Lee Morof's Real Estate Blog

This summer, quality homes are being scooped up almost as fast as they’re being listed – and for top price. Yes, it’s a seller’s market out there, which is great news if you’re planning to list your home. For those looking for a home, the competitiveness can be frustrating and aggravating.

Frustrating as it may be, there’s plenty of reason for buyers to stick it out until their offer is accepted. For starters, interest rates are still fairly low. And secondly, there are great homes out there if you act fast enough.

How can you successfully get that dream home in a seller’s market? Here are some top tips:

Stay Dedicated

Make sure that you and your Realtor are on the same page with your must-haves for your new home. Then, make sure you check for new listings daily. If any look good, make an appointment to see it that day. Don’t wait, or it will likely be gone. It can be tempting to make an offer based on listing photos alone, but be very wary of doing this. Go out and see it – and do it quickly.

Start With Your Best Offer

With some good properties gone in a matter of hours, this is no time to nickle and dime a seller. What’s more is that the seller will be unlikely to even entertain the offer and counter it. The best practice in competitive times is to start with your very best offer on the property and give the seller something to seriously consider. Chances are your offer isn’t the only one they’ll be receiving. You want it to make an impression.

Include A Personal Note

Even though they’re essentially getting rid of their property, sellers often like to work with a buyer who is going to appreciate and care for the home they’re purchasing. That’s where a personal note included with your offer to the seller can come in handy. In your note, talk about the things you love about the home and how you know it will be the perfect fit for you and your family. You can even up the ante and include a family photo. 

Make A Significant Earnest Money Deposit

Generally speaking, the larger your earnest money deposit, the more serious of a buyer you are. In a seller’s market, you will want to look for any competitive advantage over the others that are likely to make an offer on a particular property. A big deposit can serve as that advantage.

Stay Patient

Like we said in the opening, a seller’s market can be frustrating for buyers – so try to stay patient. The right home is out there for you, and good things come to those who wait. 

Your trusted real estate agent is ready to talk to you about the impact of a seller’s market and show you the best houses available in your area. Create your must-have list and call today!

Rules and covenants of a homeowners association can be a bit overwhelming, especially for a first time homeowner. Understanding that the regulations are designed to protect the value of your home helps make some restrictions easier to live with.

Homeowners Association CC&Rs, which stands for “covenants, conditions and restrictions,” can be intimidating. But, with the growing number of communities and subdivisions that have existing HOAs, it’s important to know what you’re getting into before you buy a home.

Associations Come In All Forms

An association’s goal is to maintain the ambience of the community and assure that home values are upheld. Associations are typically responsible for the maintenance and upkeep of common areas, including streets and green spaces, playgrounds and community pools, if they exist.

Some associations, often in retirement communities, include front yard upkeep; Condominium associations commonly include exterior building maintenance as well.

Homeowners Association CC&Rs may be quite restrictive, requiring vehicles to be garaged or disallowing privacy fences, for instance. Alternatively, they may be loosely organized and act primarily as social organizations designed to foster the sense of community and promote safety for resident families.

Only occasionally is HOA membership offered on a voluntary basis; in those cases, the HOA is apt to be a group with little power.

CCRs Are A Legal Obligation

Subdivisions with functioning homeowners associations must supply prospective buyers with a copy of current CC&Rs prior to closing.  If you plan to buy a home that has an existing association, it is important to familiarize yourself with the rules and regulations prior to agreeing to abide by them. Read them thoroughly and understand them completely, because they constitute a legal obligation for compliance as well as for payment of dues and special assessments.

Legal Requirements Of An HOA

Whether the dues are a lot or a little, and whether the association’s affairs are professionally managed or not, the majority of associations are governed and controlled by a volunteer board and elected officers who volunteer their time for the benefit of the community. If you choose to become involved in governance, you might have a great influence over the way rights and responsibilities are defined in your neighborhood.

However, don’t count on being able to make changes to your own property easily if there are clauses in the HOA CC&Rs that initially rub you the wrong way. In some cases, owners require association approval prior to making any changes to the property, whether that be planting a new tree, adding a skylight or changing the color of the front door. 

As you consider making an offer on a home, it’s important to decide whether or not you object to any of the existing regulations. If you feel that the regulations will negatively impact your livability in your new home, it might be better option to look for another house. It can be difficult to be at odds with your HOA and can cause significant ongoing stress. Withholding dues or flaunting existing regulations can have unpleasant legal consequences, even resulting in a lien against your property.

Talk to your trusted real estate professional about any concerns you have about HOAs and what you are looking for in a neighborhood. Your agent can help you navigate the area and offer information about individual neighborhoods to make sure that you find just the right home for you.

Nearly 70 million American households include at least one pet, but most prospective buyers won’t want to see evidence of pets in a home on the market.

Here are some tips about how to sell a pet-friendly home.

Prior To Listing

Point out special pet features to your real estate agent — a cat door, feeding station or a pet shower, even a fenced back yard or a dog run can be a bonus to many buyers. It’s important to remember that buyers want to imagine their pets in the home, not yours! Minimize your pet’s presence by decluttering pet supplies as well as your personal items.

While it is best to downplay non-human residents in a home for sale, some pets are more difficult to camoflage or move out of the way. If you have a bird, an aquarium, or large exotic pets, use your best judgment while keeping the “less is more” philosophy in mind.

If there is any pet damage, it should be repaired before you show the home. If necessary, repaint walls, refinish floors, or replace carpeting. Ask a friend or relative (one without a pet) to give your house a sniff test. If there are any odors, do whatever is necessary to eliminate them. It is not likely enough to try to mask the odors with air freshners in order to make the best impression on potential buyers.

Dealing With Showings

Always arrange for animals to be out of the house when a showing is scheduled. If you can’t be there to pick up a pet, trust a neighbor to take the dog for a walk or herd the cat into a carrier and keep it for a few hours. A barking dog in the back yard is annoying, and even the cutest puppy can intimidate a buyer. Cats, too, are notoriously independent, and not all humans are cat-lovers.

Buyers expect even a house with pets to be kept scrupulously clean. Sweep and vacuum up pet hair as often as necessary. Pick up feeding bowls and toys, and remove cat litter boxes prior to a showing. Polish nose prints off glass and put away the scratching pole. Think of pets and pet items the same as you would personal photographs and other memorbillia that clutters your home. Removing those items helps the buyer see themselves in your home and can increase the likelihood of a sale.

It’s also wise to double check with your insurance company to determine your liability in the event that your pet bites or otherwise injures anyone at your property. 

Before And During Moving

Remember that moving is stressful, not only for you, but for your best friend as well. Speak to your veterinarian in advance about possible symptoms of anxiety such as increased accidents, changes in appetite, aggressive behavior or other personality changes that may occur. If you notice any significant signs of anxiety, seek treatment.

If at all possible, take your pet to see your new home prior to your move. If not, continue to look for signs that your pet is feeling disoriented or anxious. Finding a reliable and trustworthy veternarian near your new home beforehand is a good idea in case your pet is struggling. Take extra care that your pet doesn’t try to “escape” back to the familiar and get lost. 

Selling your home and moving into a new home can be exciting, complicated and stressful events. The same can be true for your pets. With a little bit of extra planning, things can go a lot smoother for your entire family. Contact your real estate professional for even more tips for a successful home selling, home buying and relocating experience.

The closing process for a home purchase is an exciting time. The home is finished, the purchase is ready to be finalized and it’s almost time to move in. The final steps of the closing process ensures both parties are able to meet their requirements and all the paperwork is in place and verified.

The Key Players

There are actually four parties involved in a typical closing: the buyer, the seller, the bank or lender financing the purchase, and the escrow agent. Each has an important role in making sure the closing happens effectively and efficiently.

As is common with most purchases, the buyer is already familiar with the need to have a down payment ready and to be committed to a purchase. Additionally, the buyer will have already worked out the loan approval preliminary reviews and steps with the bank financing the purchase if it is not an all cash purchase.

The Escrow Process

During escrow the purchase is then validated through a number of steps. These include:

• Ensuring the property title is clear of any problems or previous liens (a legal method by which other parties get paid for the seller’s outstanding prior debts).

• Ensuring the property has been appraised and represents the actual worth represented to the bank.

• Ensuring the bank is ready to pay the seller with a payment check and that the buyer has paid any down payment as well. Both payments are put into an escrow account managed by an escrow agent and not to be released until all the purchase requirements are met.

• Ensuring the buyer has been notified, read and has committed by signature to all the purchase documentation necessary to complete the sale. This includes understanding the nature of the home loan, payment responsibilities, and what happens if there is a default.

• Ensuring any property taxes, homeowner’s association fees, and other fees have all been addressed before the seller transfers the property to the escrow agent, which is then transfered to the seller.

• Finally, passing along the keys and title of the property to the buyer, the title lien to the bank financing the deal, and the payments for the property to the buyer.

When all the above happens, a home purchase is closed and the home officially belongs to the buyer. The seller also gets paid and can deposit his income accordingly. The escrow agent files all the paperwork with the bank, the county recorder’s office, and copies are sent to the buyer and the seller for their own records.

Contact your trusted real estate professional if you have any additional questions about the closing process as well as other aspects of acquiring your new home. 

Reality TV shows have inspired people to flip houses for profit. They make it look fun, easy and the type of business anyone with some capital can get into.

Every once in a while, house-flipping episodes show an underperforming sale and a financial loss. That is why people in the flipping business need a cushion in case things don’t pan out.

This brings us to a slightly different approach. Some speculators start out flipping land. Yes, that’s right. Land.

Flipping Land Can Be Less Risky Than Homes

Rough land can be far less expensive to invest in than blighted homes. There are also fewer unknowns in terms of flipping. Investors won’t need to worry about replacing an electric box, mold behind walls or failing a building inspection. Land flippers can also start with a modest out-of-pocket investment and work their way up to short-term lending to finance endeavors.

The Basic Considerations

There are a few things to keep in mind when selecting a parcel. Property that abuts a street with sewer and water are preferable to scrub land in areas without services. It is not uncommon to run into difficulty drilling an artesian well or getting a permit for a septic system. Developers know this and will jump at street-ready parcels first.

Make certain the parcel qualifies as a buildable lot with the town or city. Then, hire an excavation team or clear the brush and trees yourself. The goal will be to create an open area where a home can be built while leaving suitable greenery.

The next step is to call a real estate agent and list the property. Quick land turnovers can earn several thousand dollars in profit with minimal effort. Remember to factor in hidden costs such as taxes, interest, and recording fees, among others.   

Upping The Ante To Spec Homes

After gaining experience in the land flipping business, take that knowledge and apply it to homes. Rather than scoop up a dilapidated structure, employ that land development acumen and take the next step.

Select a parcel that is in a prime residential location. What a surprise it would be to find a wooded lot at the end of a desirable neighborhood that can be developed.

Create A Budget and Obtain Financing

Work closely with a real estate agent to understand the types of homes that are trending and the average sale prices. With that information in hand, come to an agreement with a general contractor who can oversee the spec house project.

Decide on a design and calculate the total costs. Don’t forget to add 15 percent for overruns. Take that number to the bank for a building loan and put the team to work.

Get The Listing On The Market

Spec home projects can be listed with real estate agents even before the first nail is driven into a 2X4. A savvy real estate agent can get a property up online with design information, an artful rendition of the finished home and key selling points. In a perfect world, a new home buyer may be found before construction begins.

It’s important to realize that it doesn’t require significant wealth to get into the home buying and selling industry. By starting with modest, low-risk land deals and working up to spec homes, a solid living can be earned in the real estate industry. If this idea intrigues you, contact your trusted real estate agent to help you find just the right piece of land for inspiration.

Choosing the perfect home to settle in can be a tough decision. You have to weigh in on many factors including price, size, features and amenities, number of bedrooms and baths, design, and so on. However, all these factors are not enough to give you a great home ownership experience if you fall into the wrong neighborhood.

Picking the right neighborhood not only guarantees you happiness and comfort, but also helps with home appreciation for the sake of future re-sale value. In most cases, though, it can be tougher to find the perfect neighborhood than it is to find the right house.

Here are some factors that can help you find the right neighborhood:

Schools

If you have kids and the quality of their education is a priority, consider a neighborhood with a reputable school district. Even if you don’t have kids, such a neighborhood will most likely boost your home’s appreciation. You may also find it easier to find a buyer if you decide to move away from the neighborhood.

Crime Rate

No one wants to live in a neighborhood with high crime rates. This is one of the basic factors that you must consider when searching for a new neighborhood. Check the area’s crime statistics from the local authorities, search online, or ask your potential neighbors.

Transport

This is also a key factor to consider. How far do you have to drive to work from the new neighborhood? How much traffic will you encounter in the area?

If you don’t drive, are there adequate public transportation networks in place? How will your kids travel to school? Make sure that the new neighborhood meets all your transportation needs.

Basic Amenities

Is the neighborhood close to basic amenities that you are used to or that you rely on? Such amenities may include a nearby hospital, pharmacy, grocery store, bank or ATM, and law enforcement center. 

Recreational Amenities and Activities

Does the neighborhood have a park where you can go for a picnic with your partner or where your kids can play and make friends? Are there cultural attractions such as concerts, art exhibits and film shows?

Are there bars, movie theatres and restaurants close by? Are there malls or stores where you can go shopping during the weekends? What about a library, gym or community swimming pool?

If you are fun-loving person, make sure your neighborhood can provide as much fun as possible. You don’t want to start having regrets about a boring neighborhood in less than a year after settling in.

Community Engagement

Are you looking for a neighborhood with a sense of anonymity or a sense of belonging? In some neighborhoods, neighbors hardly know each other while in others, block parties and community events are a common thing. Which one would you prefer?

It is not easy to find everything you want in one place, but you can definitely get most of it in a certain neighborhood if you search well enough. Create your wish list and contact your trusted real estate professional so that they can help you find your dream house in the best neighborhood for you. 

As a potential home buyer, you are probably familiar with what a typical sale looks like. You probably also have a basic understanding of what a foreclosure is and how it works. Another type of sale that may be less understood is called a short sale.

These sales are not as popular in the market, but you may come across a few. You may even fall in love with a home that is listed as a short sale. What does this mean for you as the buyer? These are the basic facts that you need to know about these homes and the process for purchase. 

What Is A Short Sale?

A short sale is negotiated when the lender for the current homeowner’s mortgage agrees to list the house for a smaller mortgage payoff amount. This means that they will be taking in less money than what is owed on the property in order for it to sell quickly on the market.

This usually happens when the current owner of the property, the seller, is in a distressed financial state. There are many reasons why a seller may have lost the ability to pay their mortgage, such as losing income or unexpected expenses. Maybe the owners are going through a complicated divorce and need to unload the property. Regardless of the reason, the lender has an incentive to remedy this situation.

How Does It Work For The Buyer?

When it comes to purchasing a short sale property, the process is not much different than purchasing any other home on the market. The lender will want to make sure that you will be able to complete the purchase, especially under these circumstances, so you will likely need to be preapproved or prequalified before your offer can be accepted. 

One major difference is that the process is typically more drawn out than if you were making a traditional home purchase. Even though it is called a short sale, it is not something that happens very quickly. In fact, it can take an average of 2 to 4 months for a short sale to be approved and for the actual closing to take place. 

Now that you understand the basics of a short sale and how it works, you can decide if it is something that may fit into your criteria and timeline. If so, and you do find a home you love, you should not let something like a short sale stop you from getting it. Your real estate agent can help navigate you through the process to make it as simple as possible. 

If your financial situation is limited, yet you’re handy with a hammer and nails, then purchasing a fixer-upper home can be an attractive option. Fixer-uppers typically require a bevy of updates and repairs to bring the home up to current market conditions. Because of this, the listing price is often considerably less than a move-in ready home.  Your trusted real estate professional can help you find the best projects to buy and sell.

Getting Started

Fixer-uppers aren’t for everyone, but there are plenty of resources available if you plan to do most of the repair and upgrades yourself. Let’s take a look at a few top resources to tap into if you’re in the market for a fixer-upper or if you’ve already purchased one and you are ready to get started.

• At Home: A Blog by Joanna Gaines: Chip and Joanna Gaines are well known HGTV personalities who’ve made it their mission to fix up homes. A visit to Joanna Gaines’ blog is a gateway to renovation and decorating tips, products and real-time photos of projects in action. It’s a great place to go for inspiration.

• Hands-On Workshops: If there’s a Home Depot near your home, chances are you frequent it for many of your hardware needs. There’s another reason you should stop in: Hands-On Workshops. If you want guidance on things like installing bath vanities, tile backsplashes, hanging ceiling fans, or measuring and installing flooring, there’s likely an upcoming workshop at the store that can give you the know-how and confidence necessary to do it yourself.

• Jeff Patterson’s Home Repair Tutor: This YouTube channel boasts almost 120,000 subscribers and its how-to videos have racked up more than 30.5 million views. Videos include everything from how to tile a shower floor to installing a motion sensor light switch. If you need detailed step-by-step instructions on how to perform a particular job, chances are good this channel has it.

• The Craftsman Blog: Written by DIY fixer-upper and author Scott Sidler, this blog is packed with how-to advice for home improvement and restoration projects as well as general tips and information about repairs like painting, plastering and restoring windows. This is a blog for a DIY fixer-upper written by a DIY fixer-upper. 

• Your local hardware store: The big box hardware stores are great for finding just about any sort of tool you’ll need and for hosting how-to workshops. Generally, however, it’s your local, smaller hardware store that can really give you some great one-on-one advice as it pertains to your projects. These stores are typically family owned, and part of the reason they’re able to stay in business is because of their high level of customer service. This often includes guiding you on certain projects.

A fixer-upper can seem like a daunting project when you are getting started. Knowing where to look for the right resources can make a big difference.  Your trusted real estate professional is available to assist you and offer additional advice on your new endeavor.

Before delving into tax-deductible home improvements, it’s important to understand that these tax deductions won’t be applied immediately. In most cases, homeowners can only benefit, tax-wise, from their home renovations later, when they sell their home.

It’s important for homeowners to keep receipts for their improvements, though so they have proof of the improvements they made, even if it’s years later when they sell their residence.

Typical Renovations/ Home Improvements That Can Yield Eventual Tax Benefits

A home improvement is any project that substantially adds value to a home. It can include adapting it to be more useful or be improvements that allow it to be used differently. The following are some general home improvements that can yield tax savings when a home is sold for a profit.

• Room additions.
• Upgrades to plumbing.
• Kitchen improvements.
• A new roof.
• New bathrooms.
• Upgraded landscaping.
• Improvements to fencing.
• New decks.
• Improved wiring.
• New walkways.
• Driveway improvements.
• Plumbing upgrades.

How Delayed Tax Benefits Work

While a homeowner can’t take the amount of money they spent on one of the above home improvements and deduct it that same tax year, they can sometimes benefit from the investment in their home. This is true because a homeowner can effectively reduce the amount of taxes they have to pay if they sell their home for a profit down the road.

When an improvement is made, the cost of those improvements are added to the tax basis of a home. The basis is the investment in a home for tax purposes. The greater this number becomes, the less the profit is from selling a home.

The following explains it a little better:

Example Of Tax Basis And Home Improvement Tax Savings

A fictional homeowner purchases their home for $600,000 and sells their home 20 years later for $1,000,000. Their original “profit” from the sale would have been $400,000, which would have been taxable income at the time of the sale. However, throughout the 15 years when they resided in the home, this homeowner made around $60,000 worth of home improvements, including a roof improvement and a kitchen update. The $60,000 is then added to the original investment this homeowner made in their home, bringing their tax basis to $660,000.

The homeowner’s profit when they sell their home is then reduced from $400,000 to $340,000. Many homeowners use home improvements as a way to reduce the amount of taxes they will one day have to pay when they sell their home for a substantial profit.

Other Ways For Homeowners To Benefit From Their Home This Tax Season

Homeowners can make their home work for them each and every tax year by qualifying for the home office deduction. This only works if they own and operate a legitimate business out of their home, though. A part of the home must be used either regularly or exclusively for the business to qualify.

The above is some pertinent information on how homeowners can use home improvements to reduce their tax burden.   As always, check with your trusted tax professional for accurate advice on your personal situation.

The digital age has changed the way buyers browse for and purchase goods and services, including real estate. While home buyers still can check out property listings via a print newspaper or by driving through desired neighborhoods in hopes of finding a “for sale” sign, digital sources offer more options and can make the home buying process easier. 

The National Association of REALTORS® (NAR) states in their 2017 Report: Real Estate in a Digital Age, that 44-percent of home buyers look online when beginning their search.

Social Media As Sources For Home Buyers

According to the Pew Research Center, 68-percent or two-thirds of U.S. adults use Facebook. In addition to that popular social media site, American adults regularly use Twitter, Instagram, Pinterest, and YouTube on a daily basis for entertainment, social engagement, shopping, and news. These sites also can be excellent sources for home buyers.

Home buyers now have instant, easy access to a wide variety of property listings beyond those featured on an individual real estate agency’s website. Many real estate agents post listings on social media with interior/exterior photos and some with virtual tours. Sites like YouTube offer valuable resources particular for first-time home buyers, from tips to how-to’s. 

Real Estate Apps

More than 90-percent of all real estate firms have a website. Visiting these sites are a great starting point and ideal way to connect with an agent that knows the local market. However, home buyers may also consider real estate apps to enhance the process. Even if not tech savvy, these apps are easy to use. 

The most used real estate apps are available for both Android and iOS. Digital Trends offers a breakdown of several of the most popular. Ask a real estate agent if they have one that’s specific to their firm.

These apps can help:

• Customize a search by location, property type, features, and price
• Reveal the worth or rental value of a property
• Show floor plans and exterior/interior photos
• Provide details about neighborhoods
• Offer lending institution information
• Directly connect buyers with a real estate agent

Stay Connected With A Real Estate Agent

Cell phones appear to be everywhere today and research shows that 77-percent of Americans own a smartphone. With that smartphone it’s easier than ever to stay connected with a real estate agent when buying a home. An agent can text or email potential listings to the phone, schedule open house meetings, and send updates regarding the offer just made on the perfect home.

Home buyers that can embrace the digital age have the opportunity to take advantage of the multiple platforms and tools available for making a real estate purchase.