Selling mistakes that can cost you buyers

I just read a great article in last Sunday’s Chicago Tribune. It was the lead story on the front of the Money & Real Estate Section.  Entitled “Don’t Try This at Home,” it lists common selling mistakes that can turn away potential buyers.  I want to go over a few of them that I think are extremely important.

1. Being insulted by lowball offers.  Considering the current state of the economy, buyers feel that no matter what they purchase it can be a great deal.  While that may or may not be true, it’s important not to just turn your head at any lowball offer that comes through.  The buyers could just be feeling you out to see if you’re willing to negotiate with them.  Don’t just reject it and walk away.  You’ll want to counteroffer (even if it’s not much) just to show that you’re interested in proceeding with them.  It’s very possible that you’ll be able to agree on a deal that will make everyone happy.  By not counteroffering at all, the buyers might just move on to the next house.

2. Similarly, always accepting the most money in a multiple offer situation.  It is still possible to receive multiple offers on your home.  And sellers that automatically go for the most money, might be missing the best deal.  You want to qualify all the buyers rather than just looking at the quantity of the deal.  See who is putting the most down, who can close the fastest, if anybody waived their inspection rights, etc.  The person offering the most money might be the least qualified in terms of a mortgage and you could end up losing the deal later on.  Go over every scenario.

3. Being your own home’s tour guide.  I can’t be clear about this enough.  Please do your best not to be home during showings.  Even if you are and you can go sit in the backyard, that will make a huge difference.  People don’t want you to give a full tour for many reasons.  One, they want to go through the home at their own pace.  Two, they won’t feel comfortable opening closet doors or shower doors with you hovering over their shoulders.  Three, you could accidentally share “too much information too soon.”  You’ll also want to keep pets out of the way.  Some people may be afraid, others may be allergic, and you don’t want anything affecting the buyers’ opinions of the home.

4. Not being honest with your agent about problems.  If something was a problem and you fixed it, great.  Just tell them everything.  It will save so much time and hassle in the end.   You’d rather deal with anything up front than arguing about it over home inspection issues when it’s going to keep everything from closing on time.  If something is a problem, let the agent know.  They’ll help you determine how to present it to buyers, or maybe recommend fixing it, or letting the attorney know. 

5. Having a great condo but a less than appealing lobby or other common areas.  If this is a problem in your building, contact your home owner’s association ASAP.  You’re paying for the upkeep of the common areas, so make sure they’re taking care of them.  If they can’t get there fast enough and you’re trying to sell your unit, grab your vacuum cleaner and start cleaning yourself.  A dirty building can be a big turnoff, even if you have a beautiful home inside it. 

These mistakes can often cost you a sale.  Take your Realtor’s advice when preparing your home for sale.  They’re the ones that are constantly seeing what’s going on in the market and are there to help you get your home sold for top dollar.  Visit me online for more advice or for a free market analysis.

How to determine if you need a new roof

If you’re worried about some leaking into your home from your roof, and you’re wondering if you should replace it, hopefully these tips will help you determine if the time is right.  The National Roofers Contracting Association (NRCA) recommends inspecting your roof at least two times a year from both the inside and the outside.  This will be one of the first signs to let you know if a replacement is necessary.

First of all, certain types of roofs may not ever need to be replaced.  Find out what your roof is made out of.  Concrete is a roof that will never have to be replaced.  If you have a tile roof, individual tiles can crack or break and need to be replaced, but the entire roof should last at least 100 years.  Cedar roofs should last about 20 years and can get mossy in wet climates and split in dry ones.  Wooden shakes should be checked for any kind of termite damage or damage from other wood-eating bugs.

And just because you see water leaking, don’t jump to the conclusion that the whole thing needs to be placed.  If a roof is less than 20 years old, there’s a good chance you can just fix the trouble spot instead of the whole top.  I had a client that had water leaking into her master bedroom closet after every heavy rainfall.  There was one bad spot on the roof, but the problem was fixed for only $100.  Call a contractor or roofing specialist to determine if it’s a problem that can be fixed without replacing the entire thing.

So, when you’re doing your regular bi-annual inspection, you’ll want to walk around the interior of your home first.  Check for any water damage (light brown or warped spots in the ceiling) or leaking, dark spots (could be mold from moisture), and outside light showing through your roof.  You’ll want to make sure to get into the attic, also, to do this inspection. 

On the outside, look for cracked, broken, or missing shingles.  One big sign of advanced wear is shingle granules (what looks to be like large grains of sand) in the gutters.  Check for water damage and mold .  While you’re at it, make sure all downspouts and gutters are clear and free of debris. 

Make sure to contact a licensed contractor for all repairs and replacements.  If you need more tips, be sure to check out this article. Visit me online for any more advice.

Short sales, foreclosures, REOs … what’s the difference?

Whether you’re a buyer looking to purchase a property, or a seller who may be behind in their mortgage payment, you’re constantly seeing news articles and reports on how many foreclosures there are because of the housing market.  You may have also come across the terms short sale, bank-owned property, REO… and you wonder, “What is the difference?”  Hopefully, this will help you determine the difference as an investor looking to purchase or a homeowner deciding what to do with the home they can no longer afford.

Short sales: Because of the housing market, it’s very possible that the home you paid $100,00o for 2 years ago is now only worth $75,000 (just an example).  When you bought the home for $100,000 you put down 5% ($5,000) and got a loan for $95,000.  Well, seeing as how the home is only worth $75,000, you owe more on this home than it’s worth.  This is a short sale.  Now you can no longer afford your mortgage payment and you need to sell.  You will work out a deal with the lender for them to take less than what is owed on the loan. 

The homeowner will list their home with a Realtor.  They will be involved in the pricing, marketing, and need to sign off on any offers as if they were selling the house and getting the money themselves.  Then the offer has to be approved by the bank.  This process can be very time consuming, and it’s not guaranteed that the bank will accept the offer.  As a homeowner, you need to provide the bank or creditor information as to why you want a short sale.  This often includes tax returns, pay stubs, bank statements, and a hardship letter (written by you explaining why you can’t make the payments).  Buyers can wait up to 6 months to get a short sale approved by the bank.

Foreclosures: Once the lender takes possession of the property, it is in foreclosure.  This means that the homeowner stopped making payments on the home and was evicted.  This process can take a year to go through and proceedings are legal matters.  Foreclosures are often auctioned off and must be paid for at the time of purchase in full by cashier’s check.  If you see a home listed in the MLS that says “Foreclosure,” that means it is often in pre-foreclosure. It hasn’t been taken over by the lender at this point, but they’ve begun proceedings to have it auctioned off.  There’s still a chance to purchase it through your Realtor before the final step.  If you’re purchasing a true foreclosure, you will not get to go through the regular process of a home inspection, attorney review, etc.  This is probably not a good idea if you’re a first time buyer.

REOs: REO stands for “Real Estate Owned.”  An REO happens when the bank was unsuccessful in auctioning off the property after the foreclosure, and now they own the property.  They will list it with a Realtor.  Prior to it being listed, the home might need to be cleaned out to remove all the trash left behind and have some repair work done.  The seller is no longer involved at this point since they’re out of the home.  The bank will still have to approve any offers like a regular seller, but the process is much quicker.  You should hear back in less than a week. 

This should help you further understand the difference between these terms.  If you have any more questions, or need real estate advice relating to them, please visit me online.

Ogling over how the billionaires live

This photo is of Skywalker Ranch in California.  It’s owned by famous Star Wars Director George Lucas and sits on over 5,000 acres.  It’s not just a pretty home to look at, though.  Lucas works in his home which contains a post-production studio.  Tom Hanks used it for sound effects in Castaway as did Sean Penn for Into the Wild. 

Not all billionaires live in such high style, however.  One of the world’s richest men, Warren Buffett, lives in this 5 bedroom home that he bought for $31,500 in 1958.  The home is located in Omaha, Nebraska, and despite Buffett’s riches, he hasn’t moved yet.

This compound in Medina, Washington is home to Bill Gates, the founder of Microsoft.  The actual home is 66,000 square feet and contains tennis courts and bowling alleys (plural).  You have to climb 84 stairs to get just to the ground floor, or, you could just take the elevator.

Featuring a gold-plated indoor pool, this 17,000 square foot London home is home to Lev Leviev, the world’s largest diamond cutter.  He’s a neighbor of Ringo Starr’s and bought the home for $65 million.  It also features an indoor nightclub.

View more homes of the rich and famous in this Forbes article. Visit me online for any real estate needs.

What is the difference among all those kitchen countertops?

So you’ve decided to make some changes to your kitchen.  One of the first things you’ve chosen to do is update your kitchen countertops.  What material should you choose?  You’re faced with so many options you don’t know where to begin.  Is it worth it to pay more for granite?  Can solid surface countertops handle the amount of cutting and cooking you do?  This list goes through many of your different options and explains some of the pros and cons.  Click here for even more detailed information about your countertop of choice.

1. Granite countertops.  Granite tends to be the countertop that defines luxury in the kitchen.  One big problem: It’s expensive!  Unfortunately it can also crack if it hasn’t been installed correctly.  If you cut directly on the surface (it’s the second hardest surface after diamonds), your knives can become dull.  The bonus is that it will last forever and holds up heat.  If you can afford it, it’s probably worth it.  However, it won’t do a small kitchen justice.  If you have a small kitchen in a condo or townhouse, it’s really not worth it to put in granite.

2. Engineered stone.  This is another expensive choice.  New countertops have come out made of quartz particles.  There are more color choices than granite and it’s resistant to stains and scratches. 

3. Solid surface.  The most common name you’ve probably heard in this category is Corian.  Solid surface countertops can have the look of granite but cost you a little less.  They can stain and they can scratch, but those scratches can be sanded out.  The stains can damage the surface of the countertops along with any heat that is sitting on top.  If you do have a hot pan, make sure to place it on a trivet, cutting board, placemat, or oven mitt first.

4. Ceramic tile.  Like the floor, this is becoming a more popular surface for kitchen counters.  It’s extremely easy to clean, and can be installed yourself to save the money on labor.  However, since you have grout in between the tiles, that can become stained and the tiles themselves are prone to cracks. 

5. Laminate.  A popular choice in laminate is Formica.  And you probably know that laminate is one of the most reasonably priced.  This is a much better choice for a small kitchen.  You can get this in so many colors and patterns – even those that are starting to resemble granite.  Once it chips or cracks, it cannot be fixed unless you replace the counter.  And without it being a solid surface, you can see the edges and seams in between the pieces.

I’ve gone over the most popular five options.  New surfaces are joining this esteemed group like stainless steel, wood or butcher block, marble, and even concrete.  The more unusual material, generally, the higher the price tag.  If you are planning to sell, consult with your Realtor prior to purchasing anything.  They’ll let you know if you’ll be able to make your money back in the value of the home over what you put into it.  I’m happy to consult with you, too.  Please visit me online.

Pros and cons for rent to own homes

When searching for a home to rent, some potential tenants see lots of ads these days for homes available as a “rent to own.”  What exactly does this mean?  Usually, on top of the monthly rent, you will pay an extra amount per month that goes toward buying down the purchase price of the home.  This is generally a good solution for those who would have a hard time getting a mortgage because of credit issues or not having enough money for a down payment.

So what are some of the pros and cons?  This list should help you determine if this option is right for you.  This article also offers tips on what to do before ever signing into an agreement for a rent to own.

PROS:

1. Improving your credit.  By making regular rental payments to the owner or landlord, you’re much more likely to have an easier time qualifying for a mortgage.  You’ve quickly built up a good down payment.

2. Sellers can benefit if they’re having trouble selling their current home when they’ve already purchased a new one.  Now they have a tenant in the home helping to pay down their current mortgage so they’re not making double payments each month.

3. It gives you a chance to live in a new neighborhood, city, or town without having to make the committment of actually flat-out purchasing the home.  If you don’t like it after living there, you might lose some money that you’ve paid, but you’re not stuck in a place that you feel is uninhabitable.

CONS:

1. If you fall behind on your payments, you can very quickly lose the money you’ve already paid and don’t have a place to live.  The landlord has the right to evict you without giving you your money back.  Make sure you read the fine print in any agreement you sign detailing what happens if you stop paying.

2. Since the housing market is constantly in flux, it’s hard to set a price a year or two in advance of what you think the house will be worth when it comes time for you to actually own it.  If prices continue to fall, you may end up paying more for a home than what it’s actually worth.

3. Foreclosures.  If the owner of the home goes into foreclosure while you’re renting and they eventually lose the house to the bank, not only are you evicted from the home, but you’ve lost the extra money you’ve put towards a down payment.  You’ll need to make sure that the owner is making his monthly payments while you’re renting or you could be out a place to live.

If you have other questions on how the rent to own process works, I’m happy to help.  Please visit me online.

Lawn care tips for adding value

I’ve talked plenty before about some house fixes that were cheaper and could potentially add a lot of value to your home if you’re planning to sell soon or sometime in the future.  While indoor improvements can definitely mean a return on investment, it’s also important to be aware of what you can do outside to add value.  There’s a lot of importance in landscaping.  Now, you don’t have to be a landscape architect or master gardener to help your house show its best.  These easy tips are ones that anybody can do and they’ll increase your investment easily.

1. Take care of clutter.  Get rid of junk that’s sitting against the side of your house.  Do you have patio furniture from 30 years ago that’s completely rusted but still sitting on your patio?  Trash it.  Keep garbage cans in the garage and out of sight.  Move yard waste out of the yard and into the garage or out of view until garbage day.  And if you’re a fan of lawn ornaments, try to tone them down to an appropriate level. 

2. Give your lawn some TLC.  Fertilize it when it’s in its growing stage (starting in the spring).  Don’t let it get too long, but don’t cut the grass too short, either.  This exposes the bare patches in the lawn for all to see.  It also allows bugs and weeds to take over.  The Yard Doctor says to mow only one-third of the lawn’s height for each mowing.  This lawn will be stronger and be able to protect itself against weeds. 

3. Trim!  Nothing is less appealing than driving up to a house seeing overgrown trees and branches hanging in front of a front door or blocking a side of the house.  It really ruins the curb appeal.  You also want to cut back near decks and patios.

4. Add color.  Choose some annual flowers with a burst of color like hot pink, purple, or orange.  Try planting some near your front walk or around the base of trees in your yard.

5. Install an automatic sprinkler system.  Could lawn care be any more easy?  This is a great selling point for new buyers.  You choose when you want the sprinklers to go off.  This could be very beneficial for those living in towns where they’re trying to save water by only allowing you to water your plants and lawn at certain times and on certain days.  If you’re not around, your automatic system sure is.

View some more great tips at this Web site. Hopefully this Chicago weather will start to warm up a bit, but these cooler days could be the perfect opportunity for you to make some quick lawn fixes. Visit me online if you have any questions.

Fixed rate vs. adjustable rate mortgages

So for those of you who are looking to purchase a home and are not sure where to start in terms of getting a mortgage, I hope this blog will help you out in determining which type of loan may be best.  Two of the most common mortgages are a fixed rate (where the interest rate stays the same over the entire course of the loan) and adjustable rate (where the interest rate fluctuates).

For the fixed rate mortgage, you most commonly see this is as a 30-year fixed rate.  Meaning, you have a monthly payment every month for the next 30 years and your interest rate remains the same the entire time.  So your monthly payment will also remain the same, although over time, you will be paying more toward your principal and less toward interest. 

One of the bonuses to this is that if interest rates start to increase, your payment will never go up.  These mortgages are good if you plan on being in your home for a long time.  It’s also good if you see interest rates starting to increase while you’re looking for a home to purchase. 

They do have fixed rate loans that have time periods besides the 30 years.  Other common loans include a 15-year fixed rate (your monthly payment will be higher) and a 45-year fixed rate (your monthly payment will be lower).  Just know that that’s the amount of time it will take to pay off your house.  If you do sell prior to your loan being paid off, the money you make on your house will first go toward paying off your mortgage and short of other expenses (attorneys’ fees, title fees, etc.) you will keep the remainder.

An adjustable rate mortgage, on the other hand, has an interest rate that can change over time.  You usually see this rates listed as 3/1, 5/1, and 7/1.  That means that the rate will change in either 3 years, 5 years, or 7 years.  The lower the time before the interest rate changes, the lower the initial rate.  If rates are lower than when you applied for the loan, your payment will actually go down with a lower interest rate.  However, if rates are higher than when you applied, your payment will increase with a higher interest rate.  That’s the gamble you take with these loans.

There are pros for an adjustable rate mortgage.  If you know you’re going to be in your house for a short time, this might be a great idea because your payment will be a lot lower than with a fixed rate and you could often move out prior to your rate changing.  So if, for example, you know you’re only going to be in your home for 2 years before your employer relocates you, this can be the loan you want to choose.

So some questions to determine which loan is right for you:

1. How much can you afford?  Can you afford your monthly payment if rates go up by 1%?  3%?

2. How long to you intend to stay in this home?

3. What have interest rates been doing over the past 6 months to a year?  Have they been increasing?  Decreasing?

You will want to speak with your mortgage broker or lender to determine which loan is better suited for you.  If you have further questions or need the name of a good mortgage representative, please visit me online.

Your best local fireworks displays

For the holiday weekend, I thought I’d take a (short) break from real estate (I’ll be back Monday!) to let you know where you can catch some of the best local fireworks displays in the Chicagoland area.  I hope you’ll all be able to get out to view some of these fantastic shows. 

Evanston: July 4th at 9:15 pm at Clark Street Beach (Clark Street and the lakefront).  Palatine Concert Band will be playing from 7:30 to 9:10 pm at Dawes Park.  View Evanston’s sitefor more info. I have to say, even though I do work in the Evanston area and am probably a little biased, that this show is absolutely fantastic year after year!

Glenview: July 4th at 9:00 pm at the Glenview Park District Golf Course at 800 Shermer Road.  View the park district site here.

Skokie: Skokie is planning a 3-D fireworks display and the first 10,000 visitors get a free pair of 3-D glasses.  The show is at dusk on July 4th at Niles West High School, 5701 Oakton Street.  Their rain date for the show is July 5th.

Wilmette: Aside from Chicago’s fireworks tonight at the Taste of Chicago, Wilmette is also planning their fireworks display tonight, July 3rd.  The show is at Gillson Park at Lake Avenue and Lake Michigan and starts at 9:30.  Starting at 4 pm today, Wilmette is having a Tastefest and carnival rides for the kids.  View their Web site for more information.

Buffalo Grove: You’ll be able to view their fireworks from four locations starting at 9:15 pm July 4th.  You can see them at the Buffalo Grove Golf Course, Lake Cook Road & Raupp Boulevard, Rotary Village Green, or Willow Stream Park.  Starting at 7 pm, the Buffalo Grove Symphonic Band will be playing a concert at the Rotary Village Green.  More details here.

Libertyville: Fireworks begin at dusk on July 4th at Butler Lake Park, located on Lake Street west of Milwaukee Avenue.  In the Butler Lake Band shell, the Libertyville Village Band will play a concert at 7:30 pm.  View their site.

More local towns and villages with 4th of July fireworks information can be found here. I hope you all have a safe and happy holiday weekend. Visit me online if you need anything!

Tips to get you selling quickly

If your home is listed for sale, you most likely want to sell quickly to move on to your next phase in life.  However, some people are forced to sell quickly for a few reasons: job relocation or transfer, divorce, foreclosure probability, etc.  If you’ve been relocated to another city or state, oftentimes you need the money out of your old house to be able to purchase a new home in your new location.  Here are some tips to get you out quickly without your home sitting stale on the market.

1. Price correctly.  This is not the time to test the waters and list the house at what you want out of it.  Talk to your Realtor for a complete market analysis to determine the best price.  You can’t even offer it at market value.  It won’t stand out that way as a great deal.  It’s best to price just a little bit under your competition to get buyers interested. 

2.  Make it an online standout.  Make sure that your home is in showing condition to get pictures (and lots of them!) taken to post online on Realtor.com as well as the other real estate sites.  This way you could also get buyers who are looking to relocate to your neighborhood viewing your home.  If you can get a virtual tour, even better.

3. Fix anything that needs fixing.  You can’t expect to sell your home and make money if your carpet needs replacing or you have holes in the wall.  It’s hard with the recession to be able to consider these fixes necessary, but they truly are.  Every dollar you invest in these repairs should earn you more money when you end up selling.  You can try to speak to your contractors about putting a little bit of money down when they do the repairs and then paying the rest out of your sale proceeds. 

4. Declutter.  Nobody likes a messy home, especially a new buyer.  Make your home stand out at all times.  File papers away.  Clean up your laundry and put away your dishes.  General messes people tend to forget when they’re busy: removing dirty dishes from the sink, folding and sorting laundry, throwing out the trash, putting your toothbrushes, medicine and hair products underneath the sink in the bathroom.  Even a little mess can turn off buyers.  Keep it clean!  If you’re a procrastinator and need help with a deadline to get moving, talk to your Realtor.  Have them give you the day they will make your home available for a broker’s open and plan on it needing to be in tip-top shape by then!

5. Always make it available for showings.  It doesn’t matter if you’re watching your neighbor’s dog or you won’t be home in time for the showing to mow the lawn.  Make sure that you don’t cancel showings for any reason.  You could miss out on your potential buyer with just one cancelled showing.  Agree to put a lockbox on your home and it won’t be necessary for you to be there.

View this Chicago Tribune article for a couple more tips. And leave me a comment or visit me online if you have more to share with my readers!