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.