NEWS & ADVICE

To buy or not to buy; that is the question every potential buyer should ask

August 22, 2016

To Buy. setschedule

 

Everyone who wants to buy a home has a mindset as to how the home should be, and the type of layout, structure, number of bedrooms, and yard. People are not always aware however of the type of pitfalls involved with buying a home.

First, you need to work on your budgeting skills if you haven’t already. You also have to know where your money is coming from and what it is going to every month. Next, you should be able to pay off your monthly expenses each month without going into debt for it. So be sure to funnel some money you earned into savings so that you can cover any unexpected expenses, like home repairs, or cover bills in the event of layoffs. This blog is not meant to scare you away from homeownership, but these are the realities.

 

Before buying a house, make sure to consider the following:

 

  • Debt doesn’t control you

 

Real estate is a good, worthwhile investment, but you still need to make sure that the debt of the mortgage will not be able to control you, and you will be able to pay it off in a reasonable amount of time. If you have debt before buying a house, make sure you have it under control. Debt won’t necessarily keep you from buying a house, but it will affect the sort of mortgage loan you will be offered and your ability to make your payments. Many people however have student loan and car loans while buying a house — it just all depends on how you manage your debt. Too much will drive up your interest rate, which means you will have to borrow more to cover the interest.

 

  • You won’t have a landlord anymore

 

Landlords are great when an appliance breaks or the plumbing starts leaking. As a homeowner and property owner you will now be responsible for all repairs, whether you make the fix yourself or hire a contractor. Before purchasing a home, make sure you have an emergency fund. Everything breaks eventually and this is something that you have to plan ahead for. You won’t have anyone to fall back on other than yourself.

 

  • You have a sizable emergency fund

 

As mentioned, you should have a sizable emergency fund before purchasing a home. No one likes to think that something could happen, be it unemployment, illness or injury, but in the case of an unexpected crisis, your savings account may be the only thing keeping you in your home. If you have any doubts about your situation, you should reconsider buying a house at this time.

 

  • Your income is reliable

 

A mortgage is a long-term commitment. You must feel confident that your current situation for work will enable you to make your payments. Think ahead 20 or more years, and ask if this is something that you want to do. You need to have held the job for a few years, and be able to make enough money to be able to have a mortgage that makes sense.

 

  • You have a decent credit score

 

In order to qualify for a loan and get an interest rate that you are able to afford, you have to have a good credit score. Before you begin discussing mortgages with your bank, make sure that you start paying off your debts, including credit cards, a few years in advance. This way when you decide to discuss mortgages with your bank they will be able to look at your score, and feel confident that you will pay off the debt. People with higher numbers get better rates and in turn have to pay off less debt.

 

  • You’re ready to make a commitment to stay in one place

 

When you choose to buy a home, gone are the days of being able to find a place you like better and being able to just pack up your stuff and move to a new apartment. You have to make sure that the house you live in is one that you will be happy with for a long time, and it is something that you will have to commit to for a good portion of your life.

  1. You have saved for a down payment

A mortgage will require you to make a down payment to make the loan a little bit more secure by having your own money on the line. Buying a home is not something that should be done on a last second decision, it should be thought and planned out.

Contributed by James Link

SetSchedule has changed the way real estate marketing is viewed, by changing the way REALTORS® access clients and listing appointments. SetSchedule is a “first of its’ kind” exclusive membership based model that provides verified appointments, marketing tools, and elite invite only networking events for its members. By blending new technologies, and thought processes with proven success methods SetSchedule had incurred record producing results unseen in the industry.

Avoid These Costly Mistakes before Selling a Home

August 15, 2016

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So you have your home listed. You are ready to accept an offer at any time. You have spent a lot of money on advertising your home and updating everything to the liking of the buyers before listing it. This should be an easy deal, right? However, this is not the case. There are still a lot of things that could happen before the final transaction begins. You could turn buyers away. You may even be sued for misrepresentation if your home is improperly listed. Before selling your home, pay attention and avoid these costly mistakes.

Don’t Sell Before You Get Qualified to Buy Your New Home

Before listing the home that you are currently living in, you should have your next home lined up and be pre-approved for your next mortgage. This is something that should be planned in advance of selling your current home, since it can take some time to find the right home for you.

Don’t Guess Your Loan Payoff

Make sure that you know ahead time about how long it will take to pay off the rest of the lien on your home. Study the fine print information before you sign paperwork from the bank to make sure that you won’t have to pay extra for early payoff.

Don’t Guess on the Sales Price of Your Home

Have an appraiser that specializes in selling homes give you an estimate. This will allow you to be able to list your home and sell it quicker. If your home is overpriced for the area listed, you will not get anyone looking to buy. You also don’t want to list too low for the area and lose money on your home.

Don’t Underestimate Your Closing Costs

Before you sell, always factor the following items into consideration before moving forward with your plan to sell your home: the commission costs that come when selling with an agent, or the cost of advertising and other fees associated with selling the property yourself. Also, determine the costs of a closing agent or attorney, depending on what you go with. Consider gains from taxes depending on your situation, and be aware of any other fees that are sometimes paid by you as the seller, including inspections, appraisals, and the cost of closing.

Don’t Spend Earnest Money Given to You

If you get a deposit from a seller, don’t spend the money given to you. It is better to give the deposit to your real estate agent or a friend to keep yourself from spending it. In cases where sellers have spent the deposit, the buyers were able to fight to get the deposit back. It is a good idea to write in the contract what will happen if the transaction is unable to be finalized. Working with a title company will help you facilitate and manage these finer points.

Don’t Worry About the Inspection

The inspection may seem intimidating, but it is not something to lose sleep over. You may have to fix some small repairs. Set aside a reasonable amount and stick to it. Don’t go overboard on repairs if you are unable to fix them at the present time; you may be able to work something out with the buyer. However…

Don’t Ignore Inspection Requirements

Make sure that you take care of all the problems to the best that your ability and wallet allows. Financing companies have different inspectors to let them assess the potential risk of home.

Don’t Forget to Cancel or Switch Utilities and Insurance

Always make sure to switch your insurance and utilities for your home. It is a good idea to call and ask about the length of notice needed to switch utilities and insurance and then notify each of these vendors when you have a date that your home is closing.

Don’t Become Best Friends with the Buyer

Be friendly, but don’t go too overboard on really long, overly-personal conversations. Stay formally polite and be professional. Being too nice can cloud judgements and a mistake could be made. Potential buyers will second guess. And what may seem like innocent talk can be enough to make a potential buyer walk away.

Don’t Panic if the Appraisal Comes in Low

Your appraisal for your home may come in low. There are certain things that you and your real estate agent can do to help get what you want out of your home. Explore these options before you panic.

Don’t Go It Alone

The act of selling your home is a job in it by itself, between cleaning, packing, and everything else that comes with selling your home. This is why it is good to hire an agent instead of trying to sell your home yourself.

Don’t go to Closing Unprepared

You should have a HUD estimate. This is a settlement sheet. It can be thought of as a contract that determines the price as well as the closing insurance. It also gives the cost to you for what repairs should be. Go with your own title company when it comes to closing as they are usually more faithful to the ones who have their titles. Shop around for the most appropriate title insurance since this is a large percentage of the closing costs.

Don’t Write an Offer for the Buyer

Do not write an offer for a potential buyer! This is why you have an agent. It is best to hire an agent because they are more able to protect you and any of your interests.

Don’t Show Your Home Unprepared

All of the things that are unpleasant to look at should be addressed. Clean up. Paint up. Remove debris. Make sure to take care of anything that could keep your home from selling fast are taken care of quickly.

Don’t Follow Buyers around When the Agent is Showing Your Home

While it is an exciting time for you and your family to sell your home and move forward to bigger things, it is important that you don’t jeopardize this process by following potential buyers around. This creates an awkward situation for everybody, because buyers who are looking will feel like they are intruding on your space. If your agent is really professional, he or she may ask you to leave the house for showings. In short, if you are told that someone wants to see the house, just leave and go for a drive or go out for a bit until the showing is over.

Don’t Waste Your Time with Non-Qualified Buyers

Nothing wastes more time than showing your home to someone who is not qualified for a loan for the amount you have listed your home for. Always talk to the bank yourself or have your real estate agent do so, before trying to sell to a friend that is not even qualified for a loan.

Contributed by James Link

SetSchedule has changed the way real estate marketing is viewed, by changing the way REALTORS® access clients and listing appointments. SetSchedule is a “first of its’ kind” exclusive membership based model that provides verified appointments, marketing tools, and elite invite only networking events for its members. By blending new technologies, and thought processes with proven success methods SetSchedule had incurred record producing results unseen in the industry.

 

Things to Know When Buying a Foreclosure

August 8, 2016

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Buying a foreclosure can be risky. There are some things that set foreclosures apart from the typical home-buying experience, particularly when it comes to the different levels of foreclosures.

 

Buying During Pre-Foreclosure

“Pre-foreclosure” refers to the beginning of the process when the homeowner will be getting constant calls from the bank and potentially other creditors. If the homeowner is struggling financially, he or she will not likely just be experiencing difficulty in making a house payment. Other payments will also likely be delayed or skipped. During this time, the homeowner is likely trying to convince the bank to allow them to do a short-sale before the foreclosure hits their credit report. A short sale can be a sound way to solve multiple problems; however, depending on the area where the home is located, the bank may be unlikely to approve this sort of sale. If you move quickly with the bank and your realtor, you can buy a home in the pre-foreclosure stage. Sellers at this stage of foreclosure are willing to do whatever they need to do to sell their home as quickly as possible.   

Buying at an Auction

The second option is to buy at auction. Such a purchase is filled with risk. Foreclosure homes often have unpaid liens and unknown problems. At auctions, cash is the only accepted form of payment, meaning that if the buyer requires a loan to purchase the home, the sale will not be approved. The other risk in this situation is that the buyer may be part of a team of investors, meaning that both the burdens and the gains are shared. In some cases, the team may argue over details related to renovation. This type of conflict leads to other types of nasty problems. If you have ever watched HGTV, you could practically become an expert on some of the niggling, nagging problems that would-be renovators might endure.

Buying During Post Foreclosure

The last chance to get these great deals is during post foreclosure. At this point, a home is known as an REO (Real Estate Owned) property. The lender won at the auction and intends to sell the home to recoup just the amount loaned. The longer it is on the market, the more the bank will be more willing to work with you on purchasing the home from them. Always remember that banks do not enjoy owning real estate. They just want to sell it as quickly as possible.

A few things to keep in mind when purchasing a foreclosed property:

  1. Always get fully approved from a mortgage lender. They will verify all of your assets, which will help in your negotiating skills and the amount of leverage you have in the deal.
  2. Do research on the zip code and location of the homes. You should also check the value of the homes in the area that you are looking in.
  3. Make sure that you get the home inspected and be sure to make the offer on if the home has satisfactory condition.
  4. See what repairs the home needs and evaluate the costs of these before moving forward.
  5. Always remember that you have the upper hand in the negotiation in terms of the closing costs and repairs that the home needs.  

If you want to find foreclosures, work with a local real estate agent in your area. They will have access to a list of homes that are in foreclosure. Always be cautious and patient when it comes to buying a foreclosed home. If you do this the right way, you will be able to find a great home and you may have some instant equity.

How to Sell your Home in a Down Market

August 1, 2016

how to sell when the market value of your home is low

Selling a home in a market that is spiraling down is a very hard thing to do. People don’t want to risk buying a home, only to find out in a few years’ time that it is worth less than what they paid. What can you do as a seller to help increase your chances of selling a home in a down market?

Assume that in a given market area, there are 100 homes listed in a six-month period; out of those, there are 60 that are sold within that timeframe. A well prepared real estate agent is able to pull and analyze this data from their local databases and conclude that there were 10 homes sold every month with an absorption rate of 10%, meaning that for all homes were to be sold, it would take a total of 10 months. Data revealed that the price mark down on a typical home is 96%, and days before a home enters escrow totals 140. What does this mean for someone looking to sell their average $100,000 home, in Market A? The probability of it selling in 30 days is 10%. If it did get sold, it would take 140 days for it to get a contract price of $96,000. There is also a 40% chance that a home may never sell.

There are 4,000 Real Estate agents in the Orange County area. All of them have a different approach and advice on how to sell.  It is wise to always consult a professional real estate agent to get the best advice and seek the proper approach.

Here are seven common themes in ensuring the best approach.

  1. Price to sell. If the home is priced low enough, the theory goes, it will bring buyers in. This is one of the reasons sellers are often told to lower their price until it gets to the point where it doesn’t make sense to sell it.
  2. Offer a Commission Incentive. Offering to increase an agents’ commission will increase the incentive to bring in more clients.
  3. Fix up the property. Many homebuyers don’t have the patience or the financial resources to go about fixing a home. If you decide to fix it before selling it, then you will likely command a premium by saving the buyer time and money.  
  4. Offer concessions. Home buyers need help in overcoming the major obstacles when it comes to qualifying for a mortgage. A seller can offer to help in the closing costs or repairs.
  5. Hold a property auction. If you have run out of all other options, this offers a fast-paced solution.
  6. List and they will buy. There are a few real estate agents who believe that they can get a house sold with minimum effort. The big difference though is selling or not selling the home.
  7. Don’t be average in anything you do. Being extraordinary is what will prompt a seller to pick your property over another. If a home doesn’t sell, some real estate agents tend to tell you it is the market to blame, but while we may not be able to change the market, we do have the ability to take the home from average to extraordinary. Often, the defining factor is getting the proper professional help in selling the home and choosing the best month to sell a house.

Contributor James Link

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