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You are viewing category: Talking Points
Posted: Thursday, May 17th, 2012 @ 7:59 pm by mick@sfresidence.com
Filed under: Talking Points
- Most real estate professionals agree that the first offer sellers receive on their home is usually the best offer. Of course, this isn’t true in every situation, but there are reasons why agents believe this, and why they often suggest that sellers either accept the first offer or at least give it serious consideration.
- Buyers in the real estate market usually start off slowly by going to a few open houses, checking out prices online, and doing their homework. They may even make first contact with an agent to assess what the agent thinks about the state of the local market.
- From there, the buyers begin to get more serious. They may start going on private, second or third showings with their agent and become a “real dealer” – a buyer who is completely in the game, approved for a mortgage, and actively engaged with their mortgage lender or broker. Real dealers are often the ones who write the first offer a seller receives on a property, and that’s why their offers should be taken seriously.
- An offer from a real dealer may not come in within days of a property going on the market. But it will come from an informed buyer who is knowledgeable of the market. If a home is priced too high and a month or two goes by without an offer, it will be the real deal buyer who has been watching the listing and waiting to see how the market responds. If the buyer notes that there aren’t any offers on it and there is no activity after some time, the real dealer will come in with a low offer, which actually may be a good offer, on the seller’s home.
- While sellers may see a low offer as “insulting” and coming out of left field, the seller should still look at this offer closely and investigate who the buyer is, how long they have been looking, ask whether they’ve written other offers nearby, determine if they are working with a good local agent, and ask if the offer comes with a pre-approval letter.
- As hard as it may be for a seller to contemplate an offer much lower than their asking price, serious sellers should look at all the signs leading up to it and consider if this is the offer to accept.
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Posted: Thursday, May 10th, 2012 @ 8:18 pm by mick@sfresidence.com
Filed under: Talking Points
- It has become standard practice for lenders to check borrowers’ credit scores in the weeks leading up to the closing, sometimes even the day prior to closing.
- Large purchases can use up a considerable proportion of a borrower’s total credit limit, which can lead to a drop in the borrower’s FICO score and possibly change the terms of the loan.
- Home buyers waiting for a mortgage loan to fund are advised to be conservative when it comes to buying new furniture, appliances, or the like for the house they are purchasing.
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Posted: Thursday, May 3rd, 2012 @ 8:38 pm by mick@sfresidence.com
Filed under: Talking Points
- Home sellers looking for additional incentives to attract home buyers may want to talk to their REALTOR® about offering cash incentives. No matter how perfect a house may seem to the seller, the new owners will want to change something about it. It could e the paint, landscaping, or event the front door.
- Acknowledging this upfront and offering a cash incentive to pay for those improvements could make the house stand out from the competition.
- Cash incentives also give sellers the upper hand because they’re setting the amount of the incentive – say $1,000 or so – and can work that into the house’s asking price to recoup the outlay.
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Posted: Monday, April 30th, 2012 @ 9:01 pm by mick@sfresidence.com
Filed under: Talking Points
- California’s housing inventory declined in March, with the Unsold Inventory Index for existing, single-family detached homes decreasing to 4.1 months in March, down from a revised 5.4 months in February and down from the 5.4-month supply in March 2011. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A 7-month supply is considered normal.
- Interest rates edged up slightly in March. Thirty-year fixed-mortgage interest rates averaged 3.95 percent during March 2012, down from 4.84 percent in March 2011, according to Freddie Mac. Adjustable-mortgage interest rates averaged 2.77 percent in March 2012, compared with 3.22 percent in March 2011.
- The median number of days it took to sell a single-family home fell to 53.1 days in March 2012 and was down from a revised 57 days for the same period a year ago.
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Posted: Thursday, April 12th, 2012 @ 8:11 pm by mick@sfresidence.com
Filed under: Talking Points
- Sellers who have followed the usual advice about boosting curb appeal and staging the house properly, but still aren’t getting any bites, may want to look at other ways to catch a buyer’s eye.
- Getting a home appraisal can help a seller to determine that the home is priced correctly. A professional appraisal will cost $300 to $400 but can be well worth it.
- Pre-inspect the housing prior to listing. Buyers want to see that the home was cared for. An undisputable way to showcase that is to hire a home inspector to go through the house with a fine-toothed comb and rectify any major issues the inspector finds.
- Offer a warranty, because everyone likes a security blanket. Home warranties give buyers an assurance that if something goes wrong with any of the major appliances, plumbing, or electrical systems in the housing, they won’t have to pay a lot of money to get them fixed.
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Posted: Thursday, April 5th, 2012 @ 8:10 pm by mick@sfresidence.com
Filed under: Talking Points
- Contracts for deeds, also known as land contracts and installment sale agreements, are arrangements where a home seller provides the financing for a buyer. Over the last few years, this unconventional type of financing has gained popularity.
- However, with the rapid growth has come an increasing amount of complaints about the terms of such deals. While a popular last resort for house hunters who cannot get approved for a traditional mortgage, contracts for deeds are largely unregulated and are ripe for abuse.
- The most common problems are associated with terms that favor the sellers, including high interest rates and short repayment terms.
- Typically, a contract for deed is offered by a seller who doesn’t have a mortgage on the property. The sales price is paid in installments, and often the interest rate is a couple of percentage points higher than market rate and the term is usually five to seven years. This requires the buyer to refinance or make a large balloon payment when the contract expires. Once all the payments have been made, the owner gives the buyer the deed to the property.
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Posted: Thursday, March 29th, 2012 @ 7:32 pm by mick@sfresidence.com
Filed under: Talking Points
- Fees for refinancing into a Federal Housing Administration (FHA) loan are set to fall, as the upfront mortgage insurance decreases to 0.01 percent of the base loan amount, from 1 percent, beginning June 11.
- For buyers, the upfront mortgage insurance premium will increase to 1.7 percent of the loan mount, from 1 percent, effective April 9.
- Annual insurance costs, paid monthly, will rise 0.10 percentage points.
- Those with jumbo loans – loans that are more than $625,500 – will see a 0.35 percentage-point jump in the annual insurance premium, effective June 1.
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Posted: Friday, March 23rd, 2012 @ 8:39 am by mick@sfresidence.com
Filed under: Talking Points
- Budgeting for a large remodeling project presents a bit of a chicken-and-egg problem: Homeowners won’t have a feel for the cost until they get bids from contractors.
- But unless the homeowner give the contractors a ballpark figure from the start, the contractors will have to guess at what to include in their bids — and they’ll come back with a huge range of prices for very different plans.
- To solve this problem, homeowners should start by finding the average costs. When insurance companies need to pinpoint construction costs, they multiply the length by the width of the space and then multiply that by the project’s typical cost per square foot. Estimators who provide such data to claims adjusters and contractors use the following averages for cost-per-square foot: Kitchen, $174; Powder room, $133; Master bathroom, $160; and Family room, $92.
- Next, homeowners should tweak the costs to fit the scope of the project. The numbers above are for complete remodels, meaning the room is demolished right down to the framing and rebuilt. With a less involved project, reduce the number by about 30 percent. For a cosmetic update, as in fresh paint on the cabinets plus new lighting and hardware, reduce it by about 60 percent.
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Posted: Monday, March 19th, 2012 @ 7:26 pm by mick@sfresidence.com
Filed under: Talking Points
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Posted: Thursday, March 15th, 2012 @ 6:45 pm by mick@sfresidence.com
Filed under: Talking Points
- On closing day, most home buyers are excited about the prospect of moving into their new home. One important final step must be accomplished before settlement: A final walk-through.
- While plenty of buyers whip through each room with a glance, eager to unpack, real estate experts suggest home buyers are better served by a slow and careful inspection.
- While some REALTORS® recommend conducting the final walkthrough hours before closing, others advise doing the walkthrough the day prior. However, if a significant weather event has occurred between the last time the buyer saw the house and settlement day, like a windstorm, heavy rain, or snowfall, buyers should visit the home again to check on the condition just before settlement. Once the settlement papers are signed, the seller has no obligation to fix anything anymore.
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