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What Are Your Real Estate Goals?

Invariably, the first time you meet or speak to your real estate agent, the same prompt starts the conversation: “tell me about yourself and your real estate goals.” Seems simple enough to answer. “I need more space” or “I’m ready to downsize” are common answers.

While these answers may be at the heart of the decision for change, they neglect to provide the concrete data your agent needs to identify the right prospective homes. This in turn leads to frustration and wasted time and energy—on both sides—and ultimately will not help find the best housing option for you.

Before meeting with your agent, consider the specifics of what you need. For example, when explaining that you need more space, be specific about what that means. Do you need more bedrooms for a home office or a new baby? Would you like to have a larger kitchen or a bigger yard? In other words, what does “space” mean to you?

Discuss specifics about your lifestyle as well. Would one “great room” be a better configuration than separate living and dining areas? Would you like to live close to a park or school? Would you value a private, gated community? These are just a few of the specifics your agent needs to know.

Your agent wants to provide you the best options to tour; not only is that a good use of your time, but theirs as well. There is no reason to see 25 homes each weekend if only 4 of them suit your needs. By having clearer conversations upfront, you can save valuable time and find the right home faster.

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Looking for a New Home?

Hunting for a New Home? Don’t Wait Until Saturday!

House hunting has become a contact sport over the past year. The idealized vision of a leisurely Saturday morning reviewing open houses and plotting the day’s tours over lattes and croissants is a thing of the past. While popping into the local open house might be fun for the casual looker, if you are serious about finding your next home, this climate demands strategy.

First and most importantly, know exactly what you need and want in a new home. Then share this vision in detail with your agent. Identify not only what you need in the property, but which communities would best fit your lifestyle. With lower inventory from which to choose, you also need to be clear about any compromises you are willing to make—if any.

Once you know what you’re looking for, the next step is to clear some time during the week for house hunting. That’s right, mid-week.

In fact, for those searching for open houses, Thursdays are the best days to tour a community. Thursdays have always been the traditional days for agent open houses. This is when real estate professionals take time to tour new listings, but they are open for buyers also. This can allow serious buyers to view and write offers on new listings before the weekend crowds.

Strategy is critical in a seller’s market. Serious buyers need to prioritize their search to position themselves ahead of their competition. Being available to see new listings as soon as possible is one way to ensure you don’t lose out on an opportunity to write an offer on the right home.

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Boat Accessible Properties – 4 Things to Consider

Imagine strolling down to your private boat dock each morning with your cup of coffee to watch the sun come up. While this might sound like something reserved for the rich and famous, the country is filled with opportunities to buy on a lake, river, ocean, and other waterways. From small streams suitable for canoes or kayaks to larger ocean-ready craft, before you write an offer on your dream home, there are a few considerations to think through.

4 Things to Consider before Buying a Boat-Access Property

  1. Types of Boats Allowed – This is the most important consideration to research. Between local authorities and neighborhood associations, the kind of boat may be limited to length, engine, speed, height, and much more. Make sure the property allows the kind of boat you want.
  2. Water Depth – Just because there is a dock on the property doesn’t mean year-round access. The average depth of the water is critical. Understand the way the seasons can affect water depth and if you’ll need to pull the boat and store it for any part of the year
  3. Environmental Restrictions – Almost all waterways include restrictions. These can include easements and areas inaccessible due to military or power company use. They can also include restrictions to protect wildlife such as fish or bird populations.
  4. Type of Ownership – Waterfront properties generally include some private ownership. This can include shoreline or be limited to the boat dock itself. Before purchasing the property determine if the shoreline is part of your ownership or a public/community-controlled strip of land.

Owning a boat-accessible property is a wonderful lifestyle choice but it can also be an expensive one. Before writing the offer, it’s important to understand exactly what is and is not included in the title.

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Buyers and Sellers – Stay Focused on Your Goal

Buying or selling a home can be stressful, even in normal times. Right now, when the housing market is moving at a frenetic pace, both buyers and sellers are making quick decisions and are feeling extreme pressure. As the tension rises, it can be easy to overlook the end goal; right-sized home, relocation, dream home, etc. Try not to lose focus!

Buyer Challenges

Facing a very tight inventory of available properties, buyers have limited time to arrange to tour homes and knowing they must make a quick decision once they have. Buyers do not have the luxury of a second look or hesitation and often are competing against multiple offers, adding to the pressure.

Seller Challenges

Sellers are also feeling the challenge of the frantic pace. While it is nice to have multiple offers from which to choose, the fact that the offers are at times being made sight-unseen means that some of the offers may not be the buyer’s first choice and they could lose a “real” offer by choosing to work with the wrong one. In addition, if the seller intends to buy another home, then they will be in the same position as the buyers once they enter that side of the competitive market.

The bottom line in each case, however, is to stay focused on the end goal. Why are you looking to buy or sell? Working with your agent, and relying on their experience, keep your eye on the prize and recognize that the goal will be worth the effort.

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Buying in a Flood Zone?

It can be disturbing to realize that the beautiful home you’ve fallen in love with is in a flood zone. While it’s not necessarily a deal-breaker, there are some serious considerations to understand before moving forward.

Flood zones are defined by the Federal Emergency Management Agency (FEMA) and are categorized according to the level of risk. A high-risk area is defined as having a 1+% chance of annual flooding, whereas a low-to-moderate location has a 0.2% or less chance of annual flooding.

FEMA maintains a flood map center where you can research the classification of the location and the level of concern. Zones labeled A and V are the highest risk zones. These are areas that are either coastal or riverside communities. These Special Flood Hazard Areas will have to carry flood insurance and have a 25% chance of serious flooding in a 30-year time frame. Zones labeled B, C, and X are lower risk.

Flood insurance is available to homeowners in any location. It makes sense that homes located in high-risk areas will pay higher premiums than those in lower-risk zones. In addition to normal homeowner’s insurance, flood insurance can range from a few hundred a year to thousands per year. The good news is that proper flood insurance provides excellent coverage in the event of damage, even providing temporary housing if necessary. Coverages vary, so it’s important to discuss the options with your insurance agent.

There is no reason to dismiss a home simply because it’s located in a flood zone. Many beautiful locations are also considered high-risk. But before you write the offer, it’s important to consider all the implications and costs involved.

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Your Listing Expired – Now What?

Listing agreements all have an expiration date. No one wants to think about what happens when the listing expires; both the seller and agent hope the home will sell long before that time. But it does happen. An expired listing means two things; first, the home is now off the market, and second, you as the seller are no longer under contract with your agent.

Now you have some decisions to make. The most important question is to decide if you still want to sell the home. Let’s face it, it’s a challenge to have your home on the market; the home must always be kept show-ready and the last-minute scramble to accommodate a potential buyer is tiring. You should also consider the real estate market and whether current conditions will still allow you to sell in your expected price range.

If you decide to continue with the plan to sell, it’s time to consider whether you want to change agents or stick with the current one. There are many reasons why a home doesn’t sell that have nothing to do with your representation, but if you sense that the agent is not the right fit, this is the time to make a change. If the agent isn’t the problem, then the next step is looking at the home itself and the price. Are you overpriced for the home and its competition?

No one wants to think about an expired listing nor a home that didn’t sell—but this is the time to take stock of the situation, adjust if necessary, and try again; hopefully with the right combination of condition, price, and agent.

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Can an Expensive Home Still be Affordable?

Real estate prices across the country have increased dramatically in the past year. With increases in the 10-12% range, many potential homebuyers have given up and decided that homes are just too expensive to consider. While homes have become more expensive, it does not mean they are unaffordable.

Would you believe that we are experiencing a historically favorable market for buyers when it comes to affordability? Why? This is because affordability involves more than just the purchase price of the home. When considering whether you can afford a home, you must include wage growth and interest rates.

Interest rates are among the lowest we’ve seen in decades. In addition, wages are increasing at a staggering 7% rate year-over-year. For example, a median household income of $68,000/year with a 7% wage growth, will see an extra $400/month.

The median home price is about $325,000. If we add a 10% growth factor to this, that same home would sell for $357,500. At a 3.5% interest rate, the monthly payment would increase from $1313/month to $1444/month, an increase of only $131/month. In terms of affordability, today’s market offers home buyers more for their money.

Many home buyers indeed have sticker shock; homes are getting more expensive. But for many home buyers, other economic factors combine to make homes more affordable than ever before.

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3 Pricing Strategies in a Seller’s Market

Real estate markets across the country are experiencing a strong seller’s market right now. For potential sellers, this may be a golden opportunity to get top value for their property. While it may be tempting to aim for the sky when setting the listing price, that may not be your best option.

Here are 3 pricing strategies to consider before deciding on your asking price.

1. Listing at Market Value

Buyer’s love “realistic sellers.” After considering the market data for your area, choosing to list at the current market value can attract the right buyer and encourage a solid offer or two. Typically, this results in a full-price offer with straightforward terms.

2. Listing High

It is always tempting to list ahead of the market, especially in a seller’s market. This strategy is risky and can mean you waste valuable time by sitting on the market with little interest. Even in a strong sellers’ market, buyers will shy away from overpriced listings. If listing above market value, experts suggest not higher than 5-7% higher.

3. Listing Low

Listing below market value will attract attention. The goal of this strategy is to encourage a bidding war that results in a sales price over market value. This works best for homes in turnkey condition and can backfire if the home is unappealing and you receive low or no offers and must adjust the price again.

A seller’s market presents opportunities. Working with your agent, discuss the options and trends in your local market to get the best offer and terms.

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Should You Accept the Previous Buyer’s Inspection Report?

Sometimes a home falls out of contract. Most buyers assume that it is related to a bad home inspection, but there are many reasons for a home to come back on the market that are unrelated to the condition of the home. During the contingency period, most buyers can cancel for almost any reason – or even no reason.

Of course, the listing agent and seller are motivated to get the home back under contract as quickly as possible and may offer the previous buyer’s home inspection report to the new buyer. Some may even ask that the new buyer remove their right to a home inspection, based on the one they offer.

If you have been offered the previous buyer’s inspection report, you’re probably wondering if you should accept it and remove that contingency. In a fast-moving seller’s market, it might be tempting, but before you accept the report, there are a few considerations:

  • Before accepting the inspection, do your research. Who did the inspection? Is it a reputable, licensed home inspector? Check public review sites for comments and customer satisfaction. Check their license with the issuing board and see if they have had any violations or suspensions.
  • Once you verify the company, give them a call. Make sure they have performed a comprehensive inspection. Many companies offer both a comprehensive and a simpler, cheaper, visual inspection.
  •  Finally, read the report carefully. If there are issues discovered, ask for clarification and consider paying for the inspector to meet you at the home to discuss the report in person with you.

Accepting the home inspection might seem like a good idea – both to make your offer more appealing to the seller and to save a few dollars – but before you remove the home inspection contingency, do your homework. Make sure you understand the real condition of the property before you buy it.

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4 Things Sellers Need to Know about Backup Offers

It’s no secret that most of the country is currently experiencing a strong seller’s market. Yet even in this competitive environment, almost 25% of all escrows fall through before closing. Home inspections, appraisal surprises, and loan approvals are just a few of the issues which can arise, causing the buyer to pull out of the deal.

An essential component of any listing strategy should be a good backup offer, meaning that another buyer is willing to step in and close if escrow falls through. As you consider a backup offer, here are 4 things you need to know:

1. A Backup Offer Is Legally Binding – A backup offer is a fully executed offer, just like the original, so make sure the terms are acceptable. Typically, the buyer will include a contingency in the event they find another home.
2. Multiple Backup Offers – In a strong seller’s market, it is not unusual to accept multiple backup offers. Always clarify the position of each backup offer and whether you will continue to accept backup offers.
3. Leverage – Backup offers provide leverage during the escrow period as well as security for the seller. Use backup offers to discourage unreasonable requests for repairs or concessions during escrow.
4. Earnest Money – Backup offers do require the buyer to submit earnest money, just like the primary offer. This stays in an escrow account. Often this is smaller than a typical deposit with the condition to increase the amount if the offer becomes the primary one.

Backup offers should be an important consideration in any home sale. Not only do they protect the seller if an escrow fails to close, but the buyer can also have another opportunity to close on a home they love.