Bill Irwin

Residential Real Estate Advisor

My Blog

Selling During the Holidays

12/13/2013

Make Your Home a Hot Commodity This Winter

Inviting and Warm

First impressions are important. If you live in a snowy area, make sure walkways are cleared. Do you have late fall leaves littering the ground? Rake them up. Also, make sure the walks and stairs are free of ice.

A few exterior holiday lights or decorations show pride in ownership and seasonal cheer, but they don’t add anything during the day when potential homebuyers will be looking at your home, so don’t overdo them. Another thing to consider: Would-be buyers may view it favorably if nearby homes are brimming with lights—it shows unity and neighborliness—so you’ll want to find a tasteful balance.

As you set out to win over holiday homebuyers, here are a few other tips to keep in mind:

  • Trim outdoor trees so unexpected winds don’t knock down branches that could damage your home or hurt someone.
  • Place a holiday welcome mat outside the front door.
  • Keep the door area clear of bicycles, toys or parcels left by the mail carrier.
  • Hang a festive wreath on your door.
  • Play holiday music in the background.
  • Keep the house cozy. Entering a cold house could chill potential buyers’ enthusiasm.
  • Light a fire in the fireplace just before the agent shows your house. (But never leave a fire unattended.)
  • Choose a tree and decorate it to complement the room where it’s displayed. You don’t want the tree to appear to take over the entire living or family room. Remove furniture, if necessary.
  • Keep decorations on the conservative side. You want your house to be noticed, not your decorations.
  • If your house is being viewed in the evening, tell your agent how to turn on the holiday lights. And be sure the agent turns the lights off, or you have a plan to be home immediately, following the showing.
  • Make sure your agent turns the home security system back on after showing your house, especially if you have gifts under the tree.
  • Be certain your windows are sparkling clean.
  • Let there be light. Open blinds and curtains and turn on interior lights to reduce the pervasive dreariness of winter months.
  • Bake holiday cookies and treats to fill the home with enticing aromas before the prospective buyers arrive.
  • Leave those holiday treats and hot chocolate for your guests.

Ultimately, you want to convey the love, comfort and joy your family has shared in the house so that buyers will be eager to move in and create their own holiday memories.

Courtesy of Realtor.com Dec 2013

Real Estate Photography

12/5/2013

Real estate photography 101: Use a good camera

 Dec. 4, 2013 – Since most house-hunters (92%) comb cyberspace during their search, memorable listing photos have become a crucial ingredient in real estate listings. A report by online property firm Redfin concludes that photo quality influences both how fast a home moves off the market and what price it commands.

A professional camera is the first step in snapping good property photos. According to the Redfin analysis, listings in the $200,000-$1 million range photographed with DSLR (digital single-lens reflex) cameras fetch $3,400 to $11,200 more than their asking prices.

And no matter the list price, homes advertised with DSLR images are more likely to sell within six months than those marketed with common point-and-shoot photos.

Source: Houston Chronicle (12/03/13)

Tenant not Cooperating with Showings?

11/21/2013

Nov. 18, 2013 – Question: I am trying to sell our rental house, and our real estate agent is having no luck getting our tenant to cooperate. The tenant has always paid on time and takes decent care of the place but does not ever seem to be available to allow a prospective buyer to look at the house. I need to sell, but I also need the rent until I can sell it. What can I do?

Answer: The law and most written leases allow the landlord to access the rental house to make repairs, provide agreed-upon services and show the property to lenders, contractors and prospective buyers or new tenants. The landlord must give reasonable notice to the tenant and access the house during certain times. The access should be with the tenant’s consent, unless in the case of a genuine emergency.

If your tenant is being unreasonable, you still may be able to enter, but in doing so you risk repercussions. Barring a genuine emergency, I don’t recommend entering without consent, because you could be opening yourself up to accusations of missing or broken items and harassment. Keeping your own home staged in the proper condition to show and rearranging your life around a showing schedule is hard enough when you are the one with the incentive to sell. But for your tenant, it’s just extra work and inconvenience with no gain at the end.

Before putting a house on the market, speak with the tenant and explain that selling the house will not affect the lease. Maybe the tenant will want to buy it. Acknowledging the tenant’s efforts in helping you can be a powerful motivator. Consider throwing in a restaurant gift card or offering a small discount on the rent. That may go a long way to making it worth the tenant’s while to cooperate.

Try to find out what your tenant’s reluctance to showing the house is and look at the concern from his or her viewpoint. This should help you to find a solution that works for both of you. In most cases, good communication will solve the problem.

But if the tenant is just being unreasonable, the law is on your side.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar.

30 yr or 15 yr Mortgage...What's Right for You?

11/8/2013

30-year mortgage, or 15? 5 questions to help you choose

It has been a slow and painful process, but the housing market is now in recovery and foreclosures have been dropping. Since the housing bust, regulators have focused on preventing borrowers from entering into potentially toxic loans. To help accomplish this, the U.S. government established the Consumer Financial Protection Bureau (CFPB) in 2010.

As part of this effort, the CFPB has proposed new disclosure forms to help borrowers understand the real risks and costs associated with their mortgage. But many potential borrowers are still unsure about the type of mortgage that is right for them. Many borrowers may be attracted to 15-year mortgages, which have a shorter term and lower interest rates than 30-year mortgages. But such a mortgage may not be right for their needs.

Despite the rise in popularity of the 15-year mortgage, it is not necessarily for everyone. For borrowers, it is important to get as much information about the different common mortgages institutions offer — and to understand the different terms. While the amount being borrowed, or principal of the loan, is often clear, the cost of the loan, or interest rate, is often less so.

In an interview with 24/7 Wall St., Guy Cecala, publisher of Inside Mortgage Finance, said borrowing to buy a home is a more complicated decision than refinancing. It is "much more of a calculation about what you can afford, how secure you are about your job, what's the likelihood you're going to want to move in less than five years."

Borrowers must understand how payments, which consist of principal repayment and interest, will be structured under the different types of mortgages. They need to consider how much they will be paying for the loan, not just now, but in the future as well. And they should also consider their budget, age and other factors before deciding on a mortgage.

These are the questions to ask when deciding between and 15 and 30-year mortgage.

1. Can you afford to pay off the mortgage in 15 years?

Although a 15-year mortgage offers a lower rate relative to a 30-year mortgage, thereby allowing borrowers to pay interest for only half as long, a 15-year mortgage comes with a higher total monthly payment. This is because the principal must be paid off faster, making each principal payment larger.

Because borrowers pay down the principal balance faster, in the longer run they save on interest payments. Inside Mortgage Finance publisher Guy Cecala noted, "if you can afford the higher payments associated with the shorter-term 15-year mortgage, there is no reason not to take one."

However, because the monthly payments are higher, it can strain borrowers' ability to set aside money for retirement or their kids' college tuition. These borrowers may be better-off with a 30-year mortgage. Similarly, if the higher payments of a 15-year mortgage mean borrowers have less money to invest elsewhere and diversify their portfolios, they may be better off with a 30-year mortgage.

2. Are you buying your first home?

First-time home buyers often benefit from selecting a 30-year mortgage because the monthly payments are lower. A longer-term mortgage can make a more expensive home more affordable for a new buyer. According to Cecala, most first-time home buyers "are trying to get in as much house as they can."

Of course, 15-year and 30-year mortgages are not the only options available to consumers. Borrowers can take an adjustable-rate mortgage, which offers a low initial rate that stays unchanged for some period, such as five years. When the period expires, borrowers could pay more if interest rates rise. But for buyers who are not looking to own their home for too long and who are confident that they will be able to resell the home, an adjustable rate mortgage may be a sensible option.

3. Are you looking to refinance?

If you already have a mortgage and would like to refinance, now may be a good time. Cecala noted that if your current payments on a 30-year mortgage are high enough, you might be able to refinance into a 15-year mortgage and make similar monthly payments while shortening your mortgage term.

An additional factor that may make refinancing more attractive is the current difference, or spread, between interest rates on 15-year and 30-year mortgages. According to Cecala, "historically, the difference between the 30-year fixed rate and the 15-year fixed rate has been about 25 basis points," or about 0.25%. Currently, the spread between the two rates is especially large, at close to 1% in some cases.

4. Are you planning on retiring soon?

How close a borrower is to retiring plays a major role in whether to take out a 15-year mortgage. Typically, borrowers who take 15-year mortgages are at least 40 years old, according to Cecala. These borrowers are often willing to pay off the balance on their mortgages faster in order to retire with little or no outstanding debt on their homes. However, many older homeowners also must weigh prepayment — making early payments on their mortgage — against the need to save for retirement. According to the CFPB, 30% of homeowners aged 70 and older have outstanding mortgages.

5. Do you have a strict savings plan?

Choosing a 15-year mortgage over a 30-year mortgage also may be a worthwhile choice if you are not a disciplined saver. But many people may lack the discipline needed to save long-term, Cecala noted, especially in amounts that would offset what they would save by switching to a 15-year mortgage. He also added that "a lot of times people need that extra money for something else," and so they choose to keep their money in a 30-year mortgage with lower individual monthly payments.

Some truly disciplined savers may actually benefit from carrying their mortgages into retirement. According to a May story published by Time magazine: "if you expect to earn more after tax on your investments than you pay after tax on your mortgage, keep the mortgage." What you want to avoid in retirement, however, is a situation where you are juggling a mortgage on top of your basic costs of living, taxes and health care payments.

Alexander E. M. Hess, 24/7 Wall St. 11:58 a.m. EST November 7, 2013

FHA Appraisals & Roof Requirements

11/6/2013
FHA Appraisals and Roof Requirements

One frequently asked question about the FHA loan process is related to FHA appraisals and the minimum requirements for the roof of the home. It's the appraiser's job to look over the home, make sure it meets FHA standards, and assign it a fair market value. The appraiser notes any visible defects, conditions or issues from the basement to the roof, and recommends fixes or changes.

What is the appraiser looking for when it comes to the roof? For starters, the roof must do what it's designed to do--FHA and HUD regulations say it must not leak or allow moisture to enter the home. in order to pass the appraisal process, the roof must also "provide reasonable future utility, durability and economy of maintenance" according to the FHA official site.

But that's not all--the FHA also requires a minimum amount of durability. "The roof should have a remaining physical life of at least two years. If the roof has less than two years remaining life, then the appraiser must call for re-roofing or repair. The appraiser must clearly state whether the subject is to be repaired or re-roofed."

Any leaks or moisture due to a problem with the roof are noted will be noted on the appraisal report. Any noticeable holes, water damage or other problems are also noted. This discovery process is similar to the appraiser's job in the basement--the appraiser inspects the condition of the area and makes the appropriate observations.

That said, it's important to note that FHA appraisers are not necessarily trained experts on roofing issues, nor is the appraiser required to step onto the roof to inspect it further. The borrower must take it upon themselves to have a home inspector look over the roof and other critical areas of the property-there may be issues not immediately noticeable that an inspection would catch that do not appear on the FHA appraisal report.

FHA appraisers are not required to be specialists in any one particular area-an appraisal is a multi-faceted, more general process than a home inspection. The FHA fee appraiser is not required to enter crawlspaces, walk on roofs or perform other duties for which they have no specialized equipment or safety gear for-that's something to discuss with a home inspector.

Borrowers concerned about the state of the roof or wondering about the remaining years left on it should hire an inspector and ask specifically about those issues prior to the inspection. Borrowers should never assume the property is defect-free just because it passed the FHA appraisal.

Courtesy fha.gov

What to Expect at Closing

10/30/2013

Buying?  What to Expect at Closing

You've survived house hunting and the bidding and negotiating on your new home, and now it's time to make it yours. But to do so, you have to sit down with various people, which may include the seller, your real estate agent, title and mortgage company officials and possibly your attorney at what's known in real estate lingo as the "closing table."

At closing, you will close on the purchase of your new home, and if you are taking out a mortgage, on your home loan, as well. The whole process may take about an hour. Here's what's expected of you:

  • Complete the walkthrough

    Before the actual closing, you'll most likely have the opportunity to perform a walkthrough of the property and confirm that the condition of the home is as it should be, as specified in the sales contract.

  • Bring enough cash

    At closing, you'll be paying for your share of the closing costs, and will be bringing the down payment, so be sure to bring a certified check or a cashier's check. Your lender will provide a lender's check for the remaining balance that's due on the home.

    Your HUD Uniform Settlement Statement (which both you and the seller will sign) will detail the closing costs (plus all the monies involved in the transaction), as well as who is expected to pay them.

  • Show id

    You will also be required to show proof of your identification, such as your driver's license or passport.

  • Proof of insurance

    Bring a copy of and proof of payment for your homeowner's insurance, plus your flood insurance policy, if you have one. Your lender may want to review these before allowing you to close on the home.

  • Sign on the dotted line

    To transfer ownership of the home, both the buyer and seller will be required to sign several documents.

    You may be required to review and sign the purchase agreement, a promissory note for your loan, mortgage documents, title documents, the settlement statement and the truth in lending statement (which will outline the costs of your loan, your payment schedule and amount financed), while the seller will also sign the settlement sheet -- and, importantly -- the deed to the home to transfer ownership of the property to you. Copies of these documents will be filed at the county recorder's office, but be sure to keep your own copies as well.

  • Take the keys!

    Once all the necessary paperwork is completed and everything is in order, you will be given keys to the home. While you will no doubt immediately change the locks upon moving in, the keys are the final sign that the home is indeed yours.

    Courtesy of Trulia

Keep Your Home Sale from Falling Apart

10/27/2013

Keep Your Home Sale from Falling Apart

After finding a buyer, all you have to do to make it to closing is to avoid these five traps.

Mistake #1: Ignore contingencies

If your contract requires you to do something before the sale, do it. If the buyers make the sale contingent on certain repairs, don’t do cheap patch-jobs and expect the buyers not to notice the fixes weren’t done properly.

Mistake #2: Don’t bother to fix things that break

The last thing any seller needs is for the buyers to notice on the pre-closing walk-through that the home isn’t in the same condition as when they made their offer. When things fall apart in a home about to be purchased, sellers must make the repairs. If the furnace fails, get a professional to fix it, and inform the buyers that the work was done. When you fail to maintain the home, the buyers may lose confidence in your integrity and the condition of the home and back out of the sale.

Mistake #3: Get lax about deadlines

Treat deadlines as sacrosanct. If you have three days to accept or reject the home inspection, make your decision within three days. If you’re selling, move out a few days early, so you can turn over the keys at closing.

Mistake #4: Refuse to negotiate any further

Once you’ve negotiated a price, it’s natural to calculate how much you’ll walk away with from the closing table. However, problems uncovered during inspections will have to be fixed. The appraisal may come in at a price below what the buyers offered to pay. Be prepared to negotiate with the buyers over these bottom-line-influencing issues.

Mistake #5: Hide liens from buyers

Did you neglect to mention that Uncle Sam has placed a tax lien on your home or you owe six months of homeowners association fees? The title search is going to turn up any liens filed on your house. To sell your house, you have to pay off the lien (or get the borrower to agree to pay it off). If you can do that with the sales proceeds, great. If not, the sale isn’t going to close.


By G.M. Filisko

Reviewing Offers...

10/26/2013

6 Tips for Choosing the Best Offer for Your Home

Have a plan for reviewing purchase offers so you don't let the best slip through your fingers.

1. Understand the process

All offers are negotiable, as your agent will tell you. When you receive an offer, you can accept it, reject it, or respond by asking that terms be modified, which is called making a counteroffer.

2. Set baselines

Decide in advance what terms are most important to you. For instance, if price is most important, you may need to be flexible on your closing date. Or if you want certainty that the transaction won’t fall apart because the buyer can’t get a mortgage, require a prequalified or cash buyer.

3. Create an offer review process

If you think your home will receive multiple offers, work with your agent to establish a time frame during which buyers must submit offers. That gives your agent time to market your home to as many potential buyers as possible, and you time to review all the offers you receive.

4. Don’t take offers personally

Selling your home can be emotional. But it’s simply a business transaction, and you should treat it that way. If your agent tells you a buyer complained that your kitchen is horribly outdated, justifying a lowball offer, don’t be offended. Consider it a sign the buyer is interested and understand that those comments are a negotiating tactic. Negotiate in kind.

5. Review every term

Carefully evaluate all the terms of each offer. Price is important, but so are other terms. Is the buyer asking for property or fixtures—such as appliances, furniture, or window treatments—to be included in the sale that you plan to take with you?
Is the amount of earnest money the buyer proposes to deposit toward the downpayment sufficient? The lower the earnest money, the less painful it will be for the buyer to forfeit those funds by walking away from the purchase if problems arise.
Have the buyers attached a prequalification or pre-approval letter, which means they’ve already been approved for financing? Or does the offer include a financing or other contingency? If so, the buyers can walk away from the deal if they can't get a mortgage, and they'll take their earnest money back, too. Are you comfortable with that uncertainty?
Is the buyer asking you to make concessions, like covering some closing costs? Are you willing, and can you afford to do that? Does the buyer’s proposed closing date mesh with your timeline?
With each factor, ask yourself: Is this a deal breaker, or can I compromise to achieve my ultimate goal of closing the sale?

6. Be creative

If you’ve received an unacceptable offer through your agent, ask questions to determine what’s most important to the buyer and see if you can meet that need. You may learn the buyer has to move quickly. That may allow you to stand firm on price but offer to close quickly. The key to successfully negotiating the sale is to remain flexible.

By G.M. Filisko

 

 

10/23/2013

CNN: St. Johns County one of 'best places to live'

Ranked No. 5 on '2013 Best Places to Live: Where the Jobs Are'

Posted: August 15, 2013 - 12:29am

  

St. Johns County on Wednesday was named fifth on CNN Money’s list of “2013 Best Places to Live: Where the Jobs Are.” It said the county’s “vitals were strong” and cited job growth from 2010 to 2012 as 12.1 percent.

“It’s the healthiest county in Florida and leads the state in public education,” the Aug. 12 report said. “Plus, the weather’s gorgeous year-round. No wonder highly educated talent is being wooed there in droves.”

That statement backs up St. Johns County Chamber of Commerce figures showing that 92 percent of the workforce have high school diplomas, 35 percent have associates or bachelor degrees and 12 percent have masters or doctoral degrees.

Norm Gregory, vice president for economic development at the Chamber, said Wednesday that “education is the cornerstone of economic development and will be for some time. Those are incredible numbers when you compare them against the state or nation’s.”

The unemployment rate here was 9.2 percent in 2010, but this year is 5.5 percent, he said.

“We’re a destination for travel. Our tourism is strong and growing,” Gregory said, adding that a very strong reason people live here is the county’s quality of life. “We have a very business-friendly government today. (Many factors) are coming together to maintain and improve that quality.”

The CNN report said opportunities in clean manufacturing are big here.

“2G Cenergy, an advanced clean energy technologies company from Germany, chose St. Augustine for its first manufacturing center in the U.S,” the report said. “The company has already hired 50 employees in the area and expects to add 70 more in the next four years. Meanwhile, defense contractor Northrop Grumman plans to build an aircraft production center that would bring 40 jobs.”

That news also dovetails Gregory’s belief that the airport is an economic engine all on its own.

“It’s got an 8,000-foot runway that can handle any type of plane. It’s also got a barge-port and seaplane port. After Northrop Grumman builds a new E2-D for an overseas customer, the plane is shrink-wrapped, put on a barge to Jacksonville and put on a ship.”

The Grumman E-2D Hawkeye is an all-weather, carrier-capable tactical airborne early warning aircraft and it’s one of Northrop Grumman’s top business products.

Gregory cites the company’s newly opened center of excellence here.

“We have a lot of assets,” he said.

Courtesy of St Augustine Record

How Much Mortgage...

10/20/2013

4 Tips to Determine How Much Mortgage You Can Afford

By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget.

1. The general rule of mortgage affordability

As a rule of thumb, you can typically afford a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000.
To understand how that rule applies to your particular financial situation, prepare a family budget and list all the costs of homeownership, like property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care costs.

2. Factor in your downpayment

How much money do you have for a downpayment? The higher your downpayment, the lower your monthly payments will be. If you put down at least 20% of the home's cost, you may not have to get private mortgage insurance, which costs hundreds each month. That leaves more money for your mortgage payment.

The lower your downpayment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

3. Consider your overall debt

Lenders generally follow the 28/41 rule. Your monthly mortgage payments covering your home loan principal, interest, taxes, and insurance shouldn’t total more than 28% of your gross annual income. Your overall monthly payments for your mortgage plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 41% of your gross annual income.
Here’s how that works. If your gross annual income is $100,000, multiply by 28% and then divide by 12 months to arrive at a monthly mortgage payment of $2,333 or less. Next, check the total of all your monthly bills including your potential mortgage and make sure they don’t top 41%, or $3,416 in our example.

4. Use your rent as a mortgage guide

The tax benefits of homeownership generally allow you to afford a mortgage payment—including taxes and insurance—of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.
Here’s an example. If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership.
However, if you’re struggling to keep up with your rent, consider what amount would be comfortable and use that for the calcuation instead.
Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.

By G.M. Filisko

 

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