Selling at the Right Price

HOW TO SELL YOUR HOME AT THE RIGHT PRICE When thinking about selling your home, establishing a reasonable and profitable listing price is perhaps the biggest challenge that every homeowner faces. Go too high and risk getting priced out of the market. Setting your price too low is an even bigger gamble. Here are a few simple steps recommended by real estate professionals. Choose the Right Sales Associate. While you may rely on a friend or relative's referral when selecting a sales associate, it’s smart to interview a variety of prospective associates and invite several to show their listing presentations. Pay attention to how they plan to market your home, and find out how many homes they (and their companies) listed in your local market in the past year and how many of them were sold. Make sure they plan to list the home on the multiple listing service (MLS), and inquire about the breadth of the sales associate’s network of contacts. Remember, the more prospective buyers a sales associate can attract, the better the chance for a successful sale. Finally, because selling a home requires a lot of communication, be sure you connect with the sales associate’s personality. Do Your Homework. Work with a real estate sales associate to develop a written comparative market analysis (CMA). This will provide you with a list of recent sales prices of similar homes in your area (with comparable numbers of bedrooms, baths, square footage and lot size), the asking prices of homes currently for sale in your neighborhood and other important information. Based on the CMA, a sales associate will provide a professional estimation of a legitimate selling price. Take the Emotion Out of It. While you’ve likely spent years in your home and take pride in it, the sales associate won’t set the price based on emotion. They will consider location, condition and size of your home which significantly impact the list price. A house in a secluded, exclusive area may be appealing to some buyers, while others will want to be closer to schools, shopping and health care facilities. What is the physical condition of the home? Is it a fixer-upper? Does it make a good first impression – known as “curb appeal”? Will it appeal to a growing family, or is it better suited to empty nesters? The sales associate will know the type of buyers who will be interested in the home. Realize It Is a Buyer’s Market. Home inventory, mortgage interest rates and the economy play a role in determining whether the buyer or seller has a negotiating advantage. With interest rates at historically-low levels buyers are in a good position to shoulder the “good” debt of homeownership. A sales associate will know the inventory levels in the community. Do the Math. Don’t forget to figure in closing costs, legal fees and other selling expenses when determining the selling price. Your sales associate should be able to provide cost estimates, and negotiate with a potential buyer to ensure a good sale price. Give It the Once Over. After working with a real estate sales associate to get a CMA and considering all the other factors, the list price will be set. But there’s one more step in trying to ensure that the house sells for that price, or more. Do as much as possible to improve the home’s appearance: touch up the paint, fix leaks, seal any cracks, clean the home, eliminate clutter and rid the home of any pet odors. The house has only one chance to make a first impression.

Frozen Pipes Mean Major Trouble

One of the worst disasters that can strike a home is a burst water pipe and the leading cause of it is a pipe that freezes during frigid winter weather. When water freezes, it expands and the pipe ruptures. And according to the American Red Cross, the problem is frequent in warmer areas of the country where buildings are not well insulated. Water from burst pipes ruins floors, walls, furniture and electronic equipment in over 250,000 homes every year. Here are some steps you can take to keep it from happening to you. Shut off water to outside faucets and drain the water remaining in the pipes. Insulate water lines that run through attics and crawl spaces. You can get the supplies you need at any home center. Make sure that there is heat in every part of the house where pipes are routed. If you plan to be away during the cold weather months, don’t try to save money by shutting off the heat. Reduce the thermostat to no lower than 55° F. And make sure you know where your main shut-off valve is and learn how to use it. If your home needs more protection for water damage, fire or other risks, call NRT Insurance Agency at 1-888-717-1776 or go to www.nrtinsurance.com.

Strengthen Your Offer

I receive calls from buyers all the time who are interested in submitting offers on properties, but have no clue how to do so effectively. Excluding cash buyers, many have not even spoken to a loan officer about qualifying for a mortgage. It is commonplace for many buyers to find a home and then begin the mortgage process, but this is one area where many buyers don’t realize that they have a chance to strengthen their offer. Today, the common pre-approval process involves running your credit report, followed by you answering some basic questions over the phone with nothing being verified. You’re then given a pre approval letter that in essence, means nothing to a seller. I consistently have pre-approved buyers denied loans weeks into the contract even after purchasing a home inspection and appraisal, wasting hundreds of dollars needlessly. I recommend that you first speak with a loan officer and not only get pre-approved, but ask that your file be submitted to underwriting to gain a commitment from the lender, where the only condition that must be met to obtain the loan is a satisfactory appraisal on a home and a clear title report. This commitment, rather than a pre approval assures the seller that you as a buyer are almost as good as cash. Secondly, the deposit is a measure of the seriousness of the offer. Don’t make an offer on a home that is $200,000 and only offer to put up a $500 deposit. The seller will want to see that you have a vested interest in seeing this contract through and low deposits are not a good sign. $1,000 is a typical deposit on most properties up to $200,000, but a good rule of thumb to follow is to offer 1% of the purchase price as the deposit. Third, the inspection times should be quick. Sellers don’t want to see that you need 30 days to conduct a home inspection. An inspection can actually be completed within two hours the next day. If it reveals items that need further investigation, ask for an extension of the inspection deadline at that time. Finally, submit a clean offer. Sellers don’t want to see a bunch of crazy items written into the contract that give the buyer the right to cancel. Sellers will take your offer more seriously if you don’t give them a bunch of addendums and hand-written items on the contract.

Rate Decreases Spur Sales

A recent issue of Realtor Magazine reported that sales are picking up in markets such as Arizona, California, Florida and Nebraska. According to National Association of Realtors chief economist, Lawrence Yun, although inventories remain high, buyers are returning in such a strong way that we’re even seeing a resurgence of multiple bidding in some instances. Interest rates are at their lowest in more than 35 years. Home prices are becoming more realistic and sellers are becoming more flexible. Analysts say price reductions are enticing consumers with average household incomes to take a second look at their ability to purchase a home. On January 9, Freddie Mac reported that 30-year mortgage rates fell again to a record low of 5.01 percent during the week, representing a 28-year low and nearly a full point below the interest rate at the same time last year. Continued rate decreases have spurred an increase in mortgage applications. If you have good credit and are in the market to buy a home, now is a good time to jump into the market and take advantage of great interest rates and a wide selection of housing inventory.

Short Sale Opportunities – Know it When You See it!

If you’re a potential buyer just entering the marketplace and asking “What’s a short sale?”, here is a one sentence definition. A short sale is when a property sells for a price that is insufficient to pay back the loans and liens against it, but the seller’s lender (s) agree to forgive all or part of the amounts the seller is “short”. Advertising remarks written by REALTORS in the Multiple Listing Service (MLS) used to describe features like luxurious carpet, granite countertops or a great view. Now those kind of remarks stand side-by-side with standard short sale lines like: ”Sale is subject to seller’s lender’s approval.” and “Listing price may not be sufficient to pay the total of all liens and costs of sale.” These short sale houses are not necessarily in distressed condition, it’s the homeowner that is in the distressed financial condition. The source of that condition can be for a wide variety of reasons. Possibly, for some sellers of short sale homes it’s the adjustable rate mortgage they took out a few years ago that is finally catching up to them. For others it could be the sting of losing one’s job or a spouse’s job that makes it impossible to meet the monthly family bills anymore. Regardless of the cause of the situation, one seller’s misery of homeownership can be an opportunity for one buyer’s joy of homeownership! If that buyer has help from a REALTOR that has the knowledge and experience to know how to increase the chances of being able to navigate the transaction to a successful closing for all! *Blog presented by Beth Wigert, REALTOR and Assistant Manager, Coldwell Banker Residential Real Estate in Longwood, Florida (Orlando metro area)

Consider Downsizing to Avoid Foreclosure

Consider Downsizing to Avoid Foreclosure

Now more than ever, it’s important to take a good look at your housing expenses. If you’re upside down in your mortgage, or may soon be, ask if it’s worth the stress, aggravation and bad credit rating to stay in a home you simply can no longer afford. Know that you’re not alone. Millions of Americans realize they simply can’t continue hanging on to mortgages they can no longer afford. Carefully examine your financial picture and consider getting out from under before it’s too late. One solution is to downsize to a more realistic mortgage. With all of the real estate bargains out there right now, you’re sure to find a home better suited for your budget. Consider the potential savings in taxes, insurance, upkeep and utility bills. For example, the estimated mortgage payment (principal and interest only) for a 2,500 square foot home purchased a few years ago on a $350,000 loan and 6.0% interest rate is approximately $2,100. Combined payments for mortgage and utilities (assumes $450/month) total $2,550. By downsizing today to a 1,500 square foot home, and say a mortgage of $250,000 at a 5.6% interest rate, the new monthly mortgage payment is approximately $1,450 per month, or a 43% decline in out-of-pocket expenses. This downsizing also means a potential savings in monthly utility bills, of maybe $100 or more (for this example, assume an average utility bill of $350/month). So, combined mortgage and utility costs for this smaller home are $1,800, or a potential savings of $9,000 a year! Think about how this can help relieve your financial burdens, freeing up more money for groceries, gas, medical bills, daycare expenses and paying down debts that have been causing you stress. You absolutely want to avoid a foreclosure by taking the necessary proactive measures now. A foreclosure destroys your credit record, is stressful, not to mention humiliating. Take charge of your personal finances and consider a home that is better suited for your budget. Now is the perfect time to take advantage of great homes on the market and low interest rates. For qualified buyers, there is money to lend – but realize that long gone are the days of “creative financing” solutions. You’ll need to assess your credit rating, your budget and your ability to pay. Talk to a mortgage lender to help you through this process. Likewise, if you’re currently facing mortgage payment concerns, talk to your current lender to explore your options and protect your credit rating. Many lenders will work with you to find a solution. While it may be difficult to leave your current home, shopping for a new one can be an exciting time. Start by finding a qualified real estate agent who can help sell your existing home and purchase a new one. Take action today and get on track towards more financial freedom and harmony in your life. Sources: http://www.mortgage-calc.com/ and http://www.moneycnn.com/ (“Home Loans Swayed By Interest Rates”, November 2, 2005: 10:40 AM EST , By Rob Kelley, CNN/Money staff writer)

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