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9 Buyer Traps and How to Avoid Them

No matter which way you look at it buying a home is a major investment. For many homebuyers however, it can be an even more expensive process than it needs to be because many fall prey to at least a few of the many common and costly mistakes which trap them into either:

  • paying too much for the home they want, or
  • losing their dream home to another buyer, or
  • (worse) buying the wrong home for their needs.

A systematized approach to the home buying process can help you steer clear of these common traps, allowing you to not only cut costs, but also secure the home that’s best for you.

This important report discusses the nine most common and costly of these homebuyer traps, how to identify them, and what you can do to avoid them.

Bidding Blind

What price should you offer when you bid on a home? Is the seller’s asking price too high, or does it represent a great deal. If you fail to research the market in order to understand what comparable homes are selling for, making your offer would be like bidding blind. Without this knowledge of market value, you could easily bid too much, or fail to make a competitive offer at all on an excellent value.

Buying the Wrong Home

What are you looking for in a home? A simple enough question, but the answer can be quite complex. More than one buyer has been swept up in the emotion and excitement of the buying process only to find themselves the owner of a home that is either too big or too small. Maybe they’re stuck with a longer than desired commute to work, or a dozen more fix-ups than they really want to deal with now that the excitement has died down. Take the time up front to clearly define your wants and needs. Put it in writing and then use it as a yardstick with which to measure every home you look at.

Unclear Title

Make sure very early on in the negotiation that you will own your new home free and clear by having a title search completed. The last thing you want to discover when you’re in the back stretch of a transaction is that there are encumbrances on the property such as tax liens, undisclosed owners, easements, leases or the like.

Inaccurate Survey

As part of your offer to purchase, make sure you request an accurate property survey that clearly marks your boundaries. If the survey is not current, you may find that there are structural changes that are not shown (e.g. additions to the house, a new swimming pool, a neighbor’s new fence that is extending a boundary line, etc.) Be very clear on these issues.

Undisclosed Fix-ups

Don’t expect every seller to own up to every physical detail that will need to be attended to. Both you and the seller are out to maximize your investment. Ensure that you conduct a thorough inspection of the home early in the process. Consider hiring an independent inspector to objectively view the home inside and out, and make the final contract contingent upon this inspector’s report. This inspector should be able to give you a report of any item that needs to be fixed with associated, approximate cost.

Not Getting Mortgage Pre-approval

Pre-approval is fast, easy and free. When you have a pre-approved mortgage, you can shop for your home with a greater sense of freedom and security, knowing that the money will be there when you find the home of your dreams.

Contract Misses

If a seller fails to comply to the letter of the contract by neglecting to attend to some repair issues, or changing the spirit of the agreement in some way, this could delay the final closing and settlement. Prepare a list of agreed issues, walk through them, and check them off one by one.

Hidden Costs

Make sure you identify and uncover all costs – large and small – far enough ahead of time. When a transaction closes, you will sometimes find fees for this or that sneaking through after the “sub total” – fees such as loan disbursement charges, underwriting fees etc. Understand these in advance by having your lender project total charges for you in writing.

Rushing the Closing

Take your time during this critical part of the process, and insist on seeing all paperwork the day before you sign. Make sure this documentation perfectly reflects your understanding of the transaction, and that nothing has been added or subtracted. Is the interest rate right? Is everything covered? If you rush this process on the day of closing, you may run into a last minute snag that you can’t fix without compromising the terms of the deal, the financing, or even the sale itself.

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Major Mistakes Made by Sellers

From incorrect financing to lack of preparation, there are countless mistakes that a seller can make when putting their house on the market. This report covers some of the most common mistakes made by sellers during the property selling process.

If you’re serious about selling your house, it’s important that you know the facts. It seems like a simple prospect – just put your house on the market, show it to a few buyers, and make the sale – but as many sellers find out, selling a home can be a difficult, expensive and long prospect. By knowing some valuable information about the real estate industry, as well as some tips and tricks about selling your property, you’ll be able to more effectively tackle today’s real estate market. This report will tell you how you can:

  • Avoid making mistakes when selling your home
  • Make you aware of the most common mistakes home sellers make

Selling your home can be a difficult job, especially since you’re competing against hundreds of other properties. It’s vital that you be aware of what works and doesn’t work when it comes to home selling. Consider the following list of the most common mistakes made by home sellers:

Mistake 1: Setting the wrong price for your home

Experience shows the right price sells a house faster than any other factor. When the listing price is more than 5% over market value, the price alone discourages buyers. That’s because an overpriced house scares away potential buyers who think they can’t even afford to look. Buyers who do look at an overpriced house know they can get more house for their money elsewhere.

Mistake 2: Selling your home in ‘As-Is’ condition

In today’s competitive market, most buyers will not even consider a house that needs fix ups. In contrast, a sparkling showcase home gets top dollar when it comes to the bottom line. What most buyers are looking for is an inviting home in move-in condition, one that looks as good as a model home. Buyers who are willing to tackle the repairs after moving in automatically subtract the cost of needed fix-ups from the price they offer. Either way, you save nothing by putting off fix-ups and likely slow the sale of your house.

Mistake 3: Selling your home with a dull interior

A clean, bright decor is what buyers want. Probably the best dollar-for-dollar investment for selling your home fast is fresh paint. Neutral colors are best. Next to fresh paint, new carpeting–replaced for either condition or color–makes a big difference. Elbow grease can be as effective as spending cash to brighten your home. Start by ruthlessly getting rid of the junk you’ve accumulated. Clean each room top to bottom. Dare to make your home look better than you’ve ever had it looking before. Focus on the three rooms most inspected – kitchen, master bedroom and garage (if you’ve got one). Forget those and you may as well forget the buyer, too. In the kitchen, clear off counters and organize cupboards. Keep in mind, some prospects will judge the whole house by the cleanliness of the oven or refrigerator. In the master bedroom, move or remove furniture to create spaciousness. The ideal garage stores only cars and perhaps an orderly display of garden tools, so throw out your junk to show off room for theirs.

Mistake 4: No ‘Curb Appeal’

Your house gets only one chance to make a good first impression. That’s why “curb appeal” is one of the most critical points in selling. Buyers are apt to fall in love at first sight – or not at all. If your home lacks curb appeal, chances are the first impression will not be counteracted by the most perfect floor plan or the most tasteful interior. Spruce up the view of the house from the street, including lawn, shrubs, shutters, windows, front door, mailbox. Add potted flowers out front, a wreath on the door, brass outdoor lighting fixtures – whatever will enhance your home’s “buy me” look.

Mistake 5: Over-improving your home

While it’s important to fix whatever needs fixing to get your home ready for sale, undertaking a major project could cost more money than you would recover from the sale. Spending too much on remodeling projects just drains money out of your pocket. If your improvements will push your home’s value more than 20% over the average neighboring home values, don’t expect to recoup the entire cost. (Some major projects, however, like replacing a roof, should be done if they are needed.)

Mistake 6: Financing Incentives

The more buyers you appeal to in terms of financing, the greater your chances of selling faster. Be flexible, consider paying closing costs or points, providing a decorator’s allowance or other irresistible buyer incentives.

Mistake 7: Stretching out buyer negotiations

One of the most important moves you can make is to reply immediately to an offer. When buyers make an offer they are, right then, in the mood to buy. Moods, as you know, change, and you don’t want to lose a sale because you stall in replying.

Mistake 8: Being Adversarial during negotiations

No one wins if you enter negotiations with boxing gloves on. Instead, approach negotiations in a positive frame of mind, not as an adversary of the buyer. After all, you both want the same thing–a sale. Leave most of the discussion of price, terms, possession and other conditions up to your agent. We’ll make it our business to get you the best deal.

Mistake 9: Not having a presentable house

The presence of your family can make prospective buyers feel like intruders. If you’re at home when your home is being shown, be your usual friendly–but low-key–self and keep children and pets out from underfoot. It’s the agent’s job to show buyers what they need to see. Buyers can better focus on your home’s advantages by viewing them than by socializing. If an open house is scheduled, plan to be away from home, but let us know how to reach you quickly. When you’re not at home at other times, agents accompanying prospects will leave their business card. Please alert us afterward so we can follow up.

Mistake 10: Selling without a professional

Going it alone like General Custer could invite disaster. Without a professional adviser, you probably won’t sell. Even if you do sell, surveys show self-sellers often net less from the sale than sellers who use a real estate agent. Selling a house is a team effort between you and the listing agent. You’ll find agents do a lot more than most people know–from bringing qualified buyers to keeping things on track to settlement.

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6 Mistakes to Avoid When Trading Up to a Larger Home

Unlike the experience of buying a first home, when you’re looking to move-up, and already own a home, there are certain factors that can complicate the situation. It’s very important for you to consider these issues before you list your home for sale.

Not only is there the issue of financing to consider, but you also have to sell your present home at exactly the right time in order to avoid either the financial burden of owning two homes or, just as bad, the dilemma of having no place to live during the gap between closings.

In this report, we outline the six most common mistakes homeowners make when moving to a larger home. Knowledge of these six mistakes, and the strategies to overcome them, will help you make informed choices before you put your existing home on the market.

Mistake 1: Rose-colored glasses

Most of us dream of improving our lifestyle and moving to a larger home. The problem is that there’s sometimes a discrepancy between our hearts and our bank accounts. You drive by a home that you fall in love with only to find that it’s already sold or that it’s more than what you are willing to pay. Most homeowners get caught in this hit or miss strategy of house hunting when there’s a much easier way of going about the process. For example, find out if your agent offers a Buyer Profile System or House-hunting Service, which takes the guesswork away and helps to put you in the home of your dreams. This type of program will cross-match your criteria with ALL avail-able homes on the market and sup-ply you with printed information on an on-going basis. A program like this helps homeowners take off their rose-colored glasses and move into the home of their dreams in an affordable way.

Mistake 2: Failing to make necessary improvements

If you want to get the best price for the home you’re selling, there will certainly be things you can do to enhance it in a prospective buyer’s eyes. These fix-ups don’t necessarily have to be expensive. But even if you do have to make a minor investment, it will often come back to you ten-fold in the price you are able to get when you sell. It’s very important that these improvements be made before you put your home on the market. If cash is tight, investigate an equity loan that you can repay on closing.

Mistake 3: Not selling first

You should plan to sell before you buy. This way you will not find yourself at a disadvantage at the negotiating table, feeling pressured to accept an offer that is below-market value because you have to meet a purchase deadline. If you’ve already sold your home, you can buy your next one with no strings attached. If you do get a tempting offer on your home but haven’t made significant headway on finding your next home, you might want to put in a contingency clause in the sale con-tract which gives you a reasonable time to find a home to buy. If the market is slow and you find your home is not selling as quickly as you anticipated, another option could be renting your home and putting it up on the market later – particularly if you are selling a smaller, starter home. You’ll have to investigate the tax rules if you choose this latter option. Better still, find a way to eliminate this situation altogether by getting your agent to guarantee the sale of your present home (see point number 5 below).

Mistake 4: Failing to get a pre-approved mortgage

Pre-approval is a very simple process that many homeowners fail to take advantage of. While it doesn’t cost or obligate you to anything, pre-approval gives you a significant advantage when you put an offer on the home you want to purchase because you know exactly how much house you can afford, and you already have the green light from your lending institution. With a pre-approved mortgage, your offer will be viewed far more favourably by a seller – some-times even if it’s a little lower than another offer that’s contingent on financing. Don’t fail to take this important step.

Mistake 5: Getting caught in the Real Estate Catch 22

Your biggest dilemma when buying and selling is deciding which to do first. Point number 3 above advises you to sell first. However there are ways to eliminate this dilemma altogether. Some agents offer a Guaranteed Sale Trade-Up Program that actually takes the problem away from you entirely by guaranteeing the sale of your present home before you take possession of your next one. If you find a home you wish to purchase and have not sold your current home yet, they will buy your home from you themselves so you can make your move free of stress and worry.

Mistake 6: Failing to coordinate closings

With two major transactions to coordinate together with all the people involved such as mortgage experts, appraisers, lawyers, loan officers, title company representatives, home inspectors or pest inspectors the chances of mix-ups and miscommunication go up dramatically. To avoid a logistical nightmare ensure you work closely with your agent.

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8 Simple Secrets to Avoid Costly Mistakes Buying Your Dream Home

So you’ve finally decided to buy your next home. Problem is while you were making up your mind, other fence sitters jumped into the home market too. Now you may be facing some competition for the best properties. What to do? Just because there are other buyers in the market doesn’t mean you can’t come away with your dream house. But to be a successful buyer in today’s real estate market you’re going to need help.

Your first best move is to know a few inside tricks. As experienced real estate professionals we have many more than eight ways to increase your chances of landing a prize property despite heavy competition. The following tested tips will increase your market savvy and sharpen your competitive position. Then you’ll be ready to act quickly the minute you see that perfect house.

Step 1: Get Pre-Approved

To be pre-approved for a mortgage loan is your first step. You will go through what amounts to a mini-application process (paperwork, credit check, etc.) prior to shopping for a house. Pre-approval is more effective than pre-qualification, which only gives you a rough idea of the amount a lender will lend you—assuming no hang-ups in the credit and income checking process. When you are pre-approved, it’s like carrying around a suitcase full of money. In the eyes of the seller, pre-approval makes you a very desirable “cash” buyer. That’s a real advantage over another buyer whose financing is uncertain.

Beat the Competition to the Newest Listings

Once you know your specific price range, your real estate agent can regularly do a computerized market sweep for new listings. You should receive a hot list of attractive properties as they come on the market. This will give you a head start on other buyers because you will get the listings before they are advertised. Timing can be a vital part of your home buying experience.

Do Your Research

Make yourself a “value expert” by investigating local properties to get an idea of price points, listing-to-sale-price ratios, hottest areas, and best places for a bargain. Once you know what your money will buy, your real estate agent can add up-to-the-minute knowledge of what comparable properties sell for in specific neighbourhoods and what impact specific features have on price. Working with a good agent will guarantee you the best price and terms.

Have your Agent Present the Offer in Person

Nobody wants their offer lingering on a fax machine in the listing agent’s office while other buyers are putting offers on the seller’s kitchen table. When the situation calls for that personal touch, you’ll gain an advantage by having your agent present your offer in person. He or she may pick up critical intelligence on any competing offers by being on the scene.

Prove you Mean Business

An excellent way of showing the seller you are serious about buying the house is to include a good faith deposit along with the offer you make. This deposit could be as much as 5% of the bid price and surely will attract the seller’s attention.

Stay Cool

When deciding on your dream home you do not have to over pay to get it. Sure, you may have to offer something other than the asking price, such as paying some or all points, inspections, closing costs, or offering a settlement date that fits the seller’s timetable. If you over pay now and have to sell your house in the future it will be harder for you to get back equal value.

Keep It Simple And Clean

You want to make sure that your contract isn’t sloppy or cluttered with contingencies such as repairs. Keep contingencies to a minimum. Even better, offer to be helpful, take care of repairs, order an inspection in 48 hours, or be willing to take care of any required local certificates such as smoke detectors and water safety. Be open and flexible to try to help accommodate the needs of the seller.

Don’t be a Lone Wolf

What you need most in today’s market is experienced professional guidance. As your neighbourhood real estate specialists we can help you get pre-approved, find a prize property, and negotiate the best deal on your next home no matter how heated the competition. Call us today. We’ll help you be a cool customer.

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6 Things You Must Know About Mortgages Before You Buy

Mortgage regulations have changed significantly over the last few years, making your options wider than ever. Subtle changes in the way you approach mortgage shopping, and even small differences in the way you structure your mortgage, can cost or save you literally thousands of dollars and years of expense.

“Get the Right Information”

Whether you are about to buy your first home, or are planning to make a move to your next home, it is critical that you inform yourself about the factors involved.

Industry research has revealed that there are 6 common mistakes that most homebuyers make in mortgage shopping that can have a significant impact on the outcome of this critical negotiation. If handled correctly, these issues could result in a mortgage that will cost you less over a shorter period of time.

Before you commit your hard earned dollars to monthly mortgage payments, consider these 6 issues. Effective consideration of these important areas can make your payments work much harder for you.

1. You can, and should, get pre-approved for a mortgage before you go looking for a home

Pre-approval is easy, and can give you complete peace of mind when shopping for your home. Your local lending institution can provide you with written pre-approval for you at no cost and no obligation, and it can all be done quite easily over the phone. More than just a verbal approval from your lending institution, a written pre-approval is as good as money in the bank. It entails a completed credit application, and a certificate that guarantees you a mortgage to the specified level when you find the home you’re looking for.

2. Know what monthly dollar amount you feel comfortable committing to

When you discuss mortgage pre-approval with your lending institution, find out what level you qualify for, but also pre-assess for yourself what monthly dollar amount you feel comfortable committing to. Your situation may give you a pre-approval amount that is higher (or lower) than the amount of money you would want to pay out each month. By working back and forth with your lending institution to determine what this monthly amount is, and what value of home this translates into at today’s rates, you won’t waste time looking at homes that are not in your price range.

3. You should be thinking about your long-term goals, and expected situation, to determine the type of mortgage that will best suit your needs

There are a number of questions you should be asking yourself before you commit to a certain type of mortgage. How long do you think you will own this home? What direction are interest rates going in, and how quickly? Is your income expected to change (up or down) in the near term, impacting how much money you can afford to pay to your mortgage? The answers to these and other questions will help you determine the most appropriate mortgage you should be seeking.

4. Make sure you understand what prepayment privileges and payment frequency options are available to you

More frequent payments (for example weekly or biweekly) can literally shave years off your mortgage. Simply by structuring your payments so that they come out more frequently, will significantly lessen the amount of interest that you will be charged over the term.

For the same reason, authorized prepayment of a certain percentage of your mortgage, or an increase in the amount you pay monthly, will have a major impact on the number of years you will have to pay and could shorten your payment term considerably.

These two payment options can cut years off your mortgage, and save you thousands of dollars in interest. However, not every mortgage has these prepayment privileges built in, so make sure you ask the proper questions.

5. Ask if your mortgage is both portable and/or assumable

A portable mortgage, where available, is one that you can carry with you when you buy your next home and avoid paying any discharge penalties. This means that you will not have to go through the entire mortgage process again unless you are making a move up to a much more expensive home.

An assumable mortgage is one that the buyer for your home can take over when you move to your next home. This can be a very powerful tool at the negotiating table making it much easier and more desirable for a buyer to buy your home, and again saves you any discharge penalties.

6. You should seriously consider dealing with a Mortgage Expert

Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make a significant difference in the cost and effectiveness of the mortgage you obtain. For example they can make the process faster thereby avoiding costly delays. Typically there is no cost or obligation to inquire.