When a buyer wants to buy your home, they are spending a lot of money to convince you that they are the right ones for the deed. However, after closing costs and a large down payment, it’s no wonder that buyers are skeptical of signing on the dotted line. Though, if you have a home warranty in place, you might be increasing the likelihood of your home selling, even if the price is higher than the buyer would prefer. Home warranties can help sell your home; here’s how.
What a Home Warranty Is
For those who have only heard about a home warranty, it’s time to learn the basics. A home warranty is an insurance plan that covers the repairs and replacement of appliances that are in your home, such as the refrigerator and stove, the electrical system and plumbing system. If these appliances and systems should break down during the ownership of the home, they can be repaired or replaced for a small fee. The annual cost of this kind of home warranty plan can vary, but it’s typically around $400 a year – a reasonable price, given the coverage.
What You Need to Keep in Mind with Home Warranties
However, a home warranty isn’t going to save the buyer in every case. If you have the home inspection ahead of time and it’s noted that there are problems in the plumbing or electrical wiring, those areas will need to be fixed at full price. Those repairs will not be covered until a new home warranty is approved. The new buyer in accordance with their particular insurance can deem those repairs a ‘pre existing’ condition, just as a healthy insurance company might do the same when you are applying for a new policy.
The repairs and replacements will also have limited terms, so that’s something to keep in mind when choosing the best policy. Some warranties will not cover basic service calls, though they will cover repairs that are directly related to the problems. It’s a fine line, so be sure to read the terms of the warranty carefully before choosing the right one.
Why Buyers Love Home Warranties
These home warranties give new buyers a sense of peace when they buy a new home. Due to the fact that, in most cases, any problems that arise will be able to be fixed, there is less worry they will need to spend a lot of money when they are first settling into their new home. Instead of spending thousands of dollars, the new owner can focus on other important costs.
As a seller, you can purchase the home warranty while you are selling the home and then transfer this warranty to the buyer when the sale is complete. This provides an additional benefit to the buyer without their having to deal with buying the warranty on their own.
Of course, you will also want to make repairs and do general fixes before you put the house on the market. This will help create the right impression with the buyer in the first place, but the home warranty can turn their head and make them come in for a second look.
With the competitive housing market right now, any little thing can make the difference between a sale and a home that sits on the market for months. To help increase the odds of your home being sold, why not add a home warranty to the deal? In addition to a fresh coat of paint, your home is going to stand out from the rest as the one that should be bought by that seller.
Tags: defaults, distressed properties, fixer uppers, Foreclosures, foreclosures for sale, real estate for sale
Posted by
admin on Dec 25, 2007 in
Foreclosures,
Marketplace,
Real Estate,
Selling Professional real estate investors know that buying foreclosure real estate is difficult, frustrating and at best a complete waste of time. That is, it can be all of those things to an unsavvy new investor straight out of a “Make Big Money In Foreclosure Real Estate” seminar. But for the experienced investor, foreclosure real estate really can be a satisfying source of good income – and a rare opportunity for first time home buyers.
The Right Type Of Person
Most home buyers searching for a personal residence do not even look at foreclosure property because of the imagined problems. But they should. It is puzzling in a way. There are many people starting out with little money or credit who buy a “fixer” and spend considerable time and money fixing it up while they are living in it. They then turn around and sell it to move up to a more expensive fixer and start the process all over again.
If this describes you, you should really think about a foreclosure property. But you need to equip yourself with a little knowledge first so you don’t suffer the pain and disappointment common to so many attempting this route. Let’s start with the basics.
Foreclosure or Pre-foreclosure
The term “foreclosure” makes most people think of a scene in which a home is auctioned off on the court house steps and you bid against other interested investors. You do not want to do this. It is virtually impossible to gain the edge on the experienced bidders who have done this many times. What you need is a “pre-foreclosure” property.
A pre-foreclosure home is one on which the bank has begun foreclosure because the owner has missed several mortgage payments but it has not yet reached the auction sale stage. A key to successful pre-foreclosure investing is to gain the trust of the homeowner so that you can gather the information you need and move quickly to put together a deal that everyone will agree to.
Pre-foreclosure Properties Can Be Profitable
Done right, purchasing a pre-foreclosure property can be a profitable experience even for a first time home buyer. You have sufficient time to research them because you can purchase them up until the day of the foreclosure auction. When you purchase a pre-foreclosure, you help save the home owner’s credit by avoiding a foreclosure auction. You should remember this. You are not taking advantage of the homeowner in distress. You are helping him/her to avoid a current and many future credit related problems. Pre-foreclosure investing makes everyone involved a winner.
Lenders typically don’t bother explaining borrowers’ rights and options. They just want to collect their money. You have the opportunity to help homeowners avoid foreclosure, salvage their credit rating, and get on with their lives. And you can gain a home of your own – or resell it and make money by doing it.
You can end up saving tens of thousands of dollars on the purchase of your home by buying a pre-foreclosure property. It can be your opportunity to buy low and sell high, quickly maximizing your equity.
Repairs May Be Needed
It is not all gravy. Many of the best opportunities you uncover will need a lot of tender loving care to get them back in shape. They may need carpeting, up-dated or repaired appliances, electrical or plumbing. Roofs may need to be replaced. Most of them will probably need painting and some landscaping work. If a person is short of money and facing foreclosure, these things simply do not get any attention.
Summary
Buying a pre-foreclosure property can benefit both yourself and the current home owner. It is not always easy but it can be very rewarding. Unless you are an experienced handyman yourself, you need to get an estimate from qualified professionals on what it would take to bring the home up to standard. Don’t rush or get discouraged. Buying a pre-foreclosure home gives you plenty of time to make unrushed decisions.
Tags: defaults, distressed properties, fixer uppers, Foreclosures, foreclosures for sale, real estate for sale
You’ve spent the last couple of months looking at different homes, discussing the pros and cons of each property you’ve seen, make an offer that you felt was fair and then have the seller reject it. You do this a few times when, at last, your offer is accepted. Your real estate negotiates the final details and the contracts are drawn up. You sign them and then sweat it as you wait for the seller to sign and return them. And then….FINALLY…you have it fully signed. Now you go through the excruciating mortgage application process, get approved, and then at the last minute something turns your home purchase dream into a nightmare. And what’s worse…it’s your own fault when the deal dies.
The two most common reason why buyers spoil their own deals are:
1. Buyers Remorse
2. Doing something to adversely affect their ability to get a mortgage
1. Buyers remorse. News media reports of sub-prime mortgages, dropping housing sales prices and rising housing inventories can put the fear of failure in your mind that the deal wasn’t a good decision. The news media’s ”bread and butter” are the doom and gloom stories. Your real estate professional that worked with you to put this deal together knows more and better about what is going on in the housing market where you bought then then any reporter. We also are able to explain in consumer terms if any of the factors mentioned in the news media apply to you. In the majority of cases, the national stories are very vague in applying the details to real-life examples. We are always there for our clients to help them through the whole process. We know that Buyer’s Remorse is normal.
2. Adversely affecting your mortgage qualification. The rule for this one is real simple to follow: Don’t do ANYTHING to change YOUR financial situation from what it was when you filled out the mortgage application. Don’t charge anything on your credit card for the “new house”. Don’t spend any of the reserve money you need for settlement; if it’s in the bank, leave it there. Every REALTOR can relate stories how their buyers, who were well on the way to the settlement table, started to celebrate too early about their home purchase that they caused the deal to go bad. Buyers should always remember 2 important points - a) the mortgage lender can do a final verification up to 24 hours before the settement date (and pull the mortgage committment IF any adverse items show up), and b) even though all home purchase contraxt in NJ contain a mortgage contingency clause (the buyer must be able to secure funding for the purchase, in the majority of cases through a home mortgage), if the buyer does ANYTHING to cause them Ithe buyer) not to be able to get a mortgage, they will loose any good-faith deposit monies that they put up when they signed the contract.
Buyers can get great deals in today’s market, but they must not be overcome with unnecessary fear, or make financial decisions that could harm their financial standing. Buyers should stand in place until the day of settlement and all papers have been signed. Don’t worry about your decision to purchase to the point that you worry yourself out of it and don’t start celebrating too early by spending your reserve or adding to your credit card balance; both of these extremes can ruin your dream. Remember, neither your real estate professional nor your mortgage lender is going to allow you to get into a situation that is not in your best interest.
Tags: buyers, contracts, deal breakers, home inventories, Marketplace, Real Estate
Whenever the consumer feels the financial pinch, they tend to cut back or put off major purchases such as a new car, appliances, or some high-end electronic items. But they tend to come back when there are bargains involved. Home purchases are not that much different.
Nationally, interest rates are down to near record lows, housing inventories are at 20-year highs, and house prices nationwide have softened. The “consumer comfort” index, according to ABC News and the Washington Post, shows that only 30 percent of consumers polled believe it’s a good time to spend their money. Hmm, that’s the lowest percentage for the index in 14 years. The Consumer Conference Board found the same thing through its widely quoted monthly Consumer Confidence Index. The Expectations Index plummeted to 68.7 percent in November from 80 percent in September, which explains why the ABC/Post index was down for the first of December.
But are the housing bargains out there? Absolutely!! How do we know that? We watch the housing market in many areas that we help home owners sell their homes and from different associations within our industry. The Mortgage Bankers Association survey recently conducted showed that loan applications more than doubled from the previous period. This was due to near record interest rates and the Refinance Index increased over 56 percent.
What does this suggest? That there are housing bargains out there and that buyers know them when they see them. We know our market areas and we help our clients find those bargains.
Tags: Buying, Finances, Marketplace, prices, Real Estate, Selling
Posted by
admin on Dec 1, 2007 in
Housing,
Real Estate,
Scams I just noticed this message on one of the boards that RE/MAX agents frequent. I thought it was important enough to re-post here.
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This is a Nov. 20 advisory from the RE/MAX International Legal Department being posted on remax.com and RE/MAX Mainstreet:
RE/MAX is concerned about online consumer fraud. It has come to our attention that some classified ads for rental properties featured on Craigslist have attempted to convince potential renters to pay rental deposits by incorrectly stating that a RE/MAX office would be facilitating the transaction.Responding to e-mail inquiries, the landlord says that he or she is out of the country and is working with a RE/MAX office in the country where he or she is located (in some versions of the scam, Greece) and has arranged for the U.S.-based RE/MAX office to send keys and a lease. In return, the potential renter is asked to pay a deposit using an online payment service or to overnight a check to an address that was claimed to be a RE/MAX office. However, there is no RE/MAX office involved in any of these transactions.
If you encounter any online advertisements like this, please be very careful. You can check the name, address and contact information for any RE/MAX office or agent on remax.com using the Find an Office or Find an Agent features on remax.com. Please feel free to contact the appropriate RE/MAX office directly to verify the information.
If you believe you have been the victim of an online scam involving the RE/MAX name, e-mail it to us at abuse@remax.net. If possible, please include the URL of the ad you responded to, and include full e-mail headers of messages you received so we can try to determine the message’s origin. In addition, you may wish to report the incident to the FBI’s Internet Crime Complaint Center (IC3) at ic3.gov or to Craigslist.
Useful links and information:
RE/MAX – Find an Office
RE/MAX – Find an Agent
Craigslist information: Avoiding Scams and Fraud or Report Spams or Scams
Internet Crime Complaint Center
How to display full e-mail message headers
Tags: abuse, beware, Craigslist, e-mail scams, online payments, RE/MAX, RE/MAX International, Scams
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