Monthly Archives: July 2018

Do Property Liens Mean a Home Sale Can’t Happen? Here’s Hope

CountDuckula/iStock

Have property liens on your home? If you’re trying to sell your place, a lien can throw a wrench in things, but that doesn’t mean your efforts are doomed. It all depends on how large the lien is, and how you handle it once it’s found.

In other words: Don’t give up hope! Here’s how property liens affect home sales, and what you can do about it.

What is a property lien, anyway?

A property lien, in case you’re foggy on the concept, is a public record filed against your property for unpaid debt. Liens can be filed by an assortment of people and parties for various reasons: the government (for unpaid taxes), contractors (on renovations they weren’t compensated for), ex-spouses (for child support payments), credit card companies, and more.

Sometimes, home buyers may not even know there are liens on their property until they’re uncovered during a title search as the deal moves toward the closing table. Or homeowners may already be aware of the lien, but lack the funds to pay it off.

In either case, all liens must be settled before a home sale can happen.

“If you attempt to put a house up for sale with liens, you are going to run into delays,“ warns Nick Woodward, a real estate agent with Keller Williams in Connecticut.

Do liens mean a property sale can’t go through?

In some cases, liens can mean delays that are only hiccups. The sale can still happen, but the lien is going to eat into whatever profits the seller may have hoped to bring in.

Let’s say, for example, you’ve agreed to sell your house for $200,000 and still owe $100,000 on your mortgage. Normally, at the closing table you’d pay off your mortgage and be left with $100,000 in profit. However, if a $15,000 lien is also found on your property, that will have to be paid off first, so your profits will be only $85,000 (minus any other closing costs, of course).

Issues can arise, however, if you don’t have enough equity in your home to cover the liens.

“If you have enough equity to cover the lien, you should be all set,” says Woodward. “However, if you have low equity, the profits from your house sale may not be able to take care of the lien.”

For instance, if you’re selling your house for $200,000, yet still owe $190,000 on your loan, you have only $10,000 in home equity. If a lien is found on your property for $15,000, your home sale won’t even cover the lien, which puts this sale in jeopardy.

The first step to getting a lien removed from a property’s title is, of course, to pay the debt. But if you don’t have that option, all is not lost. Here are two options:

  • Negotiate with the party who issued the lien. Many will remove liens if you agree to pay just a portion of the amount owed, or set up a payment plan to pay it off gradually. It can’t hurt to ask.
  • Negotiate with your buyer. You could try to persuade the buyer to take on the lien, although the chances of that happening are slim.

 

“Ninety-nine percent of the time, the buyer will not want to take over a lien,” says Mike Higgins, a real estate agent in De Pere, WI. Or, even if buyers are willing to, they may have trouble getting a loan to purchase a property with a lien on it, as most lenders won’t finance them.

Yet there are some cases where liens are often transferred to buyers. For example, homes purchased in a foreclosure or at an auction may come with liens attached that become the buyer’s responsibility. While those properties may seem like a bargain upfront, a hefty lien can tip the scales.

So, should home buyers run if there’s a lien on a property they’re interested in buying? Not necessarily. says Higgins.

“Always rely on your professional that you are working with—the real estate agent or title company—to get to the bottom of it, and first see if the seller will take care of the lien,” he says.

However, he urges buyers to proceed with caution. “Make sure you know 100% what it all entails before signing on the dotted line,” he says.

The post Do Property Liens Mean a Home Sale Can’t Happen? Here’s Hope appeared first on Real Estate News & Insights | realtor.com®.

Financing Your New Home

You’ve made the decision to purchase a new home, but how will you finance it? We’ve got lending options for all types of buyers. Let Bill tell you how we can help.

With our extensive network of lenders in East Liverpool, East Palestine, and greater Columbiana County we can help you find the right option for you.

7 Things in Your Kitchen That Are Grossing Out Potential Buyers

Cat on Kitchen Counter

Chalabala/ istock

Once upon a time, my husband and I toured an adorable home for sale in a bucolic New Jersey town. We were thrilled when we walked through the front door. But that feeling dissipated quickly once we entered the kitchen.

At least, I think it was a kitchen. There was a sink.

The rest was indistinguishable due to the sheer volume of stuff—boxes, newspapers, empty cans, and dirty dishes. As we picked our way to the adjoining living room, we were forced to squeeze past a sullen teenager, who’d apparently just rolled out of bed and was slurping what appeared to be a bowl of milk.

We didn’t buy that house. Or even tour the rest of it.

The kitchen is the nucleus of any house, and if it’s not looking its best, every other part of the home seems icky, too.

“Most buyers have a 5-second rule,” explains Claire Groome, an agent with Warburg Realty in Manhattan. “If they walk into a [home] and don’t see themselves living there after 5 seconds, it’s not for them. How the kitchen looks is a very important part of that.”

Everyone has their own deal breaker, but these things that might be lurking in your kitchen are likely to make buyers run—not walk—toward the nearest exit.

1. Trash

Ashlie Roberson, an agent with Triplemint Real Estate in Manhattan, has encountered used dog potty pads splayed out in the middle of kitchens. But even that wasn’t her scariest kitchen tale.

One Sunday, Roberson took her clients to see a cool loft in the West Village. Although they had an appointment, when the seller’s agent opened the door, there were people passed out on the floor of the kitchen, surrounded by empty bottles.

“We slowly backed out of the apartment,” Roberson recalls.

The bottom line: If you want to throw a farewell bash, don’t schedule it for the evening before you show the house. If you must, build in a cushion of cleaning time.

2. Anything related to cats

You love Mr. Whiskers, but not everybody feels the same—especially if his bathroom is in your kitchen.

“You’d be surprised how many people leave kitty litter [out],” Groome says.

And even if a litter box isn’t front and center, seeing your feline friend roaming through the area where food is prepared and served might send potential buyers fleeing. One of Groome’s clients insisted on leaving a home showing when she saw cats lounging on the kitchen counter and open cans of wet, pungent cat food on the floor.

Remove evidence of your pets before you show your home. (They’ll forgive you.)

3. Stuff, stuff, and more stuff

Oddly enough, the kitchen—where you actually need room to do things—is often ground zero for stockpiled stuff, says Cedric Stewart, a real estate agent in the Washington, DC, area.

“Due to the lack of space, this phenomenon is usually accompanied by a crowded sink—and buyers can’t get past this,” Stewart adds.

While you might cohabitate just fine with your clutter, you’re going to have to clear it—or  chuck it—before you show your home. Remove everything from your kitchen counters, Stewart advises, and free up your sink. While you’re at it, clear out the pantry of old foodstuffs, and remove magnets and photos from the refrigerator.

4. Straight-up weird things

While touring one home with clients, Stewart discovered commercial hair dryers and a salon chair parked in the kitchen.

“The house was also operating as an unlicensed hair salon,” he recalls. “Big turn-off.”

During another tour, all was going well until Stewart and his clients peeked into the fridge and freezer. “They both contained a lot of meat,” he says. “Like, really big sections of meat and nothing else. Freaky stuff.”

Neither home was purchased by his clients.

If you’re unsure whether something in your home is odd, let’s be honest: It probably is. Find a temporary storage plan for your weird stuff before someone asks, “What the heck is that?”

5. A fast-food vibe

Would buyers walk into your kitchen and see fryers with grease still in them? Could they possibly spot spatter all over the walls, hood range, and cabinets? Might there be a heavy odor as well?

“Some kitchens get put through their paces and it shows,” Stewart says.

Now, no one’s telling you to stop eating at home. But if you cook foods that cause a mess, “buyers will be too concerned about leaving with a smell on their clothes to properly consider your home,” Stewart says.

Buy a Magic Eraser (or several) and go to town on the grease. Once your kitchen’s sparkling, try to keep it that way.

6. Pests—or evidence of them

Pat Vosburgh, an agent in St. Petersburg, FL, recently took some clients through a home in an upscale area—and discovered piles of termite droppings in the kitchen.

“Our clients actually kept stepping in the debris, it was that bad,” Vosburgh says.

Although the owners promised to get the pests under control ASAP, Vosburgh’s clients didn’t bite.

“Most buyers know that if there’s one bug or one mouse, there are likely many more,” says Christy Murdock Edgar, a real estate agent in the Northern Virginia and Washington, DC, area. “Buyers don’t want to find out that what they thought was one random cockroach is, in reality, a massive infestation.”

Pests are inevitably drawn to the kitchen. But if you’re fighting the good fight, hide the evidence while showing your home. Stow away traps, poison, and bug sprays. Even better? Complete your campaign against the little critters before you open your kitchen to the public.

7. Neglected appliances

Nashville, TN, broker Leneiva Head admits that her clients make a beeline to the kitchen of any house they’re interested in. What they want to see the most? The appliances—specifically, the inside of them.

“They equate a clean oven with the level of care the owner gives to their home,” she explains.

Many buyers will even pull out the refrigerator or lift the stovetop, warns Bruce Ailion, an agent with Re/Max in Atlanta.

“A filthy home is a turn-off for all but investors,” Ailion cautions.

Don’t have the fortitude to clean your refrigerator coils or scrape old marinara off the inside of your microwave door? Hire a professional crew. That will ensure all your appliances get the deep clean they—and your potential buyers—deserve.

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‘Flip or Flop’: Tarek and Christina Uncover the Secrets of Selling a House in a Bad Location

Flip or Flop

HGTV

Tarek and Christina El Moussa have faced their fair share of challenges on “Flip or Flop.” Many homes are in terrible condition—they’ve seen failing foundations and out-of-date interiors—but they always seem to overcome, with a savvy renovation concept and on-trend design choices.

But this time, on the episode called “Dark and Dingy,” the house’s condition isn’t the hard part—it’s the less than desirable neighborhood. How do you overcome that?

The property they’ve chosen to make over is a three-bedroom, two-bath, 1,200-square-foot home in Gardena, CA, a city in the South Bay region of Los Angeles County. The house itself is situated in an area with abandoned industrial buildings, graffiti, chain-link fences, and traffic (it is L.A. County, after all!). But the real kicker? It’s on a busy thoroughfare.

“This is not the best location,” Tarek says. “It’s on a main street, and from [the front porch], I can hear lots of street noise.”

Clearly, it will take more than a new open floor plan and a pretty kitchen backsplash to flip this place.

Flip or Flop
The Gardena, CA, house before Tarek and Christina El Moussa work their magic

HGTV

Could this be one of those rare occasions when Tarek and Christina actually lose money on a project? There’s no denying that it will take some serious strategy to flip this house successfully. In Tarek’s mind, it’s all about having minimal overhead.

“To make a profit in this one, we have to be cost-efficient—that’s Flipping 101,” he says.

But Christina has a different perspective.

“Tarek thinks [flipping a house in a location like this] doesn’t justify spending money for higher-end design choices, but that’s exactly what we need to get a buyer past this less desirable neighborhood,” she says.

As Tarek and Christina go head-to-head trying to make this property into something buyers will love, they also give out some remarkable advice for rehabbing a home in an undesirable location. Here are some of their best tips.

Try to buy as low as possible

Because of the questionable location, Tarek manages to get the sellers to come down from their original $450,000 asking price to $420,000. Contractor Israel “Izzy” Battres estimates renovations will cost at least $70,000, so their all-in total is around $490,000. Surprisingly enough, comps in the neighborhood are around $580,000. Seeing what could be a $100,000-plus profit in store, Tarek rolls up his sleeves and gets to work.

Eliminate street noise

When Tarek and Christina walk into the house and close the front door behind them, they can still hear street noise, so the first order of the day is to install double-paned windows. They’re more expensive, but they provide excellent sound buffering, so it’s a cost they’re willing to shell out for. Eliminating the street noise as much as possible will ultimately help sell the home.

Make it as spacious as possible

The key to making a small house feel larger is to improve the flow from room to room. Tarek thinks expanding the kitchen by making a wider pass-through door will be enough, but Christina wants to go all out and tear down the entire wall, putting in a big island to separate the kitchen from the great room.

“Too expensive,” complains Tarek.

But Christina overrules him: “This kitchen is tiny!” she says. “If we’re going to get top dollar for this place, I’ve got news for you: Size does matter!”

How can Tarek argue with that?

Flip or Flop
The kitchen and great room flow together seamlessly with this new open layout.

HGTV

Add an accent ceiling

After knocking down the kitchen wall, the great room is now so wide open that Christina feels a little somethin’ somethin’ is needed to define the dining space. She accomplishes this by creating an accent ceiling over the dining area, using reclaimed wood. You wouldn’t think this would make a big difference, but the buyers who come to the open house absolutely gush over it.

Always inspect the roof

From the outside, the roof appears to be in decent condition, and only needs a few patches. But once Battres climbs up there to inspect it, he finds there are four layers of roofing piled on top of each other.

“How many are allowed?” asks Christina.

“Two!” replies Battres, telling her that they’ll have to rip everything off and put on a whole new roof.

It’s an unanticipated expense, but Battres says the house will never be up to code unless they start from scratch.

Create a master suite

“By making the front bedroom a master suite, we’ll get a huge return on the investment,” says Tarek. They do this by eliminating the hallway entrance into the bathroom adjacent to the biggest bedroom in the house, and making that bathroom accessible only through the master bedroom.

Economize on bathroom tile

Christina has a brilliant idea for spending less on the bathroom tile: She lays the colorful tile vertically, rather than horizontally.

“Like a racing stripe,” Battres says.

“Laying the tile in a unique pattern will have a big impact on design without spending a lot of money,” she says.

Her design trick also makes the bathroom feel taller, more spacious, and modern.

Ditch the wrought-iron posts

Many homes built during the 1930s to the ’50s—including this one—have front porch posts made of elaborately scrolled and painted wrought iron. They’re one of the first exterior elements to go. Tarek opts to replace them with rustic wood posts, which bring the home into this decade.

Flip or Flop
The Gardena, CA, renovation

HGTV

Is it a flip or a flop?

Tarek and Christina go way over budget to make this poorly located mess livable. They spend closer to $90,000 than the predicted $70,000, and with closing costs, they have to make $540,000 on the house just to break even. We do not see a profit in their future.

But with new comps in the low $600,000 range, Tarek decides to go for it and lists the property at $624,900. Who is Christina to disagree?

Despite the busy location, even Tarek and Christina are blown away when they get an offer of $652,000—nearly $30,000 above their asking price—resulting in a profit of $112,000!

“We went design-heavy on this one, and it paid off,” Christina says. “People love the look of the house!”

The post ‘Flip or Flop’: Tarek and Christina Uncover the Secrets of Selling a House in a Bad Location appeared first on Real Estate News & Insights | realtor.com®.

Understanding the Mortgage Pre-Approval Process

Understanding the mortgage pre-approval process

mortgage pre-approval

Pre-Qualification is NOT Pre-Approval
To get an idea of how much a bank will loan you for the purchase of your new home – it is smart to approach a bank or credit union for pre-qualification.  This process is usually done over the phone and does not involve a credit check. The loan officer will ask about your income and assets, determine how much of a down payment you can afford, and calculate what kind of loan you’d likely qualify for.  This does not guarantee you will qualify for a loan at that amount but gives you a fair starting point.

Pre-Approval
This step is much more involved and will require an appointment with a loan officer at a bank or credit union.  In this step the loan officer will get all of your income information (i.e W-2s, tax returns, bank statements, etc.) and will check your credit history.  Based on a calculation of this data, you will be approved for a “good faith estimate”. This estimate does not guarantee you will have final approval for the loan;  it spells out the likely terms of the loan, including the interest rate, loan type and closing costs.  With pre-approval you are approved to get your loan, unless there is a problem with the underwriting.

Shop Around
It is important to meet with multiple banks about the pre-approval process. A good realtor will be able to help you select reputable lenders with good track records. Although the process is basically the same with each lender, interest rates can vary and other costs like private mortgage insurance and closing costs can be different.  Meet with at least three different banks and compare the results of those meetings before selecting the right mortgage company for you.

Make offers with confidence
Once you have your pre-approval letter – you can make offers with confidence and negotiate on price within your budget.  Some sellers prefer to restrict showings of their homes to those with a pre- approval letter from a bank. Knowing what your budget also allows you to use your time wisely, only shopping for homes within your means. not waste time looking at homes you means, making the process a lot easier.

In Cooling Housing Markets, ‘Bump Clauses’ Help Seal Win-Win Deals

Chris Gash

What to do when a home-seller gets an offer but holds out hope for something better?

Enter the bump clause.

A bump clause lets sellers enter into a contract with a buyer while still continuing to market the property. If the sellers get a better deal, they can “bump” the original buyer.

It’s most commonly used when a buyer’s offer has some contingency, usually that they need to sell their current home first. It can help coax the sellers into contract by offering them the ability to seek alternate buyers who don’t have a home-sale contingency or who are offering higher prices.

The clause tends to become more popular in markets that are “transitional,” where once-hot home sales are cooling but sellers haven’t yet adjusted their expectations. The tactic can be “a savvy technique” to help the sellers feel they could still get a better offer, says David Reiss, a Brooklyn Law School professor who specializes in real estate.

If the sellers do get another written offer they want to take, they must notify the original buyer. The buyer then typically has a few days to tell the seller they’ve sold their house, or that they’ve decided to waive the contingency. If not, the original contract terminates. The original buyer gets back the money they put down, and the sellers enter into contract with the new buyer.

The sellers can only keep marketing the property until the buyers satisfy or waive the contingency. So once the buyers notify the seller they’ve sold their existing home, the seller’s right to market the property ends.

Rebekah Carver, a real-estate broker with Douglas Elliman Real Estate in Brooklyn, N.Y., says Brooklyn has been a hot market for a long time, and bump clauses haven’t been common. But now she’s representing buyers on a deal where the seller had resisted signing a contract with a home-sale contingency, even though the property had been on the market for about six months. Ms. Carver offered the bump clause to try to put the seller’s mind at ease.

In general, the bump clause can “give the seller some sense of security and comfort,” says Ms. Carver. The bump clause can be proposed by either the buyer’s or seller’s side, but is often offered by the buyer’s agent as a way to get the seller to accept a contingency.

Robin Sheridan, a real-estate broker with Realogics Sotheby’s International Realty in Seattle, says that when she is representing a seller facing a home-sale contingency, Ms. Sheridan often does her own due diligence. “I want to be certain the other property is one that will sell quickly,” she says. “I vet the buyers via their lender and ensure all their ducks are in a row to navigate the two nearly consecutive transactions. Knowing the bump clause is a possibility is comforting to a seller, but most of my clients remain firmly committed to the contract in hand.”

Here are some things to consider with bump clauses.

For sellers:

• Use it as leverage. Since the house is already under contract, a seller can use the clause as a negotiating tactic with any other buyers that show interest. The seller can try to get the other buyers to outbid the current price or negotiate a contract without contingencies.

• Don’t get greedy. If the seller receives a second offer, he may be tempted to “bump” the first buyer and sell to the second. But sellers should make sure the second offer is at least as strong as the first, which means looking deeper than price and contingencies. The new buyers may have poor credit, for example, and be less likely to obtain a mortgage. “It’s a bird in the hand,” says Mr. Reiss. “If they walk away and are stuck negotiating with a second offer that’s weak, they could end up with nothing.”

For buyers:

• Don’t make a hasty decision. Buyers who receive notice that there is a secondary offer may have only a few days to agree to waive a home-sale contingency, or face losing the deal. Unless they’re confident that their own home will sell, buyers should be careful about waiving the contingency. They risk losing the money they put down on the contract if they can’t proceed with the purchase.

• Pick an experienced negotiator. Find someone who is familiar with bump clauses. An agent needs to not only be familiar with the mechanics of how the clause works but also be able to establish a rapport with the listing agent and allay the seller’s fear of accepting the contingency.

The post In Cooling Housing Markets, ‘Bump Clauses’ Help Seal Win-Win Deals appeared first on Real Estate News & Insights | realtor.com®.

Too Hot for House Hunters? 5 Home-Selling Tactics That Sizzle During Summer

KLH49/iStock; realtor.com

Summer is peak season for home selling—but also for barbecues, vacations, and long, lazy beach days. In other words, there are lots of things to distract even the most diligent would-be buyers. And that’s not even counting those dog days when it’s too hot to even venture out to view homes.

But for home sellers who are eager to drum up an offer before Labor Day, having their sale sidelined isn’t an option. And luckily, there’s plenty you can do to lure buyers through your door. Check out these five smart tips for getting buyers to brave the heat and squeeze your house into their summer schedule.

1. Embrace ‘rush hour’ traffic

Long weekends out of town are the stuff summer dreams are made of. But they’re also the reason many Saturday and Sunday afternoon open houses end up nearly empty. Choosing an alternative time frame may turn that around.

“During the summer months, I’ve found holding ‘rush hour’ open houses to be hugely successful,” says Lindsay Bacigalupo, Engel & Völkers Minneapolis. “For example, Minnesota is full of lakes and so many residents here go up north for the weekend to enjoy time at their cabin. That’s why I hold open houses on Thursdays from 4 to 6 p.m.—it creates an opportunity for buyers to view it during a time that might be more convenient.”

2. Turn your open house into a summer party

Let’s face it: Heading to a barbecue or pool party sounds a whole lot more fun than an open house. If you can’t beat ’em, why not join ’em?

“Advertise it as a party instead of simply an open house,” says Brett Fischer, associate broker at Lee & Associates Residential in New York, NY.

In other words, put together a gathering that feels more like a celebration than a sales pitch. Try serving up refreshments outside like lemonade and iced tea on trays, or fire up the grill to serve summer-themed appetizers or sliders.

Timing can make a difference here, too: Rather than holding your soirée in the middle of the day, wait until the evening when the temperature’s bearable and people are ready to venture out and kick back at a house party.

3. Shine a spotlight on the outdoor space

Nothing’s more appealing on a scorching summer day than a backyard pool. Play up this feature and other outdoor amenities to convince buyers this is the warm weather oasis they deserve.

“The long days of summer make for the perfect opportunity to highlight the exterior living spaces of the property,” says Than Merrill, a real estate investor and CEO of the real estate education company FortuneBuilders. “Make additional effort to keep patio areas, the pool, and outdoor furniture extra-clean. Incorporate tasteful props such as cushions, towels, lanterns, and string lights to help spur the imagination of your guests.”

Mark Cianciullli, a real estate agent at the CREM Group, recalls how setting the stage paid off by getting potential buyers to envision themselves enjoying the amenities he’s featured.

“It was a hillside home that had a beautiful view of the city below, especially at night when the city was lit up. So I decided to have a ‘summer nights’–themed open house where I set up bistro lights in the backyard and floating candles in the pool and served wine and cheese,” he says. “It was such a charming atmosphere that the ultimate buyer wanted the house so bad so she could re-create those kinds of settings for parties or just hanging out with her family and friends.”

4. Create a community event

Sometimes getting a home sold is a matter of enlisting the help of those who already live in the neighborhood. Merrill recommends hosting a summer block party at the front of the property, rather than in the backyard, to invite more attention and foot traffic from neighbors and others passing by. 

“Prepare a theme, such as a luau or a summer barbecue, with entertainment for kids,” he suggests. “Make sure to design and pass out event fliers around the neighborhood days in advance. Consider renting food trucks, including a snow cone or ice cream truck, to help serve your guests. As you mingle with guests, invite them to take a tour of the property and ask them to spread the word to friends and neighbors.”

This concept translates to urban areas as well.

“New York City is famous for its residents fleeing the city on weekends, so real estate professionals have to get creative,” explains Mable Ivory at Engel & Völkers in New York. “So this week, I hosted a community event called ‘Sunset Soiree in the South Bronx.’ Attendees could preview my listing, a penthouse on the Grand Concourse, while enjoying Bronx and Manhattan skyline views at sunset. We provided live music from Bronx native Pernell Walker, custom-designed ‘Bronx Bomber’ cocktails and bites, and had a raffle for ‘The Bronx Rox’ gift basket. It was more than just an open house, but a way for the community to get together and celebrate their neighborhood.”

5. Advertise early, often, and offline

Spreading the word about an open house is always key to getting people in the door, but never more so than that stretch between Memorial Day and Labor Day.

“Summer is a crazy season, and often people become unplugged from their devices,” says Jennifer Brownhill, regional marketing manager of CLV Group. “So advertising online well in advance will help give people the heads-up to clear their schedule for this day.”

To capture more eyeballs offline, plant signs on roadways headed toward the beach, campgrounds, and other popular summer destinations. Add extras like balloons to draw even more attention.

“Buyers know that it doesn’t take long to tour the home,” says Alex Hubler of Keller Williams Premier Realty Lake Minnetonka, MN. Advertise how your home’s just five minutes off the highway, and “people can pop in quick if they’re on their way somewhere, rather than taking the whole day to tour homes.”

The post Too Hot for House Hunters? 5 Home-Selling Tactics That Sizzle During Summer appeared first on Real Estate News & Insights | realtor.com®.