Category: Real Estate

Snooping around a home’s plumbing is not one of the more glamorous parts of buying a home. Yet far too many homebuyers ignore this aspect.

Common problems include leaks, water heater problems, and lead pipes and they can cost a small fortune to remedy.

You don’t necessarily need to put on your coveralls and construction boots to sleuth out any possible problems, but you do need to know what to look for.

Keep an eye open for plumbing leaks

Did you know that a plumbing leak won’t necessarily show up right where the leak originates? In fact, the symptoms can show up significantly far away from the source. Check ceilings, walls, foundation and driveway for the telltale signs.

• An increase in water bills over time. Ask your agent to find out the water bill amounts for the past 12 months.
• Stinky odors emanating from the walls or floors.
• Cracks in the foundation.
• Hearing running water when faucets and toilets aren’t running.
• Unexplained warm spots on the floor
• Ensure no water is running and check the water meter. If the dial is turning there may be a water leak.
• Wet or spongy areas in the yard.

What are the home’s pipes made of?

“If the home was built before 1930, there is a good chance that the pipes are made of lead. “An estimated 18 million Americans are at risk of lead leaching from old pipes in their homes and city water systems; such exposure can cause neurological problems in adults and—in children—delayed or stunted brain development,” according to Robert F. Service at Science.org.

If the pipes in the home are a dull gray in color, suspect that they’re made of lead. Another test you can try is to use a key or other implement to scratch the pipe. Lead pipes can easily be scratched.

The only solution to lead pipes is to replace them with modern plumbing supplies.

A lack of lead pipes doesn’t rule out lead in drinking water. Lead can be present in groundwater, particularly in well water, and lead solder may have been used to join the pipes together.

The only reliable way to determine if lead contaminates the home’s drinking water is to have the water tested. Lead-contaminated tap water is colorless, odorless, and tasteless. Possible signs that tap water contains lead include:

• Corrosion of pipe joints.
• Frequent leaks (caused by corrosion).
• Rust-colored water when taps are turned on.
• Stained sinks, dishes and/or laundry.

Does the water heater heat the water?

It’s important to check the water heater when buying a home. How old is it? The “… typical water heater has a lifespan of about 10 years,” claims Nick Gromicko with the International Association of Certified Home Inspectors (NACHI).

If it is at, over, or near the end of its life, you may want to ask for it to be replaced by the homeowner.

Otherwise, ask your real estate agent to find out if the current owner has experienced any problems with it and has been maintaining it according to the manufacturer’s specifications. This typically includes a bi-annual check by a professional. Then, to avoid problems with the buildup of rust, sediment and corrosion, water heaters should be flushed every year.

You also need to determine if the water heater has enough capacity for your needs. This depends on a number of factors, with the most obvious being the number of people who live in the house. A family of five will, presumably want a hot water heater with more capacity than a couple without children.

Plumbing problems are always nasty surprises, but perhaps never more so than when you’ve just moved into a home. You can save yourself a lot of headaches and cash by making sure the plumbing is in good shape before buying a home.

If you think that making the decision to purchase a home was a tough one, wait until you see what’s next! The very first step in the process involves revealing your finances to complete strangers and then waiting to see if what you’ve shown is acceptable enough to be given a loan for hundreds of thousands of dollars.

That’s pretty scary stuff, right? Fortunately, it doesn’t have to be. There’s a process to follow when applying for a mortgage and the first part of it involves shopping carefully for a lender and a loan.

Where to find a mortgage lender

Mortgages are available from banks, credit unions, savings and loans, private mortgage companies and the government. Take your time and look into the different types of lenders and what they offer so that you can intelligently compare them.

The best way to narrow down the choices is to get referrals from your real estate agent, friends, neighbors and family. Then, check their current rates online. CreditKarma.com offers a handy rate-checker that is updated daily.

If you’re going after an FHA-backed mortgage, make sure that the lender you choose is FHA-approved. You’ll find a list of those lenders online at the US Department of Housing and Urban Development’s website.

The most commonly used FHA-backed mortgage for a single-family residence or condo is the Title II.

Differences in rates and terms between lenders can be striking, so choose several with attractive rates and then compare what each has to offer. Ensure that you are comparing the annual percentage rate (APR) of each loan.

This rate includes “… your interest rate as well as additional fees and expenses associated with taking out your loan, such as any prepaid interest, private mortgage insurance (PMI), some closing costs, mortgage points (also called discount points) and other fees you may need to pay,” according to Victoria Araj at RocketMortgage.com.

You might also want to consider visiting a mortgage broker. Instead of offering loans from one lender (their employers), brokers work for themselves and shop around for loans that fit particular circumstances, such as credit scores, financial situations and more.

If you are a veteran of the U.S. military, a senior or a member of a labor union that offers loan assistance, you have access to programs that other consumers don’t.

Meeting with the lenders

Later on in the loan process you’ll be at the lender’s mercy if your income and credit are less-than-stellar. Right now, though, you are in the driver’s seat, so take full advantage of the situation. Get all the information you can to help you make an informed decision about who will be your lender.

Get clear on the exact amount of money you have for a down payment. Then, when you meet with lenders, ask about:

Interest rates

• Ask the lender for current rates and whether that rate is fixed or adjustable.
• If you want an adjustable rate, ask when the rate will increase, how that will impact the payments and whether your payments will decrease when rates do.
• This is critical: request the loan’s APR. Expressed as a yearly rate, this figure includes the interest rate, fees, points and other charges. It is the APR you should use when comparing loan offerings.

Points

Points typically confuse first-time borrowers but when explained, you’ll “get it.” Bank of America has the easiest to understand explanation:

“Points are fees paid directly to the lender at closing in exchange for a reduced interest rate. This is also called “buying down the rate,” which can, in turn, lower your monthly mortgage payments. A point is equal to 1% of your mortgage amount (or $1,000 for every $100,000).”

See how easy that is? If only everyone in the real estate industry explained concepts so clearly!

Take this knowledge and use it to ask the lender to express the points in a dollar amount versus the number of points. In other words, make him or her do the math for you.

The fees

There are a lot of people involved in the loan process, from the appraiser to the notary public to the real estate agents and the lender. Oh, and Uncle Sam has his fingers in the pie as well. Naturally, they all expect to be paid, so the list of fees (included in your closing costs) will be lengthy and somewhat confusing. Some of the fees are negotiable, and the Consumer Financial Protection Bureau walks you through the process.

In 2015, the federal government decided that Americans needed a better tool with which to compare loan products. “Know before you owe” changed the Good Faith Estimate that lenders were required to supply borrowers to two forms.

The first is the Loan Estimate, which you will receive within three days of submission of your loan application. This form includes all the facts and figures having to do with the loan that you discussed with the lender. The figures, however, are not set in stone but they will give you a rough estimate to compare against those you receive from other lenders.

Pay close attention to the “Estimated Cash to Close” section. Again, this figure is an estimate, and not the final amount you’ll owe. That could be higher or it could be lower.

Then, at least three business days before closing your lender is required to send you the Closing Disclosure. Yes, it looks very much like the estimate but these figures are set in stone, unless you dispute them.

You have three days to peruse the form and compare it to the estimate. Have questions? Call your lender immediately to get the answers. Remember, you are about to close on the loan ― time is of the essence.

If all goes well you’ll sign a stack of papers and be handed the keys to your new home. Congratulations!

Those first tentative thoughts about selling your home will invariably bring on a rush of questions: What should I do? Where do I start?

Many homeowners are under the misconception that the call to the real estate company comes first. While that’s an important part of the process, there are three baby steps you need to take before hiring an agent.

These steps arm you with the information both you and your agent need to intelligently set a price for your home.

1. Find your loan documents

If you’ve lived in the home for a long time you may not remember the conditions under which you took out the original loan. Take a look at the papers to determine:

• Who is on the title other than yourself?
• Is there a loan pre-payment penalty?
• Is the loan assumable?
• What is the loan balance? You may need to contact the mortgage company to get the payoff amount.
• Is there a second mortgage or a line of credit that also needs to be paid off? If so, what is the balance?

All of these items are important for different reasons. If someone else is on title with you, that person will need to sign all the documents involved in the sale of the home.

If the person is deceased, you’ll need to take steps to have him or her removed from the title before you sell. The best way to do this is through a lawyer.

It’s important to understand as well if there is a pre-payment penalty on your mortgage and the terms of the penalty. Some lenders don’t require payment of the penalty if you sell your home, others require its payment regardless of why you are paying the loan off early.

Finally, figure out how much you still owe on the home, including any second mortgage.

This helps you determine the amount you need to realize from the sale to pay off the lender and to move on with your life, whatever your plans may be.

2. Take stock of the condition of the home

Take a critical look at the home’s current condition. Will you try to sell it as-is or are there items that you will repair or replace?

Consider as well that the more run-down the home appears, the less likely it is you’ll get top dollar for it and the longer it will remain on the market.

Finally, be aware that some repairs are mandatory, either by the lender or the buyers’ homeowners insurance company. These typically include anything that impacts the inhabitants health and safety. These include (but aren’t limited to):

• Leaky roof
• Pest infestations
• Exposed wiring
• Major plumbing issues
• Kitchen appliances in need of repair or replacement
• Inoperable HVAC system
• Defective (wobbly, etc.) stairway bannisters
• Rotting wood

3. Get a ballpark figure on a sale price

Yes, this is something your real estate agent will help you with, but having a ballpark figure helps you determine if you’ll need to perform a short sale or a traditional sale and how much money you can expect to walk away with at the end of the deal.

If you’re planning on purchasing another home, knowing the latter is crucial.

We are happy to offer a no-cost, no-obligation assessment of the current market value of your home.

Armed with this information, it’s time to interview real estate agents and get on the road to the sale of your home.

 

I love my home. But, when it comes time for me to bring in the shingle and I contemplate what life will be like as I age (even more than I have, that is), like many Americans, I’m not sure that I will be able to remain in my home.

As much as we’d love to, as comfortable as we are, it may not be practical.

There are around 78 million baby boomers and, according to the AARP, most of them want to age in place. Whether it’s because the kids and grandkids are nearby, because they’re so solidly entrenched in their current communities, or because the thought of leaving a home they are deeply in love with breaks their hearts.

There are those who do want to move

Thirty million boomers left the workforce “… at the height of the pandemic,” according to Pew Research Center.

With retirement comes many decisions, chief among them is whether or not to stay in the current home.

The majority of the cohort, 66%, say that they plan to age in place, according to a Freddie Mac Consumer Research survey.

When we reach a certain age, however, we’ve had more than enough time to learn that sometimes what we want doesn’t mesh with reality. Mick Jagger warned us about this nearly 50 years ago but he also promised that “… if you try sometimes, you just might find, you get what you need.” (Mick Jagger and Keith Richards, composers)

Thus, the results of a National Association of REALTORS survey that shows us that baby boomers compose the largest group of home sellers, at 42 percent. That is nearly twice as many as the nearest cohort, Gen X.

When asked what they want in a new home, they’re all over the map. Some want larger homes while others want to downsize.

Then there are the aforementioned who want to remain right where they are. All well and good until you consider that who you are today, with all your pep and energy, may not be who you are a decade from now.

Thinking of a remodel to allow yourself to age in place?

This could get quite expensive. If you are or will be in a wheelchair, you’ll need to widen the hallways in your current home. Average cost? To widen a home’s hallways with structural changes will cost between $30,000 and $40,000, according to the pros at fixr.com. If you’ll need to widen an entry door, expect to pay between $200 to $7,000.

“Falls are a leading cause of death and injury for older Americans. Many of those injuries — about one-third — take place in the bathroom,” according to retirementliving.com. The author goes on to suggest that a homeowner can reduce the chances of slipping or falling by replacing “… the floor with a nonslip surface.”

Dig deep for this one: between $6,400 and $11,000

Again, if the home has more than one floor of living space, it becomes even more expensive to make it a safe and comfortable living space as you age.

Consider taking all that remodeling money and buying a home that meets your needs

“Average Home Equity in the U.S. Just Hit a Record High of $300,000,” blasts s September 2022 headline at money.com. Keep in mind that the figure represents the average.

Older Americans have typically lived in their homes for far longer than younger Americans, often up to 30 years or more. Their equity is, naturally, much higher.

If you’re among that group, consider taking all that money tied up in your current home and do something SMART with it: shop for a home that already has the features you think you’ll need in the future.

It’s time to stop thinking that a home with your bedroom located up a flight of stairs and a laundry room on the ground floor is going to work for you in the future, that narrow hallways will accommodate a wheelchair and that yard work is something your body will always tolerate.

We’re happy to help you find that just-right home where you can truly age-in-place.

Regardless of who or what is to blame, the hard truth is that Americans are paying dearly for energy this winter.

In fact, “… residential gas prices are expected to be 22 percent higher this winter compared to last year’s, and residential electricity prices are expected to be 6 percent higher on average, according to energy analyst Paul Arbaje.

This and other predictions have so far missed the mark. Anecdotal evidence across the country from everyday Americans shows that, in some parts of the country, energy prices have doubled.

That said, it’s hard to imagine anyone looking forward to receiving their monthly energy bills. But, if you have a home ready to go on the market, and that home happens to be energy efficient, you’ll want those power bills included in open house and other marketing materials.

The folks at Energy.gov claim that 25 to 30 percent of the air in our homes, whether cool or warm, escapes through the windows. This, in turn, forces the HVAC system to kick on, creating high energy bills.

If you’re just now toying with selling your home or you’re a homeowner who wants to save money on your energy bills, consider replacing your windows.

Need another great reason to consider swapping out those old windows?

Homebuyers are willing to pay more now to save money later

The National Association of Homebuilders’ (NAHB) most recent release of their annual study “What Homebuyers Really Want” shows that ENERGY STAR® windows are in high demand.

Out of 200 features from which to choose, ENERGY STAR windows came in at number four among the homebuyers surveyed. Thirty-nine percent of homebuyers rated them as “Essential, must-have.”

Windows showed up twice when homebuyers were asked for their top 5 green features. ENERGY STAR® windows came in at number one, while triple-pane insulating glass windows came in at number five.

“… significantly more buyers are willing to pay extra for a home if they understand it will lead to annual savings in utility costs,” claims the study’s authors. In fact, 57% are willing to pay $5,000 or more, on top of the price of the home, in order to save $1,000 a year in utilities.

How to choose new windows

From the choice between vinyl, aluminum, wood and wood clad frames to comparing the ratings, shopping for new windows can be overwhelming.

The folks at Consumer Reports have put various window types to the test and come up with a few tips for consumers.

First, don’t assume that the higher the price, the better the window. When it came to keeping rain and cold air out of the home, their tests found that a $260 window vastly outperformed the much pricier ones. They offer a brilliant guide what to look for when choosing new windows for your home at ConsumerReports.org.

Finally, when comparing windows, these experts recommend that you check “… the overall scores in our window Ratings, then zero in on test results that apply to where you live. If your home is exposed to high winds and cold temperatures, look for windows that were excellent at low-temperature wind resistance.”

Share with your real estate agent any improvement you make to your home that improves energy efficiency. It’s an incredible marketing tool he or she will use when marketing your home.

World War II defined the 1940s in the U.S. With the return of our soldiers came the Boom – the Baby Boom generation. Our men required homes to house all those kids and President Roosevelt came through for them by creating The Servicemen’s Readjustment Act, more commonly called the GI Bill.

The bill generated college tuition and home loans for the men who served this country on the battlefields. In fact, $33 billion in home loans were issued to veterans.

The United States Department of Veterans Affairs is one of only two government entities that provide guarantees for no-down payment home mortgages (the other is the United States Department of Agriculture).

The VA doesn’t directly loan money; it guarantees conventional lenders that a portion of the loan will be repaid in the event the borrower defaults. This assurance allows lenders the ability to offer our veterans more attractive mortgage rates and terms.

November is when we celebrate both National Veterans and Military Families Month and Veterans Day (November 11).

What better time to dive into the housing benefits provided to our nation’s heroes?  And, although the VA has a number of loan programs, one of the more difficult to obtain is the construction loan.

The Challenge

Although they are allowed by law, many lenders hesitate to make construction loans for VA loans because of the risks involved, such as construction disputes.

If you want to act as your own contractor you’ll most likely need to find construction financing outside of the VA and, when construction is complete, obtain a VA loan to refinance the construction loan.

This is not to say it’s impossible to find a lender willing to underwrite a construction loan, but it may be challenging.

Overview

Like all government programs, the VA home construction loan has specific requirements about who can receive the guarantee. The program also has specific builder tasks.

To qualify for the VA construction loan program, an applicant must be any of the following:

• A United States veteran
• Active duty service man or woman
• Current Reserve member with at least six years of service
• Current Guard member with at least six years of service
• Surviving spouse
• A current or former Commissioned Officer of the Public Health Service and National Oceanic and Atmospheric Administration

Additionally, the applicant must have:

• Separated from the service under other than dishonorable conditions
• Decent credit
• Sufficient income to make the mortgage payments
• A valid Certificate of Eligibility (COE)

Finally, the veteran or surviving spouse must intend on living in the home.

The Construction Loan

There are two types of VA construction loans:

• One-time close (or single close) loans which is “… used to close both the construction loan and permanent financing at the same time, according to the VA’s Circular 26-18-7. “The permanent financing is

established prior to construction, and the final terms are modified to the permanent terms at the conclusion of construction,” they conclude.

• Two-time close construction loans. As the name implies, this loan includes two closings, one before the start of construction of the home and “… a second closing where permanent financing is used to take out, or replace the initial loan.”

The beauty of the loan, other than the fact that it doesn’t require a down payment, is that the veteran doesn’t begin making payments until the home’s construction is completed.

Builder Responsibilities

The builder of your new dream home has certain VA-mandated fees to pay during the home’s construction. These include:

• Paying the interest while the home is being built
• Commitment fees
• Inspection fees
• Title fees
• Insurance

Application Process

Just as veterans who apply for an existing home mortgage, those planning on building need to get their Certificate of Eligibility (COE). Many lenders can obtain the COE for you, so check with your lender first. You can also get a COE through the VA website by clicking here.

You’ll also need proof of military service. DD/214 separation documents are the best way to provide this proof and you can submit your request for the records online or by fax or mail.

The process is a little different for surviving spouses. They need to use VA Form 26-1817, Request for Determination of Loan Guaranty Eligibility – Unmarried Surviving Spouses which can also be found at the VA website.

If you have questions about the VA construction loan, contact the VA Regional Loan Center nearest you.

Although Americans continue to be smitten with the DIY craze, buying real estate is not a do-it-yourself project. Sure, it’s fine to surf the Internet to search for your dream home, but when it comes time to actually view the homes, make sure you are fully represented by your own real estate agent.

Many new homebuyers don’t understand that although it may be perfectly legal in your state for the seller’s agent to also represent the buyer, it isn’t wise. This situation is known as “dual agency,” a type of transaction that at one time was outlawed in all 50 states, and here’s why:

The seller’s real estate agent has a duty to his or her client to act in the client’s best interests.

Now, how can this happen in a dual agency situation when the seller’s interests and the buyer’s interests are the exact opposite? Although agents feel they can offer the same ethical treatment to both parties, it doesn’t always happen.

To protect your interests during the purchase process, secure your own representation. It costs you, as the buyer, nothing. The seller pays the buyer’s agent’s commission out of the proceeds of the sale.

Do I Need a “Buyer’s” Agent?

Some real estate agents specialize in working only with buyers. That said, most agents have experience working on the buyer’s side of the transaction.

When looking for an agent to represent you in your home purchase, don’t feel that you need to restrict yourself to an agent who professes to work solely with buyers.

That said, there are several situations in which you should seriously consider working with an agent who not necessarily works strictly with buyers, but who is a bona fide specialist in the following:

• The mobile home purchase
• Buying a short sale
• The purchase of ranch property
• The purchase of a farm

Aside from these situations, pursue the best agent for your needs. Read on to find out how to go about finding this needle in a haystack.

Get Referrals

Whether you need a real estate agent to list your home for sale or to assist you with buying a home, a referral is the best way to find one. Ask everyone you know, including family members, co-workers, neighbors, friends and local business people.

The checkout lady at the grocery store may have just purchased a home and adores her agent. So don’t neglect to ask everyone you come into contact with and start compiling a list of names.

What if you’re relocating to an area and don’t have a network of contacts there? There are several other ways to find the perfect real estate agent for your needs:

• Online: Check reviews at Yelp.com and Google.com.
• Relocation Representative: If you work for a large company and find yourself relocating as a result of this employment, consult the employee relocation representative for a list of agents to interview.
• Chamber of Commerce: Call the Chamber of Commerce located in the area where you are moving. The folks there typically have a directory of members and will be happy to refer you to several agents in the area.

Ask the Right Questions

Most guides to choosing the right real estate agent will counsel you to find out if the agent is full-time or part-time and suggest that you go with the full-time agent. The thinking behind this suggestion is that the full-time agent will have more time for you.

Not so fast. Ask a follow-up question: How big is your staff? The superstar agent with a staff of 15 is the agent you will probably never speak with or see until closing, if then. That’s not to say this person isn’t a good agent, but to remind you that if you’re looking for personal, one-on-one interaction with the agent you hire, don’t hire the superstar with a huge staff.

Ask the agent how many other clients he or she is currently working with. The more clients the agent has, the thinner his or her attention is spread. If you find a house online that you absolutely love, time is of the essence in a fast-moving market. Will the agent have time to accommodate your last-minute showing needs?

If it’s important to you that the agent has a certain amount of experience, by all means ask how long he or she has been in the business. Keep in mind, however, that new agents typically work securely under the wing of their brokers, so you are actually getting the wisdom and benefit of a highly experienced real estate pro, although second-hand.

As important as it is to ask the right questions, listening to the agent is equally as important. What types of questions does the agent ask? One of the most important is whether or not you have loan pre-approval.

The savvy real estate agent understands that until you have seen a lender, looking at available homes is a waste of time, both yours and hers. Reject any agent who doesn’t pose this question.

Should I Sign an Agreement?

Many agents who consider themselves buyer specialists will ask that you sign a broker’s agreement.

This document commits you to working exclusively with the agent for a pre-determined amount of time. Broker’s agreements typically state that the agent will be compensated in the event the buyer switches to another agent and ends up purchasing a home shown by the original agent.

If the agent insists that you sign an agreement, ask for a short-term commitment. This way, should you decide the relationship between the two of you isn’t working out; you’re only locked into working with her for a short time. Agents typically ask for a 90-day commitment but the terms are negotiable, so choose a time period that you are comfortable with.

You are also within your rights to ask for a guarantee. Request that a clause be inserted into the agreement stating that if either party decides the business relationship isn’t a good fit, they will be released from the agreement.

Getting your finances in order and securing funding for the purchase of your home should always be the first steps in your home buying process. Finding the right real estate agent, while second on the to-do list, is no less important.

 

The process of buying a house for the first time may bring a mix of feelings, from excitement to confusion to downright fear.

Unfortunately, if you hook up with the wrong real estate agent you may harbor those last two throughout the entire transaction. It doesn’t have to be that way, though.

There is a step-by-step system to the home purchase process and, once you know how it works, everything about it becomes less scary and more thrilling. One of the ways we assist our first-time home-buying clients is by helping them learn from others’ mistakes.

Let’s take a look at five of the most common mistakes that occur when home buyers try to skip a step or take them out of order.

1. Failing to prepare

Too many first-timers get overly excited and skip right to looking at homes for sale online or hopping in the car to troll for open houses to view.

That part (yes, the fun part) of the process comes later. After all, if you won’t be paying cash, you don’t know yet how much you can spend on a home. That’s the first step – preparing your finances and visiting a lender for loan pre-approval.

When you know how much you can borrow you can skip looking at homes that you can’t afford and avoid the disappointment that comes with that mistake.

2. Borrowing too much

 While the lender will determine how much of a monthly payment you can afford, it’s up to you to determine how large of a house payment you feel comfortable with, within the lender’s limits. You don’t have to borrow up to the lender’s limit.

In fact, find that comfort spot and ask the lender to give you a price point according to your monthly limit. This way you know you can still pay your bills, vacation (if that’s something you budget for), put money aside for college tuition for the kids and other of life’s necessities.

3. Getting emotional

Yes, it’s hard to avoid becoming emotional when you find the home you want for the price you can afford, but don’t give in to emotions. Treat the purchase process as a financial transaction so you don’t become overly emotionally invested in it. Too many first-timers throw common sense to the wind in their efforts to win the home they think they must have.

4. Not getting to know the neighborhood

One of the things we see frequently are homebuyers who are so smitten with the home that they don’t consider the neighborhood in which it is located.

While the home should meet your needs, the neighborhood (location, location, location) is critical to your future happiness and the home’s future value.

Do some research. Find out the crime rate in the area and, if you have children, check out the local schools. Tour the neighborhood during various times of the day and night to get a handle on what kind of neighbors you can expect.

Are there nearby amenities, such as a park for the kids, shopping and anything else you need to feel comfortable?

Finally, consider the commute from the neighborhood to where you work.

5. Having champagne tastes on a beer budget

This is your first home, not your forever home. Naturally, it won’t be perfect and if you are insistent that you will find perfection in a home, you’ll be very disappointed.

You can, however, come close. Make those wish lists, breaking them down into “Must-have features” and those you’re willing to compromise on.

In a few years, when the home has increased in value, you can sell and then afford to be a bit pickier.

Avoiding these common mistakes gives you a leg up on the competition in the real estate market. While the competition is making these blunders, you’ll be making an offer!

 

Here’s something we find fascinating: 90% of diners researched a particular restaurant online before dining there. That is more than any other business type, according to a survey by Upserve.com.

It makes sense at first glance. Let it sink in, though, and you’ll begin to wonder why physicians, dentists, hairstylists, plumbers and others aren’t at the top of the list.

By the same token, why doesn’t what may become the biggest investment we ever make, a home, deserve such careful scrutiny?

Homebuyers are a trusting bunch which can lead to remorse after they purchase.

The market is thankfully changing and you will be able to take time to consider your purchase. Ask your agent the questions he or she can get the answers to. Then, do your own research on the remaining.

Here’s a list to get you started.

1. How old is the home? This is an easy question for your real estate agent because the year built is typically stated in the MLS listing.

 

2. How old is the water heater, HVAC system, roof and other systems in the home? For instance, the average life expectancy of a water heater is 10 years. If the one in the home you have your eye on is going on 11 years, you may want to negotiate for a new one or a credit to purchase one.

 

3. Ask about any renovations that have been done to the home, if the work was permitted and ask for copies of the permits. Who did the work? Is the contractor licensed?

 

4. Ask your agent to request a CLUE report from the seller. “The report generally contains up to seven years of personal-auto and personal-property claims history,” according to the Washington State Office of Insurance Commissioner. The Fair Credit Reporting Act entitles Americans to a free copy of the CLUE report. Your agent can point the seller to this website on which the report can be ordered.

 

5. Ask your agent to find out what the average utility bills amounted to over the past year. This should include electric, gas, water, trash and sewer.

 

6. You will be given a packet of information from the Homeowners Association if the home is in a managed community. We urge you to read everything and, if possible, run it by your attorney. These are sometimes complicated documents but what is in them impacts how you will live in the home.

 

7. Visit the local planning department to determine if there is potential property development planned for the area near the home. For instance, will a Walmart be built on the vacant parcel behind your home?

 

8. Are any of the non-built-in appliances included in the sale? This might include the refrigerator, washer, dryer, etc.

 

9. Contact the local police department to find the answers to your questions about crime in the area. You can also plug in the address of the home at Areavibes.com and get its Livability Score, find crime stats for the neighborhood at SpotCrime.com and do check the National Sex Offender Public Website.

 

10. If schools are important to you, check them out online at SchoolDigger.com, GreatSchools.org and Education Consumers Foundation.

 

 

 

 

 

You’ve no doubt heard that the housing market in changing. In fact, one expert claims that “We’re in a housing recession right now.”

While he is a lone voice on that front, there’s no doubt that the market is transitioning.

For instance, first-time homebuyers are putting their plans on hold for the time being. The pool of these homebuyers has shrunk from 34% to 26% since this time last year, according to the National Association of Realtors.

Does this mean that you’ll have trouble finding a buyer for your home?

Not at all.

What it does mean is that you should forget about the wonders of yesterday’s housing market. Tales of multiple offers, homes selling for more than the asking price, homes flying off the market within 24 hours and being able to call most of the shots during the transaction.

In other words, the market will, hopefully, correct to a normal real estate market.

There are a few other aspects of selling a home that you would do well to keep in mind right now.

1. Understand how market value is determined

Even if his home is identical to yours, it doesn’t matter what neighbor Joe’s home sold for 6 months ago. Yours isn’t worth that now. In fact, your home is only worth what a willing buyer will pay for it.

At this point in the market transition, that price is a moving target. You should certainly not rely on what the big online real estate portals (Zillow, etc.) suggest. Even professional appraisers will have to crunch more numbers to come up with a suggested value for their clients, the lenders.

Homes for sale in your neighborhood don’t dictate market value either. List prices are a bit like Fantasyland. They represent what the seller is hoping to get for the home. Only the prices of recently sold homes can help us determine current market value.

It’s important to be realistic when entertain a list price for your home. You are no longer selling at the height of the market, regardless of how much we all wish you were.

2. Most improvements don’t add significant value to a home

Many homeowners are surprised that the improvements they’ve made to the home won’t raise the value of the home. “For cost recovery, remodeling projects generally must fix a design or structural flaw to earn back the cost of construction,” warns Rebecca Baldridge, CFA, at Investopedia.com.

She goes on to caution homeowners that “The return on investment (ROI) of any given renovation project is a function of local market characteristics, the condition of the residential real estate market when the property is sold, and the quality of the work performed.”

Each year, the pros at Remodeling magazine research the average costs of a number of remodeling projects and determine how much the projects add to a home’s value.

In 2022, none of the projects studied result in a 100% or greater ROI. A garage door replacement, with specific products (which you can find here), comes closest with an ROI of 93.3%.

Again, it’s important to remain realistic about your home during the selling process.

3. Never be afraid or embarrassed to ask questions

Knowledge is power. It is therefore imperative that you understand every part of the home selling process. We are happy to help you with this.

Never allow fear of the unknown to overtake you at any point during the sale process. Ask questions and demand answers until you find your comfort zone.