When a real estate broker markets a home, they have lots of ways to bring in buyers. But, what gets buyers into your house when you are selling it by yourself? Your property needs to stand out from the crowd on real estate search sites like Zillow®. And, unless the first impression is good, people […]
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Since we are a DIY site designed to save and make you money I thought this guest post from Brett Engle of DIYguys.net would be cool.
Fixer-Upper Life: 3 Tips For Buying and 3 Tips For Renovating
If you’re in the market for your first house, you should consider a fixer-upper. Fixer-uppers tend to be less expensive, and if you’re a project junkie, you’ll have plenty of opportunities to get your hands dirty. Outlined below are tips for people new to the housing market and how to prepare for make that first real dive. If you’ve already gotten a fixer-upper, the last three steps are just for you.
- Budget beyond the mortgage
Just because you can afford the monthly mortgage payments doesn’t mean you can afford the move. Estimate your home affordability based on your annual income, down payment, monthly spending, loan type, and current average Annual Percentage Rate (APR) for your home loan. An article on Bankrate recommends that home expenses should not exceed 30 percent of your gross monthly income.
Consider using an online calculator to determine how much you can afford to spend toward a down payment based on your annual income.
- Consider your options before committing
Think about what kinds of home projects you’re comfortable with. Some fixer-uppers go beyond ugly shag ‘70s carpet and five extra layers of wallpaper and can have serious structural issues. Look at different options of fixer-uppers and carefully consider your decision. If you decide to take on the challenge of rehabilitating an older home, you’ll need to arm yourself with proper tools such as jigsaws, drills and hammers. The initial price tag may be tempting, but in the long run, it might cost you more.
- Enlist a small army of professionals
If the idea of paperwork makes you sleepy, it might be worth your time investing in a real estate agent. A real estate agent will be able to contact inspectors, know how to negotiate, and maintain positive relationships with the sellers. If you start encountering legal issues (such as evictions and rentals), you might need to hire an attorney.
If you’ve already gotten your fixer-upper and are aching to dive into repairs, here are the first steps you should take into making your house a home.
- Do your research
Look at the projects you plan on doing and research how to fix them. Some projects can be taught through an online video, but other repairs require professionals. You can hire an architect or a contractor, who can help you take care of bigger projects. You can do some projects on your own, but for the big ones, U.S. News recommends letting a contractor or an architect to determine your most immediate needs as well.
- Take care of the most important aspects first
If you’re living in another house while fixing up this one, it’ll be easier to decide on your projects. If you’re living in your fixer-upper, however, you’ll need to prioritize which areas will get the treatment first before moving onto the rest of the house. If there are any kinds of leaks or holes that get in the way of actual living, repair those first.
- Stay or sell
Once you’ve renovated, the question is: Should you stay or should you go now? The Clash references aside, if you’re looking into selling it, make sure you approach it more as a business. Be patient and understand that sometimes you won’t always turn the kind of profit you’re hoping for.
House flipping is a tricky area. It’s still likely that you can lose money on flipping a house. If you’re approaching buying a fixer-upper strictly for getting into the flipping business, make sure you’re smart about it.
However, if you’re looking to make this your permanent home, then what you can do is move in and enjoy the fruits of your labor. It’s your home, and you’ll always feel a little more connected to it after having worked on it. As long as you set a smart budget, stay patient in the buying process and research the market, you can find an excellent property that you can make your own.
Bret Engle | DiyGuys.net
How disruption will happen in real estate and how it will save you money. Disruption is the catchphrase of the times. The word itself has almost run it’s course and is hardly relevant anymore.
The world is changing so fast that’s it’s not so much disruption as simply massive inevitable change. Change in the ride share business-Uber replacing taxis. Change in where we sleep when vacationing-AirB&B replacing hotels. Change in how we watch movies-Netflix replacing the video store. Change in real estate business-Artificial intelligence replacing real estate agents.
It’s going to happen. The real estate business is going to change radically. No one knows yet what that change is going to be but it is happening now. Investors are investing hundreds of millions of dollars in startups trying to do just that. To disrupt the real estate business.
Agents are becoming irrelevant. The general public hasn’t caught on yet in masse. But they will. Homeowners are starting to wonder what they get for their money. Those huge commissions they pay when buyers are finding homes online on their own.
The problem with the startups trying to dislodge real estate agents is they still cost consumers money. Still quite bit of money. Some are trying to make it “easier” to sell home but still relatively expensive. Others have adopted the buy low sell high technique but that doesn’t make much sense for consumers. What does make sense is for someone selling their home keeping their money and actually making a profit.
An agents marketing these days consist of putting homes online, where consumers are looking. A task that can easily be performed by just about anyone . Seriously, it’s not rocket science.
While all these slick expensive startups are searching for the magic bullet I believe disruption will come from the source, the consumer. The guy selling his house figuring out he can do it himself and save thousands of dollars. I believe that’s how disruption in the real estate industry will occur. When the general public figures out how they can easily sell their homes themselves.
When selling your home yourself it pays (literally) to get your house ready for the market. How to prepare your home for selling is one of the lessons you’ll learn at DIY Real Estate, easily sell your home yourself.
Here’s a tip to help you sell your home yourself fast and for top dollar.
One very important thing to do when selling your home is to de-personalize it – make it not your house anymore.
The idea is to make sure the buyers can picture themselves and their family in your house, so they buy it. The personal stuff in in your house prevents that. The more personal touches the harder it will be for potential buyers to think of it as their new home. Get rid of everything that is not absolutely necessary when selling your house. Put it in storage. This means family photos, memorabilia, keepsakes, and anything else that says “you”.
By emptying the house it also declutters. The less stuff the more spacious it appears.
Consider hiring a stager trained in the art of decorating. Staging is simply arranging your furniture to best showcase the floor plan and maximizing space. You could even do it yourself. Learn by looking at magazines, model homes and/or moving the furniture around and seeing what works best.
You can easily sell your home yourself and keep your money.
Last post we went over a couple other negotiating points that you have to pay some attention to when selling your house yourself. Those were the type of financing your buyer is using and the ever important earnest money. This post considers closing date, possession and concessions.
Closing date is generally up to the buyer due to their lender. When the lender is ready you can close. 30 days is a common time, sometimes 45 days for more complicated loans like VA’s or some FHA special programs.
If you’re buying a house after your sale you might want to try negotiating a 45 or 60 day contract on your property and a 30 day on your new house. That way you have some time to find a house so they both can close on the same day. More often than not your house has to close before you can close on your new house, so the existing mortgage can be paid off.
It’s always good to have a backup plan, especially in a active sellers’ market, in case you can’t find a new home in the allotted time. A backup plan as in a place to live while you look for your new home.
You also will be negotiating when the buyer is taking possession, the day of closing or sometime after. At closing means as soon as the papers are signed the buyer can move in. Which also means that you must be out.
Concessions are when the buyer asks for something. The most common concession is the seller paying the buyers closing costs or a portion thereof for him/her. Other than the title insurance and the closing fee the buyers closing costs and prepaids are origination fees, filing fees, underwriting fees, appraisal fees among others.
Prepaids are part of those closing costs. Prepaids are so much taxes and insurance put into the buyers escrow account by the bank.
The buyer may be negotiating for furniture or appliances or other personal items.
You may not have to deal with any of that if your house is in the pristine condition it should be before putting it on the market. Look for that full price, or better, offer that comes with proper preparation of the property.
Remember it’s not just about price when negotiating a contract. There are other factors that matter to you also.