Suggestions to ensure the Highest possible price!

Heed these 8 suggestions from real estate pros to ensure your property gets the highest possible price.

Little things mean a lot when it comes to selling your home and getting a great price for it. But if everything counts and you have only so much time and money to invest, how do you know where to start to get your home for-sale ready and to fetch the best price?

The good folks at Consumer Reports National Research Center set out to answer just that, with an online survey of 303 real estate professionals from around the country.

As we head into the hottest selling season and with 5.3 million homes expected to change hands this year, use some or all of these strategies to help you leverage all you can against the competition.

    1. Stage and declutter your home

One of the panel members Consumer Reports consulted was the former executive producer for This Old HouseMassachusetts realtor and renovation consultant, Bruce Irving. Bruce was previously interviewed by Oprah protégé, Nate Berkus, and The New York Times called him “the house whisperer.”

“Do all the work necessary to make your property look good, not through expensive changes but through excellent staging,” says Irving. “Your agent should be able to provide proper advice and even bring in a professional.”

That means clearing out your clutter.

“I have a gal who I send into listings to declutter and depersonalize for sellers and just tidy things up using the sellers’ own possessions for the most part,” says Karen Wallace, an agent with Lyon Real Estate, located in Auburn, CA.

Tara Miller of Tarabell’s Designs in Portland, OR, does just that: she helps homeowners and agents stage their houses for maximum sales appeal.

Miller points out that people who don’t keep up on needed repairs end up spending the most when it comes time to prepare a home for sale.

“It’s remarkable what regular home maintenance, cleanliness, and minimizing clutter in your everyday life can do for you when it comes time to sell.”

She also notes that staging a home is very different from designing or decorating. “It’s a tough thought, but not everyone likes your pets, hobbies, sports teams, or religion.”

2.Clean it up!

“If it’s dirty, it will not sell — even if it’s a great place,” says Kathy Partak, a realtor with Select Estate Properties in Auburn, CA.

In fact, most of the agents we spoke to focused on overall cleanliness and space as the biggest factor in selling your home.

And cleanliness pays off, according to Consumer Reports: cleaning can deliver a 3% to 5% return on investment, and this is something you can do yourself.

When showing your home, Irving adds, “Raise window blinds, lower toilet seats — make sure the place looks at least as good as it would if you were having your boss over for dinner.”

3.Enhance your curb appeal

First impressions sell your home. As soon as a potential buyer drives up to your house, they’re making judgments — and a messy yard or a broken mailbox could cost you.

“Exterior space is ‘free’ extra square footage and is so appealing to buyers,” says Wallace. “It pays to enhance it.”

But if your staging budget doesn’t include the outdoors, Partak suggests making the most of the walk from the car to the entry.

“Make it look nice from the curb with some easy potted or planted flowers to trim the walkway.”

4,Pay attention to details

The details that you may believe are insignificant can turn out to be major selling points for your home. For Irving that includes everything from paint touch-ups throughout the house to a full redo of public rooms.

“Wash your windows, replace compact fluorescent bulbs with incandescent or halogen, and remove or minimize personal photographs,” he says.

If you have a small budget, Partak suggests upgrading to energy-efficient windows, and adding new appliances in the kitchen. “These are always the things that bring in more money.”

5.Refresh your kitchen and bath

Don’t forget two of the the most important rooms in your home: the kitchen and bathroom. Consumer Reports estimates that you can increase your home’s value by as much as 7% through renovation.

If you don’t have renovations in your budget, Kristen Kohnstamm, principal broker and co-owner of Dunthorpe Properties, a luxury real estate firm in Portland, OR, recommends fresh paint, a low-hanging opportunity to freshen up your space and potentially boost your asking price.

Choose a neutral palette to increase the appeal to as many tastes as possible; buyers need to be able to easily visualize themselves living in the home, and bright colors might turn them off.

“The worst thing you can do is put lots of money into things like carpet, paint, and other aesthetics that a new homeowner will likely want to change,” says Kohnstamm.

6.Invest in good photos

Make sure your real estate agent offers great photos that show your home in its best light when it comes time to list. Home buyers seeking a new place to live will see the pictures online before ever making a decision to visit.

And when it comes to open houses and showings, Irving suggests you “absent yourself” because sellers can sometimes get in the way of a sale by taking things too personally.

7.Don’t DIY everything

Irving’s top tip includes a good finger-wagging at people who think they can DIY a home sale and still come out ahead.

“First and foremost, for correct pricing, widest and best marketing, and the highest price, hire a real estate agent,” says Irving.

8.Try not to take it personally

Kohnstamm cautions first-time sellers to temper their emotions when it comes to the sale of their home. This won’t necessarily increase the value, but will speed up the sale.

“Whatever comments are [made] about your home, they’re never intended as a personal affront. Remember, everyone has different tastes, but clean and well-maintained never goes out of style.”

 

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Mistakes when buying a home!

8 Common Home-buying Mistakes

August 7, 2015 by Leave a comment

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 By: Andrew Penner

Gearing up to buy your first home? Not so fast. Here are 8 common mistakes you’ll want to avoid.

1. Shopping for a home before you get preapproved

Searching for a home is exciting, and it can be very tempting to hire a real estate agent and immediately begin shopping. The problem with this is twofold: you may not fully understand your price range, and you won’t be able to make a qualified offer when you do find the perfect home. Getting pre-approved for a mortgage before you shop will allow you to refine your price range, and enable you to quickly make a strong offer on the home you desire.

2. Not knowing your credit score or debt-to-income ratio

Your credit score and debt-to-income ratio are two of the most significant metrics that lenders use when approving you for a mortgage. You can find your credit score on sites such as freecreditreport.com and creditkarma.com, and you can calculate your debt-to-income ratio by dividing your recurring monthly debt by your monthly gross income.

3. Forgetting about property taxes and home maintenance fees when budgeting

Monthly mortgage payments are often significantly lower than renting costs, but they’re not the only cost of owning a home. Property taxes, homeowner’s association fees, and home maintenance costs can add significantly to your monthly expenses. Make sure to incorporate these into your budget.

4. Picking the first mortgage company and product you see

The lender and mortgage you select can help save you thousands of dollars over the course of your mortgage loan. Before choosing a lender, search for their current interest rates online and compare those with other lenders. After you’ve narrowed your choices to a few lenders, determine which lender will give you the best advice when choosing your mortgage product.

Certain mortgage products may be great for one borrower but not for another. For example, ARM loans are great for borrowers who will be moving or refinancing soon, whereas fixed rate mortgages are great for borrowers who are settling down.

5. Not budgeting properly for closing costs

Closing costs add up quickly. Taxes, origination fees, the down payment, attorney fees, title insurance, and all other closing costs place a large initial hurdle to buying a home. Make sure to thoroughly inspect your HUD-1 Settlement Statement before you close to budget and understand your closing costs.

6. Skipping the home inspection

Home inspections are often considered to be an annoying expense, but the value of a home inspection can be massive. To an untrained eye, the home you’re looking at may seem perfect, but an inspector will help point out any potential flaws in the home. These will give you a better understanding of the home you’re buying, and will allow you to negotiate with the seller for repairs or credits.

7. Buying when you’re in a transient stage

The closing costs for buying a home are not the only expense you’ll have when transferring ownership. Selling costs can also be extremely pricy – especially when you seek the assistance of a real estate agent. If you think you may move in the next year or two, it is probably smarter to rent instead of buy.

8. Relying on verbal commitments

Don’t trust any commitment unless you have it in writing. Having a commitment in writing will give you legal leverage if the other party attempts to back out of their commitme


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Seller’s disclosure and avoid a pesky lawsuit!

 

Seller disclosure is a tricky maze to navigate. If you’ve recently decided to put your home on the market, you might feel hesitant to reveal problems (minor though they might be) which could discourage potential buyers. But not revealing them could get you in a world of legal trouble.

So how much do you really need to disclose? And how detailed do you need to be?

We’d love to give you a concrete answer. But disclosure laws vary by state—and even by city. So here are some basic rules to govern how and when you disclose any problems. (Just remember to do your research on local regulations, and check with your Realtor® and/or real estate attorney so you can know you’re totally covered.)

Related Articles

10 Essential Questions to Ask When Buying a Home (That You May Have Missed)
Do I Have to Disclose a Previous Repair?
Bad Neighbors, and Other Nightmares You Might Need to Disclose to Buyers
When in doubt, disclose

In general, sellers should disclose any known facts about the physical condition of the property, existence of dangerous materials or conditions, lawsuits or pending matters that may affect the value of the property, and any other factors that may influence a buyer’s decision.

But how can you possibly know what might influence a buyer’s decision? Maybe a window leaks a little bit when it rains or the basement just barely floods every now and then. Do you really need to disclose it? After all, you’ve learned to live with those things, so the buyer should be able to deal with them, too, right?

Wrong answer! Especially if you want to avoid a lawsuit down the line.

“Most sellers think it is in their best interest to disclose as little as possible,” says Rick Davis, a Kansas real estate attorney. “I completely disagree with this sentiment. In the vast majority of cases, disclosing the additional information (especially if it is something that was previously repaired), will not cause a buyer to back out or ask for a price reduction.”

That also means disclosing issues that have recently been repaired, Davis says. Why? If the buyer later discovers that a repair job was botched, you could be on the hook for additional repairs.

Always disclose inspection reports

In most places, you don’t have to provide copies of inspection reports, but doing so can save you a lot of trouble.

Here’s why: We already know that all sellers have a duty to disclose any “material defects.” And while buyers and sellers may disagree on what a material defect is, one of the best ways to avoid a lengthy legal battle is to just give the buyer all copies of past inspection reports you have—no matter how old they are.

That way, they can’t say they weren’t informed of a problem.

“Sellers should disclose anything and everything they can think of,” says Adam Buck, a certified real estate specialist with the Frutkin Law Firm in Arizona. “Ironically, the more disclosures you make, the less important they might become to the buyer.

“Think [of] prescription medication commercials,” Buck adds. “When was the last time someone decided not to use a new medication because of the laundry list of side effects rattled off at the end of the TV commercial?”

What you don’t know won’t hurt you

Although the threat of a lawsuit can be scary, there’s one thing you don’t have to worry about: The courts won’t hold you accountable for failing to disclose issues you’re unaware of.

Let’s say your house is infested with termites. But you’ve never seen one, or they were missed by an inspection (or maybe there never was an inspection). You can’t be held responsible for not disclosing this defect if it’s discovered by the buyer a few months after closing.

In fact, at a certain point the burden falls on buyers to do their due diligence to uncover any problems.

And if you don’t know, don’t guess

Buyers can ask for a lot of information about a home, including things you’ve never even thought about.

One common problem area in disclosure? Measurements of the home.

Even if you’ve had an appraiser check out your home, you may have no idea how many square feet it truly is because, as it turns out, there’s no single agreed-upon way to measure a home. Yep, that’s right. Three different appraisers can come up with three different measurements.

In a situation like that, it can be tempting to just guess or come up with an average. Resist the temptation, otherwise the buyers can come back later and say you lied or misled them about a material issue.

If you really don’t know the answer to a question the buyers are asking, just say you don’t know—and put it on them to find out the answer.

And if they push you for exact figures on something like square footage, make sure you properly attribute where those numbers came from.

Buck even recommends including a clause in the purchase contract that any square foot measurement quote is an approximation, and if this is a material issue for the buyers, it’s their responsibility to investigate it further.

Just remember: Don’t be afraid of scaring them off with too much information.

“It is much better to lose a buyer by clearly disclosing all known issues than it is to spend two years and tens of thousands of dollars in litigation,” Buck says.
Warren Christopher Freiberg is an attorney and freelance writer living in Chicago.

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Biggest mistakes remodeling ?

Author unknown!

 

The 8 Biggest Remodeling Mistakes to Avoid

The Most Typical Remodeling Mistakes that Homeowners Encounter
Whenever there are people who would do remodeling jobs, there are just many remodeling mistakes that people encounter. These mistakes make the job longer and more difficult to finish than what they tend to be. The following are some of the biggest mistakes that people do when remodeling:

1. Starting without Enough Budget
This is the most common mistake that people experience due to various additions that they want for the job and the budgeting seems to be impossible for the job.

2. Doing Things on Your Own
It is the common mistake of people who are trying to save money, yet realize that they are not skilled enough to do it once they have already started.

3. Getting a Contractor with the Lowest Bid
You should know that people with such bids may be inexperienced with the job and just wants to have something to earn while ruining your remodeling plans.

4. Affecting the Value of the Property
It is the most devastating mistake that people can ever have among remodeling mistakes. With the aim of changing the look of a home, there is a tendency that the resale value would lessen especially when the job done is not at the top standard.

5. Over-customization
One of the reasons why you are going to remodel a place is that, you want to personalize it. Some do permanent changes with their homes, which make the home impossible to resell.

6. Contrasting Changes
The biggest mistakes that people can ever make with their home is remodeling it into a classic themed home, and add up modern touches later on. It is the problem that can leave bad impression to neighbors and even to potential buyers, which may affect their decision to buy your property.

7. Constant Changing of your Decision
Changing one’s plans constantly will only ruin the remodeling project and lengthen the time coverage prior to the completion date.

8. Starting without Finishing
If your mind is not yet set of finishing a particular job, it is best that you will not start the entire project. This will affect the budget and even the time you have allotted for the entire project.

The Effect of Remodeling Mistakes
There are just many remodeling mistakes that end up losing a big amount of money and may only add a little with the resale value. The worst thing that may happen is not getting the projected ROI that you had when you were just starting the entire project.

A part of remodeling mistakes that homeowners encounter is getting the right contractor for their remodeling project. It is essential that homeowners will always look for a contractor that is licensed, has a great experience with such jobs and offers a promising project for your project.

Make sure that the entire contract that you would sign with the contractor determines all important details on materials, budget, procedures and completion date of the entire project. The most important thing about picking a contractor is reviewing his working experiences and specialties to ensure that the project will be done according to the entire plan to prevent any remodeling mistakes.

Shutters NOT permitted 

FYI

No permit for shutters could be headache for homeowner

Owner of Gibraltar Title, Board-certified real estate lawyer Gary M. Singer writes about the housing market in the Sun Sentinel each Monday.

Q: I had shutters installed after Hurricane Wilma, but the guy who did the work did not get a permit. What are the consequences for me now, if any? – Lynn

A: You are right to be concerned and should get this resolved before it becomes a problem. The permitting process is about much more than just paying money to your local government. After you get a permit from the building department, your city inspector will make sure that the work was performed according to the minimum standards required by your building code. The point of this is to keep you safe. If your hurricane shutters were not properly installed, they could fail when you need them the most. Also, when you make a claim for damage, your insurance company may use this issue as a reason to deny your coverage.

It also may be an issue when you eventually try to sell your house. A savvy buyer will check to make sure the shutters were properly permitted. He or she may use the lack of a permit to back out of the deal or ask you to resolve the issue before closing. Also, your city code department may notice the shutters while touring neighborhoods and could fine you and make you fix or remove the shutters.

To get ahead of the situation, hire a contractor to open a new permit and fix any deficiencies. If there are any changes, have the building inspector approve the work. Because this is relatively common, you should be able to find a contractor specializing in solving this type of problem.

Tenant Evictions

Evictions are a landlord’s worst nightmare. If you’ve been through the process, you know this from experience. If you haven’t, you likely know from other landlords’ experiences.

There is nothing enticing about going through what can be a long, expensive, and drawn-out process to force a tenant from your rental. If it’s come to this, it’s a safe bet that you’ve reached your limit with them, but what is the true cost of an eviction?

For your tenant, an eviction on their record can affect their credit score and limit their options on rentals in the future. An eviction judgement will be available to future landlords, employers, or anyone else that would search their public records. The eviction will remain on their report for, on average, about seven years.

Those are a few things that it will cost the tenant, which can be a major hindrance to them moving forward (and a good deterrent to keep them from breaking the lease in many cases!), but what does it mean for you as the landlord and property owner?

CLICK TO EXPAND THE ARTICLE!

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Downsizing

When is the right time to “rightsize” to a home that’s better suited to your needs? Well, if you’re in the 60+ crowd (or have a parent in that demo), there are plenty of things that can go into that decision. Maybe you’re finding yourself in a (more or less) empty nest. Maybe you want to (finally!) get serious about retirement planning. Maybe all that maintenance on your current home is more than you can or want to handle. Or, heck, maybe you just want to simplify your life.

Whatever the scenario, you’ll find that you have plenty of company. The U.S. Census Bureau’s population projections forecast that the number of Americans aged 65 and older will more than double by 2030, increasing from 35 million in 2010 to an estimated 72 million.

Of course, getting older doesn’t mean you have to slow down or compromise on the lifestyle you want. It just means you have to take informed, calculated decisions on how best to achieve it. And that’s especially true when it comes to homeownership.

So if you’re thinking about downsizing, ask yourself these questions first:

Q: What kind of lifestyle do I want after I downsize?

For some folks, it’s a matter of living a simpler life focused on family. Some might want to cross off travel destinations on their bucket lists. Some might want a low-maintenance community with high-end upgrades and social events. Decide what you want to achieve from your move first, and you’ll be able to better narrow down your housing options.

Alex Haigh, a Realtor® with Illustrated Properties in Stuart, FL, says most folks come to South Florida for the warmer weather and amenities, and he’s seeing more seniors who are still working—because they enjoy it or want to have an extra cushion in their budgets.

Debra Whitfield, a Realtor in Charleston, SC, who specializes in working with seniors, sees her older clients making two types of moves.

“The first move are retirees looking to enjoy their freedom, so they come down to Charleston to find active adult communities where they meet like-minded people that they can befriend easily,” Whitfield says. “The second comes after retirees have enjoyed their freedom for 10 years or so and they decide to move one last time to live closer to family to have the physical, emotional, and spiritual support they need.”

Q: What should my buying budget look like?

If you’re planning to retire soon or have already entered those coveted golden years, you’ll likely be on a fixed income. Downsizing might net you a decent profit, especially if the home you’re buying next costs considerably less than the one you’re selling. Consider other expenses as you age: medical bills, health and life insurance, travel, estate planning, final expenses, and home maintenance. The common rule of thumb: Spend no more than 30% of your monthly income on housing. But in theory, it should be a lot less if you’re downsizing.

Q: Have I built up enough equity in my current home to make a profit?

For most homeowners, the answer is yes. This is if they’ve held on to their properties long enough to have positive equity that will be sizable enough to put a large down payment on their next home. Unless you have a significant amount of debt to pay off, chances are you’ll see enough profit from your sale to buy your next home outright or bring a sizable down payment on closing day.

Most of the inquiries Haigh receives are from retirees from the Northeast who are looking to relocate to the South. A majority of those downsizing buyers have a winning hand in bidding wars since they walked away with a profit on the sale of their old home. They have the funds and solid credit history to pay all cash or provide a large down payment, Haigh says.

Q: Will I be able to find another home that’s affordable in a seller’s market?

OK, this is where things might get tricky. In some fast-paced markets (such as Denver or San Francisco) where soaring home prices show no signs of letting up, you might have a tougher time. If you’re relocating from a pricier part of the country such as California or the Northeast for states such as Florida or Texas, however, you should be in a better bargaining position than first-time home buyers.

Whitfield advises her sellers who have the financial means to buy their next home first before selling their current one. She recommends they take out either an equity line of credit on their current home or a home equity conversion mortgage to finance their purchase, then pay off the loan when they sell their former home.

“Since we have low inventory here in Charleston, buying their next home first gives my clients control over finding the perfect property instead of being rushed to find whatever happens to be on the market after their house is under contract,” says Whitfield.

After you’ve answered these questions and feel confident about making your next move, find a Realtor who can help you determine what your current home is worth and what market conditions are like in the town you want to relocate to.

Not sure where you want to go but open to a new adventure? Check out Forbes’ list of the nation’s most affordable cities for retirement. Cheers on your next chapter!

Deborah Kearns, a Denver-based writer,

 

Loving your home❤

5 Things Every Loving Homeowner Should Know About Their Own Home

| Feb 8, 2017

Your relationship with your home is one that will hopefully last a long time, so it pays to learn its most intimate details. And not to be weird, but we really do mean intimate: what turns it on (or off), what makes it hot (or cold), and its delicate inner workings.

Because, after all, your home takes care of you—it keeps you warm, safe, well-fed—so it has every right to act a little high-maintenance and demand some TLC in return. Neglect your house, and there could be hell to pay later in the form of floods, electrical outages, and worse.

So as a sort of how-deep-is-your-love kind of test, ask yourself if you know these five things about your home—and if not, maybe you should go find out.

Love is a two-way street!

Q: Where is the main water shut-off valve?

Imagine you’re anywhere in your house where water is a feature: bathroom, kitchen, laundry room. They’re all connected by a network of pipes that come from your main water source. If any of those tangential pipes springs a leak, you’ll need to shut off the water until it can be fixed.

Every home is different, but you can likely find your main valve near the perimeter of your house, at ground level, nearest your water meter. If your water pipes are visible (in the basement, for example), follow them until you reach the main inlet and valve.

It’s possible your shut-off valve could be in a crawl space, closet, or somewhere out of the way, but it should definitely be in plain sight, rather than covered over with drywall. But rather than sit there and wonder, be sure to ask the previous home seller before you move in or check your home’s blueprints for a clue.

Q: Where is your circuit box, and is it properly labeled?

A circuit box is your house’s bodyguard against sudden spikes in electricity that run through the wires. Know your circuit box! It may enable you to avoid hiring a technician for simple electrical issues.

Most circuit boxes are located in a house’s basement, but some are also found in garages or utility closets. The switches inside correspond to rooms and sets of outlets in your home. Hopefully, they’re labeled properly—and if not, you should get on that pronto to avoid a tortuous guessing game every time you need to turn your power on and off.

If power suddenly goes out in a room (usually because you have too much plugged into one outlet), you can identify the tripped circuit by the switch that’s flipped in the opposite direction to the others. That means you may need to plug in your lava lamp elsewhere.

Q: What is a thermocouple, and do you know how to change it?

When your furnace goes out, you’ll be left in the cold—but not if you know how to change its thermocouple.This is the part of the furnace that shuts off the gas if your pilot light goes out, preventing that gas from seeping into your home. (You know, the gas that can kill you if left to run amok.)

If the furnace won’t stay lit, there’s a good chance you have a faulty thermocouple. Learning how to replace or adjust yours can be the difference between a $10 trip to the hardware store, and a $90/hour visit from a technician. Most thermocouples are held in place by brackets, which can be gently unscrewed to insert the replacement thermocouple.

Keeping a spare thermocouple on hand during winter is especially smart, because furnace problems can be mo

Q: Where are all your filters, and when was the last time they were replaced?

Lots of appliances in your home have filters. In fact, any device that conducts air or water should have some sort of filter in place to remove impurities and particulates. Changing these filters routinely can save you money, and keep you safe, which is why it’s helpful to know when they’re due to be replaced. Furnace filters should be replaced every two to three months; HVAC, ice maker, and water dispenser filters must change at least once a year. But that varies based on the manufacturer, so be sure to check your maintenance manual and not let it slide.

Q: Does your home have a sump pump, and do you know how to maintain it?

A sump pump is a pump (duh) installed in certain basements and crawl spaces to keep these areas of your home dry, which it does by collecting water that tries to seep in and moving it far, far away (or at least as far as the drainage ditch in your yard). They’re especially common in regions where basement flooding is an issue. Without a sump pump, the invading water can result in thousands of dollars in damage.

The good news, though, is that sump pumps are relatively easy to maintain. Check both lines, in and out, to make sure they’re not clogged with debris, and make sure the float component (this is the little bob that floats upward when water begins to fill the sump pit, activating the pump) can move smoothly.

re inconvenient—and costly—during the peak times of the year.

 

The Worst Mortgage Advice Home Buyers Actually Believe

 

By Lisa Johnson Mandell |

getting-advice

Sam Edwards/Getty Images

Getting a mortgage is a daunting prospect, which explains why so many people seem eager to pat your hand and say, “Let me give you a little advice.” Sure, those pearls of wisdom may come from an ocean of good intentions, but the suggestions might not necessarily be right for you. In fact, they could be dead wrong.

So before you take some friendly outside counsel as gospel, be sure to check it against our list of the worst mortgage advice people often give.

‘Don’t bother getting pre-approved for a mortgage’

Why you might hear this: Hey, you’ve barely begun shopping for a home! There’s no need to get all serious about mortgages just yet. And besides, a mortgage pre-approval isn’t real anyway— your application isn’t reviewed by an underwriter, so it’s no guarantee you’ll get approved for a mortgage later. So why bother?

Why it’s bad advice: While a pre-approval might not be “official,” it will help you avoid major problems down the road.

“Getting pre-approved by a bank is one way to avoid the heartbreak that comes from falling in love with a house you can never buy,” says Maryalene LaPonsie of MoneyTalks. “It may also give you an edge if there are multiple offers for the same property. A seller will feel more confident selecting a bid from someone with a mortgage pre-approval rather than a person who hasn’t even begun the process.”

‘Get your mortgage from the bank where you already have an account’

Why you might hear this: When it comes to convenience, you just can’t beat the bank you’re already using. Plus, since you have an existing relationship with it, it’ll give you the best rates, right?

Why it’s bad advice: You already know to shop around for a home. You need to do the same with your loan.

“Even though the big bank where I keep my checking and savings accounts claims they’ll give me better service and an easier application process, that may not always be true,” says Albert Tumpson, a banking and real estate attorney who owns several properties and refinances them every couple of years. “I’ve found more favorable terms with other venues. Always go with the most favorable terms.”

‘Don’t bother reading the fine print’

Why you might hear this: Because actually perusing all that mortgage paperwork will drive you insane! And besides, this is the standard contract that everyone gets. Just sign here, here, and here—and you’ll save yourself a ton of headaches.

Why it’s bad advice: Because that fine print contains some clauses that could cost you serious money!

“Take your time and go over every last word with a fine-toothed comb,” says Jamie, a homeowner who purchased her second home two years ago. She was astounded when her lender asked her to sign a mortgage contract involving hundreds of thousands of dollars without “bothering” to read the details. Jamie ended up taking several hours to go over the contract and found several items to dispute. So what if the process took a little longer? It was well worth the wait.

‘Always go with the lowest interest rate’

Why you might hear this: A lower interest rate means lower monthly payments. Duh.

Why it’s bad advice: Lower interest rates can have all sorts of strings attached—often in the form of an adjustable-rate mortgage.

ARMs are not always a bad thing, but just be on the alert when someone suggests an interest-only ARM, says Shant Khatchadourian, president of SKR Capital Group. “Interest-only ARMs can result in significant payment shock, especially if rates increase down the line and amortization kicks in.”

In the past, as interest rates were dropping and home values were rising rapidly, interest-only ARMs worked well for some people—especially those who didn’t plan to stay in the home beyond the length of the loan’s first term. But although interest rates are low, they’re likely to rise soon, so beware.

‘Borrow as much as you’re approved for, even if you don’t need it’

Why you might hear this: Who doesn’t want a bigger and better house? Besides, a bank wouldn’t approve you for all that money unless you could afford to pay it back, right? Right?

Why it’s bad advice: It’s always wise to live slightly below your means, since you never know when life might pitch you a financial curveball, such as a layoff or medical problem.“You can qualify for monthly payments up to 50% of your income these days,” says Khatchadourian. “But half of your gross income seems like quite a bit for most people, especially when they factor in taxes and insurance.”

So be sure to make a budget, decide what monthly payment you’re comfortable with, and stick to it.

Short Sales

5 common errors when buying short-sale homes

ORLANDO, Fla. – Oct. 24, 2016 – A foreclosure or short-sale home might tempt a buyer with the promise of a great deal, but it’s important for buyers to avoid common mistakes.
A short sale occurs when a homeowner sells a house for less than the amount owed on the mortgage, so the lender doesn’t get all its money back. Many homeowners facing foreclosure – a common precursor to a short sale– don’t want to leave their homes, and some take their anger out on the home or completely ignore structural and safety issues that should be addressed immediately.

Typical buyer short-sale problems

1. Ignoring the obvious
The house is in a great part of town with good schools, and the price is significantly lower than anything else nearby. Some buyers want to live there so much that they ignore the little things – like the kitchen floor that gives a bit and they don’t want to entertain the idea that it might be termite damage.

2. Skipping a home inspection
Buyers should be part of the home inspection. “Most of what we do is education,” says Kathleen Kuhn, president of inspection firm HouseMaster. She says buyers should ask how much a problem would cost to fix, or make a note of the problem and find out later. “Every homeowner underestimates how much renovation costs,” says Kuhn.

3. Ignoring legal and insurance information
Have all renovations been permitted and approved? Is the home in a flood plain? In a short sale, the home’s current owners may hold back a bit on doling out information.

4. Assuming it won’t take long
A short sale usually takes longer than a normal home sale transaction, and sometimes a lot longer. In some cases it takes a bank time to decide; in many cases, employees have a lot to get done, and that one short sale could sit in their to-do box for a while.

5. Falling in love
“Think of yourself as an investor,” says Jim Randel, real estate investor and author of “The Skinny on the Housing Crisis.” Don’t let emotions override logic. How much could you earn monthly if you rented out the property? How much will it cost to rehabilitate the home? Many buyers love a house when they buy it, but their emotions change later after they’ve put $40,000 into repairs.