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Tuesday, January 16, 2018

Real Estate Myths Debunked


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Real Estate Myths Debunked

There are many common myths that circulate the real estate market. Misconceptions are often a result of hearsay or groupthink, resulting in inaccurate assumptions that are taken as fact. Most of these myths are easily answered and explained. Below are some of the most common real estate myths and the truth behind these widely held beliefs or misunderstandings.

MYTH: The real estate market is predictable.

TRUTH: We’ve seen it too many times before. Things can change fast in the real estate market. Recessions, environmental-caused devastation, sudden changes in crime rates, increase in the number of homes that come on market, and other unknowns can have a huge impact on the stability of the real estate market. Still, most experienced Agents and Lenders can predict the immediate direction of the market, barring no major catastrophes occur. Still, it is always advisable to learn about the market and understand what is happening before and during your home sale or purchase process.

MYTH: You need lots of money to invest in real estate.

TRUTH: As a buyer, you will need enough for earnest money to lock in your real estate purchase contract, plus appropriate cash to pay for the buyer expenses. Common expenses such as earnest money, home inspections, and closing costs will require cash payment at the time of deadline per the purchase contract. There may be a few additional costs involved in the purchase process before home ownership is complete, so having reserve cash is recommended. Aside from these, a non-cash buyer will need to secure the remaining home purchase funds through a home loan and a qualified
Lender.

MYTH: Get pre-approved after finding your perfect home.

TRUTH: Many home buyers don’t fully understand the need for getting pre-approved before engaging a real estate Agent (or at the very beginning of working with an Agent.) A buyer should be pre-approved before looking at homes for a number of reasons. For one, there is the possibility of great disappointment if the buyer finds that dream home and then learns he or she cannot qualify for enough money to purchase the home. For another, if the buyer puts in an offer on a multiple offer scenario, the seller will most certainly require the Lender’s pre-approval letter to ensure the buyer is serious and able to make the home purchase. If the buyer has not been pre-qualified, he or she may lose the opportunity for the home purchase entirely as sellers will only consider serious and qualified buyers, especially in a multiple offer scenario. Most experienced Agents will encourage or require their buyers be pre-approved by a licensed Lender before working with them or showing them homes. Read more about “The Loan Process and Getting Into a Home” here.

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MYTH: Set your sale price higher than what you want to get for it.

TRUTH:
Buyers likely won’t look at homes that are overpriced compared to what’s available on the market. Setting a higher price may deter buyers, resulting in being on the market longer. Agents are aware of pricing tactics and will also look at total time on the market when pulling home options for their buyers. If a home is listed at a high price, sits on the market for a while, then drops to a more realistic price, qualified buyers may become suspicious of why the home was priced so high or why it’s been on the market so long. Ultimately, this can have a negative impact for the seller in both time on market and list price. It is a best practice to always price your listing appropriately for the market and negotiate when an offer comes in.

MYTH: Sellers will earn back all their renovation costs in their home sale.

TRUTH: A seller can recoup some of the expenses of home renovations, but it is nearly impossible to recover 100% of the costs. Siding replacement tends to bring the highest return, along with updated kitchens and bathrooms. Keeping a house updated is ideal to yield a higher sale price. The primary instance when upgrades are not recommended is when the market is flat or trending down.

MYTH: Eco-friendly features yield a higher sale price.

TRUTH: Although a wonderful earth-friendly addition to a home, in many areas, if the home is priced higher than comparable homes without the “green” features, buyers may be more willing to forgo the eco-friendly home for a lower priced comparable. Talk with your Realtor about appropriate home pricing. Consider the cost of eco-friendly updates and how long you will stay in your home before you make the investment, or understand that the new eco-friendly features may not increase your home value as much as you want, nor will it necessarily guarantee you a higher sale price.

MYTH: You can save money if you don’t use a real estate Agent.

TRUTH: Some “For Sale By Owners” do have success in selling their home quickly and for a fair market value without major issues or costs to the seller. Those people tend to be skilled or trained in the real estate market. For the majority of sellers and buyers, however, it is highly recommended that you enlist a qualified, licensed real estate Agent to oversee this often litigious process. Learn more by reading this post, “Why Use A Real Estate Agent?”

MYTH: All real estate Agents are the same.

http://www.ranliferealestate.com/TRUTH: Aside from being licensed by the state, every Agent runs his or her business individually, and every agent has different skills, experience, personalities, thoughts, practices, and connections. Realtors must differentiate themselves from their competition and must find clients that want to work with them. In the real estate world, there is a ton of variety among Agents. It is always recommended to interview Realtors before deciding to work with one.  Read this post to learn more about “How To Find The Right Agent For You.”


MYTH: It is fast and easy to make money as a real estate Agent.

TRUTH: Licensed Realtors must complete a required amount of study hours and pass an arduous test before receiving their license. Once a Realtor is licensed, that Agent must spend months building up a database of buyers and sellers, along with quality referrals. Each client is unique and an Agent must understand each client’s needs and expectations. A lot of time is spent on each client and with each client. There’s no such thing as “fast cash” in this industry. To be successful in real estate requires time and energy.

MYTH: Realtors work a 9-to-5 job.

TRUTH: Real estate is really an entrepreneurial industry. Each Realtor must run his or her business individually. Some brokerages are better than others - providing resources, training, ongoing educational courses, and opportunities to shadow tenured Agents. Regardless of the brokerage or the market, to be successful in this industry, an Agent must work long hours, including nights, weekends, and holidays. An Agent must be available when his or her clients are available. For many, that is after a typical 9-to-5 job and on weekends. Aside from face-to-face time with clients, Agents have a lot of behind-the-scenes work they must do for each client and each transaction. To be good in this industry, Agents must work hard, often resulting in long days and obscure hours. Real estate is more of a lifestyle choice than simply a job.

MYTH: Real estate Agents will say or do anything to make a sale.

TRUTH: Some people carry a negative perception of real estate Agents, similar to that of a car salesperson. However, Agents are required to abide by a strict code of ethics, rules, laws, and regulations. Breaking these set rules can result in major fines or even loss of one’s license. Agents take these rules very seriously. Also, due to the nature of the real estate industry, Realtors rely mostly on word-of-mouth referrals from current and previous clients, as well as repeat business. With this understanding, Realtors know understand that serving the needs of their clients and watching out for the client’s best interests is not only their required duty as outlined by the code of ethics, but also a necessary for their own direct and long-term success.

Have Some Additional Myths You Want Cleared Up?
Give us a call and we’ll help answer your real estate questions. We’re here to be of service and we’re happy to help clear up any real estate misperceptions or discuss your real estate goals.

We’re Here To Help!
RANLife Real Estate: 801-478-4545
RANLife Home Loans: 800-461-4152
Email us at info@ranlife.com


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Wednesday, January 10, 2018

Common Mistakes Made By FOR SALE BY OWNERS

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COMMON MISTAKES MADE BY FOR SALE BY OWNERS

Some people believe they can skip the “costs” of using an Agent and simply sell their home on their own. What these people often forget is all the hidden costs, legal obligations, and inherent risks that come with selling a home. Working with a qualified Agent mitigates the seller’s risk. If you are thinking of selling your home on your own, read the below common mistakes that many For Sale By Owners (FSBOs) make.

Lots of Paperwork
Understanding and managing all of the paperwork continues to be one of the most difficult tasks for FSBOs. Aside from the basic REPC (Real Estate Purchase Contract, there are a number of other possible required and recommended forms. Some of the more common real estate forms may include:
  • Seller Financing Addendum
  • FHA/VA Loan Addendum
  • Assumption Addendum
  • Owner Occupancy Addendum
  • Seller’s Disclosures
  • Lead-Based Paint Disclosure
  • Buyer Financial Information Sheet
  • Several Addenda that may be needed or required
Part of the real estate Agent’s responsibilities include managing all of the paperwork and ensuring agreed upon deadlines are met. 

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Liability
Mistakes happen, even in the real estate world. Only, when a mistake happens during a FSBO, the seller, who doesn’t have the representation of a licensed Agent, often pays. Conversely, a licensed Agent carries E&O insurance to cover common real estate errors or omissions. The real estate buying and selling process is a very legal-heavy affair. No homeowner wants to deal with lawsuits as part of the selling process.
FSBOs Stay On The Market Longer
FSBOs typically take longer to sell than homes that are listed by an Agent. This additional time on market is largely due to a FSBO homeowner not having the same access to marketing tools, networks, listing services, or applicable buyers that a real estate Agent can provide. It makes sense, then, to realize that FSBOs also usually sell for lower than the original asking price as the seller has to lower the home price to get qualified buyers sooner.
FSBOs Sell For Less
FSBOs lose about 16% off their original asking price, on average. Many sellers who are selling their own home aren’t able to dedicate the time needed to the selling process. Also, many aren’t trained to fully understand current market reports and trends or don’t have the experience to market and sell their home. You wouldn’t try to fly a plane if you had no proper training or education in the field. Nor would you likely handle all your own retirement plans and investments without a financial advisor or proper training in the financial world. Real estate is no different; Agents are educated, licensed, and provided with ongoing training. You want to use a professional real estate Agent to ensure what is likely your biggest financial investment.
FSBOs Are Stuck
Once a FSBO signs the real estate agreement, that seller is bound by the agreement. If there is an error or an issue, the seller may have to pay off the buyer to get out of the deal or eat some additional costs to fix the error. An Agent can protect a seller against these types of risks and concerns. A FSBO often lacks the experience and know-how of a qualified and tenured Agent.
Hidden Costs
The purpose for most to sell their home on their own is to cut costs and save money. With FSBOs, the seller ends up paying a lot for seemingly minor costs to market the property and complete the sell. These costs can include:
  • Marketing materials, like signage, photography, MLS listing
  • Credit report for buyer(s)
  • Home inspection
  • Pest inspection
  • Home warranty
  • Attorney costs (if/when needed)
  • Buyer’s Agent commission
Negotiating Tactics
An experienced Agent is also an experienced negotiator. When it comes to buying or selling real estate, there are several aspects that require key negotiating along the way. Your Agent’s responsibility is to protect your sell (or purchase) and ensure the transaction stays on course. With the real estate process, there may be several times when the buyer has questions or concerns, which can turn into requests or even demands to keep the transaction moving forward. A quality Agent will help the seller navigate the process and respond to the requests.
It is also important to note, the real estate process can be a very emotionally charged experience. It can be difficult for the seller to remove the emotion and just focus on the transaction. An Agent helps act as a buffer throughout the process.
Showings Can Be Awkward
Sellers make a home showing somewhat awkward for potential buyers. It is easier for buyers to have full access to the home and do a home tour with their buyer’s Agent. FSBOs also aren’t as familiar with the real estate process and may not know how to work best with a buyer’s Agent.
Time Costs Money
Time and money are often the two things we need more of and can’t get enough of. It takes a FSBO a lot more time and energy to sell a home than it does a qualified Agent. The old question “What is your time worth?” is directly applicable here. How much time will you spend researching the market and monitoring the contract? Are you going to leave work to unlock the house each time there’s a showing or an interested buyer? Are you willing to research a buyer to determine his/her credit worthiness?
Scams Can Be Costly
Scams are prevalent and FSBO transactions are not immune. Both both buyers and sellers have little recourse when caught in a real estate scam, other than hiring a costly attorney to chase after justice. Common scams include:
  • Falsifying paperwork (such as appraisal documents, loan forms)
  • False foreign buyers (scammer sends too much in a bad check and then requests a refund)
  • Purchase through a third-party (such as a fake attorney)
  • Asking for personal information that is not required for the transaction
  • Stealing loan information through a fraudulent wire transfer
  • Email scams

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So, What’s Your Alternative?
The main goal for most FSBO sellers is to save the commission money that a real estate Agent will earn. However, attempting to save the commission cost can result in a lot of additional risks and associated costs in the long run and throughout the real estate transaction process. Consider foregoing the commission savings to save yourself the hassles, hidden costs, and time that is involved in a real estate deal.

Looking for an Agent? Call us today to learn how we can help. 801-478-4545
info@ranlife.com


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Sunday, December 17, 2017

Ways To Boost Your Credit Score




BOOST YOUR CREDIT SCORE


For any major purchase, such as buying a home, your credit score is very important. Your credit score can determine whether or not you can even qualify for a home loan, as well as your mortgage insurance requirements and your interest rate.

INTEREST RATES
The interest rate you pay for the money you borrow is determined largely by your credit score. Many Lenders set a hard and fast rule with their lending policies. For example, a Lender may determine that the lowest mortgage interest rate possible is available to customers with a credit score of 700 and above. If your credit score is 695, those five measly points can cost you thousands of dollars over the life of your mortgage loan.

FHA LOAN
I applying for an FHA loan, you will be required to have a minimum FICO score of 580 to qualify for a low down payment loan option. If your credit score is below 580, you may still be able to qualify for an FHA loan, but be required to pay a larger down payment.

Learn more here about the Mortgage Loan Process.

CHECK YOUR CREDIT SCORE
Be sure to pull your credit score once a year and check it for any discrepancies. You can do a lot of work yourself to remove inaccurate records or incorrect postings on your credit. Look for errors on your report, like accounts that are not yours, late payments that were paid on time, debts you paid off that are still showing up, or old debts that should not be on your credit report any longer. You will have three different FICO scores comprised of the three major reporting bureaus: TransUnion, Experian, and EquiFax.

Be sure to discuss questions you have with your Lender or financial advisor. If you are just starting the process and need a Lender recommendation, work with your real estate Agent for Lender referrals.



RAPID RESCORING
If you are looking for a quick credit score boost, your Lender can help you speed up the process. Rapid rescoring can increase your credit score within a few days by quickly correcting errors or paying off balances. You will need to do this through a Lender who is a customer of a rapid rescoring service. There is a fee associated with utilizing this service, but this process can result in cleaning up your credit score and can save you hundreds to thousands on your mortgage loan.

PAY DOWN DEBT
After reviewing and fixing any errors on your credit report, next you will want to pay down debt. Start with paying down (or paying off) credit card balances. Paying down credit lines can boost your credit score and bump you into the next tier for a better mortgage interest rate or improving your likelihood for loan approval.

Always, always, always pay your bills on time. Even if you have paid bills late in the past, it’s never too late to improve your credit with ontime payments and keeping balances low going forward.

DON’T OPEN NEW LINES OF CREDIT
Open new debt only if you really need it. It is not advisable for you to open any new lines of credit. If looking to purchase a home now or in the near future, consult your Lender before you open any new lines of credit as this can severely (and even negatively) impact your credit score and your ability to purchase a home.



DON’T CLOSE OLDER ACCOUNTS
Conversely, you may be tempted to close old credit accounts that are no longer used. It is not ideal to close any old lines of credit when attempting to purchase a home as it may have a negative impact on your credit score.

TO RECAP
The first thing to do is know your credit score and work immediately on any improvements. Be sure to discuss your credit score, credit report, and credit improvement plan with your Lender or financial advisor. There is a lot you can do immediately or in the short-term to improve your credit score, allowing you to qualify for a lower mortgage interest rate and saving you money now and well into your future.

Still looking for a Lender? Call us today to learn more and get started. (800) 461-4152


Still looking for a real estate Agent? We can help you there too. Call us today. (801) 478-4545

Read here to learn more about Finding The Right Agent For You.