nancyandrichard

The Basics of Homeowners Insurance

nancyandrichard — Thu, 08 Dec 2011 23:06:44 +0000

Buying a home is likely the biggest purchase you’ll ever make. It’s important to protect this investment. This is where homeowners insurance comes in. A homeowners policy has to cover so much more. Your possessions now extend on past jewelry and electronics and must protect everything from shingles and flooring to your life savings. According to Wells Fargo, “Homeowners insurance provides you with broad coverage for losses that can arise while owning or renting out your home – like damage to your personal property, theft and vandalism, and liability coverage for accidental injury to another person or property.” In the aftermath of disaster, whether from fire, tornado, theft, or liability lawsuits, repairs and replacement costs add up fast. The majority of Americans would be unable to come up with the cash needed to return life back to normal. So, in response, you purchase insurance. Each year you pay a premium. The amount is based on numerous factors, including the value of your home and the location where you live in. Some areas have higher crime rates, greater risks of wildfire, or have multi-million dollar homes. These policy owners will likely pay more than others. Be sure to ask your insurance provider for the specifics of what your policy covers. You want a policy that gives you the right amount of coverage. Ask about add-ons, such a flood and earthquake policies. According to Allstate Insurance, “Typically, floods and earthquakes are excluded from basic policies, but in some areas, you may be able to get supplemental insurance policies for those situations. A few other conditions most companies specifically exclude are mold, fungus, wet rot, dry rot and bacteria.” Accidents do happen, and with a battery of lawyers around every corner, you want to be sure you’re protected if someone injures himself on your property. Guest medical policies also pay for medical expenses should a person injure himself on your land. In the instance that you must file a claim, you will need to pay a “deductible.” This amount ranges from a few hundred to several thousand dollars. Let’s say, for example, that you have a fire. The total dollar amount of damage is $10,000. Your policy covers the fire, so you only pay the “deductible,” say $500. This is much more manageable for most households. To cover not only your property losses in this fire, but also your possession, you will need to have proof of what you had. A home has been recorded on the tax roll, but possessions are your own private property. Homeowners should create an itemized list, updated yearly, that gives evidence of what possessions they have and how much they’re worth. You want a policy that has replacement cost coverage, not just the present value. If you lose a mattress in the fire, it will cost you $1,000 to replace, not $50 (the price it might be worth now). In order to have proof of your possession, consider making a video or photo diary. Most importantly, keep a copy of this diary and itemized list at a second location away from your home, such as at a trusted relative’s house or in a safety deposit box. If you have a mortgage on your home, you may be required to carry Homeowners Insurance. The reasoning behind this logic is simple. You are not the “owner” of your home until you have completed your loan obligations. Until that point, the bank or lender is the legal “owner.” They want to be sure their investment is protected. For those who own their home outright, homeowners insurance is not required by law, but it would be a crime not to carry it.

What is a pre-approval and why do you need it?

nancyandrichard — Mon, 14 Nov 2011 21:33:37 +0000

What is a pre-approval and why do you need it?

When shopping for a home, you’re going to be asked at some point whether you’ve been “pre-approved” or whether you have mortgage “pre-approval.” You’re going to want to answer “yes” to these questions — buyers who can are in a much better position to purchase a home. Why?

Read on to find out.

What is pre-approval?

In real estate lingo, to say you have been “pre-approved” or that you have mortgage “pre-approval” means you have a commitment in writing from a lender to lend you a specific amount to buy a home under certain conditions (e.g., length of the loan and interest rate). A pre-approval holds more weight than a loan pre-qualification, which is an estimate of how much you may be able to borrow.
Why is it important?

It’s important to have pre-approval for several reasons: It will let you know how much you can spend on a home and the size of mortgage you’ll be able to obtain, it will give you an advantage when it comes time to bid on a property, and it will speed up the process when you find a home you want to buy.
Preapproval is very important in today’s market.While we hear this is a buyer’s market. Sellers are going to what to know they are working with a legitimate buyer. If you have a preapproval letter in your hand and with your offer, the Seller knows you are prepared to move forward with your purchase.
This also applies to the purchase of the many bank owned properties that are very good buys. The bank may even want you to be preapproved by their loan officers, even if you don’t intend to use that bank to make the purchase..

When you have a pre-approval letter for a loan, you’ll know exactly how much you can borrow, and possibly the length of the loan (15 years, 30 years, etc.) and your interest rate. This will give you an idea of how much you can spend on a home and what your monthly payments will be like should you purchase the property.

Buyers prefer sellers who have their financing in place. They don’t want to choose a buyer who seems to be a qualified buyer, but can’t come up with the funds to buy the house.

If you are pre-approved with a reputable lender, you may be able to win a bid over another buyer should multiple buyers be interested in a particular home — even if the offers from the other buyers are higher.

When it comes time to place an offer on a home, having a pre-approval letter will speed up the process. That’s because you won’t have to wait to hear from a lender as to whether or not you’ve been approved.
How do you get it?

You’ll want to talk to a few lenders to search out loans that will best suit you and your financial situation. The lenders will require certain information, including: your income, your employment situation, how long you’ve been employed, and any debts you may have — e.g., student loans, car loans and credit card debt — and the source of your down payment.

You may be asked to show your tax returns, bank statements and W2 forms. The lender will use this information to determine the maximum loan you can qualify for and your monthly mortgage payment.

The lenders will also check your credit report and whether you have funds for a down payment and closing costs.

But, even when you do get pre-approved, remember that there are some caveats:
Pre-approval letters can be time-sensitive and are subject to an appraisal on the home you’re purchasing, so while a pre-approval gives you a firm idea of how much you may be able to borrow, it’s still not a concrete guarantee that you’ll get the loan.

The wrong way to invest in real estate

nancyandrichard — Fri, 04 Nov 2011 20:14:17 +0000

The wrong way to invest in real estate

“Real estate fever”… it hit this Country like a plague. Zillions of “newbies” hit the bandwagon, trying to make a profit where they lost in the stock market. I meet them all the time, and many made big mistakes!

Mistake #1: Stock market mentality

You’d think after losing $7 trillion in the stock market people would have learned. Real estate investing should be treated like a business. The local market values and trends should always be taken into consideration before making an offer. Investors should always “team up” with a local realtor who knows the real estate market in the area they are wishing to invest in!

Real estate is a long term investment. You must know going in what you expect to get out of the project, You must know the rate of return you want, your cost of capital, i.e. interest rates, holding costs and acquisition costs and capitalization rates. All this must be clear in the investor’s mind before making an offer on a property that may fit their criteria. Real estate investment can be rewarding but much homework must be done before buying.

Buying real estate solely for short-term appreciation is often a big gamble! If you buy real estate to hold for 5 years or more, the chances are you will come out on top. If you buy a property and flip it in within a year, you probably are not going to make a profit. One of the major issues I see with new real estate investors is they start off too big. They purchase a 2-5 unit building and do not expect the number of issues that come with being a landlord. Many first-time investors also don’t recognize the amount of time and expense to maintain not only the interior of the units, but also the exterior.

I think a good first-step for a real estate investor is to purchase a small one or two bedroom condo in a larger building (that way you only have to worry about the maintenance of your unit – the condo assn will take care of all of the common area maintenance) near a high rental demand area. This allows you to have a ready supply of (seasonal) renters every year, and, if you don’t like being a landlord it is easier to sell a rental that has good seasonal demand. But, if you buy a rental property for full market price with break even or negative cash flow, you’d better have a backup plan if the market doesn’t start going up. Investing is a lot like surfing… if you don’t know how to ride the wave, you will drown!

So, should you refrain from investing if you think the market will continue to drop? Absolutely not! You can find bargain-priced properties in this real estate market. You can find low-interest rate financing that will increase your cash flow so if values drop, you still are covered. You can plan short-term (six to 12 months), because real estate markets rise and fall slowly. And, if you keep a cash reserve for your business, you won’t sweat when the market tanks, because you know that in the long run, real estate markets virtually always come back.

Mistake #2: Investing blind

People continuously make the same mistake, which is blindly buying real estate based on bogus advice or complete lack of education. Real estate is one of the few investments in which risk is directly proportional to knowledge. True, it has a higher learning curve than investing in the stock market, but there’s no proof that having knowledge of the stock market reduces risk (just ask your mutual fund manager).

I just read a comment on a real estate discussion group on the Internet. In response to an inquiry as to whether a particular seminar or training program was worth the money, someone answered, “Why waste your money on that stuff? Just use your money as a down payment and learn as you go.” This is probably the worst advice you could ever give a beginner. Money for real estate deals is easy to find if you can find good deals. But, you won’t know what a good deal is without having first invested in your education!

The more knowledge of real estate investing techniques, financing, acquisition, negotiating and, of course, your local marketplace, the less risky your investments will be. A bargain real estate purchase will generally always be a safe investment; a bargain stock purchase isn’t – after all, who says the company you bought into will be in business next year?

Mistake #3: No cash reserves

Ask anyone in real estate long term (or any other business, for that matter) and they will tell you the two most important words for survival are: “cash flow.” Heck, even K-Mart failed to learn that valuable lesson!

In order to stay in real estate long term, you need cash reserves. Buying real estate nothing down is easy; handling negative cash flow, repairs and other expenses in the meantime is the trick. In fact, if you can handle the bad times, real estate will always make you come out on top. Lack of cash reserves puts unnecessary pressure on you to do substandard repairs, accept less than qualified tenants and give into tenants’ demands for fear of vacancy.

When you have a sufficient cash reserve, you act rationally. You hold out for a higher sales price. You hold out for a qualified tenant. You leave properties vacant rather than renting to taking a chance on a tenant. You call a tenant’s bluff when they threaten to leave. You take care of necessary repairs and improvements on your properties. It’s a whole different ballgame than operating from a lack of cash. Like I said, buying properties with no money down isn’t hard; it’s handling the cash flow. In other words, you can buy real estate without money, you just can’t survive in business without cash reserves. Thus, consider accumulating cash reserves before investing in rental properties.

Mistake #4: Being greedy

Many investors got started flipping properties to other investors, which is a good idea to generate cash reserves. However, you must be realistic about how much profit is in a deal. If there is a potential for a $20,000 profit in a rehab project, you can’t expect to make $10,000 flipping that property to a rehabber. A rehabber has a huge risk in embarking in such a project and wants a large enough profit to justify the risk.

For example, if a house needs $10,000 in repairs, the rehabber investor wants to make at least a $20,000 profit. If you find a deal with $20,000 in profit potential, how could you expect to get $10,000 for flipping the property if the rehab investor you flip it to is only going to make $10,000? You should be happy making $2,500 and moving on to the next deal. If you want to make more than $2,500 on such a deal, then you must find and negotiate a better bargain that has more profit potential.

Mistake #5: Treating real estate as anything other than a business

People are lured to real estate because of the quick buck that it promises. Don’t hold your breath, you won’t get rich quick. An “overnight sensation” usually takes about five years. More than ninety percent of the people who take a real estate seminar quit after three months.

Why the high fallout rate? Lack of action and unrealistic expectations. Real estate investing should be treated with the seriousness of a career. It takes months, even years for a business to cultivate customers and have a life of its own. You need to treat real estate like any other business. Give yourself at least six months to see if real estate works for you. It may even take a year before you buy your first property. Maybe in the second year you will buy three or four properties. If you work hard at it and keep your eyes and ears open, you may even find your first deal in 30 days. Certainly, you will not make money by talking or thinking about it; you must go out and take action.

Tax Tips for Home Owners

nancyandrichard — Thu, 20 Oct 2011 17:41:55 +0000

Tax tips for home owners

Buying and owning a home is a big expense — besides the purchase price, there are the property taxes, heating and cooling costs, maintenance expenses…the list goes on. But the good news is that there are tax savings available to homeowners. Read on to find out about some of the top tax deductions and credits available to those who own a home.

Mortgage interest and points

Most homeowners can deduct the interest paid on their mortgage as an itemized deduction on Internal Revenue Service form 1040, Schedule A. (Deductions reduce your adjusted gross income when computing your taxable income.) And because mortgage interest makes up much of homeowners’ monthly mortgage payments, that’s a big tax break.

However, if your mortgage is more than $1 million, or your home equity loan is greater than $100,000 you may be out of luck.

The amount of your first mortgage may limit how much you can deduct for mortgage interest on your home equity loan, especially if the debt on your home is greater than your property’s value. Read the Internal Revenue Service’s Publication 936, Home Mortgage Interest Deduction for complete requirements and information.

If you itemize your deductions on Internal Revenue Service form 1040, Schedule A, you also may be able to deduct your mortgage points in full the year they were paid. If you are refinancing, you can, based on the number of years of the loan, deduct some of the points. Read the IRS’s Tax Topic 504 – Home Mortgage Points to get all the requirements and details.

Real estate taxes

As a homeowner, you no doubt hate paying property taxes. But the good news is that real estate taxes can be claimed as an itemized deduction on Internal Revenue Service Form 1040, Schedule A. To find out how much real estate tax you’ve paid, check your escrow account through your lender.

For homeowners who don’t have enough deductions to itemize, they can now increase their standard deduction by adding some of their property taxes to their standard amount, under a new law. Single homeowners can increase their standard deduction by as much $500 (or $1,000 for those married filing jointly). This new law will be in effect through the 2009 tax year.

Moving expenses

If you had a work-related move (say, if you landed a new job or if your employer relocated you to a new location), you may be able to deduct your moving expenses. (Use IRS Form 3903 to calculate how much you can deduct and note those expenses on Form 1040.)

To qualify for the deduction, your new job must be at least 50 miles further from your old home than your old job was. Also, you need to have worked full-time for your employer at least 39 weeks in the first 12 months after your move to your new home. Read Topic 455 — Moving Expenses from the IRS for more information.

Capital gains tax exclusion

Imagine being able to sell your home, pocket the profits and not have to pay Uncle Sam a dime in taxes. That’s the tax benefit available to homeowners as long as they’ve owned their home for at least five years and lived in it at least two of the five years before selling it.

Single homeowners can realize up to $250,000 tax-free in sales gain from the sale of a home, while married joint filers can see up to $500,000 tax-free in gains.

Always check with your CPA or tax attorney for specific details on your situation. This article is only for general guidelines.

Homeowners associations: Good or bad?

nancyandrichard — Wed, 12 Oct 2011 17:52:24 +0000

If you buy a condo or a home in a planned community, chances are it will be subject to the rules and regulations of a Homeowners’ Association (HOA). HOAs can be a benefit and a foil for homeowners. Read this guide to figure out if you’d enjoy living with an HOA:

HOA pluses

The covenants, conditions and restrictions (CC&R’s) of an HOA are designed to protect the value of your home, maintain order in your community and your enjoyment of it. An HOA might prevent your neighbor from erecting an unsightly fountain in his front yard, parking his used vehicles on his lawn or having a RV parked on the stree for an unlimited about of time.
Homes in HOA – governed communities are generally well maintained.
An HOA will see to the maintenance of the common areas of your community or development — the front entrance, the community pools/spas, the roadways leading in your development, landscaping, security and roof maintenance.
Homeowners in HOA communities often have the shared use of pools and party facilities that are maintained by the association. Think heated “private pool” without the work or costs.
If you have a dispute with a neighbor over the use or look of his or her property or his barking dog, you can take the matter to the homeowners’ association for intervention.
HOA dues may pay for shared services like security, basic cable and lawn maintenance. (Think of Saturdays playing golf instead of mowing the lawn.)
The HOA may sponsor community events and get-togethers. Many of the community fitness center fees are included in your HOA fees.

HOA minuses

Membership is mandatory for all homeowners in an HOA community.
You must pay HOA membership dues. These dues may increase — before moving into such a community, you should find out when payments are due, what they cover, what they don’t cover and how likely they are to rise.
You may have less say in how you can change the appearance of your home. Your HOA may have a regulation against fencing your backyard, installing a pool or painting your front door red. It may even restrict when you can water and cut your lawn.
An HOA might not allow large pets.
If the community is an age-restricted community, the homeowners’ association might not allow people under a certain age to reside with you or to move into your home.
Homeowners looking to rent out their residence may not be able to do so under HOA rules.
If you don’t meet an HOA’s requirements — say, if you do paint that door red or get a German shepherd — the HOA can levy a fine.
If you don’t pay your HOA dues or fines — the HOA may even try to foreclose on your home.
Check to see if there is any litigation pending against the HOA and check its financials as well as its recent assessments (for community fixes or upgrades).
No two HOA’s are exactly the same, so ask to see a copy of the CC&R’s if you have questions, or go to the HOA office.

10 Questions to ask your next listing agent

nancyandrichard — Fri, 02 Sep 2011 19:03:54 +0000

10 Questions to ask your next listing agent

So you have decided to hire a listing agent to assist you in marketing your home. But who should you hire – your brother-in-law, your neighbor two doors down, or the lady who sends you a calendar in the mail every December?

Amazingly, according to the latest National Association of REALTORS® Profile of Home Buyers and Sellers, 67% of sellers interview only one agent before making the decision to list with an agent. But is that wise? No, probably not. Instead successful sellers often find it prudent to meet with multiple agents and treat each appointment as a job interview.

Today’s real estate environment DICTATES that a Seller seek out then interview ONLY a full-time real estate “marketing strategist”. An experienced “marketing strategist” is able to provide a written plan of action at the listing interview. A “marketing strategist” , first off, knows his/her local market statistics cold! Once the listing is secured, a “marketing strategist” broadcasts the availability of one’s property to a multitude of outlets using only “high-impact, call-to-action” steps. Some of these steps are easily demonstrated during the listing presentation/interview. Real Estate Marketing is about getting lots of prospective buyers excited about a property..

So what questions should you ask each interviewee?

Let’s take a look at 10 questions to ask your next listing agent:

How long have your been selling real estate and are you a full time agent?

Agents who have been in the real estate business for more than five years are likely to have double or even triple the income of newer licensees, but don’t pull the trigger too quickly. Many new licensees represent the new breed of college educated, internet enabled, smart phone packing entrepreneurs who may be just the kind of aggressive agent you’ve been looking for in this challenging market.
How much real estate did you sell last year?

Past performance can often be an indicator of future results. It may be harsh but agents who are having a hard time selling homes may also be suffering through a cash crunch which can affect their ability to invest marketing dollars into promoting your listing. Although a word of caution – don’t be too surprised if you find that even the top producers in your marketplace have had a tough last twelve months.
How many homes have you sold in my area?

A great way to find a listing agent is to identify agents who have sold homes in the last six to twelve months in your specific neighborhood. Agents that are consistently selling homes in your market area will have a better handle on how and why buyers prefer living in your community. The ability to market these positives can be a huge plus when trying to locate a buyer for your home.
What is your average market time vs. the market?

The average market time is a measurement of how long it takes the average home to sell – from the time it lands on the local multiple listing service to the day it closes escrow. Strong listing agents can often outperform the overall market by using innovate and aggressive marketing techniques that can help a home sell faster and for more money.
What is your list price to sales price ratio vs. the market?

If homes in your market area are selling for an average of 96% of their asking price, in real estate lingo this is often referred to as the list price to sales price ratio. Ideally strong listing agents will be able to “beat the street” by helping sellers price homes closer to real market value.
May I see a portfolio of other listings you have sold?

If you were going to hire a doctor to perform heart surgery you probably wouldn’t hire a dentist, right? The same is true in real estate. Ideally you want to hire an agent who specializes in your specific type of home – waterfront homes, golf course properties, and condos for instance. These agents will be better equipped to provide specialized services that will give you better odds at creating success.
Do you provide a written report to sellers, and if so, how often?

Communication is vital in a constantly changing real estate market. An agent that provides updates, even automated updates, on marketing, website activity, buyer showings, or even the sound of crickets (if nothing is happening) is a huge asset. Be clear and up front about your expectations and, if possible, set aside a day of the week to check in with the agent.
May I see your resume or personal brochure?

Asking for a resume is a great way to learn in-depth information about your potential new partner in the sale of your home. It can also reveal details you might never have known – like their job history, educational background, and list of references. Don’t be afraid to dig deeper by asking for permission to call previous clients for a testimonial.
Do you have a specific marketing plan in mind?

Aggressive agents have aggressive marketing plans that ensure that their listings are exposed to every potential buyer in the marketplace. By coming to a meeting of the minds about what the specific marketing plan will be for your home at the outset of the listing agreement, you will set the stage for a successful relationship.
Do you have internet strategy and how will you market my home online?

The vast majority of buyers today use the internet as an information resource when searching for their next home. Because of this you want an agent who has embraced an internet strategy as an integral part of their marketing plan. Ask to see their personal website, samples of virtual tours, web pages, and a list of portals where your home will be marketed.

Don’t be too surprised if some agents aren’t quite ready to answer all the questions you have prepared for them. To be fair you may wish to provide them a list of your specific questions in advance so they can come to the listing appointment ready to impress you. Also, to make the most unbiased choice, ask agents to leave their pricing suggestions at the door. This will eliminate the natural but incorrect tendency of hiring the person who tells you the highest price and focus the interview solely on each agent’s individual strengths and weaknesses.

How about, what is your sales success percentage over the past twelve months. In other words, of all the listings you have taken in the past twelve months, how many have actually sold?

The reason to hire a listing agent, is not to list your property, but to get it sold. Therefore, how many listings a Realtor is presently carrying, is not anywhere near as important, as how many he/she has sold, in any given time period.

I do everything I can to educate my sellers to the market and preserve as much of the equity in their homes as possible. Sometimes that means telling them things they do not want to hear. Unfortunately you cannot win everybody over that way because people sometimes want to hear what they want to hear. A good Realtor or Agent will always put the clients interests first, even if that means walking away from a listing. A homeowner should also be asking the Realtor what specific certifications or designations that they have and why that might be beneficial to them. If you want a residential agent that has received the highest designation that is acknowledged by the National Association of Realtors, sellers should select an agent with their Certified Residential Specialist (CRS) designation.
www.elitedeserthomes.com

What Is Your Home Worth Today?

nancyandrichard — Mon, 29 Aug 2011 22:59:38 +0000

What is your home worth today? With home prices rising and falling sharply over the last few years, it’s no wonder that this question can be something of a head-scratcher. Realtors are capable of providing an accurate assessment of a property’s value.

The truth is, Realtors can and willingly will offer homeowners a fair estimate of value, without homeowners having to do it all on their own.

Moreover, Realtors often have more detailed and accurate information about neighborhoods, than anyone else. .

If you’re watching the nightly news programs lately, you might assume that your home value has dropped to a negative number, that it’s almost impossible to sell your home at any price given the current market conditions. But that is wrong. Millions and millions of homes will be sold this year and yours can be one of them.

The classic line in real estate is that there are really three prices for every home – what the seller would love to get, what the buyer would love to pay, and finally, what the home will eventually sell for. Assuming there is no underlying motivation to sell quickly – something causing you duress which forces a sale to occur faster than normal like a divorce, a medical problem, or a foreclosure – you should be able to reasonably estimate the value of your home.

How?

The fastest way, of course, is to invite an agent provide you with a competitive market analysis (CMA). Agents have access to a huge database of active and sold listings which they can draw from to provide a very accurate picture of your home’s value, and, in general, agents will provide this information free of charge in the hopes of securing your listing. But what if you don’t want to talk to an agent quite yet?

What if you want to estimate your own home’s value? There is good news – you can still do it yourself using a few simple techniques.

Research public records

Every sale which occurs in your city, town, or neighborhood is recorded with a local government entity, typically the county recorder’s office. Because these are public records, anyone can access this information, and many now provide this information free of charge online. Take the time to review as many sales as possible.
Call a title company

Title companies often work with private owners and agents to manage real estate closings or to ensure title for the new home buyer at closing (or both). Because of this they are often happy to provide you with comparable sales for homes in your neighborhood which can be helpful in determining market value.
Be a detective

If you have keen eye for real estate signs in your neighborhood you can often watch as new listings hit the market, go pending, and eventually close escrow. By visiting real estate web sites such as Redfin, Trulia or Zillow, talking to neighbors, or even visiting with the new buyers themselves, you can often learn what the home was listed for and eventually sold for.
Use the internet

As a potential home seller you may wish to register at Redfin,Trulia or Zillow to begin monitoring the activity in your specific market. This powerful site will automatically update you on new listings, price changes, and statistics that can be invaluable when identifying the right price for your property.
Pay for an unbiased opinion One way to estimate the value of your home is to hire an appraiser to do a “pre-appraisal”. A pre-appraisal is done before a home buyer makes an offer. Appraisers have a duty to provide unbiased, objective opinions based on the latest market data. While this may cost a few hundred dollars, it can often provide invaluable information when you’re beginning to think about pricing and marketing your home.

These are all great suggestions - there are so many sources of information today.
But when it comes to estimating market value, there is no substitute for a well thought out pricing analysis from an agent that has market and inventory knowledge and the analytic abilities to apply that knowledge to market data to produce a solid analysis.

It is critical that the properties used in the analysis be the best possible comparables. And that is a critical difference. The best agents do not just rely solely on MLS data, they know the inventory inside out from seeing it first hand.There is no substitute for actually having been in the homes when it comes time to select comparables for an analysis. I’ve certainly seen pricing analysis and even appraisals that have missed the mark when just raw data is used.

The pricing analysis that I do looks back at carefully selected comparable sales from 6 months ago, and those under contract and extrapolates the market trend. It then applies this trend to active comparables to arrive at a recommended market value. This is the same analysis that I do when guiding buyers on market value for a property. What a terrific tool when done well – to guide the pricing discussion with the seller, and the bidding discussion with the buyer.

You can certainly tap public records and online data to get a sense of market trends and likely market value. This initial view can provide a good backdrop for discussions with agents about pricing the home for sale. Armed with this knowledge, you will be better able to engage in a meaningful pricing discussion and evaluate the credibility of the agent’s pricing analysis and recommendations.

My suggestion – become familiar with local market trends and inventory so you know what you are up against. Then identify several firms and agents as contender for your listing, and then take the time to sit down and interview them. Ask the agents to review a detailed marketing plan that includes a thorough pricing analysis. Ask for references and be sure to talk with them.

There is such a wealth of information available to sellers and buyers today. The selling and buying public has never been better informed. Use the information to your advantage but do not get bogged down in it – pick a great agent and put them to work!

Armed with all of this information you should be able to accurately estimate, within just a few hundred dollars, what your home will eventually sell for, right? Wrong. All of these techniques will provide you with a range of values, not a specific amount. Why? A home’s value is constantly changing, moving up, down, and sideways depending on a myriad of influencers. Your hard work should act as guide post, not a destination point.

REALTORS® continue to write about the changing market and how practices need to change to keep up with it. What worked during the years of the Real Estate market boom aren’t working now due to falling home values and changing attitudes. Tailor your offer price to the specific house you want to buy. How much you offer should depend on how much you can comfortably afford to pay, which may be less than what the lender says you can afford. The price should be determined by current local market values, how well the listing is priced for the market, and whether or not you are in competition.

HOUSE HUNTING TIP: When listing and selling a property - Real Estate professionals have two major considerations to get a property sold.

First, We Price right. The housing industry is driven by price. With the reality of short sales and foreclosures dominating the market place realize that you are in competition with them when selling a property. As a result, you must look at the sold properties in your area, the contract once it is done must pass appraisal.

Appraisal is done with comparative sold properties. The other main component of our efforts on behalf of a seller is marketing. The property must get the maximum exposure to potential buyers.

Marketing is two pronged:

1.One segment is the general public of buyers to make sure they are aware of it..

2.The other is to market to other Real Estate professionals, they have buyers too. The result of focused efforts on these two areas will lead to a successful closed transaction. That is the goal to begin with!

So next time you decide to sell, always consider hiring a local agent that knows the area well. In the long run, you will benefit from all the services we offer. Remember, houses are not a commodity and you should NOT value it based on price per square foot. You don’t buy your car by the pound or your clothes by the yard, so you shouldn’t buy or sell your home by the sq. ft.!

Smart moves for home buyers

nancyandrichard — Fri, 26 Aug 2011 19:26:22 +0000

Smart moves for home buyers

Buying a home is a big step — it’s possible that it’ll be the largest purchase you’ll ever make. You want to get it right.

Use these tips to guide you through the process:

Save for a down payment

Usually, the more money you can put down on a home, the better. That’s because the more you borrow for a home, the more you’ll pay in interest on your mortgage down the road. It’s easier to qualify for a mortgage if you have a down payment. Having a down payment also may help you to qualify for a lower interest rate on a mortgage, and may make your mortgage payments lower — and easier to make — once you own a home.
Determine how much you can afford

Before you set out to buy your dream home, compute how much you can afford, keeping in mind your current expenses, how much it will cost to own and maintain the home and how your expenses may grow or change in the future. There’s no sense spinning your wheels looking for that mansion when a more affordable condo is more your speed.
Weigh needs vs. wants

Sure, many of us want a home in the very best location with all the latest amenities in the latest style. But is that what you need? While it’d be great to find a place that fills all our needs and wants, often we have to sacrifice and buy a place that meets just some of our necessities and desires. So, think about what you must have (e.g., a community with a golf course, a new renovated kitchen is a must or can you live with a kitchen and tile countertops?), versus what you’d like but can do without — say, a backyard with a private pool and spa or will a community pool & spa be okay. Doing so will make it much easier when it comes time to go house hunting.
Secure financing

Have a lender pre-approve you for a mortgage. Being pre-approved means that a lender has agreed to lend you a certain amount based on your credit rating and finances. Being pre-approved puts you in a better position to look for a home — you know exactly what you can purchase, and when it comes time to bid on a home, you’ll be in a better strategic position than a buyer who hasn’t been pre-pproved.
Research

Do yourself a favor and save lots of extra work, work with an agent who knows the area you are intersested in and have the agent investigate your local market and the homes you’re considering. Knowing the strength of your real estate market (e.g., whether it’s a buyer’s or seller’s market) and the history of a home (such as when it was purchased and for how much) will help you bid more intelligently on a home, and will give you an edge when negotiating with a seller.
Get a Realtor

Buying a home is a complicated process — so it’s best to recruit the assistance of an expert. A real estate agent will look out for your needs during the home-buying process, will read the fine print and will help explain anything you don’t understand. Think of it as an insurance policy against running into troublesome real estate hassles after you’ve signed on the dotted line.
Inspect

Once you find that home you’d like to buy, get the property inspected by a qualified professional and make your purchase contingent on satisfactory inspection results. By doing so, you can find out if a home is in good condition, or be alerted to any serious (and costly) problems with the home. If you make your purchase of a home contingent on your satisfaction with the home’s inspection reports, you have an out should those defects prove to be too expensive to fix.

What Sells a Home Today?

nancyandrichard — Mon, 22 Aug 2011 22:57:30 +0000

In today’s market many sellers want to know the secret to selling their homes quickly. They want to know ways to hold on to the equity they’ve build over the past decade.

Unfortunately, there is no golden equation that equals the perfect sale. Yet, while there is no “sure thing” in the housing market these days, there are certain factors that affect how quickly and for how much your home sells.

Here are the top ten things that sell a house.

. Consider how these apply to your own home, how that affects marketing, as well as what aspects of your home you should “play up” to elicit a better response from buyers.

1. Price: It’s a common misconception that location is the leading factor of whether or not a home sells. It is, instead, price. Think about this scenario. You have a home located in a prestigious and sought-after neighborhood, yet the list price is tens of thousand of dollars over the comps for the area. No one will be interested. This same property priced just below the competition will fly off the market.

2. Location: Okay, location is still important. A home that sits next to a refinery, crime-ridden neighborhood, or busy street is less desirable than one that backs up to green space. If your home has a terrific location, then by all means boast about it in the marketing.

3. Livability: This is fast becoming a hot button word in real estate. Buyers today are looking for neighborhoods that deliver amenities such as golf, fitness centers, restaurants and pet friendly areas. They want good access to good medical care, walkable neighborhoods, and plenty of things to keep them entertained.

4. Condition: There is a certain segment of the market that is made up of renovators, flippers, and investors. You won’t find as many people these days eager to buy your run-down property that is in a good location. They simply can’t sell the property fast enough before monthly mortgage payments begin eating up their profit. Homes that are well-maintained or in move-in ready condition appeal to a broader range of buyers. Even simple fixes, such as new paint, cleaned carpets, or power-washed patios, can have an effect.

5. Competitive Advantage: Don’t make the mistake of assuming that you’re in this race alone. Past area sales, as well as current listings and foreclosures, are your direct competition. You must take these into consideration when settling on a list price for your home. What amenities and upgrades do these homes have? Do the homes in your neighborhood all have updated baths, kitchens, or landscaped yards? In order to price in line with them you must be able to boast these same things.

6. Curb Appeal: Curb appeal is the first impression of the home world. You must keep the yard orderly and maintained when your home is on the market.

7. Staging: Once inside your home, a buyer must be wowed. Intoxicate their senses. They want to see up-to-date furnishings, smell a clean home, touch cabinets that are in good repair, hear peace and quiet, and of course “taste the good life.”

8. Kitchens: A kitchen sells a house. It is where families gather and connect. Minor kitchen remodels rank high among the list of top remodeling projects, with owners updating cabinets, counters, and floors. Nobody wants an outdated kitchen. What fixes are in your budget? If your kitchen is already spectacular, be sure you play this up in any marketing.

9. Agents: An accomplished, knowledgeable agent can be your biggest ally during the selling process. They know the latest market trends and have built a network of agents and contacts to market your home to. With an arsenal of marketing tools available to agents today, from video tours and webcasts to brochures, websites, and MLS listings, they are part of your selling team.

10. Marketing: Marketing has gone global. With the power of the Internet, you can showcase your home to millions of potential buyers. Sit down with your agent and ask them to review their marketing plan. This is why you are paying them a commission.

The market is not what it once was. You must be realistic about what selling in today’s market means. You value your home, but it may not be “worth” as much today as it was yesterday, last month, or last year. Consider these top ten ways a home sells and help your home put it’s best face forward.

Change Your Thoughts

nancyandrichard — Wed, 25 May 2011 22:32:56 +0000

One of the hardest things about trying to change your life for the better is that it can be difficult to see beyond your present circumstances.

A problem that has plagued you for years may seem as if it’s insurmountable, yet sometimes a friend or mentor can see answers to our problems that we would never have considered.

Why? Because they have a different perspective, they’re looking at the situation from a completely different angle.

We all get stuck in a rut at times, and it’s worth remembering that we can make meaningful changes to our life if we’re willing to think outside the box a little, and find the inspiration we need to change those thoughts we’ve held for a lifetime.

Changing your outlook isn’t easy, but the rewards, and the corresponding changes in your life, make the effort worthwhile.

Here Are 5 Ways to Find Inspiration to Change Your Thoughts

1. Seek Out New Experiences
Going through the same routine day in and day out can feel comforting and safe, and at times it’s just what we need. But it can also be limiting and emotionally stifling at times.

Try to make an effort to do something out of your comfort zone once a week.

It doesn’t have to be much, you could try out a new restaurant in the neighbourhood, take a walk in a new area, or make friends with the new person on your street.

Just giving your brain some new experiences to digest will help you to be more creative and motivated.

2. Keep An Open Mind
Often we make judgments about people or events in our lives, whether positive or negative. Sometimes pre-judging situations can limit our opportunities to learn.

There is a great story about an old farmer who found a wild horse and brought him to his farm:

“That’s good,” said the farmer’s friend. “We’ll see,” said the farmer. The next day the farmer’s son was riding the new horse and fell off and broke his leg. “That’s too bad,” said the friend. “We’ll see,” the farmer replied. The following week, the army came to conscript all the young men in the village, but the farmer’s son was spared because of his broken leg. “That’s great news,” said the friend. “We’ll see,” said the farmer.

The point is that we really don’t know how the events of our lives will affect us in the long run, so by keeping an open mind, we can maintain a youthful curiosity about people, places and things, and maybe even learn a new way to think about our life experiences, or address a problem more successfully in future.

3. Spend Some Time Alone
Spending time alone thinking, praying, writing in a journal, are some of the best ways to think deeply about a problem and really get in touch with what’s going on in your mind.

When you’re alone you will tend to notice subtle things that you often wouldn’t if others were around, and you can maintain your train of thought more easily without distraction.

4. Find Mentors
Good mentors can be a tremendous help to us in life. Having someone to discuss ideas, thoughts and feelings, and share experiences with can really help us to become more open to new possibilities.

Some mentors don’t even need to be part of your life to help you. One of the best ways to learn is to read biographies of successful people, those who you aspire to be like, who have been in a similar circumstance to you.

Finding out what pitfalls they faced, and how they solved their problems, will be motivating, at the very least.

5. Share Your Experiences
Finally, sharing your experiences can help you see your life in a different context.

Teachers often report that they learn as much from their students as the students learn from them.

By sharing your experiences, you not only help others, but you allow yourself to receive support, which can lead to a beneficial change in your own thought process long-term.

Begin NOW

You can begin this process right now by sharing your own experiences, thoughts, or tips below in the comments section…

How can we all find the inspiration needed to change our thoughts for the better?

nancyandrichard

The Basics of Homeowners Insurance

What is a pre-approval and why do you need it?

What is a pre-approval and why do you need it?

What is pre-approval?

Why is it important?

How do you get it?

The wrong way to invest in real estate

The wrong way to invest in real estate

Mistake #1: Stock market mentality

Mistake #2: Investing blind

Mistake #3: No cash reserves

Mistake #4: Being greedy

Mistake #5: Treating real estate as anything other than a business

Tax Tips for Home Owners

Tax tips for home owners

Mortgage interest and points

Real estate taxes

Moving expenses

Capital gains tax exclusion

Homeowners associations: Good or bad?

HOA pluses

HOA minuses

10 Questions to ask your next listing agent

10 Questions to ask your next listing agent

How long have your been selling real estate and are you a full time agent?

How much real estate did you sell last year?

How many homes have you sold in my area?

What is your average market time vs. the market?

What is your list price to sales price ratio vs. the market?

May I see a portfolio of other listings you have sold?

Do you provide a written report to sellers, and if so, how often?

May I see your resume or personal brochure?

Do you have a specific marketing plan in mind?

Do you have internet strategy and how will you market my home online?

What Is Your Home Worth Today?

Research public records

Call a title company

Be a detective

Use the internet

Smart moves for home buyers

Smart moves for home buyers

Save for a down payment

Determine how much you can afford

Weigh needs vs. wants

Secure financing

Research

Get a Realtor

Inspect

What Sells a Home Today?

Change Your Thoughts

Here Are 5 Ways to Find Inspiration to Change Your Thoughts

Begin NOW