5 Secrets Buyers and Sellers Must Know About Virtual Home Tours

For years now, virtual home tours have helped real estate buyers far and wide find the perfect home. From long-distance military personnel being relocated, to investors expanding their portfolio, to homeowners looking for a vacation getaway, this technology makes finding a house that’s a bit out of driving distance much easier. And for real estate agents, virtual tours have been a useful way to help buyers with their home search and to assist sellers in creatively marketing their listings.

Because of the pandemic, virtual home showing options recently experienced a huge spike in popularity. One survey found that nearly 33% of recent home tour requests were for virtual tours, as compared to just 2% pre-pandemic.1 And it’s easy to see why.

Buyers want to quickly find their next safe haven, one that may need to serve as their office, gym, and even classroom for months to come. And sellers want to limit the number of strangers in their home, yet still have the ability to reach enough potential buyers to get the best offer on their property.

Virtual home tours are the popular thing right now, but that doesn’t automatically mean they’re the only option for your homebuying or selling experience. In this post, I’ll reveal five important secrets behind the virtual real estate scene. Read on to learn how they impact today’s home buyers and sellers.

 

SECRET #1: Virtual Tours Have Evolved

Lots of real estate professionals who had never used virtual tours before were forced to quickly adapt when the pandemic struck. Because of restrictions on time and resources, not everyone is able to create what would have been deemed a “virtual tour” last year. So instead, I’ve expanded the definition of the phrase by creating innovative new ways to show homes while keeping our clients safe and socially-distanced. Here are some terms you might come across as you explore homes with virtual tours.

Traditional virtual tours use 360° Photos, which are images that allow you to see all angles of a space. These are what allow virtual tour viewers to look up, down, and all around the interior and exterior shots of a home. Using a software program, 360° photos can be stitched together to create a digital model that looks like a dollhouse. This is called a 3D Tour. Sometimes agents will also add Virtual Staging, which decorates rooms with digital furniture and accents like wallpaper or paint.

Traditional virtual tours allow you to click to move from room to room in the home, but Online Walkthroughs feature the actual action of walking around. Either the seller or the agent (depending on factors such as time and safety requirements) will create a video by holding their camera or smartphone and simply moving through the home.

Online Walkthroughs can be filmed in advance or happen live. If they are live, they can also be referred to as Virtual Showings or Online Open Houses. A Virtual Showing is often a scheduled, one-on-one event that mimics an in-person tour of the home, in which the agent and viewer start at the exterior and move their way through the property. If your agent offers to FaceTime or Skype you from a home you’re interested in, for example, that would be a type of Virtual Showing. In contrast, an Online Open House is more freeform, allowing more viewers to pop in and out of a group video call on apps such as Facebook or Zoom.

 

SECRET #2: Virtual Doesn’t Mean Impersonal

All these styles of virtual tours showcase the property’s details better than static photos ever could. But for a purchase as intimate as your next home, details like a new refrigerator or the size of the master closet aren’t the only deciding factors. Luckily, virtual tours are exceptional tools for personal connection.

As a prospective buyer, virtual tours give you a feel for the property, inside and out, so you can easily picture yourself in the space and decide if the home’s flow and features work for your lifestyle. Live video walkthroughs with the real estate agent will give you insights on those crucial non-visual aspects, like creaky floors, super-fast internet speed, and neighborhood dynamics. Plus, you’ll be able to ask questions and get an insider’s perspective on what’s so great about the home.

For sellers, if your agent recommends using a virtual tour to market your home, you could attract more buyers.2 And you can be sure that those interested buyers are still getting the up-close and personal look inside your home that will inspire their strongest offers.

 

SECRET #3: Virtual Is Just The First Step To Safe Home Sales

Even as government restrictions begin to ease in some areas, virtual tours are still recommended as a safer way to buy and sell real estate.3 Buyers don’t have to worry about exposure to anyone who previously visited the property, and sellers cut down on the foot traffic in their home. Some data even suggest that virtual tours keep agents safer as well, since they’re hosting fewer in-person showings and open houses.4

But despite the variety of virtual tours available, some buyers will still need to visit a home themselves in order to feel confident enough to submit an offer. In this situation, listing agents and sellers will work together to come up with a procedure that ensures everyone feels safe and comfortable. Some recommendations include requiring interested buyers to present a pre-qualification letter, conducting tours only by appointment and with essential parties, and asking buyers to self-disclose whether they have COVID-19 or exhibit any symptoms.3

The day of the in-person tour, agents might ask buyers to remain in their vehicle until they arrive at the property, and to wear protective gear such as face coverings and gloves. Many will provide hand sanitizer and will ask buyers to refrain from touching any surfaces in the home. Instead, the agent (or seller, prior to the buyers’ arrival) will turn on lights, open doors, and pull back curtains. Then, after everyone has left, the agent will return the home to its original state and disinfect it as needed.3

 

SECRET #4: The Speed of Closing Depends on Your Goals

Though maybe not literally, virtual tours are opening doors for both buyers and sellers in terms of options available to them. In 2019, buyers viewed an average of 10 homes over a period of 10 weeks before submitting an offer.5 But thanks to an increased prevalence of virtual tours saving them driving time, they’re able to peek inside that number of homes in a much shorter period to make their final choice.

With all this viewing activity, it makes sense that sellers whose listings feature virtual tours are receiving more offers on their properties. According to one study, virtual tours can add between two and three percent to the sales price of a home, in part because increased buyer interest has made sellers feel confident waiting for the exact right offer.2

So if you’re a buyer luxuriating in viewing homes from your couch, just remember that you’re not alone in your search. Your competition is virtually viewing the same properties you are, so it’s still important to work with your real estate agent to quickly submit a strong offer when you find the home of your dreams. And for sellers, if a speedy sale is important to you, carefully weigh that against the temptation to entertain more and more offers, which can keep your home on the market up to six percent longer.2 Your agent can help you decide the right strategy for your priorities.

 

SECRET #5: Virtual May Not Always Be the Right Choice

Creating, editing, uploading, and marketing virtual tours for a listing can be pricey. Packages through popular 3D imaging platforms like Matterport and Immoviewers can cost hundreds of dollars on their own.6 Virtual staging will further bloat a listing’s marketing budget, and then there’s the advertising dollars needed. Even seemingly inexpensive options like video call walkthroughs still require time and energy on behalf of both the seller and agent.

These costs mean that a full virtual tour package might not always be the right choice for sellers. When you talk to your agent about marketing your home, it may be that an elaborate virtual tour, showing, and open house just don’t make sense. It could be that your potential buyers may not resonate with that type of marketing, that the investment-to-return ratio isn’t in your favor, or that there are more effective ways to get your listing seen by qualified buyers.

Buyers, you may notice that some listings within your search parameters don’t offer virtual tours. That’s because those for-sale homes might not have needed a full virtual marketing package to entice buyers to submit offers, or those homes are better marketed through more traditional tactics. Don’t close the door on your dream home because it doesn’t have virtual events and features. Stay open-minded so you can consider the wealth of home options that fit your lifestyle, needs, and budget.

 

ARE VIRTUAL HOME TOURS IN YOUR FUTURE?

As technology develops, it will become easier and cheaper to create virtual tours. Coupled with the high demand for them, this means that virtual tour options are likely not only here to stay, but will continue to grow into a common addition to listings.

If buying or selling a home is on your mind, I’d be happy to discuss how virtual tours can play a part in your real estate experience. Reach out to me today for help finding local homes for sale that have virtual tours, or to chat about if adding a virtual tour to your upcoming listing is the right fit.

 

Sources:

  1. Rocket Mortgage – https://www.rocketmortgage.com/learn/evolution-of-home-showings-during-covid-19
  2. Radio Iowa – https://www.radioiowa.com/2020/07/28/trying-to-sell-a-house-ui-study-finds-virtual-tours-will-bring-more/
  3. NAR Showing Guidance During Reopening – https://cdn.nar.realtor/sites/default/files/documents/Showing-Guidance-During-COVID-05-14-2020.pdf
  4. NAR 2020 Member Safety Report – https://cdn.nar.realtor/sites/default/files/documents/2020-member-safety-report-08-31-2020.pdf
  5. NAR 2019 Profile of Home Buyers and Sellers – https://cdn.nar.realtor/sites/default/files/documents/2019-profile-of-home-buyers-and-sellers-highlights-11-21-2019.pdf
  6. Realtor.com – https://www.realtor.com/advice/sell/how-to-host-virtual-home-tours-almost-as-good-as-the-real-thing/

Move-Up vs. Second Home: Which One Is Right For You?

The pandemic has changed the way many of us live, work, and attend school—and those changes have impacted our priorities when it comes to choosing a home.

According to a recent survey by The Harris Poll, 75% of respondents who have begun working remotely would like to continue doing so—and 66% would consider moving if they no longer had to commute as often. Some of the top reasons were to gain a dedicated office space (31%), a larger home (30%), and more rooms overall (29%).1

And now that virtual school has become a reality for many families, that need for additional space has only intensified. A growing number of buyers are choosing homes further from town as they seek out more room and less congestion. In fact, a recent survey found that nearly 40% of urban dwellers had considered leaving the city because of the COVID-19 outbreak.2

But not everyone is permanently sold on suburban or rural life. Instead, some are choosing to purchase a second home as a co-primary residence or frequent getaway. Without the requirements of a five-day commute, many homeowners feel less tethered to their primary residence and are eager for a change of scenery after spending so much time at home.

If you’re feeling cramped in your current space, you’ve probably considered a move. But what type of home would suit you best: a move-up home or a second home? Let’s explore each option to help you determine which one is right for you.

WHY CHOOSE A MOVE-UP HOME?

A move-up home is typically a larger or nicer home. It’s a great choice for families or individuals who simply need more space, a better location, or want features their current home doesn’t offer—like an inground pool, a different floor plan, or a dedicated home office.

Most move-up buyers choose to sell their current home and use the proceeds as a downpayment on their next one. If you’re struggling with a lack of functional or outdoor space in your current home, a move-up home can greatly improve your everyday life. And with mortgage rates at their lowest level in history, you may be surprised how much home you can afford to buy without increasing your monthly payment.3,4

To learn more about mortgage rates, contact me for a free copy of my recent report!
“Lowest Mortgage Rates in History: What It Means for Homeowners and Buyers”

One major benefit of choosing a move-up home is that you can typically afford a nicer place if you spend your entire budget on one property. However, if you’re longing for that vacation vibe, a second home may be a better choice for you.

WHY CHOOSE A SECOND HOME?

Once reserved for the ultra-wealthy, second homes have become more mainstream. Home sales are surging in many resort and bedroom communities as city dwellers search for a place to escape the crowds and quarantine in comfort.5 And with air travel on hold for many families, some are channeling their vacation budgets into vacation homes that can be utilized throughout the year.

A second home can also be a good option if you’re preparing for retirement. By purchasing your retirement home now, you can lock in a low-interest rate, start paying down the mortgage and begin enjoying the perks of retirement living while you’re still fit and active. Plus, it’s easier to qualify for a mortgage while you’re employed, although you may be charged a slightly higher interest rate than on a primary home loan.6

One advantage of choosing a second home is that you can offset a portion of the costs—and in some cases turn a profit—by renting it out on a platform like Airbnb or Vrbo. However, be sure to consult with a real estate professional or rental management company to get a realistic sense of the property’s true income potential.

WHICH ONE IS RIGHT FOR ME?

You may read this and think: I’d really like both a move-up home AND a second home! But if you’re dealing with a limited budget (aren’t we all?), you’ll probably need to make a choice. These three tactics can help you decide which option is right for you.

  1. Determine Your Time and Financial Budget

You may meet the bank’s qualifications to purchase a home, but do you have the time, energy, and financial resources to maintain it? This is an important question to ask yourself, no matter what type of home you choose.

Most buyers realize that a second home will mean double mortgages, utilities, taxes, and insurance. But consider all the extra time and expense that goes into maintaining two properties. Two lawns to mow. Two houses to clean. Two sets of systems and appliances that can malfunction. Second homes aren’t always a vacation. Make sure you’re prepared for the labor and carrying costs that go into maintaining another residence.

Of course, some move-up homes require more work than a second home. For example, if your move-up option is a major fixer-upper, you’ll probably invest more energy and capital than you would on a small vacation condo by the beach. Have an honest discussion about how much time and money you want to spend on your new property. Would a move-up home or a second home be a better fit given your parameters?

  1. Rank Your Priorities

If you’re still undecided, make a wish list of the characteristics you’d like in your new home. Then rank each item from most to least important. This exercise can help you determine your “must-have” features—and which ones you may need to sacrifice or delay. Here’s a sample to help you get started:

# FEATURE
Dedicated home office
Extra bedroom
Pool
Walk to the beach
Big backyard
Close to friends and family
Short commute to the office
Investment potential
  1. Explore Your Options

Once you’ve determined your parameters and priorities, it’s time to begin your home search.

If you’re still not sure whether a move-up home or a second home is right for you, I can help.

Contact me to schedule a free consultation. We’ll discuss your options and help you assess the pros and cons of each, given your unique circumstances.

We can also send you property listings for both move-up homes and second homes within your budget so you can better envision each scenario. Sometimes, viewing listings of homes that meet your criteria can make the decision clear.

LET’S GET MOVING

Whether you’re ready to make a move or need help weighing your options, I’d love to help. I can determine your current home’s value and show you local properties that fit within your budget. Or, if your heart is set on a second home in another market, I can refer you to an agent in your dream locale. Contact me today to schedule a free, no-obligation consultation!

Sources:

  1. Zillow –
    https://www.zillow.com/research/coronavirus-remote-work-suburbs-27046/
  2. The Harris Poll –
    https://theharrispoll.com/should-you-flee-your-city-almost-40-have-considered-it-during-the-pandemic/
  3. MarketWatch –
    https://www.marketwatch.com/story/mortgage-rates-keeping-falling-so-will-they-finally-drop-to-0-2020-08-13
  4. Toronto Star –
    https://www.thestar.com/business/2020/08/07/you-can-get-a-fixed-rate-as-low-as-184-per-cent-which-is-unbelievable-low-mortgage-rates-driving-up-home-prices.html
  5. Kiplinger –
    https://www.kiplinger.com/real-estate/buying-a-home/601091/timely-reasons-to-buy-a-vacation-home
  6. The Press-Enterprise –
    https://www.pe.com/2018/11/17/5-tips-on-when-should-you-buy-a-retirement-house-hint-before-you-quit-work/

Three-quarters of all couples fight during the homebuying process

According to a new Zillow survey conducted by The Harris Poll, a whopping 77 percent of U.S. homebuyers and 71 percent of U.S. homesellers admitted to fighting with a loved one during the stressful process in the past 10 years.

“We know buying and selling a home can be taxing, but now we know those stressors can cause friction in a relationship,” Amanda Pendleton, Zillow lifestyle expert, said in a statement on Thursday.

Arguments about the homebuying process tended to be about the size or style of home, with 54 percent of couples disagreeing over these questions. When it came to “must-haves” and “deal breakers,” 47 percent of couples clashed over these features.

Behind those arguments, 42 percent of couples fought most frequently over the location or neighborhood of their potential new home, according to the survey results. Another 37 percent of couples reported fighting over their budget and 29 percent disagreed about whether or not to purchase a fixer-upper. Approximately 25 percent of couples argued over mortgage lenders or products, however.

As for homesellers, age seemed to make a significant difference on how likely it was for a couple to argue. Millennials, for instance, were much more likely to argue with a significant other about selling a home — with 85 percent arguing over the transaction — than the 54 percent of baby boomers who argued with loved ones over the process.

“Life experience — and a higher likelihood of being a repeat seller — may help couples weather the tension that can come with a home sale,” Zillow’s study states.

Financial decisions during the home sale were also a significant source of conflict among couples, with 69 percent arguing over either what price to list the home for, whether to drop the price or whether or not to accept an offer.

Other lesser sources of conflict for selling couples were whether to allow anyone to walk through the home during an open house (24 percent argued), whether or not to make repairs (24 percent argued), maintaining a clean house for showings (23 percent argued) and general uncertainty over whether or not the house would sell (21 percent argued).

In June 2019, Zillow also determined in a separate study that 36 percent of home sellers cry at some point during the sale and, overall, are more stressed by selling their home than planning a wedding, becoming a parent or getting fired.

From an Inmam article by staff writer Lillian Dickerson published February 13, 2020

The Psychology of a Homebuyer

Buying a home is likely the most important and largest emotional purchase you will make. According to a survey conducted in 2018, about 40 percent of Americans go as far as to call home buying “the most stressful event in modern life.” Buyers shouldn’t beat themselves up for getting emotional.

While data is helpful when buying or selling properties, buyers and sellers cannot ignore the x-factor of human emotion…the variable that could have the most significant impact on the outcome. This is where a competent realtor can bring real value to the real estate process via a human connection, guidance, and counsel. Effectively combining data-driven metrics and emotion will help lead to happier homeowners.

Don’t resist getting emotional. But rather, I would encourage you to harness your emotions and weigh them carefully in concert with the data and facts. Preparation and planning are key for entering into the real estate marketplace. If you have an excited yet thoughtful approach with realistic expectations you can be on the lookout for the emotional triggers that can derail an otherwise positive homebuying experience.

First and foremost, buyers should be self-aware of their own potential emotional triggers. And, look to the mistakes many of their peers have already made. What are the stressors and triggers that may create an emotional response while buying a home? Here are some psychological traits of the typical home buyer.

Tightwad-ism: I probably made up that word. I’ve seen it plenty, where buyers will become paralyzed by the idea that they must get a good deal. Or, at least, “feel” like they are getting a deal. Some even make sport of it. Pricing intelligently takes data and experience. However, the feeling of being miserly can lead you to “low-ball” or make offers that are unrealistic, not supported by data, and frankly…are insulting to a seller. Be smart, do your homework, listen to your agent, know the value of the area and the home you are buying. Don’t second guess yourself if the seller quickly accepts your offer and you feel like you could’ve gotten a better deal. Trust the process and be at peace with the outcome. Don’t be “that guy.”

Nostalgia: Go to any home search website and you’d be hard-pressed to find a search option that allows for emotion. You can’t enter “nostalgia” or “childhood memories” or “romantic kitchen tiles from Italy that remind me of my spouse.” There’s no algorithm for humanity.

There have been multiple times when my clients have gone into a home and ended up buying, or not buying, not because it was a good price or a great neighborhood, but because they simply “had a feeling” or the house “had the right vibe.” It turns out that 80 percent of buyers know the moment they step in the door. Price, square footage, location…all that can be trumped by the visceral reaction of seeing a home. Colors, lighting, views, temperature, smells, and sounds you can hear inside or from the outside — you might not be aware of them, but they can have an influence. A study showed that 44% of home buyers spent more on a home because they “really liked it.”

Perfection: Sorry, it’s a myth. There is no perfect house. On the remote chance that you think you found perfection, the emotional attachment will sometimes become so high that you will overpay or overextend yourselves financially. Consider your exit strategy for when you buy to avoid losing money when you sell. The average time a homeowner stays in a home is 5-7 years. There is definite value over time for the enjoyment and use of the home, but that number is slight when compared to the total investment. Don’t be the guy who says, “the data says this, the data says that…blah blah blah.” It matters. As bad as these decisions can be in the long run, when it’s time to sell, this is where that earlier emotion will really wreak havoc.

Another consideration of perceived perfection is the trade-off for perfection. One of the biggest trade-offs is commuting. Yeah, the house is great but the commute sucks. It’s so easy to get caught up in comparing the physical features of the places you’re looking at but you should really stop to consider how the places you’re considering will shape your overall quality of life. It’s not just about the home. When buyers are considering a purchase, they’re purchasing a lifestyle, too!

Competition: A consequence of finding that perfect house is that others also see this house as the perfect house. The entire spectrum of emotions of the home search process will come alive when getting caught up in a multiple offer situation. Your inner warrior will rear its ugly head. You’ll say, “This is my house. I deserve this house and you’re going get it – at all costs!” Emotions jump through the roof when you feel the pressure of competition. Remind yourself that you need to stick to your plan. If you end up unsuccessful in getting your offer accepted on this perfect house, plan on going through the five stages of grief. You experience denial, anger, bargaining, depression, and acceptance as part of the framework that makes up our learning to live with the fact that you lost this house. The bad news is that you might have to relive this same cycle again. Sorry. The best advice here… you need to get back on the horse that bucked you and start looking for the next perfect house. And, do not feel guilty for making us agents chase around for days on end or think you have to please us by buying. That’s foolish.

Infatuation: Remember when you met someone and you “fell-in-love” at first sight? How did that work out for you? Maybe you dumped them after the second date. Or, quite possibly, you ended up marrying them and have been happily married ever since. Sometimes the perfect property will be the first one you look at! I’ve seen it happen. Don’t artificially rule it out. However, buyers can make the mistake of falling in love with a property after a first visit. It is likely to happen with homes that are professionally staged to elicit that kind of response. This isn’t inherently wrong. But, be sure before you proceed that you do your necessary due diligence.

Expectations: Like any emotional transaction, real estate can be extremely unpredictable. I often hear clients tell me that they simply want a three-bedroom with a big kitchen in a certain neighborhood because of x,y,z. But, reading between the lines, I know that what they really want is a certain aesthetic that exists in various shapes and forms well outside of their “desired location.” What they think they want isn’t really what they want.

Be prepared to go beyond your own preconceived notions. It’s not so surprising to see how many people buy exactly what they don’t want in the end.

Media: Facebook, Instagram, Pinterest, Snapchat, HGTV — all very popular forums. What these mediums have in common is they are places to host shared connections, deliver social proofing, and foster endless imagination. Trending ideas on any of these platforms is powerful. They can be an integral part of turning the emotional x-factor into an actionable home buying motivation.

Don’t forget about the influence of blogs, articles, government reports, and news stories swirling around issues on the economy, interest rates, and housing.

One of the biggest irrational fears just may be related to the upcoming presidential election. How might that affect housing? We will be treated with nonstop hysteria, rumors, and hype. What we’ve seen historically in the late summer months of an election year is a pause in the market. That doesn’t mean that buyers are not going to purchase. It just means that they are pausing with the perception of uncertainty. Perception is reality. The market wants to see what will happen on election day. Ironically, what happens is that 2-3-weeks following election day these same buyers and sellers will return to the market, saying, “nothing major changed, let’s keep on going.” Data tells us that elections usually have little lasting effects on the housing market. It’s a mental thing that both buyers and sellers go through. It requires a type of emotional processing that the market has to deal with.

Family: When buying a home, ask for advice from friends and family. There could things that your family sees that you can’t or won’t. Having a second opinion or a second set of eyes can be very helpful. Moreover, if you have friends or family members who have recently bought a home, they may have some pointers on how they did it. This advice comes with a caveat.

A major point of contention can be how involved the parents are going to be during the buying process and throughout ownership. It is important to develop a plan before you start shopping — and leave the family drama out of it. It’s all about the control factor and who gets to call the shots. Soliciting advice is good practice. Ultimately, you will be the homeowner. You need to take the lead and make the final decisions that are best for your own interests. It’s best to talk it out prior to sinking time into home shopping. Trust me, a home inspection is not an appropriate place for a family feud.

Money: General money management and having enough money for a competitive down payment can be stressful. This is especially true for newlyweds who are just starting to figure this out as a couple. A strong argument can be made that renters would be better off as buyers. In most cases, making a mortgage payment is cheaper than paying the monthly rent. But renters are having trouble getting over one specific roadblock to homeownership. That hump is the down payment.

In 2014, some 70 percent of overall consumers say they didn’t know that low down payment programs are available for middle-income homebuyers in their community and 73 percent of Millennials say they were unaware of lower down-payment options. Five years later, a survey found 31 percent of Millennial buyers said they used first-time homebuyer assistance to augment their first home—more than any other source of assistance, including a second job, living with parents or withdrawal from a retirement fund.

In early January, Freddie Mac launched a new, free, online homeownership education course called CreditSmart® Homebuyer U. It offers six educational modules, each focused on a critical learning principle relating to money management, credit, getting a mortgage, the home buying process and preserving homeownership. The goal of this exceptional program is to empower those who are pursuing the dream of homeownership with the knowledge to make informed, responsible decisions.

Added tension can come in the form of closing costs. What are they? These are additional fees on top of the down payment and sales price of a home. It is important to consider closing costs in the financial equation since they may be added or negotiated with your upfront cash requirement. The two biggest costs you experience when buying a home are the costs to acquire the loan and the title fees. A good rule of thumb is to anticipate 1% of the sale price will be needed for closing costs.

Other closing costs are the appraisal fee, which will come out of pocket and won’t be wrapped into the loan. Also, the inspection fees are out of pocket and not rolled into the loan.

Timing: Buying and selling at the same time is an increasingly real proposition that home sellers face, especially in a market that favors sellers. You say, “sure, I can sell my home, but what do I do after that? I don’t want to be homeless!” The fear is palpable. Whenever you face the proposition that your current home will sell quickly, make sure you have an exit plan with contingencies already built-in and accounted for. You may need to move twice. You may even need to temporarily stay with family. In the grand picture, it’s not the end of the world. In fact, it just might empower and position you to be a more effective and confident buyer.

Readiness: Am I ready? The process can be anxiety-ridden. Ultimately, you may not be ready and homeownership. There are legitimate questions and reservations you might hold – real or perceived.

  • Do I have enough for my down payment?
  • Will interest rates be better if I wait?
  • Can I even afford the monthly payments?
  • What if I lose my job?
  • Should I wait for a buyer’s market?
  • Am I willing to do the required maintenance?

The biggest worry home buyers have is that they’ll discover something is wrong with the home after they buy it. In reality, there are simple answers to these questions. But some first-time homebuyers get so consumed by them that they feel anxious and overwhelmed at the mere thought of trying to make sense of them all.

Home buying can be exciting! If you are in a good place in terms of your emotional wellness, roll up your sleeves and get after it! If you are living on pins and needles and continue to suffer through sleepless nights you may not be ready. Your emotional meter must be strong. Your data should be sound, but don’t be a slave to only the numbers. Your best approach when buying or selling is two-fold: a healthy dose of data-driven metrics and emotional wellness.

Happy shopping!

The Top 4 Deals Killers For Homebuyers

Falling in love is exhilarating. It can also be a bit scary, especially when a home has captured your heart. What if something goes wrong and you end up not spending the rest of your life with this stack of brick and mortar you’re lusting after?

No matter how careful you are, some deal killers are unavoidable. Others, however, are preventable, so pay heed if you hope to keep your deal alive.

1. Don’t Mess with Your Mortgage Preapproval

A common reason for a real estate deal to fall apart is that many homebuyers don’t fully understand the mortgage process. Sure, you may get a loan preapproval, but don’t think for one minute that this guarantees you will get the loan. It doesn’t.
Here’s what happens after you receive your preapproval letter and decide to move forward with the purchase. The lender will start your file, give you a list of paperwork required, order an appraisal and credit reports, verify your employment and income, and more.

The file is then sent to the processor who will review all of your information as well as the appraisal. He or she will then put together a package of all pertinent information to be sent to the underwriter.

The underwriter is the person who ultimately determines whether or not you are an acceptable credit risk. He or she will assess your ability to repay the loan, your credit, and the collateral used to secure the mortgage – in this case the collateral is the home. Then, just before funding the loan, the underwriter will perform what is known as a “soft pull” of your credit information to see if anything has changed.

This is the point where many borrowers run afoul. If you hope to keep your purchase alive, don’t do anything – from application to closing – that might change your financial picture and sabotage your final approval. This means no shopping on credit for appliances, furniture or anything else. Don’t switch jobs, fall behind on your bills, co-sign a loan for anyone, or in any way reduce the income stated on your application.

2. Read Homeowners Association Documents Carefully

When you purchase a home in a managed community governed by a homeowners association (HOA), you’ll be given a mountain of paperwork to read and approve. Because there may be deal killers included in the fine print, it’s important to get to this task immediately upon receipt of the documents.

Look for any information about liens against the property; current litigation against the HOA, the builder, or the developer; and any red flags in the HOA budget. Since these documents aren’t easy to read and understand, it is worth the money you’ll spend to have your attorney look them over and advise you of any potential deal killers lurking within.

While the aforementioned HOA problems could potentially derail the deal, it’s better to have it happen upfront rather than when you’re further along in the process.

3. Home Inspection Problems

All homes – even newly constructed ones – may have problems. Going into the process not fully understanding this can set you up for a failed real estate deal. Sure, you ideally want to find a home that was owned by Mr. or Mrs. Clean who conscientiously took care of it during their entire ownership, but those are few and far between, and seeking them out is unrealistic.

Set your sites on finding a home that has small, easy-to-fix problems, and don’t freak out if some are worse than others. In other words, when considering making an offer, laugh at the loose doorknob but negotiate when it comes to water damage or worse.

The nitpicky homebuyer, who plans on nickel and diming the homeowner into replacing missing switch plates and dripping faucets, is the picture of a deal-breaker-in-the-making. Sure, in a buyer’s market you may get away with minor demands. In a seller’s market, however, there is always a cleaner offer right behind yours.

4. Budgeting Blunders

The real estate industry does a bang-up job of reminding homebuyers that they’ll need a down payment – typically from 3 percent to 20 percent of the total loan amount – when they purchase a home. What they often fail to inform real estate consumers about are the loan’s closing costs – the money you will be required to pay before the house is yours. This is most likely because closing costs are a little harder to pin down. They vary wildly and depend on the type of loan, the amount of the down payment, and a host of other factors.

Unfortunately, this lack of information frequently causes real estate deals to disintegrate. To avoid this particular problem, pay attention to all communications from your lender.

First, you will receive a form called a Loan Estimate. Look this over carefully to ensure that everything your lender agreed to is included. Pay close attention to the “Calculating Cash to Close” section, which concludes with an estimated cost to close the loan. Remember, this is an estimate and the amount may go higher or lower in the end. Speak with the lender if you find any problems here, especially if it will be impossible for you to come up with this money.

Just before closing you will receive the “Closing Disclosure,” which is quite similar to the estimate, but these figures are final. Again, review the “Cash to Close” figure.

By and large, real estate deals conclude successfully. Typically, it all comes down to the experience of your agent. Choose wisely and you’ll avoid the common pitfalls that can derail transactions. For a smooth, low-stress real estate transaction, slow down, keep your expectations realistic and heed the advice of your real estate agent or attorney.