Going FSBO? Don’t make these mistakes!

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.

Information you need if you’ve got your eye on a condo

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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.

How to remove a lien on your home

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.

 

Selling your home when it’s hard to let go

Letting go can be brutal. Often, we have no choice, such as when it’s time for our kids to leave the nest, or we decide to leave a relationship that has soured.

It is often the same for homeowners when they decide to sell their homes. For some, letting go of a home isn’t just divesting themselves of a structure, but also from the lifestyle it represents, the memories made under that roof – all that life lived in it.

Selling a home can be an emotionally-charged transaction, but it doesn’t have to be. If you can put your emotions aside for a time and realize that the sale of your home is a business transaction —and stay in that mindset— you’ll avoid the pitfalls we see some home sellers contend with.

Those pitfalls

There are several commonalities among home sellers who are attached to their homes. The first is that they tend to overvalue it for the market.

It’s important to keep in mind that what you feel the home is worth may not be the same as the value the buyer puts on it. Then, there’s the appraiser’s valuation.

Depending on the type of market we’re in, be prepared for buyers coming in with lowball offers. These buyers aren’t intentionally insulting you, but treating the transaction for what it truly is, a business deal.

Ditto when buyers appear to be criticizing your taste in décor, such as by asking you to remove the wallpaper in the kitchen or for new carpet.

No home is ideal for everyone, not even yours. When you approach the sale with less emotion, you’ll be better able to let these unintentional slights roll off your shoulders.

Vow to be flexible

If your attachment to your home is strong, it’s easy to talk yourself into little ways that may sabotage the sale.

Take showings, for instance. We’ve seen some sellers who become completely unreasonable when an agent requests a showing.

Yes, we know how very challenging it is to keep a home spotless while “real life” carries on (kids to get to and from school and lessons, pets, etc.).

Remind yourself that as busy as life is, if you want to sell the home you must be accommodating to buyers. Take some deep breaths, straighten the chaos and take the kids to the park.

An offer is just an offer, not an insult

There is a reason you may be intensely emotionally attached to your home. Whether it’s because of the memories it holds, the hard work it took to get it to its current condition or something else, this attachment can cloud your judgment.

Seldom is this more evident than when entertaining offers from buyers. As mentioned earlier, many homeowners who are attached to their homes treat a simple request, such as for new carpet or a minor repair, as a personal affront.

Remember, your home is perfect for you, but it may not be for everyone. The buyers certainly don’t mean to be insulting.

Even lowball offers can cause defensiveness. Keep in mind that an offer is just an offer and selling your home is a business transaction.

And, by the way, in a tough buyers’ market, a lowball offer may be worth negotiating. Put on your business hat so we can work together on a solution.

Additional coping strategies

“Sure, this house was perfect, but the home selling and buying process isn’t [about] finding ‘the one’ that sticks around forever,” suggests Catrina Sun-Tan at homelight.com.

“It’s more about finding the home that fits your needs best, based on your current situation,” she concludes.

She goes on to suggest that you keep your focus on your ‘why.’ That may be a particular lifestyle you crave, living closer to your children and grandkids or to have a snappier commute. Keep that ‘why’ top-of-mind.

Take photos of the home, especially those areas where you spend the most time and have built the most memories.

Some homeowners will take a plant or even soil from the garden to plant at their new home (let me know if this is your plan because we’ll have to move the plant to a pot before the home goes on the market).

Then, change your focus. Focusing on the future during the sale process is one way to alleviate that panicky feeling many get when they begin dwelling on the loss of their home.

Look to the future instead – where you’re going next, how you’ll furnish and use your next home.

Get excited about what lies ahead.

4 reasons to sell your house a.s.a.p.

If you’ve toyed with the idea of moving up, downsizing or just craving a change of scenery, you may want to consider selling your home a.s.a.p.

In pockets across the country, the housing market is showing signs of change. Yes, in June we saw record high median home prices nationwide. But there are hints of change coming that you should be aware of if you hope to make maximum profit from the sale of your home.

Read on to find out why.

1. Homebuyers may start rethinking their decision to buy

Battle-weary homebuyers are starting to reconsider purchasing a home right now. In some areas of the country, they’ve chosen, “ever so slightly,” to rent a home while awaiting better opportunities for buyers, according to Rick Palacios, director of research for real estate research firm, John Burns.

In fact, the high home prices resulted in a 6% decrease in mortgage applications in mid-July. This represents a decrease of 18% over this time last year.

Selma Hepp, deputy chief economist with data analyst firm Core Logic feels that “There are signs that the hottest days of the market are behind us.” She predicts an increase in housing inventory for the remainder of the year.

Yes, the market is still red-hot for home sellers, but if you’re waiting for it to get even hotter before placing your home on the market, you may be disappointed.

Take advantage of the current pool of homebuyers to get the most money for your home.

2. What will interest rates do?

Some economists are predicting rising mortgage rates throughout the latter half of 2021, cooling off the housing market.

In late July, “The average rate for 30-year fixed loans increased slightly to 3.11% after two weeks of declines,” according to Diana Olick at cnbc.com.

“So far, the increase in rates has come with ups and downs marked by a gradual rise over time,” Stauffer claims. As this incremental rise continues “as some experts have forecasted,” he adds, the market will cool, even if it’s just slightly.

3. You’ll have little competition from other homeowners

According to the National Association of REALTORS®, the inventory of available homes in June increased 1.4%, month to month.

“We may have turned a corner on inventory,” the chief economist for the National Association of Realtors tells Olick. “There is some softening in the demand.”

When the inventory of homes for sale increases, expect home prices to soften. When this will happen is anyone’s guess, so keep an eye on housing market news. Or, give us a call; we’re happy to share with you what we’re seeing in the market.

The bonus for you as a home seller right now is that you’ll have little competition from other sellers. A well-prepared home in a decent area can easily become the belle of the local market and receive multiple offers from qualified homebuyers.

Don’t try to time the market. By the time it turns a corner for sellers, it will be too late; you will have missed the top of the market.

4. Money, money, money

Chances are good that you’ll be surprised how much equity you have in your current home.

Last year, American homeowners, on average, gained $33,403 in equity. Let that one sink in a minute. That figure represents a nearly 20% increase from the previous year, according to the number crunchers at Core Logic.

Summer appears to be heralding yet another hot real estate market for sellers. Give us a call to find out how much your home is worth.

DIY tips to increase curb appeal

What happens – or doesn’t – between the curb in front of your home and the home’s front door is known as curb appeal. It makes or breaks the potential buyer’s first impression.

It’s that important.

But, it’s the area around the front door that’s considered the focal point of the exterior of the home. While they may not be conscious of it, this area will be the potential buyers’ first impression.

Many homeowners are quite successful taking the DIY route to staging this area for maximum appeal. We’ve gathered some tips from the experts to help you get started.

Understanding landscape design is important

One of the principles of landscape design, according to the experts at Environmental Landscape Associates (ELA), a Doylestown, PA landscape architecture firm, is to ensure the landscaping near the entry area matches the home’s architecture.

For instance, while a free-flowing cottage garden in the home’s front yard may be the perfect choice for a Tudor cottage, when planted in front of a modern home it creates confusion and appears chaotic.

“Is your home a traditional colonial or a casual contemporary? The style of your home should trump your personal style preferences for the greatest curb appeal,” caution the pros at ELA.

Staging the exterior of the informal-style home

Informal-style homes, such as bungalow, ranch-style, Craftsman and cottage demand informal landscaping. Here, you can be creative in your use of hardscaping and plants. The aforementioned cottage garden works well.

Additional ideas to help you update the front of an informal-style home include:

  • Line the walkway with flowers or evergreen plants to help draw the eye to the front door.
  • Place lanterns near the front door.
  • Add a coordinating door mat.
  • Change the door hardware and house numbers to compliment the home’s architecture.
  • Check all the lighting to ensure the covers are clean and the bulbs function.

Tips to spiff up the exterior of a formal-style home

Popular formal-style designs include colonial, Georgian and Greek revival. To coordinate and compliment the home’s exterior, landscaping should rely on organization and symmetry.

A good example of this is a carefully staged entryway with “two of everything,” according to the experts at betterhomesandgardens.com. Identical planters holding identical plants on either side of the door creates symmetry and balance.

Consider well-manicured boxwood shrubs, grown as a hedge, to line the walkway.

The key to success with a formal home is to avoid over-staging the exterior entry area. Keep it sophisticated and simple.

There is a lot to consider when it comes to increasing curb appeal. We’re happy to answer any questions you may have.

What you need to know about homeowner’s associations

A Dallas homeowners association (HOA )sent a letter to homeowner Frank Larison, a 58-year-old Vietnam veteran, threatening to have his car towed, at his expense. His crime? Displaying Marine Corps decals on the car’s bumper and in the rear window.

Jim Lane decided that the common areas in his community needed some sprucing up so he planted pansies. The HOA slapped him with a fine and, when he refused to pay it, they placed a lien against his home.

Joseph Prudente’s sprinkler system died and, subsequently, his lawn started turning brown. Prudente, 66, had fallen on hard times and couldn’t afford to repair the system and, in the Florida heat, the lawn began turning brown.

His HOA, the Beacon Woods Civic Association, requires homeowners to have lawns in the front yard and notified Prudente that he was in violation of the community’s covenants. He pleaded his case to the board, but to no avail. They filed a complaint in court, which Prudente ignored, landing him in jail.

For not re-sodding his lawn.

Say the words “homeowners association” and many Americans conjure an image of a group of meddling, power-hungry, petty tyrants. Think Elmira Gulch in “The Wizard of Oz,” and you’ll have a picture of how this group is portrayed in the media and pop culture.

The reality

Despite what we read in the media, 70 percent of Americans who live in communities governed by homeowners associations say they are satisfied with their communities, according to the Community Association’s Institute 2020 Homeowner Satisfaction Survey.

71% of those surveyed say that their HOA’s rules and regulations “protect and enhance property values.”

Whether their reputation is well-deserved or overhyped, HOAs offer both advantages and disadvantages to residents living in managed communities. One of the most obvious disadvantages are the fees or dues required of residents. Don’t pay them, and the HOA can not only slap a lien against the home, but push you into foreclosure.

Why homeowners have to pay dues

When you buy a condo or single-family home in a managed community you are essentially agreeing to share in the costs of maintaining the common areas and amenities shared by all residents.

The payments are a lot easier to swallow if you think of them as helping to ensure your property’s value.

HOA fees vary, depending on amenities and services provided by the association. “Some estimates claim these fees are between $100 and $700, with roughly $200 as an average,” according to the staff at Investopedia. Payment due dates also vary, from monthly to quarterly, semi-annually or yearly.

Where does the money go?

The HOA uses the fees collected to pay for expenses, such as the improvement and maintenance of landscaping, parks, clubhouses, pools and tennis courts. HOA responsibilities and duties vary, however and may include:

  • Paying taxes on the common areas
  • Enforcing the rules
  • Legal fees
  • Insurance for the common areas

The reserve account

The HOA also uses a portion of the fees to fund the reserve account. This money is set aside to pay for major or long-term projects, such as replacing the roof on the clubhouse, installing a new pump for the community’s pool and painting or landscaping projects.

The reserve fund will also pay for any needed natural disaster emergency repairs

Special assessments

The HOA reserve fund may not hold enough money to take care of an unexpected large expense so homeowners may be asked to pay a special assessment. Typically, the governing board will determine whether or not an assessment is required and in what amount.

The HOA board is typically required to use these funds only for the stated purpose and, if there is money left over, the bylaws should outline whether it is to be redistributed to homeowners or held in the general fund.

If you are considering buying a home in a managed community

Shortly after signing the agreement to purchase, you’ll be given a huge packet of HOA documents to look over. Filled with legalese, this paperwork isn’t light reading.

In fact, we hope that our clients will consult with their attorneys if they find anything in the paperwork that they don’t understand.

Once you sign off on your acceptance of the HOA documents, there is no turning back. If you purchase the home, you are bound by them.

Pay close attention to the following documents:

  • The Declaration of the Covenants, Conditions & Restrictions — A fancy way of saying “rules and regulations,” the CC&Rs, as they are known, dictate how you can and cannot use the home. Some HOAs also issue a separate document outlining rules and regulations.
  • From pet ownership, landscaping and the appearance of the exterior of the home to whether or not you can smoke in your backyard and what color your mailbox can be painted, everything you need to know to decide whether or not the HOA is too restrictive for you can be found in these documents.
  • Financial documents – How well does the HOA’s board handle the association’s finances? You can find out in the financial documents. You should find a statement of the amount of the current dues, the history of special assessment requests, the amount of money in the reserve fund and the HOA’s budget.
  • Meeting minutes – Most HOA document packages contain copies of minutes from recent HOA meetings. Read through these with an eye toward finding frequent and repeated homeowner complaints. Repeated complaints may be an indication of an unresponsive board.

Buying a home in a managed community not only adds to your house payment each month, but it means allowing an association to govern how you use your property and, thus, impact your lifestyle.

Take your time reading the HOA documents so you go into the process with your eyes wide open.

Should I buy a new or an existing home?

One of the choices you may be faced with when you decide to buy a home is whether to buy a newly-built home in a new home community or an existing house. Sure, you can remodel an older home to suit your needs, but do you have the time and the money to do so? A new home, on the other hand, can be built to your specifications.

Building a home isn’t without its drawbacks, however. There are many decisions to be made along the way and if you aren’t careful you may end up spending more than you’d anticipated.

There is something to be said for both choices, so let’s take a look at some things to consider while making up your mind.

What you’ll spend

Although most homebuyers claim they want a brand new home, according to a Harris Research poll, few said they were willing to pay a 20 percent premium for it.

What these respondents failed to understand is that a new home may cost them less over the long haul.

Most new construction features energy efficient appliances, windows and other items. These help save money on heating and cooling bills. Then, because the home is new, maintenance won’t be as expensive as it is with an older home, at least for the first few years.

Builders often offer incentives if the buyer uses the in-house lender. If the builder offers a discount on points for the loan, the savings over the life of the loan may just be enough to offset that new construction premium.

Your lifestyle

If you need space for hobbies or if you work at home you may appreciate the perks of being able to choose how your home is laid out while it’s being built. If, on the other hand, you enjoy the charm of tree-lined streets and mature landscaping, an older home may fit the bill.

When deciding whether to buy a newly-constructed home or an existing home, it all boils down to your lifestyle. Existing homes are typically in closer proximity to city conveniences so if you enjoy walking to your favorite eatery you may want to consider an older home closer to downtown.

If the thought of an after-work dip in the community pool gets your pulse pounding, a new-home community may be your answer.

Whichever you decide, we’re happy to show you homes that fit the bill.

When shopping for a new home, consider location carefully

The real estate industry loves to harp on “location;” so much so that we repeat it three times to let you know how important it is.

Location, location, location not only determines a home’s value but the homeowner’s enjoyment of the home as well.

For instance, if you can’t tolerate noise, don’t buy a home near an airport or railroad tracks. If traffic drives you nuts, avoid looking at homes on busy streets.

We know how easy it is to focus on the homes you view and ignore the location. So we’ve come up with three things for you to consider before you sign on the dotted line of that purchase agreement.

1. “There are no homes on either side of this one!”

Yes, open space nearby is an attractive enticement, but beware. If the land isn’t a government set-aside (meaning that it’s privately owned), you’ll need to do some investigating.

A few years ago, the residents of a peaceful, 25-year-old Minneapolis suburb were shocked to find out that the open space nearby was zoned for commercial development.

They learned about it while reading news reports that the city approved construction of a 24-hour superstore directly across the street from the subdivision’s entrance.

Imagine living there after the store’s completion—the traffic, the huge trucks making deliveries in the middle of the night and glaring parking lot lights pouring through their windows.

The lesson here? Check the zoning of all vacant land in the vicinity of the home you have your eye on.

2. How’s the neighborhood?

If that adorable house you’ve fallen in love with is the only adorable house in the neighborhood, you may want to think twice about it.

The condition of surrounding homes has an impact on the value of all of them. Nearby homes with peeling paint or trashy yards drag down the value of those nearby.

Then there are the bigger impacts on nearby home values. These include homes near:

  • Foreclosed homes
  • Power plants
  • Funeral homes
  • City dump
  • Noise pollution
  • Sex offenders
  • Poor-performing schools

When you tour a home that you’re interested in, drive through the neighborhood at different times of the day, weekdays and weekends.

Then, drive around the area surrounding the neighborhood to check for anything that may impact the home’s value now and down the road when you sell. This includes railroad tracks, airport noise, dumps, etc.

3. Crime rates

Especially if you’re a single woman or a family with children, checking the area’s crime rates is critical. Even the cutest neighborhoods could be in high-crime areas.

You can find crime statistics online at various websites. Neighborhood Scout offers reports for a fee but many police departments offer them free, online.

The United States Department of Justice offers, at no charge, a way to search for sexual predators on its National Sex Offender Public Website.

Knowledge is power, especially when shopping for a home. Ensuring that the location of a new home fits your needs and desires is part of your due diligence. Neglect it, and you may be sorry.

Should You Skip the Home Inspection to Win a Bidding War?

It’s hot out there, and we don’t just mean the weather. The real estate market is one of the fastest moving in the country’s history and, although there are signs it may be slowing, we aren’t holding our breath.

Sellers are large and in charge and know it. They have the luxury to be uncompromising in what they want for the homes, both in price and terms.

This, in turn, helps fuel bidding wars on homes in good condition and located in decent areas.

Getting swept away in a multiple offer situation is common, but be on guard. It’s ok to compromise on the lesser important aspects of the purchase, but carefully consider any decision to waive the home inspection.

What a Home Inspection Won’t Do

Just as a professional home appraisal won’t let you know about the problems with a home’s systems, a professional home inspection can’t determine a home’s market value.

Not directly. It may impact the value if something major comes to light, but it isn’t something a lender requires before lending money for a home.

Because a home inspection is visual, it won’t give a potential buyer any information of anything that may be hidden behind the walls or beneath floors. It won’t tell a homebuyer if there are dangerous levels of toxins in the air, such as radon.

The inspector will look at the home’s roof, structure and major systems, such as electrical, heating and cooling, ventilation and plumbing. Even among these items, if there is a defective part or component that can’t be seen with the naked eye, it won’t end up in the report.

The home inspection is also not a guarantee that the home will be in the same condition when you take possession as it was when the inspection was performed.  Anything can happen between those two periods.

What a Home Inspection Will Do

Most of all, a home inspection provides the homebuyer with at least some peace of mind.

Inspectors who are worth hiring are those who have extensive experience and know the signs of hidden problems. They don’t hesitate to recommend additional inspections by a specialist.

For instance, if she notices evidence of wood destroying pests, such as termites, she may recommend that you have the home looked at by a pest inspector.

Should you Skip the Home Inspection?

In a multiple offer situation, with price and all other terms being equal, the offer from a buyer who waives the home inspection is most likely going to be the one the seller chooses.

If you have a hefty home maintenance or emergency fund, it’s worth considering waiving the inspection contingency. If not, doing so is a gamble.

Buying a home without having it checked out by a qualified inspector is the same as buying a home as-is. Understand that you may be buying someone else’s problems.

This isn’t the same as buying a used car as-is because the potential problems you inherit with a home can cost into the tens of thousands of dollars.

While it’s true that a home inspector can’t possibly tell you about all of the problems a home has, or is about to have, the peace of mind that you’ll get with at least knowing that the home’s major systems are in working condition is something to carefully consider before giving it up.