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Friday, May 27, 2016
Buyers and sellers are often confused about the difference between a home inspection and an appraisal. The home inspection and appraisal are two different functions of a real estate transaction with different goals.
The inspection is an optional part of the transaction. You can choose to have a home inspection and make that part of your offer, or you can forgo that option if you wish. The purpose of a home inspection is to find material defects and safety issues in the home.
Often people consider skipping the home inspection because it isn’t required and they don’t want to spend the money. It is good to remember that a home is likely the largest purchase you will make in your lifetime. And, $300 is a drop in the bucket compared to spending your first night in the house when the furnace isn’t functioning.
If you are using financing, an appraisal is a requirement to get your mortgage. Appraisers are chosen by a third party and the lender will not know who the appraiser is until the report is completed. The job of an appraiser is to confirm the value of a property is at or above the agreed upon purchase price. How they do this is by looking at comparable sold properties. They will likely be looking at properties that have sold in the same town or similar towns in the past six months with as close to the same attributes to the subject property as possible.
Once the appraiser has completed their report they will submit it to the lender and the underwriter will review it for any errors or items that need to be addressed. Some financing programs have certain criteria that a home must meet. A competent realtor will know the criteria for your loan and will have let you know if they foresee any issues with the appraisal prior to going under contract.
It is important that you are educated on the purpose of each step of the home buying or selling process, and these are two of the most important.
Cari Turnbull is a Windham resident. She and her team represent buyers and sellers in the Greater Portland area. For all your real estate needs contact Cari firstname.lastname@example.org
Friday, May 20, 2016
In today’s seller market where homes which are priced to sell are often receiving multiple offers, buyers will want to be sure to take the necessary steps to craft a solid offer. Working with a buyer agent who is a Realtor helps to ensure that you are using a comprehensive and updated Purchase & Sale Agreement and Addendums. Depending on the situation such as a newly constructed or a bank owned home, additional Agreements may have to supersede your offer.
The anatomy of the typical offer includes the Purchase & Sale Agreement, a letter of pre-qualification or pre-approval from your lender, a copy of a check for the amount of the earnest money deposit made payable to the escrow agent, and any accompanying attachments initialed by the buyer in acceptance such as the deed, tax map, seller’s property disclosures or other. If you choose to send only the Purchase & Sale Agreement with none of the necessary accompanying documents of your offer, you risk the seller not taking your offer seriously by sending a message of indifference of outcome. It is important that you get off on the right foot by sending all components and ask your buyer agent to present the offer to the listing agent by calling to review the offer together or delivering (do not assume that all agents will do this without being asked to do so).
It is not uncommon for comparable sales and other market data used to determine your offering price to be included and reviewed by your agent with the seller’s agent to help the seller better understand how you arrived at that number. You may also wish to include a personal letter you have written to the seller to set yourself apart from any competing offers and illustrate yourself as a person, not a contract. Having all of the attachments for the seller to review prior to making a decision on how to proceed is one step to building a strong offer, the next is the price, terms and conditions you set forward.
Removing as many contingencies and keeping your offer “as clean as possible” is a great way to make your offer more attractive. Your type of loan or financing may dictate certain terms such as the amount of required seller paid closing costs will be necessary, or how long it will take to be able to close on the property. These seller concessions may be offset by increasing the purchase price, if the property will appraise for the greater amount, or making a larger earnest money deposit in the event you are competing with cash offers providing a quick sale. Ask your lender and Realtor what inspections you will be required to ask the seller to allow you to hold and include any additional investigations you wish to make your offer contingent upon. Keep the timeframe for these contingencies as short as possible which may depend largely on the availability of others. Having another house to sell can be a difficult contingency for sellers to work with, so you may want to consider offering more than the asking price.
Your offering price should reflect various factors including the number of days on the market, interest and activity, availability in that neighborhood or area, the seller’s motivation for selling as well as your own urgency to move or desire to get the house. Review comparable sales with your Realtor to help determine a reasonable offer to achieve the desired outcome. Be sure to compare what the seller’s actual net proceeds are to your offering price and to consider what the seller’s most likely reaction will be to your price. If your offer is conditional upon obtaining financing, the property will most likely have to appraise for the agreed purchase price as a requirement of the loan, so over paying is less of a concern.
After your offer is presented and you are waiting to either hear back or not hear back from the seller, the minutes and hours following often seem like an eternity. As eager as you are for a prompt response, it is wise to allow ample time for the listing agent to present and discuss your offer. When it’s all said and done you will have, hopefully, taken all of the steps one can, but now the ball is ultimately in the seller’s court. Be sure to discuss this exciting and often fast paced process in advance with your Realtor so when you are ready to make a move you know what to expect.
Nicole Foster is a real estate broker/ Realtor of over ten years with Regency Realty based in South Portland. She lives in Windham with her husband who is a local builder and their four children. Learn more about Nicole at nicolefoster.mainelistings.com.
Friday, May 13, 2016
One of the favorite tools of home sellers is the open house. Open houses can be so successfully run that they solicit an offer the same day or so poorly run that no one shows except a couple that steal prescription medicine from the home. Both scenarios happen more often that most people think. When a realtor is planning an open house for a home, a home seller should make sure that it is as successful as possible by asking that certain things are done.
Open houses should take advantage of the Internet. Open houses should be advertised in the newspaper, but great open house advertising goes well beyond the newspaper. Open houses should be posted on Zillow, on Trulia, on Realtor.com, and on the Multiple Listing Site. If a website was developed for the home it should feature the open house on the landing page. By maximizing Internet marketing, an open house will attract the most amount of buyers possible.
Old fashion methods should not be overlooked. Signs, and lots of them, on the corners and crossing street can lead traffic to an open house. Get them up as early as possible in the week with date and time posted clearly. Knocking on neighbor’s doors and letting them know that there is an open house coming up is a good strategy. They may know someone looking to join the neighborhood.
Two things the seller themselves should do to make sure that the open house is as successful as possible. First is to neutralize the home. Anything that a buyer might find offensive should be removed including pets, mounted animals, political posters, and even brightly painted rooms should be removed. Anything that can turn buyers off should be taken out of the space. It makes no sense to attract lots of potential buyers and then not try to appeal to them. The second thing sellers should do is be gone. Sellers should not attend their own open houses. Buyers can be made to feel uncomfortable and can become reluctant to give feedback in the presence of home sellers.
Information packets should be developed with copies readily available to interested buyers. The package should include the property disclosures, a lot map, the tax record, neighborhood info, and other similar homes in the area for sale or recently sold. Answering as many questions as possible for potential buyers makes an offer more likely.
The realtor should solicit feedback and use a sign-in sheet to keep track of guests.
Feedback will help determine what improvements should be done to the house and give better insight to the homes pricing. A sign-in sheet allows a realtor to reach out to the home viewers at a later date to get their opinions on the home and gauge their interest.
Sellers should also be security conscious. Valuable items should be locked away and easy to take items stored safely. Prescription drugs are often a target for thieves so, they should be stored in a safe place. It can be greatly disappointing to return home after an open house and have personal items or prescription drugs missing.
Following these tips with a realtor should lead to a successful open house and the sale of the home.
Rick is a realtor, real estate author, and longtime Windham resident. You can reach Rick with any real estate questions or needs at email@example.com.
Friday, May 6, 2016
Over the past 20 years I have seen the market change in many ways, especially as technology improves. The newspapers used to be a must for advertising, especially if you were going to hold an open house. So what is the truth behind the open house and what is its real purpose. An open house is not about selling houses these days as one might think, at least not entirely. So what are they about?
Open houses are a means for realtors to meet new clients, both buyers and sellers. New agents can gain experience talking to prospective buyers or potential sellers. Also, new agents who don't have many clients can use open houses to expand their clientele. Open houses quite frequently attract nosy neighbors who are curious what your house looks like compared to theirs, and of course they are trying to see what their house might be worth.
Still not convinced. According to the National Association of Realtors, over 90 percent of home buyers start their search online. The buyers today are Internet savvy and don't want to waste time looking at homes that they have not already checked out online. They also want to see properties when it is convenient for them and fits into their schedule. Open houses 15 years ago were a way to see a home without calling and bugging your realtor, which is precisely what their job is and why they get paid.
Buyers today do a tremendous amount of research online and many times already know which towns and neighborhoods they want to look for properties in. The 2015 profile of buyers and sellers by NAR showed that 91 percent of home buyers used an agent in the process and reports show that less than 8 percent found the home they bought from an open house or a yard sign.
While some realtors will try to argue that open houses are a great tool, I would argue they benefit the realtor by finding them new clients to work with, and have little benefit to seller. Do I still do open houses, of course, if situation calls for it or the seller wants me to hold one. The real estate market of today has changed dramatically, and so have buyers and sellers. As realtors we need to change and stay ahead of the game when it comes to marketing strategies and negotiations. Just for the fun of it, the next time you are talking with someone you know is a realtor, ask them about their thoughts on open houses.
Matt Trudel- Owner of Five Star Realty 207-939-6971