Walkthrough- Crossing the T's and Dotting the i's!

As a homebuyer, the "walkthrough" before closing is simply the opportunity to make sure everything is in the same condition, or better, than when you signed the offer to purchase.  The purpose is to make sure all of the seller's personal property has been removed, nothing was damaged in the moving process, the seller's obligations were met (i.e. having the living room painted or the house cleaned before closing,) and most importantly, what needed to stay in the house stayed, like appliances for instance.

If any repairs were negotiated in the contract, this would be the last opportunity before the buyer accepts possession and ownership to make sure they had been completed satisfactorily.  So if you have an electrician friend, or a plumber friend, it might be a good idea to invite them!  Walkthroughs are even necessary with new homes!
Many homebuyers tend to think that since it's a new home, there can't possibly be anything wrong or malfunctioning with it.  Not the case!  Homes are built by humans, in the elements.  Many things can and sometimes do go wrong!  
North Carolina is a "caveat emptor" state.  Meaning, "buyer beware!"  Once the buyer signs for the home, they've signed for everything- including the hidden problems!  Take the opportunity to examine your home first!

Call Amanda for all your real estate needs!  910.545.0450  www.AmandaParmerSellsHomes.com

Should I Stay or Should I Go? Thinking about moving up??

Sometimes, making the decision to sell your house and buy a new home is relatively easy. Sometimes it is not.

What will you gain by moving? What will you lose?

Get out a piece of paper. Draw a line almost halfway down to the middle, then put a circle about the size of a quarter at the bottom of that line. After that, continue the line down to the bottom of the page.

On the left side you are going to write down everything you expect to gain by moving. Do the kids fight over bathroom time? Do you run out of hot water? Do you need a better backyard atmosphere for barbecues? Better schools? Better neighborhood? More rooms? More living space? Bigger garage? Better kitchen? Get your family to help.

Can you fix it by improving your present house? Do you want to?

Write four things down at the top of the right column. Current mortgage. Sale of home. Moving. New home. If you have a second mortgage or home equity line of credit on your present home, write that down, too.

Before you do anything else, you have to know what it would take to pay off your existing mortgage. This will include your balance, any pay-off fees, approximately 30 days of interest, and (heaven forbid!) any prepayment penalties.. Most people forget to include the interest.

You get this from your mortgage company’s loan service department. Often, you just have to punch buttons on your phone and they will fax it or mail it to you directly.

Write the total payoff figure on the right side of the page.

Repeat those steps for any second mortgage or home equity line.

Now you need to call your friendly neighborhood real estate agent so you can learn two things: how much your home is likely to sell for and how much you will net from the sale. Your agent cannot determine your net without knowing your mortgage payoff, which is why you got that information first. Your agent won’t make a big production out of it. You’re dong research. They understand.

Write down how much you will net on the right side of the page. If it isn’t a positive number, you probably shouldn’t move unless you have to. If the number is positive, continue with your research.

The next step is to call a mortgage loan officer. Not to apply for a loan (though you can get pre-qualified or pre-approved if you want), but because you need to know how much cash you need to buy a new home. You need to know the down payment, closing costs, prepaid items like homeowners insurance and property taxes, and 30 days prepaid interest (everyone forgets the interest).

Remember, you’re not shopping for a loan right now. You are deciding whether to move or not. You don’t want the “best case” deal…you want the “worst case” possibility. The most it might cost you under different down payment scenarios. You want your lender to include inspections and stuff that might not normally be in a Good Faith Estimate.

Then you need to know how much it costs to move.

If you're thinking of hiring a traditional moving company, there are moving calculators on the web that will estimate your moving expenses. There are other options, too, and you can get an estimate by making a simple phone call. Your real estate agent or loan officer will know local options and companies you can call.

Just in case you're thinking you don't know with real estate agent or loan officer to call to get this research going, look at the bottom of this page and see if (by golly!) there isn’t a phone number down there.  Or stop now, call Amanda (910.545.0450) and she will help you with the rest!

Okay, subtract the moving expenses from how much you will net from selling your home. You should still have a positive number. If so, move on to the next step.

Subtract how much the lender says it will take you to move into the new house, including down payment, closing costs, prepaid expenses, and all the other "stuff."

Hopefully, you still have a positive number. If not, don't panic. There is a lot of "fudge factor" involved here and purchases can be structured to limit the out-of-pocket cash necessary to close the deal. Or perhaps you knew you might be a little short and always intended to use savings, borrow from your 401K, or get help from family members.

Or...you might have a positive number that is fairly BIG.

If so, put that number on the left side of the page because that is "cash left over" (or it could be). It is also money that you could use to make a larger down payment or to buy new furniture or help stimulate the economy.

So the right side of the page is for calculations and reasons not to move, sort of like a right-brain vs. left-brain kind of thing. Or vice versa.

Oh. I forgot.

What about that circle you drew in the middle of the page?

(I didn’t really forget).

By the time you get through this process, you’ll know whether moving is a good idea or not. That circle is where you write your decision in big bold letters.

Call Amanda for all your real estate needs!  910.545.0450

Need to Sell Your Home? The Price Is Key!

Meeting With Realtors
So you’ve decided to sell your home and have a fairly good idea of what you think it is worth.  Being a sensible home seller, you schedule appointments with three local listing agents who’ve been hanging stuff on your front doorknob for years.  Each Realtor comes prepared with a "Competitive Market Analysis" on fancy paper and they each recommend a specific sales price.
Amazingly, a couple of the Realtors have come up with prices that are lower than you expected.  Although they back up their recommendations with recent sales data of similar homes, you remain convinced your house is worth more.
When you interview the third agent’s figures, they are much more in line with your own anticipated value, or maybe even higher.  Suddenly, you are a happy and excited home seller, already counting the money.

A Sales Practice Called "Buying a Listing"
If you’re like many people, you pick Realtor number three.  This is an agent who seems willing to listen to your input and work with you.  This is an agent that cares about putting the most money in your pocket.  This is an agent that is willing to start out at your price and if you need to drop the price later, you can do that easily, right?
After all, everyone else does it!
The truth is that you may have just met an agent engaging in a questionable sales practice called "buying a listing."  He "bought" the listing by suggesting you might be able to get a higher sales price than the other agents recommended.  Most likely, he is quite doubtful that your home will actually sell at that price.  The intention from the beginning is to eventually talk you into lowering the price.
Why do some agents "buy" listings this way?
There are basically two reasons.  A well-meaning and hard working agent can feel pressure from a homeowner who has an inflated perception of his home’s value.  On the other hand, there are some agents who engage in this sales practice routinely.
 

What Happens Behind the Scenes
If you start out with too high a price on your home, you may have just added to your stress level -- and selling a home is stressful enough.  There will be a lot of "behind the scenes" action taking place that you don’t know about.
Contrary to popular opinion, the listing agent does not usually attempt to sell your home directly to a homebuyer.  That would be inefficient.
Listing agents market and promote your home to the hordes of other local agents who do work with homebuyers, dramatically increasing your personal sales force.  During the first couple of weeks your home should be a flurry of activity with buyer’s agents coming to preview your home so they can sell it to their clients.
If the price is right.
If you and your agent have overpriced, fewer agents will preview your home.  After all, they are Realtors, and it is their job to know local market conditions and home values.  If your house is dramatically above market, why waste time?  Their time is better spent previewing homes that are priced realistically.  Additionally, Relators get paid when a house sells.  Everyone wants the house to sell for the most amount of money, (well except for the buyer,) but if it doesn't sell, the Realtor who overpriced the home has only wasted everyones time.
 

Dropping Your Price...Too Late

If you start out with a high sales price, then drop it later -- your house is "old news."  You will never be able to recapture that flurry of initial activity you would have had with a realistic price.  Your house could take longer to sell.
Even if you do successfully sell at an above market price to an uninformed buyer, your buyer will need a mortgage.  The mortgage lender requires an appraisal.  If comparable sales for the last six months and current market conditions do not support your sales price, the house won’t appraise.  Your deal falls apart.  Of course, you can always attempt to renegotiate the price, but only if the buyer is willing to listen.
Your house could go "back on the market."
Once your home has fallen out of escrow or sits on the market awhile, it is harder to get a good offer.  Potential buyers will think you might be getting desperate, so they will make lower offers.  By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received.

Interested in selling your home?  Or would you just like to know what's going on in your neighborhood?  Call Amanda for a complimentary "Competitive Market Analysis" and to discuss your options!  910.545.0450  www.AmandaParmerSellsHomes.com

What Really Makes A Real Estate Agent Valuable

Recently, an excited first-time homebuyer spent some time telling a real estate agent what she wanted in a home. They also discussed financing. Immediately afterwards, the agent took her new client out and showed her...

...two homes.

One was perfect.

Instead of making an offer right away, the buyer went home and called her friend. The friend had a real estate license. The buyer and her second agent presented an offer on the home, leaving the first agent totally in the dark.

After all, the first agent hadn't worked "too hard."

Which made me think about what really makes a real estate agent valuable, among other things.

Knowledge of inventory was near the top of the list.

It sounds boring and unexciting. Bookish, even.

You see, the reason the first agent knew which houses to show her potential client was because she had previewed those properties. That's one of those things agents do that you don't know about. They go out on their own, by themselves or with other agents, and look at property after property after property. They know what models are located where, how long they've been on the market, which ones have listing agents that are easy to work with, and more. They know all kinds of things that you don't know they know.

Not only that, the agent had been previewing properties for what "seems like forever" - so she immediately knew which houses to show the soon-to-be-excited buyer. She had been to those homes and/or model matches for those homes - for quite some time.

She knew her inventory.

The friend did not know the inventory. Otherwise, the buyer would have gone to her friend first, right?

It's like wandering around the aisles of a drug store not knowing which over-the-counter cough syrup is best for your particular ailment. Who would you rather ask? The clerk at the register or the pharmacist?

Either way, you're walking out of the store with a cardboard box filled with thick sloshy liquid.

So what you're really hiring in an agent is knowledge - and not just knowledge of inventory. Knowledge of lots of things that you don't even know you don't know. They make it seem easy, but that's because they want it to seem easy. If agents told you how hard it was, you would be even more nervous about shelling out hundreds of thousands of dollars.

After all, it is only the most expensive purchase you've ever made in your life.

But it's only a house, right?

And everyone knows that a Schedule 1 item on a termite report must be repaired prior to closing, which Schedule II items do not. And all those other little details.

By the way, the first agent and the listing agent talked to one another because she expected to present an offer shortly. No details, of course - just the name of her client and to expect the offer.

The buyer did present an offer, but with the wrong agent. This took the listing agent by surprise. Like many industries, real estate agents have a code of ethics they are supposed to obey. At the same time, agents don't always know what their clients are up to. Anyway, imagine how negotiations went, if they went anywhere at all. Plus, there were other problems that will be saved for another article.

Which isn't really the point. The point was that you hire an agent because of training, knowledge, experience, problem-solving ability, connections, their ability to communicate...and lots of other neat stuff.

The moral I promised?

You don't know what you don't know.

Which is why you hire people that will cover the blanks you know about, as well as the ones you don't. That is where you find the true value of a real estate agent.

Call Amanda for all your real estate needs!  910.545.0450  www.AmandaParmerSellsHomes.com

4 Common Mistakes by First Time Homebuyers

Being a new home buyer can be a scary and worrisome experience.  Not only is buying a home a huge decision and investment, it’s also a new world for potential buyers.  New terms, new ideas, and new paradigms all combine to make the experience one that, without a bit of guidance, can become very intimidating.  Being in the market for a new home for the first time doesn’t afford much in the way of experience.  Hopefully, what others have learned can help you not repeat these same four mistakes!

1. Spending the maximum on housing

One mistake comes when lenders qualify buyers based on their incomes and debt-to-income ratios without considering how much the borrowers spend on items such as transportation, savings, food and other necessities.

“A lot of first-time buyers are optimistic about the future and excited about buying a home, so they borrow the absolute maximum they can afford instead of allowing themselves wiggle room for a partial loss of income or for future expenses such as children,” Harrison says.

Financial experts recommend that consumers decide how much they want to spend each month on housing before meeting with a lender.

“Every buyer should create their own budget and know their limits,” says Stephen Adamo, president of Weichert Financial Services in Morris Plains, N.J.

Adamo says many first-time homebuyers experience a sizable change in their housing payments. Some new owners may go from $500 per month in rent to a monthly mortgage payment of $2,000, he says.

“You need to deal with payment shock,” Adamo says.

2. Not getting prequalified early enough

Meeting with a lender for a buyer consultation and prequalification for a mortgage should be the first step toward homeownership. Yet many first-time homebuyers wait until they are ready to start house hunting before contacting a lender.

“It’s never too early to set up a free buyer consultation with a lender,” Adamo says. “Every buyer needs to get prequalified early enough in the process so that they can make some changes if they need to or correct errors on their credit report.”

Some buyers may need to spend up to a year saving more money, increasing their incomes or cleaning up their credit before making an offer on a home.

A buyer consultation should include creating long-term financial goals and strategies for buying property, Adamo says.

3. Misunderstanding the importance of a high credit score

While most consumers know it’s important to have a high credit score, not everyone understands how costly a low score can be.

“All mortgage lending is done with a tier of interest rates and terms based on consumer credit scores,” Harrison says. “A credit score of 720 or above will earn you the best rates and can potentially save you thousands of dollars.”

A score of 680 to 720 can get you good mortgage rates, while a FICO score of 620 is usually about the lowest score to qualify for most loans, Harrison says.

Consumers should learn about credit scores the minute they start working, Harrison says. Many Websites provide information about how to improve your credit score.

Even after a mortgage approval, consumers must avoid applying for new credit or taking on new debt, Adamo says, because a second credit check is now often required before settlement.

4. Choosing the wrong mortgage product

First-time homebuyers today typically opt for a 30-year fixed-rate mortgage. Their conservatism is a reaction to stories about the dangers of interest-only mortgages and adjustable-rate mortgages.

But Harrison says home loan alternatives to a 30-year-fixed sometimes make more sense. For example, buyers certain they will be relocated by their companies within five years may find a 5/1 ARM “could be a much better mortgage,” he says.

“There’s no reason to pay a premium for a product you don’t need like a 30-year loan,” Harrison says.

Homebuyers eager to build equity in their homes or who are older and want to live mortgage-free in retirement should consider a 15-year fixed-rate loan or, if they can afford it, even a 10-year mortgage to reach their goals.

Amanda has earned the Accredited Buyer's Representative (ABR®) designation through the National Association of REALTORS® to better assist and negotiate on her buyer clients behalf.  Call her today to help you purchase your home!

www.AmandaParmerSellsHomes.com

Low-Cost Kitchen Redos!

So you've been shopping and shopping and looking at houses and at this point, you can't remember the first house you looked at, right?  We've all been there!  If you're going to the spend the money and commit to buying a house, you want it to be something you love!
But what do you do when one house has the living room and bedroom you love, but another has the kitchen you really want?  You can't just mesh them together, and you don't have time to build it.  How about considering a low cost kitchen redo?  You might get closer to what you really want, and it's relatively inexpensive to "make it yours!"

Kitchens are one of the features buyers compare most closely when they're shopping for a home.  

Replacing cabinet hardware, such as handles, knobs and hinges are a quick, DIY way to enhance kitchen space.  According to HouseLogic.com, an average kitchen is 200 square feet with 30 linear feet of cabinetry, which equates to about 40 handles and knobs.  Averaging between $2 and $20 per knob or pull, you can budget $80-$800 for this enhancement.  *Don't forget to check surplus stores, Habitat for Humanity stores and bargain websites!
Redo-ing your cabinets is like a facelift for your kitchen!  Done right, painting or refinishing the existing cabinets can cost less than $200 and leave you with a brand new kitchen!

Faucets come in every shape, style, color, and theme you could imagine to include a plethora of options for height, spouts, hoses, and folding necks.  Quality faucets start around $200 and can be a quick project that will completely change the look of your kitchen!
How about undercabinet lighting?  LED undercabinet light can have a dramatic effect for about $40.  But if you're in the lighting aisle at Lowe's, check out your other options- different types of light cast different shades and can transform your kitchen.

Typically, buyers will choose functionality over elaborate decoration.  Practical storage in the kitchen will go a long way.  Over-the door hooks, baskets in the pantry, slide shelves in the cabinets, drawer organizers, wine racks and wall hooks for pots and pans will add appeal, usually for less than $100.
Granite countertops are not always a necessary upgrade!  Laminate can mimic the contemporary look of granite at a significant discount.  On average, the cost for 30 linear feet of laminate countertop is around $1,575; the same space in granite would be close to $2,500.

If you're interested in buying or selling, I would love to talk to you about your options.  And if you would like more cheap DIY ideas to enhance the look of your home, give me a call!  I would love to chat with you about it over coffee!  I LOVE projects!

Things to do BEFORE you decide to SELL your house!

Deciding to sell your house is a big step!  Before you commit, take a look at the big picture. 

Why?  Are you moving?  Do you hate your neighbors?  Job relocation?  School district not desirable?  You don't like your house?  The reality of it is, the Jacksonville, NC housing market favors buyers right now.  Which means, you're going to have to put your best foot forward, as a seller, to make your house the most attractive and the most competitive.

What's your end goal?  Do you just want to break even?  Do you want to double your investment?  Do you just want to be done with the house?  A lot of factors can impact the outcome.  Look at your numbers.  Call me to do a comparative market analysis to show you what other similar homes are selling for, what features and concessions they offered, and what the buying trends are in the market.  We can talk it over so that you can make the most informed decision possible.

Do you have some lingering "honey do" projects?  Let's talk about that!  Some are necessary things that need to be done (i.e. replacing broken light fixtures and repainting to neutral colors) versus replacing all the appliances because you don't like them.  Most of these things won't add value to the price of your home, but they will make your home present better!  For instance, you'd buy a shiny clean car before you'd buy a beater at the same price, right?  Same concept applies to homes!

Not sure where to start?  Give me a call!  We can talk about all the major parts of it before you make any huge decisions.