Tag Archives: Dian Hymer

Five things to know about a home before committing to buy

Your due diligence inspections should include more than hiring a home inspector to look at the home and reviewing a current termite inspection. And your due diligence should start as soon as you have serious interest in a listing.

Making an offer to purchase a home consumes a lot of time and emotional energy. Before your real estate agent or attorney puts pen to paper, find out as much about the property as you can. In particular, you want to know if there’s any reason you shouldn’t try to buy the house.

Seller disclosure requirements vary from state to state, as does real estate practice and protocol. Find out if there are any seller disclosure statements and presale inspection reports. If there are, ask to see copies before you write an offer.
buy homeIn some areas, it is standard procedure for listing agents to provide a disclosure package that includes any existing reports and disclosures to interested buyers before they make an offer. In other areas, reports are made available only after the buyer and sellers have negotiated the purchase agreement. Get ahold of as much information as you can about the physical condition of the property as soon as possible.

After you review the seller’s documents on the property, you may discover that the home you find so appealing requires a far bigger investment in repair work than you can handle or afford financially. In this case, move on to the next property with no remorse. You’ve saved yourself from hassle and heartbreak.

On the other hand, if the reports and disclosures fall within your expectations, move on to investigating the local neighborhood. On closer look, you may discover that there are several large apartment buildings that back up to the house you’re interested in buying. This might create a noise factor. If you’re sensitive to noise, you might not be happy living in the property you’re considering.

Buyers sensitive to crime should check with the local police department to see if the neighborhood is being hit by waves of break-ins. Drive by the property several times during daylight and evening hours to see if the complexion of the neighborhood changes in any way that is disadvantageous to you.

Commuters should drive from the property to work and back during rush hour, and check into all the public transportation options that are available in close proximity. If you’re intent on buying within walking distance to shops and cafés, find out how long it takes to get from the house you think you want to the nearest commercial area.

HOUSE HUNTING TIP: It’s wise to include an inspection contingency in your purchase offer so that you have a time period to complete whatever inspections of the property you deem necessary before committing to move forward with the purchase. This is recommended even if the seller has completed presale inspections.

Some buyers who have confidence in the seller’s home inspector hire that inspector to do a walk-through inspection with them so that the inspector can explain his report and answer any questions. The fee for this sort of inspection will usually be less than what the seller paid for the initial inspection and written report.

Don’t skip inspections to save money. It could cost you plenty in the long run if uninspected items turn out to be faulty and you have to pay to repair them.

Order a home inspection as soon as possible after your offer is accepted by the sellers. Most home inspections include recommendations for further inspections. If you don’t have the home inspection done early, you may not have enough time to complete all the further recommendations recommended, like roof or drainage inspections.

THE CLOSING: If you run out of time, ask the sellers for an extension.

Dian Hymer is a real estate broker with more than 30 years’ experience and is a nationally syndicated real estate columnist and author.

How to tell if a home will hold its resale value when buying

Six signs a home will hold its resale value

Most buyers have a wish list of features they’d like to have in a home. Often missing from that list is how salable the home will be when they later decide to sell.

Generally, buyers deal indirectly with resale value. They want a home they can buy at market value or less. They want to buy a home that will retain its value. They want to buy a home that will suit their needs. They want to buy a home they can make their own.

home hold its resale valueA listing that’s priced low to sell fast may be one that will have good resale value only if you use this marketing strategy. The low price may offset an incurable defect, such as a location on a busy street.

There’s nothing wrong with buying a home on a busy street as long as (1) you buy it at a price that reflects the location issue; (2) it suits your long-term needs; and (3) you understand that you will probably have to discount the price accordingly when you sell, depending on the market at the time.

In a hot seller’s market, buyers are desperate to buy. They often overpay, and they are more likely to overlook defects that they would shun in a sour market.

Resale value has become a bigger issue since the housing recession began five years ago. Buyers are more cautious in their home-buying decisions. They don’t want to buy just any home; they don’t want to make a mistake and end up wanting to move in a slow market in which they might lose money.

The homes that hold their resale value well are the ones that appeal to a broad cross section of buyers; offer a good floor plan that works for different lifestyles; have a good amount of space but are not enormous and expensive to maintain; and exhibit a pride of ownership. They should also be in good condition.

Location is also a critical element of resale value. There are market niches that are always in demand, in both hot and soft markets. For example houses in neighborhoods with close proximity to shops, cafés and public transportation systems.

That’s not to say that every listing in these neighborhoods sell quickly. To sell, it needs to be priced right for the market.

It’s easier to recognize a home with good resale value in the current market than it was in the bubble market of 2005 and 2006 when virtually all homes sold in many areas. In a soft market, the homes that sell within 30 to 60 days are either good homes or good deals.

Ideally, you want to buy a home that has good resale value. Not one that’s just a good deal. There’s no urgency to buy now in many areas, although it would be nice to take advantage of record-low interest rates. But you shouldn’t buy a home that won’t work for you long term just to lock in a great interest rate.

Even though there are a lot of homes for sale on the market, in many areas there is a not a surplus of quality inventory on the market. One reason for the lack of quality homes on the market is that many sellers are waiting for a better time to sell. Another reason is that homes with good resale value don’t tend to change hands that often.

THE CLOSING: There may be good news ahead. Leslie Appleton-Young, chief economist for the CALIFORNIA ASSOCIATION OF REALTORS®, predicts that sellers who have been waiting for a better time to sell may decide they’ve waited long enough and list their homes for sale in 2012.

Dian Hymer is a real estate broker with more than 30 years’ experience and is a nationally syndicated real estate columnist and author.

Eight things to know about buying a home today

Eight things to know about buying a home today

The home-sale market is showing signs of life. More buyers are confident now than they were a year ago that now might be a good time to buy. Interest rates are near all-time lows and home prices in some areas are back to 2002-2003 levels.

Some analysts are finally suggesting that we may be headed for recovery. If you have a secure job, plan to stay put and feel this is the right time for you to buy a home, consider the following.

In most places in the country, home prices are still declining. It has only been recently that the market picked up and it’s too soon to know if this will result in a sustainable increase in prices.

Job growth in some areas combined with low inventory of good homes for sale has resulted in multiple offers with buyers bidding the price up sometimes hundreds of thousands of dollars over the asking price.

In other high-demand, low-inventory areas, buyers may find themselves in a bidding war. This doesn’t necessarily mean that the price will be bid up significantly over the asking price. This will vary from one listing to the next depending on property location, condition, and price.

It’s important to research the local community where you want to buy. Find out what homes are selling for, if multiple offers are common and if listings are selling for more than the asking price. This will help you make a realistic offer that might be accepted when you find a home you’d really like to buy. It helps to work with an experienced local real estate agent.

Some sellers in high-demand niche markets intentionally list their home at a low price hoping to stimulate multiple offers. If you see such a listing and there are a lot of buyers wanting to make offers, you will be better able to know how high your offer would need to be to win the contest if you have done your due diligence.

HOUSE HUNTING TIP: Whether you’re anticipating competition or not, you should be preapproved for the mortgage you’ll need to complete the purchase before you write an offer. In competition, this will make a big difference, particularly if everyone else who is offering is preapproved. It also lets you know what you can afford. And, it puts you in a good bargaining position with the seller.

Buyers aren’t the only participants in the housing market that have heard the news that the market has improved. Some sellers are putting their homes on the market because they’ve been waiting for a better time to sell. This is good news for buyers looking in low-inventory markets.

You should expect that you will have to negotiate. Many of today’s sellers are selling for less than they paid. Even though the market has improved a bit, sellers may be disappointed with the current market value of their home. Be prepared to negotiate, not just the initial price, but after inspections are completed if items come up that you hadn’t anticipated.

Include realistic contingency time frames in your purchase contract for loan and appraisal approval if you’re applying for a mortgage. The recent uptick in the market means that lenders are suddenly overwhelmed.

THE CLOSING: Underwriters could require that additional conditions be met before you can be approved. Act quickly to avoid further delay.

Dian Hymer is a real estate broker with more than 30 years’ experience and is a nationally syndicated real estate columnist and author.

Six signs a home will hold its resale value

Most buyers have a wish list of features they’d like to have in a home. Often missing from that list is how salable the home will be when they later decide to sell.

Generally, buyers deal indirectly with resale value. They want a home they can buy at market value or less. They want to buy a home that will retain its value. They want to buy a home that will suit their needs. They want to buy a home they can make their own.

A listing that’s priced low to sell fast may be one that will have good resale value only if you use this marketing strategy. The low price may offset an incurable defect, such as a location on a busy street.

There’s nothing wrong with buying a home on a busy street as long as (1) you buy it at a price that reflects the location issue; (2) it suits your long-term needs; and (3) you understand that you will probably have to discount the price accordingly when you sell, depending on the market at the time.

In a hot seller’s market, buyers are desperate to buy. They often overpay, and they are more likely to overlook defects that they would shun in a sour market.

Resale value has become a bigger issue since the housing recession began five years ago. Buyers are more cautious in their home-buying decisions. They don’t want to buy just any home; they don’t want to make a mistake and end up wanting to move in a slow market in which they might lose money.

The homes that hold their resale value well are the ones that appeal to a broad cross section of buyers; offer a good floor plan that works for different lifestyles; have a good amount of space but are not enormous and expensive to maintain; and exhibit a pride of ownership. They should also be in good condition.

Location is also a critical element of resale value. There are market niches that are always in demand, in both hot and soft markets. For example houses in neighborhoods with close proximity to shops, cafés and public transportation systems.

That’s not to say that every listing in these neighborhoods sell quickly. To sell, it needs to be priced right for the market.

Six signs a home will hold its resale valueIt’s easier to recognize a home with good resale value in the current market than it was in the bubble market of 2005 and 2006 when virtually all homes sold in many areas. In a soft market, the homes that sell within 30 to 60 days are either good homes or good deals.

Ideally, you want to buy a home that has good resale value. Not one that’s just a good deal. There’s no urgency to buy now in many areas, although it would be nice to take advantage of record-low interest rates. But you shouldn’t buy a home that won’t work for you long term just to lock in a great interest rate.

Even though there are a lot of homes for sale on the market, in many areas there is a not a surplus of quality inventory on the market. One reason for the lack of quality homes on the market is that many sellers are waiting for a better time to sell. Another reason is that homes with good resale value don’t tend to change hands that often.

THE CLOSING: There may be good news ahead. Leslie Appleton-Young, chief economist for the CALIFORNIA ASSOCIATION OF REALTORS®, predicts that sellers who have been waiting for a better time to sell may decide they’ve waited long enough and list their homes for sale in 2012.

Dian Hymer is a real estate broker with more than 30 years’ experience and is a nationally syndicated real estate columnist and author.

Home seller pitfalls to avoid

Six years after the market peaked in 2006 and prices started to decline, many sellers are still in denial about the current market value of their homes. It’s difficult for most sellers to accept the reality of today’s home-sale market, whether they bought at or near the peak and will lose money selling today, or bought decades ago but are still stuck at 2006 prices.

One homeowner recently remarked that she was aware that home prices had dropped quite a bit over the last five years. But she felt that her home hadn’t lost any value.

It’s hard for homeowners to divorce themselves emotionally from a home they’ve enjoyed. But this is what sellers need to do so that they can make rational decisions about a list price that will actually result in a sale.

This decision should be based on listings that have sold in your area that could be considered somewhat comparable to your home. Some sellers go to open houses to evaluate the competition. If you’re still emotionally wrapped up in your home, the exercise can be futile. You return home feeling that the other homes aren’t as good as yours.

home sellersPut yourself in the buyers’ shoes. This is easier for sellers who are also buying in this market. They know what it’s like to want to make sure they’re getting a good deal. Your house needs to be listed at a price that is enticing to buyers because it represents a good value. In most areas, buyers are buying in a market knowing that prices may continue to decline before the market fully recovers.

HOUSE HUNTING TIP: Be wary of real estate agents who tell you that your home will sell for a higher-than-supportable price just to get the listing. Then they work on you over time until you reduce the price to market value. Agents refer to this as buying a listing.

It’s hard to resist the temptation of trying for a higher price than the comparable sales indicate. However, you won’t be happy if your home is on the market for months with no activity, and each time you drop the price it feels like too little too late. You can end up selling for less later if home prices in your area are still declining.

Refinance appraisals are notoriously inaccurate in terms of market value — either too high or too low. An appraiser is attempting to gauge what price a buyer would pay when there isn’t a ratified contract that states what a buyer will pay. A high refinance appraisal can leave the seller with a false expectation.

Listing your home based on what you want or need to net from the sale won’t motivate buyers to pay more. Buyers pay market value. They’re won’t overpay in today’s market.

Find out what buyers are looking for in your area and see how your home matches up to their expectations. Generally, today’s buyers are looking for a home that is well-located, in good condition and is priced right for the market.

If your home needs a lot of work compared with the competition, you’ll either need to have work done before selling, or discount your price accordingly.

Walkable neighborhoods are highly desirable in some areas. If your home doesn’t offer this amenity, you may have to make a price accommodation.

THE CLOSING: For best results, be realistic about the current market value of your home and what preparation it needs in order to sell successfully in today’s market.

Dian Hymer is a real estate broker with more than 30 years’ experience and a nationally syndicated real estate columnist.

Price is not all that matters in real estate sales

Negotiation strategies differ depending on how well the home is priced and who’s on the other side. If you’re trying to buy a short-sale listing where the lender has to agree to accept less than the amount owed, the seller doesn’t have much say in the negotiations about price unless he can contribute money to pay down the loan amount.

Regardless of who you’re dealing with, you’re more likely to grab a seller’s or lender’s attention if you are preapproved for the mortgage you’ll need and can provide verification of cash for the down payment and closing costs.

Many buyers feel that cash is king. If buyers are willing and able to pay all cash with no mortgage, no hassling with the lender and no appraisal contingency, they feel they’re owed a price concession.

Not all sellers agree. Some, who are confident in the value of their home, would rather work 

with an offer from a well-qualified buyer who needs to obtain a mortgage but who will pay a higher price.

Before you start negotiating, you should understand as much as you can about the other party. For instance, if the sellers are moving to a retirement home, they might go for the highest-priced offer in a multiple-offer situation, even though it might not be ideal in other regards. If they are liquidating their last asset, every penny will count.

An all-cash or large-cash-down buyer might not be able to negotiate a “deal” based on the fact that no 

lender will be involved. But if the home is a good value and suits your long-term needs, you might increase your offer price and include a mortgage. This way, you conserve cash for other uses.

HOUSE HUNTING TIP: Many buyers don’t want to negotiate. They want their first offer to be their best offer. Usually, the only time this is effective is if yours is the only offer, the house is priced right for the market, and you offer full price. In this market, you’re better off planning for some negotiation, and not putting all your cards on the table at once.

In most areas, the home-sale market still favors buyers. A lot of sellers are selling for less than they paid. Some have to bring money to the closing. Sellers who have owned for years are selling for less than they would have years ago. It’s natural that they would want to try for the highest price possible.

Negotiations are about more than price. Generally, the fewer the contingencies or the cleaner the contract, the more attractive it will be to the seller. Closing and possession dates can become issues at the bargaining table. What’s included and excluded, time periods to satisfy contingencies, and virtually everything in the contract is negotiable.

Since everything is up for grabs, be clear about what’s not negotiable — for instance, you can’t go over a certain price. Show flexibility in areas that will hopefully be valuable to the sellers, such as buying “as is” regarding some needed repairs. Don’t waste your time with sellers who are firm at a price that is considerably over market value. Wait until they become realistic while you continue looking. Some sellers eventually get tired of having their home listed and reduce the price to market value. Others don’t.

Sellers need to understand that buyers in today’s market will walk away from a negotiation if they feel they’re not getting anywhere or are being treated unfairly. Buyers could become suspicious or disappear if they’re told by the sellers or their agent that other buyers are lining up to make an offer when they aren’t.

THE CLOSING: A smart strategy is to defend your position while being honest and fair with the other party.

Dian Hymer is a nationally syndicated real estate columnist and author.

Price is not all that matters in real estate sales

Negotiation strategies differ depending on how well the home is priced and who’s on the other side. If you’re trying to buy a short-sale listing where the lender has to agree to accept less than the amount owed, the seller doesn’t have much say in the negotiations about price unless he can contribute money to pay down the loan amount.

Regardless of who you’re dealing with, you’re more likely to grab a seller’s or lender’s attention if you are pre-approved for the mortgage you’ll need and can provide verification of cash for the down payment and closing costs.

Many buyers feel that cash is king. If buyers are willing and able to pay all cash with no mortgage, no hassling with the lender and no appraisal contingency, they feel they’re owed a price concession.

Not all sellers agree. Some, who are confident in the value of their home, would rather work with an offer from a well-qualified buyer who needs to obtain a mortgage but who will pay a higher price.

Before you start negotiating, you should understand as much as you can about the other party. For instance, if the sellers are moving to a retirement home, they might go for the highest-priced offer in a multiple-offer situation, even though it might not be ideal in other regards. If they are liquidating their last asset, every penny will count.

An all-cash or large-cash-down buyer might not be able to negotiate a “deal” based on the fact that no lender will be involved. But if the home is a good value and suits your long-term needs, you might increase your offer price and include a mortgage. This way, you conserve cash for other uses.

HOUSE HUNTING TIP: Many buyers don’t want to negotiate. They want their first offer to be their best offer. Usually, the only time this is effective is if yours is the only offer, the house is priced right for the market, and you offer full price. In this market, you’re better off planning for some negotiation, and not putting all your cards on the table at once.

In most areas, the home-sale market still favors buyers. A lot of sellers are selling for less than they paid. Some have to bring money to the closing. Sellers who have owned for years are selling for less than they would have years ago. It’s natural that they would want to try for the highest price possible.

Negotiations are about more than price. Generally, the fewer the contingencies or the cleaner the contract, the more attractive it will be to the seller. Closing and possession dates can become issues at the bargaining table. What’s included and excluded, time periods to satisfy contingencies, and virtually everything in the contract is negotiable.

Since everything is up for grabs, be clear about what’s not negotiable — for instance, you can’t go over a certain price. Show flexibility in areas that will hopefully be valuable to the sellers, such as buying “as is” regarding some needed repairs.

Don’t waste your time with sellers who are firm at a price that is considerably over market value. Wait until they become realistic while you continue looking. Some sellers eventually get tired of having their home listed and reduce the price to market value. Others don’t.

Sellers need to understand that buyers in today’s market will walk away from a negotiation if they feel they’re not getting anywhere or are being treated unfairly. Buyers could become suspicious or disappear if they’re told by the sellers or their agent that other buyers are lining up to make an offer when they aren’t.

THE CLOSING: A smart strategy is to defend your position while being honest and fair with the other party.

Dian Hymer is a nationally syndicated real estate columnist and author.