The Ultimate House Hunting Checklist

If you are looking at prospective homes, you probably have an idea of what you want. But do you have a list? Of course, everyone wants a big kitchen and a sizeable yard, but there’s more to it than that. Having things on paper means that you won’t miss anything or forget about it later. Also, you must look beyond size, condition, and number of rooms. Here are some other things you should look over before you make an offer on a house.

The Location

You can fix almost any imperfection in a home except for it’s location. When you are looking at a specific house, consider any potential home’s proximity to your work, the nearest doctor, and the nearest grocery store. Think about the charm of the neighbor hood, how the home is situated on the lot, the privacy you have from your neighbors, the ease of access, the parking situation, the noise from neighbors, the noise from traffic, the noise from pets, and access to public transportation.

The Site

Look at the site of the home. Is the house on a hill? If so, does it have a view? What about a lot of stairs to climb to get to the front door? How about a walk out basement? Do the neighbors windows look directly into yours? Is the yard suitable for the number of kids and pets you have? Is access to the property safe regarding driveway elevation or access to the front door? It is very expensive to change these things, so make sure you are okay with how things are from the first.

The Neighborhood

The house needs to meet your expectations, sure, but so too does the neighborhood. You should own the smallest home in the nicest neighborhood that you can afford. Drive through the neighborhood in the mornings, the afternoons, and the evenings to see how things change throughout the day. Are the homes in the neighborhood consistent in size and features? Are the yards tidy or messy? Are there any abandoned cars or stray animals running around? Would you feel safe walking to the mailbox at night? Are there a lot of children – and if there are, are you okay with their noise level?

The Curb Appeal

Your landscaping should reflect your lifestyle. If you live a laid back life, then you probably don’t want a hard-to-maintain yard. If that’s the case, it’s likely that your curb appeal will tank, considering all the plant life in your yard has died! However, if you have a green thumb, make sure there is a lot of room for a garden. A brick home is the easiest to maintain, unless you live in an area with a lot of earthquakes. Check to make sure the roof is in good condition, as well as the driveway.

The Size and Floor Plan

Does the layout of the house make sense? Do you really need as many bedrooms and bathrooms as the house has? Do you have enough furniture to fill the house? Do you have too much stuff and you need more storage space? Is the kitchen set up properly for how you will use it? Think about how the space will be used and whether it will be beneficial to your lifestyle now and in the future. You don’t want to buy a home while you’re wearing rose colored glasses and then later find out that it’s not the one for you.

The Bedrooms and Bathrooms

Decide how many bedrooms and bathrooms you really need. Sure, it’s great to have a couple of guest rooms, but you’ll be paying to heat and cool those rooms when they’re empty. If you think you’re going to add onto the house later in terms of bedrooms and bathrooms, make sure that you confirm that you’re allowed to do this with an architect so you don’t buy the house knowing you need one more bedroom – then not be allowed to build that room.

The Kitchen

It is said that the kitchen is the heart of the home. And so it should be! Of course, you can always remodel, but if that’s not in your budget after paying out a down payment, make sure that you can live with the kitchen that comes with the house. It doesn’t have to be your dream kitchen, but it should be workable. If the most that needs to be done is an inexpensive makeover, it’s as good as perfect! Don’t even worry about the appliances, as they can also be easily replaced.

The Storage

The older the home is, the less storage space it tends to have. If you have a lot of extra stuff, make sure there’s a place for it all to go. You can always add storage space, but you may have to sacrifice living space in your rooms to do so if you don’t want to add onto the house. Don’t forget about outdoor storage either – is the garage enough, or will you have to build a small shed out in the yard? Will you have enough room to fit your car in the garage after you get all of your storage stuff in there?

The Lighting

Some people love bright, sunny rooms. Some people like to keep it dark and cozy. Whatever your preference, check out the indoor and natural lighting options. If you prefer all natural, or you have a lot of window plants, does enough sun come in the windows to meet your needs? A hint – southern facing windows tend to get the best light. If you prefer more yellow, dimmed lightbulbs, and the house is currently sporting clinical, bright white bulbs, that’s okay – it’s just a matter of changing them out.

The Finishing Touches

A small, simple house can still look spectacular thanks to small details such as moldings, door frames, window treatments, hardware, and fireplaces. If you really want your new home to be a stunner, consider finding a place that already sports these finishing touches. If the house is your dream house but still needs a little touching up, that’s okay too – most of these changes are quite cheap and simple to do by yourself. Just be prepared to add these elements yourself if they are not present at the home tour and are important to you to have.

The Plumbing

Do the toilets flush? How is the water pressure? Are any of the pipes under the sink leaking? Is the water heater leaking? Make sure that all of the plumbing and pipes are acceptable – because you’ll be stuck with them once you get the keys. If you (or the inspector) notices an issue, you can ask the seller to fix them before you move in, or ask for money off of the price of the house so you’ll have extra cash on hand to fix the issue without stressing your finances much more than they already are after putting down that down payment.

Compare the features of the homes you view and rate them from one to five, with one being “poor” and five being “excellent”. View each house and neighborhood from that lens, and judge what you liked and what you didn’t like. This list can keep all of your thoughts in one place, making it simpler for you to pare things down and make a decision.

Other tips for house hunting:

  • Bring a phone or a camera for taking photos and videos of each house.
  • Only tour a house if you approve of the neighborhood.
  • Take notes as you walk through each house – you’ll forget the details later.
  • Revisit your top three favorite houses – it will help refresh your memory.
  • Talk to the neighbors to learn more about the house and the area.
  • Visit the house at night when neighbors are home. How is the parking and noise level?
  • Check your cell phone signal in the house. Make sure it’s strong.
  • Compare home values between your potential house and others in the neighborhood.
  • Ask your realtor about average monthly bills for each property you visit.
  • Hire a home inspector to check the electrical, heating, air conditioning, security, plumbing, insulation, water, and sewer systems to make sure everything is up to date and safe.
  • Check for damage to the foundation, driveway and pool by looking for cracks.
  • Make sure that the garage door functions.
  • Look for signs of pests such as ants, termites, or rodents.
  • Keep your expectations as realistic as possible.
  • Stay in your budget – you set it for a reason!
  • Ask your realtor about any known damages or home history.

House hunting can be stressful, but organizing and ensuring that each home is properly checked over can help you feel much more at ease and put together while you tour homes. You should never buy a home without first knowing everything you can about it. The only way to avoid that is to investigate and do your due diligence on each home you visit.

Real Estate Open House Ideas for 2020

A lot of agents have given up – some say that the open house is dead. This isn’t true! You just need to know how to do it. Here are the best open house ideas for you to use in 2020!

Run a Facebook Live Stream

People want what other people want. It’s a fact of life. With that being said, there is no better time to stream and record a video walk through of your listing than during your open house, when it’s full of people – competition for other buyers! This also allows potential buyers to view the house remotely and ask questions that the realtor can answer in real time. It’s like House Hunters – live! After the live stream is over, you can post the full video of it on social media for even more people to watch.

Use a Sign In App

In the old days, those who visited an open house would sign their name and contact information onto a paper sheet. It can be hard to read some people’s handwriting! The difference between a letter or two could also be the difference between an awesome lead and no lead at all. Thankfully, now there are apps that can take the place of these confusing and hard to read sheets. The open house visitors will simply type their information on a tablet instead. The apps will then forward the client’s information to your contact database, where you can sign them up for emails or follow up later by phone.

Virtually Stage the Home With Different Décor

Most people have a really hard time trying to visualize their style in a space. You can offer your visitors staged images that show the many different ways a room could be used with online décor websites. Virtual staging can make a difference! You can show them different uses for different rooms, too – that second bedroom could be a guest room, an office, a craft room, a nursery…

Skip the Alcohol

Some agents used to swear by offering people a glass of wine or champagne, saying it lowered their inhibitions a little and made them like the house more. People do love a free drink – but it’s not worth the extra crowd. Best practices says to avoid the libations. Social host liability laws in some areas mean that you could be sued if someone drinks too much and then gets hurt. Also, those people who only showed up for the free champagne and don’t care about the house? Well, they’re now clogging up your email prospect list.

Invite the Neighbors

Well, you don’t have time to go knocking on all their doors – but you could design and leave a door sign. At the end of the day, an open house is about your client, but you should also focus on the whole experience of the listing. Take advantage of the area. Obviously, the neighbors likely aren’t looking to buy the house across the street, but their presence could shout to random passers-by that something interesting is going on there, that house must really be nice on the inside for all those people to be there looking at it! Even those few extra folks in attendance could really draw a crowd for you.

Hold Raffles or Contests

Even if the prize is just a small gift card, everyone loves a free gift just for showing up. In exchange for their contact information, you can enter those visiting your open house into a drawing for a gift or prize. Advertise your plan to do this on social media and all of the flyers and other notifications for the open house. You never know, someone who just came to be entered in the raffle could end up loving the house – and being it’s next owner – all thanks to a small gift card or a fruit basket!

Give Out Paperwork

Floor plans, FAQ, and HOA information. Get this paperwork together, make tons of copies of it, and staple everything into packets for your open house visitors. The floor plans will allow people to start thinking of how their furniture could fit into the house. The FAQ saves you time from having to answer the same questions over and over. HOA information does the same. You can also include paperwork on the building itself, rental restrictions, what’s around the area in terms of shopping, schools, and entertainment, and more. This information helps the visitors to imagine themselves living in the home.

Give Yourself Enough Time to Market It

You want the advertisements to be up long enough for people to actually see them! Three days should be enough. The open house is not meant to sell the home, but instead as a lead source method of what you can deliver to the seller. Use those three days to properly prepare for and advertise the open house via cold calls, face to face interactions, flyers, social media, and more. It will show your seller that you are really on the ball, and willing to go above and beyond to make things work for them.

Schedule it Strategically

You don’t want to schedule your open house for 8 AM on a Monday when everyone is at work. The best days for open houses are the weekend of course, and the best time is around noon. If you absolutely must have the open house on a weekday, shoot for a Thursday, around 6 PM. If the home is in the city, try to line up the open house right before the local happy hour starts. Choose your hours wisely – it doesn’t matter if someone seriously loves the house, they won’t come if they have work when the open house is happening.

Get Someone to Check People In While You Mingle

You don’t want to be stuck at the door, reminding people to check in and handing out your FAQ packets, instead of on the floor, mingling and chatting. You don’t have to do everything on your own! If you are taking the time and making the effort to promote and host a great open house, then you owe it to yourself to be able to work the crowd. Have someone else on hand to help you out, checking people in, refilling drinks, and answering questions about the listing if you’re busy with someone else. Don’t get stuck at the front door – mingle with your guests, and hire someone else to help you!

Promote the Open House to Fellow Agents

It’s important for you to send a reminder to the local brokerage community a few days before the open house. There are various email marketing platforms today that make it easy to send flyers and information directly to brokers. They may not have time to make it themselves, but they might be able to pass the information on to one of their clients who is looking to buy. It might net you a few more folks in attendance, so it’s worth the extra work of reaching out to your fellow agents.

Don’t Allow Your Seller to Attend

When a potential buyer is touring the house, they could make comments that offend the seller, or ask tough questions that make them uncomfortable. Some sellers will want to be involved, but send them out to the movies during the open house. It’s better for everyone. You want the potential buyers to get the information they need without the rose colored glasses filter from the seller, and you certainly don’t want to risk your buyer showing deep offense to a seller because they stated that great-grandma’s quilt is ugly. To keep your seller in the loop, meet them for lunch the day after the open house and let them know how everything went.

For That Matter, Fido Isn’t Invited Either

Unless it’s a fish, pets aren’t welcome to the open house, either. You don’t want your seller’s dog protecting his property and biting a potential buyer, and you don’t want to risk the seller’s cat running out the front door in all of the commotion. Also, a lot of people have intense animal allergies and cannot be around pets. You want your prospective buyers leaving your open house with ideas of how they will decorate the rooms when they buy it, not itching their eyes and making an appointment with their allergist.

Don’t Miss Your Follow Up Window

You worked hard to promote the open house, harder to host it, and now you have to work even harder to follow up on it. Don’t miss your chance to solidify a buyer’s interest after the show is over. Within a few days, you need to reach out to every person that left their information on the sign in sheet, whether they left their email or their phone number. Remind them who you are and of the house for sale, and ask them if there is anything else you can do for them in regards to the house. For fun, ask them their favorite part of the open house – then you know what to do again next time!

What Does Contingent Mean in Real Estate?

There are lots of confusing terms in real estate – this is nothing new. There are some that you absolutely must know if you intend to become a home owner, and some you can get away with not knowing so well. However, “contingent” is not one of those words. You should know this one!

When a family is searching for a new home (especially if they are searching online), they will typically encounter a lot of words implying the status of different homes. Of course you will see “for sale” and “closed”, but sometimes you will also run into some homes that are listed as “pending” and “contingent”. All of these phrases are meant to help you identify where the home is in the general sale process. For example, “closed” means that the house is in the final step of executing a real estate transaction. “Contingent” is another one of those words, and the subject of our discussion today.

Understanding the differences between these words can help you identify very quickly which properties are actually still available for purchase, and you will better understand how you should move forward if you are interested in putting an offer down on the home.

Here’s what contingency means – when a home is in the contingent stage, it means that the house’s current owner has accepted an offer from a hopeful buyer and that the offer comes with contingencies before things can move towards closing. That’s it! Contingencies are conditions that the prospective buyer must meet before things can move forward. As an example, a buyer may place an offer on a home, but the offer is contingent upon the buyer selling their current home first or clarifying a negative mark on their credit report. Sometimes, the hopeful buyer is able to rectify the issue at hand and move forward, but sometimes, they are not, and the house goes back to the market.

What does it mean when a house goes from active to contingent? When a listing status is “active”, anyone can make an offer because the house has not received any accepted offers to date. When the status changes from “active” to “contingent”, the home is still technically on the market and in active status, but the family who is in contingency with the seller will have “first dibs”. You can still make an offer, but it will be a back up offer and only considered if the current deal falls through. You will have the chance to move forward with the home in this case.

A contingency doesn’t always mean that the house is for-sure off the market, and you may still have a chance of getting your hands on the keys to a house in contingency – so just because that’s how it’s labeled, you shouldn’t necessarily walk away.

After all requirements have been met as defined by both buyer and seller, and a contract is officially executed, the listing status changes from “contingent” to “pending” and is no longer an active listing. When an offer has been accepted, and the only steps left are the final paperwork and closing is the exact moment that the home becomes “pending”. Unlike contingent statuses, pending status does not mean that the sale is still active, so other prospective buyers cannot place offers on the home.

First of all – Different areas have different rules about contingencies, so you want to speak with your mortgage professionals about it. You may have a better chance of edging your way in on a contingent home in some states than in others. What you read here today is a generalized version of what contingent means for a home.

What can you expect from a home that’s marked contingent? Well, there are five different types of contingencies in real estate, and each one comes with different obligations and requirements. Which type of contingency is in place can tell you a lot about whether the home will end up back on the market or whether the deal will follow through.

Here’s one type of contingency – the Financial Contingency. It’s one of the more common types. Many things can go wrong after a buyer puts in an offer on a house, and those things can affect whether or not they will be approved for the loan they’re asking for. These issues can include taking on new debt, losing or changing jobs, or other issues.

Another thing that can incur a financial contingency? Most of the time, a buyer will seek out and receive a mortgage pre-approval from a mortgage lender prior to submitting their offer, which helps them decide whether or not they can qualify for a mortgage prior to making an official offer on a home. However, pre-approvals can be obtained in minutes these days, and there is little to no fact-checking on them. Just because a pre-approval says one number doesn’t mean that’s the true number that a potential home owner is eligible to buy at. This is referred to as a mortgage contingency and often the buyer is forced to walk away from the home. Either your finances are enough or they aren’t!

If the buyer lies about or enters wrong information about their finances when applying for a pre-approval (such as information regarding their taxes or income), the pre-approval letter basically means nothing. If the interest rates are currently low, this specific type of contingency is easy to bypass and the original potential owner gets the house. However, if interest rates are currently high, people won’t typically get out of a financial contingency.

A sale contingency comes into play sometimes too. Obviously, it is easier to sell a house before buying a new one, but sometimes that just isn’t possible. A home sale contingency allows the buyer a certain amount of time to sell (and settle) on their current home in order to finance their new one. This type of contingency acts as a protection to buyers, so that if they can’t sell their current home, they’re not stuck with a second one that they can’t afford. The buyer can back out of the contract without legal repercussions.

A home inspection contingency happens when a house returns reports of unsatisfactory issues, such as roofing or plumbing issues, structural problems, electrical miswirings, radon test failure, well water testing failure, mold growth, the existence of lead paint, and more. The buyer is the one that places the contingency here – stating that they will only move forward with buying the house if the seller fixes this issue completely in a timely manner. They can also request that the price is lowered because the house is not in pristine condition. The buyer has the option to step away from the deal if the seller does not follow through with their half of the agreement.

An appraisal contingency is generally put in place for a buyer to ensure that they aren’t being ripped off and being made to overpay for a bad house. If the home does not appraise the same dollar amount that the sellers are asking for, the buyer can request a lower price and call it a contingency. The seller then can accept the lower price or back out, meaning the deal falls through. The seller also typically has the option to pay the difference in cash.

A settlement contingency becomes a factor when the buyer already has a contract in hand and a closing date for the home in question. The property can’t legally change to “sold” until the closing date takes place, and the buyer can pull out of the deal before that day. When there is a settlement contingency, sometimes a buyer will accept back up offers in case the deal falls through. If the buyer’s new home closes on the specified date, the contract remains valid. Alternatively, if the home does not close on the specified date, the contract is terminated.

So – can you put an offer on a house that is listed as contingent? Usually, yes. Most homes listed as contingent still allow other buyers to make an offer. The deal isn’t final, so the seller may find it nice to have back up offers if the contract falls through! If you are a buyer and you find your dream house in contingency status, talk with your mortgage professionals about placing an offer on the home. If the seller likes your offer the initial prospective buyer likely be given a few days to change the contingency issue. If they are unable to, their deal will fall through and you will be given a chance to buy the home. Remember – the way contingencies work by law is different with every state, so make sure that you ask your mortgage professional for the fine print on the matter. Don’t give up if your dream house is in contingency – it could still be yours!

Rare Real Estate Vocabulary – Terms You Must Know!

When it comes to buying or selling a home, there are simply some terms you must know. Everyone knows what closing costs, titles, appraisals, and pre-approvals are, but what is escrow? Here are some rare or uncommon real estate vocabulary terms that could apply to you!

Amortization

This is the process of combining both interest and principal in payments, rather than simply paying off interest at the start. This allows you to build more equity in the home early on.

Affidavit

A written statement signed and sworn to before a person authorized to administer an oath.

Abstract of title

A condensed version of the history of a title to a particular parcel of real estate as recorded in the county clerk’s records; consists of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property.

Accrued depreciation

The actual depreciation that has occurred to a property at any given date; the difference between the cost of replacement new (as of the date of the appraisal) and the present appraised value.

Assessed value

This is how much a home is worth according to a public tax assessor who makes that determination in order to figure out how much city or state tax the owner owes.

Bilateral contract

A contract in which each party promises to perform an act in exchange for the other party’s promise to perform.

Blanket mortgage

A mortgage that covers more than one parcel of real estate and provides for each parcel’s partial release from the mortgage lien on repayment of a definite portion of the debt.

Cash reserves

The cash reserves is the money left over for the buyer after the down payment and the closing costs.

Comparative market analysis

Comparative market analysis (CMA) is a report on comparable homes in the area that is used to derive an accurate value for the home in question.

Chain of title

The succession of conveyances from some accepted starting point by which the present holder of real property dervies his or her title.

Capacity of parties

The legal ability of persons to enter into a valid contract. Most persons have fully capacity to contract and are said to be competent parties.

Contingencies

This term refers to conditions that have to be met in order for the purchase of a home to be finalized. For example, there may be contingencies that the loan must be approved or the appraised value must be near the final sale price.

Community property

A system of property ownership based on the theory that each spouse has an equal interest in the property acquired by the efforts of either spouse during marriage.

Coinsurance clause

A clause in insurance policies covering real property that requires the policyholder to maintain fire insurance coverage that is generally equal to at least 80% of the property’s actual replacement cost.

Conventional loan

A loan that is not insured or guaranteed by a government agency.

Dual agency

Dual agency is when one agent represents both sides, rather than having both a buyer’s agent and a listing agent.

Deed

A written instrument that when executed and delivered conveys title to, or an interest in, real estate.

Discount points

An added loan free charged by a lender to make the yield on a lower-than-market-value loan competitive with higher-interest loans.

Escrow

Escrow is an account that the lender sets up that receives monthly payments from the buyer.

Exclusive-right-to-sell listing

A listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell the property on the owner’s stated terms and agrees to pay the broker a commission when the property is sold, whether by the broker, the owner, or another broker.

General contractor

A construction specialist who enters into a formal construction contract with a landowner or master lessee to construct a real estate building or project. The general contractor often contracts with several subcontractors specializing in various aspects of the building process to perform individual jobs.

Interim financing

A short-term loan usually made during the construction phase of a building project, often referred to as a construction loan.

Listing

A listing is essentially a home that is for sale. The term gets its name from the fact that these homes are often “listed” on a website or in a publication.

Listing broker

The broker in a multiple-listing situation from whose office a listing agreement is initiated, as opposed to the selling broker, from whose office negotiations leading to a sale are initiated. The listing broker and the selling broker may, of course, by the same person.

Lien

A right given by law to certain creditors to have their debt paid out of the property of a defaulting debtor, usually by means of a court sale.

Market/data approach

A method of appraising or evaluating real property based on the proposition that an informed purchaser would pay no more for a property than the cost to him or her of acquiring an existing property with the same utility.

Market value

The most profitable price a property will bring in a competitive and open market under all conditions requisite to a fair sale. The price at which a buyer would buy and a seller would sell, each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.

MLS (Multiple Listing Service)

A service created for the use of displaying listings across many brokers and brokerages.

Notary public

A public official authorized to certify and attest to documents, take affidavits, take acknowledgments, administer oaths, and perform other such acts.

Open listing

A listing contract under which the broker’s commission is contingent on the broker producing a “ready, willing, and able” buyer before the property is sold by the seller or another broker; the principal (owner) reserves the right to list the property with other brokers.

Principal

The principal is the amount of money borrowed to purchase a home. Paying off the principal allows a buyer to build equity in a home. Principal is combined with interest to determine the monthly mortgage payment.

Package mortgage

A method of financing in which the purchase of the land also finances the purchase of certain personal property items.

Plat book

A book containing recorded subdivisions of land.

Piti

Principal, interest, taxes, and insurance.

Refinance

The act of acquiring a new mortgage to replace the old mortgage, oftentimes advantageous to the borrower.

Real property

Real property consists of land, anything affixed to it so as to be regarded as a permanent part of the land, that which is appurtenant to the land, and that which is immovable by law, including all rights and interests.

Renegotiable rate mortgage

A mortgage loan that is granted for a term of 3 to 5 years and secured by a long-term mortgage of up to 30 years with the interest rate being renegotiated or adjusted each period.

Secondary mortgage market

A market for the purchase and sale of existing mortgages, designed to provide greater liquidity for mortgages; also called the secondary money market. Mortgages are originated in the primary mortgage market.

Subrogation

The substitution of one creditor for another, with the substituted person succeeding to the legal rights and claims of the original claimant. Subrogation is used by title insurers to acquire the right the sue from the injured party to recover any claims they have paid.

Title Search

A title company’s review of the deed and the (potential) claims upon it.

Title insurance

Title insurance is often required as part of the closing costs. It covers research into public records to ensure that the title is free and clear, and ready for sale. If you purchase a home and find out later that there are liens on the home, you’ll be glad you had title insurance.

Tenancy by the entirety

The joint ownership, recognized in some states, of property acquired by husband and wife during marriage. On the death of one spouse, the survivor becomes the owner of the property.

Unilateral contract

A one-sided contract by which one party makes a promise to induce a second party to do something. The second party is not legally bound to perform; if the second party does comply, however, the first party is obligated to keep the promise.

Unity of ownership

The four unities traditionally needed to create a joint tenancy – unity of title, time, interest, and possession.

Variance

An exception from the zoning ordinances; permission granted by zoning authorities to build a structure or conduct a use that is expressly prohibited by zoning ordinance.

Writ of attachment

The method by which a debtor’s property is placed in the custody of the law and held as security, pending the outcome of a creditor’s suit.