6 tips for a higher credit score

6 tips for a higher credit score

Your credit score, calculated from information in your credit report, is a measure of how good a risk you are to a credit grantor. A large proportion of borrowers who can't qualify for a mortgage would qualify if their credit score was higher.

The theme of this set of articles, that many borrowers can repair their own qualification credentials, applies as much or more to credit score than to down payment or income.

Any lender to whom you apply will obtain your score and provide it to you. As noted below, however, inquiries by lenders may have a negative effect on your score, whereas inquiries by you do not. Hence, it is a good idea to find your score before you apply, so you can make an informed decision on whether you want to apply at that time.

You can obtain your score from many firms in the business, including www.equifax.com, www.transunion.com, www.experian.com and www.myfico.com.

At some point, I expect to have a program on my website that indicates how particular applicants can improve their credit score using data from their credit reports. The suggestions below, however, are necessarily general in nature.

Pay on time: The core rule is to meet your debt obligations on-time, every time. If you have had payment lapses in the past but your habits have improved, time is on your side. The credit scoring rules weight recent experience more heavily than older experience.

Correct mistakes in your credit report: Your score should not be reduced by reporting mistakes, which are all too common. I have an article on my website on How to Correct Mistakes in Your Credit Report.

Detach yourself from the "wrong vendors": Because finance companies lend to relatively poor risks, the credit score of any borrower owing money to a finance company is lower than it would be if the creditor was a bank. By the same logic, borrowers who have credit cards of department stores are penalized, relative to what their score would be if they had cards issued by banks.

Reduce balances on revolving credits to less than 50 percent of the maximums: A high utilization ratio is read as a sign of weakness and potential trouble, reducing your score. Credit cards are the most important type of revolving credits, but HELOCs belong in this category as well. A HELOC used to purchase a house or to refinance a mortgage, where the initial utilization ratio is 100 percent, will jolt your credit score.

Note that utilization ratios can be reduced by getting the maximums raised, as well as by paying down the balances. In many cases, credit card issuers are willing to raise the maximum at the borrower's request.

Minimize the number of "hard inquiries": Hard inquiries are requests to a credit agency for your credit score from a credit grantor, insurance company or other entity to which you have applied and to which you have entrusted your Social Security number. "Soft inquiries" made by you or by firms looking to sell you something for which you have not applied don't require your permission and don't impact your credit score.

The credit-scoring systems may or may not penalize borrowers who shop multiple credit grantors within a short period -- unfortunately, you can't be sure.

The credit agencies tell you that multiple inquiries within a 15-day period count only as a single inquiry, but in fact inquiries for mortgage, auto and student loans would probably count as three inquiries, and even three mortgage inquiries could count as three inquiries, depending on how the credit grantors are identified to the credit scorer. I will have an article abut this in the near future.

The bottom line is that in applying for credit, find your own score that you can deliver to the vendors you are shopping who need the score to set the price. The vendor you select will verify the score through his own inquiry, but it will be only a single inquiry.

Pay off collection accounts: This may actually reduce your score in the short-run by converting the account from an older entry with a low weight to a new one with a higher weight. However, you can't get a loan with a collection account on your record, so you must pay it off -- the sooner the better.

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

Even the Naysayers Are Saying To Buy Now!

Even the Naysayers Are Saying To Buy Now!

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

5 Reasons You Should Consider Selling Now

5 Reasons You Should Consider Selling Now

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

5 Strategies for Navigating the Summer Clearance Sale - on Real Estate!

5 Strategies for Navigating the Summer Clearance Sale - on Real Estate!

Home prices are low, interest rates are low - real estate is basically having a summer clearance sale! But unlike buying a clearance-priced car or computer, making the wrong move in this real estate 'sale' can have disastrous effects, from losing your dream home due to a bad bid to ending up with a money pit of a property.


Here are a few money-saving, pitfall-avoiding tips and tricks for buyers who want to do some smart home shopping this summer.

1. Have a vision in place, before you start your house hunt. Actually, have several visions in place. Have a financial vision, complete with a clear picture of what your total income and expenses look like, in the “after homebuying” view, including what you pay out for your home and related expenses, like HOA dues and homeowners’ insurance. Have a vision of your life in your new home, including what you want to do, with whom and where you want and need to go - in the work, family and recreation areas of your life.

If you kick off your conversations with your mortgage broker and real estate agent with a clear understanding of the lifestyle you are looking to create, you’ll be much less likely to get derailed. With a clear vision in place and, ideally, on paper, you can clearly communicate your wants, needs, goals and financial boundaries to your professionals, telling them what you can afford, rather than trying to shoehorn your financial plans into one-size-fits-all mortgage guidelines. With a vision, the temptation of an uber-low-priced, but completely inappropriate, home will not lure you into buying the wrong place for your needs. (Nor will an amazing home that is simply out of your personal price range - no matter how great a value it is for the money!)

2. Don’t let affordability get between you and reality. High affordability doesn’t necessarily mean you can get every single thing you want - and name your price. The fact is, even people who are spending millions for their homes don’t get everything they want! I’ve seen buyers insist that they need X number of bedrooms and Y number of bathrooms in move-in condition for a price that is just not going to happen, even in this clearance sale climate, and end up looking and looking, ad infinitum.

If your agent has shown you home after home that is what you want, but has sold for more than you want to spend, and you’re confident that you can find or cut a better deal because the market is down and you just os happen to be a brilliant negotiator (!), you might be at risk of falling into this trap. There are deals to be had, but if you don’t stay grounded in reality, you’ll end up chasing your tail and missing out on the tax and lifestyle advantages of homeownership.

If you’ve been house hunting for months and months on end, your agent keeps trying to tell you that you should search in a lower price bracket, you have repeatedly gotten overbid or you just can’t seem to find the precise home you seek in the location and price range you seek, at least consider the possibility that you might have an outsized wish list for your budget. Take a step back, revisit your vision, and remind yourself what’s really important. It’s okay to save some “must-haves” and “deal-breakers” for your next home purchase!

3. Get a local expert to brief you on the local market, then screen out the noise. Now more than ever, it’s essential to have laser beam focus on the information and strategies that will get you what you want - whether it’s an amazing deal on the home you’ve always wanted or simply success at becoming the owner of your first home at a price you never thought would ever be possible. Otherwise, you’ll end up all over the place, spending your time, money and sanity attending auctions, getting worked up over distressed properties that aren’t yet for sale, trying to negotiate deals with sellers who are in no position to cut them and having your lowball offers on bank-owned properties rejected time after time.

Don’t let a news story about a guy in Minnesota who got a home for $3.27 be the basis for your entire home buying strategy. Instead, ask around and get referrals to a local broker or agent who has a track record of helping the people you know. Read their answers on Trulia Voices and ask them your own questions to get a sense for whether they might be a good fit for you - if they are, and you trust them, then consult with them on the dynamics of your local market. The market is down everywhere, relative to 2006. But some markets - and some neighborhoods within markets - are still seeing multiple offers and home prices which are relatively recession-proof, compared to what you’d expect from the national news.

Once you have a strategy in place, work it - don’t let your acupuncturist or shoe repair guy convince you that your strategy is wrong, that you could get the place for cheaper or that the bank should absolutely do every single repair, or you should walk away from the deal. Many would-be buyers lose out on great homes because they take negotiating advice from their holistic veterinarian over that being offered by their broker or agent.

4. Read everything. Good faith estimates. Contracts. Disclosures. Inspection reports. There is a long, long list of multi-page documents that are very easy to “just sign” when you’re in the heat of the hunt and think you’re on the scent of an amazing deal. I’m not suggesting you ask for a week-long pause button to read every document, either - rather, read them when you get them, ask questions, and keep asking until you understand the documents.

Many buyers this summer will make offers on more than one home before they get into contract on “the one,” and many of those properties will be short sales or foreclosures. With distressed properties, every contract is different, so it behooves you not to go on autopilot, just skimming the papers as you might otherwise. Also, inspection reports might reveal red flags and condition issues that you’d normally expect to see in the seller’s disclosures. It’s especially critical, in these situations, to fully understand as much as you can about the property, your loan, and your obligations and due dates under the contracts.

5. Stop your mental accounting and do the actual math - on paper. In the field of behavioral economics, mental accounting refers to the tendency we humans have of doing math in our heads, separating things like easy money (e.g., the so-called “instant equity” from buying a home for less than it’s supposedly worth) from hard-earned wages and salary, and making spending decisions differently from these different mental accounts.

On the scent of a good deal, and in the heat of the hunt, even the most meticulous homebuyer can go up a few thousand in offer price to beat out other buyers. No problem, right? Well, but then when the inspector uncovers a few needed repairs, they make a mental guess as to what they’ll cost, and add that in - again, mentally. Then, when the lender requires a few extra thousand bucks than expected to close, that goes on top, but again, only mentally. And mental money tends to stretch a bit longer than real money does!

So, you can see how it’s possible to break the bank when you thought you were in great shape because you scored such a great purchase price for the property itself.

Even if you hate budgets with every iota of your being, buck up on this one project, pull out the calculator or open up a spreadsheet and keep track of every line item. Get actual repair bids during your inspection period, to the extent possible, and get your math mojo on. It’s fine to buy and incur these overages here and there, but keeping track of them is key. You know what I like to say - surprises are for birthday parties, not for real estate transactions, and not for your bank account, either!

Keeping a strict tab on the expenses you incur during the transaction - or will need to incur afterwards -- will save you so much drama later.

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

10 Easy Upgrades to Add Style & Value to Your Home

10 Easy Upgrades to Add Style & Value to Your Home

Sometimes, it’s the little things that make the biggest difference in the value and appeal of your home. Whether you’re trying to sell your home of just spruce up the place, here are 10 easy ways to get started.
1.Update hardware on cabinets and drawers
2.Replace towels and rugs in the bathroom(s)
3.Add overhead lighting or wall sconces to brighten rooms
4.Declutter small spaces and closets with DIY storage kits
5.Wash or power wash the exterior of your home (especially windows)
6.Add area rugs to throw in a hint of color
7.Hang a mirror in small rooms to give the illusion of more space
8.A fresh coat of paint on walls and trim brighten any room
9.Try a fresh new color on your front door for character
10.Mow and mulch your lawn even in the cooler months
Make a plan. Set a budget. Get started!

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

10 Cities Where It's Cheapest to Buy

10 Cities Where It's Cheapest to Buy
You can find a lot of housing deals in the Midwest. The region boasted the most number of cities to make it to the top of the list where median list prices for March were the lowest.

Nationally, the median list price for March was $199,500, which is down 0.25 percent year-over-year.

But in markets like Detroit, the median list price is less than half the national average.

Here is a list of the cities with the lowest median list price in March, based on housing data of 146 markets from Realtor.com.

Detroit
Median list price: $99,000
*Down 13.84 percent year-over-year
Median days on the market: 101

Fort Wayne, Indiana
Median list price: $109,900
*Up 0.92 percent year-over-year
Median days on the market: 126

Dayton-Springfield, Ohio
Median list price: $109,900
*Down 2.66 percent year-over-year
Median days on the market: 150

Toledo, Ohio
Median list price: $114,900
*No change in year-over-year
Median days on the market: 164

South Bend, Ind.
Median list price: $115,000
*Down 0.78 percent year-over-year
Median days on the market: 170

Springfield, Ill.
Median list price: $124,900
*Up 0.73 percent year-over-year
Median days on the market: 113

Akron, Ohio
Median list price: $130,440
*Down 6.82 percent year-over-year
Median days on the market: 162

Cleveland-Lorain-Elyria, Ohio
Median list price: $134,900
*Down 2.95 percent year-over-year
Median days on the market: 162

Las Vegas
Median list price: $134,900
*Down 9.46 percent year-over-year
Median days on the market: 120

Wichita, Kans.
Median list price: $135,000
*Down 1.24 percent year-over-year
Median days on the market: 107

Source: REALTOR® Magazine online (April 28, 2011)

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

4 Keys to Selling in Today's Market

4 Keys to Selling in Today's Market
Home sales and prices are still dropping around the country as huge inventories of foreclosures and short sales continue to weigh on many markets. So how can traditional sellers stand out in a crowded real estate marketplace? CNNMoney.com recently highlighted several keys to getting a home sold in a tough real estate market.

1. Cut your price by a lot. Buyers nowadays want to feel they are getting a “steal,” real estate experts say. But some sellers may be tempted to list a property above fair market value just to test out the market and see if they can get a taker. In the past year, about 25 percent of sellers who initially listed their homes too high ended up having to reduce the price, according to Trulia.com.

"The first 30 days on the market are the most important," says Elizabeth Kamar, a real estate professional in Norwalk, Conn. That crucial time is when the home gets the most attention and showings. For sellers who aren’t realistic about the price from the get-go, they often end up with less than they would have if they priced it right initially, Kamar says.

Experts also note that if after 30 days on the market there are still no buyers, sellers may need to make a big move.

"When a property sits, people start thinking it must be listed too high," says Ellen Klein, a real estate professional in Rockaway, N.J. She suggests making a giant price cut--as much as 10 percent of the asking price--which may be extra motivation for buyers to take a second look or attract a new pool of potential buyers seeking a lower price range.

2. Play hardball in negotiations. Sellers shouldn’t feel they have to accept any lowball offer that comes their way. However, if a buyer is willing to negotiate, that’s when sellers need to try to set aside feelings of anger or insult and start to counteroffer, says Mabel Guzman, president of the Chicago Association of REALTORS®. Guzman says the ideal is that you’ll be able to negotiate within $10,000 to $20,000 of an acceptable offer. Using incentives--such as agreeing to leave the appliances--may get buyers to budge in agreeing to a higher price.

3. Stage it. Staging is becoming popular in trying to sell mid-range homes. Professional stagers will help home owners highlight key areas of a home and often rearranges furniture or bring new furniture in, repaint, and get the home looking like it’s ripped from a catalog. Real estate brokers say that proper staging can actually speed up a sale and increase the final sales price too.

4. Get the home in front of as many buyers as possible. The real estate professional needs to get creative in the marketing to make sure the home gets a lot of attention from buyers. "The more eyeballs that get on the listing, the better," says Katie Curnutte of the real estate information web site Zillow.com.

One key: Boosting the home’s online presence. Having 20 instead of five photos will nearly double the number of hits the property gets on the Web, according to Zillow.com. Incentives can also draw out buyers, such as with offers to cover a buyer’s closing costs, pay the first year’s property taxes, or even a $1,000 gift card (and maybe one for the buyer's agent too). (Note: You must disclose any such gifts or payments when the offer is agreed on.)

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

The 5 Most Common Complaints of Short Sale and REO Buyers (and How to Avoid Them)

The 5 Most Common Complaints of Short Sale and REO Buyers (and How to Avoid Them)

Roughly forty percent of the homes for sale on today's market are short sales and foreclosures! Distressed properties are well known for their value (a reputation which is sometimes accurate, and sometimes not), but they also have a reputation for causing buyers to become distressed, too!

Transactional snafus, last-minute surprises and long, drawn-out escrows that never close seem to be par for the course.

Instead of avoiding these properties altogether, get educated about the most common dramas that go down in these deals, and how you can avoid falling victim.

1. Run-on (and on, and on) escrows. When you’re buying a home (or selling one, for that matter), time is absolutely of the essence. And buyers reasonably expect that the big time suck in real estate is in the house hunting process itself; seems like once you find a home you want to buy and the seller agrees to your price and terms, things should move pretty quickly, right?

Not so much, when it comes to some distressed property sales. I’ve heard tell of the occasional, swiftly-moving escrow on an REO (real estate owned - by the bank). But for the most part, these transactions take anywhere from a few days to a few weeks longer than “regular” sales, because of the extra signatures, supervisor-level approvals and even investor involvement required to seal the deal. Banks don’t have the same sense of urgency individual home sellers do, and it’s not uncommon for the people who need to sign on the dotted line to be on vacation or scattered across the country, adding days’ or weeks’ worth of time to the escrow.

And short sales are also an entirely different animal when it comes to escrow timelines. While a standard sale from an individual seller to an individual buyer might take 45 days from contract to closing, a short sale can take anywhere from 45 days to 6 or 8 months (!) to get the deal closed, after the seller has accepted the contract.

Avoid the drama by: expecting your escrow to run long, and being pleasantly surprised if it doesn’t. Expectation management is everything. Make sure you take these extended timelines into account when you’re working with your mortgage broker on the issue of when to lock your interest rate, and how long your rate locks will last. You might even need to plan on and/or set aside an allowance for the cost of extending your low interest rate, if rates are rising rapidly during the time you’re waiting for the deal to be done.

2. Bank won't take lowball offer. If I had a dollar for every time I’ve received a question from an outraged reader to the effect that a buyer has had their short sale or REO offer rejected on grounds that it was too low, even though the bank has no other offers, I could buy a foreclosure myself (admittedly, it’d be one of those $150 foreclosures in some blighted town with tax liens and no plumbing, but still).

Banks owe their shareholders and investors a duty to get as much as they can for these properties. Just because you see it’s on the market and listed as a short sale or a foreclosure doesn’t mean they’re going to give it to you for a fraction of its worth. The bank’s goal is to get a purchase price as close as possible to the home’s fair market value, as determined by the recent sales prices of similar, nearby homes, with some adjustments made for the property’s condition. Fact is, many banks would rather see the listing agent reduce the price by a moderate amount, and wait to see what offers come in, than to accept an offer 30 percent below the asking price just because there are no other offers on the table.

Avoid the drama by: working with your agent to make a realistic offer, based on recent comparable sales in the neighborhood, not just on what you think you can get away with. You can waste a lot of time, spin a lot of wheels and lose out on a lot of properties making lowball offer after lowball offer on distressed homes. Sit down with your broker or agent, review the ‘comps’ and make a smart offer that reflects a good value for you, is within your budget and is not bizarrely out of the realm of the fair market value of the property.

3. Last minute postponements/cancellations. These transactions have an uncanny way of being delayed at the last minute - or never going through at all, through no fault of the wanna-be buyer. You signed docs yesterday, put your dog in the crate this morning and just hopped in the moving truck, only to get a text from your broker that the deal didn’t close because the escrow company which was selected by the bank flubbed the checkboxes on a single sheet of paper (it happens). Or, you’ve been in contract (with the seller) on a short sale for four months, and the bank refuses the sale entirely because the seller refuses to kick even $1 of their own cash into the deal, despite having a flush savings account.

Avoid the drama by: staying as flexible as possible with your moving plans as long as possible. Best practice is to plan on some overlap between the time you can be in your last place and your scheduled move-in date. Also, if you’re in contract on a short sale, you should take the point of view that you don't have a firm deal until you get the bank’s approval of the transaction. So don’t even think about starting to make moving plans or paying for home inspections and appraisals until you know the bank has greenlit the deal and that the purchase price and terms they’ve approved work for both you and the seller.

4. The bank’s black box. Make an offer on a normal home and you’re likely to know what the outcome will be within a few hours or a few days, at the outside. If things take longer because the seller is out of town or some such, the listing agent tells you that, and you at least know what’s going on.

Make an offer on a bank-owned property or a short sale? It’s a crap shoot - could be days, but could also, easily, be weeks or months before you know what’s going on. And no amount of calling, pleading, prodding or nudging is likely to get you much information on how your offer or the seller’s short sale application is being handled or what (if any) progress is being made. And that “black box” into which your offer disappears at the benk level is very frustrating.

Avoid the drama by: continuing your house hunt until you have an answer back. Maniacally pestering the listing agent for answers or harrassing your buyer’s broker into spending hours on hold with the bank is highly unlikely to get you any insight. (With that said, it does make sense for your agent to check in regularly - sometimes even daily - with a short sale or REO listing agent to stay updated on any developments with the property and to make sure your offer/transaction stays in the front of their mind.)

Most of the angst in these situations arises when a buyer feels they passed on properties that would have really worked for them when they pinned their hopes on a distressed home. You can only control your efforts and activities, not the bank’s. So, consult with your own broker or agent about staying proactive in viewing and even pursuing other properties until you have a firm “yes” from the bank on your short sale or REO offer. Until that time, and usually for a short time after you get the bank's approval, you have the right to back out of the transaction if you need to (make sure your broker briefs you on precisely when your right to rescind your offer or exercise contingencies - i.e., bail - will expire).

5. Double standards. In a “regular” equity sale with no bank involvement, both buyer and seller are obligated to meet various timelines. Seller has to provide disclosures by X date, open the property to inspections - with utilities on - by Y, and close and move out by Z. REO and short sale buyers, on the other hand, are often dismayed to find that even though the bank might take weeks or months to sign or handle its deliverables, the bank will insist that the buyer show up, sign or send a check quick-like.

Avoid the drama by: chalking it up to the (admittedly irritating) way things are - the price you pay to buy from the bank. Realize that working with the bank on the bank’s terms is unavoidable when you buy a distressed property. Then, go into the deal with realistic expectations - including the expectation that the bank will drag its feet, despite expecting you to keep every deadline - and you’ll be less frustrated, and less likely to make poor decisions out of frustration.

Also, make sure you do respond in a timely manner to the bank’s requests and your obligations under the contract. I’ve seen banks capitalize on buyer delays in returning signatures and removing contingencies to accept higher offers they received in the interim. Don’t lose your home on a technicality because you assume that the bank’s lackadaisacal timelines apply to you as well.

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

Banks Build Record Foreclosure Inventory But Payment Delinquencies are decreasing

Banks Build Record Foreclosure Inventory, but payment delinquencies are decreasing
By Steve Cook
RISMEDIA, May 5, 2011—The pace of foreclosure starts increased by a third in March, building the national inventory of REO properties to an all-time high of 2.2 million at the end of the month.

Fortunately, foreclosure sales also increased and delinquencies continued to decline, suggesting the foreclosure glut will be temporary. Delinquencies dropped by more than 11 percent from February, the lowest level since 2008 and a 20 percent year-over-year decline, according to the March Mortgage Monitor report by Lender Processing Services, Inc.

Early-stage delinquencies have led the decline, as fewer problem loans enter the pipeline. In fact, 30-day and 60-day delinquent inventories are now approaching pre-crisis levels. Also, the first quarter of virtually every year shows a drop in new delinquencies, and historically March is consistently the month with the largest declines.

The report also found that mortgage origination activity continues to be slow, primarily due to ongoing reduction in refinance activity. As interest rates rise and credit requirements remain more exacting, the majority of homeowners eligible to refinance may have already done so.

States with highest percentage of non-current loans are Florida, Nevada, Mississippi, New Jersey and Georgia. The lowest percentage of non-current loans are in Montana, Wyoming, Alaska, South Dakota and North Dakota.

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

A Patio Makeover Can Be a One-Weekend Wonder

A Patio Makeover Can Be a One-Weekend Wonder
By Stacy Downs
RISMEDIA, May 5, 2011—(MCT)—Landscape architect Joann Schwarberg of Mission Hills, Kan., leads us through a weekend action plan for transforming our dead-leaf-riddled outdoor spaces into true retreats—including a celebratory drink at the finish line.

The Timeline

Friday after Work: Make a plan. Determine the scope of the project. The good thing about a weekend makeover is that the change can be as simple as positioning furniture and redistributing accessories. Truly updating the space can cost a little more, says interior designer Stephen Saint-Onge in his book No Place Like Home (Wiley; $20). “This is something you could do alone, as a fun family project or with a group of friends,” Saint-Onge writes. “Instead of a book club, how about forming a makeover club?”

Take digital photos. Landscape architect Joann Schwarberg documents projects by taking photographs from different angles. The “before” photos help pinpoint problems.

Make a list of tasks and supplies. Schwarberg creates spreadsheets of tasks to be performed. She includes the fun, like new pillows and plants, as well as the mundane, including cleanup.

Early Saturday: Clean like mad. Empty pots and clear out furnishings. “They need to be out of the way so you can clean the area and visualize something new,” Schwarberg says.

Christine Stephan, who assists Schwarberg, hoses off the rings of dirt outside of pots and washes the interiors with water and a drop of disinfectant. “You don’t want this year’s plants catching last year’s diseases,” Stephan says.

Spruce up. Prune nearby trees and shrubs. Clear the gutters. Add mulch to existing nearby landscaping. Power wash or hose down the area of the house getting the makeover, including the walls and pavement. If necessary, apply touch-up paint on the house. Make sure all the lighting works.

Saturday afternoon: Shop around. Assess your furniture. “If the old stuff has to make it another year or two but looks pretty run down, consider painting it with one of the special spray paints made for metal or plastic furniture,” Schwarberg says. “This will shine it up and maybe add a new fun color. Remember to clean it thoroughly first, or the paint will flake and chip.”

Another option if you have a patio set worth keeping—or if you find a great set at a flea market or estate sale—is to take it to an auto body paint shop and ask them to give it a new life, she says.

Consider new cushions and pillows. For cushions, Schwarberg advocates a solid neutral color.

“That neutral could be a blue, lime green or whatever,” she says. “You want the cushions to be fine for any type of party, whether it’s a luau or fiesta. So the accent pillows can be the fun patterns, but you don’t want to get sick of the cushions.”

Or perhaps all that’s needed is a new umbrella.

Buy pots, plants and rugs. You might already have an outdoor-grade rug in your house that you can use on the patio.

Sunday after Breakfast: Race to the end. Plant pots. Schwarberg’s system: Place about an inch or two of gravel in the bottom of large pot. Smooth it out so a plastic liner sits level on top of it. Make sure pot and liner have holes in the bottom to drain the soil of excess moisture. Insert the plastic liner pot (about an inch smaller than the ceramic or clay pot) and layer the inside with an inch of gravel, filter cloth, organic potting soil and your main plant, tree or shrub; add annuals and herbs around edges. Use Styrofoam packing peanuts to fill in the gap between pot and liner — this prevents shrinking and swelling of soil that cracks pots. Add a finishing touch of sheet moss at the top to retain moisture.

Arrange furniture. Schwarberg likes to place club chairs on a diagonal to create outdoor conversation areas. If you also have lounge chairs, set them in the lawn facing the patio, she says. “This gives an additional view of the yard and extends your entertaining space beyond the paving.”

Eat, drink and have fun. Sit back, relax and toast your hard work. Your weekend makeover will pay off all season.

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

Fielding a Lowball Purchase Offer on Your Home

Fielding a Lowball Purchase Offer on Your Home
By: Marcie Geffner

Consider before you ignore or outright refuse a very low purchase offer for your home. A counteroffer and negotiation could turn that low purchase offer into a sale.


Check your emotions
A purchase offer, even a very low one, means someone wants to purchase your home. Unless the offer is laughably low, it deserves a cordial response, whether that’s a counteroffer or an outright rejection. Remain calm and discuss with your real estate agent the many ways you can respond to a lowball purchase offer.

Counter the purchase offer
Unless you’ve received multiple purchase offers, the best response is to counter the low offer with a price and terms you’re willing to accept. Some buyers make a low offer because they think that’s customary, they’re afraid they’ll overpay, or they want to test your limits.

A counteroffer signals that you’re willing to negotiate. One strategy for your counteroffer is to lower your price, but remove any concessions such as seller assistance with closing costs, or features such as kitchen appliances that you’d like to take with you.

Consider the terms
Price is paramount for most buyers and sellers, but it’s not the only deal point. A low purchase offer might make sense if the contingencies are reasonable, the closing date meets your needs, and the buyer is preapproved for a mortgage. Consider what terms you might change in a counteroffer to make the deal work.

Review your comps
Ask your REALTOR® whether any homes that are comparable to yours (known as “comps”) have been sold or put on the market since your home was listed for sale. If those new comps are at lower prices, you might have to lower your price to match them if you want to sell.

Consider the buyer’s comps
Buyers sometimes attach comps to a low offer to try to convince the seller to accept a lower purchase offer. Take a look at those comps. Are the homes similar to yours? If so, your asking price might be unrealistic. If not, you might want to include in your counteroffer information about those homes and your own comps that justify your asking price.

If the buyers don’t include comps to justify their low purchase offer, have your real estate agent ask the buyers’ agent for those comps.

Get the agents together
If the purchase offer is too low to counter, but you don’t have a better option, ask your real estate agent to call the buyer’s agent and try to narrow the price gap so that a counteroffer would make sense. Also, ask your real estate agent whether the buyer (or buyer’s agent) has a reputation for lowball purchase offers. If that’s the case, you might feel freer to reject the offer.

Don’t signal desperation
Buyers are sensitive to signs that a seller may be receptive to a low purchase offer. If your home is vacant or your home’s listing describes you as a “motivated” seller, you’re signaling you’re open to a low offer.

If you can remedy the situation, maybe by renting furniture or asking your agent not to mention in your home listing that you’re motivated, the next purchase offer you get might be more to your liking.

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

Is This Really a Buyer's Market?

Is This Really a Buyer's Market?
With falling home prices and higher inventories, most of the public views real estate as a “buyer’s market,” in which buyers hold more of the control and sellers will more eagerly accept lower offers just to sell.

Not so fast, say buyers and sellers. More buyers are finding the sellers in the driver’s seat.

Buyer Young Hammack gave up looking for homes for a while after being outbid on three properties in California. "It's a false buyer's market," Hammack says. "If you think prices are cheap, wait until you start putting offers in."

Many sellers may be unable or unwilling to lower their home prices — mostly because they may be underwater on their mortgage — so buyers are increasingly finding lower offers than list price denied. Buyers, on the other hand, may be reluctant to agree to a deal if they don’t feel like they are getting it at a deep discount, industry insiders say.

Traditional buyers also are finding even buying a foreclosure can be difficult as they’re increasingly outbid by investors who are willing to pay cash.

"There's a shortage of attractive inventory," says Glenn Kelman, chief executive of Redfin Corp. "Customers just keep getting outbid on the houses that they want."

Real estate professional Steve Capen with Keller Williams Realty in St. Petersburg, Fla., says that the homes most in demand among buyers often don’t require much repair work and are located in good school districts and choice neighborhoods near transit hubs.

"What's selling is the cream of the crop, and they sell fast," Capen says. "If it's not cream of the crop, it's getting hammered."

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

Has Housing Reached a 'Recovery Path'?

Has Housing Reached a 'Recovery Path'?
Sales of existing homes rose slightly in March, marking the sixth consecutive monthly rise for existing home sales in the last eight months, the National Association of REALTORS reported Wednesday.

"We're clearly on a recovery path," says Lawrence Yun, NAR chief economist.

Existing home sales rose 3.7 percent in March from February, as distressed sales, such as those in foreclosure, continued to make up a big bulk of home sales (40 percent of all purchases).

"At this point, we're likely to see a steady improvement in sales," says economist Joel Naroff of Naroff Economic Advisors.

So just in time for the spring buying season, here’s what economists have to say about who’s buying and currently driving the market:

Investors: All-cash deals last month made up a record number of sales, accounting for 35 percent of all resold homes. Investors continue to make up a big part of those cash deals. Investors are buying distressed homes and flipping them for a slight profit or turning them into rentals, says Patrick Newport, economist at IHS Global Insight.

Luxury consumers: Some real estate professionals are reporting a pick up in luxury markets in some cities too. "The confidence is back in the market," says Neil Palmer, CEO at Christie’s International Real Estate.

Foreign buyers: Coastal markets, in particular, are seeing a surge of foreign buyers, such as in New York, Palm Beach, Fla., and San Francisco, AOL Real Estate news reports.

Traditional buyers: Traditional buyers are also re-emerging. Mortgage applications to buy homes rose 10 percent over a seven-week period, according to the Mortgage Bankers Association’s most recent report. "This pickup in demand should show up in improved existing home sales in April and May, unless lending conditions tighten," Newport says.

The market is making “slow, steady progress” and demand in housing is rising even with higher mortgage rates “so that's encouraging,” Pierre Ellis, an economist at Decision Economics in New York, told The New York Times.

"It's the new financial psychology," says Jarvis Slade Jr., Christie's managing director for the Americas. "We've had two years of hesitation, the sellers are realistic, the buyers confident and cautious, but Americans are starting to feel better."

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

Remodeling Market Index Reaches Highest Level in Four Years

Remodeling Market Index Reaches Highest Level in Four Years

RISMEDIA, May 2, 2011—According to the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI), the remodeling market is heading into recovery with an increase to 46.5 in the first quarter of 2011 from 41.5 in the fourth quarter of 2010. This marks the highest level for the RMI since the fourth quarter of 2006. An RMI below 50, however, indicates that still more remodelers report market activity is lower (compared to the prior quarter) than report it is higher.

The overall RMI combines ratings of current remodeling activity with indicators of future activity like calls for bids. Current market conditions for the first quarter of 2011 rose to 46.1 from 43.3 in the previous quarter. Future market indicators climbed to 46.8 from 39.7 in the previous quarter.

“Remodelers report a jump in activity so far this year and have been receiving more calls for work and appointments,” says NAHB Remodelers Chairman Bob Peterson, CGR, CAPS, CGP, a remodeler from Ft. Collins, Colo. “However, many home owners are still slow to commit to remodeling due to feeling uncertain about the economic recovery and difficulty obtaining loans.”

Regional break downs for current remodeling market conditions showed growth in all but one area: Northeast 46.1 (from 38.8 in the fourth quarter), South 46.1 (from 45.8), and West 46.1 (from 39.7). Only the Midwest experienced a decline to 47.1 (from 54.3).

All current remodeling market indicators increased: major additions to 50.3 (from 48.6 in the fourth quarter), minor additions to 48.0 (from 43.9), and maintenance and repair to 39.5 (from 37.0). Future market indicators also improved across the board: calls for bids rose to 53.1 (from 47.2), appointments for proposals to 52.4 (from 43.1), backlog of remodeling jobs to 49.7 (from 42.6), and amount of work committed for the next three months to 32.1 (from 25.9).

In an additional special question remodelers reported the top reasons prospective customers are holding back from remodeling their homes:

Customers think it is hard to get financing (90 percent of remodeler respondents); Customers have lost equity in their homes (81 percent); Customers are uncertain about their future economic situation (74 percent); Reluctance to invest in home when not sure home will hold its value (67 percent); Negative media stories making customers more cautious (62 percent) and Inaccurate appraisals are making financing more difficult (54 percent).

“Home remodeling continues to slowly increase and continued growth through the year is expected.” says NAHB Chief Economist David Crowe. “The fact that some indicators are breaking 50 means remodelers are seeing improving activity in their markets. While credit scarcity and economic uncertainty continue to weigh down remodeling, signs of increasing consumer interest are promising.”

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

Cheaper to buy than rent in 78% of major cities

Cheaper to buy than rent in 78% of major cities
Trulia: Dropping prices and rising rents boost affordability
By Inman News
Inman News™

It is cheaper to buy a home than to rent one in 39 of the nation's 50 largest cities, according to a quarterly report released today by real estate search and marketing site Trulia.

Trulia's rent vs. buy index compared the median list price with the median rent on two-bedroom apartments, condominiums and townhomes listed on Trulia.com as of April 1, 2011, in the 50 most populous cities in the U.S. While 72 percent of the cities favored buying in the previous quarter's report, 78 percent favored buying in this latest report.

"With home prices nearing a double dip and more foreclosures expected to flood the housing market over the next two years, the decision between renting and buying a home across most of the country has clearly moved in favor of buying," said Ken Shuman, Trulia's spokesperson, in a statement.

"As we head into the summer buying season, those looking to buy a home should be encouraged by improvements in the market and feel optimistic about their chances of finding an affordable home -- much more so than in previous years."

A price-to-rent ratio of 1 to 15 means that it's much cheaper to buy than to rent in a particular city. A ratio between 16 and 20 means that it's more expensive to rent than to buy, but, depending on the family's situation, buying could "make financial sense," the site said. Any ratio above 20 indicates that owning is much more costly than renting in a city.

Top 10 cities to buy vs. rent:

Rank City State Price-to-rent ratio
1 Las Vegas Nev. 6
2 Phoenix Ariz. 7
3 Arlington Texas 7
4 Fresno Calif. 8
5 Miami Fla. 8
6 Mesa Ariz. 8
7 Jacksonville Fla. 9
8 Sacramento Calif. 9
9 Detroit Mich. 10
10 Omaha Neb. 10

Source: Trulia

Most of the cities considered saw their price-to-rent ratios fall quarter-to-quarter. Fresno, Calif.; Omaha, Neb.; San Jose, Calif.; Seattle; Cleveland; and Detroit saw the biggest drops.

Rank City State Q2 2011 Q1 2011 % change

1 Fresno CA 8 11 -30%
2 Omaha NE 10 13 -25%
3 San Jose CA 12 15 -21%
4 Seattle WA 19 24 -20%
5 Cleveland OH 14 17 -15%
6 Detroit MI 10 12 -15%

Source: Trulia

Coastal cities dominated among those where renting is cheaper than buying, but consumers will have to decide if buying makes financial sense.

Rank City State Price-to-rent ratio
40 Oakland Calif. 16
41 Oklahoma City Okla. 16
42 Portland Ore. 18
43 San Francisco Calif. 19
44 Boston Mass. 19
45 Seattle Wash. 19
46 Memphis Tenn. 20
47 Los Angeles Calif. 20

Source: Trulia

The index considers the total cost of homeownership compared to the total cost of renting. Calculations for the total cost of homeownership include mortgage principal and interest, property taxes, hazard insurance, closing costs at time of purchase, homeowners association dues, and private mortgage insurance. The homeownership cost calculation also includes tax advantages from mortgage interest, property tax and closing-cost deductions.

Calculations for total rental cost include rent and renters insurance.

The total cost of homeownership was highest, compared to the cost to rent, in New York; Fort Worth, Texas; and Kansas City, Mo.

Top 10 cities to rent vs. buy:

Rank City State Price-to-rent Ratio
50 New York N.Y. 39
49 Fort Worth Texas 30
48 Kansas City Mo. 22
46 Memphis Tenn. 20
47 Los Angeles Calif. 20
43 San Francisco Calif. 19
44 Boston Mass. 19
45 Seattle Wash. 19
42 Portland Ore. 18
41 Oklahoma City Okla. 16

Source: Trulia

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

Signs of economic weakness relieve pressure on mortgage rates

Signs of economic weakness relieve pressure on mortgage rates
Purchase loan demand falls as FHA raises premiums
By Inman News
Inman News™

Share ThisMortgage rates fell for a second consecutive week on signs of weakness in the economy, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey.

Rates on 30-year fixed-rate mortgages averaged 4.78 percent with an average 0.7 point for the week ending April 28, down from 4.8 percent last week and 5.06 percent a year ago.

The 30-year fixed-rate mortgage, which hit an all-time low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11, 2010, this year has ranged from 4.71 percent in early January to a high of 5.05 percent in February.

Rates on 15-year fixed-rate mortgages averaged 3.97 percent with an average 0.7 point, down from 4.02 percent last week and 4.39 percent a year ago. The 15-year fixed-rate mortgage hit a low in records dating back to 1991 of 3.57 percent in November.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loan averaged 3.51 percent with an average 0.6 point, down from 3.61 percent last week and 4 percent a year ago. The 5-year ARM hit a low in records dating to 2005 of 3.25 percent in November.

Rates on 1-year Treasury-indexed ARM loans averaged 3.15 percent with an average 0.6 point, down from 3.16 percent last week and 4.25 percent a year ago.

"Mortgage rates followed Treasury bond yields lower this week amid weak local economic data reports on business conditions and house prices," said Frank Nothaft, Freddie Mac chief economist, in a statement.

"Regional Federal Reserve Banks reported that business and manufacturing activities declined in Philadelphia, Dallas and Richmond in April," Nothaft said. "In addition, the Standard & Poor's/Case-Shiller 20-city composite home price index recorded year-over-year declines through February in 19 of the 20 markets."

Looking back a week, a separate survey by the Mortgage Bankers Association showed demand for purchase loans falling a seasonally-adjusted 13.6 percent during the week ending April 22 compared to the week before.

The decline was driven by a 26.6 percent decrease in applications for government-backed loans, as premium increases on FHA loans announced Feb. 14 went into effect. Buyers trying to beat the deadline were probably responsible for a 20 percent increase in government purchase loan applications during the preceding four weeks, said Michael Fratantoni, MBA's chief economist.

Demand for purchase loans slipped to its lowest level since Feb. 25, and was down 28.8 percent from the same week a year ago.

In an April 14 forecast, MBA economists said they expect rates on 30-year fixed-rate loans will average 5.1 percent during April, May and June, and climb to an average of 5.6 percent during the final three months of the year.

MBA economists expect a more gradual rise in rates on 30-year fixed-rate loans next year, to an average of 6 percent in the final three months of 2012.

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

Almost 14,000 Houses Sold Yesterday

Almost 14,000 Houses Sold Yesterday

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

4 Signals It Might be Time to Buy (vs. Rent) Your Home

4 Signals It Might be Time to Buy (vs. Rent) Your Home

To rent or to buy: what used to be a given – that you would buy a home as soon as you could afford to – has become an agonizing conundrum for many a would-be homebuyer, in the face of the housing market’s big bust and super-slow recovery. Low prices seem to create a wide-open window of opportunity, but they also create the concern that prices will keep falling after closing. And that Catch-22 has hundreds of thousands of buyers-to-be stuck on the fence.
Fortunately, there are handful of life, mortgage and local market signals which indicate that the time *might* be right to hop – scratch that – leap off the fence and into homeownership:

Mortgage rates are going up. Home prices have been low for the last several years, and in fact are currently looking like they’re heading back down to the same levels they were at the depths of the real estate recession. During this same time frame, interest rates have also been low – this one-two punch has created record-high affordability for the last four years running, causing buyers to believe that this window of opportunity won’t be closing anytime soon.

While prices don’t look like they’ll be skyrocketing anytime soon, interest rates are another story. Rates have been on a rollercoaster over the past few months, and with inflation and Fed rates set to spike later this year, today’s low interest rates might be as good as they’re going to get for a long time to come. And I mean a very long time – in the next few years, governmental intervention in the mortgage markets is likely to wind down, and that means higher mortgage interest rates are not only inevitable, they’ll probably be here for a long, long time.

Mortgage rates on the rise are one signal that now might be the peak of home affordability, and the peak of the opportunity to buy.

Rents are going up. Rental rates in many areas are also on the rise – in fact, the foreclosure crisis has acted created additional demand on many markets’ rental housing inventory in several different ways. First, former homeowners who lost homes to foreclosure now need to rent; as well, buyers in foreclosure hot spots have been hesitant to buy, many electing to stay renters far beyond when they would have otherwise. On top of all that, super-tight lending guidelines have stopped even some who would like to buy homes from doing so. As a result, rental homes are in high demand – and rents are rising.

Rising rents at a time when the prices of homes for sale are low and, in some places, falling? One more signal that now might just be the time to buy. (Of course, where foreclosures are high, the chances of continued depreciation are, too – to offset this risk, have a long-term plan, to minimize the possibility that you’ll owe more than your home is worth when you need to sell. Read on for more on how to plan for the long term and minimize your homebuying risk.)

Your income and career are stable for the foreseeable future. The smartest homebuyers look to their lives, not just the market, for signals about when the time is right to buy. Homebuying is a long, long-term endeavor these days. The goal is to be able to commit to staying in the same place, geographically-speaking, for 7 to 10 years before you buy (more in a foreclosure-riddled market, less in an area that has been more recession-resistant). Most lenders will require that you’ve been at your job – or in the same general field of work – for at least two years before you buy. But that’s the bare minimum – beyond that, you don’t want to be barely beginning a career in which you think you may need to move sooner than that, nor do you want to buy when you’re advanced in your career, but in an industry which is dying or downsizing the workforce in your region (unless you have a strong Plan B).
When you get to the spot in your career where you can realistically project a stable income 7 to 10 years out, life might be giving you a green light to move forward on your homebuying dreams.

You can reasonably predict the home you’ll need in the years to come. Since successful homeownership requires that you be ready to be in the place for a good number of years, best practice is not just to buy a home with the space and number of rooms you need right now – rather, you should aim to buy the home you’ll need 5, 7 or even 10 years down the road (to the best of your ability to predict, of course). You might be a newlywed with no kids now, but you plan to have them in a few years. Or maybe you’re a newly minted empty nester right now, but can project that you’ll want to retire - and might not want to climb two flights of stairs to get to and from your bedroom - 10 years down the road. Before you buy, you should be in a position to buy the home that meets your future needs – not just your current ones; and that requires that you have a reasonable idea of your life vision and plan for the future.

If you’re able to predict – and afford, at today’s prices – a home with the space, amenity and geographic location you’ll need 7 to 10 years from now, you might be in a good phase of life to get off the rent vs. buy fence.

With that said. . . buying a home is a massive decision and includes multiple, long-term financial and lifestyle obligations, so if one or more of these signals are present for you, that doesn’t mean you have the green light to run out and buy a home tomorrow – rather, it’s a good sign you should begin down that path, if you’re so inclined. You’ll still need to do the work to make sure your personal finances and holistic life picture are also in alignment before you buy, as well of the work it takes to ensure that your real estate and mortgage decisions are sustainable and smart, over the long-term.

It’s not overkill to check in with a mortgage pro, a tax pro, a local real estate broker or agent and a financial planner to make sure all your ducks – not just one - are in a row before you make your move.

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

How to Stop Everyday Conflicts

How to Stop Everyday Conflicts

RISMEDIA, April 27, 2011—It starts in the morning with the kids before you go to work, then kicks into second gear with your co-workers or your boss, and finally culminates at home with your spouse and children. It’s conflict, and it doesn’t have to be a part of your daily life, according to Tim Scudder, CEO Personal Strengths USA, an international firm that prepares top companies and their executives to better deal with conflict in the workplace.

Scudder, who is the co-author of Have a Nice Conflict: A Story of Finding Success and Satisfaction in the Most Unlikely Places, notes that recent research suggests that the top reason why people leave their jobs is because of a poor relationship with their immediate supervisors. Conflict—both at work and at home—can actually be an opportunity to resolve long-standing issues and help people lead more fulfilling and productive lives. The secret is learning to understand the five keys to conflict and how to move them forward toward the final step—resolution.

“The key to managing conflict isn’t just about pushing them to resolution, but also to learn how to have nicer conflicts,” says Scudder. “As one set of conflicts is resolved, others will take their place, so it’s important to learn how to make conflicts productive and positive experiences, instead of allowing them to distract us from our goals and disrupt our lives.”

Scudder’s five keys to conflict include:

• Anticipate: Anticipating conflict starts with knowing who you’re dealing with. Next, ask yourself how various people might view the same situation differently. When two or more people see things differently, there is the potential for conflict. If you can figure that out, you have a good shot at steering clear of it.

• Prevent: Preventing conflict is really all about the deliberate, appropriate use of behavior in your relationships. A well-chosen behavior on your part can prevent conflict with another person. But you need to prevent conflict in yourself sometimes too, and that might have more to do with choosing your perceptions than choosing your behaviors.

• Identify: There are three basic approaches in conflict: rising to the challenge, cautiously withdrawing, and wanting to keep the peace. When you can identify these approaches in yourself or others, you are empowered to handle the situation more productively.

• Manage: Managing conflict has two components: managing yourself and managing the relationship. Managing conflict is about creating the conditions and empowering them to manage themselves out of the emotional state of conflict. It’s also about managing yourself. Managing yourself in conflict can be as easy as taking some time to see things differently.

• Resolve: To create movement toward resolution, we need to show the other person a path back to feeling good about themselves. When they feel good about themselves, they are less likely to feel threatened and are free to move toward a compromise and resolution.

“Unresolved or poorly managed conflict costs companies in ways they can’t even calculate,” Scudder notes. “Lost institutional memory, low productivity, bad morale, high turnover all cost real companies real dollars. On the other hand, well-managed conflict can not only prevent all those losses, but it can also promote higher productivity and a stronger bottom line. So, the end result will not only be fewer conflicts, but also nicer ones with positive results.”

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

5 Steps to Deciding How Much to Offer – or Ask – for Your Home

5 Steps to Deciding How Much to Offer – or Ask – for Your Home

One of the hardest, most important decisions homebuyers face is how much to offer for their home. And the glut of information on the web about real estate only makes buyers even crazier than the decision itself does. Supply, demand, foreclosure rates, mortgage rates – buyers think they need to run spreadsheets and do fancy math to make a smart offer. And THAT can be super intimidating.

But the fact is, there is a pretty short list of steps you need to take to make a smart offer – one that gets you a great value, but is also likely to be successful at getting the property. (A low offer does not make for a great deal if you don’t get the house!) And most of the same steps apply to sellers trying to set the list price that will lure the most buyers (and net them the most cash)!

Step 1: What do the “comps” say? First things first. When it comes to pricing a home, or making an offer to buy one, the ‘first thing” is the home’s fair market value. Both buyers and sellers should work with an experienced, local agent to understand what the home’s value is. Most agents will do this by offering you a look back at similar properties that have recently sold in the neighborhood – i.e., the comparable sales, or comps.


HINT: You can also find comps for a home listed on Trulia by scrolling down to the section labeled Sold Homes near 1234 Merriweather Lane on the property's Trulia listing page.


Ideally, look for comparables that are very recent sales (3 months or less before you’re listing or buying), very similar properties (i.e., same number of bedrooms, bathrooms, square footage; and similar style, condition and amenities). If you do get into contract, these may be the same comparables which will be considered by the appraiser, so looking at them before making an offer can:

(a) provide factual support for a lower-than-asking offer or for the asking price, in a negotiation, and


(b) result in a sale price at which the property will actually appraise, later on - avoiding the common glitch of the deal falling through because the appraisal comes in way below the agreed-upon price.

Also, looking at comps is the first step for locating a home’s seller and prospective buyer in the reality-based universe of current home values. The fact that you bought or refinanced the place at a given value 5 or 6 years ago is entirely irrelevant to what it’s worth today, as is the buyer’s belief that the place was worth $100K less at the trough of the market, in 2009.

Step 2: What can you afford? This step is much more critical for buyers than for sellers. (Unfortunately, sellers, the facts that you need to net a particular amount to buy your next home or pay your existing mortgages or credit card bills off has no relationship whatsoever to the price at which you should list or will sell your home.)

Buyers – it’s a must to make sure that your offer price for any given home falls within the range of what is affordable for you. This includes offering a price within the range for which your mortgage was preapproved, but also includes making sure that the monthly payment and cash you’ll need to close the deal (down payment + closing costs) are affordable in light of the particular house. If, for example, the property will require repairs for which you’ll need to conserve cash, or has HOA dues you hadn’t planned on, you may need to rejigger your offer accordingly.

Step 3: What’s your competition? (And what’s theirs?) This is another step at which it’s critical to check in with your agent. You need to know what level of competition you’ll face – whether you are a buyer, or a seller. As a seller, you can find this out by looking at things like how many comparable homes are listed in your town or your neighborhood in your general price range (your agent will brief you on this). Sellers should also consider what type of transactions their home will be up against – the more distressed properties (foreclosed homes and short sales) with which your home must compete, the more aggressive you must be with your pricing to get your home sold.

The more competition you have, as a seller, the lower you should tweak your list price to attract buyers to come see your home. (And the more buyers come to see your home, the more likely you are to get an offer!)

Buyers should also be cognizant of the competition level they will face for homes. Believe it or not, even on today’s market there are properties and neighborhoods in which multiple offers are the name of the game. Work with your agent to understand the list price-to-sale price (LP:SP) ratio , which lets you know how much under or over the asking price properties are selling for in your target home’s neighborhood; the higher the LP:SP ratio, generally speaking, the less competition there is among buyers.

Your agent can also brief you on:

(1) (1) The number of offers – if any - that have been presented on “your” property (which the listing agent will usually, gladly tell). If there are other offers, you’ll want to make a higher offer to compete successfully against them; and

(2) (2) The number of days the home has been on the market, relative to how long an average home stays on the market before it sells – the longer it has, the more pressure is on the seller, price-wise, and the less competition the buyer is likely to have. (One exception is the sweet spot scenario, when a property that has been on the market for a long time has a price reduction and gets a bunch of offers as a result! )

4. How much do they need to sell (or buy) it? Buyers: Has the listing in which you’re interested been reduced at all? By how much? Has the listing agent informed you that her clients are highly motivated, flexible or have an urgent need to sell?

Sellers – most buyers are not in a high state of urgency to buy these days, given the long-term, high affordability of homes and interest rates, except when they have an urgent personal reason for moving, e.g., buyers who are relocating for work. Of course, all of real estate is hyperlocal, so it’s important to understand how motivated buyers are in your local market, generally speaking, before you set your list price.

Trulia’s new, interactive Price Reductions Map offers a number of clues to critical indicators of buyer and seller motivations in your home’s town and zip code, in just a click on the map - including:

· how many homes in your target property’s area have had at least one price reduction,

· how likely a home in the area is to have multiple price reductions.


The higher these numbers are, the stronger of a buyer’s market it is, and the more bargaining power buyers likely have. And if you’re the seller, the higher these numbers are for your area, the lower you may need to price your home to be successful at getting it sold.

5. How much do you want to buy, or sell, the place? Step #4 was about taking the motivations of the folks on the other side of the bargaining table into account when formulating your offer and your list price. This step is all about you – what’s your level of motivation? Now, buyers, you certainly shouldn’t offer a price way above what the place is worth (see Step #1) just because you really, really want it, unless you have the cash to throw around. But within the range of the home’s fair market value, it may make sense to move higher within that range if you are highly motivated to get that particular property.

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

Home selling tax tips for accidental landlords

Home selling tax tips for accidental landlords
Real Estate Tax Talk
By Stephen Fishman
Inman News™

Due to the precipitous decline in the housing market over the past few years, many homeowners who would otherwise sell their homes are renting them out. This may be because prices are too low, or because they have to move before they can sell due to a job change.

Such accidental landlords should understand that if they rent out their homes too long before they sell them, they could lose the biggest tax break available for most people: the home sale exclusion.

Homeowners who qualify for the home sale exclusion don't have to pay any income tax on up to $250,000 of the gain from the sale if they're single, or up to $500,000 if they're married and file a joint return. Of course, this exclusion is useful only for homeowners who have equity in their homes, not the millions who are "under water" and will receive no profit if they sell their homes.

To qualify for the exclusion, a homeowner must satisfy the ownership and use tests. This means that during the 5-year period ending on the date of the sale, the homeowner must have:

owned the home for at least 2 years (the ownership test), and
lived in the home as a primary residence for at least 2 years (the use test).
However, the homeowner need not be living in the house at the time it is sold. The two years of ownership and use may occur anytime during the five years before the date of the sale.

This means that a homeowner can move out of the house for up to three years and still qualify for the exclusion. Moreover, a homeowner can rent out a home and count that time as ownership time.

This rule has a very practical application: A homeowner may rent out a home for up to three years prior to the sale and still qualify for the exclusion. However, the exclusion works a bit different for homeowners who have rented out their homes.

They cannot exclude from their income the part of their gain equal to the depreciation they claimed (or could have claimed) while renting the home. Moreover, if the home is rental property at the time of the sale, the sale must be reported to the Internal Revenue Service on Form 4797: Sales of Business Property.

Example: Connie purchases a house on Feb. 1, 2007, and lives in it for two full years. She then moves to another state to take a new job. Rather than sell the house in a down market, she elects to rent it out.

If she sells the house by Feb. 1, 2012, she'll qualify for the $250,000 home sale exclusion because she owned and used the house as her principal home for two years during the five-year period before the sale. If she waits even one more day to sell, she will get no exclusion at all.

Thus, accidental landlords who have equity in their homes need to sell them before the three-year rental period expires, or they'll lose the home sale exclusion. If they can't or don't want to sell, they would have to move back into the home to preserve the exclusion.

Homeowners who don't qualify for the exclusion will have to pay a 15 percent capital gains tax on their gain from the sale (assuming the home was owned for at least one year).

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com

4 ways to boost real estate showings

4 ways to boost real estate showings
REThink Real Estate
By Tara-Nicholle Nelson
Inman News™

Q: It is now April and we have not had a showing in almost a month. Any suggestions how to get more showings? I thought of offering to pay closing costs, lowering the price or offering a flooring allowance. --Frustrated seller

A: All of the above. But in a different order of priority. And that's not all!

One thing that virtually never changes about real estate is this: When a listing won't sell and isn't even getting any showings, a price reduction is the single tweak a seller can make that wields the most potential to get buyers interested and get the home closer to being sold. Is it that buyers are greedy? Not necessarily -- several things make this so.

First: the realities of how buyers search for homes. Well, over 90 percent of buyers look for homes, first, on the Web. As such, they are forced to enter some basic search parameters, which normally include a range of bedrooms, a range of bathrooms, a price range, and an area (city/state or ZIP code). If your home's list price does not fall within a given buyer's price parameters, that buyer will never see your home's listing.

Second: the realities of house hunting. The buyers who aren't coming to see your home are going to look at listings of other homes in your neighborhood, and they're going to see the other homes in town with similar prices and features. And then they'll compare them all. If yours is smaller, less upgraded or not as attractive as other homes at the same price, or is priced higher than really similar homes, buyers will take a pass.

Third: Other than their own space and location needs, buyers have very few reasons to feel urgency to buy on today's market. The buyers that are out there are primarily buying now to take advantage of affordability -- i.e., they want a great deal. So, overpriced homes are an A-class turnoff.

In fact, buyers who may see your overpriced home online, and like it, will actually wait to allow the market to educate you into reducing the price, rather than taking on the unpleasant and often impossible task of convincing a seller of their home's true market value.

While being educated by the market, to a seller, sounds terrible, it's worse for your home to be lagging and you not taking the lesson away.

Clearly, my top-line advice is to lower your price, below a $25,000, $50,000 or $100,000 cutoff, so that your home falls within buyers' search parameters.

And my No. 2 recommendation is something you didn't mention: offer a time-sensitive bonus and/or commission increase to the buyer's broker or agent. The vast majority of the qualified buyers out there are working with buyer's agents. Incent these agents to show your home by offering an extra half or full percentage point of commission, or a bonus to the buyer's agent who brings an offer that closes escrow by a given date.

Ask your own agent about how the agent can publicize this offer to other agents mostly likely to represent your home's target market.

Buyer incentives, like closing-cost credits, can also help distinguish your home from the competition, but they are not likely to dramatically increase showings of a home no one is currently coming to see, unless you're going from zero credit offered to a full 6 percent, which might not be necessary.

If you can reduce the price and offer a bonus or commission increase to the buyer's broker or agent, you will reposition your home, and a buyer's incentive offering won't hurt your case, either.

Instead of offering a flooring credit, though, I'd rather see you consider replacing the flooring that is in bad shape. I'm not big on sellers doing much costly repair work these days, but floors are a massive surface in a home -- replacing them can create an entirely different experience for those who do come see your home, and it can be done cost-effectively (ask your real estate broker or agent for suggestions of flooring installers and which floor materials to use).

Marketing your price-reduced homes as having new floors vs. having a flooring allowance (which implies that it has old, dirty or otherwise undesirable floors) might be the better boost to viewings.

The more viewings you get, the more likely you are to get your home sold.

If you would like expert advise and representation in your next move, please contact me.

Suzanne O'Brien
(313) 516-6644
suzanneo@realestateone.com