GREAT QUESTION! AND, A VERY COMMON QUESTION.

You find a home to buy and you wonder, should I offer the full list price, should I come in low or just what should I do?!

Today I’m going to tell you how to crack the code on knowing just how much money you’ll offer the Seller for the home they’re selling. We’ll be analyzing the local Real Estate market where the home resides, how close to perfection is the home you want to buy, what type of Buyer representation do you have and is time on your side, to name a few. Once you understand and recognize these circumstances you’ll be well equipped to be on your way to buying a home in Coral Springs or neighboring southeast Florida cities or anywhere in this great nation, for that matter! This will affect all first time home Buyers or the experienced home Buyer alike.

We can crack the code by answering the questions below. Our answers will reveal how much money you will offer to buy the home.

What Is The Home’s Value?

This is the first thing you must know in order to know how much money to offer on the home you’re considering buying. To begin, what have nearby homes sold for in the last 3 months or perhaps even having to go out to 6 months ago? Such homes will determine the value of the home you want to buy. This is where you’ll value the hiring of a Buyer’s Real Estate Agent who will guide you with their expertise. A Buyer’s Agent represents you and not the Seller and they’re able to dig in to see the particulars of the homes that have sold in the recent past within close proximity to the home you’re considering buying. From these homes that have sold, how do they compare to the home you’re considering buying? You’ll compare their features, condition and location. From the comparable homes, your Agent will be able to determine a fair market value for the home you like. This is your starting point from which your offer will be considered. An ideal situation will be fulfilled when the Listing Agent for the home Seller knows how to price homes to sell and the value your Buyer’s Agent comes up with will be in line with the list price. Unfortunately, we aren’t always fortunate to stumble upon ideal home buying price circumstances and this will be another area where you will most certainly benefit from the use of a skilled Buyer’s Agent.

What Does Seller’s Realtor Reveal About The Home?

Try to discover any desperation from Seller. If the Seller’s Agent is present at any of the home showings, your Realtor can cross examine to discover the reasons why the Seller is moving. His or her answer may reveal desperation. Desperation can mean savings to you. You really don’t want your Realtor to cross examine the Seller’s Agent, yet I wanted you to understand the value that can come from this when you hire an Agent to represent you who is talented at unearthing such valuable details.

Are You Wild About The Home?

Whether it’s the first home you’ve fallen in love with or the second, third or more, your feelings of overwhelming joy can most certainly have an effect on the price you are willing to pay for a home.

Overwhelming joy can keep you awake at night envisioning yourself in this new home that would be just perfect, you imagine. Oh, if you can only get this home, you think, your life will be perfect!

If you’re wild about the home, don’t learn the hard way by losing the home you love to another Buyer, because you thought you’d lowball the Seller. By determining the home’s value as discussed above, you should have a good idea of where your offer should be and are you really willing to risk what you love for your lowball offer? In fact, depending upon your local Real Estate market, your love of the home and any other interested Buyers, it could warrant an offer above fair market value. Yes, that’s correct. This is commonplace in a Seller’s market when homes are priced right and there are several Buyers vying for the same home; there aren’t enough homes to satisfy the wants and needs of home Buyers.

A desperate Seller means that you could possibly consider an offer to them that is below what they’re asking or below fair market value. However, keep in mind that a Seller’s desperation is not the sole factor in determining an offering price as your very own desperation may also come into play as discussed below.

What Is Your Moving Timeline?

Do you have all the time in the world or is your clock ticking? Perhaps you’re just starting to look for a home and you aren’t in a rush, as you don’t want to have regrets and want to avoid the horror’s of home buying pitfalls that you’ve likely read all about.

If you’re not in a rush then you likely may be afforded the opportunity to save on your home purchase. It isn’t a guarantee that you’ll save if the Seller is looking for a fair value for their home, yet if you’re willing to risk the home because your clock isn’t ticking, then you may win the prize of paying a bit less than a home’s value, if you’re willing to risk losing the home to another Buyer or an outright Seller rejection of your offer. You’ll find this strategy can work for you as a home Buyer if the Seller is on the flip side of a coin in that their clock may be ticking and need to sell.

What if the other scenario holds true for you and your clock is ticking and need to find a home to buy now?! You’re going to have to rely on your Realtor to provide you with the details of the home’s value as discussed above, in order to make sure your offer is fair market value so you have a good chance of the Seller accepting your offer. Yet, what happens if the Seller’s vision of their home’s value is way above market value, you love the home and your clock is ticking? In other words, the home’s list price is above market value. Then you forget this home and go on to the next home, unless your Realtor can discover that the Seller is indeed willing to negotiate down to market value or a market value offer on your part would be considered by the Seller. If not, it is time to search for a new home as time isn’t on your side.

What Loan Amount Have You Been Pre Approved For A Mortgage, If Financing Your Purchase?

This is pretty simple. If you’ve been pre approved for a mortgage at $325,000, then you cannot offer more than what the Pre Approval letter states. Your Pre Approval letter lets the Seller know that you’re well qualified to buy their home for a set dollar amount: Pre Approval letters are a powerful tool when buying a home.

Wrap Up

Now that you know the answers to the questions above, you’re able to determine the right offer price, you’ve cracked the code! From a low offer starting point, to right on the money, to sometimes above the asking list price, your answers will make the decision for you – it will crack the code.

As you can see, there are many factors that you need to consider in order to determine what is the ideal offering price for buying a home. To know how much money to offer, you’ll need to prioritize all of these factors, which will then ultimately decide for you. You’ll answer your question; How much money do I offer when buying a home?

Book an appointment now to learn more about specific tips for buying a home and how much money do I offer, in Southeast  PA? Call/Text Bob at 215-266-7137 or email Bob at BobDowns@Remax.net

You’ll find Bob selling homes in Southeast Pennsylvania the cities of West Chester, Chadds Ford, Kennet Square, Malvern, Audubon, Exton, Phoenixville, Pottstown, Downingtown, Norristown, Valley Forge, Devon, King of Prussia, Oaks areas within Chester, Delaware and Montgomery counties.

Bob Downs, a licensed Pennsylvania  Real Estate Agent serving Southeast Pennsylvania for over 2 years. Remax Action Associates. Real Estate Promises Delivered. You can speak with Bob calling/texting him at 215-266-7137 or you can email him at: BobDowns@Remax.net if you need to buy or sell a Southeast Pennsylvania home. Your local, trusted professional when it’s time to buy or sell a home.

How strong is your credit? Cleaning up your credit is essential before you make any major financial moves. Having a bad score can hurt your chances of being able to open a credit card, apply for a loan, purchase a car, or rent an apartment.

It is especially important to have clean credit before you try to buy a home. With a less-than-great score, you may not get preapproved for a mortgage. If you can’t get a mortgage, you may only be able to buy a home if you can make an all-cash offer.

Or if you do get preapproval, you might get a higher mortgage rate, which can be a huge added expense. For example, if you have a 30-year fixed rate mortgage of $100,000 and you get a 3.92% interest rate, the total cost of your mortgage will be $170,213. However, if your interest rate is 5.92%, you’ll have to spend $213,990 for the same mortgage  – that’s an extra $43,777 over the life of the loan! If you had secured the lower mortgage rate, you could use that additional money to fund a four-year college degree at a public university.

So now that you know how important it is to maintain a good credit score, how do you start cleaning up your credit? Here, we’ve collected our best tips for improving your score.

Talk to a loan professional

You can protect your score from more damage by getting a loan professional to check your credit score for you. A professional will be able to guide you to whether your score is in the ‘good’ range for home buying. Plus, every time that you request your own credit score, the credit companies record the inquiry, which can lower your score. Having a professional ask instead ensures that you only record one inquiry. Once you know your score, you can start taking action on cleaning up your credit.

Change your financial habits to boost your score

What if your score has been damaged by late payments or delinquent accounts? You can start repairing the damage quickly by taking charge of your debts. For example, your payment history makes up 35% of your score according to myFICO. If you begin to pay your bills in full before they are due, and make regular payments to owed debts, your score can improve within a few months.

Amounts owed are 30% of your FICO score. What matters in this instance is the percentage of credit that you’re currently using. For example, if you have a $5000 limit on one credit card, and you’re carrying a balance of $4500, that means 90% of your available credit is used up by that balance. You can improve your score by reducing that balance to free up some of your available credit.

Length of credit history counts for 15% of your FICO score. If you’re trying to reduce debt by eliminating your credit cards, shred the card but DO NOT close the account. Keep the old accounts open without using them to maintain your credit history and available credit.

Find and correct mistakes on your credit report

How common are credit report mistakes? Inaccuracies are rampant. In a 2012 study by the Federal Trade Commission, one in five people identified at least one error on their credit report. In their 2015 follow-up study, almost 70% thought that at least one piece of previously disputed information was still inaccurate.

Go through each section of your report systematically, and take notes about anything that needs to be corrected.

Your personal information

Start with the basics: often overlooked, one small incorrect personal detail like an incorrect address can accidently lower your score. So, before you look at any other part of your report, check all of these personal details:

●Make sure your name, address, social security number and birthdate are current and correct.

●Are your prior addresses correct? You’ll need to make sure that they’re right if you haven’t lived at your current address for very long.

●Is your employment information up to date? Are the details of your past employers also right?

●Is your marital status correct? Sometimes a former spouse will come up listed as your current spouse.

Your public records

This section will list things like lawsuits, tax liens, judgments, and bankruptcies. If you have any of these in your report, make sure that they are listed correctly and actually belong to you.

A bankruptcy filed by a spouse or ex-spouse should not be on your report if you didn’t file it. There shouldn’t be any lawsuits or judgments older than seven years, or that were entered after the statute of limitations, on your report.  Are there tax liens that you paid off that are still listed as unpaid, or that are more than seven years old? Those all need to go.

Your credit accounts

This section will list any records about your commingled accounts, credit cards, loans, and debts. As you read through this section, make sure that any debts are actually yours.

For example, if you find an outstanding balance for which your spouse is solely responsible, that should be removed from your report. Any debts due to identity theft should also be resolved. If there are accounts that you closed on your report, make sure they’re labeled as ‘closed by consumer’ so that it doesn’t look like the bank closed them.

Your inquiries

Are there any unusual inquiries into your credit listed in this section? An example might be a credit inquiry when you went for a test drive or were comparison shopping at a car dealer. These need to be scrubbed off your report.

Report the dispute to the credit agency

If there are major mistakes, you can take your dispute to the credit agencies. While you could send a letter, it can be much faster to get the ball rolling on resolving a mistake by submitting your report through the credit agency’s website. Experian, Transunion andEquifax all have step-by-step forms to submit reports online.

If you have old information on your report that should have been purged from your records already, such as a debt that has already been paid off or information that is more than 7 years old, you may need to go directly to the lender to resolve the dispute.

Follow up

You must follow up to make sure that any mistakes are scrubbed from your reports. Keep notes about who you speak to and on which dates you contacted them. Check back with all of the credit reporting companies to make sure that your information has been updated. Since all three companies share data with each other, any mistakes should be corrected on all three reports.

If your disputes are still not corrected, you may have to also follow up with the institution that reported the incident in the first place, or a third-party collections agency that is handling it. Then check again with the credit reporting companies to see if your reports have been updated.

If you can keep on top of your credit reports on a regular basis, you won’t have to deal with the headaches of fixing reporting mistakes. You are entitled to a free annual credit report review to make sure all is well with your score. If you make your annual credit review part of your financial fitness routine, you’ll be able to better protect your buying power and potentially save thousands of dollars each year.

How to clean up your credit now

Does your credit score need a boost so you can buy a home? Get in touch with me. I can connect you with the right lending professionals to help you get the guidance you need.

Whether you’re putting your home on the market this year or in the next five years, it is a smart decision to start building your home’s resale value now. Here are some ways to create a comfortable home while making it easier to put more money into your bank account on closing day.

Small Maintenance and Repairs

If you think that home maintenance on the weekends waste your time and energy, think again. The small chores you do around your home prevents it from losing value. Neglecting small maintenance and repairs causes 10% of your home’s value to walk out your door and slip through your windows. Most appraisers claim that homes showing little to no preventative maintenance can depreciate from $15,000 to $20,000.

A study conducted by researchers at the University of Connecticut and Syracuse University shows that regular maintenance boosts your home value by about 1% per year. However, ongoing maintenance costs offset that value, which means that regular maintenance actually slows down your rate of depreciation. Furthermore, because homebuyers generally notice any repairs needed upon buying a new home, proactive maintenance lets the homebuyer know that he or she will not have to spend extra money to maintain the basics. This makes your home more attractive, and thus more likely to get higher priced offers.

Maintaining the basics can cost you little money and certainly some effort, but there’s a way to accomplish this very important activity smartly. This article by HouseLogic, for example, shows you how to keep home maintenance below $300 a year.  Planning ahead will also help make maintaining your home easier. Most professional appraisers and real estate agents recommend a proactive maintenance schedule that includes:

• Keeping enough cash on hand to replace systems and materials
• Creating and following a maintenance schedule
• Planning a room redo every year
• Keeping a notebook of all your maintenance and repairs

Landscaping

The Virginia Cooperative Extension at Virginia Tech published a study that shows landscaping can increase a home’s value by 15%.  The study claims that a home valued at $150,000 could increase its value between $8,300 and $19,000 with the addition of landscaping. Particular landscape elements add different value. For instance, landscape design can increase your home’s value by 42%, plant size can increase your home’s value by 32%, and diversity in plants can increase your home’s value by 22%.

Replace Entrance Doors

If your entry doors are wood, consider switching them out for either fiberglass or steel doors. Steel doors add style and architectural interest to your home while improving security; you can add a deadbolt and electronic keypads to keep out intruders. Unlike wood doors, steel doors do not rot or splinter.

Alternatively, fiberglass doors can be designed to look like wood doors and give your home a modern look. Fiberglass doors conserve more energy than steel doors.

Pricewise, a steel door will cost you $1,335 with a 91% return on investment whereas a fiberglass door will cost you $3,126 with an 82.3% return on investment.

Garage Door Replacement

At first, you might not think that your garage door increases the value of your home. However, your garage door distinguishes your home from the other homes on your block. As the largest entryway of a house, garage doors get noticed first because they’re the focal point of your home. If you want to quickly increase the resale value of your home, you need to make the most of this space.

Some interesting things being done with garage doors include:

• Increased Size: Bigger garage doors help homes stand out more, and homeowners can do more creatively with them.
• Bold Colors: Bright and bold colors now can complement the color of your home, or you can build a concept around the color of your home.
• Faux Wood: You can install fiberglass or steel garage doors that look like wood garage doors. This gives your home a new level of sophistication.
• Windows: Large Windows on your garage door improve the aesthetic of your home, and provide light into your garage so that it’s no longer a dark space.

More importantly, a garage door replacement will cost you $1,652 and add $1,512 to the value of your home; that’s a return on your investment of 91.5%.

Fiberglass Attic Insulation

While energy efficiency is still not the sexiest selling point of your home, installing fiberglass attic insulation saves energy and garners a big payback on your investment. According to Remodeling Magazine’s 2016 Cost vs. Value top trends report, fiberglass attic insulation gained the top return on investment among the 30 projects in this year’s report. Using Remodel/Max as the cost source, a fiberglass attic insulation project cost $1,268 nationwide.  Real estate professionals surveyed estimated that the work would boost the price of a home at resale, within a year of its completion, by $1,482. That’s a 116.9% return on investment.

Replacing Windows

Replacing your windows is another way to save energy and increase your home’s resale value. Replacing your old windows with energy saving models will beautify your home, keep it comfortable, and ease the workload of your HVAC system. According to HGTV, you’ll see a reduction in your utility bill by 7% to 15%. However, if you’re selling your home, you could expect a 60% to 70% recoupment of your investment. The two types of replacement windows that fetch the best return are vinyl and wood.

Remodeling Your Kitchen

Kitchen remodeling can get expensive, but small renovations can make your home more buyer friendly. Changing your kitchen’s texture and color using a matte finish and neutral colors such as putty or grey enhances your home’s resale value. Because matte finishes have transitional qualities, your potential homebuyer can easily match his or her stainless steel or black and white appliances. Also, refinishing cabinetry, or switching to Energy Star™ appliances provide comfort you like and pizazz buyers adore.

Flow is important to any interior design of a home. If you feel that your kitchen hinders a good flow, change it. A small investment to knock out a non-structural wall or remove a kitchen island creates space and provides flow that buyers love.

A minor kitchen remodel can cost you $20,122 while putting $16,716 of resale value into your home; that’s an 83% payback on the project. If you want to do a major kitchen model, this can cost you about $60,000 and put about $39,000 of resale value into your home, which is only about a 65% payback on the project. Therefore, consider a minor kitchen remodel first.

Bathroom Addition or Remodel

Likewise, carefully consider adding a bathroom or remodeling your bathroom. Switching out your frosted glass shower doors for glass doors, cleaning the grout, replacing the shower and floor tiles, switching out your sink or toilet, or replacing your sink and shower fixtures can cost you little money.

Adding a bathroom can get expensive, but it can reduce congestion during hectic times and provide your guests with a bathroom. Consult with your real estate agent or a local appraiser before deciding whether a full remodel or addition is right for your situation. While a bathroom remodel will cost you about $18,000 with a return on investment of about 66%, a bathroom addition will cost you about $42,000 with a return on investment of about 56%. Therefore, it’s best do your due diligence before working on your bathroom.

Your Needs and Buyers’ Wants

On that note, if you need to renovate your home, be sure to consider how those changes will affect its appeal to future buyers. Knowing design trends will give you the opportunity to make changes to your home based on where your needs and your potential buyer’s desires intersect, thus increasing your property’s resale value drastically.

Designers and design websites provide great ideas when you’re brainstorming home renovations. Keep in mind as you research, however, that you don’t want to sacrifice your needs for a comfortable home just for the sake of what you think a future buyer will want!

Therefore, before you begin making any changes to your home, consult your real estate agent. Real estate agents, because we are constantly working with new buyer clients, have insider insight into what home buyers are looking for now and in the future. We’ll be able to help you make smart choices when remodeling or renovating your home.

If you think you might want to remodel or renovate your home in the near future, or if you are just curious about other ways you can increase its resale value

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