How the Appraisal Impacts Your Home Sale

Market value, appraisal value, what does it all mean? How do these numbers impact your home sale? The short answer is that the market value determines the price at which you list your home. This is the price that a buyer is willing to pay for your home in the current real estate market conditions. Your local Realtor will be able to assist in pricing your home to sell quickly.

The appraised value of your home comes from a report completed by a licensed appraiser. The appraisal is a part of most real estate contracts, as the buyer's lender will not award a loan on a home that is priced above the appraised value. Because of this, some sellers may choose to have an appraisal done on their home before listing it for sale. It's important to keep in mind that, as the market shifts, the appraised value of a home may not be its true market value.

In a buyer's market, when inventory is high and demand is low, the market value of a home will usually fall below the appraised value. In a seller's market, when inventory is low and demand is high, sellers need to be careful of pricing their homes over the appraised value.

If an appraisal comes in below the offer price, then there are a few options. The seller may decide to lower the price to the appraised value, or the buyer can bring extra cash to the table to purchase the home. The buyer's lender will not approve a loan on a home that is higher than the appraised value, so one way or the other, the money will have to be adjusted.

How to Prepare
Although many items that are covered in the appraisal are fixed within a home and the attached grounds, there are some things you, as a seller, can do to ensure your home is rated at its best value. Many of these things are also recommended when staging your home, so if you have taken those steps before listing, you will be ready to go.

• Clean up - A clean home will always make a better impression than a cluttered, dirty one. Cleaning your home also makes it easier for the appraiser to move about and get where he needs to go.
• Maximize curb appeal - Mow the lawn, tidy up the landscaping, and put a fresh coat of paint on that porch. Small maintenance items like these can go a long way in making a first impression.
• Feature your updates - Any permanent changes that you have made to the house should be documented and shared with the appraiser, if possible. This is especially important for less apparent updates like a new HVAC system or roof. The appraiser will appreciate having these pointed out to him.
• Show comparable homes - Your local Realtor should be providing you with current market updates before and while you are on the market, but if you don't have some comparable homes on hand, she should provide this for you and present it to the appraiser.

Are you buying a home in Northern Virginia this year? Contact Greater Cincy Homes today to get started!

Originally posted on www.sarahknobbs.com.

How to Write an Offer

You've met with a Realtor, you've viewed the best homes on the market, and you found the one. Now you have to write a great offer to entice the seller to work with you. In a buyer's market, you may have more flexibility, and in a seller's market, the sellers have the advantage. A combination of low inventory and high demand means well-priced homes in the area sell fast, so you have to be extra careful when submitting your offer. Your local Realtor will be sure to guide you, and this post will help you understand all the moving parts.

Price
Of course one of the most important factors to whether or not the seller will want to work with you is the price you offer on their home. It is crucial to consult your local Realtor on this. You hired her to be the expert, so listen to her advice. She will know if the listed price is fair, or if the home is overpriced. This will help you avoid giving a lowball offer, which may offend the seller and cause you to lose the home you love.

Earnest Money Deposit
As part of the real estate contract, you are asked to give consideration (i.e. a monetary deposit) with your formal written offer. Generally speaking, this amounts to 1-3% of the sale price of the home. If you are in a competitive situation and you can afford it, your agent may recommend offering a higher earnest money deposit, or EMD, to show the seller that you are all in and will work with them towards a mutually agreeable settlement.

Contingencies
There are several contingencies that may become a part of a real estate contract. The most common contingencies are financing, appraisal, and home inspection. Depending on the location of your home, you may need or want additional inspections such as well and septic. A radon test may need to be included. Your financing (or cash offer) may result in a different type of contingency as well. Your local Realtor will advise you on which ones you will need to include in your offer and the best way to present them to the seller. 

Timelines
Just as you have a date in mind by which you want or need to move, the seller is probably in the same boat. Merging schedules can be tricky, so make sure your local Realtor contacts the seller so that you can smooth over the detail of the settlement date early on in negotiations. Other timelines will need to be assigned to each contingency, and your local Realtor will be sure to advise you on what is best.

Are you buying or selling a home in Cincinnati or Northern Kentucky this year? Contact Greater Cincy Homes today to get started.

5 Unusual Items to Advertise When Selling Your Home

The great thing about homes are that every single one is unique. When you prepare to sell your home, the best things to focus on are the standout features of your individual residence. Of course buyers want to know about the kitchen, bathrooms, and outdoor spaces at a minimum, but there are some less obvious items that should not be overlooked when advertising your home to sell. See if your home boasts any of these 5 items, and shout it from the rooftop... or at least get it in the property description.

Storage
Everyone has stuff, and everyone needs places to put it. If you have large closets, built-in bookshelves, a pantry, or even an unfinished room in the basement, don't be shy about it. Buyers want to know that they can bring their collection of antique figurines or their massive library or whatever else is important to them. Plus, they want to make sure they can store their clothes and kitchen items with ease. Storage is a huge asset for any buyer.

Amenities
Does your neighborhood have a pool? A playground? A clubhouse? Walking trails? If you are nearby to any community amenities, let buyers know. Convenience can be a big motivator for buyers to make a move, especially if there are multiple homes in the same price range in your area. If you don't live in a neighborhood with a ton of amenities, think about other features of your location. Proximity to major roads, shopping, schools, and entertainment are all worth mentioning.

FlexibilityMany buyers look to stay in their home for several years and through multiple stages of life. Just because they are a young couple starting out doesn't mean they will stay just two. Buyers look for homes that have potential to grow and change with them. Empty nesters may look for a home with the option of single-level living to ease the way into old age, families might look for space in the yard for an addition, or a buyer might prefer an unfinished basement to add in a workshop or theatre room. 

EfficiencyEnergy Star- rated appliances, LED lightbulbs, tankless water heaters, multi-paned windows, and blown-in insulation are all items that should be advertised when selling your home. These features lower energy costs and are often things that buyers will not have to worry about or replace very soon after purchasing a home. An educated buyer will look for long-term saving options like these when searching for a home.

Eco-friendlinessGoing green is not just a trend anymore. The use of recycled materials in your home is something to share with potential buyers. Bamboo or cork flooring are beautiful materials that stand out in a listing description, as do recycled glass countertops or composite decking made from recycled plastic and wood products. Items that are eco-friendly are often also energy-efficient and long-lasting, so it's a win-win for the new owner. 

Are you buying or selling a home in Greater Cincinnati or Northern Kentucky this year? Contact Greater Cincy Homes today to get started.

Mortgages With Low Down Payments

Most of the news about the housing market has been good in recent months; we are recovered and moving on up. That's good news for buyers and sellers, but we are now seeing more buyers entering the real estate market than before the crash. At first the market recovery was almost too quick for many buyers; prices were rising fast, but we now see a steadier market with better affordability. The other big change we see is that the tightened lending regulations are able to open up at this point. More buyers are now able to buy with low or no down payment options.

VA Loan
The Department of Veterans Affairs provides guaranteed home loans to qualified veterans. Borrowers can buy with zero down payment, and there is no mortgage insurance. The borrower does pay a funding fee, which can range from 2.15-3.3%. That funding fee can be added into the total loan amount and paid as part of the monthly payment. The funding fee is determined by the type of service the veteran gave, whether it was National Guard, Reserves, or enlisted/officer in the military and by whether or not it is the borrower's first VA loan.

Navy Federal
Navy Federal Credit Union offers mortgages with no down payment to members of the military, Department of Defense, and their family members. The loan must be used for a primary residence, and it has a funding fee, like the VA Loan. The Navy Federal loan is only 1.75%, which gives it an edge over the VA Loan.

USDA
The Department of Agriculture supplies home loans, and not just for rural areas. They usually run out of money because of the popularity of this program. USDA loans have no mortgage insurance. They charge a 2% guarantee fee upfront, and then each year the borrower is charged 0.5% of the loan balance.

Mortgage Insurance
For borrowers with strong credit, this option allows a down payment as low as 3%. Private mortgage insurance (PMI) has stricter requirements than an FHA Loan (below), but it can cost less over the loan term. Another advantage of this over an FHA loan is that the PMI can be cancelled once the loan is under 80% of the mortgaged home's value.

FHA
The Federal Housing Administration offers loan products to borrowers with imperfect credit and not a lot of cash. This isn't the cheapest loan option, but it gives more buyers the opportunity to enter the real estate market, which is better for everyone. There is a premium of 1.75% charged at the start of the loan, and if the borrower paid the minimum down payment (3.5%), there is also an annual premium of 1.25%. This makes for a higher monthly payment on a similar property to a conventional loan, so borrowers' affordability is lowered in comparison.

No matter what your credit situation and down payment ability is, it is crucial to talk to a qualified mortgage professional before beginning your home search. Contact Preferred Realty Partners today for some great recommendations and to start your home search.

Originally posted on www.sarahknobbs.com.

5 Ways to Protect Your Finances When Buying a Home

The search for your next home is always exciting, but it can often be filled with traps and pitfalls if you are not careful. Below you'll find 5 great ways to protect yourself in your next home purchase. Don't be a statistic; do your due diligence and get settled in a home that you can afford comfortably.

1. Be cautious about distressed properties
Many buyers seek out short sale homes or homes in foreclosure as a way to get a bargain on a new home. While some of these homes are still in good condition, many are not. It's important when you are considering a foreclosure or short sale home to do your homework. Be sure to hire a competent home inspector, and if major issues are found, hire a licensed contractor to analyze the problem and see if you can afford the fix. Even if a home is priced below market value, a fixer-upper can cost you more at the end of the day.

2. Watch out for overpriced FSBOs
Some buyers will talk to FSBOs (For Sale By Owner) because they want to cut out the Realtor commission and save themselves 3% on the price of the home. In theory, that could work, but many times FSBOs are actually priced higher than the market value because they haven't been priced by a professional. Be sure to talk to your buyers agent about the neighborhood values to ensure that you are not being wooed by an enthusiastic owner to pay too much for your home.

3. Don't borrow the full amount your lender offers
When you sit down to talk to a lender, they will review your financial situation with you to determine what you are able to borrow. They all have their systems in place that will give you a price they feel you can afford in the long-term. However, it's not always the best idea to shop at the top of your budget. While the lender knows a lot about your credit and expenses, they can't decide what monthly payment you are comfortable with. That needs to be a discussion between you and anyone else who is sharing that monthly mortgage payment with you.

4. Maintain a cash reserve 
Besides determining the amount of money you want to borrow to buy a house, you have to look at what liquid funds you have at your disposal. It's never a good idea to spend your entire savings on a down payment for a house. Keep a reserve available for taxes, utilities, repairs, and maintenance. Many homebuyers don't realize how much they will need to spend to move into a new home, especially first-time homebuyers. Keep your spending conservative with your home purchase, and you will be able to comfortably enjoy it for years to come.

5. Hire a strong buyer agent
This is perhaps the single best thing you can do to protect yourself when buying a home. A strong buyer agent will guide you through all of the above and more. They will make sure you see the best homes in your price range, and that you understand all of the costs involved in living there. A knowledgeable agent will know about the local HOAs, any special assessments, and they will be able to negotiate the best sales price for you. Don't sell yourself short; hire a strong buyer agent to help you and get to closing without the headaches.

Are you buying a home in Cincinnati or Northern Kentucky this year? Contact Greater Cincy Homes today to get started!

Originally posted on www.sarahknobbs.com.