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Posted by Ada Cimpeanu on 12/15/2019

Photo by Light And Dark Studio via Shutterstock

In a sellerís market, comparable sales and competition can drive up a homeís price. This is especially true in a sellerís market where offers from multiple buyers try to outbid each other. And, while this sounds like a fantastic deal for the seller, a low appraisal can kill the deal.

Many variables affect appraised values. Some of these include artificially inflated prices from seasonal activity, rising market values, foreclosures or short sales among the comparable properties, increased or decreased supply and demand, overlooked pending sales data, mistakes made by or inexperience of the evaluators, etc.

What do you do?

  • The seller can lower the price. While this is the least preferable by home sellers, if it means the deal goes through and if time is of the essence, itís certainly an option. The seller can offer this in exchange for the buyer paying some of the closing costs.
  • The buyer can increase their down payment. The lender typically cares about loan-to-value, so if the buyer can increase their cash in, you might save the deal.
  • A seller might offer to carry a second, approved mortgage on the difference.
  • Dispute the appraisal or order a new one. The seller can request a copy of the appraisal from the buyer. Then, you or the buyer can contact the lender and dispute the appraisal. Only the lender can require and insist on a new appraisal. Ask your agent to supply a list of recent comparable sales to justify your price and submit it to the buyerís underwriter for a review.

A well-written contract requires the seller to release back to the buyer any earnest money deposited at the time of the contract. You can then put your home back on the market. As long as the appraisal was not for an FHA loan, you can hope for a better appraisal next time. FHA loans connect appraisals to the property, so any new FHA buyer would end up with the same appraisal as the first buyer.

The best way to avoid this is to follow your professional real estate agentís advice when setting your homeís price. They follow the market trends, know the neighborhood, and have the pulse of what the market can bear.




Tags: home seller   appraisal   Buyer  
Categories: real estate  


Posted by Ada Cimpeanu on 12/8/2019

Photo by Athitat Shinagowin via Shutterstock

Youíll often hear it stated that paying rent is throwing money down the drain. As a motivation to buy a home, however, that might not be the best idea. A rule of thumb is that if you can purchase a home for fifteen times what you currently pay annually in rent, buying makes sense. In real numbers, if your rent is $1,500 a month, your annual rent is $18,000. Fifteen times that amount is $270,000. That means if you can buy a comparable home for around $270,000, it makes sense to buy rather than to rent because youíll break even in 15 years and will accrue equity beyond that.

But even if housing prices fit that scenario, what is your personal criteria?

Is renting throwing money away?

That depends. There are multiple rent vs. buy calculators online that allow you to plug in the variables that apply to your situation. The adage that itís always better to buy may not fit into your lifestyle, career goals or plans. Donít buy just because someone tells you that youíre tossing away your life savings. After all, if you have enough for a down payment, you can invest it in something more liquid than property.

But, buying is a fantastic idea if you love the community, see yourself living there for at least five years, and want to own your home.

There are some guidelines, however, to help you determine if you are ready. These require that you keep financial considerations separate.

  • Do you still have student loans? If so, determine the impact that more debt places not just on your pocketbook, but on your psyche. If having education debt stresses you out, adding more debt to that is not a solution. Instead, before you buy a home, work with a student debt counselor to see if you can make some headway on your loans.
  • Do you have an emergency fund? For some people, if they get a flat tire or the fuel pump goes out in the car, the burden of taking care of that emergency can throw all caution to the wind. Having an emergency fund of a minimum of $1000 for short-term emergencies (car repair, flight to a family funeral, etc.) and three to six months for long-term emergencies (extended illness, job loss) protects you from disasters lurking around every corner.
  • Can you set aside money for home maintenance? If you replace your rent one-to-one with a mortgage (even including taxes, PMI, and homeownerís insurance), you still need funds for regular home maintenance. Generally, youíll want to set aside about one percent of the cost of the house minimum for annual maintenance. If you buy your home for $300,000, youíll need to set aside an extra $250 a month (3% or $750 a month is better) to cover repairs, maintenance, and upkeep of your home.

The other questions you want to answer are: How secure is your job? Could you be moving within five years? Do you qualify for a good interest rate? Buying just to escape renting is never a promising idea. But if the answer to these questions leads you to believe homeownership is right for you, in the right location, and itís the right time, find the right real estate professional to help you get there.




Tags: buyer tips   renting   New Buyers  
Categories: Homebuyer  


Posted by Ada Cimpeanu on 12/1/2019

When youíre searching for a home to buy, youíll probably attend many different open houses. The open house is meant to help you get a feel for different properties. While you canít get to know all the ins and outs of a home in a short time, you can get an understanding of some of the best things (and not so great things) about a property. Below, youíll find some of the biggest warning signs that a property may not be all that it appears to be. 


Thereís A Lot Of Odor Masking Elements In Place


When you walk into an open house, you may get the smell of freshly baked cookies or a lovely candle. While these are great marketing techniques, they also can be a tactic to hide things. Perhaps there are some offensive odors in the house from mold, leaks, smoke, or mildew. You may not be prepared to deal with these kinds of problems once you move into a home. 


You Notice Glaring Issues


While the home inspection will reveal many problems that may be invisible to the casual observer, you should still be on the lookout for issues on the surface of the home during the open house. These issues can include cracks in the ceiling or walls, cracks in the floor, or even squeaky floor boards. If you happen to see patchy walls in the home, that could indicate that repairs have been made several times. Be alert for these potential problems.


Does The Home Look Well-Kept?


When you pull up in front of the home is the lawn trim? Does the home appear clean? While everyone would hope that a homeowner would clean up their property before an open house, small and big things like this can indicate a bigger problem. If the home is not cared for on the surface, how many other underlying maintenance issues are there in the home? Neglected regular maintenance can cause larger problems of all kinds in a home.


Strange Cosmetic Fixes


A freshly painted wall could be suspect of a big problem. Under the paint could be mold, cracks, or other issues. Some homeowners do put fresh paint on their walls before selling in order to give the home a neutral feel. However, you should be on the lookout for other signs of problems in the home.          


Channel Your Inner Detective


While you donít need to dig as deep into a home as a home inspector does, you should be on the lookout as you scan a home for the potential livability for you. Things like glaring cracks in the ceiling, or a strong odor of cigarette smoke could be signs of future problems living in the home. The open house is your time to find a home that fits you and your life, so make the most of the opportunity.  





Posted by Ada Cimpeanu on 11/24/2019

Photo by House Method on Unsplash

The size of your kitchen does not necessarily determine its functionality. What matters more is how you utilize the space you have. With long aisles and parallel counter spaces, galley kitchens are a great and efficient option. This design provides plenty of room for storage and preparation. Galley kitchens feature a central aisle with countertops, appliances, and cabinetry on either side. It is an excellent option for small kitchen spaces but also works well for mid-sized areas. Galley kitchens are built for efficiency and when well-conceived, can also help to control traffic flow in and out of the kitchen. If you wish to have your small kitchen remodeled, the galley design is one to consider.

The tips listed below will ensure you get the best from your galley kitchen design.

Storage

There are several storage options that can be incorporated into a galley kitchen. Because the footprint is narrow, youíll want to make use of vertical spaces. If you prefer to have more counter space, create symmetry with a design that utilizes counters and base cabinets on both sides. Include open shelving or glass-front cabinets above your counters for dishes and glasses. If storage is more important to you, consider using one wall for floor to ceiling cabinets and utilize the other wall for open shelving, and preparation space. 

Style

When it comes to styling this kitchen type, your creativity comes to play. The galley kitchen is a style that encourages minimalism, but donít be afraid to introduce interesting colors or materials. If you donít have much natural light, consider incorporating lighter colored materials and installing plenty of lighting options to brighten your work areas. If your space is especially narrow, selecting cabinetry that does not need knobs or pulls will save you visual space.

Seating

Because of its narrow layout, a galley kitchen design is not one that can accommodate a dining table and chairs. Incorporating a seating area can be a challenge. If you want to be social while you work around the kitchen, consider using an island as one side of the galley. This allows for counter height seating on the opposite side of your prep surface but doesnít interrupt the flow of your space.





Posted by Ada Cimpeanu on 11/10/2019

If you are preparing to sell your house, you need to be honest with yourself and others. That way, you can increase the likelihood of a fast, profitable home selling experience.

Ultimately, it pays to be an honest home seller for a number of reasons, including:

1. You can establish a competitive price for your house.

It is important to understand that what your house is worth today is unlikely to match what you paid for it, regardless of when you bought your home. Fortunately, an honest home seller is realistic about his or her house's value and can plan accordingly.

Generally, an honest home seller will allocate the necessary time and resources to conduct a home appraisal. Because with an appraisal report in hand, this home seller can establish a competitive price for his or her house based on actionable data.

2. You can identify home problems before a buyer does.

If a home seller tries to hide home problems from a buyer, the consequences could be significant. In fact, a seller may put a potential home sale in jeopardy if he or she fails to be forthright and honest with buyers from the get-go.

For example, consider what might happen if a buyer submits an offer on a house and discovers myriad home problems during an inspection. In this scenario, a buyer may ask the seller to perform various home repairs or request a price reduction. Or, a buyer may choose to walk away from a home sale altogether.

As a home seller, it helps to take an honest approach to inform potential buyers about the condition of a house. If a residence requires assorted repairs, a seller may want to complete these repairs before listing his or her residence.

Comparatively, a seller can always include information about a home's condition in a house listing. If a seller does so, he or she can help buyers make an informed decision about a possible home purchase.

3. You can avoid rash decisions throughout the home selling journey.

An honest home seller usually is calm, cool and collected throughout the home selling journey. This seller understands the pros and cons of his or her house, and as such, can take an informed, logical approach to make the best-possible decisions.

Perhaps most important, an honest home seller is unafraid to receive negative feedback about his or her house. As a result, this seller may be better equipped than others to avoid rash decisions during the home selling journey.

There are many great reasons why a home seller should strive to be honest at each stage of the home selling cycle. Of course, if you need extra help as you sell your house, you may want to hire a real estate agent as well.

Typically, a real estate agent will provide honest, unbiased home selling recommendations and suggestions. He or she will even help you get your house ready for the real estate market. And with this housing market professional's support, a home seller can move closer to achieving his or her desired results.