Buying and selling a home

The first time homebuyer and the long-time resident tax credit is schedule to end on April 30, 2010.  Anyone not under contract to buy a house by this date will not be eligible for the up to $8,000 tax credit.  As long as a buyer is under contract by the April 30^th date they will have until June 30, 2010 to close the transaction.

There is no indication that the Government plans to extend the tax credit past the 2010 deadline.  This being the case time may be of the essence.  Depending on your real estate market, the 4 month time frame before the tax credit expires could pose a problem.  In areas that have a heavy short sale inventory the processing time from initial offer to seller lender approval can be quite lengthy.  It is not unheard of to have short sale contracts delayed by several months waiting on bank approval.

I would not encourage anyone to buy a home just because of the tax credit being offered.  However if you are ready, willing and desire to purchase a home, then the tax credit plus the low starting listing prices and low interest rates available are powerful motivators for buying a home now.

Contact me in order to speak with a real estate agent in your area about the tax credit and your situation.

New construction increased during November

November gains in permits and housing starts are encouraging news for homebuilders.  The Commerce Department reports permits up by 6% and housing starts up by 8.9% 

An increase in building of residential homes is a positive sign going into 2010 and the increase can be attributed to low mortgage rates and an increase in the banks lending mortgage money.

If you are in the market for a new home now is a great time.  New homebuilders are offering incredible incentives and great prices for their homes.

If you plan on selling your house in 2010 there are things you need to know that will help you accomplish your goal:

What do you need to know in order to sell your home?

You need to know…

• The initial list price you choose is crucial.  Testing the market or having the attitude that you can always drop the price later will result in missing buyers during the most critical stage in selling your home.  You cannot afford to miss any buyers in this real estate market.
• You have a lot of competition.  There are a lot of homes on the market in most areas of the country.  The competition is fierce.  Bank owned homes and short sales are offering low starting prices, new home builders are offering incredible incentives to entice buyers and regular sellers like you are working hard to attract buyers by offering to pay buyer closing costs and other price enhancements.
• Your home has to be ready to be seen.  Not only do you have to make sure your home is staged to impress, you also need to take the steps to make sure that when a buyer wants to view the home, the home will be available to them.  Hiring a professional stager and placing a lockbox on your door are keys to making sure your home is always ready for a potential buyer.

These are three of the things you should know if you are planning on selling your house in 2010.  Selling your house for the best price in the shortest amount of time requires that you use all of the tools and systems available to not only attract a buyer but also negotiate a successful contract that ends up at the closing table.

A real estate agent can help you sell your home in 2010

Selecting a professional real estate agent in your area to assist you with selling your home is also a key to accomplishing your goal.  Your local agent understands:

• The marketing and prospecting needed to sell your house
• The area market conditions including average sales prices and days on the market.
• How to successfully negotiate a closing from start to closing.
• Staging and how to help your home show its best.
• Buyer trends and enhancements that works in producing a sale.

Don’t leave selling your home to chance.  Take the steps outlined above including interviewing a real estate agent to help you with selling your home.  Having a solid, proven plan will result in you selling your home in 2010.

You have just viewed a home that you can see yourself living in.  The time has come to place an offer on a home in hopes that the seller will accept and you can move one step closer to owning your dream home.  The question now is, how much do you offer on the home?

The decision on how much to offer on a home is yours and yours alone to make.  However there is help available from your real estate agent if you want it and ask for it.   In addition to the help your agent can provide there are some things you will need to consider when deciding on the offer price.

Buyer’s market analysis 

• This analysis will include information on what homes in the area have sold for within the past few months plus provide you with information on the homes currently for sale and how they compare to the home you are interested in.
• You may also be able to find out what the seller paid for the home, what the original list price was and how many if any price reductions the home has received since being listed.

Buyer considerations

• The seller disclosure should give you information on recent repairs and more importantly issues and concerns that you will need to consider when making an offer.  An older roof or A/C-Heating unit will influence how much you offer on the home.
• Are you in need of closing cost assistance from the seller?  If you are going to ask the seller to help you pay all or a portion of the costs involved with financing the home, you will need to consider this when making your offer.  Any concession the seller agrees to pay reduces the net they will receive from selling their home.

Of course the seller will have the right to accept or decline any offer less than full price.  If you do not want to lose the home to another buyer then making an offer at or above list price should be strongly considered.

How much you should offer on a home?  How much do you want the home?  Are there others for sale that you would be equally happy to purchase?  Is this the best home you have viewed since starting your home search?  When you find the perfect home the decision on how much to offer will be clearer.

If you already own a house and are looking to purchase a different one you may be asking yourself this question.  Is to better to sell the house first before buying another house.  This is going to depend on your personal situation.  Before buying another house without selling yours, you should ask your self:

• Are you able to maintain both houses; mortgage payments, utilities, maintenance until the first home sales?
• How long are houses staying on the market in your area?

If you are not in a position to own two houses you can still start the process of finding a new home to buy contingent upon the selling of your current home.  First right contingencies allow you to negotiate an acceptable contract on the home you want subject to receiving an offer and closing on your current home before closing on the new house.

Talk with your real estate agent or a real estate attorney about the contract addendum needed for a first right contingency.

There are several easy things that you can do to improve your home that do not require hiring a professional or spending a lot of money which will help you sell your home faster.  These include:

1. De-cluttering the closets, the garage, the extra room no one uses and is now filled with boxes or unused stuff, the utility shed and the attic or attic space.  The more de-cluttering you can do the more the buyer will be able to visualize all of the space available to them for their very own ‘cluttering’.
2. Paint by numbers.  The numbers in this case are the number of rooms in your house that are not currently light and bright and have a neutral paint scheme.  While I am sure the bright purple paint on your living room walls match your drapes perfectly, now is the time to re-paint, choosing a neutral color.
3. Clean and then clean some more.  Clean the carpets, the tile, the shelves that are way up high, the windows, the baseboards, the roof, the driveway, the ceiling fans, the a/c filters, the ceiling fan paddles, the shower, the tub, the toilet, the drapes and curtains, the upholstery, the counter tops, and the outside fixtures that include the mailbox and entry doors.

The goal is to make a good first impression and doing the 3 easy things listed above will help you reach your goal and possibly sell your home faster.

Your kitchen can help you sell your home or prevent you from selling it. Before offering your home for sale you need to take a look at your kitchen and make a decision on what updates and improvements are needed. You should consult with your listing agent as well. Your agent can provide insight to how your kitchen compares to recent sold property and the current competition your home is up against. This will help you decide on the updates and improvements your kitchen may need without over-spending by over-improving with no chance of getting the money back when you sell. Items in the kitchen to take a look at include:

• Cabinets
• Appliances
• Flooring
• Lighting
• Counter Tops
• Paint/wallpaper

Higher end homes being sold will want to make sure they are offering the features and amenities expected with a gourmet kitchen while a moderately priced home’s kitchen might contain stainless appliances and refaced counter tops.

Spending a little money on your kitchen will allow you to sell your home faster and for a higher price.

How soon after listing your home should you consider reducing the asking price?   This is a question you should be discussing with your listing agent.  Their knowledge of your area, home prices, days on the market and the amount of traffic you have received will play in to their suggestions on price adjusting.

Typically a home will receive the most interest and traffic within the first 1-5 weeks.   If your home has received zero or limited buyer  traffic and no offers you will need to consider:

• Did you list the property high to begin with?
• Has the home been readily available to show?
• Was there a delay with entering the home information in the MLS or a delay in starting the marketing efforts?

If you find none of these apply to your home then follow up with your agent and ask them:

• Have similar homes in the area gone under contract since you listed?
• What has been the feedback from; agents who showed the home? The office caravan? Buyer calls from signs and marketing?

Armed with the information from those questions and re-examining the statistics for the area coupled with your motivation to sale should be enough to help you determine if now is the right time to reduce the asking price of your home.

Unless your home is in an area that attracts a large number of investors who only care about the rents being paid, trying to sell your house with a tenant living in it can be difficult.  Problems and issues you will encounter that might slow, delay or make it impossible to sell your home include:

• The sale is subject to tenants rights.  Make sure you are familiar with tenants rights.  Potential buyers may not be interested in viewing a home that they will not be able to receive immediate occupancy.
• Staging is in the hands of the tenant.  Staging your home to appeal to buyers who view it is important.  A tenant may not have the furnishings the compliment your home’s living space.
• There could be cleaning or repair issues.  In order for your home to give the best first impression attention must be paid to picking up, de-cluttering and repairing items around the house that are in need of repair.
• Buyers are unable to get access.  The tenant may not be eager to move or have people walk through their living space.  Attempts to see a house with no luck will turn off a buyer quickly.

You need to consider all of this before listing your home for sale while a tenant resides in it.  Your real estate agent should be able to provide sound guidance.

Your choices when house hunting include choosing from one and two story homes for sale.  In your area of the country there are most likely preferences for one or two story homes which will limit the number of options available for one or the other. 

For many buyers, a one story home makes perfect sense.  The reasons are endless and include:

• No stairs.  The constant climbing up and down a stairs to get to another part of the home is not a feature those who choose one story homes are interested in.
• Split plans.  A lot of one story homes offer bedroom split plans that provide extra master bedroom privacy.
• Appearance.  Many people love the ranch style house plan and the way it looks.

Ultimately the house you buy will depend on your preference with consideration give to location, size and price.