You’ve received an offer on your home and you’re thrilled at the prospect of getting the deal done. But first you need to make it through the next hurdle: the home inspection. In most real estate contracts, a home inspection contingency is in place, allowing the buyer a chance to back out should significant mechanical or structural issues come to light during the inspection.
While you may think your home will pass with flying colors, it’s at this stage that many deals fall through. With so much at stake, it makes sense that sellers would want to do as much as they can in advance to get their home in the best possible shape before this top-to-bottom review. By addressing any problems, sellers can assure buyers that the property is in move-in condition and save themselves a lot of negotiating and repair work down the road.
The following are areas where unpleasant surprises often arise and, ultimately, either kill the sale or cost the seller a bundle.
As you look around the interior and exterior of your home, check both the ceilings, moldings, and lower portions of walls for any cracks that could indicate a shift in the foundation. If you spot any, find a qualified foundation repair contractor or a structural engineer who can assess the situation and let you know if your issues are cosmetic or require repairs to the foundation. Rule of thumb: The sooner you deal with the issue, the better (and less expensive) it will be.
Over time, the elements take a toll on a chimney. Just like your foundation, you may start to see cracks emerge. Or, you might not be able to spot them if they’re at the very top. Either way, if there’s a structural issue that makes it unsafe, a home inspector will definitely point this out to your buyers.
Just because water isn’t cascading down from the ceiling, that doesn’t mean a home inspector won’t notice if you’ve had a leak that’s caused water damage. Stains on ceilings are often a tell-tale sign of previous problems. While your issue may have been something relatively harmless, like an overflowing toilet, buyers will suspect the worst if they notice signs of trouble. If you have a leak, fix it. Then, remove any reminders of the problem by covering stains with a fresh coat of paint. If you’re dealing with ceiling tiles, water and bleach can go a long way to restoring them to their once-clean appearance.
Moisture and Mold
Unfortunately, mold typically follows a leak. And nothing scares away buyers quite like that funky fungus. So be sure your home is mold-free by checking every nook and cranny. For example, are your bathrooms vented properly? In some homes, those helpful ceiling fans are actually sending moist air straight to the attic, causing mold to grow.
If your basement is often damp, be sure to run a dehumidifier and check for mold there as well. Should you discover mold in any location, it’s best to contact a professional who can perform removal and remediation before the inspection. Plus, you’ll feel better — both mentally and physically — once it’s gone.
Any homeowner who’s tried to take a few shortcuts by not hiring an electrician should make sure the work they’ve done is up to code prior to the inspection as electrical violations are both common and easy to spot. Faulty wiring is a fire hazard so the sooner you address it, the safer for everyone.
As most homeowners know, replacing a roof is not cheap. So it makes sense that home inspectors are going to take this section of the inspection very seriously. If you know your home could benefit from a roof replacement, consider taking care of it before putting your place on the market. Even if you believe the roof has a few good years left in it, hearing that it’s nearing the end of its life is enough to send buyers running.
Heating and Cooling Systems
Regardless of the season, a home inspector is going to want to see that heating and cooling systems are functioning efficiently. Consider the age of your furnace or HVAC system. Have they been well-maintained over time? If you have an oil tank, buyers may ask you to remove it as these have been known to leak and cause environmental hazards.
From leaky faucets and loose toilets to lead in the pipes and low water pressure, plumbing problems can cause your deal to go down the drain. If you’re aware of a problem but put off calling the plumber, now’s the time to take care of it.
When it comes to selling your home, obviously you want to do everything you can on your end to add value to your home and secure the highest offer. But while you might automatically assume that major added value comes from major renovations, sometimes it's the small things that add up ending the most value to your home.
Here are four small, inexpensive changes that can add major value to your home (and get you higher offers in process):
Spruce Up Your Exterior
While many homeowners focus their renovations and changes on the interior of their home, the exterior of your property is the first thing potential buyers will see. And if you want to get off on the right foot and make a positive first impression, it's important that the exterior of your home is inviting and well-designed.
You don't have to completely landscape your property in order to make a good first impression. A few minor changes to the exterior can really spruce things up and make the space feel more inviting for potential buyers.
Put a fresh coat of paint on your front door. Line the walkway leading up to your entrance with inexpensive potted plants. If you have room, add a small chair or table to create a sitting area on the front porch. And always make sure your lawn is watered and mowed.
Having a clean, inviting, and well-decorated exterior will have buyers falling in love with your property before they ever even walk through the front door.
Add A Fresh Coat Of Paint
One of the most inexpensive ways to add serious value to your home is by adding a fresh coat of paint, particularly if it's been awhile since your walls have been redone.
Old, peeling, or out-of-date paint can make your home look like it's in rougher shape than it actually is. A fresh coat of paint will breathe new life into your rooms and frame them in the best light to potential buyers.
When choosing paint colors, go for neutral colors like gray or beige; using bright or unique colors can be off-putting to some potential buyers. Neutral tones makes it easier for buyers to see themselves in the space. Just be sure to avoid white - the color can feel overly harsh and can make your home feel cold and impersonal (not exactly the feel you're going for when selling a home).
Update The Bathroom
If you have an older home, making a few minor updates to the bathroom - even if they're only cosmetic - can go a long way in adding value to your home.
Things like outdated wallpaper, tile, or light fixtures can make your bathroom feel dated, a feeling which may carry over into the rest of your home and turn off potential buyers.
Take stock of your bathroom and see what changes might help it feel more modern and up to date. Currently have wallpaper that looks like it belongs in the 80s? Ditch the wallpaper for a more modern print or a fresh coat of paint. Does your vanity feel ancient? Try replacing the hardware for a more sleek look.
Renovating a bathroom can be pricey, but cosmetic changes are not - and can have a huge impact on the value of your home.
Hire A House Cleaning Service
When you're selling your home, it needs to be spotless. Dust bunnies under the couch, stains on the sink, or fingerprints on the wall can keep you from getting offers on your home - even though all of those situations are temporary and completely reversible.
And while you might be great at cleaning under normal circumstances, when you're selling your home, you should definitely consider hiring a professional cleaning service. Professionals are trained to cover every nook and cranny and ensure that your house is sparkling by the end of the service. And having a house that's expert-level clean can be a huge selling point to potential buyers.
Look for a local cleaning service that has experience preparing homes to sell and book their services before your next open house. This minor investment can pay off big time when potential buyers are drafting up their offers.
Before you sell your home, you want to do everything in your power to drive up the value and walk away with the highest offer possible. And these four changes are so small, inexpensive, and easy, there's no reason not to use them to your advantage!
We all know the premise of home-flipping shows: An investor buys a veritable dump and then, with the help of a team of ready-and-willing contractors and landscapers, transforms it into the best-looking home on the block. Next, that intrepid buyer turns around and sells it for a hefty profit. Sounds like a straightforward formula for financial success, right? Well, not quite.
What makes for entertaining television doesn’t always translate into a win beyond the high definition flat screen. The following are nine ways home-flipping shows mislead viewers. So, if you’re considering turning this into your next career or even a side gig, you may want to separate fact from fiction first.
Tight turnarounds aren’t always realistic
In order to realize as large a profit as possible, it’s important to flip the property as quickly as you can, otherwise paying the mortgage, taxes, and insurance quickly chips away at your bottom line. While sales tend to happen quickly on TV, the reality is that even if you have a willing buyer, getting pre-approved and securing the financing doesn’t happen overnight. For anxious sellers, that ticking clock is a constant reminder that every passing day means a little less money in their pockets.
Finding a dedicated team isn’t easy
As far too many homeowners know, not all contractors are created equal. For the most part, the artisans who make their way onto home-flipping shows are trustworthy, knowledgeable and willing to work nearly round-the-clock to get the job done. In reality, contractors may be working on multiple projects simultaneously and may disappear for days at a time. And as we all know, time is money.
DIY doesn’t work for everyone
Part of the appeal of these home-flipping programs is the ease with which the whole property comes together. But it’s more than just the time-lapse photography that makes it seem like anyone with a tool belt can renovate like a pro. While you might be tempted to take a DIY approach to keep expenses low, remember, these people know what they’re doing, whereas most homeowners are experts at other things. Sometimes tackling a task yourself will end up costing you more than if you’d hired the right person for the job.
When trouble strikes, it’s not so easy to resolve
Even with a careful home inspection, surprises (not the good kind!) pop up when you least expect them. Yet, if a sink hole opens and threatens to swallow a sunporch, home-flipping show teams are ready to fix that issue like it’s no big deal. When it happens to non-TV-star homeowners, it’s not always easy to find the right subcontractor — especially when you’re under time constraints. And, once you do, can you even afford to deal with whatever unpleasant shocker has come your way? If you have to go back to the bank for more money, that will impact your timeframe and ultimately your profit. (See number 1.) Home-flippers on TV seem to have bottomless bank accounts. Must be nice, right?
Materials don’t arrive simultaneously
When home-flippers begin a project, all the requisite materials are on-site and ready to go. If only this were the norm! Anyone who’s ever fallen in love with a special order item knows that it’s almost impossible to find everything you like in stock and ready for delivery. Some contractors are reluctant to start a renovation until all the supplies are in, which, again, can hurt your timeline and your profit.
The back-and-forth is all done behind-the-scenes
Never mind the fact that homes showcased on these programs never seem to lack for buyers, in many instances there doesn’t seem to be any haggling to speak of when it comes to the asking price. Leaving out the art of negotiation does viewers a disservice as it makes it appear that buyers can’t wait to pay full price — or above it.
The math is fuzzy
In order to reap the biggest profit, you need to buy below market value, sell above it, and not put more money into the renovation than you’ll get back. As if that equation weren’t complicated enough, on television, you don’t always hear about the costs of buying or selling, inspection and appraisals fees, and other expenses that go into both sides of the transactions. Leaving out some numbers conveniently inflates the profit.
Costs vary by area
Renovating a bathroom in rural Tennessee is going to cost much less than it would in, say, Manhattan. Not only will the labor be less expensive, but the materials and delivery charges will also skew lower in non-metropolitan areas. Of course, none of that is addressed in the show and most often estimates on TV are far lower than those you’d gather in real life.
You can over-renovate
Once you’re in the home improvement groove, you may be tempted to splurge and really go all out, but you have to resist the temptation to overdo it and put in more money than you’ll ever get back. In the quest to make your flip as fabulous as possible, you never want to lose sight of the the reason you started this project: to make money. Consider the return on investment for each improvement you make.
A real estate transaction can be an exciting thing to experience, but it can also be nerve-wracking and stressful. Your experience will largely depend on the circumstances surrounding your transaction and, perhaps more importantly, the agent you’re working with.
A great agent will not only get you over the finish line to the best of their ability, but they can also change your life for the better. Here are eight ways:
They’ll show you they care
In today’s fast-paced world, it seems like everyone’s attention is in short supply. A great real estate agent will show you that’s not always the case, by listening and caring about you and your needs. Not only will being a good listener help an agent do their job, but it’ll also show you that even in business, there are still people out there who care.
They can save you a lot of money
There’s an old expression, “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.” Hiring a great agent can save you literally thousands of dollars, as the right agent will not only negotiate effectively, but also know what pitfalls to look for as the transaction moves along, saving you money in the process.
They can help you see things in a different way
One of the most overlooked aspects of hiring a great agent is just how much of an effect they can have on your perspective. For instance, you might think that you’re looking for something in particular, but a great agent can take what you asked for and find something that’s even better than anything you’ve ever considered. A great agent is like an expert matchmaker.
They’ll do more than help you buy or sell a home
A great real estate agent will go above and beyond for you. They’ll help you find contractors, give recommendations on design (if you’re open to them), and even help you navigate the restaurants in your new neighborhood. Great agents provide so much value because they want to be your go-to resource for anything to do with real estate.
They can find you something that no one else can
Great real estate agents aren’t necessarily miracle workers, but they’re close. A great agent will surprise you with something no one’s ever thought of before, whether it’s finding a property that you didn’t know about, or a solution to an otherwise complex problem. A great agent is proactive and instead of sitting around waiting, will make things happen for you.
They can take a lot of stress away
One of the best things about a great real estate agent is the peace of mind that comes from working with them. There are lots of things that can go wrong during a real estate transaction, and a great agent knows this and will not only anticipate issues ahead of time, but will shoulder the burden and solve problems for you, making it a low-stress experience.
They’ll go to battle for you when it counts
The right agent is like a general you can depend on when the going gets tough. From searching for the right property or buyer, to negotiating, to pushing the deal through despite all obstacles standing in the way… a great real estate agent won’t back down from adversity and will battle for your best interests at all times.
They can become a friend for life
Maybe your real estate agent is already your friend, but if not, with a great agent you might eventually become one. Real estate is much more about relationships than it is about individual transactions, and great agents know this. They also usually have the kind of infectious personality that you always want to be around. So don’t be afraid to form a lifelong friendship with your real estate agent, it could truly change your life.
Buying a home is, for many people, an essential part of the American dream. But for people with a checkered financial history - and a less-than-perfect credit score - it can feel like a dream that's out of their reach.
But just because you don't have a perfect credit store or a pristine financial background doesn't mean you can't buy a home! While it may be a bit more challenging, you can find financing and buy the home of your dreams even if your credit score isn't quite up to the level you'd like it to be.
Here are five tips for buying a house (even if you have a less-than-perfect credit score):
1. Make Sure Your Credit Report Is Accurate
If you're worried your financial past might prevent you from securing a mortgage, the first step is to go through your credit report with a fine-toothed comb to make sure everything is accurate and up-to-date.
Mistakes on credit reports are more common than you think. In fact, in 2016 alone, consumers lodged 43,000 complaints to the Consumer Financial Protection Bureau regarding inaccurate credit reporting, accounting for nearly a quarter of total complaints.
Inaccuracies on your credit report can contribute to a low score - and make it harder to secure a loan. Go through your entire credit report to check for inaccuracies and, if there are any, reach out to the credit agencies to have them removed. Even remove one or two inaccurate negative remarks on your credit score can have a big impact on your score and make it easier for you to secure a mortgage.
2. Pay Your Rent On Time For A Year
When offering a loan to someone with a less-than-perfect financial history, lenders want to know you're responsible and they can count on you to make your payments. And that's why it's SO important that you pay your rent - on time - for the entire year prior to applying for your mortgage.
Having a documented history of your rental payments that clearly shows you've made your payments on time for at least a year shows your lenders you're able to pay your living expenses on time. And since you were able to pay your rent responsibly, they'll be more likely to believe you will also pay your mortgage responsibly.
3. Apply for an FHA Loan
The Federal Housing Administration (FHA) can be an excellent resource for potential homebuyers with a less-than-perfect financial history.
An FHA Loan is a mortgage that's insured by the FHA. FHA Loans have more lenient requirements - these mortgages are available for potential buyers with a credit score of 580+ and at least a 3.5% down payment (500+ with at least a 10% down payment).
If you have some money to put down and are concerned your credit score could be holding you back from securing a mortgage, you'll definitely want to explore an FHA Loan. Just keep in mind that in addition to your mortgage, you'll need to pay insurance premiums (since the FHA is insuring your loan in case of default).
4. Find A Co-Signer
If there's any possible way to have a friend or family member with higher credit score and better financial situation, do it.
Having a co-signer can help you avoid all the negative aspects of applying for a loan with less-than-stellar credit, including sky high interest rates. Over the course of the loan, securing a competitive interest rate can save you thousands to tens of thousands of dollars in interest.
But before you ask someone to cosign your loan, remember: a cosigner is taking legal responsibility for your debt. If you default on your mortgage, the lender can take legal action against both you AND your co-signer. Make sure you're able to afford the mortgage and can manage the payments before letting someone co-sign your loan.
5. Make A Plan To Refinance
If there's no way to avoid a mortgage with a high interest rate, it's ok! Just because you've got a high interest rate now doesn't mean you'll have a high interest rate forever.
If you get stuck with a high interest rate, make a plan for how you can better your financial situation so you can refinance and get a lower rate in the future. Set a date to refinance and strategize ways you can improve your credit score before then, like lowering your total credit card debt, paying all of your bills on time, or looking into credit consolidation options.
There's no way around it - the better your credit score and financial history, the better (and less expensive) your mortgage will be. But financial mistakes don't have to keep you from buying the home of your dreams. With determination, a bit of creativity, and these tips, you'll be well on your way to buying your home - even if you don't have a perfect credit score.