What’s out? Frostbelt Lifestyle. Speculation. Exuberant consumption. Florida. California. Long commutes. No money down. McMansions. Expensive second homes. Equity clubs. Easy financing. Quick decisions.
Recovery conditions still call for bedrock rules. Common sense canons are imperative to managing the asset that, for most, remains a significant piece of our net worth. The following summarize what experts are suggesting:
Top Ten Tips for Buyers
1 Rank Your Motivations. Short and long-term. Growing family home, second home, retirement, investment. Define geographics. Mountain, coastal, heartland, urban, rural. Write down “must haves.” Sunrise/sunset view, waterfront, gated community, zero commute, three-car garage, workshop, pool, fenced garden, green design, professional kitchen, etc.
2 Professional Realtors Make a Difference. Insist on one who has earned Certified Residential Specialist (CRS) credentials.
3 Organize Your Finances. Set a tight budget range and line up financing first. Planning for 20-30 percent down will get the most favorable rates. With the exception of jumbo mortgages, interest rates are going up! Locking in a low rate is often more valuable than a lower price.
Calculate points and closing costs. The whole process will take much more time these days. Lenders want to know more about you than ever. Bank owned properties are often 20% less than seller owned. Be sure to inspect these homes carefully!
4 Think Ahead. If you’re buying in a new community with unfinished roads and “promised” amenities, ask to review their HUD filing, infrastructure bond, or other written guarantee of completion. Or, just wait until these items are complete.
5 Do Your Research. Read up on the town and region. Plan vacations around your search. Spend time on the county courthouse Website for information on recent sales. Tour, explore. Go out of your way to meet informed neighbors. As an indication of value, visit the local schools, whether you have children or not. Drive the neighborhood at different times, checking for noise, traffic, light pollution, etc.
6 Make Offers. Cash remains king. Paper is cheap. So be prepared to make numerous cash and non-cash offers that are less than the listed price, but not frivolous. If you are patient and willing to rationally negotiate, you’ll be proud of yourself for getting great value.
7 Homesites Require Planning. Buying land to build your dream home? Be prepared to work with a community developer, architect, builder and decorator. Consider modular systems construction. It’s green, fast and offers wide style selection these days
8 Buy Green. A green, energy efficient home is a great way to protect your investment and improve your health. Check into a “Green mortgage,” that features reduced down payment and other valuable terms based on calculated energy savings.
9 Consider a Spec Home. Acquire or lease back a new spec or model home where you get to make all the interior and exterior selections that come with fresh warranties. Works well when you are not immediately relocating.
10 Take your time. It’s an important decision that requires focus, controlled emotions and good council.
Top Ten Tips for Sellers
1 Select a Realtor Carefully. Experience in your neighborhood pays as does Certified Residential Specialist (CRS) credentials. Get a written “recession recovery” marketing plan as part of the listing agreement. Consider a 1031 tax deferred exchange.
2 Price to Sell. Erase delusions. Sell “value” versus “discount.” Make sure your home is priced appropriately for a “buyers’ market.” Taking more than one price reduction raises a red flag. Get comparable sales from the last 60 days.
3 Be Patient. Muster the right combination of patience, tenacity and creativity, knowing it will likely take longer to find a buyer. Consider a bonus to your Realtor to deliver a transaction in 90 days.
4 Stage. Google resources like HGTV for critical tips on “staging a home” and yard to capture buyer eyes. Trim the bushes. Plant color.
5 De-Clutter. Make sure all closets are neat or empty – makes them look bigger. Purchasers seek space for their stuff. De-personalize. Remove collectibles and family pictures.
6 Become Move-In Ready. Fix everything. Buyers (and Realtors too!) want to see everything is ultra-clean, odorless and in tip-top shape, including porch and garage. Simple updates can make a big impact, especially when they make your home greener. A fresh coat of low-VOC paint in a neutral color can re-energize a home’s décor and make it healthier. New, ENERGY STAR-rated appliances are always a selling point.
7 Take Precautions. Historically, real estate value was based on location. Today, it’s price and condition. Hire a home inspector and complete all the suggestions before pricing. Then purchase a one-year home warranty for about $350.
8 Listen to Feedback. Speak to Realtors who have toured/shown the property. What are prospects saying? Look for patterns. An offer is serious. Learn to rationally negotiate. Consider an extra half point commission to the buyer agent.
9 Women Decide. Know that women have veto power. Make sure the residence has feminine appeal.
10 Allow maximum flexibility for the Realtor to show the home. Schedule
yourself away when an appointment is set.