Online Real-Estate Listings Can Fall Short

Lately a lot of my clients have been asking me to set up appointments for homes they’ve seen online. Unfortunately, those viewings never happened because, in spite of their supposedly current listings, the properties had already been sold. One had been off the market for several months.

I know a lot of you are looking form information online about a prospective home: a record nine out of 10 house hunters searched online last year, according to the National Association of Realtors.

But there are plenty of problems with non-MLS listings, including errors, out-of-date information and properties that are listed on the Web but aren’t actually for sale.

The most common problems are simply errors—listings that advertise gas heating when in fact the house runs on electric heat, or a price cut that hasn’t been updated online. But in some cases, “mistakes” may be intentionally misleading.

These discrepancies often appear on the listings that are posted on the Multiple Listing Service, an online database that listing agents like myself are expected to keep current.

It’s estimated that around 21% of the data agents individually submit for posting on real-estate websites isn’t updated when changes are made to the price or when the property is sold, according to a report released last month by listings website Trulia.com.

For example, some real-estate agents keep listings on their personal websites long after they’ve sold; when home buyers contact the agent inquiring about the property, they’re instead pitched new properties that might not meet their criteria.

Such lagging information is more common with smaller firms’ websites and could be a function of real-estate agents simply forgetting to update those listings.

Either way, for buyers and me, it’s a waste of time.  Popular real-estate listing sites say they try to update information often, but many sites rely on a feed from the MLS, which means it’s largely the responsibility of individual real estate agents to update listings.

Bottom line, when you hire me to find you a new home, I’ll work diligently within the parameters you give me, so you can spend your time relaxing – leave the locating to me.

Staging Tips for Home Sellers

If you are about to list your house on the market or feel that your house has been sitting too long, here are some great house staging tips to improve that important first impression:

  • Maximize the “first impression” opportunity. Carefully critique the front door. Apply fresh paint and new hardware if necessary. Sweep, tidy, and power wash the walkway and entry as needed. Buy a new welcome mat.
  • Tidy the closets and leave all at least 1/3 empty.
  • Depersonalize for the buyer to imagine his belongings in the space. Eliminate family photos, personal collections and controversial art.
  • Add fresh flowers and live plants in entry, kitchen, dining room and bathrooms for showings.
  • Replace light bulbs where needed. Consider maximum allowable wattage to increase brightness of rooms.
  • Check all faucets/plumbing for leaks or drips and repair as needed.
  • Invest in a weekly cleaning service during the marketing period. Kitchens and bathrooms should “sparkle”.
  • Clean the oven, dishwasher, and refrigerator.
  • Avoid the use of potpourri and other strong pet or cooking odors. Fresh apples tend to absorb odor.
  • Consider professional window cleaning inside and out.
  • Leave window treatments open to maximize light for showings.
  • Clean carpeting and area rugs.
  • Keep toilet seats down for showings. Remove toilet plungers, bowl brushes and trash from view.
  • Clear kitchen counters and remove all items on refrigerator.
  • Remove all clutter and paperback books. Keep medications out of sight.
  • Consider removing pets and all pet dishes and toys for showing.
  • Assist your Realtor by being absent for all showings.

These great tips courtesy of Austin interior designer Jan Griffin.

Tips for Winterizing Your Home.

Tips on Winterizing

Winter is almost upon us and there are some things you should do to lower your winter energy bills and protect your home for the harsh winter. Even if your winter isn’t so harsh as in the north, there are some
things you should do about once a year to help you save money on your bills.

Go to the store and pick up all the things you will need for the winterizing, especially the furnace filter and any water softener stuff you might need. For large stuff like the softener salt, it’s easier to do this in the fall when it’s not slippery outside and still nice out, hauling things like this is sometimes better done in the fall than the dead of winter.  Some of the things you should be doing at this time and checking out are in the following list.

Window and door seals, sweeps
Caulk around windows, doors, and vents
Furnace filter, vacuum out furnace
Vacuum air ducts and around registers
Clean out Air Conditioner fan unit, turn off, cover
Check around foundation for holes, fill
Clean out window wells, between window panes
Check mortar around any brick work
Check siding, shingles, paint etc on house, touch up
Sidewalk, concrete, check and fill cracks
Gutters, clean and check
Drain field, septic tank treatment, if needed
Check any slow drains, get them fixed now
Fill oil or propane tanks, winter is a bad time to run out
Clean out fireplace chimney and flue
Check chimney screen to keep out animals, leaves
Check any heat tape on pipes, install any needed
Check decks, porches & stain, repair if needed
Check duct for clothes dryer, clean
Cover outside faucets, shut off inside
Cover outside outlets
Check outside lights, covers
Go around yard and put away summer stuff, furniture, pool toys, etc.

After you have been around and checked and fixed things, you can be sure that you will save at least something if you have done some fixing up on the caulk sealants and added some extra winterizing to your home. Some of things I have listed are not required in all homes but some things are good ideas to do before the bad weather hits.

There are some things that you need to do before it starts to get colder if your in a part of the country were it does get cold. You need to put in any sealant or caulk, mortar or paint in before it gets below about sixty degrees. You should be able to do things like check the foundation, mortar and any cement and fix this type of stuff before it gets cold also. If you own a fireplace you should do any maintenance on it before you use it the first time of the year. And if you own a pool you need to get it ready for the winter, drain, clean and winterize it.

When winter gets here is a bad time to find out you need to do things on your home or car, and it can be too late for some things. A few hours of time spent before the bad weather hits can make the difference and save you time and money later, and in some cases frustration and annoying repairs in the dead of winter.

6 Tips on the Real Estate Closing Process

Before you sign on the dotted lines, ask yourself these six crucial questions.

1. WHAT AM I BUYING!?!

Make sure you have done your due diligence and inspected the property thoroughly. This could be the biggest investment you ever make (emotionally as well as financially) so know what you are getting yourself into before you seal the deal.

2. WHAT SORT OF LOAN AM I GETTING?!?!

Before you close you will get a stack of papers ten reams high and you will be signing and initialing every last one of them. Make sure you know what you are signing – is the interest rate the attractive one you were quoted when they were begging for your business? Do you have a pre-payment penalty? When is your first payment due and where do you send it? All important questions to ask and have answers to before you seal the deal.

3. HOW MUCH MONEY DO I NEED?!

You may have your loan in place, but you will probably have to come out of pocket to close on your new dream home so where is that money coming from and how is getting from THERE to the escrow account in order to close on time?

Make sure all parties involved have the proper information to wire funds, pick up checks and get it done so your close is not held up while you are already paying interest on your funded loan.

4. AM I TURNED ON?!

Have you transferred the utilities into your name and avoided unnecessary costs to have them turned on if there is a gap between you and the previous owner’s shut-off date? Ensure that you have addresses, account numbers and all contact information for the following:

-Mortgage
-Utilities (electric, gas, water, trash)
-Maintenance
-Property taxes
-Homeowner’s insurance

And make sure your escrow officer has all the information they need (such as contact info for your insurance company) in plenty of time before the close.

5. DID THE PREVIOUS OWNER HOLD UP HIS END OF THE BARGAIN?

You may have negotiated some repairs during escrow – did you receive a credit for them and is it on your closing statement? Did the previous owner complete the repairs they agreed to do and are they up to code?

If you have realtor, rely on them to hold the seller accountable.  Make sure you have checked it out before your close as there is very little recourse once the previous owner has your money!

6. AM I AWARE OF (ALL OF) MY CLOSING COSTS?

When it comes time to close on your property, it may seem as if everyone and his brother is waiting for a handout. They are. All these fees together make up your CLOSING COSTS.

These charges can and do vary widely, but don’t be surprised to see these charges:

Escrow fees — Who will pay escrow fees (buyer or seller) is usually decided during the negotiation on the sale. Splitting these fees is common.

Credit check — Yes, you have to pay for your lender to verify your loan-worthiness (seems like a cost they might absorb, but alas, no).

Document prep fee — Again, one might assume that the mortgage and escrow companies could pay their own employees to prepare your documents, but once more you get the honors.

Title insurance — A lender won’t give you any money without guaranteeing its interest in the property. Title insurance covers you in the unlikely event that there’s a blemish on your property’s title history.

Miscellaneous fees — A courier is employed to transport your paperwork from the title company to the escrow company. Money is wired from your lender to your seller’s account. Your lender incurs an underwriting fee and passes it on to you. Count on a few hundred dollars worth of “misc. fees.”

Top 3 Rooms To Invest In When Selling Your House

Austin area homeowners as well as sellers, are continually exposed to the latest and greatest in remodeling and renovation trends on TV programs, in magazines, and on home improvement web sites. It seems there isn’t any place in the house that’s off-limits to improvement, expansion, or updating. If a homeowner is planning to remain in their home for many years to come, they should consider projects that genuinely suit their own needs – the custom kitchen, a fabulous master suite, a new home office.

However, if the plan is to sell the home in the not-too-distant future, homeowners should focus on projects that will have the best chance of getting the highest return on their investment.

Let’s take a look at the 3 rooms that rise to the top of the ROI list of midrange projects (our list does not include home additions or necessary repairs):

KITCHEN
Average ROI = 83% (minor remodel), 78.1% (major remodel)*

Even within a particular room, project costs can vary widely depending on the extent of the improvements. A major kitchen remodel -custom cabinetry, expensive surfaces, high-end appliances, and engaging a designer – may cost upward of $100,000 and, on average, get a return on investment of about 78%.

A minor kitchen “facelift”, on the other hand, averages a similar ROI in percentage terms, but will cost far less. This more-modest project may entail

  • Cabinet refinishing
  • Replacement of countertops
  • Flooring
  • Swapping out dated appliances for new but inexpensive models that improve the room’s appearance.
BATHROOM
Average ROI = 78.3%*

Bathroom remodels consistently rank at or near the top in term of return on investment. Whether it’s a powder room or a master bath, beautiful, updated surfaces, water-saving fixtures, and neutral tones are the minimal improvements that should be considered.

Taking another step up, enlarging the room itself and adding luxurious “spa” elements such as a deep soaking tub, heated floors, and a double shower will obviously increase the budget and, likely, the appeal of a master bath.

ALL ROOMS – WINDOW REPLACEMENT
Average ROI = 81.2% (wood), 79.3% (vinyl)*

Replacing windows may not rank high on the glamour scale, but buyers appreciate the appearance and improved energy efficiency of new windows and are willing to pay for them. Insulated windows are a smart improvement for homes in any climate, and will make the house look better both inside and out.

Here are a few more thoughts to keep in mind:
Regional differences
While the above figures are average, what’s most in demand in one geographical area may differ elsewhere. Do your homework before committing to a project.Aim for universal appeal
Avoid highly unusual designs, strong colors, and unique custom components that can be polarizing to potential buyers. Remodeled spaces should look great to the widest possible audience.

Don’t over-improve
Homeowners should be careful to keep upgrades and improvements within the range of similar homes in their neighborhood. The most expensive home in the area, however attractive, is rarely the easiest to sell.

Why Flip Houses

There are many great questions to ask when it comes to real estate investing and one of the many that you should consider if you are thinking of flipping houses for your real estate investment is: why? Why flip houses? It certainly seems as though it’s a great deal of work and it is. It isn’t an easy task to take upon your own shoulders and yet many people around the world purchase houses each and every day for the purpose of flipping those houses. Why? Profit is the long and the short answer but it goes much deeper than that for many who are interested in flipping houses even if profit is the ultimate goal.

Some people really enjoy working with their hands. Purchasing a property in need of light cosmetic repairs and retouches is a great way to get your hands dirty without risking too much money, time or effort. Properties needing more serious work may require a pair of hands that have some degree of experience rather than hands that are best suited for balancing books. That being said if you want to do the work yourself and enjoy the prospect you may find that you can save a great deal of money if you use your own labor rather than paying for the labor of others when it comes to flipping a house.

Other people go into this line of work because the idea of giving a family their dream home is so appealing. When you go in and flip a house you are putting your sweat into creating someone else’s dream. You are taking something that may have been plain, ugly, or drab and turning it into a beautiful home in which they can build their dreams. While it may seem a little romantic, it is in a way. This is part of the beauty of flipping houses though; there really is no wrong reason to do it.

Some people choose this line of work because deep down inside they need the pain that goes into turning a lump of coal into a diamond. I think the literal term for these people (and really this could apply to anyone who decided to flip houses for a living) is masochist. The shoe fits for most people who flip houses. If they didn’t know going into it the first time they certainly know before they go into it a second time.

Then there are those that are simply driven by profit. There really isn’t anything at all wrong with that. Most of us would never get into this business if there weren’t some hope of a pot of gold on the other side of the rainbow. This is hard work and there are days that the promise of a pay off is the only thing that gets you out of bed and hitting the ground running yet again.

Just remember that at the end of the day it doesn’t matter what your goal in flipping houses is. What matters is that you show up day after day and do the work necessary to pull off your house flip. This is what makes the difference between those playing at flipping houses and those who are doomed to be one hit wonders in this brutal business. Of course, there are still those few who flip houses just for the sake of seeing the finished product when everything is said and done.

Real Estate Investing in Rental Properties

There are many ways in which a person can make a living when it comes to real estate investing some of them carry more risks than others. It goes without saying that those that carry the greatest risks are often the very real estate investment methods with the highest potential profit but slow and steady, in many cases, wins the race. Flipping houses is in the news a lot because so many fortunes have been made doing this-more than a few have been lost in this venture as well but those don’t make the news nearly as often.

Working with rental properties isn’t nearly as glamorous and doesn’t provide the almost instant profits that flipping houses might but it is also a great and very valid method of real estate investing that will build a steady profit over time if you plan properly. Rental properties are in demand now more than ever with so many people going into foreclosure and losing the homes they’ve worked hard to build for their families. For this reason rental properties are a good thing to own at the moment, especially those that are family homes.

There are many reasons that people rent and while there are some risks involved when renting properties, the risks are much lower than the risks involved in flipping or pre-construction investment endeavors. There are a few things you should consider when purchasing a property for the sake of renting however in order to make a wise and long lasting decision for your real estate investment.

First, only invest in rental properties in areas that people want to live in. It may be true that you can buy property cheap in a few very run down sections of town but it is doubtful that you will turn those properties into profitable rental units. It is best to pay a little more for a more attractive address for renters. You will find that your properties are inhabited more often, which will make you more money in the long run.

Second, pay attention to the types of people in the area and buy rentals accordingly. It is quite possible to turn large homes into multiple smaller apartment units (according to local zoning laws) that are ideal for college students. You do not want to do this however in an area that is geared towards family homes and won’t be friendly or tolerant of college students. Design the rentals according to the market you are attempting to attract.

Third, don’t be greedy. The goal of owning rental properties is of course, to make money. At the same time if your price your properties too high you will find that they sit empty more often than not. Every month that your property is empty is a month that you aren’t making money on that property at best and a month that you are losing money at worst.

Fourth, know the market. Study the local market for buying real estate and renting real estate. This will help with many things, not the least of which is determining whether or not any given property will make an attractive rental unit. Another thing it will help you determine is how much rent the units you are considering can bring in month after month.

Finally, when renting properties you need to keep your eye on the long-term goals rather than shortsighted goals. Property rental is a marathon rather than a sprint with the greatest profits coming at the end. You will want to pay as little interest on the property as possible and pay the property off as quickly as possible in order to realize the maximum profit potential and acquire new properties. The real money when renting properties as a real estate investment isn’t in renting out one or two units but twenty or thirty. The more rental properties you own the more money you stand to make from owning them.

Pre-Construction Real Estate Investing

If you have the heart and soul of a gambler or love extreme sports and activities such as skydiving or bungee jumping then you may be the ideal candidate for pre-construction real estate investing. Pre-construction profits are often among the highest in the industry. At the same time so are the risks. You will find the greatest highs and lows that can be found in the field of real estate investing lie beneath the umbrella of pre-construction profits and many of the big names we know so well in the real estate investing field have made much of their fortunes through speculation and pre-construction sales.

Before I go any further, one word of caution should be spoken. While the potential for profits in this particular corner of the real estate market are unconventionally high the risks are also abundant. This is speculative real estate at its very best and as we have all learned in the past, when the bubble bursts in a specific market those who have the most invested are the ones who often loose most heavily.

As far as what pre-construction real estate is there are a few interpretations. The first is also the most obvious. You are buying real estate at some point before construction is complete. In hot markets you will often need to purchase the units before ground has broken on the project in order to get the lowest price for your investment and highest potential pay off for your pockets. Once you’ve purchased the unit or units you plan to sell you then begin seeking buyers for those units. In markets that are on fire like some Vegas suburbs and big retirement and vacation cities along the Florida coastline the same property is not exactly uncommon for a property to change hands and have several owners before the unit is complete. Each one will take a little something home from the table for their efforts with those who get in earliest often taking the largest piece of the pie home with them.

You may be wondering why this occurs and the answer really is simple. When the contractors attempt to get funding for their buildings in these large complexes they often need to have a certain percentage of the units “pre sold” in order to convince the banks that there is an adequate market and to garner some of the revenue that is needed to get the venture up and running, so to speak. So real estate investors buy these units at rock bottom prices because essentially they are paying for the idea of the unit (which hasn’t at this time been built and isn’t yet approved to be built in many cases) rather than a brick and mortar property. As the project draws closer to completion, particularly in markets where real estate is in high demand, the value of the property rises dramatically ending in ridiculous profits for those who have managed to hang on.

The risks however are many. There are any number of things that can go wrong on a project such as this not the least of which is that the demand for housing will be met before the unit is actually built. This has happened and continues to happen. Also recessions, business closings, economies collapsing, and tragedies in the vicinity can occur before the property is complete leaving everyone who has invested heavily in the project holding a little bit of the bag and loosing their profits and, quite possibly, their investment. These projects generally take a great deal of time to complete which makes the risks that much greater and the anticipation of these events a little more difficult to map out ahead of time. If you can manage to make it through however many investors see more than a one hundred per cent return on their investment making it a popular type of investment among many despite the rather large risks involved.

House Flip Sob Stories

What you don’t see on many of the television shows about flipping houses are the many sad tales of promising flips gone wrong. These epic tales of woe are often the precursors to financial hardships for quite some time as those who fail at their property flips work on recovering from their heavy losses and moving on with their lives. Some are hit harder than others but the snowball effect of a bad flip are often not even hinted out on the prime time televisions shows that are so proud of the many success stories that arise because of serious and studious efforts in the house flipping arena.

If you are planning to flip a house for a real estate investment you really need to take a step back and decide that you are absolutely not going to be one of the house flip sob stories that are rumored about in Internet chat rooms. In fact, you want to be listed among the success stories. Unfortunately that takes a great deal of proper planning that is almost never shown on these television shows. In fact, to put forth your best effort you need to devote as much time to studying and planning properties, prices, and home values in your area before you even begin to search for your first property to flip as you need to invest in the entire process of actually working on your first flip. In other words, months worth of planning need to go into your first property pick in order to lower the risk of failure and to greatly improve the odds of success.

The second thing you need to do when planning your first flip and avoiding a sad tale and a sob story is to be realistic and avoid great expectations. With your first flip you are darned lucky to turn a profit at all. If you are expecting to make more money on your first flip than you made last year as a full time employee you might need to make other plans. The first flip rarely goes as expected.

Third, you need to set aside at least twice as much money (preferably three times as much) as you think you will need for the work on the property in order to cover the actual costs that will be needed. There are inevitably tools, permits, supplies, and labor that wasn’t counted on in the initial budget figures as well as the tendency to seriously underestimate the cost of the materials that will be needed in order to get the job done. If you don’t have that much or can’t spend that much and walk away without a loss then the property you are considering might not be the best property for your first flip.

Finally you need to plan everything. Every day needs to be fully planned before you show up to work on the property and you need to have all the materials you will need on hand from lunch to drinks, to tools and supplies. Trips to the hardware store, lunch breaks, and coffee runs quickly kill a day and any productivity that may have been made during that day. Avoid these costly delays by proper planning and you will discover that you have a real estate investing success story worth writing home about.

Finding a Flip

Flipping houses is becoming increasingly popular. Unfortunately, the popularity of the idea is creating a bit of competition among those who would love to try it out for the first time. The increased competition often serves to drive up the costs involved in purchasing the profit, which only manages to lower the profit potential. However if you find a good deal and feel that the property is a good candidate for a flip you can ask yourself the following questions to help you determine whether or not the property really is a good candidate.

1) Have you had a qualified inspection and determined that there are only minor repairs that need to be made to the property and the landscaping? This is important because every repair that needs to be made will eat into your budget. You want to complete the project with as little extra money invested as possible in order to get the greatest return on your real estate investment possible.
2) Is the property suitable for the neighborhood? By this I mean is the property a three-bedroom house build for families in the middle of a retirement community or is it a one bedroom, cottage-style home in the midst of family houses? These aren’t exactly a good match and can cause problems when it comes time to sell.
3) Can the neighborhood bear the price you need to bring in from the flip? If you are creating an upscale home in a marginal neighborhood you are almost guaranteeing a loss on your investment. You want to find a house in need of repairs selling cheap in a neighborhood of much better houses so that it can bring in the profit you are hoping to get when all is said and done.
4) Can you make the changes you envision for the house on your budget and without significantly changing the structure of the house? This is a biggie and one that often gets overlooked. You do not want to start knocking out walls or creating additions when flipping a house. That is something you should leave for the new owners. You want to make as few waves as possible and only make changes that will improve the value of the home.
5) Can you improve the value of the home enough to make it worth your while in a short amount of time? This is another big deal when it comes to a house flip. It takes time and money to make the changes that most “flippers” have in mind for their investment, especially first time flippers. Do you have the time to stick with it and the money to cover the carrying costs while you are in the process of making the changes?
6) Is the property in a high demand neighborhood, city, etc. for selling properties? Another common mistake is buying in areas that are hard sells for buyers. It is often quite simple to find lower priced properties that are attractive at first glance however; if you can’t sell the property you purchase to flip it really defeats the purpose of putting all that time, effort, and money into making the improvements.
7) Can you do the work or will you need professionals and if so, will it still be cost effective? Be careful that you do not overestimate your abilities in this if possible. It is great to think you can put down a hardwood floor but the reality of doing it is quite another matter. Be sure you have a realistic understanding of the potential costs involved in the flip and whether or not the property will still be profitable in the worst-case scenario.

Answer these questions when checking out potential real estate investment and house flipping properties and you should be well on your way to a successful flip, at least as far as the selection of the property goes. You should also find a house to flip that you like as you will likely be spending a great deal of time there.

How to Dispute Your Home Appraisal