Archive for the ‘For Realtors’ Category

8 Mistakes to Avoid if You’re Thinking of Building/Remodeling a Home

Have you ever walked into a home (either a brand new one or one that’s been around for 25 years or more) and said to yourself, “I wonder what the builder was thinking when they built this house? Maybe you are thinking of finally building your dream home. Or considering downsizing the one you currently own. Or need to remodel the one you currently live in.

Here are 8 things to keep in mind:

1. Have a vision of what you want your home to look like. The floor plan is just the first step in the process. There a hundreds of thousands of decisions you will need to make. Take just the bathroom – what color tile? What pattern? Will the cabinets match? Faucets? Counter tops? The floor? And that’s just one bathroom!

2. Find the right people – By people, I mean an architect, a builder, sub-contractors, suppliers. Are they licensed and bonded? More importantly, can you get along with them? Do they offer suggestions? Are they difficult to deal with?

3. Visit the construction site often – Be sure that the home/remodeling is being built to your expectations. Ask questions. Make suggestions. Visiting your home every other day is recommended.

4. Building too big of a home – Don’t think about what size you need right now—but what you will need 7 to 10 years from now. A well-designed 3,000 sq. ft. home may work just as well as an ill-designed 5,000 sq. ft. home.

5. Work that you can do to reduce costs – Ask the builder what sweat equity he/she will allow you to do to help reduce costs. Painting the walls or staining the trim. Maybe you have a friend who is a licensed electrician who would charge you less.

6. Think about the upgrades – When a builder provides you with a price to build your home/remodeling, it’s usually based on “medium grade” materials. Take kitchen cabinets for example. What type, color and grade are included? Or should you pay $8,000 extra for solid maple cabinets instead? It depends on your budget and if you can find something that you like in the medium grade so you can use the money for something else. Other than you loving maple wood, there is very little resale value in upgraded cabinets when it comes time to sell. Consider only adding your MUST HAVE upgrades.

7. Think about selling your home in the future – Even if you never plan to sell your home, your descendants may have to do so. Build your home so it’s not a nightmare to sell.

8. Think about monthly mortgage payments – When you have been pre-approved for your mortgage amount there are a few things to consider.
a. What will the interest rate be when the home is completed?
b. How much will extra upgrades add to the monthly payment?
c. How much money will you need after the closing (window coverings, furniture, landscaping)?

What about Working with Real Estate Investors?

Have you ever considered working with the “real estate investor” niche? With real estate information easily obtained online and real estate offices on every corner of the street, when you specialize in this niche, investors will seek you out for your expertise and advice.

Here’s the thing about working with real estate investors—you will usually get ongoing referrals and repeat business, instead of the vanilla, residential real estate transactions where your clients may move every 7 years or so.

So what do you need to know?

• A complete understanding of all aspects of real estate investing.

• Real estate investing has its own “language” – Return on investment. Rate of return. Depreciation. Income to payment ratios.

• Real estate investments are treated differently by the IRS. While you may not be a CPA, learn how the IRS treats investment real estate. How depreciation works. Capital gains taxes. How taxes are paid when a property is sold.

• Join a real estate investment club. Do a Google search and see if there are any in your area; they usually meet to exchange tips and provide education resources to their members.

• Talk with lenders. Find out what types of mortgages are available to investors. The down payment required. Estimated closing costs. The minimum credit score. What it takes to get qualified.

• Finally, walk the talk—invest in real estate yourself.

8 Things Real Estate Agents can do to help with the Appraisal Process

I recently read an article written by an appraiser who said, “Realtors have more control working with an appraiser—more than they think they do. Spending time providing information UP FRONT will reduce the time spent on the back end trying to deal with an appraisal that comes under the sales contract price.”

I’m sharing some of the appraiser’s tips with you.

1. Provide Photos – In addition to the photos of the home that may be on your website, email the photos to the appraiser to review ahead of time. Include additional photos that may not have been posted online. Include a description of EACH photo.

2. Provide a list of recent improvements – And if you can attach the receipts for the work completed or the cost of the improvement, it’s an extra bonus.

3. Provide an Information Packet – If the home is vacant, the appraiser may not even call you to set up an appointment. Leave a folder marked APPRAISER INFORMATION. And if they do call, tell them about the packet and where it’s located.

4. Provide Insider Information – If you have information about the neighborhood that they may not know about, provide that info to the appraiser. For example, maybe a new school has been approved by the city and will be built nearby within the next few years. If you know the reason the buyers have chosen that home, include that info too. Let them know if there were multiple offers on the property, too.

5. Call the appraiser back—immediately—Appraisers typically schedule their trips within certain areas to reduce travel time. When they call, it usually means they have already done some preliminary work and are ready to do the physical inspection.

6. Provide Comps – While appraisers do their own research, it helps to BRACKET comps and supply them with what you used to establish the price. Provide sales that have sold BOTH below and above the sales price. List why each is superior or inferior. Do not rely on “per square foot price.” If known, also include seller-paid concessions.

7. Double Check the Square Footage – Appraisers must also measure the living areas, and if it’s substantially different, it creates a “red flag” and the appraiser may be looking for other things that may be inaccurate.

8. Don’t ever say these sentences –
“You should have no problems appraising this home…”
• “We need a good appraisal on this one…”
• “Let me know if you think the appraisal will come in low so I can get you additional info.”

Quick Guide to Creating the Perfect Office Space in Your Home

Do you work out of a home office?

Without proper planning and organization, your home office may do more to hinder your productivity than enhance it. Here are some tips from the experts on how to setup the perfect office.

Select the RIGHT Spot – The area in your home should be well lit, with enough room for furniture, file cabinets and other items you use on a regular basis. Windows are great for natural light but can be a distraction. You may want to configure your workspace so windows are behind you or on the side.

Get Connected – Equip the space with enough electrical outlets to support your office equipment, telephone, fax machines and Internet access. Any costs incurred to add outlets or even heating and air conditioning to your office space are tax deductible.

Furniture Requirements – Determine what furniture you will need – desks, file cabinets, printer stands, storage units and office supplies. Measure the space. Measure the furniture and compare to make sure it fits before you move into the space. Layout the locations of each piece of furniture and try several floor plans – on paper first.

Organize – Keep business files in your home office. It’s very tempting to take them with you to another room while working out of your home – but avoid the temptation! That way you won’t waste time looking for files all over your home. Keep the office as neat and clean as possible as you will be more productive if you are organized.

Tax Deductions – The IRS will let you deduct expenses only related to that part of your home that you use exclusively for your regular business. This includes mortgage payment, utilities, furniture, computer equipment and supplies. Be sure to keep records on exactly what you have purchased for your business and you might consider a separate credit card to use exclusively and easily track your expenses.

20 Magic Questions to Ask Buyers & Sellers

It’s inherent that some salespeople do all the talking – but seldom ask enough questions. The right questions can really work magic.

Here are 20 magic questions to ask when starting to work with clients.

1. What is your main objective when buying a home?
2. What game plan do you have in mind?
3. What is the biggest problem you currently face?
4. What are you doing now to help solve the problem?
5. What other ideas do you have about the home you want to buy?
6. Who else is involved in the decision?
7. What do you like most about the idea of owning a home?
8. What is your biggest fear when it comes to owning a home?
9. If you could have any house that you wanted, what would it look like?
10. Why are you motivated to buy a home now?
11. What has been your previous experience?
12. How would you feel if you did not buy a home?
13. What is your budget?
14. What financing alternatives have you considered?
15. How would buying a home benefit you personally?
16. How can I help you with the home buying process?
17. Is there anything that is keeping you from buying a home?
18. What do you see as the next step?
19. Are you working with a deadline?
20. In a perfect world, what would you like me to take care of for you?

Not all questions may apply, but consider creating a “form” listing all the questions to prompt you to ask them. How about sending out an email version to prospects that call you? Or sending out the form with your promo packet?

Word of caution: Don’t take the answers at “face value”. Sometimes the answer prompts another question. For example, the answer might be that I want to be near a school because my children are in sports! How near? 2 blocks? A mile? Within a 5 minute driving distance? The questions open the door for more dialogue and building trust.

If you are working with many different clients, you can’t remember everything. The added benefit is that it gives you a record of exactly what they say they wanted. If they have changed their mind, you can go back to the form and record the changes.