Want to Increase Your Equity When Selling Your Home? - Think of Your Home as a Financial Asset
A transition takes place when you begin the process of selling your home. You see your home not as a home, but as a financial asset, and the question becomes how do your get the most equity out of your house?
This one piece of advice will make all your home selling decisions come into sharp perspective. When selling a home, the biggest reason that a home doesn't sell at the best price on the market, or within a reasonable time frame, or with equitable terms, is because of this one simple decision isn't make by the seller(s).
Your first decision when you decide to sell your home is to separate yourself from the personal feelings you have about the house. Often when you talk with realtors about buying real estate, we'll refer to your new property as a "home." When you sell a property, we'll often refer to your property as a house. While buying a home is often an emotional decision, selling a house is a financial decision, one for which emotional detachment is needed. Potential home buyer don't care and don't want to know about the memories, or sentimental attachment you have in your home. In fact, the best way to sell your home is to make it seem like you don't live there. More about that in the next section.
When you decide to sell your home, resolve to yourself that your home no longer belongs to you. When you think of your house as another financial transaction such as a currency trade or a commodity trade, you think more clearly about all the decisions you need to make before you close on escrow. Buyers, on the other hand, invest emotion into the purchase of their new home and it is in your best financial interest to do everything possible to allow them to see your house as their new home. The downside to not detaching yourself emotionally from selling your house is that the process becomes more difficult for you, and at times, unconsciously, you can either drive potential buyers away, reduce to opportunity for all potential buyers to see your house or unintentionally create other situations that take it longer than need be to sell your house.
Sunday, February 8, 2009
Beware of Being Fooled By Home Staging
According to a report just out, it is too easy to be fooled by home staging. Home staging is a term that we are gradually becoming familiar with. It is the idea that we try to create the best impression of our home when selling the house. It used to be just run the vacuum over it and do the dishes but nowadays there is a whole set of rules to follow!
The idea is, that a staged home stands out from all the others and therefore gets sold more quickly. It certainly can be carried to extremes with reports of sellers hiring storage units to cart their junk off to. Larger items of furniture are encouraged to be put into storage by professional 'home stagers' so that the house looks bigger and more spacious
Another instruction is to remove anything personal like photographs, so that the prospective buyer can visualize the house as their own. Closets are de-cluttered so that they look more spacious and all bathroom paraphernalia is supposed to be gone from the counter top! Garbage bins are even removed and hidden from sight.
However it has been suggested that home staging can also be deliberately used to hide a multitude of sins!
The National Association of Exclusive Buyer Agents (NAEBA, who solely represent buyers in the realty business) has suggested that as much as 82% of buyers are sidetracked from the important issues by a well-staged house. This organization also concedes that home staging nets more cash and faster sales - so it works!
Some of the underhand tricks used in staging can include using smaller furniture to make a room look larger, placing rugs over damaged parts of the floor, or using curtains to hide rotting sills. Also specified is the practice of putting a cheap paint job on to cover defects. Your realtor is legally obligated to let you know of any defects, but only if he actually knows about them!
Buyers are urged by the NAEBA to be cautious and to remember that when the house is sold, the stage is taken away. The tricks of home staging do not improve the floor plan, or the square footage of the home or the quality of the neighborhood, and these are the qualities that you will be re-selling at a later date.
The idea is, that a staged home stands out from all the others and therefore gets sold more quickly. It certainly can be carried to extremes with reports of sellers hiring storage units to cart their junk off to. Larger items of furniture are encouraged to be put into storage by professional 'home stagers' so that the house looks bigger and more spacious
Another instruction is to remove anything personal like photographs, so that the prospective buyer can visualize the house as their own. Closets are de-cluttered so that they look more spacious and all bathroom paraphernalia is supposed to be gone from the counter top! Garbage bins are even removed and hidden from sight.
However it has been suggested that home staging can also be deliberately used to hide a multitude of sins!
The National Association of Exclusive Buyer Agents (NAEBA, who solely represent buyers in the realty business) has suggested that as much as 82% of buyers are sidetracked from the important issues by a well-staged house. This organization also concedes that home staging nets more cash and faster sales - so it works!
Some of the underhand tricks used in staging can include using smaller furniture to make a room look larger, placing rugs over damaged parts of the floor, or using curtains to hide rotting sills. Also specified is the practice of putting a cheap paint job on to cover defects. Your realtor is legally obligated to let you know of any defects, but only if he actually knows about them!
Buyers are urged by the NAEBA to be cautious and to remember that when the house is sold, the stage is taken away. The tricks of home staging do not improve the floor plan, or the square footage of the home or the quality of the neighborhood, and these are the qualities that you will be re-selling at a later date.
Are You Ready For A Home?
Have you spent years renting homes or apartments and have grown tired of paying all that rent money to someone else? If so, then it might be your time to consider purchasing a home, and keeping that cash for yourself. However, you do need to ensure that you are prepared on more than one level before jumping into the equity market. There are many financial considerations to make note of before you start looking for a home. But, if you can arrange your finances into a sensible plan and secure a mortgage then this can ultimately be the most rewarding purchase you have ever made or will make.
Finance plays a huge role in the decision to purchase your first home. This is to be expected as if you are purchasing your first home you will not likely have a few hundred thousand dollars sitting around and will have to find a mortgage of some sort. You should really make sure that you are prepared for the application for a mortgage as it will involve a thorough investigation of your past credit history. If there are any issues that you know of with your credit then you should take care of them before you apply for the mortgage. Sometimes this is a simple case of oversight, some things have been taken care of and not recorded as such, and sometimes there can be some debts that you will need to see to. Once these are taken care of, be sure to get a letter of release that you can show to the mortgage broker or company if necessary. If there are no issues with your credit then that will only make the process easier.
There is no stronger tool in the home buying process than having all your financing in line before you start shopping. This is a great attraction for sellers as they want their homes to sell quickly and without incident or trouble in the money phase, a buyer with ready-to-go financing's offers will hold greater favor with almost any seller. If you are mindful of these things then when the time comes to make your offer, the whole affair will go much more smoothly and you will be able to dedicate your time to what is important. How to decorate your new home.
Finance plays a huge role in the decision to purchase your first home. This is to be expected as if you are purchasing your first home you will not likely have a few hundred thousand dollars sitting around and will have to find a mortgage of some sort. You should really make sure that you are prepared for the application for a mortgage as it will involve a thorough investigation of your past credit history. If there are any issues that you know of with your credit then you should take care of them before you apply for the mortgage. Sometimes this is a simple case of oversight, some things have been taken care of and not recorded as such, and sometimes there can be some debts that you will need to see to. Once these are taken care of, be sure to get a letter of release that you can show to the mortgage broker or company if necessary. If there are no issues with your credit then that will only make the process easier.
There is no stronger tool in the home buying process than having all your financing in line before you start shopping. This is a great attraction for sellers as they want their homes to sell quickly and without incident or trouble in the money phase, a buyer with ready-to-go financing's offers will hold greater favor with almost any seller. If you are mindful of these things then when the time comes to make your offer, the whole affair will go much more smoothly and you will be able to dedicate your time to what is important. How to decorate your new home.
Avoid Foreclosure: An Option That Many Do Not Know About
Avoiding a home foreclosure is one of the hottest topics in the real estate market, however many do not understand that you have options to avoid a home foreclosure. One of these options is a Lease Purchase Agreement, or commonly called a Lease Option it may be one of your best options.
Looking down the barrel of a foreclosure, if you are among one of the over 1.4 million homeowners facing this same issue, there may be a creative technique to save your home. Save your home and salvage your equity so that you can fight again. The last thing that you want to do is give your home back to the lender.
If your financial hardship has left you in a position whereby you are not able to pay your mortgage payment, whatever the reason may be, then you cannot afford to live in your home. Foreclosures are growing dilemma for many homeowners in the Untied States today; foreclosures are at an all time high. Alan Greenspan has made comments that the US may be heading for a recession in 2008.
Some lenders out there have not been playing fair, and some even to the point of unethical practices. These unethical practices are a primary reason that foreclosures are at an all time high and not expected to slow down in 2008, from what most experts have said.
On the bright side of things, you may have an option that may allow you to keep your home, even if the foreclosure process is already under way. Something that has been around for many years, and you may possibly utilize to save your home and equity. You may need to wait a year or two in order to cash out the equity on the property, but it is better then the alternative.
This option is referred to as a Lease Purchase Agreement, find a tenant to lease your home from you, with an option to purchase the home at the end to the agreed period or time; usually 12 to 24 months. You set a price for them to buy the house when the agreement is signed; this will allow you to set the price so you can save the equity and by some time to recover. With a tenant that has the option to buy your home you may be able to:
1) First and foremost is the avoidance of a foreclosure
2) Since renters are paying less today due to the high foreclosure rates, this may be a way to increase the monthly rent, due in light of the purchase agreement
3) A one-time payment, up-front as a non-refundable deposit, this is usually 1% - 3% of the sales price. The best part of this is that even if they decide not to buy your home, you still keep the money
4) Quickly locate a buyer for your property, most times faster then trying to sell you home in the traditional manner
5) Someone else will be paying the mortgage payment, and potentially a few hundred dollars a month more
Lease Purchase Agreements usually work well in any real estate market; these agreements referred to as a "lease option" as well. This is a very valuable strategy to keep in mind, especially during market that in a distress.
While there may be many other reasons to take advantage of a lease option, they are definitely an excellent way to avoid foreclosure, and salvage your home from the bank. In a foreclosure, your credit will be destroyed for years to come, and the additional financial repercussions can take a tool on your personal life.
Looking down the barrel of a foreclosure, if you are among one of the over 1.4 million homeowners facing this same issue, there may be a creative technique to save your home. Save your home and salvage your equity so that you can fight again. The last thing that you want to do is give your home back to the lender.
If your financial hardship has left you in a position whereby you are not able to pay your mortgage payment, whatever the reason may be, then you cannot afford to live in your home. Foreclosures are growing dilemma for many homeowners in the Untied States today; foreclosures are at an all time high. Alan Greenspan has made comments that the US may be heading for a recession in 2008.
Some lenders out there have not been playing fair, and some even to the point of unethical practices. These unethical practices are a primary reason that foreclosures are at an all time high and not expected to slow down in 2008, from what most experts have said.
On the bright side of things, you may have an option that may allow you to keep your home, even if the foreclosure process is already under way. Something that has been around for many years, and you may possibly utilize to save your home and equity. You may need to wait a year or two in order to cash out the equity on the property, but it is better then the alternative.
This option is referred to as a Lease Purchase Agreement, find a tenant to lease your home from you, with an option to purchase the home at the end to the agreed period or time; usually 12 to 24 months. You set a price for them to buy the house when the agreement is signed; this will allow you to set the price so you can save the equity and by some time to recover. With a tenant that has the option to buy your home you may be able to:
1) First and foremost is the avoidance of a foreclosure
2) Since renters are paying less today due to the high foreclosure rates, this may be a way to increase the monthly rent, due in light of the purchase agreement
3) A one-time payment, up-front as a non-refundable deposit, this is usually 1% - 3% of the sales price. The best part of this is that even if they decide not to buy your home, you still keep the money
4) Quickly locate a buyer for your property, most times faster then trying to sell you home in the traditional manner
5) Someone else will be paying the mortgage payment, and potentially a few hundred dollars a month more
Lease Purchase Agreements usually work well in any real estate market; these agreements referred to as a "lease option" as well. This is a very valuable strategy to keep in mind, especially during market that in a distress.
While there may be many other reasons to take advantage of a lease option, they are definitely an excellent way to avoid foreclosure, and salvage your home from the bank. In a foreclosure, your credit will be destroyed for years to come, and the additional financial repercussions can take a tool on your personal life.
Bankruptcy And Buying A House - Is It Smart To Buy A House After Bankruptcy?
Each year, millions of people file bankruptcy as a means of erasing their consumer debts. While this approach may relieve stress, a bankruptcy is damaging, and will hang over your head for the next ten years. Still, it is possible to overcome bankruptcy. The key is making smarter financial and credit decisions. With this said, some people choose to purchase a home after a bankruptcy. Here are a few pointers to consider when buying a home.
Reasons to Delay the Buying Process after Bankruptcy
If you consult with mortgage or financial experts, they will likely discourage you from buying a home following a bankruptcy. After your bankruptcy is discharged, there is a black cloud that looms over your credit report.
When any prospective lender reviews your report, they will be notified of your recent or past bankruptcy. In some instances, this justifies an immediate denial. On the other hand, there are lenders eager to help you establish or rebuild your credit. Thus, they will approve a loan request. Nonetheless, the penalties are steep.
Higher mortgage rates can be anticipated when purchasing a home after bankruptcy, especially if you have not established other credit accounts. Mortgage lenders consider two factors: credit scores and credit reports.
Although a bankruptcy appears on your credit report, having a high credit score will increase your odds of getting a comparable rate. Unfortunately, if you buy immediately following a bankruptcy, you will not have the opportunity to boost your score.
Reasons to Buy a Home after Bankruptcy
Lenders will approve mortgage loan applications one day following a discharge. Therefore, it is possible to get a home after a bankruptcy. Buying a home is perfect for rebuilding credit. Moreover, it is the quickest way to increase your credit score.
After a bankruptcy, the average person has a credit score below 600. Good credit consist of credit scores 650 and above. Maintaining current mortgage payments will gradually increase your score. After two years of regular payments, you will have established a good payment history. Hence, you may qualify for a low rate refinancing, which may lower your mortgage payments.
Reasons to Delay the Buying Process after Bankruptcy
If you consult with mortgage or financial experts, they will likely discourage you from buying a home following a bankruptcy. After your bankruptcy is discharged, there is a black cloud that looms over your credit report.
When any prospective lender reviews your report, they will be notified of your recent or past bankruptcy. In some instances, this justifies an immediate denial. On the other hand, there are lenders eager to help you establish or rebuild your credit. Thus, they will approve a loan request. Nonetheless, the penalties are steep.
Higher mortgage rates can be anticipated when purchasing a home after bankruptcy, especially if you have not established other credit accounts. Mortgage lenders consider two factors: credit scores and credit reports.
Although a bankruptcy appears on your credit report, having a high credit score will increase your odds of getting a comparable rate. Unfortunately, if you buy immediately following a bankruptcy, you will not have the opportunity to boost your score.
Reasons to Buy a Home after Bankruptcy
Lenders will approve mortgage loan applications one day following a discharge. Therefore, it is possible to get a home after a bankruptcy. Buying a home is perfect for rebuilding credit. Moreover, it is the quickest way to increase your credit score.
After a bankruptcy, the average person has a credit score below 600. Good credit consist of credit scores 650 and above. Maintaining current mortgage payments will gradually increase your score. After two years of regular payments, you will have established a good payment history. Hence, you may qualify for a low rate refinancing, which may lower your mortgage payments.
Are FSBO's Worth The Time & Effort?
Many people have asked whether or not FSBO's are really worth the time and effort involved in the sale. The simple answer is, Yes! It stands to reason that the FSBO industry is based on some amount of success or else it would never have grown to the size it currently is. And the industry is growing in size every year. Part of the reason for this phenomena is the fact that home sellers are becoming more and more educated on the involved process and as such are demanding a level of service that many real estate agents are not willing to provide, or able to provide due to a high number of clients.
The resolution to this problem has been the education of sellers and the drive to eliminate the middle man. For years people were convinced the the only way to sell a home was to contact their local realtor and then wait for the offers. But what if that agent was not providing enough service to sell the home in a timely manner? Was there any real way to ensure that this was being done? It can be hard to trust someone in such a way when nothing appears to be happening. But you can trust yourself right? So, why not give yourself the tools you need to become your own real estate agent?
The part that cannot be stressed enough is the need to educate yourself on the process before you undertake the selling of your own home. Start investigating the rules and regulations concerning real estate contracts and conveyance. Find out about liens and easements and inspections. In selling your own home there are a lot of hats that you will have to wear. Of course it never hurts to get legal advice and guidance from a lawyer educated in real estate law. There is also an abundance of information available online to help guide your education. The web is a great resource for almost every aspect of the home sale process so take the time to investigate these things to the full extent. Good luck!
The resolution to this problem has been the education of sellers and the drive to eliminate the middle man. For years people were convinced the the only way to sell a home was to contact their local realtor and then wait for the offers. But what if that agent was not providing enough service to sell the home in a timely manner? Was there any real way to ensure that this was being done? It can be hard to trust someone in such a way when nothing appears to be happening. But you can trust yourself right? So, why not give yourself the tools you need to become your own real estate agent?
The part that cannot be stressed enough is the need to educate yourself on the process before you undertake the selling of your own home. Start investigating the rules and regulations concerning real estate contracts and conveyance. Find out about liens and easements and inspections. In selling your own home there are a lot of hats that you will have to wear. Of course it never hurts to get legal advice and guidance from a lawyer educated in real estate law. There is also an abundance of information available online to help guide your education. The web is a great resource for almost every aspect of the home sale process so take the time to investigate these things to the full extent. Good luck!
Basics Of Home Buying
The most important investment you will ever make is probably the purchase of a home. Finding the right home for you can be a long and arduous process, but there is no getting around that.
Know Your Wants And Needs
Before embarking on your journey of house hunting, you must know what you really want to find. Sit down with pen and paper and list all the features you care most about, such as:
- Location (in a particular city, school district or neighborhood)
- Size -- how many bedrooms and bathrooms
- Parking -- a 1-car garage or 2?
- Style -- 2-story house or ranch style home?
- Heating -- central heating and/or air conditioning?
Equally important, on a new sheet of paper list all the features you absolutely do not want in a house. For example:
- high-traffic area.
- high noise area (airport, train station or highway in close proximity)
- maintenance -- major repairs needed
As you look at houses, keep both lists in mind. Your lists may change over time as you do more looking. You'll want to add or remove features, or perhaps you'll become willing to make compromises. Realize that you most likely will not find the "perfect" home. Experienced homebuyers will tell you, perfect homes are not found, they are made perfect through hard work.
Get Your Credit Report In Order
Prior to looking at properties, you must get your finances in order. This is the time to review your credit report and clean it up, if need be, to maximize your credit score. Many people do not realize how important it is to check your credit report periodically to make sure it is accurate. You should pay off any past due amounts, or negotiate a settlement price to close the debt. Get such agreements in writing, before paying any settlement. Keep all receipts for any settled items from your credit report since it may take months to get the debt actually removed.
Research Your Home-Buying Options
Decide what kind of property you are interested in. Do you want a HUD property, a foreclosure, real estate, or property for sale by owner?
A number of web sites list homes according to city, state, or price range. Visit these sites to see pictures of homes, many with virtual tours, and review the listing features.
Get Pre-Approved For A Loan
You're ready now to find a lender and get yourself pre-approved for the loan. Being pre-approved offers a number of advantages. It will clarify the price range you can afford. Also, once you find the home you want, you can place an immediate offer. If you have to wait for pre-approval, someone could buy the house right out from under you.
Several special programs are often available from lenders, such as the FHA or Ameri-Dream, that can save you money in the closing. Ask the lender about any special programs before you decide on a loan.
Find A Good Real Estate Agent
It is wise for the first time homebuyer to work closely with a real estate agent, no matter what type of property you're looking for. A knowledgeable real estate agent will make your house-hunting much easier. A good real estate agent is usually a good negotiator, and will be able to help you with the complicated paperwork involved in placing an offer on a house or in closing a deal.
It's essential that you have a real estate agent working for you as the buyer, rather than relying on the seller's agent for the house you want to buy. The latter can involve a conflict of interest, which usually works to your disadvantage.
To select a real estate agent, you should check with your friends and neighbors for recommendations. Find an agent you feel comfortable with and who is knowledgeable about the area you hope to buy in.
These are just the basics of home buying. You will find many details you need to master as you move through the buying process, but having these basics under your belt will give you a head start.
Know Your Wants And Needs
Before embarking on your journey of house hunting, you must know what you really want to find. Sit down with pen and paper and list all the features you care most about, such as:
- Location (in a particular city, school district or neighborhood)
- Size -- how many bedrooms and bathrooms
- Parking -- a 1-car garage or 2?
- Style -- 2-story house or ranch style home?
- Heating -- central heating and/or air conditioning?
Equally important, on a new sheet of paper list all the features you absolutely do not want in a house. For example:
- high-traffic area.
- high noise area (airport, train station or highway in close proximity)
- maintenance -- major repairs needed
As you look at houses, keep both lists in mind. Your lists may change over time as you do more looking. You'll want to add or remove features, or perhaps you'll become willing to make compromises. Realize that you most likely will not find the "perfect" home. Experienced homebuyers will tell you, perfect homes are not found, they are made perfect through hard work.
Get Your Credit Report In Order
Prior to looking at properties, you must get your finances in order. This is the time to review your credit report and clean it up, if need be, to maximize your credit score. Many people do not realize how important it is to check your credit report periodically to make sure it is accurate. You should pay off any past due amounts, or negotiate a settlement price to close the debt. Get such agreements in writing, before paying any settlement. Keep all receipts for any settled items from your credit report since it may take months to get the debt actually removed.
Research Your Home-Buying Options
Decide what kind of property you are interested in. Do you want a HUD property, a foreclosure, real estate, or property for sale by owner?
A number of web sites list homes according to city, state, or price range. Visit these sites to see pictures of homes, many with virtual tours, and review the listing features.
Get Pre-Approved For A Loan
You're ready now to find a lender and get yourself pre-approved for the loan. Being pre-approved offers a number of advantages. It will clarify the price range you can afford. Also, once you find the home you want, you can place an immediate offer. If you have to wait for pre-approval, someone could buy the house right out from under you.
Several special programs are often available from lenders, such as the FHA or Ameri-Dream, that can save you money in the closing. Ask the lender about any special programs before you decide on a loan.
Find A Good Real Estate Agent
It is wise for the first time homebuyer to work closely with a real estate agent, no matter what type of property you're looking for. A knowledgeable real estate agent will make your house-hunting much easier. A good real estate agent is usually a good negotiator, and will be able to help you with the complicated paperwork involved in placing an offer on a house or in closing a deal.
It's essential that you have a real estate agent working for you as the buyer, rather than relying on the seller's agent for the house you want to buy. The latter can involve a conflict of interest, which usually works to your disadvantage.
To select a real estate agent, you should check with your friends and neighbors for recommendations. Find an agent you feel comfortable with and who is knowledgeable about the area you hope to buy in.
These are just the basics of home buying. You will find many details you need to master as you move through the buying process, but having these basics under your belt will give you a head start.
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