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Why Getting Pre-Approved Should Be Your First Step

In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.” 

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

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Top 5 Reasons You Shouldn’t FSBO

In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

Here are the top five reasons:

1. Exposure to Prospective Buyers

Recent studies have shown that 95% of buyers search online for a home. That is in comparison to only 17% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

2. Results Come from the Internet

Where did buyers find the home they actually purchased?

  • 49% on the internet
  • 31% from a Real Estate Agent
  • 7% from a yard sign
  • 1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

3. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser if there is a question of value

4. FSBOing Has Become More And More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money When Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

A study by Collateral Analytics revealed that FSBOs don’t actually save anything, and in some cases, may be costing themselves more, by not listing with an agent. One of the main reasons for the price difference at the time of sale is: 

“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

If more buyers see a home, the greater the chances are that there could be a bidding war for the property. The study showed that the difference in price between comparable homes of size and location is currently at an average of 6% this year.

Why would you choose to list on your own and manage the entire transaction when you can hire an agent and not have to pay anything more?

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

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Real Estate Industry News: Tax Reform Plan Affects Housing

Housing experts point out the irrelevancy of mortgage deduction risks due to a tax reform plan that encourages homeowners to take a standard deduction instead of itemizing. At the same time, landlords and investment property owners continue to receive a property tax and mortgage interest deduction.

If predictions come true that more people will rent instead of buying a home, it’s a better time than ever to buy an investment property. The latest real estate industry news points out the mortgage interest deduction has often spurred home buying, particularly with people who reduce their tax liability by itemizing deductions. According to an article by therealdeal.com, homes throughout the United States are selling at the fastest clip in the last three decades.

However, the latest tax reform measures would likely shake up the housing market.

Reducing the inventory of homes

The inventory of homes is already at a low, but tax reform will likely cause an even greater inventory crisis. Experts point out the new tax rules would say people don’t have to pay capital gains on home sales if they’ve resided in a home for 5 of the last 8 years. A person may only sell once every five years in order to reap the capital gains exclusion.

Currently, homeowners simply need to live in a home 2 years in the past 5 year period immediately preceding the sale. Home flippers who waited the full 2 years will have to come up with a new plan for overcoming the capital gains taxes.

Catering to the rental market

While wealthy people grabbed a lot of the inexpensive homes for sale during the housing decline, a number of everyday investors got into the landlord business in recent years. People who own rental properties continue to deduct mortgage interest and property taxes as part of their expenses. Landlords that provide their tenants with utilities also deduct electric, water, and other utilities.

With tax reform protecting landlords, it’s a great time to hunt for an investment property. Some of the most lucrative rentals are starter homes with three or four bedrooms, at least two bathrooms, and between 1,000 and 2,000 square feet of living space. When buying a rental, look for fenced backyards and laundry rooms.

While tax reform will likely impact the housing market, experts point out that it’s still better to own than to rent. Homeowners continue to build equity which creates greater wealth. Although most middle-class people will take the standard deduction instead of itemizing, tax reform is not likely to derail the American dream of home-ownership.

At Sunbelt Real Estate, we show aspiring homeowners the steps on the “housing ladder” so they can build wealth. For more of the latest real estate industry news, please contact us.

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Real Estate Investing: Things to Consider with an Airbnb Investment

When it comes to real estate investing, it’s no longer just about fix-and-flip homes or rental properties. A growing number of real estate investors buy homes to turn into profitable Airbnb investments. According to a recent Forbes.com article, many investors realize they can often make more money with short-term rentals compared to 1-year or traditional leases. With most Airbnb arrangements, it’s a guest and host relationship vs. a tenant and landlord scenario. For investors who don’t want to worry about hiring a property manager or collecting rent themselves, the Airbnb model provides some advantages. But before house hunting for an investment property, consider whether it’s the right decision for you.

Checking out the obstacles

Before buying a rental home or an Airbnb property, check the subdivision’s HOA (homeowner association) rules as well as any county regulations. Many counties throughout the U.S. actually collect local taxes on behalf of the host. Some HOA policies require a one-year lease rather than shorter leases but could make exceptions considering guests do not sign traditional leases.

Figuring out the added expenses

When you invest in a rental property, you typically provide the basics such as washer and dryer, a running A/C unit and clean carpet. With an Airbnb, guests expect a furnished place with towels, bedding, pillows, rugs, books, décor and dishes. When figuring out your expenses, also consider tax implications such as whether to file a Schedule C or E.

Knowing your strengths and weaknesses

If you don’t have time to clean in between guests and don’t want to coordinate a cleaning service and don’t like interacting with the public, Airbnb is not likely to suit your personality. Hiring a property manager to oversee a rental property could work. On the other hand, if you have a gift for staging and entertaining, Airbnb could bring out your strong points.

To get started with real estate investing, talk to an experienced real estate agent about homes for sale that would appeal to renters or guests. If you decide to use your investment as an Airbnb, think of a decorating theme or draw. Homes with great views, access to hiking trails or with easy access to grocery stores and entertainment often generate more income. At Sunbelt Real Estate, we help new real estate investors and experienced ones find the right properties for their real estate investing goals. Talk to us about how to profit from the booming sharing economy. For more tips, contact us today.

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An Indispensable Tip: Review Your Inspection Report

Signing off on your new home is exciting. But it’s also a bit daunting. Much responsibility awaits and there are many repairs, improvements, and potential time bombs to keep track of. A comprehensive list of all your home’s needs and features is invaluable. Fortunately, if you were on top of things during the buying process, you have a home inspection report. You’ll do well to keep it handy and review it after you move in.

Having your prospective home inspected before you buy is critical. If you skipped it before you bought, having it done ASAP is still essential. The inspector will compile a report and provide you with a copy, usually as an electronic document. As you get unpacked and settled it’s easy to forget about the issues highlighted in the report. This is why it is important to keep it readily accessible. Printing out a copy and hanging it on the refrigerator is a good way keep track of it and serves as a daily reminder. It will serve as your master reference list of maintenance issues.

The report usually contains notes on which issues are the most pressing. Looking it over with pen or highlighter in hand is a good idea. That way you can rank maintenance issues and take notes as you go. Take a break from arranging furniture and unpacking boxes and review your report shortly after moving in. This way you won’t overlook the most urgent problems and you can make arrangements for a professional to tackle work you can’t do yourself. With most maintenance issues, patience is not a virtue. The longer you wait, the worse (and the more expensive) the problem will get.

A home inspection usually covers appliances. If your report shows some of them are reaching the end of their typical life expectancy, you’ll be prepared. You can carry out research on brands, models, and features as well as ask around to find out what others have used and been happy with. This should help you get a head start on shopping and be better able to hold out for a good deal on exactly what you want. This sure beats getting caught off guard when an appliance quits unexpectedly.

Your home inspection report is an invaluable tool throughout your time as a homeowner. In many ways, it is like an owner’s manual tailored for your specific home. Reviewing it thoroughly and periodically in the first few months of home ownership will get you on solid footing for any maintenance issues that may come up.

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Keywords to Make a Listing Pop When Selling A Home

A few keywords grab a potential buyer’s attention when viewing a home listing. When selling a home, consider several marketing tips to bring the right buyers to your open house and home viewings. Experts point out that when you focus on the keywords such as “subway tiles,” you give buyers a more accurate idea of your home’s features. According to a recent article by nbcdfw.com, a recent report by Zillow Digs looked at which keywords in listings help the home sell for a better price in less time. Researchers conducted a similar analysis last year. Some of the keywords are open to interpretation such as “luxurious,” and “captivating.” But if a potential buyer looks for “subway tiles,” it’s inexpensive and easy to make such small home improvements. If you want your real estate in the Connecticut area to sell quickly, take some time to consider what inspires home buyers.

Adding a few quirky features

The Zillow Digs study found homes featuring barn doors increase the home value by 13 percent. Homes with barn doors sell 57 days faster than other homes. If you love elegant French Doors, don’t remove them just to appeal to some buyers. At the same time, if you have a place in your home where a barn door would nicely fit such as between a dining room and hallway, consider adding the feature.

Focusing on comfort factors

Buyers like keywords that make them feel good such as heated floors. Your real estate agent will likely use flattering adjectives that also create good feelings. Also, longer listings with a lot of words attract higher bids.

Some other keywords that interest home buyers include shaker cabinets, which help homes sell 45 days faster at 9 percent above the average selling price. At Sunbelt Real Estate, we use flattering and accurate keywords to describe your home for sale in the Connecticut area. For more tips on selling a home, please contact us today.

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General Improvements Better Than Too Personalized Decor When Selling

 

Before spending thousands of dollars on home improvements to sell your Stamford-area home, consider whether you will get the best bang for your buck. Unfortunately, too many personalized “improvements” backfire. According to an article by rismedia.com, one of the main reasons homes don’t sell is because the improvements are too personalized. For example, comic book murals painted on the wall of a custom office with built-in shelving specifically for your hobbies will scare off buyers. Focus on general home improvements that have the most impact on potential buyers.

Home Improvement #1 – Adding fresh coats of paint

Painting your home can either increase the value or lower the value, depending on the colors you choose. Last year, yellow was a big color for kitchens. This year, buyers are spending more for homes with different blue shades. Talk to your real estate agent about which paint colors appeal to the buyers this season. Only use daring colors such as red in small spaces such as bathrooms.

Home Improvement #2 – Sprucing up the kitchen

Instead of spending $10,000 or more on a kitchen remodel, simply add a backsplash. One study found homes with subway tile in the kitchens sold for 6.9 percent more money. If you aren’t handy, hire a professional since anything other than peel-and-stick products are difficult to install. A Zillow Digs study found homes that had Shaker cabinets sold for 9.6 percent more than expected, while granite kitchen counters brought in 4.1 percent higher bids.

Other areas of the home that matter include bathrooms. Instead of a major overhaul, simply change out old toilet bowls, add backsplashes and paint. Make sure the fireplace functions, as buyers love to cozy up by the fireplace when it’s cold outside. Also, invest in a smart thermostat, trendy barn doors, and landscaping. Spend money wisely on home improvements for the best ROI (return on investment). Although they don’t seem as sexy, new roofs and A/C systems also matter to cost-conscious buyers. At Sunbelt Real Estate, we walk through our client’s home to figure out the best improvements and strategies for a quick sale. For general home selling tips and advice on staging and marketing your home in Greenwich, Stamford and nearby areas, please contact us today.

 

 

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Buying A Home: Why You Should Be House Hunting NOW

Buying a home is one of the biggest purchases you will make in your lifetime. Many buyers jump headfirst into house hunting without any real guidance or understanding of how the housing market works. At Sunbelt Real Estate our dedicated agents are eagerly anticipating your call, armed with knowledge and insight into the real world of home-buying. If you’re considering buying your first home, a vacation home, or just exploring your options for the future, we strongly urge you to do it with the help of our qualified professionals who wants only the very best for our clients.

Reasons to Buy in Today’s Economy

  • Appreciation: House values are higher than ever in today’s economy. Historically speaking, values have risen at a rate of 5.2% yearly but in most recent years, values are rising at an astronomical 7%, which in turn will create a higher demand for housing in the very near future, thus raising the equity in your home.
  • Low-Interest Rates: Due to the economic crash, home loan rates are at an all-time low, making it easier than ever for you to get into a new home.
  • Zero Down Options: Tying into low-interest rates for mortgages are zero down options that many financial institutes now offer. If a zero down option is not available, many places are still offering lowered down payments, such as 1% or 3%, contrary to the popular belief that 20% down is required.
  • Bad Rental Market: With prices of rentals soaring, what better time to buy your own home? Paying on your mortgage instead of paying someone else’s mortgage just makes more sense logically and financially. Rental prices are expected to go up even more in the next few years, depending on your area, whereas with a fixed-rate mortgage, you pay the same amount every month!

Tips and Tricks on Buying

  • Hire An Agent: Agents can effectively choose houses that suit your individual needs without wasting your time; short sale properties and the like can be a headache to home buyers and skilled agents will know what properties to look at to avoid wasting your time.
  • Get Loan Pre-approval: Having financing in places makes it possible for you to put in an offer on a home you love immediately without the worry of having someone else put in an offer first. This is not always necessary but it can alleviate stress on you, the homebuyer, and many sellers who often times won’t entertain offers from individuals without assurance that the buyer can get a loan.
  • Negotiate Offers: Negotiating is a big part of buying a home and with the help of a real estate agent, the process can go smoother than ever. You may need to negotiate up if there are many offers on a property or negotiate down if the seller’s asking price is too high for the area or if the home had issues that would need to be tended to upon purchase.

Why Sunbelt?

Sunbelt Real Estate has been helping home buyers find their perfect home for the past 20 years. Sunbelt serves the Connecticut area into New York’s Metro area, as well as Florida and international areas. With a vast knowledge of many different areas and properties, Sunbelt is sure to satisfy your needs and provide you with a purchase you can be happy and confident in. Contact us today so we can help you move into the home of your dreams!

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Getting the Best Price For Your Stamford Luxury Home

When it comes to selling your luxury home, the stakes are a bit higher than the average house. Making a small mistake can end up costing thousands of dollars. On the other hand, understanding the intricacies of this market can result in thousands of extra dollars in your pocket. Here are a few tips for getting the best price possible for your home.

Proper Timing

One of the selling points of luxury homes is often their proximity to local, natural attractions. For example, if you’re selling a home that is close to several local ski resorts, seeing the home blanketed in fluffy, white snow may be the best way for the buyer to understand the true value of the home. A home near a lake may be best seen by buyers during the summer when the sun is shining. Make your local geography work for you; don’t let it obscure the benefits of your home.

Price It Correctly

Pricing a luxury home is more difficult than a regular home, as they often have unique features that only certain buyers will value. Using a simplistic measure like price per square foot can lead to prices that are way off, and an inaccurate price can have drastic consequences.

Price a home too high, and it will sit on the market. Luxury homes that sit on the market for too long can develop a stigma—there must be something wrong with it if no one is buying it. This is especially true in the luxury home market, which has a small pool of buyers. These buyers will eventually forget about a home that has sat on the market too long. Conversely, pricing the home too low can lead to a lot of money being left on the table.

Hire the Right Agent

All of the tips in this article boil down to one thing—partnering with the right agent. A local agent experienced in selling luxury homes will know exactly when to place the home on the market, and at exactly what price. It is crucial to have someone with this kind of experience on your side as you undertake the process of selling your home.

Contact Sunbelt Real Estate for all of your luxury real estate questions.