Friday, March 27, 2009

No Worries - Investors aren't the "Big Bad Wolf" of real estate!

We all have preconceptions, its a fact of human nature. Sometimes they can be accurate, and other times they are FAR from the truth.

One thing we've heard more than once is the idea that real estate investors (like us) are nothing more than greedy evil people out to take advantage of unfortunate homeowners. Personally, this notion really gets our feathers ruffled. Sure, there are a few slime-balls out there who have pulled terrible heists on unsuspecting home owners and padded their own pockets at someone elses expense. Its a shame these few bad apples have ruined the whole lot for the rest of us and in some cases soiled our profession's good name.

Most real estate investors, from ourselves to our many peers throughout the city, state and country, are ethical and honest people. Ask any investor at a local real estate investing group and its likely that one of their top reasons for getting into "the business" is to actually HELP people. Swindling is absolutely not on the list. Doing things like helping distressed owners out of sticky situations, providing safe and affordable rental housing, trying to boost the economy out of its housing crisis and helping people buy the home of their dreams all give us a huge sense of satisfaction from our work. Most real estate investors truly want to make the world and their cities a better place to live.

So, what if you are one who already has the idea that real estate investors are just "Big Bad Wolves" coming to your house to blow you over and gobble you (or your house or your money) all up? Our best advice: Shop around and ask around. Talk to more than one investor and/or investment company and choose one that you feel comfortable with. You should absolutely feel at ease with the entire process! Feel free to ask for references from other investors or previous clients, and you can also contact some local investment groups to inquire if the investor you've chosen is a member in good standing.

Don't let the stigma wrongly attached to some real estate investors prevent you from reaching out to one when the time comes to sell a home. We like to think of ourselves more as real estate super hero's, swooping in to save all your real estate problems in one fell swoop. Just don't be surprised if we show up at the closing table with a red cape on our backs!

For more information about selling your home, visit REstore Property Group online.

Wednesday, March 18, 2009

Pretty houses sell faster, but what should I fix up?

With so many houses on the market today, it is a fact that those listed in "as-is" condition and in need of lots of updates and repairs will sit with no offers MUCH longer than those that look pretty and are in move in condition. There's no denying that buyers have their choice of more houses than they could possibly wish for, so it is only common sence that they will choose the nicest house they can and ignore a percieved fixer-uppper.

If you are looking to sell your home and want to do it in a reasonable amount of time, you should take steps to freshen, update and repair all the major things buyers look for in a home. In many cases this will be a daunting task, but it is well worth the investment of time and money if you can manage it.

Aside from any structural or safety issues that must be addressed to sell your home, here are a few things that will also help to get your home sold faster and their average costs:

  • Paint - The easiest and most cost effective fix-up. Paint interior and exterior (if wood siding) in a neautral or earth-tones color scheme. Every wall, ceiling and trim surface should be repainted to lend a freshness and newness to the home. Estimated average cost: $400-$800 for supplies if done yourself, $2,000-$4,000 if you hire professionals.
  • Kitchen - The "big ticket" item that wil cost you the most but also be the biggest selling point for your home. Depending on the age and condition of your kitchen and appliances, you may be able to do a quick spruce up by painting cabinets and replacing countertops, hardware and older appliances. In many cases, though, the entire kitchen must be replaced in order to compete in today's marketplace. Estimated average cost: $2,000-$50,000 depending on original condition, type of finishes chosen and amount of work done yourself.
  • Bathroom(s) - Usually the second biggest item(s) that you will have to tackle. As with the kitchen, a lot will depend on the age and current condition. Estimated average cost: $500-$5,000 each bathroom depending on original condition, type of finishes chosen and amount of work done yourself.
  • Flooring - Ideally all carpeting should be replaced and all wood floors refinished. Dated or worn tile, vinyl and linoleaum should also be replaced. Replacing carpet in common areas like the living and dining rooms with hardwood floors is also an excellent way to attract buyers faster. Estimated average cost: $1,200-$10,000 depending on square footage, items to be replaced and original condition.
  • Curb Appeal - The beauty of your home from the street is the single most important factor to bring buyrs to your door. Some "fixes" in this catagory may include repaving driveways, adding trees, shrubs and flowers, pruning or removing existing trees and shrubs, installing or repairing walkways, and/or adding architectural elements to the home's exterior. Estimated average cost: $2,000-$10,000 depending on original condition and amount of work done yourself.

In addition to these mostly "cosmetic" items, you also may need to consider some other costly items that buyers will be looking for. These include replacing the roof, replacing old single pane windows, removing old sheds and/or freestanding garages, repointing old brick, upgrading elecrtical and/or plumbing, installing central air and many others. Sometimes these things will need to be addressed immediately in order for the home to have a chance at selling, while in other cases you may be able to wait and negotiate the repairs in the contract if or when you get an offer.

Very few home owners are able to sell their homes today without making at least a few of these major changes. As you can see, the average amount you can expect to invest in fixing up and repairing your home would range from a minimum of about $6,000 to as much as $75,000 or more depending on the overall condition of your home.

If you are able to use a credit line or home equity loan to make these types of changes, they are well worth your investment of time and money. With your home in top shape you can then list it with an agent and sell reletively quickly and (hopefully!) for top dollar.

Understandably, not everyone has the ability to make the needed changes to their homes in order to hasten a sale. Whether because of financial propblems or lack of time to address them, these repairs are sometimes an insurmoutnable hurdle to some home owners. In these cases you may want to consider contacting a local real estate investor and getting an offer on your home in its current condition. Chances are that after you factor in the repair costs and the holding costs of 6 or more months while the property would have been repaired and listed, the investor's offer will be very fair for your peace of mind that the home is sold.

visit REstorePropertyGroup.com for more information on selling your home

Wednesday, February 18, 2009

Costs while selling add up - Watch your bottom line

For most people, when it comes time to sell their home or property, there is a price point already bouncing around in their heads as to how much they want, need or think they can get for the house. Sometimes these prices are unrealistic, sometimes they are under value, but we all generally have some preconceived idea of what we intend to sell for.

It is said that a thing is worth exactly what a buyer is willing to pay for it. While this statement can be true, it is not 100% correct. Take for example this scenario:

Jane and Joe are homeowners. Jane was laid off from her office job a while back and has been unable to find a new job. Jane and Joe are unable to afford their mortgage payment for much longer because Jane’s unemployment compensation runs out next month.

They make the hard decision to sell their home and move into an apartment that they can afford with just Joe’s salary. They contact a real estate agent and decide to sell their home for $190,000, which is a good price for their average $200k home neighborhood. Their home is in okay condition but could use some sprucing up, but of course Jane and Joe can‘t afford to do any of that and the house is being sold “as is.”

It takes 6 months to sell their home (this is pretty good considering the market and the home’s less than perfect condition). During that time Jane and Joe got behind on their mortgage payments when Jane’s unemployment ran out and their credit is now damaged, which will make it difficult to find an apartment. They also ended up settling for less than their full asking price since they had to make some concessions to offset things that the buyers wanted like new carpet, new roof and new appliances.


Lets see just how much Jane and Joe’s home sale actually netted them:

Final Sale Price: $178,000
Minus 5 months mortgage payments -$7,100
Minus 6 months utilities -$1050
Minus 6 months home insurance -$420
Minus agent commission (6%) -$10,680
Minus seller and buyer closing costs -$5,340

Actual amount Jane and Joe received for the property: $153,410
(hopefully this is more than they owed on the mortgage!)

Notice this is nearly $40,000 less than they originally were trying to sell their home for. This also does not take into account any maintenance issues that may have come up during those months. Plus, Jane and Joe had to live with the mental stress of the selling process being stretched over many months and their damaged credit when they were finally unable to keep up with the mortgage payment. What they may not have known is that there is a real estate investor that buys properties in their area who may have offered them $150,000 for their house and closed within the first month, leaving them free to move to an apartment and get back on their feet without the stress of selling and creation of credit problems. If this investor had made the offer of $150,000 in the beginning while Jane and Joe were asking for $190,000, the couple probably would not have taken the $40,000 discounted offer seriously. In hindsight however, they would only have been loosing $3,410, a much more reasonable amount to consider in exchange for many months of peace of mind.

So was Jane and Joe’s house really worth the $178,000 price they finally got for it, or was it actually worth closer to $150,000? It all depends on how you look at it.

Costs incurred in the selling process are often disregarded when looking at the big picture, the selling price. Agent commissions are often factored in, but holding costs like mortgage payments and utilities as well as closing costs and buyer negotiations can all affect your bottom line. If you need to sell a house in a less than HOT sellers market, be sure you are considering all the extra costs that will be hiding in the eventual sale. Its possible you could get an offer for that bottom line much sooner by simply contacting a real estate investor now and skipping a long sales process.

To find our more about selling your home contact REstore Property Group

Tuesday, January 20, 2009

How do foreclosures affect my home?

Turn on the media for any amount of time and you will undoubtedly hear that this year the real estate market will suffer a huge wave of foreclosure properties flooding the market. If last year's trend tells us anything, more foreclosures are not going to bode well for our economy making a comeback.

But what does this mean for you if you need to sell your home this year?

Foreclosures can affect the selling of your home in two major ways. The first is through sheer numbers, creating an even larger number of properties in an already saturated market. The second way is they can sometimes drastically decrease the values of homes in your area, especially if there are foreclosure properties in your own neighborhood.

For the last year and for a long time to come in the future, real estate nation wide has been a "buyers market," meaning there are more properties for sale than there are people who want to buy them. This creates very choosy buyers who spend a long time looking at multiple properties, comparing them and looking for the best home their money can buy. A wave of additional houses adding to those already for sale is like adding fuel to an already very hot fire. Homes may sit, waiting for a buyer, for even longer periods of time while the potential buyers shop around and spend time chasing after these supposed foreclosure "deals."

The fact that foreclosure properties are generally perceived as deals leads to the second problem for home sellers. The banks that own these foreclosed homes do not want to keep them in their inventory, and price the houses to sell quickly and usually well under market value. This means that other homes for sale in the area must now compete with lower than average priced homes. Many home sellers are forced to lower the prices of their own homes in order to attract more buyer interest, which then leads to a domino effect of other homes in the area lowering their prices as well. It may not be long before entire neighborhoods, zip codes or even cities in some cases have lower home values than only a year before, due in large part to foreclosed properties.

If you live in an area with a high number of foreclosures, you may want to consider waiting another year or two before selling your home to let this current wave pass. It will not stay a buyers market forever and home prices will not take a downward slide for too long before bouncing back. Those who are able to wait it out will find themselves selling in a much better market for a much better price only a few years from now.

visit REstore Property Group to find out more about selling your home