How to Compete Against a Cash Buyer

In many real estate markets today, there’s a lot of talk about cash buyers.

How to Compete Against a Cash BuyerThese buyers have a reputation for swooping in and “stealing” homes out from under other buyers, simply because someone with cash doesn’t need a loan. Regular buyers relying on credit are often intimidated by what appears to be a “lose-lose” situation. They assume that if they need a loan, they can’t compete.

The truth is, someone buying a home with credit can still compete against cash buyers and win. Do you have a 20 percent down payment? Are you well employed? Do you have cash reserves in addition to your down payment? Do you have very little debt? Do you have good credit? If so, your purchase should be as bullet-proof as a cash buyer’s.

Here’s what you need to do to compete against a cash buyer.

Structure your offer as if it’s a shoo-in

Ask your lender to write not only a pre-approval letter but to verify that you’re a well-qualified buyer. Get your agent or mortgage professional to provide some financial information about you with your offer (if you’re OK with that, of course).

See if your mortgage professional can take it a step further. Have your lender take as much of your loan through the process as possible. Send the lender a copy of the preliminary title report, if available. If you’re buying a condo, find out if a condo questionnaire is available and give it to your lender. If you take any of these steps, let the seller know.

Shorten the loan and appraisal contingencies

Ask your lender how quickly an appraiser can be sent out to the property and how long the loan would take to turnaround. In some parts of the country, loans are being approved in less than 14 days.

Pre-order an appraisal

This may not be as easy with a bigger bank. But smaller banks, direct lenders or mortgage brokers can line up the appraisal in advance. At the time your offer is written, tell the seller the appraisal has already been ordered.

Have the inspection immediately

Along with the quick appraisal and loan contingencies, get your inspector in and out. Shelling out a few hundred dollars and getting the inspections done within days of having your offer accepted shows the seller you mean business.

Pay extra

Paying more money to beat a cash offer may sound counterintuitive, but cash buyers nearly always expect a discount from the seller simply because they’re offering cash. As a result, the cash buyer will often make a lower offer. To increase your chances, top the cash offer.

If a seller is faced with a few thousand dollar difference, the seller probably wouldn’t risk it. But what if your offer is 5 percent higher than the cash buyer’s? The seller, perhaps wanting the best of both worlds, may ask the cash buyer to raise his or her offer. Some cash buyers will come up, but not always enough to match.

Bottom line: Stay in the game and know your limits. Do you plan to live in the house for many years and it’s the home of your dreams? Overpaying isn’t the end of the world, so long as you’re within a reasonable range.

Make yourself known to the seller

Some buyers write “love letters” to the sellers, hoping to appeal to their personal side. Does this work? Sometimes. If you’re competing with a cash buyer, particularly an investor who plans to rent the home out, it can’t hurt to get a little personal.

When a seller’s agent presents an offer, the seller always wants to know more about the potential buyer. Ask your agent to write a cover letter and an introduction. Let the seller know who you are, why you like the home and what your intentions are. It usually works.

But not always. Sometimes a seller just doesn’t want to take a risk with someone getting a loan, and nothing you do — aside from paying all cash — will change that. So do the best you can and be realistic. Make sure your financial “‘house” is in order. Work with a good local real estate agent and start working with a local mortgage professional well in advance. Structure your offer to show that you’re ready to roll. And who knows? It just might go your way.

This article was originally published by Brendon Desimone on Zillow Blog. See the original article here.

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Rustic Contemporary Farmhouse in Vermont

This rustic red contemporary farmhouse looks right at home in its picturesque mountain setting and worth every penny of its $2.9 million price tag.

from realtor.com

from realtor.com

from realtor.com

from realtor.com

Tucked away in Stowe, Vt., the 3.5-acre property combines contemporary farmhouse architecture with sublime summit views to create one of the most coveted retreats in the area.

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from realtor.com

Sporting a red-paneled façade, the main home offers five bedrooms and an interior decor that can be described as country-contemporary — exposed beams, stone finishes and other cabin-like qualities in a modern mold.

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Enveloped in mature foliage, the home’s various porches, patios and Euro-style decks provide the ideal spot to rock away summer nights with views of a kidney-shaped swimming pond and Mount Mansfield. Manicured gardens and landscaping only enhance the relaxed atmosphere.

from realtor.com

from realtor.com

Pall Spera of Pall Spera Company Realtors is the listing agent.

This article was originally published by Neal J. Leitereg on Realtor.com. To see the original article, click here.

Trying to Sell a Haunted House?

Niche buyers actually want something to go bump in the night.

Haunted House for Sale Isn’t Spooky

You might think an old haunted house beset by ghost sightings, strange noises and apparitions would scare away potential buyers, but research has shown that such features can be a plus when putting a home on the market.

Even “The Most Haunted House in Ohio” found a buyer.

Franklin Castle, built in 1865 by Hannes Tiedemann on Cleveland’s west side, was a looming gothic mansion with intimidating size, a spooky wrought-iron gate and stone gargoyles guarding its entrance.  Over the years visitors and owners claimed they heard crying babies and odd noises, felt cold spots, and saw ghost-like figures moving about.

Local newspapers published the home’s address. Every curiosity-seeker from teenagers to paranormal societies camped outside, hoping to spot the ghosts. And the place was broken into more than once. The owners couldn’t hide the home’s past, but they didn’t have to. In 2011 it sold for $260,000.

Houses with an alleged ghost can be a plus for some buyers, according to realtor.com’s Haunted Real Estate Survey.

The survey asked average homebuyers what they thought about haunted houses. More than half of home buyers are open to buying a haunted house.

However, most buyers expect a discount. Of the survey’s respondents, 34 percent said they would want up to 30 percent off the asking price to consider purchasing a haunted place, while 19 percent said they would need more — up to half off. Only 12 percent said they would pay full market value or more for a haunted house for sale.

Niche buyers aren’t looking to get a deal on a house because of a bad reputation, they actually hope things will go bump in the night. But, if you’re trying to sell such a place, you have to set realistic expectations. Most specialty buyers aren’t going to pay more than the average price in your neighborhood just for the ghost. Still, for some sellers, waiting for a niche buyer might sound better than slashing the asking price.

If that’s you, there are a few things you can do to find the right buyers. First, look into your home’s past. Generally, paranormal buffs are looking for rich and troubled histories. If you can prove your home fits the bill through newspaper clippings or local history books, you’ll help legitimize your home’s ghost stories.

Next, find someone in the field to help market your house. Start by finding a real estate agent who will help you with your marketing plan; this is a home sale, after all, and you’ll need some professional help. Contacting local paranormal research groups may also help you find niche buyers. Many paranormal researchers are happy to investigate your home and possibly add more appeal to your haunting.

Some paranormal groups and researchers keep databases of haunted real estate for sale. For example, Bonnie Vent, owner of San Diego Paranormal Research and Genesis Creations Entertainment, posts haunted house listings on her website.

Finally, be ready to tell stories — lots of stories. During walk-throughs, potential buyers are going to have a lot of questions about the haunting, and any personal experiences you or your family members can share will help seal the deal. Don’t be afraid to point out spots that feel hot or cold, or rooms that make you feel uneasy — you are trying to sell a ghost along with your house, after all.

This article was originally published by Angella Colley on realtor.com. To see the original article, click here.

 

8 Questions to Help Resolve Your Rent or Buy Dilemma

The decision to buy a home, one of the biggest financial investments you’ll ever make, can be empowering and exciting.
8 Questions to Help Resolve Your Rent or Buy Dilemma

While the 2013 National Housing Pulse Survey by the National Association of Realtors showed that 80 percent of consumers believe buying a home is a good financial decision, it’s not always easy to know when the time is right to take the leap.

Choosing to become a homeowner takes not only a financial commitment but also the emotional maturity to create a plan and a timeline that suits your lifestyle and your budget.

Here are some of the factors that should be part of your decision to rent or buy a home:

1. How Do Home Prices and Rents Compare in Your Community?

While it’s easy to compare rental prices, when you look at the cost of buying a home you need to include not only your mortgage principal and interest payments, but also homeowners insurance, property taxes and possibly a condominium or homeowner association fee. Sometimes it’s more costly to rent than to buy, particularly when mortgage rates are low. A rent-or-buy calculator can help with your evaluation. You should also look at the long-term wealth-building benefit of homeownership that comes with rising values and increasing your equity as you pay off your home loan. A 2010 Survey of Consumer Finances by the Federal Reserve showed that the median net worth for homeowners was 30 times higher than the median net worth of non-homeowners.

2. Are You Emotionally Ready To Buy A Home?

One of the benefits of renting an apartment is that you typically only commit to a lease for one year. If you’re buying a home, you’ll need to choose a neighborhood and a home where you want to live for the next several years while you recoup the cost of buying and build equity.

3. Do You Have a Five-Year Plan?

While no one knows with absolute certainty what will happen over the next five or 10 years, if your plans include switching careers or moving out of state, you’re probably better off renting. If you plan to start a family in the next few years, you should take that into consideration when developing a budget and choosing a home.

4. Are You Ready to Take Care of a Home?

Along with the joy of decorating your home and changing it to meet your needs, you need to budget at least 1 to 3 percent of the home price each year for repairs. Whether you can handle work yourself or need to hire contractors, you should be prepared for the time and expense of maintaining your property so that it can keep its value and avoid more costly repairs in the future.

5. Do You Have Any Savings?

While there are loan programs available to some borrowers with a down payment of 3.5 percent and sometimes less, you’ll need some cash for a deposit, a down payment, closing costs and an emergency fund when you buy a home.

6. What Does Your Credit Profile Look Like?

Request your free credit report at AnnualCreditReport.com to check for errors and any negative information on your report. For a small fee you can get your credit score. Lenders typically require a minimum credit score of 620 or 640 and higher for government-insured loan programs, but for the lowest mortgage rates you need a credit score of 740 or above.

7. What Can You Comfortably Afford to Spend on a Home?

You can have a free consultation with a mortgage lender to find out how much you can borrow to buy a home, but you should develop your own budget to determine how much you can spend on your housing payment while still being able to pay your other bills and save for the future.

8. Will Your Budget Accommodate the Type of Home You Want in Your Market?

You can do a quick search on realtor.com to see what properties are available in neighborhoods where you want to live, or consult a Realtor for a more in-depth consultation about your priorities and your local market. You may also want to take a homebuyer education class to learn more about the buying process.

Your answers to these questions and consultations with professionals such as a lender and a Realtor can help you make the right choice and determine if you’re ready to buy now or need to wait a little longer to become a homeowner.

This article was originally published by Michele Lerner on realtor.com. To see the original article, click here.

What Kind of Home?

There are many different types of homes, but the vast majority fit into one of several broad categories.

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photo courtesy of freedigitalphotos.net

Depending on your particular situation, it may be best to focus on one of the following:

Single-family detached

This can be anything from a 100-year-old handyman’s special to a designer home in the most posh planned community in town. Whether it’s a starter home or a starter castle, it is, by definition, a single house on its own parcel of land.

As the owner of a single-family detached home, you get to make all decisions (within reason) regarding exterior style, yard improvements and household rules (parking, pets, late-night noise, etc.). The flip side, of course, is that you also get to pay for all repairs and routine maintenance.

Condominium

Condos, too, take many shapes and forms attached townhouses, warehouse lofts, high-rise apartments, etc., but all adhere to two basic principles:

  • Each owner owns the interior of their unit — “from the paint in,” as they say — and a portion of everything else from the roof and exterior walls to any communal facilities
  • All owners pay dues to fund a homeowner’s association that handles maintenance, common-area repairs, insurance and unpleasant surprises.

For some buyers, a condo can be an excellent choice. They tend to be more affordable (lower construction costs, shared expenses), require less maintenance (someone else cleans the gutters and mows the lawn) and often have amenities (a pool or fitness center). The downside? More density, which can lead to greater noise, less privacy and potentially, less appreciation when you’re ready to sell.

Co-op

It’s short for cooperative apartment, and although they’re not common (except in high-cost, high-density areas such as New York City), they are an option. They typically resemble condominiums, but instead of owning their own unit, co-op owners become shareholders in the corporation that owns the entire property. The corporation (through a board of directors) assesses monthly dues, manages the property and pays the mortgage and other bills.

More to the point, perhaps, shareholders get to vote on all major decisions, including who gets to live in the co-op. In other words, your fellow owners can turn down prospective buyers based on everything from financial concerns to perceived reputation (although, by law, they can’t discriminate). In other words, getting out (i.e., selling) can be just as difficult as getting in.

Town houses

The term “town house” or “town home” isn’t a legal one, but rather a decorative one. Simply put, it refers to homes that are individually owned (along with the land beneath them) but that also share common walls with one or more neighboring homes. From inner-city row houses (think “Rocky”) to downtown duplexes to golf-course villas, they occupy a sort of middle ground between condominiums and single-family detached homes.

Are they a good idea? It depends on your tastes and interests. Like detached homes, most provide a yard (although usually quite small); like condos, they often provide communal amenities (e.g., a swimming pool, tennis courts) but with the same noise, privacy and stylistic issues. And, assuming you’ll sell someday, it is wise to be aware that, all things being equal, town houses generally appreciate more than condos, but less than detached homes. However, they are usually cheaper than a detached home.

This article was published by Diane Tuman on Zillow Blog. See the original article here.

Yurt in the Colorado Wild

In most cases, living in a yurt requires a commitment to a more minimal, off-the-grid lifestyle. However, opting for tight quarters can often yield incredibly relaxed settings. A case in point being this little red dual-action yurt that punctuates vista views of the La Garita Mountains in Creede, Colo.

from realtor.com

Currently a backcountry lodging establishment, the 28-acre property consists of three separate parcels on the edge of Campbell Mountain and sits almost completely ensconced in a national forest. The three parcels have been zoned to allow for the building of a main house and a guest house on each.

from realtor.com

from realtor.com

Included in the $750,000 list price is a one-bedroom, one-bathroom yurt that offers a cozy 741 square feet of living space. The yurt has been completely remodeled and now sports metal exterior siding for better protection against the elements.

from realtor.com

from realtor.com

The wilderness lodging company business will also be conveyed in the sale. The business’ website notes that since the property is privately owned, forest permits are not necessary in order to operate the business, and the area has previously been approved by the county for “yurt rental use.”

from realtor.com

from realtor.com

Mark Richter of Scenic Mountain Properties has the listing.

This article was originally published by Neal J. Leitereg on Realtor.com. To see the original article, click here.

How to Make Your Older Home Appeal to Young Buyers

As a home seller, you can work with a Realtor to identify potential buyers for your home, but chances are your buyer will be young, particularly if you’re selling to a first-time buyer.

How to Make Your Older Home Appeal to Young Buyers

According to the 2013 National Association of Realtors® Home Buyer and Seller Generational Trends study31 percent of recent buyers were Generation X Americans (those born between 1965 and 1979), followed closely by Millennials, also called Generation Y (born between 1980 and 2000), at 28 percent.

If you own an older home, you may need to make some adjustments to your marketing and tweak your home so that it appeals to these younger buyers.

Offer Perspective on Your Home’s Condition

Many first-time buyers are leery of purchasing a home that will require a lot of maintenance or repairs, so you may want to schedule a home inspection before you list your home and provide a reassuring report about potential problems that are non-existent or that you’ve already addressed. If you don’t want to take the time or money to make repairs, you can offer an upfront rebate to your buyers to cover their renovation expenses.

If you know your home needs some major improvements to attract buyers, you can provide prospective buyers with possible renovation plans that demonstrate whether the structure can be expanded or perhaps has attic space that can be finished. You can also have a lender prepare an example of a renovation loan from the FHA 203(k) program or the Fannie Mae HomeStyle Renovation program that allow borrowers to wrap renovation costs into their purchase loan.

A home warranty can be purchased at minimal cost to provide peace of mind about potential repairs to your appliances.

Market Your Community

Younger buyers are often looking for neighborhoods with good schools, recreational amenities and a strong sense of community where they can establish their family. Pick up brochures for local attractions or make your own list of great parks, playgrounds and walking trails; and contact information for local soccer league organizers, the swim team or community groups that support the arts, block parties and local festivals. If you live in an area with restaurants, nightlife or plenty of commuting options, you can provide information about those amenities, too.

Your buyers want to visualize a lifestyle for themselves and you can provide the information that helps them recognize the benefit of living in your community.

Showcase Your Home’s Best Features

All buyers want to see a home that looks clean and bright, but younger buyers are particularly attracted to homes with plenty of natural light. Older homes sometimes have smaller windows and smaller rooms, but you can improve the appearance of these rooms by using brighter light bulbs, removing window treatments and trimming back overgrown trees or shrubs from your windows.

Stage your home by removing any excess clutter, storing your heavy and dark furniture, and adding mirrors to bounce the light around the rooms.

Bring in a few young relatives or neighbors to get their suggestions about what they might like to see in your home, and work with a Realtor who can help you add a touch of youth to your aging home.

This article was originally published by Michele Lerner on realtor.com. To see the original article, click here.