Few things are more polarizing in the real estate landscape than the idea of a rent increase. Landlords are typically ecstatic over the possibility of increasing their income, whereas tenants are, well, less than enthused. The said, a good rental property owner needs to know how to navigate the waters of a proper rent increase with finesse and ease, at least if they want to maximize their profits. How To Notify Tenants Of A Rent Increase To be perfectly clear, the process for notifying a tenant of a rate increase will vary by state, so be sure to check with the proper authorities before moving forward with an increase of your own. That said, most states will require landlords to give “proper notice.” Again, the length of time is different from state to state, bust most seem to follow a 30 day rule, meaning landlords need to tell tenants they intend to initiate a rent increase at least 30 days before doing so. The notice must be in writing, and some states even require the notice to be sent through certified mail. Determining Your Rent Increase There is only one thing more important to tenants regarding a rent increase than the reason why prices are rising: how much they are rising. I highly advise against increasing the rent arbitrarily; don’t simply throw out a number without any reason to back it up. Not unlike making an offer on a property, you are free to throw out any number you wish, as long as you can cite a reason for doing so. In other words, don’t simply increase the rent because you can. Instead, determine why you are increasing the rent, and base your new price on the resulting data. With the exception of rent controlled living spaces, homeowners and landlords have a legal right to raise their rent if it doesn’t conflict with a current lease. More specifically, landlords can’t carry out a rent increase in the middle of a lease, regardless of whether it’s year to year or month to month. Landlords can raise the rent as long as they give proper notice, “which in most states is 30 days,” according to NOLO. As a result, most landlords will be able to raise their tenant’s rent as long as they tell them at least 30 days before their current lease ends. Of course, each state will coincide with different laws, so check to make sure you are in compliance with the laws in your area. There is also no limit to the amount a landlord can increase their rent, but not so fast. It can be quite easy to want to increase the rent as much as possible, but I’d most likely advise against it. While a significant rent increase cane look attractive to landlords at first, you need to think of the repercussions; namely, those that involve your current tenant leaving at the end of their lease. Instead of increasing the rent as much as possible, first land on a reason why you are increasing it in the first place, as it’ll act as your starting point. If for nothing else, the rent increase should be justified and proportionate to the reason why. If, for example, you are intent on increasing rent to compensate for a higher cost of living, the increase in rent should be just enough to cover it — nothing more, nothing less. Rent Increase Laws Let’s make one thing abundantly clear: rent increase laws will vary depending on whether or not the building is zoned in a rent-controlled area. More specifically, rent-controlled and rent-stabilized areas are subject to the rules set forth by local municipalities. The local governing bodies in charge of regulating rent-controlled homes are responsible for deciding how often and how much rents may be increased. That said, rent-controlled homes and apartments are basically the exception, and not the rule. In reality, the majority of homes are not governed by a rent-controlled body, meaning the rules pertaining to rent increases aren’t exactly set in stone. In fact, you could argue that rent increases are subject to whatever the market will handle without actually breaking. Landlords are within their right to raise rents as much as they see fit. In fact, the loose laws around rent increases are what gave rise to rent-controlled zones in the first place. While there aren’t too many restrictions on how much a landlord can raise rent, there are some on the amount of time they must give tenants. Most notably, landlords can’t raise rents without warning; they must abide by the rules set forth by their own state. More often than not, tenants must be given at least 30 days notice before the rent increases. According to NOLO, “the rent increase notice must be in writing; in some states, certified mail is required. Oral notices are ineffective in most states and, unless you specifically agree to the rent increase, you are not obligated to pay it.” Perhaps even more importantly, rent increases can’t be enacted over the course of a current lease. Landlords have no choice but to abide by the rules laid out in the signed lease, and can’t increase rent until the lease is over. How To Justify A Rent Increase It is never a good idea to propose a rent increase without the proper justification. You had better have a good reason for increasing the rent you expect your tenants to pay, or you could find yourself with a problem down the road. And while you certainly have every right to increase your rent, some reasons are less likely to anger tenants than others. Here’s a few of the most accepted reasons for a subsequent increase:
Justifying a rent increase has more to do with providing a reason the tenant can understand, and maybe even sympathize with. That way, they are more likely to accept the new rate, provided it isn’t absurd. Conversely, landlords that can’t justify a rent increase will most likely find their request met with more opposition than they would have appreciated. The idea here is to identify a cause an effect: circumstances changed, so you need to raise the rent — it’s as simple as that. Rent Increase Summary Rent increases are nothing less than a touchy subject for everyone involved. On the one hand, renters are never going to be happy about having to pay more for a place they are already living in. On the other hand, drafting a rent increase letter addressed to your tenants is a process that must be met with empathy and justification. If for nothing else, there’s a way to increase rent, and there’s a way that’ll cause more problems. To see to it that your efforts side with the former, make sure you take the appropriate steps when it does come time to carry out a rent increase. Key Takeaways
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Today’s greatest real estate investors know it, and it’s about time you did, too: real estate trends, or at least the ability to translate them, can prove invaluable to the advancement of one’s career. Real estate market trends are, after all, the perfect indicator for divulging not only where a market has come from, but also where it has the potential to go. The more investors know about today’s emerging trends in real estate, the more likely they will be to realize success. But, of course, not all trends are created equal; some are inherently more valuable to follow than others. The key is to identify the trends most likely to last and capitalize on the position they may place you in. Real Estate Market Trends Impacting Buyers & Sellers This Summer The weather is on the brink of heating up in nearly every real estate market, and that means one thing for those with their finger on the pulse of the national housing sector: things are about to get a lot more interesting. If for nothing else, the summer real estate market represents the busiest time of the year. It is at this time when the whole of the entire housing market gains an incredible amount of momentum from both buyers and sellers. It is worth noting, however, that the summer real estate trends of 2018 look perfectly comfortable mimicking those of the previous years. The trends we have seen up to this point, and even the trends we should expect for the foreseeable future, are to be expected. To be perfectly clear, there are a number of real estate market trends that are impacting buyers and sellers this summer, not the least of which include:
It shouldn’t surprise buyers or sellers to learn that these trends look like they will carry over into summer. That said, it would be wise to familiarize yourself with them on a more intimate level. The more you can expect to glean from the upcoming summer real estate market, the more likely you are to navigate it with success. Who doesn’t like the sound of that? If you are interested in giving yourself a competitive edge this summer, you’d be wise to learn as much as you can about what to expect. Home Sales Of the real estate market trends most likely to carry a lot of weight in today’s investor landscape, home sales deserved to be talked about first. It is home sales, after all, that serve as one of the most important market indicators for gauging an area’s health, and those that take place over the course of summer are no different. Home sales will take place at a fierce pace this summer. According to Zillow, the average home lasts on the market for 78 days, but don’t get to caught up in that number. If anything, that number will witness a decrease in the coming months, as it does every summer. Case in point: home sells will speed up as the competition heats up. There are simply too many buyers eager to get into a new home, and summer appears to be the time they hope to do so. As an investor, take note of the speed in which buyers are willing to move; it’s one of the real estate trends most likely to be maintained by the state of today’s market. High Demand And Affordability Few housing markets across the United States, if any at all, have managed to solve the largest problem facing the real estate landscape: inventory levels, or lack thereof. More specifically, however, supply and demand is currently dictating today’s exponential increase in prices. It is worth noting, however, that demand hasn’t taken a step back. The economy is better off today than it was even a few short years ago, and there are more buyers looking to participate in the housing market, but there’s one problem: there aren’t enough homes to satiate demand. All year, in fact, prospective buyers have wanted to partake in the market, and have been met with opposition around nearly every single corner, and it doesn’t look like this summer will offer a solution. That said, investors should go into summer knowing that they aren’t alone. The next few months will be competitive to say the least, which means success will favor the prepared more than ever. As an investor, factor the competitive nature of today’s market trends into your acquisition strategy. Instead of low-balling sellers, try offering a little more, or even exercising an escalation clause. Real estate price trends suggest inventory levels will only continue to drive up prices, so be prepared for the cost to go up. Doing so could mean the difference between having your offer accepted or ignored. Hot Markets Hot markets are, for all intents and purposes, a relative classification. Nearly every market in the country is firing on all cylinders at the moment. However, there are markets that are doing better the others. Most notably, the California real estate market appears to be setting an incredible pace. Whether or not that pace is maintainable remains to be seen, but there’s no denying the activity currently taking place in The Golden State. More importantly, the California real estate market has several of the “hottest” markets in the country, not the least of which include:
According to Realtor.com, California accounted for 13 of the top 20 hottest housing markets as recently as the first quarter of this year. Real Estate Technology Trends The advent of technology has certainly shifted the way things are done in every industry, and the housing sector is no exception. Real estate technology trends have drastically improved the way people take on what can be, at times, an intimidating industry. Real estate technology serves one purpose: to make our lives easier. It is safe to assume that investors using the right technology are at an advantage over those that, well, aren’t. The key, however, is to adopt the right technology. There are technological advancements that are far superior to others, and it’s in your best interest to use those that will give you the best edge. Here are some of my personal favorite real estate technology trends at the moment, and how they can advance your career:
Commercial Real Estate Trends Real estate market trends aren’t relegated solely to the single-family landscape; they are also present in the commercial sector. Here are two of the most important trends investors should be keeping an eye on this summer:
Emerging trends in real estate don’t necessarily have to come out of nowhere. The majority of the real estate trends I spoke of here are the result of months, if not years, of anticipation. They are now trends because they appear ready to carry over the momentum they have already generated into summer. It is worth noting, however, that those aware of what’s going on stand a better chance of realizing success, and today’s investors are no exception. If you want to give yourself an advantage over the competition, be sure to listen to what the market is saying; it may be the only thing you need to take your career to another level. Key Takeaways:
On Point HomevestmentsWhen you buy a house or an apartment, there are several steps: You decide how much money you can spend; find a property you like; make an offer; negotiate an acceptance; sign a contract; line up your financing, and then close on the property. So, in some sense closing is what you’re working towards. It’s the point where you sign the papers that make the home legally yours, and it’s usually when you get the keys. (Note that it’s often not when you move in; that usually comes hours, or even days, later.) The exchange of “money for keys” is very similar to what happens when you rent. However, there are a couple of big differences when you’re buying instead of rent, and there’s more opportunity for things to go wrong. Let’s take a look at some of them, so they don’t happen to you: The Money What’s Supposed to Happen: A representative from your lending bank shows up with the money for your mortgage loan. What Could Go Wrong: In your “commitment letter,” the lending bank outlines certain conditions in order for your closing to happen (for example, you can’t close until you buy homeowner’s insurance.) You could forget to fulfill or violate one of the conditions (for example, by changing jobs between the time your commitment is issued and the time you close.) How to Prevent It: When your commitment letter comes, read it carefully to make sure that you are doing everything you’re supposed to do. Often there’s a list involved, so if the letter says, “your commitment is conditional on your doing A, B, and C,” go ahead and do A, B, and C. Also read the letter to see if there is a list of what violates your commitment. A common commitment breaker is a changing financial status, so don’t change jobs or make a major purchase between commitment and closing. As Michigan mortgage banker David Hall puts it, “Wait and sit on the milk crates for the first few weeks in the new home.” The Keys What’s Supposed to Happen: When you finish signing the paperwork, your broker is supposed to put a full set of keys in your hand, including keys to the front door, the mailbox, and the bike shed. What Could Go Wrong: The seller could forget to bring keys to closing (sometimes that’s a mental block because he or she doesn’t want to let go of the property) or you find out that the side door key has been lost since 2005. How to Prevent It: Have your real estate agent contact the seller to make sure that all the locks in the house are in good working order and to remind her to bring a full set of keys to closing. If you are doing your walk-through of the property right before closing, that’s a good time to remind the seller, too. The Paperwork What’s Supposed to Happen: If you’re getting a mortgage, the bank is supposed to itemize its charges on a form called the HUD-1 Settlement Statement, which indicates money going between the seller and the buyer. What Could Go Wrong: Although you’re supposed to be able to examine the HUD-1 in advance, often the charges on it are actually worked out at closing by the buyer’s, seller’s and bank’s attorney. So, you may see it late, not understand it, and leave without a copy of it (which you’ll need later when you file your income taxes.) How to Prevent It: About.com has a blank HUD-1 on its homebuying site. Take a look at the form before your closing so you have some idea of what it looks like. At closing, take a few minutes to read the form and make sure that everything looks like you expect it to. Also, ask your lawyer to make a copy of the form for you since your accountant will need it come tax time. On Point HomevestmentsIn the simplest sense, developed land has been fully prepared for home building while undeveloped land has not. Each has advantages and disadvantages. If you’re thinking about building your home on undeveloped land, be sure to consider the additional work and expenses. Are We There Yet? One of the most important things that a developer does with raw land is bring roads onto the site and connect those roads to the public right-of-way. Lots are usually located adjacent to the new road and have direct access to it. If the subdivision remains private, the homeowners will maintain the roads but often they’re deeded to the city and maintained by the municipal service department. Vehicular access to undeveloped land can be more difficult, although isolation might be one of your primary goals in choosing a rural location. You’ll almost certainly spend much more to build an access road back into the site (I can recall several “driveways” that are more than one-third of a mile long) and you won’t have city snowplows to clear it for you. Red Tape and Green Paper Buying a lot in a subdivision means buying into additional layers of government regulation including building departments and homeowner associations. Both groups will have a say about the size, location, design, types of exterior finishes, and maintenance of your house. Municipal building departments usually hold builders to a higher standard of construction quality than rural departments – a definite benefit to the homeowner – but that can mean higher construction costs, too. Subdivisions also usually have minimum house size requirements, so your home might even end up being larger than you want. On a rural property you’ll have much greater freedom to decide what your home looks like, what it’s made of, and how it’s arranged on the land. And with that design freedom comes more control over the costs of construction. Because the options are far less limited, undeveloped land is where most truly unique custom home designs are built. Power to the People The development of a lot in a new subdivision typically includes bringing all utilities onto the site, where the new house is easily connected to them. Electricity, gas, water, and sanitary sewer services are available at the edge of the property, ready to be used. Undeveloped property won’t have water and sewer taps on site. In fact, there may be no utilities anywhere nearby. Building on undeveloped land usually means providing your own private septic system and water well, installing a propane storage tank for gas appliances, and bringing electric service lines in from a distance – maybe a very long distance. Can You Dig It? By the time a subdivision is ready for construction, the developer’s engineers have tested the soil and graded the land for proper drainage. You’ll have access to information about the possibility of sub-surface conditions that might affect your construction plans and in many cases the developer will take some responsibility for the site’s suitability for building. If you want the same information about your rural property, you’ll have to order and pay for it yourself. Your county extension service can provide some of this information but it may not be recent, or specific to your site. If you discover bad soil or underground rock in your building area, you’ll have no avenue for redress except your own pocketbook. More Than One Kind of Value A house in a subdivision may have a temporary price advantage over a “stand-alone” home, since its value will be related to the selling prices of other homes in the area. If you value predictable price appreciation, closer neighbors, and want less “hands-on” involvement in the creation of your house, you’ll probably find your dream home in a development. The majority of American home buyers do just that. Building on undeveloped land will require more from you, your architect, and your builder. But if you’re willing to assume the risks of undeveloped land; if you’re interested in a truly custom home design; if you want to be more involved in the creation of your home, you might find your piece of paradise somewhere a little further outside of town. On Point HomevestmentsReal estate agents often suggest that sellers either accept the first offer or at least give it serious consideration.Real estate agents around the world generally go by the same mantra when discussing the first offer that a seller receives on their home: “The first offer is always your best offer.” Of course, this isn’t true in every situation, but there are reasons why agents believe this, and why they often suggest that sellers either accept the first offer or at least give it serious consideration. Get in the buyer’s head To understand why the first offer is usually the one you should accept, consider the buyer and the journey he or she’s on. Buyers in the real estate market usually start by dipping their feet into the water. This may be before they even engage a real estate agent. They generally go to a few open houses, check out prices online, and start to do their homework. They may even make first contact with an agent to assess what the agent thinks about the state of the local market. From there, buyers begin to get more serious. They may start going on private, second or third showings with their agent. They really start to get engaged in the process. They become “the real dealer” — a buyer who is completely in the game, approved for a mortgage, and actively engaged with their mortgage lender or broker. Maybe they’ve even written an offer or two. They’ve narrowed down their search parameters, spent months learning the market, pricing and checking the comparables. (To learn more about the three types of homebuyers, read “Seller’s Guide to Understanding Today’s Buyer.”) Real dealers are often the ones who write the first offer a seller receives on a property. And that’s why their offers should be taken seriously. Real dealers will likely get an email notification about your listing within hours of it going online. Or, since they are so engaged with their agent at this point, the agent may spot it first and send them a text or email. This buyer will want to get in and see the property ASAP. Since they’re so familiar with the market, they’ll be able to tell once they step foot inside if it will work for them, if it’s priced right, if it shows well, and if it’s in line with present or past comparable sales. If the property meets their criteria, the real dealer, armed with all their knowledge and motivation, will make an offer. The real dealer Their offer may not come in within days of a property going on the market. But it will come from an informed buyer who is knowledgeable of the market. If a home is priced too high and a month or two goes by without an offer, it will be the real deal buyer who has been watching the listing and waiting to see how the market responds. If they note that there aren’t any offers on it and there is no activity after some time, the real dealer will come in with a low offer, which actually may be a good offer, on the seller’s home. While you may see it as an insulting “low ball” offer coming out of left field, you should still look closely at this offer. Who is the buyer? How long have they been looking? Have they written other offers nearby? Are they working with a good local agent? Does the offer come with a pre-approval letter? Is this offer actually a number that is close to the number your real estate agent initially suggested? As hard as it may seem to contemplate an offer much lower than your asking price, serious sellers should look at all the signs leading up to it and consider if this is the offer to accept. Trust your agent. And even better, trust the phrase, “The first offer is always your best offer.” On Point HomevestmentsOne of the first questions for people entering the landlord game is whether to hire a property manager or manage the new rental themselves. As with everything in life, there are positives and negatives to each strategy. So let’s run through the issues that go into making this decision. Renovations? First, the property you buy will most likely need some renovations. You’re going to have to be in charge of this yourself and get bids, shop for materials, make decisions, etc. And it will cost more than you think — probably a lot more — and it will take longer than you think, probably a lot longer. Before you purchase — and this is best to do during your home inspection — try to get an experienced investment property owner to come with you, and maybe a contractor, to get a better estimate on those costs. Provide a healthy contingency of cost, like 50 percent, and a time contingency of 100 percent in your schedule. Better to be safe, than surprised. Pros and cons of managing Once you get the property closer to rent-ready status, you’ll need to make some decisions on whether you manage the property yourself, or hire someone to manage it. Pros – Managing the property yourself allows you to keep the best control of your tenants, service their issues, keep good relations with them, and keep a better watch on the property. It will also save you somewhere between 8-and-10 percent of rental income and probably dramatically increase the chances that you will keep it occupied. No management company has anywhere near the incentive that you do to keep it rented and to keep your tenants long-term. You’ll learn quickly that when faced with a vacancy, you’ll jump to get it rented. You will also save yourself one-half month or a full month’s rent in fees for handling the re-leasing process yourself. But … you will also learn it is a lot of work! Cons – The negatives about managing the property yourself are best seen in three separate scenarios: Renting it when it is vacant; what it takes in terms of monthly management; dealing with more serious issues when they arise.
It’s a lot of work! Once the tenant is in place If you put your property in good condition for rental, this part of the process is the easiest. Some properties and tenants are a breeze, but I’d guess that you’ll have to deal with about 3 to 5 minor issues per year (like the neighbor’s dog is barking). Figure on at least one more major issue, like calling a plumber or electrician. Overall, this process is not too taxing — if the property is in good shape and you follow the advice that follows. Here are some tips to ensure things go well:
If you follow those tips, it should lower the hassle of owning rental properties. Major issues can occur, too. So if your tenant stops paying, or there’s a major flood, or fire, you have to deal with it regardless of whether you have a property management company. And it’s going to be a lot of work and time involved, especially if the property is far away. Overall, learning the management side will probably best teach you the ins and outs of owning real estate, save you some money, and probably make your properties more profitable because you’ll treat tenants respectfully and keep the units occupied. Property management company handling the issues There are many quality property management companies that can do a great job for you. As noted above, they probably charge 8-to-10 percent and a half month’s rent for re-leasing. They will handle the above issues for you, except when major issues require your input — or checkbook! But the most important first step is to interview several rental companies. Call references, get copies of their insurance and make sure they have the proper type and adequate insurance in place. Once you make the decision on which property management company to hire, keep on a friendly and professional basis with your manager. Things will go wrong but just because you are paying for management doesn’t mean you can blame the property management company. Part of your role is to inspire them to help handle the issue and obtain the best possible outcome. If you’re super busy with your regular life, but own property or properties, a management company could be a good idea. You’ll still be pretty involved, if for no other reason except to maximize your value and keep those nice, consistent rental checks coming to pay the bills! Keep in touch with the management company, the tenants, inspect the properties every once in a while, and do your best to help get it rented when there’s a turnover in tenants. On Point HomevestmentsGreat home design always starts with the site – a truly special home is never designed first, then placed on the property. How do you evaluate a site for your house? How do you find the right part of the site to build on? Start with the four “S’s” – Slope, Sun, Soil, and Sewer. Slope The slope of the property can have a big effect on the cost of your project – a house placed on a slope will most definitely cost more to build than a house on a flat lot. Does your house have to be placed on the slope? Perhaps it can be placed at the top or bottom – taking advantage of the views from the slope but not incurring the costs of building there. Many owners of sloping lots want to take advantage of that situation by including a “walk-out” basement in the design. It’s one way to increase the space in your house for a relatively small cost. The steepness of the slope will partly determine how much excavation and/or fill is necessary to create the walkout. Homes on sloped lots often require more (read: costly) gravel backfill material at the foundation; they might need expensive retaining walls to create a flat area for a driveway or hold back soil at the walk-out; and they usually have a full basement – whether you want it or not. Here’s the bottom line – carefully analyze (with the help of your design professional) the impact that your sloped lot may have on your design; design a house that’s appropriate for the lot without unreasonably expensive construction techniques. Sun Many homes are designed with the primary family living spaces at the back (kitchen, breakfast room, family room). These are the rooms you want sunlight in; the rooms with all the expensive windows. And you’ll get that sunlight through those windows, too – if the back of the house faces more or less south. That’s where the sun is, remember? If your lot is on the south side of the street, great. But what if your lot is on the north side? All that living space, all that glass, isn’t going to get any direct sunlight at all. Or worse, your lot faces east, and the afternoon sun pours through that wall of west-facing glass like a blast furnace – heating up the house and fading the furniture and carpeting. Since we’re talking about sunlight, now’s a good time to bring up the subject of energy consumption. Houses are designed to keep heat in, or to keep heat out, depending on the season. The easiest and least expensive way to keep heat out of the house is with proper orientation of the windows and doors. The easiest way to keep heat in is to reduce the number of windows. So, pay close attention to the number and location of windows in your design. A properly oriented plan can save you a lot in fuel bills and give you a lot more enjoyment of your house and your building site. Soil It’s amazing, every time a backhoe starts a new house foundation, how different soils can vary from one building site to another. From loose sand to solid rock and everything in between, and sometimes all on the same site! Soil type can have a big impact on the cost of construction. Even if you know a lot about the underground conditions on your site, it’s a good idea to keep a little cash in reserve to deal with potential surprises lurking under the turf. How much do you know about the soils on your home site? It’s relatively easy to learn the basic characteristics from your County Extension Service or local building department. You might also contact builders and excavators with experience in the area and ask them what they’ve encountered on other projects they’ve built near you. Some types of foundation systems that are popular in one region are unheard of in others. Typical practice in many areas is poured concrete walls — a potentially expensive option if your plans call for concrete block. It’s important to know what foundation systems are common where you’re building. But even a house with the proper type of foundation for your site may need to be specifically engineered to accommodate the local soils, and the local building department. Soils drain and retain water differently, and soils have vastly differently capacities to bear structural loads. In most areas, you’ll have to show the building department that your foundation is designed for the local soil conditions. Sewer The Plumber’s Credo – “everything flows downhill” is extremely important to remember when designing your home. On a developed lot, the municipal sanitary sewer line is buried near the front (usually) of the lot. The height of this pipe will determine the depth below grade of the basement slab since the effluent from the house must “flow downhill” to the sewer line. An undeveloped lot is one where the utilities – electricity, water, gas, and public sewer – aren’t brought from the street to the buildable area of the lot. On larger undeveloped properties there may not be any public sanitary sewer to connect to at all. On such a lot, you’ll need some type of private sanitation system. Several types of private sanitation systems are in use today including the traditional septic tank and leach field, aeration systems, and “mound” systems. They can vary widely in cost, and not all health districts allow all types. The choice of system will also be heavily weighted by the soil type and slope of the lot, and the available area(s) for the system. A typical leach field system will require a large clear area for a primary and second field. Since a private sanitation system is more expensive than connecting to a public system, the cost isn’t typically considered in the “base” cost of building a house. A private sanitation system is usually an “extra.” Slope, Sun, Soil, and Sewer – keep these in mind when selecting a property to build on and when designing your home and you’ll have a more successful project! On Point HomevestmentsThe Redfin Blog beat us to this story, but it’s interesting nonetheless… The Los Angeles Times ran an article a while back citing a correlation between the words used in real estate listings and the length of time a home spends on the market, as well as the selling price. Oddly enough, “new paint” was the most commonly listed comment, yet drew lower sales in general. One researcher reasons that if you can’t find anything better to say than “new paint,” perhaps you shouldn’t say anything at all. Words that appeal to the beauty of a home seemed to turn the fastest sales and highest prices. “Landscaping,” “gourmet” and “granite” were among the words used in the lisings. The most blasphemous word you can use in a listing? “Motivated.” To our agent readers: are there key words you use (or avoid like the plague) that you feel have an effect on the length of time it takes to sell a home? On Point HomevestmentsLooks like efficiency is the name of the game and costs are kept to a minimum because there’s simply nowhere to put additional items. Apartments appears well appointed and seem to suit your needs just fine- – for now. It may be a different story when the little one starts to run around. Tried to put the concept of a small living space into the context of the home we currently have. 265 sq ft. is a little smaller than our kitchen and dining room combined. There is no doubt that living in a space that small would take some compromise. First compromise would be that we could only have 1 computer, no more of the networked, geeked-out gaming sessions that we enjoy currently. Second, no more letting the laundry pile up before it gets addressed. And once it is done, it will need to be put away immediately, unlike these days where it sits in the basket for days. Third, if you come to visit, stay in a hotel. Sorry friends, we love you, but there’s no room. All is not lost however; the tour would take all of 5 seconds, or however fast you could do a full turn without getting dizzy. On Point HomevestmentsThe New York Times recently ran a piece in their Ask the Contractor section (membership required to read article) about renovating for the purpose of adding value to a home. According to the contractors interviewed, the biggest bang for your buck comes from… drumroll, please… remodeling your kitchen. No surprise here since the kitchen seems to be everyone’s favorite gathering spot. Other worthwhile projects include bathroom remodel, window replacement, roof replacement, basement remodel and central air-conditioning. Of course, one should always take into consideration the location of the home when considering home improvements. For example, central air-conditioning has little value here in Seattle where the average summer temperature is in the mid-70s. On Point HomevestmentsTeardowns, knockdowns, bash-and-builds vs. McMansions, pop-tops, and snout homes: It’s a war out there these days, as detailed in New York Times article that would get anyone’s heart racing — even if you didn’t own a home. What’s happening is that folks are buying homes and hoping to tear them down to rebuild bigger ones or take existing homes and morph them into McMansions, of sorts. Communities where this is happening such as Laguna Beach, Calif., Nantucket, Mass., and Ocean City, N.J., are putting their foot down and getting help from the National Trust for Historic Preservation to slow down the madness. One funny anecdote in the article dealt with a real estate agent who was given the OK to build an addition to his home in Lewes, Del., but to make room, he needed to knock down a dilapidated chicken coop on the property that dated back to the 1800’s. Thinking it would be a slam-dunk to get the go-ahead in a public hearing he was met with fierce public disapproval and did not get the OK. The reason? It lent "value to the streetscape." So, whenever you drive down the street and see a dilapidated building ready to fall over, a community ordinance could be protecting its right to stand there. On Point HomevestmentsBefore you start picking out tile and paint chips, be sure you know how much it will cost to remodel your houseReady for a kitchen renovation? Anxious for a bathroom remodel? The easy part is knowing your goal for home remodeling — whether you’re trying to keep up with your growing family, add office space, or increase your home’s value. But figuring out how to plan a home renovation that doesn’t break the bank can be tricky. Here are five key steps in planning your home remodeling project. 1. Estimate home renovation costs As a general rule of thumb, you should spend no more on each room than the value of that room as a percentage of your overall house value. (Get an approximate value of your home to start with.) For example, a kitchen generally accounts for 10 to 15 percent of the property value, so spend no more than this on kitchen renovation costs. If your home is worth $200,000, for example, you’ll want to spend $30,000 or less. Something else to keep in mind: Contrary to popular belief, kitchen renovations offer among the lowest return on investment, according to analysis from Zillow Talk: The New Rules of Real Estate. Every dollar you spend on a kitchen remodel increases the value of your home by 50 cents. The highest return on investment? A mid-range bathroom remodel. 2. Consider home remodeling loan options If you plan on borrowing money to fund your home renovations, there are a number of loans out there to help with just that.
Refinancing, getting a HELOC or taking out a home equity loan are all big decisions, and it can be tough to know which one makes the most sense for you. As with any new loan, consult with a lender to see which option is best for your situation. 3. Get home renovation quotes from contractors Some contractors will give you an estimate based on what they think you want done, and work completed under these circumstances is almost guaranteed to cost more. You have to be very specific about what you want done, and spell it out in the contract — right down to the materials you’d like used. Get quotes from several contractors, tossing out the bid from the one who gives you the lowest estimate. Going with this choice could be asking for problems, as low-priced contractors are known to cut corners — at your expense. 4. Stick to the home remodeling plan As the renovation moves along, you might be tempted to add on another “small” project or incorporate the newest design trend at the last minute. But know that every time you change your mind, there’s a change order, and even minor changes can be costly. Strive to stick to the original agreement, if possible. 5. Account for hidden home renovation costs Your home may look perfect on the outside, but there could be issues lurking beneath the surface. In fact, hidden imperfections are one of the reasons renovation projects end up costing more than you anticipated. Rather than scramble to come up with extra money after the fact, give yourself a cushion upfront. Factor in 10 to 20 percent (or more) of your contracted budget for unforeseen expenses, as they can — and do — occur. In fact, it’s rare that any project goes completely smoothly. On Point HomevestmentsTake care of your home's hot-weather needs now, and you'll have more time for fun in the sun.Summer will be here before you know it, and you know what that means: Heat, hornets and yard work. If you’re starting to miss spring already, fear not. Here are some quick projects to make your home and garden more comfortable and cost-effective this summer. Inside the house
Out in the yard
On Point HomevestmentsBetween vacations, barbecues and pool parties, we can lose track of routines, projects and "stuff."Sometime about now in mid-summer we begin asking ourselves, “Why do things seem to be out of control? I planned on organizing my photos, painting that cute dresser I picked up at the yard sale last fall, and waking up without an alarm clock on Fridays. None of it has happened!” This scenario is all too common — and yet there is good news. It’s never too late to get and stay organized for the remainder of the summer. People tend to get busy with outdoor activities and become distracted by vacations, plus household schedules and routines tend to be different than during the school year. The most common areas that seem to spiral out of control are:
Here are my tips for getting and staying organized through the summer. Summer clutter We’re conditioned to create traditions and rituals. We buy new outdoor furniture and decorations for our backyard barbecue, and bring friends and family together for camping trips chock full of new-fangled gadgets and equipment. We have family reunions and summer vacations. We’re used to buying, creating, and preparing for events — yet we don’t really have a method or system to deal with the aftermath. It may be time to say goodbye to the stuff we buy “on the fly,” like walkie talkies for playful banter on road trips, floaties for the swimming pool, collapsible picnic tables for the beach, croquet sets for the backyard, and rain ponchos for the fast-moving and sudden rainstorm. We recommend two steps for handling summer clutter:
Project procrastination Often we feel more disorganized or confused about our perceived “free time” during the summer months. This can happen because we spend the first half of the year postponing projects until summer vacation. Each year we stack the projects-in-waiting for summer, and each year we seem to forget that we would really rather enjoy some time off in nature, traveling, or getting together with friends. If you want to reduce the pressure for yourself, release yourself from too many good intentions, like repainting the powder room; reading the stack of books you’ve collected; and that wishful photo-organizing project. Instead, pick just one project and focus on it. By making one project the priority, you can do little bits of it from time to time. So, instead of putting off the project and feeling badly that it isn’t getting done, break your priority project down into doing one small step per day. Sample summer project Want to paint that dresser? Allow yourself 13 “moments” to complete the project and never miss a bit of summer fun. Use this project breakdown to make any project fit in around your unpredictable summer schedule. Painting a dresser purchased at a yard sale
Sleep routines Most of us realize instinctively that sleep is important. “You know that babies and children need sleep to grow,” says Val Sgro, a professional organizer and author. “You know that an injured body heals itself faster with good sleep. You know that if you don’t get enough sleep, you become sluggish and cranky, and you have trouble thinking straight. That old saying, ‘I’ll sleep on it,’ comes from the realization that the solution to a problem often seems to reveal itself after a good night’s sleep. “Contrary to common belief, your brain does not rest when you sleep,” she continues. “It is often more active than when you’re awake. It’s busy — busy making sure it stays organized.” And therein lies the key to getting and staying organized in the summer months. Though our sleep routines will likely be off kilter, it’s worth asking the question, “How will I be able to get seven or eight hours of sleep tonight? How will I fit it in?” Maybe you need to grab a mid-day nap or put yourself (not just the kids) to bed an hour earlier. Getting more sleep will help you make better decisions when you pack (and thus have fewer items to “buy on the fly” while traveling). More sleep means being more alert driving on road trips; consuming less sugar or caffeine for a mid-day boost; and showing up with an overall better outlook for the day. And in the middle of summer travel or hosting guests who are visiting for a week, that couldn’t be a more welcome benefit. On Point HomevestmentsLove flexibility? It may be time to rethink renting's bad reputation.Renting often gets a bad rap. It’s true that some aspects of being a renter are less than glamorous, but it’s not all bad. In fact, the number of renters is on the rise, and the traditional mindset about renting is changing. Let’s debunk three of the most common myths about renting. 1. You’re throwing money away Many people say that paying rent is like taking your money and throwing it away. While you may not be gaining equity in a home, you are paying for somewhere to call home, which is not the same thing as throwing your money in a trash can. And let’s not understate the value of avoiding household maintenance costs. Most rentals include upkeep and repair services, and some even include the cost of utilities. Additionally, buying a home may not be a wise financial decision for you right now. Maybe you live in an expensive housing market or you don’t have quite enough saved for a down payment. Simply put, renting may be in your best financial interest. To find out whether renting or buying is more financially viable for you, there are several tools available to help you make an informed decision. 2. You have no negotiating power A common myth surrounding the landlord-tenant relationship assumes the landlord has all the power. Contrary to popular belief, renters have a lot of negotiating power when they sign a lease, says Tracy Atkinson, director of global marketing and relations for Goodman Real Estate in Seattle. “If you think you may be buying a house soon ask, ‘Do you have a mortgage clause?’ You can also ask about a job relocation clause. Simply ask, ‘Can you work with me?’ Each resident has the power to do that,” she advises. The most important thing is to read the lease in its entirety to ensure you understand what you’re signing. If you see terms you want adjusted, don’t be afraid to ask. 3. It’s difficult to get out of a lease Another common misconception about renting is that it’s hard to get out of a lease. Though it’s not advisable to sign a long-term lease when you know life changes are ahead, sometimes life throws us a curve ball. Whether you relocate for a job or your roommate moves out, sometimes it’s necessary to break your lease. One option is to sublet your place. Check with your landlord or property management company to ensure that subletting is allowed, and get everything from both your landlord and the new tenant in writing. If you’re relocating, another option is to work with your property management company to find available units at a sister property or even in another state. Talking with your property manager and explaining your situation will always help you find the right solution for you, Atkinson says. Of course, there may be fees associated with breaking your lease no matter how you go about it, so be prepared for that expense. On Point HomevestmentsWant to create wealth through HOME-OWNERSHIP? Build equity.Home equity is the percentage of your home’s value that you own, and it’s key to building wealth through homeownership. Let’s take a closer look at how to build home equity without blowing your budget — and how to access it when you need it. How much equity do you have? Equity is easy to calculate when you first buy a home because it’s basically your down payment. For example, if you put $11,250 down on a $225,000 home, your down payment is 5 percent and so is your equity. From 2016 to the first quarter of 2018, most first-time home buyers in the U.S. started with about 7-percent equity, according to Inside Mortgage Finance. This is encouraging because it shows you don’t need to spend years saving for 20 percent down or more before you buy. Repeat home buyers started with more equity, at about 17 percent. How to build your equity Here are six ways your home can create wealth for you. Some require time, money — or both. A lender can help you decide what works best for you. 1. Let your home appreciate Building equity through appreciation can take little time or a lot, depending on the market. With home prices going up like they have in recent years, appreciation has been a boon for many home owners. Zillow research indicates that the median home value grew from $185,000 in April 2016 to $216,000 in April 2018. If you bought a home for $185,000 in April 2016 with a down payment of $12,950, your beginning 7-percent equity would have grown to 23 percent by April 2018. We calculate this by subtracting your current loan balance ($165,600) from your home’s current value ($216,000). Then we divide the difference by your home’s current value. One-eighth of this additional 16 percent equity is from paying down your mortgage, and the rest is market appreciation. If you waited two years and bought the same home in April 2018 with a 20-percent down payment of $43,200, you started off with 20-percent equity. You also used 3.3 times more cash to make the purchase. And here’s the kicker: Your total monthly housing cost would be the same — about $1,050 in both cases. This example illustrates two things: First, the power of home appreciation. It’s a lot like buying stock and benefitting as its value goes up. But there’s also a difference: While you’ll pay capital gains on rising stock value, you’re exempt from paying taxes on primary-home capital gains up to $250,000, or $500,000 for married couples. Second, waiting to “save enough” isn’t the primary factor in determining if you can afford to buy a home. When it comes to qualifying for a loan, lenders do indeed look at your down payment. They’ll also want to know how much you’ll have in cash reserves after closing. But there are lots of options for low down payments that require minimal reserves. Your monthly budget is the primary factor lenders consider when deciding whether you can afford a home. Lenders will allow you to spend between 43 percent and 49 percent of your income on monthly bills, which is actually on the high side and could strain your budget. Since 2016, most first-time buyers have spent about 38 percent of their income on housing and other debt, which is a pretty safe cap for budgeting. 2. Make a larger down payment You can do this but, as we’ve seen, waiting to save extra cash can go against your broader financial interests if you lose the chance to build equity through appreciation. Therefore, you must strike a balance among down payment, monthly budget and savings for other priorities. A good lender can provide rate and market insight to help you do this. 3. Use financial windfalls Take advantage of work bonuses, family gifts and inheritances to pay down your mortgage. If you do pay down in lump sums, see if your lender will recalculate (or “recast”) your payment based on the new, lower balance. 4. Make biweekly payments Make mortgage payments every two weeks instead of once a month. Over the course of a year, this will add up to 13 monthly payments instead of 12. You’ll build equity faster and shave five to six years off a 30-year mortgage. Just make sure your lender isn’t charging extra for processing semimonthly payments. 5. Cut your loan term in half Take out a 15-year mortgage instead of a 30-year mortgage, and you’ll build equity twice as fast. Two caveats here: You’ll have a significantly higher monthly payment and, because of that, you may have a tougher time qualifying. 6. Make home improvements New appliances or cosmetic features like paint are unlikely to increase value. Only big improvements like new kitchens, or additional bathrooms or other rooms will add meaningful value. Make sure the cost of such improvements will create the added value you’re looking for. How to use your equity You must borrow or sell your home to use your equity. The three most well-known ways to get to your equity through borrowing are a home equity line of credit (HELOC), home equity loan or cash-out refinance. Compare the pros and cons of each. Rates are rising right now, so these borrowing options might cost more in the future. Talk to your lender to determine the best approach for you. On Point HomevestmentsNothing eases the pains of moving like a fully refunded security deposit. Make sure you get your cash back with these expert tips.Getting your security deposit back after you move may feel like an impossible feat, but it isn’t. Remember that your security deposit is essentially your money, so not all hope is lost when it’s time to move out. “It’s the landlord’s obligation to return [the deposit] at the end of the lease,” says Abbie Philpott with move-out company Pleased to Clean You. Here’s some expert advice for making sure your security deposit money goes back into your wallet — where it belongs. Start planning when you move in Take precautions when you move in to save time (and money) when you move out. To avoid getting charged for damage, use removable poster putty or removable hooks to hang things, and use felt pads to protect wood floors from scratches. Stay organized You know all of those rental-related documents you received when you moved in? Olivia Joyce with end-of-tenancy cleaning company Move Out Mates suggests reading them thoroughly and keeping all of them in one place. “Research the proper procedures for ending your rental agreement, and comply with them,” she says. Document everything Unfortunately, “fair wear and tear” is subjective. “I’ve seen cases in which landlords stretch this phrase to the limit,” Philpott says. She urges tenants to photograph everything in the rental property to serve as proof of the property’s condition. While photo documentation is great, sometimes it’s not enough. “Take a video walkthrough of the unit when you first move in and again when you move out,” suggest John and Melissa Steele with Team Steele San Diego Homes. If the property manager tries to keep your deposit, your video will serve as proof that you kept the rental in quality condition. “It makes it very hard for them to argue with you,” the Steeles add. “It has helped us save a few hundred dollars, and it only takes a few minutes.” Further, keep a record of each time you contacted your property manager to report maintenance issues. And whenever reporting maintenance requests, do so via email or through a reporting system that sends you a confirmation. This serves as proof for your record keeping. Contact your landlord Confirm how far in advance you need to alert your landlord about your move-out date. While your rental agreement may already note this, a quick conversation serves as both a helpful confirmation and a courtesy to your landlord. Clean thoroughly In addition to the standard vacuuming and dusting, plan to do a serious deep clean if you want all of your deposit money back. “This means behind and beneath appliances, plus details like light switches, door frames and more,” says Joyce. And don’t forget to confirm whether your rental property is required to be professionally cleaned. If so, keep your service receipt as proof for your landlord. Move out on the same day as your roommates If possible, coordinate a move-out day with your roommates. “You don’t want to leave it up to your roommate to make sure the apartment is perfectly cleaned and ready for the next tenant,” says Seth Wanta, Chicago resident. “You also don’t want your roommates to move out before you, leaving any junk for you to clean up. Make it a team effort!” Do a mock inspection with friends Invite some trusted friends over and go through your move-out checklist together. You may be surprised by how many things you would have missed if you went through your checklist solo. Joyce suggests marking every damage or deterioration, because some of them are the landlord’s responsibility, while others should be deducted from your deposit. Once you know who’s responsible for what, you can fix any issue that occurred during your occupancy. Have your landlord do a mock inspection Ask your landlord to do an unofficial inspection before your move-out date. This not only helps you assess what needs fixing but also allows both of you to get on the same page about what needs additional cleaning or repairs. Give yourself a few days between this inspection and your move-out day so you have time to correct anything your landlord may be unhappy with. Do necessary repairs Small repairs like replacing light bulbs, filling nail holes and unclogging drains are small things that make a big difference. “They’ll take you no more than an hour to complete, but they’ll raise the general condition of the property,” says Lauren Haynes, a supervisor with Star Domestic Cleaners. “The landlord will definitely appreciate the work done and will be less likely to claim deductions from the deposit.” Additionally, Kristen Chuber with Paintzen advises painting a coat of the original paint color on any walls with scuffs or holes. Chuber suggests either going a DIY route for around $50 or hiring a service and asking for cheaper “whiteboxing” rates. “Depending on the condition of your walls, this could be more cost-effective than losing that money out of your deposit, especially if your rental is small,” she says. And if you don’t have the funds for either option? “The next best thing I’ve seen is the Magic Eraser,” Chuber adds. “It’s been my BFF when it comes to getting rid of scuffs and marks.” Research local laws It’s illegal in most states for a landlord to keep your security deposit without explanation, so research renter’s rights related to security deposits at the city, county and state level. Good starting points for this information are the websites of your state’s attorney general and the U.S. Department of Housing and Urban Development. While your property manager should already be aware of these regulations, you should be too. Landlord-tenant laws exist to help you, but be your own advocate. Finally, while following these 10 suggestions will certainly go a long way, so does being nice. Patience and politeness are memorable qualities, especially if you live in a large apartment complex where plenty of other residents are moving out around the same time as you. If thinking about the process of getting your security deposit back is daunting, rest assured that it doesn’t have to be. With some planning and clear, considerate communication, you’re well on your way to getting your hard-earned deposit money back into your hands. On Point HomevestmentsGet those rainy day funds in order — you're going to need them.You’re excited because you just found the perfect home. The neighborhood is great, the house is charming and the price is right. But if you’re a first-time home buyer, you might find out that the price is pretty far from perfect. If you’re shopping for your first home, prepare for additional — and often unexpected — home-buying costs. They catch many home buyers unaware and can quickly leave you underwater on your new home. Expect the unexpected For almost every person who buys a home, the spending doesn’t stop with the down payment. Homeowners insurance and closing costs, like appraisal and lender fees, are typically easy to plan for because they’re lumped into the home-buying process, but most costs beyond those vary. The previous owners of your home are the biggest factor affecting your move-in costs. If they take the refrigerator when they move out, you’ll have to buy one to replace it. The same goes for any large appliance. And while these may seem like a small purchase compared to buying a home, appliances quickly add up — especially if you just spent most of your cash on a down payment. You’ll also be on the hook for any immediate improvements the home needs, unless you negotiate them as part of your home purchase agreement. Unfortunately, these costs are the least hidden of those you may encounter. When purchasing a home, definitely hire a home inspector (this costs money too!) to ensure the home isn’t going to collapse the next time it rains. Inspectors look for bad electrical wiring, weak foundations, wood rot and other hidden problems you may not find on your own. Worse still, these problems are rarely covered by home insurance. If an inspector discovers a serious problem, you’ll then have to decide if you still want to purchase the home. Either way, you’ll be out the cost of hiring the inspector. Consider the creature comforts Another cost is your own comfort. It’s easy to not think fully about what you’re expecting from your new home until after you move in. Are you used to having cable? If so, is your new home wired for cable? It’s much harder to watch a technician crawling around punching holes in your walls when you own those walls. And if you’re moving from the world of renting to the world of homeownership, you’ll probably be faced with much higher utility bills. Further, you could find yourself paying for utilities once covered by a landlord, like water and garbage pickup. Plan ahead The only ways to face the unknown and unexpected are research and planning. This starts with budgeting both before house hunting and throughout your search. Look at homes in your budget that need improvements, and then research how much those improvements could cost. Nothing is worse than buying a home thinking you can fix the yard for a few hundred dollars and then realizing it will cost thousands. There’s really no limit to how prepared you can be. Say you find a nice home that’s priced lower than others in the area because of its age. You may save money on the list price, but with an older house, you could be slapped with a much higher home insurance payment, making the house more expensive in the long run. This is where preparation comes in. Research home insurance and property prices in the areas you’re considering to make more educated decisions before you ever make that first offer. Clearly define how much you intend to put toward your down payment, and then look at how much cash that leaves for improvements and minor costs, like changing the locks. That way, when you find a house at the high end of your range, you’ll know to walk away if it requires a new washer and dryer or HVAC system upgrade. Establish a rough estimate for as many costs as you can think of, and be extremely critical of homes at the top of your budget — otherwise, you could easily end up being house poor. Know your budget and plan ahead. Buying a home is a lot less scary when you know what you’re getting into. On Point HomevestmentsA lot can happen between an initial offer and closing day. Meet the counteroffer ...Buying a home is rarely as simple as making an offer and paying that offer out. Negotiations can go back and forth for weeks before the seller and buyer are both satisfied. The vehicle for this negotiation is the counteroffer — a vital and complex rejection and counter to an offer made by either party. Counteroffers are typically handled between real estate agents and are time sensitive. Selling or buying a home is more of a process than a transaction, so it’s important to understand counteroffers before you make your first offer. Why was I countered? As a home buyer, if you make an offer below list price, the seller may choose to reject, accept or simply let the offer expire. If there are multiple offers, the listing agent will lay out the options for their client and then notify all buyers’ agents of the choices. Sellers may also counter your proposed closing date. If they need to move out quickly, they may want to push it earlier. They may also ask to rent the property for a time after the settlement. Price and closing date negotiations are common from both parties, but there are even more reasons sellers can potentially get countered. The condition of the home is likely the biggest factor here. As home buyers conduct ongoing research into the home, any problems with the condition of the house can result in a counteroffer. If you’ve chosen to take appliances with you when you move, buyers may also look to negotiate for those. Appraisals are another reason for counteroffers. If an appraisal comes in below the agreed-upon sale price, it will affect the amount the mortgage company will lend to the buyer. Negotiation power When reviewing a counteroffer, it’s important to have an experienced real estate agent who can capitalize on your advantages in a negotiation. Both sellers and buyers can take steps to put themselves in an advantageous position through planning and smart counteroffers. Knowledge is power in negotiations, so try to glean as much information about the seller or buyer as you can. Your agent will also seek information from the other agent on your behalf. Sometimes sellers use the pending sale of their home to finance another, meaning they have a truncated timeline and could be more eager to make a deal. Similarly, buyers who have terminated a lease may be desperate for a place to live and more willing to negotiate. If you’re selling a home with known issues, anticipate how these problems may put you at a disadvantage during negotiations. A leaky roof may not be discovered until after buyers order a home inspection. Depending on the cost, they may ask the seller to either fix the roof or deduct the cost of a new roof from the sale price. These types of issues put sellers at a distinct disadvantage because they have to either pay for repairs, lower the selling price, or reject the counteroffer and hope the next buyer doesn’t notice or care about repairs. This is why it’s worth the money (around $500) to pay for an inspection before listing a house. Preparation can save you headaches and money down the road. Responding to a counteroffer If you’ve received a counteroffer as a buyer or a seller, carefully review every aspect. Real estate agents, apart from yours, are under no obligation to ensure you read the full contract. So make sure you read everything carefully before you sign. With each individual counteroffer, consider every aspect of the sale, including old and new information. If you made an offer above the list price, there is always the possibility for an appraisal to come in low. If you are responding to a counteroffer before an appraisal or inspection, keep those at the forefront of your mind. Prepare yourself for future counteroffers once they are completed. Whether you’re selling or buying a home, establish a baseline for when you will walk away from a sale. As a buyer, you don’t want to spend so much on a home that you move in with no cash for improvements and repairs. And as a seller, you should know how much you want to make off the sale. With a measured and informed approach, counteroffers can be your friend. Communicate often with your agent to let them know what you want from the sale, and never be afraid to walk away if things go south. On Point HomevestmentsThe strength of your investing team goes a long way in determining your success. Whether you close one deal a year, or one a month, at some point you will rely on your team for help. Keeping your real estate agent, attorney, wholesaler and contractor sharp and motivated is a hidden key to success. How you treat them often determines just how hard they will work for you the next time you need them. If you constantly ask for a rush or to lower their fee eventually they will have enough and find other people to work with. On the flip side, if you are generous with your compliments and don’t nickel and dime them you can bet they will go the extra mile if you ask them. Your team has a direct impact on your success and your reputation. Here are five tips to keep them motivated and productive.
The little team building actions you do help shape and define your team. A good team makes your life easier by freeing up time to focus on areas you are needed most. On Point Homevestments |
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