If you have been paying any attention to the housing market over the past few years, you know there are definitely fewer homes being listed today than in years past. Heck, even a casual observer has to have noticed far fewer signs in yards on their morning commute. So, as a real estate agent part of my daily life is dealing with frustrated buyers who are ready, willing, and able to buy, but unable to find "the one." In fact, things are so tight they are having a hard time securing "the runner-up."
Now more than ever, buyers need an agent who will think outside the box. Luckily, that happens to be a strong suit. I love brain teasers, logic problems, and definitely enjoy a challenge. So, in this market, when learning my buyers want a home for "X" amount in just one area, and there is currently nothing on the market, I send out a postcard to homeowners whose homes suit their needs. And rather than opting for a pre-printed postcard to send out to hundreds proclaiming, "I've got a buyer for your home!" I design a card with a pertinent photo (maybe the subdivision entrance sign) and some personalized text about my buyers. I also research the sales history of each house to make sure it really is a good fit.
Once we have found that home there is a good chance we will be competing against a number of other frustrated buyers who have been searching for months.
While for many sellers "the bottom-line" can be uppermost in their minds, most have a great deal of emotion riding high during the process. In order to tap into that I always encourage my buyers to write an introductory letter to the sellers. "Why did you fall in love with their home?" can be a helpful starting place for that letter, and I am often surprised at the prose that comes back to me in pdf form. Buyers are truly invested in the property and willingly express that to the sellers.
I have added my own touch to those presentations on occasion (with the buyers' permission, of course) proposing, "So, your daughter is such a cutie...shall we use that to our benefit?" They chuckle and respond, "Absolutely. Here's a terrific shot of her playing princess." I know for a fact their lesser bid won because of that picture. Or the buyers who tapped into the emotion of a home that was part of an estate when they spoke of envisioning their future children playing in the backyard, and promised to build upon all the wonderful loving memories they must have by creating their own for years to come. The listing agent was quite candid when delivering the surprising acceptance, clearly expressing his own disbelief since we knew they could have countered for much more. "I told them they should counter but they said they just felt this was the couple who deserved the home and were happy to accept at that price."
If you are ready, willing, and able to purchase a home give me a call today and I will give do my level best to turn your dreams into an address.
THINKING OUTSIDE OF THE BOX
GETTING READY TO BUY: TAKING THE FIRST STEP
by Ro Reed
The internet has definitely changed the real estate world. By the time I unlock the door at our first showing, you have probably seen a hundred homes online. You have clicked through the pictures and gotten an idea of what you like and don't like. You have a clearer idea of what you absolutely need and a confirmation of what you absolutely cannot deal with. A big kitchen is a must, while the freeway in your backyard is not going to happen!
So, you're ready to take the plunge and "get real" about finding your first home.... but you aren't quite sure how to translate from cyberspace to a front door. Well, you've come to the right place! As an Accredited Buyers Representative I meet you at the office for a one-on-one consultation that takes you through the process and answers questions you didn't even know to ask.
With limited inventory homes regularly go under contract within a day on the market. If you are relying on third party sites such as Zillow, Trulia, and Realtor.com, you will find they can take days to get information. By then your dream home is no longer available. To ensure that doesn't happen to my buyers I set up a search in our Multiple Listing Service which looks for homes meeting your criteria every 15 minutes. When one is found, immediately upon it being uploaded by the listing agent, you are notified.
At our first meeting I will also review what to expect throughout the process: there is so much more to what I offer than unlocking a door to a home and you need to be informed from the start. I also review the purchase agreement with you so that you can be comfortable with the 5 page document, and not see it for the first time when we are rushing to put together an offer to compete against multiple buyers.
You will see from our first conversation why working with the RIGHT agent makes all the difference in the success of your home search. I look forward to working with you in turning your dreams into an address!
GETTING READY TO BUY: SEPARATE WANTS FROM NEEDS
by Ro Reed
Rolling Stones fans and savvy homebuyers know you can’t always get what you want. At least not everything you want. You should, however, have some sense of what you want and what you need when you start your home search. Distinguishing between the wants and needs can be tricky because so much emotion can swirl around visions of your “dream home.”
But making two separate lists of wants and needs will save you hours and energy in the long run. Here are a few things to do to help you decide how to assign home features to your lists:
1. Ask yourself if you can truly live without it.
“Wants” are features that would be nice to have. “Needs” are things that you really must have to function. Be honest, can you truly live without shiny new stainless steel appliances? If yes, put them in the “Wants” column. On the other hand, an additional bedroom may belong in the “Needs” column if you’re expecting twins. Creaky knees? A ranch layout is a “need.” Occasional desire for a nap by the hearth? That fireplace is a “want.”
2. Determine if a feature could be changed or added later.
No matter how ambitious you are, some things may remain beyond your control to change, like proximity to public transportation, or quality of the local school district. If these features are critical to you, they go on the “Needs” list. On the other hand, things like patios and hardwood floors can be added later. List them as “Wants.” Your agent can probably help you talk through potential future costs of renovations and additions to accommodate your wants. Changing the bus routes, on the other hand, is probably beyond the capabilities of even the most experienced Realtor.
3. Talk it through with your agent.
A trusted REALTOR can bring a much-needed dose of objectivity to your decision-making. He or she can help you visualize the day-to-day reality of living with (or without) a certain feature, as well as guide you through the math that may help you separate wants from needs.
A FEW MORE THOUGHTS...
How many bedrooms or bathrooms do you need? Remember you should always look toward resale value, even though you may think you are going to stay put for a good number of years. Although it may fit your current needs a two-bedroom home is harder to resell, as is a one-bedroom condo. Unless you are getting a great deal on these you should consider such a purchase even more carefully.
Do you enjoy cooking? Then kitchen size and functionality is important. Are you able to work from home? An office or extra bedroom should top the list. Sharing your home with teenagers? The number of bathrooms becomes a critical decision. Do you hate hot summers or have allergies or asthma? Central air conditioning may be medically necessary. Lots of "stuff"? A basement. Cars? A garage.
GETTING READY TO BUY: MOVE-IN READY?
by Ro Reed
So now you've got your pre-approval letter, you've established wants vs. needs, and you are ready to start your house hunt. You just need to decide how much work you are willing and able to put into
your dream home. Move-in ready vs. a fixer upper: These are definitely subjective terms, and the meaning can vary with each person. Even if you are willing to put in some elbow grease, that's not all that's needed in something being sold as a "fixer upper." Among REALTORS that term is usually reserved for those homes that are not just not "move-in ready" but "uninhabitable" in their current condition. They can be a great buy but you will either need an ample reserve of cash beyond the purchase price, or a home renovation loan. Do note that renovation loans are more costly and have stricter guidelines. They can also require a longer closing period after the offer is accepted.
When you see the words "needs some TLC" that will usually indicate a candidate for that elbow grease to which I alluded earlier. You can also safely assume the home has been neglected so issues may go deeper than the eye can see. And if it says a home is "dated" with few pictures, it is probably a good guess that you will be putting in some time and money to update it to your liking.
If you’re not handy, or if you are not ready for the extra financial commitment of rehabbing a home, or you can’t or don’t want to wait for remodeling projects to finish up, then a home that’s move-in ready might be right for you. Just remember, most every home will require some tweaks like painting or changing out a few light fixtures. At the same time that personalization is what makes that house into your new home!
GETTING READY TO BUY: SCHOOL DISTRICTS
by Ro Reed
Many buyers, especially those with kids, search based on a specific school district versus a city or town. It's very important to many which is why, when you work with me, I can set up your home search to only show properties in your preferred district.
Even if you don’t have children in the house, local schools will affect your property value.
Once again, always look toward the future and know that if you buy in an award winning district, odd are you will be able to resell much more quickly. In fact many buyers will adjust their "wants" list just to get a lesser home in a good school district! Families will sacrifice square footage, garages, and even the number of bedrooms if they can assure there kids a shot at a good education. It's also worth noting that many homes in areas with good schools were not as affected by the downturn in the market, not suffering the substantial losses of comparable homes in schools that do not perform well.
Make sure to do your research on the schools in the areas you’d like to live in. It may be your smartest move!
GETTING READY TO BUY: FINANCING
by Ro Reed
1. What can you afford? When you contact the lender you will need to satisfy certain criteria, the first being a DTI, or debt-to-income ratio. What can you afford to pay toward that mortgage each month? If you are currently paying rent, and able to have a little money left over for savings each month, that's probably a good place to begin.
So how does that translate into a mortgage payment? Right now, with interest rates around 4.75%, you can figure on $5.25 per $1000 borrowed as your monthly payment for principal and interest. If you are not putting down 20% there will also be an amount called PMI, or private mortgage insurance. This chart is based on a 720 credit score:
Loan-to-Value 30-year fixed 15-year fixed Monthly payment
90.01% to 95% PMI 0.62% of loan PMI 0.57% of loan $52/$48 per $100,000 borrowed
85.01% to 90% PMI 0.44% of loan PMI 0.39% of loan $37/$33 per $100,000 borrowed
85% and under PMI 0.27% of loan PMI 0.22% of loan $23/$18 per $100,000 borrowed
2. Do you want a condo or single-family home?
Here's where it gets interesting. Many buyers start out thinking they would rather go from an apartment to a condo so they need not be concerned with maintenance issues. Shoveling the snow in the winter, or mowing the lawn in the summer, can be overwhelming to some. As with most things in life, that freedom doesn't come cheap. You will be paying a monthly maintenance fee.
Condo associations can charge hundreds of dollars per month. Let's say it's only one hundred dollars; the convenience alone, for you, may warrant the expenditure. However, maintenance and HOA (Home Owners Association) fees are counted in as part of the mortgage payment when qualifying. So $100 actually takes away over $20,000 in your buying power.
And if you opt for a single family home in a neighborhood with a pool, tennis courts, and club, the same will hold true.
This is where want vs. need comes in: would you rather qualify for the higher priced home or sleep in when it snows?