Tag Archives: seller

Top 10 Most Cost-Effective Remodeling Projects

Remodeling projects with the most bang for your buck

fixer upperIf you are thinking of selling your home, you may want to consider doing a remodeling project to bring in buyer interest and garner top dollar for your home sell. But what should you remodel, especially when thinking out getting the most return on your investment?

Thankfully, the CALIFORNIA ASSOCIATION OF REALTORS has complied a quick cheat-sheet for you, based on information provided by the Cost vs. Value Report 2013 by NAR and Remodeling magazine.

In order of the most cost recouped percentage-wise, here are the top 10 most cost-effective remodeling projects:

  1. Steel entry door replacement
  2. Wood deck addition
  3. Garage door replacement
  4. Minor kitchen remodel
  5. Wood window replacement
  6. Vinyl siding replacement
  7. Attic bedroom
  8. Vinyl window replacement
  9. Basement remodel
  10. Major kitchen remodel

remodeling projects car.org

Infographic from the CALIFORNIA ASSOCIATION OF REALTORS; source: Cost vs. Value Report 2013 by NAR and Remodeling magazine.

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.

Successful Short Sale Closing Testimonial of a Current Mortgage

Here is a rare closing of a short sale that recently closed that 99% of all real estate agents can not accomplish.  The owners stayed current on their payments and the lender granted an approved short sale on a property that was an investment property.

While this is rare due to the reality that all short sales are only done if the borrower is behind in payments or, if the borrower is current, the mortgage company requires the borrower to stop payments in order for them to look at a short sale for the borrower, there are valid qualified situations that the banks will process the short sale. I have the knowledge and experience for accomplishing this task.

Since I have been doing short sales for 20 years and in two down cycle markets, you or someone you know will benefit dramatically from this result.  The benefits are that the homeowners credit rating will have little to no effect based on the credit reporting agencies guidelines.

testimonial letter

 
“Dear John,

We appreciate very much your assistance–and your crucial role–in both finding and selling the condo property at 4415, 38th in San Diego.  The latter was especially difficult in the current housing market.

We have found you to be hard-working, honest and reliable, alert as to what is going on in the area, and responsive to any of our concerns.  We would certainly recommentd you to prospective buyers and/or sellers.

Please accept the enclosed as a token of our gratitude.
Sincerely, 

Barbara S. K. and John B. K.

P.S. –And thanks for working with Katie.”

For more information and to schedule a private, no-obligation consultation right away, call me now!

 
Talk to me, an agent who has the experience that is helping people beyond what they ever thought was possible.

How to take advantage of a short sale

If you’re shopping for a home with a bargain-basement price, a short sale could be the answer.

This is where a lender allows borrowers who can’t keep up with the mortgage payments to sell their home for less than they owe on the property. The bank or mortgage company approves what you paid to purchase the home and forgives the remaining debt.

How low can you go and still expect a lender to approve the deal?

Lenders usually will accept offers that net at least 82% (after expenses) of the home’s current fair-market value, regardless of what the borrower owes. When there is a 40-50% reduction in price, this does not matter.

Why would a lender do that?

Because lenders will lose less by allowing a short sale to occur, than by going through a foreclosure on the home.

Taking advantage of a short sale is less risky then buying a foreclosure, because so many repossessed homes need tens of thousands of dollars’ worth of repairs. The worst of the bunch have been deliberately vandalized by angry owners just before they were evicted.

Here are 4 smart moves for buying a short sale property:

Smart move 1. Make sure you’re a good candidate for a short sale.

Short sales are all about presenting the lender with a deal that can’t be refused. Banks and mortgage servicing companies are more likely to approve buyers that:

  • Have a substantial down-payment.
  • Have been preapproved for a mortgage.
  • Place no contingencies on their contract, such as having to sell their current home before proceeding with the purchase.

Smart move 2. Hire a real estate agent who’s experienced in short sales.

You need someone who can steer you away from short sales that aren’t likely to succeed.

I will interview the listing agent to determine whether the seller has done everything that’s needed to win lender approval, in addition to and most importantly, finding out what is necessary to put you, the buyer, in the number one position.

You need to know whether the home has been aggressively marketed — the bank won’t like it if the seller hasn’t made a good-faith effort to get a reasonable bid — and whether the bank has received a broker’s price opinion, which it will use to determine the home’s market value.

Smart move 3. Offer the right price.

Short sales aren’t the time or place to do a lot of dickering.  There is competition for these properties, even more so than bank-owned homes that are in great condition.  The difference between the two types, is that short sales will always end up going for less than a bank-owned property.

Lenders don’t have the time or staff to evaluate an endless bunch of bids, each a little higher than the last. If you deliberately lowball a bank or mortgage company, it will just write you off as a waste of time.

You need to come up with a cheap but reasonable offer that the bank or mortgage company will accept, in one try and in a short sale. The agent representing you should be doing the work to make sure you get the best deal. Most of the time on properties that I sell as a short sale, the price accepted is one of the lower offers.

Start by estimating the fair-market value of the home for yourself, using comps (values of comparable properties that have sold near the home in the past few months), then collaborate with your agent for the highest and best offer to submit.

Take the condition of the home into account and reduce your estimate if the home needs repairs. It’s a buyer’s market, and you don’t have to treat a fixer-upper like it’s in pristine condition.

Calculate 90% of the home’s value, throw in a few thousand dollars to cover the lender’s cost of doing a short sale (ask me, your agent, what that typical is for your area), and you have a good starting point.

Now look at the quality of your comps.

If it’s a straightforward deal, and the home has spent no more than three or four months on the market, then you’re good to go. There are variables that can go with this that I can explain for you when we meet.

But if all of the comps are foreclosures that sold within a few weeks of hitting the market, then those may be damaged homes being dumped at fire sale prices, so further investigation is necessary.

You’ll have to adjust your offer upward, perhaps all the way to the full fair-market value calculated with those comps in most cases, but sometimes there may be a quick steal in sight and I can get it for you.

Check how close your offer is to the asking price on the home. Remember, the sellers won’t get any of the money, so they have no incentive to demand an unreasonable price. But unfortunately, sometimes there are unreasonable sellers and I can help get them to be co-operative, even though I am not representing them, to put the price at what you want to pay which will ultimately help the agent representing the seller get the bank to do the same.

They’re just trying to find a price you’ll pay, and one the bank will accept, to relieve them of their debt, but I have a knack for getting the seller and seller’s agent to realize what is necessary in doing the transaction because I have dealt with countless lenders while knowing their tendencies.

From the your perspective, given your agent’s guidance, you’ve probably come to the same conclusions as the seller and their real estate agent, but unfortunately this is not always the case.  It is not about the seller deciding the price; it is about the lender’s decision, while being guided by the real estate agent.  If the listing agent or their hired negotiator are not experienced in handling the process,  I take care in making sure the seller’s agent understands the approach and if the agent isn’t doing the negotiating, then I will speak with the person the listing agent hired and show them how a short sale can be successful.

Smart move 4. Be patient.

It almost always takes longer to close a short sale than a typical sale of a property, because it takes so long for lenders to review and accept your proposal.

There are deals closing in as little as five weeks when the lender has preapproved the short sale and asking price and you agree to meet that price.

But that rarely happens, however, when you hire an agent like me those results go way up!

More often than not, it takes two to four months to get a “yes” from the bank or mortgage servicing company.

Although lenders say they’re trying to process these requests more quickly, there still is a problem because of the lack of knowledge or contacts by the listing agent within a bank that I can help expedite for you the buyer.

__________

Bottom line, buying or selling a property in today’s market requires a skilled and experienced agent.  There is money to be made by sellers even if you are upside down (banks are offering special incentives or thousands of dollars to sellers that most agents do not know about) and discounts to be gotten by buyers, but only with the “RIGHT AGENT”. Call me TODAY!

I’m available at (619) 890-3648 or via email.

How to take advantage of a short sale

If you’re shopping for a home with a bargain-basement price, a short sale could be the answer.

This is where a lender allows borrowers who can’t keep up with the mortgage payments to sell their home
for less than they owe on the property. The bank or mortgage company takes whatever you pay to purchase
the home and forgives the remaining debt.
Short Sale
How low can you go and still expect a lender to approve the deal?

Lenders usually will accept offers that net at least 82% (after expenses) of the home’s  current fair market value, regardless of what the borrower owes, says Tim Harris, co-founder of Harris Real Estate University in Las Vegas.

Why would a lender do that?

Because it will lose less by allowing a short sale than by going through a foreclosure.

Taking advantage of a short sale is less risky than buying a foreclosure, because so many repossessed homes need tens of thousands of dollars’ worth of repairs. The worst of the bunch have been deliberately vandalized by angry owners just before they were evicted.

Here are 4 smart moves for buying a short sale property:

Smart move 1. Make sure you’re a good candidate for a short sale.

Short sales are all about presenting the lender with a deal it can’t refuse. Banks and mortgage servicing
companies are most likely to approve buyers that:

•  Have a substantial down payment.

•  Have been preapproved for a mortgage.

•  Place no contingencies on their contract, such as having to sell their current home before
proceeding with the purchase.

Smart move 2. Hire a real estate agent who’s experienced in short sales.

You need someone who can steer you away from short sales that aren’t likely to succeed.

Vincent Bindi, a real estate broker for ShortSalesASAP in Orange County, Calif., says your real estate agent should interview the listing agent to determine whether the seller has done everything that’s needed to win lender approval.

You need to know whether the home has been aggressively marketed — the bank won’t like it if the seller hasn’t made a good-faith effort to get a reasonable bid — and whether the bank has received a broker’s price opinion, which it will use to determine the home’s market value.

Smart move 3. Offer the right price.

Short sales aren’t the time or place to do a lot of dickering.

Lenders don’t have the time or staff to evaluate an endless bunch of bids, each a little higher than the last. If you deliberately lowball a bank or mortgage company, it will just write you off as a waste of time.

You need to come up with a cheap but reasonable offer, which the bank or mortgage company will accept, in one try.

Start by estimating the fair market value of the home for yourself, using comps (values of comparable properties that have sold near the home in the past few months).

Take the condition of the home into account and reduce your estimate if the home needs repairs. It’s a buyer’s market, and you don’t have to treat a fixer-upper like it’s in pristine condition.

Calculate 82% of the home’s value, throw in a few thousand dollars to cover the lender’s cost of doing a short sale (ask your agent what that typically is for your area), and you have a good starting point.

Now look at the quality of your comps.

If they’re straightforward deals, and the homes spent at least three or four months on the market, then you’re good to go.

But if all of the comps are foreclosures that sold within a few weeks of hitting the market, you’ve got to assume those were damaged homes being dumped at fire sale prices.

You’ll have to adjust your offer upward, perhaps all the way to the full fair market value calculated with those comps.

Check how close your offer is to the asking price on the home. Remember, the sellers won’t get any of the money, so they have no incentive to demand an unreasonable price.

They’re just trying to find a price you’ll pay, and the bank will accept, to relieve them of their debt.

If you’re close, then you’ve probably come to the same conclusions as the sellers and their real estate
agent.

If not, then your agent needs to have another talk with their agent to find out why.

Smart move 4. Be patient.

It almost always takes longer to close a short sale, because it takes so long for lenders to review and accept
your proposal.

We’ve heard of deals closing in as little as five weeks when the lender has preapproved the short sale and asking price and you agree to meet that price.

But that rarely happens.

Most sellers don’t seek the lender’s approval for a short sale until they have a signed purchase contract in hand. (Here’s a step-by-step look at what sellers must do to complete a short sale.)

More often than not, it takes two to four months to get a “yes” or “no” from the bank or mortgage servicing company.

Although lenders say they’re trying to process these requests more quickly, there still aren’t enough loss mitigation specialists to deal with the rising demand for short sales, and we’re not seeing a big improvement.

By Bonnie Biafore  |  Interest.com Contributing Editor

Personal Short Sale Experience

I just closed one of the longest short sales in history with Bank of America. This sale totaled 39 months, over 3 years. Short SaleThere were a few unfortunate problems with this short sale.

Throughout the time of having this listing, there were six individual buyers that were all approved.  Unfortunately, all six also cancelled, with one rewriting an offer through another agent after the initial cancel.  This offer was not submitted when I questioned this buyer’s agent, and as a result, the offer obviously did not go through.

After the seller’s family moved out, they left the house in shambles, but I invested my personal money (which thankfully was reimbursed later through the rent payments) to paint the interior, re-sod the front yard, and thoroughly clean.

There were several liens on the house: water, sewer, trash, and HOA liens.  Most were eventually paid off by the bank and buyer.  The tremendous HOA fines totaling over $5K I managed to negotiate them off completely with no fees to be paid.

The bank changed the locks and I had to pay $250 to re-key the house.

The property sold for $30K less, with a $12K credit for closing costs–very rare on a 50% cash
down purchase, than the REO  (bank-owned) property with no closing costs credit, a block away the
month before.

All these experiences may be things that you, as a short sale buyer, are familiar with.  And while short sale transactions can be the trickiest side of the real estate market, I have had plenty of experience in managing such transactions.  Please, let me be the one to deal with the messy side of short sales–not you!  Give me a call today if you have any questions.

John A Silva
www.johnasilva.com
619-890-3648