Wouldn’t it be great if high schools and colleges actually taught real-world concepts? The phrase “Kids don’t come with an owner’s manual” wouldn’t exist and first-time homebuyers would understand the ins and outs of the process completely. We can’t help you with the kid stuff but you’ve come to the right place to learn the basics of buying a home.

How many homes are for sale?

The inventory of homes available to you will depend on the time of year that you shop for a home and the current market conditions. Homeowners sell homes all year, regardless of the season. That said, more homes are listed in spring and summer than in fall and winter.

The condition of the current housing market bears heavily on the area’s inventory of available homes. When there are lots of other buyers in the market and few homes for sale, we are in a sellers’ market.

This happens for a number of reasons, but the most common is the economy. Low interest rates bring lots of homebuyers to the market, which tends to heat up fast. Home prices begin to rise because of supply and demand.

During a buyers’ market, on the other hand, lots of folks decide to sell their homes yet few are willing to buy. Again, the economy has much to do with this.

Emotions are for tear-jerker movies, not houses

Every day during the course of business, I watch people fall in love with houses. Sometimes it’s an irrational type of love, wasted on a home that is nothing even remotely resembling what they say they want.

At other times, my client has found the “dream home,” and, because of emotions, caution flies right out the window.

The best way to approach the purchase is as an investment. After all, homes offer dual advantages – both as shelters and as investment vehicles.

This is a lot of money you’re about to spend so the least emotional you can be during the process, the better for your pocketbook.

Please excuse my dear Aunt Sally

Algebra – remember trying to learn that one? The reason it’s so challenging for some people is that human beings have a tendency to want to take short cuts.

Sometimes this tendency leads us to success, but at others, like when we try to do the addition portion of an algebraic equation before the multiplication, it dooms us to failure.

The acronym for the home-buying process would be far too long to mess with so, consider the following akin to PEMDAS for algebra.

• Save money for the down payment and closing costs.
• Get your finances in order. Look at income and outgo. Determine your DTI (visit ConsumerFinance.gov to learn more), check your credit and fix any problems with it.
• Get a loan preapproval letter.
• Choose some neighborhoods that you like and can afford to purchase a home in.
• Decide what you want in a home and compile a wish list.
• Hire a real estate agent (there is no cost to you; the seller pays the agent’s commission).
• With your agent, view homes for sale.
• Make an offer (based on current market conditions).
• When you submit an offer to purchase, closely follow the timelines in the contract (we’ll help you with this).
• Have the home professionally inspected.
• Buy homeowner insurance.
• The final walk-through.
• Closing.

Remember, house hunting isn’t a contest, nor is it a race. The ideal home for you is out there and it may take some time to find it. But if you prepare for the purchase, keep your emotions in check and follow the steps, you will be successful.

So, relax; we’ll be beside you the entire time.

How does an extra 5 to 11% of your home’s selling price sound? Michigan State University researchers found that “… a good landscape adds 5 to 11% to the perceived value of a home.”

Your landscaping is one part of your home’s “curb appeal,” and if it’s attractive and eye-catching, it can go a long way to distracting potential homebuyers from other, negative aspects of the home’s exterior.

And the appearance of the exterior is critical when it comes to compelling potential buyers to want to see what’s inside the home.

Let’s take a look at your front yard and the improvements that the researchers suggest to increase the value of the home.

Sophisticated designs add the most value

Sophisticated landscaping is balanced. The researchers explain balance in a landscape where “… no element overwhelms the others.”

The hardscape (anything that isn’t growing, such as a birdbath, statuary, etc.) is in balance with the natural elements and the number of large trees doesn’t overwhelm the number of shrubs and other plants.

The survey found that a home with only a lawn in the front yard, offered at $300,000 would bring $315,000 to $330,000 if the landscaping was more sophisticated.

Diversity isn’t only about people

The diversity of landscape elements was second on the list of most valuable features, according to the Michigan State University study.

Balance the colors, of plants and hardscape, to achieve this diversity.

Add pops of color to break up the monotony of an all-green landscape or, in autumn, all the fall colors. If your trees are gold and maroon, add some white flowering annuals, or blue hardscaping (a birdbath, colored gravel or cobalt planting pots, etc).

Big trees are popular

Any tree on the property will add value to the home, according to an Arbor Day Foundation study. In fact, the study found a 15% increase in home value when trees are present.

Some landscape elements detract from the home’s value

When shopping for plants for the front yard, keep in mind that homebuyers don’t like yards with only small plants. If this describes your yard, consider the purchase of at least one tall tree. It may just help you maintain your asking price for the home.

While your front yard landscaping isn’t the whole ball of wax when it comes to curb appeal, it’s one of the most important aspects.

Soon, we’ll discuss other ways to spruce up the home’s exterior to ensure those buyers get out of the car and into the home.

If you won’t be paying cash for your home the lender will require that you purchase a homeowners insurance policy. This will assure the lender that the home won’t be lost to fire, acts of God and other events. These policies also benefit the homeowner, so shop carefully.

What does a homeowners insurance policy cover?

America has learned a lot about the ins and outs of insurance policies over the past few years with the ushering in of mandatory health insurance. While some services are covered in everyone’s health insurance policy, we’ve learned that not all policies are alike in other aspects and that our coverage may be quite different from our neighbor’s. Homeowners insurance policies too have similarities and differences.

Most homeowners insurance policies cover the loss of the structure, its major systems, items inside the home and damage or destruction of other structures on the property (sheds, etc.).

Types of homeowners insurance policies

The insurance industry offers eight different policies from which to choose, known as HO-1 to HO-8 (there is no HO-7). HO-3 (known as the “open perils” policy) is the one most homeowners choose. With this, you will be covered for damage to the home and other structures on the property. The perils typically listed in the policy include:

• Windstorm damage
• Damage from hail
• Explosion
• Fire
• Lightning

If you’re purchasing a condo you will be required to purchase the HO-6 policy and, for vintage home-buyers the HO-8 policy may be best.

Shop for a company that doesn’t require a 4-point inspection if the home hasn’t been updated.

How much coverage should I buy?

The lender, will of course, have a certain minimum amount of coverage required and after that, it’s up to you. Your insurance agent may counsel you, however, that it’s smart to get coverage that provides for 100 percent of the cost to rebuild the home, and we agree.

To determine how much coverage you’ll need for the home’s content requires a thorough inventory of everything in the home. The Insurance Information Institute’s website provides a tutorial on how to take such an inventory. You’ll find it by clicking here.

Don’t leave your insurance agent out of the loop. He or she is an expert who deals with these matters on a daily basis so seek your agent’s counsel.

Then there the additional policies for items not covered in your primary policy to consider. For instance, if you live in a flood plain you may need additional insurance coverage.

How to shop smart for homeowners insurance

The first insurance company to call for a quote should be the one that covers your vehicle. Then, use the quote to compare to others. Get at least three quotes, although we think five is better.

How much does homeowners insurance cost?

The average cost, nationwide, for homeowners insurance is $1,096, according to the National Association of Insurance Commissioners (NAIC). Remember, this is an average so yours may be more or less.

What is a home insurance binder?

If the company you choose has yet to issue your actual policy by closing, your lender may request that you bring a binder to closing. This is, simply, a one-page document that contains the insurance company’s commitment to insure the home. It acts as proof-of-insurance in most instances.

If you continue to have questions regarding homeowners insurance, consult with your insurance agent – your best resource in this instance.

That feeling of accomplishment when you’ve finally found the home you want to purchase is well-deserved. Whether you looked at 10 homes or 50 in your quest to find the right one, you are one step closer to holding those keys in your hand.

The offer to purchase is one of the most significant documents you’ll ever put your signature to, so it’s important to think about it strategically before doing so. Here are a few things to think about.

• Your house payment won’t be the only money you’ll spend on this home every month. Ask the seller for a ballpark figure of how much he or she pays for utility bills every month. If it’s significantly higher than what you’re accustomed to, it may push your monthly housing budget over your limit.
• Don’t forget to take into account the homeowner association’s monthly fee, if you’ll be buying in a managed community.
• Ask your insurance agent if the home is located in a floodplain. If so, you may be required to purchase flood insurance to protect the lender’s interest in the home. The average flood insurance premium is about $700 per year, or $58 per month, according to the National Flood Insurance Program (NFIP).
• Finally, ensure that the home is priced appropriately for the area and for the type of market we’re in. We are happy to run an analysis to provide you with the home’s current market value.

Now, back to the Offer to Purchase

There is much to consider when filling out the offer to purchase, but here are the most important things for you to think about.

How much should you offer?

If we were currently in a buyer’s market, where there are many homes for sale but few buyers in the market, you would have more leverage in negotiations with the seller.

Alas, it’s a seller’s market (few homes for sale and lots of buyers clamoring for them), so you’ll need to sweeten your offer, either by meeting the asking price or softening the contract’s terms.

One of the things we will help you with is determining if the home is priced right. An important question to ask is what percentage of the asking price are area sellers realizing?

The condition of the home is important to its market value as well. A well-maintained, clean home in move-in condition should sell close to asking price (if it’s priced at market value).

Rundown homes, or those that need substantial work, should be priced accordingly. If not, then you have some negotiating power.

Anatomy of the Offer to Purchase

Earnest money deposit

This is money that you’ll submit to the seller either with the offer to purchase or shortly after it is accepted. This is not the down payment (which is a lender requirement), but a good-faith offer to show you’re serious about buying the home.

The amount of money you’ll be asked for depends on a number of factors. The good news is that this money eventually goes toward the purchase and will reduce your closing costs.

Personal property

The home and land are considered real property and anything that isn’t attached to the home or land is considered personal property.

Sellers often include (and buyers often ask for) personal property in the purchase of the home.  This includes:

• Gardening equipment: Snow blowers, lawn mowers, cultivators and tools.
• Appliances that aren’t built in: This includes the washer, dryer, refrigerator, stove and microwave, if they aren’t built-in.
• Furniture and window coverings: If you want either or both, we’ll need to ask for them in the offer to purchase if it isn’t stated in the listing that they remain in the home.

When do you want to close?

This may seem like a straightforward question until you understand the different strategies. If you close toward the end of the month you’ll save money because your prorated interest payment at closing will be smaller.

If you’re crunched for cash, however, you may want to close earlier in the month. Yes, the pre-paid interest amount will be higher but, because it’s paid in arrears, you won’t owe your first mortgage payment for two months. Speak with your lender about which scenario fits your financial circumstances.

If you are purchasing the home near the fall and winter holidays either set the closing date well before or after. Real estate professionals, including lenders, title folks and real estate agents tend to take time off during the holidays and, naturally, work slows down.

The home inspection contingency

Never waive it ― even if you’re buying a newly-constructed home.

As the ink dries on your offer to purchase, a flurry of activity begins taking place behind the scenes. I’ll get together with the listing agent to make arrangements for the seller to receive your offer.

The seller will accept it, submit a counter offer with a different price, terms or both, or reject it.  If the offer is accepted, escrow opens, the clock starts ticking and time is of the essence.

Questions? Feel free to reach out; we are happy to answer them.

Home décor and design trends come and go from one year to the next. It’s a challenge to keep up with them, especially when you’re considering selling your home. You want to appeal to the broadest audience possible but the audience (the homebuyer) is fickle.

Which is why we trust builders and designers to give us the straight scoop on what home features are most in demand right now.

Since the kitchen is one of the more popular rooms among buyers, we decided to break down some of the trends to help you get yours in shape so that the home will sell quickly and for top dollar.

Decide on a color scheme for your kitchen

Designers are rejoicing over the death of the all-white kitchen, calling it too “sterile.” Kevin Isbell, owner of Kevin Isbell Interiors tells Lucia Tonelli of MSN.com that he sees more clients moving “… towards more personality and color in their homes,” and that includes the kitchen.

From wall color to the color of your kitchen cabinets, it’s time to get creative.

And, since the cabinets are the focal point of the kitchen, it’s a good idea to start the color selection there. Some of the most in-demand cabinet colors, at least according to designers, include:

• Dark blue
• Deep green
• Charcoal

“We’re seeing a move toward colors that are darker and moodier, but also grounded in nature,” Sherwin William’s Sue Waddin tells Monique Valeris at Elle.com.

When choosing a color scheme, take a tip from designers. “… the way designers incorporate color follows a certain pattern. Big colors in small quantities, with small colors as the base,” according to Scott Hochuli at DesignAndRemodelingTeam.com.

Hochuli goes on to explain that you’ll need to coordinate the color of your cabinets with your countertops.

“For example,” he says, “if you are looking to install Calacatta [sic] marble countertops with those amazing veins of gold running through, you will need cabinetry that coordinates with gold. Navy blue or even black might be the perfect hue to provide a balance against that pale warmth.

Shop for new hardware (drawers and pulls) to go with your newly-painted cabinets to pull it all together.

Painting your cabinets is time consuming, but it adds an instant update to a dated kitchen. For tips to get you started, check out Lowe’s video at YouTube.com.

How are those countertops?

Nothing dates a kitchen more than old countertops.

Countertops, however, are homebuyer bait so if you can afford to replace them, check out the latest trends.

“Granite countertops are a thing of the past,” designer Lonni Paul tells ElleDecor.com’s Lucia Tonelli and Kelley Carter.

Quartz is the new granite, “… because of its durability and ease of maintenance,” according to Paul.

For the budget-minded, consider faux marble countertops, “porcelains and man-made materials,” according to designer Hilary Matt.

While faux marble countertops are listed as “in” on Elle Décor’s 2020 list, real marble countertops are “out.”

“No one wants to worry about staining or etching which is inevitable,” Matt said. “There are many fake marbles on the market that look so real that no one would ever know it’s a reproduction.”

New countertops can get pricey but changing yours isn’t out of the question if you’re on a budget.

Check out Rust-Oleum Countertop Transformations for a DIY solution. Reviewers claim that although it’s time consuming, the process is quite easy. Check out this YouTube walk-through.

Sure, you won’t end up with a natural stone countertop, but the solution is ideal for the low-to-mid priced home.

Consider replacing that above-the-range microwave oven

It’s convenient to have the microwave over the range; you’ll get no argument from us on that. But consider this:

“Why would you want to install a microwave in a space that is one of the main focal points in your kitchen? Find a space for your microwave that is tucked away, but still accessible,” designer Darla Bankston suggests to the folks at ElleDecor.com.

Homebuyers are craving the aesthetics of decorative range hoods, according to builders and designers. It’s the perfect replacement for that not-so-attractive microwave oven.

Take a trip to the local big box home improvement stores to see the various styles and finishes. Best of all, they come in a range of prices (we saw one at Home Depot for only $138).

Homeowners on a budget may want to read the Wirecutter reviews at NYTimes.com. And you’ll find tips on how to shop for a range hood at ApartmentTherapy.com.

Remember, the kitchen is the most important room in the home to most homebuyers. Even on a tight budget you can whip yours into shape and get it on the market.

Reach out to us if you have any questions – we’re happy to answer them!

 

 

 

Marketing is vitally important to getting your home sold quickly. Without effective marketing not only may it take longer to sell, but you may get less money at the closing table as well.

The more folks that come through your front door, the better your chances of getting it sold, sooner. If your agent is slacking on the marketing of your home, get rid of him or her and hire someone who will market your home for all its worth.

You have a part to play in this as well. After all, it’s not your agent who will clean and de-clutter the inside of the home or work on the exterior to make it more appealing.

Curb appeal is one of the most important marketing factors in home sales.

Take an hour or so this weekend and drive around your general area. Check out the other homes on the market. Pay close attention to each home’s curb appeal, or lack thereof.

Then, take a few minutes to create a what-can-I-do-to-better-market-my-home list. You’ll be glad you did.

What is curb appeal?

Curb appeal is simply how your house looks from the street. It either has it, or it doesn’t. If your home is among the latter, you should consider fixing that.

Real estate buyer’s agents can tell you just how common it is to drive up to a home, with a buyer in the car, and have that buyer refuse to get out of the car. Based purely on how the home looked from the outside, they made their decision to not bother looking at the inside.

Of course, it’s not right to judge a book by its cover; we all learned that in kindergarten. But home buyers do. And that’s a fact.

How to give your home more curb appeal

Let’s take a look at a few common items that can ruin a home’s curb appeal:

Landscaping. How’s yours? Could the front yard use a little sprucing up? Start by picking up the branches, dead leaves and trash.

Rake around shrubbery and in beds. Consider adding a layer of fresh mulch to planting beds. It doesn’t cost all that much and it looks really great.

If you’re going to sell in winter, the landscaping is a bit more challenging to freshen up.

Pops of color are a welcome respite from the dreariness of winter. Choose some of the pansies we’ve seen on sale, pot them up in pretty pots and set them on the front porch. Or line the walkway with them.

Don’t think that buyers won’t notice that your window screens have holes in them or are hanging off their frames. They will; maybe not consciously, but it will give the house a general run-down and shabby sort of look. This is another relatively inexpensive fix that will pay off.

Could the front door use a new coat of paint? Sometimes just that one change can brighten the entire exterior of a house. If it coordinates with the home’s exterior paint color, consider a “… black or charcoal gray front door,” according to a survey by a major real estate website. Why?

“Homes that feature charcoal gray or black doors typically sell for $6,271 more than expected,” they said. Whatever you choose, don’t pick yellow. Homes with yellow front doors actually sell for less, according to the survey.

Before you paint the door, though, look up. That’s right UP. See the cobwebs hanging from the eaves? They kind of match the ones hanging from the porch light.

While they may have looked festive last Halloween, when the house is on the market, they look awful. Sweep or power wash them away before you paint the door.

How about some little things? New house numbers and a new mailbox will lend a fresh feeling to the home from the curb. Washing the exterior of the windows will make it look like the owner of the home really cares about it. That’s attractive to a buyer.

Overall, the effect you want to give to anyone looking at your house from the street is: “Mr. and/or Mrs. Clean live in this house.”

Even if you are more like Mr. and Mrs. Piggy. . .fake it ’til you make it, as the old saying goes.