Poor Choices Can Blow a Deal

Buying a home is a personal choice, but it’s also a significant business decision - and buyers are wise to remember this. That is why it is critical to make good choices when selecting the key service providers involved in the transaction – the lender/mortgage loan officer, real estate agent, and home inspector. A poor choice in any of these three service areas can actually blow a deal for the buyer.

Timeliness, organization, effective communication, knowledge, and accessibility are key traits to seek in each of these professionals. If you were responsible for the hiring decisions at your company, which candidates would you bring back for a second interview? Consider the fact that you are actually the CEO of your own life, and your hiring decisions could impact the quality of your life for many years to come.

No purchase can hope to take place without the necessary funds. Make sure you have chosen a reputable lender, and not some institution that no one has ever heard of. Sellers are very wary these days when it comes to lenders, and rightly so. There are simply too many devastating stories of buyers and sellers sitting across the closing table from one another for hours, waiting for the funds to arrive via wire. Countless transactions have been delayed by days or weeks when one lender cannot close the deal and a new lender must be found to eventually save the day. Imagine that scenario as a first-time buyer when your apartment has new tenants arriving, and you’re now without a place to live - with all of your belongings loaded on a rental truck.

In addition to selecting a credible lender, it’s vital to receive a pre-approval letter. A pre-qualification letter is meaningless to sellers. They want to know that a lender has actually pre-approved you for financing. Offers with pre-approvals will likely be given much stronger consideration, and some sellers won’t even look at an offer without a pre-approval letter.

Be sure to receive a GFE (Good Faith Estimate) from your lender for all fees associated with the lender, loan program, and closing costs. You will want to have this information handy as you negotiate an Offer to Purchase. You must be aware of the money you will need to bring with you to closing, in the event that a seller does not agree to pay your closing costs, and you still want to proceed with the offer.

Dates and deadlines in an Offer to Purchase are critical, where time is often of the essence. The professionals you choose must be accessible, organized, and timely in the delivery of their services. Missing deadlines or waiting until the last minute to satisfy contingencies can have dire consequences. Remember that an Offer to Purchase is a legally binding document, and not to be taken lightly.

It is not your job to know the ins and outs of loan programs and financing options. It is not your job to know the laws that govern real estate transactions in your state. Nor is it your job to know if the property you wish to purchase is safe, structurally sound, or worth its listing price. It is your job to select the professionals who do carry those responsibilities and the proper credentials. Take time to research your options. Ask friends, family members, and trusted colleagues for referrals. Attend open houses or research real estate companies and agents online (see my post, “All Agents are NOT Created Equal.”)

Do your best to make wise decisions, but don’t beat yourself up if you wind up making a poor choice. A worse choice is to sit back and do nothing once you recognize the problem. Always remember that if you made the hiring decision, then you can also make the firing decision. You can choose a different lender or loan officer. Due to complexities associated with real estate law, you may need to take an extra step with switching agents if:
1. You signed a Buyer Agency Agreement,
2. You’re in the middle of a transaction, or
3. You plan to write an offer on a property that was shown to you by that agent.
If any of these situations apply to you, contact the agent’s broker, who will reassign and oversee another agent who will better meet your needs.

Relocating? Pack it Up!

With the economy being what it is today, competition for employment is fierce. More people are determining they’re willing to move wherever they can find a decent job and attempt to regain some stability.

If the new employer offers a relocation package, it’s typical that moving expenses are paid, but the movers only insure what they themselves pack. For homeowners who now need to sell their homes to relocate, they may be hesitant to box up anything themselves. This may be fine for décor and wardrobe minimalists, but few homeowners fall into that category.

So, if this scenario applies to you, congratulations on your new opportunity! Now go get some boxes.

It’s wonderful that someone else is going to do all of the packing and moving for you, but you likely still have some work to do to get your home photo-perfect and show-ready. If you don’t take the time to prepare your home for public viewing, you could be cheating yourself out of thousands of dollars of sale proceeds. It’s also unfair to expect your real estate agent to put all sorts of time and money into marketing efforts when you haven’t done your job as homeowner first.

Take a good look around your home, paying particular attention to areas that attract clutter – and that could be anywhere. Begin to edit furnishings, décor, collections, pantry items, and overstuffed cabinets and closets. Be careful not to over-edit – you don’t want to pack up items you’ll need to have accessible until you move, and you don’t want your home to seem cold or completely devoid of personality. You just want buyers to see the great space they’ll be buying, and that’s easier to see with fewer items to distract them.

Now, there’s no need to pay for boxes, since the movers will surely come with their own packing materials. Think back to your years of apartment dwelling – and moving. Call grocery stores and office supply stores to find out when they receive their shipments, and tell them you’d like to take some boxes off their hands. You just need to be timely in your pick-up, or else they’ll have broken down the boxes already.

Since the movers will need to properly pack the items you’re temporarily placing in mismatched boxes, you don’t need to be overly careful with your packing techniques. Begin with items that aren’t fragile – clothing, seasonal shoes/boots/coats, towels, blankets, linens, metal baking pans and cookware that aren’t often used, games, books, DVDs, CDs, toys, etc. Extra furniture might be shuffled to a less furnished room or storage space.

When it comes to breakables, consider moving them to another space that you’ve managed to empty of non-breakables – like a cabinet, closet, or even inside a piece of furniture that buyers won’t look in because it’s your personal property. You get the idea.

In this housing market, you can’t leave success to chance – and you can’t place all of the responsibility on the shoulders of your real estate agent. So, get crackin’ and get packin’!

The Selling Point of Seasonal Photos

Spring has finally sprung in southern Wisconsin. Ask any allergy sufferer, and they’ll tell you it’s officially spring.

Now that the grass is actually green, the trees are budding, and tulips and other such perennials are in bloom, homeowners should be sure to take photos of their landscaping, as well as nice shots of the front and back of their home (be sure to get plenty of yard in the picture). This should be done in spring, summer, and fall – even winter, if your property looks particularly lovely covered in snow and ice.

Keep digital files of these photos, updating them every couple of years or when you’ve done something new to the landscaping or exterior of the property – whichever comes first. This will allow you to be prepared with excellent outside photos, no matter what time of year you eventually list your house for sale.

Those who have had to list their homes in winter can attest to the need for such photos. It’s no accident that most homes are listed for sale during the spring and summer months – at least in colder climates. Properties simply look more attractive when the landscaping is leafy, colorful and vibrant, and the home itself isn’t surrounded by several feet of snow.

But if you’re ever in the position of having to sell your home during the winter months, include spring and summer photos in your online listing. Also display these photos in your home for buyers to take a look at during a showing. Place them in a special photo album or spread them out on the kitchen counter or dining room table – a place where they can’t be missed.

Buyers can’t visualize how beautiful a property is when it’s covered in snow - unless they're buying a ski chalet. Give them every opportunity to view your property in its best light – or season.

Negotiating the Deal

In southern Wisconsin, as in much of the country, we are experiencing a buyer’s market. We simply have far more homes for sale than we have buyers buying.

We’ve seen housing prices fall, inventories remain high, interest rates drop to historic lows, and incentives offered to first-time home buyers to encourage them to buy.

Naturally, buyers are feeling confident when they enter into negotiations on a property. They’ve all heard stories from friends or family members that they can get properties for a steal. Play hardball, and the seller will break under the pressure. What else is he to do if he needs to sell his home?

Many buyers believe they can and should submit a lowball offer in order to secure the best deal from a seller. Here are some reasons why that’s not the best strategy:

1. Current home prices already reflect the drop in housing values. Buyers should ask their agents for a brief market analysis, showing sales and active listings for comparable properties in the area. They should also seek the sales history on the property they wish to purchase. This preparation will help them determine the appropriate price to offer for the property.

2. When presented with a lowball offer, sellers will often counter back higher than they would have if the offer was more reasonable. In a proper negotiation, both parties benefit. Anger is never good for a negotiation, so buyers are wise to remember that they are actually dealing with human beings on the other end of the transaction.

3. Price is not the only factor to consider when writing an offer. What else is the buyer asking for? Closing costs? Appliances? A home warranty? An allowance for new paint or carpeting? Is the buyer hoping to ask the seller to leave behind some of the personal property, such as the pool table, riding lawn mower, or outdoor furniture? Buyers are more likely to succeed in securing a lower price if they are not asking for more than that from the seller, AND if they bring something of value to the table: a quick closing date, pre-approved financing with a reputable lender, an amount of earnest money appropriate for the value of the property, and so forth.

4. REALLY IMPORTANT: Negotiations do not simply end with an accepted offer. Suppose the property inspections reveal that some major repairs are needed. Going back to the seller who was lowballed, to ask that he foot the bill for the repairs, may result in a lost deal. Yes, the seller will need to disclose any “defects” to future buyers that were found during the initial inspection. But that may not deter a seller from walking away from a deal that left him unhappy from the start. He may opt to make the necessary repairs and hold out for a better offer from a more reasonable buyer.

5. It often pays to be nice. Sellers are usually kind enough to provide buyers with information about the community, neighborhood, and unique workings of the property. This can be very valuable information to have – and is easy to obtain if the seller feels favorably toward the buyer. Another challenge that occurs more often than one might think: the closing gets postponed at the last minute, and now the buyers are homeless, with a truck full of belongings, and new appliances to be delivered that are already enroute. There are remedies to such situations, for which the seller may play a significant role. Power can shift in a transaction at any time.

It’s important to keep in mind that home sellers are neighbors. They are members of a community to which buyers hope to belong. Great deals can and should be negotiated where both parties walk away winners.

Should you "Pool" your Resources?

For many southern communities throughout the country, a swimming pool in the backyard makes sense. The pool and all its trimmings can be enjoyed year-round. And, in some neighborhoods, it can be difficult to sell a home without one. But travel further north and people begin to ponder the wisdom of adding swimming pools or spas/hot tubs to their properties. Are they a wise investment in colder climates? Well, ask yourself a few questions – and be honest:

1. How many days per week will your pool or spa actually be used?
2. How many months of the year will your pool or spa be eligible for use?
3. Will the benefits of the pool or spa outweigh the time and financial cost of maintenance, added insurance, and safety measures that may be required, such as a gated fence?
4. How much of your yard will be consumed by the pool or spa?
5. How long do you plan to live in your home?
6. How important will it be for you to sell your home quickly when the time comes?

A swimming pool on a property can be a strong deterrent for buyers in Wisconsin, as most do not want to deal with the time and costs associated with maintenance. This is because we have too few months when we can actually enjoy it. And if we get a cold or rainy summer, that narrows the enjoyment window even further, but does not diminish the maintenance window.

Still, if you know you’re going to be in your home for at least 7-10 years, and/or swimming is an important part of your life, then go for it. Be aware of the challenges you might face when you wish to sell, but you should feel comfortable making your home what you want and need it to be.

If much of your yard would be consumed by a pool, then consider installing an above-ground pool, as opposed to an in-ground pool. That way, when you prepare to sell your property, you can even offer buyers the option of removing the pool, if they wish.

Spas are far less of a deterrent for buyers in Wisconsin for this very reason – they can be removed fairly easily. They can also be used throughout much of the year – whether kept inside or out. Safety is of little concern, since many come complete with a cover to keep curious little children out. Plus, they serve the added purpose of easing the ache of sore muscles – which can certainly occur year-round.

If you decide to take the plunge, do plenty of research online first. There is such a variety of styles and amenities available when it comes to pools and spas. Set your budget and stick to it, and, as always, have a plan. Now is the time to dive in if you hope to be splashing around your own backyard this summer. Enjoy!

Backyard Bliss

Here, in Wisconsin, we’ve got colder temperatures for at least 6 months of the year – and I do mean cold. So, when the weather finally warms up, we like to spend as much time outdoors as possible – working, relaxing, entertaining, playing. And that’s why outdoor living space is just as important in colder climates as it is in warmer climates. We pack a whole year’s worth of enjoyment into a handful of fleeting months. And with the current state of our economy, it makes good fiscal sense to invest some vacation money quite literally in our own backyards.

So what does that mean – “outdoor living space?” Well, what began as a simple deck or patio, is taken a bit further. Main living areas that you find inside your home – such as a kitchen, dining area, and living room - are given their own distinct spaces outside. Just as you use design and décor to create a certain ambiance in your home, extend that sense of comfort, beauty, and utility, to your backyard. You’re not just a home owner, you’re a property owner – and that includes your backyard. It, too, is part of your investment, and becomes all the more valuable when you add value to it.

Outdoor living spaces can be simple or elaborate, small or grand, sophisticated or casual. One thing they should never be is boring. With so many options for decks, patios, plants, fencing, privacy screens, pergolas, arbors, gazebos, furnishings, lighting, and more, your backyard can be transformed from boring to blissful.

Now, whenever you consider a home improvement project, keep in mind the range of property values within your neighborhood. You may have elaborate plans, but a modest neighborhood may not allow you to see big returns on your investment when you eventually prepare to sell. If you have questions or concerns about over-improving your property, consult with an experienced real estate agent. We can give you an idea of your property’s current market value, both with and without your planned improvements.

And remember, you don’t have to complete every project for your backyard dreamscape this year. Create your overall plan and take steps to achieve it, one mini-project at a time.

Curb Appeal is Real

You know them when you see them. Driving around any neighborhood, there’s always at least one property that stands out from the others. Perfect lawn, great landscaping, fantastic looking home… You wonder if the inside looks as amazing as the outside. Well, sometimes it does and sometimes it doesn’t, but the point is that you’re curious about the inside because of the outside. And that could help you attract buyers, when it comes time to sell your home.

So, it’s not just a gimmick. Curb appeal is real. HGTV introduced us to the concept years ago, but people seem slow to catch on. Perhaps we’re too busy to achieve all of our property enhancement goals. Or perhaps we’re intimidated by trying to wrestle Mother Nature in full view of our neighbors. Money is often a factor, but it needn’t be. Much improvement can be made with little financial investment.

As with any home improvement project, it’s best to have a plan. But first, begin by writing down general ideas about how you want your property to appear from the outside.

Would you like to see more lighting?
More flowers, but fewer bushes?
Or different bushes – fewer evergreens?
Do you envision trees in your yard?
Does the exterior of your home need painting?
Perhaps some shutters or flower boxes to add some charm?
What about the front entrance? How can it be more inviting?
New door, new hardware, new lighting, mailbox, or address numbers?
How could you liven up the front walkway?
How does the garage door look?
Could your driveway use some work?

Sure, your list could grow to be very long, but that’s okay. Just pace yourself. You don’t have to do everything at once, and not all of your projects will cost you money.

Pruning trees, trimming bushes, pulling weeds, edging lawns, cleaning up plant beds, raking up remaining leaves – yard clean-up can be a workout, but it’s free and it makes a big difference. If you’re looking to create new plant beds or enhance the ones you have, most communities offer free mulch/wood chips to anyone willing to haul them away. Check with your community’s Public Works Department to see if and when this is available where you live. And check with your community’s sanitation department to see when they will haul away yard waste in your neighborhood. Communities typically offer this service twice a year – in spring and fall.

I always say it’s best to know your limitations. Don’t take on major projects without seeking advice or help from an experienced friend or professional. And don’t start many projects at once, or you could quickly become overwhelmed and lose your enthusiasm. If you don’t have a green thumb, ask your local greenhouse about plants, flowers, and bushes that would be best for your skill set, as well as your yard’s conditions. Is yours a sunny yard, or is there lots of shade? Sandy soil, or is it more like clay?

Also, seek out landscaping elements other than plants, such as wood, brick, stone, or decorative concrete. Pergolas, arbors, gates, and fencing can be beautiful additions to your yard. Landscaping is not just about plants.

If instant gratification is what you need to keep you motivated, you’re in good company. Here are many improvements you can complete in just one day.

So go ahead, get started, and give everyone something to slow down and admire as they drive past your home.