Real Estate Urban Legends

There are several television programs devoted to proving urban legends about hundreds of different topics wrong, and real estate is no exception. Seller’s basically handing their homes over to buyers, seller financing given out with no problems, and cosmetic work on the home for nearly nothing? All Urban legend! Real estate is definitely more affordable than it used to be and Realtor.com share a few myths that you may encounter in today's market.

Myth #1: Bad Credt,  No problem!

• Most sellers will need to pay their mortgage off before selling their home. If the sellers finance the home sale themselves opposed to requiring the buyer to take over the mortgage or providing other means to pay for the property, they then need cash available to pay the mortgage off.  Most buyers intend to use the earnings from their home sale to invest in the purchase of their next home.
• Even for the few sellers who are able to provide seller financing, they will more than likely opt out of the option because of the risk involved in collecting payments for 10-30 years.
• The sellers who will openly provide seller financing often want premium pricing and interest- some will also require not only a large down payment but a credit check.
• Although financing through a seller opposed to the traditional lender sounds like a great idea, you may be at risk as the buyer. If the seller fails to make a payment to the bank, you may lose your house to a foreclosure.
• A local attorney specializing in real estate to document the transfer and financing may be a good idea

Myth #2: “Fixer upper” saves money!

• Sellers typically update the painting and carpets to make the home look fresh and to get as much money as possible from the sell of their home.
• Homes in need of a little work aren’t selling as quickly today if at all, so they are doing more touch ups to make their homes look more appealing.
• It’s still possible to obtain a discount on a home in need of work but most discounts are going to be on homes with bigger projects needed such as a new roof, window replacement etc.

Myth #3: First time home buyer financing

• FHA loans are available to those whom qualify regardless of if they have owned a home (or two) before or even own one now.
• Most FHA programs still available involve down payments and/or closing cost assistance.
• The majority even require some cash be put into the transaction with the hopes that with the buyers own money put into the home, they will be less likely to walk away from the purchase. The other theory is, it takes some serious discipline and money management to save up for a down payment on a house, with that goal being obtained it appears a more responsible home owner would be present.

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How Foreclosures Are Priced

In this kind of market, we are seeing many more foreclosures than we have in the past which often leaves us wondering not only about the home itself but why it is priced lower than homes in the area. Realtor.com helped to shed light on how foreclosures are priced, here are a few points they mention...

First thing is first, once the lender takes possession of the foreclosed home, while there are many steps to be performed before the home goes on the market, a Broker’s Price Opinion (BPO) is prepared.

• The BPO is prepared in a similar way as an appraisal. A report is run with homes currently on the market as well as any comparable sold properties.  When the market value is established, the asking price can be determined. This is done by calculating what work needs to be done to bring the home up to standard.
• A requirement in the last section of the BPO, is for the prospective listing agent to provide an as is value, repaired value and a 30-day value. The 30-day value Is an opinion of what kind of offer the lender should receive within 30 days. The offer, or amount of the offer, can vary greatly from other surrounding homes, depending on the market conditions for that particular neighborhood.
• An asset manager typically orders one more BPO and appraisal before a pricing decision is made. Most foreclosures go on the market priced at par value excluding repair costs.

Do Bank Owned homes always need a lot of work?

• If you see a home on the market for $175,000 in a neighborhood of homes priced  at $200,000 you should have a great idea of how much work is needed.  Typically, the list price of the bank owned listing is priced accordingly that is why it is such a great price. Repair costs are typically estimated by using a professional at standard cost. These estimates are typically the buyers responsibility.

What if there are multiple offers submitted on a Bank Owned property?

Here is what you can expect:

• Say you decide to place an offer but find you are up against another offer, which offer will the asset manager be more likely to favor? If the offers are close in price, an owner over an investor will be chosen. Cash over finance unless the asset manager’s bank is being used. No inspection over inspection.  Needless to say, the easier path, with the least amount of bumps in the road, is what will be chosen in most cases.

Try to remember, the pressure an asset manager can be under is escalated. They not only have to get the most amount of money for the home in foreclosure they also have to sell it as fast as possible. What a conflicting roll when the lower the cost the faster the sale! 

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Maximize Space & Light in your Bathroom

Here are a few easy tips from the DIYNetwork to help you maximize space and light in your bathroom. If you are thinking of putting your home on the market, maximizing space and light in all rooms, especially the bathrooms, is key to a successful showing.

White and Wood

·         White molding mixed with a richly finished cabinet help keep the room light. Corner windows and sconces up-turned help to reflect light off the ceiling, keeping the space bright.

Night Light

·         Place pebbles below a clear glass countertop with blue or white LED rope lighting illuminating below for fabulous lighting.

Sticks and Stones

·         When natural-stone sinks are paired with log-haw wood, a nature setting is inevitable! Place a rough cut piece of wood at the top of dual mirrors. A glass waterfall in between the mirrors tops the space off!

Mix and Match

·         Don’t be afraid to use a variety of materials. Place a brushed-nickel bathtub on stones making an amazing contrast when placed next to a textured glass sliding door lined with rough wood.

Enjoy the view from all sides

·         Enjoy the windows allotted to you. A tub/shower placed next to a window allows for a view of the outdoors regardless your preference of bath or shower.

Mood lighting

·         Placing tea lights behind the tub helps to set the mood for relaxation.

Practicality Counts

·         If you have several kids in tow, it’s a great idea to think about making the most of your space. Three bathroom sinks and mirrors saves time. Automatic hand dryer and toothbrush sanitizer, saves not only money  but space!

Vanity Nightlight

·         Placing rope lighting under the vanity illuminates on the floor not only makes those midnight visits easier for the little ones but looks great as well.

Go Into the Wall

·         Frame recessed cubbies using reclaimed wood.  These great cubbies can be used for bath towels saving space. Hanging a chandelier over a self standing tub help to add a classic style with a unique feel!

Sometimes it might be easier to hire a professional to help you with these decorating decisions. Keep in mind real estate agents and stagers are a perfect resource to help you get started!

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