In the real estate market, a home’s price is everything. Price it too high, and you’ll miss out on buyers, but price it too low, and you might cheat yourself out of valuable profits.
A real estate agent will help you determine where to set the price for selling your home, but having your own instincts is important, too. Here are some tips to keep in mind if you’re making this important decision:
Price for Website Searches
As with every other aspect of our lives these days, most home searches begin online. That comes with its own set of quirks, particularly around the way that prices are categorized on real estate website search engines.
Search results are often grouped in $10,000 or $20,000 increments. So, if you list your home at $205,000, you’re going to miss everyone looking in the $200,000 and under range. By changing the price to $199,000, you’re not losing much profit and gaining more potential buyers in return.
Review Comparable Sales
Again, the Internet makes this pretty easy to do. You can easily see what other homes on your street and in your neighborhood sold for, how long they were on the market, and whether any price reductions were needed to close the deal.
Use this comparable sale information as a starting point, but don’t feel beholden to it. Keep in mind that the market is always changing and you may need to adopt a different pricing strategy depending on where things are in your local market.
Think Like a Buyer
If you had to buy your home over again, how much would you pay for it? This might like a strange question, but it can help you get to the bottom of what prospective buyers might be thinking.
As a seller, you’ll always want to set the price as high as possible so you can get the biggest return on your investment. This might not always be the best idea, and thinking like a buyer can help you see when that’s happening by offering a different perspective.
A home equity loan can be a great way to pay for home repairs or other expenses utilizing the value that your home already has. However, it can do more harm than good if not used properly.
Here’s what you need to know before you sign on the dotted line:
What is a home equity loan?
A home equity loan, sometimes referred to as a second mortgage, is a loan that allows homeowners to borrow against the equity in their home. Like any other loan, the money is received in a lump sum and paid back over time with interest.
These loans are commonly used for home renovations but can be used for anything from debt consolidation to paying for college. Your bank will determine how much you can borrow and what the term of the loan will be.
Home equity loans typically take between 5 and 15 years for repayment, depending on how much you borrow and what you can afford to pay each month.
Home equity loan vs. HELOC
A home equity line of credit, also known as a HELOC, is another type of loan that utilizes your home’s existing value. Unlike a home equity loan that’s disbursed in one lump sum, a HELOC is available for withdrawal on an ongoing basis.
Another way these loans differ is in the interest rates. A home equity loan has a fixed interest rate for the duration of the loan, while a HELOC has a variable interest rate.
Given this information, which loan should you choose? Home equity loans are most commonly used for larger, one-time expenses, while HELOCs are used for smaller, ongoing expenses.
Red flags to avoid
As with taking on any type of debt, you want to make sure that you have a good reason for taking out a home equity loan or HELOC before making a final decision. It might be tempting to use the money to buy something new or go on a dream vacation, but don’t borrow more than you can realistically afford to pay back.
You’ll also want to carefully evaluate your home’s value and its projections over the life of your loan. If you plan to sell your home while the loan is active, you’ll need to make enough money to cover your original mortgage plus the home equity loan or HELOC.
Allergies come in all shapes and sizes, but there are a few things you can do to make your home as allergy-free as possible. These simple activities apply whether you live in a studio apartment or a sprawling estate.
Your family and your guests with allergies will be happy you took the time to go through these steps:
Many allergens enter your home through your air vents; using clean air filters is one way to keep them out. Look for are high-efficiency particulate air (HEPA) filters, which are specially designed to remove allergens from the air.
Good filters are most important in your bedroom, which is where you spend the most time and often one of the worst rooms in terms of allergens. It’s also important to keep your home’s humidity at or below 50 percent to prevent mold from growing and spreading.
Less Clutter, Less Dust
If you were looking for a reason to go through the piles of junk that seem to spring up in your home, you’ve found it. The less stuff there is in your house, the fewer surfaces dust can gather.
If you’re not sure where to start, focus on rags, clothes, and other porous items. Once you’ve cleared up space on the floor, make sure to dust and clean the space thoroughly — and try to avoid letting clutter pile up again.
As we said, the bedroom is one of the worst places in your home when it comes to allergens. Keep them at bay by regularly washing your blankets and mattress pad and encasing pillows, mattresses and box springs in dust-mite-proof covers.
Keep stuffed animals in your child’s room to a minimum, as they can be breeding grounds for dust, and commit to regularly washing any that they do have.
If you have pets, you might want to consider keeping them out of your bedroom to prevent them from bringing hair and dander into the room where you spend most of your time.
We all know that the purpose of getting an insurance policy is for peace of mind, knowing that your home or contents are covered. Once you get an insurance policy, this is exactly how you should feel, and it shouldn’t detract from what you do day to day. After all, it is a back-up in case something goes wrong. You should however, check it periodically, because you want to make sure you are getting the best deal possible.
Why it is Crucial to Review your Policy Annually
If you are unconvinced as to why an annual check-up of your home insurance policy is absolutely critical, consider this: 5 years ago you bought a home for $300,000. You took out an insurance policy covering damages for that amount. Let’s say the housing market has been strong, and now your home is worth $500,000. In the case of fire, or another disaster that renders your home uninhabitable or in need of serious repair, the amount you are insured for may not cover the amount required for repairs. This is because the landscape has changed since you took the policy – inflation has occurred, property prices have increased and so have the cost of repairs.
Because you didn’t check your insurance policy, you are now left out of pocket.
If you have carried out major renovations or have a new car or jewelry, for example, then the value of possessions to be insured has increased. This means your policy needs to reflect this change.
Insurance policies vary in price according to the perceived risk of theft or damage. The safer your home is deemed to be by the insurer, the more willing they are to give youa good price. If you have installed safety measures like burglar alarms, smoke detectors, improved heating, plumbing and electrics, tell your insurance company – you become a safer bet in their eyes and they might give you a reduction in your payments.
A general rule of thumb is to all review your policy when it comes up for renewal. This will be every year usually. Also review it when anything changes. Changes include improvements in the safety and value of your home. And don’t forget, always look around for better deals from competitors and don’t be afraid to ask for discounts.
While we are all worried about keeping tax records and receipts, there is a limit to how much stuff we can store or how best to store it. Here are some tax tips to make organizing, reporting, and storing easier.
With changes to electronic records, the way we store records and where we store them has changed—and not necessarily for the better. When it comes tax time and you have to locate everything, getting the paperwork all together, it is often no longer in one box or file cabinet.
So much of our financial information is now in electronic format. This does make it easier to keep your financial records because they are in one convenient place. Consider it is wise to safeguard paper copies against fire, water, and theft. “They burned” or “There was a flood” is not a viable excuse if the documents are destroyed. You may even want to consider keeping multiple copies of records.
If you decide to go digital, you'll have to scan in your hardcopy records. Be sure to keep the files secure and have a backup flash drive, stored in a fire and waterproof location away from your computer.
Hanging on to all tax-related documentsthat help you identify sources of income.
Keep track of expenses in an orderly manner, whether it is filing in categories, by day/month, or whatever works for you.
Keep all papers that help you calculate the value of property, and prepare tax returns or support claims made on those returns.
An easy rule of thumb about all tax materials is: Retainall tax papers until any chance of audit is over. Usually, this is three years after filing. However, be aware that if the IRS thinks you under-reported your income by over 25 percent, it can go back as far as six years.
Set up a record system that works for you. This might be labeled file boxes. It might be drawers in a filing cabinet. Your method should make it easy to find the tax materials for the year you need.
If you are selling your house, the sale profits from your home sales may NOT be taxable. To ensure that you can claim the best deduction for your house when sold, keep all paperwork relating to your house as long as you own it.
For investment records, such as investment account statement, you need to keep these as long as the stock or mutual fund is yours. The eventual worth of the stock,minus your costs, is what will be used to determine your taxable income on the investment. Additionally, keep all retirement investment records. Contributions to traditional IRAs often are tax-deferred. However, so of the money in these accounts may have already been taxed. Thus, you need to keep detailed records when you begin taking money out of your IRA, to ensure how much of the distribution is taxable.
It's no secret that first impressions are important. So when it comes to your home, don’t overlook the impact of curb appeal on potential buyers and the value the exterior appearance can add to the sales price.
Adding curb appeal doesn't have to be expensive, time consuming or complicated. By addressing the basic curb appeal principles, you can create a warm, friendly and inviting atmosphere outside and a strong initial perception of what's left to see inside.
Remember, the outside of your home is the first thing a buyer will see. Try to view it from their perspective, and focus on improvements that will appeal to the greatest number of buyers.
Create a focal point by painting or refinishing your front door. Paint faded trim and molding, and replace worn hardware, light fixtures and house numbers. Add style and appeal to the entryway with symmetry and a blast of color in mind, such as potted plants and sidelights.
Not everyone will see your home during the day. While also providing safety and security, lighting along the walkway is aesthetically appealing and leads guests to the front door. If installing wired lighting isn't an option, go for lower-voltage solar powered fixtures.
Do look down
The condition of the walkway and driveway can have a major impact on curb appeal. Remove weeds and overgrowth, and repair cracks or stains. Simply power-washing, resurfacing or resealing can sometimes do the trick. For major impact that adds value, replace concrete with pavers, stone or bricks for a custom feel, or use them to widen existing walkways.
Terrible landscaping is an automatic turnoff. Instead of rebuilding your landscaping, improve what you have by cleaning up weeds, overgrowth and dead plants; restoring color with new plants; adding mulch and defining perimeters. Focus on a mix of colors and sizes at the front of the yard, along the walkway and immediately in front of the house for dynamics that accent and frame your home.
Dress it up
Paint is inexpensive, but a few new coats can transform the look of a home. Along with obvious defects, give a fresh look to flower boxes, shutters, railings, trim and molding with accent colors for a quick and inexpensive facelift.
Home inspections are one of the most critical steps in the home buying process, and for many reasons. Investing in a home inspection can protect you from unexpected costs before you buy, as well as save you money in the long run on your investment.
Not only is it important to know what will happen during a home inspection, but just as important to know what will not happen and how to interpret the results.
Not all home inspectors are created equal, so check certifications and chose someone who is part of the American Society of Home Inspectors and is an ACI (or ASHI) certified inspector. Even the best inspectors can make mistakes, so chose one who carries "Errors and Omissions" coverage that goes beyond the basic liability insurance. Don't choose an inspector for the wrong reasons.
Attend the inspection and don't leave the inspectors side, as you will likely pick up additional insight along the way and better understand the final report. While most inspectors in California follow the National Association of Certified Home Inspections guidelines, there is no uniform checklist. So be sure to negotiate ahead of time what is included on your checklist and understand what is potentially not included, such as items not on the house (fences, surrounding buildings, pipes and septic tanks). Know that Asbestos, lead, mold and other dangers are typically not covered. Understand how thorough the inspection was, like if the inspector climbed on the roof or entered the basement, and how they evaluated the roof and foundation.
Inspectors are not psychics
A home inspection can only go so far. Inspectors can't see the future and don't know when housing systems will fail – they can only evaluate present conditions. Most home inspections are also non-invasive – meaning they only inspect beyond finished surfaces – so protect yourself as much as possible. Many of the most expensive repairs, such as water leaks and damage, rotted wood and faulty wiring or plumbing, are behind the walls and under floor coverings. A trusted inspector can notice defects and if homeowners are trying to cover up problems.
If you are preparing to sell your home or have already started the process, it’s important to understand you can learn from other’s mistakes. And there are three time-honored mistakes that stand out above the rest that many sellers make.
There can be a lot of work involved in selling your home. But avoiding these pitfalls – the biggest mistakes a seller can make – will help you get top dollar for your home as quickly as possible.
Pricing If there is one rule to remember, it’s this: Your home is only worth what the market is willing to pay you for it. Overpricing is the biggest single mistake a seller can make, and many are tempted to list their homes for sale based on what they paid, or outdated prices, instead of the current market conditions. Your agent should know the market, inventory and current prices as well as the current and past comparables in a market analysis. If you set the price too high, it will sit, and a long stay on the market will bring about questions from wary buyers, and inevitably a reduction in your asking price. Don’t invite the opportunity for buyers to negotiate. There is a number that will get your home sold, and sold quickly.
Condition The appearance and condition of your home are the first, and most important, impressions on a buyer. Most owners do not want to invest in a home that they plan to sell, but the condition impacts both appeal and price. Ask yourself this: Do you want to sell your home quickly at the highest possible price? Good, then confer with your agent for suggestions. Don’t neglect to fix simple things that are broken, because it’s a red flag to buyers about what they can’t see. Walk through your home like you’re a buyer, and remember small things matter.
Marketing Simply put, don’t skimp on marketing because you think it’s not important. The best way to guarantee you will sell your house is to exhaust every marketing opportunity available to you, ensuring it reaches the most people buyers possible. It’s a numbers game: The more buyers (and agents) who see your house, the better your chances are of selling it. Give your agent time for a proper marketing plan, which should include professional photos. Cast a wide net, and understand the impact of social media and online marketing – 90 percent of buyers use the Internet to search for a home, according to the National Association of Realtors.
Are you thinking about selling your home? Avoid these three common mistakes.
Overpricing the price of your home is one of the biggest selling mistakes. Click here to find out the others.
What do you think are the biggest mistakes made by home sellers? Check out this list for the answers.
Regardless of whether you are an experienced property owner or real estate investor or a first-time buyer, knowing the basic terminology used in real estate is a must when you begin the process of buying or selling property.
Even a strong grasp of just a few of the most commonly used terms will help you greatly, so here is a glossary of 30 real estate terms you need to know:
Assessed Value: Typically the value placed on property for the purpose of taxation.
Broker: An individual or firm that acts as an agent between providers and users of products or services, such as a mortgage broker or real estate broker.
Chain of Title: The history of all of the documents that have transferred title to a parcel of real property, starting with the earliest existing document and ending with the most recent.
Clear Title: Ownership that is free of liens, defects, or other legal encumbranc es.
Closing: The process of completing a financial transaction. For mortgage loans, the process of signing mortgage documents, disbursing funds, and, if applicable, transferring ownership of the property.
Closing Costs: The upfront fees charged in connection with a mortgage loan transaction.
Commission: The fee charged for services performed, usually based on a percentage of the price of the items sold (such as the fee a real estate agent earns on the sale of a house).
Comparables: An abbreviation for “comparable properties,” which are used as a comparison in determining the current value of a property that is being appraised.
Contingency: A condition that must be met before a contract is legally binding.
Deed: The legal document transferring ownership or title to a property.
Deed of Trust: A legal document in which the borrower transfers the title to a third party (trustee) to hold as security for the lender. When the loan is paid in full, the trustee transfers title back to the borrower. If the borrower defaults on the loan the trustee will sell the property and pay the lender the mortgage debt.
Depreciation: A decline in the value of a house due to changing market conditions or lack of upkeep on a home.
Easement: A right to the use of, or access to, land owned by another.
Encumbrance: Any claim on a property, such as a lien, mortgage or easement.
Equity: The value in your home above the total amount of the liens against your home.
Escrow: An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition.
Fair Market Value: The price at which property would be transferred between a willing buyer and willing seller, each of whom has a reasonable knowledge of all pertinent facts and is not under any compulsion to buy or sell.
Foreclosure: A legal action that ends all ownership rights in a home when the homebuyer fails to make the mortgage payments or is otherwise in default under the terms of the mortgage.
Interest: The cost you pay to borrow money. It is the payment you make to a lender for the money it has loaned to you. Interest is usually expressed as a percentage of the amount borrowed.
Judgment Lien: A lien on the property of a debtor resulting from the decree of a court.
Lien: A claim or charge on property for payment of a debt. With a mortgage, the lender has the right to take the title to your property if you don’t make the mortgage payments.
Market Value: The current value of your home based on what a purchaser would pay on the open market.
Mortgage: A loan using a property as collateral. In some states the term is also used to describe the document signed (to grant the lender a lien on your home). It also may be used to indicate the amount of money borrowed, with interest, to purchase the home.
Note: A written promise to pay a specified amount under the agreed upon conditions.
Principal: The amount of money borrowed or the amount of the loan that has not yet been repaid to the lender.
Promissory Note: A written promise to repay a specified amount over a specified period of time.
Real Property: Land and anything permanently affixed thereto — including buildings, fences, trees, and minerals.
Security: The property that will be given or pledged as collateral for a loan.
Title: The right to, and the ownership of, property. A title or deed is sometimes used as proof of ownership of land.
Underwriting: The process used to determine loan approval. It involves evaluating the property and the borrower’s credit and ability to pay the mortgage.
Do you need to know the basic terms of real estate? Click here for a glossary of 30 commonly used terms.
Are you a first-time home buyer who needs to brush up on real estate lingo? Check out this list.
What are the real estate terms that baffle you the most? Check out this list of basic real estate terms.
The final walk-through is the last step to take just before the home-buying process is complete, and it is a crucial step.
The final walk-through is not a home inspection. But it is the opportunity to ensure the condition of the house hasn’t changed since your last visit, and the chance to ensure you’re getting the same house and amenities you agreed to purchase. It’s also the time to confirm that any previously agreed-upon repairs have been made and the terms of your contract are all met.
It’s tempting to cruise through a final walk-through, or even skip it altogether, especially when you’re pressed for time. But that’s never a good idea. A buyer’s walk-through not only gives you confidence in your purchase, but it can pinpoint any lingering problems that need to be settled before closing. Remember, once you close on the home, the previous owners are not obligated to fix any new damages.
Here are four steps to be aware of for a final walk-through:
The right timing. Timing is important when it comes to the final walk-through. It’s often suggested to schedule the walk-through 24 hours in advance of closing, but no more than 48 hours before to ensure enough time to address any potential problems that could arise. Put aside an hour to conduct the walk-through, enough time for you to be extremely thorough.
Double check conditions and repairs. The final walk-through is your chance to verify all promised and negotiated repairs with the seller were met. Include your inspector or general contractor if you have any concerns about the condition of the property. It is sometimes recommended to request receipts from the sellers for any items that have been repaired, along with the contact information for contractors, to prove the work was done.
What to look for. Take your contract with you to refer to during the final walk-through. Have a list of items that are staying with the house, and make sure that all items that should have been removed have been done so satisfactorily. Make sure there is no new damage – especially those that could have occurred when the seller was moving out – and check the yard, garage, attic and basement thoroughly for unwanted items.
Make sure everything works. It’s good to have a checklist as you go through the house room-by-room. Check that all light fixtures, faucets, and appliances are functional. Make sure all doors and windows open, close, and lock properly and no screens or storm windows are missing. Check to see that all electrical outlets are undamaged, and that circuit breakers are properly labeled. Turn the heat and/or air conditioning on and off and flush all toilets. Don’t ignore the outside of the house, walking the perimeter to look for leaks, checking lights and the garage door. Pay special attention to issues that could have previously been hidden, inside and out.
Taking action. If you do identify problems, you have options, including walking away from the deal. But be cautious of walking away due to problems that are not significant. You can choose to postpone the closing, and you do have legal recourse for issues that were negotiated to be fixed. Make any defects or new issues known to your realtor.
Have you experienced a final walk-through before closing on a house? Check out these steps.
Do you know everything that is involved in a final home walk-through? Check out these need-to-know steps.
Do you know what to bring to a final home walk-through? Check out these five steps.