So the house hunt is over, and you've found your dream home? Now is the time to start preparing for closing. Once you've supplied the mortgage company with the necessary paperwork (see one of my earlier blogs for details), once you've done your inspections and negotiated any repairs, it's time to start preparing for closing. Here's how to make that closing less hectic and more organized:
1. Decide on a closing date. Check with your Realtor and your mortgage professional to determine a feasible closing date when writing your offer, and work diligently to make it happen. How? Have everything your mortgage person needs before they even ask for it, and check frequently to make sure that everything is on track. If your funds are tight, schedule the closing for when you know you'll have been paid and have cash in the bank.
2. Get your money together. Most people have to bring some money to the closing table - even with a 100% loan, there are closing costs and some pre-paid items (such as insurance and taxes) which must be covered at closing. In our area (soutwest Louisiana), those funds must be presented in the form of certified funds, so allow time to stop by the bank and pick up a cashier's or certified check.
3. Check with your closing attorney about title insurance. Your bank will require it on the mortgaged portion of the transaction, but you may want to consider it for yourself, as well - people with significant equity in a purchase should definitely at least consider it. Find out the cost and benefit in advance, so you can make an informed decision and plan to have the money to pay for it, should you decide to purchase it on the unmortgage portion of the house.
4. Shop for your insurance well in advance. Be aware that threatening weather - a hurricane in the Gulf of Mexico, for instance, if you're purchasing a home along the Gulf Coast - can stop the purchase of insurance until the threat has passed; but if you have arranged for that purchase and paid for it in advance, you should be covered (check with your insurance professional for information on this). Shopping in advance also gives you a chance to compare rates, and find coverage that is most advantageous to you. Note that most insurance is a "prepaid item" in that you'll be required to pay for at closing or prior, but each month an insurance premium will be collected from your mortgage to cover the next year's insurance.
5. Do a walk-through. Once the Sellers have moved completely out of the house, do a walk-through prior to closing to make certain nothing has changed in the condition of the house. This includes damage from moving, things which might have been hidden by furniture, or things which have otherwise changed since you inspected the house - appliances which worked before not working, etc.
6. Review your HUD Settlement Statement. When you applied for your mortgage, your mortgage professional supplied you with a good-faith estimate of the costs involved, from origination fees to attorney costs. Compare this to the HUDE-1 Settlement Statement you should receive before closing. Some fees cannot change, while others can vary up to 10%. If there are differences, ask your mortgage professional to explain them.
That said - welcome to your new home!
Thursday, June 9, 2011
Wednesday, May 4, 2011
Staging Your Home With Color
So....you're thinking of selling your house and are trying to do everything possible to get people to not only look at it, but make a viable offer. You've seen all the real estate programs on HGTV until you can recite their mantras in your sleep: "Spruce up your home...." and "stage your home..." and "a new coat of paint can work wonders...."
Paint? you're thinking. Yep, paint. Sounds simple, until you visit a paint store, look at all the selections, and begin to wonder what potential buyers will actually like in the way of paint colors. You want to set the mood. You want to get them inspired. Most of all, you want them to buy! So here's a bit of the psychology behind various colors:
Red: Grabs attention and draws the eye. If you want to accentuate a feature of the house, add a red accessory (maybe on the fireplace mantel) or a vase of red flowers on a cold granite counter top.
Blue: Soothes and calms. Although it's considered "the world's favorite color," you don't want an overkill of it. A soft blue color in a bedroom or bath can sometimes relax and soothe potential buyers. It's also considered an inspiration for creativity, so may be appropriate for a child's room. Again, however, use it in limited doses. Instead of blue walls, perhaps a blue bedspread and draperies with the walls painted a neutral color.
Yellow: Can promote confidence and optimism, but an over-abundance of the color can also evoke depression or make people feel emotionally fragile. Try a "neutral, soft gold" in a hallway or family room.
Green: "Restful" is the reaction most people have to green. It reassures them. Stay away from yellow-greens and tend more toward soothing, more neutral greyed-greens. It's often a good color for bedrooms. Adding green plants to a room gives it life.
White: Gives a feeling of cleanliness, but unless you're selling a contemporary house, white as a wall color is usually not recommended - it gives a "don't touch me" impression. Perhaps a soft white, like antique white or Navajo white, on your trim work, but with color on your walls.
The current generation of buyers want move-in-ready houses. They almost literally want to move in, put their clothes away, and start cooking dinner. They don't want to fix up, repaint, or do things their elders did when they bought houses. So the more move-in-ready you make your house, the more likely it is to attract a quick, reasonable offer.
Paint? you're thinking. Yep, paint. Sounds simple, until you visit a paint store, look at all the selections, and begin to wonder what potential buyers will actually like in the way of paint colors. You want to set the mood. You want to get them inspired. Most of all, you want them to buy! So here's a bit of the psychology behind various colors:
Red: Grabs attention and draws the eye. If you want to accentuate a feature of the house, add a red accessory (maybe on the fireplace mantel) or a vase of red flowers on a cold granite counter top.
Blue: Soothes and calms. Although it's considered "the world's favorite color," you don't want an overkill of it. A soft blue color in a bedroom or bath can sometimes relax and soothe potential buyers. It's also considered an inspiration for creativity, so may be appropriate for a child's room. Again, however, use it in limited doses. Instead of blue walls, perhaps a blue bedspread and draperies with the walls painted a neutral color.
Yellow: Can promote confidence and optimism, but an over-abundance of the color can also evoke depression or make people feel emotionally fragile. Try a "neutral, soft gold" in a hallway or family room.
Green: "Restful" is the reaction most people have to green. It reassures them. Stay away from yellow-greens and tend more toward soothing, more neutral greyed-greens. It's often a good color for bedrooms. Adding green plants to a room gives it life.
White: Gives a feeling of cleanliness, but unless you're selling a contemporary house, white as a wall color is usually not recommended - it gives a "don't touch me" impression. Perhaps a soft white, like antique white or Navajo white, on your trim work, but with color on your walls.
The current generation of buyers want move-in-ready houses. They almost literally want to move in, put their clothes away, and start cooking dinner. They don't want to fix up, repaint, or do things their elders did when they bought houses. So the more move-in-ready you make your house, the more likely it is to attract a quick, reasonable offer.
Saturday, April 16, 2011
The First Step In House Hunting
You've heard people say they've been pre-qualified for a home loan; you've also probably heard people say they've been pre-approved. There's a world of difference between the two. If you are about to begin house hunting, the first thing to do is get pre-approved.
Here's the difference: pre-qualification involves speaking to a mortgage professional, telling him or her what your income is, and seeing how large a loan that would entitle you to - assuming you have good credit and nothing to bar your getting a long. Pre-approval, however, goes that extra step - you allow the mortgage professional to pull your credit and check your credit rating (and pulling credit through a mortgage company is a "soft ding" that doesn't adversely affect your credit rating). Listing agents will almost invariably ask the buyer's agent if their client has been pre-approved, and whether or not they are submitting a pre-approval letter with their offer; many agents advise their clients to be skeptical of readily accepting an offer which is not accompanied by a pre-approval letter, or at least the promise of one being sent within a reasonable time - if my client accepts an offer without a pre-approval letter, it's usually with a counter-offer making that a condition of acceptance, to be provided within 48 hours (if on a weekend).
Why do you want to get pre-approved? Aside from the comment above, here are other very pertinent reasons why you should make pre-approval a priority:
1. By knowing in advance that you can buy a home, and how much home you can afford, you insure that you look at the right homes. You don't waste time sorting through hundreds of homes on-line which may not be appropriate for you - you can narrow things down, and refine the search.
2. You don't overlook a house you might have been able to afford, and didn't know it, or - worse yet - fall in love with one just beyond your reach....then nothing that is within your price range is likely to look as good to you.
3. You won't get discouraged by looking at way too many houses; by narrowing your search to a few, you can examine them thoroughly, make notes, and actually remember which one had the drop-dead kitchen and which one had the antique bath tub.
4. You can enjoy a faster closing period. The lender will already be familiar with you, your credit rating, and your income, and will not be starting from scratch; given that, they may be able to push the loan process through more quickly.
5. Your offer will be taken more seriously - offers accompanied by a pre-approval letter get attention; the Listing Agent has more confidence in presenting the offer, and the Seller has more confidence that you will be able to follow through on your offer. Also, if the home is being handled by a major relocation company, most will not even consider an offer which is not accompanied by a pre-approval letter.
One thing which makes a huge difference is the location of the loan office where you are obtaining your loan. While internet loan companies sound tempting, think about this - if they fail to meet a deadline (and real estate deadlines are very firm), and they do not return your calls, can you or your agent go to their office and have a personal meeting with them to get things back on track? Much of the stress in any real estate transaction can come from the mortgage side of things; having a local loan officer can make a huge difference in relieving any sense of stress.
Monday, March 14, 2011
Preparing Your House For Market - Projects Which Provide A Return On Investment
Today's real estate market is truly competitive - there are a lot of listings on the market, and many are competing for the same buyers. So you need to do everything possible to make your house stand out above the rest. But to do that, you don't want to invest money which won't bear a good return. Some updates and changes are more "valuable" than others. A recent HomeGain survey showed six simple do-it-yourself projects which will bear excellent returns:
Cost: $0 - $290
Estimated Return on Investment: $1,900
2. Light and bright: replace all burned out bulbs, clean the windows - having everything sparkling clean and light-filled makes a house look welcoming and cheerful. Be sure to also turn on all lights (lamp and overhead) and open all blinds and windows when your property will be shown - a variety of lighting sources helps add cheer to the house.
Cost: $375
Estimated Return on Investment: $1,550
3. Staging: remove "excess" furniture, and rearrange the existing furniture to make the rooms appear larger; declutter the accessories; if walls are bland, hang just enough pictures or paintings to lend warmth (but the fewer nail holes to repair, the better!). And when the house is shown, a relatively neutral candle - vanilla, for instance - can add hominess without offending (or bake a pie just prior to the showing to give it that "your mother's house" feeling); soft music playing in the background helps relax people - walking through a house with only the echo of their footsteps on the hardwood floors can be unnerving.
Cost: $550
Estimated Return on Investment: $2,194
4. Landscaping: first impression count big time! Weed the beds, remove plants which have seen better days, add fresh mulch - have your home say "welcome" when people drive up.
Cost: $540
Estimated Return on Investment: $1,932
5. Repair Electrical and Plumbing: buyers will normally schedule a home inspection after successfully negotiating an acceptable offer. The inspector will check plumbing and electrical, among many other things. Why give the buyer cause for alarm with faulty plumbing or wiring? Repair any faults (and disclose them and their repairs) ahead of time; it will save you getting "beat up" during negotiations for repairs.
Cost: $535
Estimated Return on Investment: $1,505
6. Replace or clean carpeting: generally speaking, people over-estimate what repairs will cost them; spare yourself the pain of having the buyers submit high-priced requests for changing things like carpeting or paint colors - change them in advance with fresh carpeting or fresh paint which will give them that "let's move in, hang up our clothes, and start cooking dinner" feeling that today's buyers seem to want.
Remember, the market has changed in recent years; we've gone to a younger, more demanding Buyer who wants a house as close to perfect as they can get it. New construction generally has more appeal to today's buyers than older homes, so if you need to make your house as nearly "perfect" as possible while still keeping a handle on costs.
Wednesday, March 2, 2011
What Should NOT Affect Your Asking Price
So...you're thinking of selling your property? Definitely, Spring is the time to put it on the market. But don't make the mistake so many seem to make - don't misprice your property! Certain things matter in pricing, and certain things don't. Below is a short list of what should not affect the pricing of your property:
- Your cost. What you paid for the house does not affect the current market value. Period.
- Your Improvements. Okay, some improvements do count - typically, improvements to the kitchen or bath have the biggest impact, but even these can be neutral in impacting the price; if a potential buyer doesn't like what you've done, he won't care what you've spent to do it.
- The Assessed Value. Just because the local tax man has a high opinion of your property doesn't mean the buying public will share that enthusiasm. The market dictates price, not the tax man.
- Your needs. The value of a property is not necessarily relevant to what you "need" to get from the sale. How much a new property will cost you has zero to do with what your current property is worth. Value is determined by what buyers are willing to pay for a property, not by what the seller needs to net from the sale.
- Emotion. Value is based on market demand, not on how you feel about your house. Everyone thinks their own property is special. Is it? Put yourself in the buyer's place - you'll be comparing this property to others, and the fact that the colors are super duper and the carpeting is plus may not matter a whit to a buyer. Your property is only worth what the market will bear. Detach yourself from the emotion, and think like a buyer.
Price your property wisely. Properties which are mispriced age on the market, and invite low offers. Don't do your property an injustice - price it right the first time and you may get immediate and satisfying results!
Thursday, February 3, 2011
Building Trends
What changes can we expect in new home features? Several, in upcoming months. And the reason is that the profile of the "typical" buyer is changing. Where once our big demand for housing was the Baby Boomer generation, we're now seeing a big demand surge from the Generation X (the post-Baby Boomers) and Generation Y (aka The Millennials - those born after 1980). Builders are striving to accommodate new demand - Gen X and Gen Y aren't looking for homes which may be bought at a bargain because they need TLC; for the most part, they're looking for new construction, and simply want to move in, unpack their clothes, and text for pizza delivery. These are younger buyers with different criteria from their predecessors. To meet their needs, builders are adapting. Here's what we can expect:
1. A back-to-basics push as builders try to get prices down; houses will tend toward "no frills" as some of the "fancy stuff" falls by the wayside
2. Energy Star houses will be more in demand than ever, and their standards will be more rigidly enforced; energy efficiency will be much sought-after as utility costs rise and people become more conscious of costs and the ecological effects of energy-squandering
3. Houses will become smaller and storage sheds will become more in demand
4. As approximately 81 million Echo Boomers (those born between 1988 and 1999) enter the market, buidlers will respond to their demands; expect homes which take advantage of technology with advanced thermostats, Energy Star-rated appliances, and other eletronic advances, but all with an eye toward the bottom line
5. You'd best get used to the word WINKS (Women with Income, No Kids), as their numbers are growing quickly, and their demands will be specific to their own needs, rather than the traditional family requirements
6. We'll see more of the "Sandwich Generation" - people whose parents and children live with them; there will be an increased demand for two master suites, two cooking areas, and generous storage
7. Baby Boomers who plan to move are staying put - at least, they're staying in their own areas; they're going to want first-floor master suites, laundry areas near the bedroom, and lots of storage
Ask any Realtor, and they'll tell you that marketing techniques have had to change radically in the past five or six years, as the demographics of the Buyers have changed. Where we used to actually pick up the phone and call people, we text now, as they often prefer it. Where we relied heavily on print advertising, your listing is dead in the water if it isn't well represented on the internet. Builders are experiencing changes, as well - and we can expect to see those changes reflected in the market over the next few years as existing inventories dwindle and new homes are built.
1. A back-to-basics push as builders try to get prices down; houses will tend toward "no frills" as some of the "fancy stuff" falls by the wayside
2. Energy Star houses will be more in demand than ever, and their standards will be more rigidly enforced; energy efficiency will be much sought-after as utility costs rise and people become more conscious of costs and the ecological effects of energy-squandering
3. Houses will become smaller and storage sheds will become more in demand
4. As approximately 81 million Echo Boomers (those born between 1988 and 1999) enter the market, buidlers will respond to their demands; expect homes which take advantage of technology with advanced thermostats, Energy Star-rated appliances, and other eletronic advances, but all with an eye toward the bottom line
5. You'd best get used to the word WINKS (Women with Income, No Kids), as their numbers are growing quickly, and their demands will be specific to their own needs, rather than the traditional family requirements
6. We'll see more of the "Sandwich Generation" - people whose parents and children live with them; there will be an increased demand for two master suites, two cooking areas, and generous storage
7. Baby Boomers who plan to move are staying put - at least, they're staying in their own areas; they're going to want first-floor master suites, laundry areas near the bedroom, and lots of storage
Ask any Realtor, and they'll tell you that marketing techniques have had to change radically in the past five or six years, as the demographics of the Buyers have changed. Where we used to actually pick up the phone and call people, we text now, as they often prefer it. Where we relied heavily on print advertising, your listing is dead in the water if it isn't well represented on the internet. Builders are experiencing changes, as well - and we can expect to see those changes reflected in the market over the next few years as existing inventories dwindle and new homes are built.
Wednesday, February 2, 2011
Health Care Sales Tax on the Sale of Your Home?
THE MYTH:
By now, each of us has received at least one email which says something to the effect of: "Under the new health care bill - did you know that all real estate transactions are subject to a 3.8% sales tax?" And, as so often happens, this has been taken as gospel by many just because it passed along the internet with assurances that it came from reliable sources. NOT...
THE TRUTH:
Q: Does the health care law impose a 3.8% tax on profits from selling your home?
A: No, with a few exceptions. The first $250,000 in profit from thh sale of a personal residence won't be taxed, or the first $500,000 in profit in the case of a married couple, and then only those with incomes over $200,000 per year ($250,000 per year for a married couple) will be subject to it.
This is separate from capital gains taxes, which have been in place for years. The 3.8% "health care tax" will, in fact, affect very few people.
By now, each of us has received at least one email which says something to the effect of: "Under the new health care bill - did you know that all real estate transactions are subject to a 3.8% sales tax?" And, as so often happens, this has been taken as gospel by many just because it passed along the internet with assurances that it came from reliable sources. NOT...
THE TRUTH:
Q: Does the health care law impose a 3.8% tax on profits from selling your home?
A: No, with a few exceptions. The first $250,000 in profit from thh sale of a personal residence won't be taxed, or the first $500,000 in profit in the case of a married couple, and then only those with incomes over $200,000 per year ($250,000 per year for a married couple) will be subject to it.
This is separate from capital gains taxes, which have been in place for years. The 3.8% "health care tax" will, in fact, affect very few people.
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