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5 Ways to Get The Most Out of an Open House

5 Ways to Get The Most Out of an Open House
5 Ways to Get The Most Out of an Open House

5 Ways to Get The Most Out of an Open House

Open houses are a great source of information about the property, neighborhood and local markets. Nearly half of real-estate buyers go to one. Here are some tips regarding how to get the best data from an open house:

1. Look Past Window-Dressing. A full 94 percent of sellers do some “staging,” such as repainting or bringing in new furniture, says Coldwell Banker. “You can be so wowed by staging that you overlook important things,” says San Jose Realtor Carl San Miguel. To focus on what matters, lift rugs to look at floors, ask the agent to turn off music so you can listen for nearby noise, and beware of any smells masked by candles. Also request a disclosure sheet, which lists known structural issues.

2. You Can Learn a Lot From the Crowd. Nearly half of buyers visit open houses, says the National Association of Realtors, so pay attention to your fellow shoppers’ comments; they may have insight into how this home stacks up. Locals often pop in, too, so if someone sounds like a neighbor, ask about the area. To get a feel for demand, visit in the last hour and peek at the sign-in sheet. A full sheet could mean the home will sell quickly, says Paul Reid, a California-based agent.

3. It’s Your Chance to Test-Drive the Place. Visiting a home in person allows you to pick up on details you won’t see in the listing, such as the strength of the water pressure and how much you could actually cram in the closets. What buyers often forget, though, is to explore the neighborhood as well, says Dallas agent Mary Beth Harrison. Get a sense of the area by checking out surrounding streets and driving home using a different route.

4. The Agent May Be Scouting You. Listing agents will often tap a colleague to run an open house, so your host may be fishing for buyers to represent. If you’re in the market for an agent, this can be a chance to meet pros and see what they’re like on the job. Not interested? Say so upfront to fend off any confusion, says Harrison. Shoppers who already have a buyer’s agent should write his contact information on the sign-in sheet so he can handle any follow-up calls or emails on their behalf.

5. Gathering Info for the Seller. When a listing agent is hosting, pepper her with questions. Ask whether there have been any upgrades to the property, if she’s gotten any offers, and when and why the sellers are moving. (You may get a vague reply on that last one). Keep mum on your budget, feelings about the home, and anything else that might give the seller a leg up in negotiations. “Don’t assume the agent is there to help you out,” says Chicago agent Fran Bailey.

Source: CNN/Money

7 Steps to Being the Most Attractive Homebuyer

7 Steps to Being the Most Attractive Homebuyer
7 Steps to Being the Most Attractive Homebuyer

7 Steps to Being the Most Attractive Homebuyer

When you know what you can afford and are preapproved, you won’t be shopping outside of your price range, says Corbett. “It makes you a much stronger buyer when you can turn in that preapproval letter with your offer.”

As home prices continue to recover and interest rates remain low, some houses are receiving multiple offers and to win the bid, buyers need to stand out from the crowd. According to the National Association of Realtors, houses sold in 71 days in January, down from 99 days a year ago.

Since markets are moving fast, experts recommend sellers have their loan pre-approved and down payment ready before starting their search. “The market is changing,” says Cara Ameer, broker associate and Realtor at Coldwell Banker Vanguard Realty based in Ponte Vedra Beach, Fla. “Inventory is low and demand is high—a buyer needs to know exactly what their parameters are.”

Multiple bids are becoming the norm, so be ready to compete and do your homework to seal the deal. The longer the negotiations, the more chance you could lose out to someone else who made a better offer, says Ameer. Be reasonable without being difficult because until an offer is signed, sealed and delivered, other buyers can bid on the property.

While you have to compete in the current market, maintain your budget. “You don’t want to end up paying more for the house than it’s worth,” says Daren Blomquist, vice president at RealtyTrac.

Experts warn against cutting corners like skipping the inspection or engaging in a bidding war. You don’t want to unduly stretch yourself just to get into a property,” says Blomquist.

To help you become a homeowner in this competitive market, experts recommend the following tips for being the most attractive:

Plan Ahead “You have to plan four months before you’re going to buy,” says Michael Corbett, Trulia’s real estate expert. Check your credit for accuracy and avoid making any big purchases or taking on any big debt during this time.

“[Debt] brings down your credit score and increases your debt-to-income [ratio] which are two critical things banks look at when qualifying and preapproving you for a loan,” says Corbett.

If your debt-to-income ratio is too high, experts recommend paying down as much debt as you can to lower this ratio.

Set Your Home Price “Don’t look at a $300,000 home if all you can afford is $250,000,” says Ameer. Less supply on the market increases the likelihood for multiple offers, and you won’t be able to compete. “If properties are selling at 95% of asking price, don’t think you’ll get a deal at 85% of asking price,” she says.

If you do spot a great deal on a house, don’t wait days to make an offer, warns Corbett. Since time isn’t on your side, learn how to spot a great deal by researching an area’s home prices.

“Do a little due diligence and go to open houses—do your homework,” says Corbett. Being educated will help you negotiate and could prevent you from paying more for a house than it’s actually worth because you’re emotionally involved.

Know That Cash Is King The more cash you have, the more appealing you are as a buyer. Putting 20% or more down makes you look more financially stable and gives sellers comfort that you’ll qualify for a mortgage, says Corbett.

Cash can cover a multitude of problems when you make an offer, whether it’s difficulty with the mortgage process or a lower-than-expected appraisal. “A buyer can contribute more cash to cover the difference between the appraisal and offer price,” says Blomquist.

If your appraisal is low, don’t expect the appraiser to come up in value, says Ameer. “Appraisers are under scrutiny with the banks and they have to justify everything they do.” They’re required to follow Uniform Standards of Professional Appraisal Practice (USPAP) guidelines, as well as lender guidelines.

Appraisers use surrounding properties for comps, says Ameer, and if there are only foreclosures, that’s a bad hand to be dealt. You can always review the appraisal for discrepancies and suggest different comps but don’t expect the value to change.

Get Preapproved Before Your Search Getting prequalified for a mortgage gives a ballpark for what you can afford to buy and will streamline your search process.

If you’re financing your house with a mortgage, have a pre-approval letter with you and if you’re paying cash, have proof of funds that shows you’re good for it.

Getting preapproved will also help you to compete with an all cash buyer, says Walter Molony, spokesperson for the National Association of Realtors.

Limit Your Contingencies Experts suggest having as few contingencies as possible to be an alluring buyer. “Don’t overcomplicate your offer to the seller,” says Ameer. Certain contingencies based on your ability to get a mortgage, the appraisal and home inspection are standard, but piling on more could make the seller less inclined to work with your offer.

Experts advise making an offer based on a satisfactory home inspection. “It gives you the opportunity to walk away if you find in an inspection that there are too many problems with the house,” says Corbett.

Making your offer contingent on you selling your house first will make you a less appealing buyer. If you need to sell your house before buying a new one, then sell your home first and rent or move in with family or friends while you look for your new home, says Blomquist. “As a seller, you’ll sell that home quickly. Then as a buyer, you’re much more appealing than a buyer contingent on a sale.”

Add A Personal Touch Corbett suggests sending a letter to explain why you want to buy that house. “You become a person who really loves and appreciates the home instead of just a number,” says Corbett. Sending a letter is just one extra little thing that will help level the playing field.

Be Flexible With Closing Dates “Let the seller know that you would be flexible on the closing timeline,” says Corbett. Find out when the seller would ideally like to close on the house and see if you can match it.

Source: Fox Business

Parents: Do You Want To Help Your Children?

Parents: Do You Want To Help Your Children
Parents: Do You Want To Help Your Children

Parents: Do You Want To Help Your Children

Owning a home is a dream that is shared by millions and millions of Americans. Several years ago the national home ownership rate reached a record high as almost 70% of all families owned their own home. This number has fallen somewhat since the recession, however the dream of obtaining home ownership has remained a goal for many who are presently renting. More recently, more Americans have been able to reach their goal of home ownership because of low interest rates and moderate home prices that have made owning more affordable than ever.

The biggest obstacle to purchasing a home is coming up with the down payment. Fortunately, there are programs which allow a down payment from 0% to 5% of the sales price, such as VA, FHA and Fannie Mae and Freddie Mac programs. Yet, even with these low down payment alternatives many first time home buyers need help when purchasing their first home.

When you are preparing to purchase a home, it makes sense to consider traditional sources of aid such as our families. Traditionally, American parents have been a significant source of help when their children decide to become part of the community of homeowners. Here are a few important ways in which parents can help their children purchase real estate:

Alleviating cash shortages through gifts. We have already mentioned that the number one obstacle to owning a home is a shortage of cash. Many of the mortgage programs that require small down payments in order to purchase a home also allow some or all of the liquid assets needed for the down payment and/or closing costs to be provided through a gift from an immediate relative such as one’s parents. These programs include FHA and VA, as well as conventional programs.

For example, FHA is a very popular program for first-time buyers and it allows all of the capital necessary for the purchase to come from a gift. The capital required is typically 3.5% of the sales price for the down payment and any closing costs not paid by the seller or through a lender credit.

VA loans are for the benefit of active military and veterans of military service. The majority of VA loans require no down payment and therefore the use of gifts would typically be for those who need help with closing costs, especially when sellers are not contributing towards such costs or a lender credit is not available.

Historically, conventional programs have tended to be less liberal with regard to the use of gifts, but conventional guidelines have been liberalized more recently, especially with regard to guidelines for low-to-moderate income purchasers. In some cases, conventional programs require at least 3.0% to 5.0% of the cash needed for purchase to come from the purchaser, unless the gift constitutes 20% of the total purchase price of the home. Other conventional programs allow gifts for 100% of the required downpayment with minimum down.

Did you know that you can give a gift of equity to your child?

Many parents do not understand that most loan programs enable you to facilitate the transfer of a house to a child, by gifting part or all the equity in the home. For example, if you “sold” the property to your child for $400,000 and you had $200,000 in equity in the home, you could gift the child $100,000, which they could use as the down payment. You would then receive $100,000 which could help in retirement. This may be a way of keeping the home in the family, while you start the transfer of assets to an heir. It is highly suggested that you speak to a financial advisor regarding any tax and estate planning ramifications before structuring such a solution.

Purchasing together for income support. Purchasing a home with your children may enable those who do not have enough income to qualify for a mortgage to finance their home purchase. Once again, mortgage programs vary with regard to the allowance of co-borrowers and FHA and conventional low-to-moderate alternatives have the most liberal requirements. Under the FHA program, immediate family members can help a relative purchase without living in the home themselves. VA is the most stringent with regard to co-borrowers, as only the spouse or another veteran who will live in the home can co-sign. Conventional programs vary with regard to their requirements, but once again these have become more liberal with the growth of low-to-moderate income programs.

Purchasing together for credit support. One area in which a parent can help is for children who have a substandard credit history. It should be noted that adding a co-borrower with a clean credit history in no way erases the existence of a poor credit history. On the other hand, a strong co-borrower may be able to make the difference in cases where the credit history of the child is close, but not quite up to standards. It should also be noted that the credit score, which is used for a determination of the rate, would come from the child if it is lower than the parents’ scores.

Cash, income and credit. The three major barriers to obtaining a mortgage and reaching the American dream of home ownership. Help for overcoming these obstacles may be no further away than going back to your roots. With rates so low and home prices still affordable, there are many reasons to act now.

The Federal Reserve Board has shown that homeowners have an average net worth of over ten times the net worth of renters. Therefore, helping a child enter the world of home ownership may be the most important help you can give your children in their lifetime – from both an economic and a social economic perspective.

Looking For a Better Score: Special Real Estate Report

Credit Health

Credit Health

More Americans are actively seeking to improve their credit scores to help achieve their financial goals including home ownership. Chase Slate’s 2017 Credit Outlook reveals that 72% of survey respondents have taken steps to improve their score in the last year with 88% having checked their score, including 52% doing so in the last 6 months.

“Americans are more ambitious and action-oriented toward their credit health,” said Mical Jeanlys, General Manager of the Chase Slate card. “They are not only expressing a desire to improve their scores, but also are creating and carrying out specific strategies to achieve their goals.” A third of consumers say they check their credit score every month. More than half of respondents said they want to improve their credit score and 45% say they have a plan to do so.

Data from FICO shows that the average US consumer has a credit score of 700, 14 points above the level at the end of the financial crisis in 2009. Meanwhile the share of those with scores below 600 has fallen to 20% of the population, down from 25% in 2009. “Credit plays a critical role in nearly all facets of one’s finances, but strong credit health isn’t achieved overnight,” says Farnoosh Torabi, a personal finance expert and Chase Slate Financial Education Ambassador.

Source: Mortgage Professional America

Generation Z is Arriving: Special Real Estate Report

Diversity and More
Diversity and More

Diversity and More

In its most recent study, Zillow Group examined the newest generation to enter the housing market – Generation Z. Wait, what? Already? Are they even old enough to enter the housing market? As it turns out, yes, they are. Generation Z is considered to be those born from 1995 to 2010, meaning the oldest in the generation are now 22 years old. The Zillow Group Report on Consumer and Housing Trends 2017 shows this new generation now makes up more than 21% of the U.S. population, and is the most ethnically and racially diverse generation in our history. And they are beginning to enter the housing market as renters.

However, this generation is just as likely as older generations to say owning a home is a key component of the American Dream. In fact, 57% responded that they already considered buying a home while looking for their last rental. “It’s encouraging to see that Generation Z is inheriting the same notion of what home means as their parents and Millennial siblings,” Zillow Chief Marketing Officer Jeremy Wacksman said.

The 2017 Zillow Group Report is the second annual survey of U.S. home buyers, sellers, owners and renters, and asked more than 13,000 U.S. residents aged 18 to 75 about their homes – how they search for them, pay for them, maintain and improve them and what frustrations and aspirations color their decisions.

Source: HousingWire