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5 Tips Real Estate Investors Need to Know to Find Good Deals

With real estate prices reaching ever-higher highs in large swaths of the country, the availability of deeply discounted properties is drying up. And that means it’s getting tougher for real estate investors and home flippers to find great deals worthy of their time and cash.

“There are fewer foreclosures to buy, but there’s more interest in buying foreclosures,” says Daren Blomquist, senior vice president at ATTOM Data Solutions, a real estate data firm. “Competition, even at the foreclosure auction, is pushing prices up.”

Bank-owned property sales, foreclosure auctions, and short sales still made up 16.9% of single-family home and condo sales in the first quarter of 2017, according to ATTOM. But that’s down from 20.3% of sales a year ago.

“Back in 2007, you were getting 20% off the actual value” on bank-owned property sales, Leland DiMeco, owner and principal broker at Boston Green Realty, told ATTOM’s Housing News Report. “Now you have them selling for 5% off, if that.”

So how can established and aspiring real estate investors and home flippers find a real deal?

Tip No. 1: Be proactive and look for off-market properties

Some landlords prefer to quietly shop around their properties to investors instead of listing them publicly. This way, the owners don’t upset any tenants currently living there.

“There is quite a bit of the pie that does get moved around, legitimately, but just off-market,” DiMeco told ATTOM.

So would-be investors shouldn’t wait for property owners to find them—they should find these folks themselves.

“If you like a neighborhood, you can go knock on doors,” Blomquist says. There might be “homeowners who may want to sell and don’t even know they want to sell yet.”

Tip No. 2: Act fast and pay with cash

There are still deals to be had—if you act quickly, says real estate investor Brandon Turner, author of “The Book on Investing in Real Estate With No (and Low) Money Down” and “The Book on Rental Property Investing.” He owns 52 rental units in 18 properties and has flipped about a dozen homes in Grays Harbor County in Washington.

“You have to work faster than everyone else,” he says. “I try to make an offer within 24 hours of a new listing coming on the market—the same day, if possible.”

Paying all cash can also sweeten the deal for sellers who might have multiple offers, he says.

Tip No. 3: Don’t ignore potential tear-downs

Real estate investors might not initially see the value of buying an overpriced, small, or run-down home within the city limits. But many of these homes in desirable locations can be sold to a developer to be torn down. Then a multifamily building or larger home can go up if the zoning permits it. And that can translate into some serious moolah.

It requires some vision and a bit of a leap of faith. With a potential tear-down, “it may not be a good deal to buy it as a single-family home. But if you can buy it for what it could be, it can be an excellent way to find value and deals,” Turner says. However, this approach is not without risks and obstacles.

“If you’re going to build a new house, it takes a good while to get all the permits,” he adds. “The danger is if the market begins to decline, you might be unable to sell it.”

Tip No. 4: Seek out nasty, smelly homes

Investors shouldn’t shy away from hardcore fixer-uppers and “nasty” homes, says Turner. That’s because there is not as much competition for these potential diamonds in the rough. Many lenders won’t issue loans on these properties if they’re in really bad shape.

“The stinkier the house, the better,” Turner says. “Smells are easy to fix. A good coating of oil-based primer, new carpet, and cleaning will take care of almost any smell.”

He typically looks for the “nastiest house in the nicest neighborhood,” he says. Even homes in need of serious TLC can be profitable if they’re in the right location.

“You can’t fix a neighborhood, but you can fix the house,” he says.

Tip No. 5: Look in another city or state

Many would-be property investors living in pricey parts of the country would love to become landlords—but can’t afford to do so in their own cities. So they can consider buying in lower-priced markets such as the Midwest.

“Look in other geographies that aren’t in your backyard,” Blomquist says. Focus on places that are growing “that still have a lot of lower-priced inventory available.”

But they should make sure to do their homework first to make sure they understand the neighborhood they’re buying in and who their potential tenants or buyers would be. This includes how much they can realistically charge.

Landlords might need to hire property management services if they can’t afford to get there quickly if something breaks. And that eats into profits.

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Remember, becoming a real estate investor is still risky

Despite the stinky homes, investing in real estate might seem like a glamorous way to make a little extra cash—just look at all of those home flippers on HGTV! But in reality, it’s not risk-free.

Landlords sometimes have tenants who trash homes or don’t pay the rent on time. Flippers might encounter permitting problems or find costly structural issues in homes that cost quite a bit more than expected.

“We’re in a booming housing market. Everyone’s confident if they buy a piece of real estate it’s going to go up in value,” says Blomquist. “That’s true for the long term.

“This housing boom is on a lot more solid foundation than what we saw 10 years ago,” he says. “But you have to be very cautious because, in the short-term, we have seen … that prices sometimes do go down.”

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How to Make a Backup Offer on a Sale-Pending Home

If you think a home marked “sale pending” is off-limits, think again. Yes, this label means that the buyer and seller have negotiated an accepted purchase contract, but things happen—and sales can fall through. For that reason, there’s no harm in making a backup offer.

“If a buyer is in love with a particular home that happens to be pending, why not give it a shot?” asks John Lazenby, president of the Orlando Regional Realtor® Association.

So don’t let go of that dream house just yet. Here’s what you need to know on making a backup offer If the original deal falls through and you’re next in line—you could end up nabbing the home you were pining for all along. Sweet!

Why would a pending home sale fall through?

Even after all the work that a buyer and seller went through to create the contract, sales can still fall through.

“The contract often contains contingencies that can kill a transaction if they’re not met,” says Lazenby. Common examples are contingencies related to the following:

  • Inspections: A sagging foundation, leaking roof, or other big-ticket repair items could kill the deal.
  • Appraisal: If a home is appraised under the sale price, the financing can fall through if the buyer isn’t able to make up the difference.
  • Buyer’s loan approval: If a potential buyer is only pre-qualified, rather than pre-approved, the financing might not materialize.

Another common reason is a bit simpler: buyer’s remorse. Maybe an expected promotion didn’t come through or the buyer decided she didn’t like the open-plan kitchen after all. Truth be told, there are a million reasons buyers get cold feet and change their minds.

Reasons to make a backup offer

Some potential buyers are in a better position than others to wait it out. If you relate to one of these conditions, making a backup offer is a good idea:

  • You’re not under a time constraint—such as the desire to be settled before the start of the school year. “If a buyer is in a hurry, it might not be feasible to wait a month or longer to see if the initial contract falls through,” Lazenby points out.
  • Inventory is particularly tight, and there’s nothing else in your price range that’s tempting. Sometimes it’s best to wait and see on the house you love, rather than jump on something else that isn’t quite right.
  • The listing agent is able to give you some intel about the house that leads you to believe the other buyers might get cold feet or that there are contingencies.
  • It’s a short-sale transaction, which Lazenby says is much more likely to collapse than a regular transaction. Often the bank, or whoever holds the mortgage, will find the price too low and will demand the seller put it back on the market to achieve a fair price.

How to make a winning backup offer

If you and your agent decide to put together a backup offer, here are a few touches that can help turn the tables in your favor:

  • Money talks. Present a clean offer, complete with mortgage pre-approval and proof of funds. If you are able to, offer over asking price.
  • Be flexible. Are you willing to give them extra time to enjoy the holidays in their home, or forgo minor repairs that others might insist on? Some sellers might appreciate benefits other than cold, hard cash.
  • Write a letter. You never know when a personal touch might resonate with the sellers. Tell them how much you’re looking forward to raising a family in their family home or entertaining in their amazing dining room.
  • Stay visible. You want the sellers’ agent to know you’re ready to move when they are. Have your agent be in frequent touch to ensure you are on their radar should anything change.

The bottom line: Never say never when a sale is pending. With a little determination and luck, that house could be yours.

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How Much Are Mortgage Fees? The Costs That Come With Your Loan

When shopping for a home, it seems like there’s something to pay for at every step of the way. To get your mortgage approved—thereby allowing you to actually buy your house—you’ll have to pay mortgage fees. The most common mortgage fees also fall under the umbrella of closing costs, those expenses you pay when you close on your house that help facilitate the sale (i.e., the appraisal fee, the title search, and the processing fee).

Although it’s difficult to put an exact figure on the mortgage fees (they vary from state to state) you can expect to pay, there are some costs that almost every mortgage has in common. We spoke with Amy Bailey Oehler of PrimeLending about what they are and how much money a home buyer should plan on paying for the loan.

Mortgage fees you’re likely to pay

  • Appraisal ($450 to $650): An appraisal by a licensed appraiser will almost always be required by the lender. The price varies depending on the size of the property and the type of loan you’re getting. “A lot of lenders will require payment for the appraisal upfront,” says Oehler. “The appraisal fee goes directly to the appraiser. If the loan doesn’t close, but the appraisal was completed, then the appraisal fee is nonrefundable.”
  • Closing fee ($300 to $600): A representative from the title company will come to your closing to supervise the transfer of title, and you’ll have to pay for the service.
  • Credit report fee ($25 to $50): This is the fee to pull your credit report.
  • Inspection ($450 to $500): The inspection isn’t a requirement for the loan, but it is highly, highly recommended. This is another cost that is paid before you reach the closing table. Generally, you can negotiate either fixes, concessions, or a drop in sales price based on any problems the inspector finds.
  • Lender’s title insurance (usually 0.5% of the purchase price): This protects your lender if something was missed in the title search. The cost depends on the size of the policy and is set by the state.
  • Survey ($350 to $500): Most states require a survey of your property before you can get a loan. If a survey doesn’t already exist that can be used, you’ll have to pay someone to do it.
  • Title search ($300 to $600): Your lender will do a search to ensure there are no liens on the property or anything that could prevent you from purchasing it. Sometimes this will be bundled with other title fees in your closing document.

Mortgage fees you might have to pay

  • Application fee ($100): Some lenders charge a small fee when you submit your application. This is also sometimes bundled with the origination costs.
  • Attorney fee ($150 to $500): In some states, you bring your own attorney to the closing table; in other states, you don’t. If not, the lender might need to consult an attorney to look at closing documents or contracts.
  • Flood certification ($5 to $10): This tells the lender if the home is in a flood zone.
  • Homeowner’s title insurance ($1,000 on average): You aren’t required to take out a title insurance policy for yourself, but it’s highly recommended. If any liens were missed during the title search, you will be on the hook for any costs to clear them unless you have this insurance.
  • Origination or processing fee ($300 to $1,500): This fee covers the cost to prepare your mortgage. Sometimes you won’t be charged this fee at all. Make sure to read your Loan Estimate and Final Closing Disclosure carefully to see if/where you are being charged.
  • Points (1% of your total mortgage): Points are lender fees paid to reduce your interest rate. These are different from “origination points,” which are just another way of presenting mortgage origination fees.
  • Underwriting fee ($400 to $600): This fee is paid to your lender to cover the cost of researching whether or not to approve you for the loan. Some lenders bundle together the underwriting with origination fees or processing fees.
  • Wire or courier fees ($30 to $100): If documents need to be sent overnight or money needs to be wired, you’ll pay these fees at closing.

How to reduce mortgage fees

As with any deal, the best way to cut mortgage costs is to shop around for the best deal. Some lenders charge more for their services, and if the overall rate isn’t any better, look for someone with lower fees.

Also, make sure you understand every fee you’re being charged. There might be some optional fees you can choose to waive—just don’t be penny-wise and pound-foolish. Saving $500 on an inspection could cost you big in repairs later. If you have an FHA loan, you can sometimes use your loan to pay for closing costs, but be aware that it could increase your interest rate.

Another potential way to save is through bank loyalty programs. Sometimes if you get a loan from the bank you have other accounts with you can reduce your origination costs.

If you are a veteran, you can qualify for a Veterans Affairs loan, which requires no down payment and has lower closing costs overall.

To save cash, you can always try to negotiate with the seller to pay some of your closing costs. Depending on how motivated the sellers are to close on their property, they might be willing to pay title fees, points, and even transfer taxes.

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What Are Property Disclosure Statements? Info Buyers Need to Know

No matter how great a home looks at first glance, a host of problems could be hiding right under that fresh coat of paint—which is why buyers will want to scrutinize certain paperwork they’ll receive called property disclosure statements.

Property disclosure statements essentially outline any flaws that the home sellers (and their real estate agents) are aware of that could negatively affect the home’s value. These statements are required by law in most areas of the country so buyers can know a property’s good and  bad points before they close the deal. Here’s what all buyers need to know about real estate disclosures.

When do buyers receive property disclosure statements?

While it varies by area, most buyers will receive property disclosure statements after their offer has been accepted, says Atlanta Realtor® Bill Golden. That way, buyers can review this paperwork at about the same time that they typically hire a home inspector to check the property for any defects. In fact, disclosure statements can help point your inspector toward areas of a home you’d like to home in on, so try to read your disclosure statements before scheduling the inspection.

In certain areas, sellers might even hand buyers disclosure statements before an offer is made. But no matter what, it should be early enough to give buyers time to do their due diligence and spot problems that could make them reconsider whether this home is right for them.

What types of flaws must be disclosed?

Sellers are required to complete a variety of disclosure documents, which are often in the form of a government-issued checklist where they mark whether their home has (or once had) a variety of problems such as the following:

  • Windows that don’t close or doors that stick
  • Faulty foundation or leaky roof
  • Problems with appliances or home systems like the HVAC
  • Repairs made on any of the above as well as insurance claims
  • Renovations completed without a permit
  • Pest or mold infestations
  • Environmental hazards in the area (e.g., floods and wildfires)

The federal government requires certain disclosures anywhere in the U.S., like the existence of lead-based paint, asbestos, or other clear health and safety risks. However, states and counties also have their own particular laws on which issues must be disclosed. For instance, some states require sellers to disclose nearby sexual offenders, while others do not. Some require a death on the property to be disclosed, especially if it was a murder, while others leave you to do that kind of sleuthing yourself.

If buyers (and their real estate agent) read a disclosure document and see nothing to worry about, they sign off on it before moving one step closer to sealing the deal. If, on the other hand, buyers spot something worrisome, it’s in their interests to delve further.

What to do if a disclosure reveals something bad

If you spot something on a disclosure statement that you don’t understand or that raises concerns, have your real estate agent bring it up with the sellers (or their listing agent). In some cases, they might have an explanation that puts you at ease (i.e., “we had bedbugs back in 2012 but hired an exterminator and have been free and clear ever since”). Or, if the issue makes you seriously question whether you want to move forward, this could be an opportunity to renegotiate the sales price to compensate for the added risk you’re taking on buying this home.

At worst, you can always back out of the deal without penalty—meaning you won’t have to forfeit your earnest money deposit. And if you happen to find a problem that should have been disclosed but wasn’t, that’s all the more reason to consider carefully whether you want to move forward. After all, if sellers covered one thing up, what else could they be hiding?

However, keep in mind that the sellers are required to reveal only all known problems. That’s key. Sellers aren’t typically held responsible for problems they aren’t aware of. And that’s just one more reason why buyers absolutely should get a home inspection to root out any potential problems themselves.

But all in all, smart sellers inform buyers of everything they need to know upfront. While property disclosures exist mainly to protect the buyer from getting a lemon, this paperwork protects the seller, too.

“If sellers disclose everything they know about the house, a buyer can’t come back to them later saying they weren’t told about an issue,” says Golden.

Property disclosure statements save everyone time, hassle, and expense by preventing deals from falling apart—and that benefits both buyers and sellers.

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How to Flip a House: 7 Signs You’ll Rake in Huge Profits

It seems like just about everyone these days fantasizes about how to flip a house. The reality? Doing it successfully largely hinges on picking the right place at the right time—which is why veteran flippers keep a mental checklist to help steer them toward homes that are primed to gush cash.

Curious about those signs that indicate all systems go? Let’s check out those qualities deemed by real estate investors as signs a house flip will pay off big-time.

Sign No. 1: It’s in a neighborhood where homes sell fast

One of the first clues that a house is flip-worthy is that it’s in an area where homes sell quickly, says Larry Friedman of SDF Capital in New York and Connecticut. After all, in this game time is money—every extra month you own the house means you’re on the hook for more mortgage payments and maintenance costs. Fast-moving markets generally mean these overheads won’t last long.

Realtor.com data show that, on a national level, homes remain on the market for 62 days on average. Yet in a blistering area like San Francisco, homes typically sell in 25 days; in slow markets like Albany, NY, it’ll take 81 days. So be sure to check how long it will take in your own neighborhood by checking research.realtor.com.

Sign No. 2: The house meets the 70% rule

For a flip to be worth your time, effort, and money, you should make between 10% to 30% return on your investment. To determine your potential return, see if the flip meets the 70% rule. Can the house be bought for 70% of what it will be worth once fixed up, minus any needed repairs, closing costs, and real estate agent fees?

For example, if you can buy a house for $110,000 and fix it up for $30,000, you’ll want to sell it for around $200,000 in order for it to be worth your while, says Mark Ferguson, a Realtor and creator of Investfourmore.com.

To find what a home will be worth fixed up, check the prices of similar houses in the neighborhood (more on that next).

Sign No. 3: You can price the house right

To get a ballpark figure for how much you can sell a house for once it’s fixed up, one safe rule of thumb is to check the median home price for that market. (You can find this information by entering a home’s address or ZIP code at Realtor.com/local). In Parma Heights, OH, the median sales price is $117,000, while at the other end of the range in Manhattan, NY, buyers expect to pay $1 million. Of course, this presumes your home is typical in terms of size and number of rooms.

Sign No. 4: The property has more than one bedroom

Don’t buy a one-bedroom house to flip, because most home buyers are looking for two bedrooms and more. Anything smaller will minimize the demand at resale. Another flip-worthy must is a functional floor plan. Translation: You shouldn’t have to go through a bedroom to get to the kitchen.

Sign No. 5: The needed repairs are mostly cosmetic

The physical condition of the home should be fair and correctable without draining your bank account—like a kitchen or bathroom renovation or installing new flooring. Repairs that should give you pause include foundation and structural issues. Tackling these two problems can destroy a reno budget with overages and stretch the time frame of the flip.

“The home needs to be in good shape to begin with, unless you are planning a very large gut and addition, which is unlikely in most flips,” says Realtor Misty Weaver at Keller Williams Realty, in Winchester, VA.

Sign No. 6: Understand what scares home buyers

Most home buyers touring an open house can deal with a lime-colored wall they need to repaint or one appliance that dates to the Reagan administration. What many buyers can’t handle, though, are intimidating and pricey projects like replacing an old furnace (which will cost around $4,000), putting on a new roof ($3,000 to $10,000), electrical upgrades ($1,500 and up), or plumbing issues ($1,000 to $10,000). Not only do these issues spook home buyers, they also could make the home hard to finance with lender money.

Last but not least, a home shouldn’t have any “crazy characteristics like a railroad in the backyard, a very busy road out front, or other problems that can’t be changed,” says Ferguson.

Sign No. 7: The neighborhood itself doesn’t need flipping

People don’t just live in a house, they live in the surrounding area, too. A potential flip should be in a good neighborhood with access to transportation and amenities like parks. Perhaps the biggest indicator of a flip-worthy home is the quality of the schools.

“A large segment of the market buys to be in a good school district,” says Susan Naftulin, owner and president of Rehab Financial Group, who makes loans to house flippers. Even if you don’t have kids, most buyers see good schools as a huge plus.

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5 Reasons Why Buying an Old House Is a Great Idea

We understand the appeal of moving into a newly constructed home. After all, it’s hard not to be enticed by brand-new appliances, floors, and heating, cooling, and electrical systems. Plus, buying an old place that needs work can be intimidating, especially for those of us whose only brush with restoring a house has come from watching reruns of “Fixer Upper.”

However, home buyers can see all the beauty and potential in older houses. What some view as eyesores, others see as charm—four walls full of history that can’t be duplicated. Besides the nostalgia factor, an old house can be a smart purchase for the sake of your wallet.

Take a look at the top reasons why buying an old house might just be the best decision you’ll ever make.

1. Old homes are cheaper than new homes

What classifies as an older home? In general, if a home does not use or contain modern materials such as high-performance concrete, it qualifies as “old.” Normally, these homes would have been built before 1970.

Shelley Cluff, a real estate broker and owner of Park Place Homes, in Midland, MI, explains that an older home gives you substantially more bang for your buck.

“On average, a comparably sized new construction can sell for 10% to 20% more than an older, updated home,” she says. While newer homes might cost less to maintain, they are also built with different materials such as energy-efficient products that drive up the cost of building them and, by extension, the cost of buying them.

2. Old homes have better-quality construction

The saying “they don’t build ’em like they used to” is generally true. Established houses are built to last, and many aspects of the construction cannot be reproduced today. Older homes might be built with wood made from old-growth trees (trees that attained great age by not being significantly disturbed) and therefore more resistant to rot and warping.

Even the walls are likely different. In an older home they’re probably built with plaster and lathe, making them structurally stronger than the drywall construction of modern homes. These older materials also provide a better sound barrier and insulation.

3. Old homes are often in established locations

When choosing a neighborhood, home buyers weigh a number of factors—including the school district, crime rate, and walkability. If you’re looking at buying an old house, chances are it’s in a well-established, and probably stable, area. This is a good thing. 

4. Old homes have more character

See that mature oak tree towering over the front yard that took decades to reach such heights? You’re not going to get that kind of curb appeal from a new construction.

Some older homes have managed to maintain the amenities that are characteristic of the era it was built in—for example, original crown molding, herringbone-patterned hardwood floors, and built-ins.

While newer homes will reflect the trends of current times, they won’t satisfy other eclectic tastes. Victorian homes with authentic stained-glass windows or a midcentury sunken living room can’t be found in modern houses. While many designers do emulate these characteristics, you might prefer to go for the real thing.

5. Lot size tends to be larger with old homes

Newer homes might come with newer amenities, but on the outside (specifically in the backyard) things aren’t as remarkable. According to data from CoreLogic, new constructions tend to have a larger house with a smaller lot.

“The median size of a new home increased from 1,938 square feet in 1990 to 2,300 square feet in 2016, but lot sizes during this same period decreased from 8,250 square feet to 6,970 square feet.”

In an effort to keep the cost of new homes down and bring in more revenue, homebuilders have favored building larger homes on smaller lots. Why?

“When home prices appreciate at a fast pace, the land value rises even faster, which in turn drives the cost of homes higher,” according to CoreLogic.

So if a big backyard is on your list on nonnegotiables, you’re most likely to find that in an older home.

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7 Signs a Homeowner Is Desperate to Sell

Every house hunter hopes to move into a new home with as few hitches as possible. And that largely depends on how eager (or, let’s be frank, desperate) a homeowner is to sell. And while it’s gauche to ask outright why someone is selling—Divorce? Job transfer? Downsizing?—there are ways to sniff out the answer.

Here are some subtle signs a homeowner wants to find a buyer ASAP—and hopefully that buyer is you!

Sign No. 1: The listing begs ‘buy me!’

Granted, it won’t say that exactly, but read between the lines and you can pick up some valuable clues. The most obvious, of course, is multiple price reductions. But there are other signs, too, like an asking price below market value or a note that the seller is looking to unload the home “as is.” Another indicator that bodes well for you? A note that the seller is looking for a “cash” transaction.

“That could indicate a homeowner isn’t willing to wait around four months for a traditional bank mortgage,” explains Lucas Machado, president of House Heroes LLC a real estate investment firm in Sunny Isles Beach, FL.

Sign No. 2: The curb appeal isn’t up to snuff

“A lot of times motivation for a homeowner really means distress,” says Ed Laine, a real estate specialist with Miller Laine Properties in Bellevue, WA. “And when someone is in distress, they’re no longer focused on maintaining their yard or picking up their newspapers, so much so that they even try to close out the outside world.”

You might see an overgrown lawn or garden beds that could use a good weeding. Or there might be more subtle signs like closed blinds, even on a gorgeous day, or a stack of unread newspapers on the porch.

Sign No. 3: The closets are only half-full

“When showing a family home with three to four bedrooms or a finished basement, I’ll peek in the closet,” says Bob Gordon, a Realtor® with Berkshire Hathaway in Boulder, CO. “If it’s partially empty and only has a man’s or a woman’s clothing, it can be an indication of a divorce.”

And while you don’t want to benefit from someone else’s pain, the truth is that “divorcing sellers may be in a hurry to unload and be apart,” Gordon notes.

Other signs your home sale may go quickly because of a broken heart? Mismatched furnishings or empty spaces on the walls where art was recently taken down.

Sign No. 4: There’s been an addition to the family

A crib that barely fits in the parents’ bedroom. A hospital bed or oxygen tank in the living room.

“Small homes where there has been a recent birth or a family member who’s moved in for medical reasons can create a sense of urgency,” says Glenn Phillips, CEO of Lake Homes Realty in Pelham, AL. Here’s a family that needs more room, and fast.

Sign No. 5: The property is listed by an estate

When a house is listed by an estate—that is, the people who inherited it from the original homeowner—you might find that it’s more eager to give it up. That’s because the estate is likely looking to liquidate assets.

“There are exceptions, particularly if family members are not all in agreement about the sale,” Phillips says. “But if the family members are all out of town, then they’re usually more anxious to get the property sold.”

If you want to confirm this detail, check public records—or politely ask the listing agent, who might be at liberty to share.

Sign No. 6: The homeowners answer questions quickly and candidly

So there’s a leak in the roof? The basement flooded last year? Home sellers are rarely eager to disclose such information—but desperates seller won’t beat around the bush, because they know this could come back and bite them later by slowing down the sale.

“A seller’s willingness to disclose information about the property is one of the strongest indicators they’re eager to sell,” says Machado. “For people who are truly motivated, there’s a problem they’re looking for you to help solve, and so they’re more willing to be open and honest about their situation.”

Sign No. 7: The seller’s already moved on

If the house is vacant and the owner has already settled into a new home, then most likely they’re primed to sell, says Sacha Ferrandi, founder of Source Capital Funding, which offers real estate lending in California, Arizona, and Minnesota.

“Often, when a seller buys a home without selling the old one, their new mortgage is contingent on selling their old property,” he explains, “and every day that their home doesn’t sell puts stress on their current financial situation.”

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What Is an Energy Audit? Learn How Energy-Efficient Your Home Is

You’ve heard it before: Turning off the lights, closing the windows, and not taking 40-minute showers are all little ways to save energy in your home. But what if there was a way to determine which energy-saving solutions will pay off based on the configuration of your house? Say hello to the energy audit, a home assessment that can help you go green and lower your energy bills by potentially thousands of dollars. So what’s an energy audit, really? It tells you how energy-efficient your house is and offers home improvement recommendations to take your efficiency to the next level.

How a home energy audit can help buyers

While energy audit information is typically not included on home listings alongside the number of bedrooms and square footage, it can often be found in the multiple listing service, which has more specific details. Only licensed real estate agents can view the MLS, so you’ll want to ask your agent (or the seller’s) if an energy audit was performed. If not, you can request one during the home inspection.

The energy audit information will offer more insight into your home’s true energy potential than a review of past utility bills. That’s because the energy audit will tell you how the home is built, not how the home is used. Someone who perpetually cranks up the heat or leaves the lights on might have a high energy bill, even if the house itself is relatively energy-efficient.

“For owners and sellers, having an energy assessment done can be a powerful selling tool—or a wake-up call if it comes back low,” says Welmoed Sisson, a home inspector with Inspections by Bob in Boyds, MD.

The Home Energy Score

Home energy audits can be provided by various institutions (e.g., local utility companies) and go by different names. However, the one rating that is gaining the most traction is the Department of Energy’s Home Energy Score. It’s important to note that not all energy audits will give you an HES.

The HES measurements provide a standardized process for calculating a home’s efficiency, thus allowing two homes to be compared side by side, even if they are different ages or styles, or in different locations. All assessments take into account the local climate, too.

“The HES was developed to give buyers an easy measurement they can think of, like a car’s mpg rating,” says Sisson. “It’s a way to objectively compare a home’s energy use with others, knowing that the same standards were used to assess all the properties that have been scored.”

Other types of energy audits

The efficiency audits offered by other sources (e.g., utility companies) typically don’t involve specific measurements. Instead, they rely on visual inspections to see whether windows are double-glazed or if energy-efficient lightbulbs are in use, for example. The recommendations they offer are more general.

How much does an energy audit cost?

Depending on the size of the home, an energy audit can cost between $150 and $250, although some assessors may charge less if it’s included as part of a regular home inspection. Many home inspectors offer the service. If you want to get your home’s HES from someone who has been certified by the DOE, consult this database.

What the energy auditor looks for

An energy audit takes about one to two hours.

Using a tape measure, the assessor will measure the windows, floor space, and insulation. The assessor also records the type and age of heating or cooling appliances and water heaters, and notes the condition of the ductwork. These findings are then entered into a database to calculate the overall score for the home.

Homeowners will receive a report with a score on a 1-to-10 scale—with 10 representing a home among the top 10% in energy efficiency; 5 representing the performance of the average home; and 1 indicating a home that consumes more energy than 85% of U.S. homes.

The report also includes a set of recommendations tailored to the home, starting with the least expensive improvements that will yield the most return.

“Spoiler alert,” says Sisson. “It’s almost always ‘add more insulation.’”

The report offers an estimate of the savings you’ll enjoy after completing all the recommended improvements. For example, if you moved your home’s score from a 3 to a 7, you could save about $575 a year. On the recommendations page, the savings are broken out by improvement. While some pay off within a year or two, the DOE says that all recommended energy improvements will generally pay you back in 10 years or less. Score!

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Builders Finally Ramp Up on New Homes, but Can Buyers Afford Them?

A fresh infusion of new homes hit the market as the spring home buying season kicked off in March, adding a touch of relief to a housing market that’s been short on, well, homes. Still, the most cash-strapped buyers—typically first-timers—aren’t likely to be able to take advantage of the new additions.

About 621,000 newly constructed homes were sold in March—up 5.8% from February and 15.6% from the same month a year ago, according to a joint report by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. Realtor.com® looked only at the seasonally adjusted numbers, which have been smoothed out over 12 months to account for seasonal fluctuations.

But the majority of those residences with that new-home smell are well out of the price range of many first-time buyers. That’s because high land, labor, materials, and regulatory costs  drive up prices on these homes.

“The good news is, new home sales are surging,” says realtor.com Senior Economist Joseph Kirchner. “But the bad news is, the percentage of affordable homes” under $200,000 isn’t going up as well.

The median price of all new homes was $315,100 in March. That’s 33.3% higher than the median price of an existing home, although the lack of supply of all types of housing has driven up prices across the board. Existing homes sold for a median $236,400 in March, according to the most recent National Association of Realtors report.

Home builders doubled the number of abodes costing $150,000 or less that hit the market in March, compared with the previous month and year. But these inexpensive homes still only make up a minuscule percentage of the new home market—just 6%.

“A lot of that [increase] is because there are more homes [going up],” Kirchner says.

But the percentage of new residences costing between $150,000 and $200,000 went down—from 13% in February to 10% in March. Only 16% of all the new homes on the market in March cost less than $200,000.

The majority of new homes cost between $200,000 and $299,999 (about 28%), and $300,000 and $399,999 (about 24%). About 13% were between $400,000 and $499,999; 14% were between $500,000 and $749,000; and 5% were luxury homes costing $750,000 and up.

The most new homes to hit the market in March, about 323,000, were in the South, according to the seasonally adjusted numbers in the report. That was an increase of 1.6% from February and 5.9% from March of 2016.

Quite a few new abodes also hit the market in the West. About 175,000 homes were for sale or sold in March, up 16.7% from the previous month and 32.6% from the same month a year ago.

About 84,000 new homes went up for sale in the Midwest, down 4.5% from February but up 23.5% from March 2016.

And the Northeast received an additional 39,000 new homes in March. That’s up 25.8% from February and 21.9% from the same month a year ago.

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U.S. Home-Price Growth Climbs at Fastest Rate in Nearly Three Years

U.S. house prices continued to show no signs of slowing, hitting their highest in nearly three years as demand remains hot, especially in the Pacific Northwest and Dallas.

The S&P/Case-Shiller 20-city index rose 5.9% in the three-month period ending in February compared to the same period a year ago, an acceleration from its 5.7% yearly increase in January. This is the highest rate since July 2014.

The 20-city index was up 0.4% for the month, or a 0.7% gain when seasonally adjusted.

Economists had forecast a 0.8% monthly gain and a 5.8% yearly gain for the 20-city index.

Metro Monthly change (%) 12-month change (%)
Atlanta 0.4 5.6
Boston 0.4 7.6
Charlotte 0.5 6.1
Chicago 0.2 6.2
Cleveland -0.3 4.5
Dallas 1.1 8.8
Denver 0.4 8.5
Detroit 0.3 6.2
Las Vegas 0.4 6.3
Los Angeles 0.4 5.1
Miami 0 6.7
Minneapolis 0.1 5.9
New York 0 3.2
Phoenix 0.4 5.3
Portland 0.8 9.7
San Diego 1 6.5
San Francisco 1.2 6.4
Seattle 1.9 12.2
Tampa -0.5 6.9
Washington 0.2 4.1

The national index, which just a few months ago regained the high last seen during the housing bubble of a decade ago, rose 5.8% for the year, a 32-month high.

The largest price increases are still in the Pacific Northwest, including Seattle and Portland. Dallas replaced Denver in the top three with an 8.8% increase.

Only Cleveland and Tampa saw prices fall in the February period. Prices were flat in New York and Miami.

Separately, the Federal Housing Finance Agency also released home-price data for February, which is based on mortgages backed or guaranteed by FHFA-regulated Fannie Mae and Freddie Mac. It showed a seasonally adjusted 0.8% rise for February and a 6.4% year-over-year improvement.

Over 12 months, the Mountain region — Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico — had the fastest growth of 9.5%.

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