The Watsons: Ray & Dawna - Making Good Things Happen in Real Estate

Buying a Home in Today's Market

rayanddawna — Fri, 04 May 2012 16:31:55 +0000

Buying a Home in Today's Market

Buying a home today is intimidating, especially for the first time buyer. Terms like Short Sale, Foreclosure, Underwater, REO, HUD and VA Foreclosures can create a sea of confusion when you're trying to determine which type of property you should buy.

Working with a FULL-TIME professional real estate agent is the best way ensure you're making a commitment to purchase a property that will work within your budget and the time frame you have allowed for your move-in date. The reason we stress you work with a full time agent is that you need someone who is available when you are and can be available for timely negotiations. If you are considering purchasing what we call a "Distressed" property which would be one of the types listed above, you want to make sure your agent can clearly explain what you can expect during the process.

If you work with someone who isn't reachable or available at reasonable times, you may run the risk of missing out on a property that you were interested in. Although there are many homes for sale, there is a smaller quantity of properties that are priced right and in good condition that are not in a distressed situation. This can create competition among buyers for the same few properties, so if you're not able to get your offer in quickly you could miss out.

What's your first step? Get your financing in order. Whether a property is owned privately or by a bank, nobody wants to see your offer to purchase unless it's accompanied by a pre-approval letter. The pre-approval letter shows the seller that you've already gone through the necessary steps to ensure your ability to buy. This is important to a seller because once they accept your offer, their house is not likely to be considered by anyone else, meaning their home is pretty much off the market. That's a big risk for them to take if they're not sure you are qualified.

Now what? It's time to figure out the type of property that's best for you. Single family or townhome/condo? When you consider a townhome or condo you need to include association dues into the monthly payment, which reduces the price of the home you can afford. You can purchase a more expensive single family home with a similar monthly payment. Do you want to live within walking distance of stores and restaurants or closer to nature with bike paths and forest preserves? If schools are important review local "School report cards" to decide what's best for your children. How about expressways? If you need to commute you want to be sure you're close to major highways or the train. A good "discovery" session with your Realtor will help you figure all of these things out.

It's time to look! If you're not sure which neighborhood to choose, why not select a couple from each of your top 3-4 neighborhoods to get a feel for which one you like best. It's a great idea to drive through neighborhoods on the weekend when people are home and likely doing things outdoors. It's not unheard of to introduce yourself to potential new neighbors to see if they're people you'd like to live next door to.

As you view properties be sure make notes of what you like and dislike about each property. When you see a variety of homes in one day the details can become blurred, making it difficult to remember which homes possessed which features.

Once you've decided which home to make your offer on your Realtor will prepare a contract. This is when all the wheels start rolling toward your purchase. Our next blog will review the steps you'll go through as you make your home purchase.

Tags:

Home Buying

First Time Buyer

Buy a Home

5 Mistakes Sellers Make When Listing their Home

rayanddawna — Tue, 28 Feb 2012 02:25:37 +0000

As real estate professionals, it’s interesting to see the mistakes sellers make when they list their home. Some of these can be very obvious, while others creep up on the homeowners and aren’t evident until either market time or dollars have been lost.

1. Listing with a family member or friend. When you decide to list your home for sale you can get bombarded with people telling you that they’re “Realtors”, but are they really? Someone who has kept their license but sells homes only occasionally, for friends and family can’t provide the professional service that a true Realtor can. What happens when a buyer wants to see your home and your agent can’t be reached because they’re at “work”? Or how about someone who wants to make an offer but your agent can’t be reached? Will that agent have the time to thoroughly check every detail of your listing to make sure items like taxes and schools are correct? Selling your home is a big decision and now more than ever you want to do everything you can to get the most money possible. Agents with less experience can cost you thousands of dollars.

2. Listing with the highest bidder. When interviewing real estate agents you may find a range of values that each agent gives. Look carefully at the comparable properties used in the analysis. Does the value the agent is giving you really make sense? Just because you’d like to get that higher price for your home, doesn’t mean an appraiser will agree with that price. Do you know what happens when you sell your home and the appraisal comes in lower than the sale price? Either you or the buyer needs to come up with the difference, otherwise the buyer can’t get the loan and the sale falls through.

3. Listing for the lowest commission. If an agent is willing to “sell your home for cheap”, how cheap is their service? Will they take the time to provide quality photos online? Do they pay for upgraded internet marketing in places like Realtor.com? Do they create a virtual tour for your property? All of these things cost extra to the agent and if they’re discounting their fee they can’t afford to put dollars into the best marketing for you.

4. Listing with a company nobody has heard of. You will also find that many agents who offer a lower commission are with no-name or rarely heard of brokerages. You want your property listed with a brand name company that buyers will look for when they go online. A company that provides worldwide exposure is a huge help to you because buyers from all over the world purchase real estate in the United states these days.

5. Listing without knowing your costs. Ask your agent for a Net Proceeds sheet. This will outline all of the expenses involved with selling such as attorney fees, title, transfer stamps and commissions. Misunderstanding your selling costs can make the difference between receiving money from the sale or needing to bring money to the closing, which can be devastating.

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12 Ways to Prepare Your Home For Sale Continued

rayanddawna — Mon, 20 Feb 2012 15:19:51 +0000

Getting Your Home Ready to Sell Part Three…

Not only is curb appeal an important part of getting your home ready to sell, but all around the house is important. Here are some ideas for the exterior and just a couple of other loose ends.

9. Exterior - You've heard the term "Curb Appeal" and this is critical. The front door should be completely free of dirt, cobwebs, spider webs, torn screens, peeling paint and put away all holiday decorations. Torn screens should be replaced, gutters cleared of leaves and broken or rotting wood replaced.

10. Landscaping and Yard - Your grass should be green, cut and watered. There should be no dying trees or plants and certainly no flower pots with dead plants. Bushes must be trimmed and neat and PLEASE pick up your dog's poop! Believe it or not buyers and real estate agents will sometimes walk around the yard and a quick way to turn them off is stepping in your pet's droppings.

11. Driveway - If you have a blacktop driveway get it seal coated. Nothing makes a house look more beautiful than a freshly coated driveway. If you've got concrete make sure there are no significant cracks or holes. The cost of these repairs are likely under $1,000 but a buyer will estimate much more and may decide not to buy due to their perceived expense.

12. Simple Updating - An easy and inexpensive way to give a house a more updated look is to buy new area rugs, towels, light fixtures or artwork. Buy things that you'll be using in your new home but for now make your current one look more updated and desirable. Bathrooms can look completely transformed by replacing the basic strip of bulb lights with something more modern for under $100. Even replacing an old, stained or cracked vanity can be done for under $500.

Check every light fixture to make sure you have the maximum wattage bulbs. When people look at your home it needs to look big, bright and cheerful and having dim or burned out bulbs creates a dreary and depressing atmosphere.

When you think you've got everything done, take photos of every room. Upload the photos to your computer and look for anything that you've missed. Most buyers begin their home search online, so what you see in a photo is exactly what they'll be seeing.

Tags:

Home For Sale

Sell My Home

12 Ways to Prepare Your Home For Sale Continued

rayanddawna — Mon, 13 Feb 2012 02:56:30 +0000

This week wraps up our suggestions for the interior of your home when you're getting it ready to sell. Next week we'll continue with some exterior ideas to give your home that "curb appeal" that buyers are looking for.

Getting Your Home Ready to Sell Part Two:

5. Closets and Cabinets - Most of us have over-packed these spaces because over time we accumulate so much. Clean, donate or throw away and then clean some more. Now's your chance to get rid of all that stuff you haven't used or worn in years. If you don't get rid of it now you're going to be stuck packing and moving it with you anyway. When a buyer looks into your closets and cabinets will they be thinking, "Wow, there's so much storage space here" or will they think, "Wow if these people are bursting at the seams I will be too". Organize and if the inside walls are noticeably scuffed and marked up, clean and paint them.

6. Heat Vents and Intake Vents - People tend to forget to clean the intake vents in a home because they're on the ceiling. They collect a ton of dirt and need a good vacuuming.

7. Laundry Room - Wipe down and vacuum the hot water heater, dryer and furnace. Put in a fresh furnace filter which shows the buyer you've taken good care of the equipment. Organize shelves and make sure the floor and walls are clean and if necessary, painted.

8. Basement - Lots of basements have a wet, mildew odor. If this is due to flooding, seepage, or a leak of some kind you must get it fixed prior to listing for sale. For one thing it's the law to disclose any defects, but there are also very few buyers willing to buy a home with basement issues. Some basements just seem to have that musty odor so try a dehumidifier and possibly get a professional service in to eliminate the odor.

Tags:

Sell

Home For Sale

Sell My Home

12 Ways to Prepare Your Home For Sale

rayanddawna — Mon, 06 Feb 2012 19:54:24 +0000

Getting Your Home Ready To Sell Part One…

Selling your home is exciting, nerve-wracking and there's so much to do! There are obvious things like putting the kid's toys away and cleaning up the dishes, but do you know the little secret touches that buyers notice? These are things that individually may not seem to make a difference, but when a potential buyer walks into your home these things make the difference between falling in love and feeling like it's just so-so. Read this 3 part series on how to impress your potential buyers.

12 Things we advise all of our sellers to do:

1. Windows - All of your windows and screens must be clean inside and out. Look for peeling paint or caulking that needs to be replaced. Repair or replace windows with broken seals. Closing the drapes to cover them up can be a temporary way to make things look nicer, but all home inspectors will find them. Get an estimate to have them repaired and if you can't afford to do it, hang on to that estimate. It will come in handy during negotiations.

2. Light Switches & Fixtures - All the grime and fingerprints on light switches must be cleaned and the dust and cobwebs removed from the fixtures. The fixtures should sparkle when the buyer turns them on. If anything is cracked, replace it and if your GFCI's (Ground Fault Circuit Interrupt) outlets aren't working have them repaired or replaced too.

3. Faucets, Tubs, Sinks - Every surface must sparkle and have no staining. The grout in your shower can get pretty disgusting, so be sure to clean it thoroughly or re-grout. Soap build-up in the soap tray can get brown or moldy. Use window cleaner on all chrome surfaces so they shine. It's certainly unpleasant for a buyer to see your old dirt, especially in the bathroom. Clean the toilets too and for goodness sake, please close the lids for showings!

4. Carpets and Floors - Some sellers say, "I won't replace the carpet, because the new buyers will probably change it anyway". The problem here is if it's stained or damaged it's a turnoff. If your dog or cat has urinated on the carpet you MUST have it professionally cleaned or replaced. If you're replacing always stay neutral and light to make the rooms appear larger, not only in person but for online marketing too. Ask your flooring company for "Realtor Grade" carpet and they'll know just what to do for a more reasonable price. If you can't afford to replace the carpet, some suppliers will make arrangements to pay at closing. We can tell you that in 100% of the cases where a home had pet urine smells, the home never sold until the carpet was replaced.

Please join us next week when we'll talk about additional things you can do to the interior of your home. If you have additional questions regarding this or any other topic, send us a message and we'll answer them for you right away. Please don't forget to subscribe too!

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What is Radon Gas?

rayanddawna — Thu, 26 Jan 2012 20:05:47 +0000

Have You Tested for Radon?

Radon gas is naturally occurring and can be found literally everywhere, both in residential and commercial properties. In many situations one building may have evidence of radon while the buildings on either side do not, so don’t assume if your neighbor tested and was fine that you are too.

Radon is a gaseous, radioactive element that is extremely toxic. It is colorless, odorless and is derived from the decaying of radium in the earth. Radon enters a property through cracks in the foundation, drains and other openings.

The amount of radon that escapes from the soil to enter the house depends on the weather, soil porosity, soil moisture, and the suction within the house.

Why is it bad for us?

The effects of radon are the same as smoking dozens of cartons of cigarettes. Radon gas effects lung tissue and causes cancer. Radon is responsible for an approximate 20,000 lung cancer deaths and approximately 1,200 additional deaths per year. Symptoms of radon poisoning can be bronchitis, pneumonia, wheezing, heavy breath and infections. The danger is so great that anyone selling or renting a residential property is required by law to provide the prospective buyer/tenant with a Radon Disclosure form.

How can you get rid of it?

The first step is testing. There are companies that will conduct a 48 hour test in your home with electronic devices that test the gas levels throughout the day. Ideally this is the best way to get true numbers for about $300. Another option is to purchase an inexpensive radon testing kit from a place like Home Depot for as little as $10. The kit has simple instructions on how to run the test and then you mail in to have your results calculated. It’s not the greatest but if this is what’s in your budget it’s better than no test at all.

If you determine that your levels are above the acceptable level of 4 pCi/L as set by the Environmental Protection Agency, professional remediation is required. Depending on the size of property, installation of a radon venting system could cost about $1,100.

For more information on radon, its dangers and how to protect your family visit:

www.epa.gov/radon

Know someone who is a tenant?

Renters/tenants have rights when it comes to protecting themselves and their families from radon exposure.

The EPA recommends that all units at the third floor or lower be tested for radon, as the exposure is more likely. Ask your landlord if they have tested for radon and if not, will they. You can even purchase an inexpensive testing kit at a place like Home Depot and check on your own.

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How Soon Can You Buy After a Short Sale, Foreclosure or Bankruptcy?

admin — Wed, 16 Nov 2011 18:06:48 +0000

One of the greatest questions people have regarding losing a home to foreclosure or selling in a short sale is, "Will I ever be able to buy again?" The good news is that yes you can! There are some things you should know as you consider going through the process…

Foreclosure
A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years. FHA loans are backed by Fannie Mae and accounted for approximately 40% of all loans in 2010. This number is expected to increase to 50% next year.

Short Sale
A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years.

Investor Foreclosure
An investor who allows a property to go to foreclosure is ineligible for a Fannie Mae backed investment mortgage for 7 years.

Investor Sort Sale
An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed investment mortgage after only 2 years.

Possibility of Future Loans With Any Mortgage Company
When a buyer completes their application for mortgage they will be required to answer YES to the question on a standard form that asks, "Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?" this will affect future rates. On the other hand, there is no similar question on this form regarding short sale so it's not an issue.

What Happens to Your Credit Score?
After a foreclosure your credit score can be lowered anywhere from 250 to over 300 points. In a short sale situation only late payments on mortgage will show and after the sale a mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points if all other payments are being made. A short sale's affect can be as brief as 12 to 18 months.

Foreclosure damage to your credit history is more significant. A foreclosure will remain as public record on a person's credit history for 10 years or more.

Do you think you need to sell in a short sale? More than 70 percent of people who end up in foreclosure never respond to notices from their lender. Working with a realtor who is a certified short sale specialist can relieve much pain and stress. Authorization to communicate with the mortgage company can be given to a realtor on behalf of the homeowner, essentially relieving the homeowner of all communications.

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Foreclosure

Short Sale

Credit Score

Can I Short Sale My Home?

admin — Wed, 16 Nov 2011 18:04:53 +0000

While people have heard the term "Short Sale" over and over again, we've discovered that many don't really understand what it means. The term "Short Sale" began around 2007 at the beginning of the mortgage crisis. A short sale occurs when the lender agrees to permit the homeowner to sell their home for less than the remaining mortgage balance. In many cases, property owners have 2 mortgages on their home, requiring two different lenders to agree to a reduced payoff. Here are some of the advantages of selling in a short sale:

You have more control of your situation than if you allow your home to go into foreclosure. Once there is communication with the bank and the short sale is permitted, there is no lying awake at night wondering when the bank will kick you out.
You will spare yourself the stigma and credit impact of a foreclosure.
You are not required to be behind on payments 30 days to qualify.
Short sales are permitted for divorce, loss of income, illness and additional circumstances. Each bank handles short sales in their own way so there is a variety of permitted "extenuating circumstances" that are considered.
Your home sale will be handled like any other sale. You will be listed in the MLS (Multiple Listing Service) website and Realtors will show your home just like any other property that is for sale. When an offer is received you will first agree to or negotiate a price you feel the bank will accept. Once a contract is signed between you and the buyer, it's forwarded to the bank along with additional supporting documents for the bank's approval.
A properly handled short sale will likely be sold at a price that should be closer to market value and in nearly all cases, be better than a foreclosure, resulting in a lower deficiency.

If I sell in a short sale when can I buy again?

Unlike foreclosure, a homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae-backed mortgage within 2 years. In contrast, a homeowner who loses a home to foreclosure is ineligible for a Fannie Mae-backed mortgage for a period of up to 7 years with some exceptions.

Our next blog will outline the varying lengths of time for when you may buy again after a short sale, foreclosure or bankruptcy.

Tags:

Short Sale

Foreclosure