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Full Disclosure: How Pre-listing Home Inspections Even the Score for Sellers

By Jay Gregg

When we were kids, we stuffed our closets full of our toys in lieu of putting them neatly away, hoping that our parents would never find the mess we made. We thought we could spend as little time as possible on chores to maximize the amount of time for fun. But eventually, we would come to learn that, time after time, our parents would soon enough find our mess, negating any time saved—and then some.

That lesson is just as germane for those looking to sell a home. Unfortunately, many fail to translate that knowledge to the process of putting a house on the market, with sellers often deferring the home inspection process to buyers. In doing so, sellers are making the same mistake we made as kids, hoping that any surprises won’t make themselves known to buyers. Only now, the consequences of their inevitable discovery are far more serious than earning a grounding.

For the small price of a pre-listing inspection like that offered by Pillar To Post, sellers stand to save big when it comes time for a buyer to put pen to paper and complete the transaction. Below are just a few of the many benefits of having a pre-listing home inspection done.

You stand to earn a return far closer to your initial asking price.
When a buyer invariably performs his or her own inspection, should he or she find undisclosed flaws, you stand to lose more money off your initial asking price than you might assume. In fact, for every flaw a buyer finds that would cost $1,000 to fix, you stand to lose $3,000-$5,000 off your asking price. In truth, the average buyer doesn’t really know what it would cost to fix an issue found. Yet the fact of the matter is, flaws that are not made apparent to buyers before their own inspections are performed are seen as far more egregious than those disclosed beforehand, even if you bring an issue to their attention and make it known that you won’t fix it. It really comes down to a basic cost-benefit analysis: For a $500 pre-listing inspection, a seller could stand to save thousands more than the costly perception of an undisclosed flaw.

You become the most knowledgeable person about your listing.
It may seem self-evident, but a pre-listing home inspection report will make you the most educated person on a listing. Yet sellers often fail to see the value of being completely aware of a home’s condition before trying to sell it. While a seller might be legitimately ignorant of a home’s flaws, that ignorance is no excuse to initiate the selling process blind to a home’s condition. Should a would-be buyer’s own inspection turn up hitherto unknown flaws, the seller appears incompetent at best and as though he or she is taking part in deceptive obfuscation at worst. By having a pre-listing inspection performed, you can be the authority on your property, conveying both credibility and expertise to a buyer.

You gain considerable leverage in the negotiating process. Beyond connoting competence and professionalism, you stand to gain considerable leverage during the negotiating process by having a pre-listing home inspection. With Pillar To Post, for example, you are given a full report on the condition of the property, leaving you to determine which changes are worth fixing on your own, and which are better left to the future owners. Many changes that need to be made are inexpensive, affording sellers the opportunity to nip them in the bud before they can become known to others. But if you find some issues that would cost more to fix than you care to spend, you can get your own direct quote from a respected home repair professional about how much it would take to fix them. You can, in turn, pass them onto a would-be buyer, saving them time by giving them an accurate, upfront assessment of their potential costs.

Moreover, Pillar To Post prints a hard copy of a completed summary—including pictures—that sellers can leave sitting on the table at an open house, for example, which goes a long way in conveying transparency and integrity within the process. This helps to build trust and ensures a smooth, open transaction. Save for meeting disclosure requirements, a seller is not obligated to share the pre-listing report with potential buyers. But in the event that a seller wishes to leave found issues to the would-be owners, it’s entirely possible to convey that fact in a way that suggests you’re still providing a service—issues that would necessitate having to repaint a wall, for example, could be articulated by suggesting that the buyer would probably want to paint it in his or her own preferred color.

When it comes down to it, we’ve found that homes that have had a pre-listing inspection sell faster and at a price far closer to the listed price relative to homes that have only had a home inspection performed by a buyer. Pre-listing home inspections make you better informed, give you control over issues that are found, and make it so that you stand to make a far greater return on your investment. It’s a worthwhile step that should be an integral part of any real estate transaction.

Jay Gregg is Pillar To Post’s director of Marketing, as well as a certified home inspector based in Orangeville, Ontario, Canada.

For more information, visit www.pillartopostfranchise.com.

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2014. All rights reserved.

Tips for a Faster Sale at a Higher Price in 2015

Many homeowners today are wondering how to improve the appearance of their property for a faster sale at the highest possible price. With the start of 2015 around the corner, now is the ideal time to consider a variety of fresh and creative ways, both big and small, to achieve the goals of increased functionality, visual appeal and resale value.

1) Make kitchen improvements a top priority. Your kitchen is the most utilized room in your home, a place where families and friends gather for daily meals and holiday celebrations. The kitchen space, now more than ever, serves as a central gathering point and an extension of living and family rooms, the so-called great rooms. It’s also one of the most important areas that buyers look at when searching for a home. An updated kitchen is great for resale value.

2)  Make small, cost-effective improvements for a fresh look. Painting, whether interior or exterior, is relatively low-cost and adds a quick revamp to your home. Another way to improve on a small budget is by cleaning up and trimming landscaping, and adding new, affordable plants. Adding new plants will give your yard a pop of color and won’t break the bank. You want the best first impression and “curb appeal” for your property, and fresh flowers and landscaping will add allure to the outdoor area.

De-cluttering is another easy step, and makes a big difference in making the home look larger.

Imagine that you are a prospective buyer seeing your home for the first time, and use that critical eye as a guide for getting your property into shape.

3) Pay attention to market trends. When looking to make renovations to your home, pay attention to what will also contribute to resale value. For example, modernized bathrooms and showers are important to homebuyers. Also, creating an open floor plan for the living space, and choosing dryscape and water-conserving landscaping can be effective. Pay attention to market trends and any new and important features for homebuyers. This will help make sure you get the best return on your renovation investment.

4) Stay neutral. Keep your color palettes centered on neutral earth tones when renovating, while incorporating some contrast. You want to appeal to the largest selection of buyers, and neutral colors make it easier for buyers to visualize living there. Also, neutral colors can easily be painted over to meet buyer preferences. The most important thing is for the buyer to be able to visualize the home to meet their tastes after they make the purchase. It will be harder for the buyer to picture this with loud and outdated, odd colors throughout the home.

5) Look at houses in your neighborhood that have recently sold. By checking out homes that are for sale and have recently sold in your neighborhood, you can get a better idea of where to improve. Which styles and finishes garnered the best values? Hire a licensed and experienced contractor familiar to the area. Decide which areas of the home are most important and serve as the best areas to spend your money to see the highest return.

6) Don’t over-improve. This is a common mistake among many homeowners, especially when deciding to take on a home renovation project without the help of a professional. If you over-improve and spend money on unimportant remodeling projects, you won’t see a return on your investment, particularly if the work makes your property the highest priced home in the neighborhood.

If you are unsure of which renovations to make, and where to spend the money, it’s best to get the opinions of professionals. Consult multiple contractors, compare notes and make an informed decision on where to improve, including the areas that aren’t as critical to be updated.

7) If it’s too tough to DIY, hire a professional! Make sure to hire a professional before taking on a project that’s too tough to do it yourself (DIY). The last thing you want is to spend the money to start a home renovation project before realizing that you are in over your head, and need to spend additional funds and time hiring a professional to correct your mistakes. Before starting a project yourself, be 100 percent confident that you can finish the job correctly on your own. If not, you will save time and money by hiring a licensed contractor.

Source: Renovation Realty

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2014. All rights reserved.

Four Ways to Boost Your Credit Score

A recent Federal Trade Commission study showed that approximately 26 percent of consumers have credit report mistakes that could lead to higher loan and insurance payments. More than a quarter of participants in the study found at least one error on their credit reports, and five percent had errors serious enough to affect loan terms.

“Credit reports play a crucial role in determining consumers’ financial discipline and responsibility,” said Howard Dvorkin, CPA and Chairman of Debt.com. “Detecting credit report errors allows consumers to correct inaccurate information that could potentially lead to denied loans and high interest rates.”

Dvorkin advises that consumers review their credit report and take steps to correct any issues. He recommends:

Correcting errors on credit report – Consumers should check their credit score at least three months before making a purchase. If they identify mistakes, consumers should write a letter to the credit bureau and organization responsible for reporting the inaccurate information. In the letter they should explain why the information is incorrect and what should be changed on the credit report.

Asking for a credit-line increase – The credit utilization ratio is one of the major factors that contribute to the overall credit score. Using too much of the available credit can have a negative impact on a credit score. While it’s possible to fix this issue by paying down debt, sometimes consumers may not be able to afford it. To avoid having a low score, consumers should call their card provider and ask for a reduction of their interest rate. This could help consumers to pay off their balance quicker.

Consolidating your debt – Another quick way for consumers to improve their credit score is to consider consolidating their credit card debt. This can make it easier to pay down debt and also increase the average age of revolving credit lines, which can help the credit utilization ratio.

Consumers shouldn’t add an installment loan to their credit portfolio “just because,” but if they are in need of a student or personal loan, they may be able to quickly improve their credit score. Creditors want to see that consumers can handle a wide array of debt, so having this type of loan can be beneficial. If consumers are in dire need of improving their score, taking out a small personal loan that they can pay back over time could help.

Using an old card – If consumers have a card that they haven’t used in a while, they can start making purchases with it again. Not using a card for an extended period of time could lead to credit card providers no longer reporting it to the three major bureaus. By simply using an old card, consumers can increase their credit utilization ratio and extend their history.

Source: Debt.com

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2014. All rights reserved.

7 Helpful Tips for First-time Homebuyers

By Bill Gassett

Looking for a new home can be a pretty exciting task. With that much money on the line, it’s worthwhile to read up on the process before you set out. Unnecessary mistakes can—and should—be avoided while trying to get the best deal for your money. As a first-time homebuyer, proper guidance from seasoned professionals can make all the difference.

Here are a few tips first-time buyers can use when trying to find their first home:

1. Get clear on what you want – This is the most important part of your preparation. You are about to enter a shopping experience that is unlike any other. At times, it can be stressful and difficult. There is a lot of money on the line and a big commitment to be made, so prepare accordingly. Get clear on what you really want and what you are willing to compromise on. This will make your home-shopping experience much more efficient and will give you a map to go off of should tensions run high. The better prepared you are, the better chance of having a smooth transaction.

2. Do your research – Home shoppers today are more empowered than ever before. You have so much information at your fingertips. Go online and find the areas you want to live in. Narrow down the neighborhoods you want to consider to three or four, and focus on those. Learn about the cost of the things you really want and the cost of the things you can do without. The more knowledgeable you are, the better you will be at negotiating a good deal.

3. Talk to the bank – Preparing to get a mortgage in advance of your actual purchase will be super important. Before you start looking at houses, have a discussion with your lender. The lender will be able to give you an honest assessment of what your finances look like, how much house you can afford and what your rates will be. You want to know all of this—what it will really cost you—before you start looking at homes you can’t actually afford. Find out what your monthly payment will be at different rates and determine what your personal limits are as well. Depending on your credit, the lender may be willing to give you far more than you need. Once you know the time is right to buy a home, make sure you get pre-approved by a lender. Make sure you understand the difference between getting pre-approved and pre-qualified for a mortgage. Without a doubt, you will want to get pre-approved, as a pre-qualification letter is not worth much. A savvy REALTOR® representing a homeowner will pick up on this right away. If you are competing with other buyers and are not financially prepared, you could lose out on your dream home.

4. Think about the future
– Is this going to be a starter house that you will move out of in five years? Is it going to be a property that you fix up and flip? Is it going to be the home for your new family that you will be in for 10 or 20 years? Your long-term plans will help dictate your purchasing choices. It is important to understand what you really want this home for before you go and sign any papers and spend any money. One of the biggest mistakes first-time homebuyers make is not thinking about their long-term plans.

5. Find a good REALTOR® – A real estate agent can prove invaluable when shopping for a home. If you find one that is good—an agent that is finding people the homes they want at a price they are happy with—then much of the work will be done for you. The agent will talk about what you want, will run you through much of the above mentioned areas and will help you find the houses that are really what you are looking for. The agent will also be an effective negotiator, meaning that you will probably get more house for your money than if you went at it alone.

6. Set a timeline – The situation you are in is uniquely your own. You want to set a timeline for when you will find and buy home—a timeline that reflects your realities. If you have bad credit that needs to be cleaned up first, for instance, you will need to spend some time working on that before you actually start house hunting. If you need to move right now, that is another factor in your timeline. Give yourself some restrictions so you will be encouraged to move at a steady pace and get the job done. Hunting for a house can be quite stressful and it is not something that should be drawn out any more than necessary. Determine what you want, work with a REALTOR®, and get it
as efficiently as possible.

7. Understand your fiscal responsibility – Another problem that first-time homebuyers don’t always properly think through is the financial responsibility of owning a home. A large amount of buyers will think about making their mortgage payments and nothing else. If you have been renting for a while, or even living with mom and dad, it is easy to see why this can happen. Unfortunately, owning a home comes with quite a few more first-time home expenses that you may not have considered, such as appliances, furniture, and even taxes and insurance. These are all important things to consider when putting together your home buying budget.

Use all of the above tips for finding your first home and you will be well on your way to enjoying your new life as a homeowner.

Bill Gassett is a nationally recognized real estate leader who has been helping people move in and out of the Metrowest Massachusetts area for the past 27-plus years. He has been one of the top RE/MAX REALTORS® in New England for the past decade. In 2013, he was the No. 1 RE/MAX agent in Massachusetts.

This article originally appeared on RISMedia’s blog, Housecall.

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2014. All rights reserved.

Housing’s Share of GDP: 15.5 Percent for the Second Quarter

By Robert Dietz

Housing is an important source of economic growth. As of the second quarter of 2014, housing’s share of gross domestic product (GDP) was 15.5 percent, with home building and remodeling yielding 3.1 percentage points of that total.

Housing-related activities contribute to GDP in two basic ways.

The first is through residential fixed investment (RFI). RFI is effectively the measure of the home building and remodeling contribution to GDP. It includes construction of new single-family and multifamily structures, residential remodeling, production of manufactured homes and brokers’ fees. For the second quarter, RFI was 3.1 percent of the economy.

The RFI component reached a $496 annualized pace during the second quarter. This is the second highest quarterly total for RFI since the middle of 2008. Overall GDP expanded by 4.6 percent for the quarter, with RFI adding 0.27 points of that total.

The second impact of housing on GDP is the measure of housing services, which includes gross rents (including utilities) paid by renters, and owners’ imputed rent (an estimate of how much it would cost to rent owner-occupied units) and utility payments. The inclusion of owners’ imputed rent is necessary from a national income accounting approach because without this measure increases in homeownership would result in declines for GDP. For the second quarter, housing services was 12.4 percent of the economy.

Historically, RFI has averaged roughly 5 percent of GDP while housing services have averaged between 12 percent and 13 percent, for a combined 17 percent to 18 percent of GDP. These shares tend to vary over the business cycle.

View this original post on the NAHB blog, Eye On Housing.

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2014. All rights reserved.