When your listing receives an accepted offer, expect the buyer to enlist the services of a home inspector before the contract is complete. Even a brand-new home isn’t perfect. Buyers often use home inspections to negotiate during the buying process.
Home Inspection Purpose A home inspection is designed to ensure there aren’t any significant defects in the home. A buyer wants to know if the roof is in good condition, the air conditioning and heating system work well and there are no noticeable leaks or other potentially costly issues. However, the inspection is not designed to give the buyer more power in the negotiations of the agreed upon selling price or enlist the seller to fix a long punch list of items. Expect to make accommodations for unsatisfactory items but a seller shouldn’t be fixing every tiny detail.
Credits vs. Repairs If something does come up that needs to be repaired, it is often best to aim for a credit at closing versus repairing the item. Repair work can be costly, time consuming and come with unexpected issues. Doing what you can to avoid repairing items is in your best interest as an agent. A credit for the expected cost of the repair is a valid way to address the concern. For example, offer a credit toward a new roof instead of having the roof replaced by the homeowner. Potential issues that can arise from repairs include:
Buyers have their own ideas of what the repair should look like
Buyers can nitpick the entire process
Potential closing delay
Often longer than expected repair timelines
Home Repair Negotiation Negotiations are a part of any home selling process. A happy buyer makes selling the home easier on everyone and leads to more referrals for you. As a good realtor you are there to help guide your clients every step of the way.
There are a wide variety of ways to invest in real estate; one can make money in any of these options, one can also lose their money. To be successful in real estate investing, it’s critical that you identify what skills you have and your tolerance for risk. Then choose a type of investment that works for you and repeat that model.
Investors can make great profits by both flipping properties as well as holding them as rentals. The difference really boils down to a few considerations. First, what kind of income are you seeking? Active or Passive? Actively buying, fixing and flipping properties is quick cash that requires careful timing and effort. Rental properties on the other hand offer passive long-term income which accumulates over time. Additionally the property value increases during this time. The downside is that one must invest time in property maintenance and tenant management.
The second concern is risk. Flipping a property is not traditional investing where one buys and holds an investment. Flipping is really speculation. When buying a flipper, one must carefully gauge the cost of refurbishment, remodeling and the cost of the holding time into the price valuation, then carefully market the home and realize the profit. Any number of variances can go wrong which could cause the value to drop and profits to reduce or even disappear, such as a delay in remodeling or a slow real estate market.
Both types of investments can bring nice profits. Determining what’s best for you and your talents is important in choosing the best option for your financial goal.
You probably instinctively realize that rising interest rates will affect home buyers. The interest rate you pay can make a big difference in the size of the home loan you will qualify for as well as the price of the home you’ll be able to buy. Mortgage brokers use the monthly mortgage payment to determine how much you can afford to pay. Of course the larger the payment, the harder it is to qualify.
Interest Rate And Its Effect On Affordability All mortgage payments include principal and interest as part of the total cost. Lenders use this payment to determine how much you can borrow for the home loan. Commonly, you can have 31-35% of your total monthly gross income as a loan payment. It follows that you want the principal portion of your home mortgage payment to be as high as it can be so you qualify for a more expensive home.
Risks Of Waiting To Buy We are still seeing all-time low rates but more increases are predicted. A home mortgage is the best hedge against inflation. By purchasing a home now, you lock in your monthly housing cost, which as we’ve already seen is the largest monthly expense for most families.
Interest rates are one of the biggest factors that affect your ability to finance a home purchase. Along with your credit score and employment history, the amount of interest you pay on the loan has a big impact on affordability.