real estate

Selling Your Home Privately

August 16, 2016 By Jennifer Clark 3 Comments

Selling your home privately is no easy task, but it can save you thousands of dollars.

When that day comes that you decide to sell your property, whether it be for an investment venture or relocation, you’ll need to decide what route you want to take. Going through a realtor saves some time and energy in determining costs and the like, but it does not save you as much money.

If you’re hoping to turn around a larger profit you may want to cut out the middle man. Here’s what you need to know if you are considering selling your home privately:

Weigh out the pros and cons

Before making any decision, pros and cons need to obviously be weighed out. Ask yourself the following:

Do I have the patience and time to do this?
What is my projected savings? How much do I hope to make from this sale?
Will it be worth my time and energy?

Robert Mischler, of Davidsville, PA, decided to sell his Cape Cod home privately a few years ago. His main reason?

“I wanted to avoid the fees by a realtor,” he said in a phone interview.

For Mischler, he was aware of the challenges he faced and knew it would be worth saving money. By selling privately, you are also able to lower your asking price compared to other homes for sales in the area due to not having the added commission costs. This can make the selling process faster if you’re looking to move things along quickly. You do also have the option of pricing your home similarly and pocketing even more of a commission.

Coming up with a price

As you take this venture on your own, you’ll need to decide how much you’re going to list your house to cost. You could have a third party assess your home and evaluate your property for you but know that this will most likely come at an added expense. A bad habit to avoid is setting a price too high. You may value your home and think it is worth all the money in the world, but you need to have a realistic approach when determining the sale.

Researching your area and the local market will help you work on a fair price. You can also look at the property tax assessment, but do not rely on this fully as many can be outdated. Starting with what you paid for the house is a good start.

Mischler owned his home for close to 10 years before deciding to sell. With a 1.5 story property with 1.5 baths, three small bedrooms that included an above ground pool, a detached garage and a large shed on half an acre, he decided he’d be OK with no capital gains.

“I [chose to sell] it for what I paid for it,” he said. “I made some improvements, but it needed some other things so I figured I broke even.”

Decide what items to leave in the house

When determining your cost, you may want to consider including any furniture or appliances into the overall price. Remember to think about depreciation of any items and whether or not you think including these items will also help your sale. You’ll also need to make it clear what is and is not included with the final sale in the contract with the buyer.

Know the challenges

In addition to showing the house yourself, you will also need to advertise the listing on your own.

You can sell your home privately with no previous experience, but you still need to be aware of the challenges. In fact, Mischler is a registered nurse and had never been involved in real estate before, other than when he actually purchased the home.

“The challenges were finding buyers and knowing what to do when we had a buyer,” Mischler noted of his biggest obstacle in the process.

Another important aspect to keep in mind is advertising. Be aware of your advertising points such as any recent renovations, historic features, location and so on. Realtors take the pain of this off your shoulders, but this will be all up to your now. Get your home show-ready by ensuring it is always clean, well-maintained and creating a homey feel. Take quality photos when using these to market your property and include images of both in and outside of the house.

Mischler used primarily online resources like Zillow and Craigslist. Other low-cost advertising options include online flea market pages, social media and placing a “For Sale” sign outside of your home. It’s amazing how powerful word of mouth is as well. Tell your friends and family and encourage them to share the information with others. You may even want to hang up some flyers locally.

Overall, Mischler estimates it took about six months longer to sell than it would have through a professional. However, he did save roughly $4-5,000 in fees without looking for a profit and mentioned he would do it again.

His final tip is for the buyer:

“A closing specialist is a good help.”

A realtor may come at a cost but does make the process simpler for you while providing expertise. But, with research, diligence, time and energy, you can save money by selling your home privately.

Have you ever sold your home privately before? What was your experience?

Be sure to check back for a follow-up piece on the dangers of selling your home privately.

Saving Money on Your First Home Purchase

June 9, 2016 By Elliot Caleira 1 Comment

Buying a home. It’s a quintessential part of the American Dream and, to this day, still one of the main goals to which millions of Americans aspire. But it is no small decision, and it’s something that takes a great deal of research and preparation to build towards. Buying a house is a difficult process whether it is your first or third time, so you can imagine how daunting it is to try to figure it out yourself without any prior experience.

One of the main things that you are likely concerned about when entering the housing market for the first time is the price. Naturally, you want to keep the costs as low as possible, without sacrificing on the things that are really important to you. Here are some ways to keep the costs down and save money on your first home purchase.

Shop Around for a Good Loan

It is not exactly a thrilling process to visit different banks and lenders to find a good mortgage on a house, but it is one of the most important parts of buying a new house. Don’t be tempted to simply take the first offer that you receive on a loan. Instead make sure that you shop around and be discerning in your final decision. You also need to make sure that you have a realistic budget set aside, for how much you can spare each month without harming your finances seriously.

Know Your Limits

Lenders will decide your loan amount based on your credit and tax information, but occasionally they will approve loans that are slightly above what you can really afford. It is important that you know what you can and cannot afford before you even go to the mortgage lender. You don’t want to end up with a house purchase that is going to put you in severe debt for the rest of your life. For this reason, you need to stick firm to your upper limit. It is also important to remember that, even if you see a good deal on a bigger house, there are things like higher utility costs to take into consideration.

Use a Realtor

You may have heard talk of the web making things so much easier when it comes to buying houses in this modern age. And while, yes, it is definitely a lot easier to buy and sell a house yourself today, it would be a mistake to forgo a realtor altogether. Especially for a first time home purchase, a realtor can lend expertise and knowhow that in invaluable to a novice, not to mention they will do most of the hard work for you. How does paying for a realtor save you money? They are likely to get you a much better deal on a property than you could ever get on your own.

Don’t Limit Your Search

Some people have preconceived ideas about what they want their first house to be like, but sometimes you have to realize that when you are entering the market for the first time you may have to make certain compromises. Of course, there are some things that are essential to each home buyer, so the best technique is to work with your realtor to put together a list of things that you would like (but are not necessarily deal breakers) and a list of your non-negotiables.

Decide What It’s Worth Spending On

This is another thing that your realtor can help you out with. Think about the things that you want out of a house, and which things you are will to pay for. For example, a home inspection and a home warranty are things that you will want to budget for, while extensive renovations might be something that you want to avoid. Again, it comes down to personal preferences, but all of the aforementioned are the kinds of decisions you will want to think about before you choose a house.

Photo: Flickr: reynermedia

Online Real Estate Agents: The Future of Real Estate

February 18, 2016 By Amanda Blankenship 1 Comment

Buying, selling and haggling has moved to the Internet, we all know that too well. With websites like eBay, Amazon and online thrift stores growing in popularity, it seems like you can buy just about anything online. However, it seemed like one market had been left behind when it came to making transactions online: real estate. You can view homes online, but you’ve never been able to make the entire transaction online. Well, that may be changing.

Pretty much any market that required a broker has been taken over by the Internet. This includes paying sizable fees for an agent’s services. However, there are a few companies out there trying to get rid of this “middle man” in real estate.

Allre Inc.

Allre, based in San Diego, is a company that is trying to make real estate easier. Usually buying a home includes house visits, finding a good realtor, negotiations and a number of other steps. It can be stressful. However, Allre has made it possible to make all of the steps available on the Internet from the comfort of your own home. You can complete an entire real estate transaction (selling or buying) without an agent and without even leaving your home.

To sell your home, you simply list it. Each seller is verified and has a note from their bank about selling their property. To buy a home, you have three options: Instabuy, traditional offer or real-time negotiation. Instabuy is like the “one click” buy offered by Amazon. You can click, buy and it is done. A traditional offer gives the buyer an option to offer a number higher or lower than the asking price. The real-time negotiation is a guided negotiation between seller and buyer online. The best part? It is free!

eMoov

Another online real estate company, eMoov, has been making waves in the United Kingdom as far as real estate goes. You can get a free evaluation of your home through the website. You can also post your home for sale. Unlike traditional real estate sales, the website charges a flat fee for all of its customers. You can pay this fee at the point of the sale or prior to selling your home. eMoov has been a leader in helping its customers save money when looking for a home.

Tepilo

Tepilo, available through teplio.com, was a traditional real estate agency to begin with. However, in 2013, it relaunched its services as “online only.” This has a more traditional feel to the online real estate fad. Tepilo has people communicate with real people through their website. They make appointments for phone conversations and email back-and-forth in order to help their customers buy or sell their homes. Tepilo’s customers have left outstanding reviews of the the company’s services and many of them said they’d never go back to a traditional real estate company again.

Technology has changed just about every market out there. Some companies have completely disappeared from their prospective markets. It is likely that this will happen in the world of real estate as well. With more and more people wanting to do their bidding online, more real estate agencies will have to bend to comply with the popular demand.

What do you think? Would you use an online real estate agent?

Photo: Flickr: Mark Moz

Buying a Home in 2016 May Be a Good Idea

January 27, 2016 By Amanda Blankenship 2 Comments

With the housing market the way it has been for the past few years, people have been cautious when it comes to buying a new home. However, 2016 may be the year to buy a new home. A multitude of factors combined are making the conditions right for an up market when it comes to buying a home.

Prices Are Falling

Real estate prices have been high for quite some time now. However, in 2016 the price hikes are expected to slow greatly. The rise in real estate prices is expected to only be 3.5 percent. This will give many people a chance to hop into the buyers market for real estate. This could potentially lead to a high influx of buyers throughout the year. There is potential for the sale of six million homes between April and September, which is unheard of. Although there will be a decrease in price, it won’t be drastic enough for low-income buyers. There will also be places, like New York and San Francisco that will continue to have higher prices.

More Homes Will Hit The Market

It will be a buyers market in 2016. Because of the drop in prices of homes, more people will be listing their homes for sale, giving buyers more of a choice. The number of people putting their homes up for sale will rise and so will the number of new homes. More and more builders will be focusing on starter and middle-range homes in 2016 for people just getting into their first home or possibly even second.

Rates Will Be Higher

Cheap mortgages will be a thing of the past in 2016, but most of the rates will be higher. The Federal Reserve is expecting to increase loan rates soon, so the age of low mortgage prices is coming to an end. The mortgage rates will be rising slowly though, so the earlier in the year you can buy, the better.

Rent Prices Rising

Just because 2016 will be a year that rates will be a bit higher and more homes will be hitting the market, it doesn’t mean any rent rates will be any lower. In fact, rent is supposed to stay about the same if not go up in many parts of the country. Even though many mortgage rates are going to rise, buying a home may still be the better deal. Of course, buying a home is an investment, but in most cities buying a home will still be cheaper than renting.

Buying a Home

If you are buying a home in 2016, there are always a few things you should keep in mind. Always use a trusted realtor when you go to buy. You also shouldn’t necessarily buy for the life you live today. For instance, you and your fiancé may buy a home with extra bedrooms if you plan on having children. Also, be sure you are buying the house that you know that you can afford and not necessarily the “dream home.” You can always make renovations.

Either way you have it, if you’re looking to buy a home, 2016 is the year to do it! Happy house hunting!

Photo: Flickr: Dan Moyle

Alternative Investments to the Stock Market

January 16, 2014 By James Hendrickson 1 Comment

If you’re thinking of investing your money, you’ve probably had a lot of people tell you to invest it in the stock market. However, the stock market isn’t the only option when it comes to investing. There are plenty of alternative investments out there depending on your level of risk. Below are a few alternative investment ideas that you may want to consider.

Real Estate

While a lot of people may still be wary about investing in the real estate market after the 2008 crash, the low prices make real estate a decent investment opportunity. The best ways to get involved in the real estate market are to buy rental properties as an individual owner, to buy shares in a real estate investment trust, or to join a real estate investment group or to buy distressed properties. If you find the right tenants and manage your properties correctly, investing in real estate can provide a decent return on your money.

Private Equity

Investing in private equity means investing money in a private company that does not have public stock. You would contribute money to a company and receive returns once the company reaches a certain stage (which is usually when the company decides to go public). While investing in private equity can be risky, especially if the company fails, the success of a company can definitely pay off in a big way if they are able to survive.

Certificate of Deposit

Certificate of Deposits (or CDs) are a low risk investment that almost anyone can get involved with. CDs are similar to savings accounts, except that the interest rate is higher and you cannot touch the money for a set period. While current yields and interest rates aren’t very high at the moment, investing in a CD is still a good idea because you are guaranteed to get a return and it’s one of the more financially secure investment options.

Peer to Peer Lending

With peer-to-peer lending, you lend money to individual borrowers at a specific interest rate. There are a number of different peer-to-peer lending companies. While there’s always an issue with people defaulting on the money you lend them, one of the benefits of peer-to-peer lending is that you can diversify your investment portfolio and lend in increments as small as $25.

Fine Art

You’ve probably heard more than one person talk about buying expensive pieces of fine art. While some people buy as collectors or art enthusiasts, there are a number of people who purchase fine art as an investment. While investing in fine art doesn’t cancel out traditional investment assets or options, it’s definitely an alternative if you’re looking for something to diversify your financial portfolio. When it comes to fine art, the art market can be risky, but it can also lead to a large financial return.

Hedge Funds

Hedge funds collect money from various different investors and pool the communal capital into different investments in order to increase the chances of a return on an investment. Hedge funds are less regulated than other investment methods which allows for investments to be made in a variety of different ways. Such a broad approach can often yield high, positive returns. Additionally, while someone who manages a hedge fund can invest in stocks or other derivatives or commodities, there have been reform acts put in place to provide more transparency about how hedge fund managers are making investments.

Venture Capital

Venture capital funds are a type of private equity that focuses on investing in the early stages of start-up businesses. Venture capital funds and firms provide the initial money for these start-ups and gain a return once the company issues stock or is purchased by another company. While this type of investment can be risky and may not provide a return for several years, the returns can sometimes be quite high.

Commodities

Investing in commodities means investing in large-scale resources such as fossil fuels (oil or coal) or precious metals (copper or gold). The commodities market is extremely volatile and unpredictable, but many of these markets tend to climb after their unstable years and provide high returns. A good way to get involved in commodity investment is to become part of an exchange trade fund.

(Photo courtesy of Diana Parkhouse)