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How important is pre-qualified financing?

Can Staging Help My Home Sell Faster?

12 steps to winterize your home | Inman News

12 steps to winterize your home | Inman News

Do I need a Realtor if I build new construction?

Do I need a Realtor if I build new construction? YES, YES, YES! New construction is plentiful in Southern Colorado, and you may be considering buying a newly built home. New construction has a ton of advantages, but many buyers make the false assumption that they can save money by not using their own Realtor when purchasing a new home. This is a huge misconception! Why buyers don’t think they need their own representation with a Realtor.. Many buyers assume that the builder’s rep will help them with the purchase of their new home. They also assume that working with the internal representation will result in getting a better deal on their purchase. However, the builder’s rep is working for the builder — not for you! Their success relies on getting the best deal for the builder, who is their employer. There legally can be no discounts passed on to you if you don’t use a Realtor, there is no savings. But when you use a Realtor, you are the employer. You, the buyer, may not realize… You may not know that the commission for buyer representation is legally part of the purchase price. If you are not using your own Realtor, the builder simply receives an extra 3% from your purchase. Basically, it’s free for you to use a Realtor. Free. You also may not know that the builder is not required to have a licensed agent working for them, and many do not. When you hire your own Realtor you will be hiring a licensed agent who represents you, not the builder! Your Realtor looks out for YOUR best interests. The Builders agent or rep looks out for the BUILDERS best interests. Sometimes the best interests are the same for buyer and builder, but just as many times they are NOT. What your Realtor can do for you Experience isn’t expensive. It’s priceless. Your Realtor, who understands the ins and outs of home purchasing, can work on your behalf to negotiate a better deal, free upgrades, or simply whatever is in your best interest. Most people wouldn’t consider buying an existing home without a Realtor to represent them. Therefore, why consider going through the even more stressful and complicated process of building a home without someone on your side? In many cases, you are committing to something that doesn’t even exist yet. It can be very daunting to go through the process of home-building, and dealing with the last minute changes and surprises. Buyers can avoid a lot of bad surprises with good representation of their own Realtor. If you plan to use a Realtor to represent you… And we sure hope you do!, be SURE to hand your realtors card to the builder representative at the door of the model, and tell them, this is my Realtor. It is even better for your Realtor to bring you through the door of the model to make it clear at the very start that you have Realtor representation. There are rules as to how you are introduced to a builder, and when a Realtor is due their fee for working for YOU. Just be very clear and give your agents name, and Card. If you plan to visit a model, give your agent a call and they can call ahead fo r you so that the builders rep knows you will be coming and you are represented by a Realtor\n “To Do” List for Buying New Construction Here’s a helpful list I’ve compiled – follow these “to dos” when working with a builder to have the best experience. Hire a Realtor This is simply a must. Like I’ve said, your Realtor is working for YOU. Home-builders prefer to monopolize the sale. They may only give you special “incentive” packages if you agree to use all of their representatives: lender, title company and even insurance company! But your Realtor can walk you through this process and make sure you are protected, as well as make sure you are getting the best deal. If you decide to use the builder’s lender, your Realtor can make sure you get a good rate and fair closing costs. Your Realtor knows the standards, and can make sure the builder doesn’t try to go beyond those standards. By bringing in your own Realtor, you’re asking your builder to be on their “best behavior.” Your builder doesn’t want to get a bad reputation, and will want the potential to create a good relationship with your Realtor, who will hopefully bring buyers their way in the future if the transaction is successful. Don’t sign anything until you’ve worked out every detail You builder may try to capitalize on the emotionality of buying a new home. Once you’ve become attached to this new home, they may try to get you to write up the contract quickly so you don’t lose it. But you absolutely must know what is in the contract, understand it and agree with it. No matter what the builder tells you, IF IT IS NOT IN WRITING IT WILL NOT HAPPEN. Everything will be done as it is written in the contract, so it’s important that you understand it clearly. Your Realtor can be a great player on your team when going through and trying to understand the builder’s contract. Get a home inspection You may not think you need an inspection in a brand new home. However, in my experience, more problems are found in new construction than in most 100-year-old homes! A lot of buyers just think that, since their home comes with a one year warranty, that they will just wait to see if anything goes wrong. However, it’s highly likely that any problems won’t surface in the first year. I recommend having two inspections: One before the drywall is up, and one before the final walkt-hrough. Like with any home purchase, your Realtor can help you find a qualified expert contractor who can go through your new home and make sure everything is done properly. Also, it’s easier to get mistakes fixed right away before you move in and while the builder’s contractors are still in the proximity. Don’t agree to use the builder’s lender Builders are often large companies with many different interests. And the builder knows they can make more money if they not only sell their buyers homes but also sell loans for those homes. They may try to tell you that you can only get a great deal if you use their lender. However, this unlikely to be the case. Especially in this buyers’ market, what is most important to them is making the sale. If you use your own Realtor, they can either work with you and the builder’s lender, or, even better, help you get a relationship with your own lender. Again, when you’re hiring your own people they are looking out for you and not the builder. This will probably result in you getting the best deal in the end, as well as the peace of mind knowing your lender is looking out for you. When I’m representing a buyer in a new construction transaction, I can will review the financing to make sure it is in-line with national lenders. Research the builder Your Realtor is an expert on homes in your area. This will include builders and their reputations. You want a builder that is not selling too many properties to investors — this can lead to creating a rental neighborhood and affects pride of ownership. Ideally, you also want your builder to be constructing homes of equal or greater value in your neighborhood to keep your property values high. However, this is difficult in some neighborhoods because the economy is difficult and people are affording and spending less on homes. Your Realtor can help you sort this out and advise you on these items. In this crazy economy we are in, several builders are on the brink of shutting their doors, just be very sure your builder is not one of them, and you know who your earnest money will be returned if they close during your construction. Research city plans New neighborhoods are often in newly developing areas. Therefore, you want to know what is likely to happen in the area you are about to commit to. This includes your city’s plans for roads, public spaces, parks, and schools. You want confidence that your neighborhood is going to become a good place to live as it develops. The perfect source for this? Your Realtor, who likely already has this kind of information available. This makes the job so much easier. How to Proceed So, the first thing you did was hire a Realtor to work with you and your builder. The next thing you should do is tell the builder you’ve got a Realtor when you walk in the office door (“Hi, I’m working with Amy B!”). When touring the model home, ask the builder how much the home costs as you see it! Keep in mind that the model usually contains many upgrades and special features. You will want to understand the difference between the base model and the upgrade models. I can help you understand the difference. As your Realtor, I can advise you on what upgrades make sense and which ones are not worth the cost. I keep a list of these recommendations. Also considering upgrades, developers will often want cash upfront for upgrades you order for the house. They do not want to be held accountable for your extras if you decide to walk away from the sale. You should also expect that if you do walk away from the sale, you may not be refunded for these upgrades. Consider resale, even if you don’t want to. It’s strange to think about reselling your home before it is even built, but you should at least consider it. If your development is old enough, look at any current listings up for resale to see how the home looks “used.” Get a copy of the blueprints of your home, along with floor plans and surveys (including room sizes). This will help you in the future if you want to make changes or sell. It’s easy to get them in the beginning, and it’s very important to have them! As your home is being completed, check in! I recommend visiting every three days to daily. If you are proactive, you can catch mistakes that might happen. Some developers limit access to the site, so you can stipulate this in your contract. I can also help you with this. Do not close on your home until ALL work is finished. This is very important, and something on which your Realtor can look out for you. If any changes are substantial, have the funds set aside for them until they are complete. Once you close, it can be more difficult to have these things completed, especially if you have already paid for them. (Keep a record of this in writing, signed by buyer and seller!) Know that your Realtor can look out for you in the event of delays or problems. There are things that happen beyond the builder’s control. Have contingency plans for cost overruns, temporary housing and bridge loans. As your Realtor, I can help you with ideas, and help you work with the lender in these worst-case-scenarios. Reap the Benefits The J.D. Power and Associates 2008 survey found that buyer satisfaction with new home construction increased from 2007. The survey reported that ‘quality is up and problems are down.’ And it is believed to be because the good builders have found ways to adapt to the market, survive and succeed. If you are the type of buyer who wants to take advantage of what new homes have to offer, please consider calling a Realtor first! It will help ensure that your buying process will be a smooth and enjoyable one. As your Realtor and a player on your team, I want to make sure that “dream house” you want to build is everything you hope for!

Why Prize Investment Properties Are No Prize

Why Prize Investment Properties Are No Prize Here’s a little real estate investing secret that few rental property investors know: The fancier and more prize location of a property, the worse the cash flow. In fact, most “prize” properties are going to have negative cash flows. And that’s not a smart way to invest your hard earned cash equity dollars. Consider the options Let’s look at an example. You want to buy about $500,000 worth of real estate, and with a 25 percent down payment plus costs, you’ll need about $150,000 in cash to close the deal. You have two choices: 1.A swanky downtown San Diego condominium for $500,000, or 2.Three nice moderately priced boring suburban $165,000 condominiums. Now most people would think location, location, location and want to buy the prize downtown. That’s because their only investment criteria is that they want to buy real estate in hopes that it will go up in value. And the problem with that strategy is that they are totally missing the most important piece of rental property investing — the cash flows the property can produce. Immediate cash flow In reality, moderately priced cash flow positive condominiums are the best location, location, location, and here’s why. A $500,000 downtown San Diego condo would probably generate negative cash flows of about $1,000 per month. That’s $12,000 per year — ouch — on a $150,000 cash investment or negative 8 percent return on the investment. A moderately priced $165,000 suburban San Diego condo would probably generate positive cash flows of about positive $250 per month. Multiplied by three condominiums — so apples to apples on the $500,000 investment — is positive $750 per month. That’s positive $9,000 per year on a $150,000 cash investment, or positive 6 percent return on the investment. See the difference? You can allocate your hard-earned $150,000 of equity into either a fancy prize property with negative cash flows of $12,000 per year, or into moderately priced properties with positive cash flows of $9,000 per year. That’s a difference of $21,000 per year on $150,000 equity investment into $500,000 of real estate. Building wealth If you’re hoping appreciation in value will make up the difference on your negative cash flow property, good luck with that. To be fair, over long periods of time, most real estate should appreciate in value about the same percentage each year. But as you can see, cash flows can be very different, and that’s where you earn your wealth! You might assume that because rents increase and mortgages stay constant, the fancy prize property would turn positive one day. This is true, but it would take about 40 years until the fancy prize condominium owner really got their first dime of positive cash flow. Think that through and pencil out your real estate deal before you take the plunge. Some properties are just much better wealth-building investments than others, primarily due to the cash flows.