Security Issues for Sellers!! Do NOT Let Your Guard Down!

Security Unfortunately the issue of security must be brought up when you are selling your home. The fact of the matter is that you are inviting complete strangers in to your house. Remember when we were children and we were taught never to talk to strangers…well, not only are we talking to them, we are inviting them into our homes to see our personal effects. Most, if not all, of the people inquiring on your house will have honorable intentions. There have been cases, however, that fall way short of this. You must be completely alert of everything that is going on around you and must maintain complete control of the showing.

I will provide you with tips that I have followed throughout my years of practicing real estate. I hope that you will heed my warnings and be intelligent.

It is a good idea not to have too many people present during a showing because this causes distractions. Consequently, you find yourself alone with a stranger which can be hazardous. Make absolutely positive that someone you are close to, i.e. a neighbor, spouse, relative, know what time the showing begins and that you will check back with them in exactly one hour. This way they can be alerted of a problem.

A neighbor can watch cars coming and going, which can be a great benefit.

If you are uncomfortable being alone be sure to make statements like “My spouse will be home any minute” or “My friend is waiting for me” or something to make sure they know you are expecting company at any minute or expected to be somewhere shortly.

Always follow your prospect into a room. Do not allow yourself to be forced into a room, you need to be closest to the door at all times. Avoid letting someone get between you and your escape route.

Do not leave room for the buyer to park directly behind your car where there is no way for you to escape. Make sure that your car is parked in such a way that you will be able to quickly escape, should the need arise. With this in mind, keep your car keys on you during the showing. Tuck them away in a pocket for safekeeping. Jewelry needs to put away in a safe deposit box or home safe. Do not leave temptations laying around on a dresser shelf. Now is not the time to be a show-off.

Guns needs to be unloaded and locked in a safe as well. I would hope that this is already done and not merely being done for prospects. Guns should always be stored under safe conditions.

After the showing you must immediately go through the house and make sure that windows and doors were not unlocked or tampered with.

The bottom line is that you will have to be your best defense against ill intended people. If you have a bad intuition about your safety you must act on it. Find a way to get out of the showing or stay outside of the house and let them look on their own. Articles in the house can be replaced–you can not. It would not be outrageous for you to stand in your front yard and wait for the prospects to tour your house. You can jot down their license plate and make and model of the car. Sure, it is not the most effective way to show your house but your safety comes first…even if it costs you a sale.

The vast majority of people wanting to see your home will be genuine, honest, hard working people looking for a home. This warning is nonetheless required to make you aware of what you could be up against.

Sit back and take a few deep breaths before your prospect shows up. Gather your thoughts and get yourself into the selling mindset. Turn the radio on softly, let the candle burn and enjoy the accomplishments of your hard efforts. Your house has never looked better…uh oh, are you having second thoughts about selling now?

Holiday Letting an Investment Property: Doing the Initial Sums on a Holiday Home Investment

It sounds wonderful, doesn’t it? Owning real estate in a prime capital-growth location, gaining maximum rental returns on a nightly basis and getting free holiday accommodation for the family as well?

That is the dream that has been drawing property investors into the holiday letting real estate market for decades. Some would say it sounds too good to be true… but some swear it’s totally possible to have it all. The trick is to enter the market armed with all the information to ensure the recipe is right from purchase to profit.

Holiday Home Income

As with any investment property, the first thing to do is decide the buying budget and then calculate the necessary rental returns in order to ensure it’s affordable. It is true that holiday let investment properties almost always have higher weekly rents than permanent rentals and peak season rates can be 300% higher than the same property would if let on a permanent basis. However, it is also important to realise these rates are seasonal and estimated annual returns must account for significant variation throughout the year. A beach property for example, may rent for $1500 per week in summer, $1000 per week in other holiday periods and just $500 per week in winter.

Occupancy rates also need to be factored into estimated returns. While short-term rental occupancy rates may be as high as 90% in metropolitan areas, they are commonly 20-40% in regional areas. Talking to local holiday letting agents is the only way to get an accurate picture of area-specific occupancy rates. Particular types of properties may be more highly sought in some locales also, so quiz local letting agents on occupancy according to specific property styles and buy accordingly.

Most importantly, factor personal use into the investment return calculations. To ensure maximum revenue, avoid using the property during peak season or if personal use is one of the key reasons for purchasing the property, make sure personal time is deducted from the availability calendar prior to calculating revenue.

Vacation Investment Outgoings

Local letting agents can also provide an idea of regular holiday letting expenses. While it’s true that rental rates are higher, running costs are also more expensive than a permanent rental. Regular cleaning costs, marketing fees, linen hire and furnishing maintenance may all need to be added to management fees and standard holding costs and they can amount to more than 50% of quoted weekly rental rates.

Of course, the flip side of the higher outgoings is more tax write-offs. Because holiday homes are often let fully-furnished, right down to the crockery and the tennis racquets, there are a host of added depreciation benefits for investors keen to negative gear their holiday let property. Keeping holiday home furniture in top condition with a high replacement rate is a strong return-customer draw card and may also be in the best interests of the holiday home investor.

To sum up quickly, it is recommended the following basic figures have been estimated on an area-specific basis before beginning the holiday home property shopping:

  • Weekly/nightly rental rates
  • Seasonal rate variation
  • Seasonal occupancy rates
  • Management fees
  • Maintenance and cleaning costs
  • Cost of furnishing property and related depreciation
  • Standard council rates/body corporate fees
  • Lending costs based on budgeted purchase price
  • Extent of associated taxable claims and depreciable items.

Then it is time to consider the capital gains and marketing of a holiday-let as an investment property.

Influence Real Estate Appraisals: How an appraiser values your home can increase your property’s worth

What is the value of your home? The short answer is the maximum someone is willing to pay. It is very rare for a house to sell at exactly what it has been appraised at. Mortgage companies only lend up to the maximum value of the appraisal. This keeps properties selling at or below the appraisal value. This also makes the appraisal a very important tool in selling your home.

Understanding the Appraisal Process

Appraisals are very subjective; therefore, they are very open to manipulation. The process begins with a comparison of your home to four to six other properties. Appraisers do their best to find properties that are exactly like your property (same # of bedrooms, bathrooms, square footage, etc.). The problem with this approach is that no two properties are alike. Starting with the most obvious, location can be a big factor in home value. Unless the appraiser has been working in the same market for 20 or 30 years, the subtleties of location will be missed. One side of the street may be more preferred or even have a different tax base. All of these items should factor into the valuation of your property.

The appraiser’s next task is to adjust the valuation of your property. They adjust for upgrades (new kitchen, new bathroom, additions, etc.) by first rating your house, then rating the value of the upgrades. Typically they use words like excellent, average, and poor condition. Again, these ratings and adjustments are very subjective. There is no magic age that changes an upgrade from excellent to average. It is simply up to the appraiser to determine based on his/her experience. The longer the appraiser has been in the business the more accurate this process will be.

Influencing the Appraisal Process

Be present at the appraisal. Simply being present and pointing out positive things about your property will influence the appraisal positively. Try to note the less obvious things, like our kitchen was replaced less than five years ago or we just had our basement waterproofed. The more upgrades you can provide the appraiser, the more accurately he/she will be able to assess the condition of your property.

Ask about the set of comparable properties. Take the time to visit each property if you can get them in advance. If not, make sure that the properties are truly similar to your property. Try to visit open houses in your area before the appraisal to get a better idea of what the properties look like in your area. Understand what blocks are more valuable than others and look for other subtle things that an appraiser might miss. Additionally, your real estate agent can help you here as well. They tend to know the best appraisers and they know a lot about the neighborhood. If they can be present with you, your appraisal will go much better.

Appraisals are very important when selling a property. To maximize your home’s value, you must take an active role in this process. Appraisers are human, which means they are open to influence and they don’t know everything. The more you can help them understand your property, the better your appraisal will be

Make Money with Real Estate: Could it Become a Career?

With reality TV leading the way, the dream of making big profits with real estate is becoming more widespread. Home renovations and home flipping are very hot right now, and many are entertaining thoughts of realizing their own self employment dreams with hot properties. No matter how high the gas prices climb, one thing remains the same: people want to own their own homes.

That sort of demand calls for people to fill the need, and many are finding that working in real estate isn’t so hard after all. Getting started in real estate is sometimes slow going, but doing research beforehand can make the process much easier. For articles and information on every aspect of real estate investing, visit REI Club.

Could it become a career for someone looking to earn their way with self employment? There’s no reason that anyone can’t make money with real estate. Learn a little about the market by studying the area where you live. Where are properties selling, not selling? How much are they selling for? Learning the market is very important for real estate success, as some areas will be considered more desirable to buyers than others.

Knowing what people want is also important for real estate success. Someone who can give people what they want stands a much better chance of making money with real estate. Check out the Home & Garden section to learn more about what homeowners are looking for.

Real estate can be a very well-paying career path, for those who can master the market. Learn all you can about real estate, and you increase your chances of realizing self employment dreams.

Selling a Home Fast in this Tough Real Estate Market

The current real estate market is a fierce buyers market, meaning if a buyer is lucky enough to still have a job, have any money left, still have a good credit score (FICO score) and wants to take a chance buying a home in an unstable and possibly still declining market; he or she is worth their weight in gold. If a home buyer has committed to this process in these times, he/she is very serious and that is valuable to know.Since the market is glutted with homes for sale at rock-bottom prices,a qualified buyer demands the absolute best price, most beautiful, largest sq ft, cleanest, best location home out there. In other words they want a “smokin’ deal”and wouldn’t you? They get a Realtor and see up to 40-50 homes depending on price range, area location and amenities desired. It is the best deal that gets the offer.

How to get that offer?

It must be perfect: harsh, isn’t it? Free up space and make the home look larger by packing up clutter, personal effects, cutsy baby pictures, vacation pictures, Aunt Freeda’s paint by number artwork, crafts, silver spoon collections, desktop papers. In fact, put away at least 50% of the personal effects and “doo-dads” on every surface. Some exerts say too many personal effects distract a buyer – not so, in my opinion. It simply makes a room look smaller. Since the value in a home according to Realtors and appraisers is square footage, then giving a buyer more visual square footage makes the home a better “deal”. Unless the buyer is a family member, they won’t have the same taste as you. So pack it all up and put it away in storage. You’ll have a head start on the packing and sell the home quicker to boot.

The goal is to make each room in your home look like a fancy hotel room. Have you noticed that when you enter a hotel room, all your senses are delighted by beautiful decor, soothing/coordinating colors, decorative flare, wonderful smells and mood lighting? There is little on surfaces or counters and only one or two tasteful pieces of artwork at eye level, a blindingly clean space with shine bouncing off every angle. Is this an accident or a well thought out plan by hotel owners to make your stay superior to the competion? Apply the same prinicple to your home and get those better offers.

Clean up your act

Yes, this is going hurt. Take the time to do a “deeep” clean. Bathrooms must look like Home Depot display aisles; spotless, especially the shower/tub. All surfaces need to be clutter free and shining. Beds must be expertly made with military quarter bouncing ability, floors and baseboards lint/dirt free, shelves cleaned and organized, kitchens looking like no one has ever cooked in themand yes even inside oven. That’s where 80% “ish” of woman look first. Fine steel wool will remove grease, grunge and stuck on food from cooking surfases. Once again, all drawers, shelves and closets should have at least 50% of items removed and packed in boxes. This makes the storage areas look so much larger.The bottom line: clean and organize like the President’s coming for dinner.

Paint it

A fresh coat of paint is like scrubbing the entire house with comet. Paint any surfaces that are too bright, loud, dingy or dirty, using soothing, tasteful colors. Home or paint stores have color chips of coordinating paint schemes, so use those; why “re-invent the wheel”? The exterior paint color scheme can send buyers running away or entice them to make an offer. A cool or dark color scheme makes a home look cold and small. Lightr colors make a home look larger. A soft yellow base with white trim or warm taupe with white trim seems to the winning combination with the most curb appeal.The National Association of Realtors cited a light yellow base color to be the most popularly sold house in the United States.

Make your home look like a model home – stage it like the pros

Take 50% of furniture out into the garage and neatly pack it up. Rooms look larger with less in the room. Group according to activity. A model home designer sets a room to look functional and cozy, for instance, a living room might have two groupings: a reading center and TV grouping. So clearly define each space and set the scene.

The yard

The front of the home is the curb appeal or first impression. If it doesn’t measure up, buyers tend to ask the Realtor to keep driving and move onto the next showing. There’s just too much competition out there. Clean, sweep, prune, cut, mow, weed and scrub till it looks like a TV show. Adding a few inexpensive items like colorful flower planters or painting the walkways an alluring color will attract those buyers inside.

Spend some time and energy preparing your home for success and get those winning offers.

Advice to Real Estate Short Sellers: Selling an Underwater Home

Sellers attempting to sell their home for less than their current mortgage value need to pursue a short sale. Most mortgage documentation allows for the seller to do this with the bank’s permission; however, many times a seller will either have to make up the difference with cash or the bank will simply forgive the rest of the loan. In the case of the seller making up the difference, it is rarely a problem with the bank. On the other hand, when the seller is asking the bank to forgive the difference the transactions becomes much more complicated.

Deal with Banks in a Short Sale

Before considering a short sale, sellers should first speak to their bank regarding the short sale process. There is a tremendous amount of work that can be done before the home even goes on the market and for everyone’s sanity, this work should be done in a timely fashion. Before calling, a seller should have their latest W-2s and their latest tax filings. If possible, get the home appraised to evidence the fact that the market value is below the current value of the loan.

It will be important that the seller be able to show hardship. Sellers should be prepared to show the bank exactly what assets and liabilities they have and what they pay each month. This would also include 401k and retirement assets. While the bank may not expect sellers to cash in their 401(k) to repay their loan, it will be another data point they use to consider the seller’s financial wherewithal.

Find a Short Sale Realtor

When all the documentation is in order, contact several realtors that have work experience with short sales. Short sales are always time consuming and a challenge. Having a real estate agent familiar with the process will minimize the headache of seller, who will most likely not have any experience with the process. Experienced short sell realtors can also proactively help sellers better market the property to prospective buyers interested in short sales.

When interviewing realtors, layout what has been done and layout the full financial picture. Remember, the realtor should be the seller’s advocate to the bank and to the buyer.

Don’t let the process of the short sale become overwhelming. Start with the understanding that it will take about six months or more and will require significant legwork on the part of the seller and the seller’s agent. Also, don’t forget to consult an accountant or real estate lawyer. Some forms of debt forgiveness are taxable and in some cases a successful short sale could result in a very large tax bill at the end of the year. Be smart and be patient.