What Should You Fix Before You List?

When you’re getting ready to list your home, you want to be sure you’re showing it in the best light. Taking time to highlight its strengths (and fix up some of its possible weaknesses) can make a big difference in how fast it sells. Here are our top five recommended repairs to make before selling your home.

Repaint walls.

Giving your home a fresh coat of paint is one of the most cost effective ways to spruce it up, and generally, it can be a DIY project. Make sure to cover any walls with scratches and chips and consider updating any accent walls with a more neutral coat.

Repair floors.

Hardwood floors are a very desirable feature in a home, so you want to be sure yours look their best by fixing scratches or dull areas. If your carpet is worn or stained, consider replacing them. And don’t forget the tile in your kitchen or bathrooms — re-grouting can go a long way in making dingy tile work look brand new!

Refresh the landscaping.

Show buyers your home is the full package by dressing up the outside as well as the in. Clean walkways and driveways, plant seasonal flowers and plants, trim hedges and trees, install outdoor décor pieces and fill in mulch and gravel.

Fix your fixtures.

Leaky faucet? Rusted drains? Loose drawer handle? Making these small fixes can make a big difference to potential buyers with detailed-orientated minds. Improve your kitchen. An outdated kitchen can be a real eyesore in a home. Updating cabinetry, repairing or replacing countertops, and installing new faucets and sinks may be worth the investment

These small improvements can make a major difference in your home’s appeal. If you’re ready to sell your home, we’re ready to help make it official. Give us a call today!

What Should You Negotiate?

Whether you’re a first-time homebuyer or a seasoned veteran, negotiations on a property purchase can be a little daunting and stressful. That’s why you should always work with trusted experts (like us). So, what should you negotiate when buying a home? 

Closing Costs 

Your closing costs are determined by a variety of factors, but you can expect it to be between 2% to 5% of the purchase price. Ask the seller to cover some or all of the closing costs upfront, or request a closing credit that can be used to make specific updates and fixes to the home.

Furnishings

Love how the seller has furnished and decorated the home? Buyers often negotiate keeping couches, fixtures, landscaping items, patio furniture, appliances, and more. Many sellers will agree, because they want to make the home more appealing and get the deal they’re looking for.

Inspection & Closing Timing 

Offers that include a quick inspection and closing timeline are often more attractive to sellers, especially those who have been going through the process for a long time. Just make sure you aren’t moving too quickly — even with quick turnarounds, you need to allow yourself ample time to get your financing in place and conduct proper, thorough inspections.

Home Warranty

Sellers will often agree to pay the premium on the home warranty at closing and then hand it off to the new homeowner, who is responsible for the deductible on any future claims.

Repairs

Your inspection may uncover small or large repairs needed to bring the home up to standard. You can negotiate to have these items fixed before closing or ask for a price reduction to cover the costs.

Whenever you’re ready to start negotiations on a new property, make sure you’re working with the right team of experts. We’re dedicated to making sure your closing is quick, efficient and as cost-effective as possible. Give us a call today!

What is a Home Appraisal?

You’ve found your dream home, and now it’s time to make it your own. One of the first things you’ll want to check off your final closing list is the home appraisal. So, what exactly is that?

The home appraisal is essentially a value assessment of the home and property. It is conducted by a certified third party and is used to determine whether the home is priced appropriately. If you’re buying your home using a mortgage, your bank will require the home appraisal. This is different from a home inspection — an appraisal protects the financial interests of the lender, and while a home inspection protects the buyer from potential maintenance or repair issues.   

During a home appraisal, the appraiser conducts a complete visual inspection of the interior and exterior of the home. Their assessment will factor in a variety of things, including the home’s floor plan, functionality, condition, location, school district, fixtures, lot size, and more. Adjustments will generally be made if the home was recently renovated, or exterior upgrades like a deck or pool were put in place. The appraiser will also compare the home to several similar homes in the area — known as comps — that sold within the last six months.

Unlike a home inspection, an appraisal only looks at the surface value of the property. The appraiser will note any obvious damage, such as a badly dilapidated roof, but won’t conduct the same thorough tests you’ll get from a home inspector. The final appraisal report must include a street map showing the property and the comps, photographs of the interior and exterior, an explanation on how the square footage was calculated, market sales data, public land records, and more.

After the appraisal report is complete, the lender uses the information to ensure that the property is worth the amount they are investing. This is a safeguard for the lender, as the home acts as collateral for the mortgage. If a buyer defaults on the mortgage and goes into foreclosure, the lender generally sells the home to recover the money borrowed. 

As a buyer, the most important thing to note is that home appraisals protect the bank, not the homeowner. You’ll still need to schedule a home inspection to be sure that your home is in good condition and won’t require any unexpected repairs. 

Are you ready to close on your dream home? Give us a call! 

What Every First-Time Homebuyer Should Know

Buying a home can be an incredibly intimidating process, especially if you’re a first-time buyer. But fear not! Here are some simple tips to keep in mind to make your first home-buying experience run smoothly. 

Start saving early. 

Most people will tell you that a 20% down payment is standard, but some lending programs will allow you to put down as little as 3%. This doesn’t always mean you’re saving money, however. A low down payment often results in higher costs in the future. Even if you are able to negotiate a small down payment, that can still be a lot of money. For example, a 10% payment on a $200,000 home is still $20,000.  

Know your mortgage options.

There are a lot of factors to consider when you’re applying for your first mortgage, and a lot of opportunity for less-than-scrupulous lenders to take advantage. Make sure you do your research and work with a mortgage expert so you know you’re getting the best deal. 

Get a pre-approval letter.

You can pre-qualify for a mortgage, which means you can get a basic idea of how much a lender is willing to approve based on factors like your income, credit history, and down payment. As you get closer to finalizing your home purchase, make sure you get a pre-approval letter in writing. This will help you look more serious to sellers, and help protect you from last minute approval changes that could cost you.   

Budget for additional expenses.

It can be hard to see past the asking price of your dream home, but don’t forget there are other expenses to consider. Closing costs, title insurance, moving costs, or necessary updates and repairs can add up quickly. It’s helpful to have a little extra set aside to cover these final costs so you don’t find yourself going over budget. 

Trust the experts.

You may have seen every episode of House Hunters, but that doesn’t always translate to real world knowledge. Work with a realtor and a closing attorney you trust (hey, we know a guy!) to make sure everything runs smoothly and is cost-effective. 

Becoming a homeowner for the first time is an exciting experience, and one you’ll remember forever. Make sure you’re ready to take the leap, and know that there are plenty of people ready to help you open the door to your dream home! 

What is a Cash-Out Refinance?

Refinancing your home means asking a lot of questions. Like any major financial decision, you want to be sure you have all of the information you need to make the best choice for you and your family. Understanding the way refinancing works can seem overwhelming, but that’s okay! If real estate finance was easy, you wouldn’t need us around. We’re here to help explain a few things that you need to know. 

Today’s Lesson: Cash-Out Refinances

In real estate, there are two basic refinance options: rate-and-term and cash-out refinances. While a rate-and-term refinance could help you save money over time, a cash-out refinance could be a good option for anyone looking for a boost of cash flow in the short term. Cash-out refinancing means that your home equity is converted into cash by creating a new mortgage for a larger amount than what you currently owe. 

For example, if you took out a $200,000 home loan and have paid off $100,000 over time, this means you have $100,000 worth of home equity. If you wanted to convert $50,000 of that equity into cash, you could opt for a cash-out refinance. In this scenario, you would get a new loan for $150,000 — the remaining balance on your original loan plus the $50,000 cash. You pay the balance on the first loan ($100,000) and keep the remaining $50,000. You still owe that $100,000, but you’ll be paying a new lender at a new interest rate.  

Lenders will look at your property’s loan-to-value ratio to calculate how much equity you have, and how much you could potentially cash out. If your home has drastically increased in value since you purchased it — but you’re not ready to sell anytime soon — a cash-out refinance could be a good option. This type of refinance could also be a smart choice if you want to renovate your current home, because you’re essentially using the equity you already have to increase the value of your home. 

Cash-out refinances typically come with much higher interest rates than your initial mortgage, so they’re not always the right option for someone looking to save money long-term. Instead, a cash-out refinance could work for someone looking for extra money in the immediate future. It’s not a get-rich-quick scheme, though. You might be getting a boost of cash right away, but could end up paying more over time. 

As always, make sure you’re working with a team of trusted experts. There are so many individual factors to consider when refinancing your mortgage, and you’ll want someone who has the time to answer all of your questions and make sure your specific needs are meant. If you think a cash-out refinance is right for you, give us a call today!

What is a Rate-and-Term Refinance?

Mortgage rates are lower than in recent years, which means now is a great time to think about refinancing your existing home loan. A mortgage refinance is a big decision, and making the right choice now could save you thousands of dollars in the future. If you’ve never considered refinancing before, you’re probably finding yourself overwhelmed with questions and unfamiliar terms. And that’s okay! If real estate finance was easy, you wouldn’t need us around.   

We’re here to help explain a few things you might want to know.

Today’s lesson: Rate-and-Term Refinance

A rate-and-term refinance changes the interest rate on your loan, the term (or length) of the loan, or both. Unlike with a cash-out refinance, this type of change doesn’t advance any money on the loan — which means you won’t see a lump sum of cash. Instead, this type of refinance can save you money by lowering your monthly payment or by allowing you to pay off your loan faster (saving you money in interest). Rate-and-term refinances are driven by drops in market interest rate values. 

If you purchased your home during a time of high market interest rates, you might want to consider a rate-and-term refinance now while the rates are lower. This type of refinance is also a great option for homeowners who have seen positive changes in their financial situation since they purchased. If your consumer credit score has improved drastically over the last few years you’ve owned your home, you could qualify for a much lower interest rate. 

Rate-and-term refinances aren’t right for everyone. If you’ve only been in your home for a few years and you haven’t experienced any major financial changes, you might be better off waiting a few years or looking for a different type of refinance. 

No matter what you decide, make sure you’re working with a team of trusted experts. There are so many individual factors to consider when refinancing your mortgage, and you’ll want someone who has the time to answer all of your questions and make sure your specific needs are meant. If you think a rate-and-term refinance is right for you, give us a call today! 

Real Estate Terms Explained: Title Insurance

If you’re a first-time buyer, you’re probably faced with a lot of unfamiliar terms as you complete the closing process. But don’t worry! We’re going to use the power of the blog to explain (most of) them to you. 

Today’s lesson: Title Insurance

What the heck is title insurance? 

Technically there are two answers to this question, because there are two types of title insurance: the lender’s insurance and the owner’s insurance. Both policies protect against future financial losses. To put it simply, if your home purchase falls through after closing, these insurance policies can save you and your lender from being financially responsible for a property home that you didn’t actually purchase. Most lenders will require this insurance, and you’ll find it included with the rest of your closing costs. Owner’s insurance is optional, but highly recommended. Both policies are a one-time fee that you pay at closing.   

Why would my purchase fall through after closing?

It’s an unlikely scenario, but it is possible. When you purchase a property, a title researcher will check the ownership history to make sure you have what is known as a “clean title.” This means that there are no pre-existing issues that could prevent the title from becoming legally yours. 

A pre-existing issue could be that a previous owner failed to disclose a creditor’s lien on the house, or the property is caught up in an inheritance dispute, or there are uncollected taxes on the property. In most instances these issues are the result of a minor error and can be cleared up quickly, but there are cases where the title issues take months or even years to resolve. And if you find yourself in one of those situations, you’ll be facing a mountain of legal fees and the potential that you’ll lose the property (and the money you invested) before you even unpack. 

Alright, I hear you. How do I get title insurance? 

Typically your agent or closing attorney will start the process for you. You’ll be charged a one-time fee (the exact cost will vary depending on a variety of factors), and even though you only pay for it once, the coverage will insurance your financial transaction as long as you own the property. Please note: this is NOT homeowners insurance — that’s a completely different type of policy and coverage. If you’re not sure how to find the right title insurance, talk to your closing agent or attorney. We live for this stuff. 

Title insurance may seem like yet another unexpected cost, but trust us, it’s worth it. If you still need convincing, give us a call! We’re here to help you every step of the way. 

Are You Ready to Refinance?

As mortgage rates dip lower and lower, you might be wondering if it’s time to think about refinancing. Many homeowners could find themselves able to negotiate a lower rate, and be able to pay off their home loans sooner than they initially planned. If you’re thinking about refinancing your mortgage, here are a few things to consider before you do: 

Know how much your home is worth.

The amount of equity you have on your home is one of the most important factors in refinancing. Your loan to value ratio, or LTV, is what lenders use to calculate how much equity you have. The less equity you hold, the higher your rate will end up being. A real estate agent can compare your home to similar homes in the area and create a competitive market analysis, so you can have a better idea of how your home is currently valued. 

Have clear financial goals.

There are a few reasons that homeowners decide to refinance. You could lower your monthly payment and give yourself extra room in your budget for other expenses. Another option is to continue making the same payment, but pay off your loan a few years earlier than expected. Some homeowners opt for a cash-out refinance, where you borrow more than the balance due and take the difference as a lump sum of cash. This money can then be used to pay off other debts, such as credit cards or student loans, or used to finance remodeling or other expensive home improvements. There is no right or wrong option — it’s best to work with a financial planner or lending expert to decide what will work for you. 

Don’t wait too long.

The mortgage interest rate market is as fickle as the stock market, and interest rates can change quickly. If you feel comfortable with the way the math is adding up, work with a loan officer (and a closing attorney!) that you trust. Get the necessary paperwork — such as current mortgage statements, pay stubs and bank statements — in order so you’ll know you’re fully prepared. Once you and your loan officer find the best rate for you, be sure to request a written confirmation of the rate you’re being offered. Remember, if it’s not in writing, it’s not legally binding! 

Refinancing your home mortgage can seem like an overwhelming and impossible task, but it doesn’t have to be! We’re here to help connect you with the best agents and loan officers in town, and make all of the necessary paperwork and negotiations are completed properly. Contact us today! 

How to Find the Right Commercial Space

Finding a great commercial property isn’t quite the same as finding your dream home. Instead of looking for the right number of bedrooms or a good school district, you need to consider how the property works for your business — and if you’ll end up spending more money than you make. 

So how do you get the best deal on a commercial property? We’re glad you asked…

Think like a professional.

Commercial real estate is a different ball game. Unlike residential real estate, commercial properties are typically valued based on potential income, or how much money your property could make in the future. For example, a prominent space in an established retail district is going to be valued higher than an off-the-beaten path location. While the financial potential of a property is definitely among the things you should consider in residential real estate, it’s the thing to focus on in a commercial transaction. 

Have a plan in mind. 

Are you looking for a space to house your business, or are you in the market for a multi-family rental property? How much build out are you willing to invest in? If you’re opening a new restaurant, you probably want to look for spaces that already have the foundations (plumbing, gas lines, etc) for a commercial kitchen. If you’re interested in owning and managing a large residential property, you’ll want to consider how many units are in the building and the average rent in the neighborhood. Knowing the business side of what you’re looking for is just as important as knowing what design features you want the building to have. 

Know the neighborhood.

Commercial properties can change hands quickly. Every neighborhood has one of those spots — one year it’s a hair salon, then a pet store, then a coffee shop. Finding a motivated seller can help you score a great deal, but be careful you’re not buying into a “cursed” location. Does the space have enough parking? Is it easy for customers to find? Additionally, you’ll want to do your research on the surrounding businesses — does the area really need another pizza place? It also helps to visit neighborhood business associations or city councils, so you can start to form relationships with the people who will one day become your customers. 

Most importantly, make sure you have a team of experts on your side! We’re always ready to help you close on the perfect property, so give us a call (especially if you’re going to open a pizza place near our office).  

How to Avoid Escrow Wire Fraud

We live in a world of digital transactions. Whether we’re paying bills, buying groceries, or splitting a check at dinner, more and more of our financial interactions are occurring online or on our phones. And while that does add a level of convenience to most situations, it also makes us more susceptible to fraud. When you’re closing on a property — possibly one of the biggest financial transactions of your life — you want to be sure that your hard-earned money is safe. 

Escrow wire fraud has become alarmingly common, and it’s surprisingly easy to fall for. The way it works is simple — you get an email, phone call, or text message from someone claiming to be associated with your agent, broker, or other party involved in your transaction. At first it seems legitimate. The person contacting you sounds official and has the right information, they claim to be affiliated with someone you’re working with… who are you to question it, right? Just give them what they need and get back to your busy day. 

And that’s exactly what they want you to do. Before you know it, they’ve cleaned out your accounts and headed for an exotic location while you’re left picking up the pieces. But not today, evil doers! Here are a few simple ways you can avoid being a victim:

Keep it to yourself.

Never, ever, ever, EVER give personal information (such as your bank account or social security number) to someone you have never spoken with. It doesn’t matter if they insist that they work with someone you do know — do not give them your information. Instead, tell the person that you would like to hear from your agent or broker directly, and hang up the phone. If they’re on the up and up, they’ll understand and have the right person contact you.  

Know who you’re dealing with.

Look carefully at the phone number or email address trying to contact you. Hackers use spoofing technology that make it look like they’re coming from a familiar place, but when you look closely you’ll see that they’re off by one letter or number. It’s also important to pay attention to the URL or web domain listing — is that email coming from fbp-law.com, or fbp-law.co.au? If it’s a different address than what you’ve seen before, ignore the email and contact the right person immediately. 

Stick with the plan.

Be wary of anyone trying to change information that you already have. For example, if you’ve been instructed by your broker to send money to a specific account, don’t trust a text message asking you to “make a last minute change” and send the money somewhere else. Always verify any additional instructions you receive with the right person.

Meet in person.

Do things the old fashioned way! It may seem archaic, but the more you can do in person the harder it is to be a victim of a scam. Request face-to-face meetings as often as possible. It’s easy to fake an email address, but it’s pretty much impossible to fake an actual human being standing in the same room as you. 

Trust your gut!

If something seems fishy, it probably is. Never hesitate to ask questions or demand to speak to the right person. Don’t worry about seeming rude or “bothering” your agent or broker — any reputable real estate professional will tell you that they would much rather address your concerns than see you fall victim to a scam. 

Escrow fraud can be scary, but it can also be easy to avoid. We’re always available to answer your questions and help keep you (and your money) safe!