Hey Guys! I try to use my experience in Real Estate to help you avoid some of the most common pitfalls that customers encounter during a Real Estate Transaction. This article will be similar in that I will outline some key points that both buyers and sellers can benefit from!
1. Sellers: Know Your Hand But Don’t Over Play It
If you set a price from 5% to 10% above the market, you’re more likely to get an offer close to your home’s real value than if you start much higher and force your listing to go stale. However, if your home has better qualities than area comps, you have a bit more latitude. Try to look at your house logically instead of emotionally!
A sale contingent on the buyers selling their home is reasonable but only with a contractual escape for you, often called a “kick-out” clause. That gives you the right to continue marketing your home. If a less-encumbered bid comes in, you then offer the initial buyers a set time of 48 or 72 hours to withdraw their contingency.
2. Buyers: Know The True Cost of Home Ownership
When is a $250,000 house not a $250,000 house?
Answer: Always! Consider all of these and other closing costs when buying:
- Origination fee: On a $200,000 mortgage for a $250,000 home, assuming 3.5% interest and no points, you’d pay the lender about $1,800.
- Home inspection: Even if the mortgage insurer doesn’t require one, get one for peace of mind.
- Property taxes: You’ll usually pay a few months upfront.
- Appraisal: The bank will need to determine how much the place is really worth.
- Private mortgage insurance, or PMI: This depends on your down payment and credit rating.
Other pre-occupancy costs should include home insurance, title insurance and deed-recording fee, and possibly title insurance, survey costs, credit report fees, flood insurance and homeowners association dues/insurance.
On that $250,000 home, allow an extra $5,000 or more atop the sale price.
3. Buyers: Look For Up And Coming Neighborhoods
This might seem obvious but a home is an investment, of the biggest investments that most people make in their lives. With that being said you should invest in a neighborhood where you see growth!
Things to look for include proximity to a new or resurgent business center, the addition of a major employer, a light-rail station, a city cleanup initiative, young people moving there, crime watch and other neighborhood groups being formed, multiple renovations underway and other up-and-coming neighborhoods abutting it.
New retailers, restaurants and other commercial tenants are also a good sign. Research by RealtyTrac shows that homes in ZIP codes that have a Trader Joe’s grocery store appreciated 40% on average since the homes were last purchased. Homes with a Whole Foods nearby appreciated 34% on average. An example of this would be the Wegmans that is coming to Owings Mills. This will most certainly have a positive effect on the housing market in the area!
4. Sellers: Know Your Houses Selling Points
Upgrades rarely pay for themselves, but there are 2 spaces that can make or break a home sale: the kitchen and master bath.
Because kitchens are the heart of the home, or the “new living room,” make yours homey. Hide the coffee maker and toaster. Add simple decorative touches to the wall behind the sink.
Sure, new granite countertops and appliances are optimal, but new hardware for cabinets, new faucets, new lighting fixtures and fresh (neutral) wallpaper are inexpensive touches that carry weight. Thoroughly scour and depopulate the fridge and take magnets off it, please.
For bathrooms, always display a sparkling bathtub and commode. A new tub liner, or “shell,” can make that marred tub look like new and save you from replacing it.
A new faucet, new lights, fresh caulking, a new towel rack or new mirror may be in order. Clean out the medicine cabinet. Of course, this doesn’t mean you shouldn’t declutter, depersonalize, paint and scrub the rest of your space, too.
Some of this I have mentioned before in previous blog posts but it never hurts to repeat good advice! I also want to stress that your Realtor should be advising you on all of these things and more so make sure that they bring all of this up. As always please feel free to leave tips below or even topics that you would like me to talk about!