All About Appraisals

Appraisals are one of the most confusing aspects of buying or selling real estate for the consumer. When a buyer and seller agree on a sales price, it can be frustrating to hear that the appraisal came in with a value too low. It’s not enough for the principals to agree to the price, the appraisal is the lender’s way to ensure they are not loaning money over the actual market
value of the property.

The appraised value is reached by a licensed professional who looks at the real estate market in which the target property is located. They start with the target property and then look for recent sales in the area of comparable properties. These comparable properties will be located within a short distance of the target home, normally within a 5 mile radius. They should also be of comparable size and often fall within the same housing development.

Once these homes are identified, the appraiser will adjust for the specific differences. For instance, does the target home have an upgraded kitchen or swimming pool? They add or subtract value based on such things as location, view, lot size, upgrades, additions, condition and many other factors. They can then arrive at a valuation for the target home.

Once the appraisal has been completed, the lender is notified of the value. At this point, the loan amount is either confirmed or declined. If the appraisal comes in too low, the principals can choose to make up the difference in sales price, lower the sales price or cancel the transaction.

Appraisals are not as complicated as they appear. By learning about recent sales in your area ahead of time, you can price your home appropriately up front; then the appraisal should come back as expected.

The A Team

Tips to Pay off Your Loan Faster

For generations, homeowners would buy a home for life. Working over the years to make the payments and celebrating the end of the 30 year mortgage were great milestones in the family. Today, few home buyers expect to be in their home for longer than 7 years on average. Paying off a 30 year mortgage seems like an impossible task. Fortunately, there are great ways to pay off your loan which do not involve time. Here are a few tips for paying off your mortgage loan faster.

  • Biweekly Payments – Work with your lender to determine how they handle biweekly payments. If processed immediately, you can save 8 years of payments on a 30 year loan.
  • Extra Payments – By making just one extra payment each year, you can pay off your loan 11 years earlier.
  • Refinance to 15 years – There are great interest rates available for mortgage loans. Consider a 15 year mortgage.
  • Principal Reduction – Watch for ways to add to your monthly payment a little at a time. When possible, increase the principal payment you make.

Paying off your mortgage builds wealth. Consider your life goals, including retirement. A 30 year loan taken out at 37 years old will not be complete until 67 – retirement age. The loan needs to be part of the overall financial plan from the beginning and making payoff a priority with a few simple steps can add up to huge savings in interest which can then be used for better investments.

Top Tips When Buying Vacant Land

Building a new home from scratch can be a dream come true. The idea of designing the perfect property with morning sun in the kitchen and evening breezes on the deck can be exhilarating; the first step to a successful project is finding the right piece of land on which to build. This can present challenges if not approached correctly.

Top Tips When Buying Vacant Land

  • Hire Experience – More than most real estate transactions, it’s critical to hire an agent who specializes in vacant land purchases and can guide you through the steps.
  • Expect to Pay Cash – Finding a lender for vacant land can be very difficult. Those who will finance land typically require a 50% or higher down payment and above average interest rates and terms.
  • Get the Neighborhood Comps – Do not neglect to understand home values in the community so you do not over, or under, build your home.
  • Do Your Due Diligence – It is critical to research the property thoroughly. Just a few considerations might include:
    • Site Surveys and Environmental Testing
    • Easements and Zoning Restrictions
    • Lot Survey and Boundaries
    • Utilities and Water Rights

Once you’ve completed these preliminary reviews, it’s time to consult with an architect and General Contractor who will then begin to develop concept drawings to consider. Even at this stage, you might find that the home you want is not appropriate for the land you’ve chosen. Staying flexible is a key component to searching for land; remember that by following a few tips, you can ensure you find the right lot for your dream home.

The A Team

What does “Move-in Ready” Really Mean?

If you’ve been searching for a new home no doubt you’ve seen the term, “move- in ready.” This description sounds very appealing, but understanding what it actually means is important so you have the right expectations when arranging your home listing tour.

First it’s important to remember that the descriptions in real estate listings are written by the listing agent or broker. There is no set industry standard for what agents can say in their listings. While there are guidelines and rules which prevent blatant lying, most home buyers have become aware of the fluffy language used to market a home for sale.

The meaning of “move-in ready” is fairly straightforward; it means that the home is in a condition which is acceptable for immediate occupancy. The home meets the standards of living and assures the buyer that the essential elements needed to occupy the home are present and in running condition. For example, the home should have working plumbing, appliances, sound roof, electricity, gas and locking doors and windows.

What “move-in ready” does not necessarily mean is that the home is in pristine condition. A home that is “move-in ready” might still need significant updating and while systems are assumed to be operational, they might still be old or outdated.

“Move-in ready” is a common phrase in real estate listings. Understanding that the home might still need quite a bit of work to suit your taste and lifestyle, you can approach the listing with realistic expectations and determine if the property is the right fit for your needs.

The A Team

What to Repair in your Home Before you List It

A lot of money goes into buying a new house so it is understandable if a
seller feels hesitant investing even more money to fix up their current
house prior to selling. However, sellers may not realize that some of the
issues they live with everyday and consider minor, such as the hallway light switch or the kitchen sink that has plumbing issues, may actually be
considered major to home buyers. These issues may even prevent buyers
from making an offer on a home or making a lower offer. It’s crucial to keep your house presentable and in good shape before you list it on the market. That being said, read on to find out what repairs you might want to
consider before you list on your house on the market.

Roof Problems
A roof is one of the most important components of a home, protecting all
that is underneath. Additionally, roofs are major expenses to replace.
Therefore, it is imperative to keep the roof well maintained and free of
damage and leaks. Issues like water and sun damage, clogged gutters, and
rotting will lead to bigger issues if not fixed timely. Tending to these items
immediately will help prevent further damage and help present the home
well.

Poor Maintenance
Minor issues such as damaged flooring, paint chipping, and old carpeting
can be easily fixed to give your home a renovation. Your goal is to make
your home appealing so start by replacing anything that is heavily worn and adding a fresh coat of paint. And these minor upgrades can be inexpensive because you’ll most likely see a return on investment.

Plumbing
Plumbing problems can result in minor or major issues and it is very
important to take care of these issues right away as they can lead to further
problems. Bigger problems such as water damage can lead to mold and
easy fixes to leaky faucets can be replaced inexpensively.

Wiring
Electrical problems can cause a wide variety of problems. Smaller fixes
such as faulty switches, missing wire nuts, or damaged junction boxes can
be fixed with a good electrician. Replacing a circuit breaker might be needed if they don’t match the amperage of your home. Some repairs are obvious to see and others aren’t so it’s a good idea to run a pre-inspection of your house before listing. After, review it with your realtor because they can advise on which ones are the first priority.

Should Sellers Offer Home Warranties?

If you are selling your home, one of the most common requests with the buyer’s offer is to pay for a home warranty. As a seller, you might be wondering if it’s something that’s worth the expense. Some agents suggest that the seller purchase a listing warranty as well as part of the sales process. Understanding the benefits of a home warranty is the first step in deciding if it’s worth the cost to you, the seller.

A home warranty is a policy which covers the cost of repairs to a number of critical systems in the home. While coverage varies, most cover electrical, plumbing, heating, air conditioning and appliances. Some optional coverage could include pool and spa, roofing and code protection among others. In the event that a home buyer has a problem with any of the covered systems, the warranty would send a service person out to make the repairs for only the policy deductible – usually between $65-100 per problem.

The home warranty provides peace-of-mind to the buyer that if an undetected problem shows up after the close; their out-of-pocket cost is limited to the small deductible. While this does not negate the need for a professional home inspection, it can push a transaction to close with
buyers who are nervous about unexpected problems. As an additional bonus, most warranty companies offer a free listing warranty which covers unexpected issues during the listing; often saving the home owner hundreds of dollars in repairs arising from the inspection.

Offering a home warranty in the listing is one way to demonstrate to potential buyers that the condition of the home is important to the seller as well. You take maintenance seriously and they can rest assured that they are making a good investment.

The A Team

The #1 Feature Today’s Home Buyers Want: A Laundry Room

Home sellers and listing agents across the country spend a great deal of time and energy trying to determine what home buyers want. They pour over magazines and read blogs to learn what is the #1 feature they can add or enhance to ensure home buyers find their home irresistible.

The National Association of Home Builders’ released a 2019 home trend and buyer preferences report which cited a surprising and very practical answer – laundry rooms. In the report, 91% of those surveyed stated that having a separate laundry room was essential in their new home.

The association surveyed over 4000 home buyers and asked about features which ranged from outdoor kitchens to master suites and spa-style baths. While these features were well received, the overwhelming response to what was most important in the home design is the laundry room.

Laundry rooms have become so popular, that home builders are finding ways to increase their size and utility in home developments.

Home buyers stated that homes with laundry chutes which lead to the room was their idea of the perfect home. These home buyers were willing to forgo trendier amenities like wine cellars, dog runs and outdoor fireplaces in order to hide
piles of dirty laundry.

Home buyers can be finicky and mysterious to home sellers and their agents. What this trend demonstrates is that staying with home features which provide convenience and ease of use is more important to home buyers than fancy features and expensive upgrades.

The A Team

Tips for Selling in Summer

Summer has traditionally been the best time to sell a home. Not only do many families take advantage of moving when the kids are out of school, but in climates where winter weather is unpredictable or severe, the warmer months make it easier to be away for showings. With more homes on the market, how can you maximize your potential for a great offer among the options? Fortunately, you can take a few steps to ensure your home stands out from the crowd.

Tips for Selling in Summer

Control the Climate – The first thing a buyer will notice when they walk into a home is the temperature. If the weather is warm and humid, it’s critical you keep the home cool. A larger air conditioning bill is a small price to pay for a top dollar offer.
Let in the Sun – It might be tempting to close the blinds to save money on air conditioning, but bright, sunny rooms are always more appealing; leave enough open to showcase natural light.
Extend Outdoors – Today’s lifestyle includes the outdoor areas and more and more homes feature outdoor living and dining areas. Regardless of your home’s features, maximize the impact of your yard with furniture, BBQs and manicured landscaping.
Spring Clean – A fresh, de-cluttered home with a lighter, seasonal color scheme will be visually appealing to your buyers. Replace dark pillows, linen and accents with softer colors which make the rooms seem larger.

The summer selling season is here. Make sure your home is dressed for success. Welcoming outdoor spaces and bright sunny rooms combined with inviting an air conditioned rooms will ensure you get the best possible offer.

The A Team

Home Improvements with High ROI

Is your house a little dated? Do you want to make some improvements or upgrades but also want to make sure that you get the best bang for your buck if you decide to sell? Not all home improvements bring a good return on investment when selling, so unless the improvement is simply for your own style and enjoyment, choosing projects with higher ROI just makes sense.

Home Improvements with High ROI

  • Add square footage – The best return on investment is adding space. Converting an attic or basement into a family room, adding a room or bathroom or even installing a garden room or outside kitchen will bring solid returns when selling.
  • Bathroom and Kitchens – Remodeling a bathroom or kitchen will always bring more than their cost when selling. Create simple and soothing environments where a future owner can imagine themselves using and avoid heavy period-style cabinetry and surfaces.
  • Doors and Windows – Upgraded doors and windows can really add impact to a room. Not only do current options save energy, they come in a wide variety of styles and finishes to accentuate the space.
  • Garage Doors – If you have an old or weathered garage door, this is a relatively inexpensive way to dress up your home.
  • Paint – Fresh paint is inexpensive and makes the home appear new and modern. Choose calm tones which compliment any décor.

Regardless of whether you’re considering a weekend project or a major remodel, understanding the return on your investment can help you make the best choice for your project. Home improvements can be costly and if you’re considering listing your home for sale in the future, make sure you can recapture your cost.

Top Tips for House Hunting Online

Hunting for a new home online a is a great place to start your search but
keep in mind that you don’t see everything. Real estate agents are great at
highlighting the features of a house listing online but to make the most of
your time, keep these three things in mind:

Identify your Housing Needs
Preferences are important when house searching. A house may not have
everything you want but it will have most of the things. Be realistic about
pricing and keep in mind the must-have items that will definitely be needed because this will help narrow your search.

Stay up to Date
When you start your search, make sure you go to sites with up-to-date
listings directly from the multiple listing service. Realtors post their most
current homes for sale through this. Many sites fail to remove listings that
are already off the market, and this can lead to you trying to sort through
them and find the recent ones.

Pictures can be Deceiving
Photographers capture listings at their best. They use different strategies
and tools to boost the appeal of the home like creative editing and
expensive camera equipment known for its effects. What they don’t show is unappealing parts, like an undone bathroom or small closet.

Go See The Listing After
After you have chosen a house that’s appealing to you, schedule a showing
with your real estate agent. This is the opportunity to see every part of the
house in person and see if it’s a good fit.

Searching online is a great way to learn more about the house you’re
looking for. Even if you’re still unsure about moving, house hunting online
gives potential sellers the basic information.

The A Team