Steps in Selling the Old Home and Buying Another


Tips on How to Sell a Home Before Buying Another
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The real estate market has changed dramatically in many parts of the country from a couple of years ago. There are now fewer homes for sale than they used to be and many people might find themselves in an interesting in-between stage: finding a home to buy before they sell the one they live in. Ideally, you would switch from one mortgage to another the same day, buying the new home at the same time you sell the old one.

We don't live in a perfect world so most people need to secure financing for the new home before they are able to sell. Nobody likes to be homeless, even for a short period of time. If you sell your home first, before you bought the new one, that's exactly what you are. Now of course, the meaning of the word is not precisely the same as for the people hit by poverty and misfortune. Yet, besides the advantage of getting the cash you need to buy the new home, you need to find a way to cope with the squeeze time, from the moment you leave the old home to the one you buy and move in the new one.

Switching from one home to another is by no means a trivial step so you have to carefully consider many important aspects and ask yourself a series of important questions:
  • How long it will take to sell?
  • Is it possible to sell and buy at the same time?
  • Can you make a sale-lease back arrangement?
  • Can you afford to buy before you sell?
You can find good answers to all the questions in this recent article.

Don't panic if you were able to find the perfect next home while your old house is still on the market. Here are a few options for the squeeze time if you first sell the old house:
  • Rent back the house from the buyers, provided that you cover their costs for the time you rent back: the new mortgage, property taxes, utilities and homeowners insurance. The best way to secure this option is to include a provision in the sales contract allowing you to rent back for a certain amount of time;
  • Move in with parents, a sibling or a friend. You may need this option if it takes more than a month to find the new home. While this option buys you time, you need to consider the costs of moving your stuff twice;
Depending on the conditions of your local market, you may find the new home to buy before you sell the old one. Even though lenders have a standard 40% ratio between income and mortgage, they might loosen up a little and allow a 50% to 55% debt-to-income ratio for someone temporarily straddling two mortgages. Here are some options in this case, presented in more details in an article published on MSN Real Estate:
  • Tap your home equity;
  • Consider a bridge loan or wrap financing;
  • Borrow from relatives or from your 401(k).
We do not advice tapping into your 401(k) but use a contingent contract for selling buyer's home, meaning the buyer's home must sell before the buyer is obligated to complete the purchase transaction. But remember: your ability to bargain on a new home is greatly diminished by the conditions that you build into the offer. Many people do not entertain offers with strings attached and if you are putting a bid on a foreclosure, it won't be considered if you have a contingency on selling your home. Considering today's market, many real estate agents believe that the sale of the present house trumps the purchase of the new one in order of importance.

5 Best Practice Rules For Homebuying

5 best practice rules for homebuying
2003 was the year of flashy positive news about real estate: limited supply on the market, bidding wars, multiple offers, the whole nine yards. Mass media, social media, print media, you name it, was fast to point out the signs or recovery and low interest rates. It all seemed like the beginning of a promising race, with the market moving fast toward an encouraging end.

The only problem with that, as pointed out in this article recently published on AOL's real estate section, is that we tend to forget we are just at the beginning of a race. Moreover, it doesn't seem to be a simple race but a full-fledged marathon. If you plan on buying a home in 2014, you should raise above the trees and try to see the entire forest. Don't make decisions based on micro stats, short term events, or flashy article titles.

The above-mentioned article provides 5 important best practices for home buying, helping people focusing on long term goals. Read the article to learn how to:

  • Educate yourself on aspects related to financial self assessment while focusing on your needs and capabilities instead of market characteristics. This will help you define the best time for you to buy, a decision evolving more around you and not necessarily dictated by the market;
  • Define your priorities: your home is a place to live first and a financial investment second. Do not rush the process, as home buying is a complex affair, a mixture of rational, emotional, and financial decisions;
  • Forecasts, prognosis, and predictions may not be very accurate. Don't let yourself fooled by data posted in print or online. Make decisions after careful assessment of numbers and stats, always following your established set of priorities;
  • Take into consideration only local aspects. The realities in your community trump any trends on a national or state level.
  • Trust yourself. Any decision you make should be based on your own assessment and knowledge of your financial capabilities. 

Buying a home is more like a marathon than a fast-paced race. Move along this complex process with the speed that makes you comfortable on assessing your real financial strength, needs, and long term plan for you and your family.
Read the entire article here...

Housing Market to Improve in 2014 as Mortgage Availability Concerns Ease

© Gualberto107 | Dreamstime Stock Photos & Stock Free Images
More people plan to buy a home, recent economic outlook shows. The good news, according to an article published recently on Inman News, is that nationwide 6.9 % more people were looking into buying in December, up from 5% in November. The not-so-good news is that existing-home sales have not seen much of a rebound lately, with pending home sales only stabilizing in November.

Yes, there still are concerns about mortgage availability, but people have improved their perception and attitude about the ease of getting a mortgage. This comes as a natural reaction to the fact that loan officers have eased lending standards for residential mortgages, compensating the negative impact of the current higher interest rates.

To continue the series of good news, economists predict that the housing market's contribution to the economic growth this year will double. According to the article on Inman News, the GDP growth will reach 2.9% in 2014, but we have to wait and see.  Economists made some other projections in the past that were not confirmed in reality. Fannie Mae expects that 0.6% of the GDP growth to come from the housing market. The signals we get from home builders are extremely positive so we hope it will be even more.

Now that the foreclosures and distressed properties are fading out, competing less with the other residential properties on the market, we may experience a double-digit growth for the new-home sales and housing starts. According to the article, first-time home buyers and trade-up buyers need to step up and make for the decline in transactions made by investors if we want to see improvements in purchase mortgage applications.
Read the entire article here...

SEO Steps to Effectively Market Your Online Listings

According to the National Association of Realtors, 90% of buyers start their real estate search online. Each transaction is very important on today's competitive real estate market. Anything you can do to improve the chances of a sale to happen becomes crucial.

The best way to get exposure, drive traffic and stand out from the crowd is to optimize your own online listings for search engines. This will improve the marketability of your listings since regular MLS does not allow or support SEO.

Real estate listings are a very effective form of content. They provide many opportunities for marketing besides social media posts, online syndication, and open houses. Since MLS data is shared with every other website on that MLS feed, search engines do not index. This means MLS data brings no SEO value to real estate agents.

Get more value from your listings following Gahlord Dewald's steps as laid out in this infographics. Gahlord is an online marketing strategist and contributor at Inman and he published his real estate online listings SEO here.

Is the 500-Page Mortgage Application the New Norm?

Mortgage 500 pages files
A few years ago, before the housing market meltdown, the typical mortgage application file ran to about a hundred pages. The mortgage application file has now reached 500 pages on average.

A middle-class applicant looking to finance a median-priced home may end up with just a few hundred pages. Business owners on the other hand, or affluent people with more than one stream of income "can generate paperwork better measured with yardsticks than page numbers" according to an article published on CNN Money.

So what do these mortgage files include to make them so thick? In each one of them you will now find a credit report, appraisal and property information, income and asset records, two years tax returns, two months' bank statements, sourcing of every deposit, and other financial documents. Due to the tighter rules put in place, "the disclosure documents alone account for nearly 50 pages" according to the article.

According to the post 9/11 Patriot Act legislation, no matter how much money you have in the bank, you have to show the source of your recent deposits to make sure you are not suspected of funneling money to terrorist groups.

Just the checklist lenders use to manage the application can run three pages long, with 55 separate boxes to check, covering items like the good faith estimate, asset statements, and the original appraisal report.

Gone are the days when you signed your name and got a check. No one expects to get through the process of borrowing tens or hundreds of thousands of dollars too easily. Yet, filling yards of paperwork does not help the housing market recovery process either.

Read the entire article here...

Home Improvement and Renovation Projects to Avoid

Home renovations
Many home owners try to add value to their investment and make it more valuable. People hope that through renovations and alterations they add value to their home. Unfortunately, that is not always the case. Real estate agents and appraisers agree that many such changes add little to no value, while in some cases accomplish the opposite effect, dragging down the value of a home.

On the other hand, you don't want a lack of upkeep to have a negative impact on your home and its value. When you decide to start a renovation or addition project, the best way to avoid mistakes is to think like a buyer. What are such mistakes? Here are a few examples, but keep in mind that the list of renovation or improvement projects that can hurt the value of a home is much longer:

  • it is easy to over do it for the neighborhood you live in, turning your home into a pricey outlier;
  • invest a bunch of money into a single project while the rest of the house remains untouched;
  • remodel the home too much by the personal taste and style;
  • additions to the home that are not functional and mess up with the floor plan;
  • be cheap by adding the disastrous above-ground pool that no home buyer loves.

Since today's typical buyers plan to live in their homes for just five to seven years, it is more important than ever to consider resale when making home improvements. Read this article to learn more about 14 home project faux-pas and tips on how to avoid them.

Holidays Are The Best Time For Successful Realtors to Ready Themselves For 2014

If you are a real estate agent you may wrongly believe that holidays are the best time to turn off your cell phone, put aside the laptop and forget about your real estate business. You couldn't be further from the truth, as this article on Inman News points out.
The end of the year is a great time to reflect back on the ups and downs of real estate in 2013. It is also a great time to set things in order for a great start for your real estate business in 2014.
In case you wonder what can you spend the precious holidays time on, here are some activities successful realtors put on their list: real estate business health check; contacts database cleanup; web site content review; home office clean-up; holiday prospecting and network expansion. As you can see the list is pretty long and for a good reason: you want to give yourself a clean and strong start in 2014. How else can you be a successful real estate agent next year? Let your competitors rest for the holidays while you set the ground for a nice "eat-my-dust" start.
Once you have everything on that list covered, take care of two more things: revise (or write, you have not yet done this) a business plan for your real estate business, and re-examine your market niche. Establish clear objectives for 2014 and make sure you spend your time and effort chasing the buck in the right niche.
Read the entire article here...