Analyzing buying a house? If you are considering a real estate purchase do it now. Mid April financing changes will cost you money and reduce your buying power!
NOW IS THE TIME TO BUY
Inspection Reports – “Heads Up” Buyer
Let’s say today you found the house of your dreams and you can’t live without it. It is in your price range and it is divine. It looks like it has really been cared for. Should you hire an inspector? Your Realtor® recommends it so you do.
Home Inspector
Buyer, the inspector’s job is to make you aware. You are looking to expose big problems with which would be a “deal killer”, right? Remember, you will get a 37 page (give or take a few) report from the inspector that will expose the most minuscule defects along with the big stuff. Now, keep in mind, inspectors are human. I know that is hard to believe but it is true. Sometimes they miss items, sometimes they make recommendations that they shouldn’t in error. Give them a break and remember, the inspection report is not a “to do” list for the seller. It is a “heads up” for the buyer. Is there something so awful in the report that ruins the house of your dreams for you or just minor stuff that is part of home ownership? There was only one perfect man that ever walked on earth, that was Jesus Christ. There never has been and never will be a perfect house so stop looking for it!
If I buy a foreclosure, are there any surprises of which I should be aware?
Buyer beware! Good deals sometimes come with a price that negates the good deal. Banks have their own addenda that they will attach to your contract which will vary in different areas so check out the differences early. Foreclosures/bank owned properties often do not have the utilities on because the previous owner didn’t pay their utility bills and usually the buyer is responsible to get the utilities turned on in order to perform inspections. More times than not, at least in our area, the meters have been pulled and have to be replaced, sometimes at the expense of the new owner. So, the utilities are on and you inspect the property. Repairs need to be done. What now? Occasionally the bank who owns the property will allow for some repairs to be done but not usually. AS IS means AS IS! The bank has so many short sales, foreclosed properties they are just looking to get out! Getting a loan on a property in ill-repair is tricky unless you have money to put down. When you wade through all the inspection and repair issues and head to closing, it would be a good idea to buy title insurance. Know whether you are getting a General Warranty Deed or a Special Warranty Deed. If you don’t have a Realtor® you like and trust, get one immediately, do not pass go, do not collect $200. I’m just sayin’……………….
Itʼs not Tag, Title and Tax
Mr. and Mrs. Buyer, this is for you.
Buyers have closing costs to pay at closing and sellers have closing costs to pay at closing. Buyers often ask if they can roll their closing costs into their loan. Unlike purchasing a car, the closing costs cannot be simply rolled into the mortgage loan. Someone has to pay them.
Now, the seller has to pay their closing costs and seldom, almost never does the seller ask the buyer to pay their closing costs. Buyers ask the sellers to pay their closing costs all the time. So, hypothetically, let’s say you are buying a house that is listed at $105,000 and you know that the average list price to sale price ratio is 97% and you want to make an offer. Letʼs say the sellers were correctly advised and listed their property at $105,000 knowing the list price to sale price ratio is 97% and understanding that fair market value for the property is $101,000 – $102,000. The house is just what you need and $101,000 – $102,000 is a fair price and you need the sellers to pay your closing costs of $5,000 because you only have enough money for the down payment, will you offer $100,000 and ask them to pay for your closing costs out of that? What is a “fair exchange of value”? What if it is your house and you are selling? Do you feel you should get market value? A fair exchange of value. Fair! Yes, I said fair! Will you offer $107,000 and ask them to pay your closing costs? What is wrong with paying what itʼs worth? What is wrong about treating people fairly even in a real estate transaction? You know, treating others how you want to be treated. The monthly difference on a payment on a sale price of $102,000 vs $107,000 for 30 years at 5% interest is about $26. – less than $1 a day.
Be kind. It will make you feel good.
State of Real Estate
Wanna play the game “gossip”? Ask your neighbor about the state of the local real estate market and pass it around the block until it gets back to you and see how it makes you feel about the value of your investment. Or, you could rely on the media. That will always make you have a little skip in your step. My point is that if we understand that negative news sells and that we are programmed to gravitate to the negative because there is little or no resistance, then we will seek the truth.
Now, within the last ten years, the real estate market nationwide was amazing and if you could fog a mirror, you could buy a house. No job, no problem – get a stated income, stated assets loan. No money, no problem – include the closing costs and get a 104% loan. Bad credit, no problem – there’s a loan for you; just pay a higher interest rate. Well, now we have made a shift and it’s been a real one. We just have to shift, too.
Everyday, because I’m wearing my real estate name badge, I am asked how the market is and almost without exception, when they ask the question it’s with a grimace on their face as if they are bracing themselves for the response. Come on, we’re in Oklahoma. It’s different but it’s not that bad. Here’s the real scoop and I’ve condensed it to this:
At the end of June 2010, in the Tulsa listing area there were:
6,912 houses on the market (2009 – 6,037)
764 properties pending (2009 – 1,081)
YTD Closings- 5,346 (2009 – 5,136)
YTD Avg Sale Price $150,322 (2009 – $152,721)
9.0 months of inventory (2009 – 5.6 mos.)
Sellers are still selling. Buyers are still buying. If I were getting my house ready to go on the market, I would make sure that it was ready. By ready, my listing would stand out above the rest. Would I have to do some work? Yep. Would I have to spend a little money? Probably. Would it pay off in the long run? Absolutely. Check out the previous blogs about Staging Your Home to Sell. It makes a difference. I promise!
You Can’t Sell IT if You Can’t See IT
Preparing Your House to Sell – Final Tips
The largest investment of our lives is our home and by reading these blogs you are helping to protect and preserve your investment. As a Realtor and a homeowner for many, many years, I understand the importance of maximizing your ability to sell at the highest price possible. If you have followed my advice in these blogs and put in the time, I imagine you are pretty impressed with the results. These final tips will finish your preparation and you will be ready for a sign in your yard while you sit back with a cup of coffee and enjoy the quick results.
Curb appeal is important. Has your landscaping overgrown the house? Remember “you can’t sell it if you can’t see it!” Cut back all shrubs to window height that block light or view from windows. (If you are afraid they won’t bloom next year, remember you won’t be there, so don’t worry!) Kidding aside, seldom will trimming shrubs keep them from budding or blooming next year.
- Move all children’s toys to one are of the back yard.
- Clean and sweep paved driveways.
- Rake, weed or re-gravel driveways which are not concrete.
- In the backyard – remove any extra items from the yard, such as tools, piles of lumber, auto parts, etc.
Remember many blogs ago, the story I told about my listings that wouldn’t sell until they were staged? I have been using these tips now for years with exceptional success. I am a Realtor and I am available to help. You may reach me at 918-798-7271.
“The Way You Live in Your Home and the Way We Sell Your Home are Two Different Things!”
Sprucing Up the Exterior
Preparing Your House to Sell – Tips #12
In this age of internet listings and virtual tours, buyers will usually go through the process of elimination on line first, then the process of elimination through drive – bys. The first impression when a buyer drives up to a home is critical. Walk across the street from the property and think like a buyer. What do you see?
Take a hard look at the front door and trim. Give special attention to this because this is where buyers will get their first opportunity to make a close inspection of your home. Does it need repainting or staining? Repainting doors and trim will help make the house look crisp and in good condition. This is one of the least expensive things you can do to dress up a home. Regarding colors: if it goes on an Easter egg, it doesn’t go on your house. Drive through some new construction neighborhoods to get some ideas of what is popular at this time.
Sweep all decks, walks, porches and patios and keep them swept. Remove any moss from all decks, walks and patios. Decks should be pressure washed and stained or painted if they are in need of it. Reduce clutter on decks, porches and patios so that they look bigger. Get rid of old flowerpots, barbeques, charcoal, planters, toys, construction materials and excess furniture. If you have outdoor furniture create one simple “room setting” of clean furniture that will remind buyers of the usefulness of the space.
Clean all debris and moss from roof and gutters. If you know you need a new roof, address it now because it will definitely come up later.
Repair broken fences and paint if necessary.
Plants are like children – they grow up so fast! First they are little and cute, then they seem just right and all of a sudden they’re so big we hardly know how to take care of them! You can’t trim the kids, but you can trim your plants. If they need it, do it now.
Rake and weed flower beds. If possible spread new mulch to put a finishing touch on the landscape. Remove, and if needed replace all dead plants. Mow lawn and keep it mowed on a weekly basis during the growing season. Trim branches around roofline to prevent animals, insects, and foliage from getting on roof.
The final blog for the exterior of “Preparing Your House to Sell” is coming up so hang in there.
Getting the Closets Organized
Preparing Your House to Sell – Tips #10
Outgrown your house and need something bigger? Well, your buyers may have outgrown their current home and your house is a move up. With a little time and effort you can prepare your house to showcase its benefits and amenities such as spacious closets.
Make sure you can open the closet door freely without something falling out on a prospective buyer. Nesting baskets are a great way to store lots of stuff that you use regularly and don’t want to pack and store. They are inexpensive, can often be purchased at the Dollar store, Wal-Mart or Lowe’s, and will completely transform your cabinets and closets. I used lots of them when I put my personal house on the market and I am enjoying the organization of the nesting baskets still in my new home.
Remove all the stuff that sits on the closet floor like excess luggage, shoes, blankets, games, etc. Leave nothing at all on the floor of the closets. Arrange and fold all the linens and blankets to look like a shelf in a department store displaying their goods. If you have lots of bulky comforters and don’t want to pack and store them, you can purchase inexpensively those space bags that once filled; your vacuum will remove the air and squish the contents to a skinny little bag of goods that can easily fit in your closet or storage unit.
In my area, we don’t have many basements but we have some and they can be somewhat troublesome for people who aren’t accustomed to the nature of basements. Beware of smells, musty odors, and dampness. Do your best to alleviate problems by repairing and cleaning problem areas. Use a room de-humidifier to aid in removing the dampness and smell. If you use the basement for storage, condense the piles to one corner of one area of the basement. Repair cracks in ceilings and walls. Clear all drains.
Wow! You are so close to being done. I promise I will still talk about curb appeal so don’t miss that important part of “Preparing Your House to Sell”.
Jody Grubbs' Real Estate News 