Lee Morof's Real Estate Blog

In a hot real estate market, agents often tell buyers they must expect to make multiple offers before one is accepted. Disappointment may be the new normal rather than an exception. The stress of repeated rejections isn’t easy, so be prepared.

Significant numbers of first-time buyers find the process difficult, and recent research indicates that about 60 percent of Millennials choose to rent rather than own, delaying other important life decisions, including marriage and family. 

There are, however, at least 5 ways to strengthen your buyer profile and give yourself an advantage: 

Check Your Credit

Take advantage of the free credit checks offered by the three credit reporting agencies, and clean up any questionable entries. At the very least, be prepared to offer clear and cogent reasons for any late payments that appear within the last couple of years. Pay down credit card balances and student loan debt as much as possible, and assure that your employment record is stable. 

Sock Away Some Cash

Try to delay your home search until you have enough money for a reasonable down payment and required closing costs, plus a comfortable nest egg or contingency fund. Demonstrate a consistent savings habit. If you plan to borrow the down payment from parents or other family members, be certain it will be adequate and available when you need it.

Talk With Your Loan Officer

Get a definitive idea of how much you can comfortably afford. If you’re a veteran or qualify for other special loan programs, find out in advance. Gain a comfort level with a lender, and listen to the advice that is offered. Interest rates are currently still low, but any rate change will affect the amount you can borrow. Limit your home search homes priced lower than your loan limit.

The only thing better than a pre-qualification letter is approval confirmation for a specific loan amount. In a fast-paced real estate market, seek that pre-approval, so that you’ll be able to move quickly when you find the right property. A pre-approved loan, an offer with no contingencies, and a quick closing date are the marks of an “A-list” buyer.

Define Your Needs

Know your preferred neighborhoods, and prepare a list of “must have” items as well as a wish list to guide your search. But be realistic. Know that home-buying is a matter of priorities and a game of give and take.

Look at a home’s structure and condition; consider the location, and realize that there is no such thing as the perfect house. Know that tired style can be updated, and decor changes are relatively easy on the pocketbook.  

Make the First Offer Your Best Offer

In a seller’s market, it’s wise to make the initial offer your best offer. A lowball bid will not impress the seller, and you may never get a chance to submit a higher bid. When there is serious competition for homes, it pays to be serious about every offer. 

Finally, know that if you’re persistent and prepared, you will find a home to suit you. Practice patience!

The oft-repeated maxim that there is never a second chance to make a great first impression is especially true when it comes to real estate. Street appeal may focus on a dramatic approach to the front door, but prospective buyers will be especially “wowed” by an appealing back yard.

Early spring is the perfect time to add some new plants, set out pots of blooming flowers and focus on one memorable feature. A little work now will pay big dividends later, in terms of buyer interest, increased showings, quick offers, and even a higher price.

Here are 7 ideas that are cost-effective weekend projects:

1. Create a focal point: Find an antique garden trellis and plant some vines to create an arbor. Add a piece of sculpture or statuary either in the center of the yard or in a secluded garden spot. Install a “gate to nowhere” and add bright flowers on one side. Paint giant sunflowers on a privacy fence or on the side of a storage shed. 
2. Build a partial wall or shade trellis: There is little that’s more appealing that an an “outdoor living room.” Accent and define your patio space in an interesting way — use a sisal rug or paint a graphic design on the concrete — and fill the room with appropriate furniture. Add a small fountain or a charcoal fire pit to create a real gathering spot.
3. Install a simple drip irrigation system: Minimize landscape upkeep by planning DIY drip irrigation that will keep planting areas looking their best. All that’s really needed is some tubing and a few fittings; the system itself can be attached to an outside hose bibb and operated by a simple timer. It’s not necessary to extend the system to the entire lawn; that would be a more costly and time-consuming project perhaps best left to a professional.
4. Create a dry creek bed: If parts of the yard or garden are plagued by standing water following heavy rain, give drainage an assist by making a dry creek bed. It’s not too difficult and will add function and beauty to the back yard. Add some large boulders or a “Zen bench” to boost the appeal.
5. Plant or hang solar lights: Define a pathway, highlight planting areas or just add night-time interest to the yard with solar lighting. Buy inexpensive versions at a home store, or order artistic lights from a catalog. They’re fun, functional and portable.
6. Plant a specialty garden: Attract butterflies and hummingbirds with a patch of wildflowers. Build a small raised garden plot to grow kitchen herbs, or plant seasonal vegetables and edible flowers. Carrots. kale and rainbow chard are especially pretty and don’t take much space. Melons, squash and pumpkins have beautiful flowers and yield great fruit, but they do spread! 
7. Clean up, trim, weed and mow: Finally, don’t neglect the routine maintenance that is required in every yard, both front and back. Nothing else is as important to prospective buyers as an attractive, well-kept home exterior. 

Sustainable materials, energy savings and smart home technology are high on the list of buyer wants in a home. But there are some other architectural and design trends that will change the way Americans live this year and beyond.

When planning a remodel, it pays to pay attention to green features, as well as to improved floor plans that will make a home more comfortable, more appealing and more functional. 

Here’s a list of what’s hot right now:

Natural and Sustainable Materials

Eco-consciousness and concerns about individual health and wellness prompted a return to natural woods and stone, as well as organic forms and living greenery. All are prominently featured in today’s show houses and and on design shows. For both residential and commercial design, there is renewed emphasis on the importance of natural light, views, air quality and open space as elements that affect not only mood and function but also health and well being.

Reclaimed and Recycled Products

No matter what the design or decor, there is a way to incorporate previously used materials. Recycled plastic is commonly used for roofing tiles, carpet, insulation, composite lumber and decking material, decorative trim and landscaping rocks. Reclaimed beams, distressed wood flooring, stunning countertops fabricated from recycled glass, wood chips and even cardboard, are only a few trendy possibilities. For a planned remodel, be sure to investigate what’s available, including “repurposing” used building materials like old windows, vintage gates or antique furniture.

LEED Certified Construction

Resource conservation and energy-savings are a way of life and worthy of attention. In some ways, Europe and Asia lead the U.S. in terms of conservation, but one way to assure that new homes are built to a certain standard is to insist on LEED certification, which stands for Leadership in Energy and Environmental Design. It’s a compliance and rating system for both residential and commercial construction that is recognized internationally.

Energy-Star Rated Appliances, Systems, Fixtures and Fittings

It would be difficult today to buy a new appliance or furnace that is not energy-efficient. But in an older home, even if existing appliances, faucets and fixtures, heating and cooling systems are still operational, it might be wise to consider replacing them. Sometimes the savings on monthly water and electricity alone makes financial sense. And new replacements always add to a home’s appraised value.

Rooftop Solar Panels

There is ample evidence that buyers will pay a premium for solar homes. Although the initial investment is relatively high, an owner will benefit from an immediate reduction in energy cost, and the added property value might make such an investment worthwhile.  

Smart Home Technology and Home Automation

Buyers today almost universally want a wireless security system and some form of programmable temperature control. Additional smart home features high on the list of consumer wants include lighting controls, wireless hubs that integrate entertainment and convenience features, and trendy apps that allow control of home functions via smart phone, whether from across the block or across the globe. 

Owners who are motivated to sell will look to these buyer wants in order to be competitive in today’s hot real estate market.

The major problem that the vast majority of buyers will run into – especially when purchasing their first home – has to do with a lease agreement that is still active with their apartment complex at the time of the purchase. If you locate the perfect home in February but your lease isn’t over until August, you can’t be expected to wait around.

But at the same time, the remainder of that lease agreement could represent thousands of dollars that you’ll be paying to essentially “live” in two different places at the same time.

Luckily, all hope is not lost. There are a variety of steps that you can take to help mitigate your remaining financial risk at your apartment as much as possible.

Breaking Your Lease Early: What You Need to Know

First, look at your existing lease agreement and make sure you understand their early termination policy. This will outline the various acceptable ways, usually dictated in large part by state and other local laws, that you can break a lease early without being forced to pay through the duration of the agreement itself.

Much of this will vary based not only on the state, but also the property manager in question. Your property manager may very well allow for early termination for home buyers – particularly if they’re in an area where they know they can rent the apartment quickly.

This is not always the case, though, which is why you need to begin by reviewing the situation thoroughly so you know what you’re dealing with.

Next, you should review what state laws have to say about your landlord’s duty to find a new tenant in the area of the country that you’re living in. In some states, for example, your landlord MUST make “reasonable efforts” to re-rent your unit as quickly as possible, regardless of the reason you’ve decided to leave.

Many state housing laws require landlords to make every effort to keep their own losses at a minimum – meaning that you may not have to pay much, if anything at all, to break your lease early provided that you give said landlord enough notice. 

Why Conversations Matter

Finally, you’ll want to sit down with your landlord face-to-face (if you haven’t already done so) and explain to them exactly what is going on. Landlords are people too and oftentimes they can be more sympathetic than you think.

According to an authority on the matter, the “worst case scenario” for most renters-turned-buyers breaking a lease agreement is often that they’ll need to pay an early termination fee to break their agreement early. This can be as little as one month’s rent to “a few month’s rent” depending on the situation.

At the very least, this is better than being forced to pay every month for the remainder of your term.

In the end, it’s important for you to understand that you should not let anything get in the way of buying the home you’ve always wanted – even if you’re currently living in an apartment with an active lease agreement.

You just need to know as much about the specifics of that agreement as possible so that you can move into your new home while mitigating as much risk as possible for both yourself and your landlord at the same time.

It’s wise to consult with your trusted real estate professional about the implications of your specific situation.

Selling your home is one of the most stressful things you’ll ever go through and one of the most important decisions you’ll ever make. However, there’s a lot more to selling your home than just sticking a sign out in the front yard. Most likely, your home will need a little work before it is perfect.

Therefore, you’ll have to decide whether you need to take care of home improvement issues yourself or, to sell with the expectation that the buyer will be the one to do so. We put together a few pros and cons to doing it each way to make your decision a little easier.

Do The Improvements Yourself

Choosing to complete needed improvements yourself means that you will likely get a higher sales price for your home. In addition, with less work to do, it opens up your home to more buyers than one that is a fixer-upper does. Selling will usually be faster and closing more likely to go smoothly.

On the other hand, chances are good that you will not get the full value you put into those improvements at the closing table. In addition, when you are moving, money may be tight making this an even more difficult proposition.

Sell It As A Fixer Upper

The main benefit of selling your home as a fixer-upper is that you will not have to put that money in up front. If you are in a difficult financial situation or selling your home at a loss, this may be necessary. Additionally, you aren’t the one that has to deal with the contractors and calling around to get quotes on all of the work.

One of the downfalls to selling your home as a fixer-upper is that you’ll likely get a lower price and some buyers won’t even come out and check out your house if they think there is too much work that needs to be done. Plus, depending on the type of work that needs to be done, you may wind up in a pickle during the inspection process. Certain problems can prevent lenders from closing on the deal. You often find the closing process is slower and fraught with more concerns.

The reality is, it really depends on whether doing the improvement yourself or selling it as a fixer-upper is the right choice. Discuss your concerns and speak honestly about your financial picture with your trusted real estate professional and perhaps you will have a better idea of which of these options is the smart choice for your situation.

If you’re looking for a home upgrade that can add resale value to your home while paying itself off over time, look no further than a solar panel setup. In the past few years, the cost of installing residential solar has declined while the efficiency of the panels has increased. This combination has made home solar one of the best investments that a homeowner can make – provided they live in an area that receives a good deal of sunshine.

Solar Adds Immense Value To Your Home

While solar panel installations are not inexpensive, in almost every case they add at least their total cost to the value of the home as soon as they are installed. If you decide to sell your home, it will be very attractive to those who are interested in leaving a lighter footprint or for anyone who was thinking of going solar after they bought their new home.

A Quality Install Will Pay For Itself Over Time

As they generate electricity which can be used in your home or sold back in to the public grid, residential solar panels are one of the only home upgrades that will pay for themselves over time. If you live in a very sunny area and watch your home energy consumption, you may even find that after a few years your solar setup actually begins generating a profit each month. Home solar setups typically come with a 25-year warranty so you can rest assured that your panels will be producing energy for at least the next couple of decades.

Tax Credits And Incentives Reduce The Up-front Financial Cost

Renewable energy sources like solar quality for significant tax credits and rebates which will vary depending on the city and state or province that you live in. A quick web search will show you which types of incentives that you will qualify for, or you can call a local residential solar installer as they’ll be fully aware of all of the various incentives that are available.

For more information on home renovations or upgrades that have been adding value to homes in your community, contact your local real estate agent. They’ll be able to advise you on which upgrades you will need to make in order to keep up with other homes in your area so that if you do decide to sell, you’re able to stand up to your competition.

If you’ve just returned from the vacation of a lifetime, you probably wish that wonderful time never had to end. When you buy a vacation home or condo, you can guarantee that you have an escape that will provide you with years of enjoyment. Before you take the plunge, though, take advantage of these six helpful tips about buying a vacation home.

Choose Someplace Versatile

When buying a vacation home, it’s all about getting the most out of your investment. Consider choosing a place that you can enjoy throughout the year. Your ideal vacation home will be a haven in the summer, a beauty in the fall, a refresher during the spring, and the perfect place to celebrate the winter holidays.

Think About Convenience

When you choose your vacation home, you will want to find a relaxing getaway that fits your lifestyle. If you love to have easy access to the grocery store and other amenities, don’t buy in a remote location. If instead you’d prefer something secluded, opt for a home that is hidden far from civilization.

Consider Your Neighbors

Depending on where you choose to buy a vacation home, you’re likely to be surrounded by others who love the area as much as you do. You need to decide if you want to have many others who are in close proximity or if you prefer having your space to yourself.

Find Out About Taxes

If you are opting for an extremely popular location, beware of high taxes. You want to go into your purchase with your eyes wide open. If you choose a home that is off the beaten path, you could have a more favorable tax rate.

Learn About Restrictions

You may have restrictions to deal with when you buy a vacation home. From a Home Owner’s Association that stipulates regulations about the care of property to restrictions in paint schemes, you may not have complete freedom with your property.

Look For Excellent Deals

Whether it is due to the strained economy or someone who has to make a property move quickly, you could find a phenomenal deal. Don’t rush into any sale until you’ve reviewed all of your options. Buying a home that is in a community neighboring a hot spot (instead of in the hot spot itself) could make for better prices as well.

A vacation home is a great real estate investment that can make vacation planning much easier. With these tips in hand, you’ll be well equipped to find the perfect vacation home for your budget. If you’re ready to start the search for your dream vacation home, contact a local real estate agent today.

You’ve got house insurance, and assume your property is covered for any type of detrimental occurrence that can possibly take place.

However, not all homeowners are aware that home insurance policies don’t necessarily cover damage related to a flood, as the risks are too great. As a result, homeowners must purchase flood insurance through a private company.

Floods are one of the most common hazards in the US, costing billions of dollars in damage to properties every year.

Since this is a common issue lately, the federal government updating these policies currently so please talk with your real estate professional or local insurance company for the most up to date information.

What Is Flood Insurance?

Flood insurance policies are typically made available to homeowners in flood-prone areas. The majority of insurance policies cover some form of water damage, from things like leaking faucets to bursting plumbing pipes.

However, such policies don’t cover water damage as a result of flooding of rivers or sewers that cause water to ruin a home.

Specific flood protection is provided by the National Flood Insurance Program (NFIP), which is run by the Federal Emergency Management Agency (FEMA). Standard flood insurance policies cover “direct physical damage” to a property resulting from floods.

A separate policy must be purchased to protect the belongings inside the home or building. Homeowners can buy up to $250,000 in coverage for the home, and up to $100,000 in coverage for possessions. Even renters are permitted to purchase flood insurance to cover their possessions.

How Does Flood Insurance Work?

Flood insurance isn’t sold by FEMA directly, but rather is sold to customers through private insurance agencies. Premium rates are determined by the government, and they remain consistent from one insurer to the next.

How much a homeowner pays for their own specific flood insurance depends on a number of factors, including how prone the neighborhood is to floods and how much coverage a homeowner wants. The average annual premium is approximately $520 for $100,000 worth of coverage for a property with no basement, and approximately $615 annually for a property with a basement.

Filing A Flood Insurance Claim

The claims process is like any other insurance claim. Once the claim is filed, the damage will be analyzed by an adjustor assigned by the insurance company. A “proof of loss” form will need to filled out and submitted to the insurer within 60 days of the flood occurrence.

Do You Need Flood Insurance?

It’s necessary to find out if you are eligible for flood insurance before buying it. For residents of a community to be eligible, the community needs to enforce floodplain statutes to lessen the chances of flood damage, after which FEMA ensures that such regulations are followed.

Only those who reside in a community that participates in NFIP can buy insurance – today, about 20,000 communities across the country participate in this program.

FEMA offers maps that outline what areas are at high risk for floods, and those that are at moderate-to-low risk. The law requires homeowners to have flood insurance if the properties are located in a high-risk zone and have a federally-backed mortgage. This is because properties located in these high-risk areas have a 26 percent chance of suffering flood damage during the 30 years that it would take to pay off a mortgage.

Homeowners are not required to buy flood insurance if they reside in a moderate-to-low-risk zone, though it may be a good idea to purchase it anyway. Properties outside the high-risk areas make up over 20 percent of NFIP claims. Homeowners in these areas can purchase up to $200,000 in flood insurance.

The bottom line is, even if you don’t necessarily live in a high-risk zone, this doesn’t mean your home won’t ever get flooded. Many conditions can result in flood damage, including clogged drain systems, flash rainstorms, and damaged levees.

According to the National Association of REALTORS®, existing home sales surpassed both May sales and expectations for June. Sales of previously owned homes increased by 2.60 percent in June and reached a seasonally adjusted annual level of 5.04 million sales. June’s reading was the third consecutive monthly increase in sales of existing homes and was the highest reading for existing home sales in eight months. Existing home sales remain 2.30 percent below the June 2013 reading of 5.16 million sales of existing homes.

Analysts projected sales of 5 million existing homes for June against May’s initial reading of 4.89 million sales of previously owned homes; the May reading was later revised to 4.91 million sales. Lawrence Yun, chief economist for the National Association of REALTORS® said that market conditions are becoming “more balanced,” and noted that inventories of existing homes are at their highest level in over a year and that price gains have slowed to much more welcoming levels in many parts of the country.

Housing Market Headwinds Declining

After a particularly harsh winter and lagging labor reports, analysts forecasted lower annual sales of existing homes for 2014 than for 2013. Labor markets are stronger according to recent labor market reports and a declining national unemployment rate. Steady work is an important factor for families considering a home purchase; as labor markets improve, more would-be homeowners are expected to become active buyers.

Housing markets are not without challenges. In recent unrelated reports, the Federal Reserve has noted higher than anticipated inflation may cause the Fed to raise its target Federal Funds rate in the next several months. Gas and food prices, important components of consumers’ household budgets continue to rise and could slow save toward a home for some families. Steve Brown, president of the National Association of REALTORS®, said that first-time and moderate income buyers continue to deal with affordability due to increased FHA costs and tight mortgage credit. Relief may be in sight as a slower pace of home price growth suggests that more buyers may be able to afford homes.

FHFA House Price Index Reports Gain in May Home Sales

FHFA released its May index of home sales connected with mortgages owned or backed by Fannie Mae and Freddie Mac. The index posted a month-to-month gain of 0.40 percent in May and a year-over-year gain of 5.90 percent year-over-year. FHFA said that increased sales were driven by a 9/60 percent increase in sales in the Pacific region and that average home prices remain 6.50 percent below April 2007.

Getting pre-approved for a mortgage loan is an integral part of having the ability to purchase a home in today’s society.

With most home prices well above what the majority of us have in the bank, getting approved for a mortgage can be the deal maker or breaker when it comes to purchasing a piece of property. Therefore, getting rejected for a mortgage can feel like a huge loss.

The first thing to realize, however, is that there are action steps you can take to get to “yes.” Here’s what to do if you’re turned down for a mortgage or other home financing.

Shop Around: Don’t Take “No” The First Time

If you get a “no” from your bank the first time around, don’t be fooled into thinking that everyone will give you the same answer.

Instead, be sure to shop around your mortgage with different banks, and opt to speak to a mortgage broker to leverage all of your options.

When looking at several different lenders, you’ll have a much higher chance of getting a yes since every lender adheres to different rules and restrictions. Though you may end up with a mortgage with a slightly higher interest rate, you’re likely to get approved for a mortgage or other home financing.

Ask Friends: Get A Co-Signer

If your “no” was the result of bad credit history or a low credit score, perhaps you should consider asking for the help of friends and family. Sometimes bringing a co-signer in on the deal who has better credit history and a higher credit score will change the response of your bank or lender significantly, and suddenly you’ll find yourself hearing the sought-after “y” word.

Ask Questions: Fix The Problem

If you’ve sought out several different banks and lenders, and still find yourself with rejected mortgage applications, be sure to understand why the “no” came in the first place. If it’s an issue of your credit history, which can’t be appeased with a co-signor, you may need to put in the time in order to correct some of your credit issues.

Other common reasons why people are rejected for a mortgage include unrealistic borrowing expectations, i.e. applying for a mortgage that is too high for you to satisfy, as well as an unreliable employment history or a general lack of credit history. Speak with your mortgage professional to determine the reason, and if shopping around or bringing in a co-signor doesn’t transform the “no” to a “yes,” seek to fix the problem instead.

Though it can be a daunting task to apply for a mortgage after you’ve been rejected, ensuring that you arrive at that ultimate “yes” is something you need to undertake in order to purchase a home and reach that next milestone in your life.

Having trusted professionals on your side is something that will surely ease the tension on all things involved in purchasing a home, including getting approved for a mortgage. For more information on how to get past “no” when searching for a home, call your trusted real estate professional today.