Financial Fitness

Final walkthrough a buyer's best friend

Imagine this. You move into your new home for the first time after closing and, although you transferred the utilities into your name, the lights don't turn on. There isn't a single light bulb left in the house, the yard is overgrown, and the leaky faucets the sellers were to have fixed still leak. Most homebuyers aren't faced with such an unpleasant surprise. 

You can gain some degree of control over the situation by completing a walkthrough inspection of the property within five days of closing. Your purchase contract should include a clause that grants the buyers permission to do a final walkthrough inspection sometime close to the closing date. A final walkthrough provides the buyers an opportunity to verify that the property is in substantially the same condition it was when the sellers accepted their offer. The walkthrough is not a contingency of the contract that gives the buyers the right of approval or disapproval. 

Your purchase contract should require the sellers to maintain the property in its present condition until closing. So, if a window breaks before closing, the sellers would be responsible for fixing it, depending on the verbiage in the contract. During the walkthrough, the buyers can also confirm the completion of any work the seller agreed to do before closing. 

Ask the sellers to provide you copies of invoices for work done before closing. Keep these documents in your house file for future reference. If sellers made repairs themselves, they should provide an itemization of work completed that describes what they did. HOUSE HUNTING TIP: It's a good idea to have your REALTOR® accompany you on the final walkthrough and take notes as necessary. If the property isn't in the same condition it was when you agreed to buy it, put this in writing and have your REALTOR® contact the sellers' agent to inform them of the items remaining to be done before closing. 

Your purchase contract should include a provision for the sellers to deliver the property to the buyers free of personal property and debris, unless otherwise agreed to in writing. For example, the sellers might have agreed to leave the washer, dryer, and refrigerator with the house, and the buyers accepted the offer. These items are usually considered personal property, unless they're built in. If the sellers moved these items out or the movers did by mistake, they would need to be returned by closing unless you make other arrangements with the sellers.

 It can be very helpful if the sellers agree to do a walkthrough with the buyers to show them things about the home that the buyers would have difficulty figuring out on their own, like the location of obscure light switches or how to operate retractable skylights. If something is disclosed about the property that should have been disclosed earlier, put it in writing. If it's something significant, talk to your real estate agent or attorney about how best to resolve the issue. 

Keep in mind that most real estate agents are not licensed to practice law. Also, seller disclosure laws vary by state. Doing a final walkthrough to verify the condition of your new home can be complicated if it's tenant-occupied. If you are buying a tenant-occupied property to live in, your contract should provide for the property to be vacant several days before closing. THE CLOSING: That way you can walk through the property free of tenants' belongings before you close the deal.

Don't skimp on title insurance

Most people are trying to cut costs these days. Some even wonder if it's necessary to pay for title insurance when they buy or sell a home. 

Skimping here could end up costing plenty if you discover a title defect after you own the property. Title insurance is paid for once at closing and covers the property for as long as you own it. 

It protects the purchaser from financial loss deriving from defects in the title to the property. The premium cost varies depending on the title insurance company, and is usually based on the purchase price. Who pays the title insurance premium often depends on local custom and can vary from one county to the next. For instance, if you were to sell a home in Los Angeles County, where the seller usually pays for title insurance, and buy in Alameda County, where the buyers usually pay, you'll pay for title insurance twice during one move. Buyers typically pay the premium to cover their lender's interest in the property. 

The payment of title insurance is not set by law and can be negotiated between the buyer and seller, although local custom usually prevails. Whatever is agreed to in the purchase agreement will dictate who pays the premium. A buyer who was an attorney thought title insurance was expensive and a waste of money. Given his legal expertise, he decided he'd search the title record himself to avoid paying the title premium. In the end, his agent talked him out of the do-it-yourself approach based on the risks involved. Title insurance companies search the title to a property to make sure that there aren't any defects in the chain of title. 

They also look for liens and easements recorded against the property, as well as establish who has marketable title to the property. In one case, the title company discovered when searching the chain of title that when the property sold to the current owner, an heir to the estate had not signed the deed transferring title. This meant that person still had rights to the property. Fortunately, the title company located the heir, who was reputable. She relinquished any interest she had in the property. If the heir hadn't been cooperative, the current owner could have made a claim against the title insurance company that issued title insurance to him when he bought the property. 

Title companies usually issue a preliminary title report, which is an offer to provide title insurance on the property. It is not the insurance policy, but it shows the results of the title search. You and your real estate agent or real estate attorney should examine the preliminary report carefully to make sure the person who has marketable title to the property is the person who signed the purchase agreement. Also check for liens secured against the property. Easements grant the right to use the property to someone other than the owner. Common easements are for utilities, sewer, and drainage. Ask the title company to provide written copies of any easement and CC&Rs (covenants, conditions and restrictions), and to locate the easements in color on a copy of the parcel map. 

You can't build over an easement. Both CC&Rs, typically found in condominiums and planned-use developments, and easements restrict your use of the property. Make sure you understand how these will affect your ownership interests before you complete a purchase. If you find defects in the title, make it a condition of the purchase that the seller cures the defects before closing. Make sure that your purchase agreement includes a clause that gives you that right. THE CLOSING: Ask your title officer, REALTOR® or attorney for answers to any title-related questions. 

6 Things Homebuyers Should Avoid Once They are Preapproved for a Mortgage

You have done the hard part in the home-buying process and chosen a lender and a real estate agent to work with. You have also gone out and found the home of your dreams! Best of all, your team has done a great job of negotiating the best deal for you.

Now, as a buyer, all you have to do is sit back and wait for your loan to close … right? Wrong!!

Getting a home loan these days is a very interactive process. I am always amazed by how many clients I work with who come to me unaware of all the pitfalls they face during the loan process. To help avoid any surprises while waiting for final approval, I provide my clients with a short list of "do's and don'ts" to follow.

Let's start with the "do's" ...

1. Do keep the process moving by responding to your loan officers' requests for documentation as soon as possible.
2. Do make decisions as soon as is reasonably possible.
3. Do convey questions or concerns you
4. Do continue to make all of your rent or mortgage payments on time.
5. Do stay current on all other existing accounts.
6. Do continue to work your normal work schedule with no unplanned time off.
7. Do continue to use your credit as normal.
8. Do be prepared to explain any large deposits in your bank accounts.
9. Do enjoy purchasing your home but remain objective throughout the process to help make decisions that are best for you.

After you have been preapproved for your mortgage you will want to refrain from the following...

1. Do not make any major purchases (car, boat, jewelry, furniture, appliances, etc.).
2. Do not apply for any new credit (even if it says you are preapproved or "xxx days same as cash").
3. Do not pay off charges or collections (unless directed by your loan officer to do so).
4. Do not make any changes to your credit profile.
5. Do not change bank accounts.
6. Do not make unusual deposits into your bank accounts or move money around from one account to another.

Follow these simple rules and you will help to make your loan closing as smooth and hassle-free as possible! Good luck!

Who's Buying Homes?

Deed vs. Title: What's the Difference? Terms Home Buyers Need to Know

Deed vs. title: 

What's the difference? Most people use the terms interchangeably, but there's a significant difference between the two— a distinction that's important to understand when you're ready to purchase a home. So let's look at what distinguishes deed from title.

Deed vs. title: The difference between these 2 real estate terms
"A deed is a legal document used to confirm or convey the ownership rights to a property," explains Anne Rizzo of Title Source Title Clearance. "It must be a physical document signed by both the buyer and the seller."

Title, however, is the legal way of saying you have ownership of the property. The title is not a document, but a concept that says you have the rights to use that property.

So when you buy a property, you will receive the deed, a document that proves you own it. That deed is an official document that says you have title to the real estate.

How to get the deed and take title of a property
To get the deed and "take title," or legally own the property, your lender will perform a title search. This ensures that the seller has the legal right to transfer ownership of the property to you, and that there are no liens against it. If everything is clear, then at closing the seller will transfer the title to you, and you become the legal possessor of the property.

The title or escrow company will then ensure the deed is recorded with the county assessor's office or courthouse, depending on where you live. You'll generally get a notification a few weeks after closing that your deed has been recorded. If you don't, check with the professional who did your closing and ensure that the paperwork has been filed. At that point, you have the deed and title to the real estate and the property is all yours.

What is title insurance?
Even with all of the due diligence a title company does before closing, there are rare instances when title problems can pop up later (e.g., missed liens and other legal issues that can be very costly to resolve). To protect against any financial loss, two types of title insurance exist: owner's title insurance and lender's title insurance.

"Unlike other types of insurance that protect the policyholder from events that may happen in the future, an owner’s title policy protects the buyer from events that have happened in the past," says Rizzo. "That may jeopardize their financial interest, such as title defects from fraud or paperwork errors, unpaid liens against the property, or claims that someone else is the real, legal property owner."

On the other hand, when you secure a mortgage, your lender or bank will require that you purchase lender's title insurance to protect the lender's investment in case any title problems arise. Lender's title insurance essentially protects the lender's interest in your property, which is typically until your mortgage is paid off.

5 Reasons the Highest Offer Won’t Always Get You the House

When it comes to buying a house, the highest offer always gets the house — right? Surprise! The answer is often “no.” Conventional wisdom might suggest that during negotiations, especially in a multiple-offer situation, the buyer who throws the most money at the seller will snag the house.

In reality, however, it doesn’t always end up that way. Sure, a hefty sum is the first thing every seller wants to see, but any good real estate agent will advise a seller that each offer is a sum of its parts.

Here are five reasons why your lower offer might just beat that higher one after all.

1. Cash is always kingIf you can pay cash, you’ll likely win out over a higher-priced offer. It may sound impossible to make such a huge purchase without any financing, but many people do it.

According to RealtyTrac, 43 percent of all home sales in 2014 were all-cash deals. That’s because with an all-cash buyer, there are no mortgages and lenders involved, escrow closes faster, and there’s no appraisal to worry about.

2. The next best thing to cash: a preapproval letter A preapproval letter is the confirmation you’ve acquired from your mortgage broker or bank that confirms you’re ready to buy in a set price range and have been preapproved for the loan.

In essence, the preapproval letter turns you into a virtual cash buyer, as mortgages can be harder to come by these days. Other buyers could still make a higher offer, but if they’re not preapproved, you may have the leg up — even at a slightly lower price.

3. Timeline flexibilityTypically, the closing period lasts 30, 45, 60, or 90 days. Customizing the length of the closing to suit the seller’s needs can often help seal the deal over a higher offer. Sellers almost always want fast closings, usually 30 days. If you have all your ducks in a row, you may be able to do this.

However, there can be extenuating circumstances. What if the house they want to buy won’t be ready for 60 days? The sellers will need more time. Find out what they need and then offer it to them.

4. The “Please let me buy your house” letterRecently, a seller had three similar offers on the table when he was selling his house. Two of the offers came with very heartfelt letters. He was actually put off by the buyer who didn’t send a letter, since the other buyers did. That small piece of paper made a huge impact — and he sold to one of the letter writers, even though theirs was a slightly lower offer than the non-letter writer’s.

Writing a letter may not get you the deal, but pay attention to trends in your market. If yours is the only offer that doesn’t include one, your house hunting days could be extended.

5. Not overloading on contingencies Contingencies are negotiating tools that give you an opportunity to walk away without consequence. The most common contingencies are the inspection, the financing, and the appraisal.

However, every contingency you add has the potential to make your offer look weaker, because each one can make it that much harder to close the deal. Make sure you really need every contingency before building them into your offer.

Here are some details on specific contingencies and how to handle them.

Contingent upon inspection: Some experts suggest skipping the inspection contingency to make your offer more attractive. Here’s my advice: never give up this one. After your inspection, give the seller your list of problems along with the opportunity to fix them, make a price adjustment, or give you a credit. If the seller doesn’t agree to your requests, you can walk. You take a huge risk if you waive this one. A much better option would be to tighten up the timeline. Offer to have the inspection completed in the first few days after opening escrow and to give a response to the inspection results within a few days.

Contingent upon financing: Again, this is a contingency you should never omit, unless you’re paying in cash. With most 30- to 45-day closings, you will have 17 to 21 days to get your mortgage approval. Having that preapproval letter will make this financing contingency less of an issue for your seller.

Contingent upon appraisal: It’s possible that the house you’ve fallen for could fail to appraise for what you have offered to pay. However, if you’ve done your homework, analyzed the comps, and are comfortable with the price you’ve offered, then you might consider waiving this one. The downside (which can be significant) is that you’ll have to make up the difference of the agreed-upon sales price. But waiving this contingency can give you a big leg up over the competition — especially in a hot market.

7 Steps to a Stress-Free Home Closing

This cheat sheet helps you do your homework, so you know what you’re signing when you close the sale of your home.

You’ve already cleared several hurdles by finding the right home, negotiating the best price, and getting approved for a mortgage. 

The last obstacle on your homebuying track is the closing, which can be both tedious and tense. By knowing what to expect and doing some legwork, you can smoothly put your closing behind you. These seven steps will guide you.

1. Set a Closing Date
Ask your title company to set a closing date and time that meshes with the end of your lease or the sale of your existing home. Don’t want to skip work? Ask for an evening or weekend closing. Tight on cash? Schedule your closing for the end of the month. That’s when you’ll pay the least amount of interest at the closing table.

2. Gather Your Funds
Buyers usually have to bring money to the closing. Ask the title company what forms of payment it accepts. Chances are you can’t use a personal check.

If you have to move money into your bank account to pay your closing costs, do so a week ahead to avoid last-minute problems. If the title company requires the funds in the form of a cashier’s check, stop by the bank a few days before closing to pick it up.

3. Purchase Title Insurance
If you’re getting a mortgage, you have to buy a title insurance policy. Think it protects you against problems with the title of your home? Nope, it protects the lender in case the sellers really didn’t own the home or someone else had a claim on it.

To cover yourself, you can buy an owner’s title policy from the same insurance company that sells you the lender’s title policy. Or, shop online at Closing.com, EasyTitleQuote.com, or FreeTitleQuote.com. An owner’s title policy insures you against losses from fraudulent claims against your ownership and errors in earlier sales. In some areas, sellers traditionally pay for the buyer’s title policy.

Whether or not you get the owner’s policy, if you buy a title policy from the same company that issued the prior owner’s title insurance, you can ask for a reissue discount or “bring-down” rate. There’s a discount because the title company only has to check the records filed since that prior owner bought the home, not since the dawn of time.

4. Line Up Homeowners Insurance
Get quotes and compare policies to be sure coverage will start by your closing date. An annual policy should run $500 to $1,000, depending on your home’s size, age, and amenities. To get a lower premium, opt for a high deductible or buy your homeowners insurance from the same company that insures your car.

If you live in an area where natural disasters occur, like earthquakes, floods, or hurricanes, you’ll need separate insurance to protect your home from those hazards.

5. Review Your Good Faith Estimate and HUD-1 Settlement Sheet
Your lender already gave you a Good Faith Estimate (GFE) that showed your estimated closing fees. Some of the fees on your GFE can’t change and others can rise by 10%. Before you go to the closing, compare the numbers on your GFE with the numbers on your HUD-1 settlement statement. Question your loan officer about any fees that increased.

6. Do a Walk-Through
Schedule an appointment to walk through the home one last time just before your closing.

• Make sure repairs you requested have been made.
• Look for major changes since you last viewed the property.
• See if the sellers left everything they promised to leave.
• Check to see that the sellers took all their personal belongings.
• Test electronics and appliances to ensure they’re still working.
• Turn on the HVAC and hot water. Are they functioning right?
• Walk the yard to be sure no plants or shrubs have been removed.

7. Resolve Issues Identified in Your Walk-Through
If your walk-through uncovers problems:

1. Delay the closing until the seller corrects them (if your state allows it). But that’s often not feasible because your lease is probably over and you’ve already scheduled movers. 2. Negotiate a discount to your sales price to cover the cost of the work needed. If the air conditioning is on the fritz and a contractor says the repair will cost $500, ask that the sales price be reduced by that amount. If you make that request at closing, however, be ready for a delay while the title company redoes the paperwork. 3. Have the title company hold a portion of the seller’s proceeds in escrow until the dispute is resolved. Once that happens, the funds will be released to you or the seller, depending on the outcome.

Home Matters

The Lowdown on Down Payments: Everything a Home Buyer Needs to Know

Ask most people what’s the biggest obstacle to buying a home, and hands down they’ll say it’s scraping together enough money for a down payment. But understand a key point: This is not a separate and distinct issue from landing a mortgage. 

Lenders, after all, like to see clients lay down a sizable chunk of change before they fork over a mortgage, because this shows you have skin in the game and lowers the odds that you’ll default on your loan. 

So how large a down payment do you really need?

Why a 20% down payment is best
Most financial planners recommend that home buyers make a down payment amounting to 20% of the price of the home.

Sure, that’s a lot of cash, which may explain why one survey by NerdWallet of 2,000 Americans found that we spend an average of three years shoring up our finances before buying a home. But there’s good reason to start pinching pennies early: A 20% down payment enables you to avoid paying private mortgage insurance.

What is private mortgage insurance?
If you have good credit and can put at least 10% down, you can still qualify for a conventional loan. The catch? You’ll need to pay private mortgage insurance, a premium that protects the lender in case you default on the loan. PMI ranges from about 0.3% to 1.15% of your home loan. But with interest rates being as low as they are, buying now can be a smart move from a long-term savings perspective.

“Mortgage insurance has gained a negative connotation, but it enables many people to buy homes who wouldn’t otherwise be able to,” says Barbara Carrollo-Loeffler, director of consumer and residential lending at Provident Bank.

Another silver lining: Once you have at least 20% equity in your home, you can ask your lender to cancel your PMI. And once you have 22% equity, the lender is required to automatically cancel the coverage. (One caveat: Some lenders require homeowners to get a home appraisal before they’ll remove it.)

Of course, purchasing a home now also means that you’ll start gaining equity in the home, rather than continuing to burn money on rent. You can use realtor.com®’s Rent or Buy calculator to see how much you’ll save each month.

Don’t have 20% or even 10%? Here’s what to do
Don’t have that kind of cash lying around? You have options. Depending on your credit score and income, you could qualify for one of over 2,200 down payment assistance programs nationwide, which help out home buyers with low-interest loans, grants, and tax credits. While a certain portion is geared to low-income buyers, you don’t have to be down and out.

According to Jonathan Smoke, chief economist of realtor.com: “Most consumers do not know about these programs, and those that do assume it’s more difficult to get than it is.”

And the savings can be substantial: Home buyers who use down payment assistance programs save an average of $17,766 over the life of their loan, according to a report by RealtyTrac. But we’re talking even bigger cash in expensive housing markets such as Los Angeles, where the average down payment assistance is a handsome $40,598.

Another option is a government-backed mortgage, if you qualify. Federal Housing Administration loans let borrowers put down as little as 3.5%; if you or your spouse served in the military, you’re truly in luck: Veterans Affairs loans are available with 0% down. You’ll need to meet certain income and credit requirements—FHA loans call for a minimum credit score of 500, and VA loans require a minimum score of 620—but these loan programs could allow you to purchase a home with less than 20% down.

The downside to small down payments
While making a small down payment may seem dreamy, keep in mind that there are some drawbacks. For one, the amount of money you’re borrowing will obviously be larger, which means you’ll have to make larger monthly mortgage payments. Making matters worse, loans with down payments under 20% typically come with higher interest rates. Therefore, you’ll need to tighten your spending more than if you were making a 20% down payment, but that’s not necessarily a bad thing if it enables you to clinch the keys to a home now, is it?

To get a ballpark figure of the mortgage you can afford and how your down payment affects your finances, punch your salary and other numbers into a home affordability calculator.

Specialist Wanted

Offering Over Asking Price on a Home: When to Pull Out the Cash and When to

One tried and true method for standing out among hordes of eager home buyers is to offer more money than the asking price. 

It's a tactic that makes sense: When a well-priced house in a great neighborhood goes on the market, you'll need to do something to get the seller's attention. 

Extra cash could be just the thing to make yours the winning offer.

But before offering more money than the sellers are asking for, buyers should consider several factors, says Michele Lerner, a real estate expert and author of "Homebuying: Tough Times, First Time, Any Time."

“First, you must be completely comfortable with the larger monthly mortgage payments,” Lerner says. “Before you make a higher offer, you need to find out exactly what the financial impact would be."

Additionally, she says, you need to be honest with yourself about how much you want the house.

“Sometimes buyers get caught up in the competition and don’t realize that they’re spending more than they want for a house.”

Disadvantages of offering over asking price
While offering above the listing price can help you outbid the competition, there are also some potentially negative outcomes.

“You could write this crazy high offer, and it turns out you had no competition and could have purchased the home at the original asking price,” says Chantay Bridges, a REALTOR® with Real Estate Professionals World Enterprise Marketing in Los Angeles. “And you could be paying more than what it’s really worth.”

How much over asking price should you offer?
If you decide to offer over the asking price, determining just how much over can be challenging.

“There really is no magic formula,” says Rick Snow, a broker with Exit West Realty in El Paso, TX. “It would depend on the market.”

Your real estate agent can help you come up with a competitive offer.

“They are the ones in a position to truly understand the market," says John Powell, chief development officer of Help-U-Sell Real Estate. And the concept of "sweetening the deal" really does take on a different meaning in different regions.

"In Arizona it might be 5% over; in California it may be 10% over asking,” he says.

Sometimes you need to take a big step back and try to see the bigger picture—and it isn't always just about price. One seller, for example, might want a strong buyer who can close escrow quickly above all else. Your real estate agent can help you navigate this, and help you determine the buttons to push in getting your deal accepted.

Compromise Isn't Always Key

Before Buying, Real Estate Pros Insist on Doing These 4 Things

One house you’re looking at has the wraparound porch you’ve fantasized about, but it’s on a high-traffic street. The condo you like has a doorman in the lobby (you can order online now!), but it has no dedicated parking. What to choose?

It’s not every day that you buy a home and make decisions about the next three, five, or 10 years of your life. Since you can’t exactly take a home on a test drive, how do you decide? That got us to thinking about real estate pros. When they’ve seen practically everything on the market, how do they choose?

Four pros who’ve seen it all share their advice and their stories of hunting for just the right home.

Compromise for Your Priorities

Veteran real estate agent Nancy Farkas knew exactly what she wanted in her home: ranch style, three bedrooms, high ceilings. But you know what she bought? A two-story Colonial.

Huh?

For Farkas, an associate partner with Coldwell Banker Heritage REALTORS®, in Dayton, Ohio, the home’s location and price trumped style. “I had a dog I had to go home and walk at noon, and the house was close [to work] and the right price,” she says.

Her advice: Make sure your practical and functional priorities don’t get lost in all the home buying hoo-ha (sparkling granite counters, new hardwood floors, a steam shower!). Remember, you can always add the hoo-ha, but you can’t make a home fit all priorities, such as location and price.

Dig Into the Details (Dull, Yes, But Worth It!)

When Grigory Pekarsky, co-owner and managing broker with Vesta Preferred Real Estate in Chicago, was looking for his first home, one of his priorities was to minimize his maintenance costs. He made sure to find out if the house had a newer roof, good siding, and a newer furnace. But he recommends you go even deeper to uncover a home’s not-so-obvious maintenance costs:

• Scope out the sewer line - especially if you’re interested in an older home — to make sure there aren’t any tree branches or other debris clogging up the works. Otherwise, you might find some nasty sludge in the basement.
• Look at the trees. How mature are they? Roots from older trees can invade the sewer line; untrimmed branches can pummel your gutters during storms.
• Know what's not covered by homeowners insurance.“I learned seepage isn’t covered. Shame on me,” he says.
• Ask how old the appliances are.You might need to budget for something new in a few years. Sellers are only required to fix what the inspector finds is broken; they’re not going to upgrade working appliances for you.

Seek a House That Matches Your Lifestyle

Having lived the high-rise apartment life as a renter, Pekarsky knew a single-family home was just what he wanted. He was tired of living in a relatively small space with no yard. He wanted a house he could “grow into in the next three to five years.” That meant multiple bedrooms and bathrooms for the family he plans on having. So what he bought — a three-story, single-family with a finished attic bedroom (shown below) on Chicago’s North Side — suits his lifestyle perfectly.

In addition, “you get the biggest value from owning the land,” he says. “In a single-family [home], people aren’t telling you what to do with the investment.”

On the other hand, Matt Difanis wished he’d bought a condo when he bought his first home, a small bungalow ranch in a charming, historic neighborhood in Champaign, Ill. It was first-home love — until it rained.

“If I didn’t clean out the gutters before every rainstorm, the basement would leak,” says the broker-owner of RE/MAX Realty Associates in Champaign. He didn’t realize that taking care of a single-family home wouldn’t be his cup of tea. “I should have opted for a condo without gutters to clean and a lawn to mow,” he says.

Agent Amy Smythe Harris of Urban Provision REALTORS®, in Woodland, Texas, bought a home with a sizable downstairs suite her parents could use now (and she could use years from now). She says her millennial clients aren’t forward-thinking about their lifestyles. Some are childless and say they don’t care about schools, pools, and tennis courts. Then they become parents a few years later and have to move.

“Once they have kids, the first question [they] ask is about school districts, and the second is about where the parks and pools are,” she says.

The pros’ bottom-line advice: Think of your lifestyle preferences and how those might change in the next few years. After all, the typical homeowner lives in a house for a median of 10 years before selling, NATIONAL ASSOCIATION OF REALTORS® data shows.

Look at the House Through the Lens of Resale

All the real estate pros we talked to — no surprise here — emphasized resale. Take appraiser Michelle C. Bradley of Czekalski Real Estate Inc. in Natrona Heights, Pa. When she built her current home — a 2,200-square-foot ranch — she included a full, unfinished basement, even though she has no use for one and rarely ventures into it.

Why would she do that? Because basements are standard in her southwest Pennsylvania market. But Bradley’s not going to finish the basement until she’s ready to sell. That way, she avoids having to clean it and ensures she’ll install the most fashionable bathroom fixtures at sell time.

Her advice: “Don’t buy or build something unique that you can’t resell. If you’re not in an area with log homes, don’t choose a log home. If you’re not in an area with dome homes, don’t choose a dome home.”

Likewise, don't buy a home that's not in line with the neighborhood's average price. When you go to resell, you'll find yourself in an uphill battle to maintain your higher price.

Other advice from the pros: Watch out for unfixable flaws that could affect resale, like:

• What's next to the home, such as vacant land that could be developed, high-traffic businesses, noisy power generation stations, a cell tower, etc.
• Lot issues, such as a steep driveway that could double as a ski slope in winter, or a sloped yard that sends water special delivery to your foundation.

Of course, a home isn’t just about resale. It’s just one factor to consider. Remember the first point: Be willing to compromise for your priorities. If the home meets your priorities and you’re going to stay there awhile, then resale might be where you compromise.

Common Home Buyer Experiences

California May Sales

5 Reasons You Should Buy A Home Right Now

5 Ways to Beat Out the Competition

As the real estate market starts to pick up in many parts of the country, real estate agents from small towns to the big cities are blogging, tweeting, ranting and raving about multiple-offer situations.
A seller’s asking price is just that: an asking price. The seller may choose to price their home above, at or well below what the actual market will bear. Then, with luck, come the offers from buyers. Sometimes, there are multiple offers all under the asking price. Other times, all offers come in right around the asking price.
But in some situations, there are more than six offers coming in over asking price. Depending on where you live, you, as a potential buyer, may be forced to compete with other buyers in a bidding war. Here are five steps you can take to beat the competition in a multiple-offer situation.

Hire a good local agent

In most communities, 80 percent of the business is done by 20 percent of the agents. These agents are experienced in the local market and have relationships with other agents as well as inspectors, contractors, mortgage brokers and appraisers. More than anything, these 20 percent of agents “get” it.
A seller is looking for a sure thing and a smooth, clean escrow. With stakes high, who wouldn’t want a sure thing? In fact, the last thing the seller (or their agent) wants is to enter into escrow with an inexperienced or out-of-the-area agent.
That’s why, when faced with multiple offers, a seller, guided by their agent, may choose to work with a lower-priced offer because that buyer has a good agent. Many times, a lower priced offer will be countered up to match the price of a buyer with an unknown agent.

Get your financial ducks in a row before making an offer

Before you can make a strong and winning offer, you need to have your finances in order. This means being pre-approved for a loan and staying in regular contact with your lender or mortgage broker. Have an auto email alert set up from your real estate agent’s MLS. Know the new listings as they hit the market and be prepared to visit them right away. Be ready to make a move when the right house comes along.
An informed buyer has been in the market for some time. They’ve seen multiple properties, either at open houses or private appointments. They come to the multiple-offer situation fully prepared, knowledgeable of the market and ready to present themselves as a strong, motivated buyer. The seller and their agent will appreciate that.

Don’t wait

Many times, a new listing is sold before the first open house. If a desirable property hits the MLS on a Tuesday, you need to see it Tuesday night or Wednesday morning. As agents tell sellers all the time, your first buyer is likely your best buyer. The buyers who don’t rest on their laurels get the home. They show that they are on it, they’re motivated and they really want the property. This often translates into a successful deal or smooth escrow for the seller and the listing agent.
If you’re serious about buying and have your financial ducks in a row, don’t wait for the open house. As soon as you see the listing, let your agent know you’re interested or have them start doing the research.

Make a ‘clean’ offer

There’s an assumption that the successful bidder simply pays the most money. But this isn’t usually the case. While price is a huge factor, the terms and conditions are as important, if not more so.
To make your bid the most compelling, be as flexible as possible to the seller’s needs. If you know the seller needs a quick escrow because they just bought a place, give it to them. If they just had a baby and need some extra time, go with a longer close or offer to close quickly but give them a “rent-back.” If you’re going to have inspections, check with the inspector and see if you can get an appointment soon after getting your offer accepted. That way you can remove your inspection contingency quicker.
The same holds true with an appraisal. If your lender is able to pre-schedule an appraisal or at least check their schedule, it can only help. The last thing a seller wants is to accept an offer, only to wait 14 or 21 days to discover the buyer can’t get a loan or the leaky roof scared them away. Make your offer clean with swift timeframes for contingencies. There have been times when a seller leaves 2 to 3 percent on the table; just to be sure the deal will close “cleanly.”

Present yourself in the best possible light

Presentation can’t be emphasized enough. Make sure your agent presents your offer to the seller in a professional way. The offer should, when possible, be presented in person. A contract should be typed, not handwritten. Without a doubt, a pre-approval letter from your bank or broker should be attached to the offer. A cover letter from you or your agent presenting you, as buyers, to the sellers should always accompany your offer. If there are disclosures presented to you prior to your making an offer, sign off on them. Make it clear to the seller that you’re serious, motivated and ready to move ahead should they choose to work with you.

Strong and clean is the way to go

It’s the common sense stuff that will help differentiate you from the pack. Be up front, show that you’re motivated and look at the big picture of your offer — not just the dollar amount.
Of course, many times the highest bidder wins. But every day, there are dozens of buyers who kick themselves because they would have paid the price that it took to win the bidding war. Presenting yourself and your offer in the strongest and most clean way will go a long way to assuring you come out on top.

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