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Should You Rent Or Buy A House?

July 26, 2019 by admin

Seems like everyone is buying a condo or house these days. And there are tons of shows on HGTV about renovating your home making you wonder: should you rent or buy a house? Can you even afford to buy? We’re here to help you make that decision.

Ask yourself some questions before deciding if you should buy or keep on renting. Image: Dirk Ercken/Shutterstock

Should You Rent Or Buy A House? Ask Yourself These Questions First

1. Do you plan on staying where you’re at for at least three to five years? This is an important question. If you don’t like where you live or may have to relocate for work, why buy a house? If you can’t see yourself spending at least three years in your home, you may not see any growth in your home’s value before you have to sell and move. Can’t envision yourself living in the same home or town for at least five years? You may be better off renting.

2. Have you paid off all your debts? Make sure you’ve paid off all student loans, credit card bills and any other loans before buying a house. You’ll need to show you have a low debt-to-income ratio to qualify for a mortgage. And homeownership is scary at first. The last thing you want to worry about is covering loans, a mortgage and household expenses, too.

3. How’s your credit score? If you plan on taking out a mortgage, a good credit score is essential. Make sure you have the best possible score before you start house hunting. For more info on improving your credit score, check out myFICO.

4. Do you have some savings? You’re going to need a good amount of money set aside to buy a home. You’ll have to put down at least 3% as a down payment. And ideally, you’ll put down 20% to save yourself from having to pay monthly PMI (private mortgage insurance) to cover your lender if you stop paying your mortgage. You’ll also need to show you have enough money put aside in an emergency fund that would cover your mortgage and living expenses for at least three months should you lose your job.

If you’re debt-free, settled in your location and have savings, then you may be ready to be a homeowner. Here are five reasons why it’s better to buy than rent:

Your home is likely to grow in value over time. Image: ITTIGallery/Shutterstock

1. It’s An Investment

Owning your home or condo is usually a good investment. Every payment you make on your mortgage means you’re one month closer to owning your house free and clear. And then there’s home appreciation. Your home will most likely increase in value over time. What you buy today for $250,000 could sell for $300,000 or more later.

2. Tax Write-Offs

Many homeownership costs are tax-deductible. By the time you write off the allowed deductions, you may pay less for owning your home than if you’d rent it. Here are some home items you can write off or deduct from your taxes:

Property taxes
Mortgage interest
Loan points
A home office

3. Owning May Be Cheaper Than Renting

Many major U.S. cities are hot right now, making it very expensive to rent. In a hot rental market, it may be cheaper to buy a home, especially if you can live just outside the most sought after zip codes in the area.

4. Privacy

Owning your own home gives you a level of privacy you don’t have when you rent. First off, no more landlord on your back. And your neighbors are hopefully removed enough that you don’t hear every little conversation (or their footsteps upstairs at midnight).

Owning your own home means you can decorate it however you’d like. Image: Anna Marynenko/Shutterstock

5. You Can Renovate!

The best part of owning your home is that you can finally apply all the skills you’ve gained watching HGTV and reading Freshome to renovate your new home. Decorate in whatever style you love. Paint the walls in any color you’d like — it’s your home.

The post Should You Rent Or Buy A House? appeared first on Freshome.com.

When is a Lowball Offer a Good Idea?

July 23, 2019 by admin

Let’s face it: buying a home is like a game of chess, and each person is trying to outwit the other. You want to purchase the house for the least amount of money and the seller is trying to get as much as possible out of the deal. So when should you use a lowball offer as a part of your strategy?

Freshome asked several top realtors to weigh in on this topic.

Sometimes, it’s better to receive than to give. Image: jimfeng/Getty Images

The holidays

Apparently, sellers are in a more generous mood during the most wonderful time of the year, according to Shelton Wilder, a Beverly Hills, CA-based realtor at the Douglas Elliman Real Estate Company. In fact, she remembers one buyer who put in a lowball offer on Christmas Eve.

“The holidays and the fourth quarter are slower, but sellers tend to panic every year at this time,” Wilder says. “If a house has been sitting a while without offers, then it can create the perfect scenario for a buyer to pick up a property for a steal.” Also, she says that some sellers want to close the deal before the end of the year for tax purposes.

The longer a house sits, the better your lowball offer looks. Image: Haywire Media/Shutterstock

The home has been on the market for a while

If a home has been sitting too long, this can also be a good time to lowball an offer. A home will generally sell for asking price or over in the first seven days, according to Tom Matthews, part of the Tom and Joanne Team at Gibson Sotheby’s International Realty. “After 8 to 45 days on the market, a home is likely to sell for asking price.” But after this time frame, Matthews says a home will usually drop in price and this is an appropriate time for a lowball offer.

And Jenny Okhovat, a realtor with Compass in Los Angeles, CA, agrees. She says that a lowball offer is only a good idea when the home has been sitting on the market for quite some time, or if your realtor recommends it. “Your realtor should work with the opposing realtor — unless the home is FSBO — to come to a conclusion about whether or not the lowball offer will be considered by the seller,” she explains. “A lowball offer is only a good idea when there are no other offers on the table. Otherwise, it may be used against you to create a ‘multiple offer’ dynamic.”

A house that’s not in top shape won’t get top price. Image: ronstik/Shutterstock

The home needs repairs

If the home needs some work, the seller should be expected to lower the price accordingly. And the more work the home will need, the lower your offer can be. “If the property is in a state of significant disrepair and the seller doesn’t have the resources to fix the property or bring it up to market standard, the sellers are going to receive offers that are much lower than just the cost of fixing up the property,” explains Brett Jennings, Founder of the Real Estate Experts in the California Bay Area. “Buyers are going to factor in the price of their profit margin (if they’re an investor) or the time and hassle of renovating (if they’re a homeowner).”

Homeowners soon tire of going through the selling process. Image: Jon Bilous/Shutterstock

There are failed attempts to sell

Sometimes a house is on the market for a while because a sale didn’t go through. “It can be helpful to look for properties that accepted an offer and went into contract, but then the transaction fell apart and they came back to market,” Jennings says. “These sellers are often more motivated to accept lower offers.” If there has already been one failed attempt at a sale, he says they may be more open to negotiating the second time around. In this case, a lowball offer could be a good option.

Crime scene homes aren’t popular. Image: Calkins/Shutterstock

The home has a bad history

It’s not only people who can have a bad reputation. Not many people will want to live in a home that’s gained notoriety for an unpleasant reason. “A home could be unmarketable if it was the site of a highly public murder,” says Phil Georgiades, Realtor, Mortgage Expert and Chairman of FedHome Loan Centers. Also, if there was a bad fire or the owner chose not to rebuild after a hurricane, some buyers could be apprehensive. This could help your lowball offer get accepted.

Homeowners may overestimate the value of their home. Image: Artazum/Shutterstock

The home is overpriced or it’s an extreme buyers’ market

If the property is desirable or priced fairly, Georgiades doesn’t think a lowball offer is usually a good idea. “However, if the property is overpriced, a lowball offer may make sense,” he says. And Georgiades adds that sometimes sellers tend to overprice their homes. “If your agent appraises the home you are looking at and it is overpriced, it may make sense to write a lowball offer for fair market value,” he explains.

“An extreme buyers’ market is actually pretty rare,” Georgiades says. “In the past 20 years, there has almost always been a housing shortage.” However, this may vary depending on your region of the country — or even by city or part of town. If you are trying to purchase a home in an extreme buyers’ market, a lowball offer will go over better.

Homeowners on the verge of foreclosure are likely to take your offer. Image: olikoff Photography/Getty Images

You know the seller’s motivation

If you can learn a little more about the seller, you may be able to determine the reason why the home is on the market. Then, you can decide if a lowball offer could be appropriate. “I cannot stress enough the importance of dialogue with the seller or seller’s agent to understand the seller’s needs and motivation,” advises Joanne Taranto of the Tom and Joanne Team at Gibson Sotheby’s International Realty.

“Do they need to move to a new state for a job or to care for an elderly relative? Did they inherit the property but don’t have any interest in holding onto it? If you can identify what is important to the seller, you may be able to negotiate a better deal,” she says.

Jennings agrees. “The prospect of accepting a lowball offer is one that happens either because the seller is under some sort of stress and has a pending event like a foreclosure,” he says. “Or they don’t have the time or resources to bring a property to market.”

A lowball offer can be offensive. Image: Fancy/Veer/Corbis/Getty Images

The risks of a lowball offer

All that said, one of our realtors is against a lowball offer under any circumstances. “Talk about starting off on the wrong foot,” laments Vivian Cobb of Colorado Springs, CO-based Cobb Real Estate. “A lowball offer is usually contrary to the spirit of trying to get the deal done.”

Cobb explains that getting to the finish line of a real estate transaction is a team sport. “If the other team is starting out by being insulting, it doesn’t usually go well from there,” she warns. However, Cobb also says that this practice may vary by market. “In California, for example, lowballing is the norm. But in Colorado, it’s considered bad form.”

And while Okhovat believes there is a time for lowball offers, she also thinks buyers should be cautious. “You don’t want to lowball a property that you really want,” she says. “[A lowball offer] can only be for a property you’re willing to lose out on if your offer is not accepted. “

The post When is a Lowball Offer a Good Idea? appeared first on Freshome.com.

How to Increase Your Chances of Winning a Bidding War

July 12, 2019 by admin

You’ve found the house you love. But, apparently, so have other buyers — and it’s the same house. When several buyers want to compete for the same property, how do sellers choose among offers? What can you do to increase your chances of getting the home? Freshome asked several experts to share the secrets of winning a bidding war.

An amicable relationship can work in your favor. Image: Haywire Media/Shutterstock

Get to know the listing agent

We’re not recommending that you schmooze — although it might help. “Befriending the listing agent is a great idea,” Tracey Hampson at Realty One Group in Valencia, CA, says. “I always make a point of speaking with the listing agent and asking who she would like to use for services like escrow and title. Here in California, it is the listing agent who normally chooses. And I ask if there is anything specific the seller is looking for,” Hampson explains. She says you can get a lot of information out of a phone call.

Tory Keith, President of Natick, MA-based real estate firm Board and Park, agrees. “A good buyer’s agent will always have a conversation with the seller’s agent to get a feel for how competitive the situation is, whether there are terms besides price that are important to the seller and whether there will be a second opportunity to present best and final offers.” However, if the home is FSBO, you and your agent will need to get to know the seller since no agent will be involved on their end.

Make sure your agent is up to the task. Image: Jeff Manes/Getty Images

Choose your own agent carefully

It’s important to get to know the seller’s agent, but make sure you know your agent as well. “An agent’s reputation can and does have an effect on the offer process,” says April Macowicz, Broker Associate and Team Owner at The MAC Group RE in San Diego, CA. “If your agent has a reputation for being difficult, you can say goodbye to that home, especially in a bidding war,” she warns.

Try to accommodate the seller. Image: 10’000 Hours/Getty Images

Make the seller’s life easier

If you can give the seller more time or reduce their level of stress, you might give yourself an edge. “One way to make your offer stand out is by either removing the inspection contingency or reducing the timelines on those,” Macowicz says. “If you can get away with having a 5-day inspection period, that looks a lot better to the seller than a 17-day inspection period.”

This is why it’s important to meet with the seller’s agent to find out what the seller cares about. “There is nothing worse than writing a full price cash offer to close in 30 days when the seller needs 90 days to move out,” says Tom Matthews of the Tom and Joanne Team at Gibson Sotheby’s International Realty.

And letting the seller set the moving date is another way to gain an advantage. “Put in the contract that you will accommodate the seller’s closing/moving date,” advises Sissy Lappin, Founder of ListingDoor.com.

Don’t underestimate the power of offering more money. Image: Don Farrall/Getty Images

Money is important

Of course, a higher offer is usually the first thing that buyers consider. And Jon Tetrault, a team director at The Nick Slocum Team at Slocum Realty in Rhode Island, offers some advice on how to create a compelling offer.

“Make sure you run the numbers to be sure that the neighborhood supports the price you’re offering, but the higher the offer, the better your chances,” Tetrault says. “I always suggest buyers go slightly above an even number.” So, if the home is listed at $300,000 and his buyers want to offer $302,000, Tetrault suggests offering $302,250. “That will give them a leg up in the event that someone else offers $302,000,” Tetrault says.

Another tip is to make the offer as clean as possible, Hampson says. “Don’t ask for any money towards closing costs, etc.”

Be charming. Image: MirageC/Getty Images

Attach a short note

Lappin also recommends including a short note on what you love about the home — like the architectural details — and why you want to make it your own. “I did this on one home that had seven offers and the seller was adamant the ‘nice lady’ was going to get her home,” Lappin says.

However, Vivian Cobb of Colorado Springs, CO-based Cobb Real Estate is against including notes and letters. “Remember, this is a business deal and it’s about what makes sense for the seller,” she says. “Keeping emotions out of it is good advice.”

The post How to Increase Your Chances of Winning a Bidding War appeared first on Freshome.com.

Zillow Offers is a New Way to Sell Your Home

June 27, 2019 by admin

Zillow polled their readers and uncovered that “homeowners want a faster, simpler selling option.” Zillow Offers is their answer. The service by Zillow basically buys your home on your schedule in as little as two business days (if you qualify).

Zillow wants to make the home selling process fast and simple. Image: PureRadiancePhoto/Shutterstock

How Zillow Offers Works

The process starts online with a simple questionnaire to answer basic info about your home, like:

The number of bedrooms and bathrooms
Square feet
Major changes you’ve made that aren’t in the public record
The date by which you’d like to sell

Next, you’ll submit current photos to help the agent price your home accordingly.

If your home qualifies, you’ll receive an email offer within two business days. This is a cash offer! You then have three days to respond to the offer or it expires.

According to Zillow, you’ll receive an offer via email in two business days. Image: fivepointsix/Shutterstock

If you accept the offer, a Zillow Offers Advisor will schedule a home inspection and recommend a licensed real estate agent to represent you, if you don’t have one already. Zillow may reduce the price after the home inspection if the home wasn’t represented as they expected or if it needs repairs. You can refuse their revised offer if you don’t like it.

Once you sign the sales contract, you can close on your home sale anytime between five days and 90 days — your choice.

This new service streamlines the home selling process. Image: Stasique/Shutterstock

Zillow Offers is currently only available in certain markets: select zip codes in Atlanta, Charlotte, Dallas, Denver, Houston, Las Vegas, Phoenix, Raleigh and Riverside. They plan to add Miami, Minneapolis, Nashville, Orlando and Portland by fall.

According to this image from Zillow, it looks like the service will expand to include offers from other investors. Image courtesy of Zillow.

Should You Use Zillow Offers?

This is a great no-obligation service if your home has been listed for a while and not getting any offers. Or if you’re in a hurry to move and don’t have the time to wait for the listing, open houses, offer negotiations and closing process of traditional home sales. Or if you need cash fast.

It’s too soon to know if Zillow’s offers are competitive with the actual market. But since the whole process is no-obligation, it wouldn’t hurt to try it out.

The post Zillow Offers is a New Way to Sell Your Home appeared first on Freshome.com.

Here’s How Much It Costs to Sell Your Home in 2019

June 17, 2019 by admin

Zillow, the real estate database, just released a report showing the hidden costs of selling. So how much does it cost you to sell your house in 2019? Get ready to spend about $21,000. Don’t balk at the cost yet, though. Some of that cost goes toward home improvements and Zillow found that “sellers who make improvements to their homes are more likely to sell for more than their asking price than those who don’t.”

When you’re selling your house, here’s where your money will go:

A large portion of the selling cost goes to closing costs after your home is sold. Image: wutzkohphoto/Shutterstock

Closing Costs, $14,281 on average

The bulk of the expense in selling your house is the closing costs, which include real agent commissions, sales taxes and state transfer taxes. This figure is an average. The actual amount is a percentage based on the home’s sale price and can vary widely. Here’s a list of average closing costs throughout the U.S. from greatest to least:

San Jose, CA: $76,015

New York, NY: $28,090

Denver, CO: $24,443

Austin, TX: $18,522

Las Vegas, NV: $18,163

Philadelphia, PA: $16,296

Phoenix, AZ: $15,924

Dallas-Fort Worth, TX: $14,580

Tampa, FL: $14,291

Atlanta, GA: $13,286

Houston, TX: $12,342

Cleveland, OH: $9,046

The one positive of this expense is that it doesn’t come out of your pocket upfront. It’s usually deducted from the home sale’s proceeds.

Your house only has one shot to make a first impression, so make it a good one. Image: Artazum/Shutterstock

Home Improvements To Get The Home Ready For Sale, $6,570 on average

This amount is the average for sellers who hire professionals for their home updates. For those who wonder how much it costs to sell your house and want all the details, here is the $6,570 in home improvements, broken down by category:

Exterior painting: $2,600
Home staging: $1,805
Interior painting: $1,245
Local moving to the new home: $475
Full-service lawn care: $145
Carpet cleaning: $140
House cleaning: $160

Based on these projects, it looks like curb appeal plays a big role in successfully selling your home. If your time and budget are limited, it’s probably best to focus on presenting a clean, crisp home that is nicely but neutrally furnished to appeal to most buyers.

Home improvement costs will vary by market. The report found that sellers in Sacramento spent about $7,800 compared to Phoenix home sellers, who could spend around $4,000 for the same projects. And DIY curb appeal projects may help a home seller save money.

Sellers that make some upgrades before listing their house are more likely to sell their home successfully (and for more money). Image: Andy Dean Photography/Shutterstock

If you’re selling this year, get started on updating your house now. Spruce up your garden and lawn, plant new flowers and freshen up the space both inside and outside with paint. As you get closer to listing your house, start decluttering and storing your personal items so that your house shows best. Don’t forget about the details like clean carpets, walls and windows.

The post Here’s How Much It Costs to Sell Your Home in 2019 appeared first on Freshome.com.

Home-Buying Millennials are Obsessed with Lawns and Gardens

June 13, 2019 by admin

The U.S. Census Bureau says homeownership is up over last year. In their words, “the national homeownership rate has risen to 64.4 percent.” And Realtor Magazine says that jump is “largely attributed to the rise in new, first-time homebuyers.”

These first-time homebuyers are millennials and they don’t care about a fancy eat-in kitchen. Instead, they’re obsessed with lawns and gardens.

A survey from the National Association of Landscape Professionals found that 79 percent of U.S. homebuyers agree that a spacious and manicured lawn is an important feature in a home. And here’s the kicker: millennials, who currently make up the largest percentage of homebuyers, ranked the lawn as the top priority when house hunting.

Lawns, gardens, patios and outdoor living are the #1 priority for house-hunting millennials. Image: Artazum/Shutterstock

Sure — a large, open kitchen and a huge master bedroom with custom his and hers closets are all nice. But for a large portion of the buyer’s market, it’s all about the perfect lawn and a spacious, landscaped backyard.

If you’re listing soon, make sure you set aside some money to make sure your patio and gardens look their best. Here are four quick landscaping tips for selling your home:

Set the stage outdoors with a furniture setting that enhances your outdoor space. Image: Photographee.eu/Shutterstock

1. Don’t Just Stage Indoors; Stage A Small Outdoor Setting, Too

Buyers like to envision what their life will be like in your home. Find a spot in your backyard or patio and add a small outdoor table setting or lounge area. Complete the look with hanging lights, an outdoor area rug or colorful outdoor throw pillows.

A fresh, vibrant lawn adds a new home feel to yours. Image: nazarovsergey/Shutterstock

2. Freshen Up Your Turf

If your lawn isn’t the best one in the neighborhood, it may be a very good investment to renew or replace your old lawn before listing your house. A fresh, green lawn looks inviting and gives your home a “new” feeling. Depending on the size of your outdoor lawn area, fake turf may be in your budget and would be a low-maintenance option for year-round green curb appeal.

Planted flowers are an easy way to add pops of colors to your garden. Image: 1000 Words/Shutterstock

3. Plant Flowers

Flowers are inexpensive and easy to plant. They add a splash of color to your garden and last long enough to get your home sold.

Add LED lighting to your stairs, pathways and terrace areas. Image: Photographee.eu/Shutterstock

4. Add Lighting To Your Garden And Outdoor Spaces

You don’t have to spend a lot on electrical and wiring to light your lawn and garden. There are plenty of solar-power LED outdoor lights that are as simple as inserting a stake into the dirt. Focus on lighting a path, uplighting a large tree and lighting a sitting area or patio table setting.

Even if you’re not selling a home, get ready to embrace the outdoor living trend. Millennials have spoken and it looks like gardening and outdoor entertaining will be hot topics for a while.

The post Home-Buying Millennials are Obsessed with Lawns and Gardens appeared first on Freshome.com.

What No One Tells You About Flipping Houses

May 15, 2019 by admin

Learn the secrets of house flipping. Image: Perry Mastrovito/Getty Images

We love binge-watching house flipping shows while dreaming of tackling a flip of our own. House flipping can be fun, and sometimes profitable, but your favorite shows don’t tell you everything you need to know before you jump into your first flip. Here’s the lowdown on what you should know before you take on a house flip:

1. It can take a long time to find a house

Flippers and investors are scouring many real estate markets right now, looking for a good property to flip. There are entire companies dedicated to flipping homes. These investment firms employ scouts to find homes to flip in most markets. Expect to make several offers and wait months to find the right home.

2. You don’t need a weekend seminar to learn how to flip a house

House flipping seminars can be valuable and give you lots of inspiration, but even if you can’t attend one, you can still flip houses. You’ll still need to learn everything you can before you start flipping homes, though. Watching HGTV can inspire you, but you can’t see all of the details that go into a successful flip. You’ll need to learn about financing, permitting and marketing before your first project. If you surround yourself with professionals, they can provide you with knowledge that you can use on future flips.

3. A standard mortgage isn’t used for house flipping

When you’re ready for your first flip, you’ll need “hard money.” Potential flippers often ask online if they can use a long-term mortgage for flipping a home. The answer is “no.” Standard mortgages are structured and priced for long-term financing. You’ll need a loan that is designed for a house flip. Hard money lenders and investors are often project-based, rather than credit-based, so it may be easier to qualify for hard money as long as your potential flip meets their criteria.

Math is an important part of house flipping. Image: Natee Meepian/Shutterstock

4. Flipping a home is all about math

Be prepared to explain the ARV (after repair value) when you’re applying for a loan for your project. It won’t matter how amazing your vision is for the finished project; investors are strict about the bottom line. Your flip project must come in within that investor’s numbers or you won’t have a deal.

5. Timing is everything when you’re flipping a house

Your hard money loan can have a 6-month to 1-year end-date, after which you may incur penalty interest. Having an attorney review your contract can prevent expensive surprises later on. Unexpected construction hiccups are commonplace and permits can take a long time. Before you sign a mortgage with a short maturity, check with the local building authority to see how long the wait will be for permits. It’s not unheard of to experience a 6-month wait for permits in some areas.

6. Be prepared to account for every cent you spend on your flip

It’s crucial to keep your receipts, use a project tracking app and stay current on your budget. Your lender will ask for this information several times during your project as they release more funds to you. Spreadsheet skills are especially valuable for home flippers. Having detailed information on expenses and loan balance can help keep your funding flowing through each phase of the project.

Learn what buyers want before you plan your house flip design. Image: Artazum/Shutterstock

7. Step into the home buyer’s shoes

Buyers love neutral palettes and homes they can move right into, but don’t be a carbon copy of every flipped house in your market. For a few years, every flipped home seemed to have an aqua front door — now yellow is the most common color. Your goal as a house flipper is to create a home that doesn’t feel like a flipped home. If you have to make choices when you’re creating your budget, bath and kitchen remodels are buyer favorites.

8. There will be surprises

You won’t know everything about your home until you open a wall or remove flooring, but don’t let surprises derail your flip. Even in the most simple cosmetic flip, you will encounter complications. Make sure your budget has a contingency for surprises. Work to run your project efficiently so that you can handle whatever comes your way. You can weather any complication with a positive attitude and laser-focus on your long-term goal.

Choosing the right materials is crucial to a successful house flip project. Image: Severija/Getty Images

9. Your home’s tile work is more important than you think

Many beginning flippers miss the mark with their tile choices and installation. Choosing attractive tile for the kitchen and bathrooms can contribute to your flip’s buyer appeal. This is not the time for elaborate tile designs, crazy colors or to express your artistic vision. If you’re not experienced setting tile precisely, hire a pro to help. Buyers want a home that is move-in ready and don’t want to be faced with the expense and mess of redoing the tile.

10. Set a realistic budget

Make room in your budget to include specialty contractors if needed. (They’re usually needed on most projects.) Make sure you understand the laws in your area for permitting and using licensed contractors for some tasks, as it can cost you money and time. Hard money lenders will require you to submit a detailed budget and estimate of the work you’ll be doing, so be ready to pay a contractor to write this up. Their experienced eye can help you see exactly what needs to be done.

11. Flipping houses isn’t for everyone

If you’re not ready to take on a house flip, you can still use the same ideas and strategies to sell your own home. Approaching your home as a house-flipper would, you can create a fresh look that buyers will notice. Visiting open houses and model homes can give you inspiration for changes you can make in your own home.

The post What No One Tells You About Flipping Houses appeared first on Freshome.com.

Planning on Selling your Home? Here’s the Best Time to List Your House — and It’s Soon

April 2, 2019 by admin

Zillow, the online real estate company that keeps a database of nationwide sales, just published a report with insights on the best time to sell your house for the most money. If you’re thinking about listing, it’s time to take action. The best time to list your house is the first half of May. Here’s why.

It’s time to prep your house to list for the biggest profit and fastest sale. Image: Andy Dean Photography/Shutterstock

The report explains, “U.S. homes listed for sale in early May sell for $1,600 more than the average listing throughout the year.” Not only are you likely to sell for more money if you list your home in May, but you’re also likely to sell quicker. An average of six days quicker, in fact.

Zillow is quick to note that these numbers and time frames are averages. They break down the numbers further:

In the Twin Cities area, they sell for about $4,900 more than the median local home price
In San Jose, California, $18,900
And in Chicago, $3,300

Other cities do better listing in early June:

In Columbus, Ohio, $2,900 more
In Seattle, $7,500 more

Zillow also found that Saturday is the best day to list. The report says, “Saturday listings get the largest number of views by users on Zillow within the first week of listing.” And if Saturday isn’t possible, Friday also comes in strong with “the most views after a week in 10 of the top 35 markets.” Although realtors love Tuesdays for realtor caravans, Tuesday is the worst day to list your house, with as much as a 20 percent decline in page views compared to Saturday.

List your house on a Saturday to get the most buyer interest. Image: sirtravelalot/Shutterstock

Don’t wait for winter to be over before you start to prep your house for sale. You may miss the sweet spot to get your house sold faster and for money. Here’s a quick checklist of what you can do so you don’t miss the best time to list your house:

Start prepping your house in winter for a spring sale. Image: Artazum/Shutterstock

Start meeting with realtors to find one who’s the best fit for you
Make a checklist of repairs and upgrades (like fresh paint and adding to your home’s curb appeal)
Start budgeting for maintenance and repairs
Start decluttering and de-personalizing your home
Look into a storage unit for personal items so your home is clutter-free when you list it

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When Buying a Fixer-Upper, Where Should You Draw the Line?

March 22, 2019 by admin

When you find a great fixer-upper, it can be difficult to determine if you should put an offer. You want to restore the home to its natural beauty — especially if it comes at a good price. However, you need to weigh the good, the bad and the ugly before making a decision.

Weigh the pros and cons of purchasing a fixer-upper. Image: Hero Images/Getty Images

“Fixer-upper, remodeling and design shows have attracted large audiences and have romanticized the process to the point that buyers and homeowners believe that it is not a big deal to create their dream home,” says Karen Kostiw of Warburg Realty in New York, NY. However, she says these reality shows don’t provide the guidance you need to decide on a fixer-upper. If you’re transforming your basement, adding rooms and making other changes to the home’s footprint, there’s a lot to consider.

The advantages

You can create the home of your dreams with a fixer-upper. Image: zazamaza/Getty Images

“One of the most important factors when considering a fixer-upper is whether you can customize the home to your design aesthetic and functionality needs at a lower purchase price than an already renovated home,” Kostiw says. “Typically, you can purchase a larger home with the same purchase budget [when you choose a fixer-upper]. That home can be purchased in a more desirable neighborhood due to lower cost,” she adds. Kostiw says that today’s buyers are more likely to want new or updated homes. There’s less competition if you want to buy a fixer-upper.

The ability to create the home you want in a desirable neighborhood can’t be overstated. “The homeowner has control of the entire process. As long as it’s planned ahead, much of the home can be customized to the exact needs of the homeowner, from adding architectural details to custom cabinets and flooring to an open floor plan,” says Brad Little, President of Case Design/Remodeling in Charlotte, NC. And while it may initially seem like a daunting task, he says it really isn’t. “A remodeling firm or contractor can help you plan your whole house remodel from blueprints to final presentation.”

The price factor

Assume that you’ll go over budget. Image: Hanohiki/Shutterstock

When buying a fixer-upper, you’re competing in a different arena. “Fixer-upper purchasers must compete with builders and investors, which will drive up the purchase price,” Kostiw explains. And she says you may need to be a cash purchaser since some lenders will not approve a fixer-upper property.

Kostiw also says you should prepare to spend at least 20 percent over budget during the renovation. That’s why you need to create a fixed budget before work begins. “Be firm on the final cost you’re willing to invest before renovations begin or the project can quickly get out of control,” Little warns.

He also recommends knowing and prioritizing your needs. “Remodel for your must-haves first, and then your maybes,” Little says. “In a fixer-upper, it’s tempting to want to do everything immediately. But starting with the must-haves will give you a better idea of what you could do without.” For example, your heart may be set on a farmhouse sink. But, according to Sara Cannon at House Heroes, you may not be able to preserve the existing cabinets with this type of sink since it requires a cutout.

And when the renovation is over, there are other long-term expenses to consider. “Fixer-upper purchasers often do not consider that their real estate taxes will increase based upon new assessed post-renovation value, shocking their all-in monthly budget,” Kostiw says.

The time/money/inconvenience factor

Delays are inconvenient and costly. Image: skynesher/Getty Images

Depending on how extensive the renovations are, it could take a while. So consider the time factor in your decision. “The purchaser must be prepared for long and expensive renovations and longer timelines than originally planned,” Kostiw warns. “Often, if a large amount of work is required on a home, a purchaser may not be able to move in until work is complete, which could take six months or longer,” she says. Would you have somewhere to stay if the home is uninhabitable? Would you be able to juggle two mortgages, or a mortgage and rent payment? What about living with your parents or in-laws for several months?

The fixer-upper shows fit projects into 30-minute or 60-minute time frames, so they don’t cover everything that goes into renovating a house. “Many of the shows do not highlight the permit process or the reality of workers not showing up, which delays a project timeline,” Kostiw says. And these delays create a ripple effect. “The expense of labor and labor delays, product changes due to construction materials out of stock or a serious unexpected issue that arose on the job site could contribute to costing more than buying a new or already renovated home,” she says.

Your home may be uninhabitable during the reno. Image: Hero Images/Getty Images

Remodeling on your own

And if you plan on remodeling without the help of contractors or a remodeling firm, Little says it can be almost overwhelming. “Signing on the dotted line is just the beginning since all of the labor and project management responsibilities fall on the homeowner,” he says. “If any surprises come up that weren’t found in the inspection, the homeowner is responsible for addressing them, either personally or through a contractor/remodeling firm.”

There are other inconveniences that could prove to be costly. “If there’s a lot of drywall work involved, there will be drywall dust everywhere,” says Shawn Breyer, Owner of Breyer Home Buyers in Atlanta, GA. If you or your family members have asthma or allergies, you might not be able to stay in the home.

“Also, renovating the bathrooms will leave you using the bathroom across the house or without a useable bathroom for a few days,” Breyer adds. “Rewiring the house can leave you without power in portions of your house for weeks. So make sure that you’re prepared to live in a construction zone or have plans for living somewhere else.”

Knowing When to Draw the Line

Don’t over-improve for your neighborhood. Image: Ceneri/Getty Images

The key to successfully renovating a fixer-upper lies in the ability to envision the end result before you start, according to Associate Broker Amber Ketchum at the Get Happy at Home team of Coldwell Banker Bain. “You must weigh the pros and cons before deciding if something is worth it or not,” she says.

For example, if you have to move walls or do a complete add-on, this will dramatically increase the cost, according to Chelsea Allard, VP of Design at Case Design/Remodeling in Charlotte, NC.

“Plumbing can also create large snags in the cost or process, so it is essential to find out where the plumbing already is and know where you want to add plumbing,” Allard says. For example, if you want to add a bathroom with a soaking tub on the second floor — but on the opposite side of the house — she warns that this will increase your reno costs.

Also, you don’t want to over-improve a home. “If the home is renovated and it is over and above the value of the neighboring properties, you will never get its true value,” says Ralph DiBugnara, President of Home Qualified. “It would be best to look at the homes you like in the area and stick to some parameters when improving your home. You do not want to own a White Elephant.”

Before and after photos of a kitchen reno. Image courtesy of Case Design/Remodeling.

Making it all worthwhile

However, the end result of renovating a fixer-upper can be rewarding, as you can see in the before and after photos above. “This project was a waterfront lake house that the couple bought for the lot. When they purchased it, the previous owners had gone overboard with a DIY Tuscan theme,” explains Allard. “The clients were slowly redoing the entire house bit by bit to match it with their contemporary design style.” Allard says the company helped the homeowners to renovate the kitchen, powder room and bar.

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FSBO: Should You Sell Your Home Without a Realtor?

March 19, 2019 by admin

Who knows your home better than you do? Not only have you actually lived in it, but you know all of the home’s great features. You’ve put years of TLC into it. So it may seem like a waste of money to pay someone else thousands of dollars to sell your property. Especially if you’ve done your homework and have a pretty good idea of how For Sale By Owner (FSBO) works.

However, have you considered all of the other factors that go into FSBO? Below, Freshome takes a look at the pros and cons of selling your home without a realtor.

Advantage: Saving Money

FSBO can eliminate the middle man. Image: RichLegg/Getty Images

The most obvious advantage is the amount of money you could potentially save. “Typically, a realtor charges a 6 percent listing fee: 3 percent to the buyer’s agent, 3 percent to the listing agent, and selling by owner waives this fee,” explains Amanda Graham, a real estate agent at MacDonald/Becker/TTR Sotheby’s International Realty in Washington, DC. “Also, the homeowner is in control of the price and negotiates with the buyer for the terms they want,” Graham says.

But isn’t the homeowner in control of the price anyway? Yes, but according to Mark Cianciulli of The CREM Group in Long Beach, CA, homeowners may be influenced by their realtor’s opinion. “However, in this situation, the homeowners will be able to have complete control over pricing and can price the home for whatever they want,” Cianciulli says.

Advantage: Control

Homeowners can control every aspect. Image: tabs62/Getty Images

“When homeowners sell their own home, they can do as much or as little marketing as they wish. They have full discretion over how the marketing materials will look,” Cianciulli says.

The homeowner is the most knowledgeable person regarding the home. This, he says, puts them in a great position to communicate this information to potential buyers. For example, if you installed a new sunroom, you can explain how it helps to lower your heating bill in the winter.

Homeowners can also control the schedule. For example, you may prefer to coordinate your schedule with potential buyers to show them the home at a time that is mutually convenient. Also, you may not be in a rush to sell the home as soon as possible. Under these circumstances, Graham says the FSBO route may work for you. When homeowners have put a lot of work into their homes, such as adding architectural details, they may want to wait for a buyer with a similar appreciation.

Fred McGill, CEO and licensed agent at SimpleShowing in Atlanta, GA, believes that FSBO is a great approach for some homeowners. “For example, if you’re comfortable with the process of selling a home because you’ve done it once or twice before,” he says it could be an advantage to sell the home yourself at your own pace.

McGill also thinks it could be a good idea when selling certain types of properties. “In a homogeneous area — like a condo or townhome community — where pricing is similar across the entire community, this makes it easy to simply list the home FSBO and then grab the overflow traffic from other listings in your same neighborhood,” he explains.

Advantage: Legal Help is Available

You don’t have to go it alone. Image: Andy Dean Photography/Shutterstock

In addition, McGill says this method may work for people who aren’t afraid of the legal aspects of the contract. “This includes attorneys, in particular, and other folks in the legal field who are comfortable with contracts, amendments and exhibits,” he says.

If you’re not an attorney, and you’re uncomfortable navigating the legal aspects, you can hire an attorney. Jeff Van Fleet, an attorney at Woodhouse Roden Nethercott in Cheyenne, WY, says that selling your own home might seem challenging. But he believes that with the right team, it shouldn’t be a problem.

“An attorney can draft a buy and sell contract, generally for a flat fee, as opposed to the commission that real estate agents charge,” Van Fleet says. “And like a real estate agent, an attorney can only represent the interests of one side,” he explains.

“Buyers may approach the seller with offers involving a real estate agent, including a request for compensation in the form of a commission,” Van Fleet says. “As the seller, you are the master of the contract and you can choose the terms you desire, including the option not to work with an agent,” he explains. “If the buyer wants to engage the services of a real estate agent, let the buyer pay the real estate agent.”

Van Fleet says that your attorney will partner with a title company to arrange both the title work and closing. “The process is straightforward for experienced attorneys,” he says.

Disadvantage: Statistics

Realtors tend to sell homes for more money. Image: Andy Dean Photography/Shutterstock

While there are numerous advantages to FSBO, we found as many reasons why it may not be a good strategy. “The idea of saving thousands of dollars on commission by selling your own home can be tempting and, for a few, it may even make sense,” says Jo Ann Bauer, realtor at Coldwell Banker Residential Brokerage in Scottsdale, AZ.

But she thinks the majority of homeowners will lose money using this approach. “According to the National Association of Realtors, the typical FSBO sale in 2017 (the latest year with full data) was $200,000, compared to $265,500 for agent-assisted home sales,” she says. “When we do the math, it’s easy to see that even with paying a commission, homeowners, on average, earn more money from the sale of their home by hiring a real estate agent,” Bauer explains.

And homeowners might not even save as much money as they think on the commission. Cianciulli says you’re only saving money on the listing agent side. “Most homeowners think they are going to save 5 to 6 percent of the sales price, but this isn’t true in the majority of cases. They still have to offer a commission to buyer agents to bring their buyers to the home,” he says. “Additionally, many sellers are so hyper-focused on saving some commission dollars, yet they end up netting less money because they end up selling the property for less than they would have with a seasoned realtor.”

And that’s because there’s a learning curve if this is your first or second time selling your home without a realtor. “I guess the question is: do you really want to risk making mistakes that can cost you time and money on such a large transaction?” Cianciulli asks. So, what are some of the complications that can arise? “Dealing with unpermitted work, issues with chain of title, requests for repairs/price credits during escrow, financing issues and atypical financing structures are just some of the potential obstacles,” he explains.

Disadvantage: Subjectivity and Underestimating Work

Homeowners tend to be defensive regarding their home’s flaws. Image: Steve Debenport/Getty Images

There is also an emotional component involved in selling your own home. When valuing and negotiating your own home, Cianciulli believes that it’s almost impossible for sellers to be objective. And this type of emotional reaction can hurt sellers in more than one way. “As sales agents, we need to be able to reposition a property if current strategies aren’t quite working perfectly. One of the ways to know this is by getting honest feedback from potential buyers or their agents,” says Steven Gottlieb of Warburg Realty.

But if potential buyers are afraid of offending or insulting the seller, they won’t provide candid comments. For example, you may think your property is worth more because it has a large, unfinished basement. A buyer, though, may not want to pay more if they also have to transform the basement into livable space. “The selling agent acts as the buffer for this, and should be able to tell a seller helpful feedback — even if it’s unpleasant — to re-market the property by accentuating the property’s attributes and downplaying the handicaps.”

Sellers may also underestimate the amount of work required. “Just sticking a sign in your front yard will likely not generate the traffic and interest in your FSBO for which you hope,” warns Bauer. She admits that a seller can pay a flat fee to brokers to publish their home on the MLS. “However, the owner is responsible for all the marketing, photos, property descriptions, inquiries, open houses, showings and vetting of potential buyers,” Bauer says. “For most FSBOs, the time and effort it takes to move from deciding to sell themselves to realizing a successful close prove to be too much. Many end up eventually listing with a real estate agent.”

Disadvantage: Overestimating Ability to Sell

Selling a home is not as easy as it looks. Image: Ariel Skelley/Getty Images

After a lot of hard work, you may realize that you’re in over your head. In fact, this is what happened to Michael and Jessica Walden of Walden Custom Renos. The husband and wife duo had twelve years of experience flipping houses. They tried a variety of ways to sell their products, including the use of a popular sell-your-own-home website. “With the website, we had tons of viewings over a two-month period, and there were lots of questions and long visits — but not a single offer,” they told Freshome. “However, within 24 hours of listing the same house with the top selling agent in the Durham region, we had three offers from six viewings and sold for over asking.”

They admit that listing with an agent will generally cost between 4 and 6 percent of the sales price. However, they believe the results are worth it. “This comes with free advertising in local papers and online, as well as access to the Rolodex of other agents with clients ready and wanting to buy.”

And there are other potential challenges you may encounter when trying to sell the home yourself. “Our team has inherited listings from people who initially tried to sell with a limited service broker or on their own and the result is almost always the same. Most don’t sell,” according to Matt Miner, co-principal and real estate broker at the Get Happy at Home team of Coldwell Banker Bain in Seattle, WA.

For one reason, Miner says realtors are leery of homes being sold by the owner. “They are often very challenging transitions with a much higher probability of failure,” he says. “When we inherit these sorts of listings, we end up selling the home for much more than they were unable to sell.”

Other Considerations

Be sure to do your homework. Image: docent/Shutterstock

One alternative to using a traditional agent or doing an FSBO is using a company like SimpleShowing. “Our company, and several other ‘digital/online’ real estate brokers like us, offers a service that goes beyond FSBO but is less expensive than a traditional agent. With these types of companies, there are no upfront fees for sellers and they only pay $5,000 at closing,” McGill says.

Also, even though Van Fleet (as an attorney) handles FSBOs, he recommends paying a real estate agent to do a comparative market analysis. “Do not rely on website-generated estimates or county assessments to price the home as this fails to account for the real-life conditions of the market and is frequently incorrect.”

In addition, he does not recommend the legal forms of purchase that you can find on the internet. “These forms are usually a bad choice for a legal transaction such as selling a home, as they generally fail to incorporate local and state requirements — and the consequences could be dire.”

Van Fleet also provides advice on earnest money. “There is a trend in the market to make offers with a small amount of earnest money,” he says. As the seller, Van Fleet says you are in charge of the contract — and you can and should request additional earnest money.

“The earnest money often becomes the center of legal disputes, so make sure there is enough money to deter a buyer from improperly backing out of the deal, or that the earnest money is enough to cover your legal expenses if litigation is necessary,” Van Fleet advises.

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