"D.O.M." Your Way to better Value When Buying a Home!
Generally speaking, the longer a home is on the market, the more willing a seller is to negotiate. And that means you might be able to get a good deal!
However, notice that I said “generally speaking.” I put in that disclaimer because there are several reasons a home might be on the market for a long time.
One is that it might simply be overpriced. If that’s the case, then you’re in an excellent position to negotiate since the sellers may be anxious to sell the home.
A second reason may be someone has already put an offer on the property, but their financing, credit rating, etc. hasn’t met the requirements of the deal. In short, there was something wrong with the buyers, and nothing wrong with the home. Again, there may be an opportunity for you in this situation.
A third reason is that someone made a simple mistake in the Multiple Listing Service (MLS)! Perhaps the home got listed in the wrong ZIP code or the wrong neighborhood, or the price was simply wrong and listed too high. Now, normally, MLS is very accurate, but, as always, it’s dependent on humans entering information into the system, so mistakes happen!
Fourth, the house may have stayed on the market for so long because the owners simply refuse to negotiate! A real estate agent can help you identify these individuals for you so you don’t waste time and energy on a sale that will never happen.
Finally, a home may stay on the market for a long time because there is something wrong with it either structurally or cosmetically or both!
Depending on the situation, this can also be an opportunity for you as a buyer! You can use it as a bargaining tool; that is, either the home seller fixes the defects or lowers the price to account for the cost of repairing those defects.
However, you should always, always get a home inspection done on such houses! (Or on any house you’re considering, for that matter!). It prevents you from buying a “money pit,” in which you have to throw a small fortune in order to get defects repaired.
Here’s the short and long of it: DOM can sometimes get you a great value in a home; however, you need the expertise and guidance of an experienced real estate agent to pinpoint such values! I can provide you with that expertise. Contact Brian & Diane today!
Ride the Magic Carpet of Increased Home Value!
Your carpet. Maybe it's full of dirt tracked in by the kids and pets. Maybe you're exasperated because it's hard to maintain. Don't despair! You just need to realize that your carpet is… FULL OF MONEY!
No, I'm not kidding; it really is! And here's the simple "magical" proof - when you clean your carpet or replace an old one, you can increase the value of your home by as much as 10%! How can that be? Well, you know the old saying, "You only get one chance to make a good impression?" That's doubly true when buyers come to look at your home!
When they see a dirty or worn carpet, they think, "Oh, wow, there's an expense I don't need. What else is wrong with this place?" Ouch!With one 10-second glance, your home's value has fallen off a cliff! It's not fair, is it? But, the good news is that you can "magically" get things headed in the opposite direction of increased value by taking one of two simple steps!
Clean the Carpet!
Okay, you have two choices here. You can shampoo/steam clean/dry clean that magic carpet of yours by yourself. There are all kinds of rental systems available to you. The dry system (Oreck, for example) dries almost immediately and kills almost all mold and bacteria. These methods are cheap because you supply all the labor.
The second choice is to hire a professional carpet cleaning service (Stanley Steemer, etc.). If your carpet has a lot of bad stains, we recommend you use one of these professionals. They're experts at it, and their equipment is much more high powered than anything you can rent. It'll be more expensive, but the results will be worth it! Like magic, your carpet will look like new and have a great impact on visitors!
Replace the Carpet!
I know, I know - your first reaction is, "Wow, that's going to be expensive!" Yes, but this initial outlay has the potential to make you money in the long run. How can that be?
Well, let's assume you want to sell your home in the future. A $4,000 investment in new carpet can make a $10,000 difference in the sale price! In other words, by investing $4,000 in a new carpet, you may end up adding $6,000 to the value of your home! Now that's some financial magic that makes you look at your carpet in a whole new way, isn't it?!
So, what are you waiting for? Clean or replace that carpet right now and let your house soar upward with increased value!
P.S. If you've never called anyone on the carpet, now's the time to do so!
Stay Within Your Means to Get the Best Value When Buying a Home!
Guideline 1: Check your credit rating!
One of the first things lenders will check before loaning you money is your credit rating. If it’s good to excellent, your chances of borrowing money for a mortgage are very much improved. Currently, depending on circumstances, you need a credit score of at least 620 and the money for a down payment (the percentage varies with the type of loan).
If you have a credit score below the 620 benchmark, then additional documentation (and more time) will be required to prove to the lender that you're worthy of a loan - and even then there's no guarantee that the mortgage will be granted. So, as you can see, it's important to know what your credit score is before you approach a lender. You can find out this information from one of the "Big Three" major credit reporting agencies shown below:
• Equifax (exquifax.com)
• Experian (experian.com)
• Transunion (transunion.com)
If you're wondering exactly what such agencies do, the best explanation is that they act as a clearinghouse for lenders. That means they collect financial information. They then sell it to banks, credit card companies, mortgage companies and other lending agencies. In essence, lenders use that information to decide if you’re a good financial risk.
So, if you have a credit score of 620 or better, no problem! But what if that score is below 620? What can you do then? Follow the guideline below.
Guideline 2: Reduce or Eliminate Debt!
The only method of raising your credit rating is to pay off credit cards or any other kind of debt you have. Now, no matter what you hear or see on television, radio or the Internet, there's no "magic bullet" for reducing or eliminating debt. It has been and always will be a matter of personal discipline on your part! You can accomplish that discipline by taking the following steps:
Step 1: Pay your bills on time—all the time.
Step 2: Don’t open unneeded credit card accounts to increase available credit.
Step 3: This is the most important step. You must figure out where you stand financially by budgeting. In other words, you have to reduce unnecessary expenditures so you can apply saved monies to your debt and improve your credit score.
In this step, you must analyze your current financial situation. The first question to ask yourself is, "How much debt is too much?"There’s an easy formula for coming up with an answer to that question. It’s called the debt to income ratio. It’s a simple method of measuring your net monthly income against your debt.
For purposes of illustration, let's assume the following: Your net monthly income is $2,000. Your monthly debt payments are $500. Divide $500 by $2,000, and you’ve calculated your debt to income ratio:
500÷2000 =.25 (25%)
Financial experts generally agree that debt expenses should be 25% or less of your income. A ratio of 10% or less is great. Anything above 25% waves a red flag in the face of lenders in general. In that case, you definitely need to reduce or eliminate debt. So, what is your debt to income ratio?
Answer that question by doing the following:
• Review last month’s bills. Add up all the fixed expense items (rent, mortgage, car payments, child support, loan payments, etc.)
• Review your credit card bills. Add up the minimum payments owed on each card.
• Figure your monthly take-home pay (net salary).
• Now divide monthly fixed expenses by monthly income.
What percentage did you get? If it’s 25% or greater, then it's time to take action to reduce your debt. It’s time to budget!Okay, let's assume that your credit rating is in the good to excellent category and you have the money for a down payment on a house. That's great news!
But, you still need to stay within your means! So, upfront decide what you want in a home (two bedrooms, attached garage, etc.) and then stick to those guidelines!
Don't get swayed by an ultra-beautiful home with, say, four bedrooms and a state-of-the-art kitchen. If such a house is beyond your means, it won't look very beautiful when you can't make the monthly payments!
The best approach to take is to tell your Realtor upfront about your guidelines and ask him or her to show you only homes that meet them.
Believe me, I or any other Realtor love to work with customers who know what they want! It not only helps you but us as well because we can locate such properties faster and easier and get you into a new home that much more quickly!Please contact me so I can answer any more questions you might have about buying a great new home within your means!
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