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Karen Picarello

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Displaying blog entries 11-20 of 105

Negotiating Home Improvements into Your Sale

by Karen Picarello

When you are putting an offer on a home, multiple things are to be considered. One of those things is how much it’s going to cost to get the home ready to move in. If remodeling is on your list, the asking price is probably making you cringe. How much more will it cost to make a property your own? It turns out there are many financial options when it comes to negotiating home improvements into your sale.

1. Include Remodel Prices in the Offer

There is no reason not to lessen your offer if you think remodel costs should be considered in the negotiated price of the home. Additionally, if it is a buyer’s market, the homeowner’s may be more apt to accept such an offer. Be warned of lowering your offer to cover the costs of remodel. Your loan will also be less, so you’ll still have to find a way to come up with that extra money for the remodel.

2. Seller Pays for Remodel

You can also negotiate contingencies into your contract that say the seller will pay for repairs or improvements prior to closing. Sellers may agree to this for a negotiated loan amount or when repairs are necessary to pass a home inspection. This takes the responsibility of the repairs off of the buyer with the exception of any mortgage differences. Sellers have multiple options to cover these costs.

3. Loan with Remodel Costs Included

A buyer may seek out a loan that includes the costs of remodel. If a buyer has good credit, there is more likelihood that a loan of this sort will be approved. Not only does this free the seller from any connections from the home, but it also frees the buyer to create their own building plans.

4. Asks for the Necessities

Negotiation is the key concept when getting home improvements covered in your sale. The sellers may not be interested in helping you replace the wallpaper or creating an open concept kitchen. However, they may be accepting of more necessary items like a roof or windows. Make sure you try to get what you want out of a sale, but don’t lose opportunities because of being too rigid. Be flexible, and get what you can out of your purchase.

Rarely is an older home move-in ready without any paint or flooring changes. But when it comes to the necessities, make sure you have it covered in your home purchase or that you have the income available to make the repairs necessary.

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.

Prep the Lawn to Sell

by Karen Picarello

A well-manicured lawn is a perfect way to make a first impression, so prepping your lawn to sell will definitely attract buyers. When people look at your home for sale, they are seeking a place where the “grass is greener.” If you want to seal the deal, make that saying a reality by properly maintaining your grass.

5 Ways to Prep Your Lawn to Sell

1. Herbicide

A lawn full of crabgrass is not only an eyesore, but it is also a lot of work! Make your potential buyers want to take off their shoes and walk barefoot in your luscious carpet of thick grass by controlling the weeds. Pre-emergent herbicides will minimize this work. Contact your local extension office to find out what works in your area.

2. Aerate

Some grasses grow a thick layer of thatch underneath their blades, and this can be suffocating. Grass that cannot get enough air will yellow, and you’ll end up with patches of unhealthy, dying grass. You can fix this by aerating. There are a number of ways to aerate from handheld aerators to motorized versions. Choose your tool based on the size of the yard.

3. Test the Soil

If you want it to be green, you have to find out what to feed it. A soil test will tell you the pH along with nutrient levels, so you can amend the soil to make it the perfect environment for your grass.

4. Edge

Crisp edges and borders show attention to detail and create instant curb appeal for the home seeker. Make sure your lines are straight, and you’ll lead your potential buyer straight to the bank. Edging also helps prevent weeds and grass from encroaching.

5. Repair

Don’t leave anything unattended. You don’t need to install a sprinkler system to sell your home, but if you have a sprinkler system, make sure it works! Perspective home buyers will see broken items as a sign that the home has not had proper improvements. Don’t let procrastinated home repairs ruin your sale.

The last thing you want potential home buyers saying is, “That home was nice, but…” Remove the “but” and change it to an “and.” Make sure your lawn is green and properly-maintained. Your buyers will then be saying, “That home was nice, and did you notice the yard!” A beautiful lawn can be the tipping point for a home buyer who is unsure about which home to purchase. It allows them to picture themselves living at that location as the new homeowner with pride.

Selling and Buying a Home at the Same Time

by Karen Picarello

When a person sells a home, they must find another. These transactions will occur in a market that is better for either buyers or sellers…but not both. The seller becomes the buyer, and they are only benefited by the market in one position. This is why many people end up renting for a short time while they wait for the market to change. They sell in a seller’s market and buy in a buyer’s.

In addition to the markets, it is difficult to make an offer on a new home when your old home is still in escrow. While waiting for your home to close, you will not have that money available for a down payment. If you find your next home before you even have an offer on your old house, you may have to give it up. This just complicates the search. Thankfully, there are contingent offers that sellers may accept while you are waiting for your previous home to sell.

What is a seller’s market?

If there are more buyers than homes in the market, it is a seller’s market. Cash offers may win out over mortgages with more closing costs, and buyers must be ready to offer as soon as they find a home they desire. Sellers, on the other hand, will sell their homes quickly while having more difficulty buying. One solution for this problem (which is sort of a good problem) is to ask to do a rent-back, where the seller rents their previous home after it is sold while buying his or her next house. You can also request an extended closing. Loans may be taken out against your home’s equity to avoid delays in purchasing your next home.

What is a buyer’s market?

In a buyer’s market, there are many homes available. Because there are more homes than buyers, the buyers get the power to wheel and deal a bit. This is when contingency offers are more likely to be accepted. Homeowners are more likely to accept less-than-perfect offers to do what it take to get the home sold.

It is easy to see why it is difficult to be a buyer and a seller at the same time. The markets simple don’t support both at the same time. If you end up renting in order to find a better market, you can end up spending a lot more money in rent and storage, but sometimes it is the best option.

The best thing to do when you are buying and selling at the same time is to be organized and educated. Know the options that are available, and don’t rush into decisions that you are not comfortable with.

Mortgage Rates 101

by Karen Picarello

If you are a new home buyer, mortgage rates may seem a bit confusing. You know you want a low rate, and you don’t want a subprime mortgage, but you aren’t really sure what subprime means or how to find a low rate. A good mortgage broker will be able to help you find a good loan for which you qualify, but you should be equipped with some basic knowledge and understanding of the creation of mortgage rates and loans.

3 Basic Types of Mortgage Loans

1. 30-year fixed: A 30-year fixed rate loan is the most common type of loan for a home buyer. The interest rate is fixed, and you can get this type of loan through FHA, VA, and other standard mortgage companies.

2. 15-year fixed: It is amazing how much faster you can pay off your home (and save money) with a 15-year fixed loan. You can get a lower interest rate and pay less over time because of the shortened term length. While this may seem like an easy decision (if you can afford the increase in payments), you must consider other investment opportunities. You could be investing the difference in payment amounts. A financial advisor can help you weigh the benefits of a 30-year versus a 15-year fixed loan.

3. Adjustable-rate loan: Adjustable rate loans take advantage of current interest rates, which can be much lower in the early part of the loan. If a person isn’t planning on living in a home for many years, it may actually save them a lot of money. However, it is risky. Interest rates can shift causing great changes in monthly payments. People who get adjustable-rate loans in order to get a bigger house than they can afford may not be able to keep-up with payments. This is, in part, what caused the last housing crisis.

3 Tips for Successful Mortgage Loans

1. Get a good mortgage broker:

A good mortgage broker can time your closing to get you the best interest rate possible. However, you want to make sure you go to one who you trust and who has the knowledge to get you the best loan. Talk to people about who they have hired, and look at online reviews. An informed decision is always best.

2. Get your budget put together:

You should have a reasonable idea of how much income you have available for a home purchase. This includes how much savings you have for a down payment. Be prepared with this information prior to going to your mortgage broker, so he or she can do their job.

3. Don’t bite off more than you can chew:

You may be able to eek out the payments on a big house for a little while, but don’t bit off more than you can chew. Foreclosures and short sales are a big hit to your credit score and can take away your opportunity for future home ownership for a certain amount of time. Be reasonable. You can always upgrade when finances are better. It isn’t worth the risk to get a loan that you cannot afford.

Don’t Cut Corners Because It’s Not Your “Forever Home”

by Karen Picarello

 

Your home may not be the one that you intend on growing old in, but that is no reason to cut corners because it’s not your “forever home.” It may mean that you don’t put in gold-plated fixtures, but it is not reason not to do repairs correctly.

5 Reason Not to Cut Corners in Your “Not-Forever Home”

1. You don’t know how long you’ll be there:

Just because you plan on moving does not mean it’s going to happen. Things change. Sometimes you end up staying…with your shoddy work and all. Fix it when it needs to be fixed, and fix it right. Nobody deserves to pay for you cutting corners, not even you.

2. Cutting corners can cause more damage:

If you don’t fix it right, it may end up causing way more damage than it would have if you fixed it right in the first place. This is especially true with leaks that get mostly repaired or temporarily repaired. A little water is no big deal, but a little water over time can cause huge damage in the form of rot.

Even buying a very cheap faucet can lead to breakages that cause leaks. If you aren’t planning on spending a while there, maybe a high-end faucet isn’t necessary. However, a cheap faucet will not go unnoticed by the savvy home buyer.

3. The home will be inspected:

If you are a DIYer, you probably try to do thing in a way that would be up to code. However, if you a corner cutter, your inspector will not like it. Try not to delay your home sale with a failed inspection.

4. Could end up costing more:

Did we mention that cutting corners causes more damage? This may be the cause of extra costs. Costs can also increase if you have to have a certified plumber, electrician, or contractor come in and repair your half-hearted “fixes.”

5. Pride:

Lastly, you should have a little pride in your work, especially when it involves a home. There are families who will live in the home after you assuming no catastrophic damages occur. Don’t give them extra problems by not keeping the home up to the right standards. You should want to live in a home with proper repairs, and you should want your home to be handed over to a new owner in good condition. It’s about self-respect.

Hopefully these 5 reasons are good enough to keep your work on the up-and-up. Poorly executed work has no place in home ownership.

Displaying blog entries 11-20 of 105

Contact Information

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TeamPicarello
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