With the way DFW prices are on the rise, and the high demand vs little supply, it is not uncommon for appraisals to come in low. What you should do if an appraisal comes in too low depends on the side of the transaction you are on. Luckily, a competent agent on either side will be an asset to help remedy the situation.
On the selling side: If you are selling a home and the appraisal comes in lower than the accepted price, your agent is the best one to consult. They should be able to pull recent comparable sales and compare them to the appraisal. If the appraisal is lower than the prices of the comparable sales, your agent should be able to dispute the value using valid recent neighborhood comps. If the recent comps support the value of the appraisal however, you must either work something out with the buyer, or lose the contract and risk putting the home back on the market and return the earnest money to the buyer upon termination.
On the buying side: If you are purchasing a home and the appraisal comes in lower than the accepted price, you have a few options. The first, you can choose to walk away from the deal and invest your money in a different home. Some people also will pay the difference out of pocket up to a certain amount, You can also try to negotiate with the seller to see if they will come down on the price to meet the appraisal or meet you at some point in between the appraisal and accepted offer price. The good news for you is if the seller does not want to negotiate you should have a clause in your contract allowing you to terminate the contract and still keep your earnest money. Your agent is the best one to speak with about this situation and they can go over in detail with you about the neighborhood, realistic market prices, availability, contract termination, and more.
Monday, September 5, 2016
Sunday, August 28, 2016
Tuesday, June 21, 2016
How to get the Most Money for My Home
Every home seller wants one things when they sell their home, the most money. If you are wanting to list your home, follow these tips to maximize the dollar amount someone wants to pay you for your home.
Hire a good Realtor: A real estate agent is your best resource to sell your home for the most money. While the commission is 6%, experienced agents on average get over 10% more for homes. They know how to price a home, how to market a home, how to negotiate, and how to navigate you safely through the complicated sales process.
De-clutter: When there is too much in a home, people cannot see the home because they are so focused on what is in it instead of the actual home. Simplify your decor, get rid of unused items and clothes. Get a storage unit for the items you do not want to get rid of.
Clean: Clean your home from top to bottom. Steam clean your carpets, deep clean your appliances, and make sure you get the areas often over looked like baseboards and ceiling. It's never fun to walk into a home you are thinking about purchasing but look up to see years of cobwebs in the corner of the wall. Keep your home as clean as possible the entire time it is listed, a good rule of thumb is to keep the house looking like no one lives in it. This can be tough because people often do live in the home, but it can be done and it definitely pays off.
Make Repairs: Make repairs to the home prior to putting it on the market. Replace wood rot, hire a painter to touch up worn paint, and fix any other deferred maintenance you are aware of. Buyers almost always hire inspectors, and an inspector will catch the wood rot you elected not to fix, or the cracked electrical outlet you did not replace and then the buyers can use the report to negotiate in allowances for repairs not already done.
Stage: Staging a home is a wonderful tool to get it to sell. A stager can come in and rearrange your current furniture and make your home look like a totally different house. Remove personal items like pictures that distract a potential buyers attention from the home. Get rid of dated decor and elect for a simplistic approach instead of over-cluttering (see above).
Eliminate Odor: Odor is a huge issue that scares away buyers. What makes odor a tough thing to deal with is that often when we live in a home with smells, we become accustomed to them and it becomes harder to notice them. Cooking, pets, smoking, mess, moth balls, and even over doing the plug ins can cause a buyer to have concern about expense to remove the smell. While plug ins and scents may not be as worrisome to get rid of, an overly perfumed home can give the illusion the sellers are trying to hide a smell with the scented products.
Here are some basic tips on maximizing the money for your home, but your best resource will always be an EXPERIENCED Realtor that is familiar with these common objections and how to combat them.
Hire a good Realtor: A real estate agent is your best resource to sell your home for the most money. While the commission is 6%, experienced agents on average get over 10% more for homes. They know how to price a home, how to market a home, how to negotiate, and how to navigate you safely through the complicated sales process.
De-clutter: When there is too much in a home, people cannot see the home because they are so focused on what is in it instead of the actual home. Simplify your decor, get rid of unused items and clothes. Get a storage unit for the items you do not want to get rid of.
Clean: Clean your home from top to bottom. Steam clean your carpets, deep clean your appliances, and make sure you get the areas often over looked like baseboards and ceiling. It's never fun to walk into a home you are thinking about purchasing but look up to see years of cobwebs in the corner of the wall. Keep your home as clean as possible the entire time it is listed, a good rule of thumb is to keep the house looking like no one lives in it. This can be tough because people often do live in the home, but it can be done and it definitely pays off.
Make Repairs: Make repairs to the home prior to putting it on the market. Replace wood rot, hire a painter to touch up worn paint, and fix any other deferred maintenance you are aware of. Buyers almost always hire inspectors, and an inspector will catch the wood rot you elected not to fix, or the cracked electrical outlet you did not replace and then the buyers can use the report to negotiate in allowances for repairs not already done.
Stage: Staging a home is a wonderful tool to get it to sell. A stager can come in and rearrange your current furniture and make your home look like a totally different house. Remove personal items like pictures that distract a potential buyers attention from the home. Get rid of dated decor and elect for a simplistic approach instead of over-cluttering (see above).
Eliminate Odor: Odor is a huge issue that scares away buyers. What makes odor a tough thing to deal with is that often when we live in a home with smells, we become accustomed to them and it becomes harder to notice them. Cooking, pets, smoking, mess, moth balls, and even over doing the plug ins can cause a buyer to have concern about expense to remove the smell. While plug ins and scents may not be as worrisome to get rid of, an overly perfumed home can give the illusion the sellers are trying to hide a smell with the scented products.
Here are some basic tips on maximizing the money for your home, but your best resource will always be an EXPERIENCED Realtor that is familiar with these common objections and how to combat them.
Sunday, June 12, 2016
Why Home Buyers Should Work with a Realtor
For the full blog post, click here
If you have been considering buying a home and are thinking you should not use a Realtor, consider the following before making a decision on what is the biggest purchase of many people's lives.
Realtor representation is already paid by the seller: The seller of a home is almost always the one that pays your realtors commission. That means all the services your realtor provides you are free to you. If you think by calling the Realtor on the sign in front of the house you want to see will save you money because the seller will only pay half commission, think again. Listing agents that work both sides of the transaction (buyer and seller representation) get the entire 6% commission, instead of having to split it with the buyers agent. If you see a for sale by owner you want to purchase, most owners are willing to pay the buyer's agent commission. So you get all the services a Realtor provides you essentially for free.
Negotiation: Realtors are skilled in negotiation. It is what they do for a living. A Realtor representing the buyer will do anything and everything to get you the best price possible when you are not in a multiple offer situation. If you are in a multiple offer situation, skilled agents know what to do to make your offer more appealing.
You have someone working for you: Realtors are also in the business of customer service. With a good agent you should get answers to all your questions, information, a walk through of the process, and a partner helping alleviate your stress during one of the most stressful times. They are working for you to get you the home you want for the best deal and make sure all along the way you are on top of important deadlines, your lender is on top of your file, the appraisal is on schedule, the seller's agent is doing their part to get all the documents signed and to the title company on time, and so much more.
Looking at what you get for free, why would you elect not to use an agent? If you have had a bad experience with an agent in the past, understand that no 2 agents work identically, and interview before making your decision. Don't allow one bad experience to taint your views on Realtors, we are not all the same..
If you have been considering buying a home and are thinking you should not use a Realtor, consider the following before making a decision on what is the biggest purchase of many people's lives.
Realtor representation is already paid by the seller: The seller of a home is almost always the one that pays your realtors commission. That means all the services your realtor provides you are free to you. If you think by calling the Realtor on the sign in front of the house you want to see will save you money because the seller will only pay half commission, think again. Listing agents that work both sides of the transaction (buyer and seller representation) get the entire 6% commission, instead of having to split it with the buyers agent. If you see a for sale by owner you want to purchase, most owners are willing to pay the buyer's agent commission. So you get all the services a Realtor provides you essentially for free.
Negotiation: Realtors are skilled in negotiation. It is what they do for a living. A Realtor representing the buyer will do anything and everything to get you the best price possible when you are not in a multiple offer situation. If you are in a multiple offer situation, skilled agents know what to do to make your offer more appealing.
You have someone working for you: Realtors are also in the business of customer service. With a good agent you should get answers to all your questions, information, a walk through of the process, and a partner helping alleviate your stress during one of the most stressful times. They are working for you to get you the home you want for the best deal and make sure all along the way you are on top of important deadlines, your lender is on top of your file, the appraisal is on schedule, the seller's agent is doing their part to get all the documents signed and to the title company on time, and so much more.
Looking at what you get for free, why would you elect not to use an agent? If you have had a bad experience with an agent in the past, understand that no 2 agents work identically, and interview before making your decision. Don't allow one bad experience to taint your views on Realtors, we are not all the same..
Friday, June 10, 2016
What are the Most Expensive Repairs to make to a Home?
In general home repairs are pretty costly, however there are certain common repairs that cost the most to fix, and here is what they are.
Roof: The roof is what protects the interior of your home from the elements. Leaky roofs can cause water damage, mold, and other issues with your home. They must be replaced every 10-30 years, depending on the type of roof. Severe weather like high winds, tornadoes, or hail can cause damage to a roof as well. Sometimes your insurance will pay to have your roof replaced, but if you are paying out of pocket, depending on how bug your roof is and how complicated it was designed, replacing it can cost you anywhere from $5,000 to $15,000 or more.
Foundation: The foundation is what your home is built on, and shifting foundations can cause the entire house to come apart as they progressively get worse. If left unrepaired, foundations problems will cause cracks all over your walls and exterior brick, shifting ceilings (I have seen some that are literally being pulled apart), doors that are hard to open, shut, or lock, cracking tiles, and in more serious cases damage and warping to your roof and busting plumbing pipes underneath your home causing leaks and all kinds of extra work. In the Dallas metroplex, we have shifting soil and are notorious for bad foundations. You are almost guaranteed to have to do some sort of foundation work to your home at some point in time, even if you keep your foundation maintained the way it should be. Pier and beam foundations are typically cheaper to fix than slab foundations, unless the piers under the home are rotting and need to be replaced. Rotting pier and beam foundations can get pretty costly. Slab foundations are the most common in newer built homes, and typically cost between 180 and 350 a pier, or more. Sounds inexpensive, except that foundation repairs are often 20 or more piers and the cost per pier doesn't always include general labor and additional work (like cutting into a deck). Some foundation bids can be up to $10,000 or more.
Heating/AC: The other costly repair that needs to be made to your home is a new heating/AC unit. With a smaller home you can get away with a smaller AC unit, but the bigger the home the more power you will need to heat and cool it. Some homes are so large they even require 2 or 3 heating/AC units. You can estimate that just replacing the unit would be about $5,000 minimum, depending on the brand, size, and reputation of the unit you purchase.
Roof: The roof is what protects the interior of your home from the elements. Leaky roofs can cause water damage, mold, and other issues with your home. They must be replaced every 10-30 years, depending on the type of roof. Severe weather like high winds, tornadoes, or hail can cause damage to a roof as well. Sometimes your insurance will pay to have your roof replaced, but if you are paying out of pocket, depending on how bug your roof is and how complicated it was designed, replacing it can cost you anywhere from $5,000 to $15,000 or more.
Foundation: The foundation is what your home is built on, and shifting foundations can cause the entire house to come apart as they progressively get worse. If left unrepaired, foundations problems will cause cracks all over your walls and exterior brick, shifting ceilings (I have seen some that are literally being pulled apart), doors that are hard to open, shut, or lock, cracking tiles, and in more serious cases damage and warping to your roof and busting plumbing pipes underneath your home causing leaks and all kinds of extra work. In the Dallas metroplex, we have shifting soil and are notorious for bad foundations. You are almost guaranteed to have to do some sort of foundation work to your home at some point in time, even if you keep your foundation maintained the way it should be. Pier and beam foundations are typically cheaper to fix than slab foundations, unless the piers under the home are rotting and need to be replaced. Rotting pier and beam foundations can get pretty costly. Slab foundations are the most common in newer built homes, and typically cost between 180 and 350 a pier, or more. Sounds inexpensive, except that foundation repairs are often 20 or more piers and the cost per pier doesn't always include general labor and additional work (like cutting into a deck). Some foundation bids can be up to $10,000 or more.
Heating/AC: The other costly repair that needs to be made to your home is a new heating/AC unit. With a smaller home you can get away with a smaller AC unit, but the bigger the home the more power you will need to heat and cool it. Some homes are so large they even require 2 or 3 heating/AC units. You can estimate that just replacing the unit would be about $5,000 minimum, depending on the brand, size, and reputation of the unit you purchase.
Tuesday, May 31, 2016
Top Tips to Prepare Your North Texas Home for Heavy Rain, Severe Storms, and Possible Flooding
Top 8 Tips For Preparing Your North Texas Home for Heavy Rain, Severe Storms, and Possible Flooding
All this North Texas rain lately has everyone concerned. Whether you think are at risk of flooding or not, it is important to prepare your home and have a plan of action just in case. The lakes are beginning to fill to over capacity and with more rain predicted to be in the forecast, the importance of preparing your home for heavy rain, bad storms, and possible flooding is at an all time high.
1. Clean your rain gutters: Make sure the rain gutters around your house have been cleaned and function properly. Clogged gutters can prevent rain from running off your roof and cause potential leaking in your home. Decaying wood, siding, and other materials, in addition to damaging the outside of your home, can damage the interior of your home as well. Check that the gutters do not have leaks and are tightly sealed. Make sure the gutter runoff has somewhere to go away from your foundation. This helps prevent pooling of water close to your home.
2. Make sure your roof is in good condition: Walk around the outside of your home carefully inspecting your roof for signs that your roof may need some repairing. Look for signs of aging, damage, and sagging. Loose or missing shingles, cracks in the chimney and along the edge of the shingles, holes or rust in the sheet metal, and a part of the roof that looks unusual in comparison to the rest could be warning signs. Be aware of any areas that seem particularly worrisome and that may need a closer inspection. If you have an outdoor shed, make sure the roofing on it is in good condition as well. You can always hire a professional inspector or roofer to assess the damages for you. Clear any debris that may be on your roof off, like fallen branches, leaves, and garbage blown on the roof. Check inside your attic, if you see any light shining through the roof this could be an indication that the waterproof insulation on your roof has been damaged.
3. Fix any leaks in your windows, door, or ceiling: inspect the caulking around your home at least once a year for chips and cracks, which means the caulking is old and needs to be replaced. Remove cracked and aged caulking and re-caulk around the seals of the window and doors. Replace old or worn weather stripping under the door. Properly sealing the cracks around your home can also help cut back on your electric bill.
4. Maintain the plants around your home: Heavy winds can cause plant limbs to snap, and depending on the weight of the limb can cause serious damage to your home. If lightning strikes a tree and causes a fire, the fire can easily spread to your home. Trimming bushes and tree branches away from your home can help prevent a disaster. Stake bushes and other plants firmly to the ground, this helps prevent the wind from uprooting them, and blowing them into your home. Dead bushes and tree limbs should be removed and are especially hazardous if a fire breaks out. They are also the part of the tree most likely to snap from wind.
5. Lower water levels in pools: with all the extra water we’ve had lately, lowering the level of your pool could prevent overflow, but do not to drain more than a foot of water. The water in your pool helps protect it from damage from debris that may be blown into it.
6. Secure loose items around the yard: Patio furniture, planters, backyard toys and playgrounds, and anything else that may be loose around your home’s exterior should be secured in case of high winds that could possibly blow items into your fence windows or siding and create serious damage. Patio furniture should be stored in a dry area like a shed to prevent heavy rains from damaging the furniture.
7. Check with your home insurance policy to make sure you are covered: Consider the type of coverage you have, what level of damage you are insured for, and that your policy covers you for damages specific to your area.
8. Have an emergency plan: You can never be too careful when it comes to your family’s safety. Many people have been experiencing floods in this weather that never before had any issues with flooding. Be prepared for the worst. Generators can be an expensive but good investment if you are without power. Have bags of sand handy if necessary to soak up extra water. Consider where your family may be when emergency strikes and have a plan of action to bring everyone together and keep safe. Have an emergency kit in case you lose power or have to evacuate.
Thursday, May 26, 2016
How to Prepare Your Home for Sale
How to Prepare Your Home for Sale
When the times comes to sell your home there are several preparations you should make if you want to get top dollar, This list of top tips to sell your home quickly and for the most money is a great place to start!
De-clutter: The first thing you will need to do, is de-clutter your home. It can be difficult for buyers to see past too much furniture and items. When buyers walk into a home, they need to be able to imagine their lives there. You want them to start picturing where they would put their furniture, and how they would decorate, and if there is too much in the home, it is just not possible for buyers to picture their new life there. Storage units can be a great way to de-clutter a home without having to get rid of anything. Too much furniture, too many decorations, and piles of stuff makes a house look much smaller and takes away from the charm of the home.
Clean: Dirty homes are one of the biggest turn offs for buyers. Deep clean your home before it is on the market. You would be surprised what some buyers notice that you may not. I had a client once that would walk into a home and take a look at the baseboards and if they weren't sparkling my client wanted to leave because she felt like the owners were not clean and did not want to buy a dirty house. Clean blinds, baseboards, vents, appliances, floors, bathrooms, bedrooms, anything you can think of. Get rid of anything with an odor and try to keep your home smelling as clean as possible.
Yard Work: Take a look at your front and back yards. Make sure grass is mowed, plants look neat and well-kept, and get rid of too many plants. You don't want your home to look like a jungle. In the fall and winter, make sure you are keeping both your front and back yards completely clean from leaves, and in spring and summer make sure to water your grass and replace plants that died over the winter. Trim your trees away from your roof (inspectors will often put a tree too close to the roof in an inspection report for buyer to be aware of), prune your bushes, and replace old mulch. Keep the outside of your home looking like a meticulously maintained oasis rather than a waste land. Make sure any trash in your yard is picked up, and if you have dogs keep the back yard clean as well.
Maintenance: Check your entire house for any deferred maintenance. Paint the exterior, fix wood rot, stain your fence, touch up the inside of the home, have a roofer give you a free evaluation on the condition of your roof, get your ac checked, anything you can think of that is not perfect. Pay close attention to cracks in your home. While homes do settle and minor cracking can be caused by the home settling, sometimes cracks can be an indication of foundation problems. While covering settling cracks can make your home look better, if the cracks are from foundation they will return and continue to get bigger. A home cannot be financed if the roof needs work or the foundation needs to be repaired. Change out all burnt out light bulbs, make sure everything in the home is functioning as it should be such as the garage door, hot water heater, disposal, and appliances. Re-grout bathrooms and tiles where the grout is disintegrating, Buyers would much rather buy a home that is move-in ready and needs minimal repair than have to mess with a home where they have to replace the siding or any other maintenance issue
Updating: If you have a room that has brightly colored walls, paint them. Neutral colors are key to attracting the most buyers. Let the buyers decide for themselves what they want to paint a house. If you are updating flooring, choose something that is easy for anyone to match, not something designer and over the top where a person has to have home decor experience to make it look good. Get rid of colored carpets and anything in the home that is hard to match. Don't go over the top and put marble in a 200,000 home and expect it to sell for more, instead try to update your home to the standards the rest of the neighborhood has. How much updating you should or should not do depends largely on when your home was built, what has been done to the home, and what most other homes in the neighborhood have.
When the times comes to sell your home there are several preparations you should make if you want to get top dollar, This list of top tips to sell your home quickly and for the most money is a great place to start!
De-clutter: The first thing you will need to do, is de-clutter your home. It can be difficult for buyers to see past too much furniture and items. When buyers walk into a home, they need to be able to imagine their lives there. You want them to start picturing where they would put their furniture, and how they would decorate, and if there is too much in the home, it is just not possible for buyers to picture their new life there. Storage units can be a great way to de-clutter a home without having to get rid of anything. Too much furniture, too many decorations, and piles of stuff makes a house look much smaller and takes away from the charm of the home.
Clean: Dirty homes are one of the biggest turn offs for buyers. Deep clean your home before it is on the market. You would be surprised what some buyers notice that you may not. I had a client once that would walk into a home and take a look at the baseboards and if they weren't sparkling my client wanted to leave because she felt like the owners were not clean and did not want to buy a dirty house. Clean blinds, baseboards, vents, appliances, floors, bathrooms, bedrooms, anything you can think of. Get rid of anything with an odor and try to keep your home smelling as clean as possible.
Yard Work: Take a look at your front and back yards. Make sure grass is mowed, plants look neat and well-kept, and get rid of too many plants. You don't want your home to look like a jungle. In the fall and winter, make sure you are keeping both your front and back yards completely clean from leaves, and in spring and summer make sure to water your grass and replace plants that died over the winter. Trim your trees away from your roof (inspectors will often put a tree too close to the roof in an inspection report for buyer to be aware of), prune your bushes, and replace old mulch. Keep the outside of your home looking like a meticulously maintained oasis rather than a waste land. Make sure any trash in your yard is picked up, and if you have dogs keep the back yard clean as well.
Maintenance: Check your entire house for any deferred maintenance. Paint the exterior, fix wood rot, stain your fence, touch up the inside of the home, have a roofer give you a free evaluation on the condition of your roof, get your ac checked, anything you can think of that is not perfect. Pay close attention to cracks in your home. While homes do settle and minor cracking can be caused by the home settling, sometimes cracks can be an indication of foundation problems. While covering settling cracks can make your home look better, if the cracks are from foundation they will return and continue to get bigger. A home cannot be financed if the roof needs work or the foundation needs to be repaired. Change out all burnt out light bulbs, make sure everything in the home is functioning as it should be such as the garage door, hot water heater, disposal, and appliances. Re-grout bathrooms and tiles where the grout is disintegrating, Buyers would much rather buy a home that is move-in ready and needs minimal repair than have to mess with a home where they have to replace the siding or any other maintenance issue
Updating: If you have a room that has brightly colored walls, paint them. Neutral colors are key to attracting the most buyers. Let the buyers decide for themselves what they want to paint a house. If you are updating flooring, choose something that is easy for anyone to match, not something designer and over the top where a person has to have home decor experience to make it look good. Get rid of colored carpets and anything in the home that is hard to match. Don't go over the top and put marble in a 200,000 home and expect it to sell for more, instead try to update your home to the standards the rest of the neighborhood has. How much updating you should or should not do depends largely on when your home was built, what has been done to the home, and what most other homes in the neighborhood have.
Sunday, May 22, 2016
What is a seller's market?
What is a seller's market?
A sellers market is a real estate market in which the number of homes for sale (inventory) is less than the amount of buyers looking to buy a home. In a balanced market, there is about 6 months worth of inventory, but in a sellers market, the inventory is down to 2 months, and in some areas less than 1 month. What this means is that the supply of homes for sale would be exhausted in just 2 months by buyers if no more homes were listed.
What does this mean for you? Well, that depends on which side of the real estate transaction you are on.
Buyers are dealing with bidding wars on almost every property they are looking at. You go look at a property the day it is listed, fall in love, and make an offer only to find out there are multiple other offers. If you want to be the winning bid you must do everything you can to make your offer more appealing than the others. And even after offering substantially more than list price, you still often loose the home to another bidder and have to start your search all over again. This can go on and on, and many buyers are having to make 10 offers and sometimes more before they are able to get in a property just because there are so many other people looking for a home too.
On the flip side, sellers are seeing property values sky rocket and when they have a home that is priced right it often sells very quickly and for higher than the asking value. Now, many homeowners think this is a great market to sell your home in, and it is very appealing counting the extra equity you are gaining by selling at a time when everyone wants to buy. However, even as a seller you are facing problems when selling. Homes are selling so fast that the appraisals are not keeping up with market values and many homes do not appraise for the amount they are selling for. It is very stressful when you think you've sold your home for a high amount but then the appraisal comes in $20,000 low and the buyer is suddenly no longer able to get the home at the price you both agreed to because the banks won't lend on a home that does not appraise. Unless a buyer or seller wants to come up with the difference (sellers going down in price or buyers paying additional cash out of their pocket or a combination of both), the deal will not go through. Then when a seller sells, they need a home to move to and become buyers in this crazy market and have to face the same problems, unless they are relocating to a different market. Even rentals right now are being leased at record rates, and the rent rate goes up all the time.
What can you do as a homeowner or buyer in this situation? Your best option when buying and even selling in this sellers market is to make sure that you have a competent agent on your team to guide you through the issues you may face and help you conquer them. A good agent knows what to do to make your offer more appealing and can also guide you through appraisal issues and may even be able to dispute a low appraisal.
A sellers market is a real estate market in which the number of homes for sale (inventory) is less than the amount of buyers looking to buy a home. In a balanced market, there is about 6 months worth of inventory, but in a sellers market, the inventory is down to 2 months, and in some areas less than 1 month. What this means is that the supply of homes for sale would be exhausted in just 2 months by buyers if no more homes were listed.
What does this mean for you? Well, that depends on which side of the real estate transaction you are on.
Buyers are dealing with bidding wars on almost every property they are looking at. You go look at a property the day it is listed, fall in love, and make an offer only to find out there are multiple other offers. If you want to be the winning bid you must do everything you can to make your offer more appealing than the others. And even after offering substantially more than list price, you still often loose the home to another bidder and have to start your search all over again. This can go on and on, and many buyers are having to make 10 offers and sometimes more before they are able to get in a property just because there are so many other people looking for a home too.
On the flip side, sellers are seeing property values sky rocket and when they have a home that is priced right it often sells very quickly and for higher than the asking value. Now, many homeowners think this is a great market to sell your home in, and it is very appealing counting the extra equity you are gaining by selling at a time when everyone wants to buy. However, even as a seller you are facing problems when selling. Homes are selling so fast that the appraisals are not keeping up with market values and many homes do not appraise for the amount they are selling for. It is very stressful when you think you've sold your home for a high amount but then the appraisal comes in $20,000 low and the buyer is suddenly no longer able to get the home at the price you both agreed to because the banks won't lend on a home that does not appraise. Unless a buyer or seller wants to come up with the difference (sellers going down in price or buyers paying additional cash out of their pocket or a combination of both), the deal will not go through. Then when a seller sells, they need a home to move to and become buyers in this crazy market and have to face the same problems, unless they are relocating to a different market. Even rentals right now are being leased at record rates, and the rent rate goes up all the time.
What can you do as a homeowner or buyer in this situation? Your best option when buying and even selling in this sellers market is to make sure that you have a competent agent on your team to guide you through the issues you may face and help you conquer them. A good agent knows what to do to make your offer more appealing and can also guide you through appraisal issues and may even be able to dispute a low appraisal.
Saturday, May 14, 2016
Why you should NOT sell your home for sale by owner
Thinking about selling your home by yourself? Make sure you have done your research and understand why there are Realtors in the first place.
- Texas is a non-disclosure state- In the state of Texas, home sales prices are not public information (non-disclosure). This means that as a homeowner, you cannot accurately price your home. Sure, you can ask neighbors what they sold a home for and hope they are honest about the price, you can also find out what neighborhood for sale properties were listed at, but there is no way you can find out what a home actually sold for unless you pay for a comping service like investors do, or talk to an agent. Zillow does not have sales prices, nor do any other free sight you visit. The Zestimate on Zillow is almost never accurate, and more likely to be off by close to $50,000 or more. The tax assessed value is completely inaccurate as to the market value of your home as well. While knowing list prices on homes comparable in square footage and condition can help you get a general idea as to price, you will not be able to get an accurate market price. You have no way of knowing if homes in your neighborhood sell for more or less than list price, and how much the difference is. When pricing a home, you need the final sales price, not list price.
- Realtors know how to qualify a buyer- Real estate agents have a way of pre-screening their buyers before they even let them in their car to look at homes. As a homeowner, your family's safety should be one of your top concerns. You do not want to open your doors to just any stranger claiming they want to look at your home to purchase, and accidentally let a predator into your home. The dangers of meeting a stranger are well known, and can end up with detrimental consequences. Realtors also know which lenders have reputations for pulling funding last minute and ruining the entire transaction, and often have back up lenders that may be able to save the contract and close on time.
- Negotiating experience- Experienced agents have the negotiating skills developed specifically for real estate transactions. They have knowledge of the current market and what is typically paid by buyers and sellers, and know how to talk to buyers and/or buyers agents to negotiate the best terms for you. The Realtors job is to work for their clients best interest and get their clients the best results possible.
- FSBOs get on average 10% less than a home listed with an agent- Yes, you read that correctly, on average for sale by owners transactions sell for an entire 10% less than the same home would if it had been listed with a Realtor. Many FSBOs pay the 3% buyers agent commission on top of selling the home for more than 10% less than homes listed with agents, which means even less money in your pocket. If you pay a listing agent, you are still making over 4% more than if you elected not to.
- Investors and buyers agents know they have the advantage on a homeowner- Investors and buyers agents know the stats on the market. They know how to talk owners down on homes, and they know how to use actual facts to convince the homeowner a property is not worth what the homeowner thinks it is. An experienced listing agent knows how to weed through deception and help you understand if what the person is saying is true or false. Investors specifically target FSBOs because they know it is much easier to get a deal from a homeowner than from a property listed with an agent
- Marketing your home- Marketing is the number one thing that can be done to increase exposure to your home and generate the most offers, pushing your walk-away cash higher with more and better offers. Good agents know about how to market your home in a way buyers appreciate and can often generate a frenzy of buyers before the property is officially entered into the multiple listing service (MLS), especially in the current DFW real estate market.
- There is more to making money on your property than just the sales price- There is more involved in a transaction than just selecting the offer based on sales price alone. There are terms like home warranties, survey, title policy, and seller contributions for buyer closing costs. A Realtor can tell you what is customary for sellers to pay, and break down each of the different amounts and what they will be for the home being sold. Realtors have gone to school for and studied contracts, and understand what different contingencies are and if and how they can hinder the sale of your home. They know what is typical for option periods (both the length and amount), the length of time financial contingencies should be, what type of loans are more likely to close and which loans take longer to close. When dealing with real estate, time is money.
If, after reading this, you are thinking about speaking to an agent, make sure you interview them thoroughly. Understand what their marketing plan is, how they work, what they provide, and how much they know. It is pretty easy to spot a rock star agent among a group of average agents, don't sell yourself short by hiring someone that is less knowledgeable and experienced because you think you'll save money on a reduced commission. There is a reason people pay the full commission, and the results speak for themselves.
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