Real Estate: Your Home, Your Life

Wednesday, August 27, 2014

Real Estate YOUR HOME | YOUR LIFE

2 Wednesday, August 27, 2014

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Price and condition important factors in selling home

By AMANDA WYCOFF BNAR President-Elect

BLOOMINGTON — Due to the polar vortex this past winter, most of us here in Central Illinois were in hybernation mode. We spent most of our time shoveling snow and huddling in for warmth. The desire to shop for homes or list properties was put on hold, which caused a slow start to our Bloomington-Normal housing market in 2014.

However, for those hoping to sell in the spring, it was a great time to prepare their interiors to hit the market! And, when the snow melted, the flood gates opened... and all of a sudden it seemed that there were For Sale signs popping up everywhere! Our local inventory of homes in the spring was at a high, which meant the buyers had tons to choose from. They could be picky, and perhaps take a little longer than usual to find the "right" home for them. For the sellers, however, the competition was fierce and many were left thinking, "why hasn't MY house sold when my neighbors' sold in 5 days?"

No matter what time of year your house is on the market, it all comes down to PRICE and CONDITION. If you have those two components, it allows your Realtor's marketing to be effective and successful. No amount of marketing- no matter how creative and aggressive it iscan correct poor condition or over pricing.

PRICING: When you are approaching listing, make sure your Realtor does a Comparative Market Analysis on your home. Check out what other homes you are competing against to make sure you will be the one most likely to get an offer.

Then price accordingly and confidently.

This gives your property the best shot at selling quickly AND for the most money.

It is tempting to price a little higher than you should to see if you can get a little more money for it- but that is simply a recipe to watch your neighbors load up their moving truck and wave goodbye while you consider a series of price reductions and hope for a miracle.YOU HAVE THE BEST CHANCE OF SELLING QUICKLY and for TOP DOLLAR IF YOU LIST IT AT THE CORRECT PRICE FROM THE START! CONDITION: When you are preparing to list, begin to think of your house as a product. Think of this product from a buyer's perspective- how would they want their potential new home to look and feel when they walk through the door? Step 1? Clean & De-clutter! Cleaning is kind of a given when preparing to put your home on the market. So is decluttering. But, some people's version of clean and de-cluttered is other's version of a horder! So, here are some guidelines to get you started: Remove everything off the countertops in both the kitchen and bathrooms besides a couple MUST HAVE pieces. Things that you don't use daily (mixer, toaster oven, etc.), stuff them in a cabinet, box them up and put them in the garage... just get them out of there! Even toothbrushes need to be tucked away- especially for the marketing photos! No buyer wants to see your germs in their potential new home! Clear off all fridge "art" and everything you store on top of the fridge- think of the head start you will be getting on packing for the move! Clean all ceiling fan blades, light switches and fixtures, all vent covers, baseboards, window sills and blinds (Magic Eraser can be a miracle!). If you don't have time to clean, hire a professional cleaning service!

Once this work is done, it will help the overall look and feel of the property TREMENDOUSLY! Let's face it, in order to get people in the door, the online photos

need to show your listing in the best light.

With so many listings at the buyers' fingertips, they have the attention span of a gnat when it comes to browsing online.

If you don't grab them with the photos, you are dead in the water! And if the buyers can't see your house through all your "stuff," they will move on to the next one!

A good sign for Central Illinois sell-

ers is that each month of 2014 saw home values increase. In addition, the number of homes sold increased, with July 2014 sales at 318 and July 2013 being 306.

And, YES, homes sell year round in Central Illinois- even in the middle of a "polar vortex!" Just ask your neighbor that was priced right, looked great and sold in 5 days.

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Wednesday, August 27, 2014

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Taxes and Insurance

mortgage payment can comprise more than the price of the home plus interest. Homeowners must pay property taxes and secure some type of home insurance in addition to their principal and interest payments.

In many cases, lenders require buyers to pay into an escrow account, from which your lender keeps enough money to cover your taxes and insurance.

Unless you are granted another payment arrangement, your mortgage payment will include payments to your escrow.

Depending on how much land you purchase, you can generally tack on a couple hundred dollars a month to cover your taxes and insurance.

Tax and Insurance Payments

The convenient part of an escrow account is that your lender makes your payment for you. This helps you avoid missed or overlooked payments and ensures you have enough money in the account to cover the bills.

If you’re buying a home, the seller will likely disclose the amount of the annual property taxes on the house when it is

listed for sale. This i­ nformation is also readily available from your local property tax assessor. A local insurance agent could also give you a rough estimate on coverage for the home. Add the numbers up and divide them by 12 to get an idea of what you’ll be paying into escrow.

Protect Yourself

It is important to make sure your lender or mortgage servicer is retaining and making the correct amount of tax and insurance ­payments. You should receive a periodic statement showing how much is in your escrow account and can compare the statements with your property tax bill and ­homeowners’ policy.

The Real Estate Settlement Procedures Act is enforced by the U.S. Department of Housing and Urban Development. This is the major law covering escrow accounts.

DEB CONNOR, BROKER #1 AGENT 2011, 2012 & 2013

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Selling Your Vacant Home

I

f you’ve tried to sell a vacant home, then you understand the importance of unloading it quickly. There is a lot of money on the table because of ongoing mortgage, maintenance, insurance and other carrying costs that need to be paid for all these months that the property is sitting on the market.

That money can be better spent fixing up your new home or cushioning your savings account.

The beneficial aspect to selling a vacant home is not having to load up and leave every time a prospective buyer requests a showing. It also allows you to keep the home nice, tidy and staged in a manner you feel comfortable in displaying.

Unfortunately, in many cases selling a vacant home can offer more challenges than selling a full one. But there are some ways to make your vacant home more attractive to buyers. Here are tips:

While going out and purchasing furniture to fill your vacant home may not be the smartest investment, try to leave behind a few smaller pieces if possible.

Any extra picture frames or wall art pieces can go a long way in giving your home some life.

However, be prepared to negotiate everything you leave behind as buyers may fall in love with certain items or furniture pieces.

Drop the Price

Nothing says “ready to negotiate” like dropping the price a couple of times during the first six months of a listing. Your actions in doing so will send a message to buyers that your home can be purchased at a great When potential buyers walk deal compared to other compainto a home on the market, they rable listings on the market. imagine themselves living there.

Small, strategic reductions That’s why keeping some decora- during peak market times like tions on the walls and furniture early spring can generate buzz on the floors can be a good tactic and increase the amount of foot in catching their attention. A traffic through your home. Every completely vacant home is void time you reduce, you send off a of the personality and reference barrage of notifications to local points that buyers depend on to real-estate agents, who can then decide if it is the right fit for tell their clients about the change them. in pricing.

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Wednesday, August 27, 2014

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6 Wednesday, August 27, 2014

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Generational Optimism

L

ong crippled by the e­ conomic downturn and negative p ­ erceptions, the housing market is bouncing back — especially if you ask members of the Millennial g­ eneration.

In a recent study by the National Association of Realtors, 87 percent of buyers age 33 and younger considered their home purchase a good financial investment. Survey participants cited their aspirations and longterm stability as factors in their optimism for the market.

Other results from the Home Buyer and Seller Generational Trends study included: • Debt delays: Of the 20 percent of Millennial buyers who took longer to save for a down payment, 56 percent cited student loan debt as the biggest obstacle.

• Young buyers: The median age of the Millennial home buyer was 29, their median income was $73,600 and they typically bought an 1,800-square-foot home costing $180,000.

• Prior arrangements: Sixty-two percent of Millennials rented an apartment prior to purchasing their home while 20 percent lived with their parents, relatives or friends.

• Deciding factor: The main reason Millennial buyers took the leap was to “own a home of my own.”

• Going green: Young buyers tend to place more importance on environmentally friendly features in their homes, as well as factors such as commuting costs, energy efficiency, landscaping and

community features.

• Online savvy: Millennials were more likely to first learn about the home they purchased through the Internet than through a real-estate agent.

They were also very likely to spend time researching information and browsing through photos online.

• Finding an agent: Young buyers and sellers alike were most likely to find a real-estate

agent through a referral or a friend, or they used the same agent from a previous transaction.

• Selling stats: Optimism also reigned supreme on the selling side of the market for the millennial generation. Young sellers were most likely in need of a larger home or were moving for a job.

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BOB BRADY PRESIDENT /BROKER Choice

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Wednesday, August 27, 2014

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8 Wednesday, August 27, 2014

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Pay Your Mortgage Off Faster

P

atiently paying off your 30-year fixed-rate mortgage? Though there is nothing wrong with making the minimum payment every month, you can take some simple steps to cut off substantial amounts of interest and time from your mortgage

Doing so will help you stow away more money in the bank once your home is paid off.

Bi-weekly Payments

Paying half your mortgage every two weeks instead of a full payment once a month is the equivalent of 13 months of payments each year. If your budget can accommodate this strategy, your principal amount will decrease faster along with your ­interest costs.

The following calculation from www.bills.com shows exactly how much you can save in the long run by making bi-weekly payments.

Monthly mortgage payment

(12 months/12 payments): $997 Interest paid over the life of the loan: $209,263 Paid off in 30 years Half payment (13 months/26 payments): $498 ($997/2) Interest paid over the life of the loan: $155,938 Paid off in 22-23 years

Make an Extra Payment

Instead of spending your tax refund on a new car or TV, consider putting it toward your mortgage. Likewise, a holiday bonus or insurance overpayment reimbursement offer great ways to get ahead on your mortgage.

Don’t think of the extra checks as “bonuses,” but rather as practi-

cal investments into your mortgage. It can be a tough practice to ascribe to, but in the end it will save you money and reduce the amount time you are paying on your home.

Refinance Now

Rates for both the 30-year and 15-year fixed-rate mortgages are still near historical lows, making this the perfect time to

refinance your mortgage.

Reducing your interest rate can make a world of difference in shaving time off your payback schedule, so consider your options and do the math before making your decision.

Refinance rates vary from lender to lender. Shop around with various banks or credit unions to find the one that would best work for your situation.

Your TrusTed resource for over 30 Years. ed larsen (309) 275-3545 edlarsensells@msn.com vickie larsen (309) 310-5910 vlarsen28@msn.com www.edlarsensells.com ©2014 BHH Affiliates, LLC. An independently owned and operated franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc.® Equal Housing Opportunity.

Wednesday, August 27, 2014

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9

Why you need a real estate appraisal and home inspection

By MICHELLE KRUEGER Times Columnist

In an effort to minimize costs and maximize profits, buyers and sellers often ask why both a real estate appraisal and home inspection are needed.

Generally speaking, the appraisal is more concerned with the value of the property, and the home inspection is more concerned with the condition of the property, accord-

ing to Joe Wszolek, Chief Operating Officer of the Greater Northwest Indiana Association of Realtors.

“When an appraiser looks at a property, it’s with an independent eye for anything that adds or subtracts from value including items that do not appear normal, while it’s a home inspector’s job to provide an independent view of the physical condition and functionality of a home,” the Indiana Certified

Residential Appraiser explained.

“The main reason an appraiser will typically spend considerably less time at the property is because its components are assumed to be fully operational unless something looks or sounds wrong. Most of an appraiser’s work is done offsite, collecting property data and conducting research on comparable sales and market trends.”

Another noteworthy difference

OWN YOUR OWN HOME

between an appraisal and home inspection is the fact that the lender is often the client.

“When a lender is involved in the purchase of a property, the appraiser’s fiduciary relationship is with the lender,” Wszolek added. “The report is delivered directly to the lender, who will then forward a copy to the appropriate parties as required by law. The appraiser is

See APPRAISAL, Page 11

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10 Wednesday, August 27, 2014

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Today’s rising equity has some owners thinking of cashing out and upgrading their home MADHUSMITA BORA CTW Features

The recession that plagued the housing market is fast receding and home prices and values are not just resurfacing. They are shooting up.

The Standard & Poor’s/CaseShiller 20-city home price index jumped 12.4 percent in March compared to the year-ago period. In

several markets across the country prices are well above the 2007-2008 levels, according to RealtyTrac.

Suddenly, the market is a seller’s paradise.

While many potential first-time buyers are struggling with loan approvals and overpriced yet sparse inventory, the situation is quite different for existing homeowners. They are reaping the benefits of growing equity on their homes.

So, is now a good time to invest in that move-up home before affordability becomes an issue?

“Things are balancing out with

inventory increasing and interest rates still low,” says Leslie Piper, a Realtor and consumer-housing specialist with Realtor.com. “Rates won’t stay low forever so it’s a smart time to consider taking the leap and moving into a larger home while locking into a great rate.”

Yet others say that the market is still very complicated and it’s best to tread with caution.

Daren Blomquist, vice president of RealtyTrac, says it’s going to be a tricky dance for homeowners looking to move up.

“The positive is it’s a great time to sell,” he says. “[Owners] probably hold a lot of equity on their current homes and will be able to sell quickly.”

But, the problem would be finding the new, bigger home at an affordable price. Here are a few tips for buyers looking to move into a bigger home.

Sell Now, Buy Later Summer is the busiest season for the housing industry. With inventory levels still low, Blomquist says it’s a good time to sell and reap a good price. But, this may not be a good time to buy because the market is fiercely competitive. “I think a good strategy would be to sell now and possibly wait until the fall or winter

to buy when it becomes a buyer’s market,” he says.

Do Your Homework Find a trusted Realtor. Consult friends and family and interview a few agents before finding someone you are comfortable with. Map school districts and places that have open houses on Sundays, Piper says. Get access to apps that will help you with the buying process (think calculating mortgages and listing updates).

“Having the pulse of the market is very important,” Piper says.

Practice Patience Be ready to make four or five offers before you land a home, Blomquist says. Don’t offer more than what the property is worth or what you can actually afford.

Budget your expenses well and make a wish list, Piper adds. Make sure you have enough money left after your mortgage payment to buy furniture and pay your utilities.

Be Creative in Your Search

Besides hiring a Realtor and looking at the usual places, expand your search to the social media.

Look for properties that other buyers may not be interested in or know about. “As many as 30 percent pocket listings are not listed with agents,” Blomquist says. “You need to tap into those places.”

Don’t Be Too Picky Look at foreclosures and distressed properties. Many of those homes are not listed for sale but are likely to hit the market in the near future.

Get financing in order The market is filled with cash buyers, and they are fiercely competitive. It’s more important than ever to have a prequalified mortgage before you start shopping.

Look for a property that’s priced less than what you can afford, which will help if there are multiple bids, Blomquist says.

Patrick J. O’Rourke, Attorney at Law Concentrating on the representation of buyers and sellers in real estate transactions.

Standard real estate transaction fee = $150 1304 East Empire Street, Bloomington, IL 61701 Ph: 309-585-0714 Fx: 309-664-2224 Email: patrick@pjolawpc.com www.pjolawpc.com

The Pantagraph 11

Wednesday, August 27, 2014

APPRAISAL From Page 9

unable to talk with anyone other than the lender about the report, unless given specific permission to do so.”

So, unlike an appraisal, where the buyer typically pays for an appraisal but is not the appraiser’s client, the client of a home inspector is typically the buyer, who is the direct recipient of the report.

“For most lender-based transactions – certainly with all 20 percent down or less mortgages - you can expect an appraisal will be required,” Wszolek said. “However, while not all lenders require a home inspection, it is becoming the norm to include an inspection in the vast majority of home transactions. When you are spending that kind of money on a major purchase, you want to make sure you know what you are buying.”

While home inspections are considered a must for buyers, many sellers also take the initiative to have one done ahead of listing their property. That way, they know about important minor maintenance issues and/or major defects, can choose to address them or not, and have a better understanding as they come into play at various stages of a real estate transaction – from pricing the home to negotiating the deal and closing the sale.

“While an appraiser will notice the fact that there are dark spots on the foundation walls indicating there may be a hidden problem, it’s the inspector’s job to determine what’s causing it,” Wszolek explained. “Usually those darks

spots are indicating mold may be present, which is an indicator of so many things - from poor ventilation to a leaky pipe, runoff or seepage.

Some issues have simple cures, while others are much more serious. Either way, it’s important to

• Exterior - walls, doors, windows, garage door operators, decks, balconies, stoops, steps, railings, vegetation, grading, driveways, walkways, eaves, soffits, fascia • Interiors - ceilings, walls, floors, steps, railings, countertops, cabi-

When you are spending that kind of money on a major purchase, you want to make sure you know what you are buying.”

-Joe Wszolek

know what you are dealing with in a real estate transaction.”

Like real estate brokers and appraisers, home inspectors are now licensed and regulated by the state. They must enforce the standards set by the American Home Inspector Society (ASHI) and are required to stay current through continuing education.

While routine maintenance is the best way to prevent major, costly problems from developing in the first place, it’s no secret that some tasks can be ignored over time – especially when everything seems to be working just fine in a home.

The result, according to the experts at ASHI, is that nearly half of all resale homes in the market today have at least one significant defect.

Since the condition of a home’s basic structure and major mechanical systems is a buyer’s top concern after location, size and style, here’s a general list of components that are routinely inspected by ASHI members: • Structural - walls, floors, columns, ceilings, roof, attic, basement, crawlspace

nets, doors, windows • Roof - coverings, flashing, skylights, chimneys, penetrations, drainage system, gutters, downspouts • Plumbing - interior drain, waste, venting systems, interior

water supply, distribution system, fixtures, hot water system, shut off valve, sump pump • Electrical - main entrance, distribution panels, branch circuit conductors, connected devices/fixtures, GFCI/AFCI receptacles, smoke detectors, location of panel box • Heating and Air Conditioning – equipment, operating controls, safety controls, vents, chimney, flue, fireplace, presence of treated air in each room, condensation lines • Insulation and Ventilation – insulation, vapor retarders in unfinished areas, venting systems, fans • Built-in Kitchen Appliances dishwasher, oven, range, disposal, microwave

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12 Wednesday, August 27, 2014

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