Tag Archives: what to expect

How Online Home Valuation Tools Work and Don’t Work

Whether buying or selling a home, online home valuation tools (also called Automated Valuation Models, or AVM’s) such as Zillow’s Zestimate can be useful. But they can also be problematic. Since most buyers and sellers are looking at these values, it is a good idea to understand them and how online home valuation tools work and don’t work.

RBHcomuterIt’s a computer, not a person. Online estimates follow an algorithm to give a projected estimate of value. This means that the algorithm is based on the accuracy of the data that is has to compute. The problem occurs when data is input by sellers that may falsely inflate values or where lack of data may not produce an accurate value.

What it (generally) measures. The value of your home will usually be a product of comparable homes. How does your home compare to similar homes that recently sold (within the last 6 months) and are actively listed within a 1-2 mile radius? In addition to proximity, other features compared are: square footage of the home, number of bedrooms and bathrooms, year the home was built, and size of lot. Values tend to be most accurate when this data comes from homes that are fairly new tract homes. Homes that are custom or have been updated with custom features, however, will likely be off on their value here.

It can also be problematic when the algorithm doesn’t recognize a neighborhood boundary. For example, is the computer is using comparable homes from a nearby condo complex when your home is a single family residence? Or, do some of the comps used fall in differently rated school districts? Also, computers are not likely to take into consideration the terms of those sales, such as distressed or discounted sales.

RBHaley Mortgage CalculatorOther features that are probably not figured into the algorithm are: views, location relative to busy roads, outdoor features such as a kitchen and/or a pool, whether the lot is flat or on a steep slope, and quality of the neighborhood, and higher end upgrades and appliances.

Know your competition. The reason comparable homes are considered when deciding value is based on the idea that a typical buyer will not pay more for a similar home if all things are equal. This is why it is especially important to look at recently sold homes (last 6 months) to help determine what people have paid. One mistake many sellers and buyers make is basing value on homes that are currently listed. The problem with this logic is that often the list price is the “best case scenario” for the seller but not necessarily what a buyer is willing to pay.

The bottom line. Being able to differentiate the value the of your home based on specific features is an important part of putting these online home value tools into context. So, unless you want to hire an appraiser, use online home value estimates only as a supplementary tool. Work with a trusted real estate agent to get a more accurate home value (they have additional tools and knowledge to help obtain this value). And remember, what a seller paid for specific upgrades will not always equate to what a buyer will pay.

R.B. Haley Fine Homes & Estates

12396 World Trade Dr., Ste. 306, San Diego, CA 92128

(858) 592-4895       http://rbhaley.com/     CalBRE#01843189

Energy Efficient Home Improvements That Also Add Value

A home for sale that is energy efficient is almost always more appealing to buyers. Why? Because buyers know that they will save money monthly because of the efficiency of the home and will not have to make those upgrades themselves. But not all upgrades are valued the same, and not all buyers are willing to pay a higher price for upgrades they do not value. Here are some common energy efficient home improvements that also add value to your home (so everyone wins!).

Windows     If you have not already upgraded to energy efficient windows, start here. Not only can older windows be an eyesore, window replacements are one of the few upgrades that instantly give an updated look while also providing great function by helping to regulate the home’s temperature and reducing its exposure to extreme heat and cold.RBH window

Appliances     Many home buyers today expect kitchens to be updated with modern amenities like granite or quartz countertops and stainless steel. This also includes energy efficient appliances. Again, this upgrade is functional and goes a long way with making a positive visual impact.

Furnace and A/C     If your home’s furnace or air conditioner is nearing the end of its functional life, it may be worth replacing it before you have to. Home buyers become weary when they know that an expensive item has a higher potential for needing to be replaced in the near future. Even simply adding a programmable thermostat can go a long way.RBH air conditioning

Insulation     While insulation is not something potential buyers will necessarily be able to see, it is likely something they will be able to feel. A well insulated home will offer more in the way of comfort from extreme temperatures and noise. And, as far as energy efficient home improvements, insulation is relatively inexpensive to install.

If you want to prioritize your projects further but are not sure where your house ranks in terms of energy efficiency, you can start by requesting an energy audit from your local utility company. Another benefit that homeowners may overlook is the added bonus of homeowner tax credits available by the IRS as an incentive to upgrade your home’s energy efficiency.

While not all buyers are willing to pay more for energy efficient upgrades (even in a seller’s market), many times the homes that are in need of updating and upgrading are magnets for real estate investors who see it as an opportunity to invest their own money into these upgrades, which results in a lower offer price to the seller. Consult with your real estate agent for further guidance.

R.B. Haley Fine Homes & Estates

12396 World Trade Dr., Ste. 306, San Diego, CA 92128

(858) 592-4895       http://rbhaley.com/           CalBRE#01843189

Tips for Buying in a Seller’s Market

If you are a home buyer in today’s real estate market, you may be experiencing some challenges. Low inventory and faster selling times (average of 21.8 days Days on Market) make this seller’s market tough to navigate for potential buyers. So what can buyers do to stay competitive? Here are 8 tips for buying in a seller’s market.RBHaley Mortgage Calculator

Get Pre-approved before you start looking     Getting pre-approved before you start looking will give you the price range you know you can comfortably afford, and looking below that will give you some room for negotiating up if needed. Also, getting pre-approved shows sellers your credit worthiness and sets the stage for a smoother and more successful purchase.

Know what you need vs. what you want     Knowing your must-have features (and being in agreement on those if you are buying with a significant other) helps you know where you are willing to compromise and where you are not. Knowing what is negotiable in your mind will speed up the decision making process while ensuring that your priorities stay in check.

Find a rock star agent     Anyone can search for homes online, but a rock star real estate agent is well connected to other realtors and the market, and may even learn about homes that are not yet listed. She or he should give you a competitive edge by using her or his resources to not only find you right home, but help sell you to the listing agent and sellers as the ideal buyers. If you aren’t getting that kind of service, it might be time to look for a new agent (and we happen to know a few amazing agents!).

Be ready to act. Fast.     Being ready to act fast goes beyond being pre-approved. You will want to have a pre-approval letter written by your lender as well as proof of funds (such as a bank statement) to show you are willing and able to make a Good Faith deposit upon acceptance of your offer. It also helps to have letters of recommendation from employers, landlords, and anyone else who can vouch for your good character and dependability. Have these things ready to go so that an offer can be executed on a moment’s notice, as even mere hours can make the difference in a seller’s market.RBHaleySignContract

Make your best offer     Many sellers are receiving multiple offers right up front. If your offer isn’t competitive from the get go you may not get the chance to counter offer. Remember, it’s not always about price. You can enhance your offer by reducing or eliminating contingencies or showing flexibility to work with the seller’s time frame. Understand what the seller is looking for and write your offer accordingly.

Make it personal     Don’t be afraid to tell your story as a buyer to appeal to the seller. Most sellers (unless it is an investor) cherish their home and want to know that whomever will be buying it will love it as much as they have. Get creative and you will be light years ahead of your competition.

Be realistic     As a buyer in a seller’s market, you are probably not going to get a killer deal. Be realistic in your offer based on current values but resist the temptation to bid beyond what you can comfortably afford.   Stay focused on what gives that home real value and do your research on comparable properties so you know whether the purchase is a good investment and why.

Keep moving forward     If your offer was rejected or you were outbid, don’t despair! Do your best to move on. Believe it or not, there are many “right” homes out there; it’s just a matter of finding the right one at the right time. Stay optimistic and keep looking…often times buyers end up finding something better!

R.B. Haley Fine Homes & Estates

12396 World Trade Dr., Ste. 306, San Diego, CA 92128

(858) 592-4895       www.RBHaley.com         CalBRE#01843189

 

What to Expect When Buying a Home: Moving In

RBHmovingbox

Buying a home is a process. That process starts with working with a lender to get pre-qualified, then shopping around to find an agent and a home. The next stage in the home buying process includes making a purchase offer (and possibly counter-offer), getting acceptance and agreeing on terms, and successfully completing the purchase transaction in escrow. Once you purchased the house…the next step is to become the occupant! Make your move into your new home low stress by following a recommended timeline and using these helpful tips for “What to Expect When Buying a Home: Moving In.”

Moving begins before moving day. A smooth and successful move takes planning weeks in advance, especially if a relocation or sale of another home is involved. Here is a general week-by-week timeline you may find helpful (or use this checklist for moving):

Four weeks prior to moving:

  • Start sorting items and begin acquiring moving materials (boxes, tape, markers, bubble wrap)
    • Tip: every item should be assigned one status of KEEP, DONATE, or DISCARD
  • Make a list of accounts, creditors, insurance, and businesses to contact, and notify of new address if possible
    • Tip: you can start making these updates as you pay the final month’s bill before you move
  • Notify the utilities company of where you are moving to/from so that service can be turned on/offRBHmovingbox
  • File a change of address form with the Post Office
  • Inquire about the registration process if kids are switching schools

Three weeks prior to moving:

  • Decide what items you will move yourself and schedule a moving company to help with the rest
    • Tip: check your homeowner’s policy on whether moving is covered by your insurer and take inventory of all your belongings
  • Continue sorting and packing
    • Tip: color code labels as you pack so that like items are packed together and can be easily unpacked
    • Tip: sketch out a floor plan of your new home so that you have a general idea of where things will go and what may not fit
  • Make a list of important names, phone numbers, and addresses to take with you (and keep it handy)
    • Tip: send out an email with your new contact information to friends and family ahead of time
  • Make any travel arrangements needed for your move (including any arrangements for pets)

Two weeks prior to moving:

  • Dispose of any flammable or hazardous household items (it is usually okay to leave labeled cans of the home’s current paint colors)
    • Tip: check with your community about hazardous household waste disposal locations and hours
  • Consider ordering a curbside dumpster for large amounts of trash
  • Discontinue regular services such as landscaping, newspaper delivery and/or subscriptions, pest control, etc.
  • Finalize plans for moving larger items (TV antenna, swing set, trampoline, etc)
  • Plan to use up frozen and stored food

One week prior to moving:RBHmailbox

  • Determine what items of value (jewelry, etc.) you will keep with you during the move and where
  • Drop off all donation items (or arrange for pick up)
  • Clean appliances
  • Make arrangements to connect/disconnect phone/internet service at your new home and sold home

The day prior to moving:

  • Pack a suitcase or box of necessities that you will need upon arrival
    • Tip: include kitchen and household items such as phone chargers and cords, paper towels, trash bags, hand soap, scissors, drinking water, snacks, and toilet paper

MOVING DAY:

  • Plan to be at your sold home as movers arrive to oversee the loading process
  • Check the condition of items that are being loaded
  • Verify your new address and phone number with the movers, and be prepared for payment
  • Take a final tour of the property, including the yard
  • Lock all doors and windows and turn off all switches
  • Meet your movers at your new home and oversee the process of unloading

Welcome home!

Investing in YOUR Future,

R.B. Haley Fine Homes and Estates

Did we miss anything? Feel free add comments below with some of your great ideas and/or feedback. Thanks for your input and please remember to share!

R.B. Haley, Inc. 12396 World Trade Drive, Suite 306, San Diego, CA 92128

http://www.RBHaley.com   858.592.4895   CA Lic#01843189/01219416

What to Expect When Buying a Home: In Escrow

Navigating the home buying process can be tricky!  That is just one reason why it is important to work with a knowledgeable and experienced real estate agent. Most agents will advise that buyers first get pre-qualified (if not pre-approved) before they start looking to find an agent and a home. Your agent will also guide you through making a purchase offer. Once your offer is accepted, the escrow process begins. What does that mean? Here is “What to Expect When Buying a Home: In Escrow.”

Let’s start by first defining what it means to be “in escrow”. The escrow holder is the designated, neutral third party who is responsible for seeing that the terms of escrow are carried out according to the agreed upon escrow instructions. This is accomplished through a vehicle known as an escrow account that acts as a depository for all monies, instructions, and documents necessary for the purchase.home and contract

Here is what a buyer can expect. Once your offer has been accepted you will need to furnish a good faith deposit. You will also want to work with your lender to complete your loan application and prepay any necessary fees such as a credit report and appraisal costs. Your agent will work with you to complete any required paperwork, such as approving reports and any property disclosures required as part of the sale agreement. Your lender and agent should also keep you apprised of any steps needed for your loan approval. Once your loan is approved and funded, escrow will determine when the transaction will close and then works with Title to record necessary documents. The final stages of escrow include preparing the final settlement statements, disbursing proceeds to the seller, and paying off the existing encumbrances. At the close of escrow, statements, funds, and remaining documents are delivered.

A lot can happen in escrow. It is a good idea to prepare yourself for some of the hurdles in escrow that you may encounter. In addition to those, here are some things you can do to help ensure a smooth transaction.

  • Be ready to provide your lender with any required loan documentation and do not make any major purchases while in escrow.
  • Decide in advance how you want to take title as the buyer.
  • Be prepared with fire/hazard insurance information for a new policy.
  • Be sure to inform your agent of any “red flags” that may cause delays in escrow, such as: bankruptcies or judgments, business or other trusts, foreclosures, use of Power of Attorney, transfers or loans involving corporations or partnerships, any last minutes changes.

set-of-keys-1315125-1279x2110You should always call your agent when you have questions. It is also important to note that the escrow process may vary depending on the type of sale, such as a short sale. Once escrow is complete and everything has been finalized, you will become the new homeowner- congratulations!

What’s next? Now it’s time to move in! Check back to read our final installment of “What to Expect When Buying a Home” for a helpful timeline and tips for a successful and low-stress move. Welcome home!

Investing in YOUR Future,

R.B. Haley Fine Homes and Estates

Did we miss anything? Feel free add comments below with some of your great ideas and/or feedback. Thanks for your input and please remember to share!

R.B. Haley, Inc. 12396 World Trade Drive, Suite 306, San Diego, CA 92128

http://www.RBHaley.com   858.592.4895   CA Lic#01843189/01219416

What to Expect When Buying a Home: Get Pre-Qualified

The decision to purchase a home is one thing; actually doing it is another. If you know what to expect when buying a home, you can go into it prepared and ready to tackle any challenge. So where do you start? First, you need to be clear on your home buying goals.

Start with these 5 questions. The process of buying a home starts way before you start searching. First, you will need to know:

  1. What price range can I afford? Be realistic. Just because you think you can afford a certain purchase price doesn’t mean you should buy at that price. There will be expenses associated with buying and maintaining a home, so leave yourself plenty of cushion.Questions to Ask Yourself
  2. What are my wants and needs? For a successful home buying experience, it is crucial that everyone is on the same page here. It is best to narrow your list down to general features (separated by “need” and “want”), and a few desired neighborhoods.
  3. Am I financially and emotionally prepared to buy a house? Buying and owning a home is a big- and a more permanent- commitment. Your financials must be in order, you must be prepared to spend the money needed to maintain a home, and it may demand more of your time than renting.
  4. What is my time frame for buying? Are you relocating for a new job? Will the offer be contingent upon selling your existing home? Do you need to close escrow by a certain date? This can help guide your decision-making.
  5. Do the unique circumstances of your purchase require a specialist? Are you an active duty or military veteran? First time homebuyer? Relocating? Downsizing into retirement? There are a lot of different programs available to buyers, and it may help to work with a REALTOR who specializes in your type of transaction.

Once you have a clear idea of what you want and need, go back and revisit what you can afford in more detail. Doing this early on will help you understand what you will need to start with and how much you will need to save. Generally speaking, most lenders will lend up to three to five times your household income with a 20% down payment. You can use this mortgage calculator to help guide you. Keep in mind that existing debt will also be a factor. In addition to the down payment, you must also be able to pay for closing costs.

RBHaley Mortgage CalculatorAt this point, you will want to start talking with a mortgage professional about getting pre-approved (or better yet, getting pre-qualified). You can expect that they will run a credit check, check W2’s and pay stubs, check bank records (going back several months), and possible additional requirements. Having these documents ready and accessible will save you some time and headaches.

Once you are pre-qualified (or pre-approved), you will know what your maximum price range will be. As a buyer, being pre-approved (and especially pre-qualified) can be a big advantage when you submit a purchase offer on the perfect home…which is part of the next step of What to Expect When Buying a Home: Finding an Agent and a Home.

We hope this helps set the stage for your home buying experience. As always, feel free to call us anytime if you need help.

Investing in YOUR Future,

R.B. Haley Fine Homes and Estates

Did we miss anything? Feel free add comments below with some of your great ideas and/or feedback. Thanks for your input and please remember to share!

R.B. Haley, Inc. 12396 World Trade Drive, Suite 306, San Diego, CA 92128

http://www.RBHaley.com   858.592.4895   CA Lic#01843189/01219416