In our previous post, we talked about the basics of real estate purchase agreement. Now, we’re going to learn more about it by discussing earnest money deposit and closing expenses while answering some of the most frequently asked questions about real estate purchase agreements.
Consider earnest money as a deposit made in good faith by a buyer to a seller to demonstrate the buyer's commitment to their deal to buy a house. A buyer may withdraw from this deal at any time but will forfeit the earnest money deposit, save if the seller fails to satisfy specified restrictions.
The purchase agreement will specify how much earnest money is needed for the real estate contract. In a sense, it acts as insurance for sellers who usually want to make sure they aren't wasting their time or missing out on other chances by pursuing a contract that won't close.
To prevent any problems and guarantee that it is distributed properly and on schedule, this earnest money is often kept in escrow by a third party. When you close on the property, any funds deposited into escrow will be used for your closing expenses or down payment.
Closing costs are the additional charges that purchasers and sellers must pay in order to finalize a real estate transaction. Loan origination fees, discount points, appraisal fees, title search fees, title insurance, surveys, taxes, deed recording fees, and credit report fees are a few examples of these expenses. Three business days prior to a scheduled closing or settlement date, lenders are required by law to give buyers a closing disclosure.
What fees apply to closing? They are essentially processing costs and ongoing costs that you will pay to your lender after you close on a home.
Amounts for typical expenses including home appraisals, title searches, property taxes, homeowners insurance, lender's fees, and ownership transfers are included in closing costs. Your purchase agreement should specify who is responsible for paying these closing charges (parts of which may be divided between the buyer and seller).
Final closing fees may range from 3% to 6% of the cost of a home.
The most frequently asked queries about real estate acquisition agreements are listed below.
A real estate purchase agreement is not filed with county records, so it does not need to be notarized in order for it to be legally binding.
When the option is specified in the real estate contract or when the laws of your state permit it, a real estate contract may be ended. State laws typically permit the termination of a contract when a seller omits to disclose any significant problems with the property.
The costs involved with creating this contract are normally covered by the seller's agent commission charge, which is paid as part of the closing costs.
The terms and conditions under which a property will be sold are clearly spelled out in a real estate purchase agreement, which is a binding legal instrument. It's created to assist you prevent hitches by taking into consideration aspects related to a property purchase and sale. It's built to safeguard both buyers and sellers and ensure a smooth transaction.
As you go about buying or selling a home, being aware of the fundamentals of this document can help you avoid any potential hazards.
In the first part, we talked about different real estate techniques for investors, including live-in-flip, real estate flipping, house hacking, and investing in Single-Family Rental (SFR) homes.
Now, we're going to learn more strategies to help aspiring and current investors like you!
Serving as a middleman between a home buyer and a home seller, real estate wholesaling involves either charging a fee for the service or keeping the difference between what the seller receives and what the buyer pays.
This frequently entails "driving for dollars," or scouring communities for properties the investor believes they may profit from. Investors may also employ MLS listings and direct mail marketing campaigns or they may just keep an eye out for For Sale By Owner (FSBO) signs.
Real estate investors can invest without actually owning any real estate by using REITs, or real estate investment trusts, which function as mutual funds. Investors purchase REIT shares in a manner akin to purchasing stock or mutual fund shares, and the trust pays dividends to its stockholders.
To allow citizens to engage in large-scale, income-producing real estate, Congress formed REITs in 1960.
All dividends given to shareholders by REITs are deductible from their taxable corporate income. According to the Securities and Exchange Commission's Office of Investor Education and Advocacy, the majority of REITs do not pay corporate tax since they distribute at least 100% of their taxable revenue to shareholders.
In general, REITs are thought to be a wise investment. The 40-year compounded annual return on REITs, as measured by the FTSE NAREIT Equity REIT Index, is 9.44 percent.
Groups that invest in Real Estate Investment Groups (REIGs) are associations of private investors who pool their resources and expertise to make real estate investments utilizing a variety of techniques. Contrary to a REIT, a real estate investment group is not a taxable corporation with a board of directors subject to stringent regulations. For instance, REITs must have at least 100 investors by the end of their first year, and no more than five people may possess at least 50% of a REIT.
In contrast, private agreements rather than governmental rules control real estate investment organizations. The structures, membership fees, and levels of engagement for REIGs are all flexible. Investors who want to have an interest in actual real estate may want to consider joining a real estate investment group.
Purchasing certificates of property tax liens is an indirect method of real estate investing. When a property owner doesn't pay their property taxes, the municipality where the home is located will file a tax lien, which is a legal claim on the property. It serves as a formal claim to the assets for the owed sum.
These don't resemble mortgage liens, which grant a lender the right to the property until the borrower repays the loan.
A certificate stating the amount owed and the interest rate that the lien owner will receive is issued by the municipality when a tax lien is placed on a piece of real estate. Following that, the certificates are auctioned off to investors; at the moment, 28 states permit the auction of these certificates. Property tax arrears amounting to over $21 billion annually, according to the National Tax Lien Association, making it a substantial area for investment.
When a bidder wins the auction, they pay the outstanding taxes and acquire the right to either foreclose on the property or receive their money back when the homeowner makes up the unpaid taxes. The homeowner has a set period to make the payment or risk foreclosure. The lien holder recovers their investment plus interest if the homeowner makes good on their payment.
Another real estate technique for investors is called BRRR or Buy, Rehab, Rent, Refinance, Repeat.
The plan involves purchasing a house, ideally below market value, rehabilitating it, renting it out to pay the mortgage, obtaining a cash-out refinance, and then using the profit to start the process over again.
This is not a method for beginners; rather, it is for seasoned investors because it includes finding amazing discounts on houses that need some renovation but are still profitable investments.
Since the investor will be paying the mortgage while the renovation is taking place, it is crucial to understand the costs and length of the repairs that will make the rental property appealing to residents. It's crucial to increase the property's curb appeal because kitchens and bathrooms often have the highest return on investment.
The next stage is to find trustworthy tenants to rent the property to for a rate that at least covers the mortgage payments until the investor can refinance. Before refinancing, banks typically need a "seasoning" time, and a cash-out refinance needs a particular amount of equity. Additionally, lenders rarely refinance an empty home, so the investor will need to have a strong credit score—typically 620 or higher—to qualify.
The investor continues the process by locating another contract. It is not a passive investing approach, even though it has the potential to be profitable. A network of lenders or the capacity to take out a home equity line of credit (HELOC) may be necessary for the investor since it may be challenging to obtain a typical mortgage on a distressed property.
This is a method for paying off debt on several rental properties so that you own them free and clear. It can also be used for real estate investing. Financial expert Dave Ramsey popularized it as a method of paying off personal debt.
The strategy includes:
The mortgage on the rental property with the lowest balance must get the largest monthly payment feasible using all available resources, including savings from a day job and all rental revenue. The investor will continue to earn the same amount of money when that is paid off, but there will be one less mortgage to pay off. The snowball grows larger with each mortgage that is paid off since the investor has more money to pay off the subsequent mortgage. Finding quality rental properties at competitive mortgage rates and practicing disciplined saving for the years necessary to carry out the plan are requirements of the strategy.
Keeping your home clean can seem like a never-ending task. But with a few daily habits, you can maintain a clean and organized home that you can be proud of. Here are some daily habits that you can incorporate into your routine to keep your home clean.
Make Bed
Starting your day with a simple task like making your bed can set the tone for the rest of the day. Not only does it give your bedroom a neater look, but it also helps you feel accomplished first thing in the morning.
Tidy Up As You Go
Make it a habit to clean up after yourself as you move around your home throughout the day. This can be as simple as putting away your dishes after breakfast or hanging up your coat when you come in from outside. This will prevent clutter from accumulating and make cleaning tasks easier.
Wipe Down Surfaces
Take a few minutes each day to wipe down surfaces in your home. This includes kitchen counters, bathroom sinks, and any other surfaces that tend to collect dust or dirt. Using a multi-purpose cleaner and a microfiber cloth can make this task quick and easy.
Tackle Laundry Each Day
Instead of letting laundry pile up and become overwhelming, tackle a small load each day. This will prevent laundry from taking over your home and make the task more manageable.
Categorize Paper
Designate a specific spot for mail and other papers that come into your home. Take a few minutes each day to sort through them, tossing any junk mail and filing away important documents.
Clean Fridge Weekly
Set aside one day each week to clean out your refrigerator. This not only keeps your fridge clean and organized, but it also helps prevent food waste and spoilage.
Straighten Before Bed Time
Before heading to bed each night, take a few minutes to straighten up your home. This includes putting away any items that may have been left out during the day and ensuring that your home is tidy for the next day.
By incorporating these daily habits into your routine, you can maintain a clean and organized home without feeling overwhelmed by cleaning tasks. These habits use items that you likely already have on hand, making it easy to develop a cleaning routine that works for you. With a little effort each day, you can enjoy a clean and stress-free home.
Bookmark our blog page to stay updated on our latest home tips. And if you're looking to buy or sell a home in Indiana, our expert agents at RE/MAX Advanced Realty are here to help.
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Real estate investing is a great method to diversify your portfolio of investments.
Home prices are significantly less erratic than those of securities, and real estate has no link with the stock market. Property owners can also take advantage of numerous tax breaks, which boosts their investment's return.
Last but not least, building a portfolio of rental properties in geographically diverse areas makes investors more resilient and able to weather numerous economic crises.
Real estate assets (such as commercial real estate, single-family rental homes, apartment buildings, real estate wholesaling, real estate loans, and others) come in a number of forms, and the same is true with real estate investments.
Which approach is best for a particular investor relies on a variety of factors, including their degree of risk tolerance, the amount of control they desire over the asset, whether they are seasoned or novice real estate investors, the amount of cash they have available for a down payment, and the amount of cash flow they need.
Here are some examples of different real estate investment methods.
The United States residential real estate market is one of the most effective engines for fostering intergenerational prosperity, and rental property is one of the most promising real estate investments, thanks to a combination of fixed-rate mortgages, gradual price increases, and tax incentives that encourage home buying.
After the housing meltdown of 2008, institutions and retail buyers started to see single-family houses as highly investable assets. With a market value of $4.6 trillion, they have since grown to become the largest asset class in real estate. In 2021, the SFR and build-to-rent sectors received an expected $45 billion in institutional funding, according to John Burns Real Estate Consulting.
Although there have been ups and downs in particular markets, as this chart from the Federal Reserve of St. Louis demonstrates, overall house values have improved.
Investors may employ leverage by borrowing from banks to finance assets that offer rental income (cash-on-cash) as well as capital growth over time. Monthly rental income assists in partially or completely covering the mortgage as the investor builds equity.
Real estate also guards against inflation, which over time diminishes the value of fixed mortgage payments.
Rental property is an essential part of a diversified investment portfolio because of its low correlation to the stock market.
The down payments on investment mortgages may be too expensive for some would-be investors. Through "house-hacking," buyers could hasten the process of building equity in rental properties.
Purchasing a home to live in and then renting out a portion of it is known as "house hacking." In this manner, individuals can use the rental money to lower their mortgage payments and occasionally even turn a profit. This so-called passive income is available to the house hacker to use any way they see fit, whether to pay off the mortgage, make a sizable purchase, or even put money down for a second property to increase their portfolio.
The investor has access to residential mortgages through home hacking, which has several benefits including cheaper interest rates than investment mortgages and a far smaller down payment.
Flipping involves making quick repairs to homes and then selling them. Since the flipper continues to make mortgage payments until the house is sold, the success of a flip is determined by the seller's profit over the purchase price and the speed at which the property sells.
Flippers look for deals that are below market value, improve the homes to a sufficient extent that they can significantly increase the price, then sell the properties rapidly. The most desirable property for a flipper might be one in need of significant repairs, provided they can do it without going over budget.
Successful flippers have a system in place, including easy access to low-cost materials, a team that can complete work of a high standard at a reasonable cost, and a real estate agent who can sell a house quickly.
The drawback of flipping a home is that the seller will pay more capital gains taxes as a result than if the property were held for at least two years.
The live-in flip enables an investor to live in a fixer-upper while making improvements and then sell it for a significant, tax-free profit afterward. The live-in flipper uses the house while it is being renovated, even though they lose money for each month the house is in their possession.
They can use owner-occupied finance to live in a property they are treating as an investment if they can discover a home that is under market value or one where modifications can raise its value.
The live-in flip can be a potent investing technique, particularly if the investor is eligible for low-interest loans like Veterans Administration loans.
Gains up to $500,000 for a couple or $250,000 for an individual are exempt from taxes under the U.S. tax code when investors sell homes. For the Section 121 Exclusion to apply, the investor must own and occupy the home for at least two of the five years preceding the sale.
Some investors use the money they make from a live-in flip to buy a nicer property, to grow their portfolio, or use the money to buy a home without incurring debt.
What is the live-in flip's drawback? Every few years, the investor must relocate while living on a construction site. And there's always the chance that the house has more significant issues than they initially thought.
Additionally, there is a chance that an investor will have to vacate while a live-in flip is ongoing. Depending on the circumstances of the move, you might be eligible for a partial Section 121 exclusion.
If an investor is compelled to make an early move, they should speak with a tax expert.
These are just some strategies for real estate investors. We’ll share more investing techniques in our next post so be sure to check our website for updates.
When buying or selling a house, using a professional real estate agent can help you make wise choices and prevent expensive errors.
The good news is that the real estate industry is big. Realtors are everywhere. A quick online search on Indiana real estate agents might lead you to hundreds of results. The challenge, however, is finding the right one for you!
Lucky you! We've gathered all the necessary details you might need when searching for the best realtor to help you.
It's beneficial to be familiar with some of the common terminologies used when buying or selling a home and what to anticipate from an agent before you begin your search.
Real estate brokers assist buyers and sellers of homes. Agents inform their customers about the state of the market, walk them through every stage of the procedure, and refer them to other experts like home inspectors and real estate lawyers. The person they are representing in a real estate transaction determines the specific titles they have.
A buyer's agent assists purchasers in locating and exploring listed properties, crafting compelling offers, and negotiating with sellers.
A listing agent assists homeowners with setting a price, marketing, and negotiating with potential purchasers.
It is better to have someone who is only working for you. In some situations, an agent can represent both sides in a single transaction.
Realtors are not all real estate agents. Realtors are National Association of Realtors members who hold a real estate license. Members commit to uphold the standards and code of ethics of the association.
All real estate agents are required to have a license in the states where they operate and to follow local, state, and federal rules. Agents must finish a set amount of study and pass an exam to obtain a license. To find out whether a specific agent is licensed, you may visit the website of your state's real estate commission.
>> MORE: Importance Of Using A Realtor When Building A New Home
A real estate broker has completed further training to advance from the agent level and obtain a real estate broker license. Brokers must pass an exam and finish the state-mandated courses to get licensed, much like agents. Brokers have the option of managing other real estate agents, working independently, or both.
>> MORE: Celebrites Who Are Also Real Estate Agent
Find several potential agents by asking friends, family, and coworkers for recommendations. Visit the websites and online profiles of the agents, read about their qualifications and experience, and look through client testimonials.
Pick at least three agents to speak with, and ask them specific questions about how they would collaborate with you.
The following are the most important details to learn whether you're buying or selling a home.
You could believe that the real estate agent you select will solely work for you. Real estate agents aren't always required by law to exclusively represent the buyer or the seller in a transaction, though. A "transactional agent" works with both parties but has no fiduciary duty to either, while a "dual agent" represents both the buyer and the seller in the same transaction.
It's crucial to comprehend the agent's responsibilities when working with you. The Consumer Federation of America suggests requesting a written document that identifies the relationship and asking potential agents if they will only represent your interests during the entire procedure.
How long has the agent worked with clients, and what credentials does the agent possess? Find a representative who has experience working with people who are similar to you.
Indy Home Pros is the #1 RE/MAX Team in Indiana, therefore if you want a reliable real estate agent who will make the transaction smooth and seamless -- whether it's buying or selling a home -- then you should work with us!
Agents occasionally have team members working for them as assistants. Will you collaborate with the agency or the assistants more frequently? An effective team can meet your needs well, but be sure the agent will be available to you directly enough.
Real estate commissions are typically paid by the seller, and the listing agent distributes them with the buyer's agent. A real estate commission typically ranges from 5% to 6% of the sales price.
According to the Consumer Federation of America, if you are the seller, you might be able to negotiate a lower price, especially for a costly property. You, the buyer, have the right to request a refund of some or all of the buyer agent's commission.
It's worth asking even though agents might not be open to reducing their compensation.
Ask for references and speak with customers who have recently worked with the agent. Did they appreciate the agent's efforts? What was successful and what wasn't? How did the agent handle difficulties? To determine whether the agent is a suitable fit for you, speak with recent clients.
Here are some things to consider when picking an agent to assist you in purchasing a house.
What difficulties will I experience as a buyer in the current market? A smart realtor will describe the availability of listed homes and the level of competition you'll face with other buyers in order to set reasonable expectations.
How can you assist me in locating listed properties in my price range? Inquire about specific instances when the agent has assisted purchasers in your shoes in the recent past. This will demonstrate how effectively the agent will meet your needs.
How will you assist me in submitting bids that are competitive with those of sellers? Find an agent who will keep you anchored to your spending limit and objectives.
Here are a few things to consider when picking an agent to assist you in selling a home.
What comparable listings are there in my area? An agent should present a comparative market analysis, highlighting comparable homes that have recently sold.
Why do you believe my house is worth what you do? The greatest decision isn't usually the agent who suggests the highest price. Pick an agent who has market expertise to support the recommendation.
Depending on the local real estate market, you might need to do some repairs before you can sell your house. Keep an ear out for compelling arguments about the changes that your house needs and their potential return on investment.
Agents will probably advise listing your home on real estate portals like RE/MAX, Zillow and the Multiple Listing Service. Learn more about the additional marketing strategies the agent will employ, such as the use of images, video tours, and advertising. The market will determine how much marketing is necessary to sell a house. When there are more purchasers than available properties, marketing may not be as necessary.
Compare the backgrounds and methods of the agents, as well as their interpersonal skills. Will you feel at ease working with this person? Select a capable agent who shares your preferred working style.
Overall, choosing a real estate agent, broker, or realtor might require time and patience; however, it's crucial, especially when you want an agent you can trust and rely on. After all, you're going to invest a huge amount in your dream home!
You've made the decision to purchase a new house, and you're looking at all the new neighborhoods in your favorite places. Perhaps you've already decided on the neighborhood where you want to reside, but you haven't signed a lease. You'll want to negotiate the greatest price for your newly built home, regardless of where you are in the home purchasing process.
But before you do that, be sure to equip yourself with enough knowledge on what happens when negotiating the price of a home.
When purchasing a resale home, you must engage with the seller's sentimental attachment to the property. Thankfully, new home builders don't take that attachment into account.
Builders, however, typically don't want to sell their homes for less than what they are asking because it creates a negative precedent with potential buyers. They're thinking about things like overhead and profit margins, base construction expenses, and more, so they have a target sale price in mind to recoup the effort they've invested in the house.
You can save money on your new house in a variety of inventive ways that don't entail paying less. The builder might be ready to cover the closing costs. Additionally, you might be able to bargain for upgrades at a discount or for free.
You should also ask about the scope of lot premium costs. Lots within a certain community are frequently priced to appeal to a broad customer. You can save up money in your budget for other fees by asking the builder for more information if the lot premium turns out to be less than you anticipated.
>> MORE: How To Negotiate When Selling A Home
The model homes in a subdivision are typically offered at a bargain and are completely furnished with the greatest upgrades. There are a few causes for this.
First of all, a model home isn't a brand-new house because many people have already toured it. Second, you won't be able to choose finishes or upgrades because everything is already installed. If you like everything about the model home or if you're willing to make a few alterations after the sale, this isn't a problem. Third, because they have been used, appliance and foundation warranties won't be as long as they would be for a brand-new home.
Make sure to ask the builder whether there are spec homes—homes constructed with the intention of being sold—that have been sitting in their inventory for some time. Similar to model houses, you won't be able to choose the upgrades and finishes, but if a builder is trying to sell, there may be room to haggle over the price.
Tip: Ask -- there's nothing wrong about asking.
Your builder will probably want to direct you toward their recommended lender as soon as you begin to consider financing for your new house. Check to see if you have any incentives to use that lender, but don't stop there. Do your research and educate yourself. Their lender might not be providing you with the best mortgage conditions. Consult your bank or credit union; depending on your relationship with them, they may provide attractive rates and conditions.
Create a budget plan and stick to it. To do that, know your ideal location, price, and amenities, and in case one (or all of these) weren't met, be ready to either negotiate or walk away. Set expectations that are realistic.
Most likely, you won't be able to get a terrific price in a competitive market or short deadline. There isn't much that can be achieved from negotiation even outside of a seller's market if the neighborhood is selling quickly. Multiple bidders on a home can actually increase the final price by 3% over the initial listing price.
Due to the builder's desire to sell, homes that have been on the market for 45 days or more typically have lower prices or greater upgrading options. If you have a specific price in mind, this can be a useful approach to filter searches.
It's crucial to keep in mind that negotiations for new homes involve more than just the final cost. Upgrades, mortgage conditions, and price discrepancies on an itemized list can all make your house shopping trip more enjoyable.
If you need help negotiating with a home seller or want to know how you can have your dream home, our team at RE/MAX Advanced Realty Indy Home Pros is here to help.
You may call us at 317-298-0961 or send us a message here.
It's more critical than ever for your house to stand out in the current market. Making an effort with the "packaging" will result in a stronger first impression, which generates more offers and speeds up the sale. It is the main goal of house staging.
As home stagers, we draw attention to a home's best features so that potential buyers see them right away while also establishing a welcoming, comfortable atmosphere. Making your home as desirable as you can increases the likelihood that buyers will feel confident enough to submit an offer on it.
We've put together this beginner's guide to home staging to offer you a fast explanation of how it works, why it is so powerful, and how to use it to help sell your home if you're new to it or have questions about how it all works.
Understanding your customer is essential before trying to sell anything.
It's the same when selling a house. Indeed, most people's purchase of a home represents the largest purchase they will ever make, so several considerations influence their choice.
The idea behind home staging is the same as that used by product creators, who spend a lot of time, money, and effort packaging their goods in a way that appeals to customers.
Consider yourself the prospective homeowner. They are under a lot of pressure to spend their money wisely and are looking at a ton of residences.
In addition to practical considerations, there are a lot of emotional ones as well. House staging goes beyond simply displaying a home's advantages and makes it seem like home, allowing purchasers to form an emotional connection and feel secure in their financial decision.
You want a buyer to focus on the advantages of your house.
Family photos, personalized decor, and clutter are all major distractions.
Though it would be ideal if purchasers could see past these issues, the majority of them can't.
Family photos make most buyers uncomfortable because they remind them that they are walking through someone else's private home, clutter makes homes feel small and claustrophobic, and personalized decor can be off-putting if the buyers don't share the same tastes (and makes them think they must invest a lot of money to change it), and personalized decor can be off-putting if the buyers don't share the same aesthetic preferences.
All three of these problems are addressed by home staging. You should start by organizing the entire house. Get rid of everything you don't want (give it or toss it away), then pack the rest away. More so than you would if you were planning on relocating there. The home will feel bigger and more open if there are fewer things about it.
Then, make the décor and color scheme neutral. Get rid of any wallpaper, vividly colored walls, and esthetically distinctive decor. To appeal to the most buyers possible, you should maintain a neutral color scheme and a modern design while staging a home. Just a few bright elements will give it some personality. Buyers will be able to see the house in a lovely light and have the freedom to envision their own decor in its place as a result.
Remove all of your personal belongings, including jewelry, toiletries, and photographs.
You want potential purchasers to consider the house as their own, not someone else's.
Take care of any necessary repairs before listing your house for sale.
While it may be tempting to pass on minor or even major repairs to the new owner, most house purchasers will see dollar signs and either remove the item from their offer or move on to the next move-in-ready home.
Before beginning to show your home, make sure you thoroughly clean it. We advise hiring specialized cleaners who will use the best tools to reach every nook and corner. After that, continue to maintain it while it is for sale.
It's time to add some unique touches after you've finished all the repairs, cleaned and decluttered, neutralized the color scheme, and de-personalized the decor.
If you've ever visited a model house, you may have seen items like a coffee machine and a set of cups on a tray in the master bedroom or a pair of white robes hanging in the restroom.
These items have a significant influence on a buyer's mentality, therefore they aren't only there for entertainment. Use a handful of these extraneous elements to make customers happy and make them feel like they've found something special.
Do you have other tips when staging a home? If yes, feel free to drop them in the comments.
Thank you!
Downsizing and planning to reduce the clutter in your new house? These tips will help you not only organize your space but also, preserve the memories.
A new home move is frequently bittersweet. You are both happy to leave your familiar surroundings and sad to make a change. A smaller space means you won't have room for all of your current possessions, making downsizing even more difficult.
But, downsizing can also be a chance for renewal and a fresh start. You may make your new property feel like home by furnishing it with the things you truly love if you clear out the clutter.
So, if you’re wondering what is the best way to downsize a home, here are three tips for downsizing without giving up your priceless possessions.
Visit your new residence and gauge the dimensions of your rooms and storage spaces. You can use this as a guide to determine how much you can bring. It is preferable to undervalue than to overvalue.
One room at a time as you decide what to keep and what to throw away. You don't have to complete the entire moving process at once. To avoid feeling rushed, schedule a small bit of work each day and provide additional time.
Make your furniture selection first. You'll have a better understanding of how much room you still have to fill if you go from big to little. If you can't carry that bookcase with you, you don't want to have to rearrange everything.
One question you should ask yourself when sorting your belongings is this -- are you going to use it or not?
You can convince yourself that one day, you're going to wear that beautiful dress but if it's been 12 months and you haven't used it, it's unlikely you ever will.
Get rid of duplicates as well. How many china sets or coffee makers do you have? You don't need to keep both if you can only utilize one at once.
Follow a strict yes/no rule while sorting; "maybes" are not permitted. Create two piles: one for "yes" and one for "no," and make yourself pick one. "Maybe" piles only result in more work for you later if you aren't persuaded that the item deserves a yes.
Choose how to distribute your "no" list. These things may not be what you want or need right now, but someone else might find them beneficial. It's possible to pass special objects down to friends and family. You might sell good-condition furniture, household goods, clothing, and other items through a garage sale or on websites like Craigslist.
Alternatively, you can opt to give reusable items to charities like Goodwill, who occasionally offer neighborhood or even household pickups, making your chore even easier. Everything that is beyond repair should be taken to the landfill or the recycling center.
To reduce space and make sharing with family members easier, digitize your images.
How often do you actually go to photo albums, considering how much space they take up?
Create a slideshow screensaver for your TV or computer, or simply pick up a digital frame to watch all of your photographs in a rotating slideshow.
Objects that bring back pleasant memories but that you no longer have room for should be photographed. Even if you don't keep the objects, you can reflect on the memories.
Transferring your prized possessions to your children, grandchildren, or close friends will ensure that they are in excellent hands. They'll adore the gift, and you get to enjoy seeing them use the stuff.
Giving relics a new purpose is another tactic. If you enjoy crafting, you can keep a record of your experiences by using objects like old movie tickets, letters, and photos in a scrapbook. Alternatively, create three-dimensional artwork by employing shadowboxes. It will be simpler than ever to enjoy your memories if you collect them all in one location.
A difficult procedure is downsizing. You will find stuff you haven't seen in a long time, and you'll need to decide what to do with them. Give yourself some time to think back, and then choose. Take in mind the space you have available. Take what is actually valuable with you; only you know what you cannot live without.
Imagine being able to relax in your new location once your move is complete and you are surrounded by a sense of familiarity.
These are just some tips when downsizing a home; if you have more, feel free to drop them in the comment section below.
Thank you!
Pulling up listings to explore on your phone or tablet is the norm these days, whether you're planning to buy, rent, or sell a home. The same thing goes if you're a real estate agent attempting to sell a listing.
However, that is only the tip of the iceberg showing the impact on real estate sectors as technology continues to have a significant influence on how both consumers and business professionals view the market.
There are numerous opportunities for using current real estate technologies to expand the nation's largest asset, estimated to be worth $40 trillion, in both residential and commercial properties.
New technologies are having a significant impact on the real estate industry, both in terms of how properties are marketed and sold, as well as how they are built, managed, and maintained.
If you're a realtor, finding the best technology for real estate agents might help you grow your business and sell more houses.
Virtual And Augmented Reality: With the advent of virtual and augmented reality, potential buyers can now view properties remotely in a fully immersive way, allowing them to get a sense of the space without actually being there. This has made it easier for buyers to browse and explore properties, particularly during the pandemic when in-person viewings were limited.
Drones: Drones are being used to create high-resolution aerial images and videos of properties, which can be used in marketing materials and to identify issues with roofs, gutters, and other areas that may be difficult to access.
Artificial Intelligence: AI is being used to analyze data about property values, rental rates, and other real estate trends, making it easier for investors to make informed decisions about where to buy and what to charge.
Smart Homes: Advances in smart home technology have made it possible for homeowners to remotely control everything from lighting and temperature to security systems and appliances. This has made homes more energy-efficient and secure, while also providing greater convenience for homeowners.
Building Information Modeling (BIM): BIM is a technology that uses 3D modeling software to create detailed digital representations of buildings, which can be used to identify potential problems and optimize building design and construction.
With the presence of the latest technologies, the industry is changing for both homeowners and realtors.
For instance, websites have made it easier for anyone to view what’s available in any location, thanks to online listings.
You may find information on the area, including school rankings, tax and purchase histories, and images and extensive descriptions of the houses. Want to know how far you are from a hospital or a restaurant using a satellite view? Just get your phone and click.
Speaking of phones, mobile apps are creating an impact, too. Learning about the neighborhood and real estate per se is just a click away. Using mobile apps, you can get notifications about new listings and filter them based on your requirements. The best part is that these apps can help with your budget, find the right real estate broker or agent, and many more.
Overall, new technologies are changing the way that properties are marketed, sold, and managed, making the real estate industry more efficient and accessible.
If you’re new to real estate, whether as a buyer or an agent, decoding the industry itself can be challenging.
It’s complex to learn the process of selling, buying, or investing alone, and so is learning all its jargon. However, it’s critical to know even just the basics before you dive into it to avoid further confusion.
In this post, we’ve listed some of the commonly used real estate terms to know.
In layman’s terms, it is a mortgage with a variable interest rate. During the initial period, the interest charged to the loan is fixed, but after that, the rate will adjust at monthly or yearly intervals.
To determine the approximate worth of the real estate, an appraisal is necessary. The mortgage lender sends a property appraiser to assess the asset's worth. This helps the lender determine if the amount that the borrower is asking is worth it.
If the appraised value of a home is less than the sale price, an appraisal contingency allows a buyer to cancel the purchase agreement.
To guarantee that the loan is secured by a suitable house value, the buyer's lender hires an appraiser to assess the worth of the property. Lenders want to make sure they aren't "overpaying" for a piece of real estate.
If the initial transaction fails, a buyer who is interested in buying a property that is already under contract with someone else has the option to make a "backup offer." To ensure that a backup offer is the next in line, it must still be negotiated and any funds, like earnest money, must be provided. Legally, there can only be one backup offer because a backup to the backup cannot exist.
Even when viewing the property as possible, a buyer making an offer on it without seeing it was deemed as a "blind offer." It is an approach frequently used in highly competitive situations.
A buyer's agent also referred to as a selling agent, is a qualified real estate agent whose responsibility is to find a buyer's next home and to represent that buyer's interests by negotiating on their behalf to secure the best possible deal.
A neighborhood association, a homeowner's association (HOA), a builder, or a developer will typically impose these rules and regulations on real estate to outline any requirements and restrictions on what a homeowner is permitted to do with the property. Additionally, it could include special, yearly, or monthly assessments.
The owner could sell their home when the said property is owned outright (has no outstanding debt on the mortgage) or the owner owes less on their mortgage than what the market suggests they may get for it.
When the home transaction closes, it is deemed complete. Typically, this occurs when all parties have signed the necessary paperwork, transferred all funds, and if a lender is involved, received full lender approval. The very last stage of closure for several marketplaces around the country is documenting the deed with the county clerk's office. Considered the new homeowner, once each of these requirements has been met, the buyer is granted entrance to the residence.
DOM for short is the period between the day a property is advertised for sale on the multiple listing service (MLS) of the neighborhood real estate brokers and the day the seller and buyer enter into a contract to sell the property.
A mortgage lender's debt-to-income ratio, or DTI, is calculated by dividing your monthly housing payment and all other debt payments by your gross monthly income and multiplying the result by 100. This enables lenders to estimate how much you can afford to pay monthly for a mortgage by using their available lending programs to calculate affordability.
When a seller accepts a buyer's offer, the buyer will be required to make an earnest money deposit (EMD), sometimes known as a "good faith deposit". It demonstrates the buyer's seriousness about the purchase as well as their willingness to back up their words with deeds.
The EMD might be between 1 and 5 percent of the sales price in amount. The EMD is frequently kept by an escrow business or by other provisions of the purchase and selling agreement (PSA).
This is the depositary (impartial third-party) and agent who gathers the funds, necessary documents, personal property, written instruments, and/or other items of value to be held until specific events or the performance of described conditions happen, usually outlined in mutual, written instructions from the parties.
Equity is the investment made by the homeowner in their house. Your home's equity is calculated as the amount that is left over. To get this, take the home's market worth and deduct any mortgages or liens from it.
A set of loans that are insured by the federal government includes FHA loans. In other words, the FHA insures banks and other private lenders against potential losses they might sustain if the borrower does not repay the loan in full or on time.
Known as a "fixer-upper," this combines a mortgage loan with a loan to help pay for improvements or repairs, like structural or energy-related changes. However, it can't be used for luxury improvements, such as adding tennis courts or swimming pools.
As the name suggests, the interest rate will not change during the term of a fixed-rate mortgage. They are frequently offered as 10, 15, 20, and 30-year loans.
Hard Money Loan
An alternative to using standard lenders is to take out hard money loans. Hard money lenders often demand a sizable down payment and a quick payback plan and base the loan's eligibility on the property in issue rather than the credit score.
A private organization called a homeowner's association oversees a condominium or planned community. You agree to adhere to the HOA's rules and pay monthly or yearly HOA dues when you purchase a property that is managed by an HOA. They frequently have the right to foreclose on the property if you don't pay and/or don't comply, and/or they can file a lien against the property.
Using a house sale contingency, a buyer might tell a seller that one of the requirements for buying their property is that they can successfully close on their existing home. This is frequently negotiated as part of a clause or addition to a contract. If a buyer needs to sell their home to have the down payment needed to buy the new home or would prefer to utilize the sale money rather than their savings to make the down payment, then such a contingency could be employed.
Inspection is a process wherein a potential home buyer hires a certified professional inspector to visit the house and create a report on its condition and any required repairs. The inspection frequently takes place during the period of due diligence so that buyers can decide for themselves whether they want to purchase a particular home as-is or ask the seller to make or pay for specific repairs.
The inspection contingency, sometimes known as a "due diligence contingency," is a provision occasionally included in a purchase agreement that gives buyers a certain period during escrow to do any required inspections.
Traditionally, when you buy a house, you become the owner of both the building and the land it is situated on. A land lease may be necessary in some situations, in which case you would own the house while paying the landowner's rent.
A loan contingency is a clause or addendum (also known as a mortgage contingency) in an offer contract that permits a buyer to back out of a purchase and keep their deposit if they are unable to get a mortgage with specific parameters within a set amount of time.
Property purchasers must obtain a mortgage pre-approval letter because it outlines their financial capabilities. After examining the buyer's debt-to-income ratios, cash on hand, and credit history, the lender issues a mortgage pre-approval letter outlining the terms, loan type, and loan amount the buyer qualifies for.
Real estate agents and broker members use a database that gives them access to modify or add information about properties that are available for sale in a specific area, and this is called Multiple Listing Service (MLS). The MLS is frequently checked by buyer's agents to see what properties are available and what they have recently sold for.
Most states require this report, and this discloses when a property is situated in an area where there is a higher risk of natural disasters. Typically, the seller pays for the study and provides it to the buyer during escrow.
In an NHD report, the following natural hazard zones are included:
Customers submit a formal offer for the house they wish to buy. Depending on what you and your agent believe to be the fair market value, the offer may be the full list price.
After getting your signature and putting the offer in writing, the buyer's representative sends it to the seller's agency for consideration. The seller has two options: either accept it right away, in which case it becomes the parties' purchase contract, or make a counteroffer. It is the art of negotiation that is documented in writing.
Homebuyers must complete an application to obtain pre-approval, which enables a lender to assess their financial condition, including their debt-to-income ratio, repayment capacity, and creditworthiness. Once this is obtained, the lender can provide a letter to the buyer indicating the precise loan amount for which they have been pre-approved as well as the total sales price for which they are approved.
Typically, the letter will state the projected interest rate as well as the buyer's anticipated down payment. The majority of sellers want to see a pre-approval letter along with an offer because it is far more detailed than a pre-qualification letter.
To deliver a clear title, the seller must take care of any title problems that are revealed by a preliminary assessment. The information provided includes easements, liens, and the history of ownership. By looking through the county recorder's office's database of past property transactions, the title business compiles this report.
Before a title insurance provider may provide title insurance coverage, they must receive this report. To safeguard their interest in a property, most lenders require borrowers to buy title insurance coverage. Even though it is a negotiating point, it is common practice in many places for a seller to cover the cost of this insurance.
The sum of money owed to the lender on a mortgage loan, excluding interest, is known as the principal balance. Take a loan of $300,000. That is the loan principal or the amount you borrowed to purchase the house. The interest, which is computed daily for the majority of loan types, is paid by buyers each month together with the principal. Almost always, interest is paid on payments before the principal is deducted. After all, the bank only agrees to provide the loan because of the interest.
When a homeowner passes away without creating a will or deciding to give a property to someone, a probate sale takes place. The probate court would then provide permission to an estate lawyer or other representative to engage a real estate agent to sell the house under such circumstances.
The entire process will typically be a little more difficult and time-consuming than a typical transaction.
The term "real estate owned" refers to homes that a lender now owns after an unsuccessful auction foreclosing on them.
REO homes occasionally offer a chance for a buyer to purchase a property for less than market value because the majority of banks would rather reinvest the proceeds than waste time promoting the property for a prolonged period.
Financing can be challenging because the bank frequently markets the property "as-is," meaning they are not willing to make any modifications to it.
Although the terms "REALTOR®" and "actively licensed real estate agent" are frequently used interchangeably, not all real estate agents are REALTORS®. A member of the National Association of REALTORS® is a REALTOR® (NAR).
A REALTOR® commits to maintaining the association's Code of Ethics and to keeping one another responsible for providing the public, customers, clients, and each other with high-quality service.
When a buyer, who is now the new homeowner, agrees to let the seller, who is now the tenant, remain in the home after escrow closes, this arrangement is referred to as a rent-back, sometimes known as a leaseback. In advance of the event, the terms are agreed upon, and they frequently include a leasing deposit, a daily rental charge, and a permissible time frame.
It is occasionally feasible to calculate the rate by taking into account the new homeowner's monthly mortgage out-of-pocket costs as well as any potential trouble this may cause them by postponing their move.
To get purchasers to buy the home or make the deal more appealing, sellers may make concessions.
Up to certain restrictions and with the lender's consent, concessions are most frequently considered as a contribution toward the buyer's closing costs, which, in the end, puts more money in the buyer's pocket.
A seller's disclosure is a statement made by the seller that, to the best of the seller's knowledge, contains facts about the property or that could influence a buyer's choice to buy the property.
In addition, a seller is required by law to disclose any information that may affect a buyer's enjoyment of the property but is not directly related to it, such as pest issues, boundary disputes, knowledge of significant construction projects nearby, military base-related noises or activities, association-related assessments or legal issues, unusual odors from a nearby factory, and even recent fatalities on the property.
When a property is sold short, the amount received for it does not cover the loan it is used to secure. Since the proceeds of a short sale will fall just "short" of the debt, the lender(s) of the seller will need to approve the transaction. Because most lenders' clearance procedures for short sales are drawn out and time-consuming, a short sale will take longer to finalize than a standard one.
The seller is not allowing the property to be examined before an accepted offer when they use the phrase "submit offers subject to inspection" or "submit offers subject to inspection". Tenants who are uncooperative or who have privacy concerns are two prominent causes of this.
You can take advantage of the typical buyer's apprehension regarding buying a house without seeing it because it will surely reduce interest in the market as a whole.
Additionally, it's not as bad as it first appears because, under the typical purchase agreement, there will be an inspection period during which you can end the deal without incurring any fees.
A sort of joint ownership of a property, whether it be a single-family home or a business building, is referred to as tenancy in common. The property is owned by all of the common renters, though in various proportions.
The simplicity or complexity of obtaining finance will depend on the type of property. Additionally, tenants in common do not have the right of survivorship, therefore the deceased tenant's ownership stake or percentage truly belongs to their estate, as determined by their will or the applicable law, rather than the remaining owners receiving a share of it.
Small, whitish, soft-bodied termites feed on wood and can cause a lot of damage. A diagram of the property and the locations of current and/or past WDI activity are included in the WDI report, often known as the termite report.
The report may also, and in some cases, mention what could be required to deal with such potential infestations, such as spraying or tenting. The cost of such products won't typically—if ever—be mentioned in the WDI report because it might be seen as a conflict of interest.
During a title search, the history of the property is analyzed from public documents, including sales, purchases, tax liens, and other types of liens.
To find out who is listed as the property's official owner, a title examiner will often search title plants and occasionally county records. The Preliminary Report will detail this information, along with any liens or encumbrances that are recorded against the property, for the parties to evaluate before the conclusion of escrow.
In a trustee sale, the seller is a trustee of a living trust rather than a private individual. Most frequently, this is due to the original homeowner's passing away or the placement of their assets in a living trust.
Since the trustee may choose to sell the property, they might accept a less desirable offer because they are not as emotionally invested in it as a regular owner would be.
A VA loan is a mortgage loan provided by the U.S. Department of Veterans Affairs.
Veterans, active duty personnel, and the surviving spouses of these individuals can obtain VA loans to buy homes with a small downpayment, no private mortgage insurance, and better interest rates.
These are just some of the real estate terms to know.
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