What Exactly Do Closing Costs Cover?

A home costs more than just the sale price. For example, closing costs—which make up about 2% to 5% of the home’s purchase price—are a major added expense. Michael Hyman, a research data specialist at the National Association of REALTORS®, shares the charges that make up closing costs in a post at the association’s Economists’ Outlook blog so that home buyers can be prepared.

Lenders provide a Closing Disclosure at least three business days prior to closing on a mortgage. But buyers will need to budget for these added costs ahead of time to avoid sticker shock days before closing.

Origination fees. This is the fee charged by lenders for processing the application and underwriting it. The fee typically ranges from about 0.5% to 1% of the borrower’s mortgage. Sometimes, it’s higher for smaller loans because “the fixed costs are a higher percentage of a smaller balance,” Hyman notes.

Service charges. These include items such as the appraisal, credit report, flood determination and certificate, tax status, pest inspection, title search and insurance, and survey fees. Appraisals and surveys can cost anywhere between $300 to $500 each. Title services can add up to about $2,000, so buyers may want to shop around for that.

Transfer taxes and recording fees. Transfer taxes vary by state but can run up to 2.7% in parts of New York. “It does not matter if the buyer or seller pays, as long as the transfer tax is paid to the government, so transfer taxes can be negotiated between the buyer and seller,” Hyman writes.

Escrow items. Homeowners insurance, property taxes, and primary mortgage insurance (if applicable) also are added fees. Buyers moving into a homeowners association may need to pay monthly dues for the upkeep of the community.

Hyman offers the following example for how these costs can add up: A buyer is purchasing a $275,100 home with a 5% down payment. The loan amount is $261,345. Closing costs are estimated at 2.5% of the loan value—so $6,533. The buyer made a $2,000 earnest money deposit, so they would need to bring $4,533 in cash at the time of closing. “Altogether, this means that the potential homeowner will need to have access to approximately $18,300 in cash to pay for the down payment and closing cost net of the earnest money deposit,” Hyman says.

 

Original Post Found Here: https://magazine.realtor/daily-news/2020/01/17/what-exactly-do-closing-costs-cover

Gen Z Is Up Against Millennials for Housing

The oldest members of Generation Z are entering their homebuying years, but they’re finding steep competition from millennials for a dwindling supply of entry-level homes.

“Gen Z is entering the housing market under the radar, but at a projected 65 million strong, they are going to begin making some major waves,” says George Ratiu, realtor.com®’s senior economist. “However, as the young generation launches into homeownership, it is facing strong headwinds, including competition from millennials, many of whom are entering homeownership later in life, and a marketplace largely devoid of entry-level options.”

Forty percent of Gen Z members surveyed in 2018 said they wanted to own a home by age 25, according to research from realtor.com®. They are starting to enter the marketplace: The median price of a home purchased by Gen Z buyers is $160,600, lower than $256,500 for millennials, but it is growing more quickly, realtor.com® notes in its Fourth Quarter 2019 Generation Propensity Report.

However, the inventory of homes priced below $200,000 has plummeted by 18.1% annually, according to realtor.com®’s data. Gen Z has increased their median purchase price by 11% over the past year. Gen Z is targeting smaller Midwestern and Southern markets that tend to be known as being more affordable. For example, the top three metros where Gen Z had the largest share of homeownership are Toledo, Ohio; Grand Rapids, Mich.; and Wichita, Kan.

Nevertheless, “with major generational transitions taking place across a housing landscape clouded by lack of new construction and a shortage of inventory, young Americans’ preference for homeownership is a ray of sunshine,” Ratiu says. “It stands in contrast to the rhetoric of the past decade, cataloging young people as the ‘renter generation,’ and provides ample evidence that a significant ramp-up in affordable new home building is needed to meet the growing demand.”

Gen Z chart
 

Is Professional Home Staging Worth the Cost?

   

Home staging has become a “must do” for sellers. Some 77% of buyer’s agents said home staging makes it easier for prospective buyers to visualize the property as a future home. Staged homes sell faster and for more money than those that are unstaged, according to industry analysis.

Key Takeaways

  • Home staging is the curated furnishing and prepping an uninhabited home that is for sale on the real estate market.
  • Proponents say that staging a home can increase a home’s selling price and the likelihood that it will sell quickly as it helps prospective buyers better imagine how they can use the livable space.
  • Staging, however, comes with a cost: you will have to pay the stager as well as pay for the rental for furnishings and home accents while the house remains unsold.
  • Here, we weigh these costs and benefits to see if home staging really pays.

What is Staging? 

Good staging is “a form of visual merchandising that draws on some of the fundamentals of interior design,” according to Gordon Roberts, a broker with Sotheby’s International Realty“The object of staging is to flatter the property but not be too obvious about it, like being dressed without drawing particular attention to what you’re wearing.”

Melinda Massie, the owner of a Fort Worth home-organizing firm, says that good staging lets the buyers imagine themselves in the home; shows off its good features and hides its flaws; turns weird spaces into usable spaces; creates a mood (stagers call it “emotional” staging); and makes the home look significantly better in photos.

Benefits of Staging

Staging has only recently come into prominence—20 years ago nobody worried about staging. As a post on the legal website “NOLO.com” points out, “Giving your home a good scrubbing and hiding the kitty litter was considered enough before putting out the ‘for sale’ sign. [Now] more and more home sellers in many parts of the U.S. enlist the services of home stagers.” That makes it very likely your property will be competing with homes that have been professionally staged. In addition, the huge popularity of HGTV shows has heightened buyer expectations.

A stager can help with your online listing, too. A staggering number of people—95% according to a National Association of Realtors (NAR) report—use the Internet during their home search. That means that your home had better show really well online. Staging and photos by a professional can help you do that—and keep your home off Terrible Real Estate Agent Photographs.

Consider the return on investment. As Sid Pinkerton, a New York City-based stager, points out, if you found a financial planner who could give you a return on investment (ROI) of 5%, 10%, or sometimes as much as 20%, “wouldn’t you think they were a genius? Well, that’s what a good stager can do.”

How Staging Affects Time on Market

The Real Estate Staging Association (RESA) has a staging savings calculator that lets you figure out how much time and money (mortgage payments, carrying costs, etc.) to save if you stage your home before listing it. Its “Consumers Guide to Real Estate Staging” reports that homes that had not been staged before listing sat on the market an average 143 days.

Once these homes were staged, they sold in 40 days. Homes that were staged pre-listing averaged 23 days on the market. You can expect differences from state to state—in California homes sold five times faster, in Oregon seven times faster—but ”faster” is the key word here.

 

How Staging Affects Sale Price

According to the NAR report, 58% of sellers’ realtors believe that buyers offer more money for staged homes (29% think they offer 1% to 5% more; 21% put the increase at 6% to 10%; 3% put it as high as 20%). Only 14% of the realtors didn’t feel staging had any impact on a home’s selling price. Home Staging Resource, an organization that offers training and resources to stagers, is even more bullish on staging (as you’d expect): Its website states that in a survey of 3,500 staged homes, 46% sold for 10% more than they would have unstaged.

 

Ari Harkov, a broker for Halstead Property, cites another potential result of good staging: If you use your own furniture and the staging makes it look really good, sometimes the buyer will ask to buy the furniture, too.

 

The Cost of Staging

This is one of those “it depends” situations. It’s not possible to put an exact price tag on staging since there are so many variables: the state and city where the property is located; whether it’s a vacant property or one that’s being lived in (vacant properties really do need to have some furniture added because, as realtor Sissy Lappin says, “Seeing a vacant house is like looking at yourself in the mirror naked – you see every flaw!” ); whether you want a stager to do a walk-through and write a report; whether you want a whole house do-over using your own furniture or some supplied by the stager; or whether you want all rooms done or just the living room and the kitchen.

 

Some stagers charge by the hour, others have a set fee. Be sure to be clear about all terms of any contract you sign such as initial fee, timing and additional costs including furniture rentals.

 

In the last few years a new category of staging—virtual staging in which furniture and accessories are photoshopped into rooms—has appeared. It’s worth considering for online photos and is not as expensive as actual staging. But full disclosure is absolutely necessary. Harkov says that there should be two photos —one real, one photoshopped—on the site. He adds that there is data to show that virtually staged photos on a website bump up the viewing numbers and may convince someone that the property is worth a look.

 

Professional vs. DIY Staging

Consider the design skills, time and energy that staging will require and be realistic about whether you could undertake the task yourself. One stager quoted in a Brick Underground blog didn’t mince words: “Most homes I see that are not professionally staged look like Pottery Barn meets grandma’s hand-me-downs.” If you think you’re up for the challenge, check out the tips in How To Stage Your Home For A Quick Sale and Stage Your Home Like a Pro For Free.

 

How to Find Professional Help

Unlike some professions, there is no official licensing entity and no licensing exam for staging. Just about anyone can call themselves a stager, so the best way to find a good one is to get referrals from a seller you know who has used and found success with a particular stager or from your broker. A good broker will have connections to good stagers.

 

The Bottom Line

The cost of staging by a professional—someone who has a great track record in the biz, sound design sense and who comes well-recommended—can mean money in the bank for you. If staging helps you sell your home sooner (keeps it from being out there so long that people start wondering what’s wrong with it); if it saves you a month or more of carrying expenses; if it creates the kind of buzz that brings in offers above your asking price then your money is well spent. As Krisztina Bell, a stager in Atlanta, says, “It costs more not to stage—the average cost of a complete staging is usually much less than your first price reduction.”

Original Article found here: https://www.investopedia.com/articles/personal-finance/052815/professional-home-staging-worth-cost.asp

5 Reasons to Sell This Fall

Below are 5 compelling reasons listing your home for sale this fall makes sense.

1. Demand Is Strong

The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country. These buyers are ready, willing, and able to purchase…and are in the market right now. More often than not, in many areas of the country, multiple buyers are competing with each other to buy the same home.

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing inventory is still under the 6-month supply that is needed for a normal market. This means that in the majority of the country, there are not enough homes for sale to satisfy the number of buyers.

Historically, a homeowner would stay an average of six years in his or her home. Since 2011, that number has hovered between nine and ten years. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years due to a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

Many homeowners were reluctant to list their homes over the last couple years, for fear that they would not find a home to move to. That is all changing now as more homes come to market at the higher end. The choices buyers have will continue to increase. Don’t wait until additional inventory comes to market before you decide to sell.

3. The Process Will Be Quicker

Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and simpler, as buyers know exactly what they can afford before shopping for a home. According to Ellie Mae’s latest Origination Insights Report, the time needed to close a loan is 43 days.

4. There Will Never Be a Better Time to Move Up

If your next move will be into a premium or luxury home, now is the time to move up. There is currently ample inventory for sale at higher price ranges. This means if you’re planning on selling a starter or trade-up home and moving into your dream home, you’ll be able to do that in the luxury or premium market.

According to CoreLogic, prices are projected to appreciate by 5.2% over the next year. If you’re moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage) if you wait.

5. It’s Time to Move on with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to these questions. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

 

 

Original article found here: https://www.keepingcurrentmatters.com/2019/09/03/5-reasons-to-sell-this-fall-3/?fbclid=IwAR282dYmF9V3vzf_m4ckNUodmHsuN_PCc-lZmRXhL1fVL8TExNd9EYxhSQQ

 

Easy Home Improvements to Help Sell Your Home Fast!

You’ve been trying to sell your home and you did everything you thought was expected of you. You connected with a real estate agent, had professional photos taken of your house, and opened your home to numerous strangers as they paraded around your halls on private tours and open houses. But after weeks of your home being listed, not a single reasonable offer has been made. Sound familiar?

Currently, the median number of days a home sits on the market is 41 days. And, of course, the longer your home sits on the market the more control homebuyers have when it comes time for negotiations. So, take your house out of seller’s limbo by adding perceived value (and actual value) to your home. Here are nine easy home improvements you can do that will make your house more appealing to potential home buyers and help sell your home fast.

1. Upgrade Your Mailbox

Upgrading your mailbox might seem like a rather silly thing to do at first, but if we are talking about making a great first impression to potential home buyers, the mailbox is often the very first thing someone sees before pulling in the driveway. It’s also the easiest home improvement you can do.

It could just be a new mailbox that replaces the old, weathered one you’ve had for years. And let’s face it, most homeowners don’t put much thought into what their mailbox looks like, often becoming an eyesore to your driveway. Or, you could upgrade to a “Next Generation” mailbox that allows USPS to deliver large packages to your mailbox instead of your front door. And we all know packages that are apparently visible to any passerby have a better chance of not being taken.

In fact, with more and more consumer products being purchased online and delivered to homes, you may even consider upgrading to a security mailbox that keeps your mail and packages safe from theft altogether.

Either way, upgrading your mailbox is a simple, cost-effective method of bringing perceived value to your home.

2. Paint Your House Inside and Out

This cannot be emphasized enough, but painting the inside of your home with a fresh neutral color goes a long way with potential homebuyers. For example, your kids’ rooms may have very unique colors that they had insisted upon at one time, but not every potential buyer is going to enjoy that purple room as much as your kid does. You’ll want to put a fresh coat of paint on those walls so anyone touring your home can envision themselves living in your space.

In fact, everything you’re doing to prep your home for sale is making your home look its very best and allowing potential homebuyers to envision themselves in every room of your house. You want people touring your house to think, what if I bought this house? This room could be my office, nursery, guest bedroom, etc. However, it becomes hard for potential buyers to envision themselves in a room with purple walls.

Alternatively, painting the exterior of your home may be the best solution to getting your home sold faster. If your home’s color has faded from its former glory, the paint is chipping, or your house has always been that home on the block the neighborhood kids call the orange house, you may want to consider getting your home painted a more contemporary color. Though painting the exterior of your home can be pricey, when done by professionals, the process has a very quick turnaround time and the result will be sure to leave a lasting impression on potential buyers.

3. Enhance Your Curb Appeal

It doesn’t matter if you live in Dallas, TX or Portland, OR, enhancing your curb appeal can go a long way toward making a great first impression on potential homebuyers.

First, you’ll want to look at your landscaping in front of and around your house. How does your lawn, trees, and overall vegetation look? Make sure your lawn is freshly trimmed, all dead debris (like sticks and leaves) are picked up, and 2 to 3 inches of fresh bark mulch is placed around your shrubs, trees, and plants.

Do you have hedges that line your property or some other form of fruit or decorative trees on your property? Having your hedges trimmed and your trees cut back can make your yard go from something that resembles an unruly wilderness to a well-maintained and welcoming paradise.

Also, if you don’t already have decorative plants bringing color to your front driveway and entrance, a few well-positioned potted plants are an inexpensive and inviting sight for newcomers to your home.

4. Clean, Declutter, and Stage Your Home

Nothing turns potential homebuyers away faster than an unkept and cluttered home. If you’re looking to sell your house quickly, it might be a good idea to hire professionals to get your house in order. Decluttering and staging your home is a must if you want to make your home and all its uniqueness shine its best for potential buyers.

If your closets are overflowing with winter jackets, or you have too many large pieces of furniture in your living room, your spaces will not be showcased the way they should be. People touring your home like to look not just at the larger rooms, but also poke around in closets, drawers, and other storage areas to make sure their stuff will fit. If your stuff is in the way, that makes it much harder for buyers to see themselves in your space.

Furthermore, a deep cleaning is a must before any open house or home tour takes place. If you have a cat or dog (or both), you probably don’t smell them anymore. However, people that don’t have pets are acutely aware of homes that do, simply because it’s a scent they’re not used to. If you’re looking for a quick turnaround, a professional can help eliminate odors, stains, and any number of other things you may no longer be aware of and make your home feel brand new again.

5. Fence in Your Backyard and Refinish Your Deck

It’s amazing what a refinished deck or new cedar fence enclosing a backyard can do for a home. Not only is it functional and aesthetically pleasing, but the return on investment is nothing to shy away from if you’re looking for an easy project that will help you get your home sold fast.

In fact, the national average in 2019 for recouping the cost of a wood deck addition on a home is 75.6%. So, although you may take a small hit financially by adding a wood deck onto your house, you would recoup most of the cost and potentially sell your home faster because of the added feature.

Likewise, adding a fence to your property can do wonders for your home in a relatively short period of time. And according to a 2018 survey by the American Pet Product Association,”67% of U.S. households own a pet,” meaning over half the people touring your home have a fuzzy little friend, and a fenced-in backyard is a bonus to some homebuyers but a must for others.

6. Fix Your Light Switches and Update Your Fixtures

So it’s true, people touring your home will play with your faucets, open your drawers, and test ALL your light switches. If you have a light switch that doesn’t work (or an electrical outlet), now is the time to get it fixed. Light switches that do not work signify to homebuyers that your house may have electrical issues, when in fact, it may be something much more simple. Nonetheless, at that point, you’ve already lost that potential offer.

You’ll also want to replace all your burnt out light bulbs to make sure every room in your house is bright and inviting. Furthermore, all your interior lights should be the same color temperature for consistent lighting throughout your house.

Updating your light fixtures, ceiling fans, and even your hardware on doors and cabinets is an easy and cost-effective way of increasing the perceived value of your home. If you already have an electrician fixing your light switches, they could also replace your dated brass light fixtures with ones that have a more contemporary feel. Beyond making your interior appear more modern to homebuyers, you can take this opportunity to find fixtures that can help brighten your home and make it stand out among other homes for sale in your area.

7. Upgrade Your Garage Door

Installing a new garage door is one of the simplest and quickest ways to give your home a much-needed facelift and impress potential homebuyers. New garage doors recoup nearly all the money invested into them, and, in some areas like the west coast, a new garage door actually recoups more than its initial investment at 123.8% on average. Meaning your new garage door could actually put money back in your pocket.

There are several styles and designs to choose from, just make sure that you go with a style that fits the look of your house. Especially if you’ve recently painted your home a more contemporary color, a new garage door can be that easy home improvement that pushes home lookers into actual offers.

8. Get a New Front Door

Give others entryway envy by upgrading your front door and transforming the character of your home. Over the years, front doors see a lot of abuse and begin to look worn and tired. Luckily, a new front door is quick to replace and a very cost-effective way of making your entryway unique and aesthetically pleasing to anyone stepping up onto your doormat.

Solid wood doors are always a classic style for homes not to go out of style anytime soon. They’re solid and typically last much longer than alternative materials like fiberglass. Additionally, front doors with inlaid glass can also give your entryway more natural light for the interior of your home. Either way, a new door is a quick and easy way to impress homebuyers.

9. Update Your Kitchen Appliances for a Fresh Look

If you’re looking to sell your home quickly, updating your kitchen with modern and timeless stainless steel appliances is a great way to go. Though this can be costly, new appliances really appeal to first-time homebuyers, and as a result, you could see more competitive offers.

Furthermore, there is a good possibility your appliances probably need to be updated anyway. Typically, larger appliances like fridges and stoves should be replaced every 10 years, while smaller appliances it’s recommended to be replaced every 5 years. Nonetheless, updated appliances are a safe bet if you’re looking to sell your home fast.

Author: 

Jeff enjoys writing about the many aspects of home-ownership. From how-to projects he does on his own home to mortgage payoff and investment strategies, he likes to create useful content his readers will enjoy. His dream home would be a small house on a lake or the Puget Sound, with lots of natural light and a dedicated space for his woodworking.

Original post here: https://www.redfin.com/blog/easy-home-improvements-to-sell-your-home-fast/

7 Retro Trends Making a Comeback

These styles from the ’70s and ’80s prove it’s OK to say “in with the old!”

Each year, fashion leaves a strong impression on the design industry and its offerings for the season. For 2020, the vibe includes handmade organic details paired with the sparkle of the ’70s disco club and the velvety softness of the ’80s.

But beyond the nostalgic hints that those artistic impressions carry, what lies ahead for interiors? How will we change and evolve in our home environment? Read on and see what speaks to your design style as we approach another new year.

Cork and recycled elements

Many manufacturers, designers and architects have focused their products and projects on a sustainable, environmentally friendly approach to home building and design. Thanks to modern technology, sustainable products don’t mean inferior quality, comfort or design.

In fact, these products celebrate eco-chic versions of modern or traditional designs in both elevated and affordable versions. While products like linoleum or cork flooring may have been long forgotten, they will see a strong comeback in the new season, thanks to its natural characteristics.

Abloom with florals

The traditional beauty of floral patterns, either abstracted or straight-up chintz, will continue to be the pattern to use, especially when paired with deep luxurious velvets and maximalist styled spaces. But home designer, beware: Chintz can be tricky. Its bold old-fashioned prints can easily turn to frilly English bed-and-breakfast if you’re not careful. When done right, the floral theme can add color, texture and just the right touch of classic elegance to your interior.

Handmade accents

Handmade items made with sustainable materials like jute, rice paper and clay will be all the rage in 2020. These elements go far in grounding a home, allowing its inhabitants to be in touch with the earth and their roots. The incorporation of natural materials popular years ago — like caning, rope, sea grass and bamboo — has a strong influence over modern furniture silhouettes and decor details. Elaborately embossed wall coverings, including gold rivets and metallic accents, give surfaces a beautiful tactile sensation and modern ambiance.

Plastic and acrylic

Increasing social consciousness around climate change has influenced the design industry to produce products accordingly. Plastics are being used for indoor and outdoor furniture frames, while water bottles are being used to create outdoor rugs and accents.

For a more luxe look, acrylic products are having a comeback, giving a room the architectural structure it needs without taking up visual real estate. Acrylic in a small space, like an entryway or sitting area, provides a surface that can be layered with more organic items and not feel fussy.

Authentic construction

The rise of digitally printed fabrics has created a true appreciation for real embroidery, thick wool boucles, linens and other artisan-inspired elements. Rich textural expressions are the theme of the upcoming season. Think velvet upholstery, hemp drapery, cork walls, wicker and jute for furniture and finishes.

Maximal artwork

The surge of minimalism and Scandinavian design, characterized by neutral colors and simple materials, is finally declining. In its place, bright colors and graphic patterns are becoming more prevalent in the home.

Don’t be afraid to mix colors, patterns and textures. Take a gallery wall to the next level by having it cover an entire wall, or add a dramatic large-scale piece to your space. In this case, more is more.

Metallic accents

And speaking of timeless metal accents, sparkle is still on the design scene for living room decor compositions. Add a hint of disco glamour and luxury by introducing bronze, gold and chrome details through decorative accents, furniture inlays, hardware, lighting, mirrors and accessories.

 

About the author
KERRIE KELLY, FASID
Kerrie Kelly is a Northern California interior designer and the founder of Kerrie Kelly Design Lab. She is an award-winning interior designer, multimedia consultant and an author of two books: “Home Décor: A Sunset Design Guide” and “My Interior Design Kit,” with Pearson Professional and Career Education.
 
See Original Article:
https://www.zillow.com/blog/7-retro-trends-making-a-comeback-230761/

How to Negotiate the Best Possible Deal

In real estate it is not enough to simply get the property you desire. If you overpay or the closing is later than you desire, you won’t be able to maximize the bottom line.  It is essential to win every negotiation you are part of. Sometimes, winning means taking the sellers price and closing in ten days. Other times it means staying firm to your offer and knowing when to walk away. By winning in more negotiations than you lose, you can squeeze residual revenue from your deals. Adding this up over the course of the year has a significant impact on your year-end bottom line. Here are five tips to help negotiate the best possible deal on every transaction you are a part of.

  • Act Quickly:  You should never blindly dismiss any prospective deal that comes your way. There are plenty of times when a property seemingly doesn’t fit your criteria, but with just a little research checks off more boxes than you think. The key is to act quickly and decisively when you are presented with an opportunity. In most cases the buyer who acts first gets a decided leg up on their competition. Even if two offers are similar the offer submitted first is the first one that is negotiated. Additionally, there is something psychological from a seller’s standpoint about getting an offer shortly after listing. They sense that you really want the property and are usually more open to negotiating with you. This doesn’t mean you have to rush in any offer just to get something over. You can still do your diligence, but you need to do it quickly. Don’t wait to act when a property in an area you like hits the market.
  • Know Supply And Demand: Always know where you stand in every negotiation. On properties that have sat on the market for some time the seller is usually much more open to negotiation. They understand that they missed their peak marketing time and any interest is at least somewhat appealing. On the flip side a new bank owned listing may be much more in demand. As a buyer you should be able to gauge demand in a short amount of time and tailor your offer accordingly. If demand is strong you know your first offer must be strong without giving away the farm. There will most likely be multiple offers and you need yours to stand out from the crowd. If demand is weak you can submit an offer that is more tilted in your favor. You don’t have to worry about another offer coming in and undercutting yours. You can stand firm and negotiate a little more without fear of losing the deal. In most cases supply and demand is straight forward, but if you have doubts don’t be afraid to ask your real estate agent. Misjudging demand can instantly cause your offer to be ignored.
  • Multiple Financing Terms:  Never assume that you know exactly what the seller is thinking. You may think that they would want a cash offer with a quick close, when in fact they may be looking to walk with the highest possible amount. On properties you really want you should give multiple financing options. One offer can have a slightly discounted price, but close in 14 days free of contingencies. Your second offer can have a sizable down payment, but the remainder is financed through a traditional lender. You can justify this with a higher price. By giving the seller options you don’t pin them in a corner and you let them pick the best deal for them. You also reduce the chances of heavy negotiation since you already gave them plenty of things to choose from. The more financing options you can provide the more likely a seller will move forward with your offer.
  • Know When To Walk Away: There are plenty of times when the best move you can make in negotiation is walking away. There is a fine line in giving a little to get a property you really want and having the deal no longer make sense. It is critical to remember that the goal is not to simply acquire the property, but to make a profit on it. If you feel that the numbers and terms are no longer to your liking, you should pull the plug and walk. This is never easy when you invest hours of time and energy into a deal but is the best thing you can do for your business. You also need to avoid bidding against yourself. If there is no competition for the property don’t be afraid to call a seller’s bluff and stand firm in your offer. Eventually they will blink and take the best offer on the table. If not, you turn your energy into finding a new deal.
  • Clean Contract:  There are too many lender horror stories out there for a seller to fully feel comfortable with a lender financed transaction. If this is your only way to close, you can at least make the contract as clean as possible. The more contingencies you have the more potential potholes a seller must face. The only must have contingency on every deal is the inspection contingency, unless you plan on knocking down the property. You should think twice about adding anything else to the contract.

Don’t be afraid to ask for something that you really want. You never know what a seller will accept if they are truly motivated. The better you are at negotiating the little things the greater the impact on your bottom line.

 

Original Post Found Here: https://www.cthomesllc.com/2019/08/how-to-negotiate-the-best-possible-deal/

Top 7 Benefits Of Owning A Rental Property

Everybody is on the hunt for the perfect investment. We want minimal risk, high returns and easy management. What we don’t realize is that those are hard to come by. Instead of constantly searching for the perfect investment you should look for something more easily attainable. A rental property is undoubtedly the best long-term investment currently available today. Some will argue for stocks, but they are far too volatile and timing them just right is often difficult. With a rental property there are several key benefits and reasons why every investor should look to add to their portfolio. Just one profitable rental can entirely change your portfolio. Here are seven reasons why rental properties make a superior investment.

  1. Leverage. There are a handful of situations where you can use leverage to your advantage. In the case of a real estate investment leverage allows you to put a portion of the total value down as collateral and retain 100% ownership. For anywhere between 10-25% you can own an investment property, worth multiple times your initial investment. You can’t do this with stocks, or most other financial instruments. With real estate, a small down payment can yield multiple times on your investment in the short and long term. Instead of scraping together tens to hundreds of thousands of dollars to pay for a rental property outright, you can take ownership for a fraction of the cost.
  2. Don’t need rehab capital. Rehabs and rental properties take a different approach to the real estate business. Rehabs are obviously more of a short-term focus, but not the biggest difference between the two. With a rehab you need upfront capital to make the necessary improvements to the property. It is not uncommon for the updates to cost tens of thousands of dollars. With a rental property you may not need to give the property a complete facelift. Not only can you pursue turnkey rental opportunities, but you can often get away with simple updates instead of remolding kitchens and bathrooms down to the studs.
  3. Management. Anyone that has invested in speculative stocks knows it is a minute by minute proposition. You need to be on top of every move to maximize profit. With a rental property, you can defer these duties after you take ownership. Many outsiders think that owning rentals are more trouble than they are worth. The reality is that trouble with tenants, or the property are really the exception and not the norm. You also have the option of seeking a dedicated property manager to handle the day to day options. This removes most of the headaches and hassle associated with the property and allows you to focus on running your business.
  4. Security/stability. People are always going to need a place to live, right? Over the past decade there has been a run on rental property demand. Homeownership is down, and rentals are on the extreme upswing. This is a trend that is not expected to change any time soon. The key is buying a rental in a good market and a prime location. By doing that you ensure that you will have a steady stream of demand for the foreseeable future. Instead of worrying about finding tenants at the end of every lease, you will have multiple interested parties’ months in advance.
  5. Appreciation potential. You should never buy on appreciation potential alone. As we have seen in the past, there is no guarantee that property values will rise. That being said, if you buy in the right market and have a quality property there is a good chance you will see a spike in your value. Depending on the mortgage term you can retain the property free and clear of any mortgage in 15-30 years. This allows you greatly increase your cash flow or sell and walk away with the profits.
  6. Equity. Equity is a moving target. As much as we are obsessed with equity, it really doesn’t matter unless you plan on selling or refinancing the property. If you do see that your property value has increased, you can use equity in your favor. For starters, you can explore the option of a cash out refinance. Your mortgage payment will rise, but you will also pay off debt or have residual cash to use in any way you like. Another option is to use the equity for a new second mortgage. An interest only HELOC is a great way to take advantage of your equity without touching the first mortgage and taking on a new set of closing costs.
  7. Simplicity. On the surface, running even one rental property can be intimidating. The reality is that most rental properties pretty much run themselves. If you take care of the property, spend time finding good tenants and provide periodic updates management is a breeze. It is when you get cheap, lazy or careless that you will run into trouble. The basic concept of a rental property is a tried and true practice that has been around for decades. You are not reinventing the wheel when you become a landlord.

It is not a stretch to say that there could easily be a half dozen or more tangible benefits of rental property ownership. We didn’t even touch on all the tax breaks you can receive. If you are looking for a way to invest your money, a rental property should be at the top of your list.

Original post found here: https://www.cthomesllc.com/2019/03/top-7-benefits-of-owning-a-rental-property/