Check out this helpful Home Inspection Guide from USInspect…
(click it!)
Home Inspection Guide! April 28, 2012
My Career Stats February 13, 2012
I was just curious so I decided to check out my personal statistics, according to MIBOR. I know some of my sales aren’t included because they were new builds, and sometimes those don’t get reported to MIBOR.
| List Price | Sales Price | SP$/LP$ % | DOM | |
|---|---|---|---|---|
| High | $349,900 | $372,342 | 115.3% | 444 |
| Low | $69,900 | $67,500 | 90.4% | 0 |
| Average | $178,253 | $173,515 | 96.98% | 94 |
| Median | $155,000 | $151,000 | 96.6% | 65 |
What will my Closing Costs be?? January 25, 2012
The sort answer: It depends.
The long answer: Closing Costs are made up of several factors, and are very very difficult to predict with absolute accuracy. Many different things go into the closing, some are items that agents don’t even know about! Let’s take a look at some common closing costs. Some you will already know and expect, others that seem to pop up at the last minute.
- SELLER- The seller usually pays the Real Estate Commission. This is negotiated between the seller and the listing agent when the house is listed. There is usually a $5 fee that goes to the Title Insurance Enforcement Fund, $75 for deed preparation, and $25 wire fee. Sometimes the seller will agree to pay for a Home Warranty, these usually cost around $400 at closing. Sometimes they owe money to the utility company that has to be paid at closing. Sometimes there is a “transfer fee*” for the HOA (see comments later about this one). Any late HOA fees will also need to be paid at this time. The seller might see “Attorney’s fee” or “closing fee” which is usually about $150. A larger fee that the sellers will have to pay is the taxes. In Indiana we pay our taxes in arrears, so the seller has to give money to the buyer for the taxes. These are pro-rated to the day of closing and can vary widely. The seller usually pays the “Owner’s Title Policy”, a fee which changes according to the price of the home. Finally, and closing costs that the seller has agreed to pay for the buyer.
- BUYER- The buyer is given a list of fees by their lender before closing, a “Good Faith Estimate” that shows several of the fees associated with the loan. These might include the origiantion fee, points, credit report fee, and appraisal. Sometimes you must pay for the appraisal up front, sometimes it is paid for at closing. The lender also can set up an escrow account for the buyer to pay the insurance and taxes, in which case they will need to pre-pay a few months of those fees. You might also see a payment to the insurance company to get the insurance going, or sometimes the insurance company will have you pay them up front. Of course, your home insurance depends on the home and the items you own. If you have a down payment less that 20% you may see a fee for Mortgage Insurance. This is different from your homeowner’s insurance. The buyer usually pays the “Lender’s Title Insurance”, which varies. Recording fees around $100, transfer fee for the HOA*, and that good old Title Insurance Enforecement Fund fee of $5. Sometimes, if the seller has already paid the HOA for the full year, the buyer will need to reimbuse the seller. The seller also has to pay for their Home Inspection (at the time of inspection) and they get the credit for their taxes.
Confusing enough for you? **About that HOA transfer fee.** This is something that as an industry, we kinda stink at. There is no place on any form to disclose it, and we generally have no idea how much this is going to be until we are sitting at the closing table. In most cases, the fee is $25-$100, sometimes it is split between buyer and seller, sometimes it is charged to just one side. In a recent transaction, the fee was $500 and was going to be charged to my buyer. Nobody told her up front about this fee, and it was so high that she could not (and would not) pay it. I don’t really blame her. I know now to check with the HOA before the offer is made to see what that fee is (if they charge).
Guest Post: Being a Seller VS Being a Buyer January 18, 2012
Thank you to my friend and client, Nichole for writing about her experience as she sells and buys a home. Her blog, A Midwest Activist, is all about her animal rescue organization, Mended Hearts.
My husband and I were informed in July that my company required us to relocate out of the Indianapolis area to better fit their growth strategy. This relocation came as a surprise, and frankly, we weren’t really prepared for it, financially or emotionally. Michelle listed our beloved first home to be sold, so we could purchase a home in our new city.
Every showing request is a mixture of stress, apprehension and hope. You are letting strangers in to open your cabinets and look in your closets. You rush to put away your laundry and pretend like there isn’t a family living there. You fret over artwork – will our wrought iron crosses in the guest room put people off? You worry about what you cook for dinner and possible odors. You rearrange your schedule to accommodate as many showing requests as possible – even leaving work early to straighten for a buyer who is “going to make an offer on a house today”. You hesitate to make plans because there might be a showing request. You wait until less than 30 days to plan trips – just in case you get an offer.
The process is very emotional for the seller. It’s just another house to the buyer – but it’s your HOME. They don’t have the memories that make the house special and beautiful to you. Every negative feedback comes like an arrow to the gut. It’s hard not to take it personally. It’s too small, too non-traditional, it smells, it’s dirty (!!!), the house is in “rough shape”. This is all feedback we received after showings. There’s the occasional “very nice kitchen” thrown in but it hardly undoes the damage from the overwhelming negative. We appreciated the constructive feedback and made an effort to address the issues. Some feedback was ridiculous – replace all the windows and repaint everything? Are you nuts?!?
The hardest part is having absolutely no influence over the buyers. You don’t know who they are. You don’t know what appeals to them. You have zero control over their decision making process. You can try to eliminate the things that may repel a potential buyer, but ultimately, you have no way of knowing. You just hope that they see your house the way you did. Your buyer is out there – but how long until they find your home? How much will you have to lower the price to make them see the “value”?
And then you get an offer! Of course it’s lower than you’d like. It’s a buyers’ market, remember? Do you risk turning it down, hoping there’s another offer coming soon? Do you continue living in this suspended state with all the stress that comes with showing the house? What is the intangible value to us to finalize it and get on with our new adventure?
Buying a home is completely different. You have almost all the power! The process is full of potential and dreams. It’s exciting and fun to look at houses! We wandered through homes (only opening closets and cabinets if we were really serious about the house), daydreaming, talking about how we could arrange our lives there. Talking through every house made us appreciate our family and our marriage. This was the complete reverse of showing our house for sale – those often primed us both for a fight!
The needs of our family limited the list of homes that would work for us, but we still had 2 dozen potential properties, more if we were willing to relax some of our requirements. As the buyer, you can eliminate a home as a potential for whatever – for example, the neighboring house that has a pink carousel horse planted in their front yard (true story!).
When we finally made our offer, the negotiation was infinitely less stressful. There was another house we could buy if negotiations fell apart. As the seller, there’s no backup buyer waiting in the wings (unless you were our seller, in which case they got lucky and had a second offer). As the seller, every decision you make is fraught with concerns that you will drive your buyer away. As the buyer, it’s a business deal and you’re the boss. You can shoot for the moon – at least you’ll land among the stars!
It’s unfortunate that if we need to buy another house in the future, we’ll have to be a seller again first. I would prefer to never sell a house again! At least the painful part comes first, I guess, and it’s rewarded by the fun of buying a new house (I’m ignoring the actual moving part – yikes!). So buyers, take a little pity on the sellers, please?
Haunted Houses for Sale- The Disclosure Issue November 1, 2011
Image by Sean MacEntee via Flickr
Just in time for Halloween, I was watching a show on the DIY Network about home buyers considering purchasing supposedly haunted houses. The show followed potential home buyers as they had the home investigated by experts, and then determined if they could live with the findings.
What I thought was very interesting was that in each case the Realtor discussed the disclosure law in whatever state they were in. For example, one of the homes was in Florida (I think– I’m not particularly familiar with the real estate laws of Florida, so don’t quote me on that), and the Realtor said that because they are a full disclosure state, he had to tell them that the house was haunted. In one case, they were NOT in a full disclosure state, but the agent felt obligated to tell them because he was actually the seller as well.
In Indiana, Realtors are NOT required to disclose a psychologically effected home, unless specifically asked, and then, only if they know.
“psychologically affected property” includes real estate or a dwelling that is for sale, rent, or lease and to which one (1) or more of the following facts or a reasonable suspicion of facts apply:
(1) That an occupant of the property was afflicted with or died from a disease related to the human immunodeficiency virus (HIV).
(2) That an individual died on the property.
(3) That the property was the site of:
(A) a felony under IC 35;
(B) criminal gang (as defined in IC 35-45-9-1) activity;
(C) the discharge of a firearm involving a law enforcement officer while engaged in the officer’s official duties; or
(D) the illegal manufacture or distribution of a controlled substance.
My advice to you? If you are considering purchasing a piece of property, and you are worried about this, do a little bit of research. Check online to see if there are any newspaper articles regarding the house, ask the neighbors, ask your agent.
Short Sales make me CRAZY!! October 13, 2011
Everyone loves a great deal, and a short sale might be a way to get a great deal, BUT not without challenges!
A “Short Sale” is one where the bank must agree to take a lesser amount than they are owed for the home. Usually the seller is behind in their payments, and on their way to foreclosure. The bank knows that it costs a lot of money (and time) to foreclose on a property so they are sometimes willing to compromise. Typically these homes are in need of many repairs.
A lot of people want to look at Short Sale homes because they want a great deal, and they are willing to do the work to bring the house up to their standards. It can be instant equity if done right.
What a lot of people don’t know is that a short sale is incredibly slow and cumbersome. The bank needs to know for sure that there is a real hardship and that the seller can no longer pay for the home. They usually try to get the seller to sign a note saying that they will pay back the shortfall. They need to look at your bank statements, they need to know the value of your house, they ask a ton of questions. And once you have sent all of the information in, they might lose it and need everything sent again (2 or 3 times).
Once a buyer comes along and makes an offer the bank can take what seems like an eternity to make a decision! They need to have the house appraised. They need to talk to the investor who is backing the mortgage, they need to re-verify that the seller can’t make the payments. They need to check with 2nd or 3rd lein holders. It is shocking how what seems like should be a simple decision can take so long. You need to realize though, that you might be file #692 on someone’s desk. Someone who just doesn’t really care about your timeline.
Buyers always say they are going to be patient, they are ok with waiting, they are in no big rush. Until we haven’t heard anything from the bank for 2 weeks, and then 5 weeks, and then it’s been 7 weeks. . .
Things I have seen in Short Sales:
- the sellers trash the place out of anger at losing their house
- sometimes the houses get broken into and theives steal the appliances, the copper pipes, anything that they can re-sell
- I’ve seen homes where a back window is broken out and the rain, the raccoons, anything can get in
- I’ve seen homes vandalized and used as a comfy place to sleep
- I’ve heard of a situation where there was an offer on the house, and the buyer was waiting for an answer from the bank. It was a full price offer… but the bank foreclosed anyway, went and changed the locks, and took the house back.
- Homes with basements often flood, because the bank turns the electricity off, which means the sump pump can’t work. Then the mold can start to grow.
I am waiting on the yes or no answer from 2 banks right now, and the lack of communication can be infuriating for the buyers. You just want to pull your hair out and scream, “JUST LOOK AT OUR FILE!!!” but there is nothing that can be done to move things along.
Before you consider a short sale, be sure you understand what you are getting yourself into.
Q: My house was just assessed… September 19, 2011
I recently got a great question from a past client. They had their home built last year.
“I had a quick question for you. We recently received something in the mail that our property has been assessed..I guess now because the houses in our addition are finally complete. The total amount our property and house was assessed at was significantly less than what we paid for the house. Should we be concerned about this? the form says we can appeal but I’m not sure how any of this works. Any info you have would be appreciated!!!”
I told her that no, it should not be a big concern to her, because if her house is assessed for less than what they paid, that means that they are paying less in property taxes, so that was a good thing. Her next question was:
“what about when we go to sell the house though? will it have any negative impact?”
No, it won’t. When a Realtor or an appraisor is looking at what a house is worth, we look at what similar homes in the same area have sold for. We do not look at the assessed value, because we know that they really don’t have an impact on the sales price.
Perhaps she may be a little concerned that they paid the builder too much for the home, if it is assessed for less, but the truth is that MOST homes are assessed for less than they would actually sell for. Plus, when you build, you pay a little bit more for the “Newness factor” and the fun of choosing your own colors, layout, flooring, etc.
Pre-Qualified VS Pre-Approved September 2, 2011
The very first step to buying a home is to talk with a lender to see how much home you might be able to afford. Many Realtors will not work with a buyer who isn’t at least trying to get in touch with a lender. Personally, I would hate for a buyer to start looking at homes, only to find out that they have fallen in love with a home that is out of their price range, or we have wasted our time looking at homes that are way under their actual budget and we need to start over.
When you speak with a lender, you need to ask to be Pre-APPROVED. Many people do not know that there is a big difference between a pre-qualification and a pre-approval, but it is a big difference.
A pre-QUALIFICATION only looks at the most basic financial info, and the bank does not necessarily take the time to verify any of that info. They are simply saying that IF what you are telling them is correct, then you SHOULD be able to afford this mortgage.
A pre-APPROVAL actually requires a mortgage application, a credit check, verification of your financial status. It is way more accurate and shows sellers that you are a serious buyer.
This ain’t no rodeo!! August 29, 2011
8 seconds. Eight. That’s a very short amount of time, unless you’re on the back of a bull!
According to a study done by HGTV, it takes the average buyer 8 seconds to decide if they want to buy your house. So, you need to do everything you possibly can to make the home as appealing as possible. Here are some tips fpr making those 8 seconds count!
Make the front of your home as inviting as possible, curb appeal is very important. While the agent is getting the front door unlocked, the buyer is checking out the landscaping, the woodwork, the front door… and if that door is hard to open, the buyer will notice that too. Spruce up the front of your house with fresh mulch, plants, maybe even some new house numbers to give it some pizzaz. No matter how good the inside looks, that won’t matter if the outside is run down.
As soon as they walk into the house, they are judging. So be sure to make the best first impression possible. I always try to have the buyers enter through the front door, so that they get the grand entry. Your job is to be sure that the grand entryway is not cluttered with shoes, jackets, backpacks. Put out a small bench, maybe a vase of fresh flowers, this is the perfect place to WELCOME buyers to your home.
Make the right impression in those first 8 seconds, and buyers will want to stick around and see more!
The Pushy Real Estate Agent August 17, 2011
HAHA! Thank you to my pal, Patric Welch, for directing me to this video! This is certainly NOT how I do it! You should probably go check out Patric’s site, especially if you need any tech help! http://www.noobie.com/
