Monthly Archives: October 2018

Problems and Solutions to Common Issues in Real Estate

If you want a job in an industry where everyday is different and no two transaction are ever the same, you into real estate.  A boring day just doesn’t happen when you are working daily with a wide variety of people and personalities.  As much fun as it is to work with several different types of people on a regular basis, there are some challenges that can arise when working to find a buyer their dream home or a seller who is selling more than just a home, but an abundance of memories as well.

Common Real Estate Problems and Solutions

  1. Market Conditions That Are Not Ideal

Realtors do not have control over local real estate markets.  It is inevitable that local real estate markets will have ups and downs that need to be dealt with.  The longer you are in real estate the more you will see the market conditions fluctuate. The market conditions will play a huge role in if a home sells or not and if it sells at, below, or above the average market value. Realtors must understand and recognize if they are currently dealing with a sellers or buyers’ market.  The advice that you offer to your clients will make a huge difference in their perception and the outcome of the transaction.

  1. Emotional Sellers

Many times, the sale of a home can be quite emotional.  Real estate agents will get the full brunt of the emotion’s sellers are feeling during this process.  A wide range of emotion is felt from sadness, stress, excitement, uncertainty, and nervousness.  Selling a home is a time of mixed emotions for homeowners and you as their agent will need to help them overcome the feelings that they are having to get to the point of sale.  It will be important to remind the sellers of their initial motivation to sell, the benefits that come from the sale of a home, and how these play into their situation.  It is important not to become invested emotionally yourself in the sale of any home so that you can remain impartial throughout the process.

  1. Listing Price

There are many sellers and buyers out there that will take your recommendation when it comes to putting an offer in on a home or listing their home for sale.  However, there are times when people will feel like their home is worth more than it is or that a lower offer is better for later negotiations.  Price points are the biggest challenge most realtors will face with their clients. It is important that you as the realtor educate your clients with concrete evidence and current stats to validate your reasoning.   Point out how long comparable houses have stayed on the market and the difference in pricing points.

Most of the time real estate professionals can work out issues with their clients by listening to them and providing concrete information to reassure them.  Proper wording and empathy can often overcome any challenge that arises to help facilitate a compromise.

C21 Lady of the Lakes is a full-service realtor serving Livingston County and the surrounding areas with all their real estate needs.  More information can be found at http://www.ladyofthelakes.com/.

‘House-Rich, Cash-Poor’: Here’s What It Really Means

“House-rich, cash-poor” sounds like the title of a country song. After all, how can someone be rich and poor at the same time, unless they’re fighting some poetic struggle in a twangy ballad? Well, it all comes down to how much you have tied up in your home, compared with how much you have in your pocket.

‘House-rich, cash-poor’ explained in real numbers

Being house-rich and cash-poor means you have more equity locked into the value of your home than you have in liquid assets.

Leon Goldfeld, co-founder of the New York–based real estate brokerage startup Yoreevo, breaks down how the house-rich, cash-poor scenario can play out:

  • You have a debt-to-income ratio higher than 40%, which means your homeownership expenses take up over 40% of your income. (As a general rule, it’s best to not spend more than 30% of your income on living expenses.)
  • Your home equity makes up more than 80% of your total net worth.
  • You have less than six months in cash reserves to cover your total monthly expenses if the need arises.

Is it bad to be house-rich and cash-poor?

As a real estate professional in St. Petersburg, FL, Patricia Vosburgh advises her clients not to become house-rich and cash-poor due to her first-hand experience in the 1980s.

“I can tell you it’s not a great place to be,” she says. “The slightest financial hiccup in your life can become an issue.”

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Find a lender who can offer competitive mortgage rates and help you with pre-approval.

For instance, if you run into large medical bills or a costly home repair, you may not have the money to pay for it. Beyond that, being house-rich and cash-poor can lead to a downturn in your quality of life.

“You’re working constantly to hold onto the asset and not really enjoying the benefits of homeownership,” says Vosburgh.

How common is it to be house-rich and cash-poor?

These days, it’s a bit of a mixed bag: Thanks to a healthy economy, low unemployment, and stricter lending requirements put in place after 2008, many homeowners are house-rich, meaning they have good equity in their home. Yet many of these same homeowners are also cash-poor, lacking the reserves necessary to see them through life’s ups and downs.

“First-time buyers are saving up lots of money for the down payment—usually between 5% to 20%,” says Cedric Stewart, a residential and commercial sales consultant at Keller Williams in the Washington, DC, area. “But they often don’t leave any money for the ‘what if’ fund, such as emergency home maintenance.”

Another group vulnerable to becoming house-rich and cash-poor are buyers looking to trade up their current home.

“These buyers take the money from the sale of their current home and plunk it all down on the next one,” explains Stewart. That’s a risky move, he says, since it leaves you no financial wiggle room for whatever financial curveballs may come your way.

The bottom line: A buyer should never leave themselves cash-poor, says Ralph DiBugnara, vice president at Residential Home Funding.

“If it’s going to cost you every bit of savings just to acquire the house, you may not be ready for that specific home,” he says.

How you can avoid it

Deeply understand your finances before you buy a home, recommends Goldfeld. For starters, try entering your income and debts into a mortgage calculator to figure out what price you can afford on a home. Speak to a lender to find out how large a home loan you qualify for, too.

These moves will help you figure out what your monthly expenses would be if you had to pay for that mortgage. Take note: Even if you qualify for a large mortgage, you don’t want to get yourself into a position where every little expense is difficult to pay for.

So make sure you have at least a year of whatever your recurring monthly payments would be in reserve and shoot for a debt-to-income ratio under 30%. Then set a reasonable budget for the purchase price of a home. Look for a healthy balance between investing in a new home and creating your ideal quality of life after the home is bought. (It’s plain common sense to hold enough cash back to have a financial cushion in case of an emergency.)

Another option is to get a home warranty to cover any unexpected home expenses.

“I tell all my buyers to ask for one from the seller or pay for it themselves,” says Vosburgh.

Original Source: https://www.realtor.com/advice/finance/house-rich-cash-poor-meaning/

Original Date: Oct 12 2018

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The Most Important Repairs to Make Before Selling Your Home

Maintenance, maintenance, maintenance… I can’t stress the importance that keeping up with your home’s maintenance, repairs, and overall general well being can make when it comes time to sell.

For many buyers it is important to get into a home without having to do a ton of repairs to make it inhabitable.  It is also not on many buyers’ agendas to make an offer on a home only to determine upon inspection that there are issues that they just don’t want to deal with.  With a little bit of preparation before you place your home for sale, along with regular maintenance and consistent updates while you are actively living in the space your home should be buyer ready when you decide it is time to sell.

Listed below are just a few of the areas to pay special attention to as they are high on the list of priorities that buyers are looking at when buying a new home.

Kitchen & Bath Renovations and Updates:

  • These two spaces have the potential to make or break the sale of a house.  They also employ the most technical mechanics of the house from appliances, to plumbing and electricity, there is a lot that can go wrong.  If not kept up on kitchen and bathroom spaces can easily fall into despair.
    • Kitchen Appliances: Although it can be beneficial to have updated, energy efficient appliances when selling your home, the most important aspect is that they are all in solid working condition.  Maintenance is key in keeping appliances running properly.
    • Cabinets: Cabinets are an essential visual and functional element in both the bathroom and kitchen.  Not only should cabinets be free of damage and in good working order, new hardware never hurts to modernize a slightly older space.
    • Faucets, Sinks, Showers & Tubs: Not only are aesthetics important so is the functionality of drains and faucets. The drains within sinks, showers, and tubs should all drain properly, free and clear of any problems.  Overflow drains should also be in proper working order.  The hot and cold faucets should be properly installed.  (Believe it or not many homes I have remodeled have the hot and cold feature set up backwards) Exhaust vents should be working and clear of debris. Check all surfaces for cracks, chips, and peeling.  Homes that undergo routine maintenance should have addressed all of the above issues as problems arose.

Walls & Ceilings:

    • As part of regular maintenance homeowners should take care to repair nail holes, dings, and dents that occur. If discoloration is seen on the ceiling this will instantly turn off a buyer.  Damage from water should be repaired and brought back up to par aesthetically before placing a home for sale.  All water damage and repairs should be properly documented to give future homeowners a record if asked upon inspection how the problem was solved.

Flooring:

  • Flooring does not need to be replace before selling a home. What is important however is that it is clean and in good condition.  Chips and cracked tiles have been replaced, carpet has been cleaned, and hardwood refinished if scratches and dents are an issue.

HVAC:

  • The heating and cooling systems in the home should be in working order with updated filtration installed. Thermostats should work properly or be replaced.  Hiring an HVAC tech to complete a tune up can be a bonus to ensure everything is in proper order and can be used to market your home.
Electrical Panels and Circuit Breakers:
  • Take time to have the electrical panels in your home meet current codes. This is a perfect time to have the electrical in your home inspected by a professional.  This documentation can be given to your realtor to use as added bonuses that prove maintenance on a home has been done.  This looks really good in the eyes of a buyer even if there is a hiccup somewhere else in the home.

C21 Lady of the Lakes is a full-service realtor serving Livingston County and the surrounding areas with all their real estate needs.  More information can be found at http://www.ladyofthelakes.com/.

Real deal: Realtors share safety tips for sellers

It is the Realtor’s job to protect consumers in the real estate transaction. Seller, particularly, can be vulnerable as they allow strangers into their home to view their property.

An open house can be a great tool for marketing a home, but it also exposes Realtors and their sellers to unfamiliar people for the first time. Thieves and assailants have been known to prey on open houses. The Silicon Valley Association of Realtors cautions its members and their clients to be watchful of suspicious behavior.

Practicing safety measures is the smart thing to do. As Realtors celebrate Realtor Safety Month in September, they share the following tips to protect their clients against crime, especially at an open house.

Sellers should remember that strangers will be walking through their home during showings or open houses. Sellers should hide any valuables in a safe place, including prescription medications and alcohol, as well as personal information, such as bank statements that could be used for identity theft.

Realtors warn their clients that not all agents are who they say they are. If a stranger stops by a listing unannounced, the seller should ask the person to make an appointment with their Realtor. Sellers should never show a home without their Realtor present; nor should they let a stranger, including an unfamiliar real estate agent, into their home unannounced.

Sellers are responsible for their pets. If possible, animals should be removed during showings. If buyers and agents are attacked by an animal, the owner will be held liable.

At an open house, be alert to the pattern of visitors’ arrivals, especially near the end of showing hours. In some cases, the modus operandi of thieves is to show up in a group near the end of an open house and, while the supposed buyer distracts the Realtor and the seller, if present, the rest of the group walks through the house and steals valuables.

Inform a neighbor that your Realtor will be showing your home and ask if he or she would keep an eye and ear open for anything out of the ordinary.

When leaving a property after an open house or a showing, the Realtor should make sure that all doors and windows of the home are locked. Thieves commonly use open houses to scout for valuables and possible points of entry, then return after the Realtor leaves.

While the Realtor will take all of the above safety precautions, their clients should know when they return home that they should immediately verify that all doors are locked and all valuables accounted for.

This article is part of the National Association of Realtors’ Realtor Safety Kit. Sources are the Nevada County Board of Realtors (CA) and Realty Times. For more ideas on how to protect your personal safety, visit NAR’s website at www.REALTOR.org/safety.

Original Source: https://www.mercurynews.com/2018/09/28/realdeal/

Original Date: Sept 28 2018

Written By: Rose Meily