5 Ways To "Turn Off" A Potential Homebuyer

Posted by New England Landmark Realty ltd.

Jan 4, 2015 5:02:37 PM

5 Ways To "Turn Off" A Potential Homebuyer

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You want to sell your home, but your presentation may be driving potential buyers away. The appearance of your home is important. It isn't enough to have a solid foundation, a new furnace, and a good roof to interest people in your home. If your home doesn't look good, inside and out, it will be difficult to sell for the price you are asking.

A Dirty House

It is amazing how many people do not "super" clean their home before it is shown to a prospective buyer. If the carpets cannot be cleaned, they need to be replaced. If the house is heavy with pet smells, some buyers will turn around and leave. Tile and grout should be steam cleaned, and every inch of each bathroom must be scrubbed, painted, and shined. Windows and sills are another area owners often neglect. It's also important to know many real estate brokers don't want to show a dirty house and may choose not to give you a listing.

Old Wallpaper

Unless you are selling a historic home with period wallpaper, get rid of it. Sellers tend to look at wallpaper as another chore for the homebuyer to do, but the buyer sees it as a large negative. People who like wallpaper choose designs to match their tastes and interests, and not those of a future homebuyer. Strip off the old paper, and paint the walls a neutral color.  

 

Outdated Fixtures

There is a difference between old and antique. Old is not attractive and turns buyer's attentions elsewhere. Outdated light fixtures, cabinet handles, ceiling fans, and appliances should be replaced. If your plan is for the buyer's to replace all the fixtures, you are not going to get the best price for your home.

 

Un-decorate

Homebuyers want to see your home, not your collection of 250 sets of salt and pepper shakers or your coffee mugs from every state capital. Pack up your collections if you intend to move them to your next home, or put them in a yard sale. If you like displaying framed photos around your home, reduce the number drastically and pack them up. Buyers want to see space, not the homeowner's personal clutter.  

 

Leave When Your House Is Being Shown

Don't be anywhere on the premises when the real estate agent arrives with the prospective buyer. Owners who hang around and try to insert information into the conversation between the agent and buyer, can kill a sale in minutes. Your real estate agent is a trained and licensed professional and knows how to present your home in the best light. You are paying for his or her expertise, and it's important not to undermine it by intruding.  

Follow these few simple guidelines and increase your chances of a quick sale.

 

Contact Us Today To Get Started!

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Topics: National Real estate trends, VT Real estate trends, Home Improvement, Home Sale Tips

Homeownership and Wealth Creation – NYTimes.com

Posted by NYTimes.com

Nov 30, 2014 12:02:57 PM

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Homeownership and Wealth Creation – NYTimes.com

By THE New York Times EDITORIAL BOARD NOV. 29, 2014

Since the housing bust, renting has been in and owning a home has been out, especially among young adults who in earlier decades would have been first-time home buyers. As the rate of homeownership has declined, from a peak of nearly 70 percent in 2004 to a 20-year low of 64.3 percent recently, the number of owner-occupied homes has barely budged, while the number occupied by renters has increased by nearly 25 percent.

Those trends have led to questions about the future of homeownership. Would more and longer rentals be a bad thing? Are the benefits of homeownership overrated? The answer to the first question is yes; the answer to the second is no.

Homeownership long has been central to Americans’ ability to amass wealth; even with the substantial decline in wealth after the housing bust, the net worth of homeowners over time has significantly outpaced that of renters, who tend as a group to accumulate little if any wealth.

A recent study by researchers at the Joint Center for Housing Studies at Harvard University analyzed the reasons for these differing outcomes. Paramount among them is that homeownership requires potential buyers to save for a down payment, and forces them to continue to save by paying down a portion of the mortgage principal each month.

Renting, in contrast, offers the potential for comparable wealth building only if renters invest an amount equal to a down payment plus any savings from renting. As a practical matter, most renters do not do that. Even in instances where renters have excess cash, saving a substantial amount is difficult without a near-term goal, like a down payment. It is also difficult to systematically invest each month in stocks, bonds or other assets without being compelled to do so.

The analysis does not downplay the risks of homeownership or the devastation of the housing bust. But the lesson of that debacle is not for individuals to avoid homeownership or for policy makers to devalue its importance. Rather, the lesson should be to foster conditions under which middle- and lower-income Americans can sustain homeownership and avoid the ruin of foreclosure.

For starters, legal and regulatory protections against practices that inflated the housing bubble need to take root. The Dodd-Frank financial reform law, for example, requires lenders to ensure that borrowers have the ability to repay their home loans and outlaws complex mortgage terms that enrich lenders but expose borrowers to payment shocks.

The law also established the Consumer Financial Protection Bureau, with the purpose of looking out for consumers’ interests in financial transactions. The C.F.P.B. has gotten off to a good start, but Republicans, who now control Congress, have consistently tried to weaken the agency and the provisions of Dodd-Frank generally. President Obama must be prepared to veto legislation to repeal or weaken mortgage-finance and consumer-protection reforms.

Equally important, larger economic forces that make homeownership less possible for working people need to be in the forefront of political debate — even if Republican control of Congress makes actions to address them unlikely. Long-term wage stagnation, for example, has made it increasingly difficult to accumulate enough for a down payment, and has led many homeowners to refinance their mortgages in order to pull out equity for consumer purchases.

The solution is to lift wages, not only with new policies like higher minimum wages and toughened labor standards, but also with approaches to managing the economy to ensure that a fair share of growth goes to wages and salaries, rather than going disproportionately to corporate profits.

Renting can make sense as a lifestyle choice or because of income constraints. As a means to building wealth, however, there is no practical substitute for homeownership.

via Homeownership and Wealth Creation – NYTimes.com.

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Topics: National Real estate trends, Home Ownership and Wealth

How Much Home Can You Afford?

Posted by Craig Donofrio

Nov 24, 2014 10:59:34 AM

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Looking at sprawling villas in the suburbs and 2,000-square-foot condos in the middle of downtown is one thing. How much home you can afford may be entirely different.

Of course, there’s nothing wrong with looking. But when it comes down to finding a place that fits perfectly in looks, size and price, you need to know your affordability factor.

What Is Your Family Plan?

It’s not just how much you make; it’s also what you plan to do with it.

Do your best to anticipate what the next five years or so will be like for you and your family. Are you planning to have kids in the next few years? Is your teen graduating from high school? Will they need you to co-sign for a college loan? Are you planning for a wedding? All these can raise your debt-to-income ratio.

Even if you can afford a mortgage with a 40% debt-to-income ratio now, life events like having children can bring that ratio up to and over 50%.

Do your best to map out what the next five years or so will look like and keep an emergency fund for the unexpected. Plan for the house you can afford today—not what you can afford a few years from now when the raise kicks in.

What Is Your Payment Approach?

Do you want to plan conservatively, moderately or aggressively? The difference can determine the type of home within your ballpark range.

For example, if you make $73,000 a year, have a $40,000 down payment, $350 in monthly debts and want to buy a house in Ridgefield, CT, these are the scenarios to consider:

The conservative approach: no more than 28% of your income goes to housing expenses and 36% goes to debts. House affordability range: $303,000

The moderate approach: no more than 33% of your income goes to housing expenses and 38% goes to debts. House affordability range: $349,000

The aggressive approach: no more than 36% of your income goes to housing expenses and 41% goes to debts. House affordability range: $362,000

The more aggressive the approach, the more budgeting discipline you need.

You also will need better credit, as you will be taking on more debt for a more expensive home.

Figure out which works best for you—remember, it’s better to err on the safe side rather than be strapped for cash each month.

Check out the realtor.com® affordability calculator to see what spending approach looks like for you in the area of your choice.

What Is Your Preferred Location?

You might not have the means to afford a house in a central location. If that’s the case, consider a ZIP code in a neighboring area.

To get a feel for houses in your price range, use our affordability calculator for a nearby area and then check the listings at the bottom of the page. If you can’t find something you like, you can always go down in price or continue to rent until you have the means to afford that dream home.

What Are Other Homeownership Costs?

Home ownership isn’t as simple as paying the mortgage. You can be sure other expenses will pop up.

For example, if you can’t make at least a 20% down payment, you will need private mortgage insurance. If you have an FHA loan, you will have to budget for premiums.

There’s also property tax and home insurance on top of closing costs. Repairs, general maintenance, condo fees, utilities and buying new furniture for your new home also need to be anticipated.

The more thorough your budgeting, the more comfortable you’ll be when shopping for a home.

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Topics: National Real estate trends, Homes Sold, VT Real estate trends

Bringing Fall Into Your Home

Posted by nelrealty

Oct 14, 2013 9:16:53 PM

With over half of all homeowners planning to make some type of improvement to their home this year, the question is, what exactly are they changing? Homeowners are choosing to wait until the high temperatures break and cooler weather hits to begin outdoor work, and home improvement companies are looking to unload new products to prepare for the new season, allowing homeowners to grab some great deals as autumn begins.

The most common fall home improvement projects include fencing, interior and exterior painting, window work, flooring, and roof repair, all of which are in preparation for the cold winter weather when home improvement projects are not at the top of your priority list. By getting these projects done before winter, you can put your home improvement projects to rest until spring without worrying about leaky roofs, cold air coming through cracks in the windows, and maintaining the value of your home with fencing and a fresh coat of paint.

"The cooler autumn temperatures make for the perfect time to focus more on the home and any remodeling projects," says Jeremy Floyd of Fence Center. "Such projects like adding in bamboo or aluminum fencing, not only increases your family's security, but the value of your home. Now that autumn is officially here, people are likely beginning to get these home improvement projects rolling."

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When the weather begins to turn cold, take cues from fall to warm up your world. Think about the decorating styles that appeal to you and use the following tips for guidance:

Look to Elemental Colors: Air, Earth, Fire and Water; nature inspires the most beautiful colors. Colors reflecting air will make your home breathe. Earth inspired colors will ground and calm a room. Colors pulling from water inspire playful fun, and lastly those reflecting fire will say bold confidence.

Take Natures Cues: As the air turns cool, nature gives us clues as to which colors make your home feel warm and cozy in the fall. Look around at the fall foliage and you'll see vibrant golds, rich reds, deep chocolate browns and toasty oranges. These colors inspire life and energy as the days get darker and cooler. Look for ways to incorporate these colors and scenes into your room decor. National Geographic Wallpaper or wall murals can help create this inviting nature setting.

Go Natural: With the increasing focus on the environment, there are abundant products available today that reflect and are good for nature. These products often incorporate earthy colors and textures; a perfect theme for fall. Choose eco-friendly shades which are PVC-free and 100 percent recyclable.

'Tis the Season: Carve out a tall pumpkin and use it as a flower vase or use small pumpkins for candles. A throw pillow, bowl of fresh citrus fruit or a bouquet of cut flowers are inexpensive ways to provide some color pop while welcoming your guests with the feel of nature.

Come Together: Gather around the fireplace. Rearrange your furniture to set your fireplace, instead of the TV, as the focal point of the room. Footstools, ottomans, and floor pillows by the fire create an inviting, warm atmosphere that will get you through the harshest days of winter. If you don't want the hassle of starting and maintaining a fire, try placing tall white candles in the fireplace for a similar glow.

Go Vibrant: Add a few splashes of vibrant color. They enrich any look and keep you from feeling drab. Deep colors also inspire confidence. Use an area rug to add warmth and personality to any room.

Go Circular: Designing a wreath is one of the easiest DIY projects you could hope for. And this time of year there is an abundance of colorful items to choose from at your local craft store or around your home. Get the kids involved and make it a family project.

Prepare for Winter: Now is the time to prep your home. There are several easy steps you can take. Consider insulating cellular shades or lined window treatments such as thermal curtains or foam-backed draperies for older, drafty windows. Insulate your water heater with insulation wrap. Seal leaks and drafts with caulk or weather strips. Clean your furnace and change your air filter. And lastly, but certainly not least, install a programmable thermostat. This allows you to conserve energy during the day while you're at work and at night while you sleep, but still come home or wake up to a warm, cozy home.

 

A fun fall project: Create an indoor play area

John Powell (powellrenovations.com) at Powell Custom Homes and Renovations of Des Moines, Washington provides these tips:

play-areaImage source: happytobeathome.net

Choose a theme - Plan the entire room around a single thematic element based on a child's favorite subject, game or character. Or use the theme to create variety, such as a “story time” theme with your child’s favorite storybook characters incorporated into the decor. A themed, “special” room will give your child more incentive to spend time there, and will even help him or her to keep it clean.

Go crazy with colors - Neon paint colors are just fine here; don’t worry about matching or clashing.  Think about the fantasy worlds your children are seeing on television - the more outlandish, the more tempting the space will be for them.

Think small - Kids love spaces that are sized for them. Plan the space for smaller people, but think ahead so your kids don’t outgrow the space within the year.

Kids play rough - No matter how bomb proof you make the space, someone is bound to knock his head against the side of any piece of furniture or anything built into the space. Try to find things with rounded edges. If you buy a piece of furniture with hard corners, ask your contractor to sand it down.

Reprinted with permission from RISMedia. ©2013. All rights reserved.

Feature image: thetutorializer.com

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Topics: National Real estate trends, VT Real estate trends, Home Improvement

The Ups and Downs of Interest Rates

Posted by nelrealty

Oct 4, 2013 4:29:24 PM

We all know interest rates go up and down. But do we know why or how that affects each of us on a personal level?

In the last 12 months we have seen interest rates as low as 3.375% on a 30-year fixed mortgage and as high as 5.00% on the same loan. Currently (9/30/13) the interest rates are sitting around 4.50%.  What has caused the large shifts in rate?

Mortgage interest rates typically inversely follow bonds, specifically the 10 year T-bill.  As the cost of the 10 year T-bill goes up and the yield on return goes down, so do interest rates.  As the price of the 10 year T-bill goes down and yields go up, interest rates typically go up.  Over the last few years you may have heard the term QE (quantitative easing).  This is an economic stimulant program from the Federal Reserve (The Fed) with which they have been putting “cash” into the market by buying assets such as mortgage back securities (MBS).  By purchasing mortgage back securities The Fed has been able to artificially drive down the mortgage interest rates.  The private investor purchasing MBS is looking for a higher return, while the Fed is more concerned with driving the economy as a whole, not padding their pocket.

As the economy struggled, the Fed continued to purchase assets, thus we had QE 2 and QE 3.  The Fed has been buying billions of dollars of MBS per month, continuing to drive the interest rates down.  As the economy has slowly improved, the Fed has threatened to slow or stop completely their asset purchasing program.  In August, there was discussion that the Fed would begin pulling back as early as the 4th quarter.   Interest rates jumped up to most recent highs of 5.00%.   In September they reevaluated the economy, jobs and the GNP to realize they may have overestimated the economic growth.  At which point, the Fed announced that they did not plan to stop or slow their asset purchasing program and rates began to drop again to our current rate of 4.50%.

How does this affect you, the home buyer?

Here is a quick example:
On a $200,000 loan at 4.50% you will pay $1,013.37 / month for principal and interest. At an interest rate of 5.00% you will pay $1,135.58 / month for that same $200,000.  That is an increase of almost 11%.
To look at this differently, at a 5.50% interest rate, if you borrowed 10% less or $180,000 you would have a monthly principal and interest payment of $1,022.02.  With a 1 percent increase in rate you have reduced you borrowing power by approximately 10%.
As the price of houses go up and interest rates go up you have reduced your buying power by over 10%.  My suggestion, get out there and buy now while your purchasing power is still really strong.

Article written for NELR by Jeff Teplitz, Mortgage Loan Officer, EverBank - Dedicated to helping clients throughout the mortgage process, with over 8 years of mortgage experience and a thorough knowledge of the Vermont and Northern New England markets.

Featured image: homesolid.com

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Topics: National Real estate trends

Closing the Deal

Posted by nelrealty

Aug 30, 2013 6:38:27 PM

You spend months marketing your property, cleaning the house for showings and then you get an offer and work through all details (negotiating, inspection, appraisal, financing, other contingencies), looking forward to closing. Or, you spend months looking at multiple properties, reconfiguring your expectations, narrowing down the prospects, making an offer and working through the same details as above.

Everyone patiently waits for that hopeful “Clear to Close” from the lender. You are thrilled when you get it and usually it is clear sailing from there. But that is not always the case. What can go wrong at the closing table? Let’s see…

Some unexpected things can happen either at closing, or the days just prior. There are some things you can do to avoid a delay.

Take care of all inspection items early on. You may find yourself at the mercy of contractors’ schedules or waiting on ordered parts. If you are the Buyer, do not wait until the walk-through to make sure the items have been done.

Look over your closing statement very carefully. You want to make sure all pro-rations, commissions and deposits are accounted for. Were the utilities, association fees, and taxes (town and/or village) all taken into account? A missing item can cause disruption at the closing table.

If you are wiring money, make sure the process is started in a timely manner in relation to your closing day and time. If the money is not there, you won’t close.

If needed, set up a Power of Attorney (POA) ahead of time, so your attorney (or other appropriate person) can sign the papers for you if you cannot be there. If you are the executor of an estate, make sure you qualify to have POA to sign the paperwork. Recent laws preclude those who benefit from a sale to have POA to sign the closing documents.

All Buyers should do a final walk-through to ensure all personal property has been removed, all appliances/items that were to remain are still there, and the home is broom clean. This is also an opportunity to make sure all work that was promised to be done has been completed.

If you are the Seller…don’t save your packing for the week before closing. Moving always takes longer than you think and Buyers rightfully expect a final walk through with the home cleared of all the Seller’s personal belongings and clean. It is in the contract.

One last tip. It is not advised to allow a Buyer to move personal property into the home prior to closing. If the closing is held up or does not happen, it can lead to a very awkward and possibly contentious situation. We all want to play nice…but it is still really good advice to heed!

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Topics: National Real estate trends, VT Real estate trends

A Home's Material Facts: Let us Ask and Disclose

Posted by nelrealty

Aug 21, 2013 3:18:02 PM

Today’s real estate climate is not the “Buyer Beware” of decades ago.  No longer do you hide the facts and hold your breath that the Buyer doesn’t ask the right questions.

Even with the most honorable intentions, issues can arise. Typically, the more serious issues that come up between buyers and sellers are questionable boundary lines (location of, easements, rights-of-way), septic problems (failing system), and moisture issues around rot and mold. These can become contentious, leading to terminated contracts or legal battles.

Disclose, disclose, disclose. That is the key to keeping things moving forward and avoiding the post-closing litigation. A property owner who lists with a professional will be asked to fill out a 6-page Seller’s Property Information Report. This facilitates full disclosure of material facts regarding the home. It encompasses 7 sections: Land, Mechanical systems, structural components, water supply, sewer/septic wastewater system, additional information, and condo/homeowners’ associations.

Sellers are expected to fill this out accurately and to the best of their knowledge. Such disclosures protect both the buyer and the seller.

If a home is not listed with a professional, a buyer needs to ask all the right questions, and a Seller needs to come clean about everything related to the house. This includes, but is not limited to, information regarding flood areas, underground storage tanks, accurate boundary lines, rights-of-way/easements, condition of appliances, septic maintenance, and results of radon and water tests. Getting this information in writing is essential.

This is not a don’t ask, don’t tell situation. If you are aware of or should be aware of material facts about the home, you need to disclose.  There is no perfect home and buyers understand this.  They just want there to be no surprises after the fact. They want to be aware of everything before jumping in.

The home inspection is a time when the unknowns should come to light, including home issues that the seller was not aware of. If an inspector’s list of issues includes a handful of things the buyer was told about pre-inspection, those things are not deal breakers. It’s the surprises that tend to slam the breaks on a deal, or at least make everyone head back to the negotiation stage.

So, whether you are using a real estate professional or going it alone, make sure you disclose everything about the home. If you are on the buying side, ask lots of questions. When it comes to the material facts of the home, nothing is off limits.

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Topics: National Real estate trends, VT Real estate trends

Vermont Real Estate News: Time to Jump Into the Market

Posted by nelrealty

Aug 3, 2013 2:51:30 PM

To buy, or not. That is something many people have struggled with over the past 5 years.  Will home prices decrease further? Will interest rates stay low or continue to rise? Can I time it just right to get the best value for my money? Well, if you are out there looking now, then I would say that you have timed it well.

But now your worry may be, will my offer be better than the competition’s offer? News flash: homes are getting looks from buyers…many buyers.  And we are seeing multiple offers on properties in varying price ranges. Wait a minute. Is this a flash back to 2006? 2006 is often referred to as the end of the hot market but if we compare today’s market to that of 2006, it becomes clear that now is an ideal time to jump into the housing market.

Looking at Vermont real estate trends, specifically in Chittenden, Lamoille and Washington County, we see that the average number of homes sold in quarter 2 (about 900) and the average sell price (about $280,000) is about the same this year as it was in 2006. The difference is, homes aren’t selling quite as quickly in this market even though interest rates are lower now than they were then. In 2006, interest rates in Vermont were at 6.75% and with that rate a $300,000 loan for 30 years would cost about $1945 a month in principle and interest. Now, if you were to get the same loan with today’s interest rate of 4.75% it would cost $1565, about $400 less. It is also important to note that people are employing much more creative financing these days. In Vermont in 2006, the home selling market was fueled almost entirely by conventional loans. Now, in 2013, there are many more low-income loans, cash sales, and with many veteran’s returning from war, there is a large increase in veteran’s association financing for home sales. There are certainly more financing options available to you than just the conventional loan.

If you look at the numbers, it is a buyer eye-opener. Supply is low; demand is high. The Vermont real estate market, as well has national trends, show that inventory has been decreasing in the last six months and while Interest rates have risen 1 point in last year and 2 points in last 5 years inventory is having a more significant impact on the market. National Association of Realtors Chief Economist Lawrence Yun said last month that compared to interest rates “the bigger concern remains too few homes available for sale, especially among homes in the lower price range” (http://speakingof realestate.blogs.realtor.org). So, while there has been talk about rising interest rates, they still remain historically low and owning is often more economical choice than renting. In fact, the mortgage you will pay on that $250,000 home is comparable to what you would pay to rent a modest 2-bedroom house.

Let’s not forget the other advantages of owning your home.  Every month you pay your mortgage you are putting money into your own pocket. You have a tax deduction as well as a payment toward equity.  And don’t forget appreciation. All market indications show that home prices have leveled, with the average sell price remaining about the same in the Vermont real estate market over the past seven years, leaving us to expect housing prices to see modest appreciation in the next few years and beyond. That should prompt you to start your home search.

As wonderful as all of this sounds, it still is only attainable for those who feel a sense of job security, have taken care of their credit, and have managed to save money for their required down payment and closing costs.

Go out into the home buying arena prepared. Talk to your lender to see what you can afford. Go out there with your eyes wide open. You may be surprised. And as always, feel free to contact us at New England Landmark Realty with any questions you may have.

Feature Image courtesy of: http://www.hopperdesignllc.com

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Topics: National Real estate trends, VT Real estate trends

The Value of Home Ownership in Shifting Economic Times

Posted by nelrealty

Jul 15, 2013 12:33:35 PM

The Value of Home Ownership in Shifting Economic Times

Feature image: www.sdseacoastblog.com

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Topics: National Real estate trends, VT Real estate trends