Seller

6 Misconceptions About Selling Property That You Should Know About

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There are several misconceptions that you might fall trap to when it comes to selling property. If you’re planning to put your house in the market, make sure that you don’t make the following mistakes.

 

Misconception #1: Organizing multiple open houses will surely bring in more buyers.

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Having open houses can be laborious for you as a seller; all that prepping, moving furniture, and showing strangers around can be overwhelming and time-consuming. But that’s no reason to skip it altogether! It has been proven time and again that conducting several open houses could really draw in serious buyers. However, sellers must be wary of some “interested buyers” who go just to open houses as voyeurs: wanting to know how people live, and getting ideas for home decor. The best way to do this is to have a strategy so that your time, energy, and resources don’t go to waste.

Open houses are usually held during weekends, but you can make time for it during the weekdays, as most serious markets are inclined to peak during the week. Also, have your agent make good use of technology to put up your open house dates in apps and websites where homebuyers are set to look for listings.

 

Misconception #2: Home inspection on your end is a waste of time.

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Buyers will most likely subject the house to a home inspection once they’re serious about buying it. But just because buyers are set to do this doesn’t mean you can skip this for yourself. Having your house inspected by a professional before putting it up for listing will help you address issues in the house you might have missed. Also, presenting the home inspection report to prospective buyers will make room for transparency in the transaction -- which is always a good thing.

 

Misconception #3: It is best to decline an offer given right after putting your house on the market.

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Sellers normally get overwhelmed after getting a first offer on their home, which then leads to the decision to decline and wait for better offers to come in. However, this is not always the optimal choice in real estate selling, especially in slow markets where it could take weeks or even months to get another offer. If the first offer you get is reasonable and is not below your listing price, then it would be wise for you to consider it.

 

Misconception #4: Overpricing the home will drive up its value.

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As a seller, you want to safeguard your asking price, so it may seem logical to mark it up to make room for negotiations should the prospective buyer ask for a price reduction. Keep in mind that your goal as a seller is to not keep the house in the market for too long, and having it unreasonably priced may do just that. Buyers could be intimidated and may not look at the house in the first place. Be realistic in how you price your home -- consider the home’s location, the surrounding properties, and current market conditions.

 

Misconception #5: It is good to let the house sit in the market for a long period of time to give way for better offers.

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There are several factors that keep a property in the market for too long such as poor location or shoddy housing condition. But one common factor is related to the above number: property is not competitively priced, and the seller may be too unrealistic with the asking price that they’re unwilling to level it with market conditions. Remember that having your home sit in the market too long can depreciate it. The longer you persist in selling an overpriced home, the more you’ll encounter buyers with lowball offers.

 

Misconception #6: Lavish home improvements will increase the value of your home.

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While a home improvement can increase your home’s appeal to buyers, keep in mind that doing it does not assure a complete return on investment as you may only recoup a percentage of your expenses. Keep the home improvements practical and minimal; improving your lighting and mowing your lawn can already make a difference without to spend too much.

7 Reasons Why Buyers and Sellers Shouldn’t Ditch The Home Inspection

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The biggest mistake that both home buyers and sellers could make is skipping or waiving the home inspection due to various reasons, like during a bidding war. And while a home inspection contingency clause is almost always included in a purchase contract, some buyers agree to waive the vital inspections to win their dream home in a competitive market.

Often, sellers skip it to save time and money, not knowing it may leave them little to no time to address any important concerns before they put their home on the market. However, it’s a common ingredient for regret and unexpected costly repairs that could’ve been avoided.

Here are seven valuable reasons why both buyers and sellers shouldn’t skip the home inspection:

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Remember that there’s always more to a home than what meets the eye. It may look beautiful and something that exists in a storybook, but the truth is it’s almost impossible to know all about its details and issues. There are ugly homes with problems that are only “skin-deep,” while there are great-looking homes that have bigger problems like termite infestation and mold. These issues can be missed even after multiple showings. Even new construction homes can have issues unknown to buyers that only a home inspection can uncover.

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Even after years of living in your beloved home, a home inspection can reveal unexpected flaws that you didn’t even know existed. When did that hole in the kitchen ceiling become so big? Was my dog responsible for all those scratches on the walls? Hidden problems in the foundation, roof, or wiring you didn’t even notice as the homeowner could lead to larger issues.

 
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A home inspection ensures that there won’t be any unwanted surprises in the form of serious safety issues. Through a thorough investigation, both parties can make safety their number one priority. If serious safety issues were found, the seller can promise to make the necessary repairs to guarantee that the home is safe and habitable.

 
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The results of a home inspection can be a great tool for transparency and future planning, especially in estimating future expenses. Buyers can use the detailed findings to plan for future upgrades, calculate for repairs, and carefully prepare their budget once they become homeowners. Meanwhile, sellers can use it to plan for renovations and deal with them as soon as possible. That way, they can continue with the home sale with fewer contingencies and minimal setbacks.

 
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Having a home inspection performed can give you the power to make negotiations with the seller to offer a lower price for the home. Depending on the information gathered, you can include words in your purchase contract requesting the seller to make the repairs. Or if they are unwilling to do so, you can ask them to estimate the costs and take that amount off the final purchase price.

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You can use the home inspection report as a leverage when negotiating for a better selling price. By knowing the true condition of your property, you can deal with any problems on your own terms and fix them beforehand. You won’t have to deal with any of the buyer’s request to lower the price or arrange for repairs, which could cost you a huge amount of money or even the sale itself.

 
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While a home inspection can cost a good sum of money, it’s a significant investment that will save you from any costly repairs down the road. Things like safety hazards, pest problems, or water leakage in the basement can end up costing you a lot more money once you already own the home. And all those issues and defects could have been revealed by a home inspector if you only allowed an inspection to push through.

 
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The home inspection phase can be a huge pitfall for both parties in a real estate transaction. Sometimes a transaction doesn’t move forward because the buyer and seller couldn’t agree on the repairs requested from the inspection. A buyer may not feel entirely comfortable with the findings while the seller may refuse to accept more requests. Having a home inspection ahead of time can help expedite the process for both the buyer and seller.

Worst case scenario: a buyer can get cold feet and will not proceed anymore with the transaction if they’re not satisfied with the negotiations after the inspection.

 
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The inspection eliminates all the possible “doubts” and “what ifs” of both parties. Buyers will feel certain and satisfied with their purchase, eliminating buyer’s remorse and giving them a peace of mind. Sellers can also feel confident once the real estate transaction was completed because they can avoid the threat of any legal action due to improper disclosure. A home inspection is a great way to make both the buyer and seller feel positive that they have reached a fair deal in the transaction.

Make Your Home More Energy-Efficient With These Green Home Improvements

Whether you are a homeowner planning a major remodel or a seller preparing to put their home on the market, an important factor you have to consider is the products and materials you will use. This time, why not try to become more environmentally conscious when remodeling your home?

You can incorporate eco-friendly and energy-efficient products into your home renovation ideas, especially those green solutions that are easily available and affordable. One benefit is that there are certain tax incentives for homeowners who installed alternative energy upgrades, stated in the Residential Energy Efficient Property Credit.

According to the REALTORS® and Sustainability 2018 Report by the National Association of REALTORS® Research (NAR) Group, 71% of respondents said energy efficiency promotion in listings was very or somewhat valuable. Many MLS has green data fields that real estate agents typically use to promote green features, energy information, and green certifications. Likewise, 56% of these REALTORS® find that clients are at least somewhat interested in sustainability.

Here are the major reasons to take on eco-friendly home improvements:

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  1. Lower utility bills - In the same report, 28% of REALTORS believe a home’s utility bills and operating costs is one of the home features that are most important to their clients. Energy-efficient upgrades can help reduce your water and energy bills — a significant return on investment that any homeowner will appreciate.

  2. To reduce your carbon footprint and help the environment - Tackling these environmentally friendly projects promotes healthy living for you and your family, while helping to save the planet.

  3. Higher ROI when it’s already time to sell your home - Eco-friendly home improvements, especially in the kitchen and bathroom, add value to the home itself. They will be more prominent when it’s time to put your home on the market. Likewise, for buyers who are interested in an energy-efficient home, they can connect to a lender who provides lending products that encourage energy efficient improvements to existing homes.

Yes, there’s more you can do as a homeowner aside from using LED bulbs for your lighting fixtures. Here are some of those green home improvement projects that are relatively low-cost and easy to add or install:

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1. Using low-VOC paint for better air quality

Adding a fresh coat of paint to any room is a surefire way to transform it and make it look new. It’s also one of the minor fixes that home sellers can do before listing their home for sale. However, many paints contain high levels of volatile organic compounds (VOC), which can cause several respiratory problems and contribute to ozone pollution.

So next time you want to apply a fresh coat of paint to renovate a room, opt for low-VOC or non-VOC paints. These are water-based paints that are generally more environment-friendly than oil-based paints with high VOC content. You will end up with a room that looks not only fresh but also has better air quality.

2. Installing water-saving fixtures and appliances

Whether you are planning a kitchen or a bathroom remodel, it’s a good idea to replace your regular fixtures and appliances with their water-saving counterparts. Installing low-flow fixtures and appliances like faucets, shower heads, dishwasher, and even high-efficiency toilets, can help lower your water consumption. It’s a great way to conserve water without compromising your daily usage and comfort. Eventually, it can offer big savings in your wallet by trimming your water bills — an advantage that you and the future owner of the home can both enjoy.

Toilets, for example, account for nearly 30 percent of an average home’s indoor consumption. Switching your older, inefficient toilet with a low-flow model can lower your water bills by about $110 a year, according to the Environmental Protection Agency (EPA). Think about it: you can save your wallet and the planet at the same time.

3. Electric Tankless Water Heater

Another great option you can add on your next bathroom remodel is a tankless water heater, which is a great way to save water, money, and energy. Tankless water heaters either use gas or electricity and are generally more cost efficient. They heat water you only need to use in just seconds and there’s no need to wait for the water to heat up while wasting more water in the process. It’s another eco-friendly bathroom improvement that can add value to your home.

4. Programmable, Smart Thermostat

Compared to manual thermostats, this smart home technology is a great investment to help make a home more eco-friendly. Smart thermostats, such as the Nest Learning Thermostat, can help you save energy and lower your utility bills since you can control your heating and cooling needs.

The technology will also allow you to program your temperature preferences on the areas where you need it most. You can set up these thermostats (through their mobile apps) to turn on when you wake up and turn off when you leave the house, contributing to bigger savings.

5. Energy-efficient Windows

Energy-efficient dual pane windows made from vinyl, metal or wood offer better insulation for your home compared to older, single-pane models. They can reduce your energy usage during both hot and cold climates, helping you save money while also lowering your environmental footprint.

Double-paned windows also have great soundproofing qualities. They can significantly reduce outside noise, which can be a valuable investment if you live in the city or in a busy urban area and don’t want to wake up to the blaring car horns or sprinklers early in the morning.

6. Energy Star appliances

Replacing your dated appliances with new and high-efficiency models, especially those with an ENERGY STAR certification, will not only allow you to reap the benefits of energy savings but also help sell your home for top dollars. ENERGY STAR is an initiative of the U. S. Department of Energy that identifies energy-saving appliances and products. Its ceiling fans, for example, are 50% more efficient than conventional fans because they use less energy to operate.

Since the kitchen is a focal point in any house, home buyers will want it to look at its best. If you’re planning a major kitchen renovation, upgrading your washer, dryer, dishwasher, and refrigerator will enable your kitchen to stand out in terms of energy efficiency, design, and functionality.

On the other hand, here are some big-ticket renovation ideas if you feel you’re up for it:

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  • Eco-friendly wood flooring and using other renewable wood products - Options include bamboo flooring, marmoleum, and other eco-friendly wood flooring substitutes.

  • Solar roof panels - Homeowners who install solar panels, especially when installing a new roof, can receive rebates and credits from the solar power owner or utility company.

  • Sustainable landscaping using native plants - One eco-friendly alternative to improve your home’s curb appeal is landscaping using native species of plants. These plants are easier to maintain, and won’t be a risk to the surrounding ecosystem.

  • Improved home insulation - Homeowners can switch to alternative types of insulation that are environmentally conscious, such as insulation made of wool, cotton, or other recycled materials.


Tips on how to effectively sell your energy efficient home:

  1. Find a real estate agent with an extensive background in selling green homes or energy efficient homes. Clear communication is important for selling these upgrades to potential buyers. They have to see for themselves what they will buy and benefit with as the homeowner. This is why finding the right real estate agent who understands the benefits of your energy-efficient home is paramount. He/She should be able to advertise it appropriately, marketing it to the right buyers. The agent should also be able to explain those green upgrades to those interested buyers effectively.

  2. Documentation can help you sell faster. It’s important to not only feature the upgrades you made but to also highlight the benefits of those projects for you as a homeowner. Compare your water and energy bills before and after the remodel and emphasize how much you saved. The difference in your utility bills will be a good selling point your interested buyers will look forward to.

  3. Consider getting an appraisal from a certified appraiser who knows how to properly evaluate green properties to determine the value of your energy-efficient improvements. This is a good first step to help you decide how much you should list your property, aside from the list price you and your real estate agent will come up with.

Understanding Real Estate Commissions

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Whether you’re planning to buy a home or sell your current one with the help of a real estate agent, it is important for you to understand what commissions are and who pays for them.

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A real estate commission is a fee typically paid by the seller for the services of both the listing agent (also known as the seller’s agent) and the agent that represented him (known as the buyer’s agent). This commission is usually 6% of the paying price and is given once the deal has been closed and the payment, whether they be in full or partial, has been given by the buyer. It’s not directly given to the agents but instead passes through the brokers they work for.

Listed below are certain factors that influence how much a real estate commission is:

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Experience - agents who have only been in the real estate industry for a short while will get lower rates than those who have been in it for long. Meanwhile, top agents may get 100% of the commission fee and just give their broker a desk fee.

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Locality - the real estate market may either be moving slowly or fast-paced in different states or localities, and the agent’s commission sways with the state of the market. Another thing is that it’s common for the listing agent to be paid more than the buyer’s agents in some states. Buyers should acquaint themselves with local co-brokerage fees so that they would know if the agent working for them is paid less than the local custom.

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Agreement between parties - the percentage of the split in commission is based on the discretion of the real estate agent parties. There are also instances when the seller or the agent will negotiate on the percentage of the commission.

 
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1. Familiarize yourself with the different people you will have to transact with - Whether you’re a buyer or a seller, real estate agents are the ones who you would most likely interact with the most during the process because they act as your representative to the other part. it’s good to know each person and their specific role during the sale of the property. Here is a brief description of each type:

  • Broker - Brokers rank higher than agents in that they take an exam for licensure with stricter requirements such as completion of eight-level and at least two years of real estate experience. They can choose to either operate on their own or hire agents and they are responsible for the actions of the agents they hire.

  • Agent -  Agents are also licensed by the state, but unlike brokers, they cannot work independently and must be employed by a broker. There are agents which work exclusively for each party in the transaction -- listing agent for the seller, and buyer’s agent for the buyer. It’s important to note that it is not legal in the 50 states for a dual agent, or an agent who represents both the buyer and the seller, to operate.  

     2.  Know the local rates - As what’s stated beforehand, there are several factors that affect commission. But just to arm yourself with more knowledge, it’s best to acquaint yourself with the standard rate of the area where you wish to buy or sell your home.
     3. Know what a buyer’s agency agreement is - This is an agreement between a buyer and a licensed brokerage firm or a real estate agent that stipulates both of the parties’ commitment to the sale and to assure the agent or the firm that they will be duly paid after closing. Standard forms of agreement vary per market and brokerage firms.

The 7 Worst Things To Do When Remodeling Your Bathroom

Remodeling a bathroom is nothing like a piece of cake or a walk in the park because it’s an essential part of the house that involves complicated plumbing. You have to make sure that the new fixtures you choose will not only fit the design but also the bathroom’s layout. You also need to measure out everything even if you’re only rearranging things and adding a few items. If you’re planning to sell your home, the bathroom may not be the first thing that potential home buyers will see but it’s a crucial element that can always make or break the sale.

In the 2018 Cost vs Value Report by Remodeling Magazine, a mid-range bathroom remodel costs an average of $19,134 and has a resale value of $13,422, which recouped the costs by 70.1%. Moreover, the National Association of Home Builders Remodeling Market Index or the RMI survey always includes bathroom and kitchen remodeling as the two most common remodeling jobs.

So for homeowners and sellers alike, here are some of the biggest mistakes when renovating a bathroom you need to take note of:

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1. Not planning according to space and layout.

Experts refer to this mistake as the lack of “spatial awareness,” which could lead to bigger problems later on once renovation starts. What many homeowners don’t know is that spatial planning is the key towards a successful bathroom remodeling. It means you have to fit something in your design without losing its function and still maximizing the space. You need to consider whether you will have enough space to comfortably open the shower without squeezing yourself out of the door, get on and off the lavatory without hassle, or easily open the cabinet doors. It also includes making sure that all elements are in their right places and are close enough to function (Yep, make sure the toilet paper is within your arm’s reach!). Remember that you will use the bathroom every day, so you need to plan your remodel according to your bathroom’s space and layout to maximize convenience.


2. Ignoring ventilation.

While it’s more fun to install a new shower or vanity, never make ventilation the least of your priorities. Don't underestimate its importance especially if you don’t have a window that provides natural ventilation.

Poor ventilation can cause pervasive mold or mildew to grow that can cause you potential headaches. It can also make the bathroom uncomfortable during and after someone took a shower. Install a quality and powerful exhaust fan that can handle the size of your bathroom. Heat lamps can accompany those fans as well since they can reduce moisture.


3. Incorporating improper lighting.

For most of us, bathrooms are our little haven where we get ready and pamper ourselves before facing the world every day. Just as how proper lighting is a key factor to getting a good shot, it is also important in the bathroom. Anyway, no one would enjoy using the loo if it’s poorly lit. If you have plans to sell your home, the last thing you’d want is for buyers to find out your bathroom has unflattering lighting.  

The trick to solving this mistake: plan your lighting fixtures before starting the renovation. Because while these fixtures will be installed last, you need to decide firsthand the lighting that will best accommodate your space and design. You may also have to consider your preferred shower style to help you decide whether you need lighting above the shower or tub.

LED and recessed lighting rarely work well in bathrooms as they can create shadow lines (not good if you’re applying makeup in the bathroom mirror). This is also why vanity lighting is a top consideration. According to experts from This Old House magazine, halogen bulbs set the gold standard to be used in bathrooms. They cost a few dollars more than standard incandescent lights but can last three times as long and also fit most fixtures.


4. Not considering whether there’s enough storage space.

Storage may not be written on your list when you’re planning the remodel. But it shouldn’t be ignored as well if you already couldn’t store most of the things you need in your bathroom. It’s important to give plenty of thoughts on your storage options right from the start.

As much as possible, incorporate plenty of storage space in your design depending on how many people will use the bathroom. There should be plenty of space where you can store the much-needed toilet paper, makeup, cleaning products, and other items. Consider it a game-changer as well if all the family members wanted to have their private bathroom storage. You may opt to install a larger vanity or add recessed shelves to achieve this.


5. Getting the wrong materials.

Remodeling can be an endless battle between functionality and design. Remember that a bathroom deals with more moisture than any other part of the house, so you have to take into consideration the right materials you will use for the job. Avoid using porous materials that are highly susceptible to mold, distortion, and will keep moisture.

Remember that as a homeowner, you may also have to use the strongest cleaning products to clean your bathroom surfaces. Make sure that the materials you use in remodeling your bathroom can also withstand such harsh cleaners.


6. Using mismatched fixtures and unbalanced decor.

Aside from choosing the right materials, don’t be pressured to get the same brand for all your fixtures and furnishings. Just make sure that whatever you use will have the same finish. And while there are countless heights, sizes, and styles to choose from, you only need to know how all those designs will fit and work together.

Remember to follow the “rule of threes” when selecting specific colors and patterns to decorate your bathroom. If you have a smaller bathroom, the last thing you’d want is for it to feel overcrowded or worse, cluttered. Select decorations with unique patterns, textures, and colors that mix well together for that lovely finish.


7. Not knowing when to do DIY and when to seek professional help.

Poor DIY can be the arch-enemy of any remodeling work. It might be tempting to do the tiling yourself or try to get your hands dirty to fix the plumbing, but DIY isn’t always a good practice. Always seek professional help if you want a major bathroom renovation that includes installing a new shower stall or fixing the wiring. Avoid thinking that hiring a professional bathroom remodeler can be expensive because they can actually save you more time, money, and frustration in the long run.

Watch Out! These Neighborhood Features Can Drag Down Your Home’s Value

While there are certain home improvements you can add to your home to boost its resale value, there are also many external factors that can devalue your greatest investment. This is why the real estate cliché saying “location, location, location” will never be debunked or even grow old. Many of the things that can dampen your home’s value can actually be found in your neighborhood.

These factors are already outside the homeowner’s control and what appraisers refer to as external obsolescence. Understanding how these external factors can influence the long-term value of your home is paramount because decreasing property value can pose a challenge when it’s time to sell your home. In the worst-case scenario, you may have to sell it for less than what you purchased it for, causing you to lose money on the table.

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Bad Schools

Proximity to good quality schools is one of the most desirable factors for most home buyers. It is because neighborhoods near top-quality school districts almost always benefit when it comes to property values. However, the disastrous opposite of this is living in a bad school where there is a slim graduation rate.

Neighborhoods near low-ranking schools are less attractive to many buyers and have lower property values. According to realtor.com, the median home price of areas with schools that received a 1 to 3 GreatSchools.org Summary Rating is only $155,000. Repeatedly, there will always be a better demand for homes in good school districts.

 

Disruptive Neighbors

Don’t be surprised if noisy and disruptive neighbors can significantly reduce nearby home values. According to The Appraisal Institute, the nation’s largest professional association of real estate appraisers, a home’s proximity to a bad neighbor can impact the rate of potential decline in property value. Those “bad neighbors” include homeowners with unkempt yards, homes with unpleasant odors and poorly maintained exteriors, or own annoying dogs that are barking at night. Living near a troublesome neighbor can devalue your home by as much as 5-10%. If you’re a home buyer, it’s important to learn what is going on in the neighborhood before you sign the dotted line.

 

Excessive noise pollution—especially if your home is near an airport, train tracks, or highway

Ah, noise pollution. While you can learn to live with it, it is not a desirable factor for most buyers. If you live near an airport, train tracks, a highway, a loud factory, or near an industrial area where there is constant noise and you need to endure it every day, it can be a negative factor when it’s time for you to sell your property. The louder the noise and the more inconvenient it is, the more negative its impact could be on your home’s resale value.

If your home is located next to train tracks, it can deter buyers from purchasing it because they have to deal with the noise at various hours of the day. You will have the same scenario if your property is located on top of a freeway. While it is ideal to live near commuting routes, homes located adjacent to major highways have lower values compared to identical homes far from freeways. Ask your local real estate agent how much of an impact those nearby transportation facilities have on reducing your home’s market value.

 

Proximity to power lines and power plants

Having a power plant in the neighborhood is generally associated with lower property prices because of safety concerns. Likewise, having power lines near your home is also not a good thing. They are vital, yes, because they bring much-needed electricity that helps us live our modern life. But they are also unattractive and imposing. The perceived negative health effects of living near power lines can also make people worry so they may not purchase a home near one.

However, if you’re still planning on buying a home near power lines, it’s best to consult with your local real estate agent to know how much impact it will have on your home’s market value. There may be a reason for the low price so think carefully if it will be a good bargain.

 

Proximity to a cemetery

A graveyard next door can make many people uncomfortable. Some may even find the prospect of living near a cemetery downright terrifying. It isn’t surprising since cemeteries represent mortality so living next to one may not be ideal to many. And while there are certain pros and cons of living in proximity to those graves (just think how quiet your neighbors are), not all people can accept that. Research by realtor.com that used a list of federal and state cemeteries operated by the Department of Veterans Affairs, they found out that the median home price in ZIP codes with a cemetery is about 12% lower than similar homes in other neighboring areas without a graveyard. Many people also find it disturbing to witness a handful of funerals each year and see the road being lined up with cars of mourners.

 

Near a shooting range

While having a gun range nearby can be beneficial to some people because they can take part in such a hobby, a shooting range right next door can actually drag down your home’s value by 3.7%. If you’re looking to buy a home, think twice about purchasing one near shooting ranges. The noise of gunfire, especially from outdoor gun ranges, can be loud and disturbing. There are also environmental and safety concerns since the lead that leached out of spent shells might poison the soil and water. If you’re considering a home near a gun range, research the shooting schedule of the place and figure out whether you can tolerate hearing gunshots now and then.

 

Billboard/s near the home

Studies have shown that billboards also impact real estate prices. In urban areas where billboards stood near residential homes, the closer the billboard is to your home, the more it can lower its value. This is why many communities are implementing a no-billboard policy or enforcing strict billboard controls to protect home values and promote higher median incomes and lower home-vacancy rates.

 

Multiple foreclosures in the area

Multiple foreclosures in your neighborhood can also affect the resale value of your home. Foreclosures imply that something is wrong with the area, so they can be eyesores that can easily drag down the average home values. And since a bank-owned home is less likely to be properly maintained, they can also translate to unsightly yards with stubborn weeds taking over the lawn and poorly maintained exteriors prone to vandalism and deterioration.

According to studies have shown that living within a quarter-mile radius of a foreclosed home can cause a 4% decline in property values. A report by The Alliance for a Just Society also found that aside from a significant decline in the value of surrounding properties, areas with foreclosures also experienced an increase in property taxes.

Understanding The Roles Of Different Real Estate Experts

There are all sorts of questions that arise when you need to start seeking the help of a real estate professional, and one of the most common is: Who does what? The real estate industry is a complex system comprised of different key players, and the role of each person can sometimes be a little challenging to tell apart--which is why you should never feel embarrassed if you get a little confused!

Though many people use the terms "agent," "Realtor," and "associate" interchangeably, these are actually different titles for real estate professionals. We hope to eliminate the confusion by explaining the different types of real estate agents and the different titles that real estate professionals may have.

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Real Estate Agent

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Real estate agents are licensed salespersons who have passed a state-administered exam in order to qualify for the profession. Real estate agents are legally allowed to sell property, but they must act under a real estate broker’s authority and are in no circumstances allowed to work independently.

Requirements for a real estate agent license vary depending on where he/she wishes to be a practicing agent, but in most countries you must be at least 18 years old and have successfully completed college-level courses in real estate. This educational prerequisite must cover the specific state’s real estate laws and practices.

Real Estate Broker

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In the industry’s professional hierarchy, a real estate broker is one level above the real estate agent. The licensure exam for real estate brokers is generally longer and more difficult than a salesperson's exam, as brokers are held to higher standards of real estate knowledge. Without a broker’s license, a person is not allowed to act as a broker, run his or her own firm, or manage a team of agents.

Real estate brokers can choose to work independently, or employ real estate salespersons to whom they could distribute tasks and assign the legwork. And because they are the ones qualified to manage the agents, they generally hold bigger responsibilities. For every firm, there is only one principal broker.

REALTOR®

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The title “REALTOR®” is given to real estate agents or brokers who belong to the National Association of REALTORS® (NAR), subscribe to its extensive Code of Ethics, and pays annual dues. NAR members also belong to state and local trade associations, which means that complaints against REALTORS® can be taken to the local board.

Listing Agent

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A listing agent (also known as a seller’s agent) is a real estate agent or broker who works exclusively with the home seller, represents him/her in negotiations with potential buyers, and operates based on the seller’s best interests.

Listing agents owe a fiduciary responsibility to the seller under a listing agreement, and must guide the seller through every step of the way--from marketing to closing.

The listing agent’s responsibilities generally include the following:
- Helping you prepare and stage your home for selling
- Listing your home in the MLS
- Being on top of the open houses and private home viewings
- Negotiating with potential home buyers

Buyer’s Agent

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A buyer’s agent is a real estate agent who works in the best interests of the buyer, and is expected to help him/her navigate the process of home buying. The duties of a buyer’s agent begin as early as in the pre-approval phase, and should be carried out until closing.

Some buyer's agents never work for sellers, and offer their services exclusively to buyers. Many agents still choose to work with both sellers and buyers, although not always in the same transaction.

The responsibilities of a buyer’s agent generally include the following:
- Helping you find the best home that fits your needs AND your budget
- Negotiating with the home seller on your behalf
- Providing reliable home inspectors
- Completing and processing the necessary paperwork

Broker Associate

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A broker associate is a licensed real estate broker who chooses to work for another real estate broker. This usually happens when a broker wants to work with a larger firm to widen his or her real estate network. Some broker associates pay a flat fee to their employing firm/broker, and others earn a share percentage from each transaction.

Dual Agent

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A dual agent is a real estate agent who represents both the buyer and the seller in the same transaction. If you decide to work with a dual agent, he or she will also represent the home seller or buyer you’re negotiating with. However, dual agency is not legal in all 50 states, so you may have to check if this is a possible option in your case.

Transaction Agent / Transaction Coordinator

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In states where dual agency is not allowed, listing agents who are left with the task of writing an offer for the buyer may choose to act as a transaction agent. This means that he or she does not represent either party but simply facilitates the transaction. They assist in processing the administrative items for a real estate transaction, including gathering and sorting out all the necessary paperwork, opening an escrow account, making sure contingencies are met and disclosure forms are properly signed and filled out, and managing timelines.

What Is A Comparative Market Analysis And How Can It Help You Sell Your Home?

When you’re trying to sell your home, you have to be extra mindful about how you price it. Whether done intentionally or not, overpricing your home is a dangerous move that may cost you a great deal. If you want your home to sit on the market for the shortest time possible without compromising your sale price, you will have to come up with the fair-market value of your home.

Some sellers fear that pricing their home at fair-market value is a lost opportunity to get more from the sale, but professionals guarantee that this isn’t the case. The most competitive price of your home is it’s appraised/fair-market price, and you’re more likely to get multiple offers on your home if you follow it. This will then create competition, and will inevitably drive up the value of your home, which you can then sell at a higher price.

Of course, figuring out the right price of your home isn’t something you have to do alone. In fact, it is highly advisable that you hire a professional to help you locate the perfect amount. Most listing agents will advise you via a comprehensive market analysis or CMA. And, if the CMA is done right, it eliminates the dangers of overpricing, and can ensure that both you and your future buyer can agree on a fair deal.

What is a Comprehensive Market Analysis (CMA)?

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A CMA is a report containing useful data on recently sold properties within the geographical area of the home being sold. The length of the report can vary widely — some being a concise 2-3 page list of comparable home sales, and others reaching up to 50 pages that include comprehensive analyses and guides.

Although the complexity of the report would depend on the agent’s business practice, an accurate and well-researched CMA will show a detailed comparison of properties in the area, as well as give you an estimate of how much your house is justifiably worth.


What does a CMA usually contain?

A CMA usually contains the following data:

  • Active Listings - These are homes that are currently for sale within your area. They are included in the report only for you to be aware of what you’re up against in the current market. If you’re in a buyer’s market where it takes longer than usual to sell a home, it is important to know how high or how low your competition is pricing their homes. The prices of active listings in your area are not indicative of market value, since sellers can ask whatever they want for their homes. Offered sales prices do not dictate market value UNTIL they sell.

  • Pending Listings - These are homes in your area that are currently under contract but have yet to be sold. And since they haven’t closed, they still cannot be considered as comparable sales. However, pending listings do indicate how the market is moving. If your home is priced above these homes’ average list price, you may be looking at more time in the market. But if your home is priced competitively within their range, you could expect to get offers after the same amount of time these homeowners have waited for theirs.

  • Sold Listings - Typically, these are homes in your area that have closed within the past three months (“comps”), and are the homes that an appraiser will use as basis for appraising yours. These are what you have to look at closely when determining the right price for the home you’re selling. Just remember that these comps are going to vary based on the kind of market you are in. In fast moving markets, for example, sales that are more than two months old aren’t considered a reliable basis anymore. On the other hand, if the market has been slow for a while, comps could include homes sold in the past six months.

  • Off-Market / Withdrawn / Canceled Listings - These are homes that have been taken off the market due to a variety of reasons. Most cases are a result of overpricing, but it can also be because of a case of seller’s remorse, unmet contingencies, or seller-agent disagreements. Usually, the average price of homes in this category will almost always be higher than the average price of comparable sales.

  • Expired Listings - Expired listings show a list of overpriced homes. Some of them could be grouped with active listings, which means that they’ve probably been taken off the market for a time and listed as a new listing with a new agent.

How are comparable sales determined?

To create an accurate comparison of homes in the market, a real estate agent or appraiser must include all homes in your area that are similar to yours in size (square footage), age of construction, condition, upgrades, and features. Unless your property is in a rural or very low-density area, you may have to check homes that are outside the usual mile radius.

However, not all for-sale homes on the same street can be considered as comps, as some may actually be in a different school or tax district. These nuances can either make them cheaper or more expensive than yours depending on which area is more desirable.

Also, a house that is the same size as yours can be sold for 10 percent more than yours if it has specific features that address a particular need of the buyer. Modern additions such as green “eco-friendly” updates can also affect the value of the sale. Keep in mind: To “compare apples to apples,” you must closely examine the reason why a particular house is priced as it is.

How To Pull Off A Long Distance Move To Your New Home

Congratulations, you just purchased a new house and are now ready to move. The hassle of the home buying process is over, but the settling-in process is not quite done yet. While the hassle of moving your things can sometimes be unnoticeable because of all the excitement, it wouldn’t hurt to do a few things that will help you save a lot of time, energy, and resources during the move.

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1. Make a detailed schedule.

Moving is not an easy task, especially if you’re transferring to a neighborhood far away from where you currently reside. It can be overwhelming to think about the move itself, but plotting it on your calendar and spreading out the tasks over a number of days is sure to make it less daunting.

Before you can move, you have to pack up your stuff first. If you’ve already braved the task of decluttering your home before the sale, then great! But if you haven’t gotten around to it yet, now is the time to write down how much you have to get accomplished, and when.

Once you can say for sure that packing up your things can be completed on a specific day and at a specific time, you may proceed to booking a date with your chosen mover. If you’re moving internationally, you may have to book your ticket at least a month in advance. If you’re driving yourself there, be sure you know how long the trip will take, and factor in any stopovers you may need so that you can get enough rest along the way.

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2. Pack carefully.

While moving your things across short distances is something you can do with ease even at the last minute—it’s a different story if you’re moving across the country or halfway across the world.

When you’re about to set off on a long journey to your new home, it is important to pack as meticulously as you possibly can. It may seem like a hassle while you’re doing it, but labelling all boxes (and even the the smaller boxes inside them) can make things a lot easier later on. Make sure your fragile belongings are properly wrapped and labeled, and identify which side of the boxes should face up. You also want to make sure that you’re not transferring loose items and haphazardly sealed containers.

This not only helps the movers handle your belongings with care, but it will also give you an easier time unpacking in your new home.

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3. Prepare a carry-on bag.

If you’re going to spend a lot of time on the road or on the plane, be sure that you have everything you need in a carry-on bag. Identify the things you’ll need while traveling, and pack them in a bag before having all your other things shipped.

Have an extra change of clothes, some toiletries, and enough snacks for the road. This way, you won’t have to search for them when your really need them.

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4. Check the weather forecast.

When you set a date for the move, make sure that you have an idea of what the weather will be on that day.

Especially for cross country moves, being aware of the weather will help you avoid unexpected drives under heavy rain, or having to wait for your movers to arrive in a snowstorm. Also, if the weather turns out to be horrible on the day of your move, you may be looking at quite a few delays.

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5. Bring entertainment for the kids.

This may seem like an unimportant part of moving, but you’ll be surprised how much of a hassle bored children can be during a long drive.

If you don’t want your patience tested during the ride to your new home, make sure you have something that will keep your kids occupied. This way, everyone can be in a good mood as you arrive at your new home!

Understanding Property Liens and How They Can Be a Nightmare To Your Home Sale

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First things first: you need to have a clear idea of what a lien is. A property lien, in simplest terms, is a legal claim a creditor can put against your property as a consequence of an unpaid debt. It is the creditor’s way of collecting debts you owe to them by intending to fund the money owed through the sale of one of your biggest assets—your home.

Liens filed against a property usually come from unpaid taxes, missed mortgage payments, unpaid bills, or any payments owed to contractors for work done on the home.

Property liens can slow down a real estate transaction because your title won’t be considered clear until you pay your debt. It can hinder your ability to refinance or sell your property until the lien is satisfied.

 

What are the common types of liens on houses?

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1. Voluntary liens

These are liens that are both agreed to by a creditor and a debtor. The best example of a voluntary lien is a mortgage, which a homeowner freely enters into in order to finance his/her property. In a mortgage, the bank holds the lien in the event of a foreclosure. A contract is usually involved to place the voluntary lien on the property. The best thing about this type of lien is that it does not negatively affect the property, its title, or the homeowner’s ability to convey or transfer title.

2. Involuntary liens

Involuntary liens are imposed by law and are placed on a property due to unpaid obligations. These liens can happen without notice depending on the situation. They are usually placed on a property when a debtor falls behind in tax payments, judgments, or home improvement invoices. Involuntary liens are detrimental as they can make refinancing or selling your home difficult. They can leave you without a clean title and a huge black spot on your public record.

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  • Property tax lien - If you neglect to pay your federal, state, or county taxes, the government may file a tax lien on your property. This lien usually takes priority over all other mortgages and liens on your home, even if it was placed last. Through this lien, the government can have your home sold to pay the real estate taxes. Nonetheless, you may still have the opportunity to get your property back by paying your overdue taxes and other costs.
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  • Judgment lien - This type of lien can be placed on your property after a creditor sues you and wins the case. The creditor can use a judgment lien on your home to ensure that they will receive money. The court can grant a creditor a certificate of judgment that can be given to a land records office in the county where the property is located. Judgment liens are most commonly used by unsecured creditors, such as the holders of credit card debt, medical bills, and personal loans. It can also be imposed by an attorney if you do not pay your bill for legal services.
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  • Mechanic’s lien - A mechanic’s lien (often known as a contractor’s lien) is a claim for payment from any contractor in the home improvement business. General contractors, carpenters, plumbers, electricians, handymen, and other repair companies who worked on your home may file this lien on your property as insurance to make sure that they are paid. It is their legal recourse to force payments of overdue invoices, especially when the property will transfer ownership soon.
 

3 common ways liens can slow down a real estate transaction

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  • Once the title company performs a search for any liens that have been filed against your property and they discover a lien, it will put the real estate transaction temporarily on hold and delay the closing.
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  • A property lien that is discovered before closing can delay or even cancel a buyer’s mortgage approval. Strictly speaking, mortgage companies will not agree to finance a property until the lien is satisfied or paid off, usually by the seller.
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  • If you’re the seller, it can be very difficult to sell your property because buyers won’t purchase a home without a clear title. As previously mentioned, lenders won’t approve the purchase nor agree to finance the property. Certainly, it is your responsibility to pay off the lien on your property before you may be able to sell.

Note:

Remember that the creditors’ primary objective is to get paid. A property lien will remain in effect until the debt is paid off or if the judgment expires. Once the lien on a house is paid off, the creditor will be satisfied and the sale will usually go through. Except for property tax liens, creditors can be lenient because they usually forego foreclosure and may choose to collect what’s owed to them when you sell the property.

 

If my property has a lien, what should I do?

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Home Sellers:

If a property lien was found on your home, the first thing you should do is to determine if it actually belongs to you. Liens can be searched for by name, so it isn’t impossible that multiple matches will appear. The best way to determine the validity of a lien is by working with your real estate agent and title company to find out how you can verify the issue.

However, if it is discovered that the property lien genuinely belongs on your house, you need to start resolving the issue as soon as possible. In most cases, there’s no need for you to be deterred from putting your property on the market. In the case of a mechanic’s lien, review the claim and match it against invoices and payment receipts. As a homeowner, if you’ve obtained a signed receipt from the contractor showing that the bill is already paid in full, it will be enough proof to file a lien release form.

In other types of liens, you need to get in touch with the lien holder and arrange how to pay off your debt. You might just have to bear with the additional expenses tied to clearing the lien and the delay in title transfer. In such difficult cases where you refuse to pay or want to contest the validity of the lien, you may consider the title company’s advice on how to best handle the situation or even seek legal counsel. The bottom line is that the sale of your home will be temporarily delayed until a definitive outcome can be reached between you and the lien holder.

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Home Buyers:

Usually, buyers will be apprehensive to purchase a property without a clear title. The lender or mortgage company won’t even approve the purchase or agree to finance the home, anyway. However, there are many instances where a buyer may be faced with the responsibility to pay off any lingering debts. There may be a lien against a previous owner, and now the debt is passed on to them. Such scenarios are possible especially if the buyer purchased a foreclosed home or a sale at auction, and if they skipped paying for a title insurance. It is crucial for buyers to know what they are getting into before bidding on such auctioned properties. They need to be aware of deals that are “too good to be true” because it can actually cost them much more than a traditional sale once they’ve become the new homeowner.