Buying a home can be a frightening and overwhelming experience, especially the first time. Following is some basic buying information to help as you begin the process:
The Offer – No seller really expects a full price offer, not in this economy anyway. The past national average was that offers came in 3-5 percent below asking price. Now experts say the average national discount is about 7-8 percent. Sellers are not surprised when you offer less than they’re asking.
Real Estate Commission – Six percent real estate commission is the national norm. If you buy from a for-sale-by-owner, you can use this to reduce your asking price since, if you buy their home, they won’t be paying that commission. Sellers know this will be a cost if they list the property and they expect to pay some commission if a Realtor brings them a buyer.
Closing costs – Both buyers and sellers pay some and can negotiate who pays what. What the buyer pays typically includes:
All fees to do with obtaining the loan
Mortgage insurance if borrowing more than 80% of the value of the property
One year’s homeowner insurance premium
Property taxes from the day of the purchase to December 31
Fee for recording the documents
Survey and Appraisal – Your lender will require a survey and an appraisal. They must know the value of the property they’re loaning against. Costs are typically paid by the buyer but are negotiable.
Transfer tax - Yes, many states charge a tax to transfer property to a new owner. For example, one dollar per $1000 of selling price. Check with your county.
Inspections – Every lender requires an inspection before they will loan on a property. EVERY inspector finds things that need repairs. It is not uncommon to get a list five to ten pages long, so don’t be surprised. One time, I had an inspector say that the bottom of the attic pull-down staircase legs were cut at the wrong angle. What? Inspectors find lots of things and sometimes crazy things. And, you may want all that stuff fixed. If the inspector points out a flaw, buyers typically say, “fix it before I buy it!” Most sellers are surprised at the cost involved in fixing things the inspector finds. We all live with quirks in our own home, but a new buyer doesn’t want them. And, its amazing what we don’t know about what’s going on in our home. An inspector crawling under the house and in the attic finds all kinds of interesting things.
Home Shield Warranty – Have the seller provide a good Home Shield Warranty. Cost is typically $350-$500 and the policy will cover things like appliances and heating and air systems so that, if they break down in the first year of ownership, some of the repairs are covered by the warranty.
Appliance allowance – If the appliances are dated, rather than replacing them, many sellers simply give an allowance (i.e., $1000) for replacement so the buyer can purchase the ones they want.
Pest inspections – are required in many states because, especially in humid climates, there are lots of crawly things that eat and destroy homes (termites, powder post beetles, flying ants, etc.).
Seasons – By fall, sellers get a bit nervous about having their homes remain on the market. Winter is usually slow selling as people are busy with school, holidays, and they just don’t want to move when it’s cold! Because of this, by October, sellers may be more willing to negotiate even further.
It’s a new month and there’s a hint of a chill in the air. Have you noticed that the days are already getting a bit shorter?
Time to prepare your home for the colder months ahead. Best to prepare, inside and out, now while the weather’s still good!
So, what to do?
Yard – Aerate, fertilize and seed your lawn so, come spring, you’ll have a fresh crop of beautiful grass.
Bedding – Find, wash, and have ready your flannel sheets, blankets, and comforters. If you leave your windows open at night, you may already need them!
Gutters – Time to start cleaning out leaves. Here in North Carolina, that’s about a two month process with all the beautiful fall leaves that will float down from now until late November.
Roof – While cleaning the gutters, inspect the roof for any signs of wear or damage that can be taken care of before bad weather hits.
Fireplace – Can’t wait to start using mine. This is the perfect time to have your chimney inspected and cleaned so it’s ready to use when you are.
Heating system – Have it serviced now before cold weather strikes. Don’t wait until cold weather hits to find out your system isn’t functioning properly. Besides, that’s when all the HVAC repair people will be backed up with “emergency” calls. Don’t be one of those calls!
Water heater – Drain it and remove all debris. If you haven’t done it yet, wrap yours with a water heater blanket to insure that it runs less to keep your water hot.
Check for drafts – around all windows and doors. Now’s the time to add weather stripping insulation to keep your home warm and cozy this winter.
Remove window air conditioners – Service, clean, and store them so they’re ready when you need them again next year.
Storm windows – If you have removable screens, clean, store, and replace them with your storm windows.
Order firewood – I just offered a huge stack of cut firewood from one of our renovations for free on Craigslist. Craigslist is a great place to find free firewood, but this is the time when everyone begins collecting so start early!
Insulation – Check your attic and basements or crawl space for places where you may need to add insulation. Insulation falls and settles over time so be sure yours is filled to the brim!
Spruce up your home – Preparing for a new season is always a great time to clean, clear out and give away. As you and your family prepare to settle inside during the colder months, make sure your home is comfy and cozy. Put away spring accessories and bring out comfy throws.
What can you add to the list? What do you do this time of year to prepare for the cold months?
Have you listed your property for sale? Are you waiting for an offer? Have you done enough to stand out in this market? Here are some points to consider:
How did you come to your asking price? Did you do any research on your own? There are lots of online sites where you can get an idea of the value of your home. Today, there are a growing number of homes on the market for sale so you want to know that your home price will stand out when compared to others in the area and in your price point.
Price lower than your competition, when possible. You want prospective buyers to be pleasantly surprised by how much you have to offer for your asking price.
Property condition – Today, more than in the past five years, the condition of your house will be scrutinized.
Picking up the clutter is not enough.
Make sure the yard is mowed, the bushes are trimmed, dead branches have been removed.
Make it look great from the outside as lookers make a very significant decision about your home before they even set foot inside.
If you can’t paint the entire exterior, at least paint the shutters and front door for a fresh, clean look.
The inside really needs to sparkle.
If you don’t plan to paint the entire interior and replace all the carpets, make sure what is there is clean.
Put everything in its place.
Clean the windows.
Make sure the blinds and curtains are not torn or broken or, if they are, take them down and cover the windows with new, inexpensive blinds.
Anything torn or broken will knock a lot off the buyer’s offer and you can be sure they’re deducting as they walk through.
The kitchen and bathrooms must be spotless. If you don’t have the newest stainless steel appliances and granite counter tops, what you do have must be clean and polished – no water spots in the sink, no food spilled on the stove or counter, no toothpaste on the bathroom mirrors.
Its hard to see your own home objectively.
Take some photos. It may be easier to see what needs to be done when you’re looking at a picture.
Ask a friend or neighbor to walk through your home as if they were looking to buy. What things would they want changed or what makes them uncomfortable? Something simple that you may not think about, like the room being crowded, other people will notice.
Take out a couple of pieces of furniture, put them in storage, and suddenly your room looks more spacious.
Selling your home is no time for ego. This is a purely business transaction. To you its a home, to prospective buyers its a house. Give them reason to make it their home.
For more help with selling your home, contact our office and talk to one of our real estate agents today. We want to be the solution for all your real estate needs. 336-834-0958
Thinking of purchasing a home? In case you’re wondering, this is actually a fabulous time. Interest rates are ridiculously low, there are, once again, a record number of homes on the market for sale, and banks are lending again!
Here are some tips that you’ll need to know when you’re trying to buy:
1. Pay all bills on time! Not just your monthly lease payment (but pay that first!), but everything:
Lenders will require bank statements and will run both background checks and credit checks to determine your ability to repay the loan. Make sure everything they see is good!
2. Don’t buy anything new! Especially large purchases:
flat screen tv’s
a new car
Large ticket items can lower your credit score substantially because they significantly change your debt to income ratio. That means that what you owe becomes too close to what you earn and the banks may determine that you can’t afford to take on more debt. Keep your debt down so the lender will see that you can afford your new house payment.
3. Don’t change jobs! Lenders want to see a history of stable employment. The exception may be if you get a better job in the same profession with a salary increase but, if possible, don’t make any changes until after you’ve gotten the home.
4. Check your credit score. First, look to see if there are any incorrect items listed. If so, write to the credit bureau to have them removed. Find a good credit repair person and talk to your lender to learn what things you should do first to most improve your score. Your bank or lender can give you the name of someone reputable. Start the process there.
Why do We make these warnings?
We’ve seen buyers get their credit score high enough to buy the home they’ve been wanting, only to go out and buy a car first. Guess what? They no longer qualify for the home. Or, (this happens too often) buyers get qualified for their new home, go out and buy new furniture to put in that new home before the closing, and then guess what? They no longer qualify for the home. Lenders will do a final check on your credit the day before or the day of closing to make sure nothing has changed. Once you’re approved for your loan, make sure nothing on your credit report changes!
If you have questions about things like, “should I take this new job?”, check with the lender. See what qualifications they require. The basics requirements stay the same but from lender to lender, but specifics vary somewhat. Perhaps you can wait six months to change jobs until after you’ve moved into the home of your dreams.
Good luck! Now go out and buy your new home! If you’re in the Greensboro, North Carolina area and you need an agent, call our office!
Why should you live and invest in Greensboro, North Carolina?
Of notable importance is that Greensboro is the only city between Washington, DC and Atlanta with 5 freeways intersecting. Why so many main highways? Commerce has demanded another major east coast shipping hub and North Carolina jumped in to provide what was needed. Because of this, the population growth here over the next 5-10 years is expected to be huge. FedEx came to Greensboro and tremendously expanded our international airport making it now one of the main FedEx hubs.
Our economy has remained stable, even with the national economic downturn due, in large part, to the diverse business community. Greensboro population is about 271,000, median family income is about $45,000, sales tax is 7% and median home price is $144,000. Within 15 miles, there are 1188 restaurants, 21 libraries, 80 miles of walking and bike trails and 61 golf courses (we like our golf here in North Carolina!). Annual precipitation is 43.14 inches, average high temperature in July is 87.6 and average low temperature in January is 26.2. The median age is 33.4 and about 60% of the population has completed some college. The area boasts 13 universities and community colleges.
About the climate, let me just say, it’s the best. Four mild season so you get to get out and enjoy them all. Springtime, flowers are everywhere, even on the trees. We have dogwoods, cherry blossoms and fruit trees that keep the bees buzzing and the birds singing!
Summer, ok, it does get hot. We have days in the 90′s which wouldn’t be so bad except for the horrid humidity! That being said, the hot days and humidity don’t last all that long so, if you don’t work outdoors, just ride out those days in the comfort of your air conditioning!
Fall is spectacular. The colors are lauded in magazines and television specials. Take a drive down the Blue Ridge Parkway in the fall and you’ll be hooked. Winter brings very little snow, just enough to create the occasional beautiful winter wonderland.
The Appalachian mountains are about 1.5 hours west and the Atlantic ocean is about 3 hours east. For larger cities, we’re surrounded by Winston Salem to the west, Raleigh to the east and Charlotte to the south.
I moved to Greensboro from Pasadena, CA, because I wanted a small, family oriented area where I could raise my children. Today, I still love calling Greensboro home.
Way back then, I began my research by reading Chamber of Commerce surveys on the best places to live and work. Actually, it was Raleigh/Durham that always showed up in the top 5 most desirable cities but, when my plane landed, Raleigh was more populated than I was looking for. I drove around until I found a place to live in Greensboro. I’m glad I did.
You may have noticed a recent increase in house sales. It’s being felt all across the country. So, what/who’s responsible?
Low interest rates?
Banks are lending again (though more conservatively than in the past)?
Warren Buffet saying that single family homes are a great place to invest (currently)?
Nationally, one of the biggest contributing factors to the rise in house prices and increased sales is the move of Hedge Funds into the housing market. According to Radar Logic, these institutional investors purchased about 12 percent of the new homes sold through March. This may not sound like a lot, but if you take them out the the house purchase equation, home purchases actually declined over the past year.
They come into an area and buy up properties which drives up prices. Problem is, if another market seems better, they can jump there and leave where they currently are, meaning what’s going on in a particular market may not be stable.
Here in our local Greensboro market, we had our first hedge fund land in March. What we know for sure is that they’re buying retail properties, are paying 92-96% of market value for them, and are willing to add another $10,000 in repairs. They then hire a property manager to put in a tenant and oversee the property.
At this point, it doesn’t appear that they have any property management experience and we know the local person they hired to handle some of their properties. She has never done property management in the past. Interesting.
We all need to stop listening to CNN for their real estate “facts”. By CNN, of course, I mean the national news media. These folks get paid for selling shock and awe. They focus on the negative – fear sells.
And, real estate is always local.
Greensboro real estate has flourished during these “hard” times. Why? Because they haven’t been as hard as everyone has been led to believe – and here are the local statistics to prove it.
Decline in coastal property values have pulled down averages for the entire state, but we never had a bubble so we never had a bust.
Moving? Finding a place to go is just the beginning of the process – now you need to clean out, pack up, and move! Here are 10 tips to ease your moving experience:
Newspapers – When getting ready to move, start saving newspapers! Ask friends and neighbors to save theirs for you. You can never have too much packing material. Buy bubble wrap for the dishes and glasses.
Boxes – Grocery stores and liquor stores are great sources for strong boxes (for free!). Most stores crush their boxes after emptying so ask them to save boxes for you. Sometimes they have boxes available, sometimes they’ll tell you when to come back to pick them up. We found banana boxes to be the best, and the stores get new ones every other day!
Bags – Don’t use paper or plastic bags for transport. Items are not protected, bags tear and spill, and having everything in boxes makes it easy to stack and pack in the moving truck.
Sealing Boxes – When sealing your boxes, be sure to use packing tape. That’s the only kind that will really hold through the trials of moving. Duct tape does not stick well to cardboard and may break lose.
Marking Boxes – Be sure your boxes are clearly marked. That way, when you get to the new home, you’ll know where the boxes go, what you want to open first, and what can wait until later or go into storage.
Color Markers – Use different colored boxes, tape, markers, or stickers for each room so the movers (and you) will know which room to take each box to in your new home.
Clothes are OK to leave in drawers during transport but everything else should be taken out and boxed for safety and ease of movement. Take out all valuables, such as jewelry, and anything breakable or heavy to wrap and move separately.
Fragile – Always clearly mark the FRAGILE items. Lamps, china, computers, stereos, DVD players, all must be carefully packed and marked for safety. Remember how well they were packed when you bought them?
Wardrobe boxes are a worthwhile investment. Simply take the clothes out of your closets and hang them on the hanging bar in the box. No folding necessary. These boxes save a ton of time and energy.
Appliances – If you’re moving appliances, be sure to empty the contents of the refrigerator and freezer. Take everything out of the oven and drawers. All appliances must be empty and secure the doors so they don’t fly open during transport.
Whew… A lot to think about and to do. Have I forgotten anything? What can you add to the list?
Moving is a big deal. It’s time consuming, costly, and physically and emotionally exhausting! To make your move as smooth and successful as possible, prepare ahead. You’ll want to do all you can to avoid running out of time, scrambling at the last minute, and moving into the only thing you find that’s available.
The first things to determine are: (1) when do you want to move and (2) where do you want to live. Before beginning your search, be sure you’re ready to move. A non-refundable deposit will be required to hold any empty space you may like if you want it held while you continue your search. These following items will help with making your final decision.
1. Find an area where you want to live.
Focus on your family’s specific needs such as:
distance to schools
location to work
convenient to shopping
convenient to parks
access to public transportation
Visit the neighborhood at different times during the day and at night to be aware of traffic and noises you may encounter while you live there.
2. Determine important items you need in your space:
washer dryer space
lots of natural light
3. Know where to search:
ask everyone you know – friends, co-workers, relatives
can you make the space “your own” – paint, hang pictures and mirrors, etc.
As a tenant, you shouldn’t expect the attention to detail that you will receive when you’re buying a home, but make sure that the property is in good condition and that everything in the property is in good working order. So be sure to:
6. View the inside of the property:
or have someone you trust who lives local view it for you
make sure all of your furniture will fit through the doors and into the rooms
check for leaks under sinks, around toilets, in the ceiling
look for any damage and water issues
7. Finally, NEVER GIVE ANYONE MONEY BEFORE YOU KNOW WHO THEY ARE AND HAVE SOMETHING IN WRITING. We lease out properties every month. Before you give us money, you will have seen the property. Then, you pay an application fee when you turn in your completed application. If you are approved for the property, you may then put down a deposit, in our office where you also receive a receipt, or you may simply come to the office with the deposit and first month’s rent, sign the contracts, get the keys and move in.
Never give money to a person you don’t know. SCAMMERS CANNOT SCAM UNLESS YOU COOPERATE WITH THEM. Unfortunately, this is happening more and more often, especially if you do everything through the internet.
Good luck with your real estate search and please let me know how it works out for you and any additional questions you may have as you go through the process!
What is a lease with option to purchase, and is it right for you?
With all the recent foreclosures across the country, many homeowners have taken, and continue to take, financial losses on their homes. These thousands (millions?) of up-until-recently homeowners do not have a tenant mindset. They are not renters. Yet, they no longer have the credit needed to purchase a new home, or possibly even the money saved for a down payment.
What option do they have now beyond rental? What do they do to find their next home?
The perfect home solution for these individuals may be a Lease with Option to Purchase.
Lease with Option to Purchase works very much like a rental. The buyer moves into a property owned by someone else and pays them a monthly amount to live there. The difference between a lease with option to purchase and a straight rental is that the lessee/tenant is actually working toward owning the home at a future date.
Typically, two contracts are signed, the rental agreement and the lease option agreement. The additional lease option agreement spells out the terms of the future purchase of the home such as:
the amount of time the lessee has to purchase (typically 12-36 months)
the purchase price of the home
the amount of lease option fee (or “down payment” to move in)
which actually “buys” the lessee the right to purchase the home at a future date
is typically required at the time of contract signing
at purchase, all or part of the lease option fee is credited toward purchase
any possible seller financing terms
any other terms or conditions of the lease (ie. – a portion of the monthly lease payment may be given as credit toward purchase)
There are many great things about a lease for the lessee.
One is that they actually have a contract toward buying the home they live in. While their lease is in effect, the home cannot be sold to someone else (like a rental can). This gives them time to save a down payment and work toward improving their credit score. The lessee can experience the pride of ownership that they cannot have while renting. The purchase price is locked in at the time of lease signing so they know exactly how much they need to qualify for. And, at anytime if they decide not to purchase the property but rather to move, they can move on and the contract ends. That’s a freedom you don’t have with an actual purchase and mortgage.
Something to think about! If you’ve recently lost a home and/or don’t want to be a renter, check our current listings for a lease-to-own.
Please leave your lease option questions in the comments section below. I look forward to helping you soon!