Cash Purchases on the Rise

The latest Confidence Index, published by the National Association of REALTORS® (NAR), found that more home buyers are paying cash – 33 percent in the first quarter of 2014. Usually when that number goes up, it’s because the number of distressed home sales has gone up. But in this case, the number of distressed home sales has actually gone down, a fact that has economists puzzled.

“Distressed home sales, most popular with investors who pay cash, have declined notably in the past two years, yet the share of all-cash purchases has risen,” said Lawrence Yun, NAR chief economist. “At the same time, investors have declined as a market share, indicating other changes have been under way.”

A number of factors could explain the increase in cash purchases:

  • Mortgage lending regulations.
  • The baby-boom generation, and its accumulated equity, is retiring and trading down.
  • Individual investors and purchasers of second or vacation homes usually pay in cash.
  • Foreign buyers typically pay cash.
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Save Money through Window Treatments

Are you thinking about changing up your window treatments? Why not make them more energy-efficient and save a little money while you’re at it?

The U.S. Department of Energy (DOE) states that window shades can be one of the simplest and most effective window treatments for saving energy. Dual shades that are highly reflective (white) on one side and heat-absorbing (dark) on the other can be reversed with the seasons. Drapes can also be effective in any season, depending on fabric type and color.

In warm seasons, blinds and high-reflectivity film can reduce heat gain. The DOE estimates that, used correctly, blinds can reduce heat gain by as much as 45 percent. However, blinds aren’t that efficient at keeping out the cold, and film reflects sunlight regardless of the season, so these options are best for warmer climates.

For exterior changes, your best bets are awnings or overhangs. Overhangs can shade south-facing windows in the summer and, if oriented correctly, still allow sunlight in during the winter. Awnings can be quite effective in the summer, reducing solar heat gain by up to 77 percent. Plus, they add some personality and curb appeal to your home.

Tip: The key to any window treatment’s effectiveness in conserving energy is proper installation, so be sure to do your research.

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Alternative Ways to Pay Your Mortgage

Are you looking for a different way to pay your mortgage? Maybe your payment is eating up all of one of your bimonthly paychecks and you’d like to spread it out. Or maybe you want to pay it off earlier. You have several options for making payments, either involving your lender or on your own.

Some lenders will set up bimonthly or biweekly payment plans for you. Paying bimonthly just splits your monthly payment in half, and you pay it twice a month. This can take the burden off your whole monthly payment coming out of one paycheck. Paying biweekly involves making half of your monthly payment every two weeks, which over the course of a year adds up to an additional monthly payment made (26 payments biweekly vs. 24 payments bimonthly). This speeds up the rate at which you pay off the loan, resulting in years being taken off the term. The drawback to paying biweekly is that most lenders charge extra fees.

If you like the idea of shortening your term but don’t want to pay extra, you can do it yourself by changing the amount you pay each month. Add an extra 1/12 of your monthly payment each month, and at the end of the year you will have made the equivalent of 13 monthly payments.

Note: Anytime you pay an amount that exceeds your monthly payment, be sure to indicate to your lender that you want the additional money to go toward the principal.

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Should you replace your roof before putting the house on the market?

One of the biggest concerns home buyers have is whether they will have to replace the roof. A new roof is worth a lot to potential buyers because it puts their minds at ease. A new roof is a big expense, particularly worrisome if the new homeowner is cash-strapped after a down payment and paying closing costs.

If you are considering selling your home, you may be asking yourself if you should replace the roof.

The first thing you should do is schedule a home inspection. The inspector will examine the roof and let you know whether you need a repair, replacement, or if it’s in good shape.

If you own the home outright, your decision to replace the roof may depend on whether you are looking to maximize the sale price. Someone who still owes a great deal on the principal and wants to leave the deal with as much cash as possible may opt to not replace the roof.

If you can’t afford to spend money out of pocket, you may need a home equity loan to replace the roof, which means more debt that will need to be paid when the house is sold.

Look at the competition in your area. If there are a lot of competitively priced homes, a new roof may be a major incentive to potential buyers.

Consider how much of a negative impact leaving the roof as is will have. If you have already seen leaking or if there is a possibility that damage could occur if the roof is left as is, there’s no question that it should be replaced. Leaving it as is would make it difficult for a buyer to get a mortgage if the roof needs repair or replacement.

If insurance will cover part of the repair, it makes sense to go ahead with the repair.

It is possible that a partial repair can fix your problem. You could also offer to lower the sale price to cover the roof replacement.

A new roof can definitely help the sale of your home. Ask your real estate agent for advice regarding your ability to recoup the expense of roof repair or replacement.

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What stays with the house when it is sold?

Sometimes there are misunderstandings about what goes and what stays when a home is sold. Nasty emails and phone calls between buyers, sellers and real estate agents after the sale are common. Some people even end up in court because buyers assume that sellers would be leaving something behind.

In many cases, it depends on laws of the state. In other cases, it merely depends on what is customary for your location. That’s why it is important to work with a local REALTOR® who knows the ins and outs of the local market.

The question to ask is “Is it permanently attached?” If so, it’s fixture, and usually, it stays. However, some fixtures fall into the category of personal property. And that’s where we enter a gray area.

What is personal property?

Beds and furniture … there’s little question that they are personal property. Mirrors, art, chandeliers … they may seem custom made to fit the home, but they still fall under the category of personal property, even though the art may look as if it were made specifically for the home. If there is a question, it’s always best to ask. And get it in writing.

Here are three things usually included in the sale:


It’s not the norm everywhere to include all major appliances – including refrigerators and dishwashers – with the property. Always ask your REALTOR® about what is customary. If there’s any doubt, be sure to put it in writing as to what exactly is to be left behind, up to and including name brands.

Window Coverings

If there are window coverings present, they usually stay with the new owner. However, be sure to ask. The seller may have had the drapes custom made to match the furniture and will want to take the drapes to their new home. Make sure to ask and get it in writing.

Flat Screen TVs

TVs used to fall under personal property 100% of the time. Used to. But now media rooms and the large, flat screen, high definition TVs that are now professionally mounted above the fireplace or on the wall like a piece of art with the wires running through the walls are common. As a result, TVs are considered fixtures. Again, make sure to ask and get it in writing.

Sometimes sellers decide that they want to keep something or that they will part with it for a price. Sellers should document everything that will be included and will be excluded so there’s no doubt in the buyer’s mind what stays and what goes. Buyers should be as detailed as possible from the beginning and always ask the real estate agent during the showing or open house. If they say it’s included, make sure to get it in writing.

One more warning: Sometimes sellers will advertise “Appliances are included” and replace their high end appliances with lower-end models. Make sure to specify that “existing appliances” are included. And get it in writing.

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What should be included in your home listing

Did you know that what you say and how you say it can have a big impact on how effective your home listing is? The results can be selling your home more quickly and for a better price.

By the same token, using the wrong words and phrases can turn a buyer off as quickly as the right one can motivate a buyer to learn more. Here are some tips to improve your listing:

Be specific

Give as many details or facts about a property as you can. Include updates such as a new roof or driveway and items that differentiate your home from competitive properties. If your kitchen is a draw, don’t be afraid to drop brand names.

Use good grammar

Bad spelling and grammar, and using abbreviations that aren’t easily understood can be a big deterrent to potential buyers.

A photo’s worth

In a buyer’s market there may be more properties available than buyers to purchase them. With that much competition, sometimes the photo can draw the attention of a buyer or agent. Make sure you’re putting your home’s best foot forward with great photos.

Mention amenities

A great view or privacy won’t be apparent in photos or property details. Use the description to talk about features that aren’t obvious.

Avoid exaggeration

Be realistic in your listing. Building a buyer’s expectations with a fluff-filled description only to have it fall far short in reality can turn a buyer off.

Use the right adjectives

The words you use can make a difference. Use descriptive opinion words if they are appropriate. Also use descriptions of the property within the copy. Using property descriptors and opinion words were found to increase the sale price by just under 1% for each instance. However, there is a limit. Don’t overdo it and turn off prospective buyers.

Motivate the buyer

In advertising, sometimes saying something is enough to make a large number of people believe it. That goes for pronouncements on pricing. Telling them it’s a good deal is enough to motivate them without being dishonest, even if it priced competitively with other homes in the area.

Remember that you have a very short time to attract a buyer’s attention. Make sure to deliver the biggest selling features in the first couple of lines.

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The dual agency role in real estate

One of the things those who work in real estate can’t seem to agree on is that of “dual agent” on a home sale. While it’s legal – in some form, anyway – in all 50 states, getting people on both sides of the sale to come to a consensus is difficult at best.

What is a dual agent?

Many, if not most, REALTORS® can represent sellers as the listing agent. Their responsibility is to sell the home as quickly as they can and at as close to the listing price as possible. They act with the seller’s best interest in mind. For their efforts, they receive a commission.

When someone is ready to buy a home, they can employ a buyer’s agent to help them find their dream home. The agent acts on their behalf to negotiate the price, arrange for inspections, closing and all other things associated with buying a home. For their efforts, they receive a commission.

It may be called “transaction brokerage” by some states, or “designated agency” by others. Simply put, double-ending occurs when the same agency represents both sides of the sale of the home – the buyer and the seller. While it is legal, there are many who find the practice questionable.

The good news is, whether you’re buying or selling, if an agency hopes to represent both sides of a home sale transaction, they have to notify the parties involved.

The advantage is that with fewer people involved, the sale can be done quicker and more efficiently. The advantage to the agent or agency is that the commission is not split.

And thus arises the conflict because a single agent cannot represent the seller’s best interest while representing the buyer’s best interest. They could try to convince the seller to sell at a lower price, or oversell the attributes of the home to the buyer, in order to make the sale.

When you are hiring an agent, make sure to ask if he or she could possibly take you into a dual agent sale. If you feel comfortable, then proceed. However, if you feel that you may have remorse at the end of the transaction, it’s best to avoid the situation.

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