Blogging with Jo Crowe

Welcome to my Blog! Each week I post a short article dealing with a current real estate concern or question, offer helpful suggestions if you are considering buying property or share useful information for those who have property to sell. Here's a bit of Real Estate Wisdom for this week.

November 17, 2008

TRUTH OR CONSEQUENCES!

It’s more difficult than ever to realistically and successfully price your home for sale. Many economic factors affect your pricing decision. Agents present you with the facts, but the final determination of asking price is yours and yours alone. So contact a Real Estate agent and familiarize yourself with the following criteria.

There are more homes for sale now than in the past. Larger inventories exist mainly due to the fact that many sellers waited to list, trying to catch the top of the market. Now, they’re trying to sell before it bottoms out.

While still historically low, mortgage rates are creeping up. Every rate increase disqualifies a segment of buyers for financing, negatively impacting your selling ability.

Besides higher interest rates, buyers are subject to stricter loan application requirements. Again, the higher down payments and credit scores needed for financing eliminate many applicants from your pool of prospective buyers.

Are there homes in your neighborhood that investors couldn’t “flip”? Then they are either vacant or listed below market value by owners who would rather take the loss than become landlords. Either way, these homes and foreclosed properties adversely affect property values of others in your community.

This is reality. Expect your agent to be completely honest with you about local conditions, and you will find that trust, reason and determination will create a sale, even in a down market.

If you have questions or comments about this article, please contact me at appalachianland@appalachianland.com. We wish you good success in your Real Estate endeavors. If we can help you in any way, it will be our privilege to be of service.

November 10, 2008

STEPPING UP TO DOWN MARKETS!

Remember the ancient curse, “May you live in interesting times”? While many are indeed cursing the current real estate climate, others see opportunities. In a “soft” market the short-term options dwindle, but seasoned investors in for the long haul are positioned to take advantage.

In the words of billionaire J. Paul Getty, “Buy when everyone else is selling and hold until everyone else is buying.” Just like the stock market, more money is often made in a down cycle than in an up market.

Slower times encourage sellers to be more open to negotiation. Combine acceptance of lower prices with currently low interest rates, and you’ve got the perfect recipe for bargains. Real estate is continually cycling, and it’s guaranteed that prices will rise again. The time to get in is now, before that begins to happen.

A “buy and hold” strategy works in this market while your property appreciates. While you wait, consider leasing it. The property can pay for itself with rent collected, and an investor that can pay off a small mortgage is in an excellent position indeed.

Learn from your real estate agent and tax advisor how a “1031 Exchange” can greatly reduce your tax liability when it does come time to sell your investment. Now is the time to get in—but be sure you know how you’ll get out, too!

November 3, 2008

KEEP THE CART BEHIND THE HORSE!

It’s probably no surprise that nearly all buyers require financing for their home purchase. The real challenge is not so much in getting the loan as it is in finding the loan that’s right for you.

The time to start your loan search is before you begin looking at homes. After you’ve reviewed your loan options, you’ll have a better idea of just how much home you can afford.

Starting early also gives you an edge when you offer to purchase a property, because most contracts will specify that you have to apply for financing within a certain amount of time, usually seven to ten days. Meeting with a lender in advance prevents your having to rush into a loan decision.

You’ll also have an advantage with sellers, because an offer to purchase from a pre-approved buyer is more attractive to sellers who won’t have to worry about whether you’ll qualify for financing. It demonstrates to both you and the sellers that you have the financial strength to complete the purchase on schedule.

Many real estate agents have experience and relationships with local lenders and can suggest one or more lenders who offer a variety of loans with competitive terms and quality service. Your mortgage is as individual as you are, so take the time early on to match a loan to your particular needs.

October 27, 2008

READY TO OPEN UP?

There’s been discussion among professionals in the real estate business for years now regarding the value of holding open houses. The National Association of REALTORS® conducted a survey last year that revealed 80 percent of buyers used the Internet for property searches, but only 42 percent visited open houses. What gives and are open houses a waste of everyone’s time?

The answer varies according to whom you ask and there are good arguments on both sides. Some agents feel that truly serious buyers do their searching well in advance and choose to make appointments to see the homes that really excite them.

Other agents have learned that buyers enjoy the freedom of seeing properties without an appointment and without the company of a representative when they visit. Sellers, on the other hand, sometimes expect agents to host open houses to show that they’re woking hard for their compensation.

Real estate agents often begin developing relationships with buyers through open houses. By learning the needs of particular buyers at an open house, the agent may be able to direct those buyers to another home that’s better suited to their needs—perhaps yours!

In a nutshell, both sides can be equally argued, but the sale of your home is as unique as you are. Discuss the potential benefits and deterrents of an open house with your agent.

October 20, 2008

HELLO, FICO?

You’d have to be living on another planet if you haven’t heard reports of subprime mortgages and their effect on the real estate industry. If you’re planning to buy a home, it’s apparent that loan qualification these days is more challenging. Sellers also feel the effect from fewer qualified buyers who can make a confident, full price offer.

In preparing a loan application, the most critical factor is usually your FICO score (developed by the Fair Isaac Corporation). You may be aware that your score can range from 300 to 850 points, and that your score affects your terms and interest rate. However, there are some details you may find interesting.

You don’t have simply one score, you have three – one from each credit reporting bureau (Equifax, Experian and TransUnion), and each score may differ by as many as 100 points. Your score is formulated from percentages of five different factors: your payment history (35%), you debt (30%), length of your credit history (15%), your credit types (10%), and any newly issued credit (10%).

In order to qualify for a “prime” loan, you’ll need a FICO score of at least 620, but you’ll get the best terms and interest rate if your score is above 720. Your best bet is to check your scores and reported history well in advance of a planned purchase.

October 13, 2008

SEEING GREEN?

With global climate change and rising fuel prices, more people are growing interested in boosting energy efficiency, and homebuyers are among them. What improvements might you consider in order to make your home more marketable in the Environmental Age?

Believe it or not, simply caulking and weather-stripping your windows and doors are two of the quickest (and cheapest) ways to show off your home’s efficiency. If you’re ready to take the next step, upgrade your appliances to Energy Star standards to make a big impression. (You can research your current models at www.energystar.gov.)

Along those lines, you can ask your utility company to visit your home and perform an energy audit. It costs around $100 and takes only about an hour. Doing this in advance of your listing can be a powerful marketing tool, especially if you receive a good report or you make improvements based on its findings.

For instance, in an older home, you might go ahead and insulate your attic, helping your home retain heat and reducing your electric or fuel bills. Buyers who are made aware of this feature and the savings to be realized will likely move your home up their list of choices.

With all the other preparation involved in selling your home, it’s easy to overlook the benefits of energy efficiency, but buyers are looking for them – so start seeing green!

October 6, 2008

Bricks Beat Paper!

Yes, there’s been trouble in real estate paradise and, no matter the causes, the dramatic results have been experienced across the country. Before assuming that housing is a risky investment, please understand that owning a home offers countless advantages over stocks and other securities.

First, home ownership lets you put in a little money and get the whole house. Money in stocks only buys a very small piece of the company.

You also benefit because the government “bribes” you into buying a home by offering scores of tax write-offs like mortgage interest, property taxes, depreciation – you may even avoid capital gains taxes.

As a homeowner, you’re also the sole shareholder! YOU control what to buy and what to pay. YOU choose how to increase value through improvements. Try to exercise that kind of power at a company shareholders’ meeting of thousands!

Stocks incur risk because they may become worthless. That’s extremely unlikely with your home. Even in the worst periods, homes retain most of their value. Fluctuations over a couple of years eventually balance. What you haven’t heard widely reported is that housing lost value in only ONE year out of the last thirty-five.

But what’s the undeniable advantage of a home over a stock certificate? Quite simply, you can’t live, dream, raise a family, and feel secure with only a piece of paper over your heads!

September 29, 2008

Before It’s Too Late!

Foreclosure is forcing the sale of many homes, putting homeowners in a very stressful and challenging position. While most people think of real estate agents as mediators between buyers and sellers, realty professionals also work with lenders, who are likewise facing challenges.

Financial giant Freddie Mac commissioned a survey and found that 58 percent of homeowners who are delinquent in their payments didn’t know that lenders offer many ways to help. They also didn’t realize that free counseling is available for those facing default.

For instance, did you know that a missed payment could be added to your loan balance? Or that you can extend the term of your mortgage? It will take longer to pay off, but it keeps you in your home.

That’s another frequently misunderstood point. Banks really don’t want to take your home back – they want YOU to keep it and pay for its maintenance and property taxes and so on. Banks are in the business of lending (and making) money, not in maintaining real estate.

While help offered by lenders and assistance organizations can save four out of five homes from foreclosure, the sad fact is that most homeowners simply don’t find that help until it’s too late.

Please, protect your investment and your community’s property values by availing yourself of the assistance that’s freely available. Don’t wait another moment.

September 22, 2008

Certify that Pre-Owned Home!

If you’re looking for a competitive edge in the sale of your home, your real estate agent may have an unexpected suggestion. Although many sellers assume that it is the responsibility of the buyers to pay for an inspection, having one performed before you even list your home can go a long way towards attracting a full price offer from confident buyers.

Think about it. If you’re aware of flaws and needed repairs before you begin marketing your home, you can correct potential problems before buyers even have a chance to think about negotiating a lower price for repairs. Sellers can expect an offer that is two dollars less for every dollar in needed improvements, so why would you give away that money when you can save it by simply investing in a pre-listing inspection?

A pre-listing inspection also reduces time and stress before closing because there’s no rushing around trying to get requested repairs done on the buyer’s schedule. You’re also establishing good will right off the bat, creating an atmosphere of trust and honesty up front.

All of these aspects greatly increase the chances that the buyers will offer full price and follow through to closing without any doubts, delays, or picky negotiations. Like a quality used car, giving your home the “Certified Pre-Owned” label will encourage the buyer’s seal of approval!

September 15, 2008

Timing Isn’t Everything!

In light of declining sales and tougher loan requirements, many potential buyers are asking if they should buy now, or wait several months before moving forward with a buying decision. The truth is, you can’t time the real estate market any more than you can time the stock market. Simply put, the best time to buy is when you need to do so.

Start searching now, targeting your preferred locations and getting a sense of the local trends. Speak with local realty professionals to gauge listing times, list-to-sale ratios, and contract terms. There’s no such thing as a “national” market, and every area is going through its own adjustments—up or down.

Now is a good time to begin your loan search as well to determine how much home you can afford and to start assembling the required paperwork. If you’re not pressured to move right now, securing loan pre-approval will give you the chance to immediately take advantage of an excellent purchase opportunity as it appears.

Owners who are pressured to sell for reasons like foreclosure or job relocation may be more willing to negotiate. However, if you really love a particular home, don’t lose it by haggling over a few thousand dollars. A home is not a stock certificate. In a buyers’ market, take your time, do your homework, and make the most of it!

September 8, 2008

Hot Sales in Cool Markets

While some real estate markets are experiencing increasing listing times and decreasing sales, others are still doing well or even booming. Regardless of which applies, how do you position yourself for a quick, full-price sale? Even in slow markets, some houses sell quite quickly, and it’s for the very same reasons that they would sell in a hot market.

The best performers these days are older homes with three bedrooms and two baths. In addition to those features, the home is priced a few thousand dollars below the area’s average asking price.

You won’t consider competitive pricing a concession when offers come in more quickly and with less negotiation. Peace of mind and a quick sale are more than worth the difference between your asking price and that of your competition.

The second common denominator among successful sales in slow markets is the fact that the properties show like model homes. Sure, location is critical, but it’s condition, condition, condition that helps to set your offering apart from other homes on the market at the same price.

The final factor these sales share? Aggressive marketing by a real estate agent. A professional who shows your home to an already qualified and motivated group of buyers is worth his or her weight in gold at the closing table. Combine price, condition, and marketing for a satisfying sales result!

If you have questions or comments about this article, please contact me at

appalachianland@appalachianland.com.

We wish you good success in your Real Estate endeavors. If we can help you in any way, it will be our privilege to be of service.

September 2, 2008

Plenty of Fish in the Sea!

While many areas around the country are experiencing a “buyer’s market,” you still need to exercise caution when offering to purchase at below asking price. Bargaining is indeed an art, and the last thing you want to do is to insult the sellers.

An unreasonably low offer risks angering the sellers to the point that they won’t even make a counter-offer. In general, an offer more than 10% below asking price is not customary and faces possible rejection. However, there are ways to proceed with respect when you feel that a lower offer is warranted.

Sit down with your Real Estate agent and make a list of reasons to share with the seller about why your offer is less than asking price. Also, seriously consider negotiating other terms of purchase, such as closing costs or repairs. A reduction or concession on those aspects can still yield great savings.

Whenever you are in the presence of the sellers, be sure to practice proper etiquette and show respect. Consult with your agent before any meeting to make sure you’re both on the same page.

Ultimately, the best way to make your offer with confidence is to realize that there are many attractive homes for sale in your price range. If a seller rejects your offer outright, turn your attention to the other suitable properties on the well-prepared list of possibilities provided by your Real Estate agent.