Archive for the 'Tips & Advice' Category
Posted by Annalisa Burgos | July 31, 2009
It’s tough not to think about how much your home value has fallen since the peak of the real estate boom. But as financial expert Barry Ritholtz points out, falling prices don’t affect you unless you really have to sell.
Furthermore, delusional sellers are blocking the road to the housing recovery. Until they wake up to the reality of today’s market and price aggressively, they’ll need a dose of HGTV’s “Real Estate Intervention.”
Posted by Annalisa Burgos | July 20, 2009
I’ve never been a great haggler.
For most of my 20s, I accepted terms that were offered to me, not really knowing I could fight for what I wanted.
Perhaps it was my aversion to conflict (Libras like me seek balance, after all) or the ingrained, albeit naive, notion that people always offer a fair price.
Looking back, I wish I would have negotiated many more things in my life — career opportunities, salaries, boyfriends… but I digress.
As a first-time homebuyer, it is absolutely critical that you understand how to make a strong offer and how to negotiate with the seller to get terms you both can live with, especially if you really want the home.
Negotiating skillfully requires that you do your research — calculate the property’s fair market value from comps, understand the seller’s motivations for selling in this market, and know what concessions you are willing to make and what your deal breakers are.
Check your emotions at the door. Consider everything analytically, carefully, so you don’t get caught up in the heat of the moment and end up doing something you regret.
Think of this preparation as your training before you jump into the negotiating ring. Just because you’re in a buyer’s market doesn’t mean the seller is going to jump at your offer. You can safely assume that the seller has done their homework, so why should you come unprepared?
Posted by Annalisa Burgos | July 17, 2009
In this week’s vlog, we hear from San Diego real estate broker and blogger Kris Berg about her tips for buying and selling a home in today’s market.
Homebuying and selling resources on FrontDoor:
Posted by Annalisa Burgos | July 10, 2009
In this week’s vlog, I talk to real estate broker and attorney Tara-Nicholle Nelson about how homeowners who are struggling to make their mortgage payments can get their loans modified and avoid foreclosure.
You’ve heard about extending the loan, converting an ARM to a fixed rate mortgage, and reducing the interest rate, but what about loan forgiveness? Will the lender write off all or part of your loan? Do you need to hire a company or can you work directly with your lender and do it yourself?
Get more tips and advice about the loan modification process:
Posted by Annalisa Burgos | July 2, 2009
In this week’s vlog, find out why it’s important to get a pre-approval before you go house hunting. Some curious homebuyers will check out an open house or two before actually evaluating their financial situation, but this is actually one of the top 10 homebuying mistakes that can cost you.
Plus… Backyard. Outdoor kitchen. Outdoor living room. Pool. Deck. Find out which summer season home updates pay off when you sell.
Posted by Annalisa Burgos | July 1, 2009
With the flood of first-time buyers and bargain hunters in today’s real estate market, your friends at FrontDoor.com want to remind ALL homebuyers out there to do your due diligence.
Don’t get so caught up with finding a steal that you forget the basics!
In this month’s Top 10, we break down the 10 most costly mistakes buyers commonly make and offer some valuable tips.
Check it out:
Top 10 Home Buying Mistakes That Can Cost You
www.frontdoor.com/top10
Buying a home is a big deal, but it should also be a fun experience. By making smart decisions, your buyer’s thrill won’t become buyer’s remorse.
Happy house hunting!
Posted by Annalisa Burgos | June 24, 2009
Real estate auction company REDC (Real Estate Disposition Corp.) works with lenders to sell thousands of foreclosure properties at auctions throughout the country. And in this market, lenders need all the help they can get to unload this excess inventory, quickly and efficiently. Note: REDC auctions are for bank-owned homes or REOs, and are not the same as the public auction, which takes place at the local courthouse.
On June 7, more than 1,200 bargain hunters attended an REDC auction in New York City, where 113 bank-owned houses in the tri-state area were sold for a total of $10 million in sales.
Watch the video to see what it’s like to buy a bank-owned home at an auction.
AUCTION TIPS:
1) Research. Before you buy at a foreclosure auction, do your research. Print out the auction brochure (if there is one), note the open house dates for the properties you’re interested in and see them in person. You more than likely will have to buy “as-is” and you won’t be able to get a home inspection done. When you visit the homes, look out for these 10 red flags for homebuyers.
2) Crunch the numbers. Estimate how much you expect to spend on home improvements on top of the purchase price, which includes a premium the auction company charges each buyer. If you’re an investor, subtract those expenses from the income you expect to generate from the home (rent) and decide if it’s a smart investment.
3) Register and be prepared. Each auction has different requirements, but all of them require you to register and bring a cashier’s check or cash for the required earnest money deposit. Many transactions are cash-only, but some auctions will allow you to finance the purchase through a lender, so get pre-approved beforehand so you know what your maximum bid will be.
For more tips on how to buy a foreclosure, go to www.frontdoor.com/foreclosures.
Posted by Annalisa Burgos | June 16, 2009
Despite its name, a short sale is by no means a “short” process. But unlike what you may have heard, getting a short sale approved by your lender is not as hard as you may think — if your real estate agent knows what they’re doing.
In order to orchestrate a successful short sale, you need a master negotiator, says Troy Huerta, short sale division leader at Coldwell Banker Residential Brokerage in San Diego. “Many agents forgot how to negotiate. There was no negotiating in the past. You would list a home at a ridiculous price and someone would pay it.”
Those days are long gone. Home values are falling. Unemployment is at 9.4 percent. And according to RealtyTrac, there were more than 321,000 foreclosure filings in May, 18 percent higher than a year earlier. That’s expected to get worse.
But there’s a way to help ease this flood of foreclosures, Huerta says. Do more short sales.
In the past, lenders have been reluctant to do short sales. And why would they? They stand to lose a LOT of money. But the reality today is that if a lender doesn’t do a short sale, it may get stuck with a property that is harder to sell or will sell for less than it could have gotten. (A buyer is more willing to buy a short sale in good condition than a bank-owned foreclosure that needs a lot of work.) Not to mention the cost of pursuing the foreclosure process.
Even Fannie Mae felt short sales could help reduce foreclosures. It launched a pilot program pre-approving short sales for homeowners in Phoenix and Orlando.
Now, lenders should be more motivated than ever to get these deals done — as part of President Obama’s economic stimulus plan, the federal government will pay lenders up to $1,000 for each completed short sale or accepted deed-in-lieu of foreclosure.
READ HUERTA’S TIPS FOR BUYING AND SELLING A SHORT SALE…
Posted by Annalisa Burgos | June 2, 2009
Every now and then, we’ll invite one of our Insiders, FrontDoor’s team of savvy real estate experts, to write a guest blog. Today, Rick Sharga, SVP of foreclosure data provider RealtyTrac, shares his tips for buying a foreclosure property and how to minimize the risk:
“Interest in buying foreclosure properties has never been higher. In a Harris Research study conducted for RealtyTrac and Trulia, over 55 percent of homebuyers expressed an interest in buying a foreclosed home or bank-owned property. A number of foreclosure-related Web sites, including www.realtytrac.com, are among the most frequently visited real estate Web sites.
And it’s no wonder: according to RealtyTrac research, a homebuyer will see an average discount of over 30 percent on a foreclosure property or bank-owned home across the country. In some of the harder hit areas, discounts are considerably higher, with homes selling for 70 percent or 80 percent less than what they sold for just a few years ago. Those lower prices, combined with historically low mortgage rates and an $8,000 tax credit for first time homebuyers make this an ideal time to be on the market.
Even with all of the interest in purchasing foreclosure homes, and the financial incentives to do so, many people have concerns about possible hazards. According to the Harris study, 71 percent of those surveyed were concerned about “hidden costs” and 46 percent were afraid that the process was “risky.”
In fact, the most common mistakes people make when buying a foreclosure property are overvaluing the property itself and underestimating the amount of money it will take to repair and refurbish the home. But there are simple steps that homebuyers can take to minimize risks and ensure a more successful purchase.
Avoiding “hidden costs”: Buying a bank-owned property is the safest bet. The bank will typically have cleared the title, meaning there are no outstanding liens against the property. If the bank is servicing a loan for Freddie Mac or Fannie Mae, they will generally have to bring the property up to a minimum level of repair as well. Smart homebuyers will engage the services of a professional contractor before purchasing the home, to get a formal estimate of how much work needs to be done, and what it will cost. Many contractors will prepare an estimate for free in the hopes of securing the job. Both Fannie Mae and the FHA also have loan products that allow a homebuyer to build the cost of some repairs into the actual mortgage, further minimizing out-of-pocket costs.
Taking the “risk” out of the process: Anyone concerned about the process being risky should avoid foreclosure auctions. Purchases are made without the opportunity to inspect the property and on an as-is basis. Auction purchases are almost always cash only, and there is no recourse if the property turns out to be a lemon. Buying a bank-owned property or a foreclosure home via a short sale conducted by a professional real estate agent minimizes risks considerably.
As with any other investment, there are trade-offs between risk and reward. But given the state of today’s market, and the enormous discounts available on foreclosure and bank-owned properties, the rewards are great and the potential risks can be managed. It’s a buyer’s market that may only come along once in a generation — time to get busy!”
Thanks for the tips, Rick. For more great advice, check out FrontDoor’s step-by-step guide to buying a foreclosure home, whether it’s in pre-foreclosure, at auction or bank-owned at http://www.frontdoor.com/foreclosures.
Posted by Annalisa Burgos | May 29, 2009
I’ve been looking for a place to buy in Manhattan for about three months now. Today, my real estate agent tells me that during the summer, open houses shift from the weekends to weeknights. Or you have to set up an appointment to see the place during a weekday.
What?! That means I have to dash from the office to a property crosstown or wherever during my lunch hour (which I don’t normally take). What a major inconvenience.
According to rule #57 in the home seller’s handbook, sellers should make their homes as accessible as possible to attract as many buyers as possible, especially in a buyer’s market. Okay, there’s no handbook per se, but think about all the foot traffic you’ll miss out on. Don’t sellers want to sell their properties quickly? Manhattan is so weird.
In addition to inconvenient open houses, here are a few more pet peeves I’ve had during the house hunting process (and things sellers and agents should keep in mind when marketing their properties):
1) Not posting pictures of the inside of your home online. I’m one of the more than 80 percent of buyers who search for homes for sale online and if you don’t have pictures, I move on to the next listing that does have pictures. These days, your agent should be insisting you include pictures with your listing. If he/she doesn’t, ditch the agent.
2) Posting blurry pictures or ones that are so small you need a magnifying glass to see anything. That’s almost as bad as not having pictures at all, so take clear, appealing pictures. And get rid of the clutter so buyers can see the space, not your stuff.
3) Exaggerating what your home has. One listing I saw read “HUGE terrace.” Since outdoor space is something I want in my new home, I set up an appointment to see the place. To my dismay, the “HUGE terrace” was neither huge nor a terrace! It was a railing that ran along the outside of the bedroom with barely enough room to fit one person! I refused to deal with that listing agent again.
4) Not being prepared for the home tour. I’ve toured properties where the agent doing the showing had no idea what the house or building offered. It was a case of the blind leading the blind. Each time I would ask a question, the agent would give me a blank look and say “I’m not sure about that. I’ll look into it and get back to you.”
What are your biggest pet peeves with the house hunting process? Post your comments below and share your stories with us!
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