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How to Make Money Renting Equipment and Doing Maintenance Jobs

Not everyone owns a power washer, paint sprayer, chainsaw, backpack leaf blower, multipurpose steam cleaner or cordless wet/dry vacuum for auto detailing. But those who do own these tools can use them to make extra money.

It can be well worth investing in certain small power tools that most people don’t own to develop a side gig.

For example, Popular Mechanics ranked its top three power washers, ranging in price from $159 to $529. HomeAdvisor, a website that helps homeowners find home improvement professionals, estimates the typical power washing job for a house with siding is $220 to $380 and $130 to $220 for a driveway. Thumbtack, another website that connects clients with service providers, suggests paying 16 cents to 22 cents per square foot of power washing.

So the money earned on just two power washing jobs would easily recoup the cost of buying even the more expensive power washer.

It’s easy to spread the word on social media or flyers on windshields about your services, whether chain saw cutting and debris removal after a big storm takes down trees or steam cleaning furniture and rugs before the holidays.

Each city or county has their own regulations on what services require a license, business registration fee or insurance. Even if it costs a couple hundred dollars to file the correct paperwork, that cost can be recouped within a few jobs.

Rob Littke, a contractor who does large and small projects for clients, offered a few tips for folks considering purchasing expensive tools. Here’s his advice.

How to Make Money Renting Equipment and Doing Small Maintenance Jobs

Rent Before You Buy

Littke suggests renting any tool before buying it so you can figure out which brands and designs work best for you. Home Depot has a wide selection of tools for rent. A cordless paint sprayer costs $27 for four hours or $38 for the day, while a pressure washer is $63 for four hours or $76 per day.

If you are doing a project for yourself or selling your services, Littke suggests renting tools instead of buying them unless you know you’ll use them regularly.

“When you rent a tool they are always in good shape, clean and ready to use. No hoses are broken, nothing needs to be replaced or refilled,” he said. “You never get to a job site and find out it doesn’t work.”

Also, some tools don’t perform well if they aren’t used frequently.

“There’s nothing worse for a paint sprayer than not using it,” he said, explaining there are pumps and rubber seals that can get stuck if they are left dormant.

“I sold my paint sprayer because I was never using it,” he added. (FYI: Littke prefers brushes and rollers because sprayers require so much preparation covering furniture, floors, doors and windows.)

Find Good Deals on Tools

Home Depot’s tool rental department is also a great place to buy tools. They sell them after being rented a few years.

“I bought a chainsaw there for about $100 that would have been more than $300 new. And since they use the same tools, they stock all the parts to fix them,” he said.

Facebook Marketplace is another good resource for used tools. “I can’t tell you how many people run out and buy a $700 tile saw to tile one bathroom, then they use it once and never again,” Littke said. After a couple years of that tile saw taking up room in the garage, it ends up on Facebook Marketplace for $300 or $400.

Harbor Freight is a chain of more than 1,100 stores across the country that sell 7,000 different tools and accessories for up to 80 percent less than the price of competing products. It buys direct from the factories that supply better-known brands and is able to pass savings along to customers, according to its website. Littke said he has saved hundreds of dollars there for tools that are the same high quality as name brand equipment. He buys the extended warranty for an extra $7, and if something breaks or simply wears out over time, they replace it with a new one.

Buy a Truck, Drive it for Money

If you need to buy a used vehicle for your own use, it makes sense to get a truck because it gives you the ability to use it to make extra money.

Many people need to move just one piece of furniture across town or throw an old mattress away at the town dump. It’s not worth hiring a moving company, and renting a truck from Home Depot is often more trouble and money than finding someone who owns a truck.

Weston Willingham, a senior at the University of Florida, made hundreds of dollars using his $6,000 2005 Dodge Ram 1500 throughout high school.

“My mom is a Realtor, so she always knew people who needed something moved,” he said. “Then I think people started saying: ‘Call Weston. He has a truck. He can help you.’ I was also an extra set of hands.”

Along with the space of a truck, Willingham showed up ready to lift and load as well.

He didn’t set prices, but asked customers to pay what they felt comfortable with. He made at least $40 per job and often more than $100.

“I was lucky because I was in high school and I could be flexible. Sometimes people would call me saying: “Hey I’m going to need you here right now and I will pay you well enough you will want to drop whatever you are doing and help out,” Willingham recalled.

Katherine Snow Smith is a senior writer for The Penny Hoarder.

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Source: thepennyhoarder.com

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Earnest Money And Deposits: 4 Things You Should Know

In this intense seller’s market, buyers are pulling out the stops in order to compete. For some, that may mean offering over list price, waiving inspection, or offering other incentives to the seller. Two of the most common incentives are earnest money and non-refundable deposits. These incentives help to show a seller that a buyer is serious, but they do have some risks for buyers. Here are four things you should know about earnest money and deposits before you sign the contract!

earnest moneyearnest money

Earnest Money & Deposits Are Credits At Closing

Earnest money is a deposit that represents a buyer’s good faith in entering into an offer to purchase a property. While buyers must pay earnest money and deposits before closing, they are both considered credits to the buyer at closing. Desiree Kumar, a licensed attorney with AMT Law Group in Illinois and a former real estate agent, reminds buyers, “Both deposits and earnest money deposits function similarly and are both typically credited at closing.” How the earnest money or deposit is credited is typically at the discretion of the lender, so buyers should communicate with their loan officer to determine how those funds will be credited.

You Might Not Get The Money Back

If you’re asking yourself, “Is earnest money refundable?”—you aren’t alone. According to Kumar, the most misunderstood aspect of deposits and earnest money is “that they are always refundable.” This misunderstanding can lead to an unpleasant financial situation and even litigation if a buyer terminates a contract. Kumar says “earnest money provisions have a propensity for litigation,” however, depending on how the contract is written, earnest money can be refundable. To determine if your earnest money is refundable, Kumar advises “The executed offer will dictate what happens to the earnest money upon termination of the contract. It is important to understand what the offer says before signing it.”

Tip: It is possible for sellers to negotiate for earnest money to become non-refundable after inspection. If buyers are looking for ways to strengthen their offer, they might consider this option.

Non-refundable deposits, common with new construction, differ from earnest money. “Deposits generally benefit the seller,” says Kumar. And in this market of rising building costs, builders prefer buyers to pay a deposit. In most cases, unlike with earnest money, these deposits are not refundable to the buyer if they terminate. However, Kumar reminds buyers “Depending upon the reason for termination, the deposit may still be refundable.” But she would advise buyers considering a non-refundable deposit to remember “that no matter the reason, they cannot get their deposit back, even if the sale does not go through.”

Tip: Buyers have the right to have an attorney review a contract before signing it. Fully understanding the legal wording and ramifications of a termination is critical to avoid any future litigation.  

How The Money Is Accessed Varies

Both types of pre-payments are handled differently when it comes to who has access to the funds. For example, earnest money is held by a 3rd party until closing or termination. In most cases, earnest money funds are typically held in escrow until closing, meaning sellers can’t access those funds until closing. Earnest money funds can be held by the real estate brokerage, the title company, closing attorney or other 3rd party.

Deposits, on the other hand, can vary. Depending upon how the contract is written, deposits can be spent immediately by the seller and may not have to be held in escrow. Even if the funds are immediately accessible by the seller, if the buyer does close then they still receive a credit at closing.

Tip: Non-refundable deposits typically benefit the seller and are another way to make an offer stand out among multiple offers; however, buyers should be aware of the risks involved before agreeing to a deposit.

One Benefits The Seller and One Benefits The Buyer

Non-refundable deposits tend to benefit the seller, since (in most cases) these deposits are not refundable to the buyer. The amount of the deposit can be determined by the buyer, the seller, or negotiated between the two. While sellers like the appeal of non-refundable deposits, Kumar states she “very rarely advise[s] a buyer to enter into an offer with a non-refundable deposit.” The risk with a non-refundable deposit is that the buyer could lose the money if they fail to close.

Earnest money, on the other hand, can benefit the buyer. Again, depending on how the contract is written, that “good faith” can be refundable to the buyer if they fail to close. If sellers are wanting a guaranteed payment should the buyer fail to close, a non-refundable deposit may be the best option for them; however, it’s important both sides understand what happens to the funds upon termination and what can legally be done with the funds prior to termination or closing.

Work With an Agent!

In this intense market, buyers are desperately searching for ways to make their offer stand out. By strategically structuring an offer with benefits to the seller, this can help a buyer’s offer to standout. It’s important to know which type of pre-payment offers the most benefits and least risk. The best way to safely navigate the current real estate market is to utilize the services of an experienced real estate agent. You can find an agent in your area by using Homes.com agent search tool!


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Jennifer is an accidental house flipper turned Realtor and real estate investor. She is the voice behind the blog, Bachelorette Pad Flip. Over five years, Jennifer paid off $70,000 in student loan debt through real estate investing. She’s passionate about the power of real estate. She’s also passionate about southern cooking, good architecture, and thrift store treasure hunting. She calls Northwest Arkansas home with her cat Smokey, but she has a deep love affair with South Florida.

Source: homes.com

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Understanding a Rental Lease Agreement

Make sure you understand what you’re signing.

You love it. You want it. You’re ready to sign on the dotted line, but stop and take a deep breath first. This is everything you need to know before signing that rental lease agreement.

What is a rental lease agreement?

A rental lease agreement is a legal document that sets out the terms for you to rent a residence from a landlord, apartment community or property management company.

The agreement protects you and the prospective landlord. Both of you need to abide by the rental lease agreement’s terms.

It’s smart to get a second set of eyes on the lease before you sign it. Colleen Wightman, a licensed Realtor and a leasing specialist based in Rochester, NY says, “Have a licensed real estate agent or, better yet, an attorney look at the lease agreement. You are legally bound once you put your signature on it…Let the landlord or property manager know at the time of signing that you’ve had it reviewed by an attorney. That will make the landlord pay attention; you are someone who knows what you’re doing.”

Reviewing a lease.

What’s in this agreement?

The rental lease agreement starts off with the basics: your name, the date, the name of the person or entity who will be leasing the property to you and the property’s physical and address.

While each lease is different, they will all cover the following information:

  • Arrangement to lease: There’s an acknowledgment from both parties that you and the prospective landlord agree to the arrangement. The rental lease agreement will name the length of time, i.e., the number of months you will be renting for and when that begins and ends. This is either for a long-term or short-term duration.
  • Rent: It will state the rent amount, to whom you’ll pay the rent; how you’ll pay it (debit or credit card, some other electronic system, personal check) and when it’s due. The lease agreement will state the day rent is due each month and what happens if you fail to pay the rent — such as late charges.
  • Additional monies: This section would discuss situations in which you might pay extra money in addition to the monthly rent. “These would be things like a non-refundable pet deposit or perhaps an additional month’s rent in lieu of you having a perfect credit score,” said Wightman.
  • Property use: This part clarifies who will be living in this rental — you alone? with a roommate? spouse? pet? — and it states that the apartment is only for residential purposes with no illegal activities permitted.
  • Apartment possession: You are not liable for the rent if the landlord or management company doesn’t let you move in on the date promised. Your rent will then be pro-rated.
  • Security deposit: By signing the agreement you acknowledge that you will pay the landlord a specified amount of security deposit (usually equal to one month’s rent). This money will cover any property damages that you incur. The landlord must notify you in writing when and how much of the security deposit they keep. Keep in mind, the security deposit is different from “last month’s rent,” money you pay upfront to cover the final month you will live in the apartment. In some states, the security deposit pays for that final month. Check your state laws regarding the use of security deposits. Also, check your state’s laws regarding how your landlord holds your security deposit.
  • Addendums, provisions and disclosures, and amendments: This section lets you know that if you or the landlord/property management company want to modify this rental lease agreement in any way, it must be done in a written agreement signed by you (the tenant) and the landlord/property management company. What might you need to modify? Let’s say the apartment comes with one parking space, but you’ve got a motorcycle and a car and you want to park your motorcycle on the side of the building if that’s possible. “If you’re augmenting what’s offered — have it put into the lease because both parties have to agree to it,” shared Wightman.

Is the rental agreement lease term flexible?

Yes! You might sign a short- or long-term lease.

Leases come in all sorts of durations. Maybe you can sign a lease that’s longer than 12 months and can get a more favorable monthly rate. Or perhaps you need the apartment for less than 12 months. Maybe the landlord will agree to a six-month or even month-to-month lease, in which you actually rent one month at a time (this will likely be more expensive).

The bottom line is that anything like this needs discussing upfront, documented on the lease agreement and signed by both parties.

A couple reviewing a lease.

What if I need to break my lease agreement?

The short answer is, “Yes, you can…but.”

There will be information on your lease agreement about the rules on “early release” — likely resulting in penalties for breaking your lease. You may have to give a certain amount of notice if you choose to do this. You may have to find another renter to take your place. Or, you might have a buyout clause.

Check your lease agreement upfront so that you can prepare in case this happens. And, always be honest and open with your landlord. You don’t want to incur financial penalties or land in court.

What about working from home?

The coronavirus pandemic sent many of us into our bedrooms with our laptops. But if your rental contract says you’re only using your apartment for residential purposes, will you get in hot water for working from home? As long as you’re not inviting a third party into your home to conduct business, you’re all right.

Fair housing and discrimination

Before you sign the lease, make sure to read through the fair housing laws. It’s important to make sure that the person renting the apartment is in compliance with all fair housing laws.

Service animals can be a hot-button issue. Even if there’s a no-pet rule, Wightman says “As long as you have all your paperwork in order, a landlord cannot deny renting to you because you have a service animal.”

But make sure you get it into the lease that you have a service animal and that you’re in compliance with any and all appropriate paperwork you may need to provide. Also, it’s important to know that the landlord will likely ask for a non-refundable pet fee. It’s best to prepare for that miscellaneous cost.

Sign of the times

Read through any sort of documentation that you’re going to sign and be held accountable to. So often, people don’t think about “the legal ramifications of signing something they’re not thoroughly reading,” said Wightman.

You may feel the urgency from this rental market, but take the time to go through the rental lease agreement. “Being aware upfront and being thorough is always in the renter’s best interest,” Wightman shared.

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.

Source: rent.com

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In the Market? Here’s What You Should Know About Contingencies

Home contingencies are aspects of home purchase contracts that protect buyers or sellers by establishing conditions that must be met before the purchase can be completed. There are a variety of contingencies that can be included in a contract; some required by third parties, and others potentially created by the buyer. While sellers in the current market prefer to have little to no contingencies, the vast majority of purchase contracts do include them, so here’s a primer to help you navigate any that come your way!

Financing Contingency

The most common type of contingency in a real estate contract is the financing contingency. While the number of homes that sold for cash more than doubled over the last 10 years, the majority of home purchases — 87% of them, in fact— are still financed through mortgage loans.

Why is this important? Because most real estate contracts provide a contingency clause that states the contract is binding only if the buyer is approved for the loan. If a contract is written as cash, in most cases, the financing contingency is removed.

contingenciescontingencies

Why Does The Financing Contingency Exist?

This contingency exists to protect the buyer. If a buyer submits a winning offer, but can’t get approved for a loan to follow through with the purchase, this clause can protect the buyer from potential legal or financial ramifications.

Tip: Homeowners can, and should, request to see a buyer’s prequalification letter before accepting their offer.

Home Sale Contingency

For many repeat homebuyers, they must sell a property in order to afford a new home. Whether they’re relocating for work, moving to a larger home, or moving to a more rural area, 38% of home buyers in a recent survey reported using funds from a previous home to purchase a new one. This is where a home sale contingency comes into play; this clause states that the buyer must first sell their current home before they can proceed with purchasing a new one.

Why Does This Contingency Exist?

This is another contingency that exists to protect the buyer. If their current home sale doesn’t close, this clause can protect the buyer from being forced to purchase the new home. In other words, they can back out of the new home contract without consequence. Keep in mind that in a seller’s market, this type of contingency offer is less desirable to sellers; in fact,  they may rule out your offer completely if this is included.

TIP: In many situations, homeowners can negotiate escape clauses for the home sale which would allow them to solicit other offers and potentially bump the current buyer out of the picture.

Home Inspection Contingency

Not only is it common, it’s also wise to include a home inspection contingency in any offer. Whether it’s a new home or an existing home, there is no such thing as a flawless house. Home inspections can uncover hidden problems, detect deferred maintenance issues that may be costly down the road, or make the home less desirable to purchase completely. A home inspection contingency essentially states that the purchase of a home is dependent on the results from the home inspection.

contingenciescontingencies

Why Does This Contingency Exist?

Whether it’s a roof in need of replacement or an unsafe fireplace, homebuyers need to know the maintenance and safety issues of the properties they’re interested in purchasing. If a home inspection report reveals significant (or scary!) findings, this protects the buyer from the financial burden that repairs would require. This is why agents will tell you it’s never a good idea for a home to be purchased without a home inspection contingency.

TIP: The findings from the report can usually be used to negotiate repairs or financial concessions from the seller.

Sight-Unseen Contingency

Especially during sellers markets, it’s not uncommon for a home to have dozens of showings within the first couple of days of listing. This breakneck pace can create a scenario in which homebuyers may not be able to coordinate their schedules to get a timely showing appointment. To help prevent missing out on the chance to buy a home, buyers in this situation will sometimes make offers on the home, sight unseen.

contingenciescontingencies

There’s no sugarcoating it…this is a high-risk strategy with ample opportunity for negative consequences. However, if this strategy is used, many real estate agents will add a sight- unseen contingency to their offer. This contingency states that the offer for purchase is dependent on the buyer’s viewing of, and satisfaction with, the property.

Why Does This Contingency Exist?

In a market with shrinking inventory, desperate buyers want a fighting chance at a hot property; in some cases, that can only exist by submitting an offer before they can see it in person.

TIP: Sight unseen offers are also high risk to the seller. If you include this contingency in your offer, try to keep other seller requests to a minimum. 

Why Contingencies Can Be Positive

In a seller’s market, buyers may feel the pressure to remove as many contingencies as possible in order to compete. But, it’s important to remember that contingencies are actually safeguards in place to prevent buyer remorse, expensive future repairs, or financial calamity. It’s always crucial for buyers to hire a seasoned real estate agent who can advocate for their best interests, negotiate and strategize in safe and competitive ways, and advises them of the risks of each decision.

Looking to Buy? Don’t Go it Alone!

The homebuying process is a complex one, but that doesn’t mean you’re left with all the heavy lifting. Find your dream home and a local agent on Homes.com, then visit our “How to Buy” section for all the step-by-step insights for a smooth process.


See more posts by this author

Jennifer is an accidental house flipper turned Realtor and real estate investor. She is the voice behind the blog, Bachelorette Pad Flip. Over five years, Jennifer paid off $70,000 in student loan debt through real estate investing. She’s passionate about the power of real estate. She’s also passionate about southern cooking, good architecture, and thrift store treasure hunting. She calls Northwest Arkansas home with her cat Smokey, but she has a deep love affair with South Florida.

Source: homes.com

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5 Ways to Win in a Purchase Money Market in the New Reality

During my recent conversations with sales leaders, managers across the board expressed concern about their originators adapting to the new environment of rising interest rates and the shift to purchase money.

Sherlock: not having an accurate view of sales performance is a recipe for disaster
Pat Sherlock

The decline in refinance business is a reality with mortgage applications dropping 43% in the last week, according to the MBA. This raises a critical question: how many lenders and originators will be able to transition to a purchase money marketplace when the easy money of refinancing is replaced by the hard work of finding customers who want to purchase and finance a home?

Every experienced mortgage lender has certainly witnessed big changes in interest rates over the last 20 years. Sometimes it happens quickly. Other times it can be a slow climb to higher interest rates. This time, it is a little of both. The global pandemic caused the Fed to drop interest rates to historic lows and now, with the end in sight, rates are inching back up.

The real question for lenders and originators that have 90%+ refinance business is: can they switch to the traditional purchase money market that still depends on local relationships or will they decide to sell out to other, better structured lenders? Frankly, the selling out strategy has likely already run its course, leaving lenders that have not invested in digital technology or sales training with few alternatives.

5 Steps to Success

That said, what changes should originators who have been living off of refinance lending make to succeed in a purchase money environment? Here are five recommendations:

  1. Develop a marketing plan. Yes, I know having a plan doesn’t seem like the right strategy when a loan officer is panicked and needs income. But, setting aside some time to analyze the market and identifying underserved opportunities is a worthwhile activity because where producers commit their time and marketing resources is always a balancing act. There are only so many hours in a day and spending them correctly matters a lot.
  2. Understand growth in the local area. An originator’s marketing plan should determine what home building activities in their local market are driving growth. Is it new construction, retirement homes, second homes, etc.? Every market is different and understanding where growth will be coming from is critical. Looking at the research the local municipality has already done is a good start.
  3. Identify underserved market opportunities and the people associated with them. Every market has underserved opportunities that some individuals have already recognized—you want to know these professionals. Rarely is an underserved market completely void of participants. An originator’s job is to develop relationships with the parties in the market before other loan officers decide to market to them. Building relationships takes time and requires originators to form relationships with builders, attorneys, real estate agents and other professionals.
  4. Don’t forget about previous customers. Since developing and building relationships is time-consuming, originators must also work their database of closed loans over the last several years. Former customers are already familiar with an originator’s service levels and a certain percentage might be interested in purchasing a second home or investment property. Some clients might be receptive to listening to a webinar on the latest trends in the local real estate market. This is a great opportunity for originators to partner with a realtor to target a particular audience. The real estate agent can provide his or her perspective as part of the webinar or live stream event. However originators reach out, they should avoid sending mass emails and direct mail. Consumers want a more personal, customized approach.
  5. Rekindle referral business. Originators who have a plan, determine their niche and develop relationships with referral sources and customers in an underserved marketplace are on the path to success in a purchase money environment. Working former customers is a smart way for producers to generate current business while establishing relationships with new referral sources.

Implementing all five strategies is a great way for originators to position themselves for robust performance in a purchase money market.

Pat Sherlock is the founder of QFS Sales Solutions, an organization that helps organizations improve their sales talent management and performance. For more information, visit https://patsherlock.com.

Source: themortgageleader.com

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Housing Inventory Lowest Since 2007, But Median Price Unchanged

Last updated on January 10th, 2018

A while back, I mentioned that it appeared as if we were running out of homes for sale, despite being just years (or days) out of the housing crisis.

I was being somewhat facetious, but it’s true that there are very few homes for sale these days, at least in areas where people want to buy.

A new report from Realtor released today revealed that there were just 1.76 million single-family homes, townhouses, condos, and co-ops listed for sale in October nationwide.

That number is down 2.58% from September and 17.0% from a year ago, displaying just how bad things have become for would-be homebuyers.

Total listings in October were also 40% below the 3.1 million units for sale back in September 2007, when Realtor.com began tracking associated housing markets.

On a year-over-year basis, for-sale inventory declined in 141 of the 146 markets covered by Realtor.com. Good luck finding a house!

Median Price Unchanged

median

Despite this drop in inventory, the median list price in October was $189,900, unchanged from a year ago (it dropped 0.83% month-over-month).

It has fallen for three straight months, and likely won’t see any improvement during the holiday season, so we could be in for a long winter.

So even though there are far fewer homes for sale, demand hasn’t won over supply, though it may prevent further home price declines. Phew.

Still, it doesn’t bode well for a recovery if home prices can’t even steady themselves with record low rates on hand and limited supply.

Recovery Uneven

List prices increased in 71 markets, remained unchanged in 31 markets, and dropped in 44 markets.

Median prices are up in many hard-hit regions, such as Phoenix, Atlanta, Seattle, Las Vegas, and much of California.

The median price in Vegas in October was 12.41% above year-ago levels, thanks to a 24.4% drop in housing inventory.

[Foreclosure resales hit five year low.]

But median prices are down in many areas of the country that didn’t experience a run-up in prices during the boom, namely the Midwestern “rust belt.”

In other words, continued economic uncertainty is killing demand and hurting home prices in areas that aren’t highly sought after.

And with the impending fiscal cliff, you have to wonder if this recovery really has any legs.

Still, investors seem to be scooping up properties and everyone I know wants a house; they just can’t seem to find one for sale.

So at minimum, that should buffer home prices, even if the economy takes another turn for the worse.

Two-Year Window to Buy

While that all sounds pretty grim, Blackstone, the world’s largest private equity firm, has purchased about 10,000 foreclosed properties in the United States this year, according to a Bloomberg report.

The price tag so far is a mere $1.5 billion, with about $100 million in weekly home purchases.

The company has been scooping up properties on the cheap, with an average purchase price of $150,000, many of which were valued at $300,000 during the boom.

Blackstone plans to renovate the homes and rent them out via property management companies.

But Blackstone Global Head of Real Estate Jonathan Gray believes there are only another two to three years of buying opportunities before the market becomes less attractive from an investment standpoint.

Clearly this presents a bit of a quandary, seeing that everyday buyers can’t even find a suitable property, thanks in part to these vulture investors coming in and paying with cash.

Read more: Should you buy a house now or wait?

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.

Source: thetruthaboutmortgage.com

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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

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You Might Get a Better Deal If You Buy a House Where Kids Live

Last updated on August 16th, 2019

It’s common knowledge that home buyers are interested in purchasing properties in good school districts.

After all, many individuals purchase homes because they either have kids, or plan to in the near future.

Simply put, families and families-to-be need more space, and a house is where you get that.

But even if you don’t have children (and no plans to start a family), it can be smart to buy a house in a solid school district to ensure the resale value is strong when it comes time to sell.

What’s perhaps more interesting is the idea that you might be able to get a better deal on a home purchase if you buy it from a family.

Homeowners with Kids Sell More Urgently

  • 23% of homeowners with kids sold “very urgently” per Realtor survey
  • Versus just 14% of homeowners without kids
  • Nearly half of homeowners with kids sold “somewhat urgently”
  • While half of homeowners without kids said they could wait for right offer

A new survey from the National Association of Realtors revealed that homeowners with children sold more urgently than those with no children.

Specifically, 23% of sellers with children reported to NAR that they sold their home “very urgently.”

Comparatively, only 14% of sellers without kids said they had to sell their home quickly.

Additionally, 46% of those with children residing in the home said they had to sell “somewhat urgently,” while about half of sellers with no children said they were “able to wait for the right offer.”

NAR chief economist Lawrence Yun noted that when faced with an “upcoming school year or the outgrowing of a home – sellers find themselves rushed and forced to accept a less than ideal offer.”

Often, these parental homeowners are put in situations where they have to sell in shorter amounts of time versus the non-parent cohort.

For example, they may need to sell because they want to move into a different school district if their child is going from elementary to middle school.

It’s also more common for these homeowners to upgrade to larger homes once they find out another baby is on the way.

Per the survey, some 25% of home sellers with children said they sold because their prior home was too small.

And 19% said a job relocation forced them to sell, while 13% said a change in their family situation led to the sale.

Meanwhile, just 7% of those without kids indicated that they felt their home was too small.

This all lends itself to the idea that you might be able to get a deal if you know the seller has kids.

In other words, you could see greater success in trying to negotiate and/or lowballing a bit, asking for seller concessions, and so on.

Chances are a home seller won’t want to mess around if they have children to consider.

Conversely, a seller without kids might be happy to sit on their listing and play hardball with any prospective buyer who comes along.

The Downside to Buying a Home Kids Occupied

  • If kids lived in the home prior to you purchasing it
  • There’s a good chance it’s going to have some damage
  • You may need to repaint and make minor (or major) repairs
  • But you can ask for seller credits to bring down your acquisition cost

To put it bluntly, the house might be a mess. Kids can do a lot of damage in a short amount of time, so the property itself could be in need of some TLC.

Think slime stains on the carpet, strange paint colors on the walls, stickers on the windows and doors, dents in the drywall, and on and on.

Ultimately, having more people in the house will lead to more wear and tear, which could cost you once you move in.

You might need to repaint the place, replace the flooring, make minor repairs, etc.

The upside here, again, is if there is obvious damage, you can include repair requests in your offer to get the price down even further.

If you’re willing to overlook some of the aforementioned issues, you might be able to snag a home at a great price.

Even if kids didn’t live in the home, chances are it’ll need work anyway.

Assuming you can get some credits for those renovation/repair costs, and the seller is willing to accept a lower sales price, you could make out really well, even in a competitive housing market.

Read more: Why You Should Buy a Home Next to Trader Joe’s or Whole Foods

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.

Source: thetruthaboutmortgage.com

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Buying A Home? Here’s How To Navigate Intense Bidding Wars

It’s no secret that residential real estate is an extreme seller’s market. For sellers, this is excellent news, as many are netting hefty profits on their home sales. For buyers, however, the stress of multiple offer situations, higher prices, and intense bidding wars has become the new normal.

If homebuying is on your 2021 radar, it’s crucial to prepare for the reality of this market. And while you may have heard horror stories of bidding wars, don’t worry — it IS possible to win a multiple-offer situation and secure the house of your dreams! Here are 7 things to know when navigating these situations.

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Come Out Strong

Even if a home isn’t currently in a multiple-offer situation, it can become one in a matter of hours. That’s why it’s important for buyers to always put their best offer on the table from the start. While buyers may hope the seller will negotiate a lower offer, that just isn’t the reality of the current real estate market. Sellers have the luxury of rejecting any offer that isn’t ideal.

Dan McQuillen of The Danberry Company Realtors in NW Ohio says “In this market we are telling the buyers that they better assume they only get one chance at getting the house.” But, what is a strong offer in this market? In a nutshell, meeting the seller’s list price or above, not asking for concessions, providing a quick close, and even requesting minimal to no repairs, could go a long way in winning intense bidding wars.

Get Pre-Approved

While cash is king in the real estate world, most homebuyers need to obtain a loan to purchase. Sellers want the reassurance that buyers have the capability of getting approved for a home loan. McQuillen adds that he frequently sees buyers make the mistake of “not being pre-approved with a reputable lender.” By working with a local lender who is confident in your loan approval, you can help reassure sellers that you’re a qualified buyer who can make it to the closing table.

(READ MORE: How to Finance Your Home)

Keep Requests To A Minimum

In a seller’s market, the seller is in the driver’s seat, leaving buyers at their mercy. Given the current status of the real estate market, sellers don’t need to provide concessions to buyers. Sellers in today’s market prioritize “clean” offers: no closing cost assistance, no contingencies, no additional warranties, etc. McQuillen sums it up: “Don’t nickel and dime the seller.”

If a buyer does need to request seller-paid closing costs on their behalf, McQuillen suggests “write a higher offer and find out what else is important to the seller. There may be things besides price that the seller would like.”

Be Prepared To Lose A Few Rounds

It’s not uncommon for homebuyers to go through multiple rounds of bidding wars on multiple homes before they finally get an offer accepted. This is what causes many buyers to become discouraged with the process. However, it is possible to buy a home in this market—you just need perseverance, a highly experienced real estate agent, and realistic expectations.

Get An Agent….Then Get Real

The single greatest asset in navigating an intense seller’s market is a dedicated advocate in your corner. A buyer’s agent is a representative who does much of the heavy lifting for buyers. Their experience and knowledge of the market can assist buyers in creating offers that provide the most appeal—from price, to closing date, and everything in between. Buyer’s agents are knee-deep in multiple offer situations every day, and many have the hard-earned experience to set their client’s offer apart from the crowd.

bidding warsbidding wars

One of the greatest mistakes a buyer can make in a multiple offer situation is have lofty expectations. Expecting sellers to reduce the sale price, leave behind thousands of dollars worth of furniture or complete extensive repairs is simply not the reality of this real estate market. If you’re not entirely sure what the whole reality of the market is, it’s one more reason to work with an agent.

Be Flexible

Several factors can help you navigate intense bidding wars, but there is one thing that could derail all those efforts: inflexibility. If you’re unwilling to look outside a geographic area, or rigid on your closing date, or refuse to negotiate on the terms of your offer—you will create a scenario that only brings more difficulty and frustration.

In all areas of the process, it’s important that buyers are flexible. That flexibility can help you stand out among a sea of offers.

McQuillen suggests “It could be that the seller would really like to sell the house and be able to rent back the house for a period of time,” so by offering a flexible close date, your offer could very well rise to the top of the list.

Know When To Fold Them

In this market, real estate agents are seeing buyers offer thousands of dollars over list price, waiving inspections, and even agreeing to pay over appraisal value out of desperation to win bidding wars. But, that desperation can be a recipe for buyer’s remorse.

As McQuillen explains, “The risk in waiving an inspection is there are some pretty significant issues with the house that the purchaser would be stuck with. The risk of waiving an appraisal is that the house doesn’t appraise and, worse yet, appraises for significantly less than the purchase price; then the purchaser has to come up with more money out of pocket than they were anticipating.”

If in the course of the bidding war the seller is expecting you to overextend yourself or open you up to greater risk, it’s okay to walk away from negotiations. It’s better to have rejected the deal than to sign up for a bad deal.

Extra Advice: Stay Informed

Trends and market conditions can change in mere hours, so stay informed with all the up-to-date information you need with Homes.com resources. Local market reports, tips and advice, and consumer resources are all at your fingertips, so keep us bookmarked!


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Jennifer is an accidental house flipper turned Realtor and real estate investor. She is the voice behind the blog, Bachelorette Pad Flip. Over five years, Jennifer paid off $70,000 in student loan debt through real estate investing. She’s passionate about the power of real estate. She’s also passionate about southern cooking, good architecture, and thrift store treasure hunting. She calls Northwest Arkansas home with her cat Smokey, but she has a deep love affair with South Florida.

Source: homes.com