How to Get Your Home Sold

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Selling your home is all about attracting buyers to get top dollar for your biggest investment. To maximize your price, remember time is money in real estate. As with any product, when it initially comes on the market, the consumer is more willing to pay full price. The same is true of putting your home on the market. So how do you sell your home quicker? Here are four tips.

First, hire an expert advisor, not just any agent. Align yourself with this expert because they are selling your biggest asset, which will impact your bottom line.  Be sure the agent listens to you. An agent can do a personalized walk-through to let you know what you need to do—and not do—to increase your chances of getting top dollar for your biggest investment. An agent will ultimately save you time.

Second, have a strategy. It’s amazing the amount of planning people put into a one-week vacation, but how resistant they are to planning how to effectively position and sell their biggest asset. The agent will build this strategy so, for example, anyone who is looking for a house in your neighborhood and price range will know about your home, so you’ll sell it faster.

Third, be proactive and at the forefront of the market, which is called positioning.  An expert advisor will tell you how to position your home from a price and condition standpoint. Listen to the feedback when it comes to selling your home.

Fourth, be flexible. This does not necessarily mean be flexible about your selling price, but you can offer a home warranty, be flexible about the settlement date, leave the washer and dryer, and apply some money to the closing. Create a win-win situation. Your flexibility will help you sell your home faster and avoid problems with the buyer.

Give us a call so we can tell you where to be positioned and how to be successful in the market. Please contact us at (443) 375-2224. We’d be happy to assist you. 

Mortgage Debt Relief Act/FHA Changes

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Have you heard the latest news about the Mortgage Debt Relief Act?  Figured I’d share some info on this since it’s been a hot button issue in our country recently.

The fiscal cliff deal that was made during the first week of 2013 is bringing back a popular tax break on mortgage insurance premiums and debt forgiveness for borrowers who go through a short sale, foreclosure, or debt reduction.

 

One of the more watched provisions of the fiscal cliff was the Mortgage Forgiveness Debt Relief Act of 2007, which was set to expire on Dec. 31, 2012. 

The fiscal cliff deal extends it for another year; meaning homeowners who experience a debt reduction through mortgage principal forgiveness or a short sale are exempt from being taxed on the forgiven amount.

Its imperative that if you, or someone you know, is in a situation where debt forgiveness is an option, that option is explored & pursued this year because there’s no assurance it will be extended past the end of 2013.

Very Important Changes to FHA

FHA issued a press release at the end of January officially announcing upcoming changes to their mortgage program. Below are the 2 key changes that will be the most relevant for buyers and sellers. At this time, they have not indicated an official date for the changes to go into effect, but I would expect it would be within the next couple of months. I

1     FHA will increase its annual mortgage insurance premium (MIP) for most new mortgages by 10 basis points or by 0.10 percent

This will raise the factor for the monthly premium from 1.25% to 1.35%. The formula for calculating the monthly payment is Loan Amount x .0135 / 12

Here are examples of how this will affect monthly payments:

$200,000 Purchase Price….Added Monthly Cost = $16.09

$300,000 Purchase Price….Added Monthly Cost = $24.13

$400,000 Purchase Price….Added Monthly Cost = $32.17

     2.   FHA will also require most FHA borrowers to continue paying annual premiums for the life of their mortgage loan

In my opinion, this is the bigger change, as it will add enormous cost to borrowers over the life of the loan. 

Beginning In 2001 and up until this change is enforced, FHA cancelled required MIP on loans when the outstanding principal balance reached 78% of the original principal balance.  However, FHA remains responsible for insuring 100% of the outstanding loan balance throughout the entire life of the loan, a term which often extends far beyond the cessation of these MIP payments.  Soon, these annual premiums will no longer be dropped at that 78% threshold and will be carried for the life of the loan.

How does that affect the borrower?

Based on current 30 Year Fixed FHA rates of 3.25%, a borrower would be at a 78% loan to value which would make them eligible to have their monthly mortgage insurance dropped after 108 months (approx. 9 yrs). Based on this new change, the monthly mortgage insurance would be required for the full 360 month term of the loan.

Examples of the added cost:

$200,000 Purchase Price….Added Cost Over the Life of the Loan: $54,714.24

$300,000 Purchase Price….Added Cost Over the Life of the Loan: $82,071.36

$400,000 Purchase Price….Added Cost Over the Life of the Loan:$109,431.00

FHA buyers will obviously be looking at higher payments and added long term costs once the changes go into effect which could price them out of their desired price range.  Subsequently, this could affect sellers since they could be faced with a smaller pool of buyers.

If you, or someone you know, is looking to get into the market this year to buy or sell a home, it would be wise to get the ball rolling sooner rather than later.

To switch gears for a moment, I wanted to share our 4 predictions on what we’re expecting in the real estate industry throughout 2013.  Hopefully if you’re thinking of buying and/or selling this year, or know someone who might, this information will be helpful.

1      With pending sales having trended up throughout 2012, we expect that trend to continue throughout 2013

2      With inventory of homes down sharply since the middle of 2011 and the market seemingly starving for homes for sale, we expect to see a modest increase in home prices of 3-5% by year’s end; quick side note, saw a survey conducted by Redfin and 71% of buyers surveyed believe prices will rise by the end of 2013, so that will create sense of urgency which could impact home prices

3      Mortgage interest rates will rise slightly

4      Short sale process will continue to be expedited, resulting in a higher % of short sales and increasing their appeal to buyers

Overall, we’re expecting home affordability to remain at record highs while home selling conditions to continue on the right track of improving.

Please feel free to call, text or email with any questions/concerns. Keep in mind though, we’re not a tax accountants or lawyers, but we’re YOUR Real Estate Experts and always happy to help.

Home Improvements That Offer the Best ROI

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Time and again, homeowners put a fair amount of time and money into improving their homes. They do it for a multitude of reasons; some to increase the value of the property, others to enhance their lifestyle in the home and yet others to bring it up to par with other homes in the neighborhood. But one thing holds true across the board – there should be some level of ROI associated with each renovation or improvement.

So as you sit down to decide what renovations to embark upon and the level of resources you’d like to expend on the project, consider the following few areas where there is the most potential for a strong return on your investment.

Kitchens and Bathrooms

Always a hotspot in a home, these two areas almost always garner special attention by buyers. So whether you are doing improvements to your space to prepare it for sale or just to increase your enjoyment in the home – it’s a good investment in the long run. If listing your home in the near future seems likely, try to use neutral materials that would accommodate most buyers’ tastes. It may be useful to consult with a Realtor® in advance of any renovations to find out exactly what type of ROI you might expect on the remodel project.

Increased Living Space

A very popular renovation project involves enhancing the existing floor plan to accommodate additional living spaces. Whether you choose to increase bedroom or closet sizes, widen hallways, finish a basement or even convert wasted space into a usable area, these upgrades translate into high financial returns.

Additional Outdoor Living Areas

More and more homeowners are turning to their outdoor space as viable living areas and this feature is becoming increasingly desirable in the housing market. To enhance the outdoor areas of your home and make them more usable is always a good move because not only does it perk up the home’s curb appeal but also it sets yours apart from others when buyers are scouring the marketplace.

Energy Efficient Upgrades

In today’s green age, an increasing number of homes are being converted to high-energy efficiency. This includes the installation of high-efficiency major appliances, low-E windows, doors or other such fittings and also premium quality insulation. Updating old mechanical systems are also a great way to renovate into the 21^st century. The financial returns are significant – not only from the standpoint of day-to-day savings on energy costs but also through utility company rebates and tax credits.

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The important factors to consider when deciding just how much you want to improve your home all lead to whether or not you plan to sell soon or live in the home for a longer period of time. It’s a good idea to conduct a cost-benefit analysis to see which are your priorities and how they fit into the bigger scheme of your plans of homeownership.

If all else fails and you want to spruce up your home just before listing it and want to do it without spending too much, the ultimate quick fix is a fast coat of paint and some new flooring. Fresh fixtures will also do the trick.

For more information on how you can maximize your return on investment with home improvement projects – contact us today!

Be Un-Emotional When Buying a Home In Order to Get the Best Value!

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Want to break your heart and your bank account at the same time? Then buy a new home based on the fact that you've fallen in love with it!

Needless to say, you should never do this!

In some cases, when you fall in love with the "pretty face" of a house, you fail to look underneath and find problems like bad wiring, leaky roofs, bad foundations, etc. This is an extremely expensive way to buy a home!

A funny and sad example of this is shown in the 1986 film, The Money Pit, starring Tom Hanks and Shelley Long. They make the mistake of falling in love with a home and think they're getting a $1,000,000 property for only $200,000.

Once they get into the home, they find out it'll cost a million to repair it! It's got wood rot, a bad roof, bad plumbing, bad electricity, even bad raccoons!

Well, that's Hollywood exaggeration, of course. After all, The Money Pit was a comedy. But, when things like that happen to you, it's no joke. Repairs can cost you a lot of money and heartache, not to mention dangerously rising blood pressure!

So, again, never ever fall in love with a house at first sight! Easier said than done, you say? How do you avoid this tendency? Below, I offer some solutions to the problem!

Solutions 1: Get Cold Hard Facts about the Home!

When I talk about "cold, hard facts," I'm talking about getting the house evaluated by a certified home inspector.

It's well worth the money to have this job done because the inspector will cast the objective eye you lack on the property. He or she will evaluate every aspect of a house - roof, plumbing, wiring, foundation, etc.




And then, that inspector will provide you with a written report that may range anywhere from 20 to 50 pages. It will give you a point-by-point summary of what needs to be corrected.

The cost of a home inspection varies with the region of the country. Nationally, they range from $200 to $400. But, for the investment of, say, $200, you prevent yourself from losing thousands of dollars in repairs in two ways.One, you can simply walk away from the deal. Or, two, you can require that seller fix all items before you sign a contract!

Bonus: Often, you can ask that the seller pay for the home inspection!

Solution 2: Cool Off and Take Your Time!

Infatuation with a home is fun and exciting, and you can have the overwhelming temptation to buy an attractive home practically "on the spot."

My advice - walk away and come back several hours later, especially after you've viewed other properties! By then, it's likely you'll have a more objective eye.

Solution 3: Keep It Simple!

By this I mean that you should stick within your price range. You want the best hom e at the best price within your means! So, if you see an outwardly gorgeous home at, say, $10,000 above your price limit, say, "I love you, but you're way too pricey for me!" and walk away from the temptation!

Solution 4: Rely on Your Realtor!

At heart, I and other professional realtors like me, want you to have a home that meets your needs in the best way possible. That means preventing you from buying a home that's in substandard shape and/or beyond your means.

To be perfectly blunt about it, I rely on great word of mouth from satisfied customers to make the most of my real estate career. So, you have my promise that I'll do my absolute best to get you into the house of your affordable dreams!

Need that objective eye to help you make a smart home-buying decision? Contact us today.