Rolling In The Upgrades

If you are considering building a brand new home, there are a few things you may want to consider before you sign on the dotted line.  First of all, rolling in a bunch of upgrades into the cost of the home may just be the most expensive way to purchase the upgrades you want.

Perhaps I can give you a few examples:  If you wish to install hardwood flooring rather than carpeting; or, you would rather have a beautiful solid wood door rather than the standard metal door the builder is offering you; or, perhaps you wish to upgrade your countertops to granite, rather than the standard formica offered.   These are 3 pretty common upgrades that buyers ask for when building a home.  However, having the builder install these items at builder prices may be much more expensive than doing them after the fact.

In general, builders make a rather pretty penny on the upgrades they install on a brand new home.  Much more than it would cost you to hire someone to do the work after closing.  Now, that being said, I’m NOT recommending that you do the work yourself (unless you are truly qualified).   Do-it-yourself-jobs tend to be less than perfect and can often cost a homeowner more money repairing the damage later.

If you really want hardwood, laminate, or ceramic tile flooring that is not offered by the builder’s standard package, consider having the builder install vinyl in all the affected areas (most lenders require there be some sort of acceptable flooring  installed before they will agree to close on a property).   Vinyl is very easy to lay other flooring over, or on top of it.  It does not have to be removed.  After closing, you should be able to go right over it with the flooring of your choice.  Probably at a much better price.  Of course, you will want to do your leg-work ahead of time so you will be sure that it will be a cost savings to you.

Front doors are very often much less expensive than what a builder will charge you to upgrade.   Not only that, you may have many more choices available to you through Home Depot, Lowes, or even specialty stores.

Finally, making the decision to put granite in the kitchen can be a real source of anguish when the actual cost is revealed.  I really suggest taking the time to price the job outside the builder’s arena and see what you find.   It may not be worth the trouble if it’s only going to save you a couple hundred dollars, but, if it’s more than that, woo-hoo!

Remember, that when you roll the cost of your upgrades into your note, you are paying for them over the course of 30 years!  If you keep your home until you pay it off, your upgrades would cost you triple!  Just a thought!

The Good Ones Go Fast

Have you had a little trouble shopping online for a home?  Have you found a really great house at a really great price online, only to be told when you call the Realtor that it’s already sold?

This is a common problem.  Let’s face it, this one fact remains the same…the good ones go fast.

It really doesn’t matter where you live or how much money you want to spend.  It’s simple really, common sense.  The homes that look the best, and are priced well, will sell the fastest.  In today’s world of modern technology we have the internet, email, and smart phones, to gather information about new properties coming on the market almost instantly.  Add to that, the ability of Realtors to reach thousands of people with a simple advertisement that syndicates out to hundreds of real estate websites within minutes.  The combination equals a wonderful cocktail of instant information to hungry shoppers.  Is there now any wonder why the “good ones go fast”?

The days of driving by a home for sale and asking your Realtor to show it to you next weekend are gone.  If it’s a “good one”, it’s probably going to be sold.  As one of my long-time colleagues once said years ago, “Whatever you love, there’s a great possibility that someone more decisive, will love it more than you”.

Therefore, the moral of the story is, don’t wait too long if you find the home of your dreams, or it may always remain just that.

Showing In The Rain

There probably isn’t anything I dislike more than showing a home in the rain.  Especially, if it’s cold and raining!  Nevertheless, this is often a necessary evil when you have a client that wants to buy, a short window of time to find something, and Mr. Weatherman isn’t cooperating with you.

So, what can you do to make the experience more pleasant as home shopper, and less taxing on your home if you are the home owner?  Here are a few tips:

Make your ‘shopping in the rain’ more pleasant.

As a buyer, prepare yourself for your day of shopping.  Make sure you are dressed appropriately for the weather.  I recommend a jacket with a hood.  It’s a lot easier to throw a hood up, over your head, than it is trying to mess with an umbrella time, and time again.

Take a break and get some hot chocolate or coffee.  This will break up the cold and probably put you in a better mood.

Wear shoes you can easily slip off your feet like loafers or even boots.  Shoes that need to be tied are a pain in the fanny, and they usually require a place to sit down in order to put them back on.  I recommend bringing a pair of slippers if you don’t like walking around someone’s home in your bare feet, or in socks.  This way you will protect the home from the dirt or mud that may be on your shoes.   Not to mention, you may protect your socks from getting dirty as well.   NEVER walk on someones carpeting with your shoes on if you have been out in the rain!  This is really just unacceptable.  It’s very important to show common courtesy to the home owner.

What can you do if you are a home owner to protect your home and provide some measure of comfort to those wonderful buyers who braved the storm outside to come and see your home?  First of all, protect your flooring!  Let’s face it, no matter how much I talk, there are agents and buyers that will not respect your carpeting.  To help safeguard your home, try putting a mat inside and outside your front door.  This will give them two opportunities to wipe their feet before walking on your carpeting.  Secondly, you can also buy little plastic booties that a buyer can put over his shoes to protect your flooring.  You really only have to leave these out when it’s been raining, therefore, it’s a good  idea to leave a small trash can available to throw the booties into when they are finished.  FYI – I really don’t recommend a sign that says “Please remove your shoes”.  I can’t tell you how many times a buyer has said, “I don’t need to see the house, I’ll just wait right here”.  This is a really bad thing if you are wanting to sell.

Finally, if you can arrange it, a wonderful invitation into you home on a cold, rainy day, is a cup of coffee.  Obviously, not everybody drinks coffee, and you can’t please everybody.  Nevertheless, what a lovely to say “welcome” into your home!  Imagine the possible impact of the smell of fresh coffee and a note that says, “It’s cold outside.  Help yourselves to some coffee, and thank you for visiting our home!”.   This is a real winner when it works!   Consider putting out 3 coffee mugs and some powdered cream and sugar.  Even if you only get 1 coffee drinker in 10, it will be worth it.

In the end, the most important thing is to plan ahead and try to be considerate of the other person.  If you do this, you will have a much more pleasant experience buying or selling a home in the rain.

Buyer, Be Prepared

If you are just beginning to think about buying into the “American Dream”, well then, good for you!!  It’s about time!  The market has never been better!  Low interest rates, housing prices at an all time low, and believe it or not, the market poised to go up, up, up!

So, what can you do to get started?  Well, let me say that it isn’t shopping online, picking out a home and calling the agent on the sign to show it to you.  That’s putting the cart before the horse, and hopefully, any Realtor you spoke to on the phone would tell you that.  The first thing you should do is get yourself pre-approved for a mortgage loan.  This process, with the right loan officer, should tell you how much you can afford, what your down payment and closing costs would be, and what (if any) things you would need to do to be better prepared financially for a closing.

Now, you can use any lender you want, however, I recommend asking your Realtor for some recommendations.  My favorite lender is posted on the right side of this page under “BLOGROLL”.  I’m not bashful about it…I think she’s the best!

Nevertheless, here are some “Do’s” and “Don’ts” on preparing to shop for a home:

DON’T aimlessly shop online, especially if you don’t have any idea about what you can qualify for.  This is just wasting your time.  Unfortunately, a good many of the real estate websites available to the public are inaccurate.  Some of the most popular should be ashamed of the lousy information they put out.  At any rate, If you must shop before you have spoken to a lender, I would be discerning as to where you shop.   I’m not going to give you names of the websites that I don’t like (because I might be sorry for that later ).  I’ll just tell you that I like www.Realtor.com, www.Remax.net and www.homes.com.  I believe these are about as accurate as they come.   Nevertheless, it’s important to know that what you can afford as a house payment is not always equal to what you may be paying in rent.  Therefore, getting pre-approved before shopping will help prevent you from falling in love with something you can’t have.

DON’T try to ’do-it-your-self’.  I hear this all the time.  Someone will call me and ask if they can see a home I have listed for sale.  When I start asking a few questions like: “Have you already been pre-approved by a lender?”, or “Do you have an Agent you are working with?”, the common response is, “Well, I’m trying to do this on my own right now”.  OH MY WORD!!  Would you take a knife and open up your own head and do brain surgery??  Would you do brain surgery on your friend??  Ahhh!!!  Now, I’m not saying it takes a brain surgeon to buy a house, but it might as well when you consider all the ba-gillion forms that you need to read, understand, fill-out, agree to, and commit your hard-earned, green, dollars to!!  Knowing what I know today, I would never even consider representing myself in another state.  Everyone needs a good Realtor!

DON’T put the cart before the horse.  Get pre-approved before you start house shopping.  This takes very little time and effort, however, it will make you confident that when you are ready and you find the right house, you can act…immediately.

So…

DO find a Realtor who can assist you as a Buyer’s Representative.  This would be step one for me.  I won’t go into a lot of detail here, but you can look on this site and get a great education about this subject.  Try: Buyer Clients vs Buyer Customers (in the articles to the left) and Information about Brokerages Services (on the top bar).  Remember, in Texas, buyer’s agency is FREE TO YOU!  No gimmicks!

DO get yourself pre-approved.  This is absolutely step number two.  In my opinion, if you don’t make the time to do this step quickly, you’re not serious about buying a home.

DO ask your Realtor which websites they recommend for you to browse on yourself.  I already gave you a few of my favorites.

If you do all 3 of these steps: Find a good Realtor to represent you, get pre-approved for a mortgage loan, and use only accurate websites for your personal browsing, you will be on your way to finding your new home in the right way.  Happy Shopping!!

Don’t Let The Cosmetic Stuff Get You Down

Time and time again, when I am showing properties for sale, a buyer may walk away from a home because he feels there is just “too much work” to be done to make the home acceptable to him.  Now, this is a warning to all those trying to sell a home that doing your utmost to make your home presentable is crucial.  On the other hand, I would like to speak to all those buyers out there who may be walking away from a really great home or possibly even a really great deal.

Don’t let the cosmetic stuff turn you away too quickly!  There actually may be a diamond under all that roughness!

Quite often a property on the market is lacking in some basic updating.  When I say ”basic” that means: fresh paint, new carpeting, updated countertops, fixtures, and possibly hardware for doors and sinks.  Frankly, depending on your tastes and the size of the home, doing this kind of updating may be too expensive for your budget.  However, I often find that buyers will choose a home that is more expensive than a similar home in need of a little work, just because they don’t wish to do the work.  The most common reason I hear is, “We don’t have the money”.  Secondly, I hear, “We don’t have the time”.  And, thirdly, I hear “We just don’t want to mess with it”.

All of these are viable reasons, however, it may be worth taking a second look at the situation.  First of all, when we address the matter of “money”, the reality is that the possible savings on a “fixer-upper” may off-set the expense of the updating.   If a buyer doesn’t have the actual cash to do the work, they may be able to negotiate these funds (or a portion of the funds) into the closing with the approval of the lender and the seller.   I have had many contracts in the past where the property needed paint, carpeting, or both, and the seller accepted a price in which these updates could be done prior to, or after closing.   It’s also important to remember that some updates don’t need to be done immediately.  Next year you can put the granite in the kitchen.

Secondly, when it comes to the “time” involved, a buyer can make the arrangements to have work completed in the home during the time they are waiting to close.  This saves time after closing.  If these are arranged properly, contractors could enter the property immediately after closing and begin work.  In most cases, I have seen this type of work be completed within a week or two of closing.  The really great part about this is that the buyer gets to choose the style, type and color of any upgrades he decides to make.  The home is no longer what the seller made it to be, but becomes what the buyer wants it to be.

Thirdly, I have found that if the buyer is putting in a product that he likes, in the end, he really doesn’t mind having to “mess with it”.  In almost every case where I have seen a buyer update his home, at or just after, the time of closing, he is extremely happy with the results.  “It was worth it”, is the most common response I hear.

All that being said, obviously, there is some work involved in purchasing a home that needs updating.  Nevertheless, it’s not always a bad thing.  When shopping for a new home, just keep your options open.  Remember, if you are purchasing a home you intend on living in for years and years to come…the home’s location and floorplan are the most important things to consider.  You’ll probably change out those cosmetic things many, many times.

 

 

“I’m Paying With CASH!”

I don’t think I have enough fingers, toes, and ribs, to count how many times a buyer has said to me, “I want to get a really good deal because I’m paying CASH!”

The truth of the matter is, any good agent is going to help their buyer get the best deal possible regardless of whether they are paying cash or getting a loan.  The idea that a buyer can expect a ‘better deal’ from a seller due to the fact they are paying cash, is somewhat a fallacy.  In reality, a cash transaction saves a seller very little money, maybe $50 to $100.  Yep, that’s it!

What a buyer does offer a seller with a cash contract is a little more assurance that they can actually close the transaction.  However, and this is a BIG “however”, it is really important that the seller make sure that the buyer’s funds are verified before accepting the offer, and that an acceptable amount of earnest money is requested.

Here is a scenario:  Mr. Desperado needs to sell his home quickly.  He has listed his home for sale at a price of $210,000.   Because his home is priced so well, he receives two offers on his home in the first week.   The Smiths make the first offer at full price, however, the contract is contingent on them getting a conventional loan of 90% value.  The second offer is presented by Mr. Moneybags.  He offers Mr. Desperado $200,000, however, it is a cash offer and is not contingent on any financing.

Mr. Desperado decides that he doesn’t want to take the chance on the Smith’s financing, so he accepts Mr. Moneybags offer.   Approximately 10 days into the option period, however, Mr. Moneybags has a terrible dream about the home.  When he awakens, he terminates his offer with Mr. Desperado and signs over his earnest money.  Unfortunately, Mr. Desperado had accepted an earnest money deposit of only $2000.00.  Mr. Desperado quickly attempts to renegotiate his offer with the Smiths, yet sadly, they had already found another home and they were on contract to purchase it.

Can you see how easy it can be for someone who has $200,000 in cash to walk away from such a small amount of money?  Let me make this more clear:  If a buyer only has $8000 to purchase a $200,000 home, then a $2000 earnest money deposit would be nearly a  quarter of the entire amount they needed to close.  Losing a quarter of what would be necessary would be substantial.  On the other hand, losing $2000 when you have $200,000 is only 1%.  A big difference!!

The moral of the story is:  No matter what amount of money you choose to accept as earnest money on your transaction, make sure it would be acceptable to you if the buyer actually walked away.   And remember, people with large amounts of cash put their pants on one leg at a time…just like you!   Don’t be fooled by the cash.  Make sure your contract makes sense!

Fresh-Cut Flowers

When showing your home for sale, fresh-cut flowers are a great way to welcome your future buyers.  Flowers are lovely, fragrant, and send a message of warmth and caring.

Now, you might say, “Yea, they’re beautiful, but they are expensive!”  Well, they are definitely more expensive than doing nothing.  However, I have learned from my daughter (who has a little Martha Stewart in her), that taking care of your fresh-cut flowers will help them to live, and beautify your home, for a lot longer than you might otherwise think.

Let your home say “Welcome”!

Typically, when you purchase fresh flowers at a grocery store, they will come with a floral preservative.  This is very helpful in extending the life of your arrangement.  However, there are lots of great tips on how to organically maintain your flowers without the use of a floral preservative.  Here is a great link which will show you how to cut your flowers, maintain your flowers, and even to choose the best flowers for your purposes.

http://www.ehow.com/video_1619_keep-cut-flowers.html

Above all, smell your flowers everyday.  Flowers only have one goal in life…to be seen and smelled (and sometimes eaten).  So, help them fulfill their destiny!!

Is Your Swimming Pool Sparkling??

Pool water should look like you could drink it!

I’m not going to mince any words about this subject.  If you are thinking about selling your home and you have a swimming pool, it is absolutely imperative that your pool be pristine when you show it to the public.  That’s right!  Bright, clean, free from any debris, crystal-clear water.

This really isn’t a difficult concept to grasp.  When a buyer is looking for a home with an in-ground swimming pool, he will rarely resort to purchasing a home without one.  Therefore, the strikingly beautiful sight of a sparkling swimming pool in the back yard can practically sell the house itself.  On the other hand, if the pool is filthy, or even less than par, the sight of it will probably turn the buyer off completely.   He won’t be able to imagine himself swimming in it, and if he does, that thought will definitely repulse him.  The worst part is that most buyers feel that what they see is what they get.  So, if it’s filthy-nasty now…it will probably be filthy-nasty on the day of closing.

So, the moral of the story is:  Clean it up!  Show it perfect!  Let the buyer walk straight-in through the front door and desire to walk straight-out through the back door and jump into your pool!

The Short Sale Nightmare Continues…

Managing a transaction between two parties is tough enough.  Imagine when one of those parties has virtually no stake in the game, so he defers his (little) interest to an over-sized, inhuman, slow-moving, 3rd party, with absolutely no teeth.  Can we say frustrating??  Yes, I’m about to vent….

The problems with the short sale scenario are common to most Realtors.   Once you have the wonderful circumstance of a buyer wanting to buy, you have to deal with the two parties that ‘on the record’ want to sell.  There are issues with this, however, that a lot of people don’t understand.  I’ll discuss just a few:

1.  In the final analysis, it’s the lienholder who decides what the sales price will be.  Even though the buyer and seller have determined a value on the property in advance (usually with the assistance of their Realtors), the lienholder reserves the right to accept or reject that offer.  If they reject, and the buyer is not in agreement with the new price, the gig is up.

2.  All parties are at the mercy of the over-sized, slow-moving lienholder.  This entity also decides how they want to communicate and when.  This makes it very difficult for all other parties.  Especially if they demand to only to speak with one person, or only by email or fax.  I find it extremely debilitating to be told that I can only use email for communication.  What do you do when you send 5 emails and you still don’t have a response?

3.  The Sellers of a property in a short sale transaction are typically broke financially.  Therefore, it can be very difficult to negotiate repairs of any kind.   Even if they want to help, they may not have the funds to do so.  Even worse, I have found that a lot of Sellers refuse to do anything on the property to assist in the short sale.  After all, they are losing the house to foreclosure anyway, right?

4.  Bonus!  Watch out for that option fee!   If a buyer delivers an option fee to a short sale Seller, there may be no way for him to be credited that fee at closing.  It could be money just thrown into the wind.  It’s important to figure this out in advance.

5.  Having a vacant home in a short sale is a source of real potential problems as well.  Who is going to safeguard the home from vandals during the transaction, or be responsible for any changes in the properties condition before the closing?   I have often found that a Seller in this scenario is unwilling to take responsibility for the property.  It’s pre-foreclosure!  “I’m losing it anyway.”  “What do I care?”  “I’m not gonna throw good money….” are all statements I have heard directly from short sale sellers.

Now, all this being said, purchasing a short sale can still be one of the most inexpensive ways to buy a home.  The moral of the story is: prepare for the worst, hope for the best, and think ahead, and smart, on every move you make.

Should I Stay, Or Should I Go?

I am often asked this question when a prospective Seller wants to discuss the probability of showing their home.  “I have kids”, “I work from home”, “I don’t trust…”, or “I don’t know where to go”, are all very reasonable reactions to my suggestion that they should leave home for a showing.

In general, the answer to this question is quite simple: ”You should go.”  However,  there are always exceptions to the rule.  The fact remains that a buyer and their Buyer’s Agent will always prefer to see the home unoccupied, by either a human or canine life-form.

Why is this?  When a buyer is viewing a home, they are attempting to visualize themselves living in the property.  Often, they will want to comment out-loud to their Realtor, spouse, or other person about the home.  Perhaps there are things that they wish to point out as favorable to their co-buyer.  Or, perhaps there are unfavorable things that could be issues in the future that need to be discussed.  In either case, most buyers will not address these matters in front of a homeowner.  Good or bad, they tend to be private.  What can make matters even worse is that many times a buyer feels the need to stretch the truth regarding their feelings about the home if the homeowner is present.  Unfortunately, I’ve seen it happen countless times in the past where a client tells a prospective Seller something like, “Oh, your home is lovely, thank you.  We’ll be considering this one!”  When, in reality, they had no interest in the home at all.  They just felt the need to “be nice”.   Yet, in reality, the lie completely misled the seller.

If you want a buyer to buy your home, they need to feel comfortable inside it.  If a Seller is present, this can often cast an unspoken aura of pressure and anxiety over an interested buyer.  If they walk away with this feeling, they probably won’t be back.   An even worse scenario is when a Seller decides that he does a better job of being the Realtor than the actual Realtor.  Following a buyer around, talking to them, showing them the cool shelves that were built into the closet with his “own two hands” is a really bad idea.  It’s a truly rare buyer who can tolerate this.   Most walk out the door feeling unduly pressured.  Hence, if you have to be there, leave the buyer and agent alone.  Let the agent do his job, and let the buyer view the home at his own pace and with his own style.