5 Deal Breakers that can blindside home buyers

 

Purchasing a home can be a complex endeavor for even the most well-prepared home buyer.  You’ve diligently saved for your down payment, followed the market, researched agents and now you are ready to make an offer on your dream home.  Don’t let these 5 “Deal Breakers” come between you and your new home.

    1. Big Purchases on Credit. It is tempting to buy the furniture for your new home or a new car for the garage before the sale closes. Take care if you are making these purchases on credit. Large purchases on credit can have a major impact on your credit profile which effects your mortgage application. It’s a better plan to wait until after closing or pay cash for these transactions or you may be putting that furniture in a different living room than you originally picked them out for.
    1. Overpaying. Before your bank will approve your mortgage they will appraise the home you are purchasing.  If they feel you are overpaying they are likely to decline your mortgage application. If you find yourself in this situation consult with your agent on renegotiating your offer to be more in line with the bank’s appraised value.
    1. Purchasing too close to Foreclosure. If you are making an offer on a house which is facing foreclosure be sure to have a closing date set before the foreclosure date. Have your agent work with the lender to structure closing before the house goes back to the bank and into foreclosure.
    1. IRS liens. You’ve heard the old saying “Death and Taxes”.  Back taxes and liens can derail your attempts to get financing for a mortgage so be sure to have your books in order before filing your loan application.
    1. Comprehensive Loss Underwriting Exchange (CLUE). CLUE is a database of insurance claims for both people and property.  Your home insurance rates are determined by the information about you and the property you plan to purchase which is contained in this report. Past claims for water damage, falling trees and even dog bites from present and past owners can multiply your insurance rates. Consult your agent about the CLUE report for your future home as soon as possible once your home purchase offer is accepted.

When purchasing a home there will be challenges which you can plan for and the unexpected hurdles.  By educating yourself as a consumer and choosing a well trained real estate agent you can avoid many of the pitfalls of 21st century home ownership.

What about you? Tell us if you have had any “deal breaker” experiences.

The post 5 Deal Breakers that can blindside home buyers appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

5 Deal Breakers that can blindside home buyers

 

Purchasing a home can be a complex endeavor for even the most well-prepared home buyer.  You’ve diligently saved for your down payment, followed the market, researched agents and now you are ready to make an offer on your dream home.  Don’t let these 5 “Deal Breakers” come between you and your new home.

    1. Big Purchases on Credit. It is tempting to buy the furniture for your new home or a new car for the garage before the sale closes. Take care if you are making these purchases on credit. Large purchases on credit can have a major impact on your credit profile which effects your mortgage application. It’s a better plan to wait until after closing or pay cash for these transactions or you may be putting that furniture in a different living room than you originally picked them out for.
    1. Overpaying. Before your bank will approve your mortgage they will appraise the home you are purchasing.  If they feel you are overpaying they are likely to decline your mortgage application. If you find yourself in this situation consult with your agent on renegotiating your offer to be more in line with the bank’s appraised value.
    1. Purchasing too close to Foreclosure. If you are making an offer on a house which is facing foreclosure be sure to have a closing date set before the foreclosure date. Have your agent work with the lender to structure closing before the house goes back to the bank and into foreclosure.
    1. IRS liens. You’ve heard the old saying “Death and Taxes”.  Back taxes and liens can derail your attempts to get financing for a mortgage so be sure to have your books in order before filing your loan application.
    1. Comprehensive Loss Underwriting Exchange (CLUE). CLUE is a database of insurance claims for both people and property.  Your home insurance rates are determined by the information about you and the property you plan to purchase which is contained in this report. Past claims for water damage, falling trees and even dog bites from present and past owners can multiply your insurance rates. Consult your agent about the CLUE report for your future home as soon as possible once your home purchase offer is accepted.

When purchasing a home there will be challenges which you can plan for and the unexpected hurdles.  By educating yourself as a consumer and choosing a well trained real estate agent you can avoid many of the pitfalls of 21st century home ownership.

What about you? Tell us if you have had any “deal breaker” experiences.

The post 5 Deal Breakers that can blindside home buyers appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Real Estate Buyer Tip: How to Find a Deal

If you are ready to buy a home in a seller’s market, don’t despair. Windermere Real Estate agent, Michael Doyle, shares how you can find a good deal on a great home, even in the hottest housing market.

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Myths and Truths About Millennial Home Buyers

In recent years there has been a lot written about millennials and their impact on the housing market. Because of this, there are also a lot of misconceptions about what this generation wants from a home. To start, it’s important to know that there are more than 71 millennials, which are defined as those aged 22-37. They also represent 34 percent of all home buyers which makes them tremendously important to the real estate market. We were curious if what we’ve read about millennial home buying habits is true and here’s what we found.

Simple, Functional, Minimal Maintenance

Millennials do not appear to be drawn to fixer uppers in the same way as prior generations. They want something that is “move-in” ready with minimal maintenance. They also value simplicity and function over extravagance which means they’re drawn to spaces that serve dual purposes and furniture that doubles as storage. The old adage “less is more” takes on new meaning for millennial buyers.

Location

Similar to older generations, millennials place a great deal of importance on location. The convenience to their job, friends, family, entertainment, and shopping is a must. But the rumor out there that they only want to live in city dwellings is a myth. Millennials are getting older and starting to have families, so like prior generations, many of them are moving away from the hustle and bustle of the city and into nearby neighborhoods with good schools and family-friendly amenities.

Digitally Engaged

Millennials have grown up surrounded by technology, so smart home technology is a high priority for these buyers. And they’re willing to pay more for it: a survey conducted by Wakefield Research states that millennials are willing to pay a 20 percent premium for smart home technology, such as voice assisted devices, smart phone-controlled security systems, electronic door locks, and doorbell cameras.

Experience over Luxuries

One of the main things we’ve learned about millennials is that they are not prone to conformity. They’re a practical bunch who places a very high priority on experiences and quality of life. Studies show that millennials would rather have discretionary income to pay for things like healthy food, gym memberships, and international travel than blowing their budget on an expensive home. In other words, they’re happy with a modest space so they have money left to spend on their quality of life.

In the end, millennial buyers aren’t that different from prior generations. They’re clearly a pragmatic group that sees their home more as a functional space than a symbol of their success. Technology definitely plays a far greater role for them than their baby boomer parents, but ultimately they still want a home in a nice neighborhood with good schools and access to friends, family, and nearby amenities.

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How to Get Started on Your Home Search

Whatever your reasons for buying, finding the right home in the perfect neighborhood, and at a cost that is within your budget, is no small task. But if you do your research and approach the process with confidence, you are much more likely to emerge at the end of the day with a house you’ll be proud to call home.

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Find a New Home in Four Steps

Whether you’re a first-time homebuyer or a current owner looking for a bigger home, the ideas below will help you better navigate that all-important first step: Finding a property that you like (and can afford).

The search for a new home always starts out with a lot of excitement. But if you haven’t prepared, frustration can soon set in, especially in a competitive real estate market. The biggest mistake is jumping into a search unfocused, just hoping to “see what’s available.” Instead, we recommend you first take some time to work through the four steps below.

Step 1: Talk to your agent

Even if you’re just thinking about buying or selling a house, start by consulting your real estate agent. An agent can give you an up-to-the-minute summary of the current real estate market, as well as mortgage industry trends. They can also put you in touch with all the best resources and educate you about next steps, plus much more. If you are interested in finding an experienced agent in your in your area, we can connect you here.

Step 2: Decide how much home you can afford

It may sound like a drag to start your home search with a boring financial review, but when all is said and done, you’ll be glad you did. With so few homes on the market now in many areas, and so many people competing to buy what is available, it’s far more efficient to focus your search on only the properties you can afford. A meeting or two with a reputable mortgage agent should tell you everything you need to know.

Step 3: Envision your future

Typically, it takes at least five years for a home purchase to start paying off financially, which means, the better your new home suits you, the longer you’ll most likely remain living there.

Will you be having children in the next five or six years? Where do you see your career heading? Are you interested in working from home, or making extra money by renting a portion of your home to others? Do you anticipate a relative coming to live with you? Share this information with your real estate agent, who can then help you evaluate school districts, work commutes, rental opportunities, and more as you search for homes together.

Step 4: Document your ideal home

When it comes to this step, be realistic. It’s easy to get carried away dreaming about all the home features you want. Try listing everything on a piece of paper, then choose the five “must-haves,” and the five “really-wants.”

For more tips, as well as advice geared specifically to your situation, connect with an experienced Windermere Real Estate agent by clicking here.

The post Find a New Home in Four Steps appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

5 Deal Breakers that can blindside home buyers

dicePurchasing a home can be a complex endeavor for even the most well prepared home buyer.  You’ve diligently saved for your down payment, followed the market, researched agents and now you are ready to make an offer on your dream home.  Don’t let these 5 “Deal Breakers” come between you and your new home.

  1. Big Purchases on Credit. It is tempting to buy the furniture for your new home or a new car for the garage before the sale closes. Take care if you are making these purchases on credit. Large purchases on credit can have a major impact on your credit profile which effects your mortgage application. It’s a better plan to wait until after closing or pay cash for these transactions or you may be putting that furniture in a different living room than you originally picked them out for.
  2. Overpaying. Before your bank will approve your mortgage they will appraise the home you are purchasing.  If they feel you are overpaying they are likely to decline your mortgage application. If you find yourself in this situation consult with your agent on renegotiating your offer to be more in line with the bank’s appraised value.
  3. Purchasing too close to Foreclosure. If you are making an offer on a house which is facing foreclosure be sure to have a closing date set before the foreclosure date. Have your agent work with the lender to structure closing before the house goes back to the bank and into foreclosure.
  4. IRS liens. You’ve heard the old saying “Death and Taxes”.  Back taxes and liens can derail your attempts to get financing for a mortgage so be sure to have your books in order before filing your loan application.
  5. Comprehensive Loss Underwriting Exchange (CLUE)CLUE is a data base of insurance claims for both people and property.  Your home insurance rates are determined by the information about you and the property you plan to purchase which is contained in this report. Past claims for water damage, falling trees and even dog bites from present and past owners can multiply your insurance rates. Consult your agent about the CLUE report for your future home as soon as possible once your home purchase offer is accepted.

When purchasing a home there will be challenges which you can plan for and the unexpected hurdles.  By educating yourself as a consumer and choosing a well trained real estate agent you can avoid many of the pitfalls of 21st century home ownership.

What about you? Tell us if you have had any “deal breaker” experiences.

The post 5 Deal Breakers that can blindside home buyers appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Considering becoming a landlord? How to evaluate whether to rent or sell your property

Over the last few years, we have seen an increase in homeowners choosing to become landlords rather than placing their homes on the market.  In deciding whether or not becoming a Landlord is right for you, there are a number of factors to consider, but primarily they fall into the following three categories:  Financial Analysis, Risk and Goals.

CalculatorThe financial analysis is probably the easiest of the three to assess.  You will need to assess if you can afford to rent your house. If you consider the likely rental rate, vacancy rate, maintenance, advertising and management costs, you can arrive at a budget.  It is important both to be reasonably correct in your assumptions and to have enough reserves to cover cash-flow needs if you’re wrong.  The vacancy rate will be determined by the price at which you market the property.  Price too high and you’re either vacant or accepting applicants that, for some reason, couldn’t compete for more competitively priced homes.  Price too low and you don’t achieve the revenue you should.  If you want to try for the higher end of an expected range, understand that the cost may be a vacant month.  It is difficult to make up for a vacant month.

Consider the other costs renting out your property could accrue. If you have a landscaped or large yard, you will likely need to hire a yard crew to manage the grounds. Other costs could increase when you rent your home, such as homeowner’s insurance and taxes on your property. Also, depending on tenant turn-over, you may need to paint and deal with maintenance issues more regularly. Renting your home is a decision you need to make with all the financial information in front of you.  You can find more information about the hidden costs of renting here.

If your analysis points to some negative cash-flow, that doesn’t necessarily mean that renting is the wrong option.  That answer needs to be weighed against the pros and cons of alternatives (i.e., selling at the price that would actually sell), and some economic guesswork about what the future holds in terms of appreciation, inflation, etc. to arrive at an expectation of how long the cash drain would exist.

Risk is a bit harder to assess.  Broadly though, it’s crucial to understand that if you decide to lease out a home, you are going into business, and every business venture has risks.  The more you know, the better you can mitigate those risks.  One of the most obvious ways of mitigating the risk is to hire a management company.  By hiring professionals, you decrease your risk and time spent managing the property (and tenants) yourself.  However, this increases the cost.  So, as you reduce your risk of litigation, you increase your risk of negative cash-flow, and vice versa… it’s a balancing act, and the risk cannot be eliminated; just managed and minimized.

In considering Goals, what do you hope to achieve by renting your property? Are you planning on moving back into your home after a period of time? Will your property investment be a part of your long-term financial planning? Are you relocating or just hoping to wait to sell? These are all great reasons to consider renting your home.

Keep in mind that renting your family home can be emotional.  Many homeowners LOVE the unique feel of their homes.  It is where their children were raised, and they care more about preserving that feel than maximizing revenue.  That’s OK, but it needs to be acknowledged and considered when establishing a correct price and preparing a cash flow analysis.  Some owners are so attached to their homes that it may be better for them to “tear off the band-aid quickly” and sell.  The alternative of slowly watching over the years as the property becomes an investment instead of a home to them may prove to be more painful than any financial benefit can offset.

In the process of considering your financial situation, the risks associated with becoming a landlord, and the goals you hope to achieve with the rental of your property, – ask yourself these questions.  Before reaching a conclusion, it’s also a good idea to familiarize yourself with the landlord-tenant-law specific to your state (and in some cases, separate relevant ordinances in the city and/or county that your property lies within) and to do some market research (i.e. tour other available similar rentals to see if your financial assumptions are in line with the reality of the competition across the street).  If you are overwhelmed by this process, or will be living out of the region, seek counsel with a property management professional.  Gaining experience the hard way can be costly.

J. Michael Wilson is the dedicated broker at Windermere Property Management Seattle, and has 17 years of experience managing properties in the Seattle region.

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Does the Home of Your Dreams Really Exist?

HouseShoppingAgent: “So, what kind of a house are you looking for?”

Client: “Anything with 3 bedrooms and a couple baths. Oh, and a big yard would be cool, too.”

Agent: “I know of several that we can show you.”

Client: “Just pick three that you think I’ll like, and I’ll buy one of them.”

If only it were that easy. When you ask yourself to visualize the home of your dreams, what comes to mind? Certainly not a nondescript 3 bedroom, 2 bath home. It’s much more likely that your vision could include features like maple flooring, granite counter-tops, 6-panel doors, built-in speakers, or access to 220-electricity in the garage for a workshop. Everyone has their own custom needs and desires.

You’re allowed to be picky. Realistic is imperative, but picky is fine, too. If you’re holding out for diamond insets in the shower tile grout or solid gold door knobs, I’m afraid disappoint awaits you. Think about the most important things a home will represent to you. Do you work from home? Do you entertain large groups regularly? Do you enjoy yard work or do-it-yourself projects? Each family has their own needs, so your definition of the perfect home will be very different from even your closest friends or family members.

Not only does each family have their own needs, but each family member might have their own needs. Pets come into the picture, too. Is high-enough speed internet readily available? Is there a wall that will fit your 60” High-Def 3D TV? Will the family room have enough space that you can compete at Wii™ or Kinect™ without breaking lamps? Will the huge trees that are cooling in summer make the home darker than you like in the winter? Can you bike or run the neighborhood streets? Are you concerned about how your energy consumption will affect the environment? You’re encouraged to list all the things that are important to you.

Once you’ve made your list, prioritize it according to what is important. Figure out what’s a must-have and what would be nice, but not necessary. It might take looking at a few homes to figure out what you want versus what you need. You may love the idea of having Spanish copper sinks throughout the house, but if there were no houses on the market that had them, would you resign yourself to renting indefinitely? On the other hand, you may be working from home and need fantastic data transmission capability. You probably wouldn’t want to look in a rural area that still uses dial up, but promises to have high speed internet cables in the future.

Your agent will learn from your prioritized list, and they should be able to help you find that perfect house. Be brutally honest with yourself, think 10 years into the future, and share your desires freely with those that can help you. You may not find the house that’s 100% of what you wanted, but something very close to the home of your dreams is probably out there.

What are the “deal killers”? What are the most important features on your list?

EricJohnsonHeadShotBy Eric Johnson, Director of Education

Johnson has several years experience as a real estate agent and real estate instructor, as well as experience in construction project management, digital media/publishing and insurance. He has a bachelor’s degree in anthropology from University of Colorado.

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What You Need To Know About Buying a Bank Owned Home

SalePriceRecently, news about how to purchase a real-estate owned (REO/bank owned) home, foreclosure property or short sale is everywhere. Bank owned homes are sold directly from the lender after the foreclosure process is complete, and while you may save quite a bit of money by choosing to go for this type of home, it is not without trials and tribulations. The process of purchasing a home directly from a lender can be long and arduous, but could very well be worth it in the end.
If you have your sights on a particular home or are looking to find a deal on your first, working directly with the lender may be your only option. Purchasing a bank owned home is not for the faint of heart, here are some tips for negotiating the REO process:

1. Be prepared: The condition of bank owned properties is usually poor and hard to show. Past owners may have left angry and left the home in bad condition with foul smells, missing appliances, wires taken from breakers, gas fireplaces gone, even bathrooms without toilets and sinks.

2. Understand the costs: Maintenance or repairs may be necessary, since these homes have been vacant for an unknown period of time–sometimes months or years. Keep in mind, when they were occupied the owners could have been under a financial hardship, preventing them from doing regular seasonal care or repairs when needed. Remember as well that the bank is trying to sell the house immediately, so you will receive a financial break in the price rather than a willingness to negotiate on the maintenance and repair issues.

3. Accept the unknown: In traditional real estate transactions, homeowners fill out Form 17 regarding important information about the history of the house. A bank owned home is either exempt or marked with “I don’t know” throughout the document. Not having the accuracy of this 5 page disclosure form could leave you with a lot of unanswered questions on the history of the home.

4. Know what is non-negotiable: The pricing on the house may not get much lower. Some of these properties can be “a dream come true” if you get them at an amazing price, or they could be your worst nightmare. Do your due diligence researching any property, and conduct all necessary inspections to safeguard yourself. Some major repairs may be negotiable, but will likely not reduce the home price.

5. Make a clean offer: The higher the price you can offer, the better. Include your earnest money, keep contingencies to a minimum, and suggest a reasonable closing date. The simpler your offer is, the higher chance you have of the bank accepting your offer or countering in a reasonable time period.

6. Be patient: Consult with a professional who handles bank owned home purchases to help you negotiate the pathway to home-ownership. The process of purchasing a bank owned, foreclosed or short-sale home is typically longer than a typical real estate sale.

What do you want to know about purchasing bank owned, foreclosure and short-sale properties?

Tonya Brobeck is a Broker at Windermere Lake Stevens. She has a total of 17 years combined residential real estate and worldwide resort sales & marketing experience.

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