BuyingInvesting June 20, 2022

The Do’s and Don’ts of Investing in Real Estate

Are you thinking about investing in real estate in 2021? It may be the perfect year to purchase a rental property, a vacation home, or to flip houses. I would be happy to help you find the perfect investment property, and I’ve put together this list of tips to help you get the best return on your investment.

First, consider what type of investment property is best for you and your family.

If you are thinking about a rental property, such as a vacation condo or rental home, consider how much time will be needed for things like maintenance, managing a website or rental listings, and vetting potential tenants. For rental homes, make sure the areas you are searching are attractive to tenants in terms of proximity to nearby business centers and transportation hubs, and in good school districts for family tenants.

Is a family vacation property more to your liking? Make sure you read any and all rules pertaining to owners and guests, as well as rules on renting your property out when you are not using it, if that is something you plan to do. Also be sure that your vacation property is somewhere you foresee your family wanting to travel to often enough to make it worthwhile.

For new house flippers, you want to find out what return you can expect to get in your market area and talk to contractors and suppliers to get realistic estimates on renovations, both in terms of price and time to completion.

Here are some additional Do’s and Don’ts for investing in real estate:

•Do aim for at least a 15% return on investment.

•Do look for homes priced in the low end of the median price range.

•Do look for 3-bedroom, 2-bath single family homes for rentals or flipping.

•Do focus on one neighborhood or area.

•Do purchase rental properties close to your home if you plan to manage them yourself.

•Do use one real estate agent to help with all your buying and selling needs.

 

•Don’t purchase a second property until the first is earning revenue.

•Don’t buy properties that you wouldn’t want to manage, even if you plan to use a property manager.

•Don’t buy a home that you cannot afford to carry for several months in case of a slow market.

•Don’t buy a home or condo without having inspections performed.

•Don’t buy without title insurance.

•Don’t buy more properties than you are able to manage.

As I said, I can help you search for investment properties. Sometimes buyers make the mistake of searching on their own and contacting the sellers or listing agents directly. Working with several different people wastes your time and increases the chances that you will miss out on a deal. Also, working with one agent allows that agent to learn your tastes, needs, and parameters, so I can be out looking for the right property while you are busy living your best life!

Selling June 20, 2022

Your Questions About Selling Your Home: Answered

If you have a home to sell, you’re probably excited and maybe a little nervous to get the process started. There are many things you need to consider when selling your property, and it’s easy to feel overwhelmed by the task. The good news is I have done extensive research about what you need to know about selling your home – and I’ve answered the questions you’re probably wondering:

Q: How will you determine my home’s value?

A: To determine your home’s value and set a listing price, I will complete a Comparative Market Analysis. The CMA uses recent sales of homes close in geography, age, size, and features to yours. (A CMA is not the same as an appraisal, which a licensed appraiser can perform.)

Q: Is it a good idea to start high?  

A: Many sellers like the idea of “starting high” to see if they get higher offers, but this strategy isn’t usually practical. First, buyers may not see your listing if they use a price filter set to what they expect prices in the area to run. Second, you run the risk of the appraisal coming in lower than your contract price, which will require your contract to be renegotiated or canceled. Third, if your listing price puts your home higher than your neighborhood value, your home will likely sit on the market longer as buyers wait for you to make a reduction. It’s best to set a strategic listing price that will bring you buyers quickly. My goal is always to get you the highest possible price in the shortest amount of time.

Q: What percentage of the listing price can I expect to get?

A: The list-to-sell ratio is determined by dividing the selling price by the listing price. The ratio is largely market-driven. In a sellers’ market, which is when inventory is low, sellers may get close to 100% or over 100% if the home sells above list price. In a market with a large inventory of homes, a buyers’ market, buyers have more negotiating power, so the list-to-sell ratio may be closer to 90%. My goal is to get you as close to a 100% list-to-sell ratio as the market will bear.

Q: How soon can I get my home on MLS?

A: Once we agree to work together, I will begin entering your home information on the MLS system. I will also schedule a time for a professional photographer to take photos of the property. As soon as all the information and images are uploaded, your listing can go live on MLS.

Q: What do I need to do to get ready to list?  

A: For your part, it’s a good idea to begin cleaning out or organizing storage spaces, closets, and drawers and putting away some of your décor or belongings. You may also want to have the exterior pressure washed, and the landscaping cleaned up. We can talk further about specific things that will help your home show better, including staging, if needed.

Q: How will showings be conducted?  

A: You and I will agree on the terms you are comfortable with for showings. We want to make the home accessible to buyers without too much disruption to your personal life. We can use a showing schedule, and unless we agree otherwise, I will notify you in advance of showing requests. If you will not occupy your property during the listing period, we can use electronic lockboxes that only active members of our local Realtors association can access. We can set the lockbox on a schedule, if necessary. Any time the lockbox is accessed, I receive a notification.

Q: How will you market my property?

A: Marketing your listing is of utmost importance. Most buyers find their properties online through MLS (via their agent,) Realtor, Zillow, or other search engines. Listings in our MLS system automatically show up on these sites within a day or two of becoming active. In addition, I share my listings with the agents in my network, on my website, and on my social media. We can discuss additional opportunities such as hosting open houses and marketing within your neighborhood.

Q: How long will it take to find a buyer?

A: Several factors influence the time it takes to find a buyer. These include the market conditions, price range (higher-priced or luxury homes typically take longer to sell,) location (whether your home is in a desirable neighborhood or a unique location,) and the condition of the home (is it move-in ready or in need of renovations?) In a balanced market, most houses, when priced accurately and without significant damage or extenuating circumstances, go under contract within thirty days. Homes sell faster in a seller’s market, while buyers take more time to look when inventory is high.

Q: Will you qualify the buyer?

A: When an offer is received, I will work with the buyer’s agent to vet the buyer. All offers should be accompanied by either a pre-approval from a mortgage lender or, if paying cash, by verification of funds available to cover the purchase price. Once you accept an offer, the buyer must put down the agreed upon escrow deposit, schedule any inspections as stipulated in the contract, and, if financing is involved, their lender will initiate the loan approval process. I will stay in close contact with the buyer’s agent to make sure due process is followed.

Q: What are the costs involved?

A: The seller usually pays for the real estate agent fees, which are divided between the buyer’s agent and the seller’s agent. The seller also pays their share of the property taxes and HOA dues. If the full annual amount has been paid, the buyer will repay their portion back to the seller at closing.

Q: Is your commission negotiable?

A: The commission is not negotiable. Keep in mind that the commission is split between the two sides, and both agents must abide by the structure their brokerage follows. If we were to reduce the commission upfront, buyers’ agents might be less likely to advocate for your property. I will work very hard to represent you honestly with full loyalty and integrity to earn the designated commission. This work is my livelihood, and I often go above and beyond the call of duty to earn my pay and close transactions for my clients. When we make an appointment for a consultation, I will explain all the ways I earn my commission through marketing your property, negotiating on your behalf and ensuring a smooth transaction.

Q: Will you also represent the buyer?

A: If there are multiple offers, I never represent a buyer myself. I refer that buyer to a trusted colleague if they don’t have their own representation. In a single offer situation, If I happen to find the buyer for your home, be assured that I am trained and experienced in handling both sides of the transaction fairly. As a professional, I respect the confidentiality and loyalty required in dealing with both parties. On the plus side, communication is easy when I am representing both sides. Working on both sides of the transaction is hard work, but it would not be a problem. Please note that whether or not I will represent a buyer is at the seller’s discretion.

Q: Can I cancel if I find my own buyer?

The listing agreement is a contract between you and me and/or my brokerage. It stipulates the terms for cancellation, which you are encouraged to review. Once we have signed the listing agreement, a prospective buyer that approaches you directly should be redirected to me.

Q: How often will we communicate?

A: Communication is key to an easy and successful sale. I will keep you appraised of events every step of the way. You are welcome to reach out to me with questions or concerns. When we go over the listing information, we will discuss our preferred means of communication and schedules to make sure we know each other’s availability and boundaries.

Thinking of selling? I’m here to help! Send me a quick message or give me a call to schedule a consultation.

Home Tips June 20, 2022

Renovating Your Home: Frequently Asked Questions

Q: How do I pick a contractor?

A: Ideally, you want to build the same kind of relationship with your contractor as you do with your real estate agent: one built on trust that makes you want to go back to that person for any future needs. Your contractor should be a very good listener and communicator. You want them to “get” your vision for your home, and to keep you in the loop every step of the way. Do your due diligence by checking out contractors’ reputations, talking with other clients, and looking at work they have done previously before you make your selection.

Q: How much will my project cost?

A: Of course, the answer depends upon the scope of your project, but in order to get the best estimate from your contractor, take time to write down each detail of your plan so that the contractor can include everything in their estimate. Renovations are famous for taking longer and costing more than originally planned, but this is often because the homeowner makes additions or changes along the way, or they don’t realize that, for example, if you move a wall in your home, you may have to then reroute electricity and outlets. One item often leads to another, so you have to look at everything piece by piece.

Q: How long will renovations take to complete?

A: As we said above, this depends on the amount of work being done– and how many changes are made along the way. The more pre-planning you do, the better estimate your contractor can give you.

Q: How do I prioritize projects?

A: If you are living in your home during renovations, you may want to plan out the project in phases, so you can live out of some rooms while others are being worked in. You may also need to phase projects based on cost and availability of funds.

Q: Where do I begin?

A: You begin by conducting a lot of research. Start a look book for your home, either in a notebook or online, collecting pictures of the look and finishes you want. Talk to different contractors, and visit kitchen, bathroom, appliance, and flooring showrooms to get ideas on selections and pricing.

Q: Do I need permits?

A: Your contractor will know what projects require permitting. Make sure that you do abide by permitting regulations, as failure to secure proper permits can come back to bite you if further work is needed down the road.

Q: How much will renovations increase my home value?

A: Every homeowner hopes that making improvements will increase their home’s value, and this is usually the case, but sometimes what homeowners view as improvement can turn out to be liabilities to future buyers. For example, don’t put so much money into the house that it becomes more expensive than the rest of the neighborhood. And be careful not to add personal style preferences that can’t be easily changed, like ornamental fixtures, radical architecture, or unusual landscape features.

Q: How should I pay for renovations?

A: If you have the cash to pay for your renovations, that’s certainly a good way to go. Otherwise, you might consider a home equity loan with a manageable monthly payment or a revolving line of credit that you can use for renovations as well as emergencies that may arise later. If you plan on selling your home, I can tell you about a great program Coldwell Banker offers sellers. You may be able to obtain an advance up to $50,000 towards work to get your home ready to sell and you pay it back at the end of escrow when your home sells, interest free! Send me a quick text and we can set up a consultation.

Buying June 20, 2022

What to Check on Your Final Walk-Through?

The final walk-through on your new home is an exciting event. It means you have successfully maneuvered through negotiations, inspections, and financing approval, and are on the verge of signing your closing papers. Most buyers attend the final walk-through with thoughts of furniture placement and paint colors in their heads. But the walk-through is about more than just making sure your favorite chair will fit by the fireplace. Be sure to do your due diligence to make sure there are no issues that should be resolved before you reach the closing table.

The purpose of the final walk-through is to ascertain that the home is being conveyed to you in the same condition it was when you agreed to purchase it. Here are a few of the things you should check:

1) Make sure no damage has occurred to the home that the sellers are responsible for repairing. Weather conditions or careless movers can cause accidental damage, and old and forgotten damage may be uncovered when the sellers’ belongings are removed.

2) Check that appliances are still in working order and no new plumbing or electrical issues have popped up. While you aren’t doing a complete home inspection, you can visually check for obvious problems that should be repaired before you move in.

3) Confirm that items contractually conveying are present. If the sellers agreed to leave particular furniture, décor, or equipment, see that it has not been removed.

4) Make certain the sellers have removed all their belongings. You don’t want to arrive with the moving truck only to find out that the sellers left behind an assortment of unwanted furniture or trash. The sellers are responsible for removing everything that doesn’t convey with the sale. Depending on how smoothly the escrow is going, you may want to put this in writing to ensure the sellers will remove their items. Unfortunately, buyers are occasionally left with the extra work or expense of disposing of/donating left-behind items.

Finance June 20, 2022

Is it Smart to Refinance?

Your home mortgage is an important investment in your future, and a mortgage refinance can be a smart move to help you manage your investments when used under the right circumstances. Here are some things to consider about refinancing your mortgage. Simply put, when you refinance your mortgage, you are taking out a new loan to pay off your original mortgage, so the first question to ask yourself may be is there a better product available to you than what you started with?

EQUITY

Refinancing allows you to borrow against the equity you have built up in your home and take out cash you can use to pay off other debt, make home improvements, or invest in your retirement. For example, let’s say you have $70,000 of equity in your home, but still owe $175,000 on your mortgage. You may take out a new mortgage for $200,000 that is used to pay off the first mortgage, and then pays you $25,000 in cash. If you have made regular payments on your initial mortgage for at least five years, you probably have enough equity built up to take a cash-out mortgage.

Another reason to refinance is to reduce your monthly payment to give you more flexibility in your monthly budget. When you refinance, you are basically starting over on your 30-year commitment, but, if you are not taking cash out, your new mortgage amount will be lower, so your payments decrease.

LOAN TERM

If you originally took out a 15-year mortgage, changing to a 30-year term will lower your monthly payment considerably. You may also choose the opposite and switch from a 30-year loan to a 15-year term. Your monthly payments will likely increase, but you will pay your loan off earlier and pay less interest.

ADJUSTABLE-RATE MORTGAGE

Another reason people refinance is to change from an adjustable-rate mortgage (ARM) to a fixed-rate. This eliminates fluctuations in your monthly mortgage payment and may help you take advantage of favorable rates.

Before you decide to refinance, do some homework. You should perform an audit of your monthly budget, assess your short and long-term financial goals, check your credit score, watch interest rate fluctuations, and consider the costs involved in refinancing ads there will be closing costs on your new loan.

For more information about finding a mortgage broker, send me a quick text message and I will refer you to a great broker who is the right fit for you.