FHA Property Requirements for Appraisal

FHA PROPERTY REQUIREMENTS

FHA appraisals require repairs for conditions that rise above cosmetic defects, minor defects, or normal wear and tear.   Appraisers must report ALL deficiencies.  This information will assist your confidence that when a contract is accepted, property condition should not be a deal-breaker for you in terms of the appraisal.

What Does the Appraiser Look for?

So, what does the FHA appraiser look for during this process? The primary areas of inspection are the roof, the foundation, lot grade, ventilation, mechanical systems, heating, electricity, and crawl spaces (when present). Continue reading “FHA Property Requirements for Appraisal”

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Easy Home Improvements That Add Value and Appeal

inexpensive home upgrades

Many sellers don’t have the funds or inclination to do major renovations when selling their home.  However, there are  easy improvements that add value and appeal.  These improvements are fairly inexpensive but still make a difference in terms of market value and buyer appeal.

Repairs may only cost you hundreds of dollars to fix but not done cost thousands in terms of an offered price.  Simple improvements can move your home from “needs work” to “move-in” ready.  Again, these improvements may cost you hundreds (especially if you do the work yourself) but give you thousands more in terms of an offer price.  It can also mean that your home moves off the market quicker. Continue reading “Easy Home Improvements That Add Value and Appeal”

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Tips for Home Sellers to Get to SOLD!

tips for home sellers

There are several tips for home sellers that can help increase their odds of getting their home sold. Pricing your home appropriately  and preparing it for buyers to view are the beginning.  To get your home sold, however, sellers have other matters which need consideration.

Pricing is Key

One of the most important things in getting an offer on your home is pricing it right. Overpricing your home will result in it sitting on the market longer.  It also reduces the pool of buyers that will consider your home.  Of course, you also want to make sure that you’re not leaving anything on the table unnecessarily. Continue reading “Tips for Home Sellers to Get to SOLD!”

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Closing Costs for Sellers

 sellers closing costs

To determine the bottom line from the sale of your home, you will need to factor in several items which will be deducted from the offer price of your home.  Some of these items include the payoff of your mortgage loan, property taxes, and realtor commissions. Your realtor should be able to give you a “net sheet” when listing your home so that you have an estimate of the proceeds from the sale of your home. If the accepted offer price ends up differing significantly from the original list price, recalculate the net sheet to refresh the estimate when you get an offer. This may make a difference in your consideration of any negotiated items such as repairs, home warranty or buyer’s credit. Continue reading “Closing Costs for Sellers”

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Sellers – Tips for Successful Short Sale

short sale

The number of homeowners defaulting on their mortgage has declined compared to a few years ago.  However, a recent article states that the Chicago area has the lowest amount of home equity and the highest number of households that are underwater for big cities.  This points to short sales continuing to be an issue in our area for the foreseeable future. Note though that these trends vary by community with many communities not affected as much.

Short sales can be frustrating for both sellers and buyers.  For the homeowner, there are some tips for a successful short sale: Continue reading “Sellers – Tips for Successful Short Sale”

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Are You Planning to Sell in 2017?

 

Are you considering selling your home in the next few months?  The Chicago area continues to experience a seller’s market which makes this a great time to weigh a move.  A seller’s market means that the supply of homes is limited in some Chicago neighborhoods and suburbs in relation to buyer demand. The median sales price for the Chicago metropolitan area is showing solid growth yet again and days on market is declining. Now may be the time for you to either move up or downsize. Continue reading “Are You Planning to Sell in 2017?”

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Is it a good idea to remodel before selling?

couple-remodeling-home
Is it a good idea to remodel before you put your home on the market?  The answer …. “It depends.”

The goals with remodeling your home before selling it are to increase the value of your home and to attract more buyers.  Generally, upgrades to your home should achieve both goals.  However, before starting a major remodeling project, start with a walk through of your home.  Are there repair projects or other deferred maintenance that need to be addressed?  Are there cheaper updates that can increase value without a major outlay of cash.  You may want to start with the lower cost projects rather than an extensive kitchen or basement remodel.

Deferred Maintenance / Repair Projects:

There are three primary issues created from deferred maintenance or repair issues in the sale of your home. First, deferred maintenance and needed repairs can reduce the value of your home.  Secondly, buyers may either pass over your home or discount their offer price based on condition. Finally, these property condition issues might present a flag for the buyer’s appraisal or home inspection.  For an FHA appraisal, property conditions can prevent the sale if they fail FHA property standards. In addition, in many suburban Chicago areas, villages perform an inspection prior to sale. A poor village inspection can also block the sale.

Some deferred maintenance/repair projects to consider include:

  • Check the roof, gutter and downspouts (for both the house and garage)
  • Service the furnace
  • Fix any plumbing issues
  • Removal of mold or mildew
  • Repair any holes in the walls, windows or screens
  • Peeling paint around exterior windows or doors (FHA flag)
  • Check the deck and porch
  • Unfinished projects
Cheaper Updates

There are also some cheaper “updates” or projects that can result in a higher value for your home or at least increase the pool of buyers.  remodel homeThese projects can include:

  • DEEP CLEAN if needed
  • PURGE the excess and clutter to create the feeling of more space
  • Paint – fresh paint can go a long way to make your home feel less dated. This includes painting over that old wood paneling in the basement.
  • Remove old wallpaper and wallpaper borders
  • Replace the carpeting or get a good commercial cleaning (if there are hardwood floors under the carpeting, consider pulling it up)
  • New kitchen appliances
  • Sand and refinish the hardwood floors if stained or damaged
  • Change or add kitchen backsplash
  • Replace old vinyl tile flooring in kitchen or bath
  • Replace older faucets in the kitchen and bath
  • Replace kitchen cabinet door handles or pulls
Remodeling

There is no question that a quality remodel will generally increase the value of your home and attractiveness to buyers. However, before embarking, check out other homes in your area to see how much updating is expected in your neighborhood. If granite is not the norm or expected, then save your money and go with laminate counters.  This is a guard against “over-improvement”.

You also want to know upfront how much of an increase in value can be expected from your remodel. Consult with a real estate agent to pull comps of improved homes.  You don’t want to spend too much on improvements that are not justified by an increase in market value.   Again, guard against “over-improvement.

One last word on the decision about remodeling. There are many investors with the resources to do a complete “gut rehab” for the homes they “fix and flip”.  When you are comparing to sold properties in your neighborhood, choose those with similar condition and quality of remodeling. Don’t expect a “high end” price unless your improvements merit the comparison.  This frontend market research can aid you in directing your sweat and funds to projects that make the most sense.

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Do You Need to Buy and Sell Your Home at the Same Time – Don’t Stress.

 

buy sell home

The process of buying your new home is way more complicated when you have to sell your current home too. Many homeowners are either intimidated or confused about the process but you can avoid some of the stress.

The ideal situation, of course, is to be able to purchase your new home first and then deal with selling down the line.  However, for most people, that is not realistic. Unless your current loan is paid off, you would be responsible for paying two mortgages.  In addition, outside of the financial burden, two mortgages are also likely to kick your debt to income ratio above acceptable levels for mortgage qualification.

Many buyers will need to buy and sell simultaneously.  This is doable with some advance planning.

Know the Market First

Before you start, make sure you have a solid understanding of both  the local housing market where you live and where you are planning to buy.  Is the market weighted toward buyers or sellers? This will affect both the pricing strategy for selling your home and set expectations for buying in the new location. You’ll also want to have a market analysis or appraisal done for your current home so that you have an estimate of the market value and expected proceeds from the sale of your home.  You’ll want to be sure that the proceeds from the sale of your home can not only pay off your existing mortgage but leave enough for the funds needed to purchase your new home (if that’s needed).

Talk to a Lender

Mortgage guidelines have likely changed since you bought your current home.  Your credit score and income might be great but if you bought during the housing bubble, you’ll find the process and guidelines much tighter than before.  Income documentation, debt to income ratios, impact of student loans are all things that may have changed and may impact your loan qualification. The lender will also be able to let you know the loan amount that you qualify for.

Decide Whether You Will Buy or Sell First

Should you buy first, then sell – or vice versa? Both options have their pros and cons.  Selling first makes getting a mortgage easier, but it also means you may need to find a temporary place to live.  Buying first means moving will be easier but you’ll be carrying two mortgages. This may not be financially feasible and it may make it harder to you to qualify for a new loan. Whichever order you decide, figure out how you will handle any wrinkles that may arise.

Know Your Solutions

If you are selling first, you’ll need to plan for the storage of your stuff and find options for a short term rental. One possible option to avoid two moves is the inclusion of a post-close possession clause in the contract.  With this option, you would make an agreement with the buyer of your home that allows you to stay in your home after closing and pay rent to the buyer for the period of time needed for you to close on your new home. This option may be less likely to succeed in a buyer’s market where the greater supply of available homes gives buyers less incentive to make this compromise.

If you are buying first, there are a couple of different options to decrease your financial burden and risk:

  1. Contingency on the Sale of Your Home – You may be able to include a contingency in the purchase contract where there is an agreement that the purchase of your new home is contingent on the sale of your existing real estate. This is more acceptable to the seller if you already have an accepted contract on your existing  home.  The option may be a challenge in a seller’s market where the stricter supply of homes favor sellers and make them less likely to make the compromise.
  2. Bridge Loan – A bridge loan is a short term loan that gives you the additional funds needed to carry two loans. The loan would be paid off from the proceeds of the sale of your existing home.  You would need to make sure that the sales proceeds allow you the funds needed to purchase the new home and pay off the bridge loan.  Do your research before committing to this option.

Don’t Let Fear Push You into a Bad Decision

Some of the uncertainty in this process can be managed by planning carefully. As stated above, know your market so you can price your home appropriately which should reduce the time on market. Take the extra step of getting pre-approved for your home loan rather than just pre-qualified. Also, plan upfront for the potential of things not going smoothly so that you won’t be forced into making a bad decision.  You may want to know your options for a short term rental (or staying with family) in case you end up selling before taking possession of your new home. Finally, have more than one home in your basket of alternatives for purchase in case there is a problem with your first choice.  If you don’t plan, you may feel forced into accepting a low bid on your current home or compromising on the things you want in your new home.

Selling and buying a house simultaneously can be stressful – but careful considering and planning can help mitigate the stress.

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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The Perils of Over Pricing Your Home

pricing home to sell

“I Don’t Want To Give My Home Away!”

In almost every conversation I have with potential sellers, the conversation begins with the line “I’m not going to give my home away!!”   Despite comparable sales that clearly show a lower market value, there is a reluctance to lowering the price.  However, you have to price your home to sell.

Market valuation is determined by what buyers are willing to pay.  The price that buyers are willing to pay is primarily based on the asking and sold prices of alternate choices.  If a buyer can buy a similar home in the same neighborhood for less, they will choose the alternative.  In addition, in order for the home to be financed by the buyer’s lender, the sales price must be supported by the appraised value (value indicated by comparable sales).

You are not giving your home away if you sell it at market value.  However, you can be guilty of giving away some of your price if it is listed too high. If you insist on initially pricing your home higher than the market value, you give away some of your price because over time buyers lose interest.  They view homes on the market longer with a perception of declined value. In fact, small incremental price changes often result in homes being sold at less than the original  market value.   As a seller, you want to capture buyers at the peak of interest.  This is usually the first few days on the market.

Presentation Matters

You also might be guilty of giving away a little bit of your price when your home is not presented well.   Exterior curb appeal and a nice interior help your home stand out in any market.  Although the current market has a tighter inventory of homes, buyers can still be picky.  This is a big investment for buyers.  Most buyers prefer a home that is in better condition so a little sprucing up helps in marketing your home. Also, with the internet, many buyers will drive by the home before requesting a showing. An unappealing exterior view will stop some buyers from asking to see the inside.

Interior Pictures Matter

Finally, you may be giving away some of your price if you don’t allow interior pictures.  Most buyers start on-line and interior pictures are a big part of marketing your home on the internet.  It is documented that homes with few or no pictures are not clicked on (viewed) as often as those with more interior pictures.  Buyers and even some agents assume that a lack of interior pictures is an indication of problems with the condition of the home.  They never even request the showing to see how lovely your home actually is.  You want your home properly marketed in the place where buyers are looking.

Past Improvements Matter Some

For those still focused on the costs of past improvements and projects of their home, you just have to let go of the idea that you will get a dollar for dollar return for those past expenditures.  Actually, in most cases, you never get a 100% return of your costs.  What those projects will do is make your home more attractive to buyers. Also, homes in a better condition or with upgrades will be comparable to other updated homes that have sold.  Updated homes usually sell at a hgher point in the value rane for your neighborhood.

As a seller, you are marketing a product. Put yourself in the shoes of a buyer. Based on the available choices, would you pay what you are asking for?? 

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Home Selling Process – Presentation is Important

kitchen

No one will argue that appropriate pricing is key in the home selling process.  However, the presentation of your home for sale is also very important in attracting and keeping the attention of potential buyers.  Otherwise, your pricing has to work harder.  I am not suggesting that sellers be prepared to put forth an HGTV-style staging effort but some simple steps can go a long way.

  • De-clutter – Your potential buyer should not have to strain to see the potential of your home behind piles of clutter.  Buyers will look in closets and pull open those kitchen cabinets and drawers. Also, those extra items stored on the counters, on top of the refrigerator and in the corners detract from the features of your home.  Finally, for the pack rats out there, organized clutter is still clutter.  Less is more.
  • Clean – Enough said.
  • Maintenance – Finish those uncompleted projects. Fix those simple problems such as the dripping faucet, broken window panes, gutters filled with last fall’s leaves, patching the holes in the wall, missing thresholds, etc. Go through your home and make a list of these items. Take care of what you can but also consider hiring a handyman. Paying for a few hours of time can get a lot of things done on your list.
  •  Take a deep sniff – Strong smells can be a real turn off to potential buyers. Heavy cigarette smoke, pet smells, or past water damage in the basement can all either completely turn buyers off or reduce the price you can get.
  • Painting – If you have strong or overly feminine colors, 1990’s sponge treatments, or peeling wallpaper, consider painting.  Painting is cheap, easy and makes a big difference. Also, wallpaper generally translates as extra work or expense – consider removing yourself. It might really make a difference.
  • De-personalize – Personally, I love collecting refrigerator magnets from places I visit and having school notices right where I can see them. I love family pictures and try to display those cute knick-knacks collected over the years.  However, during the home selling process, I want the focus on the attributes of the house not the stuff.
  • Emphasize the Square Footage – You want to emphasize the square footage in your house.  Too many pieces of furniture or big bulky furniture make a room look smaller.  If the agent has to constantly direct the buyers attention to the MLS listing to verify that “the bedroom really is a nice size”, that’s not a good thing.  You want to have a feeling of an open, spacious environment.
  • Curb Appeal – Shovel the sidewalks and driveway, clean and mulch the flowerbeds, and take care of that peeling paint on the shutters and windowsills.  You may also want to consider power washing the deck and siding.  Make the outside inviting.

These are the basics…no ground-breaking advice.  However, these general tips can help make your home appear well-maintained and attractive.  They won’t allow your home to sell for more than market value but they definitely may make sure that your home is considered.  Of course, if you can afford to do more such as replacing older carpeting or updating that 1970’s bathroom, it can’t hurt.  However, in an economy where many don’t have the funds to invest a lot of money into staging, a little elbow-grease can make a difference in the home selling process.

 

Millie C Lumpkin
Broker
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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