Price it correctly and it will sell

12 01 2015

I believe the number one thing that causes a house to sell or not to sell is pricing. You can advertise and market the property like crazy, you can stage it and make it smell good; however, if the house is not priced correctly it is going to sit. I tell sellers all the time this is a beauty contest and a price war. And any objection can be fixed by pricing the house accordingly.
Sellers always want the most money from their property, and I understand that. If I had a property for sale, I would want the same. Knowing that buyers want the best deal and are likely to negotiate and for a reduction in price or concessions, sellers often want to price the house to give them some leeway to negotiate. But is this a good idea? I don’t believe so and here is why.
Home buyers are out viewing homes and comparing their features and benefits. They want and expect the home to be clean and generally in good condition unless they are looking for a fixer upper and that is a whole other article. They have a budget for a certain dollar amount and are looking in that price range. So if the seller prices the property $5,000 to $10,000 above value in order to negotiate, the buyer who is looking for a property like the seller’s may never see it. Buyers who do see it may believe that the seller is not willing to negotiate and get the price of the home in line with the market. And finally, the overpriced house may help to sell the neighbor’s house which is priced correctly because now it looks like a deal.
The thing I have learned over time is that you cannot underprice a home. If you price it a little under market then buyers will see the value in the home and it is likely that the seller will receive multiple bids. Often times when this happens the price goes up not down. It becomes like an auction atmosphere and the emotions of the buyers endeared to the property cause them to bid the price of the house back up to market value.
If you would like assistance with buying or selling real estate, please feel free to contact me at 405-213-2992 or http://www.sandiwalker.com





Recovering from Bankruptcy and getting a new mortgage

19 02 2015

Sometimes life throws you curveballs and you can either strike out or hit it out of the park. When it comes to bankruptcy, you do have a choice on how you respond to it and what you need to do after that happens. Here are a few tips and suggestions to get you on the right path.

Chapter 7 bankruptcy is the complete forgiveness of debt, wiping the slate clean. If you file this type of bankruptcy, this is what to expect. Your credit scores will drop dramatically and the rebuilding process will need to begin. You will need to rebuild by reestablishing your credit. The best way to start that is by getting a secured credit card through a bank. A secured credit card is depositing money in a savings account, the bank would put a hold on those funds and issue a credit card with a credit limit of the amount they have on hold. Use the card on a monthly basis and this will begin the payment history on your credit report. Make sure the bank you establish this with reports to all 3 credit bureaus or it won”t have the impact your looking for. After this has been done, you should work towards establishing a 2nd credit card and possibly a small installment loan or an auto loan. There is no need to go overboard on the credit re establishment, no need to get into more debt than needed. Keep it simple, keep it small and the scores will go back up. You have a minimum of 2 years from the discharge date of the bankruptcy before you are eligible for an FHA or VA mortgage, 3 years with a Conventional mortgage. If a home is claimed in a bankruptcy, that is a whole new ball game and many things will need to happen and would need to be further discussed to see when eligibility is available for a new mortgage, call for more details concerning foreclosed homes included in bankruptcies.

If you file a Chapter 13 bankruptcy, it’s a bit different then the above Chapter 7. This is a reorganization of debt and it’s paid out per court order in the bankruptcy documents. If you file this type of bankruptcy, than you need to wait 1 year from the filing date and receive permission from the trustee of the courts to be eligible for a new mortgage loan. You can also accomplish the same improvements to your credit scores as above because even though your repaying back the debt through the bankruptcy,, its still going to have a major negative impact on your credit score.

Filing bankruptcy is not the end of the world if you’re willing to work on getting it back to good standing. Mortgages are credit score driven these days and if you don’t have the eligible scores, you won’t get approved for the mortgage.

It’s a process but your scores will improve if you follow the simple instructions on re establishing your credit and you will be able to get a mortgage if you stick with it.

The following information comes from my friend and in house lender Kyle Crouch.   His information is below if you are interested in his help.  If you need help buying or selling home please feel free to contact me at 405-213-2992

Kyle Crouch
Sr. Loan Officer
NMLSR #217902
OK License # MLO01965

Direct: 405-570-0408
e-Fax: 1-866-761-3526
kcrouch@wrstarkey.com
www.KylesHomeLoans.com

WR Starkey Mortgage, LLP NMLSR #2146
1624 Southwest 122nd Street
Oklahoma City, OK 73170





The cost of mortgage insurance

31 01 2015

Lots of home buyers get a FHA loan especially first time home buyers with limited credit history. This is a good loan product that is backed by Housing and Urban development.  This loan allows buyers to buy with a minimum of 3-1/2% down payment. This down payment may be gifted, or come from a grant or down payment assistance such as the bond program. This helps lower income buyers participate in the home buying process.

Since FHA allows buyers to buy with a low down payment and often have little to no money of their own invested in the property, the risk of foreclosure is higher. Therefore mortgage insurance is required. Mortgage insurance protects the bank incase the borrower defaults. Unless a borrower puts a minimum of 10% down on a FHA loan, the mortgage insurance remains on the loan for the life of the loan. Consequently, a borrower with a strong credit history and a high credit score may decide to use a conventional loan where the mortgage insurance will fall off after the value reaches a 78% loan to value or the borrower requests it at an 80% loan to value.

FHA charges an upfront fee, currently 1.75% of the loan amount as well as a monthly fee.  Recently the government lowered this fee from 1.35% per month per annum to .85% per month. This is a huge savings for buyers using a FHA loan.

How this equates.   I will use a 100,000 loan for ease of numbers. Note the savings on a $200,000 loan are double.

100,000 loan with a 1.35% per month per annum fee is $112.50 added to the loan each month.

100,000 loan with .85% per month per annum fee is $70.83 added to the loan each month.

This makes the monthly mortgage payment more affordable. This is a substantial savings over the life of the loan.

If you are looking for an experience realtor to help you buy a home, sell a home or invest in real estate, please call me at 405-213-2992 or visit my website at http://www.sandiwalker.com





What is a good deal?

29 01 2015

Buyers are always looking to get the best deal on a house and they should. This is a large investment. However in our current market where inventory levels are low and interest rates are hovering at all-time lows while rental prices continue to increase, sellers are not discounting their properties. I talk with a lot of first time home buyers who want to offer 10% or less on a property hoping the seller will take it. This is just not realistic. Sometimes these buyers have to learn the hard way. They make a low offer only to learn a better offer came in and the seller has chosen the other offer. This can be very disheartening especially if you really thought that was your dream home.

Buyers need to look at comparable homes (comps) in the area that have sold in the past 3-6 months. Based upon the size of the house, number of bedrooms and baths, and the amenities –granite counter tops, new flooring, storm shelter, etc determine if the value of the home is fair. They need to look at the location of the property and the neighborhood values overall not just the price per square foot. I always tell my clients nobody is really stealing anything in housing, what we want is a fair deal. Fair deals can and do happen every day by comparing comparable properties and making educated decisions.

Excerpt from a Zillow article I read:

If you are continuously on the hunt for a “deal,” this could be a red flag that you are not ready to buy. If you need to purchase a car, you likely research car prices online before heading to the dealership. You understand that the values range, and attempt to get your car as close to the lower end of the range as possible. If not, you won’t be buying a car.

Will you wait another year to see where prices are? Probably not. Instead, you make a car purchase based on the best deal you can negotiate at that time.

The same goes with home buying. Buyers who spend considerable time learning the market will have experiential knowledge of what they can get for their money and where. They have a realistic view of the market.

An experienced realtor will be able to guide the buyer in determining value. They may have knowledge about the community of upcoming developments that may impact values of certain areas. An example of a new park with community center being built that was discussed at a city planning meeting or a plan to widen a road that will impact the traffic. While realtors often have this type of information, I strongly suggest that the buyer do their due diligence to research and know what is going on in their community. This can make a huge difference when you go to sell.

If you are looking for an experience realtor to help you buy or sell a home, please contact me at 405-213-2992 or visit my website http://www.sandiwalker.com





Pictures are worth a thousand words

27 01 2015

I believe in todays market that having good pictures on the web advertising a listing can cause people to look at a house, while not having good pictures could cause some people to not  look at a house. The Oklahoma City multi listing services allows a realtor to put 20 pictures on it. So many times I see a listing with only one or two pictures or just pictures of the outside. It often makes me wonder what is wrong with the house. Does it need work or updating. These pictures should be of good quality, not fuzzy or blurry. They should show you the house from various angles and give you a feeling of being inside. I personally take pictures of the backyard as well as the front so buyers can see the size of the backyard and if it has any extra features like a covered patio or pool.

It is sometimes hard in a small house to find 20 different angles to photograph especially of a 2 bedroom, 1 bath house. In that case, I still take multi angles of the living room, kitchen and bathroom. I may take pictures of the central heat and air unit to show age and condition.

In an extremely large house, I may find that I need more than the 20 photos allowed to show all the rooms especially if I want multiple angles.  Fortunately, there is software that will allow me to stitch photos together so I can get more than the 20 photos on the MLS.  I did this with a home that had a safe room as a pantry. I wanted to show the safe room all the way open and then with the door partially closed. It gave buyers an insightful view on the house. safe room

When I am marketing a house for sale, I am going to list as much information as I can that will cause it to sell. This includes large room dimensions, amenities, school information, and photos with descriptions.  If you are interested in learning more about how I get houses sold, please feel free to contact me at 405-213-2992 or visit my website. http://www.sandiwalker.com





Maybe I should just rent it

26 01 2015

In my last post I talked about pricing a home right to sell even if it means bringing money to the table. While there is nothing illegal or immoral about a seller bringing money to the table to clear the note and sell a property, it just seems wrong to many people. This is an investment and as an investment, it ought to make you money or at least cause you to break even.
So sometimes people think that the alternative is to rent the property. The renter can pay down the mortgage and then they can sell the property without bringing money to the table. That is understandable. However there are some things you will need to consider if you chose this path.
1. Either study the landlord tenant act and know it or hire a property manager. You need to know the law and follow it.
2. Make sure you have a separate bank account for the rental property and the escrow.
3. Have some savings for repairs. While you may be ok living with a broken a/c or garage door opener until you have the funds to fix it, your tenants will not.
4. Have some savings for times of vacancies or when your tenant is late paying or doesn’t pay at all. You still need to make the mortgage payment.
5. If you are going to manage your property yourself make sure you know how to properly screen a tenant. Just because they have the deposit and first month’s rent doesn’t mean they will have the next month’s rent.
6. Drive by your property and check on the inside occasionally. Your lease should give you authority to inspect with notice.
7. If you are moving out of town or state, hire a property manager. It will cost but it will be worth it.
8. Plan on painting and making some repairs when the tenant moves out. The security deposit may not cover all of it.
These are the basics considerations when considering whether you should rent out your property rather than selling it. There is also emotions that will come into play. This may have been your first home or one your fixed up. It is heartbreaking to see others not taking care of your house the same way you might. So decide if you are willing to do all these things or if it might be better to just sell it and move on. I personally have rental property. My very first rental property was one that my husband and I bought in Omaha, NE and then learned a year later we were getting transferred to Oklahoma City. We didn’t have the money to sell the house and decided to rent it. And of course we did it ourselves out of state. So I have been there. It was a learning experience. The education cost me some money. I will never personally have a rental that is not within a 20 mile radius of me. But that is me.
If you are thinking of selling and would like an experienced Realtor to help you with the transaction, please contact me at 405-213-2992 or visit my website at http://www.sandiwalker.com





Let’s price it right to begin with

23 01 2015

Sometimes people buy a home with the intention of living there for a long time and then life changes and they need to move. Depending upon when they purchased the house and the market, there may or may not be enough equity to sell the house without bringing money to the table. If they put money down when they purchased the property there is no guarantee that they will get all that money back when they sell. It is a hard conversation to have with a seller, but an important one. A house is simply not worth what the seller needs, rather what the market dictates.
So the question is always what should we do in that case. I have had several sellers want to list the price above market value in order to cover costs. Sometimes these sellers have transfer orders or need to move now so the house is left vacant. In this case I simply ask the seller if they want me to give them an accurate value and list it to sell quickly or would they like me to lie to them about the value, put it on the market at a price I know will not sell, and then reduce it every couple weeks until it gets to the actual market price. Of course, Mr. Seller, by that time you realize that the days on market is going to be long and then buyers are going to think they can negotiate for a price below market.
In addition to not selling quickly, there are holding costs associated with a house that is not selling. The seller still has to pay the mortgage, utilities, maintenance and upkeep. Even if the house is paid for there will be taxes and insurance accruing on the property. Therefore I will usually ask a seller who is in this situation, “Do you want to bring the money one month at a time or all at once?” The seller who is going to pay the holding costs waiting for a buyer is bringing money to the table so to speak–one month at a time. So why not simply price the house correctly at first. The market will always determine if the house is priced correctly by either supplying a buyer or not.
If you are looking for an experienced realtor to give you an honest assessment of your property, please contact me 405-213-2992 or visit my website.





So you want to be a landlord

17 01 2015

Rental property can be a great investment. As an investor you provide a much needed commodity for a person or family while they pay the mortgage on the house and provide you with a little extra money each month. Over the years I have helped several people start and/or add to their rental portfolio. Most of my clients tend to manage their own properties, while others find a property manager to screen tenants, and hire maintenance people.
Banking rules regarding investment property have changed greatly over the past several years, so it is advisable that you speak with a banker prior to starting your search. You should also obtain a copy of the landlord/tenant act and read it, study it, and read it again. It is important that you understand what the law says regarding your rights and responsibilities.
As you begin your search for your first rental, you will need to decide where you would like to buy. You might consider looking close to you where you work or live so you can check on it, especially if you are planning on managing it yourself.
Once you have found the property and purchased it you will want to get it rented as soon as possible. Investors don’t like their properties to be vacant. It costs money to have a vacant rental and there is always the risk of vandalism. However, I think it is worse to put an unqualified person into the unit who tears up the property and doesn’t pay you.
The most important and complex part of renting is screening the tenant. Have an application that you have everyone interested in renting fill out. You can use one from the office supply store or make one up yourself. Some landlords charge a nominal fee to run an application. This often deters people who know they don’t qualify from applying. I personally do not charge a fee. You will need to verify the information on the application to make sure it is true. I suggest verifying the address on the applicants driver’s license to the application. Check to see who actually owns the property where they live, verify that is the same name that is listed on the application. If not, it could be a property manager. The law in Oklahoma says that a property manager who is not the owner of the property managed must possess a Oklahoma real estate license. Verify all phone numbers to see who they actually belong to before calling them. They could be the applicants friends. I had an applicant that listed a cell number for his employer and said that was the only number he had. So I asked to see pay stubs. He had none and said he got paid in cash. I can’t verify that and didn’t rent to him.
Determine what your criteria you are going to use to qualify a tenant. My qualifications are 3x the rent in income (meaning if rent is $1000 a month, tenant must earn $3000 a month or more), no evictions, or felony convictions. You need to use these same requirements for each and every tenant. You will want to decide if you are willing to rent to people who smoke or not (although I think this is crazy to monitor) and also if you are willing to accept pets. If you do accept pets, I would suggest a pet deposit. A pet deposit is very common.
Once you have approved a tenant, have everyone sign a lease. The lease should be comprehensive. In real estate everything needs to be in writing so put it in writing so everyone has the same expectations.
This is just the beginning. This is not meant to be inclusive and if you have legal questions, please contact a lawyer. I will blog some more later about what should be in a lease as well as other landlord issues.
If you are looking for a Realtor who understands rental properties and are interested in buying or selling investment properties, please feel free to call me at 450-213-2992 or visit my website at http://www.sandiwalker.com








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