Friday, November 28, 2008

New Data on Home Buyers And Sellers

The National Association of Realtors (NAR) recently released the results of their annual survey pertaining to home buyers and sellers.

Some of the findings follow.
  • Sixty-one percent of home buyers are married couples.
  • The percent of first time home buyers rose to 41%, up from 39% last year.
  • Forty-nine percent of the first-time home buyers were white couples.
  • Eighty-seven percent of buyers used the internet while looking for a house.
  • Eighty-five percent of all buyers used a real estate agent.
  • Half of all buyers cited honesty, trustworthiness, and reputation as a reason they chose the real estate agent that they used.

Most of the buyers only contacted one agent when choosing who should represent them. They made the choice based on a referral or they had previously used the same agent.

Friday, November 21, 2008

Home Seller's Guide

For the last few posts, I have focused on the buyer's side in a transaction. Over the next few, I am going to focus on the seller's side.

Step 1

The first thing to do is to look at the house through a buyer's eyes. Think of things that need to be cleaned or painted. There may be items that need repaired before you can sell your house. Ask yourself what would you want corrected if you were the buyer. Remember the goal is to sell your house and you should make look as good as possible for any prospects that may be interested in purchasing it.

Remember that in a normal year in the United States there are approximately 5,000,000 houses sold. Each seller wants the same thing - the best price that a buyer is willing to pay. The buyer of real estate wants the best or lowest price that he can get. In a large part, the price you receive is based on the number of houses that are for sell in your community that are comparable to yours. You need to determine what will make a buyer want your house over the one down the street.

You want your house to stand out from the rest of the houses on the market. Improve your house so that it is comparable with other houses in the neighborhood. New paint, wallpaper and landscaping help a property to sell quicker. Any repairs should be made in order to get the best possible price from a buyer.

Before you actually put your house on the market, make sure you have prepared your house to sell. Remember, buyers want to be able to see themselves living in that house. If it needs repairs, or has too much "stuff" around, it will turn many people off. Don't look at your house as a place for you to live, look at it as a place you are trying to sell.

Thursday, November 20, 2008

Top Reasons A Buyer Should Hire A Realtor

Whether you are buying or selling real estate, it can be a complicated event. The transaction involves lawyers, appraisers, bankers, surveyors, buyers, sellers, and the list could go on and on.

Just like when your car is torn up, you take it to someone who knows what "that sound" is, a realtor will know what to do to either sell your property or to help you find the perfect house for you to buy.

We have all seen the signs "For Sale By Owner." However, according to statistics gathered by the National Association Of Realtors, around 80% of all houses are sold by real estate agents. That means that most of the FSBO's are not sold until they are listed through a realtor.

When you hire a buyer's agent:
  • the agent has a responsibility to represent your interest in the transaction.
  • the agent will ask you to sign a buyer agreement, but the seller pays the commission.
  • the agent should be someone that you trust, therefore you should interview several.
  • the agent will know the area and what is available.
  • the agent will take care of the paperwork that is necessary.
  • the agent knows the laws about selling real estate.
  • the agent will able to help pick out houses for you to see - that meet your criteria.
  • the agent knows the prices in the area and if the asking price is reasonable.

There are several reasons to hire a realtor when trying to find a house. One of the best is because they can take a lot of the work off of you.

Sunday, November 16, 2008

Maximize Your Selling Potential

In today's real estate market, a seller must present his house in the best possible way. Not only are buyers looking for a great deal, they are also looking for a house that doesn't need many repairs. One thing that will turn off a buyer quickly is going to a house and the first thing that they see are items that need repaired.


With a little effort on your part, you can create a house that can be sold at a better price and more quickly than others that have a few minor flaws.

Over the years, just about any house has a few problems that need to be repaired or replaced. With today's busy lifestyle, many minor problems get neglected and can become major problems. Following is a list of items that as a realtor, I have noticed in houses that I have shown that should be taken care of.

Curb Appeal
  • Trim any bushes that have overgrown.
  • Make sure gutters and downspouts are secure and clean.
  • Make sure all exterior lights are working.
  • Repair or replace any damaged storm windows or screens.
  • Repair or replace any broken windows.
  • Repair any roof defects.
  • Wash the house.
  • Wash the windows.
  • Keep lawns cut and edged.
  • Seal blacktop on driveway.

Inside

  • Clean the carpets.
  • De-clutter - store any excess furniture.
  • Make sure all lights work.
  • Paint or retouch items that need it.
  • Clean the baseboards and trim.
  • De-clutter your counter tops.
  • Clean cabinets, oven, and microwave.
  • Clean out refrigerator and top of it.
  • Remove personal items from refrigerator.
  • Clean the basement.
  • Clean the bathroom.
  • Remove unnecessary items from under all cabinets.
  • Clean or replace furnace filter.
  • Repair or replace any leaky faucets.

In other words, make the house sparkle. Most of these items are very inexpensive and will do wonders to make your house sell. When trying to sell a house, you need to make buyers see themselves living here. They don't want to see your "stuff" scattered about. They want to be able to imagine their items being there. If there are too many of your items there, or the place is in disrepair, they will go to the next house on the list. They need to think of your house as the best of the best for them.

Saturday, November 15, 2008

What Is Title Insurance and Why Do I Need It?

When buying real estate, it is a good idea to purchase Title Insurance. Title insurance is a contract between the title company and the person that is insured. The insurer bears all loses up the amount of the policy and is subject to conditions, exceptions and exclusions provided in the policy. A title insurance policy insures against loss to the insured in cases that may not be detected in a public records search.

There are several defects that may not be found during the search. Forgery, missing heirs, errors in the tax record, fraud, deeds by minors and mistakes in recording are just a few of the defects that may not be found during a search of the public records. These are called hidden defects. A title insurance policy is a guarantee against the possibility of loss if later a defect on the title is found.

There are two types of title policies: owners title policy and lenders title policy. However, a lender's title policy does not cover the property owner. As the name implies, it only covers the lender in case a defect in the title to the real estate is found.

In most cases, lenders will not loan on property that does not have a clear title and will require a title search to be performed. This protects their interests in the property.

Your banker or real estate agent can explain the different policies and what each cover. There are two types: the standard policy which covers the basic search and the enhanced policy, which covers many more items.

Knowing that a property has a clear title is one less worry when you are purchasing real estate.

Friday, November 14, 2008

The Pre-Approval Process

Once you have shopped around and found a bank that you like, you should go ahead and get pre-qualified for a loan. This process is fairly easy and does not involve any paperwork. Sometimes, a banker may even do this over the phone and usually only takes a few minutes.

Getting pre-qualified tells the real estate agent and the seller that you are serious about buying a house. The banker will give you an idea of how much you can pay for a house. This is usually based on statements that you make such as your income, assets and expenses.

One formula that many banks use to determine what amount you can pay is the 28/41 rule. The 28 in the formula means that your house payment cannot be more than 28% of your gross monthly income (before anything is taken out of your paycheck). For example, if your gross monthly income is $3,000, your payment cannot be more than $840 ($3,000 x .28).

The 41 in the formula means that your total payments cannot be more than 41% of your gross monthly income. As in the previous example, if your gross monthly income is $3,000 your total payments (car, credit cards, house) cannot be more than $1,230 ($3,000 x .41). This does not include utilities, insurance, etc. Your banker will explain all of this to you.

Pre-qualified and pre-approved are two different things, although many people interchange the terms.

When you are ready to find a house, you should go ahead and get pre-approved. The banker will require you to bring a few items with you to an appointment. These items include:
  • Your driver's license for verification of identity.
  • Your most recent pay stubs - usually the last two.
  • A copy of your last bank statements. This includes your checking and savings account as well as any other accounts you have.
  • Your last tax return and W-2 statements.
  • Proof of any stocks or bonds or any retirement accounts.
  • Credit report fee and any application fee. Some lenders do not charge an application fee.

After the banker has looked you over and likes what he sees, you will receive a good faith estimate which will tell you the terms of the loan such as interest rate, closing costs, term of loan, and type of loan.

I recommend that you shop around and get a couple of estimates from different banks. Even a small difference in interest rates can make a big difference over the term of a loan.

Although you have been pre-approved for a loan, it does not mean that you will get the loan. A bank usually will not guarantee that you will get the loan until a house has been appraised. An appraisal will protect the bank if your were to default on the loan. The property must also have a clear title, which means there are no liens on it.

Although buying a house can be stressful, if you have the necessary documents and there are no problems associated with the property, it can be a smooth process.

Thursday, November 13, 2008

First Things First

According to many psychologists, moving is one of the most stressful events that can happen throughout one's life. Not only does it disrupt your life, but it disrupts your families and friends lives - especially if you are moving far away. Buying or selling a house can be a very complicated event and must not be taken lightly.

One of the first things that you must ask yourself is where do I want to live. Many times, the buyer has not fully decided where he and his family will be comfortable. As a realtor, I can tell you numerous stories about driving around showing houses all over the place. One thing that I suggest to any buyer is to drive around and look at the neighborhoods that you may be willing to consider. You may find that the property you like may not be exactly where you need to be. Several questions to consider when making a decision include:

  • Do I want to live near my family? Is it important that I am close by to help out my parents or in-laws?
  • What size of a house do I need? Should it be a three-bedroom and two-bath house or will a two bedroom house fit into future plans?
  • Do I want to live in a Subdivision, or do I want to be away from everything?
  • How far from work should I be? How long will it take to commute and how much will it cost to drive back and forth?
  • What if I am transferred or decide I want to move, how easy will it be to resale this house?

I am sure that before you decide on a house, you will have many more questions that you must answer before making a final decision. Looking at property for sale is a fun thing to do. But before you contact a real estate agent, you should decide exactly what you are looking for. You probably won't get everything that you want; there is no perfect house, but your agent can help to narrow down the listings to a few that you may be interested in pursuing.

Where To Begin

Today's mortgage meltdown is causing problems for everyone. As a Real Estate Agent I have found it harder and harder to find buyers for the property I have listed. I have shown several houses in the past few weeks, however it seems harder and harder to get buyers to make offers on property that is a good value. I realize that we all attended "the party" over the past few years and now it is cleanup time.

That is why I am starting this blog. I hope that other agents, buyers, and sellers will comment and will give tips to each other about what works for them and what does not. There are a lot of good values out there, and it is our duty to educate the public that now is the best time to purchase property. I heard one person say that if anyone had the money to invest in real estate right now, that in a few years, they would be wealthy.

We all know that this current downturn will not last. Americans are resilient and will not be held down. As soon as the current crisis is over we will all begin to spend again. However, I also am a realist and know that this can also begin to spiral out of control.

If people quit buying things, jobs will be cut and those employees will quit buying - and around we go. One thing that politicians don't realize is that sub-prime loans are not the main cause of the current crisis.

If you break it down, it all started with the gas price increase. As long as the borrower can pay his payment, even though he may not like it, it does not matter what the interest rate is. When the gas price first increased to $2.50 a few years ago, I know of several businesses that closed because sales began to plummet. And when it reached over $4.00, many more closed.

I hope the new administration will truly work to solve the nations problem of independence on oil and will do what he said he would about finding alternative energy sources. If I have learned any thing, I believe that the world is truly small and what one country does affects everyone on the planet. I hope I have not got on a soap box too much. I also hope that you will comment and let's help each other out. Even though in a sense Realtors are in competition, we also depend on each other to sell one another's listings. So lets all help each other out.