6 Keys to Selling your House

Every homeowner’s dream is to sell their property quickly and for the best possible price. The more time a house sits on the market, the more likely it is that the price may have to be lowered in order to attract interested buyers. So your job is to make your home as appealing as possible. It might take a little bit of elbow grease, but it will be worth it when your house sells faster than the ones already on the market.

Here are some areas to focus on so you don’t lengthen your sale by overlooking the basics.

1. Clean. Every corner of your house needs to sparkle. The appearance of a dirty home will turn off most buyers. Hiring a cleaning service to scrub kitchen and bathroom floors, dust and polish all woodwork, and clean carpets is well worth the cost.

2. Odors. You have to eliminate bad smells, not just mask them. Remove the source of the odor if possible (carpets, trash, litter boxes), and use enzyme cleaning products. Pet smells are so pervasive, some sellers even board their pets while their house is for sale.

3. Light. People like light and spacious, not dark and cave-like. Clean your windows and keep them clear of trees or shrubbery. Remove blinds and drapes to clean them thoroughly. Increase bulb wattage in areas where you need more light.

4. Repairs. Prospective buyers like to make sure everything in the house works. They will turn on lights, open drawers and test faucets. Fix or replace broken or missing hardware, grease hinges and joints, repair cracked caulk, and make sure your outlets work.

5. Clutter. Potential buyers don’t want to see your stuff. They want to envision their belongings in your house. Make your decor as impersonal as you can. Bonus: minimal furnishings can make your home appear bigger.

6. Curb Appeal. If you don’t have it, buyers will drive right on by. The National Association of REALTORS® estimates that adding curb appeal can boost your sale price by up to 4 or 5 percent. Keep the lawn and garden neat, add some potted plants, repair cracks in the driveway, use a power washer or even repaint your exterior.

Protect Your Possessions with a Home Inventory

We pay for home insurance to protect our homes and possessions in case of burglary, damage or fire. But if calamity were to strike and you should need to recount what was lost, would you be able to remember everything? To save yourself the worry and the trouble, take time now to create a home inventory. This can help you keep track of everything you own, and it speeds up the insurance claims process.

The best way to create a thorough inventory is to physically walk around your house from room to room and build your list. Take pictures of everything, including serial numbers and receipts where you can. For each item, try to include a description, when it was purchased and an estimated value.

There are a variety of tools available to help you. You can simply write everything down in a notebook, create a spreadsheet (Microsoft Office has templates online), or use one of the new inventory apps on your computer or smartphone. The Insurance Information Institute and the National Association of Insurance Commissioners offer free apps with secure online storage. Many insurance companies have their own apps, as well. The best tool is the one that you will actually use.

Creating an inventory now isn’t difficult, though it can be a little time-consuming. But it is well worth the effort, and if disaster strikes, you’ll be thanking yourself later.

Risks When Buying a Short-Sale Home

If you are looking to buy a home at a significant reduction in price, you might have heard about pursuing a short sale. A short sale can occur when a homeowner can no longer pay the mortgage and wants to sell the property for less than the amount currently owed on the loan. This tactic has the potential to save you money, but it also has its risks. Here are few you should look out for:

Time — The short-sale process generally takes longer than the regular closing process. The seller’s mortgage lender needs to approve the sale, which typically takes about two months. If there are other liens on the house (such as a second mortgage or home-equity line of credit), those lenders must approve it as well. Sometimes final approval can take six months or more.

Deal falls through — Sometimes the lender’s approval might come with conditions that the seller is unable or unwilling to meet, and they will back out of the deal, even after months of time already invested.

Extra costs — Lenders rarely agree to pay for extras that a seller would typically take care of (such as inspections and repairs), so your closing costs could be higher.

Deferred maintenance — Cash-strapped sellers may have let maintenance and repairs go by the wayside, resulting in a lot of fixing-up that the buyer would be responsible for.

Equity Position Improvements

Another sign of an improving economy — an improvement in the equity position of U.S. households. The Federal Reserve Board of Governors recently released data showing that homeowners are continuing to regain the equity in their homes they lost during the housing crisis that began in 2007.

In its analysis of the data, CoreLogic found that at the end of the first quarter of 2014, 12.7 percent (6.3 million) of homes with a mortgage were in negative equity, meaning the homeowners owed more on the mortgage than the property was worth. This is a significant decrease from the year prior, when 20.2 percent of homeowners were “underwater.”

“Prices continue to rise across most of the country and significantly fewer borrowers are underwater today compared to last year, “ said CoreLogic president and CEO Anand Nallathambi. “An additional rise in home prices of 5 percent, which we are projecting will occur over the next 12 months, will lift another 1.2 million properties out of the negative equity trap.”

States with the highest share of negative-equity properties include Nevada, Arizona, Florida, and Mississippi. Those with the lowest share are Texas, Montana and North Dakota.

The current level has not been seen since 2007 and bodes well for the real estate market, as fewer underwater borrowers help unlock housing supply and demand.

Speculation Abounds on Mortgage Applications

The Mortgage Bankers Association’s Purchase Index keeps tabs on the rate that people are applying for mortgages, and that number can give economists some insight into what’s going on within the market.

The first half of 2014 saw the numbers falling, corresponding with a slower-than-expected recovery in home sales during first quarter.

But then over the course of one week in early summer, the index rose by 10 percent. Such a jump is leading real estate professionals and mortgage lenders to speculate about the future. Some believe it is just a blip, a repeat of a similar temporary increase that occurred in 2013. But others are more hopeful.

National Association of Mortgage Brokers vice president Rocke Andrews said he saw the jump as a good sign. “This is a response to an increase in consumer confidence and feeling good about the economy, along with a short-term dip in interest rates,” he said. “The economy is getting better and people are feeling better about their jobs. If interest rates stay stable, we will see a pretty good rebound.”

Lender loanDepot conducted a survey and reported that half of the potential home buyers surveyed indicated that they had not pursued financing for a home purchase because they were afraid they wouldn’t qualify.

President and COO of loanDepot Dave Norris said too many people are sitting on the fence. “Potential buyers are forfeiting their dreams of homeownership before they find out what financing options are available to them. It’s never been easier than it is today to go online and research your options.”

Easy Ways to Increase Home Value

Whether you are planning to put your house on the market or you just want to grow your investment in your home, there are a number of simple ways you can increase your home’s value without tackling a large remodeling project. 

Inspect Your Home
Typically buyers will request an inspection of your home. Beat them to it by regularly inspecting it yourself and taking care of any problems you find along the way.

Paint Kitchen Cabinets
You don’t have to replace all your cabinetry to give your kitchen a new look. Just give cupboards a fresh coat of paint and maybe some new hardware to spruce them up.

Replace Light Fixtures
Light fixtures tend to be put up and be forgotten, so replacing old lighting with new fixtures can give rooms a more modern feel.

Add Seating
Anyplace you have open space, think about putting in a table and some chairs. This showcases the potential of the space, which can translate into a perceived higher value.

Declutter
The simplest way to make a room appear bigger is to remove the photos, knick-knacks and other clutter that accumulate over time.

Highlight Storage
Creating or showing off the storage capabilities of your house lets potential buyers see that their stuff will fit there too. Even a wire rack closet system presents the appearance of organization.

Before investing a lot of time or money into a home-improvement project, give me a call. As your real estate professional, I can let you know what buyers in your area are looking for and save you money by preventing unnecessary upgrades!

 

Leading Markets Continue to Improve

Although it’s been slow, the economy does continue to improve, and along with it the housing market. The National Association of Home Builders (NAHB) and First American Title Insurance Co. produce a “Leading Markets Index” (LMI), which uses single-family housing permits, house prices and employment levels in various metro markets to measure how close to normal the markets are functioning.

 The LMI indicates that, nationally, we are running at 88 percent of normal economic and housing activity. Scores for metro areas varied, but 59 of the 351 measured are at or exceed 100 percent of normal activity, and 85 percent improved over the last year.

 “Things are getting slowly better overall,” said NAHB Chairman Kevin Kelly. “The nation’s economy is headed in the right direction.”

Cash Purchases on the Rise

The latest Confidence Index, published by the National Association of REALTORS® (NAR), found that more home buyers are paying cash – 33 percent in the first quarter of 2014. Usually when that number goes up, it’s because the number of distressed home sales has gone up. But in this case, the number of distressed home sales has actually gone down, a fact that has economists puzzled.

“Distressed home sales, most popular with investors who pay cash, have declined notably in the past two years, yet the share of all-cash purchases has risen,” said Lawrence Yun, NAR chief economist. “At the same time, investors have declined as a market share, indicating other changes have been under way.”

A number of factors could explain the increase in cash purchases:

• Mortgage lending regulations.


• The baby-boom generation, and its accumulated equity, is retiring and trading down.


• Individual investors and purchasers of second or vacation homes usually pay in cash.


• Foreign buyers typically pay cash.

Save Money through Window Treatments

Are you thinking about changing up your window treatments? Why not make them more energy-efficient and save a little money while you’re at it?

The U.S. Department of Energy (DOE) states that window shades can be one of the simplest and most effective window treatments for saving energy. Dual shades that are highly reflective (white) on one side and heat-absorbing (dark) on the other can be reversed with the seasons. Drapes can also be effective in any season, depending on fabric type and color.

In warm seasons, blinds and high-reflectivity film can reduce heat gain. The DOE estimates that, used correctly, blinds can reduce heat gain by as much as 45 percent. However, blinds aren’t that efficient at keeping out the cold, and film reflects sunlight regardless of the season, so these options are best for warmer climates.

For exterior changes, your best bets are awnings or overhangs. Overhangs can shade south-facing windows in the summer and, if oriented correctly, still allow sunlight in during the winter. Awnings can be quite effective in the summer, reducing solar heat gain by up to 77 percent. Plus, they add some personality and curb appeal to your home.

Tip: The key to any window treatment’s effectiveness in conserving energy is proper installation, so be sure to do your research.

Alternative Ways to Pay Your Mortgage

Are you looking for a different way to pay your mortgage? Maybe your payment is eating up all of one of your bimonthly paychecks and you’d like to spread it out. Or maybe you want to pay it off earlier. You have several options for making payments, either involving your lender or on your own.

Some lenders will set up bimonthly or biweekly payment plans for you. Paying bimonthly just splits your monthly payment in half, and you pay it twice a month. This can take the burden off your whole monthly payment coming out of one paycheck. Paying biweekly involves making half of your monthly payment every two weeks, which over the course of a year adds up to an additional monthly payment made (26 payments biweekly vs. 24 payments bimonthly). This speeds up the rate at which you pay off the loan, resulting in years being taken off the term. The drawback to paying biweekly is that most lenders charge extra fees.

If you like the idea of shortening your term but don’t want to pay extra, you can do it yourself by changing the amount you pay each month. Add an extra 1/12 of your monthly payment each month, and at the end of the year you will have made the equivalent of 13 monthly payments.

Note: Anytime you pay an amount that exceeds your monthly payment, be sure to indicate to your lender that you want the additional money to go toward the principal.

How are real estate agents paid?

Whether you're buying or selling a home, you'll probably work with a real estate professional during the transaction. If you're a seller, the REALTOR® that you work with will offer expert advice about the community and competition, provide marketing and advertising, and handle schedules for all the transactions that must occur. For buyers, the agent will help them identify properties that fit their needs, handle negotiations and also help with the paperwork and scheduling.

For all that they do, agents are paid by commission, rather than on an hourly rate. The commission they receive is based on the sale price and only after the completion of the sale. If they do not sell the home, or if they are unable to locate a home for a buyer, they aren't paid.

How much is the commission?

The typical commission is about 6 percent of the sale price, and it is usually split between the buyer's agent and the listing agent. The commission percentage that the seller agrees to pay is negotiable.

Who pays the commission?

The fee for the transaction is subtracted from the proceeds of the sale. It’s important to note that the fee comes out of the cost of the house and is not tacked on in addition to the sale price.

Don’t forget the garage when staging your home

It's well documented that staging your home for a sale helps you sell it quicker and for more money. It helps the buyer imagine what their stuff would look like in their new home.

Many homeowners forget that the garage is an extension of the home and use it as a storage space for all their clutter when getting ready for a sale. That's a big mistake.

The garage is an important amenity. Home buyers like the room for storing their stuff. So when staging the home, make sure to stage the garage so they can see the potential in it, whether they want to fill it with shelves for storage, put cars in it, use it as a shop area, or a man cave.

Here is the to-do list for staging your garage:

De-clutter

Get rid of all that extra stuff that you don’t use anymore, including the things from inside the home, and have a garage sale.

Use heavy-duty hooks to hang larger items that are taking up space.

If you have cabinets, shelves, or storage systems, organize everything in them. Get everything off the floor and into cabinets, shelves, or bins.

Put tools away in drawers or cabinets or hang them on a pegboard.

Make sure all flammable items, tools, and chemicals are stored correctly.

Clean everything

Dust the walls and corners, just like you would the rest of the house. If the walls don't come clean after scouring, they need a fresh coat of paint.

Clean the garage floor. Attack any stains and get rid of them. Like the walls, if the floor doesn't look great after a good scrubbing, consider painting and sealing it or adding a floor covering.

Don’t forget the garage door! Make sure it's clean and free of scuffs and marks. A fresh coat of paint will do wonders to increase the curb appeal of your home.

Maintenance and improvements

If it doesn’t already have one, install a smoke detector in your garage.

Check the lighting and replace all bulbs. If it's still dim, consider adding lights.

Make sure your garage door opener is working properly, along with all the extra functions, including the automatic light, automatic reverse, emergency release and wall control panel.

Tell your REALTOR® about any unique features, workbench, or extra storage space in the garage so they can be pointed out to potential buyers.

Making sure your garage is clean, organized and in good repair sets the stage for a good first impression. It may not be a deal breaker, but if a home buyer is on the fence about making an offer, it can be the small difference that tips the odds in your favor.

Should you FSBO?

On the surface, selling your own home seems like a good idea. After all, who knows your home better than you?

This is known in the real estate industry as FSBO, or For Sale By Owner.

Advantages of selling your own home

The biggest advantage of selling your home yourself is that you won't pay a commission to a REALTOR®. You also have complete control of the transaction. You don’t have to rely on anyone else. You schedule the showings, do the marketing, answer inquiries, etc.

Why it's better to work with a REALTOR®

First and foremost is experience. Most buyers choose to work with a buyers’ agent whose job it is to get a home at the best possible price for the client. As a rule, they are good at negotiation. The possibility exists that you could sell your home for less money, and you could leave yourself open to potential legal problems. If you do choose to go the FSBO route, have an experienced real estate attorney examine the contract.

Loss on the price

If you sell your home, you may end up selling it for less than you should. Real estate agents hire appraisers whose job it is to find things wrong with your home. You don't have access to all of the data that real estate agents do - including sale prices of comparable homes, the prices other homes in the area are listing for, etc.

Marketing expenses

You will have to pay for marketing, listings, signage, printing, and advertising (for which you'll pay more, because you won't get an agency's volume discount.)

Commission

Although it seems like you'll pocket what you would pay in commission - which is a tremendous savings - if you do sell your home, the buyer knows that you're saving commission, so they will probably negotiate for you to pay the buyer's commission, so expect to pay around 3% of the purchase price to the buyer's agent. And don't forget that you'll have to pay for a lawyer to review the contract.

Added time

Selling a home takes time, and because you'll be learning everything about the process on the fly, you can expect it to take longer.

Complicated process

Because selling a home is so involved, with many steps, government agencies and procedures that have to be accomplished before the sale can be finalized, there are things that will fall through the cracks.

Shrinking the pool of buyers

Because you may not be able to advertise as effectively as a real estate agent, you're going to miss some potential buyers. Also, some buyers may decide the best way to avoid any of the potential problems is to work with an agent and will avoid homes listed FSBO.

It’s not that it can’t be done, but FSBO is a tricky, time-consuming and somewhat costly endeavor. Make sure to weigh the pros and cons before making the decision.

Should you replace your roof before putting the house on the market?

One of the biggest concerns home buyers have is whether they will have to replace the roof. A new roof is worth a lot to potential buyers because it puts their minds at ease. A new roof is a big expense, particularly worrisome if the new homeowner is cash-strapped after a down payment and paying closing costs.

If you are considering selling your home, you may be asking yourself if you should replace the roof.

The first thing you should do is schedule a home inspection. The inspector will examine the roof and let you know whether you need a repair, replacement, or if it's in good shape.

If you own the home outright, your decision to replace the roof may depend on whether you are looking to maximize the sale price. Someone who still owes a great deal on the principal and wants to leave the deal with as much cash as possible may opt to not replace the roof.

If you can't afford to spend money out of pocket, you may need a home equity loan to replace the roof, which means more debt that will need to be paid when the house is sold.

Look at the competition in your area. If there are a lot of competitively priced homes, a new roof may be a major incentive to potential buyers.

Consider how much of a negative impact leaving the roof as is will have. If you have already seen leaking or if there is a possibility that damage could occur if the roof is left as is, there's no question that it should be replaced. Leaving it as is would make it difficult for a buyer to get a mortgage if the roof needs repair or replacement.

If insurance will cover part of the repair, it makes sense to go ahead with the repair.

It is possible that a partial repair can fix your problem. You could also offer to lower the sale price to cover the roof replacement.

A new roof can definitely help the sale of your home. Ask your real estate agent for advice regarding your ability to recoup the expense of roof repair or replacement.

What stays with the house when it is sold?

Sometimes there are misunderstandings about what goes and what stays when a home is sold. Nasty emails and phone calls between buyers, sellers and real estate agents after the sale are common. Some people even end up in court because buyers assume that sellers would be leaving something behind.

In many cases, it depends on laws of the state. In other cases, it merely depends on what is customary for your location. That’s why it is important to work with a local REALTOR® who knows the ins and outs of the local market.

The question to ask is “Is it permanently attached?” If so, it’s fixture, and usually, it stays. However, some fixtures fall into the category of personal property. And that’s where we enter a gray area.

What is personal property?

Beds and furniture … there’s little question that they are personal property. Mirrors, art, chandeliers … they may seem custom made to fit the home, but they still fall under the category of personal property, even though the art may look as if it were made specifically for the home. If there is a question, it’s always best to ask. And get it in writing.

Here are three things usually included in the sale:

Appliances

It’s not the norm everywhere to include all major appliances - including refrigerators and dishwashers - with the property. Always ask your REALTOR® about what is customary. If there’s any doubt, be sure to put it in writing as to what exactly is to be left behind, up to and including name brands.

Window Coverings

If there are window coverings present, they usually stay with the new owner. However, be sure to ask. The seller may have had the drapes custom made to match the furniture and will want to take the drapes to their new home. Make sure to ask and get it in writing.

Flat Screen TVs

TVs used to fall under personal property 100% of the time. Used to. But now media rooms and the large, flat screen, high definition TVs that are now professionally mounted above the fireplace or on the wall like a piece of art with the wires running through the walls are common. As a result, TVs are considered fixtures. Again, make sure to ask and get it in writing.

Sometimes sellers decide that they want to keep something or that they will part with it for a price. Sellers should document everything that will be included and will be excluded so there’s no doubt in the buyer’s mind what stays and what goes. Buyers should be as detailed as possible from the beginning and always ask the real estate agent during the showing or open house. If they say it’s included, make sure to get it in writing.

One more warning: Sometimes sellers will advertise “Appliances are included” and replace their high end appliances with lower-end models. Make sure to specify that “existing appliances” are included. And get it in writing.

What should be included in your home listing

Did you know that what you say and how you say it can have a big impact on how effective your home listing is? The results can be selling your home more quickly and for a better price.

By the same token, using the wrong words and phrases can turn a buyer off as quickly as the right one can motivate a buyer to learn more. Here are some tips to improve your listing:

Be specific

Give as many details or facts about a property as you can. Include updates such as a new roof or driveway and items that differentiate your home from competitive properties. If your kitchen is a draw, don’t be afraid to drop brand names.

Use good grammar

Bad spelling and grammar, and using abbreviations that aren’t easily understood can be a big deterrent to potential buyers.

A photo’s worth

In a buyer’s market there may be more properties available than buyers to purchase them. With that much competition, sometimes the photo can draw the attention of a buyer or agent. Make sure you’re putting your home’s best foot forward with great photos.

Mention amenities

A great view or privacy won’t be apparent in photos or property details. Use the description to talk about features that aren't obvious.

Avoid exaggeration

Be realistic in your listing. Building a buyer’s expectations with a fluff-filled description only to have it fall far short in reality can turn a buyer off.

Use the right adjectives

The words you use can make a difference. Use descriptive opinion words if they are appropriate. Also use descriptions of the property within the copy. Using property descriptors and opinion words were found to increase the sale price by just under 1% for each instance. However, there is a limit. Don’t overdo it and turn off prospective buyers.

Motivate the buyer

In advertising, sometimes saying something is enough to make a large number of people believe it. That goes for pronouncements on pricing. Telling them it’s a good deal is enough to motivate them without being dishonest, even if it priced competitively with other homes in the area.

Remember that you have a very short time to attract a buyer’s attention. Make sure to deliver the biggest selling features in the first couple of lines.

The dual agency role in real estate

One of the things those who work in real estate can’t seem to agree on is that of “dual agent” on a home sale. While it’s legal – in some form, anyway – in all 50 states, getting people on both sides of the sale to come to a consensus is difficult at best.

What is a dual agent?

Many, if not most, REALTORS® can represent sellers as the listing agent. Their responsibility is to sell the home as quickly as they can and at as close to the listing price as possible. They act with the seller’s best interest in mind. For their efforts, they receive a commission.

When someone is ready to buy a home, they can employ a buyer’s agent to help them find their dream home. The agent acts on their behalf to negotiate the price, arrange for inspections, closing and all other things associated with buying a home. For their efforts, they receive a commission.

It may be called “transaction brokerage” by some states, or “designated agency” by others. Simply put, double-ending occurs when the same agency represents both sides of the sale of the home – the buyer and the seller. While it is legal, there are many who find the practice questionable.

The good news is, whether you’re buying or selling, if an agency hopes to represent both sides of a home sale transaction, they have to notify the parties involved.

The advantage is that with fewer people involved, the sale can be done quicker and more efficiently. The advantage to the agent or agency is that the commission is not split.

And thus arises the conflict because a single agent cannot represent the seller’s best interest while representing the buyer’s best interest. They could try to convince the seller to sell at a lower price, or oversell the attributes of the home to the buyer, in order to make the sale.

When you are hiring an agent, make sure to ask if he or she could possibly take you into a dual agent sale. If you feel comfortable, then proceed. However, if you feel that you may have remorse at the end of the transaction, it’s best to avoid the situation.

Tips to make the mortgage process go faster

Mortgage lending is a very competitive industry. Lenders will sometimes promise home buyers that they can speed up the process. While they can cut a few days off of the process, it generally takes 30-45 days to close. To expedite the process somewhat, they can speed it up by scheduling appraisers, home inspectors and underwriters. There are some things you can do on your end to help cut down on the time is takes to close.

Get a handle on your credit

Having good credit is beneficial for so many reasons. Obviously, you'll need to meet a lender's credit benchmark in order to even qualify for financing. You're more likely to qualify for a more competitive rate and term if you have higher credit scores. It also saves time because you'll spend less time producing documentation and explaining some of the bad things that may appear. It's important to pull your credit reports and credit scores so you’ll know what’s there and what you can clean up.

Respond quickly to requests

You'll be asked to supply things such as tax returns and documentation from your employer. Ask your REALTOR® what your mortgage lender will need.

Buy a house that meets requirements

Federal Housing Administration and VA loans have standards and requirements that must be met in order to qualify for a loan. Make sure to ask your REALTOR® if your home meets those standards.

Don't add any new credit

Don't buy a car, boat, or make any other large purchase that can change your credit score. Don't even apply for a new credit card at a department store.

Find the right lender

Specialized products like government-backed Veteran Affairs and United States Department of Agriculture home loans require different knowledge. Make sure to ask about their turnaround times on loan files and the average number of days from contract to close.

Be sure to talk to your real estate agent about what you should and shouldn’t do to speed up the mortgage process.

Follow these tips to price your home correctly

Along with choosing a real estate agent that you’re comfortable with and marketing the home effectively, determining the correct asking price are three essential aspects of selling your home quickly and for the highest amount possible. The first are personal decisions; the last requires some research, finesse and some educated guessing.

Here are some tips to help you price your home right.

Look at the neighborhood

Consider comparable homes nearby that were for sale, recently sold or are currently for sale. This is perhaps the most important factor in pricing your home.

Local market conditions

Home sales is no different than any other industry. Supply and demand is a determinant of price. Your REALTOR® will have information about the supply of available homes compared to the demand of buyers.

Check out the competition

Visit open houses in the area to see how your home stacks up.

Price to appraise

The buyer’s appraisal price considers the prices of recently sold homes. Your sales price will be subject to an appraisal, unless your buyer agrees to pay cash or waives an appraisal contingency.

Don't pay for an appraisal

Though the buyer's appraisal will be important when it comes time to close, you don't need to obtain a separate appraisal prior to pricing your home.

Square footage

Every home listing states the square footage, but not all square footage is created equal. Two homes could have exactly the same square footage, but one could be an open floor plan while the other has separated rooms.

Beware of the high asking price

An agent may propose a high asking price to flatter you in order to win the listing, but will then push hard for a price reduction almost immediately. This is known in the business as "buying the listing." Make sure to avoid the trap by talking to several agents. If one comes in way higher than the others, they could be buying your listing.

Irrelevant factors

When it comes to pricing, there are a number of things that many homeowners think are contributing factors, but aren’t:

• Price you paid for your house


• Amount you want to net from the deal


• Price the house would have sold for a few years ago


• Amount you've spent on repairs, maintenance and improvements

Don't overprice your home

You may be inclined to list at more than what your home is worth in order to hit the price point you really want to get when the buyer makes an offer. This is dangerous because if you don’t get an offer, you may have to reduce the price, which can be an indication to buyers that it's probably more over-priced than the amount you just reduced.

Don't underprice it, either

Some homeowners deliberately underprice their home to attract more buyers and start a bidding war. This is just as risky as overpricing the home. If the bidding war you hoped for doesn’t materialize, you may only receive one offer at exactly your artificially lowered asking price.

Have pets? Here’s what you’ll need to do when you’re selling your home

When you make the decision to sell your home, there will be a lot of things that require your attention in order to put your home’s best foot forward to attract sellers. Hiring the right agent; pricing it correctly; marketing the home; staging.

Add one to the list if you’re a pet owner. If there is evidence in your home that you own a dog or cat, it can affect potential home buyers in a negative way. It can mean the difference between getting the right price and getting bids at all.

If you own a pet, there will be visual evidence as well as an odor. Believe it or not, how your home smells can affect potential buyers in a real and dramatic way.

Tips to help sell your home when you have pets:

Relocate your pets

Although you don’t want to kennel your pet for a long period of time, relocating your pet while your home is on the market may be the best option. Ask a friend or relative to take them in while you’re trying to sell. You might want to speak with your veterinarian about what is appropriate.

Get rid of the hair

Vacuuming doesn’t always work. You may have to attack the carpeting with lint rollers. In addition to the carpets, you’ll have to remove hair from furniture, drapes, vents and near the feet of furniture.

Find trouble spots on your carpet

You can buy a small black light that can identify trouble spots on your carpet. Mark any place that shows up under ultraviolet light and use enzymatic cleaners to remove the odor and stain.

Don’t forget hardwoods and tile

Hard surfaces can absorb pet odors; and the cracks between tile and slats can be hiding places as well.

Cleaning the walls

If you’ve had your pet for a long time, they can spray or rub against walls enough to leave discolored spots. The oils in their coats can discolor the wall and leave an odor. Some will just wipe away, but in some cases, you may need to repaint.

Clear the air

Rather than burning a bunch of candles, which is a good sign that you’re hiding something, replace your furnace filters and dab them with essential oils to pump clean, attractive scents throughout your entire home.

Don’t forget the yard

In addition to the most obvious evidence, you’ll also need to give attention to patches and dead spots in the yard.

On the day of a showing

If you don’t relocate them when you have a showing scheduled, don’t leave pets at home. If your pet is hyperactive around people, that’s definitely a negative, especially if the potential buyers don’t like animals. Remove litter boxes and vacuum up every bit of litter. Put pet food, bowls, cat condos, scratching posts and pet toys where they are less likely to be seen.

Your real estate agent will advise you on how to best de-pet your home prior to selling it. It will take a little work on your part, and you may have to hire a professional cleaner in order to remove evidence of your pet, but when it means the difference between getting no offers and getting the right price for your home, it’s time and money well spent.

How to ace the pre-listing home inspection

One of the things that nearly every home seller dreads is the home inspection. It's perfectly natural to have some anxiety when an inspector is coming in to evaluate your home.

As a seller, you may opt to have a pre-listing home inspection done as a way to anticipate what you may need to do prior to the buyer's inspection. Whether you choose to have a pre-listing inspection, or are preparing for the more traditional inspection, here are several things you can do to help your home inspection go more smoothly.

Remove clutter

Inspectors need access to electric panels, heating and cooling systems, water heaters, plumbing and any mechanical equipment. Those places are usually in places used as storage. Make sure to move everything out of the way so the inspector has easy access, including the cabinets beneath your bathroom and kitchen sinks.

Empty your appliances

Yes, they do look inside the washing machine, dryer, dishwasher and stove. They don't want to move laundry and dishes in order to make an assessment.

Provide attic access

Inspectors have to check insulation and for water damage from a possible leaking roof. Ensure that they have clear access to the attic. Usually that means going through the garage, so make sure to move vehicles.

Check light bulbs

They need to see everything, and you don't want them guessing as to whether or not the wiring is working. Make sure all the bulbs in the home are working.

Unlock everything

In order to expedite the process, after you let the inspector inside, unlock gates, garage doors, sheds and crawl spaces. An inspector needs to have access to everything on the property and they shouldn't have to stop the inspection to ask you to unlock something they need to see.

Disclose your home's flaws

They will find everything anyway. Make sure they know that you're being forthcoming about what needs to be addressed, whether you'll do it prior to the sale or the buyer will have to do it after the purchase. What you're trying to avoid is a negative surprise.

Provide documentation

Save receipts and invoices of repairs and maintenance and put them in a binder.

Helping the inspector do his job can improve their impression of your home and improve their assessment of it, which can help your home sell faster and for more money.

How to attract younger home buyers

If you're selling your home, attracting younger home buyers is going to be important. For the most part, younger home buyers fall into these two groups – Generation X and Generation Y or Millennials.

The largest demographic of home buyers is Generation X, who were born between 1965 and 1979. Millennials, those born between 1980 and 2000, are the second largest. Although they may fall into two demographics, they share common ground not only when it comes to what they look for in a home, but how they look and the most effective ways to sell to them.

Online listing

Younger buyers are more likely to start the search for their new home online. According to the National Association of Realtors®, 90% of buyers use the Internet to search for homes, and 62% of buyers said they walked through a home after viewing the listing online.

Low maintenance

Working around the home is not high on the younger buyers' list. They prefer to keep their weekends free, avoiding chores and maintenance associated with home ownership.

Good location

Some prefer to be closer to the city and mass transportation, while others are considering schools if they have children. Know which your location will appeal to and make sure it’s included in the listing.

Updated kitchen and bathroom

They may not have a lot of money to put into a remodeling project after they purchase; most of their cash just went into the down payment and furniture.

Technology

Cellular service and high speed Internet matter more to younger home buyers, especially since they are less likely than ever to have a landline.

Open floor plan

Younger buyers seem to be attracted to a big kitchen that transitions into a TV room, opting for flow of the home rather than sectioning off a formal dining room, living room, etc.

Home office

Technology offers more people the opportunity to work from home and younger people are most often the ones to take advantage of the opportunity.

Energy efficiency

Whether they're going green or not, a home's energy efficiency is something that most home buyers will ask about.

Staging

Buyers are affected by the home's potential, or how comfortable they are the minute that they walk into a home. Staging, rather than an empty home, is more effective to help younger home buyers imagine themselves in the home.

Attracting younger home buyers will be more important - to sellers and agents alike - as the housing market continues to recover.

Using feng shui techniques when staging your home to sell

As you may know, feng shui is a practice that originated in China. It is an ancient art and science developed over 3,000 years ago and is a complex body of knowledge that reveals how to balance the energies of any given space to assure health and good fortune for people inhabiting it.

Literally translated, "feng shui" means "wind water." In Chinese culture, wind and water are associated with good health, thus good feng shui came to mean good fortune, while bad feng shui means bad luck, or misfortune.

For homeowners, everything we associate with staging the home to sell, have their basis in feng shui strategies.

Make the room inviting

If you stand in the entranceway to a room and all you can see are the backs of chairs, it's not very welcoming to guests. Creating spaces in the room where people can sit and talk improves the intimacy of a large room.

Create good traffic flow

Look at the room in terms of creating easy-to-navigate, open pathways. You don't want anything that's going to keep people from feeling that they can move through an area. Use space wisely, and if that means removing a piece of furniture (or even two!) that's OK. You want potential buyers to feel comfortable. Too much in a room can make it feel cramped or claustrophobic.

Use plants and water

Living plants and flowers makes the room vibrant and adds splashes of color. Feng shui also dictates the use of a water feature, because water represents prosperity. The back left corner of a room is the wealth corner. Try placing a small water fountain in that location.

Make a good first impression

Feng shui, like home marketing, is about making a good first impression. You want it to be friendly and positive for all buyers. Choose neutral art that appeals to everyone, such as landscapes and nature scenes. When you're selling, you also want to put away personal family photos and religious and spiritual icons. You want to make it easy for the buyer to imagine their family in the home.

Conclusion

Feng shui alone won't sell your house. You want to make sure to have the right agent, who will help you set the right price and the right marketing plan.

Are subprime loans making a comeback?

Subprime loans make it possible for many homeowners to qualify for a mortgage and buy a home. In 2005, subprime loans also triggered a housing bubble that we are still feeling the effects of for nearly the last decade.

Subprime loans are made to borrowers who are highest risk: either they don't have a good income history, little or no down payment, or their credit scores are bad.

The housing boom and the bursting bubble

In 2005, Wall Street investors were anxious to securitize subprime loans in hopes of a big return on their investment. This encouraged lenders to push high-risk loans. The assumption was that loans would be refinanced and the prices of homes would rise.

What happened was that eventually, home prices dropped, there were massive foreclosures and investors lost billions in the housing market. The bursting bubble was severe enough to help take down investment giants Bears Stearns and Lehman Brothers, just to name a couple.

The current subprime situation

Currently, subprime lending is a fraction of the total market. In the first nine months of 2013, about $3 billion of subprime mortgages were made compared to $625 billion made in 2005.

Tougher federal lending standards in the last couple of years means millions of Americans with poor credit scores have been unable to secure traditional mortgages. Lenders who operate in the new subprime space have an opportunity not only to help renters become buyers, but turn a big profit as well.

Lenders who offer subprime mortgages are much more careful. They require as much as 30% down to safeguard their investment. They have to hold onto their loans for a while or sell them to private equity firms until they establish a strong enough track record to offer mortgage-backed securities to investors.

Burned by the last bubble, investors are taking a pass on subprime for now. For the time being anyway, buyers who pose the biggest risk will have to rely on the Federal Housing Administration for mortgage loans until the new subprime lenders establish themselves as safe investment opportunities for investors.

Questions you should ask before choosing a REALTOR®

When it comes time to sell your home, choosing the right real estate agent can mean the difference between selling your home quickly and seeing it sit on the market for a while; between getting your asking price and selling well under your target; between a stressful and a stress-free experience.

During the time your house is on the market, you’ll probably spend quite a bit of time with your agent. Their style should be compatible with yours. If you’re a type A personality, choose a go-getter. If you prefer a more relaxed approach, you’ll probably be happier with a REALTOR® who’s more laid back. You are going to be spending a lot of time with your agent, so your agent's style should be compatible with yours.

Are you a member of the National Association of Realtors?

The NAR requires ethics training and strict adherence to their code of ethics.

What percentage of your clients are buyers vs. sellers?

Can you outline how you would represent us?

Listen for information about housing inspections, following through with your mortgage approval process, and being present at your closing.

In which neighborhoods do you primarily work?

If they don’t work in your area much, it might be worthwhile to keep looking.

How do you plan to advertise my house?

You should have realistic expectations. An agent isn't going to spend half of their commission on marketing for your home.

What is a realistic time frame to sell my house at my list price?

If it sounds too good to be true, it probably is. You don’t want to be lied to here; you want to be presented with realistic expectations.

Will I be working with you directly or handed off to someone else?

In many instances, the REALTOR® gets the commitment, then farms out the work to a sales associate or administrative assistant and you never hear from him again. They’re more interested in getting the next listing and letting someone else sell the property while they collect 3%. That’s not what you should be looking for.

Do you work full-time or part-time as a real estate agent?

A lot of great agents work part-time and are very successful.

How many homes have you closed in the last year?

A small number isn’t necessarily a deal breaker. Be realistic. If it sounds low, ask why.

How many other buyers and sellers are you representing now?

The busiest agents often are the most efficient, but if they have 100 people they’re working with, they’re not committing a lot of time to your business.

Is your license in good standing?

Make sure to check the agent’s certification with the state's Department of Real Estate. Many states provide this information online.

How many years of experience and education do you have?

Years of experience is a good indicator of their level of commitment and talent. Those agents who make the effort to continue their education are usually better agents.

Do you work on weekends?

Answer to this better be yes.

Can you provide me references?

Insights from past customers can help you learn more about an agent and give you a greater comfort level.

The best strategy when picking a real estate agent is to choose the most qualified person, and the one with whom you think you'll work well. Ideally, you want to partner with an experienced agent who knows your market, has a strong sense of ethics, answers your questions and, most importantly, listens to you and addresses your concerns throughout the process.

Liens: What they are and what to do if one is placed on your home

A lien occurs when a legal claim is put on a property in order to receive payment for debt or for services rendered. The holder of the lien can sell the property in order to recover the money owed.

A lien can be placed on assets almost any time you have an unpaid debt. A creditor files a lien in the county office stating that they have an interest in your property. It basically gives the creditor a financial stake in your home.

A lien will prevent you from being able to sell, mortgage or take a home equity loan on your home until the lien is lifted. Although there are a number of different types of liens that creditors may place on your home, there are three that are most common.

Mechanic's lien

When a general contractor builds your home, they will very likely file a mechanic's lien on the property to ensure they get paid for their work. Subcontractors and repairmen - including plumbers, painters and carpenters – may also file a mechanic’s lien if they aren’t paid.

Judgment lien

If you’re involved in a lawsuit and you lose, the winning party of the lawsuite can file a judgment lien against your home until the payment is collected. This type of lien can also be imposed by an attorney if you do not pay for legal services.

Tax lien

If you don’t pay your taxes, the government entity – be it federal, state, or county - can file a tax lien on your home until the tax bill is paid.

What to do if someone files a lien

Simply put, the best way to get a lien removed against your home is to pay the bill, settle the lawsuit or pay the taxes. You can negotiate with the lien holder to have them voluntarily remove the lien. It is in your best interest to have any lien against your home removed as quickly as possible.

If the lien is unjustified, you can ask the court to remove the lien.

To ensure that there is never a lien on your home, make sure you pay your creditors and taxes on time and in full. Don’t avoid the situation if you have mounting debt or can’t pay your bills. Consult an attorney or financial advisor to get some help.

What are housing starts and why should you care?

Just last week, government issued the housing starts report for December and it was pretty good news. If you listen to talk radio or watch any financial news program on cable, one day a month they talk about housing starts and then you don’t hear much about it. The problem is that nobody bothers to tell you exactly what the term means and why it’s important.

The federal government tracks housing starts and issues the information, usually in the third week of the month. These statistics come from the Census Bureau, which is part of the Department of Commerce and from the Department of Housing and Urban Development (HUD).

The government reports the number of scheduled construction projects of new houses or apartment buildings across the country. That’s housing starts, in a nutshell. Like unemployment rates, economic growth, and consumer confidence statistics, it is used as an indicator of how the economy is doing.

The ripple effects on the economy

The housing market is one of the most vital aspects of the U.S. economy. Many analysts believe that there may be no better indication of how the housing market is doing than housing starts.

If a report comes out showing that housing starts are up, it's a good sign for the economy. There are usually ripple effects in the stock market as consumers invest, which increases the value of stocks and corporate profits. If the report says housing starts are down, investors tend to get tight-fisted.

Housing starts are an indicator of the commitment of builders to new construction. When new construction is up, more people will be employed to build those houses and apartment buildings. It also means that the people who buy those homes or move into a new apartment will be purchasing big ticket items such as furniture and appliances. These are often referred to as durable goods and are yet another economic statistic you may hear reported.

How to look at housing starts

Because construction is seasonal and subject to weather, housing start numbers tend to be volatile. One down month doesn’t mean you should take it as an indication that the economy is tanking. To identify a trend, look at a six-month period of housing starts to get a more accurate indication of what the market is doing. You should also do a year-over-year comparison.

Remember also that we’re dealing with government numbers here. Like every other report it issues, housing start figures are subject to revisions up or down. Those revisions come out within two months of the original report and are very rarely reported in the news. The change can be significant.

How to pay off your mortgage earlier

If you listen to any financial guru on talk radio or see them on financial shows on cable news, almost all will generally advise homeowners to pay off their mortgages early, if possible. How much you save depends on the amount of your mortgage, the length of time you pay and your interest rate.

The advisors put forth many strategies to accomplish the goal of paying off the house. Really, it all boils down to one thing: paying extra money up-front to save you money in the long run.

Refinancing isn’t the only option

Occasionally, lenders will offer refinancing programs in order to drop your interest rate. This means that your monthly payment will be less, of course. However, unless it specifically allows you to keep the length of your mortgage static, most of the time when you refinance, your mortgage will be 30 years. Again. If you can swing it, and if they offer it, look for mortgages that offer fewer years. The 15-year refi has been popular over the last couple of decades.

Pay more however and whenever you can

Most lenders will allow you to pay off your loan early without penalty. Any amount you pay extra on the mortgage payment comes right off the principal, which can greatly reduce the amount of interest you pay in the long run.

Here’s where the financial gurus get in a lather and offer all kinds of advice to accomplish your goal.

Round up your payment

Every month, pay your mortgage up to the next $100. If you can’t afford it month in and month out, round up to the next $50. Any money you pay extra comes off the principal.

Switch to biweekly payments

This requires a little more leeway in your budget. When you make biweekly payments, you are simply taking advantage of the fact that there are 52 weeks in the year and 12 months. When you pay half of your regular mortgage payment every two weeks, you will have made 26 half payments, or 13 full monthly payments, by the end of the year.

Pay extra when you have it

Keep in mind that you can make irregular payments and send any amount when you have it. When you get a tax refund, a bonus or any other type of windfall, apply it to your balance.

Take a look at what you’ll save

If you want to have some fun, go to a mortgage calculator and punch in some different options to see how much you’ll save.

Weird things can affect your credit score

Attaining and maintaining a good credit score is important because you could get a lower interest rate on your mortgage, potentially saving you tens of thousands of dollars over the life of your mortgage. In order to get the highest credit score possible we’ve all heard the typical advice for keeping good credit:

• Pay all of your bills on time


• Don't open a bunch of credit cards at once


• Don't file for bankruptcy unless absolutely necessary


• Keep an eye on your report to make sure everything is accurate

Those are the big things. But there are some little things... really strange things... that can add up when it comes to keeping your credit reports clean.

Getting cable or internet

There are some Internet and cable companies out there that will run a hard inquiry on your credit when you sign up for their service. A hard inquiry occurs almost any time you apply for credit - credit card, car loan or home loan, etc. A hard inquiry negatively impacts your credit score by a little bit. If you have too many hard inquiries at once, it can really ding your credit. The company has to have your permission in order to do this, so it shouldn't come as a surprise.

Using a debit card to rent a car

Most rental agencies require that the deposit be paid with a credit card. Some will agree to accept a debit card if you'll allow them to perform a credit check on you, resulting in... you guessed it... a hard inquiry.

Buying a new motorcycle

If you decide to buy a motorcycle, you should know this: Motorcycle loans are sometimes not reported to the credit bureaus as vehicle loans. Instead they are reported as revolving credit, which makes them look like a big chunk of uncollateralized credit card debt. Thirty percent of your FICO score is based on how much credit card debt you carry.

Unpaid tolls

Many toll booths in the country have switched to “toll by plate” systems where the vehicle has a tag in the windshield or on the license plate and the owner is sent a bill every month for toll road usage. Just like anything else, if you neglect to pay the bill on time, it’s reported.

Library fines

Although libraries don’t report directly to credit reporting agencies, many of them turn over unpaid balances to collection agencies, which do. Don’t let $4.00 in late fees ding your credit score.

Storage fees

There are a number of shows on TV depicting auctions of abandoned storage units. In addition to losing all of the stuff they had in those lockers, the delinquent owners have another thing in common: they all have a negative line on their credit report because the storage facility will turn over any remaining balance to a collection agency.

Financing furniture

Taking advantage of a 0% financing promotion at your local furniture store looks like a good opportunity to take advantage of free money. However, your credit could suffer because you’re adding a high balance loan to your credit report and could increase your credit utilization rate since the furniture loan is essentially maxed out.

Parking tickets

It doesn’t seem like a big deal, does it? An increasing number of cities are turning over unpaid parking tickets over to private collections agencies.

A collection action by any business can lower your credit score by up to 100 points or more when it shows up on your credit report. It can remain on your credit report for up to seven years, affecting your credit score for years to come.

Tax breaks expire for homeowners

If you keep a sharp eye out, you'll notice that you'll be paying more taxes soon - not this year, but next - if members of Congress don't act in 2014 to prevent it.

Which means you'll be paying more in taxes next year.

The good news for members of Congress is that they can say they didn't "raise" taxes; they only allowed several tax deductions that have been around for years to expire at midnight on December 31.

Private mortgage insurance premium deduction

If you put less than 20 percent down, chances are good that you're being charged PMI. It's used to protect the lender in case of default. It is usually a small percentage of the monthly payment, so most homeowners don't give it much thought. Over the course of 30 years, that small percentage can add up to thousands of dollars. Depending on your tax bracket, deducting it on your federal tax return can trim your cost by 20-35 percent.

Loan forgiveness

When a homeowner gets under water - owes more than the home is worth - they often use a tactic known as a short sale. The lender accepts what the home sells for in exchange for paid-in-full status. The difference between what was owed and what was made is considered taxable income. However, that tax had been waived for years. This could potentially cost a homeowner who does a short sale thousands of dollars at tax time.

Energy efficient tax credits

For the last few years, homeowners received credits for home improvements that increased the energy efficiency of their home. Those projects could include installing better doors and windows, insulation, furnaces, heat pumps, water heaters and central air conditioning. The credit for those will expire; however, some of the credits for installing solar water heaters, wind turbines, geothermal heat systems and other things will remain.

These three tax breaks will remain in effect for your 2013 return. There is always a chance that Congress will renew some or all of them, but it doesn't seem likely. Make sure to talk to your tax preparer.

Tips for moving in winter

For many people moving during the winter is - if you'll excuse the pun - a cold reality. It seems that more companies transfer personnel during the first two months of the year.

This means that a lot of moving takes place during the winter months. The ice, snow, slippery roads and colder temperatures make moving more of a challenge than do it during the warm spring months.

These tips will help you stay safe during your winter moving day, whether you do it yourself of or hire a professional mover.

1. To avoid slipping hazards shovel driveways and walkways before your truck arrives. Put down ice melt to all walkways between your house and the moving vehicle. Don't forget the back entrance!


2. Dress in layers to stay warm. As the day heats up and you start to work up a sweat, you can always remove a layer.


3. Constantly walking back and forth from a warm house to the cold outside is hard on your body. Leave the heat and electricity on in your home until you are completely moved out but leave the door open to balance the temperatures.


4. Cover entrance ways and floors with old sheets or tarps to avoid tracking mud and snow in.


5. Keep towels by the doors to wipe snow from dolly wheels as you come in and out.


6. Make sure you have enough extra moving pads to protect your belongings from the elements. Also make sure moving pads remain dry at all times.


7. Last things to load onto the truck are shovel and ice melt so you can clear the loading area at your new home.


8. With a high center of gravity and shifting weight in the back, driving a moving truck is completely different from driving any other vehicle. Stopping, especially on snow and ice, presents a challenge even for experienced drivers.


9. Keep the moving ramp clean and dry while loading and unloading.


10. If you are transporting any live plants, they should go in your vehicle or in the cab of your rented moving truck. They could freeze if you move them in the cargo hold of the truck.