Good for the Goose, Good for the Gander

Question:  I negotiated the purchase of a condo, downstate from here recently, and closed a about a month ago. Most of the units in the complex are unsold. I happened to be on the Internet the other day and saw that the builder has now reduced the asking price of similar units in the complex by $35,000.

I did not pay full price -- they met my offer by reducing the price about halfway and made up the rest with seller's credits which I took at closing in various ways. Their rationale for this approach was to "keep the comps up" (my official purchase price was just under that of the last buyer -- so there was a pattern of keeping the comps up).

This maybe a silly question -- but I have to ask: Do I have any recourse against them for dealing with me in bad faith? They had to have been planning this huge reduction for a while.

Answer: A builder is simply a seller. Like any seller, the builder wants as much as possible from every sale. You bargained with the builder and obtained a number of concessions. These concessions must have been attractive, otherwise you would never have purchased the unit.

But, markets change. A good deal today may not be so good tomorrow.

To see if you were treated unfairly, let's try the "good for the goose, good for the gander" test. Imagine that the value of the unit soared $50,000 within a month after buying. Would you have gone back to the builder and said, "help me out, I should be paying you more for this unit so let's renegotiate so I can give you more money." Just a guess, but I don't think so.

As to maintaining comps, the builder is right. The builder has multiple units to sell. He or she wants to maintain prices to maximize future sale values and to keep recent buyers happy with their purchase. If roles were reversed you would have the same strategy.

A Sign of the Times

Cameras and House Viewings

Q. Our home is for sale. We are not home for viewings, but we do have cameras that record the walk through with each showing. We were surprised how these people open our closets, kitchen cabinets and appliances. Do you think we should say something to our Realtor?

A. Say something about what? Are you taking the closets with you? Are you removing the Kitchen cabinets for your new home?  I can guess with extreme certainty that you are not taking them with you. Since you are leaving them because they are part of the home, what is wrong with the buyers looking at them, observing the space they offer & feeling the quality?                                                                                                                                                                                                                    As far as appliances go, whether you plan on leaving them or taking them with you, they are still negotiable items! Buyers have every right to observe them in a respectful manner. When you go to the supermarket you check the condition of the fruit. You read the labels of products that you may want to buy. The same applies to the items that are staying with the home.

Buyers will notice that there are cameras watching them and they will be very uncomfortable. This is even worse than if you were following them around during a showing, blabbing about how wonderful your home is. An uncomfortable viewing does not usually equate to a home sale. Ditch the cameras and let your buyers fall in love with what could be their new Home. 

A Few inexpensive Ideas when Selling your Home

Question. We have decided to sell our home of 40 years. We don’t have the funds to remodel our home. We do have a newer roof and furnace. We are hoping these two updates will add some value to our home. We have many memories here so we don’t want to give it away. Any suggestions?

Answer.  You have made your house a home by raising your Family here and creating priceless memories. That will never change. But, if you haven’t updated in 40 years, your home will not be priceless to potential buyers because you cannot compete with homes that have been updated, and you can be assured that the appraiser will agree! A newer furnace and roof are home essentials & are assumed to be in excellent condition. These will not add value, but will give you an advantage over a home with OLDER essentials.

 Here are a few things you can do to add value at a minimum expense. The exterior is your home’s first impression. Get a bucket of soap & water. Have some fun while cleaning. Throw on your Bermuda shorts, rent a power washer & hit the deck, stairs & gutters. Make your walkways sparkle- Wizard of Oz style.  Add curb appeal by cutting & edging your lawn for a very clean look. Add color to your exterior with flowers and bushes. Can’t afford to paint the exterior? Paint shutters, doors & trim. Tack on some new address digits to keep things classy.

In terms of selling, the Kitchen is the most important room. Add new hardware to cabinet doors. Make the Kitchen look Sparkling clean. Bathrooms can help sell a home. How about adding a new toilet seat, shower curtains and rugs? Also, remember these 2 important words: “Sparkling Clean.” How about some new switch covers? Dump the orange carpet and expose those nice Hardwood floors.                                                                                                                                                    All these inexpensive touches can make your home stand out from the competition. Sharp homes sell faster and for more money than average homes. Don’t forget about painting the interior too. Bold colors do not mean beautiful. In fact, they devalue a home. Stick to neutral colors and be sure to stay away from white walls! It’s a home, not a Laboratory! 

Need More Space? Now is a Great Time to Buy a Home

I went to the closet to store a few toys.

When I opened the door there was nothing but noise.

Box after box fell on to the floor.

It took all my power to close that big door!

Down to the basement to store all this stuff.

I was looking for room, but there wasn’t enough.

So out to the garage to find some more space.

But it was loaded with boxes all over the place.

It’s time to move, this house is too small.

I’ll get on the phone & give my Banker a call.

He looked at my numbers and said you’re Approved!

Let’s start packing our stuff and get on with this move.

We’re looking at homes, we know we’ll find one.

But after 36 viewings, there really were none.

Ugly green carpet, everything outdated.

The ads on these homes were way overrated.

We asked our Realtor, is there anything nice?

She said yes there is, but you’ll have to up your price.

We weren’t very happy, she could see on our face.

She said $10,000 higher and you’ll find a nice place!

The home on Elm Street was pretty as a picture.

With Beautiful flooring and outstanding fixtures.

Granite counters and Stainless Steel.

We can see that this home is a really good deal.

The look on our face went from frown to smile

We had found our dream home, but it did take a while.

It has triple the space, this home is just great!

Let’s make an offer, before it’s too late.

Sellers accepted our offer, we are so delighted.

Plus nervous and anxious, but definitely excited!

Christmas in our new home, because the closing is near.

And Merry Christmas to you and a Happy New Year.

Common Question: How long does the home buying process take?

Answer:  A common point of confusion for people when they are purchasing a home is how long the home buying process will take. Some think that it all comes together immediately, while others assume that it will take months before they move into their dream home. The truth is that there are a couple of different components which can either expedite the process or prolong it. First and foremost, when you begin to look for a home, you should be prepared to allot however much time you will need to find it. The amount of time it takes to find your chosen home can vary for many reasons.  If the inventory is low, it may take you a little more time to find the house that’s just right. Finding a house with any unique features that you want may also take you a little while longer.  Your motivation and personal timeline will also impact how quickly the shopping process can take. On average, though, I would say buyers in my market look at 15-30 homes before ratifying a contract.

 Once your contact has been accepted, your lender takes the ball.  The Lender work starts with getting the property appraised and all of your financial documentation in order for an underwriter to review. Although you were give a prequalification by the lender, the underwriter ultimately decides if you are credit worthy.

A 30- to 45-day window from contract to close is a good ballpark for most purchase loans in Indiana. Could be as long as 60-75 days if you are buying in Illinois. Illinois takes longer because….. well it’s Illinois. But, understand, it’s not uncommon for underwriters to require additional documents once they begin scrutinizing your loan file.  

Borrowers can help speed the process along by returning those documents as quickly as possible. You don’t have a ton of control once you’re under contract on a home, but this is one key area where your swift action — or lack thereof — can have a big impact on your homebuying timeline. During the loan process, you can complete the home inspection, so this should have no effect on the time it takes to close. Every home buying experience is different. Each has its own twists and turns. But these are general guidelines as to how long the home buying process works. 

5 Reasons to Shop for a Home in December

1. Limited competition

In December, there’s no competition to speak of. Other (saner?) buyers are at home, gathered around the Christmas tree, opening gifts and preparing a big dinner.

2. Tax benefits

Looking for some end-of-year tax deductions? If you close your home purchase before the end of the year, you can deduct certain costs from your 2016 tax return. They include:

• Mortgage interest
• Loan points
• Property taxes

Remember, mortgage interest costs tend to be especially high in the early years of a home loan. So, this could be a nice last-minute tax break for your family.

3. Desperate sellers

With the holidays looming and a new tax year nearly upon them, sellers who put their homes on the market in December might be especially motivated to close the deal and start the new year fresh.People can be forced to sell in December for several reasons. They include:

• A death in the family
• Financial pressure
• Job relocations

4. You get a realistic look at properties

Winter home-shopping allows a chance to see real-estate properties in a clearer light. With flowers gone and curb appeal at a minimum, shoppers can more easily focus on the permanent features of the home.

As you tour a property, pay attention to things such as:

• How well the home is insulated.
• Whether you feel cold drafts.
• Whether the window seals seem tight.
• How well the furnace is working.

Another advantage to winter shopping is that your inspector will get a good look at the home while it is under the stress of lower temperatures, winds, snow and rain.

5. Rates still are low

Mortgage rates are not as low as they were last year, but they still remain attractive compared with historical norms. For example, the interest rate on the average 30-year fixed-rate mortgage is just 4.03 percent, according to Nov. 23 weekly data from FreddieMac.

However, rates have been on the upswing lately. For example, the 30-year fixed-rate mortgage averaged just 3.57 percent a couple of weeks ago. Rates fluctuate, of course, but the large recent rise is a reminder that low rates might not last forever.

The downside: selection

The bummer about winter house hunting is that, even if you are not the type of shopper who needs to try on 20 pairs of shoes before making a purchase, you probably will be frustrated by the thin selection of properties on the market.

The odds aren’t great that you’ll find the home you envisioned. But house-hunting is like that anyway. Unless you’re building a custom home or buying a new home from a builder who offers you the chance to make pre-construction choices, you’ll always face compromises.