How to Use Comparable Sales to Price Your Home
Before you put your home up for sale, use the right comparable sales to find the perfect price. Read
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Copyright 2012 NATIONAL ASSOCIATION OF REALTORS®
Showing posts with label Sellers. Show all posts
Showing posts with label Sellers. Show all posts
Is Your Real Estate Agent Getting You Maximum Exposure?
What can your real estate agent offer you? That's the question you ought to be asking yourself these days. With the huge shift in traditional marketing methods to the internet, and now social media/networking platforms online, it pays to do your homework before signing any contracts.
Although nearly 90% of buyers and sellers are turning to the internet for their real estate related needs, a depressingly lower amount of Realtors are actually taking the time to learn about online marketing strategies. This can be detrimental to your exposure and/or finding the best deals possible.
Unfortunately, many agents and brokers are still stuck in the stone age of marketing, and refuse to accept change within their own industry. Although traditional methods still hold some weight when advertising a home, you could be missing an enormous piece of the pie if you don't work with one that is also innovative and tech savvy.
Here is a List of Questions You Should Be Asking During an Interview:
1. What types of social marketing do you employ? Let’s face it. If they aren't investing the time into building a Facebook, Twitter, LinkedIn, Google+ following (or the host of other media available today), then there are literally hundreds of buyers and other professional contacts that are slipping right into the hands of their local competitors.
We are in the day and age of networking, and word travels at the speed of light. So your agent should be promoting your home on all of the following platforms by building specific pages and listings for your property where buyers can instantly find you. This will give you maximum exposure.
2. How do you capture leads? On the other hand, not only is it important for your agent to network and promote your property online, but they also need to collect the necessary contact information from website visitors in order to do business with each prospect.
Your Realtor should have their own website with an active blog, in order to keep in constant contact with their audience. By marketing on Craigslist, Google, Youtube, article directories, and any other medium available, your agent should be able to drive traffic back to their own sites.
Next, each person should be directed to some form of lead capture where they can enter their contact information for further updates on your listing. This could also include using mobile marketing, which will allow people to offer their cell phone number in exchange for property details. QR and/or text codes can be included on websites or even signage and postcards.
3. How do you follow up with your leads? Finally, can you be certain that your agent will go to work for you? Regardless of how many leads they may generate, if they do not have an effective follow up plan in place to build relationships and get buyers taking action, then your efforts could be wasted.
It is important that your agent spends the time to build effective email campaigns, submit updated blog posts and social media updates, and make direct phone calls to incubate each lead and ensure that action is taken while leads are still hot.
Also, can they provide strong evidence of quantifiable results with their real estate marketing campaigns, and are you confident in their ability to sell? Do you see the potential of getting a head above the rest and truly taking advantage of all the resources that are available at your fingertips?
By carefully reviewing all of the above criteria before choosing an agent, you will be able to ensure that you are receiving the best attention and service possible. If you are interested in setting up a time to review an in depth presentation on how we will put our comprehensive marketing strategies to work for you, please contact me today. I truly believe you will not be disappointed!
Here are a few places you can find me:
How To Sell Your Home Fast!
There may be various reasons that you want to get your home off the market as quickly as possible, so the principles offered here can work in nearly every situation. So let’s look at some basic strategies that you can implement today to gain the most favorable results:
Staging Your Home Properly
This is one area where it may make sense to hire professional help. Regardless, do your homework and take the time to find out exactly what can be done to make your property more marketable. For example, be sure to strip away any of that stuff on the walls being used as "decorations" that is personal. Also, place something of interest in each room that draws buyers in.
Additionally, people want to be able to picture themselves living in your space and visualizing where their own possessions will go. So you need to clear out space and remove clutter, especially from public areas and closet spaces. In fact, it is said that at least 1/3 of your own items should be placed somewhere else other then the home you are trying to sell. We're selling floor space, after all.
Finally, maximize the use of lighting and make sure the house is spotless. Most importantly, this goes for the kitchen and bathroom spaces which tend to endure a lot of wear and tear. Patch any areas that need touch ups with some spackle, paint and caulk.
Cut That Price
If you’re in a situation where you are moving and want to be rid of your property ASAP, then consider starting your list price at about 10% below its estimated value. It’s better to start a little lower up front if you want to attract the attention of buyers and get quick offers. It can even bring multiple offers that could net you that 10% more! Your home will get the traffic you need to sell quickly!
This can also work much more effectively then dropping the price incrementally overtime. In fact, the latter can even be harmful, because it may create the perception that nobody wants your property. So make your listing competitive and be ready to entertain some early offers.
Do Your Research
If you want to go the extra mile, you can even include receipts and/or documentation of repairs done on the home, as well as any new appliances that may have been purchased. Your agent may also want to include information and statistics on the neighborhood as well.
Hire A Real Estate Agent With Proven Results
Did you know that the top 10% of agents produce 90% of the results? Therefore, why hire a Realtor that can’t follow through on their commitment to sell, especially when time matters most? You need a team to work on your side that knows your market and can command the best price for your home in a short period.
Also, it is vital that your agent has expertise in marketing your home both with traditional methods and using online strategies for maximum exposure. Because information travels so quickly on the internet, it is crucial that you have property tours, videos, listing information, etc. are submitted to all the top traffic producing sites. This will attract a high amount of responses and will help the word to travel quickly.
Let my marketing ability help you sell quickly. During our private consultation, I'll show you quantifiable results along with a comprehensive marketing process that has helped other homeowners just like you get the results they desired. I look forward to earning your business!
6 Ways to Improve Your Home's Value
Many sellers may become wary of taking the necessary time to help spruce up their home’s appearance due to the cost associated with upgrades. Yet, simple improvements to a property can make a big difference and won’t always cost thousands of dollars to accomplish.
Here are some great ways to increase value and make the most impact:
1. Improve curb appeal: You can achieve this in various ways. You can simply fill in empty spaces and add some drought resistant plants or shrubs to your landscaping. Or some flowers and potted plants near the front entrance can make a great first impression. Adding a tree for additional shade and patching up a worn out lawn can work miracles to draw buyers in.
2. Space & Cleanliness: There is nothing worse to a buyer than a cluttered or unclean home. Take the time to remove unnecessary items from your closets, clean out the garage or carport, remove clutter or toys from the living areas, and make your floors shine! Your home needs to be staged in such a way that your buyers can visualize themselves living there. The way that you decorate your walls and ceilings will also affect how your buyers perceive open space.
3. Aim for an earthy appearance: Many buyers appreciate materials and paint colors that tend to have more of an earthy appeal. Each room will be different, so be sure to choose wisely. Also, consider using ceramic tiles or wood flooring instead of carpets or linoleum. Tiles in both the bathroom and/or kitchen could also make a huge difference.
4. Change outdated items: This can be as simple as replacing some old light and sink fixtures, doors, handles, or even windows. These items can greatly impact the price of a home and don’t always require huge amounts of investment. Additionally, maybe a new coat of paint or trim is all you need to fix up an otherwise “old” appearance.
5. Ask an expert: Whether you need advice on decorating, how to improve energy efficiency, or would like to find some items that could use a little “TLC”, it could be worth a small one time investment to get another opinion. This is a way to proactively make changes before you even consider listing your home. And you may be able to even avoid bigger problems that could arise down the road.
6. Bathrooms & kitchen: Finally, if you are able to make the extra investment, two areas that have the biggest impact on price are your bathrooms and kitchen. Whether this requires replacing the floors, sinks, tubs, fixtures or appliances, there are many ways that you can astronomically boost your home’s appeal by making improvements to these two key areas.
Hopefully these tips prove to be helpful when the time comes for you to sell your home. If you would like to receive an expert opinion from an experienced Realtor on how you can command top dollar for your property, be sure to contact me today. Simply use the information provided below to schedule a free in home consultation today!
Email: rhonda@rhondasrealestate.com
Text or Call me Direct: 405-820-1740
You've heard the saying "You never get a second chance to make a great first impression"? If you are selling your home, or will be shortly, you need to take that little saying to heart. Let me share with you my top staging mistakes to avoid in hopes that you'll apply what you've read today and be on your way to a successful sale!
Staging Mistake #1: BAD MLS Photos
Staging Mistake #1: BAD MLS Photos
I see poor photos all the time. Blurry. Tilted. Dark. Cluttered. Busy. Boring. The worst is only seeing a small portion of the room. Buyer’s don’t care what the sellers BED looks like...what about the room? They want to see everything in the room in one shot.
GREAT PHOTOS are a must! Professional Photography makes all the difference in capturing buyers attention and getting them in the door. Great photos capture ALL of the room, have good color and clarity and show interesting angles of each room. Make sure YOU have at least 15 photos advertising YOUR home on the Internet/MLS. Buyer's really want to see as much of the home as possible.
Staging Mistake #2: Disappointing Curb Appeal
When selling your home, don't disappoint your buyer! When they pull up to the front of your home, they carry with them their hopes and dreams that this home could be the one! Shouldn't you do whatever you can to impress these buyers so they will want to come in for a closer look?
It's amazing how a freshly cut green lawn, trimmed trees, new mulch, shiny new fixtures, seasonal potted plants, and a fresh paint job on the front door can sing "Welcome Home" to your potential buyers. Doing these basics make all the difference! And don't forget a new “Welcome” mat and doorbell too. Believe it or not, these items get overlooked all the time.
Staging Mistake #3: A Dirty, Cluttered House
When you put your home on the market, it became a PRODUCT. In order to sell a product, it has to be packaged beautifully so it sells! Buyers expect to see an immaculate home with no visible signs of dirt, dust or hair.
It's no different when you go on vacation and you've decided to stay at a very nice hotel. You expect that when you walk into your room that the bed is made to perfection, everything is sparkling clean and they've even left you a little something that says "Welcome", right? What if you walked into the bathroom and you spotted hair in the sink and you couldn't tell if the towels were used or not? We’d be calling the front desk and demanding a new room!
Buyers are really no different. Dazzle them with a sparkling clean and clutter free home to buy! Clear away all your clutter so that the selling features in each room are highlighted and your home becomes the STAR, not the people that currently live there.
Staging Mistake #4: Making Your Buyers Feel Like A Guest
When we walk into someone else's home and look around, we see their family photos and decor, and it is apparent that this is "their" home. Their personality is in every room and even if you squeezed your eyes shut and tried really hard to imagine living there, you just couldn't do it. Trying to imagine your stuff over all their stuff is just impossible to do. This is how potential buyers feel when they walk into a home that is full of family photos and taste specfic decor. They immediately feel like a GUEST in your home and this is one mistake you don't want to make!
That’s why it is so important to pack away your family photos and neutralize each room to appeal to a broad range of buyers. This also includes collections, religious items, personal awards and trophies, your family calendar and those fifty million magnets, invitations and "TO DO" lists from the refrigerator.
Don't forget your taste specfic decor as well. You may LOVE your kitchen bright yellow because it goes so well with your sunflower collection but it has got to be neutralized so buyers can SEE your kitchen with its 42" cabinets and corian countertops. They need to be able to visualize themselves cooking and entertaining in there!
Staging Mistake #5: Decor That Fails To Connect With Buyers
It’s amazing what a few key decorative items can do for a room too. You want buyers to have that same reaction...their eyes lighting up as they view the room… becoming more impressed as they tour the home.
One of the biggest misconceptions about staging is that you need tons of new furniture and decorative items to make your house look like a model home. You can relax now when I tell you that it isn't true.
If you are living in your home while it is on the market, work with what you have, plus maybe a few new items with a minimum investment. That’s all you need.
If you are living in your home while it is on the market, work with what you have, plus maybe a few new items with a minimum investment. That’s all you need.
Consider working with a Professional Stager. They are experts at working with what you have using their creativity to re-purpose it and sometimes blending it with a few newer items. This gives older furniture and decor a fresh new look and feel. A few key accessories can make all the difference in highlighting a selling feature and breathing new life into a room! Slipcovers, new pillows that pop color, updated lamps, a rug or some inexpensive window panels might be all that is needed to turn unimpressive decor into a fabulous new room that your buyers will love and connect to!
If your house is vacant or you have empty rooms because you never got around to buying that dining or living room set, you will want to consider options like renting furniture. Most Professional Stagers carry beautiful furnishings you can rent and will work within your budget.
Stage For A Successful Sale
Selling your home and getting it ready can be a pretty overwhelming task. That is stressful in and of itself. Did you know that working with a Professional Home Stager can take that stress away and let you focus on the other important things about your move like finding YOUR dream home? They can create a staging plan for you that is unique to your property. You can have complete confidence in knowing that you will not be making any major staging mistakes with a Stager on your team while you sell your home!
If your house is vacant or you have empty rooms because you never got around to buying that dining or living room set, you will want to consider options like renting furniture. Most Professional Stagers carry beautiful furnishings you can rent and will work within your budget.
Stage For A Successful Sale
Selling your home and getting it ready can be a pretty overwhelming task. That is stressful in and of itself. Did you know that working with a Professional Home Stager can take that stress away and let you focus on the other important things about your move like finding YOUR dream home? They can create a staging plan for you that is unique to your property. You can have complete confidence in knowing that you will not be making any major staging mistakes with a Stager on your team while you sell your home!
If you would like a recommendation for staging your home,
please feel free to contact me: rhonda@rhondasrealestate.com.
Why Do I Need Title Insurance?
However, owner title insurance will be something you need to consider if you want to protect your own interests as well, since the aforementioned would not cover your own equitable interests in the property. Typically the purchase of an owner policy can either be covered by the seller, or is something that you can include along with the lender policy for a small investment.
When purchasing a home, buyers are actually obtaining a right to occupy the land and property space which comes in the form of a title. Therefore, insurance is necessary to identify any issues that may be attached to the title of the home before closing on the property.
Several Issues That This Search Could Uncover Include:
- Easements that may allow for roads, sidewalks, cables, etc. to be built on your land.
- Judgments or liens that are a result of unpaid taxes or money that is owed.
- Errors or forged signatures contained within deeds, trusts or wills.
- Undisclosed heirs or rightful owners to the property.
- Additional legal issues or pending suits such as divorce that could affect the purchase.
Owner title insurance will protect both homeowners and their heirs from any claims that arise as a result of problems that were initiated prior to obtaining the coverage. In the event that you were to inherit your own liens or judgments against the home, a new policy would then protect the next buyer if these bills were overlooked and remained unpaid upon closing.
Did you know that approximately 1/3 of all title searches will uncover some type of issue on a property? Although these tend to be extremely thorough and accurate, there are still those rare instances where certain matters will remain undetected. Title insurance is therefore the solution for any such cases that may arise.
In the event that you purchase a policy and claims do arise, the policy will reimburse you for any losses that are incurred under the coverage. Therefore, the stress, fees and wasted time that you can avoid when faced with such unfortunate circumstances are well worth the small investment.
To obtain information on reputable title companies that I highly recommend before your next purchase, feel free to contact me using the information included below.
Rhonda Miller: 405-820-1740
Email: rhonda@rhondasrealestate.com
Website: http://www.rhondasrealestate.com
Seller Showing Tips
You just listed your home for sale...now what? You've sold a home before...you should know how to do this, right? I never want to assume my seller knows what to do to get a home ready for showings because clearly they are attached to the home and its furnishings in some way so I don't want to insult them.
Here are just a few ideas:
1. Lighten up! Some people live in their home where the shades or blinds are always closed. While I realize in this heat it can keep the home cooler, when you have your home on the market, as a Realtor we don't always have time to open and close all your shades, flip on lights, and truly show your home in its best light...no pun intended! If you have enough advance notice of a showing, open things up, flip on the lights, and make it memorable for us!
2. Size up the competition. You are looking at homes now as well because you are moving. What things draw your eye? Go to a few model homes and get ideas of how the placement of furniture makes a difference. How does staging a home and removing all personal items help you see your furniture in this home? That's how we want to present your home to potential buyers. Now go home and spruce your home up!
3. Define the space. If the room is a dining room, it should be staged as a dining room. Renting or borrowing a table and chairs may just make the sale! Not everyone will use a secondary bedroom as a workout room with mirrors and padding so purchase an air mattress and fix it up to be seen as a bedroom.
4. Storage. Clearly a lot of us move because we have run out of space or have too much space. If you have accumulated too much stuff and have it setting on top of the fridge or dryer, it screams to the buyer that there isn't enough storage in this home. It doesn't matter that it's convenient to have the cereal box on the fridge, it just means that you don't have room for things.
5. Add simple curb appeal. Inexpensive plants can go along way to add color and make someone want to see what else you have that is fabulous. You may think that it's money you shouldn't have to spend, but it may just be the simple ticket to a sale! Every landscaping detail proves that you care inside as well as outside!
How To Do a Short Sale
Why Would a Lender Accept a Short Sale?
A short sale in real estate is not always a pleasant transaction.
There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale."
When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales.
If you are considering buying a short sale, there could be drawbacks. For your protection, I suggest that all borrowers:
· Obtain legal advice from a competent real estate lawyer
· Call an accountant to discuss short sale tax ramifications
As a real estate agent, I am not licensed as a lawyer nor a CPA and cannot advise on those consequences. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. could consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. A lawyer can determine whether your loan qualifies for a deficiency judgment or claim.
Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.
· Call the Lender
You may need to make a half dozen phone calls before you find the person responsible for handling short sales. You do not want to talk to the "real estate short sale" or "work out" department, you want the supervisor's name, the name of the individual capable of making a decision.
You may need to make a half dozen phone calls before you find the person responsible for handling short sales. You do not want to talk to the "real estate short sale" or "work out" department, you want the supervisor's name, the name of the individual capable of making a decision.
· Submit Letter of Authorization
Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:
Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:
· Property Address
· Loan Reference Number
· Your Name
· The Date
· Your Agent's Name & Contact Information
· Preliminary Net Sheet
This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale.
This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale.
· Hardship Letter
The sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
The sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
· Proof of Income and Assets
It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
· Copies of Bank Statements
If your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it's probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.
If your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it's probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.
· Comparative Market Analysis
Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes:
Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes:
· Active on the market
· Pending sales
· Solds from the past six months.
· Purchase Agreement & Listing Agreement
When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to pay for certain items such as home protection plans or termite inspections.
When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to pay for certain items such as home protection plans or termite inspections.
Now, if everything goes well, the lender will approve your short sale. As part of the negotiation, you might ask that the lender not to report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request.
The Short Sale Process
The short sale process can vary, but it will generally work as follows:
1) The lender is contacted to discuss the possibility of a short sale and to determine the lender’s process for completing the sale.
2) The seller issues a letter authorizing the release of personal information about the loan and the property to the buyer or escrow agency.
3) The lender will review a settlement statement, which will indicate the proposed selling price, remaining loan balances and itemize all expenses, including real estate commissions and other fees and expenses associated with the closing.
4) The seller will complete a "hardship letter," which will detail and explain all financial difficulties. Lenders will usually want to validate the seller’s financial situation by looking at bank statements, investment accounts, along with examining paystubs and other financial records.
5) The lender will then look to the broker to provide a price opinion by examining the condition of the house and the market value of comparable properties.
6) The lender will then want to scrutinize the purchase agreement to determine if all amounts are reasonable and the real estate commission is acceptable.
Because of the documentation required, the short sale process can be lengthy. But if done correctly, it can work well for all parties involved. The lender avoids the uncertainty of the foreclosure process, the seller avoids a foreclosure on his or her credit report (along with potential bankruptcy), and the buyer hopefully got a good deal on a property.
Considering the complexity of the short sale process, you must be educated. If you are considering a short sale, make sure that you discuss your situation with a competent lawyer and accountant. The more educated you are on the process, the easier the transaction will be, and the better the impression you will make on the lender.
1) The lender is contacted to discuss the possibility of a short sale and to determine the lender’s process for completing the sale.
2) The seller issues a letter authorizing the release of personal information about the loan and the property to the buyer or escrow agency.
3) The lender will review a settlement statement, which will indicate the proposed selling price, remaining loan balances and itemize all expenses, including real estate commissions and other fees and expenses associated with the closing.
4) The seller will complete a "hardship letter," which will detail and explain all financial difficulties. Lenders will usually want to validate the seller’s financial situation by looking at bank statements, investment accounts, along with examining paystubs and other financial records.
5) The lender will then look to the broker to provide a price opinion by examining the condition of the house and the market value of comparable properties.
6) The lender will then want to scrutinize the purchase agreement to determine if all amounts are reasonable and the real estate commission is acceptable.
Because of the documentation required, the short sale process can be lengthy. But if done correctly, it can work well for all parties involved. The lender avoids the uncertainty of the foreclosure process, the seller avoids a foreclosure on his or her credit report (along with potential bankruptcy), and the buyer hopefully got a good deal on a property.
Considering the complexity of the short sale process, you must be educated. If you are considering a short sale, make sure that you discuss your situation with a competent lawyer and accountant. The more educated you are on the process, the easier the transaction will be, and the better the impression you will make on the lender.
Real Estate and Divorce
While it isn't a fun topic, it does come up, it does happen, there are questions, and no one seems to want to ask. Unless you've been through it, most people don't understand it and it does or can be complicated.
Real estate a couple owns can be a real stumbling block to divorce. Property problems won't keep people together, and they might even drive people apart who have incompatible investment philosophies.
Splitting up the equity can be particularly difficult when there isn't cash available to one marital partner or the other. There are options. Let's start with the simplest and common case of the couple that only owns their home.
1. "Sell the house" is the first advice that friends and attorneys usually give. A sale has the advantage of helping the couple make a clean break. When the transaction closes there are only cash proceeds to divide. A 50-50 split is common.
2. "Keep the house." The husband or wife may prefer to continue to live there, at least until after the divorce is final. When one party wants to stay and there is an outstanding balance on the loan, the best solution is for the home to be refinanced in their name to be the responsible party. Oklahoma is a 50-50 state, meaning equity would be split equally.
In these cases the first step is to determine the equity in the home. What would be the proceeds of an outright sale, after all costs and the mortgage balance are paid off?
The mortgage lender can quote a payoff and real estate companies can state their marketing fees. Title companies can quote figures for title insurance and other closing costs. The only other usual seller costs are the appraisal and survey.
What's less clear are the costs that might have to be incurred to get the property to qualify for a buyer's financing. The type of financing the buyer chooses affects the standards that appraisers and lenders will apply.
Estimating the equity that a couple could split if one keeps the house is also something to consider.
Hire an appraiser (about $400) to help establish value and note the items that lenders look for. Hire a home inspection service (about $250) to look for repair items that buyers might say must be fixed or they won't go through with the transaction. Finally, hire an engineer approved by the Municipality to test the well and septic system (about $500, plus pumping and Municipal fees).
If any of these reports show a need for corrective action, get contractor bids. These figures can be deducted from the equity that the couple plans to split. The work doesn't have to be done: the one who winds up with the house can assume the responsibility for taking care of these items later, having been "paid" by the divorced spouse by a division of a smaller equity.
From the time of the divorce forward, the spouse with the house assumes all the risks and responsibilities of home ownership. At least the risk of surprises is minimized.
After agreeing on the equity, what if the spouse who is keeping the house doesn't have the money to buy out the spouse who leaves? This is a common problem.
It may be possible to balance the books through the rest of the property settlement. Considering cars and other personal property it may be possible for the spouse who leaves to end up with enough of these items to balance what the "house spouse" keeps as equity.
The other answer may be for the "house spouse" to give the departing spouse a note secured by a deed of trust recorded against the house. The payments can be negotiated to fit both parties needs and capabilities. The items to consider are the term of the note, whether the remaining balance is due at any particular future date, the term, interest rate and payment. Simple financial calculators can provide these answers for spouses who are doing their own dissolution.
There are so many other things that can be considered as trade offs, but this is the short version of what to consider if you should find yourself in this situation.
10 Simple Tips to Take the Stress Out of Home Buying Process - Focus on the Positives!
Tip 9: Negotiation in Real Estate.
Whether you're a buyer or a seller you want to succeed in the real estate market. That's natural and reasonable, but what are the steps you need to triumph?
Negotiation is an important part of the real estate buying process. It's a complex matter and all transactions are unique. Negotiating too much...trying to get an extra low price, or even refusing to budge on your offer may cost you the home in the end.
So how do you develop a strong bargaining position, one which will help you get the most from a transaction? Experience shows there are five basic keys which will determine who wins at the negotiating table.
- What does the market say?
At various times we're in a "buyers" market, a "sellers" market, or a market where housing supply and demand are roughly equal. If possible, you want to be in the market at a time when it favors your position as a buyer or seller.
Because all properties are unique—it is possible to buck general trends and have more leverage than the marketplace would seem to allow. For instance, if you have a property in a desirable neighborhood with only a few sales, you may be able to get a better deal than elsewhere. Or, if you're a buyer who can quickly close, that might be an important negotiating chip when dealing with an owner who just got a new job 500 miles away.
- Who has leverage?
If you're on the front page of the local paper because your business went bust—and the buyer knows it—you have little going for you in the bargaining process. Alternatively, if you're among six buyers clamoring for that one special property, forget about dictating an agreement—the owner can sit back and pick the offer which represents the highest price and best terms.
- What are the details?
A lot of attention in real estate is paid to transaction prices. This surely makes sense, but the key to a good deal may be more complex.
Consider two identical properties that each sell on the same day for $275,000. The houses are the same, the sale prices are the same, but are the deals the same? Maybe not. For instance, one owner may have agreed to paint the property, replace the roof, purchase a new kitchen refrigerator, and pay the first $3,000 of the buyer's closing costs. The second owner made no concessions.
In this example, the first house was actually sold at discount—the $275,000 purchase price less the value of the roof repairs, closing credit, and other items. If you're a buyer, this is the deal you want! If you're a seller, you would prefer to be the second owner and give up nothing.
- What about financing?
Real estate transactions involve a trade—houses for money. We know the house is there, but what about financing? There are several factors that impact the money issue:
- Has the buyer been pre-qualified or pre-approved by a lender? Meeting with a lender before looking at homes does not usually guarantee that financing is absolutely, unquestionably available—a loan application can be declined because of appraisal problems, title issues, survey findings, and other reasons. But, buyers who are "pre-qualified" or "pre-approved" (these terms do not have a standard meaning around the country) at least have some idea of their ability to finance a home and know that they are likely to qualify for certain loan programs.The result is that pre-qualified buyers represent less risk to owners than a purchaser who has never met with a lender. If the seller accepts an offer from a buyer with unknown financial strength, it's possible that the transaction could fail because the buyer can't get a loan. Meanwhile, the owner may have lost the opportunity to sell to a qualified buyer.
- The lower the interest rate, the larger the pool of potential buyers. More buyers equal more potential demand...good news for sellers. Alternatively, high rates or even rising rates may drive buyers from the marketplace—and that's not good for anyone.
- It used to be that downpayments were a major financing hurdle—but not anymore. For those with good credit, loans with 5 percent down or less are available. Reduced downpayment requirements are good for both buyers and sellers.
- Who has expertise?
Imagine you're in a fight. The other guy has black belts in 12 martial arts—and you don't. Who's going to win? Who do you want representing you at the bargaining table?
Successful negotiation depends on give and take, so make sure you are being fair in your requests. Work with a Realtor who has the negotiation skills to make the transaction come together...one with collaboration, competitive, and compromise knowledge and expertise that comes with being a Certified Negotiation Expert.
Tip 10: Buyer's Remorse After the Purchase.
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