HomesDirect Real Estate Guide

Buyers must be careful when negotiating a contract
Pub Date: 5/14/2008 12:33:47 PM
Buyers must be careful when trying to negotiate a contract. It is good to be aggressive and try to get the best deal; then again, one must be careful as I have seen things go wrong too many times. Sometimes buyers act too aggressively and it ends up costing them the deal. There are a variety of reasons as to why this occurs. I feel the most important one is the fact that the seller doesn’t want to give in to every request. They want to feel that they sold it for a fair price and that they were not taken advantage of. The moment a seller sees that they are being taken advantage of, that’s when they are willing to lose the sale rather than to just give it away to somebody they don’t like anymore. When buying a property, try to be reasonable and considerate with the sellers. Think of what is really important to you and let go of the small details that can kill the deal. Fight hard for the price, but let go the chandelier in the dining room that has huge sentimental value to the sellers. Those are the small but crucial things that can make or break a deal.

Sellers must understand that prices have dropped
Pub Date: 5/12/2008 4:03:51 PM
Why do some properties sell and others sit endlessly on the market, with no real activity and no real offers? Plain and simple, it is a price issue. Sellers must understand and come to terms with the fact that home values have gone down and that their properties are not worth what they were a couple of years back. It is a tough pill to swallow when you purchase a property worth $350,000 two years ago and that same property is worth $250,000 in today’s market; however, sellers must adjust and evaluate their personal situation. If you are in a must sell position, then you have to adjust your price and take the loss. I know it is much easier said than done, but prices will not pick up for another year or so, and unless you are willing to wait it out, then you must put it on the market for the right price. This is one reason why there is so much inventory out there. However, many sellers putting their properties for sale are selling them at the wrong price. Overpriced properties will not sell nowadays. Buyers have too much information on their hands and they will look for good deals to make their purchase, bypassing every single overpriced home.

Try to spice up your house when selling
Pub Date: 5/9/2008 12:19:34 PM
Looking to update your house but don’t want to spend the $20,000 it would cost? Here are a few simple suggestions that will greatly improve the look of your property and may give those buyers a reason to place a bid. If the floors are an issue, you can easily replace them with laminated floors that resemble wood, stone or tile. Price is good here ranging anywhere from $1 to $5 per square foot. Another suggestion is to replace the lighting. A new ceiling fixture costs less than $100 and will brighten up the place. Adding some under-the-cabinet lights illuminates work surfaces. Refinish the appliances. For a few hundred dollars, an appliance refinisher will re-enamel your stove, refrigerator and dishwasher door in the color of your choice, including a stainless steel look-alike. Give the cabinets a new life. A coat of paint and new knobs are the cheapest way to go. If you're able to spend $4,000 to $6,000 on the project, hire a refacing company to replace the doors and drawer fronts. These are just a few suggestions that will help the staging of your property. You will be surprised how a small improvement can go a long way in selling your home. 

Don’t be afraid of making a low offer
Pub Date: 5/8/2008 1:11:51 PM
A buyer needs to be aggressive when buying a property. Today’s market gives the buyer a perfect opportunity to do just that. Low interest rates, a huge inventory of properties for sale, and desperate sellers are giving today’s buyers a chance to be aggressive and offer something low. Of course, there are always the issues of being cordial and understanding with the sellers; then again, buying a property should be done with a hard face and a business heart. We have not seen such a favorable buyer’s market in quite sometime, and I doubt we will see it again anytime soon. My opinion is to take advantage of it. Search for properties and be informed about them. Do comparable sales of the area and determine what you would think a good deal would be. The odds of one seller accepting your offer are quite big. At the end of the day if that seller wanted out, you are doing them a favor by purchasing the property from them. It may not be a win-win situation, but as a buyer you have to be aggressive and look out for your best interests. 

How to get a good deal on a house
Pub Date: 5/6/2008 12:17:35 PM
If you want to get a great deal on a home, you must buy from a motivated seller. How do you find a motivated seller? Often, sellers that are going through a job relocation, divorce, or some other life change are motivated. These sellers are likely to give away equity. And unlike a foreclosure, you get a property disclosure which will give you a history of any home repairs. Also, the seller warrants their statements about the condition of the property. These properties are often in better condition than a foreclosure because the sellers are keeping the properties in “marketing” condition. Homes that are in the process of selling before foreclosure are often sold as “short sales”. A “short sale” means that the bank or lender accepts less than the current mortgage balance for the property. Usually, before a lender will agree to a short sale, the seller must be in default (that is they must be behind in their payments, or have stopped making payments altogether.) In these situations, the seller is said to be “over-encumbered” and owing more than the home is worth. A short sale might bring the price in line with market value, but not below market value. Remember, good deals are out there and you have to be smart about finding them. Talk to professionals in the business. Do a search online. In a time like this, a buyer has the power and a smart buyer may find a fantastic deal.

Be smart when searching for properties
Pub Date: 5/5/2008 1:03:02 PM
It is very easy nowadays to be smart and efficient when searching for properties. As a buyer, you have to take advantage of all the information that is on the web. Take advantage of map searches, virtual tours, property videos, neighborhood descriptions, school information and even comparable market analysis of all properties. This way you will become an educated and efficient buyer. You will be able to narrow down your search to very few specific properties that might interest you. Then, and only then should you go out there and spend time on the road looking at properties. Remember, do as much work as possible before setting up appointments. Try to soak up information about everything that you know interests you in the area. If you are moving in the same city, this process might be shorter and easier. If you are moving to a different county, then you might need more time and research to make sure you are making the right decision. Real estate websites have changed drastically and are improving everyday. A well-educated buyer is able to take advantage of all the resources available in today’s market. This means a more intelligent, time efficient search that will achieve more than satisfying results. 

Who keeps the deposit when the contract does not go through?
Pub Date: 5/2/2008 3:33:53 PM
This is a very common question asked by both, buyers and sellers. Who keeps the deposit when the purchase does not go through? It is actually not as difficult as it sounds. A good faith deposit is given at the start of every transaction. This is to ensure the seller that the buyer is serious about buying that property and that buyer is willing to put some money on the table for it. Then, if the contract does not go through, that seller gets to keep that deposit as a result of that buyer backing out from the purchase. That is true when the buyer is in default; therefore, as compensation for the time spend of the contract and the fact that the property was out of the market for a certain period of time (not to mention a lot of potential buyers that were missed), then the seller would keep the entire deposit. If working with a broker, that deposit would usually be split in half: 50% to the seller and 50% to the broker. However, there are ways a buyer can keep the deposit and that is usually tied in with the financing. Most contracts have a financing contingency clause. This means that if the bank does not give the loan to the buyer, then that buyer through no fault of his own would be unavailable to purchase that property. If that’s the case, then that buyer would get his deposit back because his intentions were to go through with the contract but the loan didn’t materialize. Other factors that are still adjacent to the loan would be if the property does not appraise for the selling price or if the property does not pass the inspections. If that’s the case, a buyer may also have an option of getting out of the contract and keep his deposit. Besides those 3 factors, if for any other reason the contract does not go through (buyer changes his mind, found something better, etc, etc) then the seller would keep the entire deposit.

The importance of pictures when selling a property
Pub Date: 5/1/2008 3:25:20 PM
Having good pictures of your property is a crucial part of the selling process. The way real estate has evolved plus the impact of the internet has made pictures a very important aspect when advertising a property for sale. Very often I get asked if the amount of pictures one publishes makes a difference. The answer is a solid yes. If you publish just a couple of pictures, buyers may think that you are hiding something and that’s why you don’t want to show more of your house online (most often than not, this way of thinking is accurate). My opinion is to show as much as possible. I am not saying to highlight the ugly or damaged parts of the property; however, what I am saying is to try and showcase every single aspect of the property. That way buyers are a little bit more informed and when they make an appointment to go see the place, these buyers will tend to be more serious because they already like what they saw and they have qualified your property as a potential purchase. On top of pictures, if you can manage to put virtual tours, slide shows, or video of your property, all of these things will help the exposure and marketing of your property. In conclusion, when advertising your property for sale, make sure you display that property correctly. Publish pictures and virtual tours. You will be surprised how buyers will appreciate this and how you will be the beneficiary of such actions. 

Buyers – be specific when looking for homes
Pub Date: 4/30/2008 4:00:56 PM
The buying process does not have to be a long, tedious, time-consuming effort. If done properly, buying a place could be done in a matter of just a few days. There are number of factors that make this transaction easier. First of all, get pre-qualified. You have to be sure of the buying power that you will have. Know your limits and search by them. Once that’s defined, you have to be very specific as to the criteria of your property. The more you know of what you want, the easier it will be to make up your mind once you find it. If you are looking for something new then make that a priority. If it’s a big yard, only look for homes with one. Whatever it is, make sure you put that in the search criteria. If 1 story homes are your thing, then look for just that. Do not waste time by looking at properties that you know don’t fit what your looking for. The more you do that, the longer and more tedious it will be to find that next place. My opinion is to enjoy searching for homes. Make it fun. Be creative and once in the property, imagine how things would be if it were your property. You’ll be surprised, if given the right attitude and applying the correct system, that you’ll be able to find your next property before you know it.

High gas prices are changing how realtors work.
Pub Date: 4/29/2008 3:10:35 PM
Being among the most mobile group of professionals, Realtors must be feeling a sting at the gas pump these days as we watch gas station employees climb the ladder to switch out the price sign more and more often. Just this week, I put a record $65 to fill the tank of my sedan. I am not sure about you, but that is a lot of money to be spending every week. This got me thinking how are realtors coping with today’s high prices? Are they showing fewer properties? Are they showing properties that are bunched up together? What about clients, are they being pickier with buyers? The answer is probably “all of the above”. How is this changing real estate as we know it? I think it will have a profound impact as realtors have to pre-qualify buyers more and more before driving over to show them a few properties. The rules of the game may be changing and both buyers and realtors should be aware of the fact that the current environment does make a difference and some adjustments have to be made. 

How to price your property correctly
Pub Date: 4/28/2008 3:43:05 PM
It is a key element in order to sell your property. It must be priced correctly. Not to high so that it will discourage potential buyers, and not to low so that you are giving it away. I am strong believer in a fair market asking price. How do we come up with this figure? First of all, a complete CMA of the area is a must. What are houses in the area selling for? What are the last sales in the area? Check into the expired listings, it will give you a very good idea of what properties did not sell and are off the market now. When you consider all these factors, you will have a ballpark figure as to the asking price of your property. Next step would be to decide a specific asking price.

If houses in the area are going from $340k to $360k, then you should be in that range as well. Pricing it above $350k is not a good idea because of the way real estate search engines work. Usually, real estate search sites have set increments when looking for houses. Meaning that you can go up every $25k or sometimes every $50k. In the $300ks, buyers will put a maximum asking price of $350k or $400k. If they put a maximum figure of $350k and you list your property at $355k, then for an extra $5k in the asking price, you would have missed out on the chance of getting that buyer. I cannot stress enough the importance of this point. You should always be underneath one of these set search intervals. If you are able to combine all this factors, then you have priced your house correctly and most likely achieved the most important part of the selling process. 

Informed buyers love rebates
Pub Date: 4/25/2008 11:57:01 AM
It never hurts to receive a little extra money when buying a property. And that is exactly what happens when a buyer gets a rebate at closing. The process is very simple and at the end of the transaction the buyer will have seen the benefits of working with a broker that is offering a rebate. Two questions generally come to mind. First, is it legal? A simple yes will answer that. Second, where is the money coming from and why brokers offer it? The money is coming from the commission that the broker is generating through the sale. Typically, a buyer’s agent will receive anywhere from a 2% to 3% commission from the purchase price of the property. From this amount, the broker will give out a certain amount as a rebate to his buyer. Brokers do it as an incentive for buyers. Competition is tough and brokers need to find an edge to obtain more customers. Buyers can take advantage of it and not only will they receive the benefits of working with a professional in the field, but they will also receive money at closing, which when buying a new home, could be very useful to say the least. 

Be a more efficient home buyer
Pub Date: 4/14/2008 12:18:19 PM
There are a number of things one can do to become a better and more efficient home buyer. The number one thing would be time maximization. Let’s face it, very few people have the luxury to search for a home every day, all day long. Most of us have regular jobs and regular families. So making the most out of the time we take to search for a home is a must. A good real estate search engine is critical for this. Something that lets you pin point exactly what you are looking for instead of having to search each and every one of the million properties out there for sale. We have to be very specific when searching for properties; otherwise, it could become a waste of time to make appointments and go see them in person (just to find out it is not what we want). When looking for a good real estate search engine we must look for a few must-haves: A good search map is one. Also, a search site that has the capabilities of showing us all pictures and virtual tours of the property. By us being able to see the property in a map and also see all available pictures and tours, we would have a very good idea if it’s worth the time of making an appointment. Being a more efficient buyer not only saves time when buying a place, but it also helps the seller as well as he/she is not showing the property to any person that will eventually have no interest in it.

The Lock Box Realtor
Pub Date: 4/10/2008 12:15:55 PM

Since I have been in Real Estate I have noticed that 20% of the Realtors make things happen while the other 80% sit back and wait for things to happen. The realtor who gets a listing and slaps a lock box on the house is the 80%. Why does that realtor make 3% for slapping a lock box on a house? I know that they will help negotiate and coordinate the closing, but is that worth 3% of the sale price? The realtor out there finding the deals and showing the home isn’t necessarily worth 3%, but definitely works harder than the realtor with the lock box. Yet, with the number of homes for sale increasing, so is the number of Lock Box realtors. Before you go out and list your home, beware of the Lock Box Realtor, they are hard to identify…

How to avoid paying a 6% commission
Pub Date: 4/9/2008 1:20:21 PM

People are always annoyed by the fact that selling real estate is very expensive. The customary 6% commission that real estate brokers charge could add up to take most of the equity in one’s home. If the property is worth $300,000; then a commission of 6% would be $18,000. In my opinion, that is a lot of money for one transaction. So how do we go about selling a place, getting help in the process, and still be able to retain our hard earn equity? Many different options have come up in the last few years for exactly this purpose. Discount brokers are always an option. This usually involves a commission of 4 to 5%. In this case, your visibility and exposure may suffer do to lack of advertisement by these brokers. The different for sale by-owner options are always a good one. Listing the property on different websites for a small fee is a fantastic way to get buyers without having to pay any commissions. Flat fee MLS companies have also tackled this issue by saving at least 3% of one side (charging sellers a fee for MLS and offering a 3% commission for the buyer’s agent). My thoughts favor the last 2 options. A combination of these two would give a seller more than enough exposure and give him a chance to pay a maximum of 3% or maybe nothing, depending on whether the buyer has an agent representing him. Selling real estate has changed drastically and more than ever, sellers have different options to choose what they feel fits right for them. If the seller is willing to take part in the selling process, then a huge amount of money could be saved while still getting the same amount of buyers.