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Real Estate Archive page stores previous Real Estate articles of interest .

Should You Wait Till Spring to Buy or Sell?
By Forrest Moody

Real estate activity typically slows down a bit during colder months. Many people don’t find the idea of house hunting in the cold very appealing. Also, many families are focused on the school year and their holiday shopping – which tends not to include shopping for a house. This reduced competition can work to a buyer’s advantage.

It can also be a great time to sell. Many sellers are thinking they should wait until spring to put their home on the market. While it is true homes show better in the spring and summer months, and there are a lot more buyers during that time, there is also a lot more competition. Everyone wants to put their home on the market in the spring. I personally sold 5 homes during the month of December. This surprised even me! And the great thing about those who are looking at homes in the winter is that they are more serious. If they want to look at your home during the worst weather or on a holiday, they are serious! That’s exactly what you want. So don’t buy into the idea that winter is a bad time to buy or sell Real Estate.

With fewer people searching for home loans, lenders are less busy and more likely to give greater personal attention to the smaller pool of buyers. Winter weather can also clue buyers in on whether a house is drafty – indicating the home might need new windows or have leaks that need to be sealed.

Of course, the extended and expanded home buyer tax credit is a strong incentive right now for buyers to brave the cold and find a home. For more information, visit www.realtor.org/taxcreditbasics

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To Inspect or Not to Inspect?
By Forrest Moody

That is the question I hear all the time from first time buyers. Most of my more seasoned buyers know that it is well worth the $400-500 that it will cost to know that the $100,000 plus investment they are about to make is in a sound property. It’s much better to spend a few hundred now than thousands later after you move in because of something that could have been detected during a home inspection. Of course, I remember when I bought my first home. We were cash poor and could barely come up with the earnest money for a no-money down loan and we asked the seller to pay our closing costs. In hind sight probably not the smartest move. If you can’t even afford a home inspection, you probably aren’t ready for homeownership. But I digress. This article is about the importance of a home inspection and what it involves, not about whether you should be buying a house in the first place.

Home inspections vary depending on the type of home you are buying. A large older home will require a much more detailed inspection than fairly new condo. Here are some of the basics that should be covered in a general home inspection.

Structure: The structural components including the framing and the foundation determine how well the home stands up to the elements.

Exterior: This would include the siding, trim, windows, doors, sidewalks, driveway, and surface drainage.

Roofing: A well maintained roof will protect you from rain, snow, heat, and cold. Make sure to take note of the age, condition of the flashing, gutters, downspouts, and watch out for buckled or loose shingles.

Plumbing: The supply and drainage systems should be thoroughly examined, as well as the water heating equipment, and fuel storage systems. Also included in this category are drainage and sump pumps. Banging pipes and poor water pressure can be a sign of a problem.

Electrical: Safe electrical systems are very important. Look at the condition of the service entrance wires, service panels, breakers and fuses, and disconnects.

Heating: The heating system, vent system, flues, and chimneys should be looked at. The age of the water heater and whether it is adequate for the size house should be considered.

A/C: The inspector should explain the type of cooling system you have and it’s energy source. They should also inspect the central and through wall cooling equipment and determine the age of the system.

Interiors: An interior inspection can uncover plumbing leaks, rot, insect damage, or even construction defects and code violations. Things they should look at closely are the walls, ceilings, and floors; steps, stairways and railings; cabinets and countertops; garage doors and garage door openers if applicable.

Ventilation/insulation: Adequate insulation and ventilation in the attic and crawl spaces can prevent energy loss. The type of insulation should be appropriate to the climate. Excess moisture can lead to mold and water damage.

Fireplaces: Although beautiful, they can also be dangerous. The vent and the flue should be inspected and fuel burning appliances should be explained how to operate.

For more information, try the virtual home inspection at www.ASHI.org, the Web site of the American Society of Home Inspectors.

Just like there are no perfect people, there are no perfect homes. No mater how new or how expensive there can be issues. Many times people think that if the home is New Construction they don’t need an inspection because the builder generally provides a warranty. But I’ve heard of brand new Million dollar homes that didn’t have the drain pipe to the bath tub hooked up. And keep in mind that just because the home has passed codes, doesn’t mean it’s acceptable. Codes are a minimum requirement only and a good home inspector will look beyond this.

So, if you are buying a home without an inspection, think about why the Real Estate professionals and their companies and even the government if they are lending you the money, have you sign a waiver saying that you have been advised of your right to have an inspection and that you have chosen to waive that right. There is a good reason why you should always choose to Inspect!
Huge Win for Home Buyers
By Forrest Moody

The U.S. Congress and administration recently extended the popular and successful $8,000 first-time home buyers tax credit through April 30, 2010. However, they didn’t just extend the credit; they also expanded it to include a $6,500 tax credit for current homebuyers who qualify.

The legislation also raised income eligibility. Single buyers making up to $125,000 and married couples making up to $225,000 can now qualify.
Economists laud the tax credit as a major factor contributing to the scores of first-time home buyers who entered the market this year. According to NAR research, 47 percent of all home sales were entry-level buyers, compared to 41 percent a year ago.

NAR data shows that the tax credit has contributed approximately $22 billion to the general economy. Each home purchase generates about $63,000, the equivalent of about one new job.

Sellers Often Spend Too Much Getting Ready For Sale
By Kevin O’Connell

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Whether it’s done at the advice of a listing realtor, or an individual decision by a seller, spending money to perfect your house’s appearance and appeal will most likely leave you without much of a chance of breaking even on the expenses. The disadvantage of this to sellers is they often spend a lot of money making the property look attractive to them. Unfortunately, the “perfect” house they plan to put on the market is perfect in their opinion, but many buyers will find it less than perfect to their preferences. Eventually they pass on property rather than pay the higher price and still have the expenses of making it the way they want it. The types of improvements, mostly cosmetic, are commonly called “buyer preference” issues.

There are a number of repairs and / or improvements sellers can make to property going to market that will not only enhance the appeal of the property, but provide a return on its cost in the form of additional value to the property and sale price. Issues such as the roof, mechanical systems i.e. heat, air, electrical systems, energy conservation improvements, will always add more value than the costs of the repairs, thus there’s potential of higher value to the buyer in exchange for a higher sale price. “Contributory value” is the market value added as a result of an improvement, and far too often, sellers consider cost to be equal to contributory value. They need to be aware that costs and values aren’t a dollar for dollar exchange.

In today’s market, particularly because of the recent history of declines in values, one of the most attractive features a property can offer to prospective buyers is the chance for them to fix it up the way they want to and not have to pay a higher purchase price. The message here is that you, Mr. & Mrs. Seller, may be able to sell your house more quickly and at a more reasonable value by doing less, investing less, and price it accordingly while trying to sell it. You need 3 basics to get started. 1.) Good curb appeal – it has to look nice when they pull up in front of it to see it, or drive by while searching. 2.) It should be kept very clean, regardless of the colors of the walls or types of flooring. 3.) It should SMELL clean. Walking through the front door to an unpleasant slap of animal odor, trash, even cooking smells is a turnoff. If it looks bad from the street, and smells foul, there’s strike 1 and strike 2 before they’ve even seen the rest of the house.

You also have the option of offering the seller assistance on the cost of improvements, cosmetic or otherwise, which can address both issues. You don’t spend more than you’re going to get back on the house, and the buyer gets to make it the way they want it with some help from you. There’s an equally good chance, or perhaps better chance, that the buyers will see more value in the opportunity to make the house the way they want it. There will always be buyers who want the house ready to move into without having to do anything in the form of work on the house. This is another example of the potential benefits of seller assistance with improvements and a better chance of recouping their investment.


Pricing a Home to Sell
By Forrest Moody

One of the most important jobs a real estate agent does is determining the proper price to sell your home. If you price it too high, it is likely to set on the market for a long time and either won’t sell at all, or when you finally do get an offer, you end up selling it for less than you could have months ago if you had priced it properly to begin with. That’s why I always tell prospective clients, when I first meet with them about selling their home, that I don’t take over-priced listings. It doesn’t help anyone unless it’s the person who finally buys it under valued a year or two later.

So what determines the proper price? Many things actually, but most of all the Market determines the price. Not the homeowner, not the agent, not the buyer, the Market. Wait a minute, wait a minute….didn’t I just say the agents most important job is to determine the proper price? Well, actually the Market determines the price, but it’s the agent’s job to figure out what the market is saying at any given time. And this can change monthly, or even weekly, and is different in every area. Even some markets have submarkets. So one neighborhood could be a buyer’s market, and one could be a seller’s market.

Yes even in today’s climate. In fact I’ve seen some neighborhoods in our area that are a buyer’s market over all, but the single level homes in that neighborhood made up a submarket that was a seller’s market. I know this seems like a lot of information that you probably don’t care about. The point is, you need an agent who can determine the market you are in so that they can price your home properly.

Having an expert on the area is important, but it’s just as important that they look at more than just a comparative market analysis (CMA). A CMA just shows the raw numbers of what homes have sold for in any given time, and breaks down the amount of time they were on the market, and how much they sold for per square foot. To price it properly, they need to do a Price Trend Analysis, and an absorption rate. This way you can see if the homes in your particular market or sub-market are either going up, down, or staying the same, and you can see how many months supply of comparable homes are on the market.

The absorption rate is crucial! For example, if there are 12 comparable homes on the market, and 3 homes are selling per month, you have a 4 month supply, provided no other homes come on the market. What if you can’t wait for 4 months to sell? Then you have to look at the competition and decide which 3 homes are likely to sell in the next 30 days and make sure you are priced to be one of them.

So no matter how much you think your home is worth, or how much you owe or how much you have put in to it updating and remodeling, the market determines the price, and a good real estate agent can figure out what that is.

Important things to keep in mind when pricing to sell:

1. Upgrades don’t always bring more money, they can help make your home more sellable, but they may not ad to the value of the home.

2. Routine maintenance or replacement of leaky roofs, broken water heaters or
HVAC systems don’t ad to the value. These are items that are expected to be in working order. If it’s broken or in disrepair it will hurt the price, but if it’s
working it will just bring what it is supposed to bring.

3. Things that make your home more livable for you may not ad any value. For example swimming pools. Your family may love having a pool and enjoy using it for years. But don’t expect someone else to feel the same way and pay more money because you have one. A swimming pool is not an investment in your home. In some cases it can cause you to get less money or take longer to sell because many people do not want a home with a pool. Of course the exception to this would be places like Florida and California where it is expected to have a pool.

4. Check out the competition. If all the homes in your price range are updated and have granite counter tops and new appliances then you have to price accordingly.

If you can ’t update to compete with them, you have to drop the price low enough that it’s worth while for someone to do it themselves. Even then it may take longer because today’s buyer doesn’t want to do anything. They want move in ready and they want it for a good price.