Working With a Design-Build Team to Create Your Dream Home

What do the experts say you need to do and know for a smooth build out?

Building your dream home from scratch is a daunting task, especially if you’ve never worked with an architect, builder, and design team before.

To make the project a little easier to wrap your head around, here’s some advice from construction professionals.

Do your research

The building process isn’t short, so make sure you are happy with your team — you’re stuck with them for a long time.

This requires doing a little homework.

To start the building process right, you’ll want to do the following:

  • Conduct extensive online research to make sure you’re using a reputable builder
  • Get referrals from friends and family
  • Look at examples of the builder’s current work

Nikki James, studio manager at Ashton Woods, a builder and design studio constructing homes in the South and Southwest, recommends visiting a builder’s model homes and those under construction.

It’s fine to even be a little sneaky, says Jesse Fowler, president of Southern California-based Tellus Design + Build. Pop in at a construction site unannounced to see what the job site looks like. Workers not wearing hard hats or lots of garbage on the ground are red flags.

Ask questions (and more questions)

You need to understand the parameters of what the builder is doing for you, advises Roger Kane of Kane Built Homes in Massachusetts. And you get that information by asking questions. Make sure the builder can execute what you want, because not all builders can accommodate custom designs.

One of the first things you should do before meeting with your team for the first time is to identify what you don’t know, and then eliminate that doubt.

If this is your first time building, there are probably going to be a lot of things you don’t know, and that’s fine, Fowler says. There are no dumb questions.

Here are a few starter questions:

  • What exactly are you paying for?
  • Do you need full architecture/design/build services, or do you just want a blueprint?
  • How much time should you allow?

Know what you want

“Design inspiration can come from anywhere,” says James. She asks her clients to bring in plenty of pictures, scraps of fabric, or anything that speaks to their aesthetic.

The first thing to do, Fowler says, is to figure out the look and feel that a customer likes, and weed out what they don’t like.

It’s also important to know your limitations, though. James warns that you must make the structural selections for your floor plan before picking design elements so you know what you can and can’t have. For example, if you want a freestanding tub, you will first need to know if you have the right plumbing for it.

An architect wants to know how you’re going to use your home, advises Kim Nigro, the architect at Chicago-based Studio Nigro Architecture. Tell your architect what you don’t like about your current home, and what your day-to-day needs are.

This can be as simple as letting them know you shop at Costco a lot, so you want a big pantry, James says.

The details matter

You probably never thought about what kind of grout you want between your tiles. But these are the kinds of decisions you will be making.

Ashton Woods gives its customers a checklist for details like this, and there are a lot of specific items on it, from what kind of edge you want on your counters to how many outlets and phone jacks you’ll need.

This sounds overwhelming, but Kane’s advice is to just take it room by room. Start out with the basics. Determine how many bedrooms and bathrooms you need, then go inside each room and think about what should be in it.

“Make a list,” he says. “’We want hardwood flooring; we need his-and-her closets.’ Make your own little notebook and just address every room. That’s a great way to start.“

Know your budget

The harsh reality is that you can’t buy something you can’t afford. So, do your math and be upfront about your budget.

“Not communicating a clear budget to a designer is a mistake,” Fowler advises. “Designers need something tangible. If you let them go wild, 99 times out of 100 they are going to do something you can’t afford.”

There are good reasons not to pinch too many pennies, though.

As the saying goes, “If it seems too good to be true, it probably is.” You probably shouldn’t go with the cheapest guy out there, Fowler suggests. A lot of builders, he says, cut corners by doing things illegally.

Don’t get roped into a mess like that. Saving a few bucks now might end up costing you more later.

James recommends doing things exactly the way you want them from the beginning, because remodeling later will cost you more money and more stress.

“We see a lot of buyers getting nervous about spending too much. As people get closer [to finishing], they wish they had spent that extra money,” she reports.

Spending more for quality products is another big consideration. Kane uses sustainable products for the exterior of his houses that last “pretty much a family’s life in a home — 30 to 40 years.”

That’s good for the environment and your wallet, because regular maintenance like repainting the outside of a house can cost $15,000.

Be decisive

The biggest mistake Kane, a veteran homebuilder, has seen homeowners make is being wishy-washy with their decisions.

Once a home is under construction, it’s important to have made all your major design selections.

“Paint color’s not a big deal,” Kane says. “But you should have things like all your tile and granite picked out.”

Why? Because at this point in the process, your selections could be backordered, and waiting on them is costly to the builder and to you.

If you do tend to change your mind a lot, make sure you pick a builder with a good warranty program.

Communication is key

One core piece of advice from construction professionals: Keep the lines of communication open. The biggest mistake you can make, says Fowler, is leaving gray areas in your building and design plan.

“I’ve heard horror stories, and most are because one party’s expectations were different from the other’s,” Nigro states. “The more developed drawings can be, the fewer assumptions the contractor will have to make.”

And it’s not only important for you to communicate to your design team. The members of your team need to be on the same page with each other as well.

“They need to really create a collaborative team,” Nigro says. “There are a lot of decisions to be made.”

Fowler recommends getting the whole team together to meet each other and start working collaboratively from the start. Most times, he says, architects, designers, and builders who work in a community have met and done projects with each other before.

Consider the trends

More homes across the country are being built “healthy” or “green.” These are homes built with non-toxic, natural products and materials.

Nigro says she used to recommend healthy building to her clients, and now people are coming to her asking for it.

Another trend sweeping the nation is “mother-in-law suites” or homes that accommodate multi-generational families.

Over the past five years, a lot of Nigro’s clients have started looking down the road to when older relatives might move in with them, or maybe their adult children will move back home after college.

This could mean a separate apartment over a garage, or maybe a guest bedroom on the main floor.

Why are trends an important factor to consider? It could help you sell your home in the future.

Have fun

“It’s important for us to personalize your home and make it yours and something that you’re proud of,” James remarks.

If this means having a full basketball court right on the main floor next to the dining room, like one of Nigro’s customers wanted, then that’s what you should have!

Custom features can range from practical to fantastical: Fowler has had clients ask for water pipes over their nightstand so they wouldn’t have to get up for water in the middle of the night; “living walls” (walls with plants or grass growing right on them); hidden cameras; and even an unexplained hole in the closet floor.

Hey, it’s your dream house, after all.

Wondering if new construction is right for you? Search new construction listings, and get more home-buying tips and resources to help you decide.

Related:

Originally published October 21, 2016.

Source: zillow.com

Bodnar of MMG: What Does Continued Volatility Mean for Clients?

Bill Bodnar of The Mortgage Market Guide (MMG) discussed how volatility continues in the bond market.

Friday morning’s “gap down” open is a negative sign. Key resistance levels in the 10-year Note yield are still holding at the moment.

Inflation will be sharply higher over the next three months due to the year-over-year baseline effect. However, Bodnar says he doesn’t see inflation being a big problem longer-term.

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Source: themortgageleader.com

5 Ways to Show Your Home Some Love

Don’t leave your home out of the Valentine’s Day fun — send it a love note or two with these quick tips.

When February rolls around, we’re often thinking of little ways to show our loved ones how special they are to us. Why not take the opportunity to do the same for your home?

While you can’t send your home a box of chocolates or a card, there are plenty of things you can do to show it a little love this Valentine’s Day.

Make easy DIY updates

Even if you’re not planning on selling your home anytime soon, it’s always good to make small improvements to increase your home’s value. Plan a quick weekend project, like one of the following:

  • Install a no-touch faucet on the kitchen sink
  • Swap those brass drawer pulls from the ’90s with a more modern design
  • Replace the old fluorescent light fixtures in the bathroom
  • Upgrade the frameless builder-grade mirror to a more stylish one
  • Paint the front door and shutters a vibrant color you love

These simple changes can make a huge difference in how you see and enjoy your home — and make it easier to sell when the time comes.

Buy it something pretty

Just like buying a new ensemble usually lifts your spirits, purchasing something you love for your home will instantly put you in a great mood.

Buy that gorgeous vintage door you’ve been eyeing online (after carefully measuring, of course). Upgrade the curtains the previous owner left behind, buy something colorful and cheery to change the room’s look, or take the plunge and finally purchase that department store rug.

Cultivating great style in your home doesn’t usually happen overnight, but occasionally purchasing items that that make you happy will eventually result in a space you love.

Make happy memories in it

When you first looked at your home, you might have said something like, “This would be a great space for entertaining.” Since moving in, however, have you actually entertained in your home?

If you haven’t (or if it’s been awhile), consider hosting a potluck or a casual dinner with friends and family.

But don’t think you have to scrub the floors for three days and prepare a feast. There’s no need to get too fancy when you host — all you really need is great friends, lively conversation, and good food. Make a menu, choose the music, and hang some string lights or light some candles to create a festive atmosphere.

Save money on it

If mortgage rates are down and you’re interested in lowering your monthly payments, you might want to consider refinancing your home.

Though saving money on your mortgage is the most obvious reason to refinance, many homeowners choose to refinance so they can change from an adjustable rate mortgage (ARM) to a fixed-rate mortgage. This can make payments more predictable and less dependent on how the market is doing.

Knowing that you are making the best financial decisions when it comes to your home will ultimately make you happier to be there.

Make sure it’s protected

Reviewing your home insurance policy may not be the most exciting way to spend an evening, but it’s a good way to make sure there aren’t any obvious gaps in your coverage.

Read your policy carefully. Are you overly insured? Or are you overpaying for the amount of coverage you’re getting? Remember that standard coverage often doesn’t often pay for flood or earthquake damage, so check your policy and understand what’s covered in the rare case of a disaster.

If you find areas for improvement, shop around for a new insurance company or work with your existing provider to create a plan that makes you feel more prepared and secure. Understanding the ins and outs of your insurance policy is the best way to look after your pocketbook — and it will likely help you sleep better at night, too.

A home is more than just a roof over your head — it’s a place that’s meant to be loved and enjoyed. Try some of these quick tips this weekend, and you’re sure to fall in love with your home even more.

Related:

Source: zillow.com

Forbearances Down 5% Over Past Month: Black Knight

Active forbearance plans fell again this week, dropping by another 19,000 (-0.7%) from last Tuesday. In total, this puts the number of active plans down by 135,000 over the last month, a 5% reduction.

That 5% monthly decline represents the strongest rate of improvement since late November 2020 and is a direct result of servicers working through the 1.2 million plans that entered this month with scheduled March month-end expirations for extension and/or removal.

It is important to note that even with such strong monthly improvement, there are still more than 46,000 active plans with March month-end expirations, which provides the potential for additional improvement in coming weeks.

As of March 23, 2.57 million homeowners remain in forbearance, representing 4.9% of all homeowners with mortgages.

This week’s improvement was driven by improvements among both GSE (-21,000) and FHA/VA plans (-10,000), while active plan volumes rose among portfolio/PLS mortgages (+12,000).

Early extension activity suggests servicers continue to approach forbearance plans in three-month increments, with the bulk of would-be March expirations being extended out through June.

Plan extensions have accounted for 75% of all extension/removal activity in recent weeks, but removals are up simply as a result of the volume of expirations that were scheduled for this month.

Early extension activity suggests servicers continue to approach forbearance plans in three-month increments, with the bulk of would-be March expirations being extended out through June.

Black Knight’s McDash Flash Payment Tracker shows that 90.7% of observed borrowers had made their payment through March 22, up from 89.8% at the same time in February.

Source: themortgageleader.com

Dealing With a Seller Who Is ‘Just Not That Into You’

You’ve got your heart set on their home. Should you try to win them over, or just walk away?

As Valentine’s Day approaches, many single folks swipe left and right searching for the “one” love of their life. Looking for the right match is not much different in real estate: trying to find the perfect home, in a prime location, that checks all the boxes on your wish list.

Given the ups and downs of a home search and the love affair many buyers have with potential matches, many real estate agents feel their job becomes part therapist and part matchmaker.

Buyers tour dozens of homes and sift through dozens of properties, maybe even going on “second dates” — or in real estate terms, “private showings.”

Sometimes they feel it in their gut when the right house comes along. They know the comps, and are prepared to make an offer at fair market value. In their minds, they’ve already moved in.

Unfortunately, sometimes love is unrequited — even in real estate.

The seller has every right to reject a buyer for any reason whatsoever. They may stand firm on their price or wait for better terms. It could be they don’t like the buyer’s contingencies, or they’re holding out for a cash deal.

Either way, the seller has no obligation to sell to you, even if you offer what seems like a fair price.

Here are five tips for dealing with a seller who is “just not that into you.”

Go to your max

After submitting an offer and even going through a series of counter offers, you realize you’re probably too far apart on price.

You’re wasting time by holding back and playing the seller’s game. If you want the home, it’s time to go to your max.

By putting your best offer forward, you’ll have done all you can. Sometimes a few weeks pass, and they will come back to you.

Move on

Moving on is easier said than done, of course. But if the seller isn’t interested in working with you, move on.

Hanging around wishing the seller will come to their senses and accept your offer is a waste of time and emotional energy. By pining away in your love affair with that house, you risk missing out on other great properties that are available and whose owners may be more “into” you.

And who knows? Sometimes, when you move on, the seller may suddenly show interest.

Learn from the experience

The sheer desire to own a home and the assumption that an available home should be yours doesn’t always translate into homeownership. If things don’t work out for you, analyze what went wrong.

What mistakes could you have avoided? Did you spend too much time negotiating with that seller? Did you get too emotionally involved?

If you can walk away with some lessons learned, your next try at homeownership should be easier — and more likely to succeed.

Don’t try to figure out the seller

You’ve got no idea what’s going on in a seller’s head. For all you know, the seller is emotionally attached to the home and not ready to sell. Or maybe they’re simply are firm on their price, and that’s it — no matter how high it seems relative to the market.

It’s certainly tempting to play armchair analyst when a seller isn’t selling to you for mysterious reasons. It’s also, in most cases, a waste of time and energy.

Accept the fact that the seller just isn’t that into you for whatever reason, and move on to the next home.

Do try to figure yourself out

Is there a pattern developing? Are you only going after the ones you can’t have? If so, are you sure you’re ready to commit?

Like finding a mate, buying a home is a huge decision and financial commitment. If you find that you keep going after sellers that aren’t co-operating, the issue may be you — not them.

Identify the motivated and serious seller, and make a play for their home.

And don’t spare too much thought for the one that got away. You’d be surprised how many times buyers, at the closing table, admit that the home they had previously pinned for wasn’t the one for them, anyhow.

Related:

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com

Biden Housing Secretary Seeks $100B Funding Boost

Marcia Fudge, the Biden administration’s recently confirmed Housing and Urban Development Secretary, has urged lawmakers to top off the department’s budget by as much as $100 billion. So reports Politico.

Fudge also called for Congress to make permanent the majority of housing-related pandemic legislation.

HUD’s annual budget, holding near $55 billion of late, is inadequate to meet the needs of more than 500,000 homeless, fix up deteriorating public housing and remove lead from subsidized housing, Fudge said in a press briefing.

Read the full article from Politico. 

Source: themortgageleader.com

What Do You Need and Want in Your Next Home?

In this article:

While everybody knows that buyers shop based on price range, there are many additional considerations to make when looking for a home. And, most buyers end up refining their criteria once they start touring homes. Ultimately, your home criteria should depend on your personal lifestyle and needs. Regardless of what you’re looking for, here are some general rules you should follow to make sure you’ll be happy with the home you buy for the foreseeable future.

What are the top features buyers look for in a home?

Today’s buyers are juggling many different priorities when it comes to buying a home, but according to the Zillow Group Consumer Housing Trends Report 2019, here are the features that rank as very important or extremely important to most buyers.

Neighborhood wants and needs for buyers

  • Safety: 82% say a neighborhood that feels safe is very or extremely important
  • Walkability: 60% say it’s very or extremely important
  • Preferred neighborhood: 56% say it’s very or extremely important
  • Proximity to shopping, services and/or leisure activities: 53% say it’s very or extremely important
  • Optimal commute to work or school: 52% say it’s very or extremely important
  • Offers a sense of community or belonging: 48% say it’s very or extremely important
  • Close to family and friends: 46% say it’s very or extremely important
  • In preferred school district: 43% say it’s very or extremely important

Home features buyers want

  • Within initial budget: 83% say it’s very or extremely important
  • Air conditioning: 78% of buyers say it’s very or extremely important
  • Preferred number of bedrooms: 76% of buyers say it’s very or extremely important
  • Preferred number of bathrooms: 67% of buyers say it’s very or extremely important
  • Private outdoor space: 67% of buyers say it’s very or extremely important
  • Preferred size/square footage: 67% of buyers say it’s very or extremely important
  • Floor plan/layout that fits preferences: 67% of buyers say it’s very or extremely important

28% of buyers look for a home to rent out, 27% looked for smart homes, 58% of buyers looked for assigned parking

1. Search for the right price

Price will ultimately dictate what you can or cannot buy. While looking at homes above your price range can be fun, it’s not a good use of time — and it can lead to heartbreak when you realize it’s not financially feasible. Despite this, Zillow research found that in 2019, just 55% of buyers stayed on budget, while 26% went over their initial budget.

How to set your home buying budget

Use Zillow’s Affordability Calculator: This handy tool gives you an initial budget range based on your income, existing monthly bills, and down payment amount. Once you have that range, you can set up Zillow alerts for homes on the market that fit your price range, along with other criteria.

Get pre-approved: Once you’re ready to really start your home search, you’ll want to get pre-approved by the lender of your choice. They’ll approve you for a loan up to a specific amount, based on your income, debt and credit history.

Forecast your mortgage payment: Even if you are pre-approved for a large loan from your lender, you should make sure you’re comfortable with your estimated monthly housing payment. When you use Zillow’s mortgage calculator to estimate your monthly payments, be sure the taxes, insurance, and HOA fees are accurate — those items can make a big difference in your monthly costs.

2. Prioritize the location

Next to budget, location is one of the most important things to consider when buying a house. The 2019 report uncovered that 24% of buyers found it difficult or extremely difficult to find a home in their desired location. If you can’t find or afford a home in your ideal neighborhood, you’ll want to ask yourself a few questions (and enlist the help of your agent) to find a location that fits your lifestyle, needs and budget. Remember — your home’s location can’t be changed, so take the time to really identify a neighborhood where you’ll be happy live.

Proximity to downtown

Unsurprisingly, homes closer to core downtown areas have better resale value, thanks to their shorter commutes. According to Zillow research, in 29 of the country’s 33 largest metro areas included in the analysis, buyers should expect to pay more per square foot for a home within a 15-minute rush-hour drive to the downtown core. That may be why 15% of buyers who compromise to stay within their budget add time to their commute.

Community attributes

If you like being able to walk to restaurants and shops, try walking the distance to town to see if it’s doable. Spend some time exploring the area, checking out nearby parks and figuring out what kinds of attractions are nearby.

Alternatively, if you’re someone who likes a more solitary life and doesn’t mind driving, you might prioritize a home that offers more privacy, perhaps in a location that’s off the beaten path.

School district quality

If you have kids (or are planning on having kids in the future), you want them to get the best education possible. Checking out the school district ratings is a starting point, but you should visit the local schools to gather your assessment of the education and programs. Even if you don’t have children, the school district that your home is in can impact your future resale value.

Flood zone status

Homes located in flood zones require additional insurance, and buying a home in a flood-prone area means you need to be prepared if a flood actually happens.

3. Think long term

According to the Zillow Group Report, the typical homeowner stays in their home for 14 years before selling. When shopping for a home, don’t just think of your immediate needs. Make sure the home you select will meet your long-term goals, so you won’t have to move again in the near future.

Bedrooms and bathrooms

If you plan to expand your family in the near future, make sure the new home can accommodate your plans, whether it’s an extra room for a new baby, an in-law suite for parents, or a guest bedroom if you’re moving out of state and anticipate lots of visitors. The same goes if you are planning to downsize or you have grown children who will be moving out soon.

Outdoor space

As mentioned above, most buyers rank outdoor space as important. If you have a dog (or plan to get one), have kids who need a safe place to play or are an avid gardener, you’ll want to make sure the home’s outdoor space meets your needs.

Potential to personalize

Many buyers look for a home that’s move-in ready, so they can avoid costly repairs and updates (especially right after moving in). But at the same time, it’s nice to be able to add some personal flair to make a house feel like home. If you’d like to add some of your own style, be sure to steer clear of homes that you won’t be able to change enough to fit your preferences.

Lifestyle amenities

Ideally, your new home should enhance your current lifestyle — and you’ve probably already envisioned what your life in a new home will look like. As you evaluate houses, consider your hobbies and what makes you happy. For example, if you love spending time outdoors, you probably want a home with a nice yard. If you love to cook, maybe a nice, big kitchen is on your wish list. And, think about your current living situation: What things do you wish were different?

4. Assess property condition

TV makes home renovations look easy, but in reality, they’re anything but. If you’re a first-time buyer who has never undergone a renovation, you may want to steer clear of a home in serious disrepair. The costs can add up quickly, and if the home needs structural work, it could delay your move-in, causing unnecessary stress. Here are the three major categories of property condition.

Move-in ready

A move-in ready home is new, close to new, or has been recently renovated. Zillow-owned homes are move-in ready homes that have been recently renovated by a licensed contractor, and are ready for new owners to start their lives.

Minor updates

A home that needs minor updates might have cosmetic issues you’d like to change, or have some dated mechanical systems that could be updated for energy savings. Learn more about minor cosmetic details below.

Major renovation

A home that needs major repairs is usually priced lower due to the work that needs to be done. One upside to a major renovation is the opportunity to personalize the home to your tastes. Keep in mind that the return on investment for a major renovation isn’t 100%, and you risk a delayed move-in if the repairs are more extensive than anticipated.

Check condition of costly systems

No matter the condition of the home you’re buying, make sure your inspector checks to make sure major systems and mechanicals in the home are functioning properly. If issues are uncovered, you’ll want to ask the seller to either repair them before closing or offer a credit so you can fix them yourself. Look out for the following costly issues:

  • Damaged roof
  • Older furnace or HVAC system
  • Flooding, water damage or mold
  • Old insulation
  • Plumbing issues
  • Exterior cracks
  • Uneven floors

5. Don’t focus on minor cosmetic details

No house is perfect, so try not to get hung up on little imperfections. For example, don’t eliminate a home from your list just because you don’t like the interior paint color. Cosmetic changes are fairly easy and affordable to make. Don’t let the following minor issues keep you from buying a house you would otherwise love:

  • Paint
  • Hardware
  • Furnishings
  • Landscaping

When you attend showings and open houses, or even when you’re just browsing through pictures online, it’s easy to get distracted by clutter. Try not to pay too much attention to the seller’s stuff — it’ll all be removed by the time you move in. Put in the effort to picture the house as a blank canvas for all of your belongings.

6. Stick with your must-haves

There’s a big difference between wants and needs, so create two different lists when searching for a home. For instance, a shorter commute may be a must-have, but smart home features are a nice-to-have. Practicality and functionality should always take priority over the bells and whistles.

Things to consider when buying a house: needs vs. wants

For example, your list of needs might look like this.

  • Need: shorter commute
  • Need: specific number of bedrooms and bathrooms
  • Need: parking

Other items might fall to your list of wants, like these.

  • Want: updated kitchen
  • Want: upstairs washer and dryer
  • Want: smart home features

Source: zillow.com

How to Negotiate Repairs After a Home Inspection

Most would-be buyers and sellers believe the real estate “deal” is negotiated at the signing of the contract.

Most would-be buyers and sellers believe the real estate “deal” is done at the signing of the contract.

In many cases, the deal-making and negotiations only start at the contract signing. Even in more competitive real estate markets, negotiations still happen once in escrow.

Issues typically arise after the home inspection, and those issues tend to result in another round of negotiations for credits or fixes.

Here are three buyer tips for negotiating repairs after a home inspection.

1. Ask for a credit for the work to be done

The sellers are on their way out. If the property is moving toward closing, they’re likely packing and dreaming of their life post-sale. The last thing they want to do is repair work on their old home. They may not approach the work with the same conscientiousness that you, as the new owner, would. They may not even treat the work as a high priority.

If you take a cash-back credit at close of escrow, you can use that money to complete the project yourself. Chances are you may do a better job than the seller, too.

Finally, if you get the credit, there will be less back-and-forth to confirm that the seller correctly made the repairs.

2. Think ‘big picture’

If you know you want to renovate a bathroom within a few years, then you likely won’t care that a little bit of its floor is damaged, that there’s a leaky faucet, or that the tiles need caulking. These things will get fixed during your future renovation.

However, the repairs are still up for negotiation. Asking the seller for a credit to fix these issues will help offset some of your closing costs.

3. Keep your plans to yourself

A good listing agent will walk the property inspection with you, your agent and the inspector. Revealing your comfort level with the home or your intentions, in the presence of the listing agent, could come back to haunt you in further discussions or negotiations.

If they sense you are uneasy with the inspection, they’ll be more willing to relay that to the seller. Conversely, if you spend two hours measuring the spaces and picking paint colors, you lose negotiation power.

If you mention you’re planning a gut renovation of the kitchen, the sellers will certainly hear about it. And they’re going to be less likely to offer you a credit back to repair some of the kitchen cabinets.

Eyes wide open

A word of caution: You should never complete the original contract assuming that you can and will negotiate the price down more after the inspection. It will come back to bite you, particularly in a competitive market.

If the property inspection comes back flawless, there’s nothing to negotiate. If you attempt to negotiate anyway — to recoup what you lost in the initial contract negotiations — you risk alienating the sellers and possibly giving them an incentive to move on to the next buyer.

You need to go into escrow with your eyes wide open. A real estate transaction is never a done deal until the money changes hands and the deed is transferred. Stay on your toes. Otherwise, you may risk losing out on further viable negotiation opportunities, which could lead to buyer’s remorse.

Shopping for a home? Check out our Home Buyers Guide for tips and resources.

Related:

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Originally published December 18, 2013.

Source: zillow.com

Homie Highlight: Erin Gordon

Title: Buying Agent

As a Homie buying agent, Erin specializes in helping clients find the perfect Boise home for them. Erin delivers a high level of personalized service and helps guide people through every step of the home buying process.

Erin’s Background

Erin was born in Vermont, but she has lived in Boise since she was six years old. She also spent a few years in Helena, MT, where she studied political science at Carroll College. Erin ran cross-country and track through high school and college. She loves spending time outdoors, especially fishing and hiking.

As she attended school and was trying to figure out what she would do for a living, Erin always had an interest in real estate. However, she was hesitant to get into it because she didn’t know where to start. Last year, Erin finally took the plunge and got her real estate license.

Why Homie?

After Erin got her license, she did her research on local real estate brokerages. That’s when she found out about Homie. Homie’s values spoke to her and aligned with her own. Erin had seen her friends and family get frustrated with the traditional real estate model. Having to give up so much of their equity when they sold a home frustrated and upset them. Erin knew there must be a better way.

Now that she works for Homie, Erin gets a sense of fulfillment and purpose from helping people start a new chapter in their lives. She loves interacting with people and listening to their stories. Making personal connections with clients is her favorite part of the job.

If you asked Erin to sell you on working for Homie, she’d tell you the same thing that sold her: the values. The focus on loyalty, humility, disruption, and balance has made Homie a good experience for her. According to Erin, everyone at the company has been welcoming and supportive.

Join the Disruption

If you want a career you love, want to help change the lives of others, and want to join a company in disrupting the real estate industry, check out careers at Homie!

Want to learn more about what Homie real estate agents do for their clients? Click here.

Read other Homie stories:

Homie Highlight: Phillip Kranefuss
Homie Highlight: Mark Oliver
Homie Highlight: Creed Nielsen
Homie Highlight: Batya Cruz

Source: homie.com

Busting 4 Big Myths About Buying a Home

Conventional wisdom, like conventional loans, can go on for decades without changes or challenges. Everyone assumes these nuggets of wisdom are true because they’ve been repeated so long and so often. But Zillow researchers used hard data to challenge some real estate assumptions and have discovered that what you think you know may not be true. Here are fresh takes on commonly held real estate beliefs, based on research for “Zillow Talk: Rewriting the Rules of Real Estate.”

Myth: Buy the worst house in the best neighborhood

This notion hangs around because it just seems to make sense. If you really want to make a smart investment, everyone knows location is the most important factor. So the worst house in the best neighborhood should be a great deal. You’re buying the best location you can afford, so what if you have to buy a sub-par house? But it turns out, that’s not such great advice. At best, the bottom 10 percent of houses in a ZIP code will appreciate at a similar rate to the other 90 percent of homes, leaving you no better but no worse off than your neighbors. But it turns out that in the most affluent neighborhoods, the worst house is actually likely to appreciate more slowly than the houses around it. In essence, not only is the myth not true, when it comes to the nicest neighborhoods, it’s the exact opposite of true. The worst house in the best neighborhood is the worst investment.

Why would that be? Most likely the demand for cheap homes isn’t very strong in affluent neighborhoods. People who want to live in fancy ZIP codes want fancy houses as well. Besides, a house that is substantially cheaper than those around it is less likely to attract bargain hunters than it is to raise concern about what’s wrong with it.

How about the worst house in the hottest neighborhood? If you can get into a neighborhood that has seen five consecutive years of higher-than-average home value appreciation, you can get one of the low-end houses, fix it up and turn a tidy profit. But timing is everything. If you miss the spike, you’ll be stuck in an underperforming house. If you buy a bottom-tier home in a neighborhood that was recently hot but now just luke-warm, you’re going to see lower than average appreciation.

According to the data, to see tBhe maximum return on your investment, you should buy in the most expensive neighborhood that you can afford to buy a home that isn’t in the bottom 10 percent. It doesn’t have to be the best house or even one right in the middle. But the worst is, well, the worst.

Myth: If you want a screaming deal, buy a foreclosure

At the height of the housing bust, you could see stories every day about the huge discounts available on foreclosed houses. Foreclosures could be had at less than half the price of other homes, so buying anything else seemed foolish. That talk has calmed but there’s still the pervasive ideas that foreclosures are always a bargain. But it’s not necessarily so.

Yes, foreclosures frequently sell for less than other homes. But they aren’t like other homes. When people are in financial crisis, unable to make their mortgage payments, chances are good that they aren’t keeping up with basic maintenance. Why fix the roof when you’re going to lose the house anyway? In addition to issues of neglect, some homeowners facing foreclosure actually vandalize the home and take out copper piping, appliances and anything else they might be able to sell. Add to that the fact that banks don’t have the same disclosure obligations as traditional homeowners.

Of course, the impact of foreclosures on price varies from market to market. In some regions, the discount for buying a foreclosure is still steep. In others, it has all but disappeared. But instead of assuming you’ll get a better deal on a foreclosed home, make sure you are comparing prices between homes of similar size and similar condition.

Myth: Real estate is a terrible investment

It’s true, when you look at annual returns over most long periods, stocks perform at almost twice the rate of residential real estate. But you can’t live in your stock portfolio. That’s worth something each and every month. In addition, buying a home probably means taking out a mortgage. Not only does that bring tax benefits, but it allows you to leverage your down payment to make a bigger investment. If you have $100,000 to invest in stocks, you can buy $100,000 worth of stock. But if you take that same $100,000 and invest it in a home at 20 percent down, you can buy $500,000 worth of real estate.

In “Zillow Talk,” Zillow Group CEO Spencer Rascoff and Chief Analytics Officer Stan Humphries crunched the numbers and determined that from 1975 to 2014 the S&P 500 averaged an annual return of 10.4 percent while residential real estate averaged 11.6 percent annual returns. Buying a home is a great investment.

Myth: Buying a home is a risk-free investment!

While it’s true that real estate is, historically, a less volatile investment than stocks, it’s still an investment and that means there is some risk. It’s a gamble that usually pays off but not always. And we’re not just talking about those horror stories you see in the news about a couple buying a home sitting atop an enormous snake den or discovering the carpeting covered giant holes in the floor.

Buying a home is a particularly risky gamble for low-income families. If you’ve had to stretch to buy an inexpensive home in an inexpensive neighborhood, you are probably in real trouble if you lose your job. You’re less likely to have a financial cushion. And if you lost your job as part of a regional economic downturn, chances are you can’t just sell your house because your potential buyers are likely out of work too. That means you can’t move to where you might get another job.

In addition to the loss of flexibility, lower income homeowners are less likely to benefit from the mortgage-interest tax deduction because they are less likely than more affluent taxpayers to file itemized tax returns.

Does that mean you have to be well-off to profit from owning your own home? Certainly not. But it does mean that you shouldn’t go into homeownership thinking that it’s going to give you an instant financial leg-up. Real estate is a good bet – if you can afford to make it.

Source: zillow.com