How this ONE thing could kill your home sale

I feel comfortable, putting it out there; even if the only property you ever bought or sold was on a Monopoly board...you more than likely know what an appraisal is.

Cars, jewelry, art and antiques...just to name a few, are items that can be appraised. The purpose of an a appraisal is to advise you of the value of an item. The need for this information is to protect the consumer from overpaying for product(s). In real estate, the dynamics of an appraisal are a little different from those commodities, just mentioned. It can be important, both in the hopes of under-paying (this allows you to walk into a nice chunk of equity); as well as, being assured you are not purchasing too high, in the surrounding market.

Car, dog or thimble...value still has to happen

If your unfamiliar with process of a home appraisal; let me take a minute to help school you.

So, you buy the home of your dreams (okay, the starter home you'd consider); and, you are willing to pay almost any amount of money for it. It's the perfect location, the best schools, close to amazing restaurants, and hip coffee shops...whatever your thing is. You've been looking forever, or maybe you just started; and, the housing market is smokin' hot (again, for sellers)! You've been instructed, if you find a place you love; it needs to be snatched up! Positive that you have found "the one", you make an offer; they accept. Cool. Schedule inspections, order title work and an appraisal. Awesome, inspections are clear, title commitment in; Aaaannnd...the appraisal, doesn't appraise. Huh? Now what?

Or, maybe your a homeowner who is trying to cash in on this seller's market, by way of frenzied multiple offers being tossed your direction. Here's the problem with your potential pay dirt sales contract; unless your buyer has the ability to whip out his Black American Express Card to pay over the asking price; then, you can count on the average buyer digging really really...really deep into those non-designer jeans for that cash. Anything over what the appraiser says is value, is the buyer's debit, most the time. No deniro...no deal.

What happens if I can't collect $200 at GO?

In either case, you can clearly see from these examples, the effect of an appraisal; and the critical need to have an accurate one. Nonetheless, this brings me back to the question; what happens if the appraisal comes in too low? How is this deficit fixed, provided the buyer isn't either willing to, or able to pay the difference between the value of the property and the sale price?

Here are a few options:

1. Have a bomb diggity, Realtor that is on top of that low appraisal report. Basically, your agent should be calling other sales professionals, who have listed properties in the area, and that are now pending for stats. Appraisers are not able to use homes that have not yet closed, as a valid source for comparables. Therefore, your Realtor needs to do their research, to obtain exact closing dates, and sold figures in order for the appraiser to consider a review. Also, looking into the county accessor records for the subject property, and neighborhood sales is another solid way to build value. Your Realtor can then forward this information to the lender, who can share it with the appraiser; and in most cases you can get that value raised. Thus, eliminating the problem.

2.  "Can't we all just get along"? Everybody agrees to a little movement. In the most simple terms; seller comes down in sales price, and the buyer comes up in equal amounts. If you have a home that is in contract for $300,000, and the value came in at $285,000...then seller comes down $7,500 and buyer comes up $7,500 (without liquid assets or cold hard stacks; it would need to be built into an increased approval amount). The bridge has been gaped and the deal is still strong.

3. Seller won't budge, buyer won't budge; now, purchase contract won't budge. Deal...dead.

Got Boardwalk Place? Don't get greedy

You may be the Monopoly King, and, every Thanksgiving for the last 20 years, you've beat everyone in your family at the game; but, in the real world of buying and selling, Boardwalk Place cannot be sold 10 times more than it's value. Unless you plan on passing GO a few dozen times to pay that ten fold difference; your best strategy will be ask a fair price, and getting an equitable deal.

Reason has always existed, but not always in a reasonable form.

Karl Marx

Taste testing homes...How many is too many?

I want it all! Wait, I need a minute; I have no idea what I want. As Forrest Gump so famously said..."life is like a box of chocolates". And, so it is, in real estate, too!

The process of taste testing

A very common apology I hear when I have been out showing property a few times, with new clients is...I'm sorry. Apparently, they feel the need to apologize for looking at too many homes. Understandably. After all, there is a common myth roaming about the universe, that Realtors become impatient and frustrated when they have to show more than 5 homes to their new clients. Umm, no. I can assure you, if you have a real estate agent with a true passion for helping folks, and they love what they do; this rumor regarding your cut-off is just that, a rumor. You're not in a bar.

In reality, it is our job to make sure that we guide you into an organized and efficient tour of homes; as this makes your ability to choose, easier. But, the operative word here is...guide. There should never be a set number of tours in place, in order to accomplish this decision.

Whether, you're relocating or looking for the first time, in your own neighborhood; we anticipate it taking a little time for you to decide. One of the funniest things, I continually experience with buyers is the "kid in the candy shop" syndrome. The prospect of what can be uncovered when we start your journey; is much like a mixed box of chocolates, not yet bitten into (don't lie, we all poke a hole in the bottom to taste test them). Our reactions to homes are nearly the same; everything from "ooh..aw" to "OH...no"! Yet, at some point, when these eclectic groups of delicious homes, are all finally revealed; it leaves you feeling feel full, and little bit queasy. The excitement of what's inside, has given way to..."I'm good...I know what I like, now". It never fails.

However, this process is important for you, and important for your Realtor, too. It should not be skipped over, or become a source of irritation for buyers or agents. Without this step, you truly can't fall in love with the right house. For without this piece of the puzzle, you will always have that nagging feeling of "is this the right home"? Yet, just like anything you put your heart and soul into; and, all things that require hard work and patience...the reward is so sweet! Because, of this taste testing process, you are confident that you have found your dream home! And, for your Realtor, there is a sense of accomplishment, in allowing this development to happen and savoring the results.

Try not to be glutenous

However, a word of warning to buyers...there is a point in which your sampling becomes glutenous; this is where your Realtor's guiding becomes important.

The truth of the matter is, there is probably less than 10 styles of homes out there. You have, traditional, contemporary, Victorian, mid-century, cottage, cape cod and patio style homes. Throw in a few A-frames, organic-green huts and a houseboat to round out your option list...and that's about it.  Basically, what I am trying to say is...you can only see so many types of houses; so please, cut yourselves and your sales agent a break, and don't look at them all! It will confuse you, I promise. The only element that truly changes within these various home designs, is the finishing. Finishing is considered...wood stain, fixtures, carpet and wall color, etc. At the end of the day...like the house? Like the location? Like the price? Then get a carpet allowance...and "like" the purchase agreement!

There is an exception to this rule, a Seller's Market. What's that, you ask? Too little inventory, too many buyers. If you don't want to be searching for a home the rest of your ever-lovin' lives; then follow this recipe...love it? Buy it! If not, the 5 other Realtors faxing over offers, will be happy to have their clients take it off your hands.

It's not just a home

When all is said and done...how many houses is too many? Use your common sense. If you were a Realtor showing someone property, at what point would you think..."enough is enough"? Your response to that question, will be a good gauge. By the same token; you should never feel rushed or pressured. Nor should you get a vibe of exasperation from your Realtor. Your not just buying a home; your buying pride of ownership and a life-time full of memories.

So, go on...taste 'em all! It's all good.

What have you done for me, lately? Your Realtor's role.

What have you done for me, lately?

Remember that mega popular song by Janet Jackson, "What have you done for me, lately"? Do you feel like you should be belting out a karaoke version of that; as it relates to your Realtor?

This poses a good question...what exactly should you expect from your Real Estate Agent? And, more importantly; have you been receiving it?

Well, at the very least a return phone call by the end of the business day; and at optimum service, a pro-active email or text, every few days. Even if it's just to tell you..."nothing is new, all is still good and I just wanted to say, hi". I find it pathetically sad when I speak with new clients who have fired their agents, and share their stories, that they often wouldn't hear from their sales professional for several weeks! Huh? Whether you're making a $100,000 purchase or a million dollar buy; personally, if it was me, and that was my experience; I'da moved on to a high decibel version of Michael Jackson's "Scream" by now!

So, what should you expect

So, what should you expect between "I forgot your name, after I wrote the contract", and "I'm just making my 20 minute check in call"?

To begin, education is a good step. Most first-time home buyers, or folks that haven't had a home in years, aren't sure how to build a bridge from visiting the real estate office, to visiting the title office for closing. Here's the part that kills me...clients think they have to have the hammer and nails to do it, themselves. What?!!! At no point, should you ever feel concerned you are asking too many questions. And, if you ever do, Donald Trump's catch phrase "YOU"RE FIRED" will suffice. A good Realtor will expect you to have many questions; and, be happy to help you through the process. Remember, there are no dumb questions.

My personal style is simplified and visual. When I say simplified, I am not indicating that my clients are not wonderfully intelligent people; but, hey...when you don't know something, you don't know it. I always think when I'm learning something new; get me from point A to point B, in the most remedial way, and we're golden!

6 simple service points

Great...yah, yah, yah....I still haven't really answered the question, specifically; what should I expect from my Realtor.

Here ya go...

1. A visit, to sit down and discuss the process of buying and/or selling a home. This conversation should include every aspect of what will happen from the visit you are currently having; until the minute they hand you your new house keys.

2. Various options to stay in contact your agent; ie: email, cell, office number, etc.

3. A commitment of time, in which they will return your calls. I find you can plan on failing, if you fail to plan. As in any good relationship; you have to lay the ground work of expectations, as well as, the no-nos in order to keep the relationship healthy. Assumptions. Bad.

4. Your Realtor will be aware of your time lines for inspections, reports, contract addendums, and so on. These time lines are critical; because; if you miss them, that home is yours now (regardless of what's on the inspection). #moneypit #theburbs

5. Granted your Realtor is not your lender; however, it wouldn't hurt your Realtor to reach out to your lender, and make an introduction. My MO as a real estate salesperson, is keep my hand in the cookie jar. Honestly, I don't care if the loan officer is offended that I call often to check on things. Yes, there is borderline obnoxiousness; but, that's not what we're talking about. In example, if you are a music producer (let's just go with that theme in this blog) and your son, daughter or best friend just got a contract with a major record label, but had no idea what any of being "signed" meant; would you lean back and watch at a distance, or keep an eye on it, to make sure they were protected? Get it? Exactly. So, heck ya...contact with the lender should be expected.

6. Even I don't fully understand the title company and what they do; but, they're awesome! In my mind, they are a company operated by The Great and Powerful Oz. I drop the check off to open your escrow account; and, 2 and half weeks later, they call to say it's magically clear and insured. Lol. Well, okay, I might know a little bit more. Basically, the title company makes sure there is nothing on the title that is an issue. For instance, a lien placed on the property, a city, state or government restriction, flood zones, etc. But, yes...your Realtor, does need to let you know, where, when and who is the title company you've chosen.

Comprehension vs Practice

Trust me when I tell you, there is a whole lot more involved than these 6 points, noted. However, the motive was to let you know, what you should expect from your Realtor. Regardless, of how busy your Realtor is (that is never a good excuse) contact is essential. If we are doing our job well, and we truly understand the mindset of a first-time or re-entry home buyer; then we comprehend the need for communication. We comprehend it, and we practice it.

If you find yourself humming along to Janet's little tune, after having left the 40th voicemail message in 10 days...it's time. Like that Disney Frozen chick sang..."Let it Go"! It's your cash, it's your home, and it's your journey. Ask away. Ask away. It's all okay!

What kind of real estate client are you? Your answer determines your success.

Diva? Doormat? Determined? Which of these personalities are you? In the daily grind, it may not matter who you are. But, as a client, in the vast sea of real estate; it will determine your success, or your failure.

After years in this business, I have been able to pin a specific title to groups of people, with certain characteristics; and each of these titles is significant in relating to their style of buying and selling property.

Let's begin with the Diva

He/She comes to the table with one, of two (and sometimes both) mindsets. First, "I know everything" and second, "You know everything; so, I'll do nothing". Here are the obstacles with each mindset. If a Diva approaches the home buying or selling process with a "I know everything way of thinking"...why the heck are you calling me, then?!!!  We both know you are never going to listen to a thing I say; since, well...you now everything! Diva #2, client knows nothing (or more importantly pretends not to) so your Realtor is going to need a good pair of waders, because they are about to go in deep. Basically, your Realtor can forget their relaxed dock pole fishin' days. You are expecting them to catch a big mouth bass, and you will not be handing them so much as an itty bitty worm to catch it with. Problem, I can't read your mind, I need a sea mate, and I know you know a little something about property; because, truth be told, you became a Diva because you are giving The Donald a run for his money.

Diva Solution: Give me the opportunity to be the expert; you did call me. Also, it wouldn't hurt for you to reach into that bait and tackle box, and pull out a fishing line strung with interdependence. After all, it is your investment.

Doormat

Just as it sounds. "I don't really know what I'm looking for...I'm not sure why I'm looking...Well, the other agent told me to...My brother said I should..." How do you get out of bed in the morning without a coach and a cheerleading squad? When it comes to real estate, you have got to have some concept of what you want. That doesn't necessarily mean you need to be assured of the exact home design, bedrooms, baths, etc, etc. However, you do need to know important things like, when you want to move, what your loan looks like; and, if in fact you are sure this is what YOU want to do. Please, never knock on the door of a Real Estate office (well, in this age of electronics..send an email) because your mother's best friend's cousin told you it's a good time to buy. For god's sakes, if you like your rented studio apartment...stay!

Doormat Solution: If YOU really want to buy; then do it "like a boss"! Use your words, pull that big voice from your belly...and let's go buy a home!

Determined

Let me just say, if you are this kind of client...I love you; and you should love you, too. Reason? You will be a success in your real estate investments, before you every need to tweek a thing.
You are best described as decisive, pro-active and a team player.

Let's take a minute to break down each of these adjectives

1. Decisive. You have already decided you want to buy a home.

2. Pro-active. You have also determined, that to do so you need to visit a lender to qualify (this will include checking your credit). The lender can tell you what your purchase amount will be, what your payments will look like and how much money you will need to close the deal. Additionally, the Determined client will have considered, area and specifics of the home they are looking for (this is not necessary, just a plus).

3. Team Player. In all honesty, this is the most important aspect of this triple-threat combo. Regardless of your decision making abilities, and your awesome "go-getter" attitude; if you can't be cooperative, and considerate in the home buying or selling process, it will fail.

Your success

Your success ultimately boils down to how willing you are to listen to the voice of experience, combined it with kick-butt decisiveness and determination; and, finally being as eager to follow the necessary steps to home ownership, as you are prepared to bait the hook, be the sea mate or share your research like a champion angler. I promise you, your internal rudder enveloped in these attributes, will guide you to real estate success!

Buyer Beware...A Whole Different Meaning.

Have you ever heard the saying "Buyer Beware"? I am sure it's a commonly used phrase as it relates to the sales industry. "Buyer Beware" of the shady car salesman. "Buyer Beware" of the mechanic who insists your car needs all the repairs, now. "Buyer Beware" of the Realtor who wants to list your home or sell you one, with no regard for your best interest. Well, "Buyer Beware" took on a whole new meaning for me, lately.

The Perfect Realtor

Recently, while meeting with some new clients, that I agreed to work with after they had fired their previous Realtor; it dawned on me that "Buyer Beware" has numerous meanings. Apparently, these folks had been through a string of agents, because many of them "didn't do their job", according to the clients. Quite frankly, I know some of these real estate agents and they are experienced, respectable salespeople! This started the wheels turning in my mind regarding the pitfalls for clients purchasing or selling property. More, specifically, is it critical for property consumers to be as mindful of the sinking hole home, as they are the "perfect Realtor"? In reality, there is no perfect Realtor. However, in an effort to find that individual, they may be passing up many very good Realtors. When we think of that phrase, "Buyer Beware" we often associate it with tangible situations; but, how often do we fasten it to emotional alerts? Simply stated, does our vehicle have to stop, or our pocket book become drained in order to be consumer cognizant?

So, I posed this question to myself..."if I were a client, in search of a Realtor, what would I be looking for"?

Answer...experience, integrity, passion and empathy. Hmm, empathy. That seems like a strange word to use as it relates to my self-imposed question; yet, after seriously pondering it...not really.

Empathy and Bonding

Take this into consideration; when we meet someone new, business or personal, what is it that connects us to that person? Similarities. Those similarities might be children, work, spouses, friends, hobbies, etc. These strangers tell us a story, and then we share one much the same, and so on and so forth. At some point, one of these stories will involve a situation that may have been frightening or trying; and, because we have related to one another's stories, we now can empathize. And? Well, once someone empathizes with us, we begin to build trust; regardless of the amount of time we have been associated with them.

But, how does the correlate to real estate? And, more importantly, how does this translate to "Buyer Beware"?

Think of it like this...whether you are purchasing a home for the first time, with little education or you are a seasoned seller; you want to be assured that the Realtor you will choose, can relate to your situation. If he/she can closely feel your history, in essence have empathy regarding your fears, lack of knowledge, past negative experiences; then you can feel confident that they too, having been through these experiences, will make every effort to prevent these same hardships from effecting you. Basically, the Realtor's empathy becomes your guarantee of protection.

So, again...how does this translate to me, personally having a better and different understanding of the old phrase "Buyer Beware"; and, how does it have real significance for you, the property consumer? Because, as important as it is for clients to avoid the money pit homes, shady loan sharks, or turn and burn agents...it is just as critical that consumers diligently seeks the right agent. Not the perfect agent. Experienced. yes. integrity. yes. passion. yes. Empathy...absolutely yes.

"Buyer Beware" of the piranha pool...instead, fish for the Empaths.

http://www.empathtest.com/ Like to know if you're an Empath?

"We have been talking about buying our first home; what do we do next?

"We've been talking about buying our first home for awhile, and we are ready. What do we do next? Do we contact a real estate agent?"

This is a common question with new home buyers. You'd think that would be the next logical step; but, there is one very important step before finding the Realtor...find the lender! Of course most Realtors can direct you to a good loan officer or bank to get qualified; but, it might not be someone you are comfortable with; so I suggest doing a little research on your own.

To begin, get referrals; that's always the best way to go. If you are new to the area or don't know anyone who can refer you to a lender; Search the Internet and thoroughly investigate offerings for details. Advertising can be overwhelming, so squint through the mountains of ads to look for qualification requirements.Take notes and have questions prepared. The mortgage lending industry is electronic, everything is available to you in writing instantly. Once you've communicated, either by email or phone with a loan officer you feel comfortable with; schedule an appointment to meet in person. The loan officer, should give you a list of items you will need to bring with you, for pre-qualifying.

Anywhere from 3 to 7 days is how long it can take for a pre-approval. Pre-approval is different from pre-qualification. Pre-qualification in essence is having the loan officer review your documentation and saying "yep, based on what we are looking at in front of us, you qualify for home loan". A pre-approval is when your documentation has been forwarded to the underwriter; where they go over it in detail to determine if your ratios, income, credit, etc. look right for a lender to fund the loan. Upon the completion of underwriting, you will be informed by your loan officer that you have been pre-approved. The loan officer will then provide you with a letter to take to a Realtor; this allows the Realtor to know how to help you in your home search.

Trust me when I say it is best to take this step first! Most qualified Realtors will not show you homes without that letter of pre-approval. One reason is they need to know "what" your purchase power is, in order to show you the right homes. Second, no good Realtor will waste their time showing homes, only to find out you don't qualify to buy one.

As tempting as it is to jump right into the FUN part of home buying; you will save yourself heartache and time by taking the qualification step first. I can promise you, we are as excited as you to search for your new home...and even more excited when you come to us prepared!

"Helping Educate with the ABC's of Real Estate"

MPP's Q&A...“I am ready to buy my first home, but I am not sure I have enough money for the downpayment and closing costs....

Miss Property Professor’s Question of The Day

“I am ready to buy my first home, but I am not sure I have enough money for the down payment and closing costs. I’m not sure what I need or when I need it. I don’t want to go and talk to a real estate agent until I know for sure I’m prepared for all these costs.”

This may be the number one question I receive from first time home buyers; and frankly, the smartest one to be asking! The last thing you want to do is get to closing day and be short on funds to close. It’s not a pretty sight. Therefore, having a great Realtor, loan officer and title representative is critical. I know there are all kinds of horror stories out there about the gazillions of dollars it is going to cost to buy a home (the truth is you’ll spend more when you sell your home) but, just like the term gazillion dollars is an exaggeration, so is the amount of money you will need.  Granted, things can get pricey...but, that doesn’t mean it is necessarily coming directly from your bank account.

Since 1934 FHA has been offering loan programs to help buyers with the “american dream”...home ownership. In 1944, The Veterans Administration followed their lead, doing the same. Since then bond programs have popped up left and right offering down payment and closing cost assistance to everyone from teachers to firefighters, and everyone in between! Upon meeting with your loan officer, you will be able to find out which, if any of these programs you can qualify for. So, given you receive approval on an assistance program...it’s all good! NO $$$ out of your pocket for the down payment.

As scary as it is to go there….closing costs (eeeeeeeek) again, not as bad as the urban legends make them out to be. I’d say in 4 out of 5 purchase contracts, the closing cost can be written into the offer (even if you are using a conventional loan. It’s pretty easy to follow…

Purchase Price: $100k

Estimated Closing Costs: $5k

Offer: $105k (purchase price + closing cost)

Seller agrees to credit back $5k to you for closing costs; bringing the purchase price back to $100k. This covers your closing cost without having to take money out of your wallet up front. Keep in mind this is only an example (in real estate everything is an estimate) until closing day!

So, see there is no down payment demon out there...lol! No closing cost spook! If you are ready to buy, you’ve been to a lender, have your pre-approval and safely ($1,000) in bank reserves...I’d say DO IT!