5 Questions to Decide Whether to Pay Down Debt or Save
It can be hard deciding whether to prioritize paying down debt or putting money into savings – especially if you have limited resources. Answering five key questions can help you allocate your funds.
1. Do you have high-interest debt?
Interest rates on credit cards are often high. That can cost you considerably over time, since credit card interest typically accumulates faster than what you can earn on savings.
Pay it down!
If you’re carrying debt with double-digit rates, it may make sense to prioritize paying it down so you can free up future funds to save or pay other debts.
2. Do you have an emergency fund?
An emergency fund provides cash you can draw on in case of:
- Unexpected car or home repairs
- Medical emergencies
- Essential costs like rent and groceries if you are laid off or out of work
Save it up!
If you don’t have three months’ worth of living expenses set aside for emergencies, consider that goal next, while paying at least the minimum on any loans and credit cards.
3. Are you planning for retirement?
Your retirement account earnings may produce earnings of their own, so the earlier you start to save, the more growth potential you have. Plus, some retirement contributions help you minimize taxes.
Save it up!
You can’t borrow for retirement, so consider this goal next. As you build your retirement accounts, you can continue to chip away at debt at the same time.
5. What are your other goals or needs?
If your high-rate debt is under control, you have savings in an emergency fund and are contributing to your retirement, it’s time to consider saving for other things.
Save it up!
Depending on your goals, you can save for: A new car, education or a down payment on a home. Once you have those up and running, you can look toward the fun stuff like vacation and other big purchases.
Pay it down!
If your rates and terms are reasonable, you may decide to stay the course with your monthly payments. Or you could bump up your payments to pay those debts faster – especially any with higher rates. That way you’ll save on total interest paid and have more money to allocate to your goals.
Based on your current financial goals; are you Saving Up or Paying Down? We want to hear from you! Sound off on our Facebook Page, our Twitter, Instagram or LinkedIn feeds. And don’t forget to subscribe to our monthly eNewsletter. You may unsubscribe at any time.
The material provided on this website is for informational use only and is not intended for financial or investment advice. Patrick Parker Realty assumes no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment options.
The Difference Between Your Mortgage Rate and the Annual Percentage Rate (APR)
Understanding the difference between an annual percentage rate (APR) and an interest rate could save you thousands of dollars on your mortgage. But most homebuyers might not know that the interest rate and the APR measure two different costs associated with your home loan.
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Interest Rate and APR
An interest rate is the cost of borrowing the principal loan amount. It can be variable or fixed, but it’s always expressed as a percentage. An APR is a broader measure of the cost of a mortgage because it reflects the interest rate plus other costs such as broker fees, discount points and some closing costs, expressed as a percentage
Why have both?
The main difference is that the interest rate calculates what your actual monthly payment will be whereas the APR calculates the total cost of the loan.
RELATED: 6 Mortgage Terms To Know
You can use one or both to make apples-to-apples comparisons when shopping for loans.
For example, a loan with a 4 percent rate will have a lower monthly payment than a loan with a 6 percent rate, assuming both are fixed for the same term. Likewise, the total cost of a loan with a 4 percent APR will be less than one with a 6 percent APR.
Where it gets tricky
Interest rates and APRs have limitations to helping you understand the true cost of your mortgage. But taken together, borrowers should be able to use both figures to determine their total costs. The trick is to understand the interplay between the two figures.
If you are only focused on getting the lowest monthly payment, then focus on the interest rate. But if you are focused on the total cost of the loan, then use the APR as a tool to compare the total cost of two loans.
This chart shows the interest rate, APR and total costs over time for a $200,000 mortgage in which 1.5 discount points cut the interest rate by one-quarter of a percentage point, and another 1.5 discount points cut the interest rate by a further quarter of a percentage point.
3 loans, same amounts, 3 APRs
Time horizon matters
If you plan to stay in your home for 30 years or more, it probably makes sense to go with a loan that has the lowest APR because it means you’ll end up paying the lowest amount possible for your house. But if your time horizon isn’t that long, it may make sense to pay fewer upfront fees and get a higher rate — and a higher APR — because the total costs will be less over the first few years.
APR spreads the fees over the course of the entire loan, so its value is optimized only if a borrower plans to stay in the home throughout the entire mortgage.
Figure the break-even point
If you’re planning to stay in your home for a shorter period, you need to do the math and determine your break-even point.
For example, if you chose a 0.25 percent lower rate for an additional 1.5 points because of the lower APR, but you moved in five years, you lost money. Your break-even on the points was seven years.
Unfortunately, those calculations can be confusing for many, which is why it’s crucial to pick the right lender. Your Buyer’s Agent should have excellent relationships with lender’s and can refer you to someone they trust.
Did you recently shop for a Mortgage? Do you have Buyer’s Remorse? What might you do differently now that you didn’t do then? We want to here from you! Sound off on our Facebook Page or on our Twitter, Instagram or LinkedIn feeds. And don’t forget to subscribe to our monthly HOME ADVICEtm eNewsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
Why Is There So Much Paperwork Required To Get A Mortgage?
Why is there so much paperwork mandated by the lenders for a mortgage loan application when buying a home today? It seems that they need to know everything about you and requires three separate sources to validate each and every entry on the application form.
RELATED: 6 Mortgage Terms To Know
Many buyers are being told by friends and family that the process was a hundred times easier when they bought their home ten to twenty years ago.
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There are two very good reasons that the loan process is much more onerous on today’s buyer than perhaps any time in history:
1. The government has set new guidelines that now demand that the bank proves beyond any doubt that you are indeed capable of paying the mortgage.
During the run-up to the housing crisis, many people ‘qualified’ for mortgages that they could never pay back. This led to millions of families losing their home. The government wants to make sure this can’t happen again.
RELATED: Will I Qualify For A Mortgage?
2. The banks don’t want to be in the real estate business.
Over the last seven years, banks were forced to take on the responsibility of liquidating millions of foreclosures and also negotiating another million plus short sales. Just like the government, they don’t want more foreclosures. For that reason, they need to double (maybe even triple) check everything on the application.
However, there is some good news in the situation.
The housing crash that mandated that banks be extremely strict on paperwork requirements also allowed you to get a mortgage interest rate around 4%.
The friends and family who bought homes ten or twenty years ago experienced a simpler mortgage application process, but also paid a higher interest rate (the average 30-year fixed rate mortgage was 8.12% in the 1990s and 6.29% in the 2000s).
If you went to the bank and offered to pay 7% instead of around 4%, they would probably bend over backward to make the process much easier.
Instead of concentrating on the additional paperwork required, let’s be thankful that we are able to buy a home at historically low rates.
What is the Cost of Waiting Until Next Year to Buy a Home?
Over the course of the last 12 months, home prices have appreciated by 7.0%. Over the same amount of time, interest rates have remained historically low which has allowed many buyers to enter the market.
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As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price, but instead about the ‘long-term cost’ of the home.
The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 4.7% over the next 12 months.
What Does This Mean as a Buyer?
If home prices appreciate by 4.7% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:
If buying a home is in your plan for 2018, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.
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Why the Holidays Are A Great Time to Sell Your Home
When it comes to real estate, many believe the ideal time to sell your home often falls in the spring months. After all, people often hunker down during the winter or are too busy with the holidays to think about purchasing a new home. Not to mention that people like to start shopping in the spring to make sure they are settled in their home before the start of a new school year.
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But putting your house up for sale around the holidays has its benefits. Sure, you may not get into a bidding war, but you are going to deal with serious buyers who are ready to pull the trigger.
Consider these major benefits to selling your home this holiday season:
1. There’s Less Inventory
Conventional wisdom says people should wait until the spring to get the most from a home sale. But studies have shown that homes listed around the holidays can not only command more money, but can also sell quicker than ones listed in the spring.
One of the reasons is there is less competition during the holidays. For a multitude of reasons people won’t put their houses up for sale when the holidays are coming up, and so the ones shopping aren’t going to have dozens of houses to choose from. In the spring, inventory usually picks up, and price wars break out in coveted neighborhoods. But during the holidays, there will be limited choices which means a homeowner can have a higher asking price.
2. Buyers Are More Serious
Anyone who is shopping for a new home around Thanksgiving, Christmas or New Year’s is undoubtedly going to be a serious buyer. While hitting open houses is a favorite pastime for many Americans, they aren’t going to spend their precious time around the holidays seeing how the other half lives. In the spring, when open houses are a regular occurrence, people may check out homes without a clear plan to buy.
If your house is up for sale in the winter and someone is looking at it, chances are that person is serious and is ready to pull the trigger. That can often result in a quicker sales process.
3. You Can Make the Home Warm and Cozy
The holidays are often a time when people gather around fireplaces, have hot chocolate and make nice smelling cakes and pies. For homeowners who put their house up for sale during the winter months, they can stage their house to give off the comfy and homey vibe that appeals to many home buyers. Some people may argue that showing a house in the winter is hard to do because there’s snow on the ground, the house is drafty and the curb appeal is lacking. But keeping the heat up, having a pie baking in the oven to give off a pleasant smell and keeping the sidewalk and driveway clear of snow and ice can boost a home’s appeal.
Not to mention that buyers tend to be more emotional during the holidays and will make decisions based on the feeling a house conjures up. During the spring there is a lot more foot traffic in homes that are up for sale. Buyers may not be able to do a thorough walk-through, may get frustrated because of the number of people looking at it and can leave with a bad feeling about the home.
4. Timing Is Perfect for Transfers
The end of the year is typically the time when people get notified that they will be moving because of a job transfer. Those people are going to need a house sooner rather than later, and as a result will be hunting for a new home during the holidays. These buyers can’t wait for the spring, which is why listing during the holidays can get the home sold and sold quickly.
5. Your Neighborhood May Look More Appealing
One of the staples of the holiday months, particularly Christmas, is that many people adorn their homes with festive lights and decorations. That is also true of local communities where lit-up snowflakes and wreaths can be found on lamp poles and up and down the main streets. People purchasing a home during that time may see the neighborhood in a different light and may be more willing to consider an area that they may have been on the fence about.
6. End-of-Year Tax Breaks
Reducing the tax bill is not the main reason buyers purchase a new home, but it could be the reason serious buyers make a move during the holidays. That’s because if the home sale closes before Dec. 31, buyers can deduct the mortgage interest, property taxes and interest costs of the loan. The tax deductions can be significant and could prompt a home buyer to move during the holidays instead of waiting until the spring.
Nobody wants their home to languish on the market nor do they want to have to lower the price they are asking for. And while many fear that will happen if they list their home during the holidays, often that isn’t the case.
Are you planning on selling your home? Contact us to find out why selling your home during the holiday season can mean less competition, more serious buyers and a quicker sale.
When is Black Friday 2017? It Depends.
Perhaps you’ll snag major deals on Black Friday, but don’t let that stop you from finding deals any time of year. Depending on what you’re looking for, Black Friday might not be the cheapest day to shop.
Websites BlackFriday.com and Rather Be Shopping looked at historical data and announced sales to determine the best dates to score deals from now until Christmas.
And if you’re looking to avoid crowds, cross that information, which follows below, with intelligence from Foursquare on the days of the week and times when stores are the least busy, broken down by product category. Generally speaking, Monday, Thursday and Friday are the best days to shop, based on foot-traffic data from the app’s users.
Mondays are good for buying cosmetics (around noon, to be precise), clothing, jewelry and candy. And Monday evenings are ideal for purchasing booze.
Thursdays are great for books, beer and building supplies.
Shopping for kids? Friday is the best day to hit up big box stores like Target, Walmart and Big Lots. It’s not just about good deals, but accessibility. Friday evenings are the slowest at stores, especially supermarkets where grocery aisles are the easiest to navigate.
Sundays are the best for buying gifts at department stores, craft stores and electronics merchants. Again, evenings have the fewest crowds.
Shopping by Product Category
What many retail shoppers and online shoppers don’t realize is there are optimal times during November and December to be buying certain products. Again, based on data, consider the following:
Dec. 4-25 – Jewelry and Wedding Bands
December is the most popular time of year to get engaged, according to wedding resource The Knot. Baubles also make great holiday gifts.
Jewelry promotions are in heavy rotation from Dec. 4 through Christmas Day, according to BlackFriday.com.
Dec. 9-11 – Name Brand HDTVs
Electronics are Black Friday favorites, but that doesn’t end after Cyber Monday.
Prices stabilize a bit following Cyber Week, but there is renewed promotional activity the second weekend in December.
Look for deals of 30-40% off on big brands including Samsung, Sony, Vizio and Panasonic, according to Rather Be Shopping.
Dec. 10 – Fitness Gear and Equipment
Dec. 12 – Stocking Stuffers and Small Gifts
Dec. 13 – Laptops
For the past three years, Dec. 13 has yielded online coupons from Dell.com and HP.com including $500 off a top of the line unit and budget models for less than $250, according to Rather Be Shopping.
Look for more of the same this year.
Dec. 14-17 – PlayStation and Xbox Consoles
Video games and consoles are big sellers in December and these are the best days to get a discount, according to BlackFriday.com
Dec. 14 – Tools and Hardware
Home improvement stores aren’t to be left out of the holiday sales rush and Home Depot, Lowe’s, Ace Hardware and Harbor Freight will have offers of up to 30% off.
Still, Father’s Day brings better deals, so for those self-gifting tools and supplies, it pays to wait until Spring.
Dec. 15 – Toys
Both BlackFriday.com and coupon site Rather Be Shopping agree that this is the absolute best day to buy toys this month at big retailers such as Toys R Us, Target, Amazon and Walmart.
This is when retailers reach crunch time for toy sales and the incentives are aplenty in order to cash in on those “semi” last minute shoppers.
Dec. 16 – Apparel, Shoes, Accessories, Winter Clothing and Kitchen Gear
The absolute best prices on these goods before Christmas is Cyber Monday, but the next best opportunity is the Friday otherwise known as ‘Free Shipping Day.’
This is traditionally the day when retailers offer guaranteed delivery by Christmas Eve, for free.
A large majority of online sites like Gap.com, Lands’ End.com, American Eagle, Macy’s and Old Navy will have fantastic coupon codes to go along with their free shipping offer.
It’s also a great day for kitchen and home goods.
Dec. 21-24 – Big Ticket Items
Retailers begin panic discounting on gift items the closer we get to Christmas, but they also begin clearing out the year’s models on appliances and furniture, but the deals get even better the day after Christmas.
Additional Ways To Save
Online shoppers would be silly not to take advantage of eBates.com. No tricks, no gimmicks, no forms to fill out. Ebates makes earning cash back easy!
Here’s how it works:
1. Shop First, start your search for the retailer where you wish to shop at eBates.com. They are partnered with hundreds of thousands of retailers, it would be extremely rare that whatever you want is not there. Then, be sure to click on any Ebates link to the store you’ll shop with before you make your purchase.
2. Validate When you click an Ebates link, you’ll see a pop-up confirmation letting you know you’re ready to shop and earn Cash Back at that store.
3. Purchase Complete your purchase as you normally would. This will also complete your Shopping Trip.
That’s all you have to do.
That’s it. And every quarter you get a check in the mail.
Do you have any secret holiday shopping tips to share? Sound off on our Facebook Page or on our Twitter, Instagram or LinkedIn feeds. And don’t forget to subscribe to our monthly eNewsletter for articles like this delivered straight to your inbox.
5 Ways To Help Protect Your Credit
If you’ve been watching the news lately, you probably already know that monitoring your information and accounts is more important than ever.
Recently, we’ve seen an unprecedented number of headlines about data theft, with the Equifax data breach being one of the largest with as many as 143 Million people being effected.
Last year was a record year for data breaches in fact, with a 40% increase from the year before. In a world where our information is increasingly digital, and potentially accessible by the “bad guys,” do you know how to take control of your information and identity?
Well, there’s good news and bad news. Starting with the bad, there’s no way to completely prevent identity theft (short of living in the woods and burying your money in a hole). The good news is that there are a few quick steps you can take now, to help protect yourself and keep tabs on your data.
1. Monitor Your Credit
It goes without saying that staying on top of your credit is key. You should know if someone tries to open a new loan account in your name or worse, has used your information to default on a loan.
Once a year, you can get a free copy of your credit report from the three major bureaus (Experian®, Equifax®, TransUnion®) at annualcreditreport.com. It’s important to review all three reports—some lenders don’t report to every bureau, so they may have different information. Read through each report carefully and make sure you recognize the accounts. If something strange turns up, start by contacting the lender to investigate. For more info, take a look at this article on checking your credit report.
It’s also helpful to enroll in a credit monitoring. There are several credit monitoring services out there and most will alert you if a new account is opened in your name, or if something meaningful changes on your credit report. And if you catch something that looks like an error or fraud, they may be able to help you figure out what to do about it.
2. Put Fraud Alerts on Your Credit Report or Freeze Your Credit
What do you do if you think there’s fraud on your accounts? Rather than punching a wall or yelling incessantly, you have more constructive options. If you are (or think you might be) the victim of identity theft, you can put a fraud alert on your credit reports to let potential creditors or lenders know what’s going on. Once they know, they may be able to help protect you by taking extra steps to verify your identity before issuing credit in your name.
You only need to notify one of the three credit reporting companies to put a fraud alert on your credit report and they’re required to tell the other two companies. Make sure you keep copies of all letters and renew the alert every 90 days until the issue is resolved. The Federal Trade Commission’s website, www.ftc.gov/idtheft, also offers information about how to protect yourself against fraud.
And, if you think you could be the victim of identity theft, consider a credit freeze. This is a tool that lets you restrict access to your credit report. And since most creditors need to see your credit report before they’ll let someone open a new account, this could make it harder for potential thieves to apply for credit or open accounts in your name. You can find out more about credit freezes here.
3. Sign Up for Purchase Notifications
Many banks and credit card companies let you to sign up for instant push notifications that’ll let you know when your credit card is used to make a purchase. This might sound annoying, but try it – you may be glad you did.
You can see immediately when your card is used. If you made the purchase, great – you can make sure the merchant charged you the right amount. If you didn’t, then you can quickly take steps to shut down the card and get a new one. And while most major credit card companies don’t hold you liable for the losses if the fraud happened on a credit card and you report it quickly, it’s nice to put a stop to it after a single questionable transaction instead of finding thirty of them on your monthly statement.
Also, some credit card companies allow you to lock and unlock your credit card through their mobile apps. When you can’t find your card, or see an unexpected transaction, you can lock down the card right away. And if your card was hiding in yesterday’s pants or the weird transaction was just something that slipped your mind, it’s easy to reverse.
4. Use A Different Password for Every Account
I know this sounds painful, but it doesn’t have to be. It’s hard to remember multiple passwords, and super frustrating when you mix them all up, but there are ways around it. And it’s better than the alternative.
• Use a password manager. Password managers can generate complex, encrypted passwords for each site you visit. You only need to know a single master password to access all of your passwords through the software and it can autofill your login credentials to save time.
• Tie something from each site to that account’s password. For example, once you build a strong password, you could also add the first 3 characters of each website to your password for that site. If you did this for every account, you’d still be able to remember your password, but help ensure that no 2 are identical. (Of course, there would be the few sites that start with the same 3 letters, but you get what I’m going for). At the very least, this is better than using the same password or forgetting your password all the time.
5. Be Suspicious of Emails or Phone Calls Asking for Your Information
Phishing is when a fraudster tries to contact you while claiming to be your bank, electric company, or anyone else you might trust enough to share your personal information. Fraudsters are getting more and more convincing, so phishing can be tough to spot.
Here are a few things to keep an eye out for:
• Generic emails sent to “Mr./Mrs.,” “Sir/Madame,” etc., instead of your legal name
• Over the phone, the caller asks you to validate your information with a Social Security Number or account number, but they don’t provide any information specific to your account
• Email addresses that don’t match the name of the company supposedly sending you the email.
• Emails with a link asking you to provide information without signing in through the secure site you typically use to access your account. Or, the link leads to a site that looks familiar, but the web address is incorrect or may have subtle differences.
If you experience any of the above, don’t risk responding directly. If you have questions or concerns, contact the company through their official website or phone number to ask about the suspicious message.
While fraud and data breaches are on the rise, so are your options in helping to defend yourself. And the best part is that you’re not alone in the fight. There are several organizations out there that offer sophisticated tools and tips that make it easier to stay on top of fraud than you might think. Bottom line: by adopting these few simple habits, you can play a big part in safeguarding your identity and reducing the impact of fraudsters.
Were you effected by the recent Equifax hack? Have you been the victim of credit card fraud? Have you ever had your identity stolen? What tips do you have for others as to how to navigate this mess? Sound off on the Patrick Parker Realty Facebook Page or on our Twitter, Instagram or LinkedIn Feeds. And don’t forget to sign up for our monthly HOME ADVICE™ eNewsletter for articles like these delivered straight to your inbox.
If you have more questions for Equifax, the company has set up a designated call center at 866-447-7559.
What Is a Real Estate Agent’s Commission?
Ever wonder what exactly a Real Estate Agent does? Are they worth the commission? Ever wonder if you’re paying too much for commission? Even consider going it your own via FSBO?
You may have a great Agent and they don’t communicate with you all they’re doing. Or, you may also have a rock star agent and who’s doing so much it hasn’t even occurred to you all the fine details going into your home sale.
Here are a few facts that might help you sleep at night and have some peace about residential real estate commissions:
1. Real estate agents are sole proprietors
That means that even if they are a part of an agency, they are small business owners and cover all their own costs and carry all the risk. Do you own or have you ever owned your own small business? Then you know you wear ALL the hats and all the responsibility falls to you. Not to mention, your rather high tax rate!
They invest in you and your home. If they take on a listing, that means they’ve calculated the cost of marketing, photos, and time – lots and lots of time. High quality marketing – online and offline – and maybe even virtual tours. All that cost money. There’s considerable overhead if you are active in the field.
They have no salary and no real predictability in income. One deal may have to last them many months or maybe even longer.
2. The sale of your home may be covering for the loss of another
Deals fall through ALL. THE. TIME. Your particular sale may go pretty smoothly – great! I guarantee you it has ended up covering for a major loss on another deal. It’s the nature of business.
3. The real work begins once a contract is accepted
It may feel like all an agent does is show up sometimes for an open house here and there and put a sign in the yard. Or every time they come over, they’re telling you things you need to spend money on. But the real work is done behind the scenes and is intensified once an offer is accepted. Getting to the closing table is more and more challenging.
Pat Vredevoogd-Combs, a former president of the National Association of REALTORS, testified before the House Financial Services Committee on Housing to stark federal complaints about residential real estate industry pricing.
She submitted a list of 184 things that Listing Agents do in every real estate transaction as a part of her testimony to the committee. She stated, “By all accounts the general public is not aware of all the services that agents provide to sellers and buyers during the course of the transaction, probably because most of the important services are performed behind the scenes.”
Here is the list of (just) 184 things residential real estate agents do:
1. Make appointment with seller for listing presentation.
2. Send a written or e-mail confirmation of appointment and call to confirm.
3. Review appointment questions.
4. Research all comparable currently listed properties.
5. Research sales activity for past 18 months from MLS and public databases.
6. Research “average days on market” for properties similar in type, price and location.
7. Download and review property tax roll information.
8. Prepare “comparable market analysis” (CMA) to establish market value.
9. Obtain copy of subdivision plat/complex layout.
10. Research property’s ownership and deed type.
11. Research property’s public record information for lot size and dimensions.
12. Verify legal description.
13. Research property’s land use coding and deed restrictions.
14. Research property’s current use and zoning.
15. Verify legal names of owner(s) in county’s public property records.
16. Prepare listing presentation package with above materials.
17. Perform exterior “curb appeal assessment” of subject property.
18. Compile and assemble formal file on property.
19. Confirm current public schools and explain their impact on market value.
20. Review listing appointment checklist to ensure completion of all tasks.
Listing Appointment Presentation
21. Give seller an overview of current market conditions and projections.
22. Review agent and company credentials and accomplishments.
23. Present company’s profile and position or “niche” in the marketplace.
24. Present CMA results, including comparables, solds, current listings and expireds.
25. Offer professional pricing strategy based and interpretation of current market conditions.
26. Discuss goals to market effectively.
27. Explain market power and benefits of multiple listing service.
28. Explain market power of Web marketing, IDX and MLS.
29. Explain the work the broker and agent do “behind the scenes” and agent’s availability on weekends.
30. Explain agent’s role in screening qualified buyers to protect against curiosity seekers.
31. Present and discuss strategic master marketing plan.
32. Explain different agency relationships and determine seller’s preference.
33. Review all clauses in listing contract and obtain seller’s signature.
After Listing Agreement is Signed
34. Review current title information.
35. Measure overall and heated square footage.
36. Measure interior room sizes.
37. Confirm lot size via owner’s copy of certified survey, if available.
38. Note any and all unrecorded property lines, agreements, easements.
39. Obtain house plans, if applicable and available.
40. Review house plans, make copy.
41. Order plat map for retention in property’s listing file.
42. Prepare showing instructions for buyers’ agents and agree on showing time with seller.
43. Obtain current mortgage loan(s) information: companies and account numbers
44. Verify current loan information with lender(s).
45. Check assumability of loan(s) and any special requirements.
46. Discuss possible buyer financing alternatives and options with seller.
47. Review current appraisal if available.
48. Identify Home Owner Association manager is applicable.
49. Verify Home Owner Association fees with manager–mandatory or optional and current annual fee.
50. Order copy of Home Owner Association bylaws, if applicable.
51. Research electricity availability and supplier’s name and phone number.
52. Calculate average utility usage from last 12 months of bills.
53. Research and verify city sewer/septic tank system.
54. Calculate average water system fees or rates from last 12 months of bills.
55. Or confirm well status, depth and output from Well Report.
56. Research/verify natural gas availability, supplier’s name and phone number.
57. Verify security system, term of service and whether owned or leased.
58. Verify if seller has transferable Termite Bond.
59. Ascertain need for lead-based paint disclosure.
60. Prepare detailed list of property amenities and assess market impact.
61. Prepare detailed list of property’s “Inclusions & Conveyances with Sale.”
62. Complete list of completed repairs and maintenance items.
63. Send “Vacancy Checklist” to seller if property is vacant.
64. Explain benefits of Home Owner Warranty to seller.
65. Assist sellers with completion and submission of Home Owner Warranty application.
66. When received, place Home Owner Warranty in property file for conveyance at time of sale.
67. Have extra key made for lockbox.
68. Verify if property has rental units involved. And if so:
69. Make copies of all leases for retention in listing file.
70. Verify all rents and deposits.
71. Inform tenants of listing and discuss how showings will be handled.
72. Arrange for yard sign installation.
73. Assist seller with completion of Seller’s Disclosure form.
74. Complete “new listing checklist.”
75. Review results of Curb Appeal Assessment with seller and suggest improvements for salability.
76. Review results of Interior Decor Assessment and suggest changes to shorten time on market.
77. Load listing time into transaction management software.
Entering Property in MLS Database
78. Prepare MLS Profile Sheet–agent is responsible for “quality control” and accuracy of listing data.
79. Enter property data from Profile Sheet into MLS listing database.
80. Proofread MLS database listing for accuracy, including property placement in mapping function.
81. Add property to company’s Active Listings.
82. Provide seller with signed copies of Listing Agreement and MLS Profile Data Form within 48 hours.
83. Take more photos for upload into MLS and use in flyers. Discuss efficacy of panoramic photography.
Marketing the Listing
84. Create print and Internet ads with seller’s input.
85. Coordinate showings with owners, tenants and other agents. Return all calls–weekends included.
86. Install electronic lockbox. Program with agreed-upon showing time windows.
87. Prepare mailing and contact list.
88. Generate mail-merge letters to contact list.
89. Order “Just Listed” labels and reports.
90. Prepare flyers and feedback forms.
91. Review comparable MLS listings regularly to ensure property remains competitive in price, terms, conditions and availability.
92. Prepare property marketing brochure for seller’s review.
93. Arrange for printing or copying of supply of marketing brochures or flyers.
94. Place marketing brochures in all company agent mailboxes.
95. Upload listing to company and agent Internet sites.
RELATED: Your Custom Home Marketing Plan
96. Mail “Just Listed” notice to all neighborhood residents.
97. Advise Network Referral Program of listing.
98. Provide marketing data to buyers from international relocation networks.
99. Provide marketing data to buyers coming from referral network.
100. Provide “Special Feature” cards for marketing, if applicable/
101. Submit ads to company’s participating Internet real estate sites.
102. Convey price changes promptly to all Internet groups.
103. Reprint/supply brochures promptly as needed.
104. Review and update loan information in MLS as required.
105. Send feedback e-mails/faxes to buyers’ agents after showings.
106. Review weekly Market Study.
107. Discuss feedback from showing agents with seller to determine if changes will accelerate the sale.
108. Place regular weekly update calls to seller to discuss marketing and pricing.
109. Promptly enter price changes in MLS listings database.
The Offer and the Contract
110. Receive and review all Offer to Purchase contracts submitted by buyers or buyers’ agents. 111. Evaluate offer(s) and prepare “net sheet” on each for owner to compare.
112. Counsel seller on offers. Explain merits and weakness of each component of each offer. 113. Contact buyers’ agents to review buyer’s qualifications and discuss offer.
114. Fax/deliver Seller’s Disclosure to buyer’s agent or buyer upon request and prior to offer if possible.
115. Confirm buyer is pre-qualified by calling loan officer.
116. Obtain pre-qualification letter on buyer from loan officer.
117. Negotiate all offers on seller’s behalf, setting time limit for loan approval and closing date.
118. Prepare and convey any counteroffers, acceptance or amendments to buyer’s agent.
119. Fax copies of contract and all addendums to closing attorney or title company.
120. When Offer-to-Purchase contract is accepted and signed by seller, deliver to buyer’s agent.
121. Record and promptly deposit buyer’s money into escrow account.
122. Disseminate “Under-Contract Showing Restrictions” as seller requests.
123. Deliver copies of fully signed Offer to Purchase contract to sellers.
124. Fax/deliver copies of Offer to Purchase contract to selling agent.
125. Fax copies of Offer to Purchase contract to lender.
126. Provide copies of signed Offer to Purchase contract for office file.
127. Advise seller in handling additional offers to purchase submitted between contract and closing.
128. Change MLS status to “Sale Pending.”
129. Update transaction management program to show “Sale Pending.”
130. Review buyer’s credit report results–Advise seller of worst and best case scenarios.
131. Provide credit report information to seller if property is to be seller financed.
132. Assist buyer with obtaining financing and follow up as necessary.
133. Coordinate with lender on discount points being locked in with dates.
134. Deliver unrecorded property information to buyer.
135. Order septic inspection, if applicable.
136. Receive and review septic system report and access any impact on sale.
137. Deliver copy of septic system inspection report to lender and buyer.
138. Deliver well flow test report copies to lender, buyer and listing file.
139. Verify termite inspection ordered.
140. Verify mold inspection ordered, if required.
Tracking the Loan Process
141. Confirm return of verifications of deposit and buyer’s employment.
142. Follow loan processing through to the underwriter.
143. Add lender and other vendors to transaction management program so agents, buyer and seller can track progress of sale.
144. Contact lender weekly to ensure processing is on track.
145. Relay final approval of buyer’s loan application to seller.
146. Coordinate buyer’s professional home inspection with seller.
147. Review home inspector’s report.
148. Enter completion into transaction management tracking software program.
149. Explain seller’s responsibilities of loan limits and interpret any clauses in the contract.
150. Ensure seller’s compliance with home inspection clause requirements.
151. Assist seller with identifying and negotiating with trustworthy contractors for required repairs.
152. Negotiate payment and oversee completion of all required repairs on seller’s behalf, if needed.
153. Schedule appraisal.
154. Provide comparable sales used in market pricing to appraiser.
155. Follow up on appraisal.
156. Enter completion into transaction management program.
157. Assist seller in questioning appraisal report if it seems too low.
Closing Preparations and Duties
158. Make sure contract is signed by all parties.
159. Coordinate closing process with buyer’s agent and lender.
160. Update closing forms and files.
161. Ensure all parties have all forms and information needed to close the sale.
162. Select location for closing.
163. Confirm closing date and time and notify all parties.
164. Solve any title problems (boundary disputes, easements, etc.) or in obtaining death certificates.
165. Work with buyer’s agent in scheduling and conducting buyer’s final walkthrough prior to closing.
166. Research all tax, HOA, utility and other applicable prorations.
167. Request final closing figures from closing agent (attorney or title company).
168. Receive and carefully review closing figures to ensure accuracy.
169. Forward verified closing figures to buyer’s agent.
170. Request copy of closing documents from closing agent.
171. Confirm the buyer and buyer’s agent received title insurance commitment.
172. Provide “Home Owners Warranty” for availability at closing.
173. Review all closing documents carefully for errors.
174. Forward closing documents to absentee seller as requested.
175. Review documents with closing agent (attorney).
176. Provide earnest money deposit from escrow account to closing agent.
177. Coordinate closing with seller’s next purchase, resolving timing issues.
178. Have a “no surprises” closing so that seller receives a net proceeds check at closing.
179. Refer sellers to one of the best agents at their destination, if applicable.
180. Change MLS status to Sold. Enter sale date, price, selling broker and agent’s ID numbers, etc.
181. Close out listing in transaction management program.
Follow Up After Closing
182. Answer questions about filing claims with Home Owner Warranty company, if requested.
183. Attempt to clarify and resolve any repair conflicts if buyer is dissatisfied.
184. Respond to any follow-up calls and provide any additional information required from office files.
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10 Rookie Mistakes That Hurt First-Time Homebuyers
If you’re a first-time homebuyer, buying a house can definitely be overwhelming. With an Agent by your side to guide you through the process, you’ll make it through just fine – but you might want to be aware of these rookie mistakes.
FREE DOWNLOAD: The Ultimate Home Buyer’s Guide
If you’re searching for homes for sale on the Jersey Shore or Eastern Monmouth County where the market is ultracompetitive, making one of these mistakes could end up costing you big time.
Here are the Top 10 mistakes often made by first-time homebuyers:
1. Getting too emotionally attached
You’re about to purchase what’s probably the most expensive item you’ve ever bought. So try – as difficult as it is – not to get too attached. There will always be another house if you lose one.
A good tip would be to work with your Buyer’s Agent to find several homes you love so that you’re not too emotionally invested in one.
RELATED: How To Find The Right Buyer’s Agent
2. Finding the home yourself
We know you’re going to browse www.patrickparkerrealty.com and other real estate websites to find homes for sale in your desired location. But don’t rely on just your research skills. Finding your own home can be like diagnosing yourself of an illness.
Let your Agent vet homes for you. A good Real Estate Agent might find you properties that aren’t yet on the market. And of the homes that are on the market, your agent should be able to tell you what the home looks like, where it’s situated, the price per square foot in the neighborhood, and every other detail.
3. Going directly to the listing agent
If you’ve ever played Monopoly, there’s a card you might pick (a bad one) that says, “Do not pass go. Do not collect $200.” It means you did something wrong and now must pay the penalty.
The same applies if you go directly to a Listing Agent who is hired by and represents the seller, not you. Unless the Listing Agent is someone you have worked with or know personally and know they are an amazing agent, this is a big no-no. You need someone representing your best interests and your best interests only.
4. Assuming you have no rules to follow as a homeowner
One of the draws of homeownership is freedom: getting out from under someone else’s rules, whether those of your parents or your landlord. But some homes have deed restrictions that come with conditions.
Deed restrictions vary, depending on the community you’re buying in. Their purpose is typically to ensure the property holds its value, which is a good thing. But if you have plans that conflict with the restrictions, you won’t be a happy camper.
Get copies of the restrictions, read them, and ‘look under the hood’ at the internal health of a condo or homeowners’ association. Look for things like whether reserves are kept, the neighbors are paying their assessments, if there are pet restrictions, and whether you can run a business from the home.
5. Not saving enough money
If you saved up enough money for a down payment, kudos. That’s a huge accomplishment. Unfortunately, it’s only the tip of the iceberg. Transitioning from a renter or your parents’ home to your own home has incidental costs that may be overlooked.
Aim to have two to three months’ worth of mortgage payments in reserve. You should also count on paying closing costs (between 2% and 5% of the home’s price) and property taxes. After moving day, you’ll also need to buy household essentials you’ve never owned before, such as appliances, tools, and garden supplies.
Three to six months of expenses saved up in an emergency fund is even better. It’s not money to buy new furniture or remodel a room. It’s for the unexpected expenses, such as a leaky roof.
6. Not getting pre-approved for a loan
You’ve run the numbers several times now and know just what you can afford. That’s great. But if you want your offer to be taken seriously by the seller, get proof of income and assets in the form of a pre-approval letter from a lender.
This process can take just a few days and simply means that the lender has looked through your financial situation and is comfortable with the idea of lending you a certain amount of money.
7. Paying private mortgage insurance (PMI)
If you don’t put down at least 20%, you’ll have to pay PMI. Many first-time buyers pay this, she says. If you do, make sure you notify your lender when you pay down your mortgage and owe just 80% of the home’s value. Your lender will automatically cancel your PMI when you owe 78%, but you don’t want to pay a month more of PMI than you have to.
8. Not checking the price of homeowners’ insurance
Buying a home on the water is a dream come true for many people. But make sure you can afford to insure that home because it could be pricey. Being on the water means higher wind insurance and, of course, higher risk of flood. Other factors may increase your insurance, such as if your new home has a pool and more. Do your research ahead of time. Your Buyer’s Agent will have a network of experts you can ask about these things.
9. Not checking your credit score
Here’s a weird trivia fact: About 42 million credit reports contain errors. True, the error might be just a misspelling of your street address, which wouldn’t affect you. But some errors could hurt your score badly, such as showing you have late payments when you don’t.
Check your credit at least three months prior to house hunting. If there’s an error, ask the credit bureau to kindly fix it. Your interest rate depends on it.
10. Not getting a home inspection
All homes need inspections, even brand-new ones. But some homebuyers skip this step because they get emotionally attached to the home and want it no matter what. If the home does have issues, you’ll want the seller to fix them or to lower the price.
If you’re first-time homebuyers, you might be a bit shy about asking the seller to fix that stuck window or leaky faucet. But the reality is that the buyers who ask for more often get more. So don’t be afraid to speak up and get outstanding issues fixed before you sign those settlement papers.
Did you make any rookie mistakes and have tips to share? Sound of on our Facebook Page, or on our Twitter, LinkedIn or Instagram feeds. And don’t forget to subscribe to our monthly HOME ADVICE email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
How to Keep Your Home Cool in Summer Without AC
Ah, air conditioning. During the dog days of summer it’s easy to deem air conditioning as one of humankind’s greatest inventions. Unfortunately, it just so happens to be an energy-intensive one, which can lead to high energy bills. What’s more, many older homes don’t have central air installed, especially in more temperate regions. This may be fine when the thermostat only clocks in at 60, but it can be painful when it soars into the 90s or above.
Thankfully, there are plenty of energy-efficient ways to keep your home cool in the summertime without the help of AC.
Let’s take a look at just a few…
1. Shading Your Windows
One of the best things you can do to keep your house cool without even thinking about AC is shading your windows. There are a number of ways to do this.
Roof overhangs and awnings. A roof overhang is a type of roof that extends further than a typical roof, providing shade for the part of the house it covers. An awning provides a similar function, and can be added to any window, whether on the first floor or second, even after a roof has been installed. For maximum cooling, you’ll want to invest in protecting your western and southern windows from light, as this is where they’ll prove most necessary and effective. However, if you’d like to benefit from passive warming in the winter, overhangs and awnings are likely too permanent of a solution. Instead, you’d be better shading your windows with one of the removable and retractable options below.
Automated blinds. A good pair of thick blinds can do wonders when it comes to keeping your house cool, especially if you keep them closed during the warmest parts of the day. Due to their construction, honeycomb blinds in particular can be effective at absorbing heat, but any thick blind will do. An automated pair of blinds that open and close on a schedule and that can be controlled from afar can help you maximize cooling throughout the day when you’re gone. Whatever kind of blinds you choose, these are a good solution for southern facing windows since they can be raised in the winter when you might need warmth.
Other window treatment options. Of course, there are many other kinds of window treatments that are great at blocking out light. Shades are particularly effective if mounted closest to the window to reduce heat gain. Medium-colored drapes with a plastic backing can reduce solar gain by as much as 33%. Pro tip: dip your drapes in water or wash them the night before and let them dry as they hang for even more cooling. Tightly woven bamboo screens, whether placed inside or outside of a window, can also prevent as much as 80% of solar heat from passing through the window.
Trees. Planting trees around your house — but not so close that they become a fire hazard — is a beautiful and natural way to shade your windows. Again, don’t do this on the south facing side if you’d like passive heat in the winter. Opt for a variety that’s known for its shading, like a species of maple or river birch.
RELATED: How to Hack Your Electric Bill
2. Insulate Your Home Well
We often think of insulation when it comes to keeping our houses warm, but it’s just as important in keeping the house cool. You’ll want to insulate ducts to prevent any leakage, as well as your attic and walls. Spray foam, rigid foam boards, and batt insulation are all effective at regulating your house’s temperature.
RELATED: Green Your Home
On a similar note, if you are currently designing or remodeling your home, now is the time to choose materials that have a high thermal mass, which means that they store heat. Such materials include brick, cement, rammed earth, stone, and ceramic tiles. If you’ve got a finished home, even covering a wall that receives a large amount of sunlight with a material like brick can help to absorb heat.
3. Install and Use Fans Strategically
Fans are an effective and cheap way to move air around your home, but that won’t do you much good if you’re just circulating hot air. Placing a fan in a window will allow you to suck cool air in at night. In corner rooms, placing another fan in the opposite direction will pull hot air out of your house, while that cooler air is sucked in through the opposite window.
Ceiling fans placed throughout the house can work great, especially if they’re made to spin counterclockwise to create a wind-chill breeze effect. And if your house has a cool basement, a ventilator fan will push that cold air up into your house.
4. Say Goodbye to Incandescent Lights
Incandescent lights are known for being energy inefficient, but did you know how they waste so much energy? By giving off heat, of course! In fact, they lose about 90% of their energy that way. Opting for more energy efficient choices like compact fluorescent bulbs for lamps and overhead lighting and LED bulbs for under cabinet kitchen lighting will save you on your lighting bills and keep your house cool at the same time.
As you can see, there are many excellent, energy efficient ways to keep your house cool without even having to glance at the price tag on an air conditioning unit. Of course, your best strategy is to use a combination of these techniques together for maximum effectiveness. So ditch the ice pack this summer, and make your house the coolest on the block.
Do you have tips to add to our list? Sound off on the Patrick Parker Realty Facebook Page, on our Twitter or LinkedIn feeds or on Instagram. And don’t forget to subscribe to our monthly HOME ADVICE email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
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