Month: November 2022

Holiday Home Selling

Winter season is not the most optimal but if you hire a Realtor that knows your market well, you still can sell your home at a competitive price. If you are living in the Northeast, Midwest, or other cold areas, the following are some ways that can help to sell your home faster and at a fair price during the busy month of December and then through the darker months of January and February.

There are fewer homes being sold now, and winter in general, which makes people nervous about putting their homes on the market. More home buyers are house-hunting in the Spring months when the weather is warmer, and the days are longer. But, you might be surprised to find out that Winter could actually be a great time to put your home on the market. The new year is a time when most people are back at work after the holidays and will often search the web for their next big move. If you are serious about selling your home, it should be online and marketed early to ensure they don’t miss this audience.

Because it isn’t a high-selling time, you will need a very experienced Realtor to help price your home as it can be complex. You don’t want to scare off buyers by pricing too high or even too low, causing buyers to wonder what’s wrong with your house. When your home is put on the market in the winter, buyers often assume you are desperate to sell your home and may lowball you thinking you’ll sell for any price. Buyers that are house hunting during this traditional off-season time, usually mean they are eager to buy and more willing to negotiate the price.

One of the beauties of the holiday months is that many people adorn their homes with festive lights and decorations. People purchasing a home during that time may see the neighborhood in a different light—more festive and cheerful—and may be more willing to consider an area that they may have been on the fence about.

Stirring up some interest during cold January is to price your home slightly under comparable homes in order to draw in multiple offers. More offers tend to drive up the value of your home prompting more competitive bids from buyers who often will end up paying more than the initial asking price.

The real challenge might be to help dress up your home after the holidays in dreary January and February weather. To help make your home feel more welcoming, shovel the walks, add outdoor illumination along paths, light candles indoors, add cozy throw blankets, and have holiday-type smells such as cinnamon or cookies.

Furthermore, during the cold, any problems you may have in your home can become more prominent including drafts and leaks. To help lessen these potential problems, crank up the heat so buyers feel toasty warm and will be less likely to notice any issues.

While it may be difficult to sell your home during the holidays and January and February, it’s not impossible especially if you hire an experienced Realtor who knows your neighborhood well and can guide you to list your home at the best possible price. Sometimes, waiting to list your home during the beautiful Spring months when the sun is out and the trees are blooming and flowering can mean that you could miss out on potential buyers. Many Realtors will tell you, some of their best sales happened in the new year.

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3 Types of Real Estate Fraud

Buying, selling, and owning real estate is often the most expensive transaction many individuals will undertake in their lives. Hundreds of thousands of dollars are involved and dishonest tricksters and scammers are out there hoping to take advantage of those involved.

Con artists may use several methods to swindle you in one of their schemes. Foreclosure bailouts, home equity fraud, home renovation scams, rental fraud, and deceptive timeshare scams, are just a few types of real estate fraud that may be performed. Here are three of the most common:

Foreclosure Bailout

A foreclosure rescue scheme is a type of fraud that takes advantage of homeowners who have fallen behind on their mortgage payments.  The fraud perpetrator approaches the homeowner with promises of paying off the delinquent mortgage and helping the homeowner stay in the property. 

There are many variations of a foreclosure rescue scheme.  Some schemes require the homeowner to unknowingly transfer the property title to a third party.  Other schemes will promise homeowners that if they transfer the title, they can continue to rent the home and repurchase it at a future date.  The purchaser of the property, sometimes the foreclosure rescue artist, is now free to refinance the property or to sell the property to another party.  Sometimes the foreclosure “rescuer” charges the borrower high ‘service fees’ up front and then disappears with the money without providing the promised service. 

Home Equity and Home Renovation Fraud

According to the Council of Better Business Bureaus, home-remodeling contractors ranked slightly behind car salespersons and auto mechanics in generating the most consumer complaints. Be very careful when using your home or your home equity as security for a home improvement loan. Fast-talking salespeople will offer to refinance your home at a lower interest rate to provide cash to the homeowner, the cash can be used to pay for home improvements or to pay off bills. Victims are frequently asked to sign blank contracts or contracts that they were not allowed to read before signing. Later, the homeowner discovers that they signed a contract that contains terms in contrast to the originally promised terms. This results in the loss of equity in the victim’s home, and also they have signed a mortgage in which they have incurred considerably higher interest rates. The homeowner is now faced with a higher mortgage payment, one that they may not be able to afford.

Rental Fraud

Rental scams occur when the victim has a rental property advertised and is contacted by an interested party. Once the rental price is agreed upon, the scammer forwards a check for the deposit on the rental property to the victim. The check is to cover housing expenses and is, either written in excess of the amount required, with the scammer asking for the remainder to be remitted back, or the check is written for the correct amount, but the scammer backs out of the rental agreement and asks for a refund. Since the banks do not usually place a hold on the funds, the victim has immediate access to them and believes the check has cleared. In the end, the check is found to be counterfeit and the victim is held responsible by the bank for all losses.

Another type of scam involves real estate that is advertised online. The scammer duplicates postings from legitimate real estate websites and reposts these ads, after altering them. Often, the scammers use the broker’s real name to create a fake e-mail, which gives the fraud more legitimacy. When the victim sends an e-mail through the classified advertisement website inquiring about the home, they receive a response from someone claiming to be the owner. The “owner” claims they’re unable to show the property without payment because they are either out of town or out of the country. If the victim is interested in renting the home, they are asked to send money and shortly thereafter the property is no longer available.

The Bottom Line: Be suspicious of unsolicited email or telephone offers. Scammers often find victims through these spam emails. They may send tens of thousands of those emails, hoping to find a handful of individuals who will respond. With advanced technology and interacting digitally with victims, it can be challenging to avoid real estate scams. However, it’s important to stay vigilant about protecting your personal information and bank accounts. Only work with qualified professionals you trust and familiarize yourself with some of the common warning signs. If you believe you’ve been involved in a real estate scam, make sure to contact the authorities immediately.

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What is Home Equity

Home equity is the difference between what you owe on your mortgage and the current value of your home. You can build equity as you pay down your loan balance and as the market value of your home increases. If you still owe money on your mortgage, you only own the percentage of your home that you’ve paid off. Your mortgage lender owns the rest until you pay off your loan.

With each mortgage payment you make, the balance of your loan decreases, and you build more and more equity (assuming your home value doesn’t decline). When your mortgage is finally 100% paid off, you have 100% equity in your home.

Equity is an important financial tool and one of the greatest financial benefits of owning a home. If you sell your home, your equity will be a factor in how much buying power you have when purchasing a new home. If you plan to stay in your current home longer while you build more equity, you can borrow against that equity to secure a home equity loan. When you take a home equity loan, you are putting up your equity as collateral in case you default on the loan.

There is usually a lot of flexibility in how you use a home equity loan. However, If you are thinking of selling your home in the near future, the home equity loan would be paid in full at the time of the sale.

Typical ways to use a home equity loan:

  • Funding a student loan for yourself or your child 
  • Paying off or consolidating credit card debt 
  • Funding a vacation 
  • Paying for weddings or important celebrations 
  • Starting a business 
  • Making home improvements and upgrades 
  • Paying medical bills 
  • Making key purchases, such as a car or a truck 
  • Funding investments 
  • Set aside for an emergency fund

Advantages of a home equity loan:

  • The interest rates for home equity loans are fixed, instead of variable, and your monthly payment is consistent, so you never have any surprises.
  • You can pay for big purchases little by little.
  • The interest rate you pay on a home equity loan is often lower than those for credit cards or other types of loans.
  • You can usually get access to funds quickly, sometimes within days of completing the loan documents.
  • You also might be able to deduct the interest you pay on a home equity loan.

The Bottom Line: Home equity loans are a great tool to help you borrow against your home’s equity. However, they’re not the only way you can access the money you’ve built up in your home. Before you can decide if a home equity loan is a right choice for your needs, you need to understand your options. Borrowing against your home’s equity is always risky, as the lender can foreclose on your home if you fail to make payments. Be sure to get excellent financial advice before making any decisions.

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Beware Overpricing Your Home!

We all want to get the most money possible when we put our homes on the market so it’s natural to want to ask for top dollar. After you and an experienced realtor review the comps from your neighborhood, you believe you should price it high so that you have room to come down and still make some good money. But the most important part of selling a home is knowing the current market value so you don’t price it too high. There are problems associated with listing your home too high that can actually hurt the sale.

Problem #1: Listings get the most showings in the first 30 days of being on the market. If a home is priced too high, buyers may choose to ignore it or put it in a “wait and see category.” The longer the home sits unsold, though, the more negatively it is viewed. Buyers will think it must be overpriced or there is something wrong with the home. If you wait too long to drop the price, most of those “wait and see” buyers will have already moved on and there will be a smaller pool of buyers interested in your listing as the days on the market increase.

If the home is on the market too long, potential buyers will think they are in a better negotiating position and you may end up receiving a lowball offer, which can be frustrating. Even if you can negotiate up, it will be for far less than your original asking price. If you want to attract as many potential buyers as possible, it’s important that the home is priced correctly from the onset of its going on the market. 

Problem #2: An overpriced home helps your competitors. When a buyer looks at your home and then visits another that is priced the same but comes with more features, your competitor’s home will look like a much better deal.

Problem #3: If your home sits on the market for too long, neighbors and potential buyers will assume that there is a problem with it. The home will be stigmatized, and buyers will either be too turned off or too afraid to check it out.

No one wants to buy a house that nobody else seems to want. A house that sticks on the market for months often generates suspicions that some undisclosed feature or element is making it unsalable.

Problem #4: A buyer is interested in your house and willing to pay the price you are asking. But they need to get money from the bank to pay for it. All banks demand an appraisal of any property they loan out money for, and yours will not be the exception. The market runs the appraiser and they will appraise your property in accordance with it. When the appraiser comes back with a noticeably lower market value than the price the buyer is offering the bank will likely refuse to give the buyer a mortgage. This can lead you from a safe sale to an unsuccessful mortgage application leaving you with no option but to seek more buyers.

The Bottom Line: Find an experienced Real Estate Agent and listen to their advice for pricing your home, stay realistic in your pricing and accomplish your ultimate goal of selling your home. Know that 75% of real estate marketing is the price you set in the beginning. All of the marketing and advertising in the world will not sell an overpriced home.

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