Ask Jim & Cathy your Real Estate Questions!

Question:  We are selling our home and we are trying to buy a Home in Indiana. We have placed offers on 3 properties and they were all rejected because we had a home to sell. There were multiple offers on 2 of these 3 homes. Our agent said eventually we will find a seller who will accept our contract even when we must sell our home first. Your thoughts?

Answer:  If you want to buy a home in a hot market, then you need to change your thinking. Why would a seller accept your offer contingent on selling your home, when they have other offers that are non-contingent? Your Plan A will not work in a hot market.

We recommend using Plan B: Sell your current home first, then stay with a friend or relative or look for a short-term rental until you find a home. Your Church members would be a great place to look for possible rentals.                                                                                                          
Plan B eliminates a lot of stress because your home is sold, the money is in the bank and you are in a great position to get your next offer accepted. Plus, you do not have to settle for a home that you are not completely in love with. Why rush or settle? A home is a big investment.

If you can afford it, and if you qualify to buy another home without selling yours, you can also buy your dream home non-contingent. You may own 2 homes for a short time, but you can stay in your own home and work on the other home before you move in.
Mark Twain said these wise words: “Never allow someone to be your priority while allowing yourself to be their option.


Question: Our offer to purchase was rejected by the homeowner. Our agent said they did not give a reason for the rejection. What could have happened?

Answer: Rejected offers cause home buyers considerable disappointment. You've found the home of your dreams and you've made an offer. Your hopes are high, and then—BOOM!
The homeowner doesn't want to sell it to you.
It begs the question: Why? What went wrong? Purchase offers are usually rejected for these common reasons, and most have dollar signs attached.

The seller might believe that the buyer isn't serious about purchasing the property if the offer is too low. Sellers can easily feel insulted and might be too angry to respond. They'll reject the offer outright with no further discussion.

The seller might also feel that it's too early to look at less-than-list-price offers if the property has just come on the market, and sellers almost certainly won't consider them if they've received multiple offers.

Your agent should always touch base with the listing agent to find out whether the seller has any specific requirements or hot buttons. But sometimes listing agents include helpful hints in the agent remarks portion of the MLS.
In either case, write these concerns into your offer. You might be able to offer a longer closing date if the seller needs a later closing date or speed up your closing in the opposite situation—the seller is anxious to get this deal done by a certain deadline.

Increase the deposit. If the seller wants substantial earnest money. Offer to buy the property "as is" after providing for a home inspection if the seller is concerned about repairs.

It can be as simple as the seller wanting a lender's preapproval letter from a reputable lender. One that your agent knows will get the job done. Sellers want assurance that you're qualified for financing, so they can proceed knowing this buyer will get approved.

It's uncommon for a seller to simply reject an offer outright. Go over your offer again, keeping in mind what we mentioned earlier, to avoid making the same mistake the second time around.


Question: You have been showing houses for a lot of years. Any spooky stories to share?

Answer: There was an old two-story house in my area that was on the market for a long time—a real fixer-upper in a hot neighborhood. It was eerie: Floors weren’t level, squeaky steps, the works. When I was inside, I felt like someone was watching me, and it wanted me to leave. It was when I noticed a light in the basement, so I calmly walked right out ... because the house had no electricity. 

Next two stories were told to me by Realtors in my office: During a showing, we walked into a vacant foreclosure that I thought no one else was showing at the time. There was no car in the driveway and no sign of anyone present. As we opened the front door, two men were coming down the staircase from upstairs—one wearing a long black robe like a priest would and a necklace with a huge cross. He had dark hair and a long, dark beard. The other man, whom Im guessing was his agent, walked behind him. We all cordially greeted one another, and they walked out the back door. We never saw them get into a car or walk down the street. They just seemingly disappeared. My buyer never lets me forget that house and tells everyone that story.

There was a bed set up in the main area of the basement. No one appeared to be home, but when we went downstairs the lights were on and music was playing. We noticed that there was someone under the covers of the bed. I said ‘Hello’ more than once but did not approach the bed. The person didn’t move, and it was clearly the silhouette of a person. So we quickly got out of there.

I was showing a townhouse. Everything was normal as we went through the house, nothing out of the ordinary until we got to the third bedroom. It was loaded with glass aquariums filled with spiders — nothing but spiders, everywhere you looked. And I'm not talking regular spiders either, they were tarantulas, wolf spiders — the big ones. It was like a room at a museum. Either the owner was a scientist or hoping to be the next Peter Parker. My clients didn't even consider the house.


Question:  A friend of mine -- honest, I'm not talking about my house -- asked me to put her house up for sale on the Internet, twice, and I got a few interested people but nothing serious. She has asked me again to do the same. She lives in a gated resort community and wants $350,000.

I just thought you might have some creative ideals for selling this house. She's going to give me $10,000 if I can sell it and I need the money. I'm also thinking of advertising in a magazine. What do you think?

Answer:   I think you're doing a terrible disservice to your friend, and I think you should also look at the real estate laws in your jurisdiction. They will no doubt say that without a real estate broker's license you have no ability to sue for a real estate commission -- thus if you sell the property your friend is not obligated to pay you a dime.

Your friend may well be trying to help you, or may honestly think that you have a skill which would allow you to sell the property. But what do you know about real estate contracts? Seller disclosures? Complete Internet exposure? Fair housing requirements? Financing? Pricing? Seller contributions?

The list goes on, but the point is this: There's a lot more to selling real estate than advertising. Without a broker's license you do not have the right to collect a fee from another for the sale of a property. Worse, you might sell the property for less than it's worth or you may create unintended liabilities that cost your friend huge amounts of money. Go no further with this until you have spoken with a local -- and licensed -- attorney.


Question:    My spouse and I purchased a home without having a home inspection. This was the worse mistake we ever made. We saw the house via the Internet, and only did a quick walk-through on the day of the closing. The broker was supposed to pick us up for the walk-thru at 2 PM, when it was light out. Instead, he picked us up at 4:45 PM and we arrived at the home when the sun was almost down. We had to be at the closing at 6 PM.                                                            

There were no lights in the bedrooms, as this is how the home was built. There were plumbing problems, it was evident in the light of day that the seller had made cosmetic improvements.   After the fact, we had a home inspection, and many problems were found.  A home is a major purchase, and a buyer should be protected from having a dream turn into a nightmare.

Answer:  I can't imagine that this situation would have arisen if you had a buyer broker or an attorney. The purchase of a home is a substantial matter and if the seller's broker cannot keep a crucial appointment then the owners will have to make adjustments, not you.

Given that the time for the pre-settlement walk-through was inadequate and that the original appointment was not made, why did you not postpone closing? Why did you not have money set aside in an escrow account for potential repairs?

In general, it makes sense to make a photographic record of the property at the time you make an offer so that the condition of the property can be proven. Always have plenty of time set aside for a pre-settlement walk-through, as you did with the 2 PM appointment.

You have a right to obtain the property at closing in substantially the same condition in which it existed as of the day your offer was made. If the lights are out, the utilities are shut off and it's dark out then you have no way to reasonably determine the property's condition or operate appliances. For this reason you were entirely right to schedule a 2 PM appointment.

Speak with a real estate attorney for specific advice.


Question:I live in a retirement community and would like start flying an American Flag outside my condo. But the condo has strict rules on what can be hung -- flags are restricted. Is this against my rights as an American?

Answer:You have rights as an American and you have obligations as someone who has voluntarily agreed to accept the rules and regulations of your community.  In the case of flag displays, your association should read the "Freedom to Fly the American Flag Act of 2005." It explains in polite language that flag displays cannot be banned, but there may be display limitations as to time and place. Your HOA can reasonably restrict the time, place, and manner of your flag display (provided the restrictions are to protect a substantial interest of the association). For example, your HOA can ban a U.S. flag that might be a danger, such as one on a rickety flagpole over a public sidewalk. The HOA probably also has the right to prohibit a flag so large it blocks a neighbor’s view.

But, ultimately, the burden will be on the association to show why it has a "substantial interest" to formulate any restrictions, not an attractive position to defend.

You also have the right to run for association office so that the rules can be changed or revoked. The American flag is emblematic of the country and suggested restrictions regarding its display will be widely seen as controversial, offensive and needlessly provocative. As a matter of common sense, condo associations would be smart to allow the display of the American flag without restriction.


Question:We've had our home on the market for eight months. It's vacant but staged and shows really well. Our greatest obstacle are neighbors who have years of accumulated junk in plain view for potential buyers. The neighbors are very nice people and we have expressed my concern regarding the adverse affect their junk is having on the sale of our property. They have been working hard at clean up and we do notice a difference. But it's just not quite enough and ultimately their definition of valuable things and a good looking home are far different than mine. What can we do?

Answer:Since you have friendly relations with the neighbors, and since the neighbors seem willing to be helpful, you could offer to clean up the area. However, this is an approach with red flags. They would either like the idea (because you would be doing the work), or they would resent the suggestion and do nothing.

Alternatively, if a vacant property has been on the market for eight months perhaps the problem is not the neighbors. It may be that your perception of value and attractiveness are not consistent with marketplace realities.

Speak with your broker and see if the marketing plan is being followed. If yes, see if it needs to be changed in light of evolving market conditions.


Question: How long does the home buying process take?

Answer:  A common point of confusion for people when they are purchasing a home is how long the home buying process will take. Some think that it all comes together immediately, while others assume that it will take months before they move into their dream home. The truth is that there are a couple of different components which can either expedite the process or prolong it. First and foremost, when you begin to look for a home, you should be prepared to allot however much time you will need to find it. The amount of time it takes to find your chosen home can vary for many reasons.  If the inventory is low, it may take you a little more time to find the house that’s just right. Finding a house with any unique features that you want may also take you a little while longer.  Your motivation and personal timeline will also impact how quickly the shopping process can take. On average, though, I would say buyers in my market look at 15-30 homes before ratifying a contract.

 Once your contact has been accepted, your lender takes the ball.  The Lender work starts with getting the property appraised and all of your financial documentation in order for an underwriter to review. Although you were give a prequalification by the lender, the underwriter ultimately decides if you are credit worthy.

A 30- to 45-day window from contract to close is a good ballpark for most purchase loans in Indiana. Could be as long as 60-75 days if you are buying in Illinois. Illinois takes longer because….. well it’s Illinois. But, understand, it’s not uncommon for underwriters to require additional documents once they begin scrutinizing your loan file.  

Borrowers can help speed the process along by returning those documents as quickly as possible. You don’t have a ton of control once you’reunder contracton a home, but this is one key area where your swift action — or lack thereof — can have a big impact on your homebuying timeline. During the loan process, you can complete the home inspection, so this should have no effect on the time it takes to close. Every home buying experience is different. Each has its own twists and turns. But these are general guidelines as to how long the home buying process works.


Question: My home is currently for sale. My agent says we should leave our home for all showings. We really feel it is best we are there. Suggestions?

Answer: You’re not going to like our answer. We think your agent is giving you very sound advice. We advise our sellers to vacate the home for all showings. Never, ever, make your buyers feel uncomfortable in your home, otherwise they will exit quickly.

Yes, it is an inconvenience to have to leave your home. But, we can assure you that buyers will spend more time in your home if you aren’t there, and they will talk about it openly with their partner. By doing this, they will become more emotionally vested in your home.

Of course, no one will ever know as much about the home as the person that lives there. But you can certainly educate your agent. Place a “showing package” for your home and leave it in a prominent place. You can place seasonal photos, Home and neighborhood amenities, even a letter from the seller talking about their home.

Sellers should be aware that at the very least, buyers feel uncomfortable when the owners are present, and that it can kill a sale. Buyers often won't even open closet or cabinet doors when the seller is home, and when they cannot view a house comfortably, they'll hurry up and move on to the next one.

Sellers like to talk, and not just about the house. You never know when a buyer will be turned off by the mood of the seller, or by a statement the seller makes. Buyers are there to look at the house, not chit chat about the weather or worse--politics and other controversial topics.

Buyers might view a clingy seller as "desperate to sell." The presence of a pesky seller who insists on overstating all the home's positive benefits can appear too overpowering for a potential purchaser.

You asked for our opinion. Here is some really good advice for you: If you must be home during a showing, then you should to go outside or stay put in one location, smile a lot, and not wander around with the agent and buyers.


Q. We asked a Realtor to come to our home and tell us what we needed to do to sell our home. He said so many negative things that we don’t know if anyone will buy it. What are your suggestions?

A. Did your Realtor offer suggestions to improve the salability of your home? When a Realtor walks through your home, they should give you a list of things that you need to do to make your home more appealing to buyers.

We know what buyers want and expect in a home because we receive feedback from buyers on all our home listings. We pass on this list of buyer wants and desires to our clients. This information can be very helpful in the selling of the home.

These suggestions range from inexpensive to more expensive. We recommend that the seller review the list to see what items fit their budget. If they cannot afford to do the upgrades, then this can usually be overcome by adjusting the sales price accordingly. By updates, we mean flooring, painting, cleaning, decluttering, kitchen and bath improvements, etc. The roof, furnace and Central air are expected to be in safe working order and NOT at the end of their life expectancy. Why? Because most buyers are not going to spend over $10,000 within the first year or two to have all these components replaced. They cannot afford to do this so they will move on to the next home that has newer components.

The objective is to get the home sold for the best possible price and in the least amount of time.

Follow our list of suggestions, then objective accomplished!


Question: I am considering purchasing a home. I am tired of renting. I’m not handy, but have friends who are. I want a place where I don’t have to answer to a landlord. My credit score is 620, and I know my income will rise in the future. I’ll save some money and in a couple years, I’ll move to another area. What are your thoughts about buying a home for the first time?

Answer: Purchasing your first home is one of the most exciting events to occur in a life! Besides the investment aspect, there are many reports that homeownership is beneficial to the family. But you pretty much checked off every reason NOT to buy a home at this time in your life. You are not handy, and you cannot rely on your friends to do these repairs for you, and to hire someone is expensive. You will have to learn to do some basic home repairs. Believe me, a home will need maintenance & repairs. Are you up for learning that?

It also sounds like you don't know what your life will be like in a few years. One of the best reasons not to buy a home is if you're unsure about where you'll be in a few years. Buying a home is generally not worth it from a financial stand point unless you're going to be there for a few years -- let's say at least three, and probably more.

Sure you can buy a home with less than perfect credit, but that doesn't make it a good idea. The traditional go-to option for shaky credit is an FHA loan, but these have high mortgage premiums.

According to myfico, a borrower with a score of 760 or above can expect a rate of about 3.38%, as of this writing. With a 620, the rate jumps to 4.97%. This may not sound like too much of a difference, but on a $300,000 mortgage, this means you'll pay almost $100,000 more in interest over 30 years.

It would be wise to advance your credit score before buying a home, save for a larger down payment and consider the other factors I listed above.

Question: I want to own a home, but the Real estate agent won’t show me homes for sale & the bank guy won’t give me a loan because of my credit score. As a US citizen, I have the right to purchase a home. I have argued my point to these so called real estate people, yet they refuse to listen anymore.  Do you know of anyone that can help me?

Answer:  Mark Twain said: “It ain’t what you don’t know that gets you in trouble. It’s what you know for sure that just ain’t so.”  Homeownership is the right of every adult in our great Country. But, to do so, we must show financial responsibility.

Instead of ignoring their advice, why don’t you listen to their professional knowledge and start shifting your negative energy to improving your credit score and reducing your debt? A real estate agent wants to sell you a home. A lender wants to give you a loan. That’s how they make a living.  But, you must follow the prequalification rules & guidelines. If you don’t meet these rules, lenders won’t lend to you and Realtors won’t show you homes. Do you think home sellers want buyers who cannot qualify for a loan walking through their homes? Would you? I don’t think so.  So now do you understand?

Take responsibility for your present situation and then listen to these professionals that can be part of your successful team. Follow their advice and soon you will own part of that American Dream! 


Question:I plan to marry in the near future; my husband-to-be had to buy out his wife's portion of the house in a hurry -- she has also ruined his credit. I have excellent credit and also a home to sell. I will make around $40,000 profit from my house.

Would we be better to use some of my profit to fix up his house and ready it to sell; or should he sell his house "as is" and get him out from under the large payments and interest rate. We plan to buy a home together in my name after we are married.

Answer:Imagine if you sell your home, provide the cash to fix up his property and then the wedding is called off. You would have no cash, no house and no hubby.

It may be best to do nothing until you're actually husband and wife.


Question:I recently joined in an agreement to purchase a home at a price accepted by the seller. Now the seller has decided she doesn't want to sell the property, because her live-in boyfriend who owns half of property will receive half of sales price. What recourse do I have if the seller refuses to complete sale of property?

Answer:I'm not sure what agreement you have with the "seller," but it seems unlikely that you have a valid purchase contract.

The problem is this: To sell real estate you first have to own it. Your "seller" does not have exclusive title to the property, she's merely a co-owner. Unless she has specific, written authority from the co-owner to sell under certain terms and conditions she can only market her interest.

You'll need to speak with an attorney to find out if you can obtain any damages. However, if you want the property the better approach would be to forget damages and get both co-owners to accept your terms.

In the future, before buying real estate, engage either a real estate broker or an attorney before signing any documents.


Question: I graduated from college last year and decided to move in with my parents. Since then I have saved a decent amount of money and am now thinking about the economics of moving out. I believe that I will stay at my company, and therefore in the area, for about five more years. I like the idea of buying a house to build equity, but I know I won't be able to complete the purchase of an entire home in five years. Should I be looking to rent, or do you think I could pull off making a down payment on a house and then selling it if I decide to leave in five years?

Answer: You don't need to pay for an entire house in five years. If you have a fixed-rate loan then each year some of the mortgage principal will be reduced, a process called "amortization." In addition, prices can rise and fall. When you sell, if the price has not changed, you will owe less on the mortgage and thus get more credit at closing. If the price has gone up, then you'll take away even more from settlement -- less closing costs of course.



Question: I am venting. We are looking to purchase a home that needs some work, but it’s amazing how many homes are past the “needs work” and into the “disgusting” category. Bad odors, torn carpeting and walls with holes…the list goes on. We can’t find anything. Any suggestions?

Answer: Let’s review this…. You are looking for a good deal, but you don’t want a home with odors, or a home that needs some work? I don’t think the distressed property market is for you. If you want a good deal on a home, you are going to have to find something that needs a lot of work. A home with odors, torn carpeting and holes in the walls and more. If the home doesn’t need work, the homeowner can sell it at fair market value which is usually always higher than what they would get in an investors market.

Finding a super deal in real estate is not easy. The overwhelming majority of homes sold would be categorized in the “fair deal” category. Fair, because Realtors price the homes correctly and appraisers ensure the buyer is not overpaying for a home in an effort to protect the lender. Fair would also mean that both the buyer and seller are satisfied with the sale terms.

If you are looking for a deal, then you need to look at homes that need work, do the math, and hope that you can make a profit by selling it for more than what you paid for it plus expenses to fix it up and sell. There is tough competition in the investor market. Everyone wants to make money selling homes.

Sometimes you can get a deal if you are a cash buyer and find a seller who does not want to deal with a buyers financing and wants a quick close.

Discuss your ideas with a Real estate Broker to see if this is really something you want and can do.



Question: My home was to suppose to close a few days ago. The property was inspected and needed four minor repairs, all of which were made by a contractor. Now, with just a week before the new closing date, the buyer has backed out of the contract because he cannot get a loan due to a credit problem. I had already packed everything and purchased a new home. I think the credit problem should have been caught much sooner. What action can I take?

Answer: When homes are sold with financing there is a need to assure as quickly as possible that the buyer can qualify for the required mortgage. Therefore, there is usually a requirement to apply for a loan within a few days to quickly secure a loan, thus minimizing damage if financing is unavailable for one reason or another.

In this case you proceeded with the presumption that your home would be sold. In practice, not all contracts evolve into property transfers and when transactions fall through there can be lots of debate and dispute. Read your sale agreement. Does it have a clause saying that if the borrower cannot get required financing that the transaction is off and the deposit must be returned? Or does it lack a financial contingency?

See if there is another loan source which might allow the transaction to be salvaged. If that doesn't work, and before releasing the deposit, have a local real estate attorney review the agreement and the borrower's efforts to obtain a loan. It may simply be something that could not be worked out despite a good faith effort by the purchaser to get a loan. Or, you may be advised that you have a right to keep the deposit.



Question: I have been looking at homes for a few weeks now with my Realtor. Many have been vacant. Some of these homes are really creepy. That got me thinking. Does the seller have to disclose a fact that the home is haunted or has had a murder inside of it?

Answer: An owner of a psychologically affected property is not required to disclose that the property is in this classification. A so called, “haunted house,” as you described it, is not a psychologically affected property since there is no formal verification or substantiation that such an entity exists. We know this is correct for Illinois & Indiana. However, an owner of or agent may not intentionally misrepresent a fact concerning a psychologically affected property in response to a direct inquiry from a prospective person who may be involved in the transaction.

Real estate professionals call homes tainted by murder, sex scandals or messy divorces as “stigmatized properties.” While they make up a sliver of the market, they have been a subject of much research and pose a challenge for brokers.

When purchasing a large, long term investment like a home, no question to the owner or listing broker is stupid. In fact, a quick google of the address isn’t a bad idea either.



Question: Recently we viewed a home and fell in love with it. Our agent advised there was a bid placed by another party. We in return also placed a bid. I called my agent the next morning and gave him our top dollar. However, the house was sold to the first bidders, and we were never asked to counter bid! Is there anything we can do about this situation? We are heartbroken that we didn't even get a chance to raise our bid.


Answer: All sellers have different motivations and interests. It may well be that the first bid met all the owners' criteria and that they no longer wished to continue marketing the home.

Could they have gotten more money? Perhaps, but selling a home involves a certain psychological cost and some owners simply want to sell as quickly as possible and move on. You were told that there was an existing bid on the property -- a bid that could be accepted at any moment prior to withdrawal. Your bid was not made until the next morning. It's perfectly possible that the first bid was accepted even as yours was being developed. Once a bid has been accepted, the property is under contract and the sellers have no obligation to consider other offers. Lastly, price is only one consideration in an offer. While a higher price is surely an enticement, there may have been other factors which attracted the sellers.



Question: My parents have a great house that has been listed for almost six weeks. Houses in the area seem to be selling quickly and it seems like the house is well priced.

On the other side of the house is an area with a sewage lift station encased in a brick building. It seems that people are not comfortable with the lift station beside the house, although the lift station does not look unsightly in the least, especially since it is encased in the brick building. What can we do to make the home sell faster?


Answer: The first step is to ask your broker how long it takes to sell a typical property in your sub-division. It may be that you need to do nothing to accelerate the sale. Sometimes it just happens that even with a great location, a terrific house and a wonderful price, homes do not sell instantly.

Is the lift station loud? Are there odors? Does it attract trucks for maintenance? Are there safety concerns? If so, contact the town and ask for help. In my area electrical sub-stations are often housed in what look like brick homes. Few people even realize what they are.

Have some patience. If your home is priced properly, in time it will sell.



Question: I'm considering a home that's in foreclosure. Naturally, it's a great deal, and in an area I would never be able to afford except for the reduced price. The home is being sold "as-is," Will I be able to make an offer that I can back out if the inspection reveals "unusual" structural damage that requires thousands of dollars to repair?


Answer: It doesn't matter what the seller will or will not allow. It only matters that in your contract you require a home inspection "satisfactory" to you. If your needs cannot be met, move on. The property may be perfectly fine, but to protect your interests you need the help of a real estate broker and an attorney to sort through issues of title, value, warranties, inspections, etc.



Question: I hired a home inspector to evaluate a residence I'm trying to buy. Now that the inspection is done, it seems that I was ripped off. My inspector found a long list of problems with the house, including defects with the electrical wiring, the furnace, the skylights and a whole lot more. But when I presented the sellers with the report and demanded repair of each and every item, they broke off negotiations and refused to sell me the house. What's the use of a home inspection if all it does is blow the deal or force me to buy the house in as-is condition?



Answer: First, no one is forcing you to buy the house. Your inspector has provided you with pertinent information. What you do with that knowledge is a matter of choice, to be exercised with prudence and thoughtful consideration.

Second, common sense dictates that if the home has problems with the electrical wiring and furnace, the inspection report for which you paid hundreds of dollars may have saved you thousands.

Finally, it is essential that you gain a clearer understanding of the position an inspection report occupies in a real estate transaction. The purpose of a home inspection is to get a clear indication as to the overall quality and general condition of the property. Upon viewing the report, you need to make some reasonable assessments:

1. Is this house still worth buying? 2. What repair items are considered immediate structural or safety issues that sellers should be expected to address? 3. What items should be regarded as routine maintenance, not requiring immediate attention?

The inspection report is not a shopping list of demands with which to extort the seller. There is a big difference between presenting a reasonable list of repair requests, consistent with the property's asking price, and issuing a manifesto of demands.

Negotiations should transpire until a mutually satisfying result is achieved. Defects involving electrical wiring & gas fixtures are conditions that need to be addressed, and most sellers understand this. Repair requests involving significant problems of this nature are usually regarded as reasonable and acceptable.

Common miscellaneous conditions such as gate repairs, door adjustments, repainting or the pruning of shrubbery are included in an inspection report purely for disclosure purposes. A thorough inspector will inform you of such conditions so that you will be fully aware of what you are buying.

Too many transactions fall through because buyers use a home inspection report as a reimbursement of grievances. My recommendation is to weigh the importance of every disclosure in the report, with the understanding that there is no such thing as a perfect house.

Question: We accepted an offer on our home. We feel the buyer got the best of the deal. Now, after the home inspection, they are asking for us to repair a light switch, repair an outlet with reverse polarity and replace a cracked ceramic tile piece in the kitchen. We feel we have come down enough in price and we do not want to do anything. What is your opinion?


Answer: Back when it was a seller’s market, buyers wouldn’t dare asking for minor issues in fear the seller would move on to the next buyer. Unfortunately, in most areas, it is a buyer’s market and most buyers feel they are in control of the situation. There are no perfect homes, but many buyers are not aware of this, so they feel that many, if not all of the inspection issues should be fixed. Most real estate contracts state that only safety and major issues are part of the home inspection contingency. If this inspection request really bothers you, then consult with your attorney on your options or just tell the buyer's no and your reason. If the buyers want the home badly enough they will agree and drop their request.

You asked my opinion. I'd fix the reverse polarity since it is a safety issue. I would also fix the other minor items and be thankful nothing more costly was found in the home inspection. The objective was to sell your home and move on to the next part of your life. Fix the minor items and the objective will be accomplished.



Question: We have a contract on our home that had a closing date of 4 weeks ago. We were not given any reason for this delay except the lender needs more time. Why did the buyers write that closing date in the contract if they can’t even come close to meeting it?


Answer: When you accepted the buyers offer, you signed the contract knowing that contingencies in the contract must be satisfied before a closing could be scheduled. The ability for the buyer to obtain financing is one of these contingencies. Sure you received a letter from the lender saying the buyer has been prequalified for a loan, but this prequalification is only based on his credit report and what the buyer told the lender. Nothing else has been verified. Sometimes buyers exaggerate, thinking none of this goes through a detailed verification process. Sometimes, the lender bites off a little more than they can swallow. This can affect the buyer’s ability to get the loan.

If you are the buyer, you were prequalified for the loan with the mind set that you are going to get the loan. If you are the seller, you need to plan a move, a new purchase or make other living arrangements. This is stressful. But the mortgage companies are the ones lending the money. Many of them do the loan approval process with little concern for any of the other parties. But, it is their business, their money, and they have the right, within the law, to do what they want to do.

Why did the buyers write that closing date? Most likely, the Realtor spoke to the mortgage person to get a timeframe on the approval process and that’s what the Realtor was told.

That being said, you must utilize your Realtor’s experience to make the best decision about the offer on your home. There is more to it than just the price. You don't get your price if the home doesn't close.


Question: Two weeks ago I made an offer on a bank-owned house. The bank was impressed with the offer, however, the listing agent said there was another offer so I upped my offer $8,000. Four days later they told me they accepted the other offer which was $15,000 lower than mine because it was a cash offer. My loan was already approved, so there was no financing contingency and I would have closed within two weeks. The house is still in contingency with the cash offer and I was wondering if I had any recourse about these terms. Should I wait in the background to see if the deal falls through because I really wanted this piece of property.

Answer: A seller is not obligated to accept the highest price because there are a variety of issues in a real estate sale agreement. That said, I would not have turned down an extra $15,000 -- but I'm not a bank.

You could make a back-up offer. If accepted and the first offer fails, then you might be able acquire the property. However, if you make a back-up offer you might want to offer less than your original bid given the information supplied by the agent. Speak with a Realtor, if you do not already have one.


Question: Is it better to accept a cash-only buyer or one who has lender financing? Or does it make any difference to me?

Answer: Assuming the two offers are for the same price, you want the all-cash model.

Why? You don't have to worry about lenders approving the buyer and no one will ask you to help defray the seller's loan costs by paying points or closing costs.

That said, you should expect an all cash buyer to require exactly the same verifications as you would find with a financed transaction -- title examination, survey, termite check, Home inspection, etc.

Question: My daughter is trying to buy a house and the mortgage broker she is dealing with told her the closing cost would be between $4,000 to $5,000 on a $113,500 house with a $10,000 down payment. This seems a little bit on the high side. Is this a normal charge or is she being ripped off?

Answer: The closing costs paid by your daughter reflect the requirements of the sales contract, transfer costs and loan expenses. Whether these amounts are reasonable or not depends on how the agreement was negotiated, the transfer costs for the local jurisdiction and the loan expenses. For instance, is your daughter paying additional points up front to get a lower interest rate? At the very least, why doesn't your daughter speak with other lenders to see what alternative financing options are available.



Question: What do the terms "Under Contract" or “Sale Pending” mean?

Answer: In real estate it is a routine matter for buyers and sellers to sign a sales agreement. That agreement, however, does not mean the house has been sold -- that title has been transferred. Instead, there may be a period of time allowed for the purchaser to have a home inspection inspection, to line up financing under certain terms, to check the title, etc. In this situation, the property is "under contract" but not sold, so other offers may be made. Such offers may also be accepted by a seller, usually as back-up agreements -- meaning they have no value unless the first offer falls through.



Question: Our daughter wants to buy a house, but she seems to be more worried about the color of the walls than what the home has to offer. What can I tell her so she sees what to look for in a home?

Answer: If you have hunted for a house, you probably got a sense that real-estate purchases don't represent consumers at their most rational. Did you like a house more or less depending on whether you saw it on a sunny day? Chances are, you did.

Buying a house isn't the same as buying a stock, an air conditioner or even a car. It's not just a product with pluses and minuses — good school system versus a small kitchen, a new roof versus a longer commute. A house represents the kind of life you want to live. And given its cost, a house and the value it gains or loses represents the life you could live.

So, it can be disturbing, though probably not surprising, to realize that people's judgment about real estate is susceptible to many of the foolish forces that affect so many other consumer decisions. In some ways, it may be affected even more.

Superficial things such as a room painted an ugly color can make people less likely to buy a house, even though fixing that problem is as cheap as a couple of cans of paint. We’ve seen people walk away from a house that they really liked because it has green shag carpeting in the Living room. That vision destroyed the other positive thoughts they had about this house.

As far as your daughter goes, you need to sit down with her, and put your years of wisdom and experience in front of her. Explain what she really needs to watch out for in a house purchase. How she can change many things inexpensively, but other items may be very costly. Have her speak to a real estate professional. They certainly will back your wise comments. Also, be sure she writes a contract on a house that is contingent on a home inspection by a licensed home inspector. If she still insists on buying for the wrong reasons, then it looks like experience is going to be her teacher.



Question: We recently placed an offer on a home that has been on the market for over 6 months. We never got an answer back. Why do you think they did not answer our offer?

Answer: You placed an offer on a home that apparently was of no interest to the sellers. In most cases that we have seen, when sellers do not counter a buyer’s offer, it is because they were insulted by the offer & do not feel the buyer is serious about buying their home.

Just because a home has been for sale for 6 months, doesn’t mean sellers are going to accept low offers. Higher days on the market in this real estate market are not unusual. Even the nicest of homes may have higher market times.

Also keep in mind that you may have damaged your negotiations. The seller may not be willing to negotiate to a lower offer with you because of your initial low offer. Although this is a business deal, there are seller emotions involved.

Has your Realtor attempted to contact the sellers Realtor? In most cases, that should provide the answer to your question.



Question: My parents are considering using a discount broker from another area. But they really need to sell quickly. Any suggestions?


Answer: If they want to take the chance with one of their biggest investments, thinking that the discount commission broker will still attract enough buyers to get them top dollar for their home and sell it quickly.... well it's their decision. But Consumer beware.

Some discount brokerages take all listings at a flat rate, paying a cooperating fee on top of that amount to selling brokers. That cooperating fee is also paid by the seller. You might see a brokerage ad offering to list your house at a fee of $2,000. But somewhere in the tiny print, if it's disclosed at all, will be a disclaimer that this fee is exclusive of the fee paid to the selling broker. This type of advertising is misleading to the consumer. Some discount brokers advertise that they will take a listing for 1% or 2%. Again, many of these brokers don't draw attention to the fact that the selling broker, in most instances, is still paid an additional fee by the seller. Our suggestion would be to use a full service Broker who has a proven track record in the community.

Here is a quote from the author John Ruskin that sums it all up: “It's unwise to pay too much, but it's worse to pay too little. When
you pay too much, you lose a little money - that's all. When you pay
too little, you sometimes lose everything, because the thing you
bought was incapable of doing the thing it was bought to do. The
common law of business balance prohibits paying a little and getting a
lot - it can't be done. If you deal with the lowest bidder, it is well
to add something for the risk you run, and if you do that you will
have enough to pay for something better.”


Question: We have made the decision to sell our home. Before we have you out for a real estate consultation, can you get us started by telling us what we should do first to get our home ready for sale?


Answer: Start with clearing the clutter. Many people move because they need more space. Clutter makes a house look smaller. A decluttered house makes it look larger. Makes sense right?

Scrub, clean and paint. Make your home look not just clean, but sparkling clean. This is a very inexpensive way to add selling power to your home.

Pet or smoking odors. Do you have them? If you do, get rid of them. We hear so many buyers’ comments on disgusting odors in homes. Turns them right off.

Make your curb appeal look really good. Cut, trim, add flowers, etc. Observe the nicest looking homes in your neighborhood to get ideas. Buyers will be looking at a lot of homes, great curb appeal will draw them into your home. Conversely, many buyers assume that if a home looks bad on the outside, it will look the same on the inside.

Add some inexpensive creativity to your unfinished basement. Simply take a section near the stairs and turn it into a Family/Rec room. Paint the walls a color to attractively brighten it. Add a carpet remnant to warm the room. Put some pictures on the wall. Set up a TV area with a couch and chair. This creates additional living space in the buyer’s mind and immediately adds value to your home at minimum cost. No need to spend thousands of dollars to completely finish the basement.

Check the basement. Do you get water by means of seepage or backup? Do you have signs of water damage? If you do, bite the bullet and fix it. You won’t want to admit it, but you should’ve taken care of it when it started happening. Nothing scares a buyer more than a home with water problems, which they see as possible mold, structural issues and big costs. The bottom line is, if you want to sell your home for the best possible price and in the least amount of time, then you have to be willing to follow the advice!


Question: My friend’s house sale fell through because the buyer was turned down for a loan. The buyers were prequalified & they were supposed to close next week. My friend wants to keep the $2000 deposit, but her Real estate agent said she had to return it. How could this be when they had a firm contract that the home was sold?

Answer: Certainly the home was sold because they had a signed purchase agreement. But the purchase agreement has other terms in it besides price. Home sales are usually contingent on the home inspection, the appraisal and the buyer obtaining financing. So, until all these contingencies are satisfied, the deal could fall through. The Realtor should get a written reason for the loan denial from their lender. The reason for the denial should be discussed with the attorney to see if the buyer is in default of the contract. But, in most cases, since the contract was contingent on the buyer getting financing, and they could not obtain the necessary financing, the buyers are entitled to a return of their earnest money deposit. These contingencies can be very frustrating, but they were part of the contract that the sellers and buyers agreed to.




Question: My son made an offer on a house. If there are multiple offers, how are they handled in a fair manner? If another buyer offers more money, will my son have the chance to up his bid?


Answer: With multiple offers, the owner (or banks if it’s a foreclosure) usually counter back all parties and ask them to submit their highest and best offer by a particular date and time, giving your son another chance. However, if there’s a clear distinction between the offers, i.e. ‘one is all cash, at or above asking price’ vs a less than asking price, fha loan, perceived as a weaker offer, the owner may very well pick the best offer without countering the other ones. Your son’s agent should be in contact with the listing agent indicating that you would rather see a counter offer than a rejection. But in all cases, if one offer clearly stands out considerably from the rest, that buyer usually ends up getting their offer accepted.



Question: How do home inspections work and how do they work into the sales contract?


Answer: When buying a home, it is common practice and encouraged for the buyer to have a home inspection on a house, once you have agreed on price, terms and conditions, and have a signed offer to purchase.

The inspector will check the structure, the mechanical system, plumbing, electrical and more.

They will come up with a report which often highlights areas that have concern, and may need to be corrected. This list may be quite extensive. The list could include anything as minor as a small rip in the kitchen floor vinyl, to as extensive as a failing foundation or major safety issues.

The practice of home inspection was intended to let the buyer know what they were buying during the discovery period, and allow them the opportunity to continue forward to purchase, or give notice that they no longer want to buy. In most cases, it allows them to get out of the contract without bias, and allows them the return of their earnest money deposit.

However, through the years, it has become common practice for the buyers to ask the seller to do repairs or give credit to the buyer at closing so they can fix the items. Most sellers will have safety issues fixed as these issues are a concern for them. But, over the years, we have seen the buyers ask for everything to be repaired, including minor issues.

Buyers need to be careful here. What most buyers who are purchasing a home may not understand is that once you ask the seller to do something as a result of the home inspection, you are renegotiating the contract, and the seller could decide not to sell anymore. The request for repair, rejects the original offer, and introduces a new offer. The seller does not have to accept the new offer, and further more does not have to sell to the buyer anymore.

Question: A property was on the market for $260,000. The price is far higher than sales made in the past 90-120 days.

We offered $205,000. This offer was rejected outright and not countered. The next day, the price dropped to $249,900.

So my question is, was our offer just ridiculously offensive?


Answer: Sellers have a right to test the market. That homes have not sold for a given price previously does not mean the owner or the owner's broker were somehow wrong. Prices rise in some communities, which means someone must be the first to breach a given price level.

The marketplace will ultimately decide the value of the property. That said, buyers have a right to bid for properties according to the value they see. You, as a purchaser, may have felt that the property was worth less based on past sales, available properties, condition, location, design, etc.

How do you know what the seller will accept unless you make another written offer? A real estate transaction is a business deal -- you made an offer, it was rejected and both parties can decide what they wish to do next, if anything.


Q. We are really stressed out trying to sell our home. Any advice you can give us?

A. It appears you have been languishing for months in one of the lousiest real estate markets since Fred & Wilma bought their stone cottage.

What you have is the after effect of what we have recognized and labeled as Sellers Stress Syndrome. (SSS). This is a condition in which prolonged exposure to spray cleaner and the continual threat of strangers appearing at your door make a person (to use a clinical term) a little whacko.

If you’ve had your home on the market for a while, SSS can sneak up on you. But we are here to help you recognize the problem. Are you experiencing symptoms like these?

· You have a constant unsettled feeling reinforced by the sight of the sign in front of your front yard, swinging in the wind and, you would swear some days, laughing.

· You avoid the neighbors because you are embarrassed that you can’t sell your house. Plus, for all you know, they came to your open houses and went through all your drawers.

· You grow to hate every prospective buyer, you hate them even more after they make an offer, because your home deserves more. You turn around and hate your house for not growing another bedroom. You hate your agent for not waving a magic wand and making more offers appear. You hate yourself for buying when the market was at its peak, even though you got top dollar for your old house. You pretty much hate everybody and everything.

Impaired judgment, paranoia, anti-social disorder, burying statues of saints in the yard. Can’t something be done?

Look at the bright side. Your home now shines, it’s cleaner and decluttered more than all the time you have lived there. You have fixed all the little things that you have lived with for years and your home looks like a magazine home. Enjoy it.

You get to go out more now during the showings for those little dinners. You really can appreciate those mornings and evenings on the patio now that they are numbered. You will miss those nice things about your home. When you get down, think of the new path you are about to enter on your new life and how exciting it will be. New people, things, and places to explore.

A good attitude and focus will carry you through . Or as Jimmy Buffett put it so well: “Changes in latitudes, changes in attitudes, nothing remains quite the same.”



Q: We contracted to buy a home on the 1st of the month. Closing is in 45 days. Ten days prior to closing there was a huge storm which took down a large tree in the backyard and damaged the house. Is the seller obligated to fix the house and replace the tree?

A: At the time you bought the property, the day the contract was signed, you purchased a home with a given physical condition -- not perfect, but as you saw it. The seller has an obligation to deliver the property in substantially the same condition as it was on the contract date.

In the situation you describe it's likely that the owner's insurance will cover some or all of the bill. If the repairs are not completed by closing, then establish an "escrow" or trust account at from the seller's funds at closing to assure that the work is completed.

As to the tree, it was going to fall at some point. The storm was plainly an act of nature. The owner is obligated to clean up. If you're on good terms with the seller, maybe ask for firewood.


Q: Four months ago we saw a house we liked and said we were interested, but didn't make a firm offer at that time. The owner now wants to take the home off the market. Is there any way we can make an offer on the house?

A: An owner is not obligated to eternally offer a home for sale. You could have made a written offer when the owner was actively marketing the property.

You can still make an offer -- I have had people approach me to buy property which was not for sale. But an owner has no obligation to review an offer or accept it.



Q. My Home has been for sale for several months now. We have had very few showings. Where have all the buyers gone?


A. Many homeowners who are trying to sell their homes have been asking that. The simple answer is that these homeowners need to look in the mirror. That is because every seller is waiting for his or her transformation into a buyer.

The typical scenario is that a seller will put their home on the market and wait for offers to come in. However, in many cases the offers are not coming in due to the current market’s “adjustment.” And this has led to a surplus of homes for sale and a scarcity of buyers. That is what happens in a slowdown; a logjam of buyers trapped in their current homes as sellers.

As the home seller, if you are going to “wait until the right buyer comes along,” or “wait for the market to catch up to your asking price,” then you could be waiting for a long time. Unfortunately, many sellers will make the mistake of holding out for an unrealistic price well beyond the point that it makes economic sense to do so. These sellers will be missing the opportunity to get a good deal on their next home. By waiting (and hoping) for the market to change in their favor, these sellers are forgoing the benefits of the current buyer’s market. You can’t have the best of both worlds. If you are holding out for an unrealistic sales price, then you are predicting that we will find ourselves in a seller’s market or at least trending in that direction. And we can’t be in both a buyers & seller’s market at the same time.


Emotionally detach when selling your Home.

Remember, when you're selling your home it's just a product to a potential buyer. They will see the things you loved about your home but they also will see the things they don't love about it and they'll share those things with their agent. So, it's likely you'll hear criticism about your home. They may criticize the very things you love. Here's where you detach and let the criticism wash over you. If you need to take action, such as repairing something, do it. If it's just a matter of opinion, don't become emotionally caught up in it. This isn't's business. Sometimes that's hard to remember because with real estate, the home we buy is, in the end, our personal sanctuary but at the time of the sale–it's business. Keep the emotions out of it and detach to sell your home.



Q. Would you buy it at this price? If you ask too much for your home when putting it on the market, you should ask yourself, would you buy it at this price yourself ? The honest answer is usually No. Why do people price their home too high? “They could always make an offer.” People know what home prices should be especially with tools like the internet. They usually will not view or make offers on over priced homes. “We can always reduce our price later.” The longer a home is on the market, the less it sells for. Once a property gets market weary, buyers & Realtors begin to suspect that there is something wrong with the home. The best time to price it correctly is at the onset. When setting an asking price, remember to ask yourself if you would be willing to pay this price if you were buying your existing home.

Q: I'm thinking of selling my home, and know my carpet, tile and other rooms need updating. Is it best to do it now or give an allowance on the selling price for these upgrades? The same with appliances?

A: Ahh, the age-old, existential question faced by buyers and sellers since time eternal: update or credit? There are dozens of ways to weigh the pros and cons of this dilemma. Some would have you do some complicated mathematical analyses to calculate whether the return on the investment is worth it, compared to the assumed incremental marketing power of offering your home at a lower price.

I, for one, think that addressing these sorts of questions mathematically is impossible to do without taking on a boatload of error-prone assumptions. That's because what does and doesn't work with buyers is not necessarily logical or calculable, nor are some of the other factors you should account for as you make this decision. My vote is that you should at least consider replacing some or all now, but only after you get input from your Realtor.

Here are the three primary factors underlying my recommendation:


1. If you're not yet 100 percent sure you're selling, replacing them now allows you to enjoy the upgrades. So many sellers, and I include my younger self, tend to make the upgrades and updates they've long dreamed of only when they're planning to move, missing out on the ability to enjoy the home in its best shape. And that's a shame. For that matter, it is not at all uncommon for home sellers to see their spruced-and-staged property and wonder why they decided to move in the first place!


In the interest of maximizing the enjoyment you get out of your home and your life now, you should at least consider updating these items if you can afford to, and enjoying them as long as you can before you do decide to sell the place, taking extra special care to live lightly on them in the interim.


2. Replacing them now might boost your home's chance of selling more than a price discount. When a home is in need of the updates you mention, it may -- simply put -- show poorly. And buyers simply like homes that look move-in-ready. Some won't even consider fixers, and I've even seen some die-hard amateur handypersons be tempted with the allure of a polished, freshly updated home (and the work-free weekends it promises).


If a few thousand dollars in basic updates and appliances makes the difference between your home showing like a fixer-upper and showing like a showplace, doing the updates before you list the place can be the difference between it selling or not -- period.


3. Replacing them yourself might be more cost-effective. Buyers almost always overestimate what things like carpet, paint and appliances will cost, so they might scoff at whatever you offer as too little, and request a bigger credit or discount than you had planned On the other hand, if you have the items replaced yourself, you can be as aggressive as you want to be in terms of shopping around, getting deals, doing the painting yourself, hitting up the appliance outlets or calling in favors with any vendors or contractors you or your agent might know.

If the work is done well and the outcome is beautiful, depending on your local market dynamics, putting a well-prepared, updated home on the market may even position you to get more than one offer (and a better price, to boot).

There's no one right answer to this question for every homeowner. Some may not have the money, or may be in a hot enough market that buyers bite on every listing. But my experience has led me to generally prefer putting a polished property on the market over a discounted cosmetic fixer every time.

Do as much updating as your budget allows while you own the home. You may wake up one morning and say, I am going to sell my home! You dont want the financial burden of getting your home ready for sale at the last minute. Remember, Sharp, Updated homes sell better than average, non- updated homes


What Will Really Hurt Your Credit Scores:

1) Opening Too Many Accounts at Once

Credit card sign-on bonuses are certainly enticing, but you shouldn't be signing up for every card that's offering some cash back. This is because each application and subsequent credit pull will generate a hard inquiry that will appear on your creditreport.

2) Missing One Payment

One missed payment may seem innocuous enough, but in reality a single delinquency can cost a previously stellar credit score to fall more than 100 points. The good news: As long as the missed payment doesn't lead to additional woes, your score will start to rebound relatively quickly and it can get back to good standing in about 12 months following the delinquency

3) Closing an Old Account

You should think twice before officially closing that credit card you opened back in college, especially if you're getting ready to apply for a new line of credit. Closing an old account can have a negative impact on your credit score since it can lower your credit-to-debt utilization ratio, which is essentially how much credit you have at your disposal versus how much credit you are actually using

4) Maxing Out a Single Credit Card

As MainStreet has previously reported, it's never a good idea to bump up against your overall credit limit because your credit utilization ratio will appear sky-high. However, maxing out a single card can negatively influence your credit score as well.

5) Racking Up a Bill Right Before Your Statement Closes

Credit card issuers typically only report two things to credit bureaus each month: whether you're up-to-date on all your payments and what your balance at the time is. As such, running up big purchases right before your statement closes – and the issuer reports the information – can negatively impact your credit-to-debt utilization ratio and subsequent score, regardless of whether you go on to pay off that balance on time or not.

6) Not Checking Your Credit Report

Even if you're not particularly credit active, it's a good idea to take advantage of the free annual credit report the Fair Credit Reporting Act entitles you to, if only to scour it for incorrectly attributed delinquencies, accounts or inaccurate balances, which can all do varying amounts of damage to your score. This is because errors on credit reports are all too common. As MainStreet has previously reported, about 30% to 40% of all credit reports have some type of error on them, some of which can unfortunately be difficult (and time-consuming) to remove.

7) Ignoring an Account That Has Gone Into Collections

You may think that you don't owe that unpaid medical bill that keeps getting sent to your house, but your score is still in jeopardy if you decide not to pay it. Many places that don't lend money, like a hospital or cable company, will send their unpaid bills to a collections agency after a certain amount of time and they will report you to the credit bureaus. Similar to a missed mortgage, credit card or auto loan payment, this delinquency can cost good scores 100 points or more.



Why Home Sales will Rise again this year, by Lawrence Yun, Chief Economist for the Natl Association of Realtors:

The first quarter ended with decent home sales activity, with existing homes selling at an annualized pace of 5.1 million. The remainder of the year should be better still, for the following reasons:


1. More jobs.

2. Rising stock market wealth.

3. Rising apartment rents.

4. Continuing high affordability conditions.

5. Home values at historically justifiable levels.

6. Foreigners buying U.S homes on the cheap.


Other potential contributing factors, although they are not happening yet, are huge bank profits translating into more desire to lend & some reduction to market friction as lenders' short sale approval processes improve and appraisals become less of an issue.

So, if existing home sales either hold at the 5.1 million pace of the first quarter or improve on that, then the annual sales tally will easily exceed the 4.9 million pace we saw last year.


But their will be more obstacles. High gas prices are a daily reminder that something is not right with the economy; that will hold back consumer confidence. Washington policy makers are debating the ending of government guaranteed mortgages (3.5% down payment)  and requiring a 10-20% down payment on a conventional mortgage.

At least through 2011, improving market developments should outweigh the negative impact imposed by Washington policymakers.




Q. I have cared for my home over the past 30 years, but I have not done any updating. How will this affect my sale and sale price?


A.  A well cared for home is very important when it comes to appealing to a buyer. Usually caring for your home involves keeping the maintenance up & adding a new roof, windows, furnace & Central air when needed.  But when it is a buyer's market, you need to have "more" just to sell your home & to get top dollar in the current market. That "more" is updating... updated baths, kitchen, plumbing & lighting fixtures. Newer carpet & flooring, modern paint colors and removal of wallpaper & paneling. Buyer's have so much to choose from that they will pick the home that is most updated, cared for & priced well.




Did you know that a ½% change in interest is approximately equal to a 5% change in sales price?

Buyers need to realize the importance of the relationship of interest rates to the monthly payments.
Change in Interest vs. Reduced Sales Price
Purchase Price: $200,000
Interest Rate: 5%
Term: 30 years
Payment: $1,073.64/mo
½% Increase in Rate: $1,135.58/mo

5% Increase in Price: $1,127.33
A ½% change in interest rates is approximately equal to 5% change in price

1% Increase in Rate: $1,199.10
10% Increase in Price: $1,181.01
A 1% change in interest rates is approximately equal to 10% change in price !


Where have All the Buyers Gone Part 2

We are convinced that the first time homebuyer tax credit was a huge success. Business was up, home viewings by prospective buyers were way up.

Then came April 30th and the Home viewings dropped to record lows.
Our office charts the number of showings on our property listings.
Home viewings were up over 70% in 2010 compared to the same period in 2009.
The week after the tax credit ended, showings were down about 14% compared to the same period in 2009, and 2009 was an extremely slow year.
But, this is not a reason for home sellers to panic.

The only constant in real estate is change.
Eventually, the buyers desire to purchase a home will outweigh the thoughts of a tax credit and they will return.
And hopefully, soon, President Obama will announce whether the tax credit is coming back. This will make up the minds of the indecisive.

Real estate is not going to return to a sellers market anytime soon, but Homes will continue to be purchased, because mortgage interest rates are historically low and because home ownership is still the American Dream.





My house has been on the market for four months now and has only had four people look at it. We have lowered the price to less than what we think it should sell for. We have some great plans that all hinge on us getting out from under the house. With the current market should we continue to just leave the house on the market hoping for someone, or should we pull it off and just give up on our plans?


Answer: There are several issues here.

First, when you say that you have "lowered the price to less than what you think it should sell for," you may not have lowered the price as much as the market demands. This is a difficult matter but it needs to be addressed realistically: Is your price competitive with like properties in your community?


Second, how long does it take to sell a typical home in your neighborhood? Chances are Market time is very high. This is what happens in a buyers market when homeowners do not realize that their home is only worth what a buyer will pay and what an appraiser says it is worth. They may lower the price, but not enough to keep pace with the market.


Third, what is the condition of your home? Buyers have so many to choose from. They will choose the one that gives the most value and the one that gives them that ‘Wow” factor. If you have not cared for or updated your home, you could sit on the market while the updated, nicer homes sell. Remember, price, location, condition and that buyer ’wow’ factor are all major items when selling your home in this market.


Fourth, review your financial situation. Speak to your loan office about your monthly payment. Can you afford to sell & buy? Are you still profiting from the sale of your home even in this market? Is your next home a great deal in this buyers market? Look at the whole picture. For example: you may save $20,000 buying your next (more expensive home) in this market. Your dream home may cost a lot more once the trend reverses back to a sellers market. Now can you afford to lower your price to sell your current home?

We would be happy to give you our opinion on what your home should be priced at and tell you what you should do to your home to sell it.




 Where have all the buyers Gone?

Many homeowners who are trying to sell their homes have been asking that. The simple answer is that these homeowners need to look in the mirror. That is because every seller is waiting for his or her transformation into a buyer.


The typical scenario is that a seller will put their home on the market and wait for offers to come in. However, in many cases the offers are not coming in due to the current market’s “adjustment”. And this has lead to a surplus of homes for sale and a scarcity of buyers. That is what happens in a slowdown; a logjam of buyers trapped in their current homes as sellers.


As the home seller, if you are going to “wait until the right buyer comes along”, or “wait for the market to catch up to your asking price”, then you could be waiting for a long time. Unfortunately, many sellers will make the mistake of holding out for an unrealistic price well beyond the point that it makes economic sense to do so. These sellers will be missing the opportunity to get a good deal on their next home. By waiting (and hoping) for the market to change in their favor, these sellers are forgoing the benefits of the current buyers’ market.


You can’t have the best of both worlds. If you are holding out for an unrealistic sales price, then you are predicting that we will find ourselves in a sellers’ market-or at least trending in that direction. And we can’t be in both a buyers’ market & a sellers’ market at the same time.


Helpful Suggestions to Get Your Home Sold:

Whether the market is slow or not, there are a few ways to increase your return in the sale of your home. The first is to "update" your home. Consider replacing old fixtures, old counter tops in Kitchen & baths. Remove out-of-date wallpaper & add a fresh coat of paint. Reface or replace the cabinets. With some updates you will make it stand out among the competition, and believe us, you have lots of competition! New carpeting in neutral colors will greatly improve the look of your home. The old saying: “The buyers are just going to change the carpet to their own colors,” is not the way you should be thinking. You have to make the home look “updated” in order to get the buyer to even consider buying it! Remodeling your kitchen or bath is in the big "plus" category. Don’t forget curb appeal. This will get the prospective buyer in the door and many buyers check out the area and exterior before deciding if they should go inside. Give your home that new paint job. Cut, trim & edge the lawn. Add some flowers, clean up the clutter. A little remodeling will not only bring it up to date, but make it stand out in the minds of potential buyers.

Give us a call. We know what is selling and we would be happy to make suggestions to get your home in salable condition!


6 Truths about The Current Real Estate Market

From Illinois Association of Realtors Convention speaker and agent trainer Kim Daugherty presented these market truths in his session "Make Your Listings Sell."

1. Buyers buy after shopping around and they will be comparing your property to others currently on the market.

2. Sellers control the pricing and salability of their homes but buyers control the VALUE. A property is worth what the market will pay.

3. If a property sits on the market for more than a few weeks it gets shop worn (like a stale donut.) Price it right in the beginning while it is fresh and buyer interest is at its peak.

4. Most properties must be sold three times — to real estate agents with buyers, to the buyers themselves and then to the lenders who will loan the money.

5. What it means if there are no showings — agents don’t see your offering as worthy of showing to their buyers or buyers aren’t interested enough to look. If there are no offers, buyers don’t see enough value to even negotiate or try to buy.

6. Overpriced properties actually help well-priced properties sell.


How to Price Your Home to Sell

As a seller, you must strike a delicate balance between setting a price high enough to reflect the full value of your home and setting a price too high for the market to bear.

The following steps can help you determine a list price that finds that balance.

Here’s how we can help you:

  • We will perform a Comparative Market Analysis (CMA) to help you accurately determine the selling price of similar homes
  • We will analyze sales data and calculate market trends.
  • Make an impartial assessment of how homes for sale in your neighborhood compare to yours in terms of size, location, amenities and condition.
  • Give you an honest assessment of your home’s saleable condition and what you may need to do to get it sold.

Comparative Market Analysis and Market Research

We can accurately measure the value of your home through a comparative market analysis (CMA). A CMA provides information about recent selling prices of similar properties in your market. They also include information about area homes that failed to sell in recent months along with their corresponding list prices. We can help you obtain and analyze this critical information.



 My home isn’t selling. What can we do to get it Sold!!


 Well, if we knew the complete solution, we could end the housing slump and turn the U.S economy around. Unfortunately, there are many reasons why homes do not sell quickly.

A year or two ago, homes in any condition were selling as long as they were priced at market value. Dirty homes, homes that were not updated along with beautiful & updated homes. There were plenty of buyers for homes in all conditions. We had investors. We had buyers with marginal credit scores. We had everyone wanting to cash in on the housing boom.

That’s not happening now. The homes that are selling are the homes that are clean, sharp & updated. That’s what today’s buyers want. If you have less than that, you will have to price your home less then those who have kept their Home updated. Those who kept their investment up…spent the money to keep it looking great, are the ones rewarded in this kind of market. Reality hasn’t set in on those who did not update & think their home is worth much more than it is. It doesn’t matter what you think your home is worth. It’s what the market says it is worth.

If you are thinking of selling. Give us a call. We’d be happy to come by and tell you what you need to do to get your home sold. Sometimes it doesn’t take much to get top dollar for your home. We are here to help you.



Are their any positives in this current real estate market?


 There sure are! Think about the whole picture. It always makes good sense to trade up in a buyers market. When prices are lower, it’s a one-time shot to get your hands on a bigger chunk of equity. For example, if you sell a $200,000 home at a reduced price of $184,000, you’ve in effect lost $16,000. But, if you immediately turn around & buy a $300,000 home at the same 8% discount, you’ll save $24,000. You have just saved $8,000 ! Remember, prices are not just down in our Market. You can probably save more than 8% in many markets!




 Our Home is Clean but not updated.

    How will this affect the value of my Home?

Having a clean home is, of course, very important to prospective buyers. It seems buyer’s these days want a home that is clean AND updated. The average current buyer works 2 jobs and/or has kids with many activities, so they do not have the time to spend updating their next home. So, unless your home is priced much below the updated homes which are your competition, you can probably expect your home to have a longer market time (in this current market). There are many homes for a buyer to choose from. They will pick the home that is the cleanest & the most updated.

How long the current ‘buyer’s market’ will last is anyone’s guess. The best advice we can give a seller in a “buyers” market, is to update your home. You will not only enjoy the great look, but it will pay for itself somewhere down the road.


Are You Buying a House or a Home?
As you read and study about buying real estate, you will often find the words "house" & "home" used interchangeably. There is a huge difference between a house and a home. A house can be a place to eat, sleep, park your car, and put all your "stuff". It is a material possession & an investment. A home is where you feel comfortable, warm, safe, and protected. A home is where you live.

A house is something you buy logically. A home is an emotional purchase. When buying real estate you have to balance your emotional wants and your logical needs because there will almost certainly be a time when the two conflict. For example, you may want a house with a view, but the payment is higher than you feel comfortable with. What do you do? Purchase the house anyway and budget more carefully for the next few years? Buy the same house without the view and get it cheaper? Make a larger down payment by borrowing from your 401K or family members, so you get a lower payment? Or buy a smaller house and still get the view?

When viewing the house, most people look at it emotionally and envision it as a safe, happy, comfortable home. Later, when making the offer your logic may begin to kick in, instead. That’s when you might start to question your decision.

The trick in buying real estate is to view all decisions with both a logical perspective and an emotional perspective. If a situation presents itself that requires a trade-off, decide on whether there is a huge conflict or a small one.

Logic should win the big conflicts, but emotion should always be a factor, even winning the small ones. With some logical & emotional thought, you will find yourself owning a warm, happy, safe home – and an investment for the future at a price you are willing to pay.