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Pre-approval Equals Seller Confidence

by Karen Picarello

With the Fed keeping interest rates stagnate, there could be more buyers in the market while interest rates remain low. However, predictions vary in whether or not the current seller’s market will continue. Many believe there is a shift on the horizon, but it is too soon to tell. For home buyers who are not cash buyers in any market, you can get the ball rolling by getting your loan pre-approved and increasing the seller’s confidence in you.

Why does a seller need confidence?

Cash buyers are a sure thing, and the mortgage process is not going to hinder the sale. On the other hand, if a buyer is going to use a mortgage to purchase the home, there are a number of things that can stall the sale. Proving income from self-employment, unknown liens against a property, and debt problems can stall or stop the mortgage process. Additionally, you must figure out how much you can afford and how much banks are willing to dole out. This is a complex process that may take a week or many months. Sellers want to know that you are ready to start the buying process, so they don’t have to wait for their house to close. Many home sellers are picking up a new mortgage, so they may not want to wait until you are pre-approved to sell their home.

How do you get pre-approved?

1. Check your credit:

If you need help getting your credit score increased, start with the basics. Make sure you are making payments on time, and make sure you don’t have too much debt compared to your assets. If you have debt problems, speak to creditors about your options. They may be able to lower your interest rates or give you a lower pay-off amount provided you pay in full.

2. Choose a lender:

There are many lenders from which to choose. Once you know you have your credit rating up to par, and you are ready to look for a lender, make sure you check out a few. Compare their rates and read their contracts, and choose a lender who you feel you can trust. You may want to refer to the advice of friends and family.

3. Provide the information needed:

You’ll have to give your potential lender your financial information in order for them to pre-approve. This means income information, debt information, credit scores, etc. The lender will go over everything and evaluate you as a financial risk. Then, they will pre-approve you for a certain amount. This is not the amount you must spend on a house, but it is the amount they feel that you can afford and the amount they are willing to provide.

Once you are pre-approved, you will still have more work involved in securing the mortgage, but your seller will know that you’ve already covered the basics, and it is likely that they will be paid in a timely manner.

Economic Worries May be Good for the Housing Market

by Karen Picarello

The economy is globally unstable, and with a lagging housing market, the Federal Reserve has decreased mortgage rates to the lowest amount in a year. New numbers are expected to be announced Wednesday, and experts are predicting that the Fed will not be raising rates any time soon. We won’t know until Wednesday, but it seems that economic worries are good for the housing market.

Wavering Stock Market = Incentives

The Federal Deserve increases and lowers interest rates in an attempt to keep all markets stable. Right now, the stock market is unstable due to global economic unrest. The trade war with China across one ocean and Brexit failures across the other ocean don’t have anyone feeling secure in volatile investments. They are seeking out secure investments like long-term bonds.

When the consumer is unsure like this, the Fed steps in and lowers interest rates to incentivize people to buy because they won’t lose as much money in interest. Last week, the rate went as low as 4.31 percent.

Insignificant Job Growth but Increased Wages

One of the other things on many economist minds is when Millennials are going to start buying homes. It’s not like there aren’t any who own homes currently, but they aren’t the major consumer demographic. They should be. Instead, Millennials are living with friends or family instead of taking on more debt. This is caused both by high rates of student loan but also by the inability to save enough for a healthy down payment.

Although job growth has been slower than expected, wages have gone up. This gives Millennials more disposable income and savings potential. It could be enough to make them feel confident in buying a home as a sound financial decision. They’ve seen the debt-ridden generations of the past and are reluctant to travel down the same path.

It’s a Guessing Game

Nobody knows what will happen to interest rates, but it makes sense that rates would stay the same or lessen. The economy is simply not safe enough to get people to buy houses unless they can’t resist low rates. Sales fell 1.2 percent from December to January, but there was an increase in new construction. As long as there are a no economic catastrophes, mortgage rates will probably only remain low for a short while. Hopefully, it will be enough to stimulate the economy. Until then, it could really help the housing market.

Do Home Renovations Pay?

by Karen Picarello

People who are selling their homes often perform costly renovations in the hopes of increasing the values of their homes. It is true that renovations can increase the value of the home, but they generally cost more than the increase in value.

Home renovations only pay in that they increase the interest in your home. You aren’t going to make money renovating your attic or even installing new windows. However, you may increase the number of offers that are close to your asking price, so they may be worth it.

1. Windows:

Ultimately the energy savings aren’t even worth replacing the windows from a monetary standpoint. It would take too long to recoup the costs from an energy savings standpoint. However, making sure your windows are in good repair and that the caulking is good will make potential buyers impressed. Small fixes will create the look needed to sell the home.

2. Front Door:

Your front door can be a huge selling point because it makes a first impression. Home buyers want strong doors for security reasons, and they want updated doors for energy efficiency. You will recoup the majority of the cost of your door, especially if your old door is in poor shape. One thing that could be a selling point is if you get a warranty on the door that is transferable to the new owner.

3. Fixtures:

One of the simplest ways to increase the salability of your home without a total renovation is to upgrade the fixtures. Faucets, outlets, lamps…anything that is dated will detract from the overall look of the home. Moreover, there is minimal cost. Hundreds of dollars versus thousands. In many cases, it can give a similar effect to a total room makeover for people who have never seen the room.

Tidy and Clean Instead of Renovating

Unless you have a contractor cousin or some type of money-saving magic to get your renovations done, they aren’t going to pay. However, if your home is a real fixer upper, some renovations may be necessary. Renovation is not ill-advised, but you won’t recoup all of your expenses in most cases.

Instead of focusing on renovations that may not meet the dreams of the future occupants, focus on staging your house for success. Remove all clutter, and make sure everything is clean. If you have accumulated a lot of stuff, put it in storage to make sure your home looks as put together as possible. The new homeowners can do their own renovations, so what you need to focus on is making their dreams become plausible. A dirty house is difficult to look beyond, but a home that is tidy and clean is like a clean slate looking for a new identity.

Moving Out But House Hasn’t Sold? A Few Tips

by Karen Picarello

The world would be a more wonderful place if timing was perfect, but it isn’t, and you are leaving your unsold house for a new home. It will be vacant for an unknown period of time. Your real estate agent has the keys and will continue to show the home, but that isn’t enough to keep your home safe from harm when you have moved on.

5 Tips for your Vacant Home

1. Check your Insurance.

If your home is vacant for a certain amount of time, your homeowners insurance will not cover losses. Just like car insurance, they typically offer some coverage during the transition period, but it may only allow for one month. Read your policy or check with your agent to make sure you have proper coverage. There is nothing worse than having a claim and finding out that you aren’t covered…and you didn’t know.

2. Increase security.

If your house is going to be vacant, make sure it is secure. All doors and windows should have good locks, and security lights should be strategically placed to deter criminals from a well-lit house. If you have the means, invest in a security system. Other things that help are making the house look occupied. This can be done by setting lights on timers or parking a car in the driveway. Vacant houses will be targeted if they are found out.

3. Notify others.

One of the best security systems is alert neighbors, and you should let them know your home is vacant. They’ll report suspicious activity. Also, let your family and friends know. Maybe some of them can drive bay once in a while to make sure everything looks okay.

4. Continue maintenance.

Remember you are trying to sell your home, so it should not appear neglected. If you are moving out of town, hire someone to mow the lawn. Make sure the home is winterized or weeds are pulled. Have someone come in a dust. The longer your home sits vacant, the more it will be neglected if you let it.

5. Set for success.

Maintaining a home can be a big job but not if you leave the home set up for success. Set your thermostat to an appropriate level to maintain efficiency. Make sure things are turned off where they should be. Put your sprinkler system on autopilot. Don’t leave things halfway finished. Any corner that is cut will come back to haunt you once you get an offer.

Do you have what it takes to sell your home without an agent?

by Karen Picarello

When it comes to selling your home without a real estate agent, you may only think about the money you’ll save. According to realtor.com, the average commission received by an agent is 6 percent. For an average home, that’s tens of thousands of dollars.

Pocketing that money is certainly an option, and this is often what motivates people to put their home on the market for-sale-by-owner (FSBO). However, another benefit of selling your own home is that it gives you more negotiating room. If you are selling your house for ten thousand dollars less than it is worth, it will stand out in a buyer’s market where there are many homes available.

Is it all about the money?

There are many good reasons people aren’t saving money by selling their homes FSBO. It is a job that requires, skill, knowledge, and a strong personality. Having an intermediary in between a buyer and a seller eases the business process between two parties with highly personal wants and needs. It is difficult to sell your own home, and making the mistake of selling FSBO only delays a sale if it turns out you can’t hack it.

Setting and negotiating a price is the first reason you may not have what it takes to sell your home on your own. A real estate has knowledge of the market and can price your home to be attractive while still getting you top dollar. Without this knowledge, you are faced with a bit of a guessing game. Then, you have to deal with offers, some of which will probably be lowball offers that could be turned into a fair offer with proper negotiating skills. Unless you are business savvy, leave it to the professional real estate agent.

Showing your home can also be difficult. If you’ve ever looked at homes, you know how critical viewers can be of things they would never point out if they were guests in your home. It’s easy to get offended. If you cannot remove yourself from the emotions of the deal, you shouldn’t be putting yourself in that position. It is normal to be emotional! However, you have to be professional if you are acting as your own agent.

There are many other reasons to hire an agent, but the biggest message I can send to you is that selling your own home is not a cakewalk. Real estate agents earn their commission. You are welcome to try it on your own, but be prepared.

Displaying blog entries 1-5 of 5

Contact Information

Photo of Team Picarello Real Estate
Team Picarello
RE/MAX Fine Properties North Scottsdale
21000 N. Pima Road, Suite 100
Scottsdale AZ 85255
Office: (480)860-8733
888-548-8713
Fax: (480)860-8755