6 Reasons to Reduce Your Home Price

While you'd like to get the best price for your home, consider our six reasons to reduce your home price.

Home not selling? That could happen for a number of reasons you can't control, like a unique home layout or having one of the few homes in the neighborhood without a garage. There is one factor you can control, your home price.

These six signs may be telling you it's time to lower your price.

1. You're Drawing Few Lookers
You get the most interest in your home right after you put it on the market because buyers want to catch a great new home before anybody else takes it. If your real estate agent reports there have been fewer buyers calling and asking about your home than there have been for homes in your area, that may be a sign buyers think it is overprices and are waiting for the price to fall before viewing it.

2. You're Drawing Lots of Lookers But Have No Offers
If you've had 30 sets of potential buyers come through your home and not a single one has made an offer, something is off. What are other agents telling your agent about your home? An overly high price may be discouraging buyers from making an offer.

3. Your Home's Been On the Market Longer Than Similar Homes
Ask your real estate agent about the average number of days it takes to sell a home in your market. If the answer is 30 and you're pushing 45, your price may be affecting buyer interest. When a home sits on the market, buyers can begin to wonder if there's something wrong with it, which can delay sale even further. At least consider lowering your asking price.

4. You Have A Deadline
If you've got to sell soon because of a job transfer or you've a;ready purchased another home, it may be necessary to generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in the area. Remember, it's not how much money you need that determines the sale price of your home, it's how much money a buyer is willing to spend.

5. You Can't Make Upgrades
Maybe you're plum out of cash and don't have the funds to put fresh paint on the walls, clean the carpets, and add curb appeal. But the feedback your agent is reporting from your buyers is that your home isn't well -appointed as similarly priced homes. When your home has been on the market longer than comparable homes in better condition, it's time to accept that buyers expect to pay less for a home that doesn't show as well as others.

6. The Competition Has Changed
If weeks go by with no offers, continue to check out the competition. What have comparable homes sold for and what's still on the market? what new listings have been added since you listed your home for sale? If comparable home sales are new listings show your price too steep, consider a price reduction.

houselogic.com by G.M Fjiisko

How To Asses The Real Costs Of A Fixer Upper

When you buy a fixer-upper house, you can save a ton of money, or get yourself into a financial fix. Trying to decide whether to buy a fixer upper house? Follow these seven steps, and you'll know how much you can afford, how much to offer, and whether a fixer upper house is right for you.


1. Decide what you can do yourself

TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don't know how to do will take longer than you think and can lead to less-than-professional results that won't increase the value of your fixer upper house.

• Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.
• Do you really have the time and desire to do it? Can you take time off of work to renovate your fixer-upper house? If not, will you be stressed out by living in a work zone for months while you complete projects on the weekends?

2. Price the costs of repairs and remodeling before you make an offer

• Get your contractor into the house to do a walk through, so he can give you a written cost estimate on the tasks he is going to do.
• If you are doing the work yourself, price out supplies.
• Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer upper house.

3. Check permit costs

• Ask local officials if the work you're going to do requires a permit and how much that permit costs. doing work without a permit may save money but it'll cause problems when you resell your home.
• Decide if you want to get the permits yourself or have your contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you you to do additional work, or change the way you want to do a project, before they give you a permit.
• Factor in the time and aggravation of permits and plans.

4. Double check pricing on structural work

If your fixer upper home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put in an offer so you can be confident you've uncovered and conservatively budgeted for the full extent of the problems. Get written estimates for repairs before you commit to buying a home with structural issues.

Don't purchase a home that needs major structural work unless:

• You're getting it at a steep discount.
• You're sure you've uncovered the extent of the problems.
• You know the problem can be fixed.
• You have a binding written estimate.

5. Check the cost of financing

Be sure you have enough money for a down payment, closing costs, and repair without draining your savings.

If you're planning to fund the repairs with a home equity or home improvement loan:

• Get yourself pre-approved for both loans before you make an offer.
• Make the deal contingent on getting both the purchase money loan and the renovation money loan , so you're not forced to close the sale when you have no loan to fix the house.
• Consider the Federal Housing Administration's Section 203(k) program, which lets qualified purchasers wrap up to $35,000 into their mortgages to upgrade their home before they move in.

6. Calculate your fair purchase offer

Take Fair market value of the property (what it would be worth if it were in good condition and remodeled to current taste) and subtract the upgrade and repair costs.

For example: Your target fixer-upper house has a 1960's kitchen, metallic wallpaper, shag carpet, and high levels of radon in the basement.

Your comparison House, in the same subdivision sold for $200,000 last month. That house had a newer kitchen, no wallpaper, was recently re-carpeted, and has a radon mitigation system in the basement. The costs to remodel the kitchen, remove wallpaper and replace carpet and put in a radon mitigation system is $40,000. Your bid for the House should be $160,000.

Ask your Real Estate Agent if it is a good idea to share your cost estimates with the seller, to prove your offer is fair.

7. Include inspection contingencies in your offer

Don't rely on your friends or contractors to eyeball your fixer-upper house. Hire pros to do common inspections like:

• Home inspections, this is key for a fixer-upper. the home inspector will uncover hidden issues in a need of replacement or repair. you may know you want to replace those 1970's kitchen cabinets, but the home inspector has a meter that can detect water leaks behind them.
• Radon, Mold, lead based paint.
• Septic and well.
• Pest.

Most home inspection contingencies let you go back to the seller s and ask them to do the repairs, or give you cash at closing to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don't want to deal with.

If it happens, this isn't the right fixer-upper House for you. go back to the top of the list and start again.

From Houselogic.com by G.M Fjiisko

Newsletter

Here is this quarters newsletter. Click on the images for a larger view. If you want to be on our mailing list, please send your address to: justinudy@rciut.com

A Note From Justin

There are always ups and downs, but the key is to find a way to succeed!

One thing is guaranteed, when you're on the river of life you are bound to hit a few rocks. That's not being negative, that's being realistic. Rather than focus on failures, focus on results.

Real Estate is cyclical and we are seeing results. Sellers are still selling and buyers are still buying. The Facts: we have lower interest rates, low prices, and a huge inventory. While some areas continue to go down value the Board of Real Estate reports that a handful of properties went up in the 3rd quarter- West Jordan up 10.7% and Canyon Rim (84109) up 4.7%. We are seeing things happen and I am seeing movement. Yet, I know that I have to be creative, persistent and put in the time to find buyers for my properties and great properties for my buyers.

"We will either find a way, or make one". - Hannibal

Whatever economic times, industry or circumstances, I know we can see success. consider these examples:

• Dr. Seuss's first children's book was rejected by 23 publishers.
• Henry Ford failed and went broke five times before he succeeded.
• Franklin D Roosevelt was struck down by polio, but never quit.
• Helen Keller, deaf and blind, graduated cum laude from Radcliffe College and went on to be a famous author and lecturer.
• It took Noah Webster 36 years to compile Websters Dictionary.
• Babe Ruth struck out 1,330 times.
• Michael Jordan was cut from his high school basketball team.

"The difference between winning and loosing is most often...not quitting". - Walt Disney

Let's keep pushing forward. there are opportunities. Be creative, be persistent and keep moving forward. I look forward to working with you and appreciate your trust in me.

- Justin Udy

4 Tips to Determine How Much Mortgage You Can Afford

1. The General Rule of Mortgage Affordability
As a rule of thumb, you can typically afford a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000.

To understand how that rule applies to your particular financial situation, prepare a family budget and list all the costs of home ownership, like property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care costs.

2. Factor in Your Down Payment
How much money do you have for a down payment? The higher your down payment, the lower your monthly payment will be. If you out down at least 20% of the homes cost, you may not have to get private mortgage insurance, which costs hundreds of dollars each month. That leaves you with more money for your mortgage payment.

The lower your down payment, the higher the loan amount you'll need to qualify for and the higher your monthly mortgage payment .

3. Consider Your Overall Debt
Lenders generally follow the 28/41 rule. Your monthly mortgage payments covering your home loan Principal, interest, taxes and insurance shouldn't total more than 28% of your gross annual income. Your overall monthly payments for your mortgage plus all of your other bills like car loans, utilities, and credit cards shouldn't exceed 41% of your gross annual income.

Here's how that works. If your gross income is $100,000, multiply by 28% and then divide by 12 months to arrive at a monthly mortgage payment of $2,333 or less. Next, check the total of all your monthly bills including your potential mortgage and make sure they don't top 41%, or $3,416 in our example.

4. Use Your Rent as a Mortgage Guide
the tax benefits of home ownership generally allow you to afford a mortgage payment- including taxes and insurance-of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.

Here is an example. If you currently pay $1500 per month in rent, you should be able to comfortably afford $2000 monthly mortgage payment after factoring in the tax benefits of home owner ship.

However, if you are still struggling to keep up with your rent, consider what amount would be comfortable and use that for the calculation instead.

Also consider whether or not you'll itemize your deductions. If you take the standard deduction you can't also deduct interest payments, Talking to a tax advisor, or using a tax software program to do a "what if" tax return, can help you see your tax situation more clearly.

Article from houselogic.com
by G.M Fjiisko

How To Use Comparables To Price Your Home

Before you put your home up for sale, use the right

comparable sales to find the perfect price.

How much can your home go for? Probably about as much as the neighbors got, as long as the neighbors sold their house in recent memory and their home was just like your home.

Knowing how much homes similar to yours, called comparable sales (or in real estate lingo, comps) sold for gives you the best idea of the current estimated value of your home. The trick is finding sales that closely match yours.

What makes a good comparable sale?
Your best comparable sale is the same model as your house in the same subdivision- that closed in escrow last week. If you cant find that, here are the other factors that count.

Location: The closer you are to your House is better, but don't just use any comparable sale within a mile radius. A good comparable sale is a house in your neighborhood, your subdivision, on the same type of street as your house, and your school district.

Home Type: Try to find comparable sales that are like your home in style, construction, material, square footage, number of bedrooms and baths, basement(having one and whether it is finished), finishes, and yard size.

Amenities and Upgrades: Is the kitchen new? does the comparable sale house have full A/C? Is there crown moulding, a deck, or a pool? Does your community have the same amenities(pool, workout room, walking trails, etc.) and homeowners association fees?

Date of Sale: You may want to use a comparable sale from two years ago when the market was high, but that won't fly. Most buyers use government-guaranteed mortgages, and those lending programs say comparable sales can be no older than 90 days.

Sale Sweeteners: Did the comparable sale sellers give the buyers down payment assistance, closing costs, or a free television? You may have to reduce the value of any comparable sale to account for any deal sweeteners.

Agents Can Help Adjust Price Based on Insider Insights:
Even if you live in a subdivision, your home will always be different from your neighbors. Evaluating those differences - like the fact that your home has one more bedroom than the comparable, or a basement office- is one of the ways real estate agents add value.
An active agent has been inside a lot of homes in your neighborhood and knows all sorts of details about comparable sales. They will have read comments the selling agent put into the MLS, seen the ugly wallpaper and heard what other REALTORS, lenders, closing agents and appraisers said about the comparable sales. Ask your real estate agent to be honest about your home and the other homes on the market, and then listen without taking the criticism personally.


Are Foreclosures and Short Sales Comparable?
If one or more of your comparable sales was a foreclosed home or a short sale (a home sold for less money than the owners owed on the mortgage), ask your real estate agent how to treat those comps.

A foreclosed home is usually in poor condition because owners who can't pay their mortgage can't afford to pay for upkeep. Your home is in great shape, so the foreclosure should be priced lower than your home.

Short sales are typically in good condition, although hey are still distressed sales. The owners usually have to sell because they are divorcing, or their employer is moving them to Kansas.

How much a short sale is discounted from the market value varies among local markets. So you have to rely on your real estate agents knowledge of the local market to use a short sale as part of your comparable sale.

houselogic.com
Article by: Carl Vogel