Easy Agent Blogs

For whatever reason, many homeowners need to sell their homes as quickly as possible. If that describes you and you don’t want to hand over a huge chunk of your equity to an iBuyer or investor, read on.

1. Pre-sale home inspection

When we looked at the common obstacles along the way to closing a home sale, several steps loomed large. But, none larger than the home inspection.

Soon after you accept an offer to purchase your home, the buyer will send a home inspector to your house to inspect its condition. Soon thereafter, he or she will issue an inspection report to the buyer and I’ve yet to see one that didn’t have at least a few, even minor, problems.

Some problems, such as those that can impact health and safety, will need to be repaired. Even if the buyer doesn’t request it, the lender may, especially if the buyer is using an FHA-backed loan to purchase the home.

Depending on the scope of the work, this can significantly slow down the sale of the home.

Fixing items before putting the home on the market is a smart move if you need to sell quickly. It also shows potential buyers that you’re dealing in good faith.

Your buyer will likely order his or her own inspection so keep in mind that all issues in your report will need to be disclosed to potential buyers.

Ridding the sale process of the biggest stumbling block is the best way to ensure your home sells quickly.

2. Ensure you have clear title

Shortly after you’ve accepted the offer to purchase, the buyer will obtain title insurance. First, however, the title company will want to find out if you truly are the rightful owner to the home, that nobody else has a claim to it and that there are no liens against the property.

A problem discovered in a title search is known as a “cloud” on the home’s title. Home sellers are often surprised to learn that there’s a cloud, but it’s a common occurrence.

The most common cloud is a lien against the property and many homeowners aren’t even aware of it. Either it was placed so long ago that the homeowner forgot or it may be so new that he or she isn’t yet aware of it.

Be proactive if you suspect that there may be a cloud on the home’s title. A trip to the county recorder’s office (where you can search public records by address) is often all it takes. Otherwise, you can order an official title search from a title company. While the fee varies, it typically starts at around $200.

If a lien shows up on the title report, you’ll be responsible for clearing it. You can dispute it, but this is a court procedure that takes time. Paying the amount owed is the quickest way to clean up the property’s title.

But liens aren’t the only problem that may show up on a title report. Some of the more common title defects include:

• Clerical errors
• Disputes over property boundaries
• Encroachments and easements
• Marital status falsely reported
• Fraud
• Forgery
• Improperly probated wills
• Unknown heirs
• Unreleased deeds of trust

Some of these are quick fixes. Others, such as clerical errors take substantially longer.

In fact, “depending on the nature and extent of the error, it can take anywhere from days to months to correct these types of issues,” according to the experts at LinearTitleandEscrow.com.

Avoid this source of major slowdowns in the sale process by checking your title before putting the home on the market.

3. Don’t play games with your home’s price

“More than half of all closing problems are related to mortgages,” according to Peter Miller at MyMortgageInsider.com.

Slightly more than 20 percent of these problems are caused by appraisal issues.

Unless the buyer is paying in cash, he or she will be using a lender for financing. The lender will send a property appraiser to the home to determine the value.

Much of the time, the appraiser’s evaluation meets the price agreed upon. Sometimes, however, it doesn’t and negotiations reopen.

There are several ways to work around an appraisal problem but most of them take time.

Avoid appraisal problems by understanding how market value for a home is determined, hire a listing agent experienced in determining fair market value and avoid the temptation to overprice the home.

We are happy to answer any questions you may have on how to sell your home quickly and still get top dollar.

As the real estate market changes, home sellers may need to take some extra steps to get their homes sold quickly and for top dollar. The right improvement projects may be one of the steps you’ll need to consider.

If so, it’s important that you don’t select projects based on your tastes or on suggestions from others (unless it’s your real estate agent).

Always focus on items that need repair first. Then, when it comes to improving the home, consider only those projects that will add value or cosmetically appeal to home buyers.

We’re happy to share our knowledge of what’s popular with homebuyers, so feel free to ask.

In the meantime, let’s take a look at three home improvement projects that are often DIY jobs and will help your home sell quickly.

1. You had me at the curb

That first impression is critical when it comes to getting people out of their cars, up the walkway and through the front door of your home. So, let’s get the curb appeal taken care of first.

Start with cleaning and de-cluttering – the same way you will start on the interior. Rake the beds, remove debris, toys and anything else that isn’t part of the landscaping.

Get the lawn in shape, prune trees and shrubs, yank and replace dying ones. A layer of fresh mulch in the planting beds adds the perfect final touch.

How is the rest of the front of the house looking? Clean the gutters, paint the trim, railings and door if they need it. By the way, a Zillow study finds that a black front door increases sale price by 2.9 percent.

Finally, add a pop or two of color with potted plants on the front porch, near the door.

2. Paint is the wonder drug

New paint on the home’s interior walls can transform the appeal. Fresh paint makes the home appear well-cared for and in move-in condition.

To be safe, you may want to choose neutral colors, such as white, off-white or gray. But, you don’t have to, and the Zillow Paint Color Analysis proves that.

Avoid brick or barn red in the kitchen, as homes with this color scheme in the kitchen sold for more than $2300 less than list price. Brown dining room? Paint it another color, or get nearly $1700 less than you hope for the home.

Learn about the money-making paint colors at Forbes.com and ApartmentTherapy.com.

3. Concentrate on the kitchens and bathrooms when upgrading

We aren’t recommending major renovations here. But, if either or both of these rooms require basic updates, performing them is critical.

Paint is the first step. Then, check the sinks and faucets. Replacing them isn’t expensive and will give the rooms a contemporary look. Here are a few other little jobs that can update the look of the kitchen and bathroom:

• Refinish the cabinets
• Add new knobs and pulls on the cabinets and drawers
• If you have the budget, consider replacing countertops, if they need it
• Re-caulk the tub and toilet
• Ensure that the lighting isn’t outdated
• Purchase new linens, such as shower curtain, coordinating towels and rug
• Choose a few stunning accessory pieces
• Avoid cluttering the countertops

Most of these upgrades are DIY jobs. The savings offered by doing it yourself helps increase your return on investment when the home sells.

More than 71 percent of home sellers look at homes for sale while their current home is on the market, according to a 2017 Zillow report. Looking back, 24 percent of them said they wished they would have started the selling process earlier.

Most of these home sellers ran up against a common problem: Should I buy first or sell first?

Let’s take a look at just some of what you should consider and a couple of solutions.

Current market conditions

In a seller’s market (when there are lots of buyers looking for homes but few homes available) you’ll most likely not have to worry about the home selling. But, once it does, you’ll be joining the ranks of all the other buyers, competing against one another for the few homes on the market.

For this reason, many home sellers choose to rent for a time after selling, until the market changes in their favor.

Others can’t stand the thought of having to pack up and move yet again. Determine your tolerance for this scenario.

Finances

If you don’t have a large cash reserve, you’ll need the equity in your current home to purchase your new one. This means you’ll have to either sell your current home before buying or choose from among the other options we outline below.

The two-house payments conundrum

Another major concern we hear from our listing clients is that they’re afraid that if one side of the deal concludes before the other, they’ll be faced with having to make two house payments.

If your budget can tolerate this eventuality, then you’ve nothing to worry about. If not, read on.

Solutions to consider

Luckily, you have several remedies to choose from when faced with the “should I sell first or buy first” question.

Bridge Loan

A bridge loan is a short-term loan that provides instant cash flow. They’re typically only provided to borrowers with high credit scores and low debt-to-income ratios.

Learn more about bridge loans at Investopedia.com.

HELOC

The Home Equity Line of Credit, or HELOC for short, offers a way for you to get at all that equity you’ve built up in your current home. This is money you can use to buy the new home and then you will pay off the HELOC with the proceeds from the sale of the current home.

There are several disadvantages to using a HELOC to come up with the money for your next home. Speak with your lender and financial advisor about this option.

Borrow against your 401(k)

Ask financial experts if borrowing money from your 401(k) to come up with the cash for your new home is a good idea and you’ll get one of two answers: “Sure” or “No way!”

The latter camp includes pros who remind you about the fact that you’ll be losing the compounding benefits of your invested money. The former group will tell you to go for it because real estate is an amazing investment and, besides, you can pay yourself back.

Again, please speak with your financial planner before deciding on this option.

Negotiate with the buyer

It’s always worth it to attempt negotiating certain contract terms with the buyer of your current home.

Ask the buyer for a longer escrow, such as 90 days, to give you time to house hunt for the next home. You might also ask the buyer to consider renting your home back to you after the sale closes. Offer a healthy security deposit and agree to pay above-market rent to cover their mortgage payments, if necessary.

There are disadvantages to the rent-back scenario, so run this idea by your attorney.

Simultaneous close

Although it is often challenging, a simultaneous close is a common way of dealing with buying/selling. This type of transaction times the close of both transactions (the sale of your current home and the purchase of the next home) to occur simultaneously.

Yes, there are dangers in this option, especially in the hands of an inexperienced real estate agent.

Whether to buy or sell first is a common dilemma and both have their pluses and minuses. We’re happy to discuss this with you in more detail; feel free to contact us.

Money management guru Dave Ramsey advises that “The ideal way to buy a house is the 100 percent down plan—pay cash for the whole house.” Wouldn’t it be nice if all of us could participate in that plan?

The fact is, in February of this year, 77 percent of American home buyers used a mortgage to purchase their homes, according to RealtyTrac.com.

With a mortgage, however, comes the need for closing costs and cash upfront for a down payment. Many would-be homeowners hesitate applying for a mortgage, thinking they need 20 percent of a home’s purchase price as a down payment on the loan.

If you’re among them, we have good news for you: you can buy a home with zero down payment (if you qualify) or with a very-low down payment–3.5 percent in many cases.

Let’s take a look at some of the alternatives to the 20 percent down payment.

There are several ways to buy a home with NO down payment

Did you or your spouse serve our country in the military? If so, you may qualify for a loan guarantee from the U.S. Department of Veterans Affairs (the VA).

Because the VA guarantees to repay a portion of the mortgage should the borrower default, lenders offer attractive rates and terms and a zero down payment loan.

The VA-backed loan is available to qualifying veterans, those currently serving and surviving spouses. Learn all the details at VA.gov.

USDA

The United States Department of Agriculture (USDA) offers several home loan options for low- or moderate-income borrowers. Neither require a down payment and the “catch” is that the home you purchase must be in a qualifying region, typically rural.

The home must also be “modest” for the area and generally excludes homes with swimming pools and other high-end features.

But, it’s an ideal way to become a homeowner, if you qualify. Learn more about these programs online at USDA.gov.

Use down payment assistance programs

If you don’t qualify for the zero down programs, you may want to look into some of the many down payment assistance programs available.

You’ll find many are offered by federal and state government entities as well as local municipalities.

Federal programs include help for teachers, fire fighters, medical personnel and police officers. There are programs for Native Americans, Alaskans and Hawaiians as well.

We’re happy to give you information on regional programs – reach out for more information.

Consider programs with a low-down payment requirement

If you don’t qualify for one of the zero down payment programs, pursue a mortgage through one of the programs with low down payments.

FHA

Lenders are far more amenable to loan money to borrowers with less-than stellar credit when the government guarantees the repayment.

The Federal Housing Administration (FHA), a department within the U.S. Department of Housing and Urban Development (HUD), a loan program you’ll want to pursue if this sounds attractive to you.

Although the program has experienced several changes over the years, it’s still the most widely used mortgage program by first-time home buyers.

The down payment requirement for an FHA loan varies, from 3.5 percent to 10 percent of the loan amount. Which you’ll pay, depends on your financial situation and, naturally, each lender’s requirements.

The biggest drawback of the FHA mortgage program is that you’ll pay for being what lenders call “high risk” or “sub-prime” borrowers. This payment is in the form of a mortgage insurance premium (MIP) – an extra payment tacked onto your mortgage payment each month.

In the past, it was possible to get rid of the MIP when you reached a certain amount of equity. That changed in recent years and now the insurance remains for the life of the loan, if you pay less than 10 percent down when you purchase.

If you pay more than 10 percent down, MIP is cancellable in 11 years.

With a conventional loan, on the other hand, you can dump the MIP when you reach 20 percent equity in the home.

Fannie Mae and Freddy Mac

Fannie Mae and Freddie Mac started backing loans with a 3 percent down payment back in 2014 and 2015.

To snag one of these loans, you’ll need to purchase private mortgage insurance, your credit score will need to be at least 620 and you’ll need to agree to participate in home ownership counseling classes.

Questions? Feel free to reach out to us. We’re happy to help.

One of the hardest things in life for us to come to grips with is that our parents have advanced into old age.

At some point in the not-too distant future, they will leave the home, whether through death or hospitalization. Then, it’s up to you to dispose of their belongings and the home.

Depending on family dynamics, selling a parent’s home can very easily be a situation fraught with potential problems.

Let’s look at some tips to make it easier.

Get it on the market as quickly as possible

There are several reasons this is easier said than done, and we’ll get into some of those below, but the longer the house sits unoccupied, the more carrying charges you’ll incur, such as property taxes, utility bills and vacant home insurance.

Get a head start

You won’t be able to obtain clear title on the property until a personal representative is appointed and is given the documents required to dispose of real property. While you wait, however, you can save time by making repairs and interviewing real estate agents.

Check out the home’s mechanicals

Elderly homeowners often can’t keep up with routine home maintenance, and the last thing you need during the sale process is a costly surprise, such as faulty heating or plumbing.

Be ready to dispose of stuff

Your parents likely will have accumulated many things over the years. Hopefully, they won’t have been hoarders, but even so, you’ll have plenty of things that neither you nor your siblings want.

It could be outdated furniture or your dad’s dragon collection. Every member of the family with an interest in the home should be involved in the sorting and disposal process.

It can be very sad to toss out things that meant so much to our parents and some family members may take it harder than others.

If you grew up in the home, bring tissues

Nothing we say will prepare you for the emotions you’ll feel when all is said and done and you close and lock the door to the family home for the last time.

Feel free to ask your listing agent for copies of the listing photos to keep as mementos. You may also want to take some of your own to remember special parts of the property that mean a lot to you.

Trust your real estate agent to list the home at its market value

Heirs often have dollar signs in their eyes and want to set the asking price too high, which can lead to the house staying on the market much longer, increasing those carrying costs.

Ensure that everyone is on the same page when it comes to the asking price and how far everyone is willing to negotiate on price. This will save time during the process.

Don’t DIY it

As tempted as you might be to make money from the sale, especially if you have several siblings to divide it up amongst, let professionals help you. Surround yourself with experts, especially if you hope to make any money from the situation.

If you’re the estate’s personal representative, hire a probate lawyer to help with the many filings the court will require, and hire an experienced real estate agent. An agent is especially essential if you and your siblings live out of town and can’t be there to hire people to clean out the home and fix it up.

Give the home a nip and tuck

Although your parents’s home may be dated, place limits on the money you spend to fix it up. Giving the kitchen a total makeover, for instance, probably isn’t worth the cost involved.

But it will pay off to clean thoroughly, paint the walls and remove old carpeting throughout the house, especially if there are hardwood floors underneath.

We’re happy to help in any way we can. Feel free to contact us if you need suggestions on how to ready the home for the market and for a free determination of its current market value.