Category Archives: Home Buyer Advice

Buying your first home, beginning the hunt

20 Monday May 2013

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This is the probably the largest purchase you’ve ever made…gear up with some real world knowledge before starting the hunt.

First off, most first-time homebuyers are so excited to walk through homes that they skip a step. Go get pre-approved for a loan, before even looking at one home. What tends to happen is that the homebuyer does the math and thinks they can afford a $150,000 home, and they go start looking at $150,000 homes. They find one they love and then try to get pre-approved. Come to find out, the most comfortable payment for the buyer is actually a $120,000 home. Then, all the $120,000 homes are nowhere near as nice as the $150,000 home and the buyer and real estate agent both start getting frustrated. The buyer decides to keep renting and what started as a really fun experience becomes a bad memory.

Second, take stock. Take a good look at your furniture, your current residence, and the money you have in reserves. Your furniture is important, if you like it, because it’s going to need to fit in your new home. Your current residence; are you comfortable? Do you need a fence? Need an office? Make a list of your needs, must haves and things you’d like to have…and share that list with your real estate agent. Save the list to your cell phone to remind yourself of the things that are really important to you. Next, cash reserve. Since you’ve met with a lender, you’re going to have an idea of how much money you need to have for closing costs and/or a down payment. But, a few things you might not be thinking about are: earnest money and money for inspections.

Earnest money is just that, money that shows the seller of the home how ‘earnest’ you are about buying the home. The most misunderstood thing about earnest money is what happens to it. When you decide it’s time to submit an offer, discuss an appropriate amount of earnest money with your real estate agent. $250, $500, $1000 and up. The amount of earnest money and down payment help show that you’re serious and your offer is strong. You will write a check (usually to a title or real estate company) and give it to your real estate agent when you’re writing up the offer. Your agent will take a copy of the check and send the copy to the listing agent with your offer. If your offer is accepted, the earnest money will be deposited and held in an escrow account until closing. At close, it will be applied towards your new home.

Next blog: Buying your first home, how to hunt

Disclaimer: We sell real estate in Missouri and Kansas. Laws and contracts will vary from state to state.

Tearing My Hair Out in KC!!!

05 Tuesday Apr 2011

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I really don’t know if it’s much better in other areas, but one thing the Kansas City area real estate agents have always struggled with is finding rental properties for customers.
You know how it goes…a customer calls and they’re relocating to the area, but they’d like to get to know the area before they commit to purchasing a home. Or…you have customers going through a divorce and a spouse needing a rental. Or…you have the couple that would like to move out while their home is on the market to make it easier to show and sell. There’s 100 scenarios for needing rentals and we get the calls non-stop.

The problem? Rental properties are not listed on our MLS. Nor are they all in any one place…or so I thought.

So, I was tearing my hair out the other day explaining to a gentleman from out of town how our rental market works. The property owner or manager puts a handwritten “For Rent” sign in the yard and then posts it to some website like Craig’s List, the classifieds or their personal rental site. And, for the most part, real estate agents don’t get paid anything when they bring a renter to a property. So, this poor guy had called around and was terribly frustrated at the response he was getting. Doesn’t anyone want to rent him a property? So, yours truly, did her good deed for the day and explained why all the agents he had encountered seemed ‘uncaring’ about his rental needs.

I told him I would happily try and search for places and ask around to see what I could find for him.

That’s when I found it….

OODLE!!
OMG, this has changed my whole outlook on rentals. Oodle is a website that pulls information from other websites to compile the information in one place.

And now, I’m putting my hair back into place and sharing this great tip with my friends.

P.S. Please don’t brag if you’re in one of those awesome markets that embraces rental property. I just can’t take it! 🙂

Should I Accept This Offer?

15 Tuesday Mar 2011

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March 15, 2011 — Realty Times Feature Article by Carla Hill

Today’s market can be a difficult one for many sellers to navigate. And while your real estate agent can advise you, the ultimate decision of what offer to accept is entirely up to you.

This decision can come with quite a bit of pressure. Even in the most favorable of markets this can be a difficult time. How do you know when to accept an offer?

Here are some questions to consider.

1. Is the buyer pre-qualified/approved? Selling will require an investment of time and money. You may need to find a new home or a temporary rental. There’s nothing worse than buying a new house, only to find out the deal to sell yours has fallen through.

2. Do you need to move? The urgency of your move may dictate what offer you accept. Many sellers need to move quickly for a new job. Or they may need to sell to avoid foreclosure. If you are in a rush, you may need to accept an offer that is less than ideal.

3. How much do you owe? You don’t want to sell your home at a loss. And be sure to take closing costs into consideration. Many markets experienced high levels of depreciation over the last year. If you are underwater on your loan, now may not be the time to sell.

4. What is the market climate? Are you likely to get another offer? How long has your home been on the market? Have you had many showings? All of these are factors to consider when contemplating what offer to accept.

Above all, ask yourself if this offer was a reasonable offer. There are buyers that may attempt to low ball you. They may see that your home has been on the market longer than your competition. They may know that it’s a strong buyers market. And in response they offer a much smaller amount for your home than it is worth. You are not obligated to accept or even respond to these low ball offers. But if you are in need of selling now, every offer warrants consideration or a counter offer.

In the end, you must accept an offer that works for you. You may be willing to accept a lower amount in exchange for a faster closing date. Or you may wish to hold out for the highest dollar amount.

Buy Owner.com Sells for $1M

10 Thursday Feb 2011

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MIAMI — The real estate website BuyOwner.com has sold for $1 million.

The Daily Business Review reported Tuesday that Utah entrepreneur Jonathan Holbrook bought the site. It was once billed as the nation’s largest for-sale-by-owner operation.

Holbrook told the paper he intends to close the sale Wednesday. The proceeds will be split among the company’s creditors.

The Florida company’s revenue has declined sharply since 2008, from more than $28 million to less than $250,000 last July.

Since July, the company has generated about $588,000 in revenue but after expenses netted only $56,000.

Holbrook said he will hire additional employees, including sales and customer service agents for the Deerfield Beach, Fla., headquarters and the Chicago office.

Why did they lose so much revenue? There’s probably quite a few reasons for this. One of the main reasons, I believe, is that as transactions have gotten more difficult and home prices have dropped further than most sellers want to acknowledge, the general public has been forced to turn to the experts to help guide them through the process of selling their home. Also, with most markets still having a high number of foreclosure listings, banks don’t usually sell FSBO, they list the home with a REALTOR.

Is it REALLY a Short Sale?

28 Friday Jan 2011

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Even though they’ve been around forever, short sales are at the forefront of the real estate market along with foreclosures. I’ve found there’s a general misunderstanding about short sales that I’d like to correct.

As listing agents, we have to disclose to selling agents every type of potential hindrance to a closing, especially a short sale. That being said…it’s important to understand there’s essentially two different types of short sales.

The first one, and least common, is a sale on a listing where the seller owes more than the home is worth, but has the ability to bring money to closing to make up the difference. You may wonder why we would need to disclose this type of short sale since there’s no bank involved. Well, let’s say, the seller has the ability to bring funds to closing, but suddenly falls on hard times and blows through his/her emergency funds. The seller can no longer afford to sell the home that way and the buyer would’ve been blindsided by the change or cancellation. What this sale would then hopefully switch to is the second type.

The second type of short sale is the most common one. Since home prices have depreciated in most areas, homeowners owe much more than their home is worth and sometimes have fallen on hard times and have to move. At this point, a real estate agent can swoop in to help the homeowner by facilitating a conversation with the bank/lender, to see if they’re willing to accept a short sale. Once the agent has the go-ahead from the bank, the property can be marketed and sold at a reduced and more marketable price without the seller having to come up with extra cash to close.

You may be thinking, ‘but if I don’t have to pay a real estate agent, I can sell my home for what I need to get out of it.’ Well, but if you’re at a point of hardship, timing can be everything for you. It’s been proven over and again that listing your home with a real estate agent at a recommended price, will snag you a buyer in a much shorter amount of time. And, by now, most all agents have knowledge of how to work a short sale and should be able to knowledgeably direct you through the sale.

One thing’s for sure, short sales are a much better option for the seller’s credit than foreclosure. Sure, they take patience, but doesn’t everything that worth doing?

Happy Friday! Sunny and 46 degrees in our fair city today—-whooohooo!

What about the Tax Credit I Received?

11 Tuesday Jan 2011

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I was chatting with a friend the other day and she brought up that there’d been some changes in her life and she was now having to think about selling the home she bought a year and a half ago. Her question was about the tax credit. “What happens if I sell my home before the 5 years?”

Because it’s been so recent, I hadn’t had the chance to do much research on this question, so I went into ‘research mode’ before giving her any answers and I thought I’d share with you what I’ve found.

It depends on exactly when you bought the home. It’s 36 months. But, if you do sell before 36 months, the tax credit will be payable at the time of close but is limited to the amount of proceeds you receive on the home. Let’s say you sell your house and you have $7,000 left to repay, but you only net $2000 profit on the sale. The government can only take that $2000 and it looks like the rest will be written off.

Here’s the government website where YOU can do more research if you’d like.

Property Appraisals Today

11 Thursday Nov 2010

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….WARNING…things aren’t the same as they used to be!

Bet you knew that, right?

Let me tell you, earlier this year this post would’ve been completely different than it is today. During the economic/real estate nightmare of the last two years, appraisals have been a ‘last minute’ issue when selling a home.

You may think, why?? Trust me, I’m of the school of thought that a home is only ‘worth’ what a buyer is willing to pay. But after this financial crisis, the lenders are understandably scared of lending money on homes that aren’t worth their price. They’ve lost a ton of money on foreclosures and new rules have been put on appraisals to keep this mess from happening again. The new HVCC (Home Value Code of Conduct) for Fannie & Freddie loans turned the real estate world upside down for a while.

But, thankfully, I can now report that informed consumers are now more reasonable about the value of their home. Real estate agents have been through enough transactions in this economy to be have more confidence in their pricing opinion.

Earlier in the year, I would’ve guessed about >50% of the homes that were selling were having appraisal issues right before close. When there’s an appraisal issue, the seller either has to come down on price or the buyer has to come to the table with the difference between the contract price and the appraisal price. If the parties can’t agree, the contract fails. You can see how this would not only be a nightmare for the agents to negotiate, but also extremely stressful for the buyers and sellers.

I can actually say that it’s been several months since I’ve seen an appraisal issue come through on a pending sale. Thank goodness!!

One thing is for sure, though. You need an experienced company on your side when you’re ready to buy or sell your home. We’re still stumbling through an economic crisis; and you’ll need a strong and confident helping hand.

You know where to find me!

Until next time—I hope you’re enjoying this beautiful fall weather as much as I am!

That’s What Your Contract Says

25 Sunday Jul 2010

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The current housing market has created an interesting problem. Sellers are feeling like they’re “giving” their house away, and buyers feel like they’re doing the sellers a favor by taking it off their hands.

Problem is, both parties are a bit disgruntled with each other. Sometimes, when a seller is moving out, they may accidentally damage something. Let’s say, they put a little hole in the wall or spill something on the carpet. Usually, by the time something like this happens the buyer has already done a final walk-through on the property and everything looked fine. So, the sellers move out, leave the damage; then the buyers move in and find it. Who’s the first person they call and scream at?? Their agent.

It’s not your real estate agent’s fault this has happened. It’s the seller’s fault for not bringing it to anyone’s attention and/or repairing it. You see, the contract says that the seller will deliver the home to the buyer in the same condition it was whenever the contract was written. If the home was damaged by a tornado or fire, the buyer would either have the right to cancel or the right to the insurance money for the repairs.

Now, I’ve been preaching this to the agents in our office since we’ve had many issues with this lately. Every seller out there needs to read and understand that paragraph in our contracts. Ultimately, the agent cannot really do anything after the sale has closed. We can offer to put the two parties in contact with each other, or even act as a mediator for a face-to-face meeting with the sellers and the buyers. But, we are not the ‘judge and jury’ enforcers of the contract. If there’s a serious problem with the property after closing, your only option may be small claims court.

Either way, please know that your agent isn’t leaving you high and dry in this situation, it’s that we can only legally offer so much.

Disclaimer: We sell real estate in Missouri and Kansas. Laws and contracts will vary from state to state.