Easy Agent Blogs

Got cash?

If not, and you’re in the market to buy a home, you are at a distinct disadvantage.

The volume of cash buyers in the market has increased significantly over the past year. In Florida, for instance, the number of homebuyers who paid cash for a home increased 150%, according to Bernadette Berdychowski at the Tampa Bay Times.

Alicia Adamczyk at cnbc.com tells the story of a young Virginia family, first-time homebuyers, who kept losing out on homes for sale to other buyers who “… would offer $20,000 or $30,000 more than the listing price, in cash.”

It sounds a bit trite, but it’s nonetheless true, especially in the housing market: Cash is king.

In fact, “… all-cash offers increase homebuyers’ chances of getting a home up to 290 percent,” said Johnny Hannah at utahbusiness.com, citing recent research.

Those are some crazy odds and equally stiff competition to face in the search for a new home. Let’s dive into some tips that we offer our clients that help give them a leg up.

Money talks and cash screams

When a homeowner is confronted with multiple offers, the first thing he or she will look at is the amount of money each buyer is offering. Naturally, the lowest offers get little consideration, regardless of how we urge them to seek out the terms the buyer is offering.

Often, terms trump price

The seller will then take the highest offers and look for the most favorable terms. These start with the loan contingency.

An offer with no loan contingency, because the buyer is paying cash, will naturally catch the seller’s eye. With no lender involved, there will be no mandated appraisal, no lender-demanded repairs and a smoother road to closing. It’s almost a slam-dunk.

That’s tough to compete against for the mortgage-bound homebuyer, especially those with FHA or VA loans. This doesn’t mean you can’t compete. You just need to pull out the big guns.

Sure, a cash offer screams. But, if you are in a position to provide the buyer assurances about your financial position, you can scream just as loud.

Don’t stop at obtaining a loan pre-approval letter; give the lender permission to share your salary, your bank balances and even your credit report.

“Overload the seller to show them [sic] that you’re as solid as the cash buyer,” suggests Brendon Desimone at Zillow Porchlight.

Show the seller you’re as nimble as the cash guys and gals

Not all lenders will conduct an appraisal before the offer is accepted, but many will. Ask your lender if you can order a pre-appraisal.

This way, you can submit an offer on which the appraisal has already been ordered and scheduled (hopefully within 24 to 48 hours of acceptance), negating one of the positives of the cash offer.

Desimone suggests that you also work with a lender who will give you “a head start on the mortgage.” Then, get your agent in the loop to ensure that the seller understands that your mortgage is on steroids – which includes hyper-accelerating the lender’s receipt of the preliminary title report, HOA documents and others.

Do everything you can on your end, such as ensuring your paperwork has been submitted well in advance and quickly responding to communications from the lender.

Take advantage of the cash buyer’s biggest weakness

Cash buyers are an arrogant lot. No, we’re not dissing them, but just pointing out to you that they understand the power and leverage they possess that mortgage-bound buyers don’t.

So, they typically come in with a lower price, knowing that cash screams and overwhelms most sellers’ better judgment.

If you can afford to over-bid, we suggest that you do. Not a lot, but enough to overcome the cash advantage, which may be “a little more than you think the home is worth,” according to Desimone.

First, the higher bid will catch the seller’s attention and put you in contention. Then, if you’ve guessed correctly, and your bid price is higher than the cash buyer’s, it may just win you the home.

“If you plan to live in the house for many years and it’s the home of your dreams, paying a little more to get the deal might only translate into $20 per month over the course of a long-term mortgage,” claims Desimone, and we agree.

The aforementioned strategies are ideal for the financially-fit, serious homebuyer. They involve doing some initial legwork on getting your finances in order, strategically choosing a lender and home inspector and ensuring you have a nimble and resourceful real estate team backing you up.

The latter, by the way, is most important. After all your hard work, it’s only natural that you’ll want to ensure that your agent can structure the offer that will win you the home.

Feel free to reach out to us if you need additional advice.

Despite what many first-time mortgage shoppers imagine, Freddie Mac and Fannie Mae aren’t members of the cast of “The Beverly Hillbillies.”

They are both what are known in the economic world as Government Sponsored Enterprises, or GSE for short, and since they have some pretty impressive loan products out right now you should get to know them.

Today, we introduce you to a Freddie Mac program that we’re particularly fond of.

First, some history

Freddie Mac stands for Federal Home Loan Mortgage Corporation. Both it and Fannie Mae were created by Congress, Fannie in 1938 and Freddie in 1970.

What they do, in a nutshell, is buy mortgages from lenders and either hang on to them or bundle them into what are known as “mortgage-backed securities” which are then sold to investors.

Their most important function, at least for consumers, is that the money they spend buying these mortgages is then used by the lender to make more loans. In essence, they help ensure that there is always a continuous supply of mortgage money.

A home is possible, even with a low income

The Freddie Mac Home Possible® mortgage helps “…very low to low-income borrowers attain the dream of owning a home,” according to the GSE’s website.

Our favorite feature of the product is the down payment—as little as 3%. But there is more:

• The down payment funds can come from a variety of sources, including gifts, a second mortgage and grants.
• Co-borrowers who do not live in the home can be included (on the purchase of a one-unit residence).
• Yes, you can have another financed property and still qualify.

You will be required to purchase private mortgage insurance (PMI) unless you put 20 percent of the loan amount down.

Unlike the FHA-backed loan where the mortgage insurance remains in place for the life of the loan, once your Home Possible loan balance falls lower than 80% of the home’s appraised value and “… cancellation criteria is met,” you can cancel the PMI.

How to Qualify

You’ll need to meet the lender’s credit score requirements (typically 680, although you may qualify with a lower score), your earnings must not exceed 2021 area median income (AMI) limits and you’ll need proof of funds for the down payment and closing costs.

You can find your area’s 2021 AMI at fanniemae.com.

If this will be your first home, you’ll also need to attend a homebuyer education course.

To apply, contact a mortgage lender and let him or her know you’re interested in the Home Possible mortgage.

While we aren’t mortgage professionals, we are happy to refer you to someone we know and trust. Give us a call!

The home inspection and the home appraisal are undoubtedly the two most nerve-wracking events of the home sale. Either of them can completely derail a deal.

Unless, of course, you prepare for them. Many home sellers obtain a pre-sale home inspection to get an idea of what they may be on the hook for as far as repairs are concerned.

Although the appraiser isn’t concerned with cosmetic issues, the perception of a well-maintained home can lead to a higher appraisal.

That ball is completely in your court. So, let’s take a look at some tips to ensure that the first impression of your home is amazing. It all starts with what the appraiser sees from the curb.

Get your landscaping spiffed up

Our favorite landscaper gave us a tip for this blog post: start at the top of your landscape and work your way down. With that as a guide, start your curb appeal project with tree trimming.

Dying, broken and bare branches need to come off (unless the tree is dormant, of course).

Next, move on to the gutters and windows. Yes, we get that window cleaning isn’t ‘landscaping,’ but in keeping with the advice we mentioned earlier, if you don’t take care of these items now, you’ll take a chance of smashing bedding plants and scattering mulch if you put it off for later.

Get rid of the debris in the gutters, such as leaves and twigs. Run some water through them while you’re at it.

Next, give the outside of the windows a good cleaning, wipe cobwebs from the front porch, clean the porch light cover and the doormat.

Next, assess the rest of your front yard. Get rid of and replace any plants that didn’t make it through the heat of summer. Trim shrubs and hedges and rake garden beds.

Finally, add a fresh layer of mulch to the beds.

Work on the little things

While few people consciously notice the little things you do, they give an overall perception of a well-maintained home. Consider the following for the exterior of your home:

Pressure wash your driveway

This is an easy DIY project but there are professionals you can hire to do it for you.

Since the process involves the use of chemicals, the latter may be preferable to some. Prefer to DIY the project? Watch this youtube.com video for tips.

Add pops of color to the walkway and the front porch

Flowers and plants with colorful foliage are ideal for the walkway while potted plants and flowers can get the job done on the front porch.

You’ll find tons of inspiration online, at pinterest.com and bhg.com.

Go shopping. Here is your list:

• House numbers – Big and bold is the theme here. Find ideas online at home-designing.com, pinterest.com and hgtv.com.
• Welcome mat – Check out the selection at westelm.com, ikea.com and walmart.com.

If you prefer to DIY your doormat, check out the tutorials at simplyss.com, diybeautify.com and these on youtube.com.

• Front door light fixture – It’s doubtful that the appraiser will be at your home in the evening, but if your front porch light fixture is shabby in the daylight, he or she will have a negative perception before even stepping inside.

Learn how to choose the right front porch light fixture for your home at build.com. Then, go shopping!

• rh.com
• walmart.com
• wayfair.com
• homedepot.com
• amazon.com
• lowes.com

Mailbox – If yours is free-standing, curbside, and has seen better days, buy a new one. Or, clean and paint the one you have.

Sure, it sounds like a lot of work, but if you prepared the home for potential buyers, getting it ready for the appraiser should just be a matter of cleaning up what nature has brought in and purchasing (or DIYing) a few items.

Here’s to a sky-high appraisal!

If you think this is going to be yet another blog post from a real estate agent telling you how dim-witted you are for trying to sell your home by yourself, think again.

There are some common mistakes that most FSBOs make and some assumptions that they shouldn’t. Both will cost them money in the end.

If you work with an agent will you sell your home for more? Maybe not, according to a Stanford University Economics Department study. Yet a National Association of REALTORS study says otherwise.

Will it sell faster? Yes, studies show that one of the benefits of using an agent is that homes sell demonstrably faster than when you don’t work with an agent.

So, there are huge benefits to listing your home with a real estate agent. But I get that most FSBO sellers are trying to save money and who am I to poo-poo that idea?

So, if you insist on going it alone, at least be aware of some of the mistakes commonly made by homeowners in your position.

Incorrect Pricing

Incorrect pricing is the number one problem I see among FSBO sellers. I have seen some crazy prices out there and can’t help but wonder where the homeowners came up with them.

Market value is determined by what willing buyers will pay for a home during any particular time period. The only way to know what they’re willing to pay is to look at what other buyers have, indeed paid, and that means looking at the sales prices of homes in your area.

It’s not just the prices, however. You’ll need to be brutally honest with yourself when comparing your home to those that have sold.

Is yours smaller, older, in worse condition or in a less desirable area? If so, it’s worth less than the homes you’re using as comps. The opposite is true as well. If your home is in better condition, is newer, larger or offers amenities the others lack, it’s worth more.

How much more? I wish I could tell you. Pricing homes takes much research and there’s no set dollar amount for any of the criteria when comparing homes.

Incorrect pricing is the most expensive mistake a FSBO can make. Unfortunately, we see it often.

Lack of Curb Appeal

If you’ve watched any of the DIY TV shows about curb appeal you may be under the misconception that you’ll need a team of landscapers, landscape architects and truckloads of landscaping plants to give your house an appealing aspect from the curb.

Nothing could be further from the truth. While you’ll need to do some spiffing up, depending on the condition of the house and landscaping, there’s no need to do a complete makeover.

Understand that while we’ve been told not to judge a book by its cover since we were knee-high, we still do. Houses are no different.

Real estate agents across the country can attest to driving up to a home with a prospective buyer in the car and then immediately driving away. The buyer simply refused to get out of the car, based solely on what the house looked like from the curb.

Since you can’t sell your house unless buyers look at it, you can imagine the importance of curb appeal.

Painting the exterior of the house is probably one of the best ways to increase its curb appeal and sellers typically see a hefty return on the investment when they sell the house. At the very least, clean out the planting beds, spread fresh mulch around and green up the lawn.

Lack of Interior Appeal

Studies show that homebuyers want a home that appears move-in ready. If the interior of the house is dirty, it’s not move-in ready. Not only that, a dirty house makes buyers wonder what other maintenance you’ve let slide and offers to purchase will be low.

Clean the house until it sparkles, get rid of offensive odors and let in all the natural light you can.

Pay special attention to kitchens and bathrooms while cleaning. Leave the counters bare of any item that isn’t decorative in nature and ensure that the rooms are impeccably clean.

Marketing

Where will you market your home? While newspapers are still accepting real estate classified ads, homebuyers typically don’t read them. It’s all about the Internet these days, and finding the best places to market your home is critical.

Even more important than where you market the home is how. Buyers want to see photos, and lots of them.

Photos should be clear and show your home in the best possible light. Include as many photos as possible and don’t forget to include photos of the kitchen, bathrooms, backyard and front of the home.

While selling the home on your own isn’t rocket science, it’s not something you do every day, so arm yourself with as much knowledge as possible. We’re happy to offer advice.

They’re typically smaller than single-family homes and they require far less upkeep. Yet the process of purchasing a condo may be much more detailed than that of purchasing a house.

Some of the advantages to purchasing a condominium, rather than a single-family home, include the obvious facts that condos are typically less expensive and may offer more amenities. Let’s take a look at some of the other advantages:

• Maintenance chores are greatly reduced for condo owners. Although there may be landscaping in front of your unit, it is typically (though not always) up to the Homeowner’s Association (HOA) to maintain it. The same holds true for the roof, fencing and other items.
• The typical HOA maintenance fee imposed on owners includes paying for items such as water, trash collection and sewer fees. Insurance is also paid for by the HOA, bringing down the cost of living in a condo even more, although you will still need to insure the contents of your condo.
• The appearance of the complex and issues such as noise and other types of disturbances are regulated by the HOA.
• Condominiums may offer more security than a single-family home. Many have doormen, guards or gates at the entry. The proximity of neighbors also adds a certain level of security that may not be present in an area’s single-family home selection.

Yes, there are disadvantages to owning and living in a condo:

• The proximity of neighbors, while also listed as an advantage, may be a disadvantage for those who crave privacy.
• The HOA, while advantageous for many reasons, may be intrusive and dictate unreasonable restrictions.
• Condos tend to have less storage space than single-family homes, a concern especially for families with lots of “stuff.”
• When you purchase a house, unless it sits on leasehold property, you are also buying the land beneath it. Not so with a condo. In most instances you will own only the space inside the unit and share ownership the common areas of the complex.
• Your share of the common areas, however, does not grant you the right to alter them in any way. So, although you may despise the tree in front of your unit, you are not allowed to remove it unless the HOA approves.

The Condo Purchase Process

If you’ve purchased a house before you’ll notice that the condo purchase requires far more paperwork. This is because the seller must provide the buyer with certain HOA documents, which vary by state. These documents may include:

• Covenants, Conditions & Restrictions (CC&Rs)
• HOA budget
• Bylaws
• HOA meeting minutes

Each document in the HOA package provides valuable information. For instance, the meeting minutes let you know the type of issues that the board deals with frequently and whether there has been discussions regarding raising fees or if they are considering special assessments.

By far, the most important documents are the HOA’s financials, especially the reserve balance, sometimes called “reserve funds,” or “reserves.”

This is money set aside to cover major repairs, replacement or maintenance of common area elements, such as a broken sewer line. A well-funded reserve account ensures you that there will most likely not be future special assessments imposed on the owners.

Another red flag to look for in the HOA documents is the number of non-owner occupied units. There are several reasons that a large number of tenants make the condo less attractive. First, many lenders won’t finance a condo in a complex with a tenant ratio over 25 percent.

Next, tenants don’t have the same incentive as owners to keep the property maintained so an overabundance of them may tend to bring down the value of the complex.

Lots of tenants also means a noisier environment and heavier usage of common area amenities such as the pool and exercise equipment, according to Robert Irwin, author of “Tips and Traps When Buying a Condo, Co-op, Or Townhouse.” Irwin suggests looking for a complex with 10 percent or fewer tenant-occupied units.

If you have any questions about anything in the HOA documents, consult an attorney before signing an agreement to purchase the condo.

Since these documents govern how you can use your unit and the future costs of owning it, you owe it to yourself to understand every word.

Unless she checks her credit report periodically, the average American will often not realize that there is a lien against her property until she applies for credit or tries to sell property.

A lien will stop the sale of your home until it’s taken care of.

A lien is a type of security for an unpaid debt, and it can be placed on a home, an auto, a boat, a business and any other type of property with significant cash value. It essentially keeps the property from being sold until the debt is paid.

There are several types of liens that find themselves slapped on a home. Among the most common are mechanic’s liens, tax liens and judgment liens. Let’s take a look at each.

Mechanic’s lien

Homeowners who have had remodeling or other construction work done around the home should check to ensure that the contractor or a subcontractor didn’t place a lien for non-payment.

“For example, if you are remodeling your bathroom and the supplier who supplied the bathtub isn’t paid by the general contractor, a lien can be placed against your house to recover the money,” warns the attorneys at FindLaw.com.

Even if you paid the contractor for the bathtub, you’ll be held liable if the contractor failed to pay the supplier for it.

No, it doesn’t seem fair, but the law presumes that you can sue the contractor for the money. When you’re knee-deep in a home sale, however, time is of the essence and court cases take time.

Tax lien

Don’t pay your taxes and the government can and will put a lien on your home. This includes federal, state and local governments.

Judgment lien

If you’ve ever sued or been sued in small claims court, you may be familiar with the judgment lien.

Investopedia defines the judgment lien as “a court ruling that gives a creditor the right to take possession of a debtor’s real property if the debtor fails to fulfill his or her contractual obligations.”

Liens must be removed before you sell your home

Unless the buyer agrees to buy your house subject to the lien, it will need to be paid and released before the sale can go through. Even if the buyer did agree to this, however, his or her lender most likely will not.

• The first step you should take when you learn of a lien against your property, and you feel you don’t owe the debt, is to contact an attorney.
• If you agree that the debt is valid, contact the lien holder for instructions on how to pay it off. Request that he or she sign a Release-of-Lien, in front of a notary public. These forms are available from your attorney, the county clerk and online.
• Pay off the debt to the lien holder if the debt is valid. Sometimes an attorney can negotiate a lower payoff for you.
• Request that the lien holder sign a Release-of-Lien, in front of a notary public. Release-of-Lien forms are available from an attorney and from the county clerk’s office.
• File the Release-of-Lien at the county recorder’s office. This makes the release a matter of public record. There is usually a charge for this, and the fee varies by region.
• Consult with your real estate agent about how to notify the title company of the release.
• Keep a copy of the Release-Of-Lien in a safe place, for your records.

We are not attorneys and can’t offer legal advice, so your best course of action when concerned about lien removal is to contact your attorney.