Empty Nesters: Best to Remodel or Time to Sell?

 Your children have finally moved out and you and your spouse now live alone in a four-bedroom colonial (or a similar type of house). You have two choices to make:

1. Remodel your house to fit your current lifestyle and needs
2. Sell your house and purchase the perfect home

Based on the record of dollars spent on remodeling and renovations, it appears that many homeowners are deciding on number one. But, is that the best long-term solution?
If you currently live in a 3-4-bedroom home, you probably bought it at a time when your children were the major consideration in determining family housing needs. Along with a large home, you more than likely also considered school district, the size of the property and the makeup of other families living in the neighborhood (example: you wanted a block with other kids your children could play with and a backyard large enough to accommodate that).
Remodeling your home to meet your current needs might mean combining two bedrooms to make one beautiful master suite and changing another bedroom into the massive walk-in closet you always wanted. However, if you live in a neighborhood that historically attracts young families, you may be dramatically undermining the value of your house by cutting down the number of bedrooms and making it less desirable to the typical family moving onto your block.
And, according to a recent study, you will recoup only 64.4% of a remodeling project’s investment dollars if you sell in the future.
Your home is probably at its highest value as it stands right now. Instead of remodeling your house, it may make better financial sense to sell your current home and purchase a home that was built specifically to meet your current lifestyle and desires.
In many cases, this well-designed home will give you exactly what you want in less square footage (read less real estate taxes!) than your current home.

Bottom Line

If you are living in a house that no longer fits your needs, at least consider checking out other homes in your area that would meet your lifestyle needs before taking on the cost and hassle of remodeling your current house.

7 Steps for Selling Your Home!

7 Steps for Selling Your Home! If you're considering  putting your Atlanta area home on the market, please contact me today! www.timgrissett.com

'So Why Are You Selling?' 10 Answers You Should Never Give

“Why are you selling your house?” might seem like a perfectly innocent question from home buyers, but watch out—if you're the home seller they're asking, this is one of the diciest questions you can answer. The reason: Pretty much any explanation you give is bound to contain revealing info that these home buyers could use against you, thereby compromising your negotiating power.

“Home buyers are looking for any indication that you’d be willing to accept an offer that’s below list price,” says Annapolis, MD, real estate agent Greg Beckman. “If you say the wrong thing to a buyer, the person might make you a lowball offer.”

To prevent that from happening, Beckman recommends sellers let their listing agent handle communication with prospective buyers. “Let your agent do all the talking,” he says, adding that sellers shouldn’t be present for showings or open houses.

That said, there are times when you might still interact with home buyers—say, if they arrive early for a showing or linger until you return. If that happens, and if the seller asks why you're selling, you want to have a short, neutral response prepared in advance, says San Francisco real estate agent Allison Fortini Crawford. Such as: “We love the home, but we’re ready for a change.”

So, what’s a bad answer? Well, there are many, actually, like these doozies below.

‘I got transferred for my job’

This is one of the most common reasons why people sell their house. In fact, 17% of people surveyed by the moving company Allied Van Lines said they’ve been relocated for a job. Nonetheless, revealing this to home buyers could make them think that you’re desperate to sell fast and, in turn, lead them to make a lowball offer.

‘Our family needs a bigger house’

Trading up? Don’t relay that to home buyers. The reason is pretty simple: “You don’t want to give buyers the idea that the house may not be enough room for them, either,” says Crawford. Similarly…

‘Now that our children have left the nest, we’re ready to downsize’

Downsizing makes total sense for empty nesters and retirees, but likewise, you don’t want home buyers to think that your house is too large and difficult to maintain.

‘We need a smaller mortgage payment’

There are a couple of reasons why this response is a bad idea. First, you don’t want to give the impression that the house is too expensive or overpriced. Second, you don’t want home buyers to presume that your finances are in such poor shape that you’d accept a lowball offer. Put simply, “Never discuss your financial situation,” says Beckman.

‘We’ve already bought our next house’

If you want to fetch top dollar for your house, don’t divulge that you’ve already purchased your next home. “It makes the home buyer think that there’s a sense of urgency and that you have to sell quickly,” says Crawford—which is a valid assumption, considering that a lot of people can’t afford to carry two mortgages at once.

‘We want a quieter neighborhood’

Steer clear of saying anything that could paint the neighborhood in a negative light. Even saying that the area is quiet could backfire. “You don’t know what a home buyer wants,” says Beckman. For instance, some people are drawn to areas with a hopping night life (and the noise that entails), or at least a place where the streets aren't barren by 8 p.m.

‘We need to move closer to our parents to help care for them’

Many people move to be closer to family—and in some cases, it's out of necessity. However, there’s no need to share that information with home buyers, since this suggests you have to sell your home pronto.

‘My back problems make it too difficult for me to climb the stairs’

A number of home sellers move out of two- or three-story houses for health reasons. However, you don’t want to draw attention to the fact that there are a lot of stairs throughout the home, since it could scare off older home buyers or home buyers with young children.

‘Our utility bills are through the roof’

Energy-efficient home features are all the rage nowadays, which makes sense when you consider that home owners spend on average $1,945 a year on their energy bills. But some home buyers still overlook utility costs when they go house hunting. So, the very last thing you want to do is draw attention to the fact that your gas or electric bills are expensive.

‘The house is too difficult for us to maintain’

No one wants to buy a money pit. So, even if you’re selling a clear fixer-upper, don’t mention maintenance costs to a home buyer. Also avoid talking about repairs that you just never got around to making, like repairing the bathtub caulking, as well as big projects like replacing the 20-year-old water heater—all reasons for home buyers to think twice about making an offer.

What Is the Difference Between a Short Sale, Pre-foreclosure, and Foreclosure?

What is the difference between a short sale, pre-foreclosure, and foreclosure? If you're considering purchasing one of these kinds of properties, it's very important to understand what these terms mean and how the home's status could affect its sale.

The first rule of thumb: Proceed with caution. The pitfalls for the average buyer are numerous when it comes to a short sale or a foreclosure, according to Virginia Field, a Realtor® and instructor for the National Association of Realtor®'s Short Sales and Foreclosure Resource.

Let's take a look at these three distinct real estate terms and what they mean for buyers.

Short sale

"A short sale is when the property owner owes more on the mortgage than the market value of the property and is asking the bank to accept a short payoff of the loan," explains Cathy Baumbusch, a Realtor in Alexandria, VA.
A short sale may or may not be in pre-foreclosure, but the homeowner is asking the bank to let it sell the property for less than what is owed on the loan.
Short sales go through a real estate agent, but they don't function exactly like your typical real estate deal.
"The biggest misconception the average consumer has about buying a short sale is not realizing how long it takes," says Field. "It can take between six months to a year to close. Also, people think they are going to get a screaming deal, but they have to understand that the bank is going to try to get as much back as it can."
Even more frustratingly, a seller can accept an offer on a short sale, but that doesn't guarantee that the deal is going to close. If the lender is not satisfied with the sale price, the home is not going to close. In some cases, foreclosure makes more sense for the lender because there are fewer costs associated with a foreclosure than a short sale.

Pre-foreclosure

A home is in pre-foreclosure if a homeowner is more than 90 days late on the mortgage payments and the bank has begun the foreclosure process.
"A pre-foreclosure is a property in the process of foreclosure but is still legally owned by the owner. It may or may not be a short sale," says Beverley Hourlier, a real estate agent in San Diego.
Pre-foreclosure doesn't necessarily mean that the homeowner is underwater, and it doesn't guarantee that the home will be foreclosed on. In fact, says Field, if homeowners facing pre-foreclosure contact their bank, they have a chance of saving their home.
"The bank doesn't want the property back," she says.
"They want you to be able to save it, but you have to take action. Don't bury your head in the sand and stop opening the mail. Contact your bank right away, and they may be able to find a way to work with you," Hourlier adds.

Foreclosure

"Foreclosure means the property lender has taken back the property for lack of payment. It's a process," says Tracey Martin, a real estate agent in Salinas, CA.
Buying a foreclosure is completely different from a typical home purchase. Generally, foreclosures are bought at auction sight unseen, meaning you could end up with a home in need of serious repairs.

"You don't have investigatory rights; you're buying a property as is," says Field.
Field also explains that experienced investors go into foreclosure auctions with cash and a formula.

"For someone who just wants to buy a home to live in, it's not a smart idea," she says.
But whether you're a seasoned pro or a first-time home buyer, a foreclosure can be a risky investment for anyone. Many foreclosure homes are still occupied by their former owners, whom you would be responsible for evicting.

Furthermore, "if you buy, you assume all liens, IRS liens, and other mortgages possibly tied to the property," says Kevin Sucher, a real estate agent in Portland, OR.

Before signing on the dotted line, do as much research about the property as possible and be prepared for surprises. Field suggests investigating websites that sell foreclosures, as they tend to have more guidance for the novice than an auctioneer at the courthouse steps.

Also, when bidding on foreclosed homes, be aware that having the highest offer won't necessarily nab you the property.

"Servicers will go with the buyer most likely to close. They may take a lower price from someone with better terms," Field explains. In short, unless you're shopping with cash, you might have to bid on several properties before you find a winner.

"It can be done," Field says, "but it requires caution, patience, and ideally guidance from someone with experience buying foreclosures."

Home Prices Up 6.64% Across the Country!

Some Highlights:

• The Federal Housing Finance Agency (FHFA) recently released their latest Quarterly Home Price Index report.
• In the report, home prices are compared both regionally and by state.
• Based on the latest numbers, if you plan on relocating to another state, waiting to move may end up costing you more!
• Alaska & West Virginia were the only states where home prices are lower than they were last year. 

Study: FSBOs Don't Save Real Estate Commission

One of the main reasons why For Sale By Owners (FSBOs) don’t use a real estate agent is because they believe they will save the commission an agent charges for getting their house on the market and selling it. A new study by Collateral Analytics, however, reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” (emphasis added)

Why would FSBOs net less money than if they used an agent?

The study makes several suggestions:

• “There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids on with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
• “Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
• “Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.

Three conclusions from the study:

1. FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
2. The differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%.
3. The sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

If you are thinking of selling, FSBOing may end up costing you money instead of saving you money. 

Talking Real Estate

Experts say prices will be up over 5% by the end of the year! That's just four more months. Analysts say mortgage interest rates will be 4% by the end of the year. Now is the time to lock in a low interest rate and buy your piece of America. 

These Are The Most Important Tips For Homebuyers

Closing On A House

Here is what the process of closing on a house looks like in 10 easy steps. View this as a checklist to make the process of closing seem like a breeze.

Steps to Obtaining A Mortgage

What Are Restrictive Covenants? Read These Rules Before You Buy

If you're looking to buy a home in a community run by a homeowners association, or HOA, then you may have also heard that in order to join the club, you'll have to abide by its restrictive covenants. So what are restrictive covenants?

Although this term may conjure up images of a satanic cult, "restrictive covenants"—also known as CC&Rs (for “covenants, conditions, and restrictions")—aren't as ominous as they sound.

Simply put, CC&Rs are just the rules you'll have to follow if you live in that community. Unlike zoning regulations, which are government-imposed requirements on how land can be used, restrictive covenants are established by planned subdivisions to maintain the attractiveness and value of the property.

Odds are you're all for rules that keep the real estate you're buying in good shape! But some CC&Rs don't always sit well with some residents and are seen as too, well, restrictive. It all depends on your perspective and how much freedom you want over your home—or protection from your neighbors exercising that same freedom in ways you might not like.

Common restrictive covenants

Restrictive covenants differ from community to community, but there are some you can expect to see:

• Permissible colors for exterior house paint
• Minimum property and landscaping standards
• Types of fencing allowed
• Types of window treatments allowed
• Limitations on the type of security lights you can attach to the house
• Controls on installing sporting equipment such as a basketball hoop in the driveway
• Restrictions that limit vehicle storage or recreational vehicle parking
• Curbs on property uses that generate noise or smells (e.g., raising livestock)
• Rules on commercial or business uses of land reserved for residences

While it's easy to focus on what these rules say you can't do, try to turn the tables and see the upsides, too.

“A reasonable HOA is like heaven,” says Bruce Ailion, Realtor® and attorney for Re/Max Town and Country in Atlanta. Several years ago he represented a builder of family homes that were sold to investors; with no restrictive covenants in place, the community looked terrible two years later. By contrast, a nearby community that had instituted an HOA to oversee lawn care and home exteriors was thriving.

“Those properties looked like new, and year after year the gap in price between the two communities has grown,” he says.

When to review your CC&Rs

After your offer to buy a home is accepted, you are legally entitled to receive and review the community's CC&Rs over a certain numbers of days (typically between three and 10). Warning: Some CC&Rs can be hundreds of pages, but given these are the laws you'll have to abide by, this is required reading that you skip at your own peril.

If you spot anything in the restrictive covenants you absolutely can't live with, you can bring it up with the HOA board or just back out of your contract completely (and keep your deposit). It may seem extreme, but if this is the place you hope to call home, living with rules that seriously cramp your style may just not be worth the trouble.

Can you change restrictive covenants?

Restrictive covenants, however, aren't set in stone. They can be contested and changed with a majority vote of the shareholders, aka neighbors in your development. This can work for or against you depending on where you stand. Ailion says he has seen neighborhoods tighten regulations by issuing fines for cars parked in the streets, bicycles left outside the garage, nonstandard mailboxes, and other potentially petty problems.

“Yes, restrictive covenants keep the appearance of the property up and can prevent eyesores such as wrecked cars, unkempt lawns, and oddball home colors," Ailion says. But he admits there are times when CC&Rs can be so restrictive that they start infringing on the rights of their residents.

But even in that case, there are things you can do. In January 2016, for instance, when an HOA in Keizer, OR, wouldn't allow a family to park their RV in their driveway—a necessity for their disabled child—the family fought back with a lawsuit, arguing that the Fair Housing Act requires HOAs to make "reasonable accommodations" for people with disabilities.

The bottom line: Restrictive covenants are meant to protect residents, but they can be changed if they're out of line. Make sure to review them before you buy a home, and if you disagree, by all means speak up! Many others may be glad you did.

The Dirty Truth About Rent To Own

What landlords don’t tell you about rent-to-own programs: Are you considering a rent to own or lease to own option because your credit score is low? Or maybe because you think you can get a better deal on a home? As a real estate agent, I get asked a lot of questions about rent-to-own programs, how they work, and if they're a good deal.

Investing in Real Estate with a Self-Directed IRA

10 Questions You MUST Ask BEFORE Buying a House - Buying a house without asking the right questions can end up a costly problem.

MOVIES IN THE PARK

Free, family-friendly and fun! Join us to see MOANA @ Grove Park on Friday 8/11 at 8:45pm. 🍿☀️🎬#AtlParksandRec

With each passing month in 2017, experts expect it to become more difficult to buy a home. Here's why you should get started with your home search—pronto. 1. Rates are rising. In 1981, when mortgage rates hit 18% and seemed to rise every day, single-digit rates seemed like an impossible dream. 2. Inventory is shrinking. Every day you wait to start looking for a new home, you face stiffer competition for fewer homes. 3. Home prices are still rising. The good news? If you jump into the market pronto, you just might make it before those doors close.

The Mortgage Process Timeline www.timgrissett.com

8 Things Home Sellers Risk When They Sell Without A Realtor

Poor and incomplete presentation of a listing when selling is setting the stage for a home to be incorrectly perceived and potentially undervalued in the marketplace.

Ultimately, unguided decision making when handling the single largest transaction someone makes can result in a rocky real estate process with issues that could have been avoided.


https://www.inman.com/2017/07/26/8-things-homesellers-risk-when-they-sell-without-a-real-estate-agent/

Benefits of Homeownership

What is an assumable mortgage?

What is an assumable mortgage? True to its name, it's a type of home loan where the buyer takes over the seller's mortgage, rather than applying for a new loan. Assumable mortgages offer an array of advantages over traditional loans, but not all mortgages can be passed along in this manner. Here's how to tell if an assumable mortgage is something you should consider, as a home buyer or seller.

What types of mortgages are assumable?

Conventional loans are not eligible for assumption; they require the loan be paid in full—and a new one issued—whenever a property is sold or transferred to a new owner.

The three types of loans that are assumable include the following:

• FHA loans: These loans are backed by the Federal Housing Administration, which grants loans to low-income borrowers who might not quality for a conventional loan. Keep in mind that the new borrower, like the old, must qualify under all FHA terms, including credit and employment standards.
• USDA loans: These loans are offered or backed by the U.S. Department of Agriculture to low-income borrowers in rural areas. As above, the new buyer will need to meet the USDA's credit score and income guidelines.
• VA loans: These loans, offered to active or retired military, can even be assumed by nonveterans.

Benefits for the buyer

Assumable mortgages can benefit buyers in numerous ways:

• A low interest rate: The key benefit to assuming a loan is snagging a lower interest rate than what is currently available. For instance, if the seller took out a 30-year fixed-rate loan of $200,000 at 4.2%, the monthly mortgage payment would total $978. If you were to borrow $200,000 at a slightly higher 5.2% rate, your monthly principal and interest payments would total $1,098. “Assumable loans are most logical in a rising rate environment, which this is becoming,” says Todd Huettner, founder of Huettner Capital in Denver.
• Fewer upfront costs: Since you aren’t getting a new loan, your costs for getting a mortgage will be greatly reduced. This can be a particular benefit if you’re assuming an FHA loan, since you won’t need to pay upfront mortgage insurance costs; you'll just be responsible for the ongoing insurance payments for the life of the loan.
• A shorter loan life: Since the seller has already repaid the initial years of the loan, you would need only to make payments for the remaining years. So, if the original borrower was five years into a 30-year loan, the buyer assuming that would pay for the remaining 25 years.
• Long-term savings: This combo of a lower interest rate, fewer upfront costs, and a shorter loan life add up to major savings. You can calculate these savings with an online mortgage calculator.

Benefit for the seller

If you have a stellar mortgage, you can consider offering an assumable mortgage as a “pot sweetener” for potential buyers. Of course, if you're in a seller's market where properties are getting snapped up, there's less incentive to make such concessions, but if you're struggling to find a buyer, an assumable mortgage can definitely reel buyers in.

Reasons to not get an assumable mortgage

It sounds pretty enticing, doesn’t it? But before you run out to capitalize on someone else’s favorable loan, you should realize that even if the loan is eligible for assumption, that doesn't mean it always makes sense. Here are three scenarios that make the assumable mortgage an unfavorable option:

• The assumable mortgage has a higher interest rate. This is a no-brainer. If the assumable mortgage has a 6% interest rate but the buyer can snag a loan for less, it's better to get your own home loan.
• The home has appreciated significantly. If the home has risen in value by a long stretch, then assuming that loan won't cover your costs. For instance, if the sellers bought the home for $200,000 but it's now worth $250,000, you'll need to pay the difference out of pocket. You can finance some of those additional costs with a second loan, but be aware that second mortgages are more difficult to qualify for and typically have a higher interest rate than a first mortgage.
• The seller needs his VA benefit. The VA benefit stays with the loan, not the person, which can make it challenging for the veteran to get another VA loan if he needs one after he moves on. The entitlement for each veteran is $36,000, which won't go very far spread over two properties, but Huettner says this can work if a veteran’s old and new properties are very affordable or if he is planning to make a larger down payment on his new home and doesn't need more of the benefit than what remains.

Assumable mortgages can make great sense in a variety of circumstances, despite their stringent guidelines. So consider talking to your lender about whether they might be a good choice for you.

What Influences A Consumer Mortgage Rate?

If you're planning to buy a home, or even refinance an existing mortgage, you need to be aware of the numerous factors that can influence your mortgage interest rate. Here are six such factors. #MortgageInterestRates

#ATL has a thing for streets named "Peachtree." Can you guess how many we have? 🍑🌳🛣

Ready to sell? Wondering what your Atlanta-area home is worth? I would be happy to help you in whatever way I can. #Atlanta

Do Your Future Plans Include a Move? What's Stopping You from Listing Now?

Do Your Future Plans Include a Move? What's Stopping You from Listing Now?

Are you an empty-nester? Do you want to retire where you are, or does a vacation destination sound more your style? Are you close to retirement and not ready to move yet, but living in a home that is too big in size and maintenance needs?

How can you line up your current needs with your goals and dreams for the future? The answer for many might be the equity you have in your house.

According to the latest Equity Report from CoreLogic, the average homeowner in the United States gained $14,000 in equity over the course of the last year. On the West Coast, homeowners gained twice that amount, with homeowners in Washington gaining an average of $38,000!

Do you know how much your home has appreciated over the last year?

Many homeowners would be able to easily sell their current house and use the profits from that sale to purchase a condo nearby in order to continue working while eliminating some of the daily maintenance of owning a house (ex. lawn care, snow removal).

With the additional cash gained from the sale of the home, you could put down a sizeable down payment on a vacation/retirement home in the location that you would like to eventually retire to. While you will not yet be able to live there full-time, you can rent out your property during peak vacation times and pay off your mortgage faster.

Purchasing your retirement home now will allow you to take full advantage of today’s seller’s market, allow you to cash in on the equity you have already built, and take comfort in knowing that a plan is in place for a smooth transition into retirement.

Bottom Line

There are many reasons to relocate in retirement, including a change in climate, proximity to family and grandchildren, and so much more. What are the reasons you want to move? Are the reasons to stay more important? Meet with a local real estate professional who can perform an equity evaluation to determine your options, today! 

Be Careful Not to Get Caught in The Rental Trap!

There are many benefits to homeownership. One of the top benefits is being able to protect yourself from rising rents by locking in your housing cost for the life of your mortgage.

Don’t Become Trapped

A recent article by ConsumerAffairs addressed the continuous rise in rents, stating:
“The cost of putting a roof over your head continues to go up. Not only are home prices still rising, but the cost of rent rose 0.5% in June.”
Additionally, in the Joint Center for Housing Studies at Harvard University’s 2017 State of the Nation’s Housing Report, it was revealed that,
“Despite a slight improvement from 2014, fully one-third of US households paid more than 30 percent of their incomes for housing in 2015. Renters continue to be more likely to face cost burdens…the number of cost-burdened renters (21 million) considerably outstrips the number of cost-burdened owners (18 million) even though nearly two-thirds of US households own their homes.”
These households struggle to save for a rainy day and pay other bills, including groceries and healthcare.

It’s Cheaper to Buy Than Rent

As we have previously mentioned, the results of the latest Rent vs. Buy Report from Trulia shows that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.
The updated numbers show that the range is an average of 3.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Baton Rouge (LA), and 33.1% nationwide!

Know Your Options

Perhaps you have already saved enough to buy your first home. A nationwide survey of about 24,000 renters found that 80% of millennial renters plan to eventually buy a house, but 72% cite affordability as their primary obstacle. Aside from affordability, one in three millennial renters have concerns about their credit scores, and another 53% said that a down payment is an obstacle.
Many first-time homebuyers who believe that they need a large down payment may be holding themselves back from their dream homes. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!

Bottom Line

Don’t get caught in the trap that so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible for a mortgage.