Some people think that when it comes to buying or selling a home, that they might not need the help of a real estate agent. Real estate agents can help sellers and buyers get what they want quicker and easier then if they did it by themselves. Here are some ways you can tell if you might need a real estate agent.
Do You Need a Listing Agent to Sell a Home?
Nobody really needs an agent. As a seller, you can find your own buyer, but there is always a lingering question, would a listing agent have helped you to net more on your bottom line? According to NAR (National Association of Realtors) it can be almost 22% more. A lot depends on the real estate market.
- In super hot seller markets, almost anybody can put a sign in the yard and attract offers. All buyers will be coming to make an offer.
- In buyer's markets, there are fewer buyers, which makes an agent's services worth more.
- More than 80% of buyers purchase a home through a real estate agent. If you don't hire an agent, you could be losing exposure to 80% of the buying population.
Listing Agents Can Bring Added-Value to a Transaction
Unless you routinely attend every open house in your neighborhood, you may not possess intimate information about the interiors of your neighbor's homes nor know why some sold for higher prices than others. Experienced agents have this knowledge and use it to position your home to sell at the highest possible price. Top listing agents sell homes day in and day out. Here is a list of services most listing agents offer to sellers:
- Top-notch marketing materials and proven selling systems.
- Professional virtual tours and photography.
- Wide Internet exposure.
- Promotion at company meetings and MLS meetings.
- Networking with fellow real estate agents.
- Price guidance according to market data and recent sales.
- Home stagers, inspectors and repair contractor referrals.
- Buyer feedback and private showings.
- Confirmation of potential buyer qualifications.
- Counter offer and negotiation expertise.
Buyer's Agents Work for the Buyer and Not the Seller
If it is done correctly, a buyer's agent's job is to put the buyer's interests ahead of the agent's, to disclose all material facts, keep the buyer's information confidential, provide the buyer with sufficient information to purchase a home and expertly negotiate on the buyer's behalf.
Here are some of the services you can expect to get from a buyer's agent that you might not be able to obtain on your own. Apart from hearing about listings before home are available to the public, agents can:
- Provide comparable sales from the tax rolls.
- Provide sales data from MLS based on map searches.
- Pull property profiles reflecting sales history, property data, demographics and neighborhood services.
- Obtain a copy of the home's historical documents.
- Run reports on listing agent's list-price to sales-price ratios.
- Calculate annual facts and trends about an area.
- Suggest pricing strategy.
- Prepare a strong offer that presents the buyer in the best light based on market demands and agent interaction/networking.
- Review of documents for loopholes and obtain disclosures.
- Provide a buffer between you and the seller's agent.
If you feel competent that you can handle a sale or purchase on your own, you probably can. But you may always wonder if you paid too much or accepted too low of a price.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.
Buying a home with a swimming pool means that proper pool maintenance is very important. Most pools are located outside, which makes taking care of them easier. One thing you should find out if you are going to buy a home with a pool, is if your pool complies with federal and local pool barrier laws regarding enhanced safety regulations.
Who Buys Homes with Swimming Pools?
Most home buyers fall into three different categories when it comes to buying a home with a pool:
- Home Buyers Who Won't Look at Homes Without a Pool
- For these buyers, a pool is important because a home is not a home without a pool. Pools are very popular in warm state, where they are used year round.
- Home Buyers Who Won't Look at Homes With a Pool
- Buyers with small children are often concerned about accidental deaths by drowning. Some buyers don't want the upkeep or expense of a pool.
- Home Buyers Who Never Thought About a Pool
- If the home has everything else a buyer desires but it also has a pool, these buyers may face a quick decision they hadn't anticipated. Some buy the house and fill the pool with rocks.
Should You Buy a Home with a Pool?
According to The Association of Pool and Spa Professionals, the number of new in-ground pools in the U.S. grew by 10% from 2002 to 2005, and some 4.7 million U.S. homes have in-ground pools. Most low-end and many middle-range buyers do not want a home with a pool. Higher-end homes are more likely to have pools, but some are never used. Some pools exist for decoration. If you enjoy swimming, then a pool might be for you. Make sure to only buy a home with a pool if you are going to use it. Otherwise, your sparkling pool could turn into an expensive pond for ducks.
Types of Swimming Pools
If you plan on installing a swimming pool, make sure to hire a reputable pool contractor. The costs for a new pool starts around $30,000, but can easily soar part six figures, depending on desired amenities such as fountains, landscaping or decking.
- Gunite Pools
- Gunite pool construction, which is achieved by spraying a mixture of concrete and sand into a pool-sized hole, is the most popular. Unlike above-ground pools, which are temporary, these in-ground pools are permanent structures. Gunite pools can be laid out in almost any shape the home owner desires and last for years. The only problem with gunite is that it is pricey.
- Vinyl Pools
- Vinyl in-ground pools are generally rectangular, but other configurations are available. They are less expensive than gunite because the pools are lined with vinyl; however, the liners often need to be replaced after 10 years. They are popular in areas where temperatures dip below freezing and the pools are drained in the the winter. To prepare for a vinyl pool, the ground is excavated and support walls are constructed from a variety of materials such are wood, steel, fiberglass or aluminum.
- Above-Ground Pools
- The National Association of Realtors say above-ground pools add no value to the home because they are not portable. Above-ground is an expensive option for a pool. Some home owners buy do-it-yourself kits and assemble their own above-ground pools. Unlike in-ground pools, which can require weeks to complete, these pools can be installed in a few days.
The Advantages of Owning a Home with a Pool
- Many people believe pools increase the aesthetic value of their yard.
- People who host a lot of parties utilize their pools as an entertainment center, and kids love pools.
- Pools provide an easy way to instantly cool down on hot days.
- Some people use swimming pools exclusively for in-water exercise and say pools add health benefits for them.
- Swimming pools can bring added value at resale, especially in hot climates.
The Disadvantages of Owning a Home with a Swimming Pool
- Regular maintenance. Pools require chemicals, cleaning and over time, repair.
- Children can drown. Drowning is the leading cause of accidental death among children ages 1 to 4.
- Pools appeal to fewer buyers.
- Pools consume valuable yard space, and in a small yard, they can overwhelm.
- It might cost more to insure a home with a pool, and heating it can drive up utility bills.
Do Pools Add or Detract from the Value of a Home?
Depending on where you live, depends on if a pool adds value to a home. According to the U.S. Consumer Product Safety Commission, the three most popular states for pool homes are California, Arizona, and Florida. The National Association of Realtors says an in-ground pool adds about 7.7% more in value to the home's market value. However, in colder climates, such as Minnesota, a pool may add no value at all.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.
On average, an American home owner sells and moves every five to seven years. Here are the top 15 reasons why people sell their home and move:
#1- Home is too small
First-time home buyers often outgrow their "starter" homes. Increased family size is the main reason home owners say they need a larger home.
#2- Upgrade
The grass is greener on the other side. People often want what they do not have and long for a bigger, more expensive and grander, upscale home. It is the American way.
#3- Fix purchase error
Owners might believe they made a mistake when purchasing their present home and want to rectify that mistake. Maybe they thought they could get by without a back yard, but they want a garden, or the dining room is the center of the house annoys them, or they no longer enjoy the underbelly of planes flying overhead within inches of their face.
#4- Job transfer
Relocation makes it necessary for many to sell their home and move. If the commuting distance exceeds an hour, most people would prefer not to spend two hours in traffic every day.
#5- Personal Relationships
Moving in with a partner or getting married can mean one of the parties will need to sell, especially if both owned homes prior to the commitment. On the other hand, break-ups cause owner to sell as well for three basic reasons:
- One party may need to buy out the other and not have the cash available.
- The home may not be affordable to sustain on one person's income.
- The home holds bad memories, making a fresh start desirable.
#6- Neighborhood changes
The neighborhood might have changed for the worse, economically, socially or physically. For example, maybe a freeway was constructed nearby. Maybe the next-door neighbors receive visitors who arrive wearing stripped pajamas at 2 AM. Or they have hung sheets over their windows while a skunk-like odor permeates the air.
#7- Empty nest
The kids have grown up and moved out. The owners want a smaller home. The older you get, the harder it is to keep a big house clean.
#8- See family more often
Some people want to be closer to their family as they age and will move to be near relatives. Parents want to be near their children. Grandparents, near their children and grandchildren.
#9- See family less often
To put more distance between the home owners and relatives. Some might move out of the state to keep harmony within the family. Dysfunctional and fractured families have been known to blossom being separated.
#10- Retirement
Active-adult communities are attracting many buyers over the age of 55. These planned communities have golf courses, club houses, workout facilities, week-end social gatherings, back-yard barbecue parties and more, all designed for people over 55.
#11- Health problems
Physical ailments such as knee or back problems make it difficult for an aging population to climb the stairs in a two-story, so a one-story home may be more practical. A trade-off solution for many elderly people who do not require round-the-clock care is to buy a condo or move into assisted living housing.
#12- Deferred maintenance
Some people don't want to put on a new roof, replace the siding or buy a new furnace, so it is easier to buy a newer home. When you figure the life of most home systems is about 15 years, it could make sense to get out before everything goes haywire.
#13- Home improvement perfection
A small segment enjoys fixing up and selling, spending time, money and effort on remodeling, and once the work is completed, these people become restless because there is nothing left to do. Some of you may call these people obsessed, but for some, it is a way to maintain balance while mastering a hobby.
#14- Cash in equity
Some home owners can't stand the fact their home is worth all that money because that money is not in their pockets. These people would prefer to stare at their passbook savings than stare at four walls with empty pockets. They want the money.
#15- Lifestyle change
Others are simply tired of owning a home and would prefer to travel, pursue a hobby or be less responsible. We used to call these people misfits or boomers, but many past a certain age want to find a calling that is meaningful to them. So, for these people, home ownership loses its priority and turns into the ticket for realizing dreams.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.lascrucescentury21.com for a list of agents.
If you are thinking about buying a home, one question to ask yourself is how much home can you afford to buy? Here is how you can tell how much home you can afford to buy:
Debt Ratios
First, look at your monthly gross income, before taxes and contributions. This is how much you make per month, not how much you take home. What you take home is net income.
- Front-End Ratios- Lenders use what is called a front-end ratio, which is reflected as a percentage of your gross monthly income. The front-end ratio signifies the payment a buyer can reasonably afford, from a lender's point of view. You may prefer a lower payment. The front-end ratio for a FHA loan is 31%. For a conforming conventional loan, the front-end ratio is 33%. This means if your monthly gross income is $4,000, to qualify for the maximum FHA loan, your monthly principal, interest, taxes and insurance (PITI) payment can't exceed $1,240. For a conventional loan, it is $1,320.
- Back-End Ratios- The back-end ratio reflects your new mortgage payment, plus all recurring debt. It, too, is computed on your gross monthly income. The back-end ratio is higher than the front-end ratio. For an FHA loan, the back-end ratio is 43%. For a conforming conventional loan, it is 45%. This means if you have a car payment of $300, and you pay $100 a month between two credit cards, your total monthly recurring debt is $400. On the FHA loan payment above $1,240 PITI, plus $400, recurring debt, your total is $1,640. The back-end ratio number is $1,720 ($4,000x43%=$1,720). Your total debt is less than $1,720, so you qualify. For a conventional loan, $4,000x45% (back-end ratio),equals $1,800. The total debt of $400, plus your new mortgage payment of $1,320 for a conventional loan equals $1,720. Your total debt is less than $1,800 so you would qualify for a conventional loan.
Home Sales Price Affordability
Working backward, now that your know how much of a mortgage payment you qualify to pay, you can figure out how that relates to a sales price. You will hear experts say to pay anywhere from two to six times your annual salary, but it is smarter to look at the amount of mortgage you can get for that monthly payment.
Your mortgage amount will depend on interest rates. Interest rates fluctuate daily, sometimes hourly. For example, say you want to pay $1,000 per month PI. At 6% interest, on a 30-year fixed-rate mortgage, you can borrow $170,000, payable $1,019 per month.
At 7% interest, you can borrow only $150,000, payable at $998 per month. In this example, you lose $20,000 of borrowing power when the rate jumps from 6% to 7%.
Down Payments
Down payment amounts will depend on several factors. First, how much do you feel comfortable putting down? For first-time home buyers, keep a healthy reserve and not dump every single cent into a home.
- No Down Payment- If you qualify for 100% financing, your down payment will be zero. VA loans are available for veterans at no-money-down. Some first-time home buyers programs accept borrowers with limited funds for gift down payment programs, providing certain income limits are met. If you make too much money, you will not qualify.
- FHA Down Payments- Minimum FHA down payments are presently 3.5% of the sales price. To borrow $150,000, your sales price will be $155,440, and your down payment is $5,440. Legislation is pending to lower that percentage. Some first-time home buyer programs, used in conjunction with FHA, help with the down payment.
- Conventional Loan Down Payments- Any loan that is more than 80% of the sales price will involve PMI (Private Mortgage Insurance), which will increase your monthly mortgage payment. Typical down payments are 5%, 10% or 15% of the sales price. If you plan to put down 5% of the sales price and borrow $150,000, your sales price will be $157,900 and your down payment will be $7,900.
- Closing Costs- Sometime, sellers will pay some or all of the buyer's closing costs. You can figure 2% to 3% of the sales price will equal your closing costs. On a sales price of $150,000, your closing costs could run $4,500, with is extra and on top of your down payment.
Your Payment Comfort Level
Before you jump into home ownership, why not set aside the additional amount you would pay for a mortgage every month to see how you do? For example, if your rent is $800 and you plan to pay $1,200 for a PITI payment, set aside $400 per month for three to six months.
In other words, pretend your are paying a mortgage payment. If 41,200 a month doesn't strap you for cash, you can probably afford to pay that much for a mortgage payment.
If you feel more comfortable borrowing less than the amount shown in your loan preapproval letter, then do so. Don't make the mistake of taking out a mortgage that will be a struggle for you to maintain. Do what feels right to you.
You can usually wait for your dream home. You probably don't need to buy the most expensive home you are qualified to buy. Consider a starter home as your first home. Work first on building equity and security for yourself and your family.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.
The home buying process is not always an easy one. The first step in home buying is to prepare for the obstacles. Here are the 5 biggest home buying obstacles.
Home Buying Obstacle #1: Finding a Down Payment
Unless you are very wealthy, you will probably need to get a mortgage. Only VA loans, available to veterans, let a buyer put down zero. All other loans require a down payment. The two most popular types of mortgages are FHA loans and conventional loans, which require minimum down payments ranging from 3.5% to 10% of the sales price.
Home Buying Obstacle #2: Obtaining a Minimum FICO Score
The two magical numbers are 620 for FHA and 720 for conventional loans with mortgage insurance. If your FICO score falls below that number, you may not qualify for those mortgages. For conventional loans without mortgage insurance, your FICO can dip as low as 620, but the pricing is ugly.
To find out your FICO score, you should ask your lender to run your credit report. You can obtain a FICO score online, but it will cost you, and it most likely will differ from the score your lender obtains. Your lender will pull your credit scores from 3 credit reporting agencies and take the middle FICO score.
Home Buying Obstacle #3: Meeting Lender Ratios
Most lenders expect a buyer to have a maximum 33% front-end ratio. This means your mortgage payment, plus taxes and insurance (PITI), cannot exceed 33% of your monthly gross income. If you earn $5,000 a month, the maximum PITI payment for which you may qualify is $1,650.
The back-end ratio is trickier. This involves adding together your PITI payment with all monthly revolving debt payments. That percentage of your gross monthly income should fall between 41% and 50%, depending on the type of loan and lender. With mortgage insurance, your highest back-end ratio cannot exceed 41%, which means to qualify for a higher back-end ratio, you need to put down at least 20%.
Home Buying Obstacle #4: Receiving an Appraisal at Value
The Home Valuation Code of Conduct, HVCC, became effect May 1, 2009, and applies to all conventional transactions. Since January 1, 2010, it now applies to FHA transaction as well. In the past, a lender could select its own appraiser. That appraiser was generally experienced, knew the neighborhood and had appraised many homes in specific areas, which typically would result in a fair and balanced appraisal. Now, appraisal management companies pluck an appraiser at random from a pool of appraisers. Your appraiser could be from another area or unfamiliar with the neighborhood, which often results in a low appraisal.
If the appraisal does not come in at value, and if the seller refuses to adjust the price, buyers with an appraisal contingency can either walk away from the transaction or pay the difference in cash.
Home Buying Obstacle #5: Satisfying Loan Conditions
Underwriting can be frightening. An underwriter reviews the file and can make demands. These demands can include more documentation, a review appraisal and, even then, the underwriter could reject the loan for a variety of reasons. If you have remarried and your spouse had owned a home that went through foreclosure or a short sale, if your name was still on the mortgage, you could be disqualified from buying a home with your new spouse. The way to increase the odds of underwriting approval is to disclose everything about yourself and your financials to your lender, and make sure the loan officer has been in the business long enough to foresee future problems before you get that far.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.
For first-time home buyers, they are making the biggest investment they will most likely ever make in their lives and that can be scary. Many first-time home buyers put down a minimum amount and buy a home using an FHA loan. This means that your home is leveraged, and you can't immediately sell it and hope to make a profit. Here are some ways to know if you are ready to be a home buyer.
Top 5 Traits of a Home Buyer
Everyone needs to live somewhere. If you can buy a home for around the same amount you would pay in rent, and don't mind staying put for a while to build equity, becoming a home buyer might be a good decision. You will make a good home buyer if you are:
- A buyer who conforms to the market- Serious home buyers research the market and have realistic expectations. If you are a type of buyer who thinks that all the homes on the market are overpriced and that you won't pay that much, then your are not conforming to the marketplace.
- A buyer who has savings--enough to put 2 to 3 months of mortgage payments in reserve- Mortgage lenders want buyers to have a reserve. You should not take every nickel you can and throw it into your home purchase. You will need to make sure you have a small emergency fund.
- A buyer who has the resources and time to maintain a home- All home require upkeep. You will have a lawn to mow, windows to wash, furnace filters to replace, and you may need to tend to minor repairs from time to time.
- A buyer who is employed with at least two years on the job- If you don't have two years of employment at the same company, then two years in the same field will do the same. Lenders expect to see stability in your employment history.
- A buyer who plans to stay in the area- If your state of residency is uncertain, it is probably a good idea to skip buying a home. Some home buyers who relocate are able to rent out their home, but handling a rental long distance is not always a good choice. You don't want to be forced to sell when you don't have enough equity to pay commissions and the other costs to sell.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.
Home owners who are facing foreclosures often don't like dealing with the facts that got them to that place. Few home owners plan to go into foreclosure. Here are some ways to help stop a foreclosure.
Reasons For Pending Foreclosure
Most home owners face sudden extenuating circumstances that force them to stop making timely mortgage payments. Here are a few reasons:
- Job loss/unexpected unemployment
- Sudden illness or medical emergency
- Death in the family
- Divorce/loss of second income
- Excessive debt obligations
- Job demotion or promotion denials
- Inability to pay an adjustable interest rate that increases
- Unexpected major home maintenance expense
Ways to Avoid Foreclosure
The best way to avoid foreclosure is to prevent the filing of a Notice of Default. Lenders do not want to foreclose but will file a Notice of Default to protect their interests. If you know you are unlikely to meet your mortgage obligation, the first thing you should do is call your lender. Don't put it off, be embarrassed or ignore letter from your lender because those responses will make the situation worse, not better. Depending on your particular situation and hardship circumstances, here are some options your lender might propose to you:
- Time to make up your payments- Lenders might agree to wait before taking legal action against you and let you work out a repayment plan that is affordable for you. This is called forbearance.
- Forgiving a payment- If you can agree on a way that you will be current after missing a payment or two, without the means to pay it back, the lender might give you a break and waive your obligation. This is called debt forgiveness.
- Spread out the missed payments over a longer term- For example, if your payment is $1,200 a month, the lender might let you add $100 a month to each payment for a year until you are caught up. This is called a repayment plan.
- Changing the terms of your loan- If your mortgage is an adjustable loan, the lender might freeze the interest rate before it increases or change the interest rate to a more manageable rate for you. A lender might also extend the amortization period. This is called a note modification.
- Add the back payments to your loan balance- If you have sufficient equity and meet the lender's lending guidelines, the lender might increase your loan balance to include the back payments and re-amortize your loan. This is called a refinance.
- Make a separate loan to you- Certain government loans contain provisions that let borrowers who meet specific criteria apply for another loan, which will pay back the missed payments. This is called a partial claim.
Ways to Stop Foreclosure
Your options are limited when the lender files a Notice of Default. That is why it is better for you to call your lender before falling behind on your payments, because lenders are often reluctant to work out repayment schedules after foreclosure proceedings have been commenced.You will be given a certain time period to bring the payments current, pay the costs of filing the foreclosure and stop the foreclosure. This is called reinstatement of your loan. If you can't make up the missed payments and the lender will not work with you, here are a few other options that you have to stop foreclosure:
- Sell Your Home- Interview real estate agents to get an opinion of market value and the average days on market (DOM) to sell your home. You might be tempted to hire a discount broker, but many sellers feel they need the exposure and marketing that full-service brokers offer. Compare both to determine which best meets your needs and time frame.
- Consider a Short Sale- If your home is worth less than the amount you owe, you might be a candidate for a short sale. A short sale affects credit but it is not as bad as a foreclosure. You or your agent will need to negotiate with your lender to find out if the lender will cooperate on a short sale. This is called a pre-foreclosure redeemed.
- Sign a Deed-in-Lieu of Foreclosure- This is called deeding the home back to the lender. The homeowner gives the lender a properly prepared and notarized deed, and the lender forgives the mortgage, effectively canceling the foreclosure action. Deeds-in-Lieu of Foreclosure affect credit the same as a foreclosure.
The lender might also work an arrangement where a home owner can remain in the home until finding a place to move into. Owners in default should negotiate the right to retain occupancy, arguing that if the lender followed through on the foreclosure, an owner would still enjoy the right of possession during that procedure.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.
If you find a short sale that you would like to buy, the first thing that you need to do is call your real estate agent and have your agent research the short sale listing first. In some real estate markets, fewer than one in 10 short sales close. Just because a home is listed as a short sale doesn't really mean it is a short sale because it is subject to lender approval and it also doesn't mean it will sell at the advertised price. Here are 6 things you need to know before trying to buy a short sale.
Comparable Sales For That Short Sale House
On average, short sale homes take anywhere from 2 to 4 months to close and pending sales will become the comparable sales at closing. Some short sales are priced very low and so low that the seller's bank will never accept them. These types of listings receive multiple offers. To get your offer accepted, it will need to be priced near market value. If you are not prepared to pay above a superficial price on a lowball short sale listing, then pass on it.
Mortgage Amounts, Number of Loans and Lenders
It is a good idea to ask your agent to research how much is owed against the home and find out the number of loans that are on record. A second or third mortgage lender will not receive as much compared to the amount a senior lender in first position will get.
Some lenders, deserving or not, get a reputation for being difficult to work with. If your agent is an experienced short sale agent, he or she will know who these lenders are and can advise you of the difficulty you may encounter.
If your offer is 20% or 30% of mortgaged amount, it is unlikely that your offer will get sent to the negotiator's desk and accepted.
Short Sale Listing Agent's Track Record
A listing agent who is advertising a short sale, but has never closed a short sale is a risky proposition for you. That is because it is up to the listing agent to submit the short sale package to the lender and negotiate. Your buyer's agent can't talk to the bank. Some listing agents hire outside companies to do their job, and the results of those negotiations are sketchy at best. You should ask yourself, do you want to risk rejection of your short sale purchase because the listing agent has no experience?
Short Sale Seller Qualifications
Find out if the listing agent has received a completed short sale package from the seller, and ask about the contents of that package.The following is the minimum contents of what a short sale package consists of:
- Sellers' hardship letter
- Tax returns
- W-2s
- Payroll stubs
- Financial statement
- Bank statements
Some sellers do not want to cooperate and are slow to return these documents. Others have never been told by their agent that these documents are mandatory. You do not want your short sale purchase delayed because the listing agent does not have the required documents.
Number of Short Sale Offers Received
Homes priced under market value will receive multiple offers. An agent is not required to disclose the terms of those offers, but you do want to know how many other offers you are up against.
Here is how it generally works:
- When a short sale home first comes on the market, the first offer will most likely be a tad below list price
- The second offer will be at list price
- The third offer will be slightly higher, maybe by a $1,000 or $2,000
- The fourth offer will be significantly more
You want to make sure to make an offer that will beat the competition yet one that will still be below market, or don't waste your time on it.
The Listing Agent's Short Sale Procedure
REALTORS are required by the REALTOR Code of Ethics to treat everybody fairly, not every agent is a REALTOR. This means the short sale listing agent may decide to submit only the first offer to the bank and withhold all the other offers.
Withholding other offers could be considered a violation of the fiduciary relationship formed between the listing agent and the seller. The seller is entitled to receive the highest and best price. Realize that even if your offer is submitted to the bank, as time goes on while waiting for short sale approval, another buyer might come along and could possibly outbid you.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.
Some short sale offers are accepted by banks and some are not. If a bank has agreed upfront to accept a short sale, which is rare, no one knows for certain if a short sale offer will be accepted or rejected by the bank. Here are the top 5 reasons banks reject short sale offers and how to increase your odds that a bank will not turn down your short sale offer.
Short Sale List Prices
The list price of a short sale home generally has very little bearing on the actual price a bank may accept. The list price might be too high to attract an offer or too low for the bank to accept. Some agents advertise short sales at unbelievable prices, in hopes a buyer will be enticed to submit an offer. Also, just because the seller may accept the offer, that does not mean the bank will agree to take a short sale.
Short Sale Definition
Short sales happen when a bank agrees to accept less than the amount of the mortgage the seller owes to the bank. The property may be encumbered by two loans or one loan. If it has two loans, both lenders must agree to accept a short sale.
Why Banks Reject Short Sales
Banks demand a lot of documentation before approving a short sale. Sellers do not need to be in foreclosure or have fallen behind in making mortgage payments, for a short sale occur. Here are reasons that banks turn down short sale requests:
- Short Sale Offer Price is Too Low- Banks will request an appraisal, sometimes several appraisals, and may also order a BPO. When the listing agent submits that short sale offer, the agent should also include a comparative market analysis that justifies the price in short sale offer. If the bank believes it can make money by taking the property through foreclosure proceedings, the bank will reject the offer.
- Tip: Be prepared to argue with a rejection and show comparable sales that support the short sale offer price.
- The Short Sale Package is Incomplete- The bank might misplace a piece of documentation or an important document might not be in the file, and without every single required document, the sale will not be granted.
- Tip: Ask the bank for a list of documents, make copies, and send complete packages.
- The Seller Does Not Qualify- If the seller is asking for debt forgiveness, the bank will want to see a hardship letter from the seller that explains why the seller can't afford to pay back the shortfall difference. Sellers who have tapable assets are at a disadvantage if the sellers are unwilling to work out a repayment plan with the bank.
- Tip: Prepare a hardship letter, profit and loss statement and monthly budget that show the seller has little or no assets and no disposable income.
- The Buyer Does Not Qualify- A desire to buy a home and the financial means to afford a mortgage payment doesn't mean a buyer qualifies to buy a home. A buyer's lender will examine credit history, length of time on the job, debt ratios, and a host of other criteria to determine a borrower's qualifications.To gain credibility with the seller's bank, buyers need to submit a loan prequalification letter along with the offer, but a loan preapproval letter carries more weight.
- Tip: Send a preapproval letter and a copy of a sizeable earnest money deposit that adequately reflects the buyer's ability to obtain a mortgage and intent to close the transaction.
- The Bank Sold the Loan- Sometimes the bank won't realize that it no longer holds the mortgage on the property until many months have passed by during the short sale negotiations. If the bank has sold the mortgage to another lender, the bank has no authority to approve a short sale because it has released the asset. Although the seller may continue to receive statements from the bank, the bank might be servicing the loan but not own it.
- Tip: Ask the title company to check the public records for an assignment of deed of trust or other documents that reflect the loan has been sold. Redirect your short sale package to the new lender.
If you have any questions or need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.
Most home buyers never think about having the attic inspected before they buy the home. It is a good idea to make sure that when you are buying a home to get the attic inspected because an attic reflects the history of a home and it can provide clues to serious problems that might not be disclosed or even known by the current occupant of the home. Here are some reasons why you should get the attic inspected.
Supporting Truss or Rafter Damage
Roof inspections won't necessarily turn up defects in the structural members inside the attic. The roof might look sound and secure, but inside the attic you might find broken trusses or rafters. An inspection would disclose stress cracks that could lead to a loss of integrity and would also give buyers peace of mind that the size of the lumber was correct and up to code.
Previous Fire Damage
If the rafters are any other color than natural wood, that could be a sign that the home was on fire. If the wood is black, scorched and sooty, that is almost a sure sign it had been burned in the past. However, if the wood is painted white, that could indicate that the smoke and burned damage was covered up because painting wood helps to eliminate the smell.
Adequate Insulation
Attics can be insulated in a number of ways, including blowing in insulation or laying fiberglass batts. Insulation is rated with an R factor, which means that higher the R number, typically the higher the insulating factor. Make sure to ask your home inspector if the batts are facing the right direction, which means the paper is up or the paper is down.
Water Damage
Water flows from the top down and rarely enters a home sideways. Inspectors will look for staining on the wood supports or on the walls which would provide evidence that water had leaked or is leaking through the roof somewhere. Condensation can form around pipes, which can cause the wood to rot.
Chimney
No one is able to inspect the interior of the chimney from the attic, but an inspector can note whether the structure of the chimney itself is solid within the attic. The portion of the chimney that is not exposed to the elements can also weather and deteriorate, and this is especially true for older homes. Inspectors will look for cracks in the bricks and whether the mortar has crumbled.
Squirrel, Raccoon and Rodent Damage
The first sign that a critter has been living in the attic is often evidence discovered in the form of tiny pellets. Squirrels, raccoons or rodents often enter attics through the eaves or loose boards and can cause considerable damage.
It is always a good idea as a buyer to have the attic inspected along with the rest of the home. Anything that is found in the inspection that wasn't disclosed in the first place, can be requested by the buyer to have the seller make the repairs before the home goes into the closing process.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.
Have you ever wondered what the difference was between a real estate broker and an agent? There are so many types of real estate agents. To make themselves stand out, some agents add titles after their names like an associate, a real estate consultant or a REALTOR®, but they are all real estate agents. Agents who give real estate advice must have a real estate license. Most states maintain an online site where consumers can look up an agent's name, get a license number and check on violations filed against an agent. The following are different types of real estate agents that you might come across and what they are about:
Real Estate Broker
A real estate broker generally has more education than an agent, but not always. For example, in California, there are three ways to get a broker's license.
- Individuals who have a four-year degree and have completed eight college-level real estate courses can qualify to take the broker's real estate exam.
- Without a four-year degree, the Department of Real Estate requires applicants to have:
- Two years of real estate sales experience, and
- Completion of eight college-level real estate courses
- Lawyers who belong to the bar are exempt from the college-level course requirements, but must pass the exam.
A real estate broker can work independently and/or hire real estate salespersons. The broker's exam is generally longer and more difficult than a salesperson's exam. Brokers are held to higher standards of knowledge.
Broker Associate
A broker associate is a real estate broker who works for another real estate broker. Although the broker could work for himself/herself, many choose to join a larger real estate network. Some pay a flat fee to the employing broker, and others earn a percentage of each transaction.
Real Estate Agent
Real estate agents are licensed salespersons. They are not real estate brokers. A real estate agent must work for an employing broker and cannot work independently. Brokers are responsible for their real estate agents' actions. Requirements for a real estate salesperson license vary from state to state.
REALTOR®
A REALTOR® can be a real estate broker or a real estate agent. It is a title that means the individual belongs to the National Association of REALTORS® (NAR), subscribes to its extensive Code of Ethics and pays annual dues. Not every real estate agent belongs to the NAR.
Members of the NAR also belong to state and local trade associations. Complaints against a RELATOR® can be filed with the local board.
Listing Agent
A listing agent is also known as a seller's agent because they represent the seller. A listing agent can be a real estate broker or a real estate agent. These types of agents owe a fiduciary responsibility to the seller under a listing agreement and must protect that interest.
Buyer's Agent
A buyer's agent is known as a selling agent, which is not to be confused with a seller's agent, a buying agent or, in some states, an exclusive buyer's agent. Exclusive buyer's agents never work for sellers. Many agents, however, work with both sellers and buyers, although not usually in the same transaction. Buyer's agents may or may not require a buyer to sign a buyer's broker agreement, depending on local custom.
Dual Agent
Agents enter dual agency when they represent both the seller and the buyer. Dual agency can happen even if there are two agents involved- a listing agent and a buyer's agent- if both agents work for the same broker. That is because it is the real estate broker who creates agency. Dual agency is not legal in all 50 states.
Transaction Agent
In states where dual agency is not permitted, listing agents who find themselves in the position of writing an offer for the buyer may choose to become a transaction agent. This agent does not represent either party but simply facilitates the transaction.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.
A short sale is a property that sells for less than the balance owing on its mortgage. A short sale can be an underwater home, an apartment building or even vacant land. If there is a mortgage balance that is greater than the market value of the home, that property is a short sale.
A Short Sale is a Privilege, Not a Right
In the bank's eyes, not every property qualifies as a potential short sale. A bank must agree to grant a short sale. Banks are under no obligation to approve a short sale. A short sale will be granted by a bank, if the bank feels it is in the bank's best interest to approve the short sale. If the bank is able to make more money from the short sale than to foreclose it, then the bank will approve a short sale. It is estimated that a bank might save 25% to 30% on foreclosure costs to grant a short sale over a foreclosure, but some investor guidelines make it more profitable for the bank to foreclose.
What is Necessary for a Short Sale?
Real estate agents who specialize in short sales will most likely be the ones to handle a short sale transaction. There are four essential ingredients to a short sale, however, strategic short sales, which are those without a hardship, are also possible. The following are what makes a short sale work:
- An underwater home
- A willing short sale bank
- A seller with a hardship
- A buyer willing to purchase the home
What Role Do Real Estate Agents Play in a Short Sale
Some real estate agents will throw homes on the market that will never close as a short sale. That is because the agents don't always qualify the short sale sellers. Some agents place unrealistic prices on the short sale, which the bank will never accept. It is wise to choose an experienced short sale agent who has closed at least 100 short sales. The following is what an agent does in a short sale:
- An agent determines the type of short sale. There are many types of short sales, from Fannie Mae HAFAs (Home Affordable Foreclosure Alternatives) to regular, non-GSE HAFAs to a traditional short sale, and a few more in between.
- An agent gathers the required paperwork and submits the short sale package to the bank. Sometimes agents outsource this part to negotiate the short sale.
- An agent helps the seller to price the short sale home. The price needs to be attractive enough to entice a buyer to wait for short sale approval,but it also needs to be high enough to satisfy the bank's BPO.
- An agent puts the home on the market. The agent must submit all offers received to the seller. Some offers will be lowball offers because buyers don't know any better.
- An agent negotiates the short sale. Sometimes a seller will hire a lawyer to do the short sale, but often it is the agent who negotiates with the bank on behalf of the seller.
- An agent submits the short sale approval letter to the seller. Most sellers want a release of liability and no deficiency to do a short sale. State laws tend to govern the terms in the approval letters.
Also, a seller should always get legal and tax advice before completing a short sale.
If you have any questions our you need real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.
MLS stands for multiple listing service. Every home that is for sale by a real estate agent will be listed on MLS. Only real estate agents and other professional affiliates can access MLS, but a home buyer or seller can still get the same information, it just won't be directly from the MLS site.
What is MLS?
MLS is a site where comprehensive home information is shared among real estate professionals. Listing brokers enter the information about the home for sale and offers to share the commission with a broker who brings a buyer. It is an online software that contains all the specifics about a home, like the address, age, square footage, number of bedrooms and bathrooms, upgrades, school districts, and types of financing the seller will consider. Typically, there is at least one to a dozen photos of the home, as well as a link to a virtual tour. If a home buyer tries to access the information online, they will receive data that might be limited in scope, outdated, or often inaccurate.
For Sale By Owners in MLS
MLS does contain listings that are from sellers who are not represented by an agent, but there is no separate category for a For Sale by Owner (FSBO) listing.
- The way For Sale by Owners get around some MLS restrictions is by paying a flat fee to a discount real estate broker that will enter the information, but the seller is not represented. It is frowned upon or prohibited by MLS authorities to instruct to have all offers presented directly to the seller.
- Sometimes the selling commission is less than the fee agents are offered by traditional brokers, which does not motivate agents to show these listings even though they can't legally refuse to do so.
Who Owns the MLS?
There is some talk on whether it is leaning towards local MLS companies joining or merging with other local MLS companies to create regional MLS services. MLS can be privately owned and operated or it can be an affiliate of a local board of Realtors, among other forms of ownership, but most are subject to regulations set forth by the National Association of Realtors.
Finding MLS Listings
Most services offer to provide home buyers with a list of available homes on the market, but few will provide comprehensive information. To get that information, you need to ask your real estate agent to set you up on a home search. Typically, there are many types of reports a buyer can receive, so to get the most comprehensive information, you will need to ask your agent to get that for you. You can have your agent enter your name, e-mail and home search preferences into a search engine on MLS that will send you automatic e-mails of new listings.
MLS Searches
If you are beginning your home search, you can ask your real estate agent to customize a search for you that will automatically send you updated listings. Not all agents will set up a search for you based on anything other than active listings, so if you want to receive e-mails about price reductions, pending or sold sales information, then you need to ask for it. The following is a few ways that you can request to have your report customized:
- Zip code
- Radius search, within a specified distance from a target address
- Street or subdivision
Within those parameters, you can further define your search to:
- Price range from low to high
- Number of bedrooms and bathrooms
- Garages
- Pools and spas
- Square footage
Your preferences can be defined even more clearly, it all depends on your priorities. But be aware that as the number of exceptions climb, you might miss out on opportunities. It is a good idea to keep the list somewhat limited.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com.
If you are showing your home, you want to make sure that you engage the buyer emotionally because the decision to buy a home is based more on emotions and less on logic. The best way to make a home buyer say "Yes, I want to buy this home," is by accentuating your home's positive attributes and not to draw any attention towards the negative aspects of it. Here are the top 10 tips to help you show your home.
#1- The Gracious Welcome
Even though a home buyer is a guest in your home, you want them make them imagine themselves owning the home and not make them feel like they are an intruder.
- Don't expect the buyer to remove their shoes, unless the buyer's religion or culture demand that they remove their shoes.
- Leave the house. The buyer won't talk about the house in front of you or open doors with you still there.
- Don't pressure or hurry the buyer. Make sure to tell the buyer to take all the time they need.
- Leave a bowl of wrapped candy or other treats near the front door and a small note thanking the buyer for coming to see your home.
#2- Check the Temperature
- When showing your home, this is the time where you shouldn't worry about your utility bill. If it's cold enough outside that you need to wear a sweater or coat, turn on the heat.
- If it is warm outside, turn on the air conditioning. It is a good idea to heat or cool your house a degree or two warmer or colder than usual and then set the temperature to normal. Doing this prevents the heat or A/C from kicking on when the buyer is present, because some HVAC systems are too loud.
- You want the temperature inside your home to be as comfortable as possible and to give the home buyer more of a reason to stick around, especially when it is cold or hot outside.
#3- Create a Mood
- Light a fire in the fireplace.
- Make it romantic by placing two champagne glasses on a nearby table.
- Turn on soft music.
- Turn on water fountains if you have them. They are very useful to drown out traffic noise.
#4- Play Down the Scent
- Many people are allergic certain kinds of scents and deodorizers, so make sure not to spray the air or plug-in air fresheners.
- Don't burn candles or spray perfume in the bedroom for the same reason.
- Open the windows if the weather is nice outside. If there is too much noise outside, close the windows.
- If you are going to bake cookies or simmer spices such as cinnamon in water on the stove, put out some snacks so buyers are not disappointed when they smell it.
#5- Play Up the Visual
- If you have seasonal photographs that show flower gardens, leaves bursting in color or a snow-covered lawn that is twinkling from street lights, make sure to display them where home buyers will be able to see them.
- Open all the window blinds to let the light in.
- Make sure to keep blinds closed partially so that they don't show undesirable outdoor scenery such as an ugly fence or a nearby structure that obstruct views from the windows.
#6- Light Up the House
- Turn on every light in the house, which will include appliance lights and closet lights.
- Brighten dark rooms with few windows by placing spot lights on the floor behind furniture.
- Turn off the TV.
#7- Encourage Touching
- Make sure to drape sensuous fabrics like velvet or silk throws over chair arms.
- Leave doors open slightly.
- If you have carpeting, vacuum it in one direction.
#8- Provide Thoughtful Cards
Attach printed cards to items and in rooms to provide further information the buyer might miss or might not know.
- If you have an antique chandelier in your dining room, put a card on it that discloses its age and other important details about it.
- If you have removed the washer and dryer from the laundry room, attach a card to the wall describing the room.
- If your basement stairs are steep, attach a card to the railing that cautions buyers to watch their step.
- Take care when placing a card that says: "Not included in the sale." That will make a home buyer want it, but you can play that later to your advantage.
#9- Top It Off With Food
The best way to make sure that buyers will stay around longer and notice more details about your home is to offer them food. It doesn't have to be a lot of food, finger sandwiches, cookies, soft drinks, water, and desserts would be enough.
- Make sure to set out serving utensils if they are needed.
- Provide plates, cups and napkins.
- Provide a trash can that is in plain sight.
#10- Encourage Buyer Feedback
- Next to the snacks, make sure to leave pens and a stack of preprinted questionnaire cards or a guest book to sign.
- Buyers will feel obligated to respond to your request after being fed food.
- The showing feedback that you will receive will be invaluable.
- Allow for buyer to be anonymous.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.
If you are trying to sell your home and the market is a seller's market, good marketing can bring higher prices and if the market is a buyer's market, it can mean the difference in your home selling or expiring on the market. Here are 10 tips on how to market your house to make sure it gets sold.
#1- Photograph the Front
When home buyers search for homes, they first begin their search online. Homes that have no photo or only an exterior photo are often overlooked or ignored. Here are some tips on how to photograph the front of your home:
- Crop out sidewalks and streets.
- Remove vehicles from driveway or from in front of the home.
- Shoot up-close and angled photos.
- Avoid shade on the house.
- Clear away vegetation blocking front door or the path to the door.
#2- Exterior Photographs
If you own a property without a yard, like a condo or town home, take pictures of the clubhouse, pool, spa, or tennis courts. If you have a yard, buyers will want to see what it looks like.
- Emphasize space and shoot long.
- Mow the lawn and trim down the bushes.
- Remove any evidence of pets.
- Put away any children's toys.
- Avoid shooting into the sun.
#3- Interior Photographs
Make sure to take photographs of every room. If you think a room might not photograph well, still take some pictures of it anyway because the photo quality might make it look better.
- Open drapes and blinds.
- Turn on lights.
- Focus on interesting details like the condition of a wood floor or a fireplace mantle.
- Remove trash cans and close toilet lids in bathrooms.
- Use floral arrangements in kitchens and dining rooms.
- Avoid shooting into mirrors because your image will reflect.
#4- Virtual Tours
Make sure if you are selling your home to have a virtual tour, even if it only has two spins.
- A good virtual tour will show a buyer room by room, each with a 360-degree view.
- Depending on the tour company, you can add sound, music, or an exciting, professionally written description of each room as it moves through the tour.
- Virtual tours can also include individual photos that are available to download or to print.
#5- Signs
Signs encourage home buyers to call you or your agent. If your home is located on a corner, you can put up two signs.
- Some homeowner associations prohibit real estate signs.
- Some homeowner associations allow only window signs.
- Try talking to a neighbor whose home is located at the corner of busy street and ask their permission to put a sign in their yard with an arrow that points toward your home.
- Agent signs should include the number of the closest office, if there is more than one office in the city, and the agent's cell phone or voice mail number.
#6- Print Advertising
Print advertising will reach buyers who read the newspaper. Using online ads will reach the rest of the home buyers. Place your ad in:
- Major newspapers. Make sure to find out which days will pull the most readers. Typically it is Sunday, but some newspapers also publish "picture classifieds" on the other days.
- Local newspapers. You can probably run larger ads for less money that will more closely target those looking in your area.
- Real estate publications. Check on press date and depending on the date, can you wait?
- Every web site you can find. Most online listings are free.
#7- Direct Mail
If you are selling your house and are not represented by an agent, you can buy mailing lists from list brokers. If you are represented by an agent, ask about a direct mail program. Here are a few good places to mail:
- Neighbors. Everybody has friends and relatives who might want to move closer to family.
- Agents who represent buyers in your neighborhood.
- Buyers who live in other areas and often relocate to your neighborhood.
#8- Open Houses
Many homes might not be suitable for an open house because of location or other factors, but the only way to find out for sure is to hold an open house. If you hold an open house and nobody comes then you know your home is not suitable for an open house, but if your home is located near a high traffic area where buyers often come to, then your home is a good candidate for an open house.
- Place open house signs throughout the area directing buyers to your home.
- Advertise in the newspaper.
- Advertise open house times online.
- Invite neighbors because they are close and they might know somebody who might like your home.
#9- Host Broker/ Agent Tours
If you are selling your home and are not represented by an agent, then you can skip this step. If you are represented by an agent, then its a good idea to get as many agents and brokers as possible to come see your home.
- Agents who stay longer in your home will better remember details to later describe to buyers.
- The best way to entice an agent to stay around is food. You don't need to buy expensive food, sandwiches would be enough.
- As agents eat and talk, the hope is that they will like your home and want to bring back buyers.
#10- Send E-Flyers
Technology has made it easy to create and send electronic flyers. In your flyers you can include photos of your house. The cost for e-flyers varies, but it normally costs less than $100 to produce. Here are some people that you can send your e-flyers to:
- Real estate agents who sell homes in your area.
- Friends, family and coworkers.
- Out-of-area brokers and agents who represent buyers in your area.
If you have any questions or you need a real estate agent, you can call your local Century 21 Haggerty Co., agent at (915)-757-3445 or you can visit our website at www.elpasocentury21.com for a list of agents.