Recently, news about how to purchase a real-estate owned (REO/bank owned) home, foreclosure property or short sale is everywhere. Bank owned homes are sold directly from the lender after the foreclosure process is complete, and while you may save quite a bit of money by choosing to go for this type of home, it is not without trials and tribulations. The process of purchasing a home directly from a lender can be long and arduous, but could very well be worth it in the end.
If you have your sights on a particular home or are looking to find a deal on your first, working directly with the lender may be your only option. Purchasing a bank owned home is not for the faint of heart, here are some tips for negotiating the REO process:
1. Be prepared: The condition of bank owned properties is usually poor and hard to show. Past owners may have left angry and left the home in bad condition with foul smells, missing appliances, wires taken from breakers, gas fireplaces gone, even bathrooms without toilets and sinks.
2. Understand the costs: Maintenance or repairs may be necessary, since these homes have been vacant for an unknown period of time–sometimes months or years. Keep in mind, when they were occupied the owners could have been under a financial hardship, preventing them from doing regular seasonal care or repairs when needed. Remember as well that the bank is trying to sell the house immediately, so you will receive a financial break in the price rather than a willingness to negotiate on the maintenance and repair issues.
3. Accept the unknown: In traditional real estate transactions, homeowners fill out Form 17 regarding important information about the history of the house. A bank owned home is either exempt or marked with “I don’t know” throughout the document. Not having the accuracy of this 5 page disclosure form could leave you with a lot of unanswered questions on the history of the home.
4. Know what is non-negotiable: The pricing on the house may not get much lower. Some of these properties can be “a dream come true” if you get them at an amazing price, or they could be your worst nightmare. Do your due diligence researching any property, and conduct all necessary inspections to safeguard yourself. Some major repairs may be negotiable, but will likely not reduce the home price.
5. Make a clean offer: The higher the price you can offer, the better. Include your earnest money, keep contingencies to a minimum, and suggest a reasonable closing date. The simpler your offer is, the higher chance you have of the bank accepting your offer or countering in a reasonable time period.
6. Be patient: Consult with a professional who handles bank owned home purchases to help you negotiate the pathway to homeownership. The process of purchasing a bank owned, foreclosed or short-sale home is typically longer than a typical real estate sale.
What do you want to know about purchasing bank owned, foreclosure and short-sale properties?
Giving back has always been a big part of who we are at Windermere. In the early days of our company, it was pretty simple; we would see a need and help any way we could. But as we grew, we realized we could accomplish much more if we had a common purpose. That’s how the Windermere Foundation was born.
A big idea
We started with an idea that would give every Windermere agent the ability to make a difference. Housing is our business, so helping homeless families seemed like a natural fit. We later expanded that to include low-income families, with an emphasis on helping children.
Every time a home is sold
For the past 30 years, a portion of every Windermere agent’s commission has been donated to the Windermere Foundation. Having 100% participation gives us a common purpose and sends a powerful message about our commitment to the community.
Who we help
Last year alone we provided funding to more than 500 organizations throughout the Western U.S. Homeless shelters, food banks, schools, hospitals, community centers, parks; the list goes on. The main thing that they all have in common is a deep devotion to helping our neighbors in need.
How we help
Our agents have proven time and time again how committed they are to making their communities a better place to live. Their generosity funds backpacks full of food so school kids don’t go hungry on the weekends. They help keep families in their homes by covering housing costs. And their donations make sure the homeless are getting their most basic needs met, and the dignity that goes with it.
If at any point during the past 30 years you’ve bought or sold a home using a Windermere agent, you are a part of the Windermere Foundation too, and you’ve helped make a positive difference in your community. And for that, we thank you on behalf of everyone at Windermere.
If you would like to learn more about the Windermere Foundation, please visit windermerefoundation.com.
- New Homes
- New Apartments
- New Medical Facilities
However, you will not notice new office buildings under construction.
What gives? I thought we had a booming economy. Why no new office buildings?
There are a couple of reasons. First, construction costs have sky rocketed. In ten years, construction costs have gone from about $200 per square foot to over $300 per square foot.
Rental rates have not increased at the same pace as construction costs so speculative investors can’t make their numbers work.
It’s too expensive to build compared to the rents that can be charged.
One reason why rental rates haven’t increased at high rate is property taxes. Property taxes on Class A office buildings have basically doubled in the last 10 years in many cases.
So, until rental rates catch up with construction costs, we won’t see many new office buildings under construction.
“Of course, thanks to the house, a great many of our memories are housed, and if the house is a bit elaborate, if it has a cellar and a garret, nooks and corridors, our memories have refuges that are all the more clearly delineated. All our lives we come back to them in our daydreams.”
Gaston Bachelard, the Poetics of Space
I have been following the news about the housing market pretty closely and am pretty disappointed with some of the articles declaring a case against homeownership. I couldn’t disagree more. If anything, I see the value of homeownership: responsible financial investment, social stability and community connection as more important than ever.
I was particularly moved by the story in the Seattle Times yesterday about the Lutz family in Ballard, a family with seven adopted siblings that are helping their parents move from their family home to a smaller condo now that their children have left the nest. Though their story is far from typical, it really resonates how home is the center of family life, a place where memories are created and how houses tell the stories of the lives we build while in their shelter.
Homes do that for people. They are the places where some of our most intimate stories unfold.
Finding and creating a home is an emotional, psychological, social and financial investment. There is a lot of energy involved in finding the place to envision the future, raise a family, and perhaps retire. There is no other investment as enjoyable as your own home. Investments in gold or stocks cannot compare to the feelings about a place where you collect memories, create spaces that reflect your ideals and develop to fit your needs over time.
Beyond the emotional ties to home, a number of studies have shown that home ownership has a great impact on feelings of personal autonomy, life satisfaction and increased investment in the community. The sense of satisfaction goes beyond the ability to paint walls whatever color we want, or make improvements to our homes on our own terms. It goes deeper by improving our sense of well being. Furthermore, when we have a stake in the community we live in, we participate more, making our neighborhoods safer and healthier for all members.
Not all the news about the housing market is negative, actually there are many great articles: “in defense of home ownership”, “ten reasons to buy a home “and “a dream house after all” to name a few. But regardless of where you stand on the housing market right now, we can all likely agree that there is no place like a home.
All of our experiences of home are unique. Please share your best memories of home.
As the old saying goes, you only have one chance to make a first impression. If you’re selling your home, it’s true, except that there are several impressions to be made, and each one might have its own effect on the unique tastes of a prospective buyer. I’ve worked with scores of buyers, witnessed hundreds of showings, and I can summarize that experience down this: a tidy and well maintained home, priced right, listed with professional photographs, enhanced curb appeal and onsite visual appeal will sell fastest. We all know first impressions are very important, but the lasting impressions are the ones that sell your home. It’s not easy, but if you can detach a little and look at your home from a buyer’s perspective, the answers to selling it quickly may become obvious to you.
The very first impression your home will make is through its web presence, whether on Windermere.com, the MLS, Craigslist or any multitude of websites. Fair or not, the price is typically the very first thing people look at, and it will be the measurement by which your home is judged. You can always adjust to the right price later, but the impact is lost. It will take something dramatic to get a buyer to reassess the way they feel about the value of your home.
Closely following price are the listing photos. According to this recent article in the Wall Street Journal, professional photos will not only impact your first impressions, it may also make a difference in the final selling price. Great photos might even overcome those initial price objections. Does the exterior photo capture your home at its hi-res best? Does the accompanying text enhance or distract? Online, your home has only a few seconds to capture the home buyer’s attention. If it doesn’t, they’ll click the “Back” button and resume their search. The goal is to have buyers excitedly calling their agents to arrange a showing.
Another old saying is “Location, location, location,” and sure enough, the first live impression of your home is the location. Forget this one; you can’t move your home. There’s not much you can do about location, right? Actually, there is one thing you can do: price it right from the start.
Let’s move on to the first time a buyer sees your home as they pull to the curb out front. Go stand out at the curb and look at it the way you would if you were shopping for a home. Sometimes, a couple hours of labor and $100 worth of beauty bark can be worth thousands in the sales price. I’ve had buyers choose not to get out of the car when we pulled up to a home that they had once been excited to see.
Likewise, I’ve had buyers say they’ve seen enough simply by peaking into the front door. The nose trumps the eyes when it comes to the first impression when entering the house. Buyers get more caught up in the details. Once the home shopper is inside, it’s easy for them to get distracted and focus on something that seems to have nothing to do with the structure they will be buying, from a dirty dish in the sink to a teenager’s bedroom that’s been decorated in posters and/or melodrama. Do everything you can to set a positive lasting impression. The buyer may look at dozens of homes. What is your strategy to convince them to make an offer on yours?
Guest post by Eric Johnson, Director of Education
It seems the winter is settling in early through much of the West Coast this year, with October frost and early winter warnings. Last week The Seattle Times reported, “This year will bring the most intense La Niña conditions since 1955 … Meteorologists say more rain, colder temperatures and bigger snowstorms are likely.” Whether the meteorologists are right this year or not, now is the time to do some home repair so you can enjoy the winter inside your warm house.
Weatherizing your home should be more than just packing in your patio furniture, checking your furnace and cleaning out your rain gutters, though these make a big difference in preparing your home and avoiding December disasters. Weatherizing your home–especially in light of harsh warnings–will protect your investment from preventable damage, save money on energy costs and, most importantly, keep your home safe and warm for you and your loved ones throughout the winter season. Here is a useful checklist to manage your weatherization project.
Getting started: Check your toolbox to make sure you have all the materials you need for home maintenance in one place. This NY Times article provides a good list of the tools you’ll really need to maintain your home. After your toolbox is put together, you can confidently begin the maintenance on your home.
Insulation: According to the Sustainable Energy Info Fact Sheet “Insulating a home can save 45-55% of heating and cooling energy”. For the best results, your home should be properly insulated from the ceilings to the basement. However, if insulating your complete home is not in your budget, the U.S. Department of Energy states, “one of the most cost-effective ways to make your home more comfortable year-round is to add insulation to your attic.” By starting in your attic and progressively adding insulation to other areas of your home over time, you will avoid spending a large sum of money up-front.
Cracks & Leaks: Do a run-through of your entire house for cracks and leaks, from your roof to your baseboards. Winter weather is unpredictable. Whether your area gets rain, wind or snow, cracks in your house can lead to cold drafts or leaks that cause water damage. Do-it-Yourself.com reports, “The average house, even when well-insulated, contains cracks and gaps between building materials that add up to a hole about 14 inches square. All year long, a leaky house not only wastes energy, but can lead to water damage and provide a path for insects”. Depending on your house type, most cracks can be easily filled with supplies from your local hardware store in a do-it-yourself fashion. Use caulk to seal any cracks in the permanent building materials.
Windows & Doors: Another common place for heat leakage is in your windows and exterior doorways. Make sure seals are tight and no leaks exist. If you have storm windows, make sure you put them on before the cold season begins. This 5 minute video, How to Caulk Windows & Doors, demonstrates how to find leaks, pick the correct tools to use, and fill in the leaks. Don’t underestimate the difference some weather strips and a door sweep can provide in preventing drafts and keeping the heat in.
Rain Gutters: Clean your rain gutters of any debris. Buildup will cause gutters to freeze with ice, crack and then leak. Once you have removed the residue from the drains, test them by running hose water to make sure cracks and leaks have not already formed.
Pipes: Pipes are a number one risk in winter climates. A burst pipe can become a winter disaster in a matter of seconds. Remember to turn off your exterior water source and take in your hose. Internally, wrapping your pipes is a recommended precaution to take. This article from Insights, Natural Hazard Mitigation advises, “Vulnerable pipes that are accessible should be fitted with insulated sleeves or wrappings, the more insulation the better”.
Heating System: What is one thing gas fireplaces, wood burning stoves, and central air heating systems all have in common? They all need to be cleaned and maintained. Check and clean your indoor heating system thoroughly. This is important to avoid dangers such as house fires. If you use an old fashioned wood stove, make sure there is no leaks and that all soot build up or nests are removed. If a furnace is what you have remember to change the filters as recommended or clean out your reusable filters.
Fireplace & Wood burning stoves: Make sure to have chimneys and air vents cleaned early in the season if you are planning on warming your home with a wood-burning source. When your fireplace is not in use make sure to close the damper, some resources estimate an open damper can increase energy consumption as much as 30%.
Outside: As we mentioned before make sure you bring your patio furniture inside (or cover) for the winter- but don’t forget other, smaller items such as your tools, including a hose and small planting pot. These items can be damaged or broken in extreme cold. Clear out any piles around the side of your house, checking for cracks as you go so to avoid providing shelter for unwelcomed guests over the cold season.
If your property has large trees check for loose branches and call someone to trim back any items that may fall in your yard, on your roof or even damage a window.
Emergency Kit: Make sure your emergency kit is up-to-date with provisions, batteries, fresh water, food for animals, entertainment for kids, etc- especially if you live in an area prone to power outages.
When it comes to protecting our investments and our families’ safety “an ounce of prevention is worth a pound of cure” is a good philosophy. Your winter preparedness plan will fit your property, schedule and needs. What are some tips you have for preparing for winter? What are some of your favorite activities to do at home over the winter while weathering out a storm?
By Brittany Lockwood
You may know Brittany as the helpful voice behind the Marketing Solutions Help Desk. She grew up in Cheney, Washington so she knows a thing or two about harsh winters.
The other day I was searching for my daughter’s cell phone number – which I haven’t memorized because I simply speed-dial it – and I realized it’s been years since I memorized anyone’s phone number. And this was just after I’d booked a flight online and selected my seat, and downloaded some new music into my iPod.
It occurred to me that these are just three examples of the tremendous changes that have happened just since the new millennium began. At the beginning of this decade, iTunes, YouTube and Facebook did not exist. Today, their combined daily views and downloads are in the billions.
An article in Newsweek a few months ago highlighted how much things have changed in a decade. The numbers are staggering and surprising.
- Ten years ago, a total of 400,000 text messages were sent per day; today 4.5 billion are zinging through cyberspace every day.
- In 2000, 12 billion emails were sent each day; today 247 billion are sent daily (many of which were in my spam filter this morning).
- Ten years ago, about 208 billion letters were mailed through the postal system each day; today the number of letters mailed daily is less than 176 billion.
This decade has been tumultuous, to say the least. Beyond the tremendous technology-driven advances, we are still struggling with this economy. Unemployment rates are too high. Banks are still struggling. And it is heartbreaking that people have lost their homes.
Even though there is a lot of uncertainty, I remain optimistic. I am realistic enough to know that this recovery will take awhile. But recover we will.
One thing that hasn’t changed in the past decade is the resiliency of real estate over time. When you look at median single-family home prices ten years ago versus this year, you’ll see that home values have increased since 2000. This is encouraging, especially when you consider that the stock market today is the same place it was 10 years ago. For most people, their home is worth more today than when they bought it. It might be worth less than it was two or three years ago, but real estate has never been about day trading. It’s a long-term investment. And if the last 10 years, or 100 years, are any indication, we can count on growth in home values.
And that’s a good thing.
July Median Home Prices*
What are some of the most memorable changes for you in the past decade?
The results are in from FHFA.gov’s latest ranking of the top performing markets in the U.S.
Each quarter they track 245 cities across the country and rank their real estate markets by home price appreciation.
What’s the highest performing city the the U.S.
Vegas! Their prices have gone up 17.63% in the last year.
How about the worst?
Bloomington, Illinois sits in dead last where prices went down 3.58%
Here’s how Colorado cities are ranked:
• #10 Colo. Springs = 11.41%
• #16 Greeley = 10.68%
• #59 Fort Collins = 8.29%
• #64 Denver = 8.15%
• #97 Boulder = 6.85%
DIY Home Staging Tips:
With a little time, effort and imagination, you can stage your home to showcase its best features, sell it faster and get top dollar.
Clean up, pare down, and toss out: By simply getting rid of excess furniture and clutter, you can make any room look larger and more inviting.
Make it professional, not personal: Remove family photos, mementos and other personal items from the space. This not only eliminates clutter, it helps potential homebuyers envision their lives in the space.
Repurpose rooms: Do you have a “junk” room? You can transform a liability into an asset by turning an underused space into a reading nook, a craft room, a yoga studio or a home gym. Just clean it up, add a coat of paint, some furniture and the right accessories.
Lighten up: Light, airy rooms look bigger and more welcoming. You can create a pleasing effect by using the right wattage bulbs and multiple light sources. The right window treatments can also have a big impact. Choose fabrics that are light and gauzy, rather than dark and heavy.
Try a little color: Paint is the cheapest, easiest way to update your home. Stick with warm, natural hues, but try darker colors for accent walls and to highlight special features. You can give old furniture new life with a coat of shiny black paint—and freshen up the front door with a bold, cheerful color.
Add some decorative touches: Art, accessories, plants and flowers breathe life into a home. Make rooms more inviting with accessories that are carefully grouped, especially in threes. Pay attention to scale, texture and color. Bring the outdoors in with plants and flowers.
When it comes to looking for a home most people start on the internet. The photos in your property listing can make a powerful first impression. According to a recent Wall Street Journal article, professional photos can increase home views up to 61%. Make sure your home is “ready for its close-up” by following these simple guidelines before the photographer shows up.
For exterior photography:
· Make sure no cars are parked in front of your house or in your driveway.
· Sidewalks and streets should be cropped out
· There should be up-close and angled shots, as well as long shorts that emphasize space.
· Clear away or trim vegetation blocking the front door or path to the door.
· Make sure lawns are mowed, hedges clipped, etc.
· Remove evidence of pets.
· Put away children’s toys.
· If you are selling a condo or townhome, such amenities as tennis courts, a gym, a garden patio or clubhouse should be photographed.
For interior photography:
· Make sure your house is spotless, windows are clean and rooms are decluttered.
· Repair all visible damage, e.g., bad water stains, gouges, chipped paing.
· Drapes and blinds should be open and lights on.
· Remove trash cans, close toilet seats.
· Use floral arrangements in kitchens and dining rooms.
· Make sure that interesting details and attractive features—e.g., wood floors, a carved mantel, marble countertops and ornamental tile backslashes, etc. – are photographed.
When I was growing up, my family must have moved a dozen times. After the first few moves, we had it down to a science: timed out, scheduled, down to the last box. Despite our best efforts, plans would change, move-out and move-in days would shift, and the experience would stress the entire family out. Despite the stress, we always managed to settle in our new home and sell our old one before the start of school.
With a lot of planning and scheduling, you can minimize the stress of selling your house and moving. Here are some tips:
Know when you want to be moved out and into your new home and have a backup plan in case it falls through. Before you sell your home, familiarize yourself with local and state laws about selling a home so you’re not caught by surprise if you forget something important.
Lists and schedules are going to be your new best friend through the process. Have a timetable for when you want to sell your house when you have appraisers, realtors, movers, etc. over. Also, keep one for when your things need to be packed and when you need to be moved into the new place. I suggest keeping it on an Excel sheet so you can easily update it as the timeline changes (and it will – stuff happens).
First time selling a house? Check out some great resources on what you need to know. US News has excellent, step-by-step guides on what you need to know to sell. Appraisers and realtors can also be good resources, and since you’ll be working with them through the process, be sure to ask them questions or have them point you to resources.
Have your house appraised before you sell so you know your budget for your new home. This will help you look for an affordable home that meets your family’s needs. It will also help you maximize the amount you can receive for your old home. You can also learn useful information from an appraisal, such as which repairs need to be made, if any.
Does your house need repairs before you move? If so, figure out whether you’ll be covering them, or whether your buyers will (this will be a part of price negotiations, so factor it in with your home budget). Will you need to make repairs in your new house, or will that be covered? Either way, make sure you know which repairs need to be made – and either be upfront with buyers about them or make them before you sell.
Prepare to Move
If you’re moving to a new town or a new state, you need to prepare more than just a new home. Research doctors and dentists, places to eat, and what to do for fun. If you have school-aged children, look at the local school district or private school options – not only to learn how to enroll your kids, but also to get a feel for the school culture, see what extracurricular activities your kids can do, what standards/learning methods your kids’ new school will implement, etc.
Think: how soon are you moving, what will you need to use before you move, what can get boxed and what needs to stay out? The sooner you’re moving out, the sooner you need to pack, but if you have time, just take a day per weekend to organize a room, pack what you want to take and arrange to donate what you want to get rid of.
Moves are a great time to purge old, unwanted and unused stuff from your home. Sometimes, it’s necessary if you’re moving into a smaller space. Either way, as you pack each room, think about whether you use what you’re packing to take with you. If you do, pack it to go. If not, put it in a separate box to go to your local donations place. You can also call some organizations to have your unwanted things picked up, no hassle.
If You Have Kids
Moving with kids can be extra stressful. Be sure to include them in the process. This is a wonderful opportunity to teach younger children about moving and prepare them for the changes it brings. Older children can help out with responsibilities, like packing their room or researching their new town.
Your New Place
Moving into a new place takes some planning as well. Once you’ve bought your new home or condo, design at least a basic outline for where your stuff will be set up. Make necessary repairs and decorate (painting, for example) before you unpack. Ideally, you should have some time to do these things before, but if you don’t, don’t be in a hurry to unpack everything – it can be a hassle to paint if you have all your furniture and bookshelves up!
Staying In Touch and Making New Friends
Finally, moving can mean good-byes with family and/or friends. Social media is a great way to keep in touch with people after you’ve moved, but distance can still weaken these old relationships. Make some time to call or message your old friends to keep in touch. Pair that work with a concerted effort to meet new people. See what hobbies or groups are in your new area and start there. It doesn’t seem like a lot, but it can make your new house a home and make your new town a community you can enjoy.
Patrick Bailey is a professional writer mainly in the fields of mental health, addiction, and living in recovery. Patrick is currently a writer for Mountain Springs Recovery as well as on his own blog.