Tag: mortgage

What Does Contingent Mean in Real Estate?

What does the term “contingent” in real estate mean?

The term “contingent” means that the sale is subject to the fulfillment of the contract’s conditions. A contingent real estate listing is one in which the one selling has received an offering but has chosen to put it live until they ensure that all requirements have been completed.

The purchase will only proceed if the terms and conditions are fulfilled by both the seller and buyer parties. However, if a problem arises, one or both parties may be able to withdraw from the agreement. In this situation, a property with a contingent listing may reappear on the market for purchase.

What are typically real estate contingencies?

Both sellers and buyers wish to avoid unpleasant happenings as real estate dealing can involve significant financial outlays. To safeguard oneself against such unforeseen conditions, both parties, seller, and buyer, can incorporate contingencies in their deal. Below we have jotted down a few of the more typical ones:

Appraisal Contingency

Appraisal contingency would be included in an offering in case the buyer will be financing the purchase of the property. To ensure that the property is worth adequately securing the mortgage they are issuing; lenders have it assessed. The one lending may want a larger down payment or decline to approve the loan in case the property is appraised for less than it was anticipated. If the home appraises for less than expected, an appraisal contingency allows the buyer to cancel the transaction.

Home inspection Contingency

Buyers can perform a professional assessment of a house prior to their purchase which is possible because of a home inspection contingency. Through this, the buyer might get alert to any potential problem and required fixes. In addition, the buyer’s utmost willingness to pay to fix the house could be specified in the home inspection contingency. However, if the estimated repair expenses are deemed to be high, then it might be possible that the buyer will cancel the purchase.

Home sale Contingency

The buyer may intend to utilize the money from the sale of their current home to purchase their new house. In this circumstance, buyers might include a condition to their offering to stipulate that the recently made acquisition will go through if they are successful in selling their current residence by a specific deadline.

Title Contingency

A title contingency gives the purchaser the option to cancel the deal if, through research, they discover that the title to the property is not clear or if there are any charges on the property that may affect the buyer’s ownership rights after the purchase is made.

Mortgage Contingency

No matter the condition, if they have received the loan prior or in any other case, there is always a possibility that something might arise, causing the failure of their agreement with the lender. When a buyer has mortgage contingencies, they are released from responsibility if they are denied a loan regardless of making a reasonable effort to get it approved.

New housing Contingency

Sellers require housing once they vacate their current residence. Hence in case a seller accepts an offer but hasn’t found themselves a new place to live yet, they can include this contingency as it may let them call off the deal if they can’t move by a specific date.

What are the types of contingent statuses?

Continue to show

In this instance, the seller has agreed to an offer subject to certain conditions but still desires to showcase their property to other prospective buyers in case the deal goes through.

No show

Once the deal is closed, the seller no longer wants to show the house to other prospective buyers. This often indicates that the offering includes a small number of conditions that would not cause any further issues.

Short sale

When a listing is described as subject to a “short sale”, it signifies that the owner has agreed to an offering and is prepared to sell the house for less money than what they owe to their mortgage company. Since the lender is also involved, short sales may take a little longer to complete than ordinary. In certain circumstances, the seller retains the right to consider substitute offers if the original one is rejected.

Probate

The legal procedure known as “probate” is how the courts manage a decedent’s estate. The sellers of the homes sold through probate have already accepted an offering. However they are still looking for offers at the other end to be on the safer side because the probate process makes the transaction more challenging.

What Sets Contingent Offers Apart from Pending Offers?

When seeking to buy a home, you would witness many properties. Some might have “for sale” status, some could say “Contingent,” while others might say “Pending,” and so on. These words and phrases show that the house is at some point in the selling process. These statuses will be helpful and will enable you to identify houses that you might purchase only if you are aware of the variations between pending and contingent bids. Hence, if you are considering placing a bid on any one of them, it can advise you on the best course of action.

What are the reasons for Contingent Status?

What are the reasons for Pending Status?

The house has not passed inspection. Despite accepting the offer, the seller will continue to consider additional bids.
The buyer has not yet secured the financing. Despite accepting the offer, the seller is still displaying the house because of a technicality.
The buyer must first leave their current residence to close the sale. Despite the seller accepting the offer, the sale has not yet been completed after three or more months.

How long would it take to change from contingent to pending?

The time period would fluctuate significantly from one payment to the other; it depends on some factors. For instance, a contract will probably progress more quickly if there are fewer contingencies. At the same time, the deal without a kick-out provision could take longer since there will be no time limit imposed for the buyer to fulfill all requirements.

What Prospective Buyers Should Know About a Contingent House Listing?

It’s critical for the purchasers to comprehend what the listing’s contingent clause signifies. There might be a wide range of complications that prevent the offer closing of the residence.

There are differences between contingencies in terms of how likely it is that they will prevent the transaction. Therefore, you must be aware of any eventualities that could affect a house of your interest.

A contract will be signed once the seller accepts a buyer’s offer, and it will typically include conditions that both sides must meet. These conditions give the customer the option to back out of the agreement if they so choose. After agreeing to the terms of the contract, the seller cannot accept any other offer; however, if the transaction fails, a different buyer may take over. The seller may accept any backup offers even though the residence is advertised as contingent.

 

Which could cause something to go wrong in the Contingent offer?

There are many things that could go wrong with a contingent sale. For example, in case the buyer is unable to secure the expected mortgage, an issue may occur.

Buyers typically receive a letter of preapproval for their mortgage, assuring them that now they can obtain the loan necessary to purchase the property. However, the letter would go to waste if the information they provided to the lender was not entirely truthful and accurate. Hence, having a preapproval letter doesn’t guarantee that the desired mortgage will be granted, and this is why some property sales usually fall through.

There may occasionally be other issues as well, even in the case the one lending has given the lender proper information. For example, their mortgage application may be turned down if their financial condition has changed since receiving preapproval, such as if they will witness a decline in their credit score.

Maybe they have applied for another loan or forgot to pay any bill. Hence, there are many numerous methods to lower your credit score, which can cause a mortgage application to be rejected. At that time, a borrower might need to switch gears and obtain a mortgage with terrible credit. They might not even be able to extend the financing contingency with the seller. For debtors, alteration in the interest rates might be problematic because qualifying for a home loan is simpler when the interest rates are lower. However, higher interest rates may result in more contingencies that are not met.

Is It possible to Make an Offer on a Contingent Home?

Potential purchasers are often still able to submit offers during the contingent sale period. The sale is still regarded as active. So, there’s still a chance that the present buyer would renege on the agreement or that unexpected mishaps will force the seller to hunt for any other buyer.

They will frequently have a condition that prevents them from buying the new property until their current house is sold. This way, the seller would start to show more interest in other prospective purchasers and the offerings they are prepared to make if the existing buyer is having trouble selling their home.

Keep in mind that the contingency will only be satisfied if a buyer is successful in selling their house promptly. This will result in the listing becoming pending, leading the sale to closure.

Conclusion:

Although it is stressful, buying a property is not easy. When purchasing a house, contingencies might assist reduce a few of the risks, but they can appear to be a barrier when attempting to resell. It would be best to comprehend contingencies and how they will impact you to make the decision wisely. Now that you know what contingent implies in real estate, maybe you have a lot better knowledge of it.

The JS Realtor Team is so committed to serving our clients through-out the process. We are here to make the home buying experience one that preserves the excitement but sheds the anxiety. We provide clear guidance and advice to help you find the right home, at the right price, in the right neighborhood. Download our FREE Buyers Guide and connect with us today! Text/Call Jeff at 614.721.0450 or email Jeff@JSRealtorTeam.com. Offices in Columbus & Mansfield to serve Central Ohio.

Avoid These 9 Bidding War Mistakes

Too Many Contingencies 

Homebuyers set basic guidelines for concluding a property purchase through contingencies. Normally, having one or two contingencies might not have much of an impact. Contingencies, however, can either make or break your contract in a bidding war.

If you’re too demanding, the home seller might choose a different buyer whose proposal doesn’t have a long list of conditions. Therefore, prioritize your contingencies and make your offer as straightforward as possible.

Although many of us aren’t in a situation to submit a cash offer, we must get a pre-approval from a lender before entering the bidding process. It’s not always all about the price you submit.

Discover any additional requirements from the seller and make every effort to meet them. Your REALTOR® can help guide you through the contingencies in the contract.

Bidding The Pre-Approved Amount 

In today’s environment, well-priced homes typically receive a flood of offers, and the bidder who is ready for a bidding battle usually prevails. The greatest way to prepare for battle is to ensure that your financial preparation is strong. That includes obtaining a home purchase pre-approval.

Avoid entering the exact amount you had been pre-approved for in your offer. Many buyers arrive with a pre-approval for the same bid price. A buyer with an identical pre-approval may worry the listing agent because they have no room to haggle and may lose their eligibility if interest rates spike. It is frequently a wise move for purchasers in this marketplace to look at properties below their maximum loan amount. They will need some leeway to increase when you must compete against numerous bids, and if they have reached their highest amount, that will not happen.

Bidding Too Low 

Without a doubt, you won’t acquire the house if you don’t make a sufficient offer. When selling their house, many sellers have an optimum price in mind. You will not be eligible for the race if you do not reach or surpass that amount.

Buyers need to be aware that the desired sale amount is frequently near to market value. The homeowners will have gone over pricing data their agent had provided for comparable properties that had already sold in the area. Therefore, sellers typically know the value of their home and can support it with facts. This is not a time for low-ball offers. The one factor that causes purchasers to lose out in competition the most frequently is a sale price that is below this amount.

Your real estate agent will give you the sales prices of similar properties in the same neighborhood as the home you intend to purchase to further assist you in your preparation. These selling prices will provide significant insight into market worth and serve as important guidance as you choose the appropriate offer price.

Best offer first is the secret to winning a bidding battle, though. Bring your best bid straight away because there’s a good possibility you won’t get another opportunity to enhance it. Sellers frequently choose the overall most alluring firm offer. You’ll have a better chance of winning the house if you make your first offer as strong as you can.

Offering a low Earnest Amount 

Even if you do everything else perfectly, you risk losing the house if the owner does not find your Earnest Check Offering strong enough.

Earnest Checks are used to show how serious a bidder is about a house. A sizable payment signals a completely committed buyer to a vendor. In addition, if the check is non-refundable to the buyer so that both parties adhere to the conditions of the contract. The seller is thus given plenty of assurance that they can, in fact, see the sale through to closing day.

Consult your real estate agent if you’re unsure of how much to give in earnest money. They can advise you on what might be anticipated, and based on interactions with the listing agent, they might even have more information about the seller’s demands.

Conditions In the Offer 

A condition is nothing more than a hindrance to a seller. Sellers typically dislike conditions because they prevent a contract from being fully completed.

Sellers anticipate the presence of conditions in an offer in a balanced market. Conditions for financing and home inspections are most frequently used. These terms often safeguard the buyer by requiring that the mortgage money and the property’s construction and working order be confirmed before the offer can be accepted as firm.

Whether there is a seller’s market or not, agents will advise you to put conditions to protect yourself. In addition, you must balance your prospects of winning a bidding battle against the hazards of putting conditions on your offer. Ultimately, it’s an individual choice, and everyone has a different level of risk tolerance. Choose wisely.

Consider increasing your chances by shortening the period you must finish your due diligence if you feel more comfortable inserting conditions in the offer but are aware that there will be competition for the house.

Before submitting your offer, discuss the benefits and drawbacks of putting conditions with your real estate agent. 

Making An Offer Too Early 

Before offer day, some vendors will evaluate offers, while others won’t. So, use caution if you are faced with the latter situation.

Presenting an advance offer despite the seller’s intention not to accept pre-emptive offers (typically stated in the listing) may backfire on you. On the other hand, sending a seller an early bid lets them know how much you intend to offer for the house.

Even worse, it might set off a system requiring the estate agent to notify every other agency of an impending offer, which would bring about competition just as you were attempting to prevent it.

While making a preemptive offer is not always a bad idea, get advice from your real estate agent beforehand to ensure it’s likely to get considered. 

Making The Offer Too Late 

In most cases, listings will state if a seller has chosen to hold offers until a particular date in the future. This is new to the current market.

There are two reasons why this is crucial. Initially, you are on a very tight deadline if you schedule your first visit to the house on the day that offers are being accepted.

Second, the posting documents will specify the exact time of day by which offers must be received. This is done to maintain buyers’ parity and establish timelines for when an owner will evaluate incoming offers.

Discuss anticipated offer dates with your real estate agent before any showings to avoid this situation. This will enable you to leave at least one day between visiting a property and submitting an offer.

Not Reconsidering the Offer 

Today is offer day. It’s now only a matter of waiting for the decision after submitting a compelling offer with a substantial earnest check. Then something unexpected occurs. Your offer is sent back for revision.

Often a seller will send a few chosen bidders to the drawing board to resolve a tie when two or more offers are extremely comparable, raising their eventual selling price in the process. The seller will request that the buyers return with a better offer and even outline the adjustments that need to be made.

If a seller makes a verbal counter proposal or proposition to a bidder, it should only be taken as an offer to join. If the buyer decides not to proceed, the negotiation will be over, and another person will purchase the home.

This kind of negotiation might be emotionally charged. It could be challenging to embrace what the seller is proposing: it’s simply not good enough if you have already entered a bidding battle with your absolute best, strongest offer.

In the end, you’ll need to decide how much you intend to spend on the house and whether you can agree to the extra conditions that are being asked for.

Letting Others Influence You 

You’ll probably want another opinion when purchasing a home. Just be careful not to allow these well-intentioned individuals—who haven’t seen as many houses as you have—to influence your offer.

The advisor acts in the buyer’s best interest, protects them, and typically trashes the house. Unfortunately, they lack the knowledge necessary to view the other nine homes or comprehend the market. Ask the individual who has been with you for most of the process if you are going to be relying on outside guidance.

Trust your real estate agent and price appropriately. Even if doing so involves giving a little bit more than you first anticipated. It could be counterproductive to lowball the prospective sellers to start a negotiation. A rude lowball offer that isn’t supported by math or similar sales data may irritate the seller.

A Final Word 

When buyer demand outpaces the supply of available homes for sale, homes on the market frequently attract several purchase offers in the real estate market. As a result, a bidding war typically ensues when homeowners receive numerous offers from interested parties.

Don’t be discouraged—we know this list is a lot. That’s why our team at JS REALTOR® is so committed to serving homebuyers. We want to make the home buying experience one that preserves the excitement but sheds the anxiety. We provide clear guidance and advice to help you find the right home, at the right price, in the right neighborhood. Download our FREE planning kit and connect with us today! Let’s go find your first home!

Top 5 Factors Lenders Use to Qualify You for a Home Loan

Before you can get a loan from most lenders, you will usually need to meet specific criteria that show you meet the lender’s general expectations. Here are some of the most important things a lender will think about when deciding whether or not to give you a loan.

 5 Factors Lenders Use to Qualify You for a Home Loan

Your Current Credit Rating

Your credit score is based on how much you’ve borrowed and paid back in the past and how well you’ve paid your bills in the past. When you apply for a loan, most lenders will check your credit score as one of the first things they do. The better your credit score, the more likely you will get a loan and the lower your interest rate.

The minimum credit score needed to qualify is much lower for a loan backed by the government, like an FHA or VA loan. For example, you can get a loan from the Federal Housing Administration (FHA) with a score as low as 500, and there is no minimum score for a loan from the Department of Veterans Affairs (VA).

On the other hand, a conventional home loan usually requires a credit score of at least 620. But if your score is below the mid-700s, you may have to pay a higher interest rate.

If you have bad credit and want to buy a house, you will have to pay a higher loan payment every month for as long as the loan is in effect. You should try to improve your credit score as much as possible by lowering the amount of debt you have, making payments on time, and not applying for new credit before buying a loan.

Ratio of Debt to Income

Your debt-to-income ratio (DTI) is the amount of debt you have compared to how much money you make. This includes your monthly mortgage payment. If you had a monthly income of $5,000 and total monthly debt payments of $1,500 for housing, auto loans, and school loans, your debt-to-income ratio would be 30 percent of your income or $1,500 divided by $5,000.

There are a few exceptions to this rule, but generally, the most debt you can have concerning your income and still get a traditional home loan is around 43%. Smaller lenders may be more willing to let you borrow a little bit more money, but larger lenders may have stricter rules and limit your DTI ratio to no more than 36%.

In contrast to the rules for credit scores, the rules for FHA and VA loans regarding DTI are very similar to those for conventional loans. When you apply for a loan through the VA, the most debt you can have compared to your income is 41%. On the other hand, the FHA usually lets you have up to 43% debt. But there are times when it is still possible to qualify even if your DTI is higher. For instance, the VA would still give you a loan, but if your ratio is higher than 41%, you’d have to show more proof that you can pay back the loan.

If you have too much debt, you won’t be able to borrow money for a property until you either pay off your debt or buy a home that costs less and has a lower mortgage.

Your Initial Deposit of Funds

Lenders usually need down payment from people who want to buy a home so that the buyer has some equity in the property. This protects the lender because if you don’t repay the loan, the lender will try to get back all the money they gave you. If you borrow the total amount that the property is worth now and then don’t pay back the loan, the lender may not get all of their money back because of the costs of selling the home and the chance that home values will continue to go down.

When you buy a house, the best down payment is 20% of the total price, and you should borrow 80% of the rest of the money you need. Most people, though, put down a lot less than that. Most traditional lenders require a minimum down payment of 5%, but if you are a good candidate, some may let you put as little as 3% down on the property.

You can get an FHA loan with as little as a 3.5% down payment. If your credit score is at least 580, you don’t have to put anything down for a VA loan unless the property is worth less than what you’re paying. If the property’s value exceeds what you’re paying, you can get an FHA loan with as little as a 3.5 percent down payment.

If you put less than 20% of the purchase price down on the house with a standard loan, you must pay private mortgage insurance (PMI). This usually leads to an annual cost between 0.5% and 1% of the total amount borrowed. You won’t be able to stop paying PMI on your mortgage until more than 80% of what you still owe on it has been paid off.

Get a loan through the Federal Housing Administration (FHA). You will have to pay a mortgage insurance premium upfront and every month for either the first 11 years of the loan or for the life of the loan, depending on how much money you borrowed at the start. Even if there is no down payment, a VA loan doesn’t need mortgage insurance, but the borrower usually has to pay an upfront financing fee.

Work Experience

Whether applying for a conventional loan, a VA loan or an FHA loan, every lender will ask you to show proof that you are currently working.

Lenders usually want to see that you’ve worked for at least two years and have a steady income. If you don’t have a job right now, you will have to prove that you are getting money from somewhere else, like disability payments.

The Home’s Valuation as Well As Its Current State

Last but not least, lenders want to ensure that the property you are buying is in good shape and worth the amount you are paying for it. The lender usually won’t give you money to participate in a questionable real estate deal unless you have the house inspected and the property evaluated.

If the house inspection finds significant problems, they may need to be fixed before the loan can be closed. The property’s appraised value also affects how much money the lender will let you borrow.

If you want to buy a house that is only worth $100,000 according to an appraisal, but you want to pay $150,000 for it, the lender won’t give you money for the total amount. They will give you a loan for a portion of the property’s appraised value of $100,000, but you will also need to come up with the agreed-upon additional payment of $50,000.

There is never a good reason to pay more than necessary for real estate. If an appraisal comes in lower than the price you gave for a home, your best bet is to either negotiate a lower price or back out of the deal. If you can’t get financing, the purchase agreement should have a clause letting you back out of the deal without paying any money.

Compare the Terms and Rates Offered By a Variety of Lenders

Even though all mortgage lenders consider these things, each lender has rules for who can get a loan and how much they can borrow.

Make sure to look into all the different kinds of loans you can get and compare mortgage lenders to find a loan with the best interest rate, given your current financial situation.

Final Words

Since purchasing a house is a significant financial and emotional choice, you should consider all the criteria listed above and select the correct type and quantity of loan so you won’t be burdened down the road. Additionally, conducting in-depth web research before selecting a loan is wise. By performing a fast internet search, you could uncover cheaper deals on interest rates and other costs. However, you should also talk to your primary banker because they can provide you with the greatest offers and services.

Each lender is unique. Finding out in advance what various lenders are searching for can help you present yourself in the best possible light.

In the end, if you want to get accepted for a loan, you must be truthful with your lender. It won’t help your predicament if you mislead your lender or keep facts from them. And if you’re left with a loan you can’t afford to pay off, it can come back to haunt you.

Don’t be discouraged—we know this is a lot. That’s why our team at JS is so committed to serving homebuyers. We want to make the home buying experience one that preserves the excitement but sheds the anxiety. We provide clear guidance and advice to help you find the right home, at the right price, in the right neighborhood. Download our FREE planning kit and connect with us today! Let’s go find your first home!

8 Things to Do to Get Ready to List Your Home 

1.   Research, Research, Research!

Do your research on the market value of your house first. Start by browsing different online realtors to learn more about the neighborhood housing market. Then, to determine the right listing price, look at recent comparable properties in your area. Examine the square footage, amenities, and locations of the various comps and consider how they measure up against your house. For instance, even though your neighbor’s house may have gone for $1 million, you will probably need to market your property for less if it is significantly smaller. Of course, a trustworthy realtor must be able to help you identify comparable properties and choose a selling price for the house.

2.   Declutter Your Home 

According to the National Association of Professional Organizers, individuals spend at least a year in their lives searching for lost things. 

This won’t happen if we simply decluttered our homes, and only kept things in regular use. 

Start decluttering your home a few months prior to listing it. You may notice that you’re storing a lot of goods that you could immediately dispose of or re-home if you consider your children’s toys and artwork, old washroom toiletries, and piles of mail.

Neat property with spotless floors and counters appears welcoming in listing images and, tempting purchasers to present you a solid offer.

Well, decluttering isn’t exactly a glamorous task. For example, if you have various boxes of rubbish or significant pieces of furniture to get rid of, you might want to make plans for dumpster rentals.

To get going, take these actions:

.

  • Reduce the number of items on floating shelves, mantles, and walls that are on display. Sports memorabilia and trinkets should be removed, and family photos should be kept in a secure location.
  • Sort through the old mail, papers, pens, and notebooks that have been piling up in the dining as well as home office. Do not keep sensitive papers you any longer require; shred them.
  • Put away seasonal things like the Thanksgiving roasting pan along with tiny equipment you don’t frequently use, such as the Air Fryer.
  • Get some plastic storage containers for your toiletries. Utilize them to conceal your daily makeup, toothbrushes, hairbrush, and other items by keeping them in bathroom cupboards.
  • Go through the bedside and throw away the body lotion and extra stuff. Hide your midnight reading and sleeping necessities in the area. Just leave a lamp perched atop.
  • Remove spoiled food from your refrigerator and pantry.
  • Consider donating the extra clothes in the closet. 

3.   Deep Clean Your Home 

You must establish a program of frequent cleanings and fast sprucing-ups prior to buyers stopping in for visits. This will keep your home tidy and neat, and won’t take too much time and effort. 

Regular cleanings are especially crucial if you intend to remain in your home while it is on the market for sale, which is what most sellers do.

Deep cleaning should be one of your top priorities before putting your house on the market because it will make these activities much simpler. However, to avoid having to cope with a messy home later, pay attention to these sometimes-overlooked areas:

  • Dust your ceiling fans. To finish the task, use a stool or ladder and disinfectant spray. Replace your rag with a pillowcase for stopping dirt from spilling on the floor.
  • Clean the interiors and doors of cabinets and closets. Cobwebs in the corners can be removed using a microfiber duster.
  • You can use a sock attached at the end of a broomstick and a band to clean in the nooks behind appliances. Vacuum up any debris.
  • Use the vacuum cleaner’s brush attachment to clean the baseboards. Apply a sponge soaked in lukewarm water with dish soap after that. Clean any unclean corners using cotton swabs.
  • Think of other parts of the house that need cleaning and start there right now. 

4.   Get Maintenance Work Done 

Before listing your home, you should discuss with your realtor and consider your budget when deciding whether to do costly repairs, including changing a 30-year-old ceiling. 

Did you know that renovating your entire home would cost around $45,000 to $75,000?

Now, renovations won’t cost this much if homeowners simply did necessary maintenance work. 

To ensure that everything’s in excellent working condition before potential buyers arrive, you might begin doing minor repairs all around the house.

For instance, consider this: 

  • If it has been over a year, get the HVAC serviced.
  • Patch up the drywall’s holes.
  • Replace all the air filters. 
  • Change out any burned-out light bulbs.
  • Check to see if the panels close and open properly and fix any that don’t.
  • Fix the water heater or the faulty faucet.
  • Ensure that the essentials, including large kitchen equipment and the bathroom fixtures like toilets, bathtubs, and showers, are in good working order.

5.   Gather All Your Renovation Documents 

If you’ve been in your house for a while, there’s a good chance that you will have all documentation and receipts for improvements and repairs to your appliances, little and large renovations, and fireplace and HVAC maintenance. Gather those right away so that they are prepared for your house inspector, property appraiser, and realtor.

The National Association of Home Builders say that the two most prominent areas homeowners renovate are the kitchen and bathroom. If you’ve also renovated these areas, make sure that you keep the renovation documents and receipts. Moreover, keeping your home in top condition with renovations and spruce-ups will likely increase the curb appeal and value of your home on the block. 

Buyers view your home as “old” and question how soon they’ll need to fix or replace something, like a huge appliance, if they’re purchasing a brand-new building. Therefore, you need to put yourself in the buyer’s shoes and think about the things you would replace or renovate. Once you have an idea of the places or devices you want to replace or renovate, make a list of them. Of course, you would keep in mind your budget for the renovations while doing this. However, just remember that these renovations pave the way of improving your property’s value. 

You may knock tasks off a buyer’s to-do list and increase the appeal of your house if you can show that you have already invested the time and expense necessary to improve it or maintain it in top condition.

6.   A Pre-Sale Inspection Might Be Good for You 

Even though you might think you know your house like the back of your hand, there might be problems lurking that you aren’t aware of. Therefore, consider getting pre-listing house inspection to learn about any issues before the buyer’s assessment, so you aren’t taken aback after accepting an offer.

If you’re worried about unattended maintenance or major problems that might be hiding, the inspection will set you back an equivalent of $339. However, it can bring you peace and relieve your stress. 

Discuss with your realtor about selling the house “as is,” and even think about asking for an upfront cash offer in case you don’t have the money to pay for the repairs upfront. 

7.   Get Your Preliminary Title Report 

The preliminary title report, sometimes known as “prelim,” is a brief report that informs you, the sellers, of any remaining issues with your home before you list it for sale. It is a preventative report, to put it another way.

You won’t be allowed to sell your house until the lien has been paid off, whether it relates to failure to pay child support, HOA dues, delinquent real estate taxes, another lender, or another issue.

8.    Find A Realtor 

In relation to real estate agents, we strongly advise hiring one to advertise your property. Through referrals from friends and family, as well as many realtor websites on the internet, you can easily find a realtor. Interview the listing agent you are considering hiring regarding their expertise in your community, their relationships with possible buyers, and their knowledge of social media. The agent needs to be able to provide you with a carefully thought-out plan for selling your house.

It’s important to begin that research as soon as you can because title difficulties can take some time to fix.

A Final Word 

Listing your property for sale can be overwhelming. However, going step-by-step in the process will help you stay on top of your schedule while keeping your peace of mind. 

Don’t be discouraged—we know there is a lot to consider. That’s why our team at JS REALTOR® Team is so committed to serving our clients. We want to make your experience one that preserves the excitement but sheds the anxiety. We provide clear guidance and advice to help you make the right decisions. Download our FREE planning kit and connect with us today! Let’s get ready to sell your home.

Top 5 Things Appraisers Look For To Value A Home

The General Neighborhood 

When inspecting homes, appraisers frequently speak with the neighbors to Guage their feelings about residing in the general area of the house. 

Neighbors are a great source of information about the attractiveness and value of a particular area. For example, if you want to purchase a home, but most of your neighbours say the high crime rate in the region, you should factor that into your offer price.

Appraisers frequently use recent selling prices from other residences in the neighborhood to help them identify what is reasonable and fair in establishing comparable selling prices for their documents. 

The Home’s Condition 

Another factor appraisers consider is the overall condition of the residence. They will inspect your home to ensure that it is rigid and free of problems that could jeopardise its liabilities, such as the establishment or roofing problems.

Appraisers will also check the condition of your siding, sewer lines, roof, HVAC, piping, and other systems. The estimate may suffer if they are old and in need of renovations.

Furthermore, appraisers look for indications that your home has not been appropriately maintained. If they notice flaws such as peeling paint, sheared rugs, smashed windows, or leaking pipes and faucets, the value of your home may suffer.

When evaluating a home, appraisers examine “curb appeal” and how a residence appears from the street concerning other residential properties. Although lot size and views are considered, having usable, clean, and appealing land adds to the appraised value and attraction of the home to potential buyers. In addition, window boxes, patio planters, and a new mailbox provide a lot of beauty without much labor or cost if you aren’t seeking to overhaul landscaping completely.

The Property’s Floor Plan 

This is among the most important aspects of house appraisals. The appraiser can determine whether or not the home’s areas lend themselves to valuable assets by determining how much area is well distributed.

In other words, possessing well-distributed space may increase the resale value of a specific property. This is because some buyers may want certain features present in their own homes. This is more about appearances.

On the other hand, floor plans are essential to appraisers because they can improve a property’s market value. Consider the possible resale value when looking for a home, as having too much or too little floor area can make or break an offer.

Upgrades and Renovations 

Certain additions and upgrades can help to raise a home’s value. A new kitchen, refurbished bathroom, renovated basement, and freshly installed landscaping, for example, can increase a home’s value. Therefore, when determining the home’s value, an assessor will consider these changes.

Type Of Construction Materials Used 

The kind of materials utilised to construct the home would also be considered. A home with higher-quality and more contemporary finishes will be worth more than one built with low-quality, dated materials. Updating materials can help a homestay in better shape while also enhancing its efficiency and degree of safety.

Materials and worn or damaged sections are included on appraisal checklists, as well as whether your property is concrete or wood-sided are considered. For example, brick is prized for its insulation and high durability. However, sections of deteriorated inter-brick cement and gaps in between the foundation and exterior walls may require patching to improve the look. Another instance where siding can add value but is not necessary for safety purposes is replacing aged wood with siding. Another modification that can add value to an older property is adding insulation between outer and interior walls and repainting the weathered exterior of the siding.

Before displaying a home, power-washing the exterior is recommended since it is a reasonably low-cost project that may dramatically improve the home’s appearance by cleaning accumulated debris from small cracks. If the sealing and framing are worn out, replacing the windows is a good idea; however, it’s one of the pricier home improvement chores. On the other hand, potential purchasers prioritise decent window conditions on their wish lists.

Bedrooms & Bathrooms 

Before spending $20-30 thousand or more on a bathroom, seek professional advice to ensure that the upgrade would pay for itself based on the appraised value. You may break even by adding a newly designed bath addition to a home that has declined due to the location or market prices, but you might not.

Another item to think about is the bedrooms in your house. When is the bedroom no longer a bedroom? When it comes to selling, some properties have rooms with no closets, and the owners discover that space without a closet cannot be represented as an extra bedroom. It’s only fit for a study or an “extra” room.

Temperature & Appliances 

Home evaluations consider the age and efficiency of appliances, heating, ventilation, and air conditioners (HVAC) units, power components, and drainage. Unfortunately, replacing older appliances isn’t always cost-effective for many people wanting to sell their homes. Still, assessment value is unlikely to decline when everything is in good condition, clean, or has a track of servicing and even warranty documents. However, if things are in bad form or aren’t working correctly, it could have a negative impact on the home’s value. Positive improvements include new appliances and update supporting fixtures, including ducts and pipes.

A Final Word 

This article enlisted the factors which appraisers look for during home valuation. These include the general neighborhood, the home’s condition, the residence’s floor plan, the materials used in the home’s construction, bedrooms, and bathrooms, as well as temperature and appliances. 

 The Appraisal Process does not have to be scary. That’s why our team at JS is so committed to serving our clients through-out the process. We want to make the home buying or selling experience one that preserves the excitement but sheds the anxiety. We provide clear guidance and advice to help you find the right home, at the right price, in the right neighborhood. Download our FREE planning kit and connect with us today! 

Are Adjustable-Rate Mortgages a Good Option?

What Do Adjustable-Rate Mortgages Entail? 

The adjustable-rate mortgage is a loan with an interest rate that is fixed at first and then changes with time. Typically, you will pay a smaller fixed interest rate during starting few years. After that period, the interest rate will fluctuate regularly under current market conditions.

When you embrace the mortgage, you will already agree on the time intervals for your low fixed interest rate and any accompanying rate fluctuations. A 10/6 ARM implies you’ll pay an interest rate that is fixed for the first ten years; then, the interest rate will modify every six months. A 7/1 ARM, on the contrary, means that you will receive an interest rate that is fixed during the first seven years, after which the rate will adjust annually. Your rate may be higher or lower based on the market conditions.

What Happens When You’re in A High-Interest Rate Environment? 

In an ARM, the period of time for a fixed interest rate can be the first seven to ten years. As compared to a fixed-rate mortgage, adjustable-rate charges less interest, enabling you to save money during the fixed time. 

After the fixed period, you will encounter an adjustable period. The adjustable period will last for the rest of the loan term with varying interest rates. It is worthwhile to note that the interest rate changes at every fixed time, such as six months or even a year. 

The market will determine your latest interest rate; if interest rates are low, you will most likely receive a low rate; if interest rates have risen, your new rate will be even higher. However, because most adjustments have caps, your rate will not be able to go above a certain fraction or raise by more than a specific amount during every adjustment.

So, Should You Get an Adjustable Rate Mortgage? 

The lower overall interest rate is the most appealing feature of ARMs. An interest rate that is gradually low at the start of the loan may allow you to save some money that can be implemented to the principal, allowing you to pay off your mortgage quicker. In addition, you could be able to finance the more expensive property with lower payments due to the sheer increased cash flow upfront. It may also be advantageous to have additional cash flow in order to gain an advantage in the competitive real estate market.

Many analysts predict that mortgage rates will rise even further this year; due to the varying nature of ARMs. As a result, you must pay far more than you anticipated. Even minor changes in interest rates can result in hum sum of dollars in additional payments. Returning to the $500,000 mortgage example, if the interest rate rises by 2% (from 4.12% to 6.12%), the principal and interest payment rise by around $530/month. So, it may be prudent to lock in a cheaper rate now. Of course, you don’t want to be on the leash for a rising mortgage rate in the future, but ARMs aren’t for everyone.

Things To Consider When Getting Adjustable-Rate Mortgages 

Learn About the Adjustment Period 

Borrowers must understand the basics of ARMs to ascertain whether they are suitable for them. The adjustment time is, in principle, the time between changes in interest rates. Take, for example, an adjustable-rate mortgage with one year of adjustment. The loan would be known as a 1-year ARM and the interest rate; therefore, the monthly loan fee changes once a year. If the adjustment period is three years, the loan is known as a 3-year ARM, and the interest rate changes every three years.

Understand The Rate Change 

Borrowers must know the premise for the interest rate change in addition to recognizing how frequently their ARM will adjust. ARM rates are determined by various indexes, the most common of which are one-year constant-maturity Treasury securities, the Cost of Funds Index, as well as the interest amount. Before deciding to take out an ARM, find a lender whose score will be used and research how it has varied in the past.

Prevent Payment Shock 

Among the most significant risks that ARM borrowers encounter when their mortgage adjusts the payment shock, which happens when the monthly loan payment increases significantly due to the interest rate adjustment. If the borrower is unable to make the new payments, this can cause hardship.

Keep an eye on the interest rate as the adjustment time approaches to avoid experiencing a shock. Knowing what your adjusted payment will be ahead of schedule will allow you to allocate funds for it, shop around for an improved loan, or seek assistance in determining your options.

A Final Word 

Taking out adjustable-rate mortgages is not always a risky venture if you know what is happening when your loan interest rate resets. Unlike the fixed mortgages, which have only one interest rate for the entire loan lifetime, an ARM’s interest rate may vary after a certain time and may increase significantly in particular cases. Knowing just how much you’ll owe every month can help you avoid payment shock. More importantly, it can assist you in making your monthly mortgage payment.

Don’t be discouraged—we know this list is a lot. That’s why our team at JS is so committed to serving homebuyers. We want to make the home buying experience one that preserves the excitement but sheds the anxiety. We provide clear guidance and advice to help you find the right home, at the right price, in the right neighborhood. Download our FREE planning kit and connect with us today! Let’s go find your first home!

JS REALTOR® Team
545 Metro Place
Columbus, Ohio 43017

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