Which one is the right decision for you? Here is a great article on how you should decide.
How to Sell Your Home and Buy Another at the Same Time
Real Estate News-Diedre Woolard
Being a move-up buyer can be tough in today’s market. Although deals are closing rapidly, there’s no guarantee that your new dream home will close at the same time as your old dream home. Selling and buying at the same time is a delicate dance, but it is doable. There are a few ways to pursue this plan:
1. Sell first, then buy. This is perhaps the safest plan, but it calls for multiple moves. In this scenario, you list your home and complete the transaction before purchasing another home. When you sell your home, you put the bulk of your belongings in storage and live in a temporary rental or, if possible, enter into a rent-back deal with your home’s new owner. The advantage of this method is that you know exactly how much you can spend on a new home, and you don’t have to worry about temporary financing. Also, without another home waiting in the wings, you’ll be less tempted to drop the price or to take the first offer that is below the asking price. The disadvantage is that it is a disruptive experience, and you could be displaced for a while if you are home-shopping for a long time.
2. Buy first, then sell. This strategy minimizes disruption. You can move into your new place at your leisure and then take time to prepare your home for sale. The major disadvantage is that, depending on how fast your old home sells, you could be shouldering the burden of two mortgages for some time. You are also responsible for maintenance and security on the vacant home. This scenario works best if your first home is already paid off.
A variation of this plan is to buy a new home with the plan to rent out the old one for a year. This buys you some time with money coming in, but being a landlord comes with its own stresses and responsibilities. You may also need to repair or renovate the home after it has served as a rental.
3. Buy and sell simultaneously. To execute this plan, you need to prepare for all contingencies and to know that if your timing is off, you will face one of the two scenarios listed above. The trickiest bit can be timing the financial burden. One option is bridge financing. This enables you to own two homes for a short amount of time. To do this, you need to either borrow money from family or obtain a short-term loan from a bank or other lending institution to span the time period between when you close on your new home and sell your old one. In essence, you are getting a short-term home-equity loan, also known as a HELOC, a Home Equity Line of Credit, on your present house and using it as a down payment on your new house. You then repay the loan when you sell your first home. It is not easy to qualify for a conventional bridge loan, since you have to demonstrate that you have enough money to pay for both mortgages for an indefinite period of time.
Experts advise applying for the HELOC well before you buy a new house. That way most of the credit on the line is unused until you actually need it. Lenders don’t like a HELOC that works only for a very short time, and it’s a challenge to get a HELOC if your present home is on the market.
Try to schedule the closing date on the sale of your old home after the closing date on the home you buy. In this way, you can stay in your present home until you move into your new home. Otherwise, you can attempt to negotiate a rent-back arrangement.
There is no right answer in choosing any of these scenarios. Your Realtor may be able to advise which is best, depending on the local market. However, much depends on your financial stability, as well as your tolerance for risk or disruption.
Showing posts with label Washington D. C. real estate. Show all posts
Showing posts with label Washington D. C. real estate. Show all posts
Friday, June 21, 2013
Friday, May 24, 2013
It's a seller market! Here are some great tips on writing the best offer letter that you can!
10 tips on how to write an offer letter
By Sam DeBord Real Estate News
Homebuyers trying to stand out from a crowd of offers in today’s competitive market are often told to write a personal letter to accompany their offer. Buyers who are financing a home, or have a smaller down payment, often have trouble competing with all-cash buyers. Appealing to the seller as a person, as opposed to a contract, can sometimes give a buyer an emotional edge.
What isn’t often explained to buyers is how exactly to write that letter. The best ideas are often squandered by poor execution. Here is a quick guide to framing the home buyer letter and leveraging your best attributes by thinking from the seller’s point of view:
1) Flatter First
This is an emotional pitch. You’re attempting to tell the seller, “I’m such a good person that you should ignore the numbers.” They need to like you. Tell the seller how great their taste in color is, how much you’d love to have their lifestyle, and what an amazing neon bottle cap exhibit they have over the fireplace. Lay it on thick, but keep it sincere. You’re selling, but you don’t want them to feel like they’re being sold a used car.
2) Get To The Point
You may have 10 great ideas that you’d like to tell the seller. They will only remember two. The seller may have 10 other letters to read. If you mix in your best points with your lesser points, they may all just become a jumble.
Pick two or three reasons why you will be the best buyer for this home, and make them distinctly recognizable. The more streamlined you make your message, the more memorable it will be.
3) Paint A Picture
People remember what they’ve read at a far higher rate when they can see a picture of it in their head. “I really love this neighborhood because I’ve lived here and gone to school here,” doesn’t resonate.
On the other hand, “I spend half of my time walking the cobblestone streets around this block, dropping my daughter off at Gilman School and volunteering at Schnitzelfest every summer,” will trigger a visual memory for a seller. Think “I’d be so happy in the summer to be cooking Neapolitan pizza for friends and neighbors in your outdoor wood-fired oven”.
4) Don’t Remodel The House
Planning on adding a second story or changing the landscaping? Don’t mention it. You might be correct that the seller’s sewing room would make a great workout room for you, but this isn’t the time.
If you’re going to expand to create more bedrooms, you might be changing the seller’s favorite eyebrow windows in the roofline. They may have buried their dog under the tree you’re planning to pave over. he sellers may have awful taste, but homeowners are very protective of their homes.
5) Show Stability
Present yourself as a stable buyer who will have no problem closing the purchase. Whether that is a reference to your lack of contingencies, stellar employment record, or commitment to moving in as soon as the sellers are comfortable, ease the sellers’ fears of a shaky transaction.
6) Show Humility
At the same time, be humble and ask for the sellers’ blessing on your offer. “We would be so honored to live in your home,” goes much further than “We are confident that you will accept our generous offer.” The ball is in their court, and your letter should acknowledge that.
7) Don’t Whine
The emotion of your letter must be upbeat and high. It needs to make the seller feel good. Everyone wants to play with a winner.
The seller doesn’t care how many other homes you’ve lost out on. They don’t care that your rent just doubled. They don’t want to know about your wife’s sad condition that requires you to have a home like this. They just feel uncomfortable now. In fact, they’re already tossing your offer in the round file as they finish this paragraph.
8) Close With Clarity
Remember the five-point paragraphs and five-paragraph themes you had to write in school? While those formulas are too long and rigid for this letter, their closing advice should be noted. Your excitement, motivation, and ability should be reiterated at the end of your letter in a quick recap.
Remember that the sellers could be reading a few letters. Make sure that the closing of your letter reminds them of your best qualities and reinforces them.
9) Sign with Appreciation
The feeling your sellers will leave with can live or die on the signature line: “Sincerely”, “Cordially”, “Best Regards”, and “Yours Truly” do not apply. This is not a business correspondence of equals. Thank the sellers for spending their valuable evening reading the ode that you wrote about your unworthy self.
“Thank you so much for your time,” “Thank you for the opportunity,” “Your consideration is greatly appreciated,” or even “We are honored to have the opportunity,” will leave the seller understanding that you value their time and are grateful for it.
10) Spell Check. Grammar Check. Buddy Check. Do It Again.
As the recovering son of a former Catholic school English teacher, there is a dark secret I’d like to let you in on. We’re prejudiced. We look down on people who aren’t like us. There is a heinous belief ingrained in us from birth that says people who misspell and use incorrect grammar are lesser beings and not worthy of our respect.
Truthfully, though, there is an unbelievable amount of weight that some sellers will put on the preciseness of the letter. Right or wrong, the buyer’s personality will be judged from their attention to detail, ability to follow-through, and level of care in the letter. Buyer reliability is often gleaned from how well the rules of grammar are followed. If grammar isn’t your thing, find someone whose thing it is. You never know: the house you want to buy just might belong to my mother.
Write The Letter, Check It Twice, and Send It Off
There are many tactics being used by home buyers to stand out from the crowd. While not all sellers will read them, personalized letters are the most-accepted and popular form of unique buyer strategies available. Don’t rush the letter. Take the time to write it correctly. It just might be the most valuable single page of text you ever write.
By Sam DeBord Real Estate News
Homebuyers trying to stand out from a crowd of offers in today’s competitive market are often told to write a personal letter to accompany their offer. Buyers who are financing a home, or have a smaller down payment, often have trouble competing with all-cash buyers. Appealing to the seller as a person, as opposed to a contract, can sometimes give a buyer an emotional edge.
What isn’t often explained to buyers is how exactly to write that letter. The best ideas are often squandered by poor execution. Here is a quick guide to framing the home buyer letter and leveraging your best attributes by thinking from the seller’s point of view:
1) Flatter First
This is an emotional pitch. You’re attempting to tell the seller, “I’m such a good person that you should ignore the numbers.” They need to like you. Tell the seller how great their taste in color is, how much you’d love to have their lifestyle, and what an amazing neon bottle cap exhibit they have over the fireplace. Lay it on thick, but keep it sincere. You’re selling, but you don’t want them to feel like they’re being sold a used car.
2) Get To The Point
You may have 10 great ideas that you’d like to tell the seller. They will only remember two. The seller may have 10 other letters to read. If you mix in your best points with your lesser points, they may all just become a jumble.
Pick two or three reasons why you will be the best buyer for this home, and make them distinctly recognizable. The more streamlined you make your message, the more memorable it will be.
3) Paint A Picture
People remember what they’ve read at a far higher rate when they can see a picture of it in their head. “I really love this neighborhood because I’ve lived here and gone to school here,” doesn’t resonate.
On the other hand, “I spend half of my time walking the cobblestone streets around this block, dropping my daughter off at Gilman School and volunteering at Schnitzelfest every summer,” will trigger a visual memory for a seller. Think “I’d be so happy in the summer to be cooking Neapolitan pizza for friends and neighbors in your outdoor wood-fired oven”.
4) Don’t Remodel The House
Planning on adding a second story or changing the landscaping? Don’t mention it. You might be correct that the seller’s sewing room would make a great workout room for you, but this isn’t the time.
If you’re going to expand to create more bedrooms, you might be changing the seller’s favorite eyebrow windows in the roofline. They may have buried their dog under the tree you’re planning to pave over. he sellers may have awful taste, but homeowners are very protective of their homes.
5) Show Stability
Present yourself as a stable buyer who will have no problem closing the purchase. Whether that is a reference to your lack of contingencies, stellar employment record, or commitment to moving in as soon as the sellers are comfortable, ease the sellers’ fears of a shaky transaction.
6) Show Humility
At the same time, be humble and ask for the sellers’ blessing on your offer. “We would be so honored to live in your home,” goes much further than “We are confident that you will accept our generous offer.” The ball is in their court, and your letter should acknowledge that.
7) Don’t Whine
The emotion of your letter must be upbeat and high. It needs to make the seller feel good. Everyone wants to play with a winner.
The seller doesn’t care how many other homes you’ve lost out on. They don’t care that your rent just doubled. They don’t want to know about your wife’s sad condition that requires you to have a home like this. They just feel uncomfortable now. In fact, they’re already tossing your offer in the round file as they finish this paragraph.
8) Close With Clarity
Remember the five-point paragraphs and five-paragraph themes you had to write in school? While those formulas are too long and rigid for this letter, their closing advice should be noted. Your excitement, motivation, and ability should be reiterated at the end of your letter in a quick recap.
Remember that the sellers could be reading a few letters. Make sure that the closing of your letter reminds them of your best qualities and reinforces them.
9) Sign with Appreciation
The feeling your sellers will leave with can live or die on the signature line: “Sincerely”, “Cordially”, “Best Regards”, and “Yours Truly” do not apply. This is not a business correspondence of equals. Thank the sellers for spending their valuable evening reading the ode that you wrote about your unworthy self.
“Thank you so much for your time,” “Thank you for the opportunity,” “Your consideration is greatly appreciated,” or even “We are honored to have the opportunity,” will leave the seller understanding that you value their time and are grateful for it.
10) Spell Check. Grammar Check. Buddy Check. Do It Again.
As the recovering son of a former Catholic school English teacher, there is a dark secret I’d like to let you in on. We’re prejudiced. We look down on people who aren’t like us. There is a heinous belief ingrained in us from birth that says people who misspell and use incorrect grammar are lesser beings and not worthy of our respect.
Truthfully, though, there is an unbelievable amount of weight that some sellers will put on the preciseness of the letter. Right or wrong, the buyer’s personality will be judged from their attention to detail, ability to follow-through, and level of care in the letter. Buyer reliability is often gleaned from how well the rules of grammar are followed. If grammar isn’t your thing, find someone whose thing it is. You never know: the house you want to buy just might belong to my mother.
Write The Letter, Check It Twice, and Send It Off
There are many tactics being used by home buyers to stand out from the crowd. While not all sellers will read them, personalized letters are the most-accepted and popular form of unique buyer strategies available. Don’t rush the letter. Take the time to write it correctly. It just might be the most valuable single page of text you ever write.
Friday, May 17, 2013
Seller's market tips
The market is great right now for sellers! That being said, here is a great article for seller's that are looking for the right agent. by Deidre Woollard-Real Estate News
Deciding to move isn’t a step anyone takes lightly. Your house is more than just an investment, it is your home. As you begin the process of distancing yourself from the place where you made so many lasting memories you will begin to think about what your home will be worth to someone else.
When you are ready to meet with a Realtor you may already have an idea of what your home is worth. You may have seen what other homes in your neighborhood have sold for or kept an eye on local listings. Your agent will prepare for you a comparative market analysis (CMA) that is an in-depth version of any research you may have done on your own.
The CMA is used to help evaluate how your home will fare against the competition. It takes a look at both homes that are currently listed and those recently sold. The purpose is to find the highest price that will still make the home competitive on the open market.
A Portrait Of Your Home And Its Surroundings
The CMA includes a fact-based portrait of the home including information such as number of bedrooms and baths, approximate square footage, size of major rooms, age of the home, property taxes, and desirable amenities such as fireplaces and pools.
Depending on the market the CMA will go back in time as long ago as a year or a month or week ago. The range can also vary. Some will just cover a few streets around your home, CMAs can cover areas as narrow as one or two streets surrounding your home, or as broad as an entire subdivision.
Beauty Is In The Eye Of The Beholder (Or Potential Buyer)
Selling a home isn’t just about the facts. There are many pieces to the puzzle and it’s often the indefinables that impact a potential buyer’s perception of the home. A home purchase remains fundamentally personal. Speaking at the Luxury Roundtable: State of Luxury 2013 conference, Camilla Papale, the chief marketing officer of Douglas Elliman Real Estate, defined real estate, especially at the high end, as being primarily emotional. She said that 90 percent of Douglas Elliman’s transactions are influenced by the buyer’s emotions versus rationalization. Perception can alter reality and so this is an important consideration when looking at a CMA. People make decisions based on curb appeal, light, design choices and many other factors.
At the end of each home’s information on the CMA report there will be a brief statement provided by the listing agent that will address some of these subjective factors such as recent remodels, historic features, or things that might be of interest to the buyers. The agent will be marketing the home and is already thinking about how it will be presented as a product to tempt the public.
The Changing Face of the CMA
The CMA today is different than it was before the internet era partly because the potential seller does so much of their homework ahead of time. Jeff Rightmyer, a sales agent with Building Bridges Partners Keller Williams explains how technology has changed the CMA: “If anything, it has increased the amount of avenues now available to display more accurate and precise information ranging from short sales, standards, all the way up to luxury. It also has allowed little room for error as clients can accurately research the information for themselves.”
There are still resources that agents have access to that most sellers do not. Also agents have the experience of listing, marketing, and selling many homes on their side. A local expert will know what buyers in the area look for and be able to easily assess how your home measures up. Together you and your agent can find a price that brings you what you need and will be attractive enough to attract your home’s new owner.
Deciding to move isn’t a step anyone takes lightly. Your house is more than just an investment, it is your home. As you begin the process of distancing yourself from the place where you made so many lasting memories you will begin to think about what your home will be worth to someone else.
When you are ready to meet with a Realtor you may already have an idea of what your home is worth. You may have seen what other homes in your neighborhood have sold for or kept an eye on local listings. Your agent will prepare for you a comparative market analysis (CMA) that is an in-depth version of any research you may have done on your own.
The CMA is used to help evaluate how your home will fare against the competition. It takes a look at both homes that are currently listed and those recently sold. The purpose is to find the highest price that will still make the home competitive on the open market.
A Portrait Of Your Home And Its Surroundings
The CMA includes a fact-based portrait of the home including information such as number of bedrooms and baths, approximate square footage, size of major rooms, age of the home, property taxes, and desirable amenities such as fireplaces and pools.
Depending on the market the CMA will go back in time as long ago as a year or a month or week ago. The range can also vary. Some will just cover a few streets around your home, CMAs can cover areas as narrow as one or two streets surrounding your home, or as broad as an entire subdivision.
Beauty Is In The Eye Of The Beholder (Or Potential Buyer)
Selling a home isn’t just about the facts. There are many pieces to the puzzle and it’s often the indefinables that impact a potential buyer’s perception of the home. A home purchase remains fundamentally personal. Speaking at the Luxury Roundtable: State of Luxury 2013 conference, Camilla Papale, the chief marketing officer of Douglas Elliman Real Estate, defined real estate, especially at the high end, as being primarily emotional. She said that 90 percent of Douglas Elliman’s transactions are influenced by the buyer’s emotions versus rationalization. Perception can alter reality and so this is an important consideration when looking at a CMA. People make decisions based on curb appeal, light, design choices and many other factors.
At the end of each home’s information on the CMA report there will be a brief statement provided by the listing agent that will address some of these subjective factors such as recent remodels, historic features, or things that might be of interest to the buyers. The agent will be marketing the home and is already thinking about how it will be presented as a product to tempt the public.
The Changing Face of the CMA
The CMA today is different than it was before the internet era partly because the potential seller does so much of their homework ahead of time. Jeff Rightmyer, a sales agent with Building Bridges Partners Keller Williams explains how technology has changed the CMA: “If anything, it has increased the amount of avenues now available to display more accurate and precise information ranging from short sales, standards, all the way up to luxury. It also has allowed little room for error as clients can accurately research the information for themselves.”
There are still resources that agents have access to that most sellers do not. Also agents have the experience of listing, marketing, and selling many homes on their side. A local expert will know what buyers in the area look for and be able to easily assess how your home measures up. Together you and your agent can find a price that brings you what you need and will be attractive enough to attract your home’s new owner.
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