen it happen.

  • Seller concessions

This is where the seller might ask you to cover their closing costs, or to deduct a specific dollar amount to cover repairs or decorating. Most offers in a buyer’s market come with some concessions, so consider the costs when figuring out how much you will get back from the sale of your home.

  • Inspection contingencies

This generally states that the sale is contingent on a home inspection proving that the home is in good condition. We will have already established that, so this should not be a problem at all.

  • Personal property

Generally, anything that is physically attached to the property, like a dishwasher or custom bookcases, will remain in the house for the next owner. I have seen cases where the buyer likes a particular mirror, or a fountain in the back yard, and makes the offer contingent on these items remaining in the house. This can actually be a great place to negotiate, if you are willing to leave the requested items behind. Buyers may also request that you remove items before they move in, like a dilapidated shed.

  • Appraisal contingency

This is where the buyer wants proof that the house is actually worth what they are paying for it. Again, if we have done our work prior to this time (which I will), this will be a formality.

  • Buyers selling property contingency

In this case, the buyer’s offer is contingent upon the sale of his or her own property.  Basically, they need to sell their house before they buy yours. It’s important to make sure there is a time limit, so your house isn’t stuck off the market for a long time. I advise my clients to include a 72-hour clause.

This allows you to keep your house on the market.  If another buyer makes an offer, the first buyer has 72 hours to fulfill the contract or the deal is cancelled. I’ve actually seen this make a house more attractive to other buyers. After all, if someone else wants it, it must be good, right? Just make sure to protect yourself with the time limit and the 72-hour clause.

As you can see, there is more to an offer than just the purchase price.  Take these items into consideration, and you will be able to judge whether or not the offer is truly a good one.

About the author: Jim Klein is a real estate agent in Wellington, Colorado servicing both home buyers and sellers in the Fort Collins real estate market. You can learn more about Jim on his blog where he recently posted about whether or not it’s a good time to buy a Fort Collins home.

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Fluctuating Times in Real Estate: Are You Prepared?

by admin on January 17, 2012

Fluctuating Times in Real EstateThings are changing in the real estate world, and continued change in 2012 is inevitable. Some homeowners and homebuyers might feel like things have been kind of rough recently. The economy has not made it easy to buy or to sell. However, not all change is bad.

In fact, change brings about opportunity, thankfully. However, it takes a Realtor who is willing to work in order to capitalize on the changes and opportunities and bring about success for their customers. I invite the challenge to do right by my clients in this ever-evolving market. It has been and continues to be my pleasure to work hard to arrive at excellent outcomes for both my buying and my selling clients.

Fluctuating Times in Real Estate – Let Me Help

Savvy homeowners and homebuyers right now are keeping an eye on the state of the mortgage market. They are watching interest rates carefully and using the information to strategize their investment decision. As a real estate agent, I have always watched the interest rates carefully. My clients expect that of me; it’s my job.

Of course, if you are paying cash for a home, then interest rates do not matter to you; but people who purchase a home with cash are the exception to the rule. Thus, factoring in interest rates into the price of a home can help you determine what the true cost of a home is. And, interest rates can truly decide if the home is affordable or not.

My clients who are looking to buy a home obviously want the best rates possible, and my clients who want to sell are trying to price their homes in order to attract these buyers. What a delicate balance for everyone in these times. These are days when doing business with a real estate agent is essential. I am professionally trained to evaluate prices, numbers, rates, perceived value of a home, buying power, and then match that evaluation to a home that you absolutely love.

It could be overwhelming to try to accomplish that all by yourself. Additionally, I know things about homes that you couldn’t know, such as the previous owners, the builder’s reputation, the neighborhood’s reputation; and I know about homes that are about to go on the market that you can’t find online or while driving around because they are not yet for sale. My expertise is at your service—rest assured, and it is my pleasure to assist my clients.

Trying to navigate through these fluctuating times on your own as a buyer or a seller is not advisable. You will do well, really, to allow a professional to help you through both processes—buying and selling. Not only are rates changing all the time, but also different lenders offer “specials” for periods of time that you could not know about without the help of a Realtor.

Your real estate agent knows when rates are predicted to rise, and can help you focus and narrow in on your search in order to take advantage of the rates before they change. And, when rates are unpredictably changing, your real estate agent will to tighten up your closing dates to lessen the chance that anything will interfere with you being able to lock in at a favorable rate for purchasing your home.

Fluctuating Times in Real Estate – Refinancing, Too

Fluctuating rates also cause people to consider refinancing. I am always happy when I can help a former client who has already been in their home for a few years. I can help them by updating their mortgage and helping them refinance when rates are favorable. 2012 is just the beginning, and I am optimistic for my clients’ real estate success! Cheers to a new year of real estate in 2012!

If you’re interested in buying a home, you may want to check out Vickie Nagy’s San Ramon CA real estate website where you have access to MLS listings and homes for sale in Danville CA. For those looking for a great deal on a property, you should check out the Dublin California area as well.

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What is a Short Sale?

by admin on January 17, 2012

What is a Short Sale?People all over are talking about some of the amazing deals in the real estate world right now. Some of unimaginable deals can seem quite tempting after all the housing market crisis has taken us through over the past few years.

Over the past 18 months, the buzz going on about short sales, foreclosures and bank owned property has hit an all time high. We can barely walk a block or turn on the TV or radio without hearing someone speaking about the supposed great benefits of investing in troubled homes. This applies even more if you’re an online surfer that likes researching information about the current state of our housing crisis.

What is a Short Sale?

Basically, a short sale is an agreement made between a lender and a delinquent homeowner who is facing foreclosure. The home is sold for less than the amount owed on the loan, in place of foreclosing on the property.

Short sales are becoming more and more common these days. This is due in part to market prices dropping so far below current mortgages held by distressed homeowners. The short sale process saves the bank the time, money and the hassle of having to physically evict the owners after the foreclosure is complete. The banks decide to “play nice” and “forgive” them for the reduced amount of the loan payoff.

Benefits of a Short Sale

Although this may sound nice, it is important to note that a buyer has to be found who agrees to pay a price that the bank will approve of. And, it needs to be done fast to avoid the foreclosure proceedings. Hypothetically, all the parties involved can benefit from short sale deals. Here are some of the benefits each party can possibly celebrate:

  • The seller is released from the financial burden of a loan they can no longer afford to pay. That’s when they can begin their road to financial recovery and try to move on with their lives. They also avoid having a foreclosure on their credit report, which lasts 7-10 years. Although a short sale is also a negative hit on their credit report, it is nowhere near as bad as a foreclosure. There have been instances where sellers have been able to qualify for a new home loan in just two years after the short sale.
  • The buyer ends up with a new home at a very great price. The discount price is usually anywhere between 10-50 percent less than what the seller originally purchased the home for.
  • The bank now has one less distressed property to worry about. They make a quick buck, too. It may be less than what was owed, but it’s 100 percent more than what they would have gotten out of a foreclosed homeowner.

A short sale can be a lifesaver for a distressed homeowner. Although the process is nowhere near as simple as people think, it can still be beneficial if done right. Remember, you need the right buyer, and you have to have the patience it takes to negotiate the terms with your lender. It can be a quite frustrating experience. But, it just may be worth it to get relief and unbind yourself from mortgage payments you can no longer afford. If you need assistance, an experienced realtor will be able to help you.

This article was written by Mitch Ribak a Titusville FL real estate agent who also specializes in helping home buyer purchase short sales in the Palm Bay real estate market to and has vast experience in helping home sellers sell their Melbourne Homes.

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Improve The Marketability Of Your Home

by admin on January 14, 2012

Improve The Marketability Of Your HomeIt doesn’t have to cost you a lot of money when you renovate and make major changes to the interior and exterior of your home. There are some great, cheap options that can add to the value of your home.

These projects can help to make your home much more enjoyable to live in. They will also improve the marketability of your home. These are some of the changes you can make that are very affordable:

  • Lighting – Change the lighting in your home. Add more modernized light fixtures. Change to sheer curtains so that the natural sunlight shines through. Lighting can make your home look larger and gives it a more airy feel.
  • Painting – Remember that some customized looks are not good for selling your home. Potential buyers may not be able to see past your own personal touch. Earth tones provide a soothing feel. These colors allow buyers to see the actual potential of the home without being overwhelmed with the seller’s tastes.
  • Flooring – Linoleum is the flooring of the past. Try replacing yours with hardwood floors, modern tile, or even carpet in some rooms. This makes the home look as if it has been cared for and pampered over the years.

There are other features that can be added to your home that will add an even higher level of comfort. These cosmetic touches are much more expensive. But, they are amenities that many buyers are looking for in a home:

  • Central air conditioning
  • Updated kitchen cabinets
  • Gas fireplace
  • Garage (especially if attached)
  • Energy-efficient windows

Upgrade Your Kitchen

If the home is where the heart is, then the kitchen is the “heart of the home”. It’s where families spend a lot of quality time together. Kitchen cabinets can be expensive. If you are thinking about moving anytime soon, keep in mind that new buyers may want to remodel the kitchen to fit their own personal tastes. So, before going out and spending lots of cash on new cabinets, think about some of these more affordable ways to liven up your kitchen instead:

  • Cupboards – Instead of replacing the entire cabinets, how about just changing the doors? Or, maybe you can start with new handles, and see what happens from there. In some cases, changes as simple as a coat of paint, or new, elegant fixtures can work wonders.
  • Switches & Sockets – You’d be amazed at how much different a room can look with new light switches and electrical sockets. Be creative, but stay simple. Don’t forget, your buyers need to see potential. Don’t bombard them with your personal style.
  • Floor – Since many buyers are attracted to hardwood floors, make sure yours is in almost new condition. Do whatever needs to be done to get rid of chips and discolorations in your flooring. The same goes for your carpet. Make sure to replace any worn areas, including tears, unraveling strands, etc…

Keep in mind that there is no way to please every potential buyer that looks at your home. That’s why sellers need to be aware of basic changes they can make to appeal to the majority. Your style is great for providing a comfortable home for you and your family. But, when you’re ready to list your property for sale, try to make changes that will help buyers visualize your home’s potential. They need to be able to see what they can do to infuse their styles, not be overwhelmed by yours.

About the Author: Paula Henry of Sycamore Group Associates provides Avon real estate services and providing information about Avon Indiana Homes for those people searching Avon Indiana Neighborhoods to buy or sell their home.

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It’s What is on The Inside That Matters When Buying A Home

by admin on January 13, 2012

It’s What is on The Inside That Matters When Buying A HomeFamed designer, Nate Berrkus, always has such good ideas as to how a room should look when he decorates and designs a room.  He has great ideas that are tailored to the styles of different people in the audience of his show each day.

When he asks them questions, it is evident that the general population has an idea of what they like but they just simply do not know what the style is.  There are so many out there to fit every taste.  But usually, they fall into a few categories of style that bring a home to life.

It’s What is on The Inside That Matters When Buying A Home

Most often, people generally go in the direction of the traditional style when thinking of creating a style.  It is an easy style with which to work.  Traditionally styled homes are known for being calm, orderly and very “matchy-matchy.”  Everything has its place and there are no surprises or eye-jolting combinations.

As a very elegant style, in a traditional home, you will see lots of crown molding, chair rails, and complimentary baseboards.  In terms of decorating, traditional styles often use soft understated fabrics that may have simple details such as stripes, florals, or geometric shapes.  Accessories are often placed in a room in matching pairs like two lamps, two pillows, two chairs, and so on.  While traditional is a classic look, it is very predictable and sometimes lacks any character or individuality.

Totally opposite from traditional is the contemporary style of design and decorating.  The focus of contemporary style is straight lines and lots of space.   Additionally, with the contemporary look, a clean design using different materials is achieved with metal, stone, glass and heavy textures.  Art in homes is often in the form of sculpture, paintings featuring straight lines, and bold color.   The contemporary look is for those who like a minimalist feel to things as well as those who consider themselves to be modern and in-style.

Electic Styles Homes Are The New Rave of Home Buyers

Electic Styles Homes Are The New Rave of Home Buyers

A favorite style that is kind of a mish-mash of design comes forth in an eclectic style.   Eclectic styled homes feature the unexpected in terms color.  A room may have a neutral base to it then suddenly highlight a punch of color.  These homes have unusual pieces of furniture often custom made and painted to pull out the personality of the homeowner.  Fabrics are textured and contain punches of color that are surprising and fun.  Eclectic homes are cheerful and make everyone happy.

Along the lines but slightly more understated is another favorite style – casual.  With today’s busy lifestyles, people long to feel comfortable and relaxed when at home.  That is why a casual look has become so popular with designers and design enthusiasts.  A casual home has a little of everything in it.  It combines that simple, traditional look with the textures and whimsy that is seen in an eclectic home.

Arrangements of furniture are often less symmetrical and do not always come in pairs.  Upholstery is usually neutral in color and usually is brought out by a bold color in the fabric through a brightly colored pillow or a small flash of color in upholstery.   Furniture like chairs and sofas are thick, cushiony and very inviting.  Wood finishes are often lighter in color than in traditional homes.

There are so many more styles in interior design.  The goal of design is to bring out your personality and let it shine without going crazy.  With all of the television shows, cable channels, books, magazines and websites, it is easy to get the look you want with lots of direction from the professionals.  Do not be afraid to try something new but start small and go from there.  And remember to keep the same look throughout the house.  Rooms should appealing and flow from one to the other.   Have fun and be excited about creating a new style!

This article was provided by Aaron Seekford, also known as Mr. Arlington a Realtor in Arlington, VA. For more information about Aaron, you can check out his Arlington VA real estate website or tune into his local Arlington news blog for the latest happenings in Northern, Virginia.

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Do All Banks Require an Appraisal for Approval?

by admin on January 11, 2012

Do All Banks Require an Appraisal for Approval?If you have not sold or bought any real estate lately, then you may wonder how an appraisal works.  It is important to understand appraisals since the appraisal can literally halt a real estate transaction – including a sale or a mortgage refi – in its tracks.

Do All Banks Require an Appraisal for Approval?  

Let’s say that you find a home that you really like, and you and the seller have reached an agreement on price, based on the property’s market value.  You have already gone forward with a home inspection.  Now it is time for an appraisal to be made of the home.

The appraisal is a tool that is used to establish the property’s true market value.  This true market value is the sales price that the property would bring when being offered in a competitive and open real estate market.  Most lenders require that an appraisal is made when you take out a mortgage.  This is because the lender wants to be sure that they will be able to sell the home for enough to recoup the amount they loan you, should your home loan enter default.

Isn’t That What A CMA Is For?

A comparative market analysis, also known as a CMA, is not the same things as an appraisal.  The CMA is typically used by the real estate agent in order to properly price the home, based on market trends and homes that have sold in the area in recent months.  An experienced real estate agent will often prepare a CMA that values the home at close to the price that a trained appraiser will.  However, the appraisal offers a lot more details about the property, and is required by the bank in order to consider the loan.

An appraiser is a licensed professional who has completed the required training and put in hours and hours as an intern in order to become familiar with the real estate market.  Some banks have their own appraisers that work only for them, or they may contract an appraiser who works independently of the bank.  If the bank allows you to choose an appraiser, it is always smart to go with an appraiser that the bank recommends or is familiar with.  Otherwise, the results might be subjected to more extensive review and hold up the process of getting your loan.

Appraisers Are Supposed To Be Objective!

Appraisers Are Supposed To Be Objective!All appraisers are supposed to be objective, and the appraiser should have no connection to any of the persons involved in the transaction, including the buyer and the seller.  You may be asked to pay the appraiser, or the amount of the appraisal may be included in closing costs.  Sometimes the bank will pay one-half of the appraisal fees on your behalf.

While the bank may approve you, until the appraisal report comes in, your loan is not certain.  Should the property appraise for lower than the sales price, the loan can be declined.  Appraisals are not home inspections, but the appraiser will note any problems that they see.  They will not check for problems, and are not trained to.  Therefore, if you are a buyer, don’t count on the appraisal as a determination of the condition of the home.  Your inspection should do that.

And don’t go into panic mode if the appraisal comes in under the asking price.  Oftentimes, the problems can be corrected.  Your real estate agent can help you on that end!

This guest blog was supplied by Kimberley Joy Kelly a Realtor in Palm Springs. If you’re looking to buy a home and have questions about an appraisal or the home buying process, you can contact Kimberley on her website by clicking here. You may also want to learn more about short sales and the short sale process when buying, which you can learn by checking out Kimberley’s short sale information section.

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Understanding Closing Costs When Buying A Home

by admin on January 8, 2012

Understanding Closing Costs When Buying A HomeThere are a lot of things that you need to know about buying a home. One of them is what is it going to cost you to purchase. There are more costs than just the down payment. Most people don’t realize this. Here is a breakdown of some of the costs you could encounter.

Understanding Closing Costs When Buying A Home

Application Fee: Application fees are charged by the loan officer to offset costs that are related to the mortgage loan process. These fees can include the appraisal, credit reports, and any underwriting that is done.

Closing Fee:  A closing fee may be charged for the closing processor who will prepare the documents. They will also close the mortgage for the buyer’s lender. These are usually lawyer or escrow officers at the title company.

Commitment Fee:  The commitment fee is usually called a loan origination fee. It is computed at about one percent of the loan amount. This is the fee that pays the lender for the work they did to get your loan approved.

Discount Points: Every discount point equals 1 percent of the loan amount. Discount points are usually utilized by the loan officer to vary the yield of the loan if is being sold to a outside investor. The borrower will be able to get a lower interest rate by purchasing more points.

Homeowner’s Insurance: A one year insurance premium is due at the time of the closing. This premium is to pay for one year of insurance in advance. This is to protect the lender from any issues with the home directly after you take possession of the property.

Mortgage Insurance:  Mortgage insurance is required by the   lender when the down payment is less than 20%. This insurance can reduce the lender’s financial loss in cases where the borrower defaults.

Prepaid: A Prepaid is an adjustment of escrow accounts. This adjustment is from the time of the closing to the day that the first payment is due. Interest is always paid through the end of the month of the closing; taxes are paid to the end of the month of closing.  Plus the taxes are paid through the following month also. PMI is collected for two months. Homeowner’s insurance is also collected for two months.  A homeowner’s insurance policy must be in place along with a receipt showing that the first year’s premium has been paid.

Processing Fee:  A processing fee is charged by the person who processes escrow; either they work for the escrow company, the title company, or real estate company. They handle all administrative escrow services that occur from the time of contract through the time of closing.

Recording Fees:  Recording fees are charged by municipal or state entities for the recording of closing documents into public records.

Title Insurance: Title Insurance provides protection for homeowners and the lender against any financial loss that may result from legal issues with the title. If there is an unknown lean against the property the title insurance will remove the lien by paying what is owed.

It is common practice in most stated to have the seller help the buyer pay most of these fees. They are included in the loan amount, and subtracted from the seller’s proceeds. Federal law states that the seller can pay up to 3% of the loan amount to help cover the buyer’s closing costs.

If you have more questions about closing costs when buying Merritt Island real estate for sale, you can visit Linda Hare’s website where you can search Cocoa FL real estate and Palm Bay Florida homes for sale in Southern, Florida.

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FSBO Buyer Advice – or Is It?

by admin on January 6, 2012

For Sale By Owner AdviceI read a blog post on Inman.com titled “What to know when buying FSBO” that I think necessitates a response. The post is by Tara-Nicholle Nelson who received a question, via email, from a buyer inquiring about purchasing an FSBO (For Sale By Owner) home.

The buyer wanted to know the pros and cons of buying an FSBO property. While I do believe that buyers generally should use the services of a real estate agent, I thought Ms. Nelson’s answer was inaccurate, to say the least.

FSBO? – Yes It Does Happen And You Shouldn’t Be Afraid To Try!

Ms. Nelson asserted that FSBO sellers should not expect to get the same price for their home as that of a house listed by a real estate agent, because comparable sales prices include agents’ commissions; therefore, an FSBO property should be discounted; the buyer should demand it.

Why? Sales comps serve to provide house values in the area regardless of an agent’s commission; they are merely recorded sales prices. Real estate commissions are negotiable, how do you determine the discount?

Ms. Nelson continued by saying that ‘the seller should pass the commission savings to the buyer’. Then what’s in it for the seller? Why is there even such a thing as a FSBO? Nonsense, opting to do the grunt work to save money is certainly the seller’s prerogative. This is tantamount to saying that if I decide to save money by doing my own oil change, I should pay more per quart. Not very logical.

Ms. Nelson added that if there’s no agent involved, the seller should pay for legal representation for the buyer. The seller should do this because of ‘contracts and disclosures’. Real estate agents are not lawyers, nor do they draft contracts. Real estate agent or not, contracts used in most FSBO transactions are standard state contracts.

Selling FSBO May Be In Your Best Interest? Amazing!

Sign Here Please Contractual TrapAs far as disclosures, by law the seller has to disclose everything to the buyer, which is exactly what would happen were a real estate agent involved. Nothing more nothing less.

Lastly, Ms. Nelson stated that the buyer had hinted to her in the email that they planned to do an all-cash purchase. This, she added, is more reason to hire an agent because ‘buying with cash would easily cause the buyer to forgo doing inspections, running a title search, or getting title insurance, things which would have been required by a real estate agent or mortgage broker’.

Again, this is simply not accurate, at least not entirely. An agent cannot require a buyer to do any of those things. They can advise a buyer that it’s in their best interest, but that’s the extent of it.

A cash buyer is in fact free to bypass all of the above. If buyers are ‘highly educated and savvy’, as she mentions in her post, Ms. Nelson surely doesn’t believe that they don’t know enough to do their due diligence.

Let’s not forget that the reason the buyer asked the question is likely because they’re interested in the property. Making demands may not bode well with the seller, and much like they’re not obligated to give a discount, they’re not obligated to sell either. You negotiate a price, you don’t demand it.

Article provided by Allison Klein, a Fort Collins Colorado real estate agent. If you’re interested in moving to CO, you can check out Windsor Colorado homes and Loveland Colorado homes on Allison’s website.

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