Seller

Stop Believing These 6 Common Pricing Myths When You Sell Your Home

When you put your home on the market, the one aspect that usually comes to mind is profit. Without a doubt, every seller’s main goal is to sell their home for the best possible price. However, in an effort to get the best deal possible, many sellers fall prey to myths about home pricing that don’t reflect the current real estate market.

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Setting an asking price for your home will never be a walk in the park. But coming up with an accurate number can give you the biggest advantage. It can mean the difference between quickly getting an offer and risking your home to sit on the market for months, losing the interest of many potential buyers.

So if you want to get the most out of your home sale, disregard these most common myths about pricing a home and start your journey with some realistic expectations!

 
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Many sellers think that getting a quick offer is an indication that they priced their house too low. They are contemplating whether they should have asked for more money or feeling that their realtor “gave their home away” because it was sold too quickly.

But here’s the reality: getting an offer (or offers!) in the first few days most likely means your home was priced accurately and competitively, which attracted multiple buyers. Your home has the right price on the right market that’s why you received multiple offers even in a short amount of time.


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After receiving an offer from the first showing, sellers may be hesitant to accept it, wondering if other potential buyers would be keen to cough up more money for their beloved home. This is another common assumption among many sellers: if they’re willing to wait long enough, a better offer will come. The thoughts of potential bidding wars could prompt them to be in a “no rush mode” when it comes to selling their home.

However, that’s not how real estate works most of the time. The longer your home stays on the market, the worse the offers could get. Or maybe you’d get none at all. This is because homes sell for the most money when they are on the market for less than 30 days. According to the NAR 2018 Profile of Home Buyers and Sellers, recently sold homes were on the market for a median of three weeks. When a home has taken so long to sell, buyers will start to wonder what is wrong with it. They may assume that it was priced too high, or that there are issues with the property itself.


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Be wary of using any home value estimate tools you find online. The numbers they give can be inaccurate since they have not assessed your home physically, and haven’t taken into consideration any of its special features and the prices of the surrounding properties. Many home estimates go above or under the home’s real market value. Keep in mind to always trust your realtor over your home’s estimates.

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Every seller’s goal is to get top dollar for their home. However, overpricing your home thinking that you could accept a lower offer, later on, will never be a good strategy. The worst is it could just leave you empty-handed, especially when buyers start to wonder what’s wrong with your property. Trying to price it too high, thinking that it will create a lot of negotiating room will get you nowhere. Instead, buyers and their agents will steer clear from your property and will choose a listing that has a reasonable price.

Your realtor knows that negotiation is very important in real estate, so trust their experience in this matter. They will price your home appropriately from the beginning but will make sure there’s enough wiggle room so you can still get what you want out of the sale.


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You may have remodeled your kitchen, added a master bedroom, or replaced your garage door. But don’t think that the money you spent making these renovations will be recouped once you sell. Don’t set your expectations too high just because the potential new owners will be enjoying all the hard work you put into your property. Keep in mind that while some changes might see some return on investment, you won’t recoup the whole amount. Likewise, there are renovations that can give you profit, and there are those that can even hurt your home sale.

To get an idea of which upgrades yield the biggest return on investment, check out the 2018 ‘Cost Versus Value’ report by Remodeling Magazine. For instance, you can expect to get back only 56% of the costs of an upscale bathroom remodel. Meanwhile, the projects with the biggest return include a garage door and entry door replacement.


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Real estate agents are being paid a percentage of the selling price of the home. However, this commission will still be divided up between his or her broker and the buyer’s agent, leaving the agent with less money in his or her pocket. Even with weeks or months of showings and marketing expenses, no agent would want to lose a potential sale just for the sake of a few hundred dollars. Trust your realtor because they’re the one who knows the market well, and the price given to your home was based on extensive market research.

4 Reasons Why Homeowners Decide To Sell Their Homes “As Is”

For starters, what exactly is “as is home”?

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Selling a home “as is” means sellers put up their homes on the market without doing any repairs to improve its current condition. Rather than putting tons of money, time, and effort to fix the issues in their home, they put it up for listing as is, often for a lower asking price to attract multiple offers.

Maybe you’re thinking, “Why would anyone sell their home as is?” After all, there’s no better way to increase a home’s value and sell for top dollars than making repairs and staging your home nicely.

Here we explain some of the most common reasons why sellers might have to do it:

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1. They’re in a tight financial situation so they couldn’t afford to do any repairs.

Sometimes homeowners would like to sell, but they don’t have the funds to make any repairs or tackle home improvement projects to increase their home’s value. In this situation, they may have no other choice but to sell as-is. There are also instances where a homeowner might have finished doing maintenance work on the home’s exterior but have no money left to spend on interior improvements. There are also those who, well, just want to save tons of money on repairs.

Since making repairs and staging are just some costs associated with putting a home for sale, it’s easier to sell as is for those who are in a tough financial situation because they can skip those processes.


2. They want a cash offer.

Many people sell their houses as is because they want to attract cash buyers. Many of these buyers are local investors and flipping companies who purchase fixer-uppers or ugly homes and renovate them. Likewise, sellers generally love a cash offer because it helps expedite the home sale process. They get paid faster and use the quick cash to settle debts or spend it on other expenses.

Investment companies help distressed owners sell as is by purchasing with cash. The only downside is that you cannot expect them to pay anywhere close to a home’s market value.


3. They want to avoid a lot of stress after inheriting a property or going through a divorce.

One option for people to offload a house they’ve inherited after a parent or loved one passed away is to sell it as is. It might make sense if you need to sell with your siblings and all of you live far away to oversee any home improvements before putting it on the market. It can also help prevent a major headache since they only have to split the profits from the home sale, avoiding a family feud.

Another common scenario is if someone had just “won” a house after a painful divorce but found out they couldn’t afford to pay for taxes, utilities, and upkeep costs anymore and would rather spend the money somewhere else. In this situation, it’s better to sell the property in its current condition, especially if it can help with moving on into a new life.


4. They want to sell quickly.

Making repairs and doing home improvements may sound great, but the truth is they are also too time-consuming to deal with. It takes time to fix every minor issue, make some updates, and even to stage your home. They can prolong the time you have to wait before you can put your house up for sale. Homeowners who want to sell their homes quickly put it up on the market as is. It also helps speed up the transaction if they get a cash buyer or work with a reputable investment company.

 

A few things to remember when selling a home in its current condition:

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  • You still need to disclose known issues and defects. Selling a property as is does not exclude you from disclosing known defects and issues. It remains your legal obligation to talk about the home’s existing problems and truthfully answer any question from a buyer. The only exception is if you’ve inherited the property and you aren’t aware of its general condition.

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  • It doesn’t mean that the buyer will skip the home inspection. Although you clearly stated your intentions when selling the home, it doesn’t mean that a typical buyer won’t request a home inspection that will uncover any issues. Regardless, most mortgage lenders will require a home to be free from any health or safety issues before they can lend money to it.

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  • Make sure you’ve explored all other options before coming up with this decision. Putting your home up for sale can put a lot of stress and pressure on any homeowner. If you are considering selling as is, you may want to get help from a realtor who has experience in this kind of transaction before making a final decision. Maybe you can still come up with other ways to continue with the home sale without selling as is or adopt a creative sales plan that will suit your situation.

6 Things to Remember When Choosing Paint Colors for Your Home

Putting on a fresh coat of paint is one of the simplest and cheapest ways to transform the look of a home. However, with the endless colors and shades to choose from, deciding on a paint color can be the most difficult part.

In 2019, we bid farewell to Ultra Violet and say hello to Living Coral as the Pantone Color of the Year. But don’t just go straight to the paint store to buy several cans of this coral hue. Choosing the perfect color for your home can be tricky and formula guides and color swatches won’t be helpful if you don’t take into consideration some factors involved in your home.

So whether you’re looking to sell your home or simply give it a makeover, keep your paint obsession on hold until you read these essential suggestions first:

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1. Pay attention to the room’s lighting.

The light source in the room you’re painting can greatly affect the way a color appears. A certain color may appear different in a room filled with sunshine, compared to a room that’s lit with fluorescent bulbs. So don’t forget to take lighting into consideration when selecting colors for a specific space.

2. Take note of the color’s undertone and the paint’s finish.

Despite having endless options, remember that all colors have undertones. And according to TheSpruce.com, “undertones are the secret code of every color.” Some undertones are not easily visible unless paired with other colors. The floor, counter surfaces, and even lighting can all bring out surprising undertones from your painted walls, so make sure that the items or the lighting in the room didn’t bring out an undertone that you weren’t intending to.

Likewise, paint colors have varying sheens and finishes, like a matte vs semi-gloss paint. Matte finishes can be cheaper but are less durable, while high-gloss can be easier to clean.

3. Choose paint colors that will complement the fixed furnishings in the room.

Take into consideration the fixed furnishings in a room — the flooring, wood finishes, countertops, wallpaper, tile, or built-in cabinets — and choose colors that will enhance these materials. As much as possible, you’d want your wall color to complement the existing color scheme of the cabinetry and other furnishings, especially in the kitchen and bathroom.

4. Keep in mind the character of your neighborhood.

Putting a fresh coat of paint on your house’s exterior can give it an instant makeover and spruce up curb appeal, which can be a huge selling point for your home. But when choosing a color for your facade, keep in mind the character of the neighborhood, especially when you’re living in an HOA community. Make sure the color of the exterior will blend well with the landscape surrounding your property and the neighborhood you’re in.

5. Never pick a color from a computer screen.

Have you experienced receiving an online order, like a sweatshirt or a dress, that turned out to be a different color than what you saw on the screen when you ordered it? You can blame the computer screen, as colors always show up differently in monitor displays. So if you’re choosing paint colors for your home, better not rely on what you see on the computer. Instead, get color chips from the hardware or paint store to start your search and narrow down your choices.

6. If you’re looking to sell your home, choose paint colors that will give you the best bang for your buck.

According to Zillow’s 2018 Color Report, the colors you choose to decorate your home with can have a powerful impact on the home’s sale price. Their Paint Color Analysis showed that the rules and results vary depending on the room type. Although it may seem like a tedious job to paint your house to get it ready to sell, the effort may be worth it.

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Here are some of the best paint colors to help sell your home:

  • The Blues

Blue proves to be the color of royalty, especially when your house with its different shades of blue rakes in more cash than you expected.

- A navy blue front door could add as much as $1,514 to the sales price of your home and painting your front door is one of the cheapest projects you can do to upgrade the look of your home.

- A light pale blue to a periwinkle blue paint could do well for bathrooms and increases the average selling price of a home by $2,786.

- Cerulean or cadet blue is a great choice for bedrooms!

  • Gray and Beige

“Greige,” or a combination of gray and beige, is a trendy color that is the offspring of light gray and warm beige. It’s a neutral color that will work well with most types of furniture, textile, and other furnishings. It helps create a modern-day classic feel in any home and is also a safe color when it comes to staging. Zillow reports that greige-colored homes saw as much as $3,496 more than the expected price of the home, even outselling their brown or tan counterparts.

  • Earth Tones and neutral colors

Don’t neglect the neutral colors and don’t even think that they’re boring or won’t help sell your home. In fact, Zillow believes that homes with neutral colors simply have wider appeal for minimalists and maximalists alike, and it could be a signal that a home has other desirable features. Homes with light taupe living rooms, particularly with tan, peach or pink undertones, sell for more than what is expected.

  • The Good Ol’ Black

You can accentuate the color black when you use it for your front door, or opt for black kitchen islands with white cabinets.

 

The colors you want to avoid (as much as possible)

The colors that could be harmful to your home’s sale price include:

  • Yellow - Specifically for the kitchen. Homes in this color reportedly sell for $3,408 less than expected, according to the Zillow report. Even homes with brown walls with yellow undertones sell less than expected.
  • Red - Especially in the dining room and kitchen.
  • White - Surprisingly, bathrooms painted in plain white sold for $4,035 less on average.


The Pet Owner’s Guide To Selling A Home: 5 Things To Do To Prepare Your Property

We love our pets, there’s no doubt about it. They’re a part of our family, of our home. However, once you’ve put your house on the market, you need to understand that not all potential buyers would want to see your pets while they are touring your property. In fact, seeing your pets or any evidence of them can make them wince and possibly turn them away, even if they are pet lovers themselves.

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If you have a dog, cat, or any other pets, here are some extra steps you need to take to prepare your home for sale:

1. Give them a holiday.

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The best way to keep your home clean and get it ready for showings is to temporarily relocate your pets. If you can, arrange to let them stay with a trusted family member or friend for the meantime. This will give you the chance to meticulously clean your house and eliminate all signs of animals.

Likewise, buyers (and your realtor) will have an easier time looking at your property during showings since there won’t be any barking or purring in the background. Remember that you won’t be at home when people tour your home, so if your pets can also get out for a little while, the better.

 

2. Eliminate pet odors.

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What’s one of the biggest deal-breakers among buyers? Funky smells and pet odors, by the way, are one of the main culprits. Removing the scent your animals leave behind can be your biggest challenge when preparing your home for sale. It’s not as easy as hiding away your pet’s accessories or throwing out their litter box. You don’t want buyers to be welcomed by your living room’s magnificent carpet, only to find out that it reeks of urine. Uh-oh.

Because you’re already accustomed to the odors in your home, it might be harder to realize how your property really smells. Try using a pet odor remover or baking soda to dispel all traces of your pet’s urine. For animals like hamsters, guinea pigs, turtles, snakes, and fish, clean their cages or tanks frequently. If you need to, you can hire a professional cleaning service to clean your carpets and other hard-to-reach places. Then, bring in a friend or your realtor to do a whiff test to ensure your home smells fresh and inviting.

 

3. Get rid of pet hair and stains.

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Aside from the smell, tufts of fur can get stuck to your upholstered furniture and even on floors. This will not only make your home look messy, but it can also trigger allergies among your potential buyers. Make sure that before each showing, you’ve dusted and vacuumed your entire home to remove any signs of your furbaby’s hair.

The same goes for any stains on the carpets and rugs. Take note of any discoloration and fix them, if you can. If not, replace your rugs and deal with the tougher stains on your floors and walls using a commercial-grade cleaner and disinfectant.

 

4. Hide their stuff and accessories.

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Remember that your pet’s accessories are not part of your home staging, no matter how adorable they look (Yes, even those cute socks and holiday costumes!). Even potential buyers who are pet lovers won’t be impressed and will likely see them as clutter. So those collars, leashes, toys, food, food bowls, and pet beds need to be put away— make sure to clean them before stashing them away in a cupboard or closet.
 

5. Repair any damage caused by your pets.

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Take the time to fix any significant damage in your home that was caused by your dog or cat’s constant chewing and biting. It may cost you money, especially if the damage to your furniture, carpets, and hardwood flooring is extensive. However, remember that the amount you’ve spent paying for repairs and cleaning may be worth it once you see that many potential buyers want your home and your home eventually sells for top dollar.
 

Bottom Line

Selling a home when you have pets won’t be any harder as long as you know how to properly prepare your property to get offers from potential buyers. The best way to manage it is by informing your real estate agent about your pet situation so he or she will know how to handle every little detail to help sell your home.

Renovating Without A Permit? Here Are 7 Reasons Why It’s A Big No-No

A home renovation is a great way to add value and satisfaction to your beloved abode. After all, who doesn’t love stepping into a new room, a finished basement, or a renovated bathroom?

However, before "undertaking any of the character-building, heavy-lifting labor" there’s the time-consuming and costly process of obtaining renovation permits. How long a permit can be approved depends on the scale of the project. For smaller renovations, it may take as little as 24 hours. Expectedly, larger projects might take longer so homeowners may have a bit of a wait on their hands. So who says it isn’t tempting to save a bit of time and money skipping that step entirely and pushing ahead with your planned renovations?

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Well if you do, prepare to face some terrible consequences. Unpermitted work refers to any modifications made to the home that should have been permitted but were not.

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Aside from a sunken property value, your biggest risk may lie in the job itself. Without the proper permits, there's no guarantee that your contractors will execute a professional job. The results of this could be disastrous. For instance, if you sell, those substandard improvements might cause you trouble during a home inspection.


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It’s a nightmare to think about, but it means big trouble if your municipality or city office finds out you’re renovating sans-permits. Some cities will only inspect, but some will issue a stop-work order and may even slap a hefty fine on both the homeowner and contractor. Worse still, the city could order a teardown of the entire project with a subsequent order to redo any work done with the proper permits finally in hand.


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Another area of concern is that any unpermitted additions may not be covered, and even violate your insurance policy. It is especially concerning if an accident or disaster occurred in that part of your home. If there’s been a house fire caused by faulty wiring due to poor electrical work, or if someone fell and seriously injured themselves you could be facing a costly nightmare.

Filing an insurance claim for a scenario like this could be futile; your policy probably isn't going to cover the issue, additionally, you may be heading towards a complicated, costly lawsuit.


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As we mentioned earlier, failing to get permits could cause the value of your home to drop. Why? For starters, real estate information in your local municipality needs to be up to date to help maintain home values and stay current with taxes and insurance. Renovation permits will help ensure that your property keeps up with the latest health and safety standards.

When you sell, an appraiser will assess your home in order to gauge its objective market value. Any unpermitted work brought into concern because of safety defects could depreciate your home’s value. Even worse, you could be fined with the appraiser also demanding that the work be removed and redone—this time with proper permits secured. Likewise, any room additions not up to code will be excluded in the square footage stated in your “updated”  home listing. That means buyers will think your home is smaller than it really is.


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Notwithstanding the huge laundry list of features and amenities potential buyers look for in a new home, above all is a safe and secure place. Should they discover the house they’re looking at has undergone an unpermitted structural remodel, it can imbue them with uncertainty, causing a loss of confidence in your property, and resulting in some serious purchase reconsiderations.

The buyer might think you hired someone unqualified to do the work because you didn’t even bother getting permits. They may feel that the completed renovation is unsafe, leaving them clouded with worry about long-term problems down the line. A good buyer’s agent is going to make sure that permits were pulled on any significant additions done to the property, so there’s no escaping the consequences. However, if permits were secured for the renovations, concerns like these all go out the window, with the buyer immediately given peace of mind and assurance, enticing them to make a good and reasonable offer.


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Well, it might be overreacting, but not getting permits for a significant modification or addition can stop a home sale. Wait, what?

You heard right! Once your home has entered the market, a subsequent home inspection and appraisal will follow as is required by the selling process. The inspector will ensure that buyers know exactly what they’re getting while the appraiser will look to protect the interests of the bank or lending institution, ensuring proper standards are met before they approve the loan. Both professionals can easily request public records on your home, including the permits (or lack thereof) for any improvements made, assuring that the property is not only habitable but in good working order.

It could cost you the home sale if the bank doesn’t want to fund the loan because the appraiser’s requests were not met, or if the potential buyer backed out due to personal uncertainty with regard to property safety and structural integrity.  


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Admittedly, securing a renovation permit can be a hassle. You have to provide your local municipality with your detailed plans for the remodel, as well as additional documentation if needed. Moreover, permits come with corresponding fees.

However, proceeding to push through with a renovation without proper paperwork can lead to dire consequences, as discussed above. The commonalities shared by those risks are time wasted, money squandered and maybe a forthcoming lawsuit. Not to mention, most likely you’d also be required to undo all the work done, taking you and your home back to square one on what could have been a great addition.

 

Tips:

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  • Know what renovations require permits. Any substantial, structural, or significant remodel requires the homeowner or seller to get a permit. These major renovations could include electrical or plumbing work, basement refurbishment, or room addition. However, if you are only updating or sprucing up an existing space, then permits might not be necessary.

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  • Consult with your city building committee. However, building codes and the legal requirements to pull a permit vary with every city. With this in mind, it’s important to check with your local municipality or city building code committee to make sure there won’t be any problem before you tear down a wall or remodel anything.

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  • Hire only licensed and reputable contractors. You can rest assured that they won’t work without securing proper permits, giving you peace of mind that their work will be up to code.

Why Do Home Sales Fall Through? 5 Common Reasons Why The Seller or Buyer Walk Away

Why do home sales fall through? Why is it that sometimes, the buyer or the seller walk away from a home sale, causing it to fall apart and for the home to return to the market?

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Let’s rewind: You’ve put your home on the market and have been doing everything to prepare your home for upcoming showings. An offer (or even multiple offers) comes in and you accept it. Both parties sign a real estate purchase contract and hope everything goes as planned. You’re definitely a step closer to a closed sale.

But then, life throws a curveball — an issue comes up that turns out to be a major deal-breaker, causing the sale to fall through. Here are some examples:

 
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An inspection could reveal serious flaws affecting the home sale. If major defects, like structural issues, wet basements, leaky roofs, high radon levels, or mold were discovered in the home, it could be a major deal-breaker for the buyer.

These issues could cause the buyer to panic and open further negotiation on the price, or they could ask for a credit or relief from the seller as compensation. If the buyer included a home inspection contingency in their offer, it also allows them to renegotiate the price or walk away due to those issues.

The seller, in return, has three options: 1.) They can fix the problems by hiring contractors; 2.) They can credit  the buyer so they can make the fixes themselves; or, 3.) They can reduce the selling price of the property.

The problem comes if the seller refuses to do any of these. The buyer can then cancel the home sale and simply walk away, although they may lose the earnest deposit they made when signing the contract.

How to prevent this:

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Sellers should never underestimate the power of a home inspection. Especially for older homes, they should hire a home inspector prior to placing their house on the market. The “pre-listing inspection” will help them address any issues the house may have and give them time to fix them. Once you put your property on the market, and potential buyers order an inspection, you will know what to expect and be able to negotiate more easily.

 
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There are cases where a buyer puts in an offer with the condition that they need to sell their current home before they can purchase a new one. They may include it as a home sale contingency, which makes the contract contingent upon the success of selling their own home within a specific time frame. Not all people can afford to handle two mortgage payments at once. The contingent offer will give them a set number of days to sell their current home.

However, if for any reason, their home doesn’t sell within the timeframe, it could cause delays with your home sale or cause it to fall apart. You may be left searching for another buyer or having to proceed with a backup offer and begin a new transaction all over again.

How to prevent this:

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Home sale contingencies can be very risky for you as a seller as it can cause the home sale to fall apart. You can avoid this by prioritizing buyers who don’t need to rely on the sale of their current home to proceed with the transaction. If possible, reject an offer with a home sale contingency and choose another buyer who loves your home and doesn’t need a contingency in order to make the purchase.

 
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Your buyer has been pre-approved; you’ve agreed on a final purchase price; you’ve both signed the contract. So far, everything is going great—until the buyer just gets rejected for a mortgage.

Keep in mind that a mortgage is not guaranteed until the buyer has signed a final agreement with the lender. While waiting for the mortgage to close, buyers should avoid making significant financial changes, such as taking out a new loan for a car, changing or losing a job, etc. These changes could affect their debt-to-income ratio, which may make them ineligible for the mortgage loan for which they originally applied. Once the buyer’s financing falls through, the pending home sale will go back to active and the transaction falls out of escrow.

How to prevent this:

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To ensure that the sale won’t experience any hurdles related to the buyer’s financing, it’s best to accept offers from buyers who already have a mortgage pre-approval. If they are pre-approved, they are less likely to be rejected for a mortgage loan. This means they can get the financing they need to close on the home.

With the help of your listing agent, you can request that buyers be pre-approved and only enter into a contract with a serious and qualified buyer. The only exception is when the buyer wants to make a cash purchase. In this case, there won’t be any financing contingency to deal with.

 
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Buyers who apply for a mortgage will be asked by their lender to pay for an appraisal of the property. Unfortunately, sometimes the home appraisal comes in at less than the asking price. This can be a huge deal breaker to buyers because banks will only lend them the appraised value of the home, and not all buyers can afford to pay the difference. This situation is common in a seller’s market where there’s limited housing inventory and the rampant bidding wars cause prices to go beyond the normal home value.

If this situation occurs, the buyer and seller have a few options. The buyer can order another appraisal from a new professional. If not, they will have to pay the difference in cash. However, not all buyers have the extra amount to bring to the table. They may also ask the seller to reduce the sale price so it’s more in line with the appraisal. Sellers need to be prepared for this negotiation.  The seller can attempt to justify their own appraisal, with comparables in the area, to prove their higher asking price.

However, if both parties cannot reach an agreeable solution, the buyer can walk away, and the pending sale will most likely fall through.

How to prevent this:

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To avoid this situation, it’s best to list your home with a fair and accurate asking price. Consult with your real estate agent so you can come up with an asking price based on comparable home sales in your neighborhood.  

 
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Buyer’s remorse or “cold feet” is real. It’s when the buyer backs out of a deal at the last minute after they realize that they don’t want to buy the home. It happens to both first-time and repeat buyers. After all, buying a home is a huge financial decision and is far from simple.

Once a buyer places an offer, he or she is legally bound. However, buyers can get scared or overwhelmed with the difficulties of the process. Once they realize they don’t want to continue with their purchase, they will do anything they can to get out of it, whether it be contingencies stated in their offer or loopholes in the contract.  

When this happens, the seller is left in a bad position. This is why the earnest deposit is important. This deposit, which is typically 1 percent of the home’s final sale price, is made when the buyer signs the purchase contract. It serves as protection for the seller in case the buyer changes their mind. If the buyer chooses to walk away from the deal due to a change of heart, they will lose their deposit money to the seller.

However, it’s still a heart-breaking situation for the seller because they now need to put their home back on the market and start from scratch.

How to prevent this:

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While this issue depends entirely on the buyer and there isn’t much you can do as the seller, there are ways you can avoid it. With the help of your agent, make sure that there are no undisclosed points in the contract that a buyer can use to make their offer null and void. Also, in the case of multiple offers, favor a buyer whose offer has fewer contingencies and is confident enough to proceed with the purchase.

For buyers, especially first-time home buyers, get the help of an experienced real estate agent who can walk you through the real estate process and eliminate any misconceptions you have about buying a home. Realtors can also provide counseling if they notice any signs of cold feet from their client.

 

Of course, there are other reasons a home sale could fall through that are out of the seller’s control. Regardless, it can be very frustrating and time-consuming when you have to start from square one and put your house back on the market. Whether you are the seller or the buyer, it’s important to know and understand these deal-breakers so you can actively prepare and attempt to avoid them as much as possible.

Notice Of Intent to Foreclose: Know Your Options

As a homeowner, there’s an f-word that is avoided as much as possible. Even though we don’t want to say it we have to talk about it. Why? Because like most problems, that’s how it’s handled. So say it with us, foreclosure.

Most of the time, when people find out that their dream house is facing foreclosure, their world stops. No one buys a house and puts in all the effort into making it a home only to one day realize that it will be taken away from them. Getting a Notice of Foreclosure is something that people dread, and even ignore in the hopes that the problem will go away.

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Ignoring Your Foreclosure Notice

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What happens if you don’t respond to the notice of intent for foreclosure?

When you receive a notice of foreclosure, the best thing to do is take charge. Getting a notice of foreclosure doesn’t mean that the world has stopped because there are many options for you!

Even when you get the notice, you can still avoid having foreclosure and bankruptcy on your record. So, to answer the question, ignoring your foreclosure notice will only limit your options and ultimately lead to losing your home.

If you’re reading this, and you still haven’t received a notice of foreclosure—in which case you’re at the stage of dreading it—what can you do?

 

Foreclosure Avoidance Plan

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Banks offer Foreclosure Avoidance Plans for those who want to be extra-sure about their home loans.

Always consult with your lender about this first. It will seem like a fair deal, but don’t forget that this is actually an additional loan. So now, you’re paying for your mortgage and an additional foreclosure plan.

If this is something you can handle, then by all means, go for it!  If you’d rather work on your primary loan before adding another one into the equation, it’s also okay not to enter into a foreclosure plan.

 

Filing for Bankruptcy

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What if you just totally forget the foreclosure of your house, and file for bankruptcy instead?

The good news is, yes, you can do that. Your foreclosure will be curbed if you do this. What happens when you file for bankruptcy is that your lender will not be able to collect the debt from you. The bad news is, courts cannot discharge secured debts that include mortgage payments.

What happens here is that since you are filing for bankruptcy, you don’t have to pay for your mortgages yet.  However, as soon as your bankruptcy process is complete, your lenders will definitely be back for your debt.

In cases like this, homeowners usually struggle with paying for their mortgages after filing in the courts. The worst part is that, most times, these homeowners end up with not just a bankruptcy but also a foreclosure on their record.

 

Your Financial Status

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Let’s say you don’t go with bankruptcy and are looking at simply foreclosing your home. How does this affect your financial status?

Your foreclosure report will be on your record for seven years.  Not only that, after those seven years, you may also have to write a report to three major credit agencies to have the foreclosure removed from your record.

Although lenders have been more lenient over recent years, those who are approved for new loans, and even credit lines, have to pay higher interest rates. You can’t really blame them, though. They see those who have a record of foreclosure, with or without bankruptcy, as more of a liability than those who have a clean record.

 

You’re Not Alone

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Yes, getting a Foreclosure Notice is something you might have never thought would happen to you. It has been found that this has actually become more common recently.

A 2013 study found that over 4.1 million foreclosures were completed in the United States during September 2008-December 2012. This is quite a big number and does not even include those who avoided foreclosure through some of the methods mentioned above, those who opted to sell their homes, or those who found ways to work things out with their lenders.

7 Reasons You’ll Love Selling Your Home in the Spring

Ah, spring! When the trees blossom, the lovely tulips and daffodils bloom, and everyone’s mood brightens. But aside from our daily dose of sunshine during spring, we also see the high season for real estate. As the temperature rises, the housing market starts to heat up.  Even in areas where the weather is great all year long, spring remains the most active time for house buyers and sellers alike.

While there are plenty of reasons to consider selling in the spring, here’s a few examples as to why it’s so worthwhile:

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1. You can show a better-looking home.

Unlike selling in the colder months, which can be stressful because of the snow and harsh weather, you can go to greater lengths in spring to prepare your home for sale. If you list your home in the spring, you can take advantage of the warmer weather and elevate your home’s curb appeal.

Show your home at its best to draw the attention of potential buyers. Maximize your curb appeal by cleaning the walkways, strategically placing colorful plants and flower boxes, maintaining the lawn, and making it as green and lush as possible. Allowing the natural sunshine to stream through the windows of your home helps showcase it in its best light. Additionally, don’t forget to address parts of your home that are in need of repair or upkeep, especially if you haven’t done annual maintenance yet.

 

2. The longer days and better weather make it easier for buyers to go looking for homes.

When the clocks sprang forward in March, the days became longer. More daylight hours means more potential buyers can view your home. Likewise, the good weather gives people a boost to go outside and search for the picture-perfect home just like yours. Unlike home shopping in winter, where buyers need to drive through crappy weather in their soggy boots just to visit an open house, springtime brings in a fresh pool of potential buyers who’ve done their homework and want to use the longer days wisely. This improves your odds of landing a desirable offer for your home.

 

3. It’s a perfect time for families who want to move before the new school year.

Many home buyers with families are looking to move before the summer and the start of a new school year. This way, their children will still have a couple of months to get settled in their new neighborhood. If you put your home on the market early enough in the spring, your pool of buyers won’t have the same sense of urgency seen in summer or winter sales. Parents who buy in the spring can move during the summer, avoiding juggling their time between school pickup and packing up their stuff to get ready for their new home.

 

4. The buyer’s demand is higher and could spark bidding wars.

It’s no surprise that the months of March, April, and May are the best months for sellers to list their homes as many people are ready to enter the housing market to purchase. More buyers means more potential offers. Sellers can even expect to receive multiple offers, often sparking bidding wars. Buyers will always be competing for homes, especially if the home is in a good location and is listed at a reasonable price. If a bidding war occurs, the cost of the house is most likely to increase, putting the seller in a stronger position to receive more money for the home.

In those months, there’s also a greater chance that you’ll encounter an all-cash offer. This could speed up the entire home selling process. A cash buyer won’t have to rely on mortgage financing or on the sale of their current home, the so-called contingencies, in order to close the deal.

 

5. Higher home valuation

Since prices tend to be higher and more homes are being sold this season, the data for comparable homes that were recently sold in your neighborhood can also work in your favor. Your agent will have access to more of these comps when setting a price for your home. Likewise, when your home’s value is assessed by an appraiser, he or she will look at these comps, so your house is more likely to pass the appraisal if you’re selling it at fair market value.

 

6. You can be a bit more selective about who you sell your home to.

With more people getting into the market, you can afford to choose who you sell your home to. You don’t have to sell your house to the first buyer that gives you an offer, and you can stay firm on your price. The increase in demand affords you the opportunity to receive your asking price and close on the offer with which you are most comfortable. You can also decide whether to sell to an individual owner, joint owners, or even corporate buyers.

 

7. It’s also easier for you to move.

Even though your primary goal is to sell your home, chances are you are also planning to buy and move to a new home yourself. Since entering a real estate transaction can be stressful (not to mention chaotic), it’s another good reason why spring is the best time for you to sell. The weather is more convenient, you can take advantage of the longer days to accommodate home showings and also do your own house-hunting. There’s a greater chance you can sell your home quickly and for a higher price due to the higher demand in the spring.

How To Find The Best Agent For A Short Sale

A short sale transaction is different from the usual home buying process. It involves more waiting time, and more leg work for your agent. Due to the rise of short sale properties on the market, training companies see it as an opportunity to train agents specifically in this area, giving them certification upon completion. Although it’s a plus to have your agent be trained in short sales, it’s better that they have actual experience doing the work. Here are some pointers on short sales, and the qualities you should seek when hiring an agent for this transaction.

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What is a short sale?

If you’ve come across properties that are priced below the usual market value, those properties are most likely a short sale. A short sale is when a property is sold for less than its unsettled mortgage. The value of the properties put up for a short sale has usually dropped by 20% or more.

How does a short sale work?

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If a homeowner is in financial strife and there is not enough equity in the home to pay off the mortgage after paying for the costs of sale, they may consider a short sale. A short sale allows homeowners to avoid incurring a bad record of foreclosure on their credit rating. To do so, they must present documents that support their claim of inability to pay off their remaining mortgage balance to their lender. These documents are subject to the approval of the lender before the house can officially be put up for sale.

A prospective buyer will have to make an offer to the seller, and also to the lender, and wait for their short sale approval letter.

 

As a home buyer, what are the advantages and disadvantages of buying a short sale?

Advantages:

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  • It’s cheaper than the usual house prices in the market - The last thing that the bank/lender and the homeowner want is for the house to remain for too long on the market, so they price it low to attract buyers.

  • Less competition with fellow buyers – Most buyers are not prepared to wait, and since the process of buying a short sale can take time, this trims down the number of prospective buyers that can make an offer on the property.

 

Disadvantages:

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  • The process is long – Processing the escrow is a long haul, and the approval of your offer is passed on from the seller to the lender.

  • You may need to pay costs that are not included in the selling price – Included in these costs are the closing costs, which the lender will not agree to split. There may be additional costs as well.

  • You buy the house as is – Contrary to the norm of buying a property and asking for a decrease in price based on necessary repairs, price reductions for a short sale will usually be declined.. You can counteract this by including contingencies on home damage and repair on your purchase contract.

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  • You may need to pay part of the agent’s commission – It’s the lender who calls the shots on commissions for the agents in a short sale transaction. They typically pay more to the seller’s agent. Buyer’s agents know this is the case, and may request a higher commission be included in the buyer’s brokerage agreement.

 

What agent qualities should I look for when deciding to buy a short sale home?

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  • They’ve handled short sales before - And to be exact, an agent who’s not only handled but closed a short sale. If they’ve closed a handful, that would be even more ideal because that means they know the necessary (and tedious!) legwork short sale transactions require. They could also acquaint you with lawyers to aid you in the negotiation process.

  • Ability to explain the whole process of a short sale to you in a comprehensible manner – Have them explain to you all the legwork and necessary measures involved in a short sale transaction. That way, you are able to prepare what needs to be done, and ascertain whether they have enough knowledge to handle the transaction.

  • They have a trained eye for spotting red flags – An agent with a good amount of experience in short sales can easily detect if there are possible legal or tax consequences. Once they spot something fishy in the transaction, they can direct you to consult with your hired attorney on how to address the issue.

  • They’re knowledgeable on lenders and banks –The lengthy part of the short sale process is really at the bank, and the agent will need to call for regular updates. An agent who has closed a lot of short sales will know how the lenders/banks fare in the process. This can shorten the process significantly, as there would be no guessing game on your side of the equation. Your agent would already know how to strategize in order to expedite the process and make it as smooth as possible.

Should You Sell or Buy A Home in Winter? Here’s Why the Colder Climate Might Work in Your Favor

During the spring and summer months, bidding wars are rampant, there’s fierce competition, and a large pool of buyers are looking to move before the school year begins.

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But in winter, especially in colder climates when everything is covered in snow, sellers and buyers alike can also take advantage of the season to score a good deal on real estate. Experts say that the idea that homes are very tough to sell or buy in the winter might be a myth. When temperatures drop, the market could be full of eager sellers and serious buyers who are both looking to score a cold, sweet deal.

Advantages for Sellers

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You have less competition

Since there are fewer homes on the market, you have less competition from other sellers. The low inventory creates increased competition among buyers, which generally result in higher sale prices. This is why winter can also be an ideal time to sell your home.

You will show your home to a pool of serious buyers

When you put your home in the market during the winter months, there’s a greater chance you’ll attract a pool of real buyers looking to purchase and not those window shoppers who are just curious about the house. These serious buyers want to take advantage of the less competitive market and don’t want to wait until spring to get their hands on their ideal home.

You can highlight that your home is winter-ready

Aside from cozy fireplaces, hot tubs, and steaming mugs of hot chocolate with freshly baked cookies that await buyers when they tour your home, you can feature your house’s winter-readiness when you sell in the colder months. Show off the design and features that will make their life easier during winter, like an easy-to-shovel driveway, new roof and furnace, south-facing windows, and well-insulated pipes, among other things. These features, however simple, will show that your home can handle the harsh elements.

Many buyers are looking to relocate

People often look to relocate at the start of the year, especially those with new job opportunities, or young parents who want to start the new year somewhere in a more spacious family home. These buyers are serious about the sale and want to secure the property before Christmas or New Year. They are more likely to sign on the dotted line once they find the home they are looking for, which could potentially mean a swift sale with fewer contingencies.


Advantages for Buyers

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Take advantage of this season to score a bargain

Because more buyers are likely to house hunt during warmer weather, home prices are generally lower in the winter. You can then take advantage of this season and have more buying power since sellers are motivated to sell their home and move before the year ends.

However, don’t assume that you can automatically score a sweet deal. What you can do is use the seller’s motivation to negotiate a bargain. This is particularly in markets where there’s generally less interest and the seller already feels some pressure. They might be more willing to accept an already good offer rather than waste time waiting for a better one. Work closely with your real estate agent to give a good offer and secure a quick settlement.

You can use your end-of-year financial bonus to enter the housing market

The end of the year also means many employees or workers will get their performance reviews, which could mean receiving financial bonuses and large payouts. If you’re a first-time home buyer, you can use this opportunity to enter the housing market and invest that money in purchasing your ideal home, especially if your credit is already in good standing. Buyers can also use the incentives to upgrade their living situations.

 

Before starting your house-hunting this season, just remember to avoid too much holiday debt while shopping for gifts for your loved ones. Any new debt can change your debt-to-income ratio and affect your mortgage pre-approval. Keep in mind that buying a home can be your biggest investment, so take note of your priorities especially this holiday season.