5 Myths (and 5 Truths) About Selling Your Home

True or false: All real estate advice is good advice. (Hint: It depends.)

Everyone has advice about the real estate market, but not all of that unsolicited information is true. So when it comes time to list your home, you’ll need to separate fact from fiction.

Below we’ve identified the top five real estate myths — and debunked them so you can hop on the fast track to selling your property.

1. I need to redo my kitchen and bathroom before selling

Truth: While kitchens and bathrooms can increase the value of a home, you won’t get a large return on investment if you do a major renovation just before selling.

Minor renovations, on the other hand, may help you sell your home for a higher price. New countertops or new appliances may be just the kind of bait you need to reel in a buyer. Check out comparable listings in your neighborhood, and see what work you need to do to compete in the market.

2. My home’s exterior isn’t as important as the interior

Truth: Home buyers often make snap judgments based simply on a home’s exterior, so curb appeal is very important.

“A lot of buyers search online or drive by properties before they even enlist my services,” says Bic DeCaro, a real estate agent at Westgate Realty Group in Falls Church, Virginia. “If the yard is cluttered or the driveway is all broken up, there’s a chance they won’t ever enter the house — they’ll just keep driving.”

The good news is that it doesn’t cost a bundle to improve your home’s exterior. Start by cutting the grass, trimming the hedges and clearing away any clutter. Then, for less than $50, you could put up new house numbers, paint the front door, plant some flowers or install a new, more stylish porch light.

3. If my house is clean, I don’t need to stage it

Truth: Tidy is a good first step, but professional home stagers have raised the bar. Tossing dirty laundry in the closet and sweeping the front steps just aren’t enough anymore.

Stagers make homes appeal to a broad range of tastes. They can skillfully identify ways to highlight your home’s best features and compensate for its shortcomings. For example, they might recommend removing blinds from a window with a great view or replacing a double bed with a twin to make a bedroom look bigger.

Of course, you don’t have to hire a professional stager. But if you don’t, be ready to use some of their tactics to get your home ready for sale — especially if staging is a trend where you live. An unstaged house will pale when compared to others on the market.

4. Granite and stainless steel appliances are old news

Truth: The majority of home shoppers still want granite counters and stainless steel appliances. Quartz, marble and concrete counters also have wide appeal.

“Most shoppers just want to steer away from anything that looks dated,” says Dru Bloomfield, a real estate agent with Platinum Living Realty in Scottsdale, Arizona. “When you a design a space, you need to decide if you’re doing it for yourself or for resale potential.”

She suggests that if you’re not planning to move anytime soon, decorate how you’d like. But if you’re planning to put your home on the market within the next couple of years, stick to elements with mass appeal.

“I recently sold a house where the kitchen had been remodeled 12 years ago, and everybody thought it had just been done because the owners had chosen timeless elements: dark maple cabinets, granite counters and stainless steel appliances.”

5. Home shoppers can ignore paint colors they don’t like

Truth: Moving is a lot of work, and while many home buyers realize they could take on the task of painting walls, they simply don’t want to.

That’s why one of the most important things you can do to update your home is apply a fresh coat of neutral paint. Neutral colors also help a property stand out in online photographs, which is where most potential buyers will get their first impression of your property.

Hiring a professional to paint the interior of a 2,000-square-foot house will cost about $3,000 to $6,000, depending on labor costs in your region. You could buy the paint and do the job yourself for $300 to $500. Either way, if a fresh coat of paint helps your home stand out in a crowded market, it’s probably a worthwhile investment.

Related:

Originally published April 1, 2014.

Source: zillow.com

5 Things to Look for in a Rental Listing

Lackluster listings abound — learn to cut through the clutter and spot the keepers.

Whether you’re looking for an apartment, single-family house or townhome — and whether you’re in a city, the suburbs or a small town — be prepared to spend a lot of time online and even more time driving around to tour the most promising places in person.

If you want to save time and avoid headaches, make sure that every rental listing you consider has all the information you need. High-quality listings help you weed out the places that don’t fit your criteria (wait, Fido’s not welcome?), but they also indicate an organized, communicative and professional landlord — something every renter wants.

As you begin your search, consider these five important things every good rental listing should contain:

1. Detailed details

Front and center should be the number of bedrooms and bathrooms, square footage, storage space and a floor plan to help you visualize the layout.

Avoid listings with vague terms like “junior one bedroom” or “open one bedroom.” According to Zillow research, 65 percent of renters require their preferred number of bedrooms. Landlords know this, so they get creative with descriptions to attract more tenants.

Another need-to-know detail is how safe the property is. Zillow research reports that 75 percent of renters said that a safe neighborhood is a must-have. Most landlords will say that the neighborhood is safe, so do your own research, especially if you’re new to the area.

Speaking of being new — if you’re moving to a new part of town or an entirely new city, look for listings with important facts about the neighborhood, including proximity to transit or major freeways, convenient shopping centers, and nearby recreation and entertainment options.

2. Amenities — all of them

Beyond basics like heating and kitchen appliances, every renter has different amenities that they consider must-haves.

The most popular amenities renters look for include air conditioning, in-unit laundry, ample storage and private outdoor space. Watch for other nice-to-have in-unit amenities, like recent renovations, hardwood floors, plenty of windows and upgraded kitchens.

Shared amenities should be included in the listing too — things like parking, rooftop decks, fitness areas, outdoor space, swimming pools and bike storage.

3. Major (and potentially problematic) policies

The listing should disclose any policies that could be a deal breaker for you. Examples include rules around pets (including specific breeds), the maximum number of people who can live in the unit, smoking, parking, noise and — most importantly — lease terms and length.

Additionally, see if you can tell if the landlord lives on-site or if a local property management company manages things. If the landlord is nearby, they’ll likely handle repair requests quickly, along with general building upkeep and maintenance.

4. Clearly described costs

Make sure the landlord is exceptionally clear about the dollars and cents:

  • What is the monthly rent?
  • How much of a deposit is required, and is any of it refundable?
  • Are there any one-time fees?
  • Is there a pet fee or monthly charge?
  • Does parking cost extra?
  • Who pays for utilities?

These additional charges can quickly move a listing from feasible to fruitless, so make sure you have all the info you need to do the math ahead of time.

5. High-quality photos

Focus on listings that have not only good photos but also recent photos — and lots of them.

Look for listings that include both interior and exterior shots, plus photos of all shared amenities. But renter beware: If the landlord says the photos are of a similar unit — not the one that’s actually for rent — you may find yourself in a bait-and-switch situation.

Once you find a few listings that include these details, you’re off to a great start. You can more easily compare properties side by side, identify deal breakers and find areas where a landlord might be open to compromising.

Related:

Originally published June 2018. Statistics updated January 2019.

Source: zillow.com

5 Things to Do Before and After Closing

Your journey doesn’t end on closing day. Here are some next steps to consider before you actually move in.

You’ve been house shopping for months or even years. You’ve endured a series of offers, property disclosures, inspections and reports. Finally, after so much excitement, stress and anxiety, the house hunt has come to an end.

But the story isn’t over yet. Here are some next steps to consider before you actually move in.

1. Plan renovations well in advance

Rarely does a buyer get a place that’s move-in ready. By the time you’ve signed a contract, you have lots of ideas about how you’ll live in the home, how you’ll customize it and what work needs to be done.

If the place needs work, don’t wait until you’ve closed to engage a professional. Either at your final walkthrough or during a private appointment, get the proper contractors in the house and start collecting bids for necessary work. If possible, have floor sanding, painting or small fix-it work done before you move in. Real estate agents work with all kinds of tradespeople, so they’re often a great resource for referrals. 

2. Set up the utilities

Some people assume the utilities will work once they walk in. While many utility companies have grace periods (the days between when the seller cancels service and the new owner calls), you can’t always assume this will be the case. If you have an out-of-town seller, they may have canceled services the day they knew all contingencies were removed. In this instance, the grace period likely lapsed, and you may be stuck dealing with the electric company, waiting for an appointment or just being without power when you really want to start painting, fixing or cleaning.

The best plan is to call the utility companies and get service set up well before closing. If they haven’t received cancellation notice from the seller, let the seller know to take care of that.

3. Change the locks

Assume that everyone has a set of keys to your new home. The seller’s real estate agent likely gave copies to their assistant, a painter, a stager or even another agent at some point during the listing period. That’s why the first person you should call after getting the keys is a locksmith.

4. Hire a cleaning crew

There’s nothing worse than showing up with the movers, dozens of boxes and your personal belongings only to discover the seller hasn’t had the place cleaned.

Assume the worst and get a professional cleaning crew in there the minute after closing. Even if the seller did clean, they may have done a poor job. You want to start life in your new home with a clean slate. The bones of the place will be sparkling clean, and you won’t be scrambling to get cleaners in while the home is in a state of unpacking disarray.

5. Have a handyperson, contractor or designer on call

Moving involves the kind of stuff you wouldn’t wish on your worst enemy. Things like aligning your framed artwork, centering the couch in the living room or getting the large rug set up in the master bedroom can drive you crazy.

While it may seem like a luxury, investing a few hundred dollars in hiring someone to help with these tasks will save time and potentially relieve you of a giant headache.

Thinking ahead is the way to go

As your closing date draws near, you’re probably exhausted. But taking a little extra time to plan ahead will save you time, money and stress — and make the move into your new home so much more satisfying.

Related:

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow. Originally published February 2013.

Source: zillow.com

Pros & Cons to Building Your Own New Home

When it comes to owning a house, the decision whether to build or buy is one you have to contend with. Each option comes with its set of advantages and disadvantages. For instance, buying ensures you become homeowner in record time as opposed to building which takes longer. Whichever option you settle on, it helps to evaluate the argument for and against each. With that in mind, here are the pros and cons to building your own new home.

Building Your Own HomeBuilding Your Own Home

Pros

Less
Competition

Building has less competition than buying when it comes to getting your desired home. Properties are typically on the market for a little over a month. This means the competition is not only high but it’s also possible not to get a home; between the time it takes for financing to be approved and shopping, ‘your house’ could already be off the market.

Customization

Building means that you get to come up with a
design that embodies your dream house. You can personalize every detail from
the wall colors to the types of faucets. This beats buying whereby you have little
or no control on the layout, number of rooms or even the types of installations.

With own construction you can replicate
design features from your parents house for nostalgia. You also get the chance
to choose the type of contractors whose work is reliable. This is in contrast
to buying a home whose construction integrity could be faulty and easily to be
missed by real estate assessors.    

Less
Maintenance

Building codes and standards keep on
changing. This makes building from the ground up a chance for you to make your
home up-to-date. You can incorporate energy saving measures such as solar
powered HVAC systems. Furthermore, new appliances and building material means
you will be spending less on renovations for some years to come.

Cons

Time
Consuming

Building a new home can take anywhere between
a few to over 10 months, this is according a US Census Bureau report. This means for the entire duration of contraction you will have to
shoulder rent payments; money that could have gone to other expenses if you
opted to buy.

Can
be More Expensive

According to figures from the National Association of Home Builders, on average the cost of building a single-family house is about $289,415; this translates to over $66,415 more than the cost of purchasing a ready home. The high cost is a result of the level of personalization that comes with your own design and preferences. This could be spacious rooms, expensive décor or antique finishes.

Stressful

Building is quite stressful, even if you are not doing it with your own two hands; you are bound to get some headaches from overseeing the process. The project manager or foreman will be there to ask questions on specifications, design alterations and of course payments.

These issues will more than likely leave you exhausted and will eat into your daily routine. The stress from seeing construction can even lead to under performance in your job and cutting into your family time.

The Bottom Line  Building
comes with the satisfaction of knowing that you are the first owner of the
home. You get to install modern and energy saving appliances which lowers your
utility bills. You can also count on paying less for maintenance and upgrades
that comes with buying a house. On the other hand, building has some drawbacks.
These includes; having to wait for a long time before construction is
completed, being stressed due to strenuous decision making and lastly, there is
the possibility of spending way more on your new home than you would if you
chose to buy.

Source: creditabsolute.com

Down Payments Explained (How Much Should You Pay?)

Preparing for a big-ticket purchase? Be sure to learn about down payments beforehand. It’s pretty rare to buy a house, car, wedding ring, or any type of expensive item in all-cash without draining your savings, so many people turn to financing to seal the deal. But you’ll still need some upfront cash to place a partial payment that lets your lender know you’ve got skin in the game.

Most financing terms require a down payment to secure the loan—but what is a down payment, how do they work, and how much should you save up for? We’ll cover all of that and more in our down payment guide, or you can jump ahead to the section that sparks your interest by using the links below.

What is a down payment?

Let’s start with a simple down payment definition: A down payment refers to the portion of cash paid upfront when financing an expensive purchase, like a house or car.

Think of a down payment as the portion of the price you pay for out-of-pocket (as opposed to borrowing), expressed as a percentage. When you’re buying a pricey item with a loan, an initial payment is usually required; how much you put down can be critical to getting approved, and the amount you pay upfront can also significantly impact your overall borrowing costs throughout the lifespan of the loan.

Types of down payments

There are many different types of down payments, all with their own varying terms and structures. We’ll take a look at some of the most common ones below.

  • Down Payment on a House

When you’re ready to buy a house, you’ll need to apply for financing through a mortgage lender. A mortgage down payment represents your contribution to the purchase and initial ownership stake in the home. The lender then covers the remainder of the price to complete the sale.

While most lenders require a mortgage down payment, there are certain exceptions to this rule. If you qualify for a VA loan or USDA loan, which are backed by the federal government, there may be no minimum down payment required.

  • Down Payment on a Car

Buying a new car is exciting, but also expensive. If you can’t afford a new set of wheels outright, then you may be able to qualify for financing with a down payment on a car that applies toward its principal balance. In some cases, you may be able to find a vehicle offered with “zero-down”, meaning that financing is available with no minimum down payment.

Note: Even though you might not have to make a down payment on a house or car, doing so anyway could be well within your interest—we’ll dive deeper into those details in a bit.

  • Other Assets

There all sorts of items you can buy with a down payment loan, from boats to dirtbikes, memory foam mattresses to full furniture sets, diamond rings, shiny things—even music festival passes can be purchased with money down upfront and paid off in installments on little to no interest.

How down payments work

Put simply, down payments reduce the amount of money you’ll have to borrow in order to purchase a home, car, or similar expense. The higher down payment percentage you put down, the less financing you’ll need to cover the remainder of the purchase price. And the smaller the loan you take out, the faster you can get out of debt, usually with less interest accumulated.

Lenders want to make borrowing decisions they feel confident about and a large down payment suggests that you’re invested in the transaction. You won’t be seeing that money back, so contributing a sizable amount of your personal savings shows that it’s in your interest to pay off the loan with timely installments to minimize the risk of default and losing the money you’ve put at stake.

Note: This is why down payments are sometimes known as “deposits”, especially in England where deposit mortgages are very common.

  • Home purchases

Let’s look at an example:

A 10% down payment on a house that costs $300,000 would be $30,000. The lender finances the remaining $270,000, which you can repay over the course of a 15- or 30-year mortgage loan (on top of interest and closing fees) with monthly installments—unless you pay it off early with one large payment or choose to refinance the mortgage down the road.

  • Auto purchases

A 20% down payment on a car that costs $20,000 would be $4,000. You bring the cash or cashier’s check to the dealership and agree to cover the remainder of the sticker price through financing. The most common term on an auto loan is 72 months, but the shorter the loan length, the quicker you can build equity in your vehicle. You can also refinance a car loan similar to a home mortgage, but the qualification criteria weighs more heavily on the borrower’s credit score rather than the outstanding loan balance and market value.

Lender requirements

Minimum down payment requirements vary by lender and the borrower’s credit score. For example, you can qualify for an FHA loan with a down payment as little as 3.5% if your credit score is 580 or higher, but if your credit score is between 500 and 579, you’ll need to put down at least 10%.

When it comes to conventional mortgages, lenders require borrowers to pay Private Mortgage Insurance (PMI) to protect them from the risk of default. This can dramatically increase the overall borrowing cost of your loan, typically ranging around 0.3% to 1.2% of the principal balance per year.

However, a mortgage down payment of 20% waives the PMI requirement and can thereby save you a significant amount of money by eliminating the insurance premiums on top of your monthly payments.

How much should you put down?

While many individuals aim to place a 20% down payment on a home in order to avoid PMI, this isn’t always attainable—especially for first-time homebuyers looking to enter the real estate market. Learning how to save for a house is no easy task, and amassing savings worth tens of thousands of dollars can be really challenging while paying off student loan debt and keeping up with the costs of living.

New research from the National Association of Realtors reports that 61% of first-time buyers put down between 0% and 6% in order to make purchasing a home more affordable. So, although 20% down is a good rule of thumb, it’s certainly not a hard requirement. You might also consider taking the time to improve your credit score in order to qualify for a mortgage at a better rate with a smaller minimum down payment requirement.

When it comes to how much you should put down on a car payment, Autotrader.com also advises 20% of the purchase price in order to avoid becoming “upside-down” on your car loan, or owing more than the car is worth. New vehicles tend to depreciate at a fast rate; you might find yourself in a position where you get in an accident, total the car, and receive a check from the insurance company for the car’s value, only to find that the amount is much smaller than the loan you’re still paying off.

A larger down payment percentage can help offset the depreciation hit, and it also means that your lender won’t have to sell the car at top dollar should they have to repossess your vehicle—meaning you may be able to negotiate a better interest rate on the car loan. It’ll also lower your monthly payment which can help you afford a shorter term so you can own the car sooner and pay less in interest, no matter what rate you negotiated.

Benefits of a larger down payment vs smaller down payment

There are several pros and cons to putting down more money versus less money. ConsumerFinance.gov offers advice on how to decide how much to spend on a down payment, but here are some benefits to each side of the coin you may want to consider. 

On the one hand, a higher down payment can earn you a lower interest rate and therefore a lower monthly payment. It’ll also reduce or eliminate PMI premiums, potentially saving you thousands of dollars in the end.

On the other hand, a lower down payment will allow you to purchase a home or car sooner. You’ll also be able to keep some funds aside for renovations or repairs and maintain savings in your emergency budget.

How to save for a down payment

Ready to start shopping? Here are some tips on how to save for a down payment to improve your chances of receiving great financing terms:

  • Set savings goals – You should first calculate roughly how much you’ll need to set aside and how long it’ll take you to do so. Chipping away at a timeline can help you stay on track and achieve your savings goals.
  • Cut expensesTighten your budget by eating in more often or canceling your streaming subscriptions and allocate that money toward a down payment so you can hit your savings goals faster.
  • Increase income – You might consider taking up a side hustle to bring in a little more money and buy a home or car sooner rather than later.

Mint can help you manage your budget and bolster your savings so you can afford a car or mortgage down payment on a realistic timeline. Download the app today to get started.

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Source: mint.intuit.com