Thinking of Selling Without an Agent? 6 Reasons Why You Shouldn’t

You wouldn’t try to rewire your home, give yourself a root canal, or replace the engine in your car on your own without the help of a professional, would you?

Well, selling a home is no different. This is a critical asset and one of high value, and the selling transaction should be handled with the representation of a real estate agent.

The thing is, agents charge commissions to sell homes. It’s how they make money. It’s their job. You wouldn’t expect to report to the office 8 hours a day without a paycheck. Your tasks are valuable to your company, as are the tasks that agents handle to ensure a successful transaction.

But many sellers try to take the FSBO route in an effort to save money. But what ends up happening is that many sellers not only end up with less money in their pocket at the end of the day, but they also put themselves at risk for litigation.

If you’re planning to sell your home and are thinking of going solo, consider the following reasons why you should think twice.

1. Emotions Could Get the Best of You

Buying and selling real estate is an emotionally-charged situation. As a seller, you’re probably emotionally vested in your home, especially given the memories you’ve likely built up in that place. It can be tough to keep these emotions out of the picture when negotiating with a buyer.

Instead, a real estate agent can be a neutral buffer that you need to serve as the middleman between you and the buyer. Your agent will be able to keep a cool head and make sure that all pertinent matters are handled appropriately and professionally without letting emotions cloud better judgment.

This will help you avoid making any regrettable mistakes, such as overpricing, overreacting to a lowball offer, or throwing in the towel if you’re in a rush to sell. Having an agent in your corner will help to keep these emotions from getting in the way of making sound decisions.

2. You’ll Have to Spend a Lot of Time Booking and Hosting Showings

One of the many things that real estate agents do is book showings for their listed homes. After all, buyers need to have a chance to scope out a home in person, and booking a showing is the way to do that.

But if you’re selling on your own, you’ll be tasked with taking all these calls and making sure that the people who want to meander throughout your home are qualified and even trustworthy enough. Taking these calls and qualifying buyers is a lot of work and takes a lot of time. It would be a real nuisance, especially if you work full-time and have to put up with your job being interrupted regularly.

A real estate agent will be able to put a cap on these hassles and book showings with buyers who are more likely to be serious about buying. They’re trained to ask the right questions to identify how serious or motivated a potential prospect is. Listing agents will also ensure that buyer agents are present during the showings.

If you do this on your own, you’ll either have to be present during the showing or allow a complete stranger to walk around your home unattended, neither of which is recommended.

3. Negotiating Can Prove to be Very Difficult

How much experience do you have negotiating real estate deals? Unless you’re an agent yourself, you probably don’t have much. The thing is, negotiating is a critical component to ensuring a successful transaction.

An experienced listing agent will have already negotiated several home sales and will know exactly what needs to be said and done in order to ensure there’s a meeting of the minds between buyer and seller.

Sellers who try to negotiate on their own probably aren’t familiar with local market conditions or customs at the negotiating table. Instead, agents have their finger on the pulse of the market and are better able to understand what’s currently driving demand. This, in turn, gives them the benefit of knowing what terms of the contract are worth negotiating for versus those that they can let the buyer take.

4. You Likely Don’t Know How to Come Up With an Appropriate Listing Price

One of the most important aspects of selling a home is coming up with an appropriate listing price. Many sellers have a natural inclination to go high with their listing price, which is a bad idea if it’s not in line with the market. If you price higher than what your home is worth, buyers will likely gloss over your home in favor of a property that’s more fairly priced.

This can leave you with no offers to consider and will cause your listing to become stale. The longer it sits in the market, the more buyers will start to think there’s a problem with it. At some point, you’ll have to drop the price. You may even have to lower it below what the market value dictates just to get some attention.

Instead, an agent will be able to find out what similar homes sold for in the recent past in your area and help you come up with a competitive listing price that can help you get your home sold more quickly and for a higher price.

5. You Could Put Yourself at Risk of Legal Action

A real estate contract is legally binding. That means that all parties involved have a legal obligation to follow through with its terms. There are plenty of legalities involved in a real estate contract, so if you are not prudent enough to make sure the contract is legally airtight, you could find yourself at risk for litigation.

6. You’ll Have a Much Shorter Marketing Reach

Real estate agents are masters at marketing homes for sale. It’s one of their best traits – and most important ones. A crucial aspect of selling a home is being able to reach the masses of buyers out there.

When selling, how will you reach buyers if you’re taking on this job on your own?

Instead, an agent will use every marketing avenue they have available that would effectively reach buyers. They have analytic tools and know how to promote their listings to other agents in the area to find a buyer sooner rather than later. Having this type of marketing help is crucial to a successful sale.

The Bottom Line

If you’re thinking of selling soon, one of the first things you should do is start interviewing agents. Going it alone is not recommended at all. You’ll leave yourself at risk of legal action and could even end up selling for a lot less than you should.

Plus, it will take up a lot more time that you probably have and can end up being a stressful situation if you’re inexperienced with this type of transaction. Your best bet is to leave it to the pros and call in an agent to help you sell your home.

Investing in Real Estate Investment Trusts (REITs): 101

Investing in real estate is a great way to build wealth over time and even make a very handsome income as a career. Whether you buy a property to rent out, fix and flip a fixer-upper, or just buy in hopes of a property appreciating in value, making a lot of money in real estate is possible.

But there’s another way to make money in real estate without actually having to deal with physical properties: with REITs.

What Are REITs?

Real Estate Investment Trusts (REITs) are companies of shareholders that own and operate different types of properties that generate income. The properties are typically large scale and include office buildings, industrial warehouses, commercial units, shopping malls, apartments, hotels, and storage facilities.

Instead of developing properties in an effort to resell them for a profit, REITs buy and develop properties mainly to operate them to generate an income over the long haul.

Many REITs are publicly traded on the stock exchange, while others are private. It’s important for investors to distinguish between the two before deciding which type to invest in. You can buy REITs through a broker, or purchase shares in a REIT mutual fund or exchange-traded fund (ETF).

When you purchase shares of a REIT, the REIT pools that money with other investors’ capital to make investments. REITs do their due diligence when scoping out properties to buy and make informed purchasing decisions in order to ensure the properties that are being added to the investment portfolio will be big income drivers.

The REIT earns income from rent payments or from interest on real estate debt. The dividends are then distributed among the investors according to how many shares they’ve got invested.

What Types of REITs Are There?

Equity REIT – These are the more common types of REITs that invest in real estate to generate income from rent. Mainly, rent is collected from leases. The money collected is then distributed as dividends to shareholders who have a stake in these properties.

Mortgage REIT – These types of REITs either lend money to real estate owners or purchase existing mortgage-backed securities. Income is generated as a result of the interest earned on the loans, minus the cost of funding such loans.

Hybrid REIT – These combine investments in properties and mortgages. In this case, REITs own properties while providing mortgages to real estate investors. Income with these types of REITs is generated from both rent and interest earned.

Why Invest in REITs?

There are plenty of reasons why you might choose REITs, including the following:

Easy to liquidate – With publicly-traded REITs, you can enjoy liquidity by easily selling your shares.

Provides a steady source of income – The dividends that are earned from a REIT can provide you with a steady stream of income at each pay period.

Diversified investment portfolio – It’s suggested that investors have a diversified investment portfolio that’s made up of different investment products in order to protect them in case one particular investment vehicle does poorly. Throwing REITs into the mix can be a great way to diversify your portfolio.

Relatively safe investment – Generally speaking, real estate tends to do well in terms of appreciation, and REITs are directly impacted by the level of appreciation of the properties invested in.

Hands-off investment – REITs don’t usually require much involvement on your part, so there’s little for you to do.

Are There Any Drawbacks to REITs?

While there are plenty of reasons why you might want to consider looking down some capital in REITs, there are some risks that you should know about first.

Fees – Many REITs charge high fees in exchange for all the services provided to find and buy income-generating properties, as well as for property management and administrative costs. These fees can be rather high and can eat into your profits.

Little control – Since you don’t actually own the property on your own, you don’t have the same level of control over your investment as you would if you owned a physical property yourself.

Slow growth – About 90% of profits made are distributed among investors. That only leaves 10% to be reinvested back into the company, which means growth can be rather slow.

Vulnerability to market volatility – REITs that are publicly traded on the stock market are subject to the same risks as other stocks. And fluctuation in share prices will directly affect investors’ bottom line.

The Bottom Line

REITs present a unique investment opportunity for investors who are interested in investing in the real estate market in addition to owning physical property. If you’re thinking about adding this type of investment vehicle to your portfolio, make sure you weigh the pros and cons. Consult with a real estate agent and investment advisor to help you decipher which avenue is best for you.

How Do Short Sales and Foreclosures Compare?

No buyer wants to pay more for a home than they have to. Instead, buyers are typically on the prowl for a good deal, and some look to short sales and foreclosures in an effort to slash a few thousand dollars off the final purchase price of a home.

Both short sales and foreclosures are last resorts for homeowners who are struggling to keep up with their mortgage payments. When they default on their home loans, they either have to sell short or lose their home through foreclosure.

While this is a negative situation for homeowners, it can be a good opportunity for buyers to snag a good deal. That said, there are plenty of factors involved in buying these types of homes that can complicate the transaction.

So, what exactly are short sales and foreclosures? How are they similar? And how do they differ?

What is a Short Sale?

A short sale happens when a homeowner has trouble making their mortgage payments and resorts to selling for less than what their home is currently worth in an effort to avoid foreclosure. This situation usually happens when the homeowner owes more on the home loan than the property is currently worth.

With a short sale, the lender allows the homeowner to get out of their mortgage and avoid foreclosure by selling for less than what they would normally have fetched if selling under normal circumstances. The owner basically asks the lender to accept a lower amount than what is currently owed on the mortgage. If the lender accepts, the mortgage will be settled and the homeowner will be released from the mortgage.

Typical home sales don’t involve lenders, but with short sales, the mortgage lender is part of the process. In fact, the lender will have to approve the short sale in order for it to go through. Lenders typically prefer to deal with short sales than foreclosures because of all the expenses and red tape associated with the latter.

Obviously, the seller will want to recoup as much as possible on the sale of their home, but the ultimate goal is to be released from the mortgage without having their home repossessed.

Short sales can take anywhere between 90 to 120 days on average to close, which is longer than the average time needed to sell a home under normal circumstances. That’s because a number of details will need to be ironed out, including getting buyers to agree to cover the cost of making repairs and covering typical closing costs that would normally be paid for by sellers.

What is a Foreclosure?

When homeowners default on their mortgage and are unable to sell their home through a short sale, a foreclosure may be imminent. When this happens, the homeowner loses possession of the home, and the lender ends taking back the property. Since the home is used as collateral for the mortgage, lenders can repossess this valuable asset when borrowers default on their payments.

A Notice of Default will be filed with the local county’s office after three to six months of the homeowner missing mortgage payments. This will inform the borrower in writing of the risk of foreclosure. The homeowner then has between 30 to 120 days after receiving this notice to attempt to settle their mortgage debt with the lender.

If nothing is done about the debt owed, the lender can initiate the foreclosure process and sell the property at a foreclosure auction. Usually, these types of properties are bought without buyers actually seeing the homes or receiving any warranties.

How Do Short Sales and Foreclosures Differ?

While both short sales and foreclosures involve the homeowners vacating the premises, the end results differ somewhat. With a short sale, the homeowner still has some level of control over the sale process. Further – and perhaps more importantly – owners are still allowed to live in the home while it’s on the market until a deal is reached and the closing date arrives.

With a foreclosure, on the other hand, the owner is evicted from the premises and is left with no equity when all is said and done. Further, foreclosures usually involve many more fees, penalties, and legal costs compared to short sales.

Both short sales and foreclosures are unfortunate events. But at the end of the day, short sales can leave homeowners with fewer financial headaches than foreclosures.

The Bottom Line

Homeowners who are struggling to make their mortgage payments should seek out assistance in order to avoid a short sale or foreclosure. And for buyers, it’s it’s important to work with a real estate agent who’s well-versed in buying distressed properties in order to get a good deal and ensure the transaction is as seamless as can be.

How to Prepare Your Home For an Appraisal

When you find a buyer for your home and strike a deal, there are plenty of events that will follow, and an appraisal is one of them. Lenders order appraisals in order to make sure that whatever price the buyer agreed to pay is in line with the current housing market.

But sellers can have their own appraisals ordered (at their own cost) before they even put their home on the market. Having a home appraised will help sellers determine how much their home is worth according to current market conditions and come up with a sound listing price.

Either way, an appraisal plays a crucial role in any real estate transaction. And for obvious reasons, you’ll want to make sure the appraised price comes back as high as possible. To help make that happen, there are a few things you can do to make sure the appraisal goes your way.

Make Any Necessary Repairs

While you might be aware of certain minor issues with your home that you just never got around to fixing (or never intended to fix), there might be a number of other little problems that you might not have been aware of. Now’s the time to walk around your home with a watchful eye and look for any issues that might need attention.

Make a list of anything that catches your eye. And before you list, take the time to make the needed repairs so your home is appraised at a high value. Chipped tiles, cracked windows, leaky faucets, ill-functioning appliances, or nail pops should all be rectified before the appraiser steps foot through the front door.

Not only will this help you fetch a higher price, but it can also impress buyers. Not only that but the home inspection that the buyer orders after offer acceptance will likely come back with far fewer issues if you’ve taken a proactive approach and tackled any known issues yourself.

Make Any Helpful Upgrades

Certain upgrades can bring in a high ROI. Ideally, you’ll recoup all the money spent on home improvement projects – and then some. That’s why it’s important to pick your projects wisely.

Appraisers will take note of any upgrades that they notice and will typically add to the value of your home accordingly. Whether such upgrades are just cosmetic in nature or are more structural, any upgrades will be included in the appraiser’s report and will impact the final appraised value.

Even just quick and simple cosmetic upgrades – like refacing kitchen cabinets, replacing countertops, or replacing old flooring material – can make a big difference not only in how your home looks but in its perceived value, too. Just make sure that you verify whether or not any building permits are required for any projects you undertake, as the appraiser will want to see them if they find out any work was done.

Keep a List of Upgrades Handy to Provide the Appraiser

Whether you just made a few upgrades recently in anticipation of the sale of your home or have already made some improvements in the past, you might want to provide the appraiser with a list of all these updates. While they will likely notice them, it might be helpful if you make the appraiser aware of the work done.

Appraisers will be looking for upgrades, but they’re not always going to notice every single one. They’re also not going to know exactly how much you spent on them. Make this easier for them by providing them with a list that highlights all the upgrades made and the expense of such improvements. Your list should also include the date that each improvement was made, any permits that were obtained to get the work done, and any home warranties that accompanied such work.

Clean and De-Clutter

While a messy home shouldn’t really affect property value, it can skew the appraiser’s opinion of your home. The final appraised value that your appraiser establishes for your home matters a great deal to the sale of your home, so anything you can do to make your home stand out in a positive way should be done. And that includes cleaning and de-cluttering.

Make sure that everything is put away in its proper spot. Things that you don’t use anymore should be tossed or donated. You might even want to start packing a few things in boxes in anticipation of your upcoming move to make de-cluttering easier. A couple of days before the appraisal, have the home deep cleaned and be sure to stay on top of dishes, laundry, kids’ toys, and so forth to make sure your home is spic and span. 

Paint

Giving your home a fresh coat of paint is a great way to perk up your interior and make your home seem newer (and cleaner). In fact, painting is typically considered to be the best upgrade to make because of the high ROI it tends to bring. The cost of a couple of cans of paint pales in comparison to how much more value you can add to your home, and your appraiser will take notice.

Boost Your Curb Appeal

Your appraiser will assess not just the inside of your home, but the outside, too. Ensuring that your home has great curb appeal is crucial and will play a key role in the appraised value of your home. Cut the grass, trim the hedges, water the flowers, rake the leaves, spruce up the front door, and tidy up your front porch in order to appeal not only to the appraiser but to potential buyers as well.

While you can always call a professional landscaper to tackle this for you, you can get the job done yourself in as little as a weekend to save some money while potentially adding some extra value to your home.

The Bottom Line

The appraisal report plays an important role in the sale of your home, so you want to make sure it goes well. Whatever the appraiser values your home at will have a direct impact on the deal. Before your appraiser visits, be sure to take the time and put in some effort to prep your home to ensure all goes well with the appraisal.

Are You Ready to Move? 11 Signs That the Answer is ‘Yes’

Moving is a big deal. Think of all the things that you’ve likely accumulated over the years and have stored all over your home, not to mention the process of selling your home and looking for a new one that will suit your lifestyle – and your budget.

Before you make a move, make sure you’ve thought long and hard about whether it’s time for you to move onto something new. There are plenty of things to consider before making this decision, so make sure to give yourself enough time to contemplate a potential move before you plant a For Sale sign on your front lawn.

Here are some signs that you’re ready to move.

1. You Can Make a Pretty Penny Thanks to the Current Market

If it’s currently a seller’s market where you live and you’ve already seen a few of your neighbors make a huge profit from the sale of their homes, you might want to jump on the bandwagon yourself. If you have your home appraised and find out that it’s worth much more than what you bought it for, you might be tempted to cash in.

If you do decide to take advantage of the seller’s market in your area, keep in mind that you still have to purchase something and will be on the buying end. If you’re moving in another area that happens to be in a buyer’s market or you’re considering downsizing and buying something cheaper, then perhaps now might be a good time to make your move.

2. You’re Having a Tough Time Keeping Up With Your Mortgage Payments

The last thing you want is to end up in default on your mortgage. If that happens, you run the risk of foreclosure. If you’re currently finding that your mortgage payments are just too much for you to handle, consider downsizing to something less expensive so you can take some pressure off your finances.

3. Your Current Home No Longer Suits Your Needs

Maybe you need more square footage or a larger backyard. Or perhaps a single-story home might be easier for you to get around in than your current two-story home. Whatever the case may be, it’s possible that your current home is no longer giving you what you need. If that’s the case, selling your home and buying one that has all the features you need to better suit your lifestyle might be a wise decision.

4. You Got a New Job Opportunity in Another City

A very good reason to sell is if you are offered a new job in a different city. In this case, the commute wouldn’t make much sense. Instead, selling your current home in favor of one closer to your new place of work would be warranted.

5. You’re Close to Retirement

Empty nesters and retirees often sell the homes they spent many years in and raised a family in and buy something smaller, easier to maneuver in, and easier to maintain. The type of house that may have suited you in your younger years might not be suitable as you get older. At his point in life, trading in your current home for another might be a good choice.

6. You Want to Upgrade Your Lifestyle

Maybe you’ve climbed the ladder in your career and are more financially stable these days. In that case, you might have the finances to afford the finer things in life and may want to make some improvements in your home and neighborhood. Moving up is another great reason to sell what you currently have and buy something that better suits your more sophisticated tastes.

7. The Neighborhood is Showing Signs of Decline

Have you been noticing lots of boarded-up storefronts, poorly-maintained yards on the street, and even unruly behavior from neighbors over the recent past? What about the crime rate? Has it been going up in your area?

Any number of factors can negatively impact a neighborhood, which can then pull down property values. In this case, you might want to get out while you can still get a relatively good deal on your house and trade it in for a home in a neighborhood where property values seem like they’ll be on an upward trend.

8. You Want to Make the Switch to Suburban Living (or Vice Versa)

Both suburban living and city living have their perks, but one might be better for you than the other. If you currently live downtown, you might want to move to the ‘burbs in order to have more space, less noise, and less congestion. On the other hand, you might be living in the suburbs right now but might prefer being closer to amenities and have the ability to walk everywhere you need to go that downtown has to offer. 

9. Your Current Commute is Draining You

Is the long drive or train ride into work starting to get to you? If so, making a move to someplace close to work is probably for the best. Even if you end up with less for more money, the trade-off might be worth it to save time and reduce the stress levels associated with long commutes.

10. You’re Considering Buying a Vacation Home and Need to Free up Some Capital

Do you dream of owning a vacation property but are unable to afford a second home while you’re still paying your current mortgage? Would you be able to afford having two homes if you trade in your current property for something more affordable? If so, the money freed up from the sale can be applied to a vacation home to be enjoyed year-round.

11. You Want to Send Your Kids to a Better School

If you have school-aged kids, you’ll likely want to send them to the best school possible. But maybe the choices in your neighborhood aren’t the greatest. Moving into prestigious school districts is a common reason why people move, and it might make sense for you too. If you’re looking to get your kids into a decent school, selling your home and buying one nearby the school of your choice might be something to seriously consider.

The Bottom Line

There are plenty of signs that might pop up that are telling you that it’s time to move. If any of these signs apply to your situation, get in touch with a seasoned real estate agent who can help you determine if a move is right for you. And if it is, they’ll also be able to help you find something up your alley.

How to Snag a Low-Interest Rate on Your Mortgage

Out of all debt payments that you may have on the books, a mortgage payment will likely be one of your biggest. After all, mortgages are taken out to pay for real estate purchases, which are hefty expenditures. Thanks to mortgages, however, consumers across the country have the ability to make these large purchases that they may otherwise not be able to afford.

But the overall cost of a mortgage can be directly affected by the interest rate charged. When rates are low, mortgages are much more affordable, while the opposite is also true when rates spike.

Right now, rates are still somewhat low compared to what they have been in years past. In fact, since the housing crash in 2008, mortgage rates have hovered near historic lows for years, though they are now starting to creep back up.

While there is little that buyers can do about the posted mortgage rate, there is still a lot that can be done to keep the rate that lenders offer as low as possible.

Here are some ways to help you get a low-interest rate on your mortgage that can help you save thousands of dollars over the life of your loan.

Shop Around

Much like you would comparison shop before purchasing any goods, you’ll want to do the same with a mortgage in order to get the lowest interest rate. Taking the time to compare what different lenders are willing to offer can really save you thousands of dollars over the life of your mortgage. Even a fraction of a percent can make a huge difference in how much you end up paying.

You may also want to consider working with a mortgage broker who will do all the comparison shopping for you. That way you only have one loan application to fill out, and your mortgage broker will take that information and look around from their network of lenders to see who is willing to offer the lowest rate and best mortgage terms.

Give Your Credit Score a Boost

A huge factor that comes into play in terms of the interest rate offered to buyers is credit scores. Generally speaking, the higher the credit score, the lower the interest rate, and vice versa. If your credit score is anywhere over 760, you will likely get the lowest rate possible. But if your score is less than 650, you’ll probably wind up with a much higher rate, which will make your mortgage a lot more expensive.

Buyers with high credit scores present a much lower risk to lenders because they will be more likely to make their mortgage payments on time. Those with low scores, on the other hand, are perceived as a higher risk. And in order to hedge against this elevated risk, lenders tend to charge low-credit borrowers a higher interest rate.

Giving your credit score a boost is a great way to ensure a lower interest rate when you’re ready to apply for a mortgage. If your score could use a little improvement, consider taking the following steps:

  • Pay all your loan bills on time
  • Don’t spend any more than 30% of your credit card limit
  • Don’t apply for any additional loans or lines of credit
  • Have any errors on your credit report fixed
  • Pay down your debt

Boost Your Down Payment

The more money you’re able to put towards your home purchase, the better in terms of the type of interest rate you may be able to get. Making a higher down payment can effectively reduce the amount of money you need to borrow and will also reduce your loan-to-value ratio (LTV), which is a measure of the loan amount relative to how much the property is valued at. A lower LTV is viewed more favorably by lenders, who will often reward borrowers by offering a lower rate.

Not only can you decrease the interest rate charged to you, but you can also save more money by not having to pay Private Mortgage Insurance (PMI). This type of insurance premium is charged to borrowers who put less than a 20% down payment towards their mortgages. If you can come up with at least 20% of the purchase price of your home, you can avoid having to pay these extra fees.

Pay Down Your Debt

The amount of debt you carry relative to the income you bring in will have an impact on the interest rate your lender offers you, as well as your overall ability to secure a mortgage at all. If you carry a lot of debt, adding another debt to the pile might overburden your finances.

Lenders will look at your debt-to-income ratio (DTI) to assess your current debt relative to how much money you make. If your income is barely enough to cover your current financial obligations, then your lender may not approve your mortgage application. If your application is approved, you may be subject to a much higher interest rate.

Ideally, lenders like to see DTIs no higher than 36%, though 43% has often been the acceptable limit. If you’re looking to get a lower interest rate on a mortgage, work diligently to pay down your debt and inevitably reduce your DTI.

Ensure Steady Employment

For obvious reasons, lenders prefer to work with borrowers who not only make a decent income but are steadily employed. Having a permanent full-time job is safer than a contract position. Ideally, you should be able to prove steady employment for a minimum of two years. The longer, the better.

If your employment past shows sporadic periods of unemployment over recent years, you’ll be hard-pressed to not only snag a low-interest rate but get approved at all. If time is on your side, get your employment situation in order to boost the odds of securing a mortgage at a relatively low-interest rate.

Consider an Adjustable-Rate Mortgage

If rates are expected to stay low over the next two to five years, then an adjustable-rate mortgage might be a good way to get a lower interest rate. These types of mortgages come with a low-interest introductory period, which usually lasts anywhere between two to five years.

The rates offered during this period are typically lower than those with fixed-rate mortgages, which is why they’re often an attractive option for borrowers.

But once this introductory period is over, the rates will usually increase. Adjustable-rate mortgages are therefore ideal for those who either have an appetite for risk of rates increasing or who may have intentions of selling their home before the introductory period ends.

Lock in a Low Rate

If it’s anticipated that rates are expected to increase over the next little while, it may be worth it to go with a fixed-rate mortgage instead of an adjustable-rate mortgage. With a fixed-rate mortgage, you have the opportunity to lock in a lower rate and hedge against an increase in mortgage rates over the near future.

You can even ask your lender to lock in the rate sooner rather than later – even while your mortgage is being processed – in order to make sure the rate stays put. Your lender might charge you a fee for this, but it might be worth it if you have reason to believe that the rate you’ve been quoted is likely to increase soon.

The Bottom Line

If there’s any way for you to knock even a fraction of a percent off your mortgage interest rate, you can effectively save yourself a ton of money in mortgage payments. Luckily, there are plenty of things you can do to help ensure that you’re offered the lowest rate possible. Consider working with a mortgage specialist who will be able to guide you throughout the mortgage process and make recommendations of what you should do to put you in the best position to snag a low-interest rate on your mortgage.

Bad Signs to Look For Before Buying a Home

Buying a home is a big commitment, so you obviously want to make sure that your purchase is a sound one. That’s the reason why you might go back a second time – or even a third – before putting in an offer, then maybe even return once or twice more before sealing the deal. You want to make sure the home and the surrounding neighborhood justify the money you’re spending on the property.

When you’re scoping out homes, you might have some items on your must-have list that you’ll be keeping an eye out for. But there are also some negative things that you should look out for that may be signs that the home or the neighborhood is not up to par, including the following.

Cracks in the Exterior

While fine cracks in the foundation wall might be OK, large ones that are at least a half-inch wide or are uneven might be cause for concern. Out of all issues with a home that can be the most cumbersome and expensive to fix, structural issues would be it.

If you notice any large cracks, that might be a red flag that the foundation is faulty. This could be a result of shifting or sinking soil underneath, grading issues, or other reasons. You may want to call in a structural engineer to check out the cracks to make sure there’s no serious underlying issue with the structure or foundation that will end up costing you a lot more than what you had intended to spend.

Paint Covering Up Water Damage

Some homeowners may try to conceal any water damage done to their ceilings or walls by painting over it. What homeowners might not know is not only are they not fully covering up the damage, they may also be allowing mold to fester, which can become a health hazard.

Pay close attention to any uneven patches of paint. If it seems as though certain areas were painted over, take a closer look. There just may be signs of water damage underneath.

Lots of Room Fresheners and Scented Candles

While it’s perfectly fine to freshen up the smell in a home when it’s on the market – and even recommended – overdoing it with the fresh smells might be a cover-up for something lurking. Find out if there is something that may be releasing a foul odor in the home, such as mold, pet urine, sewage, or a leaky pipe.

No Permits For Improvements Made

If it’s obvious that some work was done on the home – such as a room addition or a new deck, for instance – ask to see the permits for the work done. If the seller can’t produce them, the work may have been done without a permit. This could spell trouble for you if the building inspector in your area catches wind of the work done.

If that happens, you’ll need to not only pay for the permit yourself but even possibly go through the motions of having to apply for it and get it approved. The inspector could even go so far as to force you to take down whatever work was done.

Uneven Floors

Floors that are obviously uneven could be a sign of structural issues. As already mentioned, this can be a costly problem to fix. In addition to floors that are not level, look for doors and windows that stick when you try to open and close them or bubbling on the floors. 

Lots of For Sale Signs

So far, we’ve been talking about the home itself. But in reality, you’re buying into the neighborhood, too. As far as the area itself is concerned, there are a few things to look for, and one of them is an overabundance of For Sale signs. If you notice that there are plenty of homes for sale in the area or on your street, find out why.

While it may just be that the demographics are changing – such as empty nesters downsizing and making room for younger families – there could be more serious issues at the hub of all the for sale signs. Tanking property values or an increase in crime are issues you’ll definitely want to know about before you put an offer on a home.

Plenty of Empty Storefronts

Like the For Sale signs on residential properties, too many vacancies in commercial units could also be a sign that a particular neighborhood is not doing so well. Bustling businesses is a good sign in neighborhoods, but entities that are either going out of business or are bailing on the area for a better one is not a good sign of a healthy neighborhood.

All the Homes Look the Same

If you’re considering buying in an HOA community, take a look at how uniform all the houses are. While HOAs typically have restrictions about what homeowners can do to their exteriors, too much uniformity might be a sign that there is little wiggle room to deck out your home the way you’d like to.

Music is Playing in All Rooms

Having music played during showings or open houses might be fine, but it could also be used to mask any noise pollution in the area, such as a nearby train, planes flying overhead, or the neighbor’s dog barking.

Neighbors’ Homes Are Poorly Maintained

Speaking of the neighbors, look at how they maintain their properties. If they’re unkempt, that could affect the value of the property you intend to buy.

The Bottom Line

Buying a house is a big deal, so make sure you take your time scoping out different properties and the neighborhoods they’re located in before you make an offer. There’s a lot of money at stake, so you want to make sure that the house and the area you buy into are exactly what you’re hoping for without any unpleasant surprises down the line.

Should You Accept the First Offer on Your Home?

When it comes to real estate transactions, sellers may often hold out for a better offer and might not necessarily take the first offer too seriously. They’ll often hold out in hopes of something bigger and better coming along.

Not only that, but it’s also common practice for buyers and sellers to barter with one another and participate in a little back-and-forth negotiating. For sellers, it’s expected that the first offer that comes in will be open for a counter offer. After all, getting the highest price on a home sale is the ultimate goal.

But are there ever times when it’s wise to take the first offer given? Do all real estate deals necessarily have to involve tossing the first offer or countering offers, or is it OK for sellers to take the first offer on their home? Further, should sellers even entertain the first buyer that shows interest? Or should they wait to see if there’s something better out there?

Here are a few situations where taking the first offer might be something to consider.

You’re Motivated to Move

If time is of the essence and you need to move sooner rather than later, then that first offer might be one to take seriously. Whether you need to move because you’ve been relocated to another city for work, or the kids are starting school soon, or the closing date on your new home is coming up, you might have a very good reason to want to move sooner rather than later. And that may entail taking the first offer that’s given to you.

Of course, you don’t want to settle for a sub-par offer. You’ll certainly want to assess the offer – as well as any others you may get – and make sure everything is satisfactory. The offer price, closing date, deposit amount, and contingencies all play a role in the strength of an offer. That said, taking too long to accept an offer can put a huge stress on you and your finances.

The First Offer is Solid

Before you finalize your listing, identify what type of offer would be deemed an attractive one, That way when you do get an offer, you’ll be able to better assess whether or not it’s worthy of acceptance.

Weigh the offer against the initial criteria you established with your real estate agent. If that first offer meets – and even exceeds – these standards, there’s little reason why you shouldn’t grab it and seal the deal.

Your Home Has Been Sitting on the Market For a While

As mentioned earlier, a listing that sits on the market for too long will become stale. And a stale listing doesn’t fare too well among buyers. Instead, buyers will start to think that there’s something potentially wrong with the property. After all, why else would a home sit on the market so much longer than other comparable properties?

The best time to stir up interest in your listing is right out of the gates within the first week or two after the listing goes live. It gets increasingly more difficult to generate interest a few weeks after a listing initially goes up on the market.

If you get a decent offer within the early days of listing your home, you might want to seriously consider it. It’s not uncommon for sellers to lose out on a good offer when they give up on the first one that comes in the door simply because it’s so early on in the game. Waiting around for a better offer doesn’t always work out.

You’re in a Strong Buyer’s Market

If the market is ripe for sellers, you might have a lot of demand for your home and a large pool of qualified buyers to choose from. But if the market is cooling in your area and demand is weaker, that may limit your pool of buyers.

Your home could be in great shape, located in a desirable area, and priced aggressively. But if the market is not in your favor, the first good offer that is put on the table should probably at least be considered. This is even truer if your home is not as desirable or located in an area that isn’t highly sought-after, which can further put a cap on the pool of interested buyers.

You’ve Got an All-Cash Offer

It’s tough to turn down an all-cash deal. Even if the amount being offered is slightly lower than what you may have wanted, taking an all-cash offer can eliminate the waiting game that usually accompanies offers that are contingent on the buyer securing a mortgage.

When there’s no need to bite your nails hoping that a mortgage – or even a home inspection – goes through, the deal can proceed with minimal issues.

The Bottom Line

The truth is, there’s no rule set in stone that you shouldn’t accept the first offer that you get for your house. Whether or not you do will depend on a number of factors, including the specific situation, the market, and your home, for example.

The first couple of weeks that a home is on the market is the busiest time for listings and is the time when the most interest and activity are seen. Once those couple of weeks have passed, interest and activity start to fade, which is why it’s important to take advantage of this window of opportunity to find a willing buyer.

If you get an offer right away, don’t discard it. Instead, consider it, especially if it’s a sound offer. Many times sellers get burned by taking a gamble on finding a better offer, only to be left with a listing that grows more staler by the day.

Of course, if the offer is sub-par, perhaps waiting for a better one to come around might be the better option. Just be sure to make your decision after careful consideration and collaboration with your real estate agent.