House hunting can be a fun, yet frustrating experience. While it’s exciting to look for a home of your own, you also have to recognize that sellers are trying to put their homes in the best possible light. By recognizing common phrases, you’ll be better equipped to know which homes should be avoided altogether.
“Pride of Ownership Shows”
At first glance, this phrase implies that the owners have taken good care of the property. However, in most cases, it also means little, if anything, has been updated. You can look forward to decades-old tiling, antique appliances, and more than a few rooms that need a remodel.
“In One of the Hottest Neighborhoods”
If you see a descriptive phrase that uses words like “hot” or “up and coming,” be aware that you’re expectations may fall short of the reality. Often, sellers will use these terms to describe neighborhoods that are expected to take a good turn and attract developers. Typically, these neighborhoods will lack nearby amenities and may only show the promise of improvement.
Even if you are an investor, you might want to stay away from properties with this as a headline. It indicates a property in distress most of the time and suggests you will need to make several updates just to make the property welcoming. If you’re looking for a home, this may not be the best choice for you.
“Offered as Is”
This is another one that would be best avoided. Often, “as is” suggests the owner knows there’s a great deal wrong with the property and he’s hoping to pass his problems onto an ambitious buyer. By the time the needed repairs are complete, you may have spent more money than the home is actually worth.
Think condo, but smaller. If you’re on the market for a single-family home, you’re probably looking for something roomy and something with potential for expansion. You’ll find neither in homes that are marketed with this phrase. These are typically very small homes that won’t suit your needs.
This is a deceptive phrase indicating you’ll probably spending a few weeks just getting the yard presentable. The current owner probably hasn’t put much effort into maintaining the “curb appeal” of the home. Of course, if you love the rest of the home and want to spend the money, you can always hire professional landscapers to do the dirty work for you.
These are some common phrases used in real estate marketing. While you should be wary of them, not every one of them is the kiss of death. Be aware that you may be getting more than you expect, but also keep an open mind. You may end up getting that diamond in the ruff.
If working with a real estate appraiser feels like a frustrating and complicated matter, you’re not alone. There’s a reason it feels as though your appraiser is keeping something from you and that’s because he or she is keeping secrets. Here are a few things you probably didn’t know about your appraiser.
- Appraisers are Under Pressure
When the housing bubble burst a few years ago and created the Great Recession, mortgage lenders weren’t the only ones that took the heat. Appraisers also came under fire and the Dodd-Frank Wall Street Reform and Protection Act of 2010 now requires the government to keep a closer eye on all real estate appraisers. This is why the process is so much more complex and takes more time.
- Appraisers are No Longer Local
Those same reforms have created a situation in which appraisers are often sent to regions with which they have no familiarity. Since they don’t know the markets that are local to the properties they’re appraising, their estimates may be either too low or too high. This can keep a homeowner from getting the true value for their home and, conversely, can prevent a buyer from affording a home that should be within their range.
- Who Does the Appraiser Really Work For?
In a normal home-buying scenario, the buyer pays the fee for the appraiser, which can fall anywhere within the $350 to $500 range. Even so, the appraiser doesn’t work for you and his reports go directly to the lender. This means that neither the buyer nor the seller will likely see the appraisal firsthand. According to federal law, you have to be given a copy of the appraisal, if you submit a written request for it. However, most people aren’t aware of the law, so they never see the appraisal for which they paid.
- Always Get a Second Opinion
It can be beneficial to get an appraisal of your own in advance, so you’ll have something to compare to the official appraiser’s findings. This can be fairly simple by asking your real estate agent to deliver a broker’s price opinion. While your lender may not accept the broker’s opinion in place of the appraisal, it does provide that point of reference. A difference in estimates can end up saving you as much as $20,000 on a home purchase.
Appraisers won’t tell you everything about their jobs. This is partly because they have to react to pressure from banks and that affects every appraisal. By staying alert and seeking outside advice, you may be able to better ensure your appraisal is fair and on point with the area market.
Having access to an MLS database can put you one step ahead of the the market in pursuit of a home. So what exactly is and MLS? MLS stands for “Multiple Listing Service” and it’s a database of homes or properties for sale. These databases typically populate major real estate listing sites like Realtor.com, Redfin.com and the many others you see online but don’t always hold all of what’s available in the market. Generally speaking, it’s always smart to work with a broker, since they have direct access to more listings and will help you jump on great opportunities.
So how do you navigate real estate listings, find the best deals, and win big? I’ll take you through a couple points below:
Have your ducks in a row
Simply put: get pre-qualified. This should be your first step if you’re seriously considering a home because it’ll impact your next moves in a few ways. Being pre-qualified means a lender has evaluated your financial picture, including income, debt, and assets and feels that you’re qualified for a home at a certain price. Sellers want to know you’re serious and have pre-qualified for a mortgage, and one step further, have a pre-approval letter from the lender as well. In very competitive markets, a buyer with a mortgage can be at a disadvantage compared to partial or all cash buyers. All cash deals are quick and easy and don’t involve outside lenders to help the buyer. So, the lesson here is to have that pre-qualification, and if you want to make yourself shine a bit brighter, a pre-approval letter from the mortgage company willing to back you financially.
Be in front of the pack
Coming across a fresh listing will hopefully put you ahead of the competition. But don’t think a quick pick up out of the gate will give you a great deal. New listings tend to be priced high, with the idea of a seller decreasing the sale price over time depending on buyer interest and comped properties in the area. However, there’s always a chance of properties priced far below their actual value! In a very competitive market, these little blips on the radar can happen, so a ‘shark’ like attitude is necessary when pursuing listings. Additionally, you never know the circumstances of the seller; there may be underlying reasons as to why they are pricing a home so low.
Be the last
So I first spoke of being ahead and now I’m talking about being last? I hope to not confuse you, but there’s a reason for this. According to a recent Forbes article, selling a home can take time, and could cause a great deal if isn’t sold in a timely manner. In some cases, sellers could own two homes, two mortgages, and a financial burden rising every month. Because of this, prices are lowered and good deals pop up. Ask your real estate agent to send over properties past 6 months on the market, with the hope of finding one of these great deals.
These are just a few ideas to consider when starting the search for a home. Having a real estate broker, a good idea of your financial situation, and an understanding of how to approach listings in the MLS database will set you in a solid place for finding a great home.