When you prepare an offer to purchase a home, you already know the seller’s asking price. But what price are you going to offer and how do you come up with that figure?
Determining your offer price is a three-step process.
First, you look at recent sales of similar properties to come up with a price range. Good place to go would be http://yahoo.iplace.com/sales_search.asp. Then, you analyze additional data, such as the condition of the home, improvements made to the property, current market conditions, and the circumstances of the seller. This will help you settle on a price you think would be fair to pay for the home. Finally, depending on your negotiating style, you adjust your "fair" price and come up with what you want to put in your offer.
Comparable Sales
The first step in determining the price you are willing to offer is to look at the recent sales of similar homes. These are called "comparable sales." Comparable sales are recent sales of homes that compare closely to the one you are looking to purchase. Specifically, you want to compare prices of homes that are similar in square footage, number of bedrooms and bathrooms, garage space, lot size, and type of construction.
If the home you are interested in is part of a tract of homes, then you will most likely find some exact model matches to compare against one another.
There are three main sources of information on comparable sales, all of which are easily accessed by a real estate agent. It is somewhat more difficult for the general public to access this data, and in some cases impossible. Two of the most obvious information sources are the public record and the Multiple Listing Service.
Comparable Sales in the Public Record
The most accessible source of information on comparable sales is the public record. When someone buys a home the property is deeded from the seller to the buyer. In most circumstances, this deed is recorded at the local county recorder’s office. They combine sales data with information already known about the property so they can assess property taxes correctly.
Provided there have been no additions to the property, the information available from the public record is usually correct regarding sales price, square footage, and numbers of rooms. This makes it easy to use the public record as a source of data for comparable sale information.
Accessing the data is another matter, at least for the general public. Realtors can generally look up this information through title insurance companies. The title companies either compile the data directly from the county recorder’s office or purchase if from other companies.
One problem with the public record is that it tends to run at least six to eight weeks behind. Add another four to six weeks for the typical escrow period and you can see the data is not current. The most current information is the most valuable.
Comparable Sales in the Multiple Listing Service
Most of the public is aware that the Multiple Listing Service is a private resource where Realtors list properties available for sale. Recently, the public has been able to access some of that information on such sites as Realtor.com, MSN HomeAdvisor, and others.
Once a property is sold and the transaction has closed, the selling price is posted to the listing in the Multiple Listing Service. Over time, it has become a huge database on past sales, containing much more information on individual homes than can be gleaned from the public record. This information is only available to real estate agents who are members of the local Multiple Listing Service.
Comparable Sales – Pending Transactions
The most valuable information would be the most current, of course. A sale last week has more validity in helping you determine a purchase price than a sale from six months ago. The problem is that there is no actual record of the sales price until the transaction is completed. The information is not available in the public record because no deed has yet been recorded.
Neither is the information available in the Multiple Listing Service. Once a property is sold, it becomes a "pending sale" and all pricing information is removed from the listing. Prices are not posted until it becomes a "closed sale." This protects the seller in case the transaction falls apart and the property is placed back on the market. It would give an unfair advantage to future potential buyers if they already knew what price the seller had been willing to accept in the past.
However, if a Realtor has a reason to know the sales price, they can usually find out through professional courtesy. Also, some real estate brokerages post sales information on a transaction board in their office.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=43
Monday, June 18, 2007
Do You Know The Real Price Of Your ARM?
Adjustable-rate mortgages are complicated instruments. No one characteristic fully describes one.
This is why, when readers ask me for the pros and cons of COFI ARMs, or Libor ARMs, or flexible payment ARMs, I get heartburn. You can't assess an ARM based on only one of its features.
But some features are more important than others. If any one feature deserves to be considered the "real price" of an ARM, it is the fully indexed rate, or FIR. Yet ironically, I have never had a reader ask me a question about the FIR.
The FIR is the most recent value of the interest rate index used by the ARM (such as COFI or 1-month Libor) at the time the loan is taken out, plus a margin. The margin is the lender's spread over the index, often 2.5 percent to 3 percent, but it can vary widely.
On Dec. 20, 2003, when this was written, the most recent value of the COFI index was 1.171 percent for the month of November. If an ARM using COFI had a margin of 3 percent, its FIR would be 4.171 percent.
The importance of the FIR is that it indicates where the ARM rate may go when the initial rate period ends. If the rate index does not change, the FIR will become the ARM rate, subject to any caps that may limit a rate change. Ignoring the FIR is deception by omission.
Just how deceptive this omission can be is well-illustrated by an advertisement for a "1.95 percent ARM," which I found in my e-mail this morning. What the ad does not say is that the 1.95 percent rate holds for just one month. If I closed on this loan today, and if it used the COFI index with a 3 percent margin, my rate in January would be 1.95 percent, and in February it would jump to 3 percent plus the index value in December.
In other words, the ad told me the rate for one month, but it did not give me any information bearing on what the rate might be over the subsequent 29 years and 11 months. If you went to the lender's Web site, you would not find the FIR. It is not a required disclosure and does not appear on any documents.
Neither is the FIR mentioned by loan officers. If they can help it, loan officers don't discuss numbers that invite comparison with those of other lenders. They are in the business of selling ARMs, which they do by focusing on one sexy feature, such as a low initial rate and payment, a stable index, or payment options.
This is why I continually receive letters asking about these features, but I have never had a letter asking me about the FIR. Loan officers may not even know the most recent value of the index, although they will know the margin.
The importance of the FIR to the borrower depends mainly on the length of the initial rate period. With a monthly ARM, it is critically important, as already noted. With an ARM on which the initial rate holds for 10 years, the FIR may mean little. With other ARMs, the importance of the FIR will depend on the likelihood that the borrower will be in the house past the expiration of the initial rate period.
If the FIR is important to you, reconcile yourself to the fact that the system is rigged against you and you are going to have to dig it out for yourself. The loan officer will give you the margin if you ask, and will usually be able to identify the rate index. You are fine if he says COFI, MTA, CODI, or Prime Rate because these are all unique series. Don't accept "Treasury" or "Libor" because there are multiple indexes under each of these headings, and you need to know the one that applies.
When you have identified the rate index, you can find the latest value on the Internet. Go to "ARMs/Rate Indexes" on my site, where you will find a list of all the indexes, and the Web sites at which the latest values can be found.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=145
This is why, when readers ask me for the pros and cons of COFI ARMs, or Libor ARMs, or flexible payment ARMs, I get heartburn. You can't assess an ARM based on only one of its features.
But some features are more important than others. If any one feature deserves to be considered the "real price" of an ARM, it is the fully indexed rate, or FIR. Yet ironically, I have never had a reader ask me a question about the FIR.
The FIR is the most recent value of the interest rate index used by the ARM (such as COFI or 1-month Libor) at the time the loan is taken out, plus a margin. The margin is the lender's spread over the index, often 2.5 percent to 3 percent, but it can vary widely.
On Dec. 20, 2003, when this was written, the most recent value of the COFI index was 1.171 percent for the month of November. If an ARM using COFI had a margin of 3 percent, its FIR would be 4.171 percent.
The importance of the FIR is that it indicates where the ARM rate may go when the initial rate period ends. If the rate index does not change, the FIR will become the ARM rate, subject to any caps that may limit a rate change. Ignoring the FIR is deception by omission.
Just how deceptive this omission can be is well-illustrated by an advertisement for a "1.95 percent ARM," which I found in my e-mail this morning. What the ad does not say is that the 1.95 percent rate holds for just one month. If I closed on this loan today, and if it used the COFI index with a 3 percent margin, my rate in January would be 1.95 percent, and in February it would jump to 3 percent plus the index value in December.
In other words, the ad told me the rate for one month, but it did not give me any information bearing on what the rate might be over the subsequent 29 years and 11 months. If you went to the lender's Web site, you would not find the FIR. It is not a required disclosure and does not appear on any documents.
Neither is the FIR mentioned by loan officers. If they can help it, loan officers don't discuss numbers that invite comparison with those of other lenders. They are in the business of selling ARMs, which they do by focusing on one sexy feature, such as a low initial rate and payment, a stable index, or payment options.
This is why I continually receive letters asking about these features, but I have never had a letter asking me about the FIR. Loan officers may not even know the most recent value of the index, although they will know the margin.
The importance of the FIR to the borrower depends mainly on the length of the initial rate period. With a monthly ARM, it is critically important, as already noted. With an ARM on which the initial rate holds for 10 years, the FIR may mean little. With other ARMs, the importance of the FIR will depend on the likelihood that the borrower will be in the house past the expiration of the initial rate period.
If the FIR is important to you, reconcile yourself to the fact that the system is rigged against you and you are going to have to dig it out for yourself. The loan officer will give you the margin if you ask, and will usually be able to identify the rate index. You are fine if he says COFI, MTA, CODI, or Prime Rate because these are all unique series. Don't accept "Treasury" or "Libor" because there are multiple indexes under each of these headings, and you need to know the one that applies.
When you have identified the rate index, you can find the latest value on the Internet. Go to "ARMs/Rate Indexes" on my site, where you will find a list of all the indexes, and the Web sites at which the latest values can be found.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=145
Does Home Remodeling Always Pay Off?
Perhaps you've heard stories about homeowners who've greatly improved their net worth by remodeling homes and selling them.
But, while remodeling can add value, there's no guarantee that a future buyer will pay you enough to recoup your investment.
Consider the example of a homeowner who lost his home in the Oakland Hills, Calif., firestorm of 1991. Rather than rebuild, this fire victim decided to buy an existing replacement home. He invested his insurance proceeds in the purchase and subsequent remodel of the property. When he decided to sell several years later, he barely recouped the money he'd invested in the renovation. He had over-improved the property for the neighborhood. Buyers weren't willing to pay more than the property was worth on the open market.
Some homeowners fall into the trap of thinking that their home is worth what they paid for it, plus the money they've invested in remodeling projects. This logic is often faulty, and can result in unwise investments.
Replacement cost value is not the same as market value. Market value is the price a ready, willing and able buyer will pay for a property. This is the only value that's relevant when you're selling your home. Replacement cost value is an important consideration when you've evaluating how much insurance coverage you'll need to replace your home if it burns down. But, it may have little bearing on the selling price of your home.
Another homeowner made the mistake of completing a major expansion and renovation of a home before doing a thorough investigation of the infrastructure. After years of living in a home that was too small and had an inefficient floor plan, the owners hired an architect to redesign the home to better suit their lifestyle.
The renovations indeed added value from a market perspective. When the owners put the home on the market, they received multiple offers. They accepted an offer at a price that more than returned the money they'd invested. However, the sellers ended up giving back a huge chunk of their profits when a termite inspection revealed that there was extensive dry rot in the internal framing.
REMODELING TIP: Before tackling a major remodel, make sure to have the property inspected by a structural pest control inspector. It's also a good idea to have an engineer look at the foundation to make sure that you're not investing good money to improve a home that's sitting on a bad foundation.
Another reason to inspect the infrastructure before remodeling is that you may be able to upgrade facilities while you're taking care of routine maintenance. Before starting an extensive remodel of the kitchen, another homeowner had a termite inspection done. The report revealed dry rot in the master bathroom.
Rather than simply repair the damage, the owners had the kitchen contractors rip out the master bath and redo it at the same time they did the kitchen job. By doing so, they reduced the cost of the bath remodel significantly. Furthermore, instead of a simple repair, the owners ended up with an entirely new bathroom that added considerably to the value of the property.
To realize the most from your remodeling efforts, stick to classic designs and finishes. Trendy designs may look outdated five or 10 years from now when you decide to sell.
Don't invest in a major renovation if you're planning on selling in the near future. It's highly likely that you won't be repaid for your investment.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=143
But, while remodeling can add value, there's no guarantee that a future buyer will pay you enough to recoup your investment.
Consider the example of a homeowner who lost his home in the Oakland Hills, Calif., firestorm of 1991. Rather than rebuild, this fire victim decided to buy an existing replacement home. He invested his insurance proceeds in the purchase and subsequent remodel of the property. When he decided to sell several years later, he barely recouped the money he'd invested in the renovation. He had over-improved the property for the neighborhood. Buyers weren't willing to pay more than the property was worth on the open market.
Some homeowners fall into the trap of thinking that their home is worth what they paid for it, plus the money they've invested in remodeling projects. This logic is often faulty, and can result in unwise investments.
Replacement cost value is not the same as market value. Market value is the price a ready, willing and able buyer will pay for a property. This is the only value that's relevant when you're selling your home. Replacement cost value is an important consideration when you've evaluating how much insurance coverage you'll need to replace your home if it burns down. But, it may have little bearing on the selling price of your home.
Another homeowner made the mistake of completing a major expansion and renovation of a home before doing a thorough investigation of the infrastructure. After years of living in a home that was too small and had an inefficient floor plan, the owners hired an architect to redesign the home to better suit their lifestyle.
The renovations indeed added value from a market perspective. When the owners put the home on the market, they received multiple offers. They accepted an offer at a price that more than returned the money they'd invested. However, the sellers ended up giving back a huge chunk of their profits when a termite inspection revealed that there was extensive dry rot in the internal framing.
REMODELING TIP: Before tackling a major remodel, make sure to have the property inspected by a structural pest control inspector. It's also a good idea to have an engineer look at the foundation to make sure that you're not investing good money to improve a home that's sitting on a bad foundation.
Another reason to inspect the infrastructure before remodeling is that you may be able to upgrade facilities while you're taking care of routine maintenance. Before starting an extensive remodel of the kitchen, another homeowner had a termite inspection done. The report revealed dry rot in the master bathroom.
Rather than simply repair the damage, the owners had the kitchen contractors rip out the master bath and redo it at the same time they did the kitchen job. By doing so, they reduced the cost of the bath remodel significantly. Furthermore, instead of a simple repair, the owners ended up with an entirely new bathroom that added considerably to the value of the property.
To realize the most from your remodeling efforts, stick to classic designs and finishes. Trendy designs may look outdated five or 10 years from now when you decide to sell.
Don't invest in a major renovation if you're planning on selling in the near future. It's highly likely that you won't be repaid for your investment.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=143
Dream homes on eBay (Barbie not included)
Suzanne "Mercedes" Hayes sells a lot of stuff on eBay.
Just this week, the eBay merchant's list of for-sale items included a "Star Wars" chess set, the Jay Jay plush rocker by Toy Island, two mint-condition porcelain harlequin clowns with brown feathers, a Lite Brite Cube, a Caterpillar toy plastic wheelbarrow with jackhammer, a Hummer Pedal Car by Velocity Toys, a Playmobil Jungle Skeleton Dinosaur Cave toy and a Lou Rankin plush Charlie Chow stuffed animal.
That list also includes a multimillion-dollar home. No, not a Barbie Dream Home. This is the real thing: Bowman's Farm Estate in Bucks County, Penn. It's a 16,600-square-foot Georgian-style home on the Delaware River, with access to a 25-acre private island. The home carries a $3.99 million price tag.
Bowman's Farm is an example of the many real estate gems hidden on the Web. The Internet has become a venue where people go to seek out their wildest, most unique housing dreams.
Hayes is also a Realtor with Weidel Realtors in Flemington, N.J., and she's got enough eBay experience so she decided to try her hand at selling the high-end home on the popular Web site. The estate is listed for sale on eBay but, unlike many items, is not going to be auctioned.
"My client was pretty excited about it," said Hayes, who posted the home on eBay last month. "I have been an eBay merchant for five years; I have a very good comfort level with eBay. Most of our marketing has been traditional, through the (multiple listing service)." The seller, she said, has had a lot of local exposure for the property but not a lot of showings.
There is a glut of about 28 homes for sale in Bucks County that are listed between $2 million and $6 million, Hayes said, so she decided to try something different to spread the word about the Bowman's estate. "Most of the Realtors in my office didn't know there was an eBay real estate category. The prevailing opinion in the industry is that eBay is a waste of time (for home sales). At this point I think it's strictly a tool for advertising." Hayes said. "I feel like I'm kind of a ground-breaker."
But she expects home sales through sites like eBay to catch on. "My gut feeling is it's only a matter of time. What better way to get exposure, right?" she said. And the cost of a 30-day listing on the site was $150, which is cheaper than a lot of other advertising options, she added.
More than 10,000 people viewed the eBay home posting, but Hayes suspects that the vast majority "were just being nosy." So far she's had just a handful of calls related to the posting, and most of those have been from people who work at owner-financing companies, she said. "So far eBay has not been a very good tool." But who knows, she said, the Internet was what led her to become the home's listing agent. "If I got my buyer through eBay that would be real kudos."
EBay promotes a potential audience of 70 million people for real estate listings at the site, and its fees range from $150 for a 30-day ad or auction listing to $300 for a 90-day ad listing. There are no final value fees or commissions charged for real estate sales. More than 2,200 real estate properties sell on eBay each month, on average, and the site is particularly popular for posting unique homes, vacation homes and investment properties.
Hayes has seen a lot of for-sale-by-owner home listings on eBay. One sign vendor in Albuquerque, N.M., capitalized on this trend by offering customized eBay real estate signs that can be personalized with the home's eBay item number and the homeowner's phone number.
While luxury-home postings are popular on eBay, the site also features some real fixer-uppers. This week, a Kentucky Lake Weekend Cabin was posted for bid with a starting price of $30,000, for example. "It's not fancy, but it's a good place to stay while your (sic) hunting or fishing for crappie on the weekend. Also, I am haveing (sic) a new driveway put in this week (paved) at the cabin," according to the online description of the cabin. The ad also states the cabin "is in a cozey (sic) setting."
Another property for sale on eBay, a three-bedroom, one-bathroom home in Cherokee, Ala., has "a terrible smell from all the dogs that used to live there," "a big hole where the dryer blows straight through the wall," and, "is infested with fleas and it's almost impossible to walk through the house without them getting all over you." But "other than the smell and the fleas, the rotten wood on the outside of the house and the broken windows, it's a pretty good house," the item description states. The purchase price was listed at $14,500, and bidding on the down payment started at $1.
Homes aren't the only real estate for sale on eBay. Timeshares, vacation rentals, land and commercial properties have also been posted on the site. A few entrepreneurs have even attempted to sell entire towns through eBay.
Tortilla Flats, Ariz.; Minkler, Calif.; and Bridgeville, Calif., were all put up for sale on eBay in the past couple of years.
Owner Sylvia Ashcraft put Minkler up for sale in January. The asking price was $600,000 for a general store, a mobile home and two other buildings in Minkler, which is about 230 miles north of Los Angeles, but the town did not have a buyer after generating about 39,000 hits during the three months it was on eBay.
Bridgeville, in Mendocino County, generated nationwide attention when it was listed on eBay in December 2002. After much media hype, the price jetted from a minimum price of $775,000 to about $1.78 million at the time the auction closed. But that deal fell through, and even the lower bidders fell away, one by one, until the eBay auction was a total bust. In May of this year the town, which included 10 homes, four cabins, a post office and a cemetery, sold for $700,000 to an investor in Southern California, but this time through traditional methods.
Denise Stuart, a real estate agent for California Real Estate in Eureka, said the overwhelming publicity from the attempted sale of Bridgeville on eBay was great, but she would never again attempt to sell a property on eBay. "It ate up six months of my life," she said. "It was just kind of a fiasco—too much too fast." She fielded calls from prospective buyers in the Ukraine and England. Media from around the globe called her for interviews. She referred some business to other agents in her office because the town sale was gobbling up too much of her time.
"I had my hands full," she said. But, she added, the Bridgeville sale did generate a lot of leads for her and her company. "It was a really positive thing for my office."
The eBay auction fell apart because there weren't any real legal teeth to the auction that bound the sale, she said. The highest bidder "got buyer's remorse," she said, and quickly stepped away from the table.
Tortilla Flats, a remote Old West-era town along the Apache Trail in Arizona, was for sale this year on eBay with an opening bid of $5.5 million. In 2003, acreage on a private, uninhabited island in Whitefish Bay was for sale for about $700,000.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=171
Just this week, the eBay merchant's list of for-sale items included a "Star Wars" chess set, the Jay Jay plush rocker by Toy Island, two mint-condition porcelain harlequin clowns with brown feathers, a Lite Brite Cube, a Caterpillar toy plastic wheelbarrow with jackhammer, a Hummer Pedal Car by Velocity Toys, a Playmobil Jungle Skeleton Dinosaur Cave toy and a Lou Rankin plush Charlie Chow stuffed animal.
That list also includes a multimillion-dollar home. No, not a Barbie Dream Home. This is the real thing: Bowman's Farm Estate in Bucks County, Penn. It's a 16,600-square-foot Georgian-style home on the Delaware River, with access to a 25-acre private island. The home carries a $3.99 million price tag.
Bowman's Farm is an example of the many real estate gems hidden on the Web. The Internet has become a venue where people go to seek out their wildest, most unique housing dreams.
Hayes is also a Realtor with Weidel Realtors in Flemington, N.J., and she's got enough eBay experience so she decided to try her hand at selling the high-end home on the popular Web site. The estate is listed for sale on eBay but, unlike many items, is not going to be auctioned.
"My client was pretty excited about it," said Hayes, who posted the home on eBay last month. "I have been an eBay merchant for five years; I have a very good comfort level with eBay. Most of our marketing has been traditional, through the (multiple listing service)." The seller, she said, has had a lot of local exposure for the property but not a lot of showings.
There is a glut of about 28 homes for sale in Bucks County that are listed between $2 million and $6 million, Hayes said, so she decided to try something different to spread the word about the Bowman's estate. "Most of the Realtors in my office didn't know there was an eBay real estate category. The prevailing opinion in the industry is that eBay is a waste of time (for home sales). At this point I think it's strictly a tool for advertising." Hayes said. "I feel like I'm kind of a ground-breaker."
But she expects home sales through sites like eBay to catch on. "My gut feeling is it's only a matter of time. What better way to get exposure, right?" she said. And the cost of a 30-day listing on the site was $150, which is cheaper than a lot of other advertising options, she added.
More than 10,000 people viewed the eBay home posting, but Hayes suspects that the vast majority "were just being nosy." So far she's had just a handful of calls related to the posting, and most of those have been from people who work at owner-financing companies, she said. "So far eBay has not been a very good tool." But who knows, she said, the Internet was what led her to become the home's listing agent. "If I got my buyer through eBay that would be real kudos."
EBay promotes a potential audience of 70 million people for real estate listings at the site, and its fees range from $150 for a 30-day ad or auction listing to $300 for a 90-day ad listing. There are no final value fees or commissions charged for real estate sales. More than 2,200 real estate properties sell on eBay each month, on average, and the site is particularly popular for posting unique homes, vacation homes and investment properties.
Hayes has seen a lot of for-sale-by-owner home listings on eBay. One sign vendor in Albuquerque, N.M., capitalized on this trend by offering customized eBay real estate signs that can be personalized with the home's eBay item number and the homeowner's phone number.
While luxury-home postings are popular on eBay, the site also features some real fixer-uppers. This week, a Kentucky Lake Weekend Cabin was posted for bid with a starting price of $30,000, for example. "It's not fancy, but it's a good place to stay while your (sic) hunting or fishing for crappie on the weekend. Also, I am haveing (sic) a new driveway put in this week (paved) at the cabin," according to the online description of the cabin. The ad also states the cabin "is in a cozey (sic) setting."
Another property for sale on eBay, a three-bedroom, one-bathroom home in Cherokee, Ala., has "a terrible smell from all the dogs that used to live there," "a big hole where the dryer blows straight through the wall," and, "is infested with fleas and it's almost impossible to walk through the house without them getting all over you." But "other than the smell and the fleas, the rotten wood on the outside of the house and the broken windows, it's a pretty good house," the item description states. The purchase price was listed at $14,500, and bidding on the down payment started at $1.
Homes aren't the only real estate for sale on eBay. Timeshares, vacation rentals, land and commercial properties have also been posted on the site. A few entrepreneurs have even attempted to sell entire towns through eBay.
Tortilla Flats, Ariz.; Minkler, Calif.; and Bridgeville, Calif., were all put up for sale on eBay in the past couple of years.
Owner Sylvia Ashcraft put Minkler up for sale in January. The asking price was $600,000 for a general store, a mobile home and two other buildings in Minkler, which is about 230 miles north of Los Angeles, but the town did not have a buyer after generating about 39,000 hits during the three months it was on eBay.
Bridgeville, in Mendocino County, generated nationwide attention when it was listed on eBay in December 2002. After much media hype, the price jetted from a minimum price of $775,000 to about $1.78 million at the time the auction closed. But that deal fell through, and even the lower bidders fell away, one by one, until the eBay auction was a total bust. In May of this year the town, which included 10 homes, four cabins, a post office and a cemetery, sold for $700,000 to an investor in Southern California, but this time through traditional methods.
Denise Stuart, a real estate agent for California Real Estate in Eureka, said the overwhelming publicity from the attempted sale of Bridgeville on eBay was great, but she would never again attempt to sell a property on eBay. "It ate up six months of my life," she said. "It was just kind of a fiasco—too much too fast." She fielded calls from prospective buyers in the Ukraine and England. Media from around the globe called her for interviews. She referred some business to other agents in her office because the town sale was gobbling up too much of her time.
"I had my hands full," she said. But, she added, the Bridgeville sale did generate a lot of leads for her and her company. "It was a really positive thing for my office."
The eBay auction fell apart because there weren't any real legal teeth to the auction that bound the sale, she said. The highest bidder "got buyer's remorse," she said, and quickly stepped away from the table.
Tortilla Flats, a remote Old West-era town along the Apache Trail in Arizona, was for sale this year on eBay with an opening bid of $5.5 million. In 2003, acreage on a private, uninhabited island in Whitefish Bay was for sale for about $700,000.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=171
Estimating How Much Home You Can Afford
It's the question you need to ask yourself before you even BEGIN your new home search. It's the most important factor in determining what kind of home you can secure, and where you can begin to look. It's a crucial consideration for first-timers and veteran home buyers alike.
How much can you afford to spend on your next – or first – home?
Primary Rule – Annual Income
Most experts would advise you to follow a basic rule to determine your "home buying power" – multiply your annual gross income by two and one-half. Several factors may raise or lower this number, but it is a good baseline to use as an estimate when beginning your home search. Using this rule, you can predict the amount for which you will qualify when seeking a pre-approval document from a lender - a "must-have" before beginning your home search in earnest.
Secondary Rule – Housing Expense Ratio
A second rule to consider, and another that lenders will contemplate in determining your loan amount, is your ability to make a monthly mortgage payment that falls between 25% and 33% of your gross monthly income. This "housing expense ratio" can fall outside of this range to some degree (depending on a number of factors), but lenders are more likely to approve loans that deduct a smaller percentage of your monthly income.
Debt-to-income Ratio
Your debt and credit history are also import considerations in this decision. Lenders will obviously look more favorably on candidates who have a history of paying their credit card bills, vehicle loans, and student loans in a timely manner, and whose debt does not exceed more than 30% to 40% of their income.
Other Factors
While the mortgage payment is certainly the major element of a homeowner's monthly housing expense, there are a number of other factors prospective buyers should keep in mind when predicting and estimating these costs:
Down Payments – The First Hurdle
For most home buyers, the first hurdle to overcome in any home purchase is making the initial down payment. This is often the largest single payment you will ever make in your life, and it is usually the determining factor in whether a seller accepts your bid.
Fortunately, there are a number of sources into which you can tap to satisfy a down payment requirement. As always, speak to a tax professional for advice on using these options:
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=198
Finding a Good Home Inspector: What You Should Ask
You've found the house, your offer has been accepted, and funding is in place. But before you start packing, be sure you hire a professional home inspector to make sure your house doesn't have any major defects that could cost you down the road.
A home inspection typically includes an examination of heating and central air conditioning systems, interior plumbing, electrical systems, the roof, attic, visible insulation, walls, ceilings, floors, windows, foundations, and basements. Inspections may also include appliances and outdoor plumbing.
Once the inspector examines the house, he or she will write up a report with findings. If there are any major problems, you'll need to negotiate with the seller to either lower the sale price of the home, or determine how the problem will be fixed.
When you make an offer it's wise to have a contingency clause based on the home inspection. In other words, if the inspector finds $10,000 worth of problems and the seller doesn't want to provide the fix, you can rescind your offer.
In fact, two in five resale houses will have at least one major defect that could cost you from a few hundred dollars to as much as $15,000 to repair, according to the 2000 HouseMaster Resale Home Deficiencies Study.
Spending a few hundred dollars for a home inspection is well worth the peace of mind.
If you don't know how or where to find a home inspector, be cautious about asking your real estate agent.
"Be careful, though, of inspectors who are popular with agents - that popularity may stem from not killing too many deals by going easy on their inspections," says Eric Tyson and Ray Brown in their book Home Buying For Dummies (Hungry Minds, Inc., 1999).
Tyson and Brown say the American Society of Home Inspectorsis a good place to start.
"Just because an inspector is an ASHI member doesn't guarantee that you'll get a good inspection, but it certainly increases the likelihood that you'll be working with a qualified professional," Brown and Tyson write.
All certified members have performed at least 250 inspections have passed two written proficiency exams. They must also adhere to standards of practice, continuing education requirements, and code of ethics.
The authors and the ASHI recommend you interview several inspectors before choosing one. Some of the questions you should ask include:
- What does the inspection cover? Make sure the inspection and the inspection report meet all applicable requirements and comply with the ASHI Standards of Practice.
- How long have you been in the profession and how many homes have you inspected? Again, ASHI Members are required to have completed at least 250 paid professional home inspections and passed two written exams that test the inspector's knowledge.
- Are you specifically experienced in residential inspection? The answer should be yes. If someone says they have specialized training in something like construction or engineering but not in residential inspection, you may want to move on to the next candidate.
- Does the inspector's company offer to do repairs or improvements based on the inspection? The answer should always be no. This is against the ASHI Code of Ethics because it might cause a conflict of interest.
- How long will the inspection take? The average for a single inspector is two to three hours for a typical single-family house; anything less may not be enough time to do a thorough inspection. Some inspection firms send a team of inspectors and the time frame may be shorter.
- How much will it cost? Costs vary quite a bid depending on the region, size of the house, scope of services and other factors. A typical range might be $300-500, but consider the value of the home inspection in terms of the investment being made.
- Does the inspector prepare a written report? Ask to see samples and determine whether you understand the report.
- Does the inspector encourage the client to attend the inspection? This is a valuable educational opportunity for you to learn about how things work around what could be your house, and the inspector may point out things that don't quite merit a mention in the report but which you should keep an eye on. An inspector's refusal to allow you to be present should raise a red flag.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=91
For-sale-by-owner fallouts
Why most do-it-yourself sellers give up after 30 to 60 days.
Are you planning to sell your home in the next few months? According to the National Association of Realtors and state Realtor associations, the home sales market in most areas is booming. Most community median sales prices are at or near record levels.
The obvious reason is today's ultra-low mortgage interest rates have flooded the home sales market with eager buyers. Landlords are complaining about high apartment vacancies because virtually every renter who can afford rent can afford to buy a house or condo.
In addition to extremely low mortgage interest rates, virtually every mortgage lender offers 90, 95, 97, 100 and even 103 percent mortgage financing. As a mortgage broker recently told me, "Even a bankrupt arsonist can get approved for a home loan today."
But home sellers aren't complaining because, if they owned and occupied their principal residence any two of the last five years, they can claim up to $250,000 tax-free sales profits (up to $500,000 for a married couple filing jointly).
If you're thinking of selling your home, don't miss the fall sales market.
The best time to sell your home is usually in the spring and early summer. That's when the most home buyers are searching for homes in most communities. Statistics show the 2002 national home sales volume so far is likely to set a new annual record.
But the second best time to sell your home is in the fall. Weather is usually good and, especially with today's low mortgage rates, prospective home buyers are out in droves. If you have a lower-priced home that is likely to appeal to first-time home buyers, now is a great time to sell. Just ask any realty agent who specializes in residential sales.
To hire a real estate agent, or not; that is the question.
Most home sellers, at least for a few fleeting moments, dream of selling their home alone without having to pay a typical realty agent's sales commission of 6 or 7 percent.
Just run a few newspaper ads, put a "for sale by owner" sign on the front lawn, hold some weekend open houses, and the home will sell. That's what do-it-yourself home sellers dream about.
But the reality is usually far different. According to National Association of Realtors statistics, less than 20 percent of U.S. homes are sold without the help of a professional realty agent. However, maybe you are in that 20 percent who can sell your home alone and "save" the sales commission. Review this checklist of six key questions to help decide:
1. How can I correctly set my home's asking price? Here's a little "insider secret" for correctly setting your home's asking price: Interview at least three successful local realty agents who sell homes in your vicinity and compare their estimates of your home's market value.
Even if you want to market your home "for sale by owner" (called "fizzbo" by real estate agents), they won't mind giving you their listing presentations. The reason is, they know that within 30 to 60 days, most "fizzbo" home sellers give up and list with a professional real estate agent. Chances are you will eventually list with one of the agents you interviewed.
Each agent you interview should give you a written comparative market analysis (CMA). The CMA form shows a) recent sales prices of comparable nearby homes, b) asking prices of similar neighborhood residences now listed for sale (your competition), c) asking prices of recently expired comparable homes listed for sale which didn't sell, and d) each agent's estimated sales price and recommended asking price for your home. Best of all, this service is free.
2. How can I effectively market my home alone? Placing newspaper classified ads, putting up a "for sale by owner" lawn sign and holding a few weekend open houses usually is not enough to sell a home.
Important problems to anticipate are how to handle the phone calls which will result, how to arrange showings if you will be home alone, who will conduct the weekend open houses and what to tell real estate agents who have prospective buyers.
Will you agree to pay a buyer's agent half of a typical real estate commission? Or will you refuse to cooperate with agents who have serious prospective buyers? Paying half of a customary sales commission to an agent is usually smarter than not selling your home.
A major marketing problem is how to make your home stand out from the crowd of other nearby homes for sale. Real estate agents have the local multiple listing service (MLS) to market listed homes to hundreds of member realty agents, many of whom have waiting buyers looking for a home like yours. But without access to the MLS, and the increasingly important Internet Web site www.realtor.com for MLS listings, how can your home compete?
3. How can I obtain a legally binding sales contract and comply with all the new disclosure requirements? As part of his or her listing presentations, each agent should show you the required and optional disclosure forms used in your area. Depending on state and local laws, these include the lead-based paint disclosure, known-defect disclosures, radon disclosure, hazardous substance disclosure, building code and permit disclosure and energy efficiency disclosure.
More important, do-it-yourself home sellers ask themselves, "When a serious buyer wants to make a purchase offer, especially on a weekend when most homes are sold, how can I obtain a legally-binding purchase contract?"
The obvious answer is to have a pre-arranged real estate attorney standing by to quickly prepare the necessary legal paperwork. Unfortunately, most real estate attorneys are not available on weekends. By Monday or Tuesday, your serious buyer might have contracted the dread disease, "buyer's remorse." Worse, the buyer might have bought another home.
4. When a buyer wants to make a purchase offer, how can I know if the buyer is financially qualified to complete the purchase? Most real estate agents know how to evaluate purchase offers from pre-approved buyers and recommend their sellers accept or reject them. But successful do-it-yourself home sellers need to be familiar with FHA, VA, Fannie Mae or Freddie Mac and jumbo mortgage terms. Pre-arrangement with a nearby mortgage lender offering easy-finance alternatives greatly eases do-it-yourself “fizzbo” home sales.
Some buyers, known as "flakes," are not financially qualified to purchase a home. But they will waste your time. However, other potential buyers are already pre-approved for a mortgage by a mortgage lender and are ready to buy. Still other prospective buyers are unsure how to proceed with a home purchase unless an experienced real estate agent guides them through the process.
5. What home purchase contingencies are normal? Most home purchase contracts contain reasonable contingency clauses for at least (a) a satisfactory appraisal by the buyer's mortgage lender, and (b) a professional inspection report satisfactory to the buyer.
However, some buyers will add contingency clauses that are usually not in the seller's best interests, such as a contingency for the sale of the buyer's current residence. Most real estate agents advise against accepting a purchase offer with such a contingency unless the local home sales market is very slow and there are no other prospective buyers.
But, as a do-it-yourself home seller, you'll need to know what to do if a second buyer then makes an equal or better purchase offer with no contingency for sale of another residence.
6. Who will handle the home sale closing details? Depending on local custom, the actual home sale closing should be handled by an attorney, escrow or title firm. The buyer's earnest money purchase deposit is usually held by the same entity.
Who pays for the closing settlement costs? What about arranging title insurance? Who pays the transfer taxes and other closing costs? These are home sale expenses that home sellers should anticipate.
How to decide if you can sell your home alone:
After reviewing this do-it-yourself home sale checklist, you might find the task of selling your home alone without a professional agent overwhelming. Or, you might relish the opportunity to save the sales commission by selling your home yourself.
But there's one more consideration. It is the buyer who, when purchasing from a for-sale-by-owner, expects to share in the commission savings. That's why "fizzbos" should be prepared to sell for less than the recent sales prices of nearby comparable homes.
Still another situation "fizzbos" need to anticipate is how to handle buyer's agents who ask to receive 50 percent of a typical real estate sales commission for bringing a qualified buyer. Will you pay half of a commission? Or will you refuse to pay any commission, risking loss of that agent's buyer?
Conclusion: Selling a home is never easy. But it can be especially challenging when the seller insists on selling without a professional agent. After 30 to 60 days without sales success, most do-it-yourself sellers give up and decide to list their homes with one of the agents previously interviewed.
That's why most real estate agents enjoy giving their listing presentations to home sellers who think they can sell alone. However, experienced agents know few homes are sold without professional help.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=54
Are you planning to sell your home in the next few months? According to the National Association of Realtors and state Realtor associations, the home sales market in most areas is booming. Most community median sales prices are at or near record levels.
The obvious reason is today's ultra-low mortgage interest rates have flooded the home sales market with eager buyers. Landlords are complaining about high apartment vacancies because virtually every renter who can afford rent can afford to buy a house or condo.
In addition to extremely low mortgage interest rates, virtually every mortgage lender offers 90, 95, 97, 100 and even 103 percent mortgage financing. As a mortgage broker recently told me, "Even a bankrupt arsonist can get approved for a home loan today."
But home sellers aren't complaining because, if they owned and occupied their principal residence any two of the last five years, they can claim up to $250,000 tax-free sales profits (up to $500,000 for a married couple filing jointly).
If you're thinking of selling your home, don't miss the fall sales market.
The best time to sell your home is usually in the spring and early summer. That's when the most home buyers are searching for homes in most communities. Statistics show the 2002 national home sales volume so far is likely to set a new annual record.
But the second best time to sell your home is in the fall. Weather is usually good and, especially with today's low mortgage rates, prospective home buyers are out in droves. If you have a lower-priced home that is likely to appeal to first-time home buyers, now is a great time to sell. Just ask any realty agent who specializes in residential sales.
To hire a real estate agent, or not; that is the question.
Most home sellers, at least for a few fleeting moments, dream of selling their home alone without having to pay a typical realty agent's sales commission of 6 or 7 percent.
Just run a few newspaper ads, put a "for sale by owner" sign on the front lawn, hold some weekend open houses, and the home will sell. That's what do-it-yourself home sellers dream about.
But the reality is usually far different. According to National Association of Realtors statistics, less than 20 percent of U.S. homes are sold without the help of a professional realty agent. However, maybe you are in that 20 percent who can sell your home alone and "save" the sales commission. Review this checklist of six key questions to help decide:
1. How can I correctly set my home's asking price? Here's a little "insider secret" for correctly setting your home's asking price: Interview at least three successful local realty agents who sell homes in your vicinity and compare their estimates of your home's market value.
Even if you want to market your home "for sale by owner" (called "fizzbo" by real estate agents), they won't mind giving you their listing presentations. The reason is, they know that within 30 to 60 days, most "fizzbo" home sellers give up and list with a professional real estate agent. Chances are you will eventually list with one of the agents you interviewed.
Each agent you interview should give you a written comparative market analysis (CMA). The CMA form shows a) recent sales prices of comparable nearby homes, b) asking prices of similar neighborhood residences now listed for sale (your competition), c) asking prices of recently expired comparable homes listed for sale which didn't sell, and d) each agent's estimated sales price and recommended asking price for your home. Best of all, this service is free.
2. How can I effectively market my home alone? Placing newspaper classified ads, putting up a "for sale by owner" lawn sign and holding a few weekend open houses usually is not enough to sell a home.
Important problems to anticipate are how to handle the phone calls which will result, how to arrange showings if you will be home alone, who will conduct the weekend open houses and what to tell real estate agents who have prospective buyers.
Will you agree to pay a buyer's agent half of a typical real estate commission? Or will you refuse to cooperate with agents who have serious prospective buyers? Paying half of a customary sales commission to an agent is usually smarter than not selling your home.
A major marketing problem is how to make your home stand out from the crowd of other nearby homes for sale. Real estate agents have the local multiple listing service (MLS) to market listed homes to hundreds of member realty agents, many of whom have waiting buyers looking for a home like yours. But without access to the MLS, and the increasingly important Internet Web site www.realtor.com for MLS listings, how can your home compete?
3. How can I obtain a legally binding sales contract and comply with all the new disclosure requirements? As part of his or her listing presentations, each agent should show you the required and optional disclosure forms used in your area. Depending on state and local laws, these include the lead-based paint disclosure, known-defect disclosures, radon disclosure, hazardous substance disclosure, building code and permit disclosure and energy efficiency disclosure.
More important, do-it-yourself home sellers ask themselves, "When a serious buyer wants to make a purchase offer, especially on a weekend when most homes are sold, how can I obtain a legally-binding purchase contract?"
The obvious answer is to have a pre-arranged real estate attorney standing by to quickly prepare the necessary legal paperwork. Unfortunately, most real estate attorneys are not available on weekends. By Monday or Tuesday, your serious buyer might have contracted the dread disease, "buyer's remorse." Worse, the buyer might have bought another home.
4. When a buyer wants to make a purchase offer, how can I know if the buyer is financially qualified to complete the purchase? Most real estate agents know how to evaluate purchase offers from pre-approved buyers and recommend their sellers accept or reject them. But successful do-it-yourself home sellers need to be familiar with FHA, VA, Fannie Mae or Freddie Mac and jumbo mortgage terms. Pre-arrangement with a nearby mortgage lender offering easy-finance alternatives greatly eases do-it-yourself “fizzbo” home sales.
Some buyers, known as "flakes," are not financially qualified to purchase a home. But they will waste your time. However, other potential buyers are already pre-approved for a mortgage by a mortgage lender and are ready to buy. Still other prospective buyers are unsure how to proceed with a home purchase unless an experienced real estate agent guides them through the process.
5. What home purchase contingencies are normal? Most home purchase contracts contain reasonable contingency clauses for at least (a) a satisfactory appraisal by the buyer's mortgage lender, and (b) a professional inspection report satisfactory to the buyer.
However, some buyers will add contingency clauses that are usually not in the seller's best interests, such as a contingency for the sale of the buyer's current residence. Most real estate agents advise against accepting a purchase offer with such a contingency unless the local home sales market is very slow and there are no other prospective buyers.
But, as a do-it-yourself home seller, you'll need to know what to do if a second buyer then makes an equal or better purchase offer with no contingency for sale of another residence.
6. Who will handle the home sale closing details? Depending on local custom, the actual home sale closing should be handled by an attorney, escrow or title firm. The buyer's earnest money purchase deposit is usually held by the same entity.
Who pays for the closing settlement costs? What about arranging title insurance? Who pays the transfer taxes and other closing costs? These are home sale expenses that home sellers should anticipate.
How to decide if you can sell your home alone:
After reviewing this do-it-yourself home sale checklist, you might find the task of selling your home alone without a professional agent overwhelming. Or, you might relish the opportunity to save the sales commission by selling your home yourself.
But there's one more consideration. It is the buyer who, when purchasing from a for-sale-by-owner, expects to share in the commission savings. That's why "fizzbos" should be prepared to sell for less than the recent sales prices of nearby comparable homes.
Still another situation "fizzbos" need to anticipate is how to handle buyer's agents who ask to receive 50 percent of a typical real estate sales commission for bringing a qualified buyer. Will you pay half of a commission? Or will you refuse to pay any commission, risking loss of that agent's buyer?
Conclusion: Selling a home is never easy. But it can be especially challenging when the seller insists on selling without a professional agent. After 30 to 60 days without sales success, most do-it-yourself sellers give up and decide to list their homes with one of the agents previously interviewed.
That's why most real estate agents enjoy giving their listing presentations to home sellers who think they can sell alone. However, experienced agents know few homes are sold without professional help.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=54
Home-based business brings recapture concerns
Working at home has become as common as playing at home. Some employers will tell you the two are synonymous while many spouses – especially seniors and aging Baby Boomers not used to having their partner in the home all day—wonder if home-based work really is a good idea.
("When can I use the fax machine?" "No, I can't be here for the FedEx delivery…" "Can you move your files off the sofa so Mary can spend the night?")
If you have turned the family den into a home office – via a complex remodel or by simple paint and wall covering – you are not alone. Since 1990, the number of telecommuters has grown at a rate of 15 percent a year mainly because of the convenience, tax and selling advantages.
In the days leading up to the April 15 federal tax deadline, let's check some of the reasons why working at home continues to make sense while the sting of eventually selling your palace with a place to work often is underestimated.
It's now relatively easy for taxpayers to deduct the cost of a home office. To qualify for a deduction, the space must be used exclusively and on a regular basis for either the entire business or its administrative and management activities.
The management provision was added in the Taxpayer Relief Act of 1997. It enables a home office deduction to be available for any trade or business of the taxpayer as long as there is no other fixed location where the taxpayer "conducts substantial administrative or management activities of the trade or business." The deduction is not curtailed if associates at other locations perform some management or administrative activities (such as mailings).
A home office deduction is comprised mainly of depreciation, utilities and insurance. For example, if a home has 2,500 square feet and the old den now deemed "the office" is 250 square feet, then 10 percent of the utilities and insurance are deductible.
The actual office depreciation is 10 percent of what would be a depreciation deduction if the entire home were being depreciated for tax purposes. (Depreciation is not allowed on a typical principal residence, so the square footage allotted to "residence" would not qualify.) Supplies and other expenses directly related to the home office are fully deductible.
The area used for your home business can be depreciated using the 39-year depreciation method. The lower of your home's adjusted cost basis, or its market value on the day business use began, can be the starting points.
However, all these benefits do come at a price. The tax law states that if you sell your home at a gain any depreciation for a home office will have to be "recaptured." That means that any profit on the business portion is taxable as capital gain.
In a capsule, if you bought your home for $150,000 and sold it for a net figure of $300,000, your capital gain would amount to $150,000. Because the business portion does not escape the new primary residence exclusions, 10 percent, or $15,000 (the 250 square feet of office space) would be taxable.
One way of possibly avoiding the home office tax would be to eliminate your home business two years before selling the home. If you can find another place to work, you could revert the usage back a 100 percent primary residence.
Because depreciation can be confusing, it's always best to consult an accountant or a tax attorney. The Internal Revenue Service's Publication 587 "Business Use of Your Home" is accessible on the Internet.
Homes that can accommodate an office – perhaps converting an extra bedroom or garage – are becoming as desirable a selling point as any other home amenity. That's because when potential home buyers intend to make a living from a specific space within the new home, they choose a home that meets both their living and working requirements.
While resale homes often have to be remodeled to include home-office space, many designers are helping builders with new plans that include one room that's versatile and can be easily identified as a home office. In fact, some real estate agents say home offices sometimes help make or break a sale in a relocation situation, especially those involving double incomes and senior citizens.
Baby boomers and seniors are simply working longer. Transferring your base to the home can be a good idea, yet consider an exit strategy long before you sell. You could get hit with a recapture surprise.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=88
("When can I use the fax machine?" "No, I can't be here for the FedEx delivery…" "Can you move your files off the sofa so Mary can spend the night?")
If you have turned the family den into a home office – via a complex remodel or by simple paint and wall covering – you are not alone. Since 1990, the number of telecommuters has grown at a rate of 15 percent a year mainly because of the convenience, tax and selling advantages.
In the days leading up to the April 15 federal tax deadline, let's check some of the reasons why working at home continues to make sense while the sting of eventually selling your palace with a place to work often is underestimated.
It's now relatively easy for taxpayers to deduct the cost of a home office. To qualify for a deduction, the space must be used exclusively and on a regular basis for either the entire business or its administrative and management activities.
The management provision was added in the Taxpayer Relief Act of 1997. It enables a home office deduction to be available for any trade or business of the taxpayer as long as there is no other fixed location where the taxpayer "conducts substantial administrative or management activities of the trade or business." The deduction is not curtailed if associates at other locations perform some management or administrative activities (such as mailings).
A home office deduction is comprised mainly of depreciation, utilities and insurance. For example, if a home has 2,500 square feet and the old den now deemed "the office" is 250 square feet, then 10 percent of the utilities and insurance are deductible.
The actual office depreciation is 10 percent of what would be a depreciation deduction if the entire home were being depreciated for tax purposes. (Depreciation is not allowed on a typical principal residence, so the square footage allotted to "residence" would not qualify.) Supplies and other expenses directly related to the home office are fully deductible.
The area used for your home business can be depreciated using the 39-year depreciation method. The lower of your home's adjusted cost basis, or its market value on the day business use began, can be the starting points.
However, all these benefits do come at a price. The tax law states that if you sell your home at a gain any depreciation for a home office will have to be "recaptured." That means that any profit on the business portion is taxable as capital gain.
In a capsule, if you bought your home for $150,000 and sold it for a net figure of $300,000, your capital gain would amount to $150,000. Because the business portion does not escape the new primary residence exclusions, 10 percent, or $15,000 (the 250 square feet of office space) would be taxable.
One way of possibly avoiding the home office tax would be to eliminate your home business two years before selling the home. If you can find another place to work, you could revert the usage back a 100 percent primary residence.
Because depreciation can be confusing, it's always best to consult an accountant or a tax attorney. The Internal Revenue Service's Publication 587 "Business Use of Your Home" is accessible on the Internet.
Homes that can accommodate an office – perhaps converting an extra bedroom or garage – are becoming as desirable a selling point as any other home amenity. That's because when potential home buyers intend to make a living from a specific space within the new home, they choose a home that meets both their living and working requirements.
While resale homes often have to be remodeled to include home-office space, many designers are helping builders with new plans that include one room that's versatile and can be easily identified as a home office. In fact, some real estate agents say home offices sometimes help make or break a sale in a relocation situation, especially those involving double incomes and senior citizens.
Baby boomers and seniors are simply working longer. Transferring your base to the home can be a good idea, yet consider an exit strategy long before you sell. You could get hit with a recapture surprise.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=88
House design for a friendly family
What describes a great house? It looks good and makes you feel good when you're inside it. It is energy efficient and comfortable. And it facilitates frequent casual interactions among family members.
This last qualification may seem to be such a statement of the obvious it's not worth making. But as our houses have become bigger with more rooms in the shared public area and more bedrooms and bathrooms in the private area, family life has changed. The daily familial interactions that characterized American family life in a smaller house in which everyone was within talking distance of each other are no longer the rule.
Why does this matter? Frequent interactions are the essence of family life. They make us feel good and help maintain household cohesion. Even more important, through the thousands of interactions that we have with our children from infancy to adulthood, they learn a crucial life skill—how to get along with other people.
When children are young, family members will have plenty of contact with one another, whatever kind of house they live in. Very young children require constant supervision. Somewhat older children can play by themselves, but most still want to hang around their parents or caretakers. As the kids approach adolescence, however, they begin to want more independence and most will fan out into the rest of the house. Once those hormones kick in, they can become famously uncommunicative, often reclusive, and many prefer to stay in their own rooms. You can't force them to talk or to spend more time with you.
Points of contact. But the odds are in your favor if you have built "points of contact" into the design of your house so casual interaction and the occasional longer conversation are embedded in the fabric of your family life. When such interactions are a part of the daily routine, they are more easily carried over into your children's teenaged years when you are eager to stay in their loop and they give every indication of wanting to keep you out of it.
For example, instead of placing the stairs in an entry foyer that no one uses—nearly universal in two-story houses—move the stairs to a place where everyone congregates such as the kitchen. Every time your teens pass through you have a chance to catch their ear.
Locating all the bedrooms on the same floor provides another opportunity for casual conversation between parents and teens. The parents, with an eye to their own aging and perhaps a desire for peace and quiet and more privacy, may want their bedroom on the first floor. But if you do this, you may be regarded as an interloper every time you climb the stairs and approach your teenagers' bedroom area. If they spend most of their time there, you will be out of the loop.
The space that connects the bedrooms can also be a point of contact. Instead of a three-foot wide hall that funnels the household in and out of bedrooms, create a larger area onto which all the bedrooms open. When the kids are young, it may become a favorite play area because it's in the middle of everything. When they're older, it can become a spot for endless extended telephone conversations or reading and provide yet another opportunity for a casual encounter between a parent and a teen.
Even the use of a bedroom as a home office will increase familial interactions. If you choose the bedroom closest to the kids' bathroom and leave your door open, you'll have an opportunity to talk every time your teens pass by, as I serendipitously discovered in my own house.
Limiting the number of rooms in the public part of the house increases the likelihood that the family members will congregate in the same spot. If you have only one television and you put it where you want the household to come together, the likelihood of the family actually congregating there increases exponentially.
Some families find the television intrusive and purposely want to keep it out of a family room area. For such households, a separate television room adjacent to the kitchen/family room puts the family in the same part of the house, if not in the same room.
Tension busters. While families need to spend time together, each member also needs to a place for solitude, where he or she can shut the door and tune out the hubbub. The private sanctuary can be an actual room or a designated spot—"my corner of the bedroom," "my closet" or even "my space under the bed." The most important aspect is that it be recognized and respected by the other family members.
In the public area where the household congregates, clutter will inevitably accumulate, but it can be kept to a tolerable level if there is adequate storage. For example, some combination of a closet, base cabinets and book cases in the family room can accommodate all the different items your kids will bring in as they pass through various stages from blocks to Barbies to board games, books, CDs and blankets and pillows for watching television in maximum comfort.
Comings and goings. Every house should have a place for the sendoff and the return. If the architect is inspired, this area might be uplifting and energizing for family members as they sally forth for work or school at the beginning of the day, then at the end of the day, change tacks to become a nurturing and embracing space through which everyone passes as they reenter the refuge of home.
But at the very least, the early-bird launching pad that becomes the evening landing pad should have plenty of storage for seasonal outerwear, sports equipment and a place for the incoming mail. More often than not, however, new houses have a sizeable formal front hall that lacks adequate storage and is in the wrong place for daily use. Most families routinely enter from their garage, often passing through a laundry room and kitchen before they finally reach the front hall. In many cases, their path through the house is marked by a trail of coats, backpacks and mail. To help alleviate this situation, when budget and space allow, many architects and home builders have added a second foyer at the garage entry.
A simpler solution would be to merge the two entries into one so that whether you enter through the garage or the front door, you end up in the same spot, which should have sufficient storage to hold all the outerwear, sports equipment and whatever else a family routinely brings into the house and needs to stash in the entry. A bench would be handy and a cleverly concealed recycling bin for the unwanted junk mail would be a big hit. Should visitors see an errant boot or glove or two, it will convey the message that real people live there.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=158
This last qualification may seem to be such a statement of the obvious it's not worth making. But as our houses have become bigger with more rooms in the shared public area and more bedrooms and bathrooms in the private area, family life has changed. The daily familial interactions that characterized American family life in a smaller house in which everyone was within talking distance of each other are no longer the rule.
Why does this matter? Frequent interactions are the essence of family life. They make us feel good and help maintain household cohesion. Even more important, through the thousands of interactions that we have with our children from infancy to adulthood, they learn a crucial life skill—how to get along with other people.
When children are young, family members will have plenty of contact with one another, whatever kind of house they live in. Very young children require constant supervision. Somewhat older children can play by themselves, but most still want to hang around their parents or caretakers. As the kids approach adolescence, however, they begin to want more independence and most will fan out into the rest of the house. Once those hormones kick in, they can become famously uncommunicative, often reclusive, and many prefer to stay in their own rooms. You can't force them to talk or to spend more time with you.
Points of contact. But the odds are in your favor if you have built "points of contact" into the design of your house so casual interaction and the occasional longer conversation are embedded in the fabric of your family life. When such interactions are a part of the daily routine, they are more easily carried over into your children's teenaged years when you are eager to stay in their loop and they give every indication of wanting to keep you out of it.
For example, instead of placing the stairs in an entry foyer that no one uses—nearly universal in two-story houses—move the stairs to a place where everyone congregates such as the kitchen. Every time your teens pass through you have a chance to catch their ear.
Locating all the bedrooms on the same floor provides another opportunity for casual conversation between parents and teens. The parents, with an eye to their own aging and perhaps a desire for peace and quiet and more privacy, may want their bedroom on the first floor. But if you do this, you may be regarded as an interloper every time you climb the stairs and approach your teenagers' bedroom area. If they spend most of their time there, you will be out of the loop.
The space that connects the bedrooms can also be a point of contact. Instead of a three-foot wide hall that funnels the household in and out of bedrooms, create a larger area onto which all the bedrooms open. When the kids are young, it may become a favorite play area because it's in the middle of everything. When they're older, it can become a spot for endless extended telephone conversations or reading and provide yet another opportunity for a casual encounter between a parent and a teen.
Even the use of a bedroom as a home office will increase familial interactions. If you choose the bedroom closest to the kids' bathroom and leave your door open, you'll have an opportunity to talk every time your teens pass by, as I serendipitously discovered in my own house.
Limiting the number of rooms in the public part of the house increases the likelihood that the family members will congregate in the same spot. If you have only one television and you put it where you want the household to come together, the likelihood of the family actually congregating there increases exponentially.
Some families find the television intrusive and purposely want to keep it out of a family room area. For such households, a separate television room adjacent to the kitchen/family room puts the family in the same part of the house, if not in the same room.
Tension busters. While families need to spend time together, each member also needs to a place for solitude, where he or she can shut the door and tune out the hubbub. The private sanctuary can be an actual room or a designated spot—"my corner of the bedroom," "my closet" or even "my space under the bed." The most important aspect is that it be recognized and respected by the other family members.
In the public area where the household congregates, clutter will inevitably accumulate, but it can be kept to a tolerable level if there is adequate storage. For example, some combination of a closet, base cabinets and book cases in the family room can accommodate all the different items your kids will bring in as they pass through various stages from blocks to Barbies to board games, books, CDs and blankets and pillows for watching television in maximum comfort.
Comings and goings. Every house should have a place for the sendoff and the return. If the architect is inspired, this area might be uplifting and energizing for family members as they sally forth for work or school at the beginning of the day, then at the end of the day, change tacks to become a nurturing and embracing space through which everyone passes as they reenter the refuge of home.
But at the very least, the early-bird launching pad that becomes the evening landing pad should have plenty of storage for seasonal outerwear, sports equipment and a place for the incoming mail. More often than not, however, new houses have a sizeable formal front hall that lacks adequate storage and is in the wrong place for daily use. Most families routinely enter from their garage, often passing through a laundry room and kitchen before they finally reach the front hall. In many cases, their path through the house is marked by a trail of coats, backpacks and mail. To help alleviate this situation, when budget and space allow, many architects and home builders have added a second foyer at the garage entry.
A simpler solution would be to merge the two entries into one so that whether you enter through the garage or the front door, you end up in the same spot, which should have sufficient storage to hold all the outerwear, sports equipment and whatever else a family routinely brings into the house and needs to stash in the entry. A bench would be handy and a cleverly concealed recycling bin for the unwanted junk mail would be a big hit. Should visitors see an errant boot or glove or two, it will convey the message that real people live there.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=158
House Inspectors: Choosing The Right One...
A qualified house inspector is the surest way to discover a house's not-so-obvious problems. Most professional inspectors are from some type of construction background, such as engineering, architecture or contracting. Their responsibility is to crawl beneath the floors, squeeze through the attic and generally comb the house's structure and mechanical systems for shortcomings. They give the buyer a complete report; with this, the buyer can decide whether or not the house is a good deal, or at least put together a "punch list" of items that must be fixed (it isn't unusual for this report to contain about 50 items). The fee for this service generally runs from about $300 to $500 and up.
You're usually welcome to accompany the inspector during the inspection; doing so lets you discuss specifics and ask questions about the severity of some concerns. On the other hand, you probably won't want to crawl under the floors with him or her, so it's important to get one you can trust.
You can find house inspectors through the Yellow Pages or by contacting the American Society of Home Inspectors (ASHI), at (85 West Algonquin Rd., Arlington Heights, IL 60005-- phone 847-290-6012). Nationally, 1400 inspectors are members of this trade organization, which requires a minimum level of experience for membership. You can also go to InspectAmerica Home Inspections for more information about home inspectors or to ImproveNet for a searchable database of contractors.
Real estate brokers regularly refer house inspectors to clients, but it's best to ask a non-partial broker for references. Often the best sources for good house inspectors are friends who've recently bought houses and believe that their inspectors were honest, thorough, and highly professional.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=228
You're usually welcome to accompany the inspector during the inspection; doing so lets you discuss specifics and ask questions about the severity of some concerns. On the other hand, you probably won't want to crawl under the floors with him or her, so it's important to get one you can trust.
You can find house inspectors through the Yellow Pages or by contacting the American Society of Home Inspectors (ASHI), at (85 West Algonquin Rd., Arlington Heights, IL 60005-- phone 847-290-6012). Nationally, 1400 inspectors are members of this trade organization, which requires a minimum level of experience for membership. You can also go to InspectAmerica Home Inspections for more information about home inspectors or to ImproveNet for a searchable database of contractors.
Real estate brokers regularly refer house inspectors to clients, but it's best to ask a non-partial broker for references. Often the best sources for good house inspectors are friends who've recently bought houses and believe that their inspectors were honest, thorough, and highly professional.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=228
How can I improve my real estate purchase offer?
Few failed endeavors can match the frustration of losing out in a multiple-offer competition. But, almost as disappointing is making the only offer—and a strong one—and having the seller outright reject it. Here are a few tips on how to sweeten your offer without jeopardizing your financial security.
A strategy that has been effective for some successful home buyers is to offer to pick up the cost of a fee that is normally paid for by the seller. For example, in some areas sellers pay for title insurance. This can amount to a few thousand dollars on an expensive property. If you pay for this instead of the seller, it increases the seller's net proceeds.
Some communities, such as Oakland, Piedmont and Berkeley in California, have hefty transfer taxes. The Berkeley tax is 1.5 percent of the purchase price, which is customarily shared 50-50 by the buyer and seller. Recently, a Berkeley home buyer who was bidding in competition offered to pay for the entire tax. This increased the seller's net by $9,000. The seller chose this offer over the others.
Whether in competition or not, it's always a good idea to find out as much as possible about the seller's situation before you make an offer. Many sellers, particularly those who haven't lined up a new home, would like the opportunity to rent their home back from the buyer for a while after closing. If you're renting, or haven't sold your current home yet, you can gain favor with the seller by offering a rent back to accommodate the seller's needs.
Under normal circumstances, a seller who rents his home back after closing pays rent to the buyer in an amount that covers the buyer's carrying costs-principal, interest, taxes and insurance (PITI), prorated on a per diem basis. But some buyers in a multiple offer situation offer free rent for a time to make their offer even more enticing to the seller. This effectively puts more money in the seller's pocket.
It's never a good idea to waive contingencies if the condition covered by the contingency hasn't been satisfied. For example, it would be risky to buy a home without having it thoroughly inspected by professionals. But, when there are several buyers competing, you may find that your competitors are making offers that don't include an inspection contingency. Although it's also risky for a seller to accept an offer that does not include an inspection contingency, most sellers find a contingency-free offer hard to resist.
HOUSE HUNTING TIP: If you're inclined to waive contingencies, make sure you do your due diligence research first. Ask the seller for permission to complete inspections before you make an offer. Or, it the seller has obtained a presale home inspection from a reputable home inspector, make sure you read it carefully and fully understand it before you do make an offer.
Call the home inspector to discuss any questions you might have. Better yet, schedule an appointment with the inspector to walk through the property with you to explain the report and answer your questions. But, be sure to ask for the seller's permission first.
Home inspections often include recommendations for further inspections. There may not be time to collect all the information you'd like to have before making an offer. In this case, it's best to imagine the worst-case scenario. If the home inspection indicates that the roof is worn, assume you'll need to replace it. Call a roofer for a ballpark estimate.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=168
A strategy that has been effective for some successful home buyers is to offer to pick up the cost of a fee that is normally paid for by the seller. For example, in some areas sellers pay for title insurance. This can amount to a few thousand dollars on an expensive property. If you pay for this instead of the seller, it increases the seller's net proceeds.
Some communities, such as Oakland, Piedmont and Berkeley in California, have hefty transfer taxes. The Berkeley tax is 1.5 percent of the purchase price, which is customarily shared 50-50 by the buyer and seller. Recently, a Berkeley home buyer who was bidding in competition offered to pay for the entire tax. This increased the seller's net by $9,000. The seller chose this offer over the others.
Whether in competition or not, it's always a good idea to find out as much as possible about the seller's situation before you make an offer. Many sellers, particularly those who haven't lined up a new home, would like the opportunity to rent their home back from the buyer for a while after closing. If you're renting, or haven't sold your current home yet, you can gain favor with the seller by offering a rent back to accommodate the seller's needs.
Under normal circumstances, a seller who rents his home back after closing pays rent to the buyer in an amount that covers the buyer's carrying costs-principal, interest, taxes and insurance (PITI), prorated on a per diem basis. But some buyers in a multiple offer situation offer free rent for a time to make their offer even more enticing to the seller. This effectively puts more money in the seller's pocket.
It's never a good idea to waive contingencies if the condition covered by the contingency hasn't been satisfied. For example, it would be risky to buy a home without having it thoroughly inspected by professionals. But, when there are several buyers competing, you may find that your competitors are making offers that don't include an inspection contingency. Although it's also risky for a seller to accept an offer that does not include an inspection contingency, most sellers find a contingency-free offer hard to resist.
HOUSE HUNTING TIP: If you're inclined to waive contingencies, make sure you do your due diligence research first. Ask the seller for permission to complete inspections before you make an offer. Or, it the seller has obtained a presale home inspection from a reputable home inspector, make sure you read it carefully and fully understand it before you do make an offer.
Call the home inspector to discuss any questions you might have. Better yet, schedule an appointment with the inspector to walk through the property with you to explain the report and answer your questions. But, be sure to ask for the seller's permission first.
Home inspections often include recommendations for further inspections. There may not be time to collect all the information you'd like to have before making an offer. In this case, it's best to imagine the worst-case scenario. If the home inspection indicates that the roof is worn, assume you'll need to replace it. Call a roofer for a ballpark estimate.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=168
How do I prepare to close my home purchase?
Finding a home to buy and negotiating the purchase contract are the toughest parts of the home buying process for most people. But, if you don't plan ahead, and carefully monitor your home purchases transaction, you could find trouble ahead.
The first thing you should do after your offer is accepted is review the contract and make a list of important dates. These will include such things as the contract contingency deadlines and the actual closing date. If you and the seller countered back and forth before arriving at a mutually acceptable contract, these dates may have changed from the original draft of the contract.
Most home purchase contracts include an inspection contingency. It's wise to complete a home inspection as soon as you can. This way you'll have time to order further inspections if necessary. When the real estate market is active, you may have difficulty lining up an inspector quickly. It helps if you're working with a real estate agent who has established relationships with local inspectors.
Homeowner's insurance can be difficult to obtain in some areas, so you should start working on this right away. This used to be one of the last items on a buyer's closing checklist. But, these days, it should be at the top of the list. In some, like California and Texas, some big insurance companies are not currently writing new homeowner's policies. But, a mortgage lender will require that you have a homeowner's policy before they will commit the money to close the sale.
Insurance companies scrutinize both the buyer and the property. The buyer must have good credit. The insurer would also like the buyer to be someone who does not have a history of submitting a lot of insurance claims. Ideally, the property should have had no insurance claims made against it in the last five years. Insurers are particularly sensitive to claims that have been made for water damage.
It's recommended that you investigate the insurability of the property during your inspection contingency time frame. This way, if you find out that it's going to cost more than you expected to insure the property because of the seller's past insurance claims, you will have the opportunity to try to negotiate some form of compensation from the seller. Even if the seller won't give a dime, at least you have full knowledge of what the purchase will cost before you proceed.
When a closing is delayed, it usually has something to do with the buyer's mortgage. In order to ensure that this doesn't happen to you, be diligent about providing your lender with all the documentation needed to give you final loan approval. A lender won't prepare the loan documents for you to sign until all the lender's conditions for approval have been satisfied.
As the closing date approaches, you'll need to arrange for the transfer of any remaining funds that are necessary to close the sale. Many buyers wire closing funds to the closing agent. This may be an escrow office or an attorney depending on where you're buying.
It's a good idea to schedule a final walk-through of the property to make sure that it is in substantially the same condition as it was when the seller accepted your offer. If possible, ask the seller to do an informal walk-through with you to show you all the idiosyncrasies of the house. It might take your to discover these on your own.
THE CLOSING: Ask the closing agent to provide you with a copy of all the documents that you will need to sign in advance of your signing appointment. This may not be possible due to time constraints. But, if you can review the documents in advance, the signing will go more smoothly.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=176
The first thing you should do after your offer is accepted is review the contract and make a list of important dates. These will include such things as the contract contingency deadlines and the actual closing date. If you and the seller countered back and forth before arriving at a mutually acceptable contract, these dates may have changed from the original draft of the contract.
Most home purchase contracts include an inspection contingency. It's wise to complete a home inspection as soon as you can. This way you'll have time to order further inspections if necessary. When the real estate market is active, you may have difficulty lining up an inspector quickly. It helps if you're working with a real estate agent who has established relationships with local inspectors.
Homeowner's insurance can be difficult to obtain in some areas, so you should start working on this right away. This used to be one of the last items on a buyer's closing checklist. But, these days, it should be at the top of the list. In some, like California and Texas, some big insurance companies are not currently writing new homeowner's policies. But, a mortgage lender will require that you have a homeowner's policy before they will commit the money to close the sale.
Insurance companies scrutinize both the buyer and the property. The buyer must have good credit. The insurer would also like the buyer to be someone who does not have a history of submitting a lot of insurance claims. Ideally, the property should have had no insurance claims made against it in the last five years. Insurers are particularly sensitive to claims that have been made for water damage.
It's recommended that you investigate the insurability of the property during your inspection contingency time frame. This way, if you find out that it's going to cost more than you expected to insure the property because of the seller's past insurance claims, you will have the opportunity to try to negotiate some form of compensation from the seller. Even if the seller won't give a dime, at least you have full knowledge of what the purchase will cost before you proceed.
When a closing is delayed, it usually has something to do with the buyer's mortgage. In order to ensure that this doesn't happen to you, be diligent about providing your lender with all the documentation needed to give you final loan approval. A lender won't prepare the loan documents for you to sign until all the lender's conditions for approval have been satisfied.
As the closing date approaches, you'll need to arrange for the transfer of any remaining funds that are necessary to close the sale. Many buyers wire closing funds to the closing agent. This may be an escrow office or an attorney depending on where you're buying.
It's a good idea to schedule a final walk-through of the property to make sure that it is in substantially the same condition as it was when the seller accepted your offer. If possible, ask the seller to do an informal walk-through with you to show you all the idiosyncrasies of the house. It might take your to discover these on your own.
THE CLOSING: Ask the closing agent to provide you with a copy of all the documents that you will need to sign in advance of your signing appointment. This may not be possible due to time constraints. But, if you can review the documents in advance, the signing will go more smoothly.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=176
How much work should you do before selling?
Recently a couple that owned a home in Berkeley, Calif., decided to move to neighboring Piedmont. They started their search by visiting Sunday open houses. It was quite apparent to them which listings had been prepared for sale and which ones had not. They were invariably drawn to listings that were charming, clean, and uncluttered.
Looking at open houses helped this couple realize what they needed to do to their Berkeley home to ensure that it would attract buyers. By the time their home went on the market, it was charming, clean and uncluttered. It sold quickly and the sellers realized a handsome profit.
As a seller, you have several options when considering how much work to do before selling. One option is to do relatively little and sell the property in it's "as is" condition. Another is to invest time, effort and money into fixing the property up before you sell. A third option is to do a combination of the first two approaches.
In making your decision, keep in mind that in general buyers pay more for homes that are in move-in condition. Most buyers would prefer to buy a turnkey listing that doesn't need a lot of work. A home in great condition will usually attract more buyers than will one that doesn't show well and needs a lot of work.
But there is a market for fixer-upper properties, although it is more limited. Fixer buyers will pay more for fixers that have a big upside potential. Fixer listings sell at a discount when compared to listings that are in move-in condition.
HOME SELLER TIP: A higher sale price is not the only benefit to be derived from fixing up your home for sale. If you're doing the fix-up work, rather than the buyer, you have control over the improvements. You can shop the repair work for the best price. This can save you as much as 15 to 30 percent. Just make sure you use licensed contractors who will abide by city building permit requirements.
Often the decision of how much fix-up for sale work to do will depend on how much time you have before marketing your home. The best approach is to plan ahead so that you have as much time as possible. It can take months to get a house ready to sell, depending on what kind of work needs to be done.
No matter what kind of time frame you're working with, consult with your real estate agent before embarking on major fix-up work. Plan to walk through your home with your agent. Make a list of all the items that should be done before you sell. Ask your agent which reports should be ordered and order them as soon as possible.
The next step is to get bids from contractors and trades people for the recommended work. Also find out about availability and how long it will take to complete the work. With this information you can fine-tune your fix-up for sale work.
Some projects may be too costly and some may not be able to be completed within your time frame. Your agent can help you prioritize if necessary. Other projects, like de-cluttering and cleaning cost practically nothing except your time and effort.
THE CLOSING: Even if you decide to sell "as is," it usually helps the sale to present a property that is clean and free of debris. Buyers need to see what you have to sell in an uncluttered state in order to make a decision to buy.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=60
Looking at open houses helped this couple realize what they needed to do to their Berkeley home to ensure that it would attract buyers. By the time their home went on the market, it was charming, clean and uncluttered. It sold quickly and the sellers realized a handsome profit.
As a seller, you have several options when considering how much work to do before selling. One option is to do relatively little and sell the property in it's "as is" condition. Another is to invest time, effort and money into fixing the property up before you sell. A third option is to do a combination of the first two approaches.
In making your decision, keep in mind that in general buyers pay more for homes that are in move-in condition. Most buyers would prefer to buy a turnkey listing that doesn't need a lot of work. A home in great condition will usually attract more buyers than will one that doesn't show well and needs a lot of work.
But there is a market for fixer-upper properties, although it is more limited. Fixer buyers will pay more for fixers that have a big upside potential. Fixer listings sell at a discount when compared to listings that are in move-in condition.
HOME SELLER TIP: A higher sale price is not the only benefit to be derived from fixing up your home for sale. If you're doing the fix-up work, rather than the buyer, you have control over the improvements. You can shop the repair work for the best price. This can save you as much as 15 to 30 percent. Just make sure you use licensed contractors who will abide by city building permit requirements.
Often the decision of how much fix-up for sale work to do will depend on how much time you have before marketing your home. The best approach is to plan ahead so that you have as much time as possible. It can take months to get a house ready to sell, depending on what kind of work needs to be done.
No matter what kind of time frame you're working with, consult with your real estate agent before embarking on major fix-up work. Plan to walk through your home with your agent. Make a list of all the items that should be done before you sell. Ask your agent which reports should be ordered and order them as soon as possible.
The next step is to get bids from contractors and trades people for the recommended work. Also find out about availability and how long it will take to complete the work. With this information you can fine-tune your fix-up for sale work.
Some projects may be too costly and some may not be able to be completed within your time frame. Your agent can help you prioritize if necessary. Other projects, like de-cluttering and cleaning cost practically nothing except your time and effort.
THE CLOSING: Even if you decide to sell "as is," it usually helps the sale to present a property that is clean and free of debris. Buyers need to see what you have to sell in an uncluttered state in order to make a decision to buy.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=60
How to avoid buying bad real estate
Ask any experienced residential real estate attorney about his or her most difficult case. The answer will probably involve a "bad house." While not exactly a legal term, a bad house is one where the buyer alleges the seller knew about a serious structural defect, but failed to disclose it to the buyer before purchase.
Proving the seller knew of the undisclosed defect, which the buyer usually discovers shortly after the purchase, can be very difficult. Since it's human nature to look for someone to blame, a home buyer usually looks first to their seller, then to the realty agent, and finally to the professional inspector if one was involved.
But buying a truly bad house can usually be avoided by following the correct steps. Even brand-new houses have their defects. A local building inspector's approval is no guarantee. However, whether a new or resale house is involved, home buyers can minimize their chances of making a serious mistake.
HOME SELLER DISCLOSURES ARE NOT GUARANTEED ACCURATE. Many states now require home sellers to provide written disclosures of known defects. If the seller lied and failed to disclose a defect, which the buyer can prove the seller knew about, the seller is liable to the buyer for damages.
Incidentally, the easiest way to prove what the seller knew is usually to ask the neighbors. They often know as much about a neighboring house as the seller knew.
For example, shortly after I bought my current home, one of my neighbors came over to get acquainted. After a few pleasantries, he said, "I suppose the sellers told you about when that hill behind your house slid. There must have been at least three feet of mud against the house."
When I replied that the sellers hadn't said a word about the hill slide against my house, he quickly added something about how all the new drainage toward the street probably took care of the problem.
That was 26 years ago. Every time there's a heavy rain, I look at the steep hill behind my house and wonder whether it will slide again. Perhaps it's a good thing the seller didn't disclose the slide, which was apparently corrected properly, because otherwise I might not have purchased my otherwise very desirable home.
HOME BUYER'S FIRST DEFENSE AGAINST BUYING BAD HOUSE
Today's smartest home sellers, before putting their homes on the market for sale, obtain professional home inspection reports. If any serious defects are revealed, sellers should have them corrected so they don't become detriments to a successful home sale.
The best realty agents recommend home sellers also have customary or required inspections completed before marketing the home, such as for termites, energy efficiency, well-water quality, septic system, radon, and building code compliance. Savvy home sellers then have any defects corrected to avoid later problems.
However, the home buyer's first line of defense against buying a bad house is to hire his or her own professional home inspector in addition to the required or customary specialized inspections. To avoid wasting money, the buyer's professional inspection should be completed after the seller accepts the buyer's purchase offer.
Before hiring a professional home inspector, buyers should check the inspector's credentials. Be wary of an inspector recommended by the realty agent. The inspector might be known as "easy" because realty agents don't want to recommend a tough "deal killer" inspector.
The cost of a professional home inspection should be around $300. That's cheap because a typical inspection requires at least two hours, plus time to write the report. Smart home buyers and their realty agents accompany their professional inspectors to discuss any problems discovered.
Although I've used this example many times, it's worth repeating. Several years ago, I looked at a run-down house that had a bad fireplace crack. Fearing the entire fireplace needed expensive replacement, I made my purchase offer contingent on a satisfactory professional inspection of the entire house. When I accompanied my inspector, I asked him to check the chimney especially close. After inspecting it completely, he reported the chimney was fine and the crack could be repaired with special fireplace mortar cement for about $150.
Later, I learned many prospective buyers rejected that house because of the ugly fireplace crack. Fortunately, I made my purchase offer contingent on a satisfactory professional inspector's report, as smart home buyers should always do. If I had disapproved the report, I would have been entitled to refund of my good-faith earnest money deposit.
Incidentally, hiring a professional inspector is also a great way to avoid buying a "sick house." Don't hesitate to ask your professional inspector about moisture and mold, radon, asbestos, lead-based paint, formaldehyde, carbon monoxide and other negative influences that concern many home buyers.
HOW TO HANDLE "AS IS" HOME SALE
Recently I had the pleasure of visiting Sarasota and Tampa, Fla., where I observed many modestly priced fix-up homes with for-sale signs. As these are my favorite type of profitable home purchases, I was drooling at the profit opportunities.
Although I didn't have time to investigate, when a run-down home is offered for sale "as is" that means it is offered in its present condition and the seller won't pay for any repairs. However, in most states, sellers must disclose in writing the known defects of as is homes. Selling a home as is is not a way to avoid defect disclosures.
However, to avoid buying a bad house, prospective buyers of as is homes should condition their purchase offers on a satisfactory professional inspection report to be obtained by the buyer after the seller accepts the purchase offer.
IF BUYER DOESN'T ASK, SELLER USUALLY DOESN'T HAVE TO TELL
Except for statutory defect disclosure requirements, which vary by state law, if a buyer doesn't ask, the seller usually doesn't have to disclose. It's up to the home buyer to ask about special concerns.
For example, if the roof leaked, but the seller had a new roof installed a year ago and it hasn't leaked since then, the seller isn't required to disclose the roof previously leaked. However, if the seller knows there is toxic mold in the attic from the leak, the mold problem should be disclosed.
But some problems are of special concern to just a few buyers. Death on the premises is one of these potential problems that bother some buyers but not others.
To illustrate, a few years ago, a San Francisco real estate broker was sued by his home buyer for failing to disclose there had been a suicide in the house. The broker knew about the suicide, but didn't disclose it because the event had nothing to do with the house's structural condition or desirability. However, the buyer came from a country where suicide on a property is considered a bad omen. After learning about the suicide, the buyer sued the realty broker. The jury found the broker had no liability because the buyer didn't ask if there had been a recent death on the property.
CONCLUSION. The best way to avoid buying a "bad house" is for the buyer to ask lots of questions and make their purchase offer contingent on a satisfactory professional home inspection. Buyers should strive to learn everything possible about the home before purchase.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=161
Proving the seller knew of the undisclosed defect, which the buyer usually discovers shortly after the purchase, can be very difficult. Since it's human nature to look for someone to blame, a home buyer usually looks first to their seller, then to the realty agent, and finally to the professional inspector if one was involved.
But buying a truly bad house can usually be avoided by following the correct steps. Even brand-new houses have their defects. A local building inspector's approval is no guarantee. However, whether a new or resale house is involved, home buyers can minimize their chances of making a serious mistake.
HOME SELLER DISCLOSURES ARE NOT GUARANTEED ACCURATE. Many states now require home sellers to provide written disclosures of known defects. If the seller lied and failed to disclose a defect, which the buyer can prove the seller knew about, the seller is liable to the buyer for damages.
Incidentally, the easiest way to prove what the seller knew is usually to ask the neighbors. They often know as much about a neighboring house as the seller knew.
For example, shortly after I bought my current home, one of my neighbors came over to get acquainted. After a few pleasantries, he said, "I suppose the sellers told you about when that hill behind your house slid. There must have been at least three feet of mud against the house."
When I replied that the sellers hadn't said a word about the hill slide against my house, he quickly added something about how all the new drainage toward the street probably took care of the problem.
That was 26 years ago. Every time there's a heavy rain, I look at the steep hill behind my house and wonder whether it will slide again. Perhaps it's a good thing the seller didn't disclose the slide, which was apparently corrected properly, because otherwise I might not have purchased my otherwise very desirable home.
HOME BUYER'S FIRST DEFENSE AGAINST BUYING BAD HOUSE
Today's smartest home sellers, before putting their homes on the market for sale, obtain professional home inspection reports. If any serious defects are revealed, sellers should have them corrected so they don't become detriments to a successful home sale.
The best realty agents recommend home sellers also have customary or required inspections completed before marketing the home, such as for termites, energy efficiency, well-water quality, septic system, radon, and building code compliance. Savvy home sellers then have any defects corrected to avoid later problems.
However, the home buyer's first line of defense against buying a bad house is to hire his or her own professional home inspector in addition to the required or customary specialized inspections. To avoid wasting money, the buyer's professional inspection should be completed after the seller accepts the buyer's purchase offer.
Before hiring a professional home inspector, buyers should check the inspector's credentials. Be wary of an inspector recommended by the realty agent. The inspector might be known as "easy" because realty agents don't want to recommend a tough "deal killer" inspector.
The cost of a professional home inspection should be around $300. That's cheap because a typical inspection requires at least two hours, plus time to write the report. Smart home buyers and their realty agents accompany their professional inspectors to discuss any problems discovered.
Although I've used this example many times, it's worth repeating. Several years ago, I looked at a run-down house that had a bad fireplace crack. Fearing the entire fireplace needed expensive replacement, I made my purchase offer contingent on a satisfactory professional inspection of the entire house. When I accompanied my inspector, I asked him to check the chimney especially close. After inspecting it completely, he reported the chimney was fine and the crack could be repaired with special fireplace mortar cement for about $150.
Later, I learned many prospective buyers rejected that house because of the ugly fireplace crack. Fortunately, I made my purchase offer contingent on a satisfactory professional inspector's report, as smart home buyers should always do. If I had disapproved the report, I would have been entitled to refund of my good-faith earnest money deposit.
Incidentally, hiring a professional inspector is also a great way to avoid buying a "sick house." Don't hesitate to ask your professional inspector about moisture and mold, radon, asbestos, lead-based paint, formaldehyde, carbon monoxide and other negative influences that concern many home buyers.
HOW TO HANDLE "AS IS" HOME SALE
Recently I had the pleasure of visiting Sarasota and Tampa, Fla., where I observed many modestly priced fix-up homes with for-sale signs. As these are my favorite type of profitable home purchases, I was drooling at the profit opportunities.
Although I didn't have time to investigate, when a run-down home is offered for sale "as is" that means it is offered in its present condition and the seller won't pay for any repairs. However, in most states, sellers must disclose in writing the known defects of as is homes. Selling a home as is is not a way to avoid defect disclosures.
However, to avoid buying a bad house, prospective buyers of as is homes should condition their purchase offers on a satisfactory professional inspection report to be obtained by the buyer after the seller accepts the purchase offer.
IF BUYER DOESN'T ASK, SELLER USUALLY DOESN'T HAVE TO TELL
Except for statutory defect disclosure requirements, which vary by state law, if a buyer doesn't ask, the seller usually doesn't have to disclose. It's up to the home buyer to ask about special concerns.
For example, if the roof leaked, but the seller had a new roof installed a year ago and it hasn't leaked since then, the seller isn't required to disclose the roof previously leaked. However, if the seller knows there is toxic mold in the attic from the leak, the mold problem should be disclosed.
But some problems are of special concern to just a few buyers. Death on the premises is one of these potential problems that bother some buyers but not others.
To illustrate, a few years ago, a San Francisco real estate broker was sued by his home buyer for failing to disclose there had been a suicide in the house. The broker knew about the suicide, but didn't disclose it because the event had nothing to do with the house's structural condition or desirability. However, the buyer came from a country where suicide on a property is considered a bad omen. After learning about the suicide, the buyer sued the realty broker. The jury found the broker had no liability because the buyer didn't ask if there had been a recent death on the property.
CONCLUSION. The best way to avoid buying a "bad house" is for the buyer to ask lots of questions and make their purchase offer contingent on a satisfactory professional home inspection. Buyers should strive to learn everything possible about the home before purchase.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=161
How to buy profitable real estate
Are you the adventurous type of home buyer who wants to make a profitable purchase? Or are you looking for a near-perfect "model home" acquisition where all you have to do is turn the key in the front door and move in?
If you are the adventurous type, as I am, please read on. But if you want to buy a model home in perfect condition and are willing to pay top dollar, you're wasting time reading further.
Just a few days ago, I received an e-mail from a homeowner who purchased in December 2002. He spent three months fixing up the home and moved in during March 2003. He reports his home has substantially appreciated in market value, presumably due to the profitable improvements he made.
Now he wants to know how soon he can sell and claim his tax-free principal residence sale profits up to $250,000. The answer is he must wait until March 2005 to meet the 24-month ownership and occupancy test of Internal Revenue Code 121.
It sounds like that buyer bought a profitable home with the right things wrong. You can accomplish the same result.
WHAT ARE "THE RIGHT THINGS WRONG" WITH A HOUSE? If you want to profit from your home purchase by more than the current average 5 percent annual market value appreciation rate in most communities, you'll need to buy a less-than-perfect home.
Here are five keys to unlock a profitable home purchase:
1—BUY A SOUND, WELL-LOCATED HOME WITHOUT MAJOR DEFECTS. Most home buyers aren't looking for major fix-up projects. But minor cosmetic repairs are the most profitable way to enhance a home's market value.
Presuming a house is in a decent location and doesn't require major renovation, it is the perfect profit candidate. Paint is the most profitable cosmetic improvement of all. Spending $1 for paint often produces $5 or more in increased market value.
Other examples of profitable cosmetic improvements include new carpets and hardwood floor refinishing, fresh landscaping, new light fixtures, and updated window coverings.
But try to avoid buying a home that needs unprofitable structural improvements, such as a new roof or foundation repairs.
For example, if a house needs a new roof, which will be costly but will add little or no market value, that is an unprofitable but necessary expenditure. More examples are foundation repairs, new plumbing, or wiring updates, which are expensive but add zero market value.
2—ASK HOW MUCH THE SELLER PAID FOR THE HOME. This might seem like an irrelevant question for a home buyer to ask, but it is extremely important.
If the seller has owned the home for many years, he or she probably paid a low purchase price compared to today's market value. That means the seller has lots of room to negotiate on price and terms.
However, if the home seller recently purchased for a price close to today's market value, that seller doesn't have much room to negotiate on the sales price, considering the condition of the residence.
3—PURCHASE BELOW MARKET VALUE TO COMPENSATE FOR THE OBVIOUS NEED FOR REPAIRS. Some naïve home sellers think their home, which needs cosmetic repairs, should sell for just as much as the similar home down the street, which was recently sold in excellent condition.
But savvy home buyers negotiate hard, emphasizing to sellers and their listing agents that the market for a home needing fix-up work is very limited.
Most prospective buyers seek near-perfect homes but the few buyers of fix-up homes must be rewarded in the form of a lower purchase price because they must encounter the work of fixing up the house.
4—BUY FROM A HIGHLY MOTIVATED HOME SELLER. Closely related to the previous key to unlocking a profitable home purchase is determining why the seller is really selling.
If the seller is just testing the market and isn't anxious to move, negotiating a bargain purchase price to compensate for "the right things wrong" can be very difficult.
However, if the seller is highly motivated, such as moving to a retirement home, a job transfer, family situation, or economic problem such as a pending foreclosure, the seller is unlikely to hold out for the last dollar of profit.
5—LOOK FOR AFFORDABLE FINANCING. As home mortgage interest rates slowly escalate, it pays to look for affordable mortgage financing. The best source, by far, is the home seller.
Retirees who need extra retirement income are, by far, the best source of seller financing. To illustrate, if you discover the reason for the seller's sale is to move to a retirement home, or an assisted living center, that seller probably needs extra income.
If he or she receives an all-cash sale, the best that seller can expect to receive today is 3 percent or 4 percent interest at a bank. But if you offer that seller 5 percent or 6 percent interest, secured by a mortgage on the home they know so well, you can obtain bargain financing and also help the seller.
I've learned from buying many houses with seller financing, the key to success is to include in the purchase offer the exact mortgage payment the seller will receive each month, such as $1,893.45. The interest rate alone is not sufficient to gain acceptance.
DON'T BUY A HOME NEEDING AN "EXTREME MAKEOVER." One of my favorite weekly TV programs offers an extreme home makeover to a lucky homeowner. After viewers learn why the home needs major renovation, the experts quickly move in and perform major miracles within a week or so to create a practically new home for the happy homeowner.
But that's not the real world. Having renovated many fix-up homes that needed profitable improvements, I know it takes weeks, sometimes months, to renovate a house.
However, the results of acquiring a house with "the right things wrong" can be extremely profitable. If you want to profit from your next home purchase, follow the five keys above and buy a house with profit opportunities.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=180
If you are the adventurous type, as I am, please read on. But if you want to buy a model home in perfect condition and are willing to pay top dollar, you're wasting time reading further.
Just a few days ago, I received an e-mail from a homeowner who purchased in December 2002. He spent three months fixing up the home and moved in during March 2003. He reports his home has substantially appreciated in market value, presumably due to the profitable improvements he made.
Now he wants to know how soon he can sell and claim his tax-free principal residence sale profits up to $250,000. The answer is he must wait until March 2005 to meet the 24-month ownership and occupancy test of Internal Revenue Code 121.
It sounds like that buyer bought a profitable home with the right things wrong. You can accomplish the same result.
WHAT ARE "THE RIGHT THINGS WRONG" WITH A HOUSE? If you want to profit from your home purchase by more than the current average 5 percent annual market value appreciation rate in most communities, you'll need to buy a less-than-perfect home.
Here are five keys to unlock a profitable home purchase:
1—BUY A SOUND, WELL-LOCATED HOME WITHOUT MAJOR DEFECTS. Most home buyers aren't looking for major fix-up projects. But minor cosmetic repairs are the most profitable way to enhance a home's market value.
Presuming a house is in a decent location and doesn't require major renovation, it is the perfect profit candidate. Paint is the most profitable cosmetic improvement of all. Spending $1 for paint often produces $5 or more in increased market value.
Other examples of profitable cosmetic improvements include new carpets and hardwood floor refinishing, fresh landscaping, new light fixtures, and updated window coverings.
But try to avoid buying a home that needs unprofitable structural improvements, such as a new roof or foundation repairs.
For example, if a house needs a new roof, which will be costly but will add little or no market value, that is an unprofitable but necessary expenditure. More examples are foundation repairs, new plumbing, or wiring updates, which are expensive but add zero market value.
2—ASK HOW MUCH THE SELLER PAID FOR THE HOME. This might seem like an irrelevant question for a home buyer to ask, but it is extremely important.
If the seller has owned the home for many years, he or she probably paid a low purchase price compared to today's market value. That means the seller has lots of room to negotiate on price and terms.
However, if the home seller recently purchased for a price close to today's market value, that seller doesn't have much room to negotiate on the sales price, considering the condition of the residence.
3—PURCHASE BELOW MARKET VALUE TO COMPENSATE FOR THE OBVIOUS NEED FOR REPAIRS. Some naïve home sellers think their home, which needs cosmetic repairs, should sell for just as much as the similar home down the street, which was recently sold in excellent condition.
But savvy home buyers negotiate hard, emphasizing to sellers and their listing agents that the market for a home needing fix-up work is very limited.
Most prospective buyers seek near-perfect homes but the few buyers of fix-up homes must be rewarded in the form of a lower purchase price because they must encounter the work of fixing up the house.
4—BUY FROM A HIGHLY MOTIVATED HOME SELLER. Closely related to the previous key to unlocking a profitable home purchase is determining why the seller is really selling.
If the seller is just testing the market and isn't anxious to move, negotiating a bargain purchase price to compensate for "the right things wrong" can be very difficult.
However, if the seller is highly motivated, such as moving to a retirement home, a job transfer, family situation, or economic problem such as a pending foreclosure, the seller is unlikely to hold out for the last dollar of profit.
5—LOOK FOR AFFORDABLE FINANCING. As home mortgage interest rates slowly escalate, it pays to look for affordable mortgage financing. The best source, by far, is the home seller.
Retirees who need extra retirement income are, by far, the best source of seller financing. To illustrate, if you discover the reason for the seller's sale is to move to a retirement home, or an assisted living center, that seller probably needs extra income.
If he or she receives an all-cash sale, the best that seller can expect to receive today is 3 percent or 4 percent interest at a bank. But if you offer that seller 5 percent or 6 percent interest, secured by a mortgage on the home they know so well, you can obtain bargain financing and also help the seller.
I've learned from buying many houses with seller financing, the key to success is to include in the purchase offer the exact mortgage payment the seller will receive each month, such as $1,893.45. The interest rate alone is not sufficient to gain acceptance.
DON'T BUY A HOME NEEDING AN "EXTREME MAKEOVER." One of my favorite weekly TV programs offers an extreme home makeover to a lucky homeowner. After viewers learn why the home needs major renovation, the experts quickly move in and perform major miracles within a week or so to create a practically new home for the happy homeowner.
But that's not the real world. Having renovated many fix-up homes that needed profitable improvements, I know it takes weeks, sometimes months, to renovate a house.
However, the results of acquiring a house with "the right things wrong" can be extremely profitable. If you want to profit from your next home purchase, follow the five keys above and buy a house with profit opportunities.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=180
How To Plan Custom Home and Cut The Cost
Last spring I participated in an "Ask the Experts" panel in Sarasota, Fla. Afterwards, a woman in the audience asked me to review her plans for a new beach house overlooking the Gulf of Mexico.
Designed by her builder/architect, the house was $400,000 over budget, and she wanted some suggestions for where to cut back.
As we started talking, I quickly realized that her apprehension was not just about the budget. As she described her lifestyle and her family, it was clear that much of the house in its current iteration did not make sense for her household.
Though our discussion was directed towards a specific design in Florida, we touched on many issues that confront a family planning a new house.
For example, how do you address the timeline—your family's needs now, 10 years from now when your kids are older, and 20 years from now when you're older? How much flexibility and multi-purpose "swing space" do you need?
What about resale? The day will come, but if it's 20 years or more into the future, how much or how little should it affect the look or the floor plan of the house you're building now? How accurately can anyone, even a marketing genius, predict what home buyers will want in the year 2023? When you have a great location and a compelling view, as this family did, is resale even an issue?
Can the design incorporate solutions for differing personal styles that cause conflict? Say you are messy and your partner is not?
As your architect or builder draws up the design for your new house, how much should you challenge his or her work?
Going back to the Florida homeowner's apprehensions, her first concern was the bedroom arrangement. The house had three bedrooms on a second floor, and a sprawling master suite on the first floor below. But her three kids were still young and waking up at night, and she wanted to sleep nearby.
Her hesitation to do just that was resale. In Florida where retirees form a significant portion of the buying public, first-floor master suites are the rule, and her builder/architect was pushing for one. But nothing is inviolate, even in real estate. The unthinkable is always thinkable. And, view and location will usually trump many otherwise perceived shortcomings. When your house sits on a beach overlooking the Gulf of Mexico, resale buyers will forgive a lot.
The obvious solution was to put resale concerns aside and move a scaled down master suite upstairs with the kids. This was not as radical a change as one might suspect. The second floor already had a large "bonus room" because the owners decided they didn't want a two-story space in the family room below.
Scaling back the sprawling first floor master suite to mere bedroom status would have some advantages. Using it as a home office with a sofa bed would accommodate guests but discourage long visits (a hazard of living on the beach in Florida I understand). And the owners, who were looking for ways to cut their cost, could excise the separate home office.
In 10 years when their kids will be teenagers, the parents could move downstairs, or maybe not. Many teens are uncommunicative and most conversations with parents are fleeting, occurring on the fly. If the bedrooms are in close proximity, the chances of a parent having a fleeting conversation increase dramatically.
In 20 or 25 years the parents might be ready to move downstairs and use the first floor bedroom themselves. And, down the line two master bedrooms could be a selling point if intergenerational households continue to be a growing trend.
The homeowner also had some concerns about the main living area of the house. Her husband wanted a place to entertain where toys and pets would not be under foot, so her builder/architect had included living and dining rooms on the non-beach side of the house. Nothing unusual, but it did not seem appropriate for this house because both guests and family members would gravitate to the same spot—the back of the house with its panoramic views of the water and beach.
In our brief conversation, we didn't reach any conclusions. But as I thought about it on my way home, it seemed that a more sensible solution, and one that was more in keeping with the homeowner's desire for less formality, would be to use the same space for both family activities and entertaining and build in adequate storage—plenty of cabinets and one or two good sized closets—so that toys could be scooped up and put away before the guests arrived. The storage would still be useful when the kids are older because even as teenagers they will be bringing stuff into the family room area.
Another advantage of this scheme is that the parents could jettison the formal living and dining rooms in their efforts to cut costs.
Moving beyond the overall design scheme to more specific rooms, the generously sized kitchen of this beach house as shown in the plans would be impossible to work in. The stove and sink were at opposite ends of the room, about 15 feet apart. To prepare a meal, you'd need roller blades. In a builder's model, such a shortcoming in the kitchen will be immediately apparent if you pantomime preparing a meal. When there's only a floor plan to study, you have to imagine how you would prepare a meal, but it's an important mental exercise. No matter how great the cabinets and counters look, they'll never offset a poor layout, and you don't want to make this disheartening discovery after you move in.
And then there is the personal style issue. The homeowner said that neatness was a source of tension, and she was the messy one. A few refinements here and there would definitely help keep her new house more orderly. We didn't discuss specifics, but these suggestions could be incorporated into any house.
An entry area designed to siphon off all the stuff that comes into the house before it gets strewn around makes a big difference. Hooks, a large cubby for each household member, and large closets keep jackets, coats, backpacks, umbrellas, boots, sports equipment, briefcases and laptops where they can be found in the morning rush. If the space is big enough, an alcove with a place to sort mail and a small desk and filing cabinet for household records reduces clutter by confining the mail and bill paying activities to one spot.
A second dishwasher can often reduce upsets over the condition of the kitchen. In many households, dishes pile up in the sink and on the counters because the dishwasher is still full of clean dishes from the day before. With two dishwashers, dirty ones can be loaded as they are used, and the clean ones removed during meal preparation. When entertaining, a second dishwasher is also handy.
A huge bedroom and sitting area for the master suite sounds good and looks luxurious, but a smaller bedroom area without the sitting alcove and a separate dressing area is easier to keep neat. There's no a trail of clothes worn the day before and less area for clutter to accumulate.
My last piece of advice for the Florida homeowner and anyone else planning a new house: the designer is supposed to be the expert in houses, but you're going to live there. If the design runs counter to your perceptions of what you need, don't be too intimidated to speak up.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=149
Designed by her builder/architect, the house was $400,000 over budget, and she wanted some suggestions for where to cut back.
As we started talking, I quickly realized that her apprehension was not just about the budget. As she described her lifestyle and her family, it was clear that much of the house in its current iteration did not make sense for her household.
Though our discussion was directed towards a specific design in Florida, we touched on many issues that confront a family planning a new house.
For example, how do you address the timeline—your family's needs now, 10 years from now when your kids are older, and 20 years from now when you're older? How much flexibility and multi-purpose "swing space" do you need?
What about resale? The day will come, but if it's 20 years or more into the future, how much or how little should it affect the look or the floor plan of the house you're building now? How accurately can anyone, even a marketing genius, predict what home buyers will want in the year 2023? When you have a great location and a compelling view, as this family did, is resale even an issue?
Can the design incorporate solutions for differing personal styles that cause conflict? Say you are messy and your partner is not?
As your architect or builder draws up the design for your new house, how much should you challenge his or her work?
Going back to the Florida homeowner's apprehensions, her first concern was the bedroom arrangement. The house had three bedrooms on a second floor, and a sprawling master suite on the first floor below. But her three kids were still young and waking up at night, and she wanted to sleep nearby.
Her hesitation to do just that was resale. In Florida where retirees form a significant portion of the buying public, first-floor master suites are the rule, and her builder/architect was pushing for one. But nothing is inviolate, even in real estate. The unthinkable is always thinkable. And, view and location will usually trump many otherwise perceived shortcomings. When your house sits on a beach overlooking the Gulf of Mexico, resale buyers will forgive a lot.
The obvious solution was to put resale concerns aside and move a scaled down master suite upstairs with the kids. This was not as radical a change as one might suspect. The second floor already had a large "bonus room" because the owners decided they didn't want a two-story space in the family room below.
Scaling back the sprawling first floor master suite to mere bedroom status would have some advantages. Using it as a home office with a sofa bed would accommodate guests but discourage long visits (a hazard of living on the beach in Florida I understand). And the owners, who were looking for ways to cut their cost, could excise the separate home office.
In 10 years when their kids will be teenagers, the parents could move downstairs, or maybe not. Many teens are uncommunicative and most conversations with parents are fleeting, occurring on the fly. If the bedrooms are in close proximity, the chances of a parent having a fleeting conversation increase dramatically.
In 20 or 25 years the parents might be ready to move downstairs and use the first floor bedroom themselves. And, down the line two master bedrooms could be a selling point if intergenerational households continue to be a growing trend.
The homeowner also had some concerns about the main living area of the house. Her husband wanted a place to entertain where toys and pets would not be under foot, so her builder/architect had included living and dining rooms on the non-beach side of the house. Nothing unusual, but it did not seem appropriate for this house because both guests and family members would gravitate to the same spot—the back of the house with its panoramic views of the water and beach.
In our brief conversation, we didn't reach any conclusions. But as I thought about it on my way home, it seemed that a more sensible solution, and one that was more in keeping with the homeowner's desire for less formality, would be to use the same space for both family activities and entertaining and build in adequate storage—plenty of cabinets and one or two good sized closets—so that toys could be scooped up and put away before the guests arrived. The storage would still be useful when the kids are older because even as teenagers they will be bringing stuff into the family room area.
Another advantage of this scheme is that the parents could jettison the formal living and dining rooms in their efforts to cut costs.
Moving beyond the overall design scheme to more specific rooms, the generously sized kitchen of this beach house as shown in the plans would be impossible to work in. The stove and sink were at opposite ends of the room, about 15 feet apart. To prepare a meal, you'd need roller blades. In a builder's model, such a shortcoming in the kitchen will be immediately apparent if you pantomime preparing a meal. When there's only a floor plan to study, you have to imagine how you would prepare a meal, but it's an important mental exercise. No matter how great the cabinets and counters look, they'll never offset a poor layout, and you don't want to make this disheartening discovery after you move in.
And then there is the personal style issue. The homeowner said that neatness was a source of tension, and she was the messy one. A few refinements here and there would definitely help keep her new house more orderly. We didn't discuss specifics, but these suggestions could be incorporated into any house.
An entry area designed to siphon off all the stuff that comes into the house before it gets strewn around makes a big difference. Hooks, a large cubby for each household member, and large closets keep jackets, coats, backpacks, umbrellas, boots, sports equipment, briefcases and laptops where they can be found in the morning rush. If the space is big enough, an alcove with a place to sort mail and a small desk and filing cabinet for household records reduces clutter by confining the mail and bill paying activities to one spot.
A second dishwasher can often reduce upsets over the condition of the kitchen. In many households, dishes pile up in the sink and on the counters because the dishwasher is still full of clean dishes from the day before. With two dishwashers, dirty ones can be loaded as they are used, and the clean ones removed during meal preparation. When entertaining, a second dishwasher is also handy.
A huge bedroom and sitting area for the master suite sounds good and looks luxurious, but a smaller bedroom area without the sitting alcove and a separate dressing area is easier to keep neat. There's no a trail of clothes worn the day before and less area for clutter to accumulate.
My last piece of advice for the Florida homeowner and anyone else planning a new house: the designer is supposed to be the expert in houses, but you're going to live there. If the design runs counter to your perceptions of what you need, don't be too intimidated to speak up.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=149
How To Save Money On Your New Home
Do you clip food coupons from your Sunday newspaper? Or do you take advantage of sales at your favorite department store? Then you will certainly appreciate BIG savings on the purchase of a new home!
Imagine clipping a coupon for a free swimming pool package; or $500 towards options; or a free washer or dryer. These and many more buying incentives are available online – and now you can easily find them on one web site.
When you visit HomePromotions.com you’ll find tons of great opportunities to save on a new home in your area. There are even special savings offers on homes that have just been built and are ready for immediate occupancy.
More and more builders are placing their Internet buying incentives on homepromotions.com. Why? Homes sold as a result of Internet advertising (which costs much, much less than newspaper advertising) represent much more profitable sales for the builder. So it makes sense for builders to offer incentives to Internet home buyers. It’s a good deal for them and a great deal for you!
Just visit HomePromotions.com and print out any of the coupons. Make sure to present the coupon on your first visit to the community. The builders will not accept them after the first visit since the coupons are intended to reward you for visiting the community as a result of finding them on the Internet.
Happy home hunting and enjoy your savings!
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=218
How to sell home without real estate agent
Have you noticed when you are on an airplane, the stranger sitting next to you will often reveal secrets he probably wouldn't tell his closest friends?
For example, a few weeks ago I was on four-hour flight from Chicago to San Francisco. I would name the airline, but the minimal service doesn't deserve praise. After the usual "what business are you in" pleasantries with my seatmate, when the young man sitting next to me learned I write about real estate, he had to tell me how he and his wife sold their house "for sale by owner" without a real estate agent.
He said his wife read several "how to sell your home without a broker" books so they felt reasonably confident. They even paid a local realty broker $985 to list their home in the local MLS (multiple listing service) so they would get exposure to buyer's agents.
My new friend proudly told me as part of the MLS service, their listing was automatically posted on the Internet at www.realtor.com. Because more than 50 percent of today's home buyers begin their quest on the Internet, he reported the Internet produced several interested buyers who phoned.
In addition, my seatmate and his wife paid to list their home at www.forsalebyowner.com, a Web site for do-it-yourself home sellers. Apparently, that didn't produce any results.
Every weekend for five weeks, my new friend continued, he ran expensive newspaper classified ads in the city newspaper and several local newspapers to advertise their Saturday and Sunday open houses.
One purchase offer eventually materialized. It was made by a buyer represented by a "buyer's agent" who insisted upon receiving a 3 percent sales commission (half of a typical home sales commission).
Then he told me after the sales contract was signed with a 3 percent commission, the buyer began a process of further price negotiation downward as the buyer demanded repair credits for alleged defects discovered by the buyer's professional home inspector.
Finally, I asked, "Would you sell without a listing agent again and how much sales commission did you save?" "Never again" was his immediate response. "I figure we saved less than $10,000 by selling without an agent," he said. "But it was a nightmare waiting to learn if the sale would close or if the buyer would keep negotiating more repair credits," my new friend added.
Then my seatmate revealed the key reason the home sale finally closed. "If it wasn't for the sharp buyer's agent who badly wanted his 3 percent sales commission, we would still be trying to sell our home," he revealed.
IF YOU WANT TO SELL YOUR HOME, DON'T MISS THE FALL SALES MARKET. Whether you want to sell your house or condo alone, without a listing agent, or you realize selling your major investment is not a do-it-yourself project and you need a professional agent, the fall season is a great time to sell a home. This is the second best time of year to sell a home (spring is the best time when the largest number of potential buyers are in the market).
But mortgage interest rates are still very affordable for home buyers. They realize interest rates might go up in the next few months and today is still a great time to buy a home. According to realty sales statistics, the home sales market is still almost as strong as it was a few months ago.
HOW TO DETERMINE IF YOU NEED A PROFESSIONAL HOME LISTING AGENT. I wish I had met my airline friend before he and his wife put their house on the market for sale. Although he thinks he saved about $10,000 sales commission, I'll bet he sold his home below market value because he didn't have a listing agent pricing the home correctly and looking out for his best interests.
Whether you are thinking of selling your home alone, or you realize you need professional help to market your home for top dollar, here are the questions to ask yourself:
1—HOW CAN I CORRECTLY SET THE ASKING PRICE FOR MY HOME? The easiest way to determine your home's market value is to invite at least three successful realty agents who sell homes in your vicinity to give you their listing presentations.
Even if you are thinking of selling "for sale by owner," the agents you interview won't mind. The reason is they know most "for sale by owner" sellers fail and, usually after 30 to 60 days, list with a professional agent, which is likely one of the agents interviewed.
Presuming your home is in tip-top condition to show to prospective listing agents, after each agent inspects your home, he or she will prepare a CMA (comparative market analysis). This form shows recent nearby sales (not asking) prices of homes like yours, the asking prices of current competitive listings, and even the asking prices of comparable neighborhood homes, which didn't sell.
Each agent you interview will then give you their opinion of the correct asking price and the probable actual sales price for your home. If you decide to list your home with one of the interviewed agents, before doing so be sure to phone their seller references to ask "Were you in any way unhappy with your listing agent and would you list a home with the same agent again?"
2—HOW CAN I EFFECTIVELY MARKET MY HOME ALONE? The next question to ask is how can you market your home without a professional agent. Of course, you will include placing newspaper classified ads, posting a "for sale by owner" lawn sign, and holding weekend open houses.
You might also want to pay to post your listing on one of the Internet "do it yourself" Web sites. Perhaps, like my airline seatmate, you might want to pay a local real estate broker to post your listing on the local MLS, which also gains access to the ultra-important www.realtor.com Web site where most home buyers today start their quest. Home sellers should bear in mind the MLS is the most effective sales tool.
3—HOW CAN I OBTAIN A LEGALLY-BINDING SALES CONTRACT AND COMPLY WITH HOME SALE THE DEFECT DISCLOSURE LAWS? If you are successful finding an interested buyer for your home, the next step is to obtain a legally-binding sales contract. If you are lucky, you know a real estate attorney who is on-call seven days a week and he or she will prepare a binding sales contract for you and the seller to sign before the seller changes their mind.
But that is highly unlikely. You might buy a printed sales form at a local stationery store. However, it probably doesn't contain all the important clauses in the forms used by professional agents.
In addition, are you up-to-date on the state-required disclosure laws, plus the other required disclosures such as for lead-based paint? Failure to provide proper defect disclosures can result in after-sale lawsuits.
4—CAN I HELP THE BUYER OBTAIN A MORTGAGE? Unless your buyer is Warren Buffett or Bill Gates, the buyer will probably need a mortgage. Can you help the buyer obtain a mortgage?
Will you be able to explain FHA, VA, PMI, and conventional adjustable or fixed-rate mortgages? Unless your buyer is already pre-approved in writing by an actual lender (not just pre-qualified by a mortgage broker), obtaining financing is a major home sale hurdle to overcome.
5—WHAT HOME SALE CONTRACT CONTINGENCY CLAUSES ARE NORMAL? Smart home buyers will insist on reasonable contingency clauses in the home sales contract, such as for a professional home inspection and mortgage financing.
If the buyer needs to sell his current home, he might insist on a contingency clause for the sale of his old residence. Are you willing to take your home off the market while the buyer tries to sell his home?
6—HOW WILL THE HOME SALE CLOSING DETAILS BE HANDLED? The final and most important home sale step is to get the sale successfully closed. This step is usually handled, depending on local custom, by an attorney, escrow, or title firm. The buyer's earnest money good faith deposit should be held by the same entity for the mutual protection of buyer and seller.
Who pays for the closing settlement costs? Which party customarily pays for the lender's and buyer's title insurance policies? Who pays the transfer taxes and recording fees? These are typical home sales closing expenses, which sellers should anticipate and provide for in the sales contract.
7—WILL THE BUYER EXPECT A PRICE REDUCTION IF NO REALTY SALES COMMISSION IS INVOLVED? Savvy home buyers understand when buying direct from a "for sale by owner" that the seller is saving the sales commission, typically 6 percent of the sales price. Buyers aren't dumb. They expect to share in that commission saving in the form of either a price reduction or seller credits at the closing.
Will you agree to discount the sales price if you don't have to pay a sales commission? This is an issue to anticipate in a do-it-yourself home sale.
CONCLUSION. Selling a home without a professional real estate agent is not easy. If it were, more than 80 percent of home sellers wouldn't hire professional agents to guide them through the maze. That's why, after 30 to 60 days of failure, most "for sale by owner" home sellers list their homes with a professional agents, usually one of the agents they interviewed when contemplating the sale of their most valuable asset.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=218
For example, a few weeks ago I was on four-hour flight from Chicago to San Francisco. I would name the airline, but the minimal service doesn't deserve praise. After the usual "what business are you in" pleasantries with my seatmate, when the young man sitting next to me learned I write about real estate, he had to tell me how he and his wife sold their house "for sale by owner" without a real estate agent.
He said his wife read several "how to sell your home without a broker" books so they felt reasonably confident. They even paid a local realty broker $985 to list their home in the local MLS (multiple listing service) so they would get exposure to buyer's agents.
My new friend proudly told me as part of the MLS service, their listing was automatically posted on the Internet at www.realtor.com. Because more than 50 percent of today's home buyers begin their quest on the Internet, he reported the Internet produced several interested buyers who phoned.
In addition, my seatmate and his wife paid to list their home at www.forsalebyowner.com, a Web site for do-it-yourself home sellers. Apparently, that didn't produce any results.
Every weekend for five weeks, my new friend continued, he ran expensive newspaper classified ads in the city newspaper and several local newspapers to advertise their Saturday and Sunday open houses.
One purchase offer eventually materialized. It was made by a buyer represented by a "buyer's agent" who insisted upon receiving a 3 percent sales commission (half of a typical home sales commission).
Then he told me after the sales contract was signed with a 3 percent commission, the buyer began a process of further price negotiation downward as the buyer demanded repair credits for alleged defects discovered by the buyer's professional home inspector.
Finally, I asked, "Would you sell without a listing agent again and how much sales commission did you save?" "Never again" was his immediate response. "I figure we saved less than $10,000 by selling without an agent," he said. "But it was a nightmare waiting to learn if the sale would close or if the buyer would keep negotiating more repair credits," my new friend added.
Then my seatmate revealed the key reason the home sale finally closed. "If it wasn't for the sharp buyer's agent who badly wanted his 3 percent sales commission, we would still be trying to sell our home," he revealed.
IF YOU WANT TO SELL YOUR HOME, DON'T MISS THE FALL SALES MARKET. Whether you want to sell your house or condo alone, without a listing agent, or you realize selling your major investment is not a do-it-yourself project and you need a professional agent, the fall season is a great time to sell a home. This is the second best time of year to sell a home (spring is the best time when the largest number of potential buyers are in the market).
But mortgage interest rates are still very affordable for home buyers. They realize interest rates might go up in the next few months and today is still a great time to buy a home. According to realty sales statistics, the home sales market is still almost as strong as it was a few months ago.
HOW TO DETERMINE IF YOU NEED A PROFESSIONAL HOME LISTING AGENT. I wish I had met my airline friend before he and his wife put their house on the market for sale. Although he thinks he saved about $10,000 sales commission, I'll bet he sold his home below market value because he didn't have a listing agent pricing the home correctly and looking out for his best interests.
Whether you are thinking of selling your home alone, or you realize you need professional help to market your home for top dollar, here are the questions to ask yourself:
1—HOW CAN I CORRECTLY SET THE ASKING PRICE FOR MY HOME? The easiest way to determine your home's market value is to invite at least three successful realty agents who sell homes in your vicinity to give you their listing presentations.
Even if you are thinking of selling "for sale by owner," the agents you interview won't mind. The reason is they know most "for sale by owner" sellers fail and, usually after 30 to 60 days, list with a professional agent, which is likely one of the agents interviewed.
Presuming your home is in tip-top condition to show to prospective listing agents, after each agent inspects your home, he or she will prepare a CMA (comparative market analysis). This form shows recent nearby sales (not asking) prices of homes like yours, the asking prices of current competitive listings, and even the asking prices of comparable neighborhood homes, which didn't sell.
Each agent you interview will then give you their opinion of the correct asking price and the probable actual sales price for your home. If you decide to list your home with one of the interviewed agents, before doing so be sure to phone their seller references to ask "Were you in any way unhappy with your listing agent and would you list a home with the same agent again?"
2—HOW CAN I EFFECTIVELY MARKET MY HOME ALONE? The next question to ask is how can you market your home without a professional agent. Of course, you will include placing newspaper classified ads, posting a "for sale by owner" lawn sign, and holding weekend open houses.
You might also want to pay to post your listing on one of the Internet "do it yourself" Web sites. Perhaps, like my airline seatmate, you might want to pay a local real estate broker to post your listing on the local MLS, which also gains access to the ultra-important www.realtor.com Web site where most home buyers today start their quest. Home sellers should bear in mind the MLS is the most effective sales tool.
3—HOW CAN I OBTAIN A LEGALLY-BINDING SALES CONTRACT AND COMPLY WITH HOME SALE THE DEFECT DISCLOSURE LAWS? If you are successful finding an interested buyer for your home, the next step is to obtain a legally-binding sales contract. If you are lucky, you know a real estate attorney who is on-call seven days a week and he or she will prepare a binding sales contract for you and the seller to sign before the seller changes their mind.
But that is highly unlikely. You might buy a printed sales form at a local stationery store. However, it probably doesn't contain all the important clauses in the forms used by professional agents.
In addition, are you up-to-date on the state-required disclosure laws, plus the other required disclosures such as for lead-based paint? Failure to provide proper defect disclosures can result in after-sale lawsuits.
4—CAN I HELP THE BUYER OBTAIN A MORTGAGE? Unless your buyer is Warren Buffett or Bill Gates, the buyer will probably need a mortgage. Can you help the buyer obtain a mortgage?
Will you be able to explain FHA, VA, PMI, and conventional adjustable or fixed-rate mortgages? Unless your buyer is already pre-approved in writing by an actual lender (not just pre-qualified by a mortgage broker), obtaining financing is a major home sale hurdle to overcome.
5—WHAT HOME SALE CONTRACT CONTINGENCY CLAUSES ARE NORMAL? Smart home buyers will insist on reasonable contingency clauses in the home sales contract, such as for a professional home inspection and mortgage financing.
If the buyer needs to sell his current home, he might insist on a contingency clause for the sale of his old residence. Are you willing to take your home off the market while the buyer tries to sell his home?
6—HOW WILL THE HOME SALE CLOSING DETAILS BE HANDLED? The final and most important home sale step is to get the sale successfully closed. This step is usually handled, depending on local custom, by an attorney, escrow, or title firm. The buyer's earnest money good faith deposit should be held by the same entity for the mutual protection of buyer and seller.
Who pays for the closing settlement costs? Which party customarily pays for the lender's and buyer's title insurance policies? Who pays the transfer taxes and recording fees? These are typical home sales closing expenses, which sellers should anticipate and provide for in the sales contract.
7—WILL THE BUYER EXPECT A PRICE REDUCTION IF NO REALTY SALES COMMISSION IS INVOLVED? Savvy home buyers understand when buying direct from a "for sale by owner" that the seller is saving the sales commission, typically 6 percent of the sales price. Buyers aren't dumb. They expect to share in that commission saving in the form of either a price reduction or seller credits at the closing.
Will you agree to discount the sales price if you don't have to pay a sales commission? This is an issue to anticipate in a do-it-yourself home sale.
CONCLUSION. Selling a home without a professional real estate agent is not easy. If it were, more than 80 percent of home sellers wouldn't hire professional agents to guide them through the maze. That's why, after 30 to 60 days of failure, most "for sale by owner" home sellers list their homes with a professional agents, usually one of the agents they interviewed when contemplating the sale of their most valuable asset.
http://www.americanhomeguides.com/homebuying_tips_view.php?RowID=218
Subscribe to:
Posts (Atom)