Tuesday, January 31, 2012

When You Should Sell

Over the past year or so I've had several friends and clients ask me when they should sell. Let me be frank, there is absolutely no way to perfectly time the market on either the buy or the sell side. There are so many outside factors that could and should affect your decision.

When You SHOULD Sell
The main factors that determine when you absolutely should sell are personal in nature and are typically things out of your own control and financial in nature.

· Death or Divorce: Let's face it, these things happen. If there is a separation between you and your spouse, either through death or divorce and it would be financially unreasonable for you to continue making payments on your home, you should sell.

· Job Loss: Over the past 4-5 years this has been a huge reason why people have had to sell their home. When you know that paying your mortgage might come after trying to feed your family, it's best to sell your home and get into a more affordable situation.

· House Poor: Times were great in the mid-2000's. You could get approved for anything. Maybe you wanted that dream life with the huge dream home, and the bank said you could afford it. Fast forward to the present. You have a monstrous house payment that has kept you from funding retirement for yourself or funding your children's education. You can barely scrape by after paying your mortgage payment. It's not that you're poor, you just have too much house, and you're house poor. Once again, it's best to sell and get into a better situation, and save some sanity.

When You CAN Sell
There are plenty of reasons out there that won't force you to sell your home as well. These factors aren't dire, but will generally improve your quality of life after sale.

· Moving Up: Got five kids and a 2 bedroom/1 bathroom home? Maybe you're looking to get out of an unsafe neighborhood. If you're moving up, it's always a good time to sell, simply because even if it's a buyer’s market, you can make up any losses from the sale of your home, on the buy side. It's safe to move up when you can afford a reasonable payment and when you're doing it for the right reasons.

· Moving Down: Often moving down can be attributed to empty nesters and retirees. They want to downsize because they just don't need the space anymore, and they want less housework and yard work. This can dramatically improve quality of life and is a perfect reason to sell.

· When Prices Are High: If you've got a lot of equity and you're looking to make a move, obviously the best time to make a move is when prices are high. When you sell, you can apply some or all of that equity towards a new home and a better situation for you.

The best time of year to sell your home (in Northern Colorado) is during the warm months from March through September. Typically, the number of homes sold in July are twice that of January. People are eager to take advantage of warm weather and the summer break so they can easily change school districts for their children.

Like I said before, there is no great way to time the market. If it feels right and your finances are in order, there's never a bad time to increase your quality of life.

Tuesday, January 17, 2012

6 Ways to Be an Exceptional Client

A real estate transaction isn't overly complicated, but there are many things that have to fall into place at the right time, from beginning to end.  There's getting pre-approved, the search, the offer, the due diligence, and closing.  An exceptional Realtor will tell you what to expect and handle the entire transaction while making it look easy.  An excellent way to make sure your Realtor does their job, is to make sure you do your job as well.  Below are six ways you can ensure a smooth real estate sale and be known as an exceptional client.

1.  Ask Questions
Agents will bombard you with questions to help understand your needs, wants and motivations.  It's their job to completely understand you and exactly what you want.  You should also be asking as many questions as possible.  If you don't understand a term or a process, ask the question.  Make it a point to understand everything you're signing, ask, "What comes next?", and communicate often with the Realtor.  Never be afraid to ask anything.

2.  Know What You Want
A lot of time and effort can be salvaged if you establish and communicate your needs and wants early on.  Are schools important?  What about a big yard?  Do you need an upgraded kitchen?  Agents typically get stuck in between husband and wife debates over what is more important in a home.  My advice: sit down and write a list of ten "must haves" and prioritize them together, before the agent does their first search.  If you find a home with seven or more of your top ten qualities and it feels like home, write an offer.

3.  Be Flexible and Open-Minded
A good agent will help expose you to new and different areas, styles and opportunities that you might not have thought about.  It helps to be semi-flexible on price range too.  Make sure it's wide enough to understand what you might be able to get.  Don't be turned off by nauseating paint colors and other things that are easily changed.  Being flexible and open minded is an excellent trait of exceptional clients because it seeks potential and understands what is possible, rather than what isn't.

4.  Cooperation is Key
Throughout the entire process, your agent is going to need you to respond timely to lenders, title companies, insurance underwriters and other parties to ensure the transaction goes through.  There is a lot of paperwork and information that gets processed through you.  Sometimes, you'll even provide the same information twice.  Instead of getting upset about it, just understand that it's part of the process and do it as quickly as possible.  You'll be in your new house before you know it if you do what's required of you and cooperate to the best of your ability.

5.  Be Open and Honest
Honesty really is the best policy.  Communicating honestly is being open.  To make sure you and your agent are on the same page, you need to be honest and open with them.  An exceptional Realtor will understand that and respond with the same honesty and openness.  If your situation changes, or you re-evaluate your parameters, let your agent know.  Deal with your lenders honestly and act in good faith towards the other parties involved.  If your agent isn't working out for you, give them the courtesy of letting them know why before you let them go.  Being open and honest isn't an easy thing, but it is highly important.

6.  Be a Decision Maker
Decisiveness is a trait of an exceptional client.  There's nothing worse than a portfolio of 15 "maybes".  When searching for your house, you're going to see things you like and don't like about each one of them.  If it doesn't feel like home, then get out, and cross it off the list.  Don't search for things to like about it, thinking that you might be able to settle for it.  Make the tough decisions.  Finding the right house is much more about eliminating the wrong homes than finding the right one.  Saying "YES" or "NO" is so much more helpful than "maybe".

Keep these in mind when considering buying or selling your home and you'll be off to a much better start than most.  Exceptional clients attract exceptional Realtors.

Tuesday, January 10, 2012

The Homebuying Process (Simplified)

A big issue with the homebuying process is when homebuyers (and sellers for that matter) don't fully understand the process, and what needs to happen at specific times to make the process run smoothly.  Below is a (simple-ish) flowchart that shows you what happens, and when.