Real Estate Blog
Wednesday, January 29 2014
Part of the recovery in Evansville’s real estate scene is the increasing likelihood of multiple offers on a listed property. This is every seller’s dream— but if you are one of the bidders, it’s important that you don’t allow it to become your nightmare.
There is one way— the only sure way—to keep the specter of competing multiple offers from upsetting your home buying prospects. Summed up in one word, it’s “preparation.”
Preparation starts with assembling a strong financial package. If your target property attracts multiple offers, you want yours to stand out. By the time you learn that other offers are at hand, it’s probably already too late to begin putting together documents—they should be in hand before you even identify a property. Getting pre-approval for your loan, having a letter that says so, and being able to show you have funds available can be persuasive.
When it comes to making the offer itself, although including “Subject to” clauses will protect you from unforeseen problems with the property, when multiple offers are on the table, the fewer contingencies the better. Again, only preparation will make this reasonable. If you’ve had an advance home inspection, and also made sure that there aren’t any right-of-way or easement issues, your offer can be significantly more attractive.
Personal preparation can be another positive. Visiting the property on several occasions at different times of the day should give you added confidence for what the home is truly worth to you…and when the listing agent and owner can put a face to your offer, it tends to strengthen its validity.
When multiple offers on a property occur, it’s possible that someone is going to bid more than the home is really worth. If you’ve done thorough research and know precisely what its value is in today’s market, that won’t be you. Having your bottom line number unshakably in mind means that in any bidding war, you’ll be able to sweeten your offer without hesitation. You can be creative, perhaps by offering to reduce the seller’s costs by picking up escrow fees, transfer fees or title policies; perhaps by offering the seller a few additional days to move without seeking financial compensation in return; perhaps by increasing the down payment or earnest money. When you know your bottom line, the arithmetic is uncomplicated (and your less-prepared competitors are more likely to throw up their hands!)
And then…should the bidding go over what you know it’s worth, you’ll be ready to walk away. There will be other properties to bid for – and I’m always here to help keep all your options open!
Wednesday, July 17 2013
Buying a house for the first time! It means you’ll be joining the club: the home ownership club that Americans have traditionally recognized as emblematic of the fullest community membership. It’s an exciting endeavour — one that ushers in a whole new realm of pride, maturity…and of a truly major commitment.
It’s the show of responsibility that’s the reason home ownership bestows automatic respect from the community. It is, after all, unmistakable evidence of long-term stability, as well as commitment to deal with the future with all it holds — known and unknown. That commitment is something all homeowners share.
Today, buying a house in Evansville means entering a changing market. Still-historically low interest rates continue, but now they have started to rise. Broader lending prospects are improving along with that rise (which is the good news). But especially for first-time buyers, it should also mean that it is doubly important to think of the long term, and to let caution and prudence lead to a buying decision that will prove to be the right choice for the future.
What that means when buying a house in Evansville, especially when taking advantage of an attractive adjustable interest rate (ARM) loan, is to plan for the likelihood that monthly repayments will eventually increase. Before taking advantage of a great deal, consider whether you will be able to manage monthly repayments if they jump by 1, 2 — even 3%. Although it’s only natural to expect that your family income will grow as time passes and professional experience broadens, cautious buyers keep their budget in line with actual current finances. And they make hard-headed estimates of the upkeep expenses that accompany home ownership.
If the past seven years have taught anything about buying a house, it’s the advantage of tempering optimism with realism. I’m here to help my clients make educated real estate decisions for the short term and long term. If you’ve been preparing to make that exciting first buy, I hope you will give me a call to meet and discuss your goals and the current market – I’d love to hear from you! You can reach me on my cell phone 812-499-9234 or by email Rolando@RolandoTrentini.com
Monday, May 09 2011
To rent or to buy: what used to be a given – that you would buy a home as soon as you could afford to – has become an agonizing conundrum for many a would-be homebuyer, in the face of the housing market’s big bust and super-slow recovery. Low prices seem to create a wide-open window of opportunity, but they also create the concern that prices will keep falling after closing. And that Catch-22 has hundreds of thousands of buyers-to-be stuck on the fence.
Fortunately, there are handful of life, mortgage and local market signals which indicate that the time *might* be right to hop – scratch that – leap off the fence and into homeownership:
Mortgage rates are going up. Home prices have been low for the last several years, and in fact are currently looking like they’re heading back down to the same levels they were at the depths of the real estate recession. During this same time frame, interest rates have also been low – this one-two punch has created record-high affordability for the last four years running, causing buyers to believe that this window of opportunity won’t be closing anytime soon.
While prices don’t look like they’ll be skyrocketing anytime soon, interest rates are another story. Rates have been on a rollercoaster over the past few months, and with inflation and Fed rates set to spike later this year, today’s low interest rates might be as good as they’re going to get for a long time to come. And I mean a very long time – in the next few years, governmental intervention in the mortgage markets is likely to wind down, and that means higher mortgage interest rates are not only inevitable, they’ll probably be here for a long, long time.
Mortgage rates on the rise are one signal that now might be the peak of home affordability, and the peak of the opportunity to buy.
Rents are going up. Rental rates in many areas are also on the rise – in fact, the foreclosure crisis has acted created additional demand on many markets’ rental housing inventory in several different ways. First, former homeowners who lost homes to foreclosure now need to rent; as well, buyers in foreclosure hot spots have been hesitant to buy, many electing to stay renters far beyond when they would have otherwise. On top of all that, super-tight lending guidelines have stopped even some who would like to buy homes from doing so. As a result, rental homes are in high demand – and rents are rising.
Rising rents at a time when the prices of homes for sale are low and, in some places, falling? One more signal that now might just be the time to buy. (Of course, where foreclosures are high, the chances of continued depreciation are, too – to offset this risk, have a long-term plan, to minimize the possibility that you’ll owe more than your home is worth when you need to sell. Read on for more on how to plan for the long term and minimize your homebuying risk.)
Your income and career are stable for the foreseeable future. The smartest homebuyers look to their lives, not just the market, for signals about when the time is right to buy. Homebuying is a long, long-term endeavor these days. The goal is to be able to commit to staying in the same place, geographically-speaking, for 7 to 10 years before you buy (more in a foreclosure-riddled market, less in an area that has been more recession-resistant). Most lenders will require that you’ve been at your job – or in the same general field of work – for at least two years before you buy. But that’s the bare minimum – beyond that, you don’t want to be barely beginning a career in which you think you may need to move sooner than that, nor do you want to buy when you’re advanced in your career, but in an industry which is dying or downsizing the workforce in your region (unless you have a strong Plan B).
When you get to the spot in your career where you can realistically project a stable income 7 to 10 years out, life might be giving you a green light to move forward on your homebuying dreams.
You can reasonably predict the home you’ll need in the years to come. Since successful homeownership requires that you be ready to be in the place for a good number of years, best practice is not just to buy a home with the space and number of rooms you need right now – rather, you should aim to buy the home you’ll need 5, 7 or even 10 years down the road (to the best of your ability to predict, of course). You might be a newlywed with no kids now, but you plan to have them in a few years. Or maybe you’re a newly minted empty nester right now, but can project that you’ll want to retire - and might not want to climb two flights of stairs to get to and from your bedroom - 10 years down the road. Before you buy, you should be in a position to buy the home that meets your future needs – not just your current ones; and that requires that you have a reasonable idea of your life vision and plan for the future.
If you’re able to predict – and afford, at today’s prices – a home with the space, amenity and geographic location you’ll need 7 to 10 years from now, you might be in a good phase of life to get off the rent vs. buy fence.
With that said. . . buying a home is a massive decision and includes multiple, long-term financial and lifestyle obligations, so if one or more of these signals are present for you, that doesn’t mean you have the green light to run out and buy a home tomorrow – rather, it’s a good sign you should begin down that path, if you’re so inclined. You’ll still need to do the work to make sure your personal finances and holistic life picture are also in alignment before you buy, as well of the work it takes to ensure that your real estate and mortgage decisions are sustainable and smart, over the long-term.
It’s not overkill to check in with a mortgage pro, a tax pro, a local real estate broker or agent and a financial planner to make sure all your ducks – not just one - are in a row before you make your move.
Wednesday, May 04 2011
If your house is on the market then you might be at the point of tearing your hair out. After all, some sellers have had their home up for sale for years at this point. It can be maddening, and the competition is only getting more intense as prices continue to fall and more foreclosure homes flood the market.
So what, exactly, are buyers looking for this spring? In short, they're looking for homes that are going to save them money. And when you think about it, it just makes sense. Mortgage loans are harder to come by, and thanks to an uncertain economy, people are less likely to splurge on a McMansion they're going to have to pay to heat and cool for the next five years (i.e. save money on utility bills).
[See the best personal finance stories from around the Web at the U.S. News My Money blog.]
Even if you're planning on staying in your home the next few years, it's still helpful to know what people are looking for because you're likely going to make changes and home improvements over the years. Knowing what potential buyers are interested in can help you invest your money wisely, so you have a better chance of selling when you're actually ready. So what are people looking for?
1. Homes in Good Condition
Buyers aren't interested in fixer-uppers right now. They don't have a lot of cash, and they don't want to spend money on home repairs immediately after they move in. They're looking for homes that are in great condition and that are absolutely move-in ready. They don't want to have to repaint, clean carpets, or cover up cracks in the ceiling. And they especially don't want to spend money on major repairs. To increase your chances of an offer this spring and summer, make sure you do everything you can to get your home in tip-top shape. Utilize a house spring cleaning checklist and make your home spotless before showing it off.
2. Homes with Green Features
Saving money and living green are trends that aren't likely to disappear anytime soon. Buyers are now looking for features which are going to cut down on a home's operating costs, as well as lessen its impact on the environment. Tankless water heaters, high-efficiency furnaces, energy-efficient appliances, energy-efficient windows, adequate insulation, and solar panels are just a few that are making it on to buyers' wish lists.
Basically, any "green" upgrade that's going to save money on utility bills will be highly appealing to people looking for a new home. You probably don't want to splurge on solar panels, a geothermal furnace, or other expensive green energy technologies, but there are some small changes you can make that will help potential buyers save money in your home. For instance, you could install a rain barrel or two against the house, add insulation, upgrade any old appliances to Energy Star rated models, and plant some trees to help with shading during the summer months.
[In Pictures: 10 Smart Ways to Improve Your Budget.]
3. Outdoor Living Spaces
In an uncertain economy, people travel less. This means that our homes are truly becoming our castles, no matter how small they are! Outdoor living spaces have always been popular, but they're especially appealing now since so many people are taking staycations, and choosing to relax at home instead of going out at night and on weekends. If your backyard leaves a lot to be desired, then do whatever you can to turn it into an oasis. Build a deck, plant flowers, add a fountain, and turn it into an escape for potential buyers.
If your home is currently on the market, it's important to do everything you can to remove any concerns buyers might have about your house. Sellers sure don't want to continue spending money on their homes, but small changes such as planting flowers, repainting, and cleaning can go a long way towards getting you an offer. Remember, you don't want to give people any reason not to buy your home!
Have you had any success selling your house in this market? What are some of the best methods that worked for you?
Heather Levin is a regular contributor to the Money Crashers personal finance resource site and is also the creator of The Greenest Dollar, a blog focused on green and frugal living.