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Curb Appeal 101

Do you plan to sell your home in the near future? If so, you need to do everything you can to increase the likelihood of a quick sale. This is particularly true in a slower market that has plenty of homes but not enough demand. In such a market, you must go above and beyond to attract buyers and make the sale.

Curb appeal is one of the key factors that will determine whether a potential buyer comes inside for a closer look, or keeps on driving. So it’s worth your time and effort to improve your home’s exterior appeal.

Here are some key areas to focus on:

* Start by assessing your lawn, if you have one. The grass should be green and healthy, unless of course it’s winter. If your lawn has problems such as brown patches, you need to address those problems right away. Turning a lawn around can take time, depending on how severe the problems are.

* Is the exterior paint chipped or faded? If so, give it a fresh coat of paint. It’s relatively inexpensive, and it will do wonders for that critical first impression we talked about earlier.

* When evaluating the paint, pay particular attention to the shutters, doors and trim. Sometimes you can get away with hosing them off. Other times they simply need to be painted. If the doors and shutters are painted different / contrasting colors, you may want to standardize them.

* Planting fresh flowers can really brighten up a yard and entryway. Healthy shrubs can do the same, and they don’t cost much either. If you don’t have a green thumb, enlist help from a friend of family member who does.

* The windowpanes should be spotless, and the frames around them should be free of dirt, cobwebs and defects.

* Lighting can be used for aesthetic and safety reasons at the same time. If you have potential buyers coming by in the evenings, light up the walkways and entry. Consider using decorative lighting to illuminate landscaping features, trees, etc.

* Do you have vinyl railings, shutters or storm doors outside your home’s entryway? If so, give them a good washing. You would be amazed at what a little elbow grease can do for these areas. It’s quick, easy and affordable — all you need is a hose, a bucket, and some car wash liquid or dish soap.

Create a Plan of Attack

The key here is to avoid taking on too much work at once, or spending too much money. You need to strike a balance of cost versus gain. If you bite off more than you can chew and create a long list of improvements, you could delay your ability to show the property. Create a checklist of all the projects you feel are necessary.

Next, prioritize your projects by level of importance. Organize the list by things that must be done immediately, things that can wait, things that aren’t a big deal, etc. That way, if you run out of money or time, you’ll have the most important items out of the way first. And remember to start with the lawn and other landscaping areas. Making the grass greener is a gradual process, so start that right away.

Conclusion and Going Forward

Curb appeal is essential when selling a home because it gives buyers a good first impression. On the other hand, if they get a bad first impression when pulling up to the house, they will carry that negativity into the house with them. That’s not something you want.

Do what is necessary to improve your home’s outward appearance, but don’t take on so much that you postpone the listing / showing of the property. And get help where you need it, if you’re not handy with a certain project. All of your efforts will pay off in the end.

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How Do I Know the True Market Value of a Home I’m Considering?

Question: “I’m looking at a house that I think might be overpriced. What’s the best way to know for sure? How do I know the market value of a home I’m thinking about buying?”

Let’s start off with a quick definition, just to make sure we’re on the same page. In real estate terms, the “market value” is the most probable price a home will sell for, based on local housing market conditions and recent sales activity.

Notice that this definition does not mention the original price paid by the current owner. Unless they bought the home a month ago, the original purchase price is likely irrelevant to the current market. Likewise, the market value of a home has nothing to do with the homeowner’s current mortgage balance. Many sellers list their homes for the amount needed to pay off the loan. This is wishful thinking, and nothing more.

How to Determine Market Value

So, with that introduction out of the way, let’s get to the heart of your question. How do you know the market value of a home you’re considering?

The first thing you need to do is track home sales in the area. The longer you do this, the better. It gives you a good base of knowledge with regard to asking prices versus selling prices (only the latter determines market value).

Next, you should look for sales data on homes that are similar to the one you’re considering. This is what real estate agents refer to as comparable sales, or comps. The more similar the two properties, the more accurate the pricing comparison.

Try to dig up as many home sales as possible. This will help you support your offer amount, by showing the seller you’re using actual market value for homes in the area. You should lean toward the most recent data. Prices change over time, so recent comps will give you a better idea of what’s happening now, in the current real estate market.

When you determine the market value of a home, you also need to take any unique features into account. For example, let’s say I’ve found sales data for two colonial-style homes that are 2,000 square feet. The home I’m considering is also a colonial with 2,000 square feet. But it has a completely renovated kitchen, a pool, and sits on a more spacious corner lot with a great view. The other houses lack these qualities. So the house I’m considering will likely sell for more than the two comps, despite the fact the homes are similar in size and style.

Here’s a good “formula” to keep in mind when considering the market value of a home in a particular area:

Comparable sale prices + unique features = a good asking price

If a homeowner uses this kind of logic when setting the asking price, the home will probably sell at or near the price they are asking. If they go over this amount, based on greed or the need to pay off their mortgage, the house will probably be on the market for a long time. This is why it’s important to understand true market value before making an offer.

With all of this being said, real estate pricing is not an exact science. So if it comes down to a situation where the owner is asking a little over what you feel is the market value (but you really want the house), you might want to give them what they are asking. Especially if home prices are expected to rise in your area.

Pricing, Real Estate, Selling, , , , , ,

Getting Approved for a Mortgage: 5 Steps to Approval

If you’re like most home buyers, you probably have questions about the mortgage approval process that awaits you. This is only natural, given the size of the investment. The good news is that the approval process is usually straightforward and easy to understand. Here are the basic steps.

Mortgage Approval by the Numbers

In most cases, the approval process includes the following steps: Pre-approval, application, underwriting, property appraisal, and mortgage approval (if all goes well).

1. Pre-approval Process

This is a preliminary review of your financial situation. The lender will pre-approve you for a certain size of loan. Basically, this is a way for the lender to decide whether or not to move forward with the process. If this preliminary review goes well, you move one step closer to mortgage approval.

Among other things, the lender will want to know the approximate cost of the home you plan to buy (even if its hypothetical at this stage), how much money you need to borrow, the type of loan you want, how much money you earn each month, and your total recurring debts.

2. Mortgage Application

Based on the pre-approval process, the lender will have a general idea whether or not you’re a good candidate for a mortgage loan. If they feel you are a candidate, you will likely move on to the mortgage application itself. (Some lenders combine the application and pre-approval process, while others separate the steps. It varies.)

This is where you will have to make a final decision on the type of mortgage loan you want, and also lock in an interest rate for the loan. In nearly all cases, you’ll have to pay an application fee as well.

3. Underwriting and Documentation Review

Underwriting it the most critical part of the process, but also the most “mysterious” to home buyers. The lender’s underwriting department will closely review your documentation, credit score, employment documents, etc. If they find anything wrong, it could slow down the process or, at the worst, derail it altogether. If they find minor issues, they will give you a conditional approval, along with a list of conditions that must be addressed prior to final approval. If you’re lucky, you’ll sail through the underwriting process with no issues whatsoever.

4. Property Appraisal

One of the next major steps in the mortgage approval process is the property appraisal. This is where the lender sends a professional home appraiser out to evaluate the property. The lender wants to make sure the home is worth the amount you have agreed to pay for it. In the event that you default on the loan and can no longer make payments, the lender will have to take on the property and sell it. So they want to know what it’s worth, before approving the loan.

5. Mortgage Approval

If everything goes well up to this point, there is very little between you and your new home. You will attend the closing or settlement process, where you will have to pay all remaining fees and costs. This is also where you get the keys to your new home!

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Selling Strategies | Pricing Your Home for Quick Sale

You can price your home in one of three ways. You can price it to sell quickly, eventually, or not at all. The first option appeals to most sellers, obviously. So let’s talk about how you would achieve it. How to Price Your Home to Sell Quickly * When selling a home, you have to change your mindset from “owner” to “seller.” In reality, you are both of these things. But you need to think more like a salesperson than a homeowner, especially when it comes to pricing. Adopt this mindset now, before you move any further into the home selling process.
* Here’s a little mantra to help you think like a salesperson. “It’s not personal. It’s business.” You should repeat this mantra as you determine your asking price, and when negotiating with buyers. The personal and emotional connection you have to your home does not translate into market value.

* There’s a possibility your home is worth less today than when you bought it. When the housing bubble burst a few years ago, it caused property values to drop in many cities across America. You might live in a city where home values have recovered since then. If so, count yourself lucky. But you might also live in a market where prices haven’t yet reached their pre-bubble peaks. So be prepared for this kind of harsh reality, in case it applies you.
* The market determines what your home is worth — you do not. If you price the property based on what you need to get from the sale (and this amount exceeds the true market value), you could be in for a long wait.

* The only way to sell an overpriced home is by finding a buyer who is willing to pay more than market value. Such buyers are few and far between. Buyers are more price-savvy than ever before, due to the housing crisis of the late 2000s. Nobody wants to buy into a negative-equity situation, and most lenders won’t even allow it. So price the home properly from the start.

* If you have a real estate agent, he or she will help immensely during this stage. Your agent will gather data from recent comparable sales in the area. This is what agents refer to as “comps,” and they are the key to your pricing strategy. If the buyer also has an agent (and most of them do), they will be looking at the same data. If you price yourself above the comps but have nothing to justify the increase, your home might be on the market for a long time.

* If you’re selling the home by yourself, you should have an appraisal done. Comparable sales are a good guide to pricing, but they only take the other houses into account. They don’t take into account any improvements you’ve made to your own house. A person has to do this — whether it’s a real estate agent or a professional home appraiser. As you can see, there is a lot of research involved in the pricing process. But it’s necessary research. If you skip it, you could end up overpricing the home. And that’s rarely the path to a quick sale.

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