Make it Legal!

Millions of people each year move from one state to another. Reasons for relocating range from a new job to retiring to simply better housing. The financial and personal impact of buying and/or selling a home can be enormous. One aspect you should fully understand before making a big move is the tax implications.

Real estate agents are not financial advisors, but they do know a thing or two about what to do before relocating. At the top of the list is to legally change your state of residence and determine how that affects taxes on income, property, and your estate.

Once you're a legal resident of your new home state, you can apply for incentives like homestead exemptions (if available). Also make sure you've updated the address on your credit report. Investigate how the enforcement of certain legal documents like wills and powers of attorney might change because of the change in residence.

Rules are different from state to state, and many experts suggest trying to make your move as early in the year as possible in order to minimize the impact. Tax returns can be confusing when you're claiming part-time residency in two different states during the year you move. Trust a real estate professional to help with selling, buying and moving, and seek advice from a tax consultant about the financial implications.

No Time for Modesty!

You've taken care of needed repairs and cosmetic improvements, and you're ready to list your home for sale. A likely next step is hosting an Open House, where buyers and agents can check out your new offering. Expect plenty of visitors, and expect some of them to be neighbors.

You might be concerned about "tire kickers" or nosy neighbors traipsing through your home, but don't be too skeptical. There are plenty of reasons neighbors visit an Open House, many of which are quite harmless and understandable.

They might simply be looking for decorating ideas to implement in their similar homes. True, in this case they are not potential buyers, and are not looking on behalf of someone else. But why would you want to start quarreling with people from whom you are soon moving away?

Maybe they are interested in the presentation of your home because they are considering selling theirs. The point is, you just never know. Frankly, that is the work of the real estate agent.

It's simply best for you to leave your home during the showing, and leave the "Lookie Lou's" and genuine prospects to the agent to handle. Sincere buyers can be uncomfortable asking questions in front of the owners, but the agent will have all the knowledge and experience to separate the seed from the chaff. Don’t worry, start packing!

Putting it in Reverse!

Reverse mortgages have existed for nearly twenty years now, but still aren't well understood. Their complexity makes it difficult to separate fact from fiction, and not every person over 61 years old will find a reverse mortgage to be the best choice.

How does it work? It's still a loan, but is not paid back until the last owner/co-owner dies, or the home is sold or left unoccupied for one year. You may receive an equity line of credit, borrowing money as needed, or receive monthly checks for the rest of your life, like an annuity.

The loan amount is based on your age and your home's value, among other factors. Lenders don't loan the full value of your home, and there are fees. While a reverse mortgage provides a low-risk option that allows seniors to remain in their home for the rest of their lives, other investments should be depleted before giving it consideration. Your home's equity should be tapped as a last resource.

When the loan becomes due for any of the reasons stated above, the home is sold and you (or your heirs) would receive any money left over. If the house sells for less than the loan amount, the lender eats the loss. Again, this is a great option for many, but not all, qualified borrowers. Give it thorough investigation.

Creating Demand!

You hear it everywhere, "It's a seller's market." True, homeowners in many parts of the country haven’t had to wait long for offers, but let's assume that the great times won't last forever. Don't worry about any "bubbles" bursting, but take a smart approach if you're considering selling your home soon.

You cannot control the laws of supply and demand, but you can control whether or not your home sells. The two biggest factors you need to work on are pricing the property correctly and getting buyers inside the door.

The best opportunity to sell your home is immediately after it enters the market. Pricing your home too high at the start will result in few offers. Serious and qualified buyers jump on brand new listings, and if you wait too long to reduce your price back down to market, it will simply be too late to attract those buyers. Worse, you'll only generate interest again if you reduce to below market, an unsatisfactory option.

Now that the price is right, the greatest challenge is getting those buyers inside your home. Create "curb appeal" by mowing the grass, cleaning the windows, planting flowers, and so on. If your best features are inside or out back, offer photos and "virtual tours" online. Lure them with price and wow them with value, the solution for any market.

How Does that Compute?

The growth of information technology in real estate has provided benefits to both agents and consumers. Not only are buyers and sellers better informed and more demanding, but real estate agents are also able to offer a higher level of service.

When computers and the Internet first came to prominence and use in real estate, the expectation was that access to all that information would soon replace the need for representation in the sales transaction. Why then would there be so many more agents practicing now? In the real estate industry, the number of agents, the use of technology, and economic growth have all increased together over the years.

Now consumers can view listings online, research neighborhood demographics, and even find a lender after shopping around for the best rates and lowest fees. All of this creates a more educated homeowner or buyer, who understands the benefits of representation.

It's almost like "information overload," and the real estate agent is there to translate all the input, as well as assist with complicated matters like title insurance, inspections, legal documents, negotiations, and more.

Real estate, like law or medicine, is not something you learn on Internet search engines like Google or Yahoo. There may be such a thing now as virtual reality, but there can never be virtual realty, and there should never be a virtual agent!

Less is More!

High prices and rising interest rates are making smaller homes an attractive option to buyers. Of course, there has always been a market for small homes, especially because that's where so many first-time buyers begin their home ownership experience.

With smaller homes in such high demand, there is a lot of competition for buyers. What steps can you take to prepare your home for a quick, full-price sale? If you can't afford the services of a "home stager" to come in and redecorate, you can at least follow some of their advice.

Make your home look more spacious by using neutral colors on the walls and carpeting. Far from appearing boring, the neutral scheme will actually allow buyers to better visualize their own decorating plans. Along those same lines, get organized and reduce the clutter around the home.

This also means rearranging furniture, or even putting some furniture into storage, if it will help your rooms "breathe." After all, you want buyers to be able to picture their own furniture and belongings in your home. It will be easier for them to imagine moving in if you’ve already taken steps to clear the space a bit.

Details like door handles, cabinet hardware, and faucets can be inexpensively updated to show pride of ownership in your smaller home. Now you’re ready to successfully compete for those buyers!

Be Ready For Anything!

Whether you are buying or selling a home, you will probably encounter "the inspection." This needn't strike fear into the hearts of sellers, and it needn't encourage buyers to look for fault.

Disclosure and awareness are the most important issues, and a recent survey of the National Association of Home Inspectors sheds some light on the most prevalent problems that they encounter. Sellers will want to address any problems before listing their home, and buyers will want to be sure to pay special attention to the following survey results.

One of the four most common major problems is improper drainage around the house. Unsuitable grading can lead to water penetration and even problems with the foundation. Another of the four biggest problems involves – big surprise – roofing. Look for damage in the form of worn materials or improper flashing.

The survey results also point to a couple of interior problems. In older homes, particular attention should be paid to the electrical system, which might have inadequate overload protection or "suspicious" wiring, if not insufficient power. Also inspect the heating and air conditioning systems, especially if managed with an older thermostat or other controls.

Keep in mind that most homes will not have major problems, but that these are the most common. Trust your agent to prepare you for anything, whether selling or buying.

Rental Potential

If you've bought a home or are considering doing so, you've probably learned all the arguments for "Don't Rent – Buy!" After all, it's better to build equity by owning than to put that money into the landlord's pocket. However, if you're considering selling a secondary property, there are some arguments for "Don’t Sell – Rent!"

Some investors may be prematurely panicking in expectation of a weakening housing market, and thinking of selling secondary properties. One real estate research firm, Reis, predicts nearly a three percent rise in rent this year. This is partly due to reduced rental stock that resulted from strong homebuying in recent years. A gentle rise in mortgage rates has also contributed, because more tenants are staying put instead of applying for financing.

A stronger rental market suggests that investors could boost their long-term property values by renting now instead of selling. But how to do so successfully? The biggest area of competition is rent. Once an investor determines the costs associated with the mortgage, taxes, maintenance, utilities and the like, how much wiggle room is left?

Find out what competing landlords are charging, and consider incentives like discounts for timely rent payments. When weighing the pros and cons, remember that many real estate agents specialize in this kind of property, and can provide a valuable resource in making your investment decision.

A Little Goes a Long Way!

You might be surprised to learn that the simpler the home renovation, the more likely you are to recoup your costs when you sell. Basic renovations should enhance your home’s "livability," while avoiding over-customization.

While buyers may pay top dollar for elaborate improvements in "hot" real estate markets, appropriate touch-ups in the kitchen and bathroom prove effective in more moderate markets. The kitchen and bath always draw the most attention from buyers, and remodeling those rooms will likely result in a quicker sale.

Without tearing up your kitchen and having to eat out for two weeks, you can simply install new cabinet fronts and hardware for a fresh look. Another easy and relatively inexpensive option for the kitchen and the bath is to replace dull scratched sinks and update the faucets.

In 2005, REALTOR® Magazine partnered with Remodeling Magazine to publish its Cost vs. Value Report. One unsurprising result that was reported is that major kitchen renovations typically recoup more than 90 cents on the dollar. Sounds pretty good, right? Then consider another result that reported minor jobs will recoup almost 100% of the cost.

Take care of these improvements in advance of your first showing, because when your home first hits the market is when buyers will have the greatest interest, and you will stand the greatest chance of an early sale at full price.

Just Do It!

Thinking of buying a home, but feel bewildered by conflicting reports about the state of real estate? Well, you're certainly not alone, but in a word, relax! Whether or not real estate is up, down or sideways, most people don't make their purchase decisions based on market conditions. Rather, it has more to do with lifestyle.

For most folks, a home is very much like a "durable good," similar to a washing machine. Sounds silly, but think of it this way: When you need a new washer, your decision is based upon that requirement, and you search for a machine that offers good value and service. You don't think about whether the price of washers will be going up or down in the coming months or years.

You can have greater peace of mind when your purchase is made out of necessity and not out of a desire to turn your property into a cash cow. You get the greatest value out of your home by simply living in it, and as long as you can continue to make mortgage payments, you run little risk of losing on your investment.

Speaking with a local real estate agent is a great place to get the ball rolling, so that you can learn about local market conditions and prices. Armed with knowledge, you can move forward and move in!

It's More than a "Sale"

Our culture is fascinated with the concept of Do-It-Yourself, and it's no surprise that homeowners sometimes consider a DIY approach to selling. It's even the subject of popular television shows. Court TV is popular, too, but most people wouldn't act as their own legal counsel after watching a few episodes!

The label "For Sale By Owner" is a bit misleading. That's because in fact, ALL homes are for sale by owner, since the homeowner holds the title. In most cases, real estate professionals are employed to facilitate the sale, but do much more than just "sell" the home. They represent the seller and market the property.

Once you go beyond selling, it becomes apparent that For Sale By Owner really translates to Unrepresented Seller. It sounds fun to sell something, but it's not fun to be unrepresented in a competitive industry. Think about it: most buyers seek the services of an agent to save time and money. The seller is at a definite disadvantage if not armed with the same representation.

Unrepresented sellers report that the three most difficult aspects of going it alone are:

1. Pricing correctly
2. Preparing the home effectively
3. Understanding and completing paperwork.

Unrepresented sellers face more liability issues and lower sales prices than their represented counterparts. There's a lot more involved in For Sale By Owner than just the "Sale."