Lee Morof's Real Estate Blog

All real estate transactions come with at least some negotiations, and some transactions are heavily negotiated from start to finish. As a home buyer, you understandably want to negotiate the best overall deal possible while successfully reaching your goal of closing on the home you have fallen in love with. To be truly successful with this process, it is important that you understand how to negotiate with the seller and the seller’s real estate agent.

Understand The Seller’s Position

In order to be successful with negotiations, you will need to understand the motivations and desires of the other party. A seller may have an emotional attachment to his or her home, but he or she also may have a desire or need to move. Some may have a firm bottom line for a price that they can accept or concessions that they are able to pay for out of pocket. While some may be unreasonable, most are willing to compromise and negotiate provided that your offer is feasible for their financial situation.

Define Your True Requirements

Just as a seller will have a hard and fast bottom line, you also may have specific requirements that you need to meet. This may be a firm closing date, the need to have some of your closing costs paid or a firm sales price that you do not want to exceed. While negotiations inevitably may have you asking for slightly more than what you truly need, it is important to define for yourself what your true requirements are and to remain focused on these when negotiating.

Be Willing To Compromise

When offers and counter-offers are flying back and forth between a buyer and seller, it is easy to feel stressed and even challenged by the other party. While there are times when a seller’s counter-offer may be unreasonable, most are reasonable and fair within limits. You may decide to submit a counter-offer as well, but some compromise will show the other party that you are willing to work with them.

From negotiating a sales price to asking the seller to make some repairs to the home after the inspection has been completed, there may be different times during the process when you need to negotiate. Consider these tips to help you more successfully negotiate with the seller and seller’s agent. A skilled real estate agent can also be instrumental with representing you during negotiations, and you can seek assistance from an agent today.

It was very common decades ago for several generations of a family to live together, and this may have included kids, parents, grandparents and even great-grandparents in some cases. Today’s modern homes are generally designed to accommodate a more traditional modern family, which includes only parents and kids or for only a married couple without kids. When you are buying a home for other generations as well, it is important for you to pay attention to a few important points.

The Right Living Spaces and Accommodations

Generally, a home with a floor plan that is most suitable for multiple generations is one with different wings of bedrooms and several different living areas. There is something to be said for togetherness, but you may find that having several different living areas as well as having a floor plan that keeps older family members’ bedrooms away from the bedrooms of younger family members is a good idea.

After all, there will be plenty of times when older family members may want to chit chat or read a good book in a living area while others may want to turn on the TV or music. In addition, they may have different sleeping schedules, and noise from either of their rooms can be bothersome.

Special Considerations for Older and Younger Generations

You should also think about the special needs of older and younger generations. Very young family members, for example, may benefit from a large, enclosed backyard, a play room and well-insulated windows or a home location removed from loud busy roadways. Older generations may prefer a bedroom on the first floor, special safety features in the bathroom and a home without many steps or steep elevations outdoors.

It may be challenging to find a home that can accommodate older and younger generations perfectly, so some modifications may need to be made to a home after purchasing it.

Finding the perfect home for a basic nuclear family is rarely easy, and your challenges may be more significant when you are searching for a home for a multi-generational family. While you may have more needs and desires when looking for a home that is ideal for a larger number of people with more variation in their ages, the fact is that most will be able to find a great home that is ideal for most or all of their needs with a little time and effort.

When you purchase a new home, escrow is a word that you will hear numerous times from different parties. There are several types of escrow accounts that will be established, and you may be wondering where your money will go when placed in an escrow account or how it is applied to your transaction. By taking time to learn more about the escrow process, you can be a more informed buyer.

Your Initial Escrow Deposit

Within a short period of time after your offer is accepted by the buyer, you will be required to make an escrow deposit to the title company. Typically, you will write a check for the escrow deposit, and your title agent will hold the funds in a non-interest bearing account. These are funds that will be applied to your down payment at closing, and they serve as a good faith of your interest to proceed to the seller.

In the event you back out of the contract after the option period has passed, the escrow deposit may be handed over to the seller and would not be refunded to you.

Escrows for Taxes and Insurance

In addition to this type of escrow deposit, you may also hear about an escrow account for your property taxes and insurance. Setting up this type of escrow account may be a requirement by your lender, but it is not always required. Essentially, this is the account that your property taxes and homeowners insurance will be paid out of. You will pay a specified amount of money into the escrow account to establish a balance at closing, and a portion of your monthly payments will be applied to taxes and insurance as well.

The amount of money that is required at closing will be dependent on the month that you close as well as the annual costs for taxes and insurance.

Essentially, escrow accounts are established to pay for specified expenses that you are required to pay for as a buyer. The initial escrow deposit for the sales contract is a short-term type of escrow account, and the property tax and insurance escrow will remain intact until your mortgage is paid off in most cases.

Now that you know more about the escrows that you will be required to contribute money to as a buyer, you will be a more informed buyer when making your real estate purchase.

As a home buyer, you may go through a number of different steps to ensure that the property that you purchase is in great condition. For example, you may complete an initial walk-through or even several home tours before you make an offer. You may also order a property inspection and even negotiate for the seller to make some repairs on your behalf.

A day or two before your closing date, you may set up a final home inspection to ensure that the home is still in the same condition as the initial walk-through. In most cases, there will be no problems with the final inspection. However, in the event that there is a problem with the final inspection, you will need to know how to handle it.

Work With Your Real Estate Agent

As a first step, you should discuss the issues with your real estate agent. Your real estate agent may have some strategies or ideas that can be used to help you overcome the issue in the best possible way. Minor issues may be resolved with a last minute negotiation to the sales contract. More significant issues may need to be rectified prior to closing, and you may need to delay the closing by a few days or longer until any issues are resolved.

Consider Walking Away

It may be rare for a property to have issues during the final home inspection, and most issues that do arise at this late stage in the buying process may be resolved through negotiations between the buyer and seller. However, in the event that the seller plays hardball and refuses to work with you to resolve the matter, or in the event that the issue is so significant that you are not comfortable with it, it may be an option to walk away from the property.

In most sales contracts, wording is present that requires the property to be delivered to the buyer in the same condition as it was when the contract was signed less general wear and tear. Walking away may not be ideal, but it may be the best option in some cases.

Making a final home inspection is not a requirement, but it is advisable. It can ensure that the home your purchase is in the same condition as it was when you did the initial walk-through, and you can apply these tips if you discover that the home is not in the same condition.

Whether you are preparing to purchase your first home or it has been many years since you last walked through the home buying process, you may be starting to feel overwhelmed at the thought of all of the work that lies in front of you. From concerns about finding the right home to the physical act of relocating all of your belongings after the closing, there is certainly a lot to think about. While each home buying transaction is unique, the most successful home buyers have typically adopted a few behaviors. You may keep these in mind to help you navigate through the process with success.

Keep An Eye On Your Budget

Financial stress when buying a home is common. You may have saved for years to afford your down payment, but there are various expenses that some may have not calculated or planned for. It is important to leave extra funds available for unexpected expenses, such as paying for the appraisal up-front on the home you have fallen in love with. Likewise, keep a close eye on your budget so that you are aware of your financial situation at all times.

Be Available And Flexible

It is imperative that you remain available and flexible as much as possible. Your real estate agent may call you at the last minute with a great new listing that has come on the market, and you may need to be flexible with your schedule to see this property before other buyers do. In addition, you may need to be flexible and accommodating with regards to contract negotiations, working with title company requests and more.

Seek Advice And Knowledge

Buying a home does not have to be stressful, but it also is not something that you do every day. There is a lot for even an experienced home buyer to learn, and you should be prepared to seek advice and to educate yourself along the way. Ask questions as necessary, and use the Internet for additional research.

Home buying is a process, and you may consider taking one day at a time as you proceed through the journey to reach your ultimate goal. A skilled real estate agent can guide you through the process and can help you to more successfully reach your goal. Reach out to a real estate agent today to begin looking for your new home.

When you buy a home, you may have dreams of settling into a beautiful new space that meets your needs and that your family can feel comfortable in. While many will enjoy this vision of domestic tranquility after taking ownership of their dream home, others have had their dream turn into a veritable nightmare due to some simple mistakes or oversights on their part. By understanding these mistakes, you can avoid making them yourself.

Paying Too Much For The Property

One the surface, the main cost of buying a home relates to the sales price, and it is true that your monthly housing payment may be the primary related expense. However, other expenses such as homeowners insurance, property taxes, repair and maintenance costs, utilities and more will all need to be factored into the cost of home ownership. Some buyers believe that because an online calculator or a lending professional tells them that they can afford a high priced home that it is the case. You can review your budget and estimate all related home expenses to determine how affordable a specific property is for you.

Finding Out That The Location Is Undesirable

There are many things that can make a location undesirable, and you should take time to become comfortable with the location before making an offer. Consider, for example, if the neighbors like to throw loud parties on the weekend or if there is a teen driver that likes to speed down the street. If you are buying a property with open land or vacant buildings around it, consider researching zoning, and think about future uses for these properties that could influence value and desire.

Discovering That Your Property Is In Bad Condition

Some home buyers discover after purchasing a property that it is not in the best condition, and some even learn that their home needs tens of thousands of dollars of repair work or more. Even properties that appear to be in great condition on the surface may have hidden issues with the foundation, structure, roof, pipes or electrical work, to name a few. You can order a property inspection to learn more about the true condition of a property.

These are among the most common issues that can turn a dream home into a nightmare. When you work with a local real estate agent when buying a home, your agent can help you to avoid unpleasant and costly mistakes such as these.

Few people consider the tax implications of buying a home, but there are many. Here are a few ways buying a home can impact the amount of tax you pay.

Mortgage Interest

Most people put down the minimum amount of money needed to buy a home and finance the rest, usually over 30 years. This means that, especially in the early years of the loan, most of what they are paying are the finance charges. The good news is that all that interest is tax-deductible for people who itemize their deductions, which adds up to several thousands of dollars in deductions annually. You also can deduct interest on home equity loans, up to a certain amount.

Property Taxes

Another way that buying a home affects your taxes is property taxes. In most jurisdictions, property taxes are based to some extent on the price you pay for your home, meaning the more you pay, the higher your taxes will be. The positive is that, just as with mortgage interest, those property taxes you pay are deductible if you itemize deductions on your income tax return.

Points

Points are up-front fees you pay to lower the interest rate on your home mortgage. If you paid them when buying your home, you can deduct the entire amount on your tax return. If you paid points on a refinance or home equity loan, you have to deduct them a bit at a time over the entire term of the loan.

Tax-Free Appreciation

One of the reasons many people treat homes as an investment is the favorable tax treatment on profit from a sale. For example, in the United States as long as the home is your principal residence for at least two years out of the five years before you sell, you can exclude up to a $250,000 gain from capital gains taxes, or $500,000 if you are married.

Retirement Accounts

Buying a home for the first time is one of the few situations in which the government allows you take money from retirement accounts early without paying a tax penalty. For example, you can take up to $10,000 out of an individual retirement account without having to pay the early withdrawal penalty, although you still might face income taxes if your contributions were tax-deferred.

If you are considering buying a home, contact a real estate professional to discuss the potential tax and other benefits.

There are few things that can be more stressful than buying or selling a home. When you are buying and selling a home at the same time, your stress level may understandably skyrocket through the roof. There may be financial aspects of both transactions that may be cause you stress, and you may be dealing with logistical issues or simply feel stressed by the stacks of documents piling up for both transactions. While this will inevitably be a challenging time in your life, you can more easily navigate through the transactions with success by following a few tips.

Consider the Timing of Both Transactions

One of the best things you can do when buying and selling a home at the same time is to plan ahead and consider the timing of both transactions. You may get lucky enough to get an offer on your home from a buyer who wants to close just a few days before you close on your new home. However, it is more likely that these two transactions may be finalized weeks or longer apart from each other. You may need to plan on finding an interim home or paying double mortgages for a period of time. You may consider which of these two options is more preferable to you based on your work situation, your family’s needs and your budget.

Prepare a Budget Ahead of Time and Update It Periodically

Financial stress can mount during this period of time. You will need to make a good faith deposit and pay for third party reports and mortgage application fees for your new home purchase. You may also need to pay money to make repairs and to stage your current home before you list it. It is common to rent a storage unit and to pay for boxes and moving supplies as well.

In addition, a buyer for your current home may request that you make repairs to your home before closing. It is important that you prepare a budget so that you can pay for all of these expenses as they arise, and you should consider leaving yourself ample funds for unexpected expenses. If you run into a cash crunch, consider completing the sale of your current home entirely before going under contract with your new home purchase.

Use the Same Real Estate Agent for Both Transactions

The knowledge and support of a real estate agent can be beneficial to you for both transactions, and you may consider using the services of the same agent for both. Dealing with one person who is familiar with your goals and needs can be truly beneficial to you throughout the entire process, and he or she may offer insight about the best steps to take to make the transition from one home to the other smoother for your family.

While buying and selling real estate can be stressful, you do not have to make the process more difficult than it needs to be. You can set up a time to meet with a real estate agent today to begin discussing your plans and to take the initial step.

Your home is your castle, your own little piece of the American dream. But lately, your little corner of the world has been feeling cramped and you find yourself eyeing those larger homes. Is it time to pull up stakes and move on from your starter home?

Growing Family

If you’ve added to your family in recent years, you may have more bodies than bedrooms. A two-bedroom home may have been a great idea when it was just you and your spouse, but with two kids, you’re starting to have turf wars over the play area.

Overflowing With Stuff

From an overflowing toy chest to closets packed so tightly with shoes and coats you risk an avalanche every time you open the door, your home just doesn’t have the space to keep all your things. You may have even had to move some things off-site, spending money to rent storage space to keep that antique dresser your grandmother left you or the set of state spoons you carefully collected during your college years.

No Rest For The Weary

You’d love to spend an afternoon soaking in the tub, but before the warmth of the water can take you away, there’s a banging on the door of the only bathroom in the house and a chorus of “hurry up” invading your quiet time. And the man cave you dreamed of? Those visions of a big screen television were shattered by the realization you needed somewhere for the kids to sleep.

No Room For Extras

When you first moved in, the two-car garage doubled as your woodworking shop. Now, the equipment has been sent to storage to make room for the family’s second car. You’d love to take up organic gardening, but your tiny yard barely has room for a grill and a lawn chair. You’d love to host your friends visiting from out of state, but there is hardly room for their luggage, much less them.

Changes In Career

You may have opted for a starter home when you first entered the market because you had a smaller income. Now, thanks to changes in careers or promotions at work, you can afford a home with greater square footage and room for your growing family that will provide the space you need for many years of happy memories.

Home prices across the country are starting to rise. Contact your local real estate agent today and take advantage of the opportunity to give your family the most space at the best price now.

Many buyers anticipate the day they drive to their new home. Then it happens: the movers pull up. It’s time to move everything in. This can be a daunting task, but following a few steps will break down the work and careful planning will maximize space in the years ahead.

Clear Your Space

Go through each room to make sure the seller removed all belongings. Contact the real estate agent if the seller did not do this. Check the condition of all surfaces to determine how much preparation may be required.

Place Boxes In Correct Rooms

Boxes should be marked by room and either carry a label detailing what’s inside or be matched to a list showing what’s inside. Put each box in the correct room.

Place Boxes In Order Of Need

In each room, place boxes that will not be immediately needed against the far wall. Place boxes needed sooner in front of or on top of those boxes.

Eliminate Excess Items

If this wasn’t done while packing, buyers should stop any unwanted belongings from being taken into the house.

Create A Strategy

Unpacking does not have to be done in one day. Create a strategy for unpacking in three steps: immediate, secondary, and long-term needs.

Immediate Unpacking

Unpack what you need in the next couple of days. This will include bedding, toiletries, basic cooking equipment, and a few changes of clothing.

Secondary Unpacking

In the first week, unpack secondary items. Each day, unpack these items for one or two rooms. In the bedroom, for example, unpack your clothing and accessories. In the kitchen, unpack the rest of what you use for everyday cooking and eating. Do the same for other rooms.

Long-term Unpacking

By the end of the first month, decide what you are going to do with items you don’t use every day. Use extra closets, cupboards, basement or storage rooms, outdoor sheds, and the like. Remember where you put things so you can find them later.

Organize as You Go

Put items away in an organized fashion. Don’t just haphazardly unpack and toss things. It’s better to unpack more slowly and take time to put things away thoughtfully.

Call your real estate agent for moving-in tips and lists to track belongings. Take your time with unpacking and you will create a home where you can find things easily, maintain livable spaces, and enjoy a spacious environment.