Five Common Mistakes First-Time Home Buyers Make

Without question, first-time home buyers can be eager to jump into home ownership...and it's understandable!  It's a very exciting time when you finally decide which direction your life is going, your career is taking off in the right direction, and you decide to plant roots.  However, real estate experts say they see many first-time home buyers committing the same mistakes time and time again.  This is also understandable!  Unless you've gone through the home buying process, not only can it be intimidating, it can be a real mystery.  Here are some of the most common mistakes first-time buyers make, as identified by experts in a recent CNBC article:

1. They’re unprepared to compete against all-cash offers.  

Buyers need to be ready to make a quick decision if their housing market is heating up.....A housing market can turn on a dime, and when there are more shoppers than homes to be shopped, quick decisions are a must!  Buying a home is “really like finding a job – it’s going to take a lot of time to prepare,” says Cara Pierce, a certified housing counselor with ClearPoint Credit Counseling Solutions. “That way, when the deal comes along, you’re ready to pounce on it.” Housing experts say buyers should prepare well in advance of their search, and have already saved as much money as possible for a down payment.  Before they shop, they should repair any credit report blemishes, and have already gained pre-approval for a loan.  Your realtor can help you with these important steps....They know the best game plan as they begin your house-hunting journey, and they will help to place you in the best position to compete with other shoppers!

2. They place a car ahead of the home. 

Lenders are going to scrutinize applicants’ debt-to-income ratio when assessing how well they can afford a potential mortgage payment. Consumer debt has gone on average from $40,000 in 2010 to around $51,000 today, according to David Norris, president and COO of loanDepot, a non-bank mortgage lender. "It would be much easier to own a home if you can show a history of saving and not have gotten yourself into too much debt," Norris told CNBC.  As mentioned earlier, moving from renter to owner takes time and preparation.  The best way to be prepared is to keep your debt ratio to a minimum -- at the same time, you want to establishing good credit by paying all bills on time -- and getting approved for a loan will be a much easier process for you.

3. They place too much emphasis on online loan information.  

Online sites can be good for general information about loan products and estimated costs, but experts recommend visiting with mortgage lenders face-to-face.  This will help to demystify some of the process and to take into account your specific situation.  Your realtor has relationships with many lenders, so rely on them for some great advice and referrals!  It is best to go to different places and talk to loan officers to get a feel for all types of loans -- there are several options out there!  Pierce says, "Sometimes a company won't charge an origination fee, but then the interest rate is higher … and in some cases you can put many of the upfront costs—closing costs, title insurance—into the loan, which makes your balance larger."  The best advice is be a savvy shopper...and a savvy student.  It can be time consuming to research on your own, but having this knowledge is necessary!  This is a BIG purchase, so you want to educate yourself as much as you can.  Learn about the different types of loans that are out there, and which loan would work best for you and your family! 

4. They rely too much on online home values. 

Some real estate websites are giving buyers a false sense of home values, the CNBC article notes. "If a buyer believes that the actual value of the property is $1.1 million [as listed online] when it's really $1.3 million, it's a real disservice to the client,” says John Barrentine, co-founder and CEO of RED Real Estate Group. “You really should [spend time] with someone that understands the market, someone who's there day in and day out." Home buyers can get the best feel of the market by working with a real estate agent they know and trust.  Home buyers should also drive around a variety of neighborhoods to get a sense about homes that may be less valuable or even more valuable than what they originally perceived by viewing them online.

5. They forgo the home inspection. 

About 10 percent of homes recently purchased weren’t inspected by a home inspector, according to Bill Loden, president of the American Society of Home Inspectors. Some buyers were trying to cut down on the costs of hiring an inspector to investigate a home, which usually averages about $450, but defects uncovered later could potentially result in the loss of thousands of dollars. "It takes a trained eye to be able to see the problems that can exist in a home," Loden said. "The inspection can also give the first-time buyer a bit of a schooling on the house and how to maintain it." Buyers should also be prepared to ask questions about conditions that are common to their specific areas.  Issues include radon gas in Midwest, sewers in California, and active clay soils in Dallas that can lead to foundation issues, the CNBC article notes. The home may require additional inspection from a specialist to rule out potential problems.

Some information included here is from the source: “8 Biggest Mistakes First-Time Homebuyers Make,” CNBC (July 17, 2014)

I’m thinking about selling!  When should I list my home?

Like several dimensions of the real estate game, determining when you should list your home is both an art and a science.

The art comes in when you work with an experienced Realtor who has knowledge of the local market, knows your neighborhood and understands the ebb and flow of home sales.  The science part of your decision is easier, because a Realtor tracks the data on how long it takes -- in general -- for homes to sell on a monthly basis.

According to the National Association of Realtors, the median time on market for all homes was 93 days in September 2013, little changed from 92 days in August, but 10.58 percent faster than homes were selling in September 2012.

You can see updated data on the realtor.com Monthly Real Estate Trends Report that tell you what the median age is for listings in your area.  It also tells you whether homes are selling faster or slower than in the previous month and during the same month in the previous year. You can also ask a Realtor what the average time is for a home to sell once it’s listed in your community. 

Remember, though, that statistics only look at the broad picture and won’t be exact in predicting how long it will take to sell your particular home.

There are several points to take into consideration about timing your listing date. Consult with your Realtor about these points:

Condition and Price

Remember, in order to sell your home as quickly as possible, it needs to be in the best possible condition and priced appropriately when it hits the market. If you want to move in three months or six months or even in one month, start working on your home now.   As in...today!  Come up with a good game plan.  Give yourself a "to-do" list with reasonable expectations, and simply work through your list. 

You need to compete with the buyer expectation of finding a “move-in ready” home!  This means your home needs to be as clean as possible, neutralized in terms of your décor and as "clutter-free" as possible.  The length of time it will take to get the home ready for sale depends on whether you’ve kept up with regular maintenance.  It may also depend on how willing you are to admit that "most" people will not find your magenta and black striped bedroom as appealing as you do!   

If you can rid your closets and other storage areas (like the pantry, linen closet, etc) of all things you're not currently using, or things you've been storing.  Those areas will appear neater, spacious, and tidy.  That's the idea!  Potential buyers will gauge their "stuff" (where they would put it) by how much "stuff" you have....And you always want them to think their "stuff" will fit comfortably and neatly in the designated storage areas or closets.  Buy some large totes, then label and fill them with non-essential clothing, sheets or towels.  Store the totes in a corner of the garage!  It will be nice when you move as well; those totes are already packed for you.   

On the pricing side, an experienced Realtor can share a comparative market analysis of homes that have recently sold in your area, the current competition, and homes that have been taken off the market. Keep in mind that if you overprice your home at first, it will likely take longer to sell and even at a lower price.  This often occurs because potential buyers perceive it as "sitting" on the market for too long.

Think About the Season

Traditionally (as realtor.com has informed buyers in other articles), the spring market is the most robust for home sales, which then slow down a bit in the summer, pick up again in the fall, and slow down again around the winter holidays. This doesn’t mean you should only sell in the spring, but you should think about the fact that fewer buyers will be looking for homes between Thanksgiving and New Year’s. On the other hand, you may have less competition from other sellers in "off" times, which is definitely a good thing!  The fact of the matter is, today, people need to buy and sell homes in all seasons due to job relocation, school considerations, and just life in general.  You need to bring your best "product" to the market despite season, so make sure your project list is complete before introducing your home for sale. 

Negotiate

Everything is negotiable!  You can negotiate with your buyer to establish a settlement date that’s convenient for you both, or you could negotiate to rent back your home after closing, for example, should you have to delay your move.  Regardless of when you put your home on the market, you should always have back-up plans for how you’ll handle the situation if your home lingers on the market longer than you anticipate or, better yet, sells very quickly! 

Colors! Colors! Colors! What colors are most appealing to home buyers?

Colors! Colors!  Colors!  What colors are most appealing to home buyers?

It is no secret that a lot of work goes into preparing a home for sale!  One trend is toward using home staging professionals to assist in showing homes to potential buyers. Home staging takes into consideration many factors, but few are as important as using the best paint colors.  Using the wrong paint colors can send potential buyers reeling. With a little thought, paint colors can actually attract buyers.  Follow a few basic rules:

Exterior Colors 

With exterior colors, it is important to realize that some colors simply clash with their environment. It might be fun to live in the only bright yellow house on the street, but realize that the buyer is new to the neighborhood and does not need the attention of a canary yellow home. The best colors should take into consideration other homes in the neighborhood and environmental surroundings. According to Bob Vila, former host of "This Old House," earth tones play well in natural settings such as wooded lots. The color also should take into account other features of the home.  The right exterior color takes into account the roof color, stonework, bricks and other elements of the home. The color selection also depends somewhat on the vegetation on the lot. Shrubs and trees might impact your choice of exterior color. Lastly, some homes have an architectural style that demands conforming to some traditional colors. As Vila says, Colonial-style homes often look their best with white exteriors, but ranch-style homes are more appealing with more color.

Living Room Colors

The key to living room color is to combine warmth with neutrality. Warm colors are inviting, and give a living room more character than plain white walls. Meanwhile, the use of neutral colors ensures that the walls do not conflict with the potential buyers’ plans for the room. Remember, home buyers already have furniture to bring into the home, and they are unlikely to paint or buy new furniture to accommodate bold colors in a living room. Good neutral colors feature creamy whites, muted beiges and light gray tones. A living room is the most likely room to be repainted at some point. Therefore, it is the one room where you can be a little stylish. Check on trends and consider incorporating those color styles into a living room. It might help you sell your house.

Kitchen Colors

The key to kitchen color is to pick something bright. Most buyers want a bright kitchen. After all, this is the place where meals will be prepared, and they need to see the food they are dicing, slicing, chopping, frying and baking. How can you tell if your steak is ready if you can’t see the color? Light colors help add brightness to the room. Light bounces off of them. At the same time, plain white walls are dull and unappealing. Pale yellow, light olive and warm beige are great choices for kitchen colors.

Bedroom Colors

Bedrooms are designed for relaxation. They are not areas of a home buyers expect to showcase for guests. Therefore, there is little need to establish trendy looks in these rooms. Instead, bedroom colors should be mild, soft tones. Eggshell whites, beige tones, lighter grays, light yellows and light olives often work well in bedrooms.

Bathroom Colors

Many homeowners make the mistake of going with bold colors in bathrooms. An essential approach to bathrooms is to select colors that emphasize space. Bathrooms are often relatively small spaces to begin with, and a small bathroom can turn many buyers away. After all, who wants to knock out a wall to make more bathroom space? Warm whites are great for making bathrooms look larger than they are. Stay away from darker colors. Deep reds, browns, yellows and blues make bathroom walls leap toward a viewer. This makes the room look extremely small.

I'm ready to sell! How do I get my home market-ready?

·         I'm ready to sell!  How do I get my home market-ready?  

Step 1: Reason for Selling

It is often more emotional to sell a home than to buy a home.  The reason for selling your home may be a determining factor in the urgency of the sale.  Urgency may also have an effect on the price of the property.  It is important to take the following factors into consideration.  They can influence the sale of your home:

1.      > Reason for selling

2.      > Price

3.      > Location

4.      > Condition of property

5.      > Size

6.      > Design / style

7.      > Accessibility

·         Step 2: The Cost of Selling

It is very important to first calculate the expenses that may be incurred while selling your home. This knowledge is necessary because it helps you to determine a good price for the house, as well as the potential profit you can realize.  The cost of selling your home may include things like commission to be paid to the agent, taxes, advertising costs or specific reports, such as a property inspection.

·         Step 3: Price

The most important factor when putting your home on the market to sell is setting the right price. The price at which your property is marketed can make or break the deal.

Over-pricing of the property may result in:

1.      > A smaller buyers' pool

2.      > A prolonged stay on the market that will result in lower offers being submitted

Under-pricing of the property may result in:

3.      > You losing money on your investment

4.      > A buyer offering an even lower amount due to a negative perception of the property or area

Step 4: Location

It is often said that the three most important factors in selling a home are "LOCATION-LOCATION-LOCATION."  Although you cannot do anything about the physical location of your property, it plays a very important part in the marketability of your home. So, it is important to take the following into consideration:

1. > Is your property priced in relation to other offers in your area?
2. > What type of neighborhood is your property located in - well-established, up-and-coming, transitional?
3. > Is your property located in an urban or rural area?

Step 5: Condition of the Property

The condition of your property is always a factor in how quickly your home sells. It's a fact: acquiring the highest market value and elevating your home above the others in the same price range often comes down to first impressions. Here are some inexpensive ways to maximize your home's curb appeal:

1. > Keep the grass cut and yard clutter to a minimum.
2. > Apply fresh paint to any wooden fences and your front door.
3. > Clean windows inside and out.
4. > Wash or paint your home's exterior.
5. > Ensure gutters and other exterior fashions are firmly attached.

Step 6: Staging

Did you know well-placed furniture can open up rooms and make them seem larger than they are? Or, that opening drapes/blinds and turning on lights make a room seem bright and cheery? It's true, which is why staging your home to look its absolute best is an important factor in the selling process.

Here are some inexpensive ways to highlight your home's best features:

1. > Clean or paint walls and ceilings.
2. > Clean all flooring and fixtures - lights, fans.
3. > Repair all plumbing leaks.
4. > Remove excessive wall hangings, furniture and extra personal goods.
5. > Turn on all lights and open the drapes during the daytime.
6. > Play quiet background music and infuse your home with a comforting scent.
7. > Vacate the property when and if it's being show to prospective buyers.

Step 7: Accessibility 

Accessibility is a major issue in many cities. Again, you cannot do anything about your home's accessibility to specific things, but it does play a role in the price of your property. Your agent will work with you to highlight the places of interest that are most accessible to your home.

Here are a few important areas to think about:

1. > Public transportation
2. > Main roads
3. > Shopping centers
4. > Schools and other educational institutions
5. > Outdoor areas - public pools, parks, playgrounds
6. > Entertainment